Exhibit 10.7

 

CCUR HOLDINGS, INC.

AMENDED AND RESTATED

2011 STOCK INCENTIVE PLAN

 

SECTION 1.       Purpose. The purpose of the CCUR Holdings, Inc. 2011 Stock
Incentive Plan is to advance the interests of CCUR Holdings, Inc. (the
“Company”) by enabling officers, employees, non-employee directors and
consultants of the Company and its Affiliates to participate in the Company’s
future and to enable the Company to attract and retain such persons by offering
them proprietary interests in the Company.

 

SECTION 2.       Definitions. For purposes of the Plan, the following terms are
defined as set forth below:

 

a.“Affiliate” means a corporation or other entity controlled (as determined by
the Committee) directly, or indirectly through one or more intermediaries, by
the Company and designated by the Committee as such.

 

b.“Award” means an award granted to a Participant in the form of a Stock
Appreciation Right, Stock Option, or Restricted Stock, or any combination of the
foregoing.

 

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

 

d.“Cause” shall have the meaning set forth in Section 9.

 

e.“Change of Control” shall have the meaning set forth in Section 12.

 

f.“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor thereto.

 

g.“Committee” means the Committee referred to in Section 5.

 

h.“Company” means CCUR Holdings, Inc., a Delaware corporation.

 

i.“Disability” means permanent and total disability as determined under
procedures established by the Committee for purposes of the Plan (provided, in
the case of Incentive Stock Option "Disability" is determined consistent with
permanent and total disability as defined in Section 22(e)(3) of the Code).

 

j.“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor thereto.

 

k.“Fair Market Value” means the closing sale price as of any given date of a
share of Stock if the Stock is listed on a national securities exchange or
quoted on the NASDAQ system or, if no such closing price is available on such
date, such closing price as reported for the immediately preceding business day.
If the Stock is not listed on a national securities exchange or quoted on the
NASDAQ system, the Fair Market Value of the Stock shall be determined by the
Committee in good faith.

 

l.“Incentive Stock Option” means any Stock Option intended to be and designated
as an “incentive stock option” within the meaning of Section 422 of the Code.

 

m.“Non-Employee Director” means any director of the Company who is not an
employee of the Company or any of its Affiliates.

 

n.“Non-Qualified Stock Option” means any Stock Option that is not an Incentive
Stock Option.

 

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o.“Normal Retirement” means retirement from active employment with the Company
or an Affiliate at or after age 65 or at such other age as may be specified by
the Committee in the Award agreement.

 

p.“Participant” means an officer, employee, Non-Employee Director or consultant
of the Company or of an Affiliate to whom an Award has been granted that has not
terminated, expired or been fully exercised.

 

q.“Plan” means the CCUR Holdings, Inc. 2011 Stock Incentive Plan, as set forth
herein and as hereinafter amended from time to time.

 

r.“Prior Plan” means the Concurrent Computer Corporation Third Amended and
Restated 2001 Stock Option Plan.

 

s.“Restriction Period” means the period of time, which may be a single period or
multiple periods, during which Restricted Stock awarded to a Participant remains
subject to the Restrictions imposed on such Stock, as determined by the
Committee.

 

t.“Restrictions” means the restrictions and conditions imposed on Restricted
Stock awarded to a Participant, as determined by the Committee, that must be
satisfied in order for the Restricted Stock to vest, in whole or in part, in the
Participant.

 

u.“Restricted Stock” means an award of Stock subject to Restrictions whereby the
Participant’s rights to full enjoyment of the Stock are conditioned upon the
future performance of substantial services or are otherwise subject to a
“substantial risk of forfeiture” within the meaning of Section 83 of the Code.

 

v.“Restricted Stock Agreement” means a written agreement between a Participant
and the Company evidencing an Award of Restricted Stock.

 

w.“Restricted Stock Award Date" means the date on which the Committee awarded
Restricted Stock to the Participant.

 

x.“Retirement” means Normal Retirement or early retirement if the Company’s
Profit Sharing and Savings Plan provides for same.

 

y.“Rule 16b-3” means the exemption under Rule 16b-3 to Section 16(b) of the
Exchange Act, as amended from time to time.

 

z.“Stock” means common stock, $.01 per share par value, of the Company.

 

aa.“Stock Appreciation Right” means a right granted under Section 10 to receive
the appreciation in a share of Stock.

 

bb.“Stock Option” or “Option” means an option granted under Section 9.

