Exhibit 10.22

 

MORGANS HOTEL GROUP CO.

 

2006 OMNIBUS STOCK INCENTIVE PLAN

 

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SECTION 1.                                          GENERAL PURPOSE OF PLAN.

 

The name of this plan is the Morgans Hotel Group Co. 2006 Omnibus Stock
Incentive Plan (the “Plan”).  The purpose of the Plan is to enable the Company
to attract and retain highly qualified personnel who will contribute to the
Company’s success and to provide incentives to Participants (hereinafter
defined) that are linked directly to increases in stockholder value and will
therefore inure to the benefit of all stockholders of the Company.  To
accomplish the foregoing, the Plan provides that the Company may grant awards of
Stock, Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock and Other Awards (each as hereinafter defined).

 

SECTION 2.                                          DEFINITIONS.

 

For purposes of the Plan, the following terms shall be defined as set forth
below:

 

(A)           “ADMINISTRATOR” MEANS THE BOARD, OR IF AND TO THE EXTENT THE BOARD
DOES NOT ADMINISTER THE PLAN, THE COMMITTEE IN ACCORDANCE WITH SECTION 3 BELOW.

 

(B)           “AFFILIATE” MEANS ANY ENTITY OTHER THAN THE COMPANY AND ITS
SUBSIDIARIES THAT IS DESIGNATED BY THE BOARD AS A PARTICIPATING EMPLOYER UNDER
THE PLAN, PROVIDED THAT THE COMPANY DIRECTLY OR INDIRECTLY OWNS AT LEAST 20% OF
THE COMBINED VOTING POWER OF ALL CLASSES OF STOCK OF SUCH ENTITY OR AT LEAST 20%
OF THE OWNERSHIP INTERESTS IN SUCH ENTITY.

 

(C)           “AUTOMATIC NON-EMPLOYEE DIRECTOR STOCK AWARDS” HAS THE MEANING SET
FORTH IN SECTION 10 HEREOF.

 

(D)           “AWARD” MEANS AN AWARD OF INCENTIVE STOCK OPTIONS, NON-QUALIFIED
STOCK OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK, STOCK OR OTHER
AWARDS UNDER THE PLAN.

 

(E)           “BENEFICIAL OWNER” SHALL HAVE THE MEANING SET FORTH IN RULE 13D-3
UNDER THE EXCHANGE ACT.

 

(F)            “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

 

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(G)           “BOOK VALUE” MEANS, AS OF ANY GIVEN DATE, ON A PER SHARE BASIS
(I) THE SHAREHOLDERS’ EQUITY IN THE COMPANY AS OF THE END OF THE IMMEDIATELY
PRECEDING FISCAL YEAR AS REFLECTED IN THE COMPANY’S CONSOLIDATED BALANCE SHEET,
SUBJECT TO SUCH ADJUSTMENTS AS THE ADMINISTRATOR SHALL SPECIFY AT OR AFTER
GRANT, DIVIDED BY (II) THE NUMBER OF THEN OUTSTANDING SHARES OF STOCK AS OF SUCH
YEAR-END DATE (AS ADJUSTED BY THE ADMINISTRATOR FOR SUBSEQUENT EVENTS).

 

(H)           “CHANGE IN CONTROL” MEANS THE OCCURRENCE OF ANY ONE OF THE
FOLLOWING EVENTS:

 

(I)            INDIVIDUALS WHO, ON THE EFFECTIVE DATE, CONSTITUTE THE BOARD (THE
“INCUMBENT DIRECTORS”) CEASE FOR ANY REASON TO CONSTITUTE AT LEAST A MAJORITY OF
THE BOARD, PROVIDED THAT ANY PERSON BECOMING A DIRECTOR SUBSEQUENT TO THE
EFFECTIVE DATE, WHOSE ELECTION OR NOMINATION FOR ELECTION WAS APPROVED BY A VOTE
OF AT LEAST TWO-THIRDS OF THE INCUMBENT DIRECTORS THEN ON THE BOARD (EITHER BY A
SPECIFIC VOTE OR BY APPROVAL OF THE PROXY STATEMENT OF THE COMPANY IN WHICH SUCH
PERSON IS NAMED AS A NOMINEE FOR DIRECTOR, WITHOUT WRITTEN OBJECTION TO SUCH
NOMINATION) SHALL BE AN INCUMBENT DIRECTOR; PROVIDED, HOWEVER, THAT NO
INDIVIDUAL INITIALLY ELECTED OR NOMINATED AS A DIRECTOR OF THE COMPANY AS A
RESULT OF AN ACTUAL OR THREATENED ELECTION CONTEST WITH RESPECT TO DIRECTORS OR
AS A RESULT OF ANY OTHER ACTUAL OR THREATENED SOLICITATION OF PROXIES BY OR ON
BEHALF OF ANY PERSON OTHER THAN THE BOARD SHALL BE DEEMED TO BE AN INCUMBENT
DIRECTOR;

 

(II)           ANY PERSON IS OR BECOMES A BENEFICIAL OWNER, DIRECTLY OR
INDIRECTLY, OF SECURITIES OF THE COMPANY REPRESENTING 35% OR MORE OF THE
COMBINED VOTING POWER OF THE COMPANY’S THEN OUTSTANDING SECURITIES ELIGIBLE TO
VOTE FOR THE ELECTION OF THE BOARD (THE “COMPANY VOTING SECURITIES”); PROVIDED,
HOWEVER, THAT THE EVENT DESCRIBED IN THIS PARAGRAPH (II) SHALL NOT BE DEEMED TO
BE A CHANGE IN CONTROL BY VIRTUE OF ANY OF THE FOLLOWING ACQUISITIONS:  (A) BY
THE COMPANY OR ANY SUBSIDIARY, (B) BY

 

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ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR MAINTAINED BY THE
COMPANY OR ANY SUBSIDIARY, (C) BY ANY UNDERWRITER TEMPORARILY HOLDING SECURITIES
PURSUANT TO AN OFFERING OF SUCH SECURITIES, (D) PURSUANT TO A NON-QUALIFYING
TRANSACTION (AS DEFINED IN PARAGRAPH (III)), (E) PURSUANT TO ANY ACQUISITION BY
A PARTICIPANT OR ANY GROUP OF PERSONS INCLUDING A PARTICIPANT (OR ANY ENTITY
CONTROLLED BY A PARTICIPANT OR ANY GROUP OF PERSONS INCLUDING A PARTICIPANT);
(F) A TRANSACTION (OTHER THAN ONE DESCRIBED IN (III) BELOW) IN WHICH COMPANY
VOTING SECURITIES ARE ACQUIRED FROM THE COMPANY, IF A MAJORITY OF THE INCUMBENT
DIRECTORS APPROVE A RESOLUTION PROVIDING EXPRESSLY THAT THE ACQUISITION PURSUANT
TO THIS CLAUSE (F) DOES NOT CONSTITUTE A CHANGE IN CONTROL UNDER THIS PARAGRAPH
(II); OR (G) BY NCIC OR NORTHSTAR PARTNERSHIP, L.P. OR ANY OF THEIR
MAJORITY-OWNED OR CONTROLLED SUBSIDIARIES, PARTNERSHIPS OR AFFILIATES;

 

(III)          THE CONSUMMATION OF A MERGER, CONSOLIDATION, STATUTORY SHARE
EXCHANGE OR SIMILAR FORM OF CORPORATE TRANSACTION INVOLVING THE COMPANY OR ANY
OF ITS SUBSIDIARIES THAT REQUIRES THE APPROVAL OF THE COMPANY’S STOCKHOLDERS,
WHETHER FOR SUCH TRANSACTION OR THE ISSUANCE OF SECURITIES IN THE TRANSACTION (A
“BUSINESS COMBINATION”), UNLESS IMMEDIATELY FOLLOWING SUCH BUSINESS
COMBINATION:  (A) AT LEAST 50% OF THE TOTAL VOTING POWER OF (X) THE CORPORATION
RESULTING FROM SUCH BUSINESS COMBINATION (THE “SURVIVING CORPORATION”), OR (Y)
IF APPLICABLE, THE ULTIMATE PARENT CORPORATION THAT DIRECTLY OR INDIRECTLY HAS
BENEFICIAL OWNERSHIP OF AT LEAST 80% OF THE VOTING SECURITIES ELIGIBLE TO ELECT
DIRECTORS OF THE SURVIVING CORPORATION (THE “PARENT CORPORATION”), IS
REPRESENTED BY COMPANY VOTING SECURITIES THAT WERE OUTSTANDING IMMEDIATELY PRIOR
TO SUCH BUSINESS COMBINATION (OR, IF APPLICABLE, IS REPRESENTED BY SHARES INTO
WHICH SUCH COMPANY VOTING SECURITIES WERE CONVERTED PURSUANT TO SUCH BUSINESS
COMBINATION), AND SUCH VOTING POWER AMONG THE HOLDERS THEREOF IS IN
SUBSTANTIALLY THE SAME PROPORTION AS THE VOTING POWER OF SUCH

 

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COMPANY VOTING SECURITIES AMONG THE HOLDERS THEREOF IMMEDIATELY PRIOR TO THE
BUSINESS COMBINATION, (B) NO PERSON (OTHER THAN NCIC OR NORTHSTAR PARTNERSHIP,
L.P. OR ANY OF THEIR MAJORITY-OWNED OR CONTROLLED SUBSIDIARIES, PARTNERSHIPS OR
AFFILIATES OR ANY EMPLOYEE BENEFIT PLAN (OR RELATED TRUST) SPONSORED OR
MAINTAINED BY THE SURVIVING CORPORATION OR THE PARENT CORPORATION), IS OR
BECOMES THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF 35% OR MORE OF THE
TOTAL VOTING POWER OF THE OUTSTANDING VOTING SECURITIES ELIGIBLE TO ELECT
DIRECTORS OF THE PARENT CORPORATION (OR, IF THERE IS NO PARENT CORPORATION, THE
SURVIVING CORPORATION) AND (C) AT LEAST HALF OF THE MEMBERS OF THE BOARD OF
DIRECTORS OF THE PARENT CORPORATION (OR, IF THERE IS NO PARENT CORPORATION, THE
SURVIVING CORPORATION) FOLLOWING THE CONSUMMATION OF THE BUSINESS COMBINATION
WERE INCUMBENT DIRECTORS AT THE TIME OF THE BOARD’S APPROVAL OF THE EXECUTION OF
THE INITIAL AGREEMENT PROVIDING FOR SUCH BUSINESS COMBINATION (ANY BUSINESS
COMBINATION WHICH SATISFIES ALL OF THE CRITERIA SPECIFIED IN (A), (B) AND
(C) ABOVE SHALL BE DEEMED TO BE A “NON-QUALIFYING TRANSACTION”); OR

 

(IV)          THE STOCKHOLDERS OF THE COMPANY APPROVE A PLAN OF COMPLETE
LIQUIDATION OR DISSOLUTION OF THE COMPANY OR THE CONSUMMATION OF A SALE OF ALL
OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS.

