Exhibit 10.17

 

 

 

SPINNAKER EXPLORATION COMPANY

 

2005 STOCK INCENTIVE PLAN

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TABLE OF CONTENTS

 

1. Purpose

   1

2. Definitions

   1

3. Administration

   3

(a) Authority of the Committee

   3

(b) Manner of Exercise of Committee Authority

   4

(c) Limitation of Liability

   4

4. Stock Subject to Plan

   4

(a) Overall Number of Shares Available for Delivery

   4

(b) Application of Limitation to Grants of Awards

   4

(c) Availability of Shares Not Delivered Under Awards

   4

(d) Stock Offered

   5

5. Eligibility; Per Person Award Limitations

   5

6. Specific Terms of Awards

   5

(a) General

   5

(b) Options

   5

(c) Restricted Stock

   6

7. Certain Provisions Applicable to Awards

   6

(a) Stand-Alone and Additional Awards

   6

(b) Term of Awards

   7

(c) Form and Timing of Payment under Awards; Deferrals

   7

(d) Exemptions from Section 16(b) Liability

   7

(e) Non-Competition Agreement

   7

8. Performance Awards

   7

(a) Performance Conditions

   7

(b) Performance Awards Granted to Designated Covered Employees

   7

(c) Written Determinations

   8

(d) Status of Section 8(b) Awards under Section 162(m) of the Code

   9

9. Recapitalization or Reorganization

   9

(a) Existence of Plans and Awards

   9

(b) Subdivision or Consolidation of Shares

   9

(c) Recapitalizations and Corporate Changes

   10

(d) Change in Control

   10

(e) Additional Issuances

   11

(f) Restricted Stock Awards

   11

10. General Provisions

   11

(a) Transferability

   11

(b) Taxes

   12

(c) Changes to this Plan and Awards

   12

(d) Limitation on Rights Conferred Under Plan

   12

(e) Unfunded Status of Awards

   13

(f) Nonexclusivity of this Plan

   13

(g) Payments in the Event of Forfeitures; Fractional Shares

   13

(h) Severability

   13

(i) Governing Law

   13

(j) Conditions to Delivery of Stock

   13

(k) Plan Effective Date and Stockholder Approval

   14

(l) Term of Plan

   14

 

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SPINNAKER EXPLORATION COMPANY

 

2005 STOCK INCENTIVE PLAN

 

1. Purpose. The purpose of the Spinnaker Exploration Company 2005 Stock
Incentive Plan (the “Plan”) is to provide a means through which Spinnaker
Exploration Company, a Delaware corporation (the “Company”), and its
subsidiaries may attract and retain able persons as employees, directors and
consultants of the Company and to provide a means whereby those persons upon
whom the responsibilities of the successful administration and management of the
Company rest, and whose present and potential contributions to the welfare of
the Company are of importance, can acquire and maintain stock ownership, or
awards the value of which is tied to the performance of the Company’s stock,
thereby strengthening their concern for the welfare of the Company and their
desire to remain in its employ. A further purpose of this Plan is to provide
such employees and directors with additional incentive and reward opportunities
designed to enhance the profitable growth of the Company. Accordingly, this Plan
provides for granting Incentive Stock Options, options which do not constitute
Incentive Stock Options, and Restricted Stock Awards as is best suited to the
circumstances of the particular individual as provided herein.

 

2. Definitions. For purposes of this Plan, the following terms shall be defined
as set forth below, in addition to such terms defined in Section 1 hereof:

 

(a) “Award” means any Option or Restricted Stock Award granted to a Participant
under this Plan.

 

(b) “Beneficiary” means one or more persons, trusts or other entities which have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under
this Plan upon such Participant’s death or to which Awards or other rights are
transferred if and to the extent permitted under Section 10(a) hereof. If, upon
a Participant’s death, there is no designated Beneficiary or surviving
designated Beneficiary, then the term Beneficiary means the persons, trusts or
other entities entitled by will or the laws of descent and distribution to
receive such benefits.

 

(c) “Beneficial Owner” shall have the meaning ascribed to such term in Rule
13d-3 under the Exchange Act and any successor to such Rule.

 

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

 

(e) “Business Day” means any day other than a Saturday, a Sunday, or a day on
which banking institutions in the state of Texas are authorized or obligated by
law or executive order to close.

 

(f) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions and regulations
thereto.

 

(g) “Committee” means a committee of two or more directors designated by the
Board to administer this Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist solely of two or more
directors, each of whom shall be (i) a “nonemployee director” within the meaning
of Rule 16b-3 under the Exchange Act, and (ii) an “outside director” as defined
under section 162(m) of the Code, unless administration of this Plan by “outside
directors” is not then required in order to qualify for tax deductibility under
section 162(m) of the Code.

 

(h) “Covered Employee” means an Eligible Person who is a Covered Employee as
specified in Section 8(d) of this Plan.

 

(i) “Effective Date” means March 30, 2005.

 

(j) “Eligible Person” means all officers and employees of the Company or of any
Subsidiary, and other persons who provide services to the Company or any of its
Subsidiaries, including directors of the Company. An employee on leave of
absence may be considered as still in the employ of the Company or a Subsidiary
for purposes of eligibility for participation in this Plan.

 

(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, including rules thereunder and successor provisions and rules
thereto.

