Exhibit 10.1

 

Advanstar Holdings Corp.

2000 Management Incentive Plan

(as amended by Amendments No.1, No.2, No.3, No.4 and No.5)

 

SECTION 1.  Purpose.  The purpose of the Advanstar Holdings Corp. 2000
Management Incentive Plan (the “Plan”) is to promote the interests of Advanstar
Holdings Corp. (formerly known as Jetman Acquisition Corp.), a Delaware
corporation (the “Company”), and its stockholders by (i) attracting and
retaining exceptional key employees of the Company, its Subsidiaries and its
Affiliates (as defined below) and others; (ii) motivating such individuals by
means of performance-related incentives to achieve longer-range performance
goals; and (iii) enabling such individuals to participate in the long-term
growth and financial success of the Company.

 

SECTION 2.  Definitions.  As used in the Plan, the following terms shall have
the meanings set forth below:

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person;
provided that no stockholder of the Company shall be deemed an Affiliate of any
other stockholder of the Company solely by reason of any investment in the
Company.  For purposes of this definition, the term “control” (including with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), when used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Award Agreement” means any written agreement, contract or other instrument or
document evidencing any Option, which may, but need not, be executed or
acknowledged by a Participant.

 

“Board” means the Board of Directors of the Company.

 

“Cause” means, with respect to any Participant, “cause” as defined in such
Participant’s Employment Agreement or Award Agreement, or if not so defined:

 

(i)                  such Participant’s willful failure to perform his or her
material duties (other than as a result of total or partial incapacity due to
physical or mental illness) which such Participant shall not have cured within
30 days of receiving notice of such failure;

 

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(ii)               such Participant’s conviction of a felony arising from, or
any act of, fraud, embezzlement or willful dishonesty by such Participant in
relation to the business or affairs of the Company and any Subsidiary or
Affiliate thereof, or any other felonious conduct on the part of such
Participant that is detrimental to the best interests of the Company or any
Subsidiary or Affiliate thereof;

 

(iii)            such Participant’s being repeatedly under the influence of
illegal drugs or alcohol while performing his duties; or

 

(iv)           any other willful misconduct or gross negligence of such
Participant which is demonstrably injurious to the financial condition or
business reputation of the Company or any Subsidiary or Affiliate thereof,
including such Participant’s breach of the provisions of any noncompetition,
nonsolicitation or confidentiality covenant (whether or not contained in this
Agreement) in favor of the Company or any Subsidiary or Affiliate thereof
binding upon such Participant.

 

“Change of Control” means:

 

(i)                  any “person” (as such term is used in Section 3(a)(9) and
13(d)(3) of the Exchange Act) other than (A) the DLJ Funds and/or their
respective Permitted Transferees (as defined in the Shareholders’ Agreement) or
(B) any “group” (within the meaning of such Section 13(d)(3)) of which any of
the DLJ Funds is a part, acquires, directly or indirectly, by virtue of the
consummation of any purchase, merger or other combination, securities of the
Company (or its successor) representing more than 51% of the combined voting
power of the Company’s (or its successor’s) then outstanding voting securities
with respect to matters submitted to a vote of the stockholders generally; or

 

(ii)               a sale or transfer by the Company or any of its Subsidiaries
of substantially all of the stock or consolidated assets of the Company and its
Subsidiaries to an entity which is not an Affiliate of the Company prior to such
sale or transfer.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Compensation Committee” means a committee of the Board designated by the Board
to administer the Plan.

 

“Contribution” shall mean revenue less direct expenses (including, without
limitation, staff costs), as generally calculated by the Company in its internal
management reporting.

 

 

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“Credit Agreement” means the Credit Agreement dated as of October 11, 2000 among
Advanstar Communications, Inc., Various Financial Institutions, Fleet National
Bank and DLJ Capital Funding, Inc. as Syndication Agent and Documentation Agent
for the Lenders.

 

“Disability” means, with respect to any Participant, “disability” as defined in
such Participant’s Employment Agreement or Award Agreement, or if not so
defined:

 

(i)                  any permanent physical or mental incapacity or disability
rendering such Participant unable or unfit to perform effectively the duties and
obligations of his employment or to participate effectively and actively in the
management of the Company (or, if applicable, any Subsidiary or Affiliate
thereof); or

 

(ii)               any illness, accident, injury, physical or mental incapacity
or other disability, where such condition has rendered such Participant unable
or unfit to perform effectively the duties and obligations of his or her
employment or to participate effectively and actively in the management of the
Company (or, if applicable, any Subsidiary or Affiliate thereof) for a period of
at least 6 consecutive months or 12 months in any 24-month period (in either
case, as determined in the good faith judgment of the Compensation Committee).

