Exhibit 10.1
ASSET ACCEPTANCE CAPITAL CORP.
2004 STOCK INCENTIVE PLAN
(as amended and restated effective January 1, 2008)
I. GENERAL PROVISIONS
     1.1 Establishment. On February 2, 2004, the Board of Directors (“Board”) of
Asset Acceptance Capital Corp., a Delaware corporation (“Company”), adopted the
2004 Stock Incentive Plan (“Plan”). On February 2, 2004, the Company’s
shareholders approved the Plan. On April 2, 2007, the Board amended and restated
the Plan, and separately on April 2, 2007 the Board amended and restated the
Plan to provide as set forth herein, with the changes made through this
restatement being (i) effective only on their receipt of shareholder approval at
the Company’s annual meeting in 2007, and (ii) applicable to all outstanding and
future awards of Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Deferred Stock Units, Performance Share Awards, or
Annual Incentive Awards. On May 22, 2007 this amended and restated Plan was
approved by shareholders at the Company’s 2007 annual meeting of shareholders.
As of January 1, 2008, the Plan was further amended and restated to comply with
Internal Revenue Code Section 409A.
     1.2 Purpose. The purpose of the Plan is (i) to promote the best interests
of the Company and its shareholders by encouraging Employees, consultants and
non-employee directors of the Company and its Subsidiaries to acquire an
ownership interest in the Company through Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Deferred Stock Units, Performance
Share Awards and Annual Incentive Awards, thus identifying their interests with
those of shareholders, and (ii) to enhance the ability of the Company to attract
and retain qualified Employees, consultants and non-employee directors. It is
the further purpose of the Plan to permit the granting of Nonqualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Deferred Stock Units, Performance Share Awards and Annual Incentive Awards that
will constitute performance based compensation, as described in Section 162(m)
of the Code, and regulations promulgated thereunder.
     1.3 Definitions. As used in this Plan, the following terms have the meaning
described below:
          (a) “Agreement” means the written agreement that sets forth the terms
of a Participant’s Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Units, Deferred Stock Units, Performance Share Award, Annual
Incentive Award, or Deferred Stock Unit award within the meaning of Section 4.10
of the Plan.

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          (b) “Annual Incentive Award” means an award that is granted in
accordance with Article VI of the Plan.
          (c) “Board” means the Board of Directors of the Company.
          (d) “Change in Control” means the occurrence of any of the following
events: (i) the acquisition of ownership by a person, corporation or other
entity, or a group acting in concert, of fifty-one percent, or more, of the
outstanding Common Stock of the Company in a single transaction or a series of
related transactions within a one-year period; (ii) a sale of all or
substantially all of the assets of the Company to any person, corporation or
other entity; (iii) a merger or similar transaction between the Company and
another entity if shareholders of the Company do not own a majority of the
voting stock of the surviving entity or any parent thereof and a majority in
value of the total outstanding stock of such surviving entity or any parent
thereof; or (iv) during any consecutive two-year period commencing after the
date of adoption of this Plan, individuals who constituted the Board at the
beginning of the period (or their approved replacements, as defined herein)
cease for any reason to constitute a majority of the Board, with a new Director
being considered an “approved replacement” Director if his or her election (or
nomination for election) was approved by a vote of at least a majority of the
Directors then still in office who either were Directors at the beginning of the
period or were themselves approved replacement Directors, but in either case
excluding any Director whose initial assumption of office occurred as a result
of an actual or threatened solicitation of proxies or consents by or on behalf
of any person other than the Board. Provided, however, that there shall not be
included within the meaning of “Change in Control,” any such event involving:
(a) any employee benefit plan (or related trust) sponsored or maintained by the
Company; or (b) any of the current shareholders of the Company as of the date of
adoption of this Plan by the Board (or any entity at any time controlled by any
such shareholder or shareholders).
          (e) “Change in Position” means, as determined by the Committee in its
discretion with respect to any Participant, a significant change in such
Participant’s employment relationship with the Company, including but not
limited to any or all of the following: (i) such Participant’s involuntary
termination of employment or services; (ii) a significant reduction in such
Participant’s duties, responsibilities, compensation and/or fringe benefits, or
the assignment to such Participant of duties inconsistent with his or her
position (all as in effect immediately prior to a Change in Control), whether or
not such Participant voluntarily terminates employment or services as a result
thereof; or (iii) a significant change in the geographic location of the
Participant’s primary workplace.
