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Exhibit 10.12

CONTINENTAL AIRLINES, INC.

INCENTIVE PLAN 2010
(as amended and restated through February 17, 2010)

1. PURPOSE

The purpose of the Continental Airlines, Inc. Incentive Plan 2010 is to provide
a means through which Continental Airlines, Inc. and its subsidiaries may
attract able persons to serve as directors, or to enter or remain in the employ
of the Company (as defined below) or its subsidiaries, and to provide a means
whereby those individuals upon whom the responsibilities of the successful
administration and management of the Company and its subsidiaries rest, and
whose present and potential contributions to the Company and its subsidiaries
are of importance, can acquire and maintain stock ownership, thereby
strengthening their concern for the welfare of the Company and its subsidiaries.
A further purpose of the Plan is to provide such individuals with additional
incentive and reward opportunities designed to enhance the profitable growth of
the Company and its subsidiaries. Accordingly, the Plan provides for granting
Incentive Stock Options, Non-Qualified Options, SARs, Restricted Stock Awards,
Performance Awards, Incentive Awards, and Other Stock Awards, or any combination
of the foregoing, as is best suited to the circumstances of the particular
person.

2. DEFINITIONS

The following definitions (including any plural thereof) shall be applicable
throughout the Plan unless specifically modified by any Section:

(a)           “Administrator” means the Committee or the Chief Executive Officer
of the Company (if the Chief Executive Officer is a Director), subject to the
provisions of Section 4(a) of the Plan.

(b)           “Award” means, individually or collectively, any Option, SAR,
Restricted Stock Award, Performance Award, Incentive Award, or Other Stock
Award.

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

(d)           “Change in Control” shall have the meaning assigned to such term
in Section 12(e) of the Plan.

(e)           “Code” means the Internal Revenue Code of 1986, as amended from
time to time. Reference in the Plan to any section of the Code shall be deemed
to include any amendments or successor provisions to such section and any
regulations promulgated under such section.

(f)           “Committee” means a committee of the Board comprised solely of two
or more outside Directors (within the meaning of the term “outside directors” as
used in section 162(m) of the Code and applicable interpretive authority
thereunder and within the meaning of “Non-Employee Director” as defined in Rule
16b-3). Such committee shall be the Human Resources Committee of the Board
unless and until the Board designates another committee of the Board to serve as
the Committee.

(g)           “Common Stock” means the Class B common stock, $.01 par value, of
the Company, or any security into which such common stock may be changed by
reason of any transaction or event of the type described in Section 12 of the
Plan.

(h)           “Company” shall mean Continental Airlines, Inc., a Delaware
corporation, or any successor thereto.

(i)           “Director” means an individual who is a member of the Board.

(j)           “Disability” means, with respect to any person, such person’s
disability entitling him or her to benefits under the Company’s group long-term
disability plan; provided, however, that if such person is not eligible to
participate in such plan, then such person shall be considered to have incurred
a “Disability” if and when the Administrator determines in its discretion that
such person has become incapacitated for a period of at least 180 days by
accident, sickness, or other circumstance which renders such person mentally or
physically incapable of performing the material duties and services required of
him or her in his or her employment on a full-time basis during such period.

(k)           “employee” means any person (which may include a Director) in an
employment relationship with the Company or any parent corporation (as defined
in section 424 of the Code) or any subsidiary.

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

(m)           “Grant Document” means the document or documents, which may be in
electronic format, evidencing an Award under the Plan, which may be either an
agreement between the Company and the Holder as to the Award (with any
amendments thereto) or a notice of grant of the Award from the Company to the
Holder (including any attached statement of the terms and conditions of the
Award and any modifications thereto made in accordance with the Plan).
References in the Plan to terms to be included in a Grant Document may
alternatively be included in a program adopted by the Committee pursuant to the
Plan to implement the Plan provisions.

(n)           “Holder” means an employee or a Director who has been granted an
Award.

(o)           “Incentive Award” means an Award granted under Section 10 of the
Plan.

(p)           “Incentive Stock Option” means an incentive stock option within
the meaning of section 422 of the Code.

(q)           “Market Value per Share” means, as of any specified date, the
closing sale price of the Common Stock on that date (or, if there are no sales
on that date, the last preceding date on which there was a sale) in the
principal securities market in which the Common Stock is then traded. If the
Common Stock is not publicly traded at the time a determination of “Market Value
per Share” is required to be made hereunder, the determination of such amount
shall be made by the Administrator in such manner as it deems appropriate and is
consistent with the requirements of section 409A of the Code.

(r)           “Non-Qualified Option” means an Option that is not an Incentive
Stock Option.

(s)           “Option” means an Award granted under Section 7 of the Plan and
includes both Non-Qualified Options and Incentive Stock Options to purchase
Common Stock.

(t)           “Other Stock Award” means an Award granted under Section 11 of the
Plan.

(u)           “Performance Award” means an Award granted under Section 9 of the
Plan.

(v)           “Performance Measure” means a performance measure established by
the Administrator that may be absolute, relative to one or more other companies,
relative to one or more indexes, or measured by reference to the Company alone
or the Company together with one or more of its subsidiaries.  In addition, a
Performance Measure may be subject to adjustment by the Administrator for
changes in accounting principles, to satisfy regulatory requirements, and other
specified significant extraordinary items or events.  A Performance Measure may
be based upon any of the following:

(i)  
the price of a share of Common Stock,

 
(ii)
the Company’s earnings per share,

 
(iii)
the Company’s market share or the market share of a business unit of the Company
designated by the Administrator,

 
(iv)
the Company’s sales or the sales of a business unit of the Company designated by
the Administrator,

 
(v)
operating income or operating income margin of the Company or a business unit of
the Company,

 
(vi)
any operational or financial performance measure or metric with respect to the
Company or any business unit or operational level within the Company,

 
(vii)
earnings or earnings margin before or after interest, taxes, depreciation,
amortization and/or aircraft rent of the Company or any business unit of the
Company designated by the Administrator,

 
(viii)
net income or net income margin (before or after taxes) of the Company or any
business unit of the Company designated by the Administrator,

 
(ix)
return on capital, assets, or stockholders’ equity achieved by the Company,

(x)  
cash flow or return on investment of the Company or any business unit of the
Company designated by the Administrator,

(xi)  
maintenance or achievement of a specified level of cash, cash equivalents and
short-term investments (determined with or without regard to restricted cash,
cash equivalents and short-term investments),

 
(xii)
total stockholders’ return, or

 
(xiii)
a combination of any of the foregoing, including any average, weighted average,
minimum, hurdle, rate of increase or other measure of any or any combination
thereof.