 

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(l) “Fair Market Value” means, for a particular day:

 

(i) if shares of Stock of the same class are listed or admitted to unlisted
trading privileges on any national or regional securities exchange at the date
of determining the Fair Market Value, then the mean of the high and the low
reported sales price, regular way, on the composite tape of that exchange on
that Business Day or, if no such sale takes place on that Business Day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to unlisted trading privileges on that
securities exchange or, if no such closing prices are available for that day,
the last reported sales price, regular way, on the composite tape of that
exchange on the last Business Day before the date in question; or

 

(ii) if shares of Stock of the same class are not listed or admitted to unlisted
trading privileges as provided in subparagraph (i) and if sales prices for
shares of Stock of the same class in the over-the-counter market are reported by
the National Association of Securities Dealers, Inc. Automated Quotations, Inc.
(“NASDAQ”) National Market System as of the date of determining the Fair Market
Value, then the last reported sales price so reported on that Business Day or,
if no such sale takes place on that Business Day, the average of the high bid
and low asked prices so reported or, if no such prices are available for that
day, the last reported sales price so reported on the last Business Day before
the date in question; or

 

(iii) if shares of Stock of the same class are not listed or admitted to
unlisted trading privileges as provided in subparagraph (i) and sales prices for
shares of Stock of the same class are not reported by the NASDAQ National Market
System (or a similar system then in use) as provided in subparagraph (ii), and
if bid and asked prices for shares of Stock of the same class in the
over-the-counter market are reported by NASDAQ (or, if not so reported, by the
National Quotation Bureau Incorporated) as of the date of determining the Fair
Market Value, then the average of the high bid and low asked prices on that
Business Day or, if no such prices are available for that day, the average of
the high bid and low asked prices on the last Business Day before the date in
question; or

 

(iv) if shares of Stock of the same class are not listed or admitted to unlisted
trading privileges as provided in subparagraph (i) and sales prices or bid and
asked prices therefor are not reported by NASDAQ (or the National Quotation
Bureau Incorporated) as provided in subparagraph (ii) or subparagraph (iii) as
of the date of determining the Fair Market Value, then the value determined in
good faith by the Committee, which determination shall be conclusive for all
purposes; or

 

(v) if shares of Stock of the same class are listed or admitted to unlisted
trading privileges as provided in subparagraph (i) or sales prices or bid and
asked prices therefor are reported by NASDAQ (or the National Quotation Bureau
Incorporated) as provided in subparagraph (ii) or subparagraph (iii) as of the
date of determining the Fair Market Value, but the volume of trading is so low
that the Committee determines in good faith that such prices are not indicative
of the fair value of the Stock, then the value determined in good faith by the
Committee, which determination shall be conclusive for all purposes
notwithstanding the provisions of subparagraphs (i), (ii) or (iii).

 

For purposes of valuing Incentive Stock Options, the Fair Market Value of Stock
shall be determined without regard to any restriction other than one that, by
its terms, will never lapse.

 

(m) “Incentive Stock Option” or “ISO” means any Option intended to be and
designated as an incentive stock option within the meaning of section 422 of the
Code or any successor provision thereto.

 

(n) “Option” means a right, granted to a Participant under Section 6(b) hereof,
to purchase Stock or other Awards at a specified price during specified time
periods.

 

(o) “Participant” means a person who has been granted an Award under this Plan
which remains outstanding, including a person who is no longer an Eligible
Person.

 

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(p) “Performance Award” means a right, granted to a Participant under Section 8
hereof, to receive Awards based upon performance criteria specified by the
Committee.

 

(q) “Person” means any person or entity of any nature whatsoever, specifically
including an individual, a firm, a company, a corporation, a partnership, a
limited liability company, a trust or other entity; a Person, together with that
Person’s Affiliates and Associates (as those terms are defined in Rule 12b-2
under the Exchange Act), and any Persons acting as a partnership, limited
partnership, joint venture, association, syndicate or other group (whether or
not formally organized), or otherwise acting jointly or in concert or in a
coordinated or consciously parallel manner (whether or not pursuant to any
express agreement), for the purpose of acquiring, holding, voting or disposing
of securities of the Company with such Person, shall be deemed a single
“Person.”

 

(r) “Qualified Member” means a member of the Committee who is a “Non-Employee
Director” within the meaning of Rule 16b-3(b)(3) and an “outside director”
within the meaning of Treasury regulation 1.162-27 promulgated pursuant to
section 162(m) of the Code.

 

(s) “Restricted Stock” means Stock granted to a Participant under Section 6(c)
hereof, that is subject to certain restrictions and to a risk of forfeiture.

 

(t) “Rule 16b-3” means Rule 16b-3, promulgated by the Securities and Exchange
Commission under section 16 of the Exchange Act, as from time to time in effect
and applicable to this Plan and Participants.

 

(u) “Securities Act” means the Securities Act of 1933 and the rules and
regulations promulgated thereunder, or any successor law, as it may be amended
from time to time.

 

(v) “Stock” means the Company’s Common Stock, par value $.01 per share, and such
other securities as may be substituted (or resubstituted) for Stock pursuant to
Section 9.

 

(w) “Subsidiary” means with respect to any Person, any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by that Person.

 

3. Administration.

 

(a) Authority of the Committee. This Plan shall be administered by the Committee
except to the extent the Board elects, in order to comply with Rule 16b-3 or for
any other reason, to administer this Plan, in which case references herein to
the “Committee” shall be deemed to include references to the “Board.” Subject to
the express provisions of the Plan and Rule 16b-3, the Committee shall have the
authority, in its sole and absolute discretion, to (i) adopt, amend, and rescind
administrative and interpretive rules and regulations relating to the Plan; (ii)
determine the Eligible Persons to whom, and the time or times at which, Awards
shall be granted; (iii) determine the amount of cash and the number of shares of
Stock that shall be the subject of each Award; (iv) determine the terms and
provisions of each Award agreement (which need not be identical), including
provisions defining or otherwise relating to (A) the term and the period or
periods and extent of exercisability of the Options, (B) the extent to which the
transferability of shares of Stock issued or transferred pursuant to any Award
is restricted, (C) the effect of termination of employment of a Participant on
the Award, and (D) the effect of approved leaves of absence (consistent with any
applicable regulations of the Internal Revenue Service); (v) accelerate the time
of exercisability of any Option or the restriction period applicable to any
Restricted Stock Award; (vi) construe the respective Award agreements and the
Plan; (vii) make determinations of the Fair Market Value of the Stock pursuant
to the Plan; (viii) delegate its duties under the Plan to such agents as it may
appoint from time to time, provided that the Committee may not delegate its
duties with respect to making Awards to, or otherwise with respect to Awards
granted to, Eligible Persons who are subject to section 16(b) of the Exchange
Act or section 162(m) of the Code; (ix) subject to ratification by the Board,
terminate, modify, or amend the Plan; and (x) make all other determinations,
perform all other acts, and exercise all other powers and authority necessary or
advisable for administering the Plan, including the delegation of those
ministerial acts and responsibilities as the Committee deems appropriate.
Subject to Rule 16b-3 and section 162(m) of the Code, the Committee may correct
any defect, supply any omission, or reconcile any inconsistency in the Plan, in
any

 

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Award, or in any Award agreement in the manner and to the extent it deems
necessary or desirable to carry the Plan into effect, and the Committee shall be
the sole and final judge of that necessity or desirability. The determinations
of the Committee on the matters referred to in this Section 3(a) shall be final
and conclusive.