          (f) “Code” means the Internal Revenue Code of 1986, as amended.
          (g) “Committee” means the Compensation Committee of the Company, which
shall be comprised of two or more members of the Board.
          (h) “Common Stock” means shares of the Company’s authorized common
stock.
          (i) “Company” means Asset Acceptance Capital Corp. a Delaware
corporation.

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          (j) “Continuous Service” means the absence of any interruption or
termination of service as an Employee, non-employee director, or consultant.
Continuous Service shall not be considered interrupted in the case of: (i) sick
leave; (ii) military leave; (iii) any other leave of absence approved by the
Committee, provided that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise pursuant to Company policy adopted from
time to time; (iv) changes in status from director to advisory director or
emeritus status; or (v) in the case of transfers between locations of the
Company or between the Company or its respective successors. Changes in status
between service as an Employee, director, and a consultant shall not constitute
an interruption of Continuous Service.
          (k) “Deferred Stock Unit” means Common Stock that is subject to future
delivery in accordance with Section 4.10 of the Plan.
          (l) “Disability” means total and permanent disability, as defined in
Code Section 22(e).
          (m) “Employee” means an individual who has an “employment
relationship” with the Company or a Subsidiary, as defined in Treasury
Regulation 1.421-7(h), and the term “employment” means employment with the
Company, or a Subsidiary of the Company.
          (n) “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time and any successor thereto.
          (o) “Fair Market Value” means for purposes of determining the value of
Common Stock on the Grant Date the Stock Exchange closing price of the Company’s
Common Stock as reported in The Wall Street Journal (or as otherwise reported by
such Stock Exchange) for the Grant Date. In the event that there were no Common
Stock transactions on such date, the Fair Market Value shall be determined as of
the immediately preceding date on which there were Common Stock transactions.
Unless otherwise specified in the Plan, “Fair Market Value” for purposes of
determining the value of Common Stock on the date of exercise means the Stock
Exchange closing price of the Company’s Common Stock on the last date preceding
the exercise on which there were Common Stock transactions.
          (p) “Grant Date” means the date on which the Committee authorizes an
individual Option, Stock Appreciation Right, Restricted Stock grant, Restricted
Stock Units, Deferred Stock Units, Performance Share Award or Annual Incentive
Award, or such later date as shall be designated by the Committee.
          (q) “Incentive Stock Option” means an Option that is intended to meet
the requirements of Section 422 of the Code.
          (r) “Nonqualified Stock Option” means an Option that is not intended
to constitute an Incentive Stock Option.
          (s) “Option” means either an Incentive Stock Option or a Nonqualified
Stock Option.

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          (t) “Participant” means an Employee or non-employee director or
consultant designated by the Committee to participate in the Plan.
          (u) “Performance Share Award” means a performance share award that is
granted in accordance with Article V of the plan.
          (v) “Plan” means the Asset Acceptance Capital Corp. 2004 Stock
Incentive Plan, the terms of which are set forth herein, and amendments thereto.
          (w) “Restriction Period” means the period of time during which a
Participant’s Restricted Stock or Restricted Stock Unit grant is subject to
restrictions and is nontransferable.
          (x) “Restricted Stock” means Common Stock that is subject to
restrictions.
          (y) “Restricted Stock Unit” means a right granted pursuant to
Article IV to receive Restricted Stock or an equivalent value in cash pursuant
to the terms of the Plan and the related Agreement.
          (z) “Retirement” means termination of employment on or after the
attainment of age 65 and completion of three (3) years of service with the
Company.
          (aa) “Stock Appreciation Right” means the right to receive a cash or
Common Stock payment from the Company, in accordance with Article III of the
Plan.