 

(I)            “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED FROM
TIME TO TIME, OR ANY SUCCESSOR THERETO.

 

(J)            “COMMITTEE” MEANS ANY COMMITTEE THE BOARD MAY APPOINT TO
ADMINISTER THE PLAN.  TO THE EXTENT NECESSARY AND DESIRABLE, THE COMMITTEE SHALL
BE COMPOSED ENTIRELY OF INDIVIDUALS WHO MEET THE QUALIFICATIONS REFERRED TO IN
SECTION 162(M) OF THE CODE AND RULE 16B-3 UNDER THE EXCHANGE ACT.  IF AT ANY
TIME OR TO ANY EXTENT THE BOARD SHALL NOT ADMINISTER THE PLAN, THEN THE
FUNCTIONS OF THE BOARD SPECIFIED IN THE PLAN SHALL BE EXERCISED BY THE
COMMITTEE.

 

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(K)           “COMPANY” MEANS MORGANS HOTEL GROUP CO., A DELAWARE CORPORATION
(OR ANY SUCCESSOR CORPORATION).

 

(L)            “EFFECTIVE DATE” HAS THE MEANING SET FORTH IN SECTION 15 HEREOF.

 

(M)          “ELIGIBLE RECIPIENT” MEANS AN OFFICER, DIRECTOR (INCLUDING A
NON-EMPLOYEE DIRECTOR), EMPLOYEE, CO-EMPLOYEE, CONSULTANT OR ADVISOR OF THE
COMPANY OR OF ANY PARENT OR SUBSIDIARY WHO PROVIDE SERVICES TO THE COMPANY.

 

(N)           “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED FROM TIME TO TIME.

 

(O)           “FAIR MARKET VALUE” MEANS, AS OF ANY GIVEN DATE, THE FAIR MARKET
VALUE OF A SHARE OF STOCK AS DETERMINED BY THE ADMINISTRATOR USING ANY
REASONABLE METHOD AND IN GOOD FAITH (SUCH DETERMINATION WILL BE MADE IN A MANNER
THAT SATISFIES SECTION 409A OF THE CODE AND IN GOOD-FAITH AS REQUIRED BY
SECTION 422(C)(1) OF THE CODE); PROVIDED THAT (I) IF SHARES OF STOCK ARE
ADMITTED TO TRADING ON A NATIONAL SECURITIES EXCHANGE, THE FAIR MARKET VALUE OF
A SHARE OF STOCK ON ANY DATE SHALL BE THE CLOSING SALE PRICE REPORTED FOR SUCH
SHARE ON THE EXCHANGE ON SUCH DATE ON WHICH A SALE WAS REPORTED; (II) IF SHARES
OF STOCK ARE ADMITTED TO QUOTATION ON THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS AUTOMATED QUOTATION SYSTEM (“NASDAQ”) OR A SUCCESSOR QUOTATION SYSTEM
AND HAS BEEN DESIGNATED AS A NATIONAL MARKET SYSTEM (“NMS”) SECURITY, FAIR
MARKET VALUE OF A SHARE OF STOCK ON ANY DATE SHALL BE THE CLOSING SALE PRICE
REPORTED FOR SUCH SHARE ON THE SYSTEM ON SUCH DATE ON WHICH A SALE WAS REPORTED;
AND (III) IF SHARES OF STOCK ARE ADMITTED TO QUOTATION ON THE NASDAQ BUT HAVE
NOT BEEN DESIGNATED AS AN NMS SECURITY, FAIR MARKET VALUE OF A SHARE OF STOCK ON
ANY SUCH DATE SHALL BE THE AVERAGE OF THE HIGHEST BID AND LOWEST ASKED PRICES
FOR SUCH SHARE OF STOCK ON THE SYSTEM ON SUCH DATE ON WHICH BOTH THE BID AND
ASKED PRICES WERE REPORTED.

 

(P)           “FREE STANDING RIGHTS” HAS THE MEANING SET FORTH IN SECTION 8
HEREOF.

 

(Q)           “FREE STANDING STOCK APPRECIATION RIGHTS” HAS THE MEANING SET
FORTH IN SECTION 8 HEREOF.

 

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(R)            “IMMEDIATE FAMILY” MEANS ANY CHILD, STEPCHILD, GRANDCHILD,
PARENT, STEPPARENT, GRANDPARENT, SPOUSE, SIBLING, MOTHER-IN-LAW, FATHER-IN-LAW,
SON-IN-LAW, DAUGHTER-IN-LAW, BROTHER-IN-LAW OR SISTER-IN-LAW, AND SHALL INCLUDE
ADOPTIVE RELATIONSHIPS OF THE PARTICIPANT AND FAMILY LIMITED PARTNERSHIPS,
TRUSTS OR SIMILAR ENTITIES WHICH ARE PRIMARILY FOR THE BENEFIT OF THE
PARTICIPANT AND HIS OR HER IMMEDIATE FAMILY.

 

(S)           “INCENTIVE STOCK OPTION” MEANS ANY STOCK OPTION INTENDED TO BE
DESIGNATED AS AN “INCENTIVE STOCK OPTION” WITHIN THE MEANING OF SECTION 422 OF
THE CODE.

 

(T)            “INITIAL OFFERING PRICE” MEANS THE “PRICE TO PUBLIC” OF THE
SHARES OF STOCK THAT THE COMPANY ISSUES AND SELLS TO THE IPO UNDERWRITERS
PURSUANT TO THE UNDERWRITING AGREEMENT, AS SET FORTH ON THE COVER PAGE OF THE
IPO PROSPECTUS.

 

(U)           “INITIAL PUBLIC OFFERING” MEANS THE INITIAL UNDERWRITTEN PUBLIC
OFFERING OF STOCK PURSUANT TO THE IPO PROSPECTUS.

 

(V)           “IPO PROSPECTUS” MEANS THE COMPANY’S PROSPECTUS RELATING TO THE
INITIAL PUBLIC OFFERING AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 424(B) UNDER THE SECURITIES ACT AND DEEMED A PART OF THE
COMPANY’S REGISTRATION STATEMENT ON FORM S-1 (NO. 333-129277) AT THE TIME SUCH
REGISTRATION STATEMENT IS DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE
COMMISSION.

 

(W)          “IPO UNDERWRITERS” MEANS THE UNDERWRITERS OF THE INITIAL PUBLIC
OFFERING.

 

(X)            “LLC UNIT” OR “LLC UNITS” MEANS A MEMBERSHIP INTEREST OR
MEMBERSHIP INTERESTS IN MORGANS GROUP LLC, A DELAWARE LIMITED LIABILITY COMPANY
AND THE ENTITY THROUGH WHICH THE COMPANY CONDUCTS A SIGNIFICANT PORTION OF ITS
BUSINESS.

 

(Y)           “NON-EMPLOYEE DIRECTOR” MEANS A DIRECTOR OF THE COMPANY WHO IS NOT
AN EMPLOYEE OF THE COMPANY.

 

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(Z)            “NON-QUALIFIED STOCK OPTION” MEANS ANY STOCK OPTION THAT IS NOT
AN INCENTIVE STOCK OPTION, INCLUDING ANY STOCK OPTION THAT PROVIDES (AS OF THE
TIME SUCH STOCK OPTION IS GRANTED) THAT IT WILL NOT BE TREATED AS AN INCENTIVE
STOCK OPTION.

 

(AA)         “NCIC” MEANS NORTHSTAR CAPITAL INVESTMENT CORP., A MARYLAND
CORPORATION.

 

(BB)         “OTHER AWARDS” MEANS AN AWARD GRANTED PURSUANT TO SECTION 11
HEREOF.

 

(CC)         “OVERALLOTMENT IPO SHARES” MEANS ANY SHARES OF STOCK THAT THE
COMPANY ISSUES AND SELLS TO THE IPO UNDERWRITERS AS A RESULT OF ANY EXERCISE OF
THE OVERALLOTMENT OPTION GRANTED BY THE COMPANY TO THE IPO UNDERWRITERS PURSUANT
TO THE UNDERWRITING AGREEMENT RELATING TO THE INITIAL PUBLIC OFFERING.

 

(DD)         “PARENT” MEANS ANY CORPORATION (OTHER THAN THE COMPANY) IN AN
UNBROKEN CHAIN OF CORPORATIONS ENDING WITH THE COMPANY, IF EACH OF THE
CORPORATIONS IN THE CHAIN (OTHER THAN THE COMPANY) OWNS STOCK POSSESSING 50% OR
MORE OF THE COMBINED VOTING POWER OF ALL CLASSES OF STOCK IN ONE OF THE OTHER
CORPORATIONS IN THE CHAIN.