 

(b) Manner of Exercise of Committee Authority. At any time that a member of the
Committee is not a Qualified Member, any action of the Committee relating to an
Award granted or to be granted to a Participant who is then subject to section
16 of the Exchange Act in respect of the Company, or relating to an Award
intended by the Committee to qualify as “performance-based compensation” within
the meaning of section 162(m) of the Code and regulations thereunder, may be
taken either (i) by a subcommittee, designated by the Committee, composed solely
of two or more Qualified Members, or (ii) by the Committee but with each such
member who is not a Qualified Member abstaining or recusing himself or herself
from such action; provided, however, that, upon such abstention or recusal, the
Committee remains composed solely of two or more Qualified Members. Such action,
authorized by such a subcommittee or by the Committee upon the abstention or
recusal of such non-Qualified Member(s), shall be the action of the Committee
for purposes of this Plan. Any action of the Committee shall be final,
conclusive and binding on all persons, including the Company, its subsidiaries,
stockholders, Participants, Beneficiaries, and transferees under Section 10(a)
hereof or other persons claiming rights from or through a Participant. The
express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. The Committee may delegate to officers or managers
of the Company or any Subsidiary, or committees thereof, the authority, subject
to such terms as the Committee shall determine, to perform such functions,
including administrative functions, as the Committee may determine, to the
extent that such delegation will not result in the loss of an exemption under
Rule 16b-3(d)(1) for Awards granted to Participants subject to section 16 of the
Exchange Act in respect of the Company and will not cause Awards intended to
qualify as “performance-based compensation” under section 162(m) of the Code to
fail to so qualify. The Committee may appoint agents to assist it in
administering this Plan.

 

(c) Limitation of Liability. The Committee and each member thereof shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him or her by any officer or employee of the Company or a
Subsidiary, the Company’s legal counsel, independent auditors, consultants or
any other agents assisting in the administration of this Plan. Members of the
Committee and any officer or employee of the Company or a Subsidiary acting at
the direction or on behalf of the Committee shall not be personally liable for
any action or determination taken or made in good faith with respect to this
Plan, and shall, to the fullest extent permitted by law, be indemnified and held
harmless by the Company with respect to any such action or determination.

 

4. Stock Subject to Plan.

 

(a) Overall Number of Shares Available for Delivery. Subject to adjustment in a
manner consistent with any adjustment made pursuant to Section 9, the total
number of shares of Stock reserved and available for delivery in connection with
Options under this Plan shall not exceed 275,000 shares of Stock. Unless amended
to the contrary, and whereby such amendment is approved by the stockholders of
the Company, no Restricted Stock Awards may be granted pursuant to the Plan.

 

(b) Application of Limitation to Grants of Awards. No Award may be granted if
(i) the number of shares of Stock to be delivered in connection with such Award,
or the number of shares to which such Award relates exceeds (ii) the number of
shares of Stock remaining available under this Plan minus the number of shares
of Stock issuable in settlement of or relating to then-outstanding Awards. The
Committee may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting and make adjustments if the number of shares of
Stock actually delivered differs from the number of shares previously counted in
connection with an Award.

 

(c) Availability of Shares Not Delivered Under Awards. Shares of Stock subject
to an Award under this Plan that expire or are canceled, forfeited, settled in
cash or otherwise terminated without a delivery of shares to the

 

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Participant, including (i) the number of shares withheld in payment of any
exercise or purchase price of an Award or taxes relating to Awards, and (ii) the
number of shares surrendered in payment of any exercise or purchase price of an
Award or taxes relating to any Award shall not again be available for Awards
under this Plan.

 

(d) Stock Offered. The shares to be delivered under the Plan shall be made
available from (i) authorized but unissued shares of Stock, (ii) Stock held in
the treasury of the Company, or (iii) previously issued shares of Stock
reacquired by the Company, including shares purchased on the open market, in
each situation as the Board or the Committee may determine from time to time at
its sole option.

 

5. Eligibility; Per Person Award Limitations.

 

Awards may be granted under this Plan only to Eligible Persons. In each fiscal
year of the Company, during any part of which this Plan is in effect, a Covered
Employee may not be granted Restricted Stock Awards, if the grant of Restricted
Stock Awards is approved by the stockholders of the Company in an amendment to
the Plan, relating to more than 100,000 shares of Stock or Options relating to
more than 250,000 shares of Stock, in either case subject to adjustment in a
manner consistent with any adjustment made pursuant to Section 9.

 

6. Specific Terms of Awards.

 

(a) General. Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter (subject to Section 10(c)), such
additional terms and conditions, not inconsistent with the provisions of this
Plan, as the Committee shall determine, including terms requiring forfeiture of
Awards in the event of termination of employment by the Participant and terms
permitting a Participant to make elections relating to his or her Award. The
Committee shall retain full power and discretion to accelerate, waive or modify,
at any time, any term or condition of an Award that is not mandatory under this
Plan; provided, however, that the Committee shall not have any discretion to
accelerate, waive or modify any term or condition of an Award that is intended
to qualify as “performance-based compensation” for purposes of section 162(m) of
the Code if such discretion would cause the Award to not so qualify. Except in
cases in which the Committee is authorized to require other forms of
consideration under this Plan, or to the extent other forms of consideration
must be paid to satisfy the requirements of the Delaware General Corporation
Law, no consideration other than services may be required for the grant (but not
the exercise) of any Award.