 

“DLJ Funds” shall have the meaning assigned to it in the Shareholders’
Agreement.

 

“Employee” means an employee of the Company or any Subsidiary or Affiliate
thereof.

 

“Employment Agreement” means an employment, severance, consulting or similar
agreement between the Company or any Subsidiary or Affiliate thereof and a
Participant.

 

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

 

“Fair Market Value” means:

 

(i)                  with respect to a Share:

 

(A)           as of the date of the closing of the transactions contemplated by
the Merger Agreement (the “Closing Date”), $10.00.

 

(B)             on any date after the Closing Date, if the Shares are traded on
an exchange or market, as of any given date, the average

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reported closing price of a Share on such exchange or market as is the principal
trading market for such Shares for the three trading days immediately preceding
such date; or

 

(C)             on any date after the Closing Date, if the Shares are not traded
on an exchange or market on the applicable date, as determined by the
Compensation Committee in good faith taking into account as appropriate recent
sales of the Shares, recent valuations of the Shares and such other factors as
the Compensation Committee shall in its discretion deem relevant or appropriate
(excluding a minority discount but taking into account an Initial Public
Offering Discount).

 

(ii)               with respect to an Option, for each Share underlying such
Option, the Fair Market Value per Share as determined under clause (i) less the
exercise price per Share.

 

“Good Reason”  means, with respect to any Participant, “good reason” as defined
in such Participant’s Award Agreement or Employment Agreement, or if not so
defined:

 

(i)                  any failure by the Company to comply with any of the
provisions of this Plan or such Participant’s Award Agreement or Employment
Agreement, other than an insubstantial or inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by such Participant; or

 

(ii)               the material diminution of such Participant’s duties as in
effect during the effectiveness of such Participant’s Award Agreement, excluding
an insubstantial or inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by such
Participant.

 

“Initial Public Offering Discount” means a discount to Fair Market Value, as
otherwise determined, of the magnitude that would be necessary, in accordance
with usual and customary underwriting market practice, to effect a successful
Initial Public Offering (as defined in the Shareholders’ Agreement).

 

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“Loans” shall have the meaning ascribed to it in the Advanstar Holding Corp.
Direct Investment Program.

 

“Merger Agreement” means the Agreement and Plan of Merger dated as of August 14,
2000, among the Company, Junior Jetman Corp., Advanstar Inc. and AHI Advanstar
LLC.

 

“Option” means a right to purchase Shares from the Company that is granted under
Section 6 of the Plan.

 

“Participant” means any Employee, non-employee director of the Company of any
Subsidiary or Affiliate thereof or consultant to the Company or any Subsidiary
or Affiliate thereof selected by the Compensation Committee to receive an Option
under the Plan (and, to the extent applicable, any heirs or legal
representatives thereof).

 

“Permitted Transferee” shall have the meaning assigned to it in the
Shareholders’ Agreement.

 

“Person” means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.

 

“Rule 16b-3” means Rule 16b-3 as promulgated and interpreted by the SEC under
the Exchange Act, or any successor rule or regulation thereto as in effect from
time to time.

 

“SEC” means the Securities and Exchange Commission or any successor thereto.

 

“Section 162(m)” means Section 162(m) of the Code, or any successor
section thereto as in effect from time to time.

 

“Shareholders’ Agreement” means the Shareholders’ Agreement dated as of
October 11, 2000 among the Company, DLJ Merchant Banking Partners III, L.P. and
other DLJ Funds party thereto, the Existing Shareholders party thereto and the
Management Shareholders party thereto.

 

“Shares” means (i) shares of common stock, par value $0.01 per share, of the
Company and any stock into which its common stock may thereafter be converted or
changed and/or (ii) such other securities as may be designated by the
Compensation Committee from time to time.

 

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“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which:

 

(i)                  if a corporation, a majority of the total voting power of
shares of stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the Subsidiaries of
that Person or a combination thereof; or

 

(ii)               if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other similar ownership
interests thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination thereof.