 

cc.“Termination of Employment” means the termination of a Participant’s
employment with the Company and any Affiliate. A Participant employed by an
Affiliate also shall be deemed to incur a Termination of Employment if the
Affiliate ceases to be an Affiliate and the Participant does not immediately
thereafter become an employee of the Company or another Affiliate.

 

In addition, certain other terms used herein have definitions given to them in
the first place in which they are used. For purposes of the definitions set
forth in this Section 2, the singular shall include the plural and the plural
shall include the singular.

 

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SECTION 3.       Effective Date. The effective date of the Plan shall be
November 1, 2011. From and after the Effective Date, no further Awards shall be
made under the Prior Plan; however, Awards made under the Prior Plan before the
Effective Date shall continue in effect in accordance with their terms.

 

SECTION 4.       Stock Subject to Plan.

 

The number of shares of Stock reserved and available for issuance pursuant to
Awards under the Plan effective October 23, 2014, shall be increased by an
additional 600,000 shares of Stock so that the total number reserved and
available for issuance pursuant to Awards under the Plan on such date shall be
600,000 plus the number of shares of Stock then remaining from the 500,000
shares of Stock which were originally reserved and available for issuance
pursuant to Awards under the Plan as adopted on November 1, 2011. As of
September 1, 2014 there were 102,535 shares available for distribution under the
Plan. Shares of Stock reserved and available for issuance pursuant to Awards
under the Plan may consist, in whole or in part, of authorized and unissued
shares or treasury shares. A maximum of all shares of Stock may be issued under
the Plan pursuant to Incentive Stock Options.

 

If any shares of Stock cease to be subject to a Stock Option (as a result of
cancellation, expiration or exchange of such Option), if any shares of
Restricted Stock are forfeited, or if any Award otherwise terminates without a
distribution being made to the Participant in the form of Stock, such shares
shall again be available for Awards under the Plan.

 

In the event of any merger, reorganization, consolidation, recapitalization
(including, but not limited to, the issuance of Stock or any securities
convertible into Stock in exchange for securities of the Company), stock
dividend, stock split or reverse stock split, extraordinary distribution with
respect to the Stock or other similar change in corporate structure affecting
the Stock, such substitution or adjustments shall be made in the aggregate
number of shares reserved for issuance under the Plan, the annual grant caps
described in Section 6, and the number of shares and the Option price or Stock
Appreciation Right grant price of shares subject to outstanding Awards granted
under the Plan as may be determined to be appropriate by the Committee, in its
sole discretion; provided, however, that the number of shares subject to any
Award always shall be a whole number. In addition, the Committee shall have the
right (in any manner that the Committee in its discretion deems consistent with
Section 424(a) of the Code and without regard to the annual grant caps described
in Section 6) to make any Award to effect the assumption of, or the substitution
for, stock option, stock appreciation right and restricted stock grants
previously made by any other corporation to the extent that such corporate
transaction calls for such substitution or assumption of such stock option,
stock appreciation right and restricted stock grants.

 

SECTION 5.         Administration.

 

The Plan shall be administered by the Compensation Committee (“Committee”) of
the Board or such other committee of the Board, composed of not less than two
(2) members, each of whom shall be appointed by and shall serve at the pleasure
of the Board and shall come within the definition of a “non-employee director”
under Rule 16b-3 and an “outside director” under Section 162(m) of the Code. If
at any time no Committee shall be in place, the functions of the Committee
specified in the Plan shall be exercised by the Board.

 

The Committee shall have plenary authority to grant Awards to officers,
employees, Non-Employee Directors and consultants of the Company or an
Affiliate.

 

Among other things, the Committee shall have the authority, subject to the terms
of the Plan,

 

(a)to select the officers, employees and consultants to whom Awards may from to
time be granted;

 

(b)to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and Restricted Stock, or
any combination thereof, are to be granted hereunder;

 

(c)to determine the number of shares of Stock to be covered by each Award
granted hereunder;

 

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(d)to determine the terms and conditions of any Award granted hereunder
(including, but not limited to, date of Awards, the Option price, any vesting
restrictions or limitation, any repurchase rights in favor of the Company and
any vesting acceleration or forfeiture waiver regarding any Award and the shares
of Stock relating thereto, based on such factors as the Committee shall
determine);

 

(e)to determine under what circumstances an Award may be settled in cash or
Stock;

 

(f)to determine Fair Market Value;

 

(g)to make all determinations under the Plan concerning any Participant’s
Termination of Employment, including whether such Termination of Employment
occurs by reason of Cause, Disability, Retirement or in connection with a Change
in Control, and whether a leave constitutes a Termination of Employment; and

 

(h)to exercise all such other authorities, take all such other actions and make
all such other determinations as it deems necessary or advisable for the proper
operation and/or administration of the Plan.