(w)           “Personal Representative” means the person who upon the death,
Disability, or incompetency of a Holder shall have acquired, by will or by the
laws of descent and distribution or by other legal proceedings, the right to
exercise an Option or SAR or the right to any Restricted Stock Award,
Performance Award, Incentive Award, or Other Stock Award theretofore granted or
made to such Holder.

(x)           “Plan” means the Continental Airlines, Inc. Incentive Plan 2010,
as amended from time to time.

(y)           “Restricted Stock” means shares of Common Stock granted pursuant
to a Restricted Stock Award as to which neither the substantial risk of
forfeiture nor the restriction on transfer referred to in Section 8 of the Plan
has expired.

(z)           “Restricted Stock Award” means an Award of Restricted Stock
granted under Section 8 of the Plan.

(aa)           “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act,
as such rule may be amended from time to time, and any successor rule,
regulation or statute fulfilling the same or similar function.

(bb)           “SAR” means a stock appreciation right granted under Section 7 of
the Plan, and may be granted in connection with an Option or independent of an
Option.

(cc)           “subsidiary” means any entity (other than the Company) with
respect to which the Company, directly or indirectly through one or more other
entities, owns equity interests possessing 50 percent or more of the total
combined voting power of all equity interests of such entity (excluding voting
power that arises only upon the occurrence of one or more specified events).

3. EFFECTIVE DATE AND DURATION OF THE PLAN

The Plan became effective on the date of its adoption by the Board (December 1,
2009), subject to approval by the stockholders of the Company at the Company’s
2010 annual meeting of stockholders.  Notwithstanding any provision of the Plan
or in any Grant Document, no Option or SAR shall be exercisable, no Restricted
Stock Award or Other Stock Award shall be granted, and no Award shall vest or be
payable in cash or settled in Common Stock prior to such stockholder approval.
No further Awards may be granted under the Plan after 10 years from the date of
the adoption of the Plan by the Board.  The Plan shall remain in effect (for the
purpose of governing outstanding Awards) until all Options and SARs granted
under the Plan have been exercised or expired, all restrictions imposed upon
Restricted Stock Awards granted under the Plan have been eliminated or the
Restricted Stock Awards have been forfeited, and all Performance Awards,
Incentive Awards and Other Stock Awards have been satisfied or have terminated.

4. ADMINISTRATION

(a)           Administrator. The Plan shall be administered by the
Administrator, so that (i) Awards made to, and the administration (or
interpretation of any provision) of the Plan as it relates to, any person who is
subject to section 16 of the Exchange Act, shall be made or effected by the
Committee, and (ii) Awards made to, and the administration (or interpretation of
any provision) of the Plan as it relates to, any person who is not subject to
section 16 of the Exchange Act, shall be made or effected by the Chief Executive
Officer of the Company (or, if the Chief Executive Officer is not a Director,
the Committee), unless the Plan specifies that the Committee shall take specific
action (in which case such action may only be taken by the Committee) or the
Committee (as to any Award described in this clause (ii) or the administration
or interpretation of any specific provision of the Plan) specifies that it shall
serve as Administrator.  Notwithstanding the foregoing, the Committee may from
time to time in its discretion put any conditions and restrictions on the powers
that may be exercised by the Chief Executive Officer of the Company in his or
her capacity as Administrator.

(b)           Powers. Subject to the express provisions of the Plan, the
Administrator shall have authority, in its discretion, to determine which
employees or Directors shall receive an Award, the time or times when such Award
shall be granted, the type of Award that shall be granted, the number of shares
to be subject to each Option, Restricted Stock Award, Other Stock Award, or SAR,
and the number of shares to be subject to or the value of each Performance Award
or Incentive Award. In making such determinations, the Administrator shall take
into account the nature of the services rendered by the respective employees or
Directors, their present and potential contribution to the Company’s success,
and such other factors as the Administrator in its sole discretion shall deem
relevant.

(c)           Additional Powers. The Administrator shall have such additional
powers as are delegated to it by the other provisions of the Plan. Subject to
the express provisions of the Plan, this shall include the power to construe the
Plan and the respective agreements executed hereunder, to prescribe rules and
regulations relating to the Plan, and to determine the terms, restrictions, and
provisions of the Grant Documents, including such terms, restrictions, and
provisions as shall be requisite in the judgment of the Administrator to cause
designated Options to qualify as Incentive Stock Options, and to make all other
determinations necessary or advisable for administering the Plan. The
Administrator may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Grant Document relating to an Award in the
manner and to the extent it shall deem expedient to carry the Plan or any such
Grant Document into effect. All determinations and decisions of the
Administrator on the matters referred to in this Section 4 and in construing the
provisions of the Plan shall be conclusive; provided, however, that in the event
of any conflict in any such determination as between the Committee and the Chief
Executive Officer of the Company, each acting in capacity as Administrator of
the Plan, the determination of the Committee shall be conclusive.

(d)           Forfeiture in Certain Circumstances (“Clawback”).  The Committee
may terminate an Award if it determines that the Holder of such Award has
engaged in material misconduct. Material misconduct includes conduct adversely
affecting the Company’s reputation, financial condition, results of operations
or prospects, or which constitutes fraud or theft of Company assets, and such
other conduct as may be set forth in a Grant Document.  If such material
misconduct results, directly or indirectly, in any error in financial
information used in the determination of compensation paid to the Award Holder
and the effect of such error is to increase the payment amount pursuant to an
Award, the Committee also may require the Holder to reimburse the Company for
all or a portion of the compensation provided to such Holder in connection with
any such Award.  In addition, if there is a material restatement of Company’s
financial statements that affects the financial information used in the
determination of compensation paid to the Award Holder, then the Committee may
take such action, in its sole discretion, as it deems necessary to adjust such
compensation.