 

(EE)         “PARTICIPANT” MEANS ANY ELIGIBLE RECIPIENT SELECTED BY THE
ADMINISTRATOR, PURSUANT TO THE ADMINISTRATOR’S AUTHORITY IN SECTION 3 BELOW, TO
RECEIVE AN AWARD.

 

(FF)           “PERSON” MEANS AN INDIVIDUAL, CORPORATION, PARTNERSHIP, LIMITED
LIABILITY COMPANY, JOINT VENTURE, ASSOCIATION, TRUST, UNINCORPORATED
ORGANIZATION, OTHER ENTITY OR “GROUP” (AS DEFINED IN THE EXCHANGE ACT).

 

(GG)         “PLAN” HAS THE MEANING SET FORTH TO IT IN SECTION 1 HEREOF.

 

(HH)         “RELATED RIGHTS” HAS THE MEANING SET FORTH IN SECTION 8 HEREOF.

 

(II)           “RELATED STOCK APPRECIATION RIGHTS” HAS THE MEANING SET FORTH IN
SECTION 8 HEREOF.

 

(JJ)           “RESTRICTED PERIOD” HAS THE MEANING SET FORTH IN SECTION 9
HEREOF.

 

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(KK)         “RESERVED SHARES” HAS THE MEANING SET FORTH IN SECTION 4 HEREOF.

 

(LL)           “RESTRICTED STOCK” MEANS SHARES OF STOCK SUBJECT TO CERTAIN
RESTRICTIONS GRANTED PURSUANT TO SECTION 9 BELOW.

 

(MM)       “SECURITIES ACT” MEANS THE SECURITIES ACT OF 1933, AS AMENDED.

 

(NN)         “STOCK” MEANS THE COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF THE
COMPANY.

 

(OO)         “STOCK APPRECIATION RIGHT” MEANS THE RIGHT PURSUANT TO AN AWARD
GRANTED UNDER SECTION 8 BELOW TO RECEIVE AN AMOUNT EQUAL TO THE EXCESS, IF ANY,
OF (A) THE FAIR MARKET VALUE, AS OF THE DATE SUCH STOCK APPRECIATION RIGHT OR
PORTION THEREOF IS SURRENDERED, OF THE SHARES OF STOCK COVERED BY SUCH RIGHT OR
SUCH PORTION THEREOF, OVER (B) THE AGGREGATE EXERCISE PRICE OF THE SHARES OF
STOCK COVERED BY SUCH RIGHT OR SUCH PORTION THEREOF.

 

(PP)         “STOCK OPTION” MEANS AN OPTION TO PURCHASE SHARES OF STOCK GRANTED
PURSUANT TO SECTION 7 BELOW.

 

(QQ)         “SUBSIDIARY” MEANS ANY CORPORATION OR OTHER ENTITY (OTHER THAN THE
COMPANY) IN WHICH THE COMPANY HAS A CONTROLLING INTEREST, EITHER DIRECTLY OR
INDIRECTLY.

 

SECTION 3.                                          ADMINISTRATION.

 

(A)           THE PLAN SHALL BE ADMINISTERED IN ACCORDANCE WITH THE REQUIREMENTS
OF SECTION 162(M) OF THE CODE (BUT ONLY TO THE EXTENT NECESSARY AND DESIRABLE TO
MAINTAIN QUALIFICATION OF AWARDS UNDER THE PLAN UNDER SECTION 162(M) OF THE
CODE) AND, TO THE EXTENT APPLICABLE, RULE 16B-3 UNDER THE EXCHANGE ACT BY THE
BOARD OR, AT THE BOARD’S SOLE DISCRETION, BY THE COMMITTEE, WHICH SHALL BE
APPOINTED BY THE BOARD, AND WHICH SHALL SERVE AT THE PLEASURE OF THE BOARD.

 

(B)           THE ADMINISTRATOR SHALL HAVE THE POWER AND AUTHORITY TO GRANT
STOCK OPTIONS, STOCK APPRECIATION RIGHTS, RESTRICTED STOCK, STOCK, OTHER AWARDS
OR ANY

 

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combination of the foregoing hereunder to Eligible Recipients pursuant to the
terms of the Plan.  In particular, but without limitation, the Administrator
shall have the authority:

 

(I)            TO SELECT THOSE ELIGIBLE RECIPIENTS WHO SHALL BE PARTICIPANTS;

 

(II)           TO DETERMINE WHETHER AND TO WHAT EXTENT AWARDS ARE TO BE GRANTED
HEREUNDER TO PARTICIPANTS;

 

(III)          TO DETERMINE THE NUMBER OF SHARES OF STOCK TO BE COVERED BY EACH
AWARD GRANTED HEREUNDER;

 

(IV)          TO DETERMINE THE TERMS AND CONDITIONS, NOT INCONSISTENT WITH THE
TERMS OF THE PLAN, OF EACH AWARD GRANTED HEREUNDER, INCLUDING THE WAIVER OR
MODIFICATION OF ANY SUCH TERMS OR CONDITIONS;

 

(V)           TO DETERMINE THE TERMS AND CONDITIONS, NOT INCONSISTENT WITH THE
TERMS OF THE PLAN, WHICH SHALL GOVERN ALL WRITTEN INSTRUMENTS EVIDENCING AWARDS
GRANTED HEREUNDER, INCLUDING THE WAIVER OR MODIFICATION OF ANY SUCH TERMS OR
CONDITIONS;

 

(VI)          TO ADOPT, ALTER AND REPEAL SUCH ADMINISTRATIVE RULES, GUIDELINES
AND PRACTICES GOVERNING THE PLAN AS IT SHALL FROM TIME TO TIME DEEM ADVISABLE;
AND

 

(VII)         TO CONSTRUE, INTERPRET AND IMPLEMENT THE TERMS AND PROVISIONS OF
THE PLAN AND ANY AWARD ISSUED UNDER THE PLAN (AND ANY AWARD AGREEMENTS RELATING
THERETO) AND TO OTHERWISE SUPERVISE THE ADMINISTRATION OF THE PLAN.

 

(C)           THE ADMINISTRATOR MAY, IN ITS ABSOLUTE DISCRETION, WITHOUT
AMENDMENT TO THE PLAN, (I) ACCELERATE THE DATE ON WHICH ANY STOCK OPTION GRANTED
UNDER THE PLAN BECOMES EXERCISABLE, WAIVE OR AMEND THE OPERATION OF PLAN
PROVISIONS RESPECTING EXERCISE AFTER TERMINATION OF EMPLOYMENT OR OTHERWISE
ADJUST ANY OF THE TERMS OF SUCH STOCK OPTION, AND (II) ACCELERATE THE LAPSE OF
RESTRICTIONS, OR WAIVE ANY CONDITION IMPOSED

 

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hereunder, with respect to any share of Restricted Stock or otherwise adjust any
of the terms applicable to any such Award; provided, however, that no action
under this Section 3(c) shall adversely affect any outstanding Award without the
consent of the holder thereof.

 

(D)           ALL DECISIONS MADE BY THE ADMINISTRATOR PURSUANT TO THE PROVISIONS
OF THE PLAN SHALL BE FINAL, CONCLUSIVE AND BINDING ON ALL PERSONS, INCLUDING THE
COMPANY AND THE PARTICIPANTS.  NO MEMBER OF THE BOARD OR THE COMMITTEE, NOR ANY
OFFICER OR EMPLOYEE OF THE COMPANY ACTING ON BEHALF OF THE BOARD OR THE
COMMITTEE, SHALL BE PERSONALLY LIABLE FOR ANY ACTION, DETERMINATION, OR
INTERPRETATION TAKEN OR MADE IN GOOD FAITH WITH RESPECT TO THE PLAN, AND ALL
MEMBERS OF THE BOARD OR THE COMMITTEE AND EACH AND ANY OFFICER OR EMPLOYEE OF
THE COMPANY ACTING ON THEIR BEHALF SHALL, TO THE EXTENT PERMITTED BY LAW, BE
FULLY INDEMNIFIED AND PROTECTED BY THE COMPANY IN RESPECT OF ANY SUCH ACTION,
DETERMINATION OR INTERPRETATION.

 

SECTION 4.                                          SHARES RESERVED FOR ISSUANCE
UNDER THE PLAN.

 

(A)           THE TOTAL NUMBER OF SHARES OF STOCK RESERVED AND AVAILABLE FOR
ISSUANCE UNDER THE PLAN (THE “RESERVED SHARES”) SHALL INITIALLY BE 3,500,000
SHARES OF STOCK.  THE NUMBER OF RESERVED SHARES SHALL BE AUTOMATICALLY INCREASED
(WITHOUT ANY FURTHER ACTION BY THE BOARD OR THE STOCKHOLDERS OF THE COMPANY) BY
THE NUMBER OF SHARES OF STOCK THAT IS EQUAL TO TEN PERCENT (10%) OF ANY
OVERALLOTMENT IPO SHARES; PROVIDED, HOWEVER, THAT THE MAXIMUM NUMBER OF RESERVED
SHARES SHALL NOT EXCEED 3,770,000, SUBJECT TO ADJUSTMENT AS SET FORTH IN
SECTION 5 BELOW.  SUCH SHARES OF STOCK MAY CONSIST, IN WHOLE OR IN PART, OF
AUTHORIZED AND UNISSUED SHARES OF STOCK OR TREASURY SHARES.