 

The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from to time, deem advisable; to interpret the terms and provisions of the Plan
and any Award issued under the Plan (and any agreement relating thereto); and to
otherwise supervise the administration of the Plan.

 

The Committee may act only by a majority of its members then in office, except
that the members thereof may authorize any one or more of their number or any
officer of the Company to execute and deliver documents on behalf of the
Committee.

 

Any determination made by the Committee pursuant to the provisions of the Plan
with respect to any Award shall be made in its sole discretion at the time of
the grant of the Award or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Committee pursuant to
the provisions of the Plan shall be final and binding on all persons, including
the Company and Participants.

 

SECTION 6.       Eligibility and Annual Grant Caps.

 

Officers, employees, Non-Employee Directors and consultants of the Company and
its Affiliates who are responsible for or contribute to the management, growth
and profitability of the business of the Company and its Affiliates are eligible
to be granted Awards under the Plan. Any person who files with the Committee, in
a form satisfactory to the Committee, a written waiver of eligibility to receive
any Award under the Plan shall not be eligible to receive an Award under the
Plan for the duration of the waiver.

 

No officer, employee, Non-Employee Directors or consultant shall be granted in
any calendar year Options to purchase more than 100,000 shares of Stock, Stock
Appreciation Rights based on the appreciation with respect to more than 100,000
shares of Stock, or Awards of Restricted Stock for more than 100,000 shares of
Stock.

 

SECTION 7.       Intentionally Left Blank

 

SECTION 8.       Duration of the Plan. The Plan shall terminate ten (10) years
from the effective date specified in Section 3, unless terminated earlier
pursuant to Section 13, and no Options may be granted thereafter.

 

SECTION 9.       Stock Options.

 

Stock Options granted under the Plan may be of two types: Incentive Stock
Options and Non-Qualified Stock Options. Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time approve.

 

The Committee shall have the authority to grant any officer, employee,
Non-Employee Director or consultant of the Company or of an Affiliate Stock
Options (with or without Stock Appreciation Rights). Incentive Stock Options may
be granted only to employees of the Company and its subsidiary corporations
(within the meaning of Section 424(f) of the Code). To the extent that any Stock
Option is not designated as an Incentive Stock Option, or even if so designated
does not qualify as an Incentive Stock Option, it shall constitute a
Non-Qualified Stock Option.

 

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Stock Options shall be evidenced by Option agreements, the terms and provisions
of which may differ. An Option agreement shall indicate on its face whether it
is an agreement for an Incentive Stock Option or a Non-Qualified Stock Option.
The grant of a Stock Option shall occur on the date the Committee by resolution
selects an individual to be a Participant in any grant of a Stock Option,
determines the number of shares of Stock to be subject to such Stock Option to
be granted to such individual and takes such other action as necessary for the
grant of the Stock Option. The Company shall notify a Participant of any grant
of a Stock Option, and a written Option agreement shall be duly executed and
delivered by the Company to the Participant. Anything in the Plan to the
contrary notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended or altered nor shall any discretion or
authority granted under the Plan be exercised so as to disqualify the Plan under
Section 422 of the Code or, without the consent of the optionee affected, to
disqualify any Incentive Stock Option under such Section 422 of the Code.

 

Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions as the
Committee shall deem desirable:

 

(a)   Option Price. The Option price per share of Stock purchasable under an
Option shall be determined by the Committee and set forth in the Option
agreement, and shall not be less than the Fair Market Value of a share of Stock
subject to the Option on the date of grant of the Option (or, in the case of an
Incentive Stock Option granted to a “10 percent” stockholder under Section
422(b)(6) of the Code, shall not be less than 110% of the Fair Market Value of a
share of Stock subject to the Option on the date of grant of the Option).

 

(b)   Option Term. The term of each Stock Option shall be ten (10) years, unless
otherwise specified by the Committee in the written option agreement (provided
that no Option shall be exercisable more than ten (10) years after the date of
grant and no Incentive Stock Option granted to a “10 percent” stockholder under
Section 422(b)(6) of the Code shall be exercisable more than five (5) years
after the date of grant).

 

(c)   Exercisability. Subject to Section 12, Stock Options shall be exercisable
at such time or times and subject to such terms and conditions as shall be
determined by the Committee. If the Committee provides that any Stock Option is
exercisable only in installments, the Committee may at any time waive such
installment exercise provisions, in whole or in part, based on such factors as
the Committee may determine. In addition, the Committee may at any time,
accelerate the exercisability of any Stock Option.