5. SHARES SUBJECT TO THE PLAN, AWARD LIMITS,
AND GRANT OF AWARDS

(a)           Shares Subject to the Plan and Award Limits. Subject to adjustment
in the same manner as provided in Section 12 with respect to shares of Common
Stock subject to Options then outstanding, the aggregate maximum number of
shares of Common Stock that may be issued under the Plan, and the aggregate
maximum number of shares of Common Stock that may be issued under the Plan
through Incentive Stock Options, shall not exceed 3,750,000 shares. To the
extent that an Award lapses, the Holder’s rights to an Award terminate, shares
issued under an Award are forfeited, or an Award is paid in cash such that all
or some of the shares of Common Stock covered by the Award are not issued to the
Holder pursuant to the Award, then any such forfeited or unissued shares of
Common Stock then subject to such Award shall not be deemed to have been issued
under the Plan (including for purposes of the limitations set forth in
subparagraphs (i) thru (v) and (d)(v) below) and shall be added back to the
number of shares available for issuance under the Plan (provided the grant of
such Award resulted in a reduction in such number) and shall be available for
the grant of an Award under the Plan. Notwithstanding the foregoing, the
following shares of Common Stock may not again be made available for issuance
pursuant to an Award under the Plan: (A) shares of Common Stock not issued or
delivered as a result of the net settlement of an outstanding Award, or (B)
shares of Common Stock used to pay the exercise price or withholding taxes
related to an outstanding Award. Further, if any shares of Common Stock are
purchased by the Company on the open market with the proceeds of an Option
exercise, such purchase shall not result in any increase in the number of shares
available for issuance under the Plan. Notwithstanding any provision in the Plan
to the contrary,

 
(i)
the aggregate maximum number of shares of Common Stock that may be subject to

 
(A)
Options, SARs, Restricted Stock Awards, and Other Stock Awards, and

 
(B)
Incentive Awards and Performance Awards that must be settled in shares of Common
Stock

granted to any one individual during the term of the Plan may not exceed 50% of
the aggregate maximum number of shares of Common Stock that may be issued under
the Plan (as adjusted from time to time in accordance with the provisions of the
Plan); and provided that any Performance Awards that must be settled in shares
of Common Stock shall be measured for purposes of this limitation based on the
maximum award level at the date of grant unless and until the settlement of such
Performance Awards, at which point the settlement amount shall be taken into
account instead of the maximum amount underlying such Performance Award at
grant, and

 
(ii)
the aggregate maximum number of shares of Common Stock that may be subject to

 
(A)
Options, SARs, Restricted Stock Awards, and Other Stock Awards, and

 
(B)
Incentive Awards and Performance Awards that must be settled in shares of Common
Stock

granted to non-employee Directors during the term of the Plan may not exceed
500,000 shares (subject to adjustment in the same manner as provided in Section
12 with respect to shares of Common Stock subject to Options then outstanding);
and provided that any Performance Awards that must be settled in shares of
Common Stock shall be measured for purposes of this limitation based on the
maximum award level at the date of grant unless and until the settlement of such
Performance Awards, at which point the settlement amount shall be taken into
account instead of the maximum amount underlying such Performance Award at
grant, and

 
(iii)
the aggregate maximum number of shares of Common Stock that may be issued as
Restricted Stock Awards or Other Stock Awards or in settlement of Incentive
Awards or Performance Awards during the term of the Plan may not exceed
1,000,000 shares (subject to adjustment in the same manner as provided in
Section 12 with respect to shares of Common Stock subject to Options then
outstanding and provided that shares issued under such Awards that are forfeited
back to the Company shall again be available for issuance within such limit),

 
(iv)
the maximum amount of compensation that may be paid under all Performance Awards
that may be settled in cash (including the fair market value (determined based
upon Market Value per Share) of any shares of Common Stock paid in satisfaction
of such Performance Awards) granted to any one individual during any calendar
year may not exceed $20 million, and any payment due with respect to a
Performance Award shall be paid no later than 10 years after the date of grant
of such Performance Award, and

 
(v)
the aggregate maximum number of shares of Common Stock that may be subject to

 
(A)
Options, SARs, Restricted Stock Awards, and Other Stock Awards, and

 
(B)
Incentive Awards and Performance Awards that must be settled in shares of Common
Stock

granted during the term of the Plan and that do not contain the minimum
exercisability or vesting requirements as set forth in paragraphs (d) below may
not exceed 5% of the aggregate maximum number of shares of Common Stock that may
be issued under the Plan (subject to adjustment in the same manner as provided
in Section 12).

The limitations set forth in clauses (i) and (iv) of the preceding sentence
shall be applied in a manner that will permit Awards that are intended to
provide “performance-based” compensation for purposes of section 162(m) of the
Code to satisfy the requirements of such section, including, without limitation,
counting against such maximum number of shares, to the extent required under
section 162(m) of the Code and applicable interpretive authority thereunder, any
shares subject to Options or SARs granted to employees that are canceled or
repriced.

(b)           Grant of Awards. The Administrator may from time to time grant
Awards to one or more employees or Directors determined by it to be eligible for
participation in the Plan in accordance with the terms of the Plan.

(c)           Stock Offered. Subject to the limitations set forth in Section
5(a) above, the stock to be offered pursuant to an Award may be authorized but
unissued Common Stock or Common Stock previously issued and outstanding and
reacquired by the Company. Any of such shares that remain unissued and that are
not subject to outstanding Awards at the termination of the Plan shall cease to
be subject to the Plan but, until termination of the Plan, the Company shall at
all times make available a sufficient number of shares to meet the requirements
of the Plan. The shares of Common Stock to be issued pursuant to any Award may
be represented by physical stock certificates or may be uncertificated.
Notwithstanding references in the Plan to certificates, the Company may deliver
uncertificated shares of Common Stock in connection with any Award. No
fractional shares of Common Stock shall be delivered, nor shall any cash in lieu
of fractional shares be paid.

(d)           Minimum Exercisability or Vesting Requirements.

(i)  
Time Vested Awards.  Awards granted to employees that have a condition to
exercise or vesting related solely to the continued employment of the employee
may not be exercisable in full, and any applicable vesting conditions shall not
be released, in less than three years from the date of grant (but pro rata
exercisability and release of any applicable vesting conditions may be permitted
over such time); provided that if an Award is granted with conditions that
relate to both time and Performance Measures, the Award may vest upon the
earlier satisfaction of the Performance Measures, subject to subparagraph (ii)
below.

(ii)  
Performance Based Awards.  Awards granted to employees that have a condition to
exercise or vesting based on the achievement of Performance Measures shall have
a minimum waiting period for exercise or vesting of one year from the date of
grant.

(iii)  
Awards to non-employee Directors.  Awards granted to non-employee Directors
pursuant to the Company’s non-employee Director compensation program, which may
be amended from time to time, need not be subject to the requirements set forth
in subparagraphs (i) and (ii) above and may vest in full on the date of
grant.  However, discretionary Awards to non-employee Directors shall be subject
to the requirements set forth in subparagraphs (i) and (ii) above.