          (bb) “Stock Exchange” means the principal national securities exchange
on which the Common Stock is listed for trading or, if the Common Stock is not
listed for trading on a national securities exchange, such other recognized
trading market or quotation system upon which the largest number of shares of
Common Stock has been traded in the aggregate during the last 20 days before a
Grant Date or date on which an Option is exercised, whichever is applicable.
          (cc) “Subsidiary” means a corporation or other entity defined in Code
Section 424(f).
          (dd) “Vested” means the extent to which an Option or Stock
Appreciation Right granted hereunder has become exercisable in accordance with
this Plan and the terms of the respective Agreement pursuant to which such
Option or Stock Appreciation Right was granted.
     1.4 Administration.
          (a) The Plan shall be administered by the Committee. At all times it
is intended that the directors appointed to serve on the Committee shall be
“disinterested persons” (within the meaning of Rule 16b-3 promulgated under the
Exchange Act) and “outside directors” (within the meaning of Code
Section 162(m)); however, the mere fact that a Committee member shall fail to
qualify under either of these requirements shall not invalidate any award made
by the Committee if the award is otherwise validly made under the Plan. The
members of the

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Committee shall be appointed by, and may be changed at any time and from time to
time, at the discretion of the Board.
          (b) The Committee shall interpret the Plan, prescribe, amend, and
rescind rules and regulations relating to the Plan, and make all other
determinations necessary or advisable for its administration. Subject to
applicable law and the restrictions set forth in the Plan, the Committee may
delegate administrative functions to officers and Employees of the Company or
its Subsidiaries, and may delegate in writing to one or more executives the
authority, which shall be revocable in writing at any time by the Committee, to
make grants to non-executive Employees.
          (c) The Committee shall have the discretion to interpret or construe
ambiguous, unclear, or implied (but omitted) terms in any fashion it deems to be
appropriate in its sole discretion, and to make any findings of fact needed in
the administration of the Plan or Agreements. The Committee’s prior exercise of
its discretionary authority shall not obligate it to exercise its authority in a
like fashion thereafter. The decision of the Committee on any question
concerning the interpretation of the Plan or its administration with respect to
any Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Units, Deferred Stock Units, Performance Share Award or Annual Incentive Award
granted under the Plan shall be final and binding upon all Participants and
their beneficiaries, transferees, successors, and assigns. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any grant or award hereunder.
     1.5 Participants. Participants in the Plan shall be such Employees
(including Employees who are directors), non-employee directors of, or
consultants to, the Company and its Subsidiaries as the Committee in its sole
discretion may select from time to time. The Committee may grant Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Deferred Stock
Units, Performance Share Awards and Annual Incentive Awards to an individual
upon the condition that the individual become an Employee of the Company or of a
Subsidiary, provided that the Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Units, Deferred Stock Units, Performance Share Award or
Annual Incentive Award shall be deemed to be granted only on the date that the
individual becomes an Employee.
     1.6 Stock. The Company has reserved 3,700,000 shares of the Company’s
Common Stock for issuance in conjunction with all Options and other stock-based
awards to be granted under the Plan. Shares subject to any unexercised portion
of a terminated, cancelled or expired Option, Stock Appreciation Right,
Restricted Stock grant, Restricted Stock Units, Deferred Stock Units, or
Performance Share Award granted hereunder, and pursuant to which a Participant
never acquired benefits of ownership, including payment of a stock dividend (but
excluding voting rights), may again be subjected to grants and awards under the
Plan, but shares surrendered pursuant to the exercise of a Stock Appreciation
Right shall not be available for future grants and awards. Notwithstanding the
foregoing, the number of Shares that are available for Incentive Stock Option
awards shall be determined, to the extent required under applicable tax laws, by
reducing the number of shares designated in the preceding paragraph by the
number of Shares granted pursuant to all awards (whether or not shares are
issued pursuant to such awards), provided that any shares that are either issued
or purchased under the Plan and forfeited back to the Plan, or surrendered in
payment of the exercise price for an Option or Stock

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Appreciation Right shall be available for issuance pursuant to future Incentive
Stock Option awards. All provisions in this Section 1.6 shall be adjusted, as
applicable, in accordance with Article VIII.