 

(b) Options. The Committee is authorized to grant Options to Participants on the
following terms and conditions:

 

(i) Exercise Price. Each Option agreement shall state the exercise price per
share of Stock (the “Exercise Price”); provided, however, that the Exercise
Price per share of Stock subject to an Option shall not be less than the greater
of (A) the par value per share of the Stock or (B) 105% of the Fair Market Value
per share of the Stock on the date of grant of the Option.

 

(ii) Time and Method of Exercise. The Committee shall determine the time or
times at which or the circumstances under which an Option may be exercised in
whole or in part (including based on achievement of performance goals and/or
future service requirements), the methods by which such exercise price may be
paid or deemed to be paid, the form of such payment, including without
limitation cash, Stock, other Awards or awards granted under other plans of the
Company or any Subsidiary, or other property (including notes or other
contractual obligations of Participants to make payment on a deferred basis),
and the methods by or forms in which Stock will be delivered or deemed to be
delivered to Participants, including, but not limited to, the delivery of
Restricted Stock subject to Section 6(d). In the case of an exercise whereby the
Exercise Price is paid with Stock, such Stock shall be valued as of the date of
exercise.

 

(iii) ISOs. The terms of any ISO granted under this Plan shall comply in all
respects with the provisions of section 422 of the Code. Anything in this Plan
to the contrary notwithstanding, no term of this Plan

 

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relating to ISOs shall be interpreted, amended or altered, nor shall any
discretion or authority granted under this Plan be exercised, so as to
disqualify either this Plan or any ISO under section 422 of the Code, unless the
Participant has first requested the change that will result in such
disqualification. Notwithstanding the foregoing, the Fair Market Value of shares
of Stock subject to an ISO and the aggregate Fair Market Value of shares of
stock of any parent or Subsidiary corporation (within the meaning of sections
424(e) and (f) of the Code) subject to any other incentive stock option (within
the meaning of section 422 of the Code)) of the Company or a parent or
Subsidiary corporation (within the meaning of sections 424(e) and (f) of the
Code) that first becomes purchasable by a Participant in any calendar year may
not (with respect to that Participant) exceed $100,000, or such other amount as
may be prescribed under section 422 of the Code or applicable regulations or
rulings from time to time. As used in the previous sentence, Fair Market Value
shall be determined as of the date the incentive stock option is granted.
Failure to comply with this provision shall not impair the enforceability or
exercisability of any Option, but shall cause the excess amount of shares to be
reclassified in accordance with the Code.

 

(c) Restricted Stock. The Committee is authorized to grant Restricted Stock to
Participants on the following terms and conditions:

 

(i) Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances (including based on
achievement of performance goals and/or future service requirements), in such
installments or otherwise, as the Committee may determine at the date of grant
or thereafter. Except to the extent restricted under the terms of this Plan and
any Award agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder, including the
right to vote the Restricted Stock and the right to receive dividends thereon
(subject to any mandatory reinvestment or other requirement imposed by the
Committee). During the restricted period applicable to the Restricted Stock, the
Restricted Stock may not be sold, transferred, pledged, hypothecated, margined
or otherwise encumbered by the Participant.

 

(ii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment during the applicable restriction period, Restricted
Stock that is at that time subject to restrictions shall be forfeited and
reacquired by the Company; provided that the Committee may provide, by rule or
regulation or in any Award agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted Stock shall be
waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part the
forfeiture of Restricted Stock.

 

(iii) Certificates for Stock. Restricted Stock granted under this Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant, the
Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.

 

(iv) Dividends and Splits. As a condition to the grant of an Award of Restricted
Stock, the Committee may require or permit a Participant to elect that any cash
dividends paid on a share of Restricted Stock be automatically reinvested in
additional shares of Restricted Stock. Unless otherwise determined by the
Committee, Stock distributed in connection with a Stock split or Stock dividend,
and other property distributed as a dividend, shall be subject to restrictions
and a risk of forfeiture to the same extent as the Restricted Stock with respect
to which such Stock or other property has been distributed.

 

7. Certain Provisions Applicable to Awards.

 

(a) Stand-Alone and Additional Awards. Awards granted under this Plan may, in
the discretion of the Committee, be granted either alone or in addition to any
other Award or any award granted under another plan of the Company, any
Subsidiary, or any business entity to be acquired by the Company or a
Subsidiary, or any other right of a Participant to receive payment from the
Company or any Subsidiary.

 

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(b) Term of Awards. The term of each Award shall be for such period as may be
determined by the Committee; provided that in no event shall the term of any
Option exceed a period of seven years (or such shorter term as may be required
in respect of an ISO under section 422 of the Code).

 

(c) Form and Timing of Payment under Awards; Deferrals. Subject to the terms of
this Plan and any applicable Award agreement, payments to be made by the Company
or a Subsidiary upon the exercise of an Option may be made in such forms as the
Committee shall determine, including without limitation cash, Stock, other
Awards or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Award may be
accelerated, and cash paid in lieu of Stock in connection with such settlement,
in the discretion of the Committee or upon occurrence of one or more specified
events (in addition to a Change in Control). Installment or deferred payments
may be required by the Committee (subject to Section 10(c) of this Plan,
including the consent provisions thereof in the case of any deferral of an
outstanding Award not provided for in the original Award agreement) or permitted
at the election of the Participant on terms and conditions established by the
Committee. Payments may include, without limitation, provisions for the payment
or crediting of reasonable interest on installment or deferred payments. Any
such deferral shall only be allowed as is provided in a separate deferred
compensation plan adopted by the Company. This Plan shall not constitute an
“employee benefit plan” for purposes of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended.

 

(d) Exemptions from Section 16(b) Liability. It is the intent of the Company
that the grant of any Awards to or other transactions by a Participant who is
subject to section 16 of the Exchange Act shall be exempt from section 16
pursuant to an applicable exemption (except for transactions acknowledged in
writing to be non-exempt by such Participant). Accordingly, if any provision of
this Plan or any Award agreement does not comply with the requirements of Rule
16b-3 as then applicable to any such transaction, such provision shall be
construed or deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 so that such Participant shall avoid liability under
section 16(b).