 

“Substitute Options” means Options granted in assumption of, or in substitution
for, outstanding options previously granted by a company acquired by the Company
or with which the Company combines.

 

“Super Performance Vesting Options” means Options granted pursuant to the form
of Award Agreement set forth in Appendix A hereto.

 

SECTION 3.  Administration.

 

(a)          Authority of Compensation Committee. The Plan shall be administered
by the Compensation Committee or by the Board as a whole, if no Compensation
Committee has been constituted.  All references to the powers and
responsibilities of the Compensation Committee set forth in this Plan shall be
deemed to be references to the Board if no Compensation Committee has been
constituted.  Subject to the terms of the Plan, applicable law and contractual
restrictions (including, to the extent applicable, any Award Agreements and
Employment Agreements) affecting the Company, and in addition to other express 
powers and authorizations conferred on the Compensation Committee by the Plan,
the Compensation Committee shall have full power and authority to:

 

(i)                  designate Participants;

 

(ii)               determine the type or types of Options to be granted to a
Participant;

 

(iii)            determine the number of Shares to be covered by, or with
respect to which payments, rights or other matters are to be calculated in
connection with, Options;

 

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(iv)           determine the terms and conditions of any Option and Award
Agreement;

 

(v)              determine whether, to what extent and under what circumstances
Options may be settled or exercised in cash, Shares, other securities, other
Options or other property, or canceled, forfeited, or suspended and the method
or methods by which Options may be settled, exercised, canceled, forfeited or
suspended;

 

(vi)           determine whether, to what extent and under what circumstances
cash, Shares, other securities, other Options, other property and other amounts
payable with respect to an Option shall be deferred either automatically or at
the election of the holder thereof or of the Compensation Committee;

 

(vii)        determine whether, to what extent and under what circumstances
cash, Shares, other securities, other Options, other property and other amounts
issued or payable with respect to an Option shall be subject to restrictions on
transfer, assignment, pledge or other disposition or alienation, and the nature
of such restrictions;

 

(viii)     interpret and administer the Plan and any instrument or agreement
relating to, or Option made under, the Plan;

 

(ix)             establish, amend, suspend or waive such rules and regulations
and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and

 

(x)                make any other determination and take any other action that
the Compensation Committee deems necessary or desirable for the administration
of the Plan.

 

(b)         Compensation Committee Discretion Binding. Unless otherwise
expressly provided in the Plan or any applicable Award Agreements, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Option shall be within the sole discretion of the
Compensation Committee, may be made at any time and shall be final, conclusive
and binding upon all Persons (including the Company or  any Subsidiary or
Affiliate thereof, any Participant, any holder or beneficiary of any Option, any
stockholder and any Employee).

 

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SECTION 4.  Shares Available for Options.

 

(a)          Shares Available. Subject to adjustment as provided in
Section 4(b),  the number of Shares with respect to which Options may be granted
under the Plan shall be the sum of (i) 4,047,789, plus (ii) the amount by which
39,363 exceeds the total number of Shares purchased with Loans during the period
after the closing of the transactions contemplated by the Merger Agreement
through December 31, 2000.  Super Performance Vesting Options may not be granted
to purchase Shares in excess of the number set forth in clause (ii) of the
preceding sentence, and Options other than Super Performance Vesting Options may
not be granted to purchase Shares in excess of the number set forth in clause
(i) of the preceding sentence.  If, after the effective date of the Plan, any
Shares covered by an Option granted under the Plan (other than a Substitute
Option) or to which such an Option relates are forfeited, or if such an Option
otherwise terminates or is canceled without the delivery of Shares, then the
Shares covered by such Option, or to which such Option relates, or the number of
Shares otherwise counted against the aggregate number of Shares with respect to
which Options may be granted, to the extent of any such settlement, forfeiture,
termination or cancellation, shall again become Shares with respect to which
Options may be granted under clause (i) or (ii) above, depending on whether the
forfeited, terminated or canceled Option was a Super Performance Vesting
Option.  Notwithstanding the foregoing and subject to adjustment as provided in
Section 4(b), no Participant may receive Options in any calendar year that
relate to more than 900,000 Shares (subject to adjustment as provided in
Section 4(b)).