II. STOCK OPTIONS
     2.1 Grant of Options. The Committee, at any time and from time to time,
subject to the terms and conditions of the Plan, may grant Options to such
Participants and for such number of shares of Common Stock (whole or fractional)
as it shall designate; provided, however, that no Participant may be granted
Options during any one fiscal year (when aggregated with all other stock-based
awards granted under the Plan during such fiscal year), to purchase more than
500,000 shares of Common Stock (subject to adjustment in accordance with
Section 8.1(a) below). Any Participant may hold more than one Option under the
Plan and any other Plan of the Company or Subsidiary. The Committee shall
determine the general terms and conditions of exercise, including any applicable
vesting requirements, which shall be set forth in a Participant’s Option
Agreement. No Option granted hereunder may be exercised after the tenth
anniversary of the Grant Date. The Committee may designate any Option granted as
either an Incentive Stock Option or a Nonqualified Stock Option, or the
Committee may designate a portion of an Option as an Incentive Stock Option or a
Nonqualified Stock Option. An Incentive Stock Option may only be granted to an
Employee. At the discretion of the Committee, an Option may be granted in tandem
with a Stock Appreciation Right. Nonqualified Stock Options are intended to
satisfy the requirements of Code Section 162(m) and the regulations promulgated
thereunder, to the extent applicable.
     2.2 Incentive Stock Options. Any Option intended to constitute an Incentive
Stock Option shall comply with the requirements of this Section 2.2. No
Incentive Stock Option shall be granted with an exercise price below the Fair
Market Value of Common Stock on the Grant Date nor with an exercise term that
extends beyond 10 years from the Grant Date. An Incentive Stock Option shall not
be granted to any Participant who owns (within the meaning of Code Section
424(d)) stock of the Company or any Subsidiary possessing more than 10% of the
total combined voting power of all classes of stock of the Company or a
Subsidiary unless, at the Grant Date, the exercise price for the Option is at
least 110% of the Fair Market Value of the shares subject to the Option and the
Option, by its terms, is not exercisable more than 5 years after the Grant Date.
The aggregate Fair Market Value of the underlying Common Stock (determined at
the Grant Date) as to which Incentive Stock Options granted under the Plan
(including a plan of a Subsidiary) may first be exercised by a Participant in
any one calendar year shall not exceed $100,000. To the extent that an Option
intended to constitute an Incentive Stock Option shall violate the foregoing
$100,000 limitation (or any other limitation set forth in Code Section 422), the
portion of the Option that exceeds the $100,000 limitation (or violates any
other Code Section 422 limitation) shall be deemed to constitute a Nonqualified
Stock Option.
     2.3 Option Price. The Committee shall determine the per share exercise
price for each Option granted under the Plan. The Committee, at its discretion,
may grant Nonqualified Stock Options with an exercise price below 100% of the
Fair Market Value of Common Stock on the Grant Date. The foregoing
notwithstanding, no Incentive Stock Option shall be granted with an exercise
price below the Fair Market Value of Common Stock on the Grant Date.

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     2.4 Payment for Option Shares.
          (a) The purchase price for shares of Common Stock to be acquired upon
exercise of an Option granted hereunder shall be paid in full in cash or by
personal check, bank draft or money order at the time of exercise; provided,
however, that in lieu of such form of payment and to the extent authorized in an
Agreement, a Participant may pay such purchase price in whole or in part by
tendering shares of Common Stock, which are either (i) subject to the Option
being exercised or (ii) have been held by the Participant for at least six
(6) months and which are freely owned and held by the Participant independent of
any restrictions, hypothecations or other encumbrances, duly endorsed for
transfer (or with duly executed stock powers attached), or in any combination of
the above. Shares of Common Stock surrendered upon exercise shall be valued at
the Stock Exchange closing price for the Company’s Common Stock on the day prior
to exercise, as reported in The Wall Street Journal (or as otherwise reported by
such Stock Exchange), and the certificate(s) for such shares, duly endorsed for
transfer or accompanied by appropriate stock powers, shall be surrendered to the
Company. Participants who are subject to short swing profit restrictions under
the Exchange Act and who exercise an Option by tendering previously-acquired
shares shall do so only in accordance with the provisions of Rule 16b-3 of the
Exchange Act.