 

(d)   Method of Exercise. Subject to the provisions of this Section 9, Stock
Options may be exercised (to the extent then exercisable), 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 subject to the Stock Option to
be purchased.

 

Such notice shall be accompanied by payment in full of the purchase price by
certified or bank check or such other instrument as the Company may accept. If
approved by the Committee, payment in full or in part also may be made in the
form of unrestricted Stock already owned by the optionee of the same class as
the Stock subject to the Stock Option; provided, however, that, in the case of
an Incentive Stock Option, the right to make a payment in the form of already
owned shares of Stock of the same class as the Stock subject to the Stock Option
shall be authorized only at the time the Stock Option is granted.

 

In the discretion of the Committee, payment for any Stock subject to an Option
also may be made by delivering a properly executed exercise notice to the
Company together with a copy of irrevocable instructions to a broker to deliver
promptly to the Company the purchase price. To facilitate the foregoing, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms. The value of already owned shares of Stock exchanged in full or
partial payment for the shares purchased upon the exercise of an Option shall be
equal to the aggregate Fair Market Value of such already owned shares of Stock
on the date preceding the exercise of such Option (and transfer of such already
owned shares to the account of the Company).

 

(e)   Non-transferability of Options. No Stock Option may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, by the optionee other
than by will or by the laws of descent and distribution, and all Stock Options
shall be exercisable, during the optionee’s lifetime, only by the optionee or by
the guardian or legal representative of the optionee, it being understood that
the terms “holder” and “optionee” include the guardian and legal representative
of the optionee named in the Option agreement and any person to whom an Option
is transferred by will or the laws of descent and distribution.

 

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(f)    Termination by Death. If an optionee’s employment terminates by reason of
death, any Stock Option held by such optionee may thereafter be exercised, to
the extent then exercisable or on such accelerated basis as the Committee may
determine, for a period of one year (or such other period as the Committee may
specify at grant) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is shorter.

 

(g)   Termination by Reason of Disability. If any optionee’s employment
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination or on such accelerated basis as the Committee may determine,
for a period of one year (or such shorter period as the Committee may specify at
grant) from the date of such Termination of Employment or until the expiration
of the stated term of such Stock Option, whichever period is the shorter;
provided, however, that if the optionee dies within such one-year period, any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such one-year period, continue to be exercisable to the extent to
which it was exercisable at the time of death for a period of one year from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.

 

(h)   Other Termination. If an optionee incurs a Termination of Employment for
any reason other than death, Disability or Cause, any Stock Option held by such
optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of termination or on such accelerated basis as the
Committee may determine, for a period of three (3) months (or such shorter
period as the Committee may specify at grant) from the date of such Termination
of Employment or until the expiration of the stated term of such Stock Option,
whichever period is shorter. If an optionee incurs a Termination of Employment
by the Company or an Affiliate for Cause, any Stock Option held by such optionee
shall thereupon immediately terminate in full. Unless otherwise determined by
the Committee at the time of grant of an Option, for the purposes of the Plan,
“Cause” shall have the same meaning as that set forth in any employment or
severance agreement in effect between the Company and the Participant at the
time of determination. If there is no such employment or severance agreement,
“Cause” shall have the same meaning as set forth in the Award or if there is no
such definition in the Award, “Cause” shall mean (1) the conviction of the
optionee for committing a felony under federal law or the law of the state in
which such action occurred, (2) dishonesty in the course of fulfilling the
optionee’s employment duties (or duties as a director, in the case of a
Non-Employee Director), or (3) willful and deliberate failure on the part of the
optionee to perform his or her employment duties (or duties as a director, in
the case of a Non-Employee Director) in any material respect.

 

(i)    $100,000 Limit for Incentive Stock Options. No Stock Option shall be
treated as an ISO to the extent that the aggregate Fair Market Value of the
shares of Stock subject to the Option that would first become exercisable in any
calendar year exceeds $100,000. Any such excess instead automatically shall be
treated as a Non-Qualified Stock Option. The Committee shall interpret and
administer the Incentive Stock Option limitation set forth in this Section 9(i)
in accordance with Section 422(d) of the Code, and the Committee shall treat
this Section 9(i) as in effect only for those periods for which Section 422(d)
of the Code is in effect.

 

(j)    Cashing out of Option. On receipt of written notice of exercise, the
Committee may elect to cash out all or part of any Stock Option to be exercised
by paying the optionee an amount, in cash or Stock, equal to the excess of the
Fair Market Value of a share of Stock that is the subject of the Option exercise
over the Option price times the number of shares of Stock subject to the Option
on the effective date of such cash out.