 

(e) Non-Competition Agreement. Each Participant to whom an Award is granted
under this Plan may be required to agree in writing as a condition to the
granting of such Award not to engage in conduct in competition with the Company
or any of its subsidiaries for a period after the termination of such
Participant’s employment with the Company and its Subsidiaries as determined by
the Committee.

 

8. Performance Awards.

 

(a) Performance Conditions. The right of a Participant to receive a grant or
settlement of a Restricted Stock Award, and the timing thereof, may be subject
to such performance conditions as may be specified by the Committee. The
Committee may use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions, and may
exercise its discretion to reduce or increase the amounts payable under a
Restricted Stock Award subject to performance conditions, except as limited
under Section 8(b) in the case of a Performance Award intended to qualify under
section 162(m) of the Code.

 

(b) Performance Awards Granted to Designated Covered Employees. If the Committee
determines that a Performance Award to be granted to an Eligible Person who is
designated by the Committee as likely to be a Covered Employee should qualify as
“performance-based compensation” for purposes of section 162(m) of the Code, the
grant, and/or settlement of such Performance Award may be contingent upon
achievement of pre-established performance goals and other terms set forth in
this Section 8(b).

 

(i) Performance Goals Generally. The performance goals for such Performance
Awards shall consist of one or more business criteria or individual performance
criteria and a targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with this Section 8(b).
Performance goals shall be objective and shall otherwise meet the requirements
of section 162(m) of the Code and regulations thereunder (including Treasury
Regulation §1.162-27 and successor regulations thereto), including the
requirement that the level or levels of performance targeted by the Committee
result

 

7

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in the achievement of performance goals being “substantially uncertain.” The
Committee may determine that such Performance Awards shall be granted and/or
settled upon achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant and/or settlement of
such Performance Awards. Performance goals may differ for Performance Awards
granted to any one Participant or to different Participants.

 

(ii) Business and Individual Performance Criteria

 

(A) Business Criteria. One or more of the following business criteria for the
Company, on a consolidated basis, and/or for specified Subsidiaries or business
or geographical units of the Company (except with respect to the total
stockholder return and earnings per share criteria), shall be used by the
Committee in establishing performance goals for such Performance Awards: (1)
earnings per share; (2) increase in revenues; (3) increase in cash flow; (4)
increase in cash flow return; (5) return on net assets, return on assets, return
on investment, return on capital, or return on equity; (6) economic value added;
(7) operating margin or contribution margin; (8) net income; net income per
share; pretax earnings; pretax earnings before interest, depreciation and
amortization; pretax operating earnings after interest expense and before
incentives, service fees, and extraordinary or special items; or operating
income; (9) total stockholder return; (10) debt reduction; (11) cash flow; or
cash flow per share; and (12) any of the above goals determined on an absolute
or relative basis or as compared to the performance of a published or special
index deemed applicable by the Committee including, but not limited to, the
Standard & Poor’s 500 Stock Index or a group of comparable companies.

 

(B) Individual Performance Criteria. The grant and/or settlement of Performance
Awards may also be contingent upon individual performance goals established by
the Committee. If required for compliance with section 162(m) of the Code, such
criteria shall be approved by the stockholders of the Company.

 

(iii) Performance Period; Timing for Establishing Performance Goals. Achievement
of performance goals in respect of such Performance Awards shall be measured
over a performance period of up to ten years, as specified by the Committee.
Performance goals shall be established not later than 90 days after the
beginning of any performance period applicable to such Performance Awards, or at
such other date as may be required or permitted for “performance-based
compensation” under section 162(m) of the Code.

 

(iv) Performance Award Pool. The Committee may establish a Performance Award
pool, which shall be an unfunded pool, for purposes of measuring performance of
the Company in connection with Performance Awards. The amount of such
Performance Award pool shall be based upon the achievement of a performance goal
or goals based on one or more of the criteria set forth in Section 8(b)(ii)
hereof during the given performance period, as specified by the Committee in
accordance with Section 8(b)(iii) hereof. The Committee may specify the amount
of the Performance Award pool as a percentage of any of such criteria, a
percentage thereof in excess of a threshold amount, or as another amount which
need not bear a strictly mathematical relationship to such criteria.

 

(v) Settlement of Performance Awards; Other Terms. After the end of each
performance period, the Committee shall determine the amount, if any, of (A) the
Performance Award pool, and the maximum amount of potential Performance Award
payable to each Participant in the Performance Award pool, or (B) the amount of
potential Performance Award otherwise payable to each Participant. The Committee
may, in its discretion, reduce the amount of a settlement otherwise to be made
in connection with such Performance Awards, but may not exercise discretion to
increase any such amount payable to a Covered Employee in respect of a
Performance Award subject to this Section 8(b). The Committee shall specify the
circumstances in which such Performance Awards shall be paid or forfeited in the
event of termination of employment by the Participant prior to the end of a
performance period or settlement of a Performance Award.

 

(c) Written Determinations. All determinations by the Committee as to the
establishment of performance goals, the amount of any Performance Award pool or
potential individual Performance Awards and as to the

 

8

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achievement of performance goals relating to Performance Awards under Section
8(b) shall be made in writing in the case of any Award intended to qualify under
section 162(m) of the Code. The Committee may not delegate any responsibility
relating to such Performance Awards.

 

(d) Status of Section 8(b) Awards under Section 162(m) of the Code. It is the
intent of the Company that Performance Awards under Section 8(b) hereof granted
to persons who are designated by the Committee as likely to be Covered Employees
within the meaning of section 162(m) of the Code and regulations thereunder
(including Treasury Regulation §1.162-27 and successor regulations thereto)
shall, if so designated by the Committee, constitute “performance-based
compensation” within the meaning of section 162(m) of the Code and regulations
thereunder. Accordingly, the terms of Sections 8(b), (c), and (d), including the
definitions of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with section 162(m) of the Code and
regulations thereunder. The foregoing notwithstanding, because the Committee
cannot determine with certainty whether a given Participant will be a Covered
Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the
Committee, at the time of grant of Performance Awards who is likely to be a
Covered Employee with respect to that fiscal year. If any provision of this Plan
as in effect on the date of adoption or any agreements relating to Performance
Awards that are designated as intended to comply with section 162(m) of the Code
does not comply or is inconsistent with the requirements of section 162(m) of
the Code or regulations thereunder, such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements.