(iv)  
Permitted Exceptions.  The exercisability and vesting requirements set forth in
subparagraphs (i), (ii), and (iii) above shall not be applicable to (A) grants
to new hires in lieu of cash compensation to replace forfeited awards from a
prior employer, including Awards described in Section 7(h), (B) acceleration of
exercisability or vesting upon the death, Disability or retirement of the Holder
and upon certain other terminations of employment as provided pursuant to the
terms of any employment agreement with a Holder entered into with the Company
prior to the Effective Date of the Plan, (C) acceleration of exercisability or
vesting upon a Change in Control or Corporate Change, and (D) grants of Awards
made in payment of other earned cash-based incentive compensation.

(v)  
Administrator Discretion.  The Administrator shall have the discretion to grant
an Award that does not contain the minimum exercisability and vesting
requirements as set forth in this paragraph (d) subject to the limitation set
forth in paragraph (a)(v) above.

 
 

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6. ELIGIBILITY

Awards may be granted only to persons who, at the time of grant, are employees
or Directors. An Award may be granted on more than one occasion to the same
person and, subject to the limitations set forth in the Plan, Awards may include
an Incentive Stock Option, a Non-Qualified Option, an SAR, a Restricted Stock
Award, a Performance Award, an Incentive Award, an Other Stock Award, or any
combination thereof.

7. OPTIONS AND SARS

(a)           Option Period. The term of each Option shall be as specified by
the Administrator at the date of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date of grant.

(b)           Exercise of Option. Subject to Section 5(d), an Option shall be
exercisable in whole or in such installments and at such times as determined by
the Administrator.

(c)           Special Limitations on Incentive Stock Options. An Incentive Stock
Option may be granted only to an individual who is employed by the Company or
any parent or subsidiary corporation (as defined in section 424 of the Code) of
the Company at the time the Option is granted. To the extent that the aggregate
fair market value (determined at the time the respective Incentive Stock Option
is granted) of stock with respect to which Incentive Stock Options are
exercisable for the first time by an individual during any calendar year under
all incentive stock option plans of the Company and its parent and subsidiary
corporations exceeds $100,000, such Incentive Stock Options shall be treated as
Non-Qualified Options. The Administrator shall determine, in accordance with
applicable provisions of the Code, Treasury regulations and other administrative
pronouncements, which of a Holder’s Incentive Stock Options will not constitute
Incentive Stock Options because of such limitation and shall notify the Holder
of such determination as soon as practicable after such determination. No
Incentive Stock Option shall be granted to an individual if, at the time the
Option is granted, such individual owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of its
parent or subsidiary corporation, within the meaning of section 422(b)(6) of the
Code, unless (i) at the time such Option is granted the option price is at least
110% of the Market Value per Share of the Common Stock subject to the Option and
(ii) such Option by its terms is not exercisable after the expiration of five
years from the date of grant. Except as otherwise provided in section 421 or 422
of the Code, an Incentive Stock Option shall not be transferable otherwise than
by will or the laws of descent and distribution, and shall be exercisable during
the Holder’s lifetime only by such Holder or the Holder’s guardian or Personal
Representative.

(d)           Option Grant Document. Each Option shall be evidenced by a Grant
Document in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Administrator from time to time shall approve,
including, without limitation, provisions to qualify an Option as an Incentive
Stock Option under section 422 of the Code. Each Option Grant Document shall
specify the effect of termination of employment or membership on the Board, as
applicable, on the exercisability of the Option. The terms and conditions of the
respective Option Grant Documents need not be identical.

(e)           Option Price and Payment. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be set forth in the
Option Grant Document and shall be determined by the Administrator but, subject
to adjustment as provided in Section 12, such purchase price shall not be less
than the Market Value per Share of a share of Common Stock on the date such
Option is granted. The Option or portion thereof may be exercised by delivery of
an irrevocable notice of exercise, which may be in electronic format, to the
Company or to a third party administrator designated by the Company. To the
extent permitted by the Administrator, the Holder of an Option may pay the
Option purchase price, in whole or in part, by delivery of a number of shares of
Common Stock (plus cash if necessary) having a fair market value (determined
based upon the Market Value per Share) equal to the Option purchase price of the
portion of the Option being exercised. To the extent permitted by the
Administrator and applicable law, the Holder also may exercise the Option
through a “cashless exercise” of the Option pursuant to procedures satisfactory
to the Administrator with respect thereto. Separate stock certificates shall be
issued by the Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to the exercise of
any Non-Qualified Option.

(f)           Stockholder Rights and Privileges. The Holder of an Option or an
SAR shall be entitled to all the rights and privileges of a stockholder only
with respect to such shares of Common Stock as have been acquired under the
Option or the SAR and for which certificates representing such Common Stock have
been registered in the Holder’s name.

(g)           SARs. A SAR provides the Holder with a right to acquire, upon
exercise of the right, Common Stock and/or, in the sole discretion of the
Administrator, cash having an aggregate value equal to the then excess of the
Market Value per Share of the shares with respect to which the right is
exercised over the exercise price therefor. The Administrator shall retain final
authority to determine whether a Holder shall be permitted, and to approve any
election by a Holder, to receive cash in full or partial settlement of a SAR.
The Administrator (concurrently with the grant of an Option or subsequent to
such grant) may, in its sole discretion, grant SARs to any Holder of an Option.
In the case of any SAR that is granted in connection with an Incentive Stock
Option, such SAR shall be exercisable only when the Market Value per Share of
the Common Stock exceeds the price specified therefor in the Option or portion
thereof to be surrendered. In the case of any SAR that is granted in connection
with an Option, the exercise of the SAR shall result in the surrender of the
right to purchase a number of shares under the Option equal to the number of
shares with respect to which the SAR is exercised (and vice versa). In addition,
a SAR may be granted independently of an Option pursuant to a Grant Document in
such form and containing such provisions not inconsistent with the provisions of
the Plan as the Administrator from time to time shall approve; provided however
that (i) the exercise price per share of Common Stock subject to the SAR shall
be determined by the Administrator but, subject to adjustment as provided in
Section 12, such exercise price shall not be less than the Market Value per
Share of a share of Common Stock on the date such SAR is granted, (ii) the term
of the SAR shall be as specified by the Administrator at the date of grant, but
in no event shall an SAR be exercisable after the expiration of 10 years from
the date of grant, and (iii) subject to Section 5(d), the SAR shall be
exercisable in whole or in such installments and at such times as determined by
the Administrator. Additional terms and conditions governing any SAR may from
time to time be prescribed by the Administrator in its sole discretion.

(h)           Options and SARs in Substitution for Stock Options Granted by
Other Entities. Options and SARs may be granted under the Plan from time to time
in substitution for stock options and such rights held by individuals providing
service to corporations or other entities who become employees or Directors as a
result of a merger or consolidation or other business combination of the
employing corporation with the Company or any subsidiary.