 

(B)           SUBJECT TO THE PROVISIONS OF SECTION 162(M) OF THE CODE, AS FROM
TIME TO TIME APPLICABLE, TO THE EXTENT THAT (I) A STOCK OPTION EXPIRES OR IS
OTHERWISE CANCELLED OR TERMINATED WITHOUT BEING EXERCISED, OR (II) ANY SHARES OF
STOCK SUBJECT TO ANY AWARDS GRANTED HEREUNDER ARE CANCELLED, TERMINATED,
FORFEITED OR WITHHELD TO PAY TAXES, SUCH SHARES OF STOCK SHALL AGAIN BE
AVAILABLE FOR ISSUANCE IN CONNECTION WITH FUTURE AWARDS GRANTED UNDER THE PLAN.

 

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(C)           THE AGGREGATE NUMBER OF SHARES OF STOCK AS TO WHICH AWARDS MAY BE
GRANTED TO ANY INDIVIDUAL DURING ANY CALENDAR YEAR MAY NOT, SUBJECT TO
ADJUSTMENT AS PROVIDED IN SECTION 5, EXCEED 1,600,000.

 

(D)           THE AGGREGATE NUMBER OF SHARES OF STOCK THAT MAY BE DELIVERED
PURSUANT TO THE EXERCISE OF INCENTIVE STOCK OPTIONS MAY NOT, SUBJECT TO
ADJUSTMENT AS PROVIDED IN SECTION 5, EXCEED 2,400,000.

 

SECTION 5.                                          EQUITABLE ADJUSTMENTS.

 

Upon the occurrence of any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure
affecting the Stock or other corporate transaction, the Administrator shall make
appropriate equitable adjustments, which may include, without limitation,
adjustments to: (i) the aggregate number of shares of Stock reserved for
issuance under the Plan, (ii) the kind, number and exercise price of outstanding
Stock Options and Stock Appreciation Rights granted under the Plan set forth in
Sections 4(a), 4(c) and 4(d) of the Plan, and (iii) the kind, number and
purchase price of shares of Stock subject to outstanding awards of Restricted
Stock granted under the Plan, in each case as may be determined by the
Administrator, in its sole discretion.  Such other substitutions or adjustments
shall be made as may be determined by the Administrator, in its sole
discretion.  In connection with any event described in this paragraph, the
Administrator may provide, in its sole discretion, for the cancellation of any
outstanding Awards in exchange for payment in cash or other property equal to
the Fair Market Value of the Stock covered by such Awards, reduced by the option
or exercise price, if any.

 

SECTION 6.                                          ELIGIBILITY.

 

Eligible Recipients shall be eligible to be granted Stock Options, Stock
Appreciation Rights, Restricted Stock, Stock, Other Awards or any combination of
the foregoing hereunder.  The Participants under the Plan shall be selected from
time to time by the Administrator, in its sole discretion, from among the
Eligible Recipients, and the

 

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Administrator shall determine, in its sole discretion, the number of shares of
Stock covered by each such Award.

 

SECTION 7.                                          STOCK OPTIONS.

 

Stock Options may be granted alone or in addition to other Awards granted under
the Plan.  Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve, and the provisions of Stock Option
awards need not be the same with respect to each Participant.  Participants who
are granted Stock Options shall enter into an award agreement with the Company,
in such form as the Administrator shall determine, which shall set forth, among
other things, the option price of the Stock Option, the term of the Stock Option
and provisions regarding exercisability of the Stock Option granted thereunder.

 

The Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options.

 

The Administrator shall have the authority to grant to any officer or employee
of the Company or of any Parent or Subsidiary (including directors who are also
officers of the Company) Incentive Stock Options, Non-Qualified Stock Options,
or both types of Stock Options (in each case with or without Stock Appreciation
Rights).  Directors who are not also employees or officers of the Company or of
any Parent or Subsidiary, consultants or advisors to the Company or to any
Parent or Subsidiary may only be granted Non-Qualified Stock Options (with or
without Stock Appreciation Rights).  To the extent that any Stock Option does
not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.  More than one Stock Option may be granted to the
same Participant and be outstanding concurrently hereunder.

 

Stock Options granted under the Plan shall be subject to the following terms and
conditions and to the award agreement evidencing each Award which shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Administrator shall deem desirable:

 

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(A)           OPTION PRICE.  THE OPTION PRICE PER SHARE OF STOCK PURCHASABLE
UNDER A STOCK OPTION SHALL BE DETERMINED BY THE ADMINISTRATOR IN ITS SOLE
DISCRETION AT THE TIME OF GRANT BUT SHALL NOT, IN THE CASE OF INCENTIVE STOCK
OPTIONS, BE LESS THAN 100% OF THE FAIR MARKET VALUE OF THE STOCK ON SUCH DATE
(110% OF THE FAIR MARKET VALUE PER SHARE ON SUCH DATE IF, ON SUCH DATE, THE
ELIGIBLE RECIPIENT OWNS, OR IS DEEMED TO OWN UNDER THE CODE, STOCK POSSESSING
MORE THAN TEN PERCENT (A “TEN PERCENT OWNER”) OF THE TOTAL COMBINED VOTING POWER
OF ALL CLASSES OF STOCK).

 

(B)           OPTION TERM.  THE TERM OF EACH STOCK OPTION SHALL BE FIXED BY THE
ADMINISTRATOR, BUT NO STOCK OPTION SHALL BE EXERCISABLE MORE THAN TEN YEARS
AFTER THE DATE SUCH STOCK OPTION IS GRANTED; PROVIDED, HOWEVER, THAT IF THE
ELIGIBLE RECIPIENT IS A TEN PERCENT OWNER, AN INCENTIVE STOCK OPTION MAY NOT BE
EXERCISABLE AFTER THE EXPIRATION OF FIVE YEARS FROM THE DATE SUCH INCENTIVE
STOCK OPTION IS GRANTED.

 

(C)           EXERCISABILITY.  STOCK OPTIONS SHALL BE EXERCISABLE AT SUCH TIME
OR TIMES AND SUBJECT TO SUCH TERMS AND CONDITIONS AS SHALL BE DETERMINED BY THE
ADMINISTRATOR AT OR AFTER THE TIME OF GRANT; PROVIDED, HOWEVER, THAT NO ACTION
FOLLOWING THE TIME OF GRANT SHALL ADVERSELY AFFECT ANY OUTSTANDING STOCK OPTION
WITHOUT THE CONSENT OF THE HOLDER THEREOF.  THE ADMINISTRATOR MAY PROVIDE AT THE
TIME OF GRANT, IN ITS SOLE DISCRETION, THAT ANY STOCK OPTION SHALL BE
EXERCISABLE ONLY IN INSTALLMENTS, AND THE ADMINISTRATOR MAY WAIVE SUCH
INSTALLMENT EXERCISE PROVISIONS AT ANY TIME, IN WHOLE OR IN PART, BASED ON SUCH
FACTORS AS THE ADMINISTRATOR MAY DETERMINE, IN ITS SOLE DISCRETION, INCLUDING
BUT NOT LIMITED TO IN CONNECTION WITH ANY CHANGE IN CONTROL OF THE COMPANY.

 

(D)           METHOD OF EXERCISE.  SUBJECT TO SECTION 7(C), STOCK OPTIONS MAY BE
EXERCISED IN WHOLE OR IN PART AT ANY TIME DURING THE OPTION TERM, BY GIVING
WRITTEN NOTICE OF EXERCISE TO THE COMPANY SPECIFYING THE NUMBER OF SHARES OF
STOCK TO BE PURCHASED, ACCOMPANIED BY PAYMENT IN FULL OF THE PURCHASE PRICE IN
CASH OR ITS EQUIVALENT, AS DETERMINED BY THE ADMINISTRATOR.  AS DETERMINED BY
THE ADMINISTRATOR, IN ITS SOLE DISCRETION, PAYMENT IN WHOLE OR IN PART MAY ALSO
BE MADE (I) IN THE FORM OF UNRESTRICTED STOCK ALREADY OWNED BY THE PARTICIPANT
WHICH, (X) IN THE CASE OF UNRESTRICTED STOCK

 

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acquired upon exercise of an option, have been owned by the Participant for more
than six months on the date of surrender, and (y) has a Fair Market Value on the
date of surrender equal to the aggregate option price of the Stock as to which
such Stock Option shall be exercised; (ii) in the case of the exercise of a
Non-Qualified Stock Option, in the form of Restricted Stock subject to an award
hereunder (based, in each case, on the Fair Market Value of the Stock on the
date the Stock Option is exercised); provided, however, that in the case of an
Incentive Stock Option, the right to make payment in the form of already owned
shares of Stock may be authorized only at the time of grant; (iii) any other
form of consideration approved by the Administrator and permitted by applicable
law; or (iv) any combination of the foregoing.  If payment of the option price
of a Non-Qualified Stock Option is made in whole or in part in the form of
Restricted Stock, the shares of Stock received upon the exercise of such Stock
Option shall be restricted in accordance with the original terms of the
Restricted Stock award in question, except that the Administrator may direct
that such restrictions shall apply only to that number of shares of Stock equal
to the number of shares surrendered upon the exercise of such Stock Option.

 

(E)           RIGHTS AS STOCKHOLDER.  EXCEPT AS OTHERWISE PROVIDED IN AN
INDIVIDUAL AWARD AGREEMENT, A PARTICIPANT SHALL GENERALLY HAVE THE RIGHTS TO
DIVIDENDS AND ANY OTHER RIGHTS OF A STOCKHOLDER WITH RESPECT TO THE STOCK
SUBJECT TO THE STOCK OPTION ONLY AFTER THE PARTICIPANT HAS GIVEN WRITTEN NOTICE
OF EXERCISE, HAS PAID IN FULL FOR SUCH SHARES OF STOCK, AND, IF REQUESTED, HAS
GIVEN THE REPRESENTATION DESCRIBED IN PARAGRAPH (B) OF SECTION 14 BELOW.