 

(b)         Adjustments. In the event that the Compensation Committee determines
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, reclassification, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Shares or other securities of
the Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Compensation
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Compensation Committee shall, in such manner as it may deem equitable,
adjust any or all of:

 

(i)                  the number of Shares of the Company (or number and kind of
other securities or property) with respect to which Options may thereafter be
granted;

 

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(ii)               the number of Shares or other securities of the Company (or
number and kind of other securities or property) subject to outstanding Options;
and

 

(iii)            the grant or exercise price with respect to any Option, or, if
deemed appropriate, make provision for a cash payment to the holder of an
outstanding Option.

 

(c)          Substitute Options.  Any Shares underlying Substitute Options shall
not be counted against the Shares available for Options under the Plan.

 

(d)         Sources of Shares Deliverable Under Options. Any Shares delivered
pursuant to an Option may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.

 

SECTION 5.  Eligibility.  Any Employee, non-employee director of the Company or
any Subsidiary or Affiliate thereof or consultant to the Company or any
Subsidiary or Affiliate thereof shall be eligible to be designated a
Participant.  Holders of options granted by a company that is acquired by the
Company or with which the Company combines are eligible for grants of Substitute
Options hereunder in connection with such acquisition or combination
transaction.

 

SECTION 6.  Stock Options.

 

(a)          Grant. Subject to the provisions of the Plan and contractual
restrictions (including, to the extent applicable, any Award Agreements or
Employment Agreements) affecting the Company, the Compensation Committee shall
have sole and complete authority to determine the Participants to whom Options
shall be granted, the number of Shares to be covered by each Option, the
exercise price therefor and the conditions and limitations applicable to the
exercise of the Option.

 

(b)         Exercise Price. The Compensation Committee shall, in its sole
discretion, establish the exercise price at the time each Option is granted.

 

(c)          Exercise. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Compensation Committee may, in its
sole discretion, specify in the applicable Award Agreement or thereafter. The
Compensation Committee may impose such conditions with respect to the exercise
of Options, including without limitation, any relating to the application of
federal or state securities laws, as it may deem necessary or advisable.

 

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(d)         Payment. No Shares shall be delivered pursuant to any exercise of an
Option until payment in full of the exercise price, or adequate provision
therefor, is received by the Company.  Such payment may be made: (i) in cash;
(ii) in Shares owned by the Participant (the value of such Shares shall be their
Fair Market Value on the date of exercise); (iii) by a combination of cash and
Shares; (iv) if approved by the Compensation Committee, in accordance with a
cashless exercise program; or (v) in such other manner as permitted by the
Compensation Committee at the time of grant or thereafter.

 

SECTION 7.  Vesting; Termination of Employment.  Each Award Agreement shall
contain such terms as the Compensation Committee may in its sole discretion
determine concerning vesting, forfeiture, the Company’s rights of repurchase of
Shares acquired upon exercise of an Option, and/or the effects of termination or
suspension of a Participant’s employment upon the exercisability of any Option
granted thereunder.

 

SECTION 8.  Accelerated Vesting.  The Compensation Committee may, in its sole
discretion, provide in an Award Agreement or at any other time for the
accelerated vesting of an Option.

 

SECTION 9.  Amendment and Termination.

 

(a)          Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without stockholder approval if such approval is necessary to
qualify for or comply with any tax or regulatory status or requirement
(including any approval requirement which is a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act or Section 162(m) of the Code) for which
or with which the Board deems it necessary or desirable to qualify or comply;
provided further, that any such amendment, alteration, suspension,
discontinuance or termination that would adversely affect the rights of the
Participant or any holder or beneficiary of any Option theretofore granted shall
not to the extent be effective without the consent of such affected Participant,
holder or beneficiary. Notwithstanding anything to the contrary herein, the
Compensation Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.

 

(b)         Amendments to Options. Subject to the terms of the Plan, the
applicable Award Agreement and applicable law, the Compensation Committee may
waive any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Option theretofore granted, prospectively
or

 

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retroactively; provided that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would adversely affect the
rights of a Participant or any holder or beneficiary of any Option theretofore
granted shall not to that extent be effective without the consent of such
affected Participant, holder or beneficiary.