(i)           Repricing. Without the affirmative vote of holders of a majority
of the shares of Common Stock cast in person or by proxy at a meeting of the
stockholders of the Company at which a quorum representing a majority of all
outstanding shares is present or represented by proxy, except for adjustments
authorized under Section 12, neither the Board nor the Administrator shall
approve either (i) the cancellation of outstanding Options or SARs and the grant
in substitution therefore of any new Awards under the Plan having a lower option
or exercise price than that of the cancelled Options or SARs specified on the
original date of grant, or (ii) the amendment of outstanding Options or SARs to
reduce the option or exercise price thereof below the price specified for such
Award on the original date of grant.  This Section 7(i) shall not be construed
to apply to “issuing or assuming a stock option in a transaction to which
section 424(a) applies,” within the meaning of section 424 of the Code.

8. RESTRICTED STOCK AWARDS

(a)           Stockholder Rights and Privileges. Unless provided otherwise in
the related Grant Document, each grant of Restricted Stock pursuant to a
Restricted Stock Award will constitute an immediate transfer to the Holder of
all stockholder rights and privileges with respect to the shares of Common Stock
subject to the Restricted Stock Award, including record and beneficial
ownership, the right to receive dividends and all voting and other ownership
rights, except that (i) the Holder shall not be entitled to delivery of the
stock certificate until the Forfeiture Restrictions (defined in paragraph (b)
below) have expired, (ii) the Company shall retain custody of the stock until
the Forfeiture Restrictions have expired, (iii) the Holder may not sell,
transfer, pledge, exchange, hypothecate, or otherwise dispose of the stock
underlying the Restricted Stock Award until the Forfeiture Restrictions have
expired, (iv) a breach of the terms and conditions established by the Committee
pursuant to the applicable Grant Document shall cause a forfeiture of the
Restricted Stock Award, and (v) with respect to the payment of any dividend with
respect to shares of Common Stock subject to the applicable Grant Document
directly to the Holder, each such dividend shall be paid no later than the end
of the calendar year in which the dividends are paid to stockholders of such
class of shares or, if later, the fifteenth day of the third month following the
date the dividends are paid to stockholders of such class of shares.  At the
time of such Award, the Committee may, in its sole discretion, prescribe
additional terms, conditions, or restrictions relating to the Restricted Stock
Award, including, but not limited to, rules pertaining to the termination of
employment or service (by retirement, Disability, death, or otherwise) of a
Holder prior to expiration of the Forfeitures Restrictions. Such additional
terms, conditions, or restrictions shall be set forth in the Grant Document
related to such Award.

(b)           Substantial Risk of Forfeiture and Restrictions on Transfer.
Shares of Common Stock that are the subject of a Restricted Stock Award shall be
subject to one or more restrictions determined by the Administrator in its sole
discretion, including, without limitation, a restriction that constitutes a
“substantial risk of forfeiture” within the meaning of section 83 of the Code
and applicable interpretive authority thereunder (the “Forfeiture
Restrictions”).  Each Restricted Stock Award may have different Forfeiture
Restrictions, in the discretion of the Administrator. The Administrator may
provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of
one or more Performance Measures, (ii) the Holder’s continued employment with
the Company or a subsidiary or continued service as a Director for a specified
period of time, (iii) the occurrence of any event or the satisfaction of any
other condition specified by the Administrator in its sole discretion, or (iv) a
combination of any of the foregoing.  During such period or periods during which
such Forfeiture Restrictions are to continue and subject to the provisions of
Section 5(d), the transferability of the Restricted Stock subject to such
restrictions will be prohibited or restricted in a manner and to the extent
prescribed by the Administrator at the date of grant.

(c)           Payment for Restricted Stock.  The Administrator shall determine
the amount and form of any payment for Common Stock received pursuant to a
Restricted Stock Award (which payment may be an amount that is less than the
Market Value per Share on the date of grant); provided, however, that in the
absence of such a determination, a Holder shall not be required to make any
payment for Common Stock received pursuant to a Restricted Stock Award, except
to the extent otherwise required by law.
 
(d)           Restricted Stock Grant Document. Each grant of Restricted Stock
shall be evidenced by a Grant Document in such form and containing such
provisions not inconsistent with the provisions of the Plan as the Administrator
from time to time shall approve. The terms and conditions of the respective
Restricted Stock Grant Documents need not be identical.

9. PERFORMANCE AWARDS

(a)           Performance Period.  The Administrator shall establish, with
respect to and at the time of each Performance Award, the number of shares of
Common Stock subject to, or the maximum value of, the Performance Award and a
performance period over which the performance applicable to the Performance
Award shall be measured. A Performance Award may be granted in the form of a
“restricted stock unit” or “RSU” award or such other form as determined by the
Administrator from time to time.

(b)           Performance Measures.  A Performance Award shall be awarded to a
Holder contingent upon future performance of the Company or any subsidiary,
division, or department thereof during the performance period. To the extent
that compliance with section 162(m) of the Code is intended with respect to an
Award, the Committee shall establish the Performance Measures applicable to such
Performance Award within the applicable time period permitted by section 162(m)
of the Code, subject to adjustment thereto as may be determined by the
Administrator for changes in accounting principles and other specified
significant extraordinary items or events as permitted by section 162(m) of the
Code. The Administrator, in its sole discretion, may provide for an adjustable
(i) number of shares of Common Stock subject to the Performance Award or (ii)
value of the Performance Award based upon the level of achievement of
Performance Measures.

(c)           Awards Criteria.  In determining the value of Performance Awards,
the Administrator may take into account a Holder’s responsibility level,
performance, potential, other Awards, and such other considerations as it deems
appropriate.  The Administrator, in its sole discretion, may provide for a
reduction in the number of shares of Common Stock subject to the Performance
Award or the value of a Holder’s Performance Award during the performance
period, if permitted by the applicable Grant Document.

(d)           Payment.  Following the end of the performance period for a
Performance Award (or at such other time as the applicable Grant Document may
provide, subject to Section 5(d)), the Holder of a Performance Award shall be
entitled to receive payment of an amount not exceeding the number of shares of
Common Stock subject to, or the maximum value of, the Performance Award, based
on the achievement of the Performance Measures for such performance period, as
determined by the Administrator and certified by the Committee if and as
required by section 162(m) of the Code. Payment of a Performance Award may be
made in cash, Common Stock (valued at the Market Value per Share), or a
combination thereof, as determined by the Administrator.  Payment shall be made
in a lump sum or in installments as prescribed by the Committee. If a
Performance Award covering shares of Common Stock is to be paid in cash, such
payment shall be based on the Market Value per Share on the payment date or such
other date, or averaged over such period, as may be specified by the Committee
in the applicable Grant Document.