 

(F)            NON-TRANSFERABILITY OF STOCK OPTIONS.  EXCEPT AS OTHERWISE
PROVIDED BY THE ADMINISTRATOR OR IN A PARTICIPANT’S AWARD AGREEMENT, STOCK
OPTIONS MAY NOT BE SOLD, PLEDGED, ASSIGNED, HYPOTHECATED, TRANSFERRED, OR
DISPOSED OF IN ANY MANNER OTHER THAN BY WILL, BY THE LAWS OF DESCENT OR
DISTRIBUTION, BY INSTRUMENT TO AN INTER VIVOS OR TESTAMENTARY TRUST IN WHICH THE
STOCK OPTIONS ARE TO BE PASSED TO BENEFICIARIES UPON THE DEATH OF THE
PARTICIPANT, OR BY GIFT TO IMMEDIATE FAMILY, AND MAY BE EXERCISED, DURING THE
LIFETIME OF THE PARTICIPANT, ONLY BY THE PARTICIPANT OR THE PARTICIPANT’S LEGAL
REPRESENTATIVE.

 

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(G)           TERMINATION OF EMPLOYMENT OR SERVICE.  IN THE EVENT THAT A
PARTICIPANT CEASES TO BE EMPLOYED BY OR TO PROVIDE SERVICES TO ANY OF THE
COMPANY, ANY PARENT OR ANY SUBSIDIARY, ANY OUTSTANDING STOCK OPTIONS PREVIOUSLY
GRANTED TO SUCH PARTICIPANT SHALL BE EXERCISABLE AT SUCH TIME OR TIMES AND
SUBJECT TO SUCH TERMS AND CONDITIONS AS SET FORTH IN THE AWARD AGREEMENT OR ANY
OTHER AGREEMENT GOVERNING SUCH AWARDS.  UNLESS OTHERWISE PROVIDED IN THE AWARD
AGREEMENT, STOCK OPTIONS GRANTED TO SUCH PARTICIPANT, TO THE EXTENT THEY WERE
NOT VESTED AND EXERCISABLE AT THE TIME OF SUCH TERMINATION, SHALL EXPIRE ON THE
DATE OF SUCH TERMINATION.

 

(H)           ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS.  IN ADDITION TO THE
LIMITATION APPLICABLE TO STOCK OPTIONS IN SECTION 4(C) ABOVE, TO THE EXTENT THAT
THE AGGREGATE FAIR MARKET VALUE (DETERMINED AS OF THE DATE THE INCENTIVE STOCK
OPTION IS GRANTED) OF SHARES OF STOCK WITH RESPECT TO WHICH INCENTIVE STOCK
OPTIONS GRANTED TO A PARTICIPANT UNDER THIS PLAN AND ALL OTHER OPTION PLANS OF
THE COMPANY OR OF ANY PARENT OR SUBSIDIARY BECOME EXERCISABLE FOR THE FIRST TIME
BY THE PARTICIPANT DURING ANY CALENDAR YEAR EXCEEDS $100,000 (AS DETERMINED IN
ACCORDANCE WITH SECTION 422(D) OF THE CODE), THE PORTION OF SUCH INCENTIVE STOCK
OPTIONS IN EXCESS OF $100,000 SHALL BE TREATED AS NON-QUALIFIED STOCK OPTIONS.

 

SECTION 8.                                          STOCK APPRECIATION RIGHTS.

 

Stock Appreciation Rights may be granted either alone (“Free Standing Rights”)
or in conjunction with all or part of any Stock Option granted under the Plan
(“Related Rights”).  In the case of a Non-Qualified Stock Option, Related Rights
may be granted either at or after the time of the grant of such Stock Option. 
In the case of an Incentive Stock Option, Related Rights may be granted only at
the time of the grant of the Incentive Stock Option.  The Administrator shall
determine the Eligible Recipients to whom, and the time or times at which,
grants of Stock Appreciation Rights shall be made, the number of shares of Stock
to be awarded, the exercise price, and all other conditions of Stock
Appreciation Rights.  The provisions of Stock Appreciation Rights need not be
the same with respect to each Participant.

 

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Stock Appreciation Rights granted under the Plan shall be subject to the
following terms and conditions and to the award agreement evidencing such Award
which shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Administrator shall deem desirable:

 

(A)           AWARDS. THE PROSPECTIVE RECIPIENT OF A STOCK APPRECIATION RIGHT
SHALL NOT HAVE ANY RIGHTS WITH RESPECT TO SUCH AWARD, UNLESS AND UNTIL SUCH
RECIPIENT HAS EXECUTED AN AGREEMENT EVIDENCING THE AWARD AND DELIVERED A FULLY
EXECUTED COPY THEREOF TO THE COMPANY, WITHIN A PERIOD OF SIXTY DAYS (OR SUCH
OTHER PERIOD AS THE ADMINISTRATOR MAY SPECIFY) AFTER THE AWARD DATE. 
PARTICIPANTS WHO ARE GRANTED STOCK APPRECIATION RIGHTS SHALL HAVE NO RIGHTS AS
STOCKHOLDERS OF THE COMPANY WITH RESPECT TO THE GRANT OR EXERCISE OF SUCH
RIGHTS.

 

(B)           EXERCISABILITY.

 

(I)            STOCK APPRECIATION RIGHTS THAT ARE FREE STANDING RIGHTS (“FREE
STANDING STOCK APPRECIATION RIGHTS”) SHALL BE EXERCISABLE AT SUCH TIME OR TIMES
AND SUBJECT TO SUCH TERMS AND CONDITIONS AS SHALL BE DETERMINED BY THE
ADMINISTRATOR AT OR AFTER GRANT.

 

(II)           STOCK APPRECIATION RIGHTS THAT ARE RELATED RIGHTS (“RELATED STOCK
APPRECIATION RIGHTS”) SHALL BE EXERCISABLE ONLY AT SUCH TIME OR TIMES AND TO THE
EXTENT THAT THE STOCK OPTIONS TO WHICH THEY RELATE SHALL BE EXERCISABLE IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 7 ABOVE AND THIS SECTION 8 OF THE
PLAN; PROVIDED, HOWEVER, THAT A RELATED STOCK APPRECIATION RIGHT GRANTED IN
CONNECTION WITH AN INCENTIVE STOCK OPTION SHALL BE EXERCISABLE ONLY IF AND WHEN
THE FAIR MARKET VALUE OF THE STOCK SUBJECT TO THE INCENTIVE STOCK OPTION EXCEEDS
THE OPTION PRICE OF SUCH STOCK OPTION.

 

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(C)           PAYMENT UPON EXERCISE.

 

(I)            UPON THE EXERCISE OF A FREE STANDING STOCK APPRECIATION RIGHT,
THE PARTICIPANT SHALL BE ENTITLED TO RECEIVE UP TO, BUT NOT MORE THAN, AN AMOUNT
IN CASH OR THAT NUMBER OF SHARES OF STOCK (OR ANY COMBINATION OF CASH AND SHARES
OF STOCK, AS DETERMINED BY THE ADMINISTRATOR) EQUAL IN VALUE TO THE EXCESS OF
THE FAIR MARKET VALUE OF ONE SHARE OF STOCK AS OF THE DATE OF EXERCISE OVER THE
PRICE PER SHARE OF STOCK SPECIFIED IN THE FREE STANDING STOCK APPRECIATION RIGHT
(WHICH PRICE SHALL BE NO LESS THAN 100% OF THE FAIR MARKET VALUE OF THE STOCK ON
THE DATE OF GRANT) MULTIPLIED BY THE NUMBER OF SHARES OF STOCK IN RESPECT OF
WHICH THE FREE STANDING STOCK APPRECIATION RIGHT IS BEING EXERCISED, WITH THE
ADMINISTRATOR HAVING THE RIGHT TO DETERMINE THE FORM OF PAYMENT.

 

(II)           A RELATED RIGHT MAY BE EXERCISED BY A PARTICIPANT BY SURRENDERING
THE APPLICABLE PORTION OF THE RELATED STOCK OPTION.  UPON SUCH EXERCISE AND
SURRENDER, THE PARTICIPANT SHALL BE ENTITLED TO RECEIVE UP TO, BUT NOT MORE
THAN, AN AMOUNT IN CASH OR THAT NUMBER OF SHARES OF STOCK (OR ANY COMBINATION OF
CASH AND SHARES OF STOCK) EQUAL IN VALUE TO THE EXCESS OF THE FAIR MARKET VALUE
OF ONE SHARE OF STOCK AS OF THE DATE OF EXERCISE OVER THE OPTION PRICE PER SHARE
OF STOCK SPECIFIED IN THE RELATED STOCK OPTION MULTIPLIED BY THE NUMBER OF
SHARES OF STOCK IN RESPECT OF WHICH THE RELATED STOCK APPRECIATION RIGHT IS
BEING EXERCISED, WITH THE ADMINISTRATOR HAVING THE RIGHT TO DETERMINE THE FORM
OF PAYMENT.  STOCK OPTIONS WHICH HAVE BEEN SO SURRENDERED, IN WHOLE OR IN PART,
SHALL NO LONGER BE EXERCISABLE TO THE EXTENT THE RELATED RIGHTS HAVE BEEN SO
EXERCISED.

 

(D)           NON-TRANSFERABILITY.

 

(I)            FREE STANDING STOCK APPRECIATION RIGHTS SHALL BE TRANSFERABLE
ONLY WHEN AND TO THE EXTENT THAT A STOCK OPTION WOULD BE TRANSFERABLE UNDER
PARAGRAPH (F) OF SECTION 7 OF THE PLAN.