          (b) At the discretion of the Committee, as set forth in a
Participant’s Option Agreement, any Option granted hereunder may be deemed
exercised by delivery to the Company of a properly executed exercise notice,
acceptable to the Company, together with irrevocable instructions to the
Participant’s broker to deliver to the Company sufficient cash to pay the
exercise price and any applicable income and employment withholding taxes, in
accordance with a written agreement between the Company and the brokerage firm
(“cashless exercise procedure”).
III. STOCK APPRECIATION RIGHTS
     3.1 Grant of Stock Appreciation Rights. Stock Appreciation Rights may be
granted, held and exercised in such form and upon such general terms and
conditions as determined by the Committee on an individual basis. A Stock
Appreciation Right may be granted to a Participant with respect to such number
of shares of Common Stock of the Company as the Committee may determine;
provided, however, that no Participant may be granted a Stock Appreciation Right
during any one fiscal year (when aggregated with all other stock-based awards
granted under the Plan during such fiscal year), for more than 500,000 shares of
Common Stock (subject to adjustment in accordance with Section 8.1(a) below). A
Stock Appreciation Right may be granted on a stand-alone basis or in tandem with
an Option. If granted in tandem with an Option, the number of shares covered by
the Stock Appreciation Right shall not exceed the number of shares of stock
which the Participant could purchase upon the exercise of the related Option.
Stock Appreciation Rights are intended to satisfy the requirements of Code
Section 162(m) and the regulations promulgated thereunder, to the extent
applicable.

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     3.2 Exercise of Stock Appreciation Rights. A Stock Appreciation Right shall
be deemed exercised upon receipt by the Company of written notice of exercise
from the Participant. Except as permitted under Rule 16b-3, notice of exercise
of a Stock Appreciation Right by a Participant subject to the insider trading
restrictions of Section 16(b) of the Securities Exchange Act of 1934, shall be
limited to the period beginning on the third day following the release of the
Company’s quarterly or annual summary of earnings and ending on the 12th
business day after such release. The exercise term of each Stock Appreciation
Right shall be limited to 10 years from its Grant Date or such earlier period as
set by the Committee or in a related Option. If granted in tandem with an
Option, a Stock Appreciation Right shall be exercisable only at such times and
in such amounts as the related Option may be exercised. A Stock Appreciation
Right granted to a Participant subject to the insider trading restrictions shall
not be exercisable in whole or part during the first six months of its term,
unless the Participant dies or becomes disabled during such six-month period.
     3.3 Stock Appreciation Right Entitlement.
          (a) Upon exercise of a Stock Appreciation Right, a Participant shall
be entitled to payment from the Company, in cash, shares, or partly in each (as
determined by the Committee in accordance with any applicable terms of the
Agreement), of an amount equal to the difference between the aggregate Fair
Market Value on the date of exercise for the specified number of shares being
exercised and the aggregate exercise price of the Stock Appreciation Right being
exercised. If the Stock Appreciation Right is granted in tandem with an Option,
the payment shall be equal to the difference between:
          (i) the Fair Market Value of the number of shares subject to the Stock
Appreciation Right on the exercise date; and
          (ii) the Option price of the associated Option multiplied by the
number of shares available under the Option.
          (b) Notwithstanding Section 3.3(a), upon exercise of a Stock
Appreciation Right the Participant shall be required to surrender any associated
Option.
     3.4 Maximum Stock Appreciation Right Amount Per Share. The Committee may,
at its sole discretion, establish (at the time of grant) a maximum amount per
share which shall be payable upon the exercise of a Stock Appreciation Right,
expressed as a dollar amount or as a percentage or multiple of the Option price
of a related Option.
IV. RESTRICTED STOCK GRANTS AND UNITS
     4.1 Grant of Restricted Stock and Restricted Stock Units. Subject to the
terms and conditions of the Plan, the Committee, at any time and from time to
time, may grant shares of Restricted Stock and Restricted Stock Units under this
Plan to such Participants and in such amounts as it shall determine; provided,
however, that no Participant may be granted a Restricted Stock Award or
Restricted Stock Units during any one fiscal year (when aggregated with all
other stock-based awards granted under the Plan during such fiscal year), for
more than 500,000 shares of Common Stock (subject to adjustment in accordance
with Section 8.1(a) below).