(e)           Termination of Award.  A Performance Award shall terminate if the
Holder does not remain continuously in the employ (or in service as a Director)
of the Company or a subsidiary at all times during the applicable performance
period, except as otherwise set forth in the applicable Grant Document or
determined by the Administrator.

(f)           Performance Award Grant Document.  Each grant of a Performance
Award shall be evidenced by a Grant Document in such form and containing such
provisions not inconsistent with the provisions of the Plan as the Administrator
from time to time shall approve.  The terms and conditions of the respective
Performance Award Grant Documents need not be identical.

 
10.  INCENTIVE AWARDS

(a)           Incentive Awards.  Incentive Awards are rights to receive shares
of Common Stock (or the Market Value per Share thereof), or rights to receive an
amount equal to any appreciation or increase in the Market Value per Share of
Common Stock over a specified period of time, which vest over a period of time,
subject to Section 5(d), as established by the Administrator, without
satisfaction of any performance criteria or objectives.  The Administrator may,
in its discretion, require payment or other conditions of the Holder respecting
any Incentive Award.  An Incentive Award may be granted in the form of a
“phantom stock” award or “restricted stock unit” or “RSU” award or such other
form as determined by the Administrator from time to time.

(b)           Award Period.  The Administrator shall establish, with respect to
and at the time of each Incentive Award, a period over which the Award shall
vest with respect to the Holder.

(c)           Awards Criteria.  In determining the value of Incentive Awards,
the Administrator shall take into account a Holder’s responsibility level,
performance, potential, other Awards, and such other considerations as it deems
appropriate.

(d)           Payment.  Following the end of the vesting period for an Incentive
Award (or at such other time as the applicable Grant Document may provide), the
Holder of an Incentive Award shall be entitled to receive payment of an amount,
not exceeding the maximum value of the Incentive Award, based on the then vested
value of the Award.  Payment of an Incentive Award may be made in cash, Common
Stock (valued at the Market Value per Share), or a combination thereof as
determined by the Administrator.  Payment shall be made in a lump sum, except as
otherwise set forth in the applicable Grant Document. Cash dividend equivalents
may be paid during or after the vesting period with respect to an Incentive
Award, as determined by the Administrator.

(e)           Termination of Award.  An Incentive Award shall terminate if the
Holder does not remain continuously in the employ (or in service as a Director)
of the Company or a subsidiary at all times during the applicable vesting
period, except as otherwise set forth in the applicable Grant Document or
determined by the Administrator.

(f)           Incentive Award Grant Document.  Each grant of an Incentive Award
shall be evidenced by a Grant Document in such form and containing such
provisions not inconsistent with the provisions of the Plan as the Administrator
from time to time shall approve.  The terms and conditions of the respective
Incentive Award Grant Documents need not be identical.

11. OTHER STOCK AWARDS
 
(a)           Other Stock Awards.  Each Other Stock Award granted to a Holder
shall constitute a transfer of unrestricted shares of Common Stock on such terms
and conditions as the Administrator shall determine.  Other Stock Awards shall
be made in shares of Common Stock and, subject to Section 5(d), need not be
subject to performance criteria or objectives or to forfeiture.  The purchase
price, if any, for shares of Common Stock issued in connection with an Other
Stock Award shall be determined by the Administrator in its sole discretion.

(b)           Other Stock Award Grant Document.  Each grant of an Other Stock
Award shall be evidenced by a Grant Document in such form and containing such
provisions not inconsistent with the provisions of the Plan as the Administrator
from time to time shall approve.  The terms and conditions of the respective
Other Stock Award Grant Documents need not be identical.

12. RECAPITALIZATION, REORGANIZATION AND OTHER CHANGES

(a)           No Effect on Right or Power. The existence of the 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 or any subsidiary to make or authorize
any adjustment, recapitalization, reorganization or other change in the
Company’s or any subsidiary’s capital structure or its business, any merger or
consolidation of the Company or any subsidiary, any issue of debt or equity
securities ahead of or affecting Common Stock or the rights thereof, the
dissolution or liquidation of the Company or any subsidiary 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; Common Stock
Dividends.  The shares with respect to which Awards may be granted are shares of
Common Stock as presently constituted, but if, and whenever, prior to the
expiration of an Award theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Common Stock or the payment of a
Common Stock dividend on Common Stock without receipt of full consideration by
the Company, the number of shares of Common Stock with respect to which such
Award may thereafter be exercised or satisfied, as applicable, (i) in the event
of an increase in the number of outstanding shares, shall be proportionately
increased, and, if applicable, the purchase price per share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding shares, shall be proportionately reduced, and, if applicable, the
purchase price per share shall be proportionately increased.  Any fractional
share resulting from such adjustment shall be rounded up or down to the next
whole share as determined by the Administrator.  Further, the Committee shall
have the authority to make such further adjustments to Awards pursuant to this
paragraph as necessary to avoid adverse accounting effects or to satisfy
regulatory requirements.
 
(c)           Adjustments to Options and SARs.  If the Company recapitalizes,
reclassifies its capital stock, or otherwise changes its capital structure (a
“recapitalization”), the number and class of shares of Common Stock or other
property (including cash) covered by an Option or SAR theretofore granted and,
if applicable, the purchase price of Common Stock or other property subject to
such Option or SAR shall be adjusted so that such Option or SAR shall thereafter
cover the number and class of shares of stock and other property 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 Common Stock then covered by such Option or
SAR.
 
If (i) the Company shall not be the surviving entity in any merger or
consolidation (or survives only as a subsidiary of an entity), (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, or (iii) the
Company is dissolved and liquidated (each such event is referred to herein as a
“Corporate Change”), then, the Committee, acting in its sole discretion without
the consent or approval of any Holder, shall effect one or more of the following
alternatives in an equitable and appropriate manner to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, which alternatives may vary among individual Holders and which
may vary among Options or SARs held by any individual Holder:
 
 
(1)
accelerate the time at which Options or SARs then outstanding may be exercised
so that such Awards 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 such unexercised Awards and all rights
of Holders thereunder shall terminate,

 
 
(2)
require the mandatory surrender to the Company by all or selected Holders of
some or all of the outstanding Options or SARs held by such Holders
(irrespective of whether such Awards 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 Company shall thereupon cancel such Awards and
shall pay (or cause to be paid) to each Holder an amount of cash per share equal
to the excess, if any, of the Corporate Change Value (as defined below) of the
shares subject to such Awards over the exercise price(s) under such Awards for
such shares, or

 
 
(3)
make such adjustments to Options or SARs then outstanding as the Committee deems
appropriate to reflect such Corporate Change and to prevent the dilution or
enlargement of rights (provided, however, that the Committee may determine in
its sole discretion that no adjustment is necessary to such Awards then
outstanding), including, without limitation, adjusting such an Award to provide
that the number and class of shares of Common Stock covered by such Award shall
be adjusted so that such Award shall thereafter cover securities of the
surviving or acquiring corporation or other property (including, without
limitation, cash) as determined by the Committee in its sole discretion.