 

(c)          Cancellation. Any provision of this Plan or any Award Agreement to
the contrary notwithstanding, in the event of a Change of Control or an offer to
Participants generally relating to the acquisition of Shares, including through
purchase, merger or otherwise, the Compensation Committee may cause any Option
granted hereunder to be canceled and, in consideration of such canceled option,
pay the holder (i) a cash payment equal to the difference between the aggregate
value of the Shares (based upon the Change of Control or other acquisition
offer) subject to the Option and the aggregate exercise price of such Option
(the “Intrinsic Value”) or (ii) a substitute option (preserving the Intrinsic
Value of the canceled Option).

 

SECTION 10.  Treatment of Ungranted Options Upon Occurrence of a  Liquidity
Event.  Immediately prior to the occurrence of a Liquidity Event (as defined in
Annex A hereto), the Board shall award Options, at an exercise price of $10.00
per Share (as adjusted to reflect any of the events contemplated by
Section 4(b)), to purchase that portion of the Shares on which Options are
authorized to be granted under Section 4(a)(i) of the Plan as to which Options
have not, as of such date, previously been granted.  For the avoidance of doubt,
Options which have been granted and subsequently canceled, forfeited, terminated
or repurchased shall be treated as having been previously granted, pursuant to
the preceding sentence.  The Options granted under this Section 10 shall be
allocated among persons eligible for an award under Section 5 hereof, in the
sole discretion of the Board.

 

SECTION 11.  General Provisions.

 

(a)          Dividend Equivalents. In the sole and complete discretion of the
Compensation Committee, an Option may provide the Participant with dividends or
dividend equivalents, payable in cash, Shares, other securities or other
property on a current or deferred basis.

 

(b)         Non-Transferability of Options. Except to the extent otherwise
provided in a Participant’s Award Agreement, no Option shall be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
such Participant, except by will or the laws of descent and distribution.

 

(c)          No Rights to Options. No Employee, Participant or other Person
shall have any claim to be granted any Option, and there is no obligation for
uniformity of treatment of Employees, Participants or holders or beneficiaries
of

 

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Options. The terms and conditions of Options need not be the same with respect
to each recipient.

 

(d)         Stock Certificates. Certificates, if any, issued in respect of
Shares shall, unless the Compensation Committee otherwise determines, be
registered in the name of the Participant or his or her Permitted Transferees
and, so long as a Participant continues to be governed by any forfeiture
provisions relating to the Shares, shall be deposited by such Participant or
Permitted Transferee, together with a stock power endorsed in blank, with the
Company.  When such forfeiture conditions lapse, the Company shall deliver such
certificates to the Participant upon request.  Such stock certificate shall
carry such appropriate legends, and such written instructions shall be given to
the Company’s transfer agent, as may be deemed necessary or advisable by counsel
to the Company in order to comply with the requirements of (i) the Securities
Act of 1933, as amended, any state securities laws or any other applicable laws
and (ii) the Shareholders’ Agreement.  Subject to the provisions of the
Shareholders’ Agreement, all certificates for Shares or other securities of the
Company or any Subsidiary delivered under the Plan pursuant to any Option or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Compensation Committee may deem advisable under the Plan or
the rules, regulations and other requirements of the SEC or any exchange or
market upon which such Shares or other securities of the Company are then listed
and any applicable laws or rules or regulations, and the Compensation Committee
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.

 

(e)          Withholding. A Participant may be required to pay to the Company or
any Subsidiary, and the Company or any Subsidiary shall have the right and is
hereby authorized to withhold from any Option, from any payment due or transfer
made under any Option or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Options or other property) of any applicable withholding taxes in respect of an
Option, its exercise or any payment or transfer under an Option or under the
Plan, and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes. The
Compensation Committee may provide for additional cash payments to holders of
Options to defray or offset any tax arising from any such grant, lapse, vesting
or exercise of any Option.

 

(f)            Award Agreements. Each Option hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Option and any rules applicable thereto.

 

(g)         No Limit on Other Compensation Arrangements. This Plan is not
intended to be the exclusive authority for the grant of options, stock or
stock-based awards, and nothing contained in this Plan shall prevent the Company
or

 

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any Subsidiary or Affiliate thereof from adopting or continuing in effect other
compensation arrangements, which may, but need not, provide for the grant of
options, restricted stock, Shares and other types of awards provided for
hereunder (subject to stockholder approval if such approval is required by
applicable law).  Any such arrangements may be either generally applicable or
applicable only in specific cases.