 

SECTION 10.     Stock Appreciation Rights.

 

Subject to the terms and conditions of the Plan, Stock Appreciation Rights may
be granted any officer, employee, Non-Employee Director or consultant of the
Company or of an Affiliate at any time and from time to time as shall be
determined by the Committee. The Committee may grant Stock Appreciation Rights
(a) in connection with, and at the Grant Date of, a related Option (a Tandem
SAR), or (b) independent of, and unrelated to, an Option (a Freestanding SAR).
The Committee shall have complete discretion in determining the number of shares
of Stock to which a Stock Appreciation Right pertains (subject to Section 6)
and, consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to any Stock Appreciation Right.

 

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Stock Appreciation Rights shall be evidenced by Stock Appreciation Rights
agreements, the terms and provisions of which may differ. The grant of Stock
Appreciation Rights shall occur on the date the Committee by resolution selects
an individual to be a Participant in any grant of Stock Appreciation Rights,
determines the number of shares of Stock to be subject to such Stock
Appreciation Rights to be granted to such individual and takes such other action
as necessary for the grant of the Stock Appreciation Rights. The Company shall
notify a Participant of any grant of Stock Appreciation Rights, and a written
Stock Appreciation Rights agreement shall be duly executed and delivered by the
Company to the Participant.

 

Stock Appreciation Rights granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions as the Committee shall deem desirable:

 

(a) Grant Price. The grant price for each Freestanding SAR shall be not less
than one hundred percent (100%) of the Fair Market Value of a share of Stock on
the grant date of such Freestanding SAR. The grant price of a Tandem SAR shall
be equal to the Option price of the related Option.

 

(b) Term of Stock Appreciation Right. The term of a Stock Appreciation Right
granted under the Plan shall be determined by the Committee, in its sole
discretion; provided, however, that the term of any Tandem SAR shall be the same
as the related Option.

 

(c) Exercisability. A Tandem SAR shall entitle a Participant to elect, in lieu
of exercising his or her unexercised related Option for all or a portion of the
shares of Stock for which such Option is then exercisable pursuant to its terms,
to surrender such Option to the Company with respect to any or all of such
shares of Stock and to receive from the Company in exchange therefor a payment
described in Section 10(d). An Option with respect to which a Participant has
elected to exercise a Tandem SAR shall, to the extent of the shares of Stock
covered by such exercise, be canceled automatically and surrendered to the
Company. Such Option shall thereafter remain exercisable according to its terms
only with respect to the number of shares of Stock as to which it would
otherwise be exercisable, less the number of shares of Stock with respect to
which such Tandem SAR has been so exercised. Notwithstanding any other provision
of the Plan to the contrary, with respect to a Tandem SAR granted in connection
with an Incentive Stock Option (a) the Tandem SAR will expire no later than the
expiration of the related Incentive Stock Option; (b) the value of the payment
with respect to the Tandem SAR may not exceed the difference between the Fair
Market Value of the shares of Stock subject to the related Incentive Stock
Option at the time the Tandem SAR is exercised and the Option Price of the
related Incentive Stock Option; and (c) the Tandem SAR may be exercised only
when the Fair Market Value of the shares of Stock subject to the Incentive Stock
Option exceeds the Option Price of the Incentive Stock Option. A Freestanding
SAR may be exercised upon whatever terms and conditions the Committee, in its
sole discretion, in accordance with the Plan, determines and sets forth in the
Award Agreement.

 

(d) Payment of SAR Amount. Upon exercise of a Stock Appreciation Right, the
Participant shall be entitled to receive payment from the Company in an amount
determined by multiplying the excess of the Fair Market Value of a share of
Stock on the date of exercise over the Grant Price of the SAR, by the number of
shares of Stock with respect to which the Stock Appreciation Right is exercised.
Notwithstanding the foregoing, the Committee may establish and set forth in the
applicable Award Agreement a maximum amount per share of Stock that will be
payable upon the exercise of a Stock Appreciation Right. At the discretion of
the Committee, such payment upon exercise of a Stock Appreciation Right shall be
in cash, in shares of Stock of equivalent Fair Market Value, or in some
combination thereof.

 

(e) Rights as a Stockholder. A Participant receiving a Stock Appreciation Right
shall have the rights of a stockholder only as to shares of Stock, if any,
actually issued to such Participant upon satisfaction or achievement of the
terms and conditions of the Award, and in accordance with the provisions of the
Plan and the applicable Award Agreement.