 
For the purposes of this Section 12(c), the “Corporate Change Value” shall equal
the amount determined in clause (A) or (B), whichever is applicable, as follows:
(A) the per share price offered to stockholders of the Company in any such
merger, consolidation, sale of assets or dissolution transaction, or (B) if a
Corporate Change occurs other than pursuant to an offer to stockholders, the
fair market value per share of the shares into which such Options or SARs being
surrendered are exercisable, as determined by the Committee as of the date
determined by the Committee (in accordance with section 409A of the Code to the
extent applicable) to be the date of cancellation and surrender of such
Awards.  In the event that the consideration in any transaction described in
this Section 12(c) above consists of anything other than cash, the Committee
shall determine the fair cash equivalent of the portion of the consideration
offered which is other than cash.

(d)           Other Changes in Common Stock and Company Transactions. In the
event of changes in the outstanding Common Stock or corporate transactions
involving the Company, including, but not limited to, recapitalizations,
reorganizations, mergers, consolidations, combinations, split-ups, split-offs,
spin-offs, stock splits, exchanges, liquidations, issuances of rights or
warrants, or other relevant changes in capitalization or distributions (other
than ordinary dividends) to the holders of Common Stock occurring after the date
of the grant of any Award, and not otherwise provided for in this Section 12
with respect to such Award, then such Award and the related Grant Document shall
be subject to adjustment by the Committee at its sole discretion in a timely,
equitable and appropriate manner to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under such Award
(including, without limitation, adjustments as to the number and price of shares
of Common Stock or other consideration subject to such Award).  In the event of
any such change in the outstanding Common Stock, corporate transaction or
distribution to the holders of Common Stock, or upon the occurrence of any other
event described in this Section 12, the aggregate maximum number of shares
available under the Plan, the aggregate maximum number of shares that may be
issued under the Plan through Incentive Stock Options, the kind of shares that
may be delivered under the Plan and the provisions of Section 5(a) imposing
limits on the numbers of shares of Common Stock covered by Awards granted or
issued under the Plan shall be adjusted appropriately by the
Committee.  Adjustments to Awards pursuant to this paragraph may include, but
shall not be limited to, (i) adjustments to the number and kind of shares
subject to outstanding Awards, (ii) adjustments of the purchase price or
exercise price, if applicable, of outstanding Awards, (iii) replacement of
Awards with other Awards that the Committee determines have comparable value and
which are based on stock of a company resulting from the transaction, and (iv)
cancellation of an Award in return for a payment of cash, property or a
combination thereof having an aggregate value equal to the current value of the
Award (as determined by the Committee). Notwithstanding the foregoing, (x)
adjustments pursuant to this Section 12 shall be subject to any required
stockholder action and (y) to the extent required by section 409A of the Code,
no adjustment shall be made in a manner that would give rise to an impermissible
acceleration of the time or form of a payment of a benefit under the Plan
pursuant to section 409A(a)(3) of the Code and any regulations or guidance
issued thereunder.

(e)           Change in Control. As used in the Plan (except as otherwise
provided in an applicable Grant Document), the term “Change in Control” shall
mean:

(aa) any person (within the meaning of Section 13(d) or 14(d) under the Exchange
Act, including any group (within the meaning of Section 13(d)(3) under the
Exchange Act), a “Person”) is or becomes the “beneficial owner” (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company (such Person being referred to as an
“Acquiring Person”) representing 25% or more of the combined voting power of the
Company’s outstanding securities; other than beneficial ownership by (i) the
Company or any subsidiary of the Company, or (ii) any employee benefit plan of
the Company or any Person organized, appointed or established pursuant to the
terms of any such employee benefit plan (unless such plan or Person is a party
to or is utilized in connection with a transaction led by Outside Persons (as
defined below)), or (iii) a Person who files a Schedule 13G with the Securities
and Exchange Commission pursuant to the requirements of Rule 13d-1 under the
Exchange Act, with respect to its holdings of the Company’s voting securities
(“Schedule 13G”), if and for so long as such Person is and remains eligible to
file a Schedule 13G with respect to its holdings of the Company’s voting
securities.  (Persons referred to in clauses (i) through (iii) hereof are
hereinafter referred to as “Excluded Persons”); or

(bb) individuals who constituted the Board as of December 1, 2009 (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director on or after December 1,
2009 whose appointment to fill a vacancy or to fill a new Board position or
whose nomination for election by the Company’s stockholders was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board; or

(cc) the Company merges with or consolidates into or engages in a reorganization
or similar transaction with another entity pursuant to a transaction in which
the Company is not the “Controlling Corporation” (as defined below); or

(dd) the Company sells or otherwise disposes of all or substantially all of its
assets, other than to Excluded Persons.

For purposes of clause (aa) above, the term “Outside Persons” means any Persons
other than (I) Persons described in clauses (aa)(i) or (iii) above (as to
Persons described in clause (aa)(iii) above, while they are Excluded Persons)
and (II) members of senior management of the Company in office immediately prior
to the time the Acquiring Person acquires the beneficial ownership described in
clause (aa).

For purposes of clause (cc) above, the Company shall be considered to be the
“Controlling Corporation” in any merger, consolidation, reorganization or
similar transaction unless either (1) the stockholders of the Company
immediately prior to the consummation of the transaction (the “Old
Stockholders”) would not, immediately after such consummation, beneficially own,
directly or indirectly, securities of the resulting or acquiring entity entitled
to elect a majority of the members of the Board of Directors or other governing
body of the resulting entity or (2) those persons who were Directors of the
Company immediately prior to the consummation of the proposed transaction would
not, immediately after such consummation, constitute a majority of the directors
of the resulting entity, provided that (I) there shall be excluded from the
determination of the voting power of the Old Stockholders securities in the
resulting entity beneficially owned, directly or indirectly, by the other party
to the transaction and any such securities beneficially owned, directly or
indirectly, by any Person acting in concert with the other party to the
transaction, (II) there shall be excluded from the determination of the voting
power of the Old Stockholders securities in the resulting entity acquired in any
such transaction other than as a result of the beneficial ownership of Company
securities prior to the transaction and (III) persons who are directors of the
resulting entity shall be deemed not to have been Directors of the Company
immediately prior to the consummation of the transaction if they were elected as
Directors of the Company within 90 days prior to the consummation of the
transaction.