 

9. Recapitalization or Reorganization.

 

(a) Existence of Plans and Awards. The existence of this Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Board 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 debt or equity securities ahead of or affecting Stock or the rights thereof,
the dissolution or liquidation of the Company or any sale, lease, exchange or
other disposition of all or any part of its assets or business or any other
corporate act or proceeding.

 

(b) Subdivision or Consolidation of Shares. The terms of an Award and the number
of shares of Stock authorized pursuant to Section 4 for issuance under the Plan
shall be subject to adjustment from time to time, in accordance with the
following provisions:

 

(i) If at any time, or from time to time, the Company shall subdivide as a whole
(by reclassification, by a Stock split, by the issuance of a distribution on
Stock payable in Stock, or otherwise as determined in the sole discretion of the
Committee) the number of shares of Stock then outstanding into a greater number
of shares of Stock, then (A) the maximum number of shares of Stock available for
the Plan as provided in Section 4 shall be increased proportionately, and the
kind of shares or other securities available for the Plan shall be appropriately
adjusted, (B) the number of shares of Stock (or other kind of shares or
securities) that may be acquired under any Award shall be increased
proportionately, and (C) the price (including the exercise price) for each share
of Stock (or other kind of shares or securities) subject to then outstanding
Awards shall be reduced proportionately, without changing the aggregate purchase
price or value as to which outstanding Awards remain exercisable or subject to
restrictions.

 

(ii) If at any time, or from time to time, the Company shall consolidate as a
whole (by reclassification, reverse Stock split, or otherwise) the number of
shares of Stock then outstanding into a lesser number of shares of Stock, (A)
the maximum number of shares of Stock available for the Plan as provided in
Section 4 shall be decreased proportionately, and the kind of shares or other
securities available for the Plan shall be appropriately adjusted, (B) the
number of shares of Stock (or other kind of shares or securities) that may be
acquired under any Award shall be decreased proportionately, and (C) the price
(including the exercise price) for each share of Stock (or other kind of shares
or securities) subject to then outstanding Awards shall be increased
proportionately, without changing the aggregate purchase price or value as to
which outstanding Awards remain exercisable or subject to restrictions.

 

9

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(iii) Whenever the number of shares of Stock subject to outstanding Awards and
the price for each share of Stock subject to outstanding Awards are required to
be adjusted as provided in this Section 9(b), the Committee shall promptly
prepare a notice setting forth, in reasonable detail, the event requiring
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the change in price and the number of shares of Stock, other
securities, cash, or property purchasable subject to each Award after giving
effect to the adjustments. The Committee shall promptly give each Participant
such a notice.

 

(iv) Adjustments under Subsections 9(b)(i) and (ii) shall be made by the
Committee, and its determination as to what adjustments shall be made and the
extent thereof shall be final, binding, and conclusive. No fractional interest
shall be issued under the Plan on account of any such adjustments.

 

(c) Recapitalizations and Corporate Changes. If the Company recapitalizes,
reclassifies its capital stock, or otherwise changes its capital structure (a
“recapitalization”), the number and class of shares of Stock covered by an
Option theretofore granted shall be adjusted so that such Option shall
thereafter cover the number and class of shares of capital stock and securities
to which the holder would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to the recapitalization, the holder had
been the holder of record of the number of shares of Stock then covered by such
Option. If (i) the Company merges with or into any entity or is a party to a
consolidation, (ii) the Company sells, leases or exchanges or agrees to sell,
lease or exchange all or substantially all of its assets to any other Person or
entity, (iii) the Company is to be dissolved and liquidated, (iv) any Person or
entity, including a “group” as contemplated by section 13(d)(3) of the Exchange
Act, acquires or gains ownership or control (including, without limitation,
power to vote) of more than 50% of the outstanding shares of the Company’s
voting stock (based upon voting power), or (v) as a result of or in connection
with a contested election of member of the Board (“Directors”), the persons who
were Directors before such election shall cease to constitute a majority of the
Board (each such event is referred to herein as a “Corporate Change”), no later
than (x) ten days after the approval by the stockholders of the Company of such
merger, consolidation, reorganization, sale, lease or exchange of assets or
dissolution or such election of Directors or (y) thirty days after a Corporate
Change of the type described in clause (iv), the Committee, acting in its sole
discretion without the consent or approval of any holder, shall effect one or
more of the following alternatives, which alternatives may vary among individual
holders and which may vary among Options held by any individual holder: (A)
accelerate the time at which Options then outstanding may be exercised so that
such Options may be exercised in full for a limited period of time on or before
a specified date (before or after such Corporate Change) fixed by the Committee,
after which specified date all unexercised Options and all rights of holders
thereunder shall terminate, (B) require the mandatory surrender to the Company
by selected holders of some or all of the outstanding Options held by such
holders (irrespective of whether such Options are then exercisable under the
provisions of the Plan) as of a date, before or after such Corporate Change,
specified by the Committee, in which event the Committee shall thereupon cancel
each such Option and pay or cause to be paid to each holder the securities or
other property (including, without limitation, cash) referred to in clause (D)
below with respect to the shares of Stock subject to such Option in exchange for
payment by such holder of the exercise price(s) under such Option for such
shares, (C) make such adjustments to Options then outstanding as the Committee
deems appropriate to reflect such Corporate Change (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary
to Options then outstanding), or (D) provide that the number and class of shares
of Stock covered by an Option theretofore granted shall be adjusted so that such
Option shall thereafter cover the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which the holder
would have been entitled pursuant to the terms of the agreement of merger,
consolidation or sale of assets and dissolution if, immediately prior to such
merger, consolidation or sale of assets and dissolution, the holder had been the
holder of record of the number of shares of Stock then covered by such Option.