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     4.2 Restricted Stock Agreement. Each grant of Restricted Stock or
Restricted Stock Units shall be evidenced by an Agreement that shall specify the
terms of the restrictions, including the Restriction Period, or periods, the
number of Common Stock shares subject to the grant or units, and such other
general terms and conditions, including performance goals, as the Committee
shall determine in its discretion; subject to the Committee’s discretion to make
awards having no restrictions or Restricted Period.
     4.3 Transferability. Except as provided in this Article IV or Section 9.4
of the Plan, the shares of Common Stock subject to a Restricted Stock grant or
Restricted Stock Unit hereunder may not be transferred, pledged, assigned, or
otherwise alienated or hypothecated until the termination of the applicable
Restriction Period or for such period of time as shall be established by the
Committee and as shall be specified in the applicable Agreement, or upon the
earlier satisfaction of other conditions as specified by the Committee in its
sole discretion and as set forth in the applicable Agreement.
     4.4 Other Restrictions. The Committee shall impose such other restrictions
on any shares of Common Stock subject to a Restricted Stock grant or Restricted
Stock Unit under the Plan as it may deem advisable including, without
limitation, restrictions under applicable Federal or State securities laws, and
may legend the certificates representing such shares to give appropriate notice
of such restrictions.
     4.5 Certificate Legend. In addition to any legends placed on certificates
pursuant to Sections 4.3 and 4.4, each certificate representing shares of Common
Stock subject to restrictions under a Restricted Stock grant or Restricted Stock
Unit shall bear the following legend:
     The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is subject
to certain restrictions on transfer set forth in the Asset Acceptance Capital
Corp. 2004 Stock Incentive Plan (“Plan”), rules and administrative guidelines
adopted pursuant to such Plan and an Agreement dated                     . A
copy of the Plan, such rules and such Agreement may be obtained from the
Secretary of Asset Acceptance Capital Corp.
     4.6 Removal of Restrictions. Except as otherwise provided in this
Article IV of the Plan, and subject to applicable federal and state securities
laws, shares of Common Stock subject to a Restricted Stock grant or Restricted
Stock Unit under the Plan shall become freely transferable by the Participant
after the last day of the Restriction Period. Once the shares are released from
the restrictions, the Participant shall be entitled to have the legend required
by Section 4.5 of the Plan removed from the applicable Common Stock certificate.
Provided further, the Committee shall have the discretion to waive the
applicable Restriction Period with respect to all or any part of the Common
Stock subject to a Restricted Stock grant or Restricted Stock Unit.
     4.7 Voting Rights. During the Restriction Period, Participants holding
shares of Common Stock subject to a Restricted Stock grant hereunder may
exercise full voting rights with respect to the Restricted Stock.

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     4.8 Dividends and Other Distributions. Unless otherwise provided in an
Agreement, during the Restriction Period, a Participant shall be entitled to
receive all dividends and other distributions paid with respect to shares of
Common Stock subject to a Restricted Stock grant or Restricted Stock Unit. If
any dividends or distributions are paid in shares of Common Stock during the
Restriction Period, the dividend or other distribution shares shall be subject
to the same restrictions on transferability as the shares of Common Stock with
respect to which they were paid (unless an Agreement provides otherwise).
     4.9 Restricted Stock Grants and Units Under Code Section 162(m). The
Committee, at its discretion, may designate certain Restricted Stock grants or
Restricted Stock Units as being granted pursuant to Code Section 162(m). Such
Restricted Stock and Restricted Stock Units must comply with the following
additional requirements, which override any other provision set forth in this
Article IV:
          (a) Each Code Section 162(m) Restricted Stock Award or Restricted
Stock Unit shall be based upon pre-established, objective performance goals that
are intended to satisfy the performance-based compensation requirements of Code
Section 162(m) and the regulations promulgated thereunder. Further, at the
discretion of the Committee, a Restricted Stock Award or Restricted Stock Unit
also may be subject to goals and restrictions in addition to the performance
requirements.