13. AMENDMENT AND TERMINATION

(a)           The Plan.  Subject to the last sentence of Section 3 hereof, the
Board in its discretion may terminate the Plan at any time with respect to any
shares of Common Stock for which Awards have not theretofore been
granted.  Subject to Section 13(c) hereof, the Board shall have the right to
amend the Plan or any part thereof from time to time, and the Administrator may
amend any Award (and its related Grant Document) at any time, except as
otherwise specifically provided in such Grant Document; provided that no change
in any Award theretofore granted may be made which would impair the rights of
the Holder thereof without the consent of such Holder, and provided further that
the Board may not, without approval of the stockholders of the Company, amend
the Plan to (i) increase the maximum aggregate number of shares that may be
issued under the Plan, (ii) increase the maximum aggregate number of shares that
may be issued under the Plan pursuant to Incentive Stock Options, (iii) change
the class of individuals eligible to receive Awards under the Plan, or (iv)
amend or delete Section 7(i).  Notwithstanding the foregoing, prior to the date
of stockholder approval of the Plan at the Company’s 2010 annual stockholder
meeting, the Board may authorize the Committee to amend the Plan or any part
thereof, including but not limited to the provisions referenced in clauses (i)
thru (iv) above.

(b)           Grant Documents.  Subject to the consent of the Holder and the
restrictions set forth in the Plan, the Administrator may, in its sole
discretion, amend an outstanding Grant Document from time to time in any manner
that is not inconsistent with the provisions of the Plan.

(c)           Stockholder Approval Requirements.  To the extent stockholder
approval of an amendment to the Plan is necessary to satisfy (i) the
requirements of Rule 16b-3 or (ii) any securities exchange listing requirements
of the New York Stock Exchange or other securities exchange on which the Common
Stock is then listed, no such amendment shall be effective unless and until so
approved by the stockholders of the Company.

14. MISCELLANEOUS

(a)           No Right to an Award. Neither the adoption of the Plan nor any
action of the Board or the Administrator shall be deemed to give an employee or
Director any right to be granted an Award except as may be evidenced by a Grant
Document from the Company reflecting a grant by the Company of an Award to such
person and setting forth the terms and conditions thereof. The Plan shall be
unfunded. The Company shall not be required to establish any special or separate
fund or to make any other segregation of funds or assets to assure the
performance of its obligations under any Award.

(b)           No Employment or Membership Rights Conferred. Nothing contained in
the Plan shall (i) confer upon any employee any right with respect to
continuation of employment with the Company or any subsidiary or (ii) interfere
in any way with the right of the Company or any subsidiary to terminate his or
her employment at any time. Nothing contained in the Plan shall confer upon any
Director any right with respect to continuation of membership on the Board.  For
purposes of the Plan, except as otherwise determined by the Administrator, an
employee shall be considered to be in the employment of the Company as long as
the employee remains an employee of (1) the Company, (2) a parent corporation
with respect to the Company, (3) a subsidiary, or (4) a corporation or a parent
or subsidiary of such corporation assuming or substituting a new award for an
Award granted under the Plan.  Without limiting the scope of the preceding
sentence and except as otherwise determined by the Administrator, an employee
shall be considered to have terminated employment with the Company at the time
of the termination of the “subsidiary” status under the Plan of the entity or
other organization that employs such employee.  Any question as to whether and
when there has been a termination of such employment, and the cause of such
termination, shall be determined by the Administrator and its determination
shall be final.

(c)           Compliance with Laws. The grant of Awards and the issuance of
Common Stock pursuant to any Award shall be subject to compliance with all
applicable requirements of federal, state, local and foreign law with respect to
such securities and the requirements of any stock exchange upon which the Common
Stock may then be listed. The Company shall not be obligated to issue any Common
Stock pursuant to any Award granted under the Plan at any time when the shares
covered by such Award have not been registered under the Securities Act of 1933,
as amended, and such other state and federal laws, rules, and regulations as the
Company or the Administrator deems applicable or, in the opinion of legal
counsel for the Company, there is no exemption from the registration
requirements of such laws, rules, and regulations available for the issuance and
sale of such shares.  The Administrator shall have the right to suspend the
right of any Holder to exercise an Option during any period in which the
Administrator deems such suspension to be necessary or appropriate to comply
with applicable laws, rules, and regulations.

(d)           Withholding. The Company shall have the right to (i) make
deductions from any settlement or exercise of an Award made under the Plan,
including the delivery of shares, or require shares or cash or both be withheld
from any Award, in each case in an amount sufficient to satisfy withholding of
any taxes required by law, or (ii) take such other action as may be necessary or
appropriate to satisfy any such tax withholding obligations. The Administrator
may determine the manner in which such tax withholding may be satisfied, and may
permit shares of Common Stock (together with cash, as appropriate) to be used to
satisfy required tax withholding based on the Market Value per Share of any such
shares of Common Stock.

(e)           No Restriction on Corporate Action. Subject to the restrictions
contained in Section 13, nothing contained in the Plan shall be construed to
prevent the Company or any subsidiary from taking any corporate action, whether
or not such action would have an adverse effect on the Plan or any Award granted
hereunder. No employee, Director, beneficiary or other person shall have any
claim against the Company or any subsidiary as a result of any such action.

(f)           Restrictions on Transfer. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in Section
7(c)) shall not be transferable otherwise than (i) by will or the laws of
descent and distribution, (ii) pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder, or (iii) with the consent of the
Administrator. In the discretion of the Administrator, a percentage (determined
by the Administrator and set forth in the applicable Grant Document) of the
aggregate shares of Common Stock obtained from exercises of an Option (which
percentage may be satisfied out of particular exercises as determined by the
Administrator and set forth in the applicable Grant Document) shall not be
transferable prior to the earliest to occur of (x) the termination of the
relevant Option term (or such shorter period as may be determined by the
Administrator and set forth in the Grant Document), (y) the Holder’s retirement,
death or Disability, or (z) termination of the Holder’s employment with the
Company and its subsidiaries.

(g)           Governing Law. The Plan shall be construed in accordance with the
laws of the State of Texas, without regard to conflicts of laws principles
thereof.