 

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(II)           RELATED STOCK APPRECIATION RIGHTS SHALL BE TRANSFERABLE ONLY WHEN
AND TO THE EXTENT THAT THE UNDERLYING STOCK OPTION WOULD BE TRANSFERABLE UNDER
PARAGRAPH (F) OF SECTION 7 OF THE PLAN.

 

(E)           TERMINATION OF EMPLOYMENT OR SERVICE.

 

(I)            IN THE EVENT THAT A PARTICIPANT CEASES TO BE EMPLOYED BY OR TO
PROVIDE SERVICES TO ANY OF THE COMPANY, ANY PARENT OR ANY SUBSIDIARY, ANY
OUTSTANDING STOCK APPRECIATION RIGHTS PREVIOUSLY GRANTED TO SUCH PARTICIPANT
SHALL BE EXERCISABLE AT SUCH TIME OR TIMES AND SUBJECT TO SUCH TERMS AND
CONDITIONS AS SET FORTH IN THE AWARD AGREEMENT OR ANY OTHER AGREEMENT GOVERNING
SUCH AWARDS.  UNLESS OTHERWISE PROVIDED IN THE AWARD AGREEMENT, STOCK
APPRECIATION RIGHTS GRANTED TO SUCH PARTICIPANT, TO THE EXTENT THEY WERE NOT
VESTED AND EXERCISABLE AT THE TIME OF SUCH TERMINATION, SHALL EXPIRE ON THE DATE
OF SUCH TERMINATION.

 

(II)           IN THE EVENT OF THE TERMINATION OF EMPLOYMENT OR SERVICE OF A
PARTICIPANT WHO HAS BEEN GRANTED ONE OR MORE RELATED STOCK APPRECIATION RIGHTS,
SUCH RIGHTS SHALL BE EXERCISABLE AT SUCH TIME OR TIMES AND SUBJECT TO SUCH TERMS
AND CONDITIONS AS APPLICABLE TO THE RELATED STOCK OPTIONS.

 

(F)            TERM.

 

(I)            THE TERM OF EACH FREE STANDING STOCK APPRECIATION RIGHT SHALL BE
FIXED BY THE ADMINISTRATOR, BUT NO FREE STANDING STOCK APPRECIATION RIGHT SHALL
BE EXERCISABLE MORE THAN TEN YEARS AFTER THE DATE SUCH RIGHT IS GRANTED.

 

(II)           THE TERM OF EACH RELATED STOCK APPRECIATION RIGHT SHALL BE THE
TERM OF THE STOCK OPTION TO WHICH IT RELATES, BUT NO RELATED STOCK APPRECIATION
RIGHT SHALL BE EXERCISABLE MORE THAN TEN YEARS AFTER THE DATE SUCH RIGHT IS
GRANTED.

 

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SECTION 9.                                          RESTRICTED STOCK.

 

Awards of Restricted Stock may be issued either alone or in addition to other
Awards granted under the Plan and shall be evidenced by an award agreement.  The
Administrator shall determine the Eligible Recipients to whom, and the time or
times at which, Restricted Stock awards shall be made; the number of shares of
Restricted Stock to be awarded; the price, if any, to be paid by the Participant
for the acquisition of Restricted Stock; the Restricted Period (as defined in
Section 9(c)) applicable to Restricted Stock awards; and all other conditions
applicable to Restricted Stock awards.  The provisions of the awards of
Restricted Stock need not be the same with respect to each Participant.

 

(A)           PURCHASE PRICE. THE PRICE PER SHARE OF RESTRICTED STOCK, IF ANY,
THAT A PARTICIPANT MUST PAY FOR SHARES OF RESTRICTED STOCK PURCHASABLE UNDER AN
AWARD OF RESTRICTED STOCK SHALL BE DETERMINED BY THE ADMINISTRATOR IN ITS SOLE
DISCRETION AT THE TIME OF GRANT.

 

(B)           AWARDS AND CERTIFICATES. THE PROSPECTIVE RECIPIENT OF A RESTRICTED
STOCK AWARD SHALL NOT HAVE ANY RIGHTS WITH RESPECT TO ANY SUCH AWARD, UNLESS AND
UNTIL SUCH RECIPIENT HAS EXECUTED AN AWARD AGREEMENT EVIDENCING THE AWARD AND
DELIVERED A FULLY EXECUTED COPY THEREOF TO THE COMPANY, WITHIN SUCH PERIOD AS
THE ADMINISTRATOR MAY SPECIFY AFTER THE AWARD DATE.  EACH PARTICIPANT WHO IS
GRANTED AN AWARD OF RESTRICTED STOCK SHALL BE ISSUED A STOCK CERTIFICATE IN
RESPECT OF SUCH SHARES OF RESTRICTED STOCK, WHICH CERTIFICATE SHALL BE
REGISTERED IN THE NAME OF THE PARTICIPANT AND SHALL BEAR AN APPROPRIATE LEGEND
REFERRING TO THE TERMS, CONDITIONS, AND RESTRICTIONS APPLICABLE TO ANY SUCH
AWARD; PROVIDED THAT THE COMPANY MAY REQUIRE THAT THE STOCK CERTIFICATES
EVIDENCING RESTRICTED STOCK GRANTED HEREUNDER BE HELD IN THE CUSTODY OF THE
COMPANY UNTIL THE RESTRICTIONS THEREON SHALL HAVE LAPSED, AND THAT, AS A
CONDITION OF ANY RESTRICTED STOCK AWARD, THE PARTICIPANT SHALL HAVE DELIVERED A
STOCK POWER, ENDORSED IN BLANK, RELATING TO THE SHARES OF RESTRICTED STOCK
COVERED BY SUCH AWARD.

 

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(C)           NONTRANSFERABILITY. THE RESTRICTED STOCK AWARDS GRANTED PURSUANT
TO THIS SECTION 9 SHALL BE SUBJECT TO THE RESTRICTIONS ON TRANSFERABILITY SET
FORTH IN THIS PARAGRAPH (C).  DURING SUCH PERIOD AS MAY BE SET BY THE
ADMINISTRATOR IN THE AWARD AGREEMENT (THE “RESTRICTED PERIOD”), THE PARTICIPANT
SHALL NOT BE PERMITTED TO SELL, TRANSFER, PLEDGE, HYPOTHECATE OR ASSIGN SHARES
OF RESTRICTED STOCK AWARDED UNDER THE PLAN EXCEPT BY WILL OR THE LAWS OF DESCENT
AND DISTRIBUTION; PROVIDED THAT THE ADMINISTRATOR MAY, IN ITS SOLE DISCRETION,
PROVIDE FOR THE LAPSE OF SUCH RESTRICTIONS IN INSTALLMENTS AND MAY ACCELERATE OR
WAIVE SUCH RESTRICTIONS IN WHOLE OR IN PART BASED ON SUCH FACTORS AND SUCH
CIRCUMSTANCES AS THE ADMINISTRATOR MAY DETERMINE IN ITS SOLE DISCRETION.  THE
ADMINISTRATOR MAY ALSO IMPOSE SUCH OTHER RESTRICTIONS AND CONDITIONS, INCLUDING
THE ACHIEVEMENT OF PRE-ESTABLISHED CORPORATE PERFORMANCE GOALS, ON AWARDED
RESTRICTED STOCK AS IT DEEMS APPROPRIATE.  ANY ATTEMPT TO DISPOSE OF ANY
RESTRICTED SHARES IN CONTRAVENTION OF ANY SUCH RESTRICTIONS SHALL BE NULL AND
VOID AND WITHOUT EFFECT.

 

(D)           RIGHTS AS A STOCKHOLDER. EXCEPT AS PROVIDED IN SECTION 9(B) OR AS
OTHERWISE PROVIDED IN AN AWARD AGREEMENT, THE PARTICIPANT SHALL POSSESS ALL
INCIDENTS OF OWNERSHIP WITH RESPECT TO SHARES OF RESTRICTED STOCK DURING THE
RESTRICTED PERIOD, INCLUDING THE RIGHT TO RECEIVE DIVIDENDS WITH RESPECT TO SUCH
SHARES AND TO VOTE SUCH SHARES.  CERTIFICATES FOR UNRESTRICTED SHARES SHALL BE
DELIVERED TO THE PARTICIPANT PROMPTLY AFTER, AND ONLY AFTER, THE RESTRICTED
PERIOD SHALL EXPIRE WITHOUT FORFEITURE IN RESPECT OF SUCH AWARDS OF RESTRICTED
STOCK EXCEPT AS THE ADMINISTRATOR, IN ITS SOLE DISCRETION, SHALL OTHERWISE
DETERMINE.

 

(E)           TERMINATION OF EMPLOYMENT. IN THE EVENT THAT A PARTICIPANT CEASES
TO BE EMPLOYED BY OR TO PROVIDE SERVICES TO ANY OF THE COMPANY, ANY PARENT OR
ANY SUBSIDIARY DURING THE RESTRICTED PERIOD, ANY RIGHTS PURSUANT TO ANY AWARD OF
RESTRICTED STOCK PREVIOUSLY GRANTED TO SUCH PARTICIPANT SHALL BE SUBJECT TO SUCH
TERMS AND CONDITIONS AS SET FORTH IN THE AWARD AGREEMENT OR ANY OTHER AGREEMENT
GOVERNING SUCH AWARDS.  UNLESS OTHERWISE PROVIDED IN THE AWARD AGREEMENT OR ANY
SUCH OTHER AGREEMENT, THE RESTRICTED STOCK AWARDS GRANTED TO SUCH PARTICIPANT,
TO THE EXTENT THAT RESTRICTIONS HAVE NOT LAPSED OR

 

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applicable conditions have not been met at the time of such cessation of
employment or provision of services, shall expire on the date of such
termination.