          (b) Each Code Section 162(m) Restricted Stock Award or Restricted
Stock Unit shall be based upon the attainment of specified levels of Company or
Subsidiary performance during a specified performance period, as measured by any
or all of the following: earnings (as measured by net income, net income per
share, operating income, operating income per share, or earnings before
interest, taxes, depreciation and amortization [“EBITDA”]), revenue growth,
market capitalization, and price per share.
          (c) For each designated performance period, the Committee shall
(i) select those Employees who shall be eligible to receive a Restricted Stock
Award or Restricted Stock Unit, (ii) determine the performance period, which may
be a one to five fiscal year period, (iii) determine the target levels of
Company or Subsidiary performance, and (iv) determine the number of shares
subject to a Restricted Stock Award or Restricted Stock Unit to be paid to each
selected Employee. The Committee shall make the foregoing determinations prior
to the commencement of services to which a Restricted Stock Award or Restricted
Stock Unit relates (or within the permissible time-period established under Code
Section 162(m)) and while the outcome of the performance goals and targets is
uncertain.
          (d) For each performance period, the Committee shall certify, in
writing: (i) if the Company has attained the performance targets, and (ii) the
number of shares pursuant to the Restricted Stock Award or Restricted Stock Unit
that are to become freely transferable. The Committee shall have no discretion
to waive all or part of the conditions, goals and restrictions applicable to the
receipt of full or partial payment of a Restricted Stock Award or Restricted
Stock Unit.
          (e) Any dividends paid during the Restriction Period automatically
shall be reinvested on behalf of the Employee in additional shares of Common
Stock under the Plan, and

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such additional shares shall be subject to the same performance goals and
restrictions as the other shares under the Restricted Stock Award or Restricted
Stock Unit. No shares under a Code Section 162(m) Restricted Stock Award or
Restricted Stock Unit shall become transferable until the Committee certifies in
writing that the performance goals and restrictions have been satisfied.
          (f) Except as otherwise provided in this Article IV or Section 9.4 of
the Plan, and subject to applicable federal and state securities laws, shares
covered by each Restricted Stock Award or Restricted Stock Unit made under the
Plan may not be transferred, pledged, assigned, or otherwise alienated or
hypothecated until the applicable performance targets and other restrictions are
satisfied, as shall be certified in writing by the Committee. At such time,
shares covered by the Restricted Stock Award or Restricted Stock Unit shall
become freely transferable by the Employee. Once the shares are released from
the restrictions, the Employee shall be entitled to have the legend required by
Section 4.5 of the Plan removed from the applicable Common Stock certificate.
     4.10 Deferred Stock Units.
     (a) Elections to Defer. The Committee may permit any Participant who is a
director, consultant or member of a select group of management or highly
compensated Employees (within the meaning of the Code) to irrevocably elect, on
a form provided by and acceptable to the Committee (the “Election Form”), forego
the receipt of cash or other compensation (including the Shares deliverable
pursuant to any Award other than Restricted Shares for which a Section 83(b)
Election has been made), and in lieu thereof to have the Company credit to an
internal Plan account (the “Account”) a number of Deferred Stock units
(“Deferred Stock Units”) having a Fair Market Value equal to the Shares and
other compensation deferred. These credits will be made at the end of each
calendar month during which compensation is deferred. Each Election Form shall
take effect on the first day of the next calendar year (or on the first day of
the next calendar month in the case of an initial election by a Participant who
first receives an Award, subject to adjustments by the Committee in accordance
with Code Section 409A) after its delivery to the Company, unless the Company
sends the Participant a written notice explaining why the Election Form is
invalid within five business days after the Company receives it. Notwithstanding
the foregoing sentence: (i) Election Forms shall be ineffective with respect to
any compensation that a Participant earns before the date on which the Company
receives the Election Form, and (ii) Election Forms must be submitted to the
Committee no later than December 31st of the calendar year preceding the
calendar year in which the Eligible Person first performs the services that are
attributable to the compensation being deferred. Notwithstanding the foregoing,
any Eligible Person who first becomes eligible to defer compensation under the
Plan and is not eligible to defer or otherwise accrue an amount of deferred
compensation under any other plan or arrangement that (i) is maintained by the
Company or any other Affiliate that would be considered a single employer with
the Company pursuant to Code Sections 414(b) or 414(c) and (ii) constitutes a
single plan under Treasury Regulation §1.409A-1(c)(2)(A), may submit his or her
Election Form to the Committee no later than 30 days after the date the Eligible
Person first becomes eligible to defer compensation under the Plan; however, the
Election Form may relate only to compensation that is to be paid for services
performed after the date the Election Form is submitted to the Committee. The
Committee may reject any Election Form that it determines in its sole discretion
does not satisfy the requirements of this paragraph. The Committee may
unilaterally

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make awards in the form of Deferred Stock Units, regardless of whether or not
the Participant foregoes other compensation.