 

(f) Termination of Employment or Service. The Committee may establish and set
forth in the applicable Award Agreement the terms and conditions under which a
Stock Appreciation Right shall remain exercisable, if at all, upon a Termination
of the Participant; provided, however, that in no event may a Stock Appreciation
Right be exercised after the expiration date of such Stock Appreciation Right
specified in the applicable Award Agreement. The provisions of Section 9(f),
9(g) and 9(h) above shall apply to any Stock Appreciation Right if the Award
Agreement evidencing such Stock Appreciation Right does not specify the terms
and conditions upon which such SAR shall be forfeited or be exercisable or
terminate upon, or after, a Termination of the Participant.

 

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(g) Non-transferrability. No Stock Appreciation Right may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, by the Participant
other than by will or by the laws of descent and distribution.

 

SECTION 11.     Terms of Restricted Stock Awards.

 

Subject to and consistent with the provisions of the Plan, with respect to each
Award of Restricted Stock to a Participant, the Committee shall determine:

 

(a)the terms and conditions of the Restricted Stock Agreement between the
Company and the Participant evidencing the Award;

 

(b)the Restriction Period for all or a portion of the Award, which Restriction
Period may differ with respect to each Participant but shall be at least three
(3) years, unless the Restriction(s) applicable to the Award are based on the
attainment of specific corporate, divisional or individual performance standards
or goals, in which case no more than 5% of the shares authorized will be granted
with performance restrictions that can all lapse within one (1) year;

 

(c)the Restriction(s) applicable to the Award, including, but not limited to,
continuous employment with the Company or an Affiliate for a specified term or
the attainment of specific corporate, divisional or individual performance
standards or goals, which Restriction(s) may differ with respect to each
Participant;

 

(d)whether the Participant shall receive the dividends and other distributions
paid with respect to the Award as declared and paid to the holder of the Stock
during the Restriction Period or whether such dividends or other distributions
shall be withheld by the Company for the account of the Participant until the
Restriction Period has expired or the Restriction(s) have been satisfied, and
whether interest shall be paid on such dividends and other distributions
withheld, and if so, the rate of interest to be paid; and

 

(e)the percentage of the Award that shall vest in the Participant in the event
of death, Disability or Retirement prior to the expiration of the Restriction
Period or the satisfaction of the Restriction(s) applicable to the Award.

 

Upon an Award of Restricted Stock to a Participant, the stock certificate
representing the Restricted Stock shall be issued in the name of the
Participant, or otherwise shall be transferred to the name of the Participant on
the books and records of the Company, whereupon the Participant shall become a
stockholder of the Company with respect to such Restricted Stock and shall be
entitled to vote the Stock. Any stock certificates issued to the Participant
shall be held in custody by the Company, together with stock powers executed by
the Participant in favor of the Company, until the Restriction Period expires
and the Restriction(s) imposed on the Restricted Stock are satisfied. Restricted
Stock may not be sold, transferred, pledged, assigned, encumbered, alienated,
hypothecated or otherwise disposed of until the end of the applicable
Restriction Period. Unless otherwise determined by the Committee and set forth
in a Participant’s Restricted Stock Agreement, to the extent permitted or
required by law, as determined by the Committee, Participants holding Restricted
Stock shall be granted the right to exercise full voting rights with respect to
those shares during the Restriction Period.

 

SECTION 12.    Change of Control.

 

Unless an Award agreement provides otherwise, upon the occurrence of a Change of
Control,

 

(a)any and all outstanding Options and Stock Appreciation Rights shall become
immediately exercisable, and the Committee, in its discretion, shall have the
right (but not the obligation) to cash out prior to the transaction each Option
and Stock Appreciation Right by paying the optionee an amount, in cash or Stock,
equal to the excess of the Fair Market Value of a share of Stock over the Option
price per share of Stock times the number of shares of Stock subject to the
Option on the effective date of the cash out (in which event each Option and
Stock Appreciation Right shall thereupon expire); and

 

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(b)the Restriction Period and Restriction(s) imposed on the Restricted Stock
shall lapse, and the Restricted Stock shall vest in the Participant, and any
dividends and distributions paid with respect to the Restricted Stock that were
escrowed during the Restriction Period shall be paid to the Participant.