 

SECTION 10.                                    AUTOMATIC GRANTS OF STOCK TO
NON-EMPLOYEE DIRECTORS.

 

The Company shall grant awards of Stock, Restricted Stock and Other Awards to
Non-Employee Directors as described in further detail below (the “Automatic
Non-Employee Director Awards”).  Such grants shall be automatic and
non-discretionary and otherwise subject to the terms and conditions set forth in
this Section 10 and the award agreement evidencing such grant, as well as the
terms of the Plan.

 

Each recipient of an Automatic Non-Employee Director Award shall enter into an
award agreement with the Company.  The award agreement shall set forth such
terms and conditions, not inconsistent with the provisions of this Section 10,
with respect to such automatic grant as the Administrator may determine.

 

(A)           INITIAL GRANT.  EACH NON-EMPLOYEE DIRECTOR SHALL AUTOMATICALLY BE
GRANTED AN OTHER AWARD OF RESTRICTED STOCK UNITS HAVING A VALUE AS OF THE DATE
OF GRANT EQUAL TO APPROXIMATELY $100,000.  EACH SUCH AWARD SHALL BE GRANTED
(I) ON THE DATE OF THE IPO PROSPECTUS OR AS SOON AS PRACTICABLE THEREAFTER, TO
EACH PERSON WHO IS A NON-EMPLOYEE DIRECTOR ON THE DATE OF THE IPO PROSPECTUS,
WITH THE CALCULATION OF THE NUMBER OF SHARES OF  STOCK COVERED BY THE RESTRICTED
STOCK UNITS TO BE COMPUTED BY DIVIDING $100,000 BY THE INITIAL OFFERING PRICE,
ROUNDING DOWN TO THE NEAREST WHOLE NUMBER OR (II) TO EACH PERSON WHO IS NOT A
NON-EMPLOYEE DIRECTOR ON THE DATE OF THE IPO PROSPECTUS, THE DATE OF THE FIRST
BOARD MEETING ATTENDED BY SUCH NON-EMPLOYEE DIRECTOR, WITH THE CALCULATION OF
THE NUMBER OF SHARES OF  STOCK COVERED BY THE RESTRICTED STOCK UNITS TO BE
COMPUTED BY DIVIDING $100,000 BY THE FAIR MARKET VALUE OF THE STOCK ON THE DATE
OF GRANT AND ROUNDING DOWN TO THE NEAREST WHOLE NUMBER.  FORFEITURE CONDITIONS
WITH RESPECT TO ONE-THIRD OF EACH SUCH AWARD SHALL LAPSE ON THE FIRST
ANNIVERSARY OF THE DATE OF THE GRANT AND FORFEITURE CONDITIONS WITH RESPECT TO
THE REMAINING TWO-THIRDS OF EACH SUCH AWARD SHALL LAPSE ON THE LAST DAY OF EACH
MONTH OVER THE TWENTY-FOUR MONTH PERIOD

 

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thereafter, and, furthermore, the underlying shares of Stock which are vested
shall be delivered at the time the Non-Employee Director ceases to be a member
of the Board.  No fractional shares of Restricted Stock shall be included in
such Award.

 

(B)           ANNUAL GRANT.  ON THE FIRST BUSINESS DAY AFTER THE FIRST ANNUAL
STOCKHOLDERS’ MEETING OF THE COMPANY, AND ON THE FIRST BUSINESS DAY AFTER EACH
SUCH ANNUAL STOCKHOLDERS’ MEETING OF THE COMPANY THEREAFTER DURING THE TERM OF
THE PLAN, EACH NON-EMPLOYEE DIRECTOR SHALL AUTOMATICALLY BE GRANTED AN OTHER
AWARD OF RESTRICTED STOCK UNITS HAVING A VALUE EQUAL TO APPROXIMATELY $25,000 AS
OF THE DATE OF THE GRANT, PROVIDED, HOWEVER, THAT EACH SUCH PERSON IS THEN A
NON-EMPLOYEE DIRECTOR OF THE COMPANY.  THE NUMBER OF SHARES OF STOCK COVERED BY
THE RESTRICTED STOCK UNITS SHALL BE COMPUTED BY DIVIDING $25,000 BY THE FAIR
MARKET VALUE OF THE STOCK ON THE DATE OF GRANT AND ROUNDING DOWN TO THE NEAREST
WHOLE NUMBER.  SUCH AWARDS SHALL BE FULLY VESTED UPON GRANT AND THE UNDERLYING
SHARES OF STOCK SHALL BE DELIVERED AT THE TIME THE NON-EMPLOYEE DIRECTOR CEASES
TO BE A MEMBER OF THE BOARD. NO FRACTIONAL SHARES OF STOCK SHALL BE INCLUDED IN
SUCH AWARD.

 

(C)           STOCK AVAILABILITY.  NOTWITHSTANDING ANY OF THE FOREGOING, IN THE
EVENT THAT THE NUMBER OF SHARES OF STOCK AVAILABLE FOR GRANT UNDER THE PLAN IS
NOT SUFFICIENT TO ACCOMMODATE THE AUTOMATIC NON-EMPLOYEE DIRECTOR AWARDS, THEN
THE REMAINING SHARES OF STOCK AVAILABLE FOR SUCH AUTOMATIC AWARDS SHALL BE
GRANTED TO EACH NON-EMPLOYEE DIRECTOR, EACH OF WHOM IS TO RECEIVE SUCH AN AWARD,
ON A PRO-RATA BASIS.  NO FURTHER GRANTS SHALL BE MADE UNTIL SUCH TIME, IF ANY,
AS ADDITIONAL SHARES OF STOCK BECOME AVAILABLE FOR GRANT UNDER THE PLAN THROUGH
ACTION OF THE BOARD OR THE STOCKHOLDERS OF THE COMPANY TO INCREASE THE NUMBER OF
SHARES OF STOCK THAT MAY BE ISSUED UNDER THE PLAN OR THROUGH CANCELLATION OR
EXPIRATION OF AWARDS PREVIOUSLY GRANTED HEREUNDER.

 

SECTION 11.                                    OTHER AWARDS AND LLC UNITS.

 

(A)           NATURE OF OTHER AWARDS.  OTHER FORMS OF AWARDS (“OTHER AWARDS”)
THAT MAY BE GRANTED UNDER THE PLAN INCLUDE AWARDS THAT ARE VALUED IN WHOLE OR IN
PART BY REFERENCE TO, OR ARE OTHERWISE CALCULATED BY REFERENCE TO OR BASED ON,
SHARES OF STOCK,

 

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including without limitation, (i) LLC Units, (ii) convertible preferred stock,
convertible debentures and other convertible, exchangeable or redeemable
securities or equity interests (including LLC Units), (iii) membership interests
in a Subsidiary or operating partnership, (iv) Awards valued by reference to
Book Value, fair value or Subsidiary performance, and (v) any class of profits
interest or limited liability company membership interest created or issued
pursuant to the terms of a partnership agreement, limited liability company
operating agreement or otherwise by an Affiliate that has elected to be treated
as a partnership for federal income tax purposes and qualifies as a “profits
interest” within the meaning of Revenue Procedure 93-27 with respect to a
Participant who is rendering services to the issuing Affiliate.

 

(B)           FOR PURPOSES OF CALCULATING THE NUMBER OF SHARES OF STOCK
UNDERLYING AN OTHER AWARD RELATIVE TO THE TOTAL NUMBER OF SHARES OF STOCK
RESERVED AND AVAILABLE FOR ISSUANCE UNDER SECTION 4(A), THE ADMINISTRATOR SHALL
ESTABLISH IN GOOD FAITH THE MAXIMUM NUMBER OF SHARES OF STOCK TO WHICH A GRANTEE
OF SUCH OTHER AWARD MAY BE ENTITLED UPON FULFILLMENT OF ALL APPLICABLE
CONDITIONS SET FORTH IN THE RELEVANT AWARD DOCUMENTATION, INCLUDING VESTING,
ACCRETION FACTORS, CONVERSION RATIOS, EXCHANGE RATIOS AND THE LIKE.  IF AND WHEN
ANY SUCH CONDITIONS ARE NO LONGER CAPABLE OF BEING MET, IN WHOLE OR IN PART, THE
NUMBER OF SHARES OF STOCK UNDERLYING SUCH OTHER AWARD SHALL BE REDUCED
ACCORDINGLY BY THE ADMINISTRATOR AND THE RELATED SHARES OF STOCK SHALL BE ADDED
BACK TO THE SHARES OF STOCK AVAILABLE FOR ISSUANCE UNDER THE PLAN.  OTHER AWARDS
MAY BE ISSUED EITHER ALONE OR IN ADDITION TO OTHER AWARDS GRANTED UNDER THE PLAN
AND SHALL BE EVIDENCED BY AN AWARD AGREEMENT.  THE ADMINISTRATOR SHALL DETERMINE
THE ELIGIBLE RECIPIENTS TO WHOM, AND THE TIME OR TIMES AT WHICH, OTHER AWARDS
SHALL BE MADE; THE NUMBER OF SHARES OF STOCK OR LLC UNITS TO BE AWARDED; THE
PRICE, IF ANY, TO BE PAID BY THE PARTICIPANT FOR THE ACQUISITION OF OTHER
AWARDS; AND THE RESTRICTIONS AND CONDITIONS APPLICABLE TO OTHER AWARDS. 
CONDITIONS MAY BE BASED ON CONTINUING EMPLOYMENT (OR OTHER SERVICE
RELATIONSHIP), COMPUTATION OF FINANCIAL METRICS AND/OR ACHIEVEMENT OF
PRE-ESTABLISHED PERFORMANCE GOALS AND OBJECTIVES.  THE ADMINISTRATOR MAY REQUIRE
THAT OTHER AWARDS BE HELD THROUGH A LIMITED PARTNERSHIP, OR SIMILAR
“LOOK-THROUGH” ENTITY, AND THE

 

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Administrator may require such limited partnership or similar entity to impose
restrictions on its partners or other beneficial owners that are not
inconsistent with the provisions of this Section 11.  The provisions of the
grant of Other Awards need not be the same with respect to each Participant.