 

(h)         No Right to Employment. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the employment or
service of the Company or any Subsidiary or Affiliate thereof.  Further, the
Company or any Subsidiary may at any time dismiss a Participant from employment
or service, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.

 

(i)             Rights as a Stockholder. Subject to the provisions of the
applicable Option, no Participant or holder or beneficiary of any Option shall
have any rights as a stockholder with respect to any Shares to be issued under
the Plan until he or she has become the holder of such Shares.

 

(j)             Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan and any Award Agreement
shall be determined in accordance with the laws of the State of Delaware.

 

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

 

(l)             Other Laws. The Compensation Committee may refuse to issue or
transfer any Shares or other consideration under an Option if, acting in its
sole discretion, it determines that the issuance or transfer of such Shares or
such other consideration might violate any applicable law or regulation or
entitle the Company to recover the same under Section 16(b) of the Exchange Act,
and any payment tendered to the Company by a Participant in connection therewith
shall be promptly refunded to the relevant Participant, holder or beneficiary.
Without limiting the generality of the foregoing, no Option granted hereunder
shall be construed as an offer to sell securities of the Company, and no such
offer shall be outstanding, unless and until the Compensation Committee in its
sole discretion has determined that any such offer, if made, would be in
compliance with all

 

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applicable requirements of the federal and state securities laws and any other
laws to which such offer, if made, would be subject.

 

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

 

(n)         No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Option, and the Compensation Committee
shall determine whether cash or other securities or other property shall be paid
or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise
eliminated.

 

(o)         Shareholders’ Agreement Transfer Restrictions.  A Participant shall,
as a condition precedent to the exercise or settlement of an Option, execute an
instrument agreeing to be bound by the terms of the Shareholders’ Agreement or,
at the election of the Company, a counterpart of the Shareholders’ Agreement. 
In any event, any Shares acquired upon exercise or settlement shall be subject
to the provisions in the Shareholders’ Agreement regarding restrictions on
transfer and the Company’s rights to compel sales and repurchase Shares.

 

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

 

SECTION 12.  Term of the Plan.

 

(a)          Effective Date. The Plan shall be effective as of October 11, 2000
subject to approval by the stockholders of the Company. Options may be granted
hereunder prior to such stockholder approval, subject in all cases, however, to
such approval.

 

(b)         Expiration Date.  Unless otherwise expressly provided in the Plan or
in an applicable Award Agreement, any Option granted hereunder may, and the
authority of the Board or the Compensation Committee to amend, alter, adjust,
suspend, discontinue or terminate any such Option or to waive any conditions or
rights under any such Option shall, continue after the authority for grant of
new Options hereunder has been exhausted.

 

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AS AMENDED EFFECTIVE APRIL 19, 2005

ANNEX A

 

I.                                         VESTING OF PERFORMANCE VESTING
OPTIONS.

 

1.                                       To the extent that the Performance
Vesting Options are not previously vested as of April 19, 2005 (the “Unvested
PVO”), 25% of the Unvested PVO shall become fully vested and exercisable on each
of the following dates: (a) May 31, 2005; (b) December 31, 2005;
(c) December 31, 2006; and (d) December 31, 2007 (each such date, a “Performance
Vesting Date”); provided that the Optionee is on such Performance Vesting Date,
and at all times since the date of grant set forth in such Optionee’s Award
Agreement (the “Date of Grant”) has been, in the employment of (or, in the case
of a non-employee director of the Company or any Subsidiary or Affiliate thereof
or a consultant to the Company or any Subsidiary or Affiliate thereof, in the
service of) the Company or a Subsidiary or Affiliate thereof.

 

2.                                       It is acknowledged and affirmed that by
action of the Board on March 7, 2002, 25% of the Shares subject to the
Performance Vesting Option were vested on March 31, 2002 (the “2002 Vesting
Date”).  For Performance Vesting Options having a Date of Grant prior to the
2002 Vesting Date, the provisions of paragraph I.1 above shall be applicable to
the 75% of such Performance Vesting Options which remained unvested as of
April 19, 2005.  For Performance Vesting Options having a Date of Grant after
the 2002 Vesting Date, the provisions of paragraph I.1 above shall be applicable
to all of such Performance Vesting Options.

 

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