 

For purposes of this Plan, “Change of Control” means the occurrence of any of
the following events:

 

(a)the acquisition, directly or indirectly, by any “person” or “group” (as those
terms are defined in Sections 3(a)(9), 13(d), and 14(d) of the Exchange Act and
the rules thereunder, including, without limitation, Rule 13d-5(b)) of
“beneficial ownership” (as determined pursuant to Rule 13d-3 under the Exchange
Act) of securities entitled to vote generally in the election of directors
(“voting securities”) of the Company that represent 50% or more of the combined
voting power of the Company’s then outstanding voting securities, other than:

 

(i) an acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any person controlled by the Company or by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any person controlled
by the Company, or

 

(ii) an acquisition of voting securities by the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of the stock of the Company, or

 

(iii) an acquisition of voting securities pursuant to a transaction described in
clause (c) below that would not be a Change of Control under clause (c);

 

(b)a change in the composition of the Board that causes less than a majority of
the directors of the Company to be directors that meet one or more of the
following descriptions:

 

(i) a director who has been a director of the Company for a continuous period of
at least 24 months, or

 

(ii) a director whose election or nomination as director was approved by a vote
of at least two-thirds of the then directors described in clauses (b)(i), (ii),
or (iii) by prior nomination or election, but excluding, for the purpose of this
sub clause (ii), any director whose initial assumption of office occurred as a
result of an actual or threatened (y) election contest with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person or group other than the Board or
(z) tender offer, merger, sale of substantially all of the Company’s assets,
consolidation, reorganization, or business combination that would be a Change of
Control under clause (c) on consummation thereof, or

 

(iii) who were serving on the Board as a result of the consummation of a
transaction described in clause (c) that would not be a Change of Control under
clause (c);

 

(c)the consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a sale or
other disposition of all or substantially all of the Company’s assets or (z) the
acquisition of assets or stock of another entity, in each case, other than in a
transaction

 

(i)that results in the Company’s voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding
or by being converted into voting securities of the Company or the person that,
as a result of the transaction, controls, directly or indirectly, the Company or
owns, directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least 50% of the
combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction, and

 

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(ii)after which more than 50% of the members of the board of directors of the
Successor Entity were members of the Board at the time of the Board’s approval
of the agreement providing for the transaction or other action of the Board
approving the transaction (or whose election or nomination was approved by a
vote of at least two-thirds of the members who were members of the Board at that
time), and

 

(iii)after which no person or group beneficially owns voting securities
representing 50% or more of the combined voting power of the Successor Entity,
unless the Board determines in its discretion that beneficial ownership by a
person or group of voting securities representing 50% or more of the combined
voting power of the Successor Entity shall not be deemed a Change of Control; or

 

(d)a liquidation or dissolution of the Company.

 

For purposes of clarification, an acquisition of Company securities by the
Company that causes the Company’s voting securities beneficially owned by a
person or group to represent 50% or more of the combined voting power of the
Company’s then outstanding voting securities is not to be treated as an
“acquisition” by any person or group for purposes of clause (a) above. For
purposes of clause (a) above, the Company makes the calculation of voting power
as if the date of the acquisition were a record date for a vote of the Company’s
stockholders, and for purposes of clause (c) above, the Company makes the
calculation of voting power as if the date of the consummation of the
transaction were a record date for a vote of the Company’s stockholders.

 

SECTION 13.     Amendments and Termination.

 

The Board may, at any time and without prior notice, amend, alter, or
discontinue the Plan, but no amendment, alteration or discontinuation shall be
made that would (i) impair the rights of an Award theretofore granted without
the Participant’s consent, except such an amendment made to cause the Plan to
qualify for the exemption provided by Rule 16b-3, or (ii) disqualify the Plan
from the exemption provided by Rule 16b-3. In addition, no such amendment shall
be made without the approval of the Company’s stockholders to the extent (a)
such approval is required by law or agreement (including the applicable
regulations and rules of the SEC and any national securities exchange on which
the Stock is traded), (b) such amendment materially increases the benefits
accruing to Participants under the Plan, materially modifies the requirements as
to eligibility for participation in the Plan, (c) except as is provided in
Section 4, such amendment increases the maximum number of shares of Stock which
may be sold or awarded under the Plan, increases the maximum limitations set
forth in Section 6, or decreases the minimum Option price or Stock Appreciation
grant price requirements of Sections 9 and 10, respectively; or (d) such
amendment extends the duration of the Plan or the maximum period during which
Options or Stock Appreciation Rights may be exercised under the Plan.