 

(d) Change in Control. Notwithstanding any provision of the Plan to the
contrary, if (1) the Company is involved in a merger or consolidation and,
immediately after giving effect to such merger or consolidation, less than 50%
of the total voting power of the outstanding voting stock of the surviving or
resulting entity and of the parent company of the surviving or resulting entity,
if any, is then “beneficially owned” (within the meaning of Rule 13d-3 under the
Exchange Act) in the aggregate by the stockholders of the Company immediately
prior to

 

10

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such merger or consolidation or (2) any person or entity, including a “group” as
contemplated by section 13(d)(3) of the Exchange Act, acquires or gains
ownership or control (including, without limitation, power to vote) of more than
50% of the outstanding shares of the Company’s voting stock (based upon voting
power) other than as a result of a merger or consolidation in which 50% or more
of the total voting power of the outstanding voting stock of the parent company
of the surviving or resulting entity is beneficially owned in the aggregate by
the stockholders of the Company immediately prior to such merger or
consolidation, then, except as provided in any Option or Restricted Stock Award
agreement, (I) outstanding Options and Restricted Stock Awards shall immediately
vest and become exercisable or satisfiable, as applicable, and (II) any such
Option shall continue to be exercisable for the remainder of the applicable
Option term unless the Committee has determined, in its sole discretion, to take
the action described in clause (A) or (B) above with respect to such Option. The
provisions contained in this Section 7(c) shall not terminate any rights of the
holder to further payments pursuant to any other agreement with the Company
following a Corporate Change.

 

(e) Additional Issuances. Except as hereinbefore expressly provided, the
issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, and in any case whether or not for fair
value, shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to Awards theretofore granted
or the purchase price per share, if applicable.

 

(f) Restricted Stock Awards. Without limiting the applicability of Section 9(d),
with respect to any Restricted Stock Awards outstanding at the time a Corporate
Change occurs, the Committee may, in its discretion and as of a date determined
by the Committee, fully vest any or all Stock awarded to the holder pursuant to
such Restricted Stock Award and then outstanding and, upon such vesting, all
restrictions applicable to such Restricted Stock Award shall terminate as of
such date. Any action by the Committee pursuant to this Section 9(f) may vary
among individual holders and may vary among the Restricted Stock Awards held by
any individual holder.

 

10. General Provisions.

 

(a) Transferability.

 

(i) Permitted Transferees. The Committee may, in its discretion, permit a
Participant to transfer all or any portion of an Option, or authorize all or a
portion of such Options to be granted to an Eligible Person to be on terms which
permit transfer by such Participant; provided that, in either case the
transferee or transferees must be 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, in each case with respect to
the Participant, any Person sharing the Participant’s household (other than a
tenant or employee of the Company), a trust in which these Persons have more
than 50% of the beneficial interest, a foundation in which these Persons (or the
Participant) control the management of assets, and any other entity in which
these Persons (or the Participant) own more than 50% of the voting interests
(collectively, “Permitted Transferees”); provided further that, (A) there may be
no consideration for any such transfer and (B) subsequent transfers of Options
transferred as provided above shall be prohibited except subsequent transfers
back to the original holder of the Option and transfers to other Permitted
Transferees of the original holder. Agreements evidencing Options with respect
to which such transferability is authorized at the time of grant must be
approved by the Committee, and must expressly provide for transferability in a
manner consistent with this Subsection 10(a)(i).

 

(ii) Qualified Domestic Relations Orders. An Option or Restricted Stock Award
may be transferred, to a Permitted Transferee, pursuant to a qualified domestic
relations order entered or approved by a court of competent jurisdiction upon
delivery to the Company of written notice of such transfer and a certified copy
of such order.

 

(iii) Other Transfers. Except as expressly permitted by Subsections 10(a)(i) and
10(a)(ii), Options and Restricted Stock Awards shall not be transferable other
than by will or the laws of descent and distribution.

 

11

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Notwithstanding anything to the contrary in this Section 10, an Incentive Stock
Option shall not be transferable other than by will or the laws of descent and
distribution.

 

(iv) Effect of Transfer. Following the transfer of any Award as contemplated by
Subsections 10(a)(i), 10(a)(ii) and 10(a)(iii), (A) such Award shall continue to
be subject to the same terms and conditions as were applicable immediately prior
to transfer, provided that the term “Participant” shall be deemed to refer to
the Permitted Transferee, the recipient under a qualified domestic relations
order, the estate or heirs of a deceased Participant, or other transferee, as
applicable, to the extent appropriate to enable the Participant to exercise the
transferred Award in accordance with the terms of this Plan and applicable law
and (B) the provisions of the Award relating to exercisability hereof shall
continue to be applied with respect to the original Participant and, following
the occurrence of any such events described therein, the Award shall be
exercisable by the Permitted Transferee, the recipient under a qualified
domestic relations order, the estate or heirs of a deceased Participant, or
other transferee, as applicable, only to the extent and for the periods that
would have been applicable in the absence of the transfer.

 

(v) Procedures and Restrictions. Any Participant desiring to transfer an Award
as permitted under Subsections 10(a)(i), 10(a)(ii) or 10(a)(iii) shall make
application therefor in the manner and time specified by the Committee and shall
comply with such other requirements as the Committee may require to assure
compliance with all applicable securities laws. The Committee shall not give
permission for such a transfer if (A) it would give rise to short-swing
liability under section 16(b) of the Exchange Act or (B) it may not be made in
compliance with all applicable federal, state and foreign securities laws.

 

(vi) Registration. To the extent the issuance to any Permitted Transferee of any
shares of Stock issuable pursuant to Awards transferred as permitted in this
Section 10(a) is not registered pursuant to the effective registration statement
of the Company generally covering the shares to be issued pursuant to this Plan
to initial holders of Awards, the Company shall not have any obligation to
register the issuance of any such shares of Stock to any such transferee.

 

(b) Taxes. The Company and any Subsidiary is authorized to withhold from any
Award granted, or any payment relating to an Award under this Plan, including
from a distribution of Stock, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Award, and
to take such other action as the Committee may deem advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Stock or other property and to make
cash payments in respect thereof in satisfaction of a Participant’s tax
obligations, either on a mandatory or elective basis in the discretion of the
Committee.