 

(C)           TERMS AND CONDITIONS.  OTHER AWARDS MADE PURSUANT TO THIS
SECTION 11 SHALL BE SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:

 

(I)            TERMINATION OF EMPLOYMENT OR SERVICE.  IN THE EVENT THAT A
PARTICIPANT CEASES TO BE EMPLOYED BY OR TO PROVIDE SERVICES TO THE COMPANY, ANY
PARENT, OR ANY SUBSIDIARY, ANY OUTSTANDING OTHER AWARDS PREVIOUSLY GRANTED TO
SUCH PARTICIPANT SHALL BE SUBJECT TO SUCH TERMS AND CONDITIONS AS SET FORTH IN
THE AWARD AGREEMENT OR ANY OTHER AGREEMENT GOVERNING SUCH OTHER AWARDS.  EXCEPT
AS MAY OTHERWISE BE PROVIDED BY THE ADMINISTRATOR EITHER IN THE AWARD AGREEMENT,
SUCH OTHER AGREEMENT, OR, SUBJECT TO SECTION 12 BELOW, IN WRITING AFTER THE
AWARD AGREEMENT IS ISSUED, A PARTICIPANT’S RIGHTS IN ALL OTHER AWARDS THAT HAVE
NOT VESTED SHALL AUTOMATICALLY TERMINATE UPON THE PARTICIPANT’S TERMINATION OF
EMPLOYMENT (OR CESSATION OF SERVICE RELATIONSHIP) WITH THE COMPANY, ITS PARENTS
AND ITS SUBSIDIARIES FOR ANY REASON.

 

(II)           SUBJECT TO THE PROVISIONS OF THIS PLAN AND THE AWARD AGREEMENT OR
SUCH OTHER AGREEMENT, SHARES OF STOCK SUBJECT TO AWARDS MADE UNDER THIS
SECTION 11 MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE
ENCUMBERED PRIOR TO THE DATE ON WHICH THE SHARES ARE ISSUED, OR, IF LATER, THE
DATE ON WHICH ANY APPLICABLE RESTRICTION, PERFORMANCE OR DEFERRAL PERIOD LAPSES.

 

(III)          SUBJECT TO THE PROVISIONS OF THIS PLAN AND THE AWARD AGREEMENT OR
SUCH OTHER AGREEMENT AND UNLESS OTHERWISE DETERMINED BY THE ADMINISTRATOR AT
GRANT, THE RECIPIENT OF AN AWARD UNDER THIS SECTION 11 SHALL BE ENTITLED TO
RECEIVE, CURRENTLY OR ON A DEFERRED BASIS, INTEREST OR

 

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DIVIDENDS OR INTEREST OR DIVIDEND EQUIVALENTS WITH RESPECT TO THE NUMBER OF
SHARES OF STOCK COVERED BY THE AWARD, AS DETERMINED AT THE TIME OF THE AWARD BY
THE ADMINISTRATOR, IN ITS SOLE DISCRETION, AND THE ADMINISTRATOR MAY PROVIDE
THAT SUCH AMOUNTS (IF ANY) SHALL BE DEEMED TO HAVE BEEN REINVESTED IN ADDITIONAL
SHARES OF STOCK OR OTHERWISE REINVESTED.

 

(IV)          SHARES OF STOCK (INCLUDING SECURITIES CONVERTIBLE INTO SHARES OF
STOCK) ISSUED ON A BONUS BASIS UNDER THIS SECTION 11 MAY BE ISSUED FOR NO CASH
CONSIDERATION.

 

SECTION 12.                                    AMENDMENT AND TERMINATION.

 

The Board may amend, alter, suspend or discontinue the Plan in whole or in part,
at any time, but no amendment, alteration, or discontinuation that would impair
the rights of a Participant under any Award theretofore granted shall be made
without such Participant’s consent.  Unless the Board determines otherwise, the
Board shall obtain approval of the Company’s stockholders for any amendment that
would require such approval in order to satisfy Sections 162(m) and 422 of the
Code, stock exchange rules or other applicable law or regulation.  The
Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Section 5 of the Plan, no such
amendment shall impair the rights of any Participant without his or her consent.

 

SECTION 13.                                    UNFUNDED STATUS OF PLAN.

 

The Plan is intended to constitute an “unfunded” plan for incentive
compensation.  With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.

 

SECTION 14.                                    GENERAL PROVISIONS.

 

(A)           SECURITIES LAWS COMPLIANCE.  SHARES OF STOCK SHALL NOT BE ISSUED
PURSUANT TO THE EXERCISE OR SETTLEMENT OF ANY AWARD GRANTED HEREUNDER UNLESS THE
EXERCISE OR SETTLEMENT OF SUCH AWARD AND THE ISSUANCE AND DELIVERY OF SUCH
SHARES OF STOCK PURSUANT

 

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thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act, the Exchange Act and the requirements of any
stock exchange upon which the Stock may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

 

(B)           CERTIFICATE LEGENDS.  THE ADMINISTRATOR MAY REQUIRE EACH PERSON
ACQUIRING SHARES OF STOCK HEREUNDER TO REPRESENT TO AND AGREE WITH THE COMPANY
IN WRITING THAT SUCH PERSON IS ACQUIRING THE SHARES OF STOCK WITHOUT A VIEW TO
DISTRIBUTION THEREOF.  THE CERTIFICATES FOR SUCH SHARES OF STOCK MAY INCLUDE ANY
LEGEND WHICH THE ADMINISTRATOR DEEMS APPROPRIATE TO REFLECT ANY RESTRICTIONS ON
TRANSFER.

 

All certificates for shares of Stock delivered under the Plan shall be subject
to such stock-transfer orders and other restrictions as the Administrator may
deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable federal or state securities law, and the
Administrator may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions.

 

(C)           COMPANY ACTIONS; NO RIGHT TO EMPLOYMENT.  NOTHING CONTAINED IN THE
PLAN SHALL PREVENT THE BOARD FROM ADOPTING OTHER OR ADDITIONAL COMPENSATION
ARRANGEMENTS, SUBJECT TO STOCKHOLDER APPROVAL, IF SUCH APPROVAL IS NECESSARY AND
DESIRABLE; AND SUCH ARRANGEMENTS MAY BE EITHER GENERALLY APPLICABLE OR
APPLICABLE ONLY IN SPECIFIC CASES.  THE ADOPTION OF THE PLAN SHALL NOT CONFER
UPON ANY ELIGIBLE RECIPIENT ANY RIGHT TO CONTINUED EMPLOYMENT OR SERVICE WITH
THE COMPANY OR ANY PARENT OR SUBSIDIARY, AS THE CASE MAY BE, NOR SHALL IT
INTERFERE IN ANY WAY WITH THE RIGHT OF THE COMPANY OR ANY PARENT OR SUBSIDIARY
TO TERMINATE THE EMPLOYMENT OR SERVICE OF ANY OF ITS ELIGIBLE RECIPIENTS AT ANY
TIME.

 

(D)           PAYMENT OF TAXES.  EACH PARTICIPANT SHALL, NO LATER THAN THE DATE
AS OF WHICH THE VALUE OF AN AWARD FIRST BECOMES INCLUDIBLE IN THE GROSS INCOME
OF THE PARTICIPANT FOR FEDERAL INCOME TAX PURPOSES, PAY TO THE COMPANY, OR MAKE
ARRANGEMENTS SATISFACTORY TO THE ADMINISTRATOR REGARDING PAYMENT OF, ANY
FEDERAL, STATE, OR LOCAL TAXES

 

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of any kind required by law to be withheld with respect to such Award.  The
obligations of the Company under the Plan shall be conditional on the making of
such payments or arrangements, and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant.

 

(e) Tax Notifications. Each Participant shall promptly notify the Company of any
election the Participant makes under Section 83(b) of the Code or any
disposition of shares of Stock delivered pursuant to the exercise of an
Incentive Stock Option under the circumstances described in Section 421(b) of
the Code (relating to certain disqualifying dispositions).

 

(f) Section 409A. If any distribution or settlement of an Award pursuant to the
terms of this Plan or an Award agreement would subject a Participant to tax
under Section 409A of the Code, the Company shall modify the Plan or applicable
Award agreement in the least restrictive manner necessary in order to comply
with the provisions of Section 409A, other applicable provision(s) of the Code
and/or any rules, regulations or other regulatory guidance issued under such
statutory provisions and, in each case, without any diminution in the value of
the payments to an affected Participant.

 

SECTION 15.                                    EFFECTIVE DATE OF PLAN.

 

The Plan was adopted by the Board on February 9, 2006.  The Plan was approved by
the stockholders of the Company on February 9, 2006. The Plan shall become
effective on the day prior to the date of consummation of the Initial Public
Offering (the “Effective Date”). In the event that the date of consummation of
the Initial Public Offering has not occurred by July 1, 2006, the Plan shall
expire and be null an void without any force or effect.

 

SECTION 16.                                    TERM OF PLAN.

 

No Award shall be granted pursuant to the Plan on or after the tenth anniversary
of the Effective Date, but Awards theretofore granted may extend beyond that
date.

 

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SECTION 17.                                    GOVERNING LAW.

 

The Plan and all determinations made and actions taken pursuant hereto shall be
governed by the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.

 

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