 

The Committee may, at any time and without prior notice, amend the terms of any
Stock Option or other Award theretofore granted, prospectively or retroactively,
but no such amendment shall impair the rights of any Award holder without the
holder’s consent, except such an amendment made to cause the Plan or Award to
qualify for the exemption provided by Rule 16b-3; provided that no Stock Option
or other Award may be amended retroactively without stockholder approval. Except
as otherwise provided in Section 4, neither the Board nor the Committee may take
any action: (1) to amend the terms of an outstanding Option or Stock
Appreciation Right to reduce the Option price or grant price thereof, cancel an
Option or Stock Appreciation Right and replace it with a new Option or Stock
Appreciation Right with a lower Option price or grant price, or that has an
economic effect that is the same as any such reduction or cancellation; or (2)
to cancel an outstanding Option or Stock Appreciation Right in exchange for the
grant of another type of Award, without, in each such case, first obtaining
approval of the stockholders of Company of such action.

 

Subject to the above provisions, the Board shall have authority to amend the
Plan to take into account changes in law and tax and accounting rules, as well
as other developments, and to grant Awards that qualify for beneficial treatment
under such rules without stockholder approval.

 

SECTION 14.     General Provisions.

 

(a)  Nothing contained in the Plan shall prevent the Company or an Affiliate
from adopting other or additional compensation arrangements for its employees.

 

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(b)  The Plan shall not confer upon any employee any right to continued
employment nor shall it interfere in any way with the right of the Company or an
Affiliate to terminate the employment of any employee at any time.

 

(c)  No later than the date as of which an amount first becomes includible in
the gross income of a Participant for federal income tax purposes with respect
to any Award under the Plan, the Participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any federal,
state, local or foreign taxes of any kind required by law to be withheld with
respect to such amount. Unless otherwise determined by the Company, withholding
obligations may be settled with Stock, including Stock that is part of the Award
that gives rise to the withholding requirement. The obligations of the Company
under the Plan shall be conditional on such payment or arrangements, and the
Company and its Affiliates shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment otherwise due to the Participant. No
federal tax withholding shall be effected under the Plan that exceeds the
minimum statutory federal withholding requirements.

 

(d)  The Committee shall establish such procedures as it deems appropriate for a
Participant to designate a beneficiary to whom any amounts payable in the event
of the Participant’s death are to be paid.

 

(e)  Agreements entered into by the Company and Participants relating to Awards
under the Plan, in such form as may be approved by the Committee from time to
time, to the extent consistent with or permitted by the Plan shall control with
respect to the terms and conditions of the subject Award. If any provisions of
the Plan or any agreement entered into pursuant to the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions of the Plan or the subject agreement.

 

(f)  As a condition to the grant of an Award, or the issuance of shares of Stock
subject to an Award, the Committee may prescribe corporate, divisional, and/or
individual performance goals applicable to all or any portion of the shares
subject to the Award. Performance goals may be based on achieving a certain
level of revenue, earnings, earnings per share, net income, return on equity,
return on capital, return on assets, total stockholder return, return on sales
or cash flow, or any combination thereof, of the Company or the Company and its
Affiliates, or any division thereof, or on the extent of changes in such
criteria.

 

(g)  All references to sections are to sections of the Plan unless otherwise
indicated. The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.

 

(h)  It is the intention of the Company that no Award shall be deferred
compensation subject to Code Section 409A unless and to the extent that the
Committee specifically determines otherwise. To the extent the Committee
determines that an Award will be subject to Section 409A of the Code, including
any rules for payment, including elective or mandatory deferral of the payment
or delivery of cash or shares of Stock pursuant thereto, and any rules regarding
treatment of such Awards in the event of a Change in Control, shall be set forth
in the applicable Award Agreement and shall be intended to comply in all
respects with Section 409A of the Code, and the Plan and the terms and
conditions of such Awards shall be interpreted and administered accordingly. The
Committee shall not extend the period to exercise an Option or Stock
Appreciation Right to the extent that such extension would cause the Option or
Stock Appreciation Right to become subject to Code Section 409A. Notwithstanding
any other provision of the Plan or an Award Agreement to the contrary, no event
or condition shall constitute a Change in Control with respect to an Award to
the extent that, if it were, a 20% additional income tax would be imposed under
Section 409A of the Code on the Participant who holds such Award; provided that,
in such a case, the event or condition shall continue to constitute a Change in
Control to the maximum extent possible (for example, if applicable, in respect
of vesting without an acceleration of payment of such an Award) without causing
the imposition of such 20% tax.

 

(i)  The Company and Affiliates shall have the right to offset against the
obligations to make payment or issue any shares of Stock to any Participant
under the Plan, any outstanding amounts (including travel and entertainment
advance balances, loans, tax withholding amounts paid by the employer or amounts
repayable to the Company or Affiliate pursuant to tax equalization, housing,
automobile or other employee programs) such Participant then owes to the Company
or Affiliate and any amounts the Committee otherwise deems appropriate pursuant
to any tax equalization policy or agreement.

 

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