 

(c) Changes to this Plan and Awards. The Board may amend, alter, suspend,
discontinue or terminate this Plan or the Committee’s authority to grant Awards
under this Plan without the consent of stockholders or Participants, except that
any amendment or alteration to this Plan, including any increase in any share
limitation, shall be subject to the approval of the Company’s stockholders not
later than the annual meeting next following such Board action if such
stockholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the Stock
may then be listed or quoted, and the Board may otherwise, in its discretion,
determine to submit other such changes to this Plan to stockholders for
approval; provided that, without the consent of an affected Participant, no such
Board action may materially and adversely affect the rights of such Participant
under any previously granted and outstanding Award. The Committee may waive any
conditions or rights under, or amend, alter, suspend, discontinue or terminate
any Award theretofore granted and any Award agreement relating thereto, except
as otherwise provided in this Plan; provided that, without the consent of an
affected Participant, no such Committee action may materially and adversely
affect the rights of such Participant under such Award.

 

(d) Limitation on Rights Conferred Under Plan. Neither this Plan nor any action
taken hereunder shall be construed as (i) giving any Eligible Person or
Participant the right to continue as an Eligible Person or Participant

 

12

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or in the employ or service of the Company or a Subsidiary, (ii) interfering in
any way with the right of the Company or a Subsidiary to terminate any Eligible
Person’s or Participant’s employment or service at any time, (iii) giving an
Eligible Person or Participant any claim to be granted any Award under this Plan
or to be treated uniformly with other Participants and employees, or (iv)
conferring on a Participant any of the rights of a stockholder of the Company
unless and until the Participant is duly issued or transferred shares of Stock
in accordance with the terms of an Award.

 

(e) Unfunded Status of Awards. This Plan is intended to constitute an “unfunded”
plan for certain incentive awards.

 

(f) Nonexclusivity of this Plan. Neither the adoption of this Plan by the Board
nor its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board or a committee
thereof to adopt such other incentive arrangements as it may deem desirable,
including incentive arrangements and awards which do not qualify under section
162(m) of the Code. Nothing contained in this Plan shall be construed to prevent
the Company or any Subsidiary from taking any corporate action which is deemed
by the Company or such Subsidiary to be appropriate or in its best interest,
whether or not such action would have an adverse effect on this Plan or any
Award made under this Plan. No employee, beneficiary or other person shall have
any claim against the Company or any Subsidiary as a result of any such action.

 

(g) Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise
determined by the Committee, in the event of a forfeiture of an Award with
respect to which a Participant paid cash or other consideration to the Company
in exchange for such Award, the Participant shall be repaid the amount of such
cash or other consideration. No fractional shares of Stock shall be issued or
delivered pursuant to this Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

 

(h) Severability. If any provision of this Plan is held to be illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
provisions hereof, but such provision shall be fully severable and the Plan
shall be construed and enforced as if the illegal or invalid provision had never
been included herein. If any of the terms or provisions of this Plan or any
Award agreement conflict with the requirements of Rule 16b-3 (as those terms or
provisions are applied to Eligible Persons who are subject to section 16(b) of
the Exchange Act) or section 422 of the Code (with respect to Incentive Stock
Options), then those conflicting terms or provisions shall be deemed inoperative
to the extent they so conflict with the requirements of Rule 16b-3 (unless the
Board or the Committee, as appropriate, has expressly determined that the Plan
or such Award should not comply with Rule 16b-3) or section 422 of the Code.
With respect to Incentive Stock Options, if this Plan does not contain any
provision required to be included herein under section 422 of the Code, that
provision shall be deemed to be incorporated herein with the same force and
effect as if that provision had been set out at length herein; provided,
further, that, to the extent any Option that is intended to qualify as an
Incentive Stock Option cannot so qualify, that Option (to that extent) shall be
deemed an Option not subject to section 422 of the Code for all purposes of the
Plan.

 

(i) Governing Law. All questions arising with respect to the provisions of the
Plan and Awards shall be determined by application of the laws of the State of
Delaware, without giving effect to any conflict of law provisions thereof,
except to the extent Delaware law is preempted by federal law. The obligation of
the Company to sell and deliver Stock hereunder is subject to applicable federal
and state laws and to the approval of any governmental authority required in
connection with the authorization, issuance, sale, or delivery of such Stock.

 

(j) Conditions to Delivery of Stock. Nothing herein or in any Award granted
hereunder or any Award agreement shall require the Company to issue any shares
with respect to any Award if that issuance would, in the opinion of counsel for
the Company, constitute a violation of the Securities Act or any similar or
superseding

 

13

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statute or statutes, any other applicable statute or regulation, or the rules of
any applicable securities exchange or securities association, as then in effect.
At the time of any exercise of an Option or at the time of any grant of a
Restricted Stock Award, the Company may, as a condition precedent to the
exercise of such Option or vesting of any Restricted Stock Award, require from
the Participant (or in the event of his death, his legal representatives, heirs,
legatees, or distributees) such written representations, if any, concerning the
holder’s intentions with regard to the retention or disposition of the shares of
Stock being acquired pursuant to the Award and such written covenants and
agreements, if any, as to the manner of disposal of such shares as, in the
opinion of counsel to the Company, may be necessary to ensure that any
disposition by that holder (or in the event of the holder’s death, his legal
representatives, heirs, legatees, or distributees) will not involve a violation
of the Securities Act or any similar or superseding statute or statutes, any
other applicable state or federal statute or regulation, or any rule of any
applicable securities exchange or securities association, as then in effect. No
Option shall be exercisable and no restriction on any Restricted Stock Award
shall lapse with respect to a Participant unless and until the holder thereof
shall have paid cash or property to, or performed services for, the Company or
any of its Subsidiaries that the Committee believes is equal to or greater in
value than the par value of the Stock subject to such Award.

 

(k) Plan Effective Date and Stockholder Approval. This Plan was adopted by the
Compensation Committee of the Board on March 30, 2005, subject to approval by
the stockholders of the Company.

 

(l) Term of Plan. No Awards may be granted under the Plan after the fifth
anniversary of the Effective Date. The Plan shall remain in effect until the
later of (i) the date all Options granted under the Plan expire, are exercised
or are forfeited, and (ii) the date all Restricted Stock Awards granted under
the Plan become non-forfeitable or are forfeited.

 

14