     (b) Vesting. Unless an Agreement expressly provides otherwise, each
Participant shall be 100% vested at all times in any shares subject to Deferred
Stock Units.
     (c) Issuances of Shares. The Company shall provide a Participant with one
share for each Deferred Stock Unit in five substantially equal annual
installments that are issued before the last day of each of the five calendar
years that end after the date on which the Participant’s incurs a “separation
form service” within the meaning of Treasury Regulations §1.409A-1(h)
(“Separation from Service”), unless —
          (i) the Participant has properly elected a different form of
distribution, on a form approved by the Committee, that permits the Participant
to select any combination of a lump sum and annual installments that are
triggered by and completed within ten years following the Participant Separation
from Service, and
          (ii) the Company received the Participant’s distribution election form
at the time the Participant elects to defer the receipt of cash or other
compensation pursuant to this Section 4.10(a), provided that such election may
be changed through any subsequent election that (i) is delivered to the Company
at least one year before the date on which distributions are otherwise scheduled
to commence pursuant to the Participant’s election, and (ii) defers the
commencement of distributions by at least five years from the originally
scheduled commencement date. Fractional shares shall not be issued, and instead
shall be paid out in cash.
     (d) Crediting of Dividends. Whenever shares are issued to a Participant
pursuant to Section 4.10(c) above, such Participant shall also be entitled to
receive, with respect to each share issued, cash dividends or a number of shares
equal to the sum of (i) any stock dividends, which were declared and paid to the
holders of shares between the Grant Date and the date such share is issued, and
(ii) a number of shares equal to the shares that the Participant could have
purchased at Fair Market Value on the payment date of any cash dividends for
shares if the Participant had received such cash dividends between the Grant
Date and the settlement date for the Deferred Stock Units.
     (e) Emergency Withdrawals. In the event a Participant suffers an
unforeseeable emergency within the contemplation of this Section and
Section 409A of the Code, the Participant may apply to the Company for an
immediate distribution of all or a portion of the Participant’s Deferred Stock
Units. The unforeseeable emergency must result from a sudden and unexpected
illness or accident of the Participant, the Participant’s spouse, or a dependent
(within the meaning of Section 152(a) of the Code) of the Participant, casualty
loss of the Participant’s property, or other similar extraordinary and
unforeseeable conditions beyond the control of the Participant. Examples of
purposes which are not considered unforeseeable emergencies include
post-secondary school expenses or the desire to purchase a residence. In no
event will a distribution be made to the extent the unforeseeable emergency
could be relieved through reimbursement or compensation by insurance or
otherwise, or by liquidation of the Participant’s nonessential assets to the
extent such liquidation would not itself cause a severe financial hardship. The
amount of any distribution hereunder shall be limited to the amount necessary to

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relieve the Participant’s unforeseeable emergency plus amounts necessary to pay
taxes reasonably anticipated as a result of the distribution. The Committee, in
its sole and absolute discretion, shall determine whether a Participant has a
qualifying unforeseeable emergency and the amount which qualifies for
distribution, if any. The Committee may require evidence of the purpose and
amount of the need, and may establish such application or other procedures as it
deems appropriate.
     (f) Unsecured Rights to Deferred Compensation. A Participant’s right to
Deferred Stock Units shall at all times constitute an unsecured promise of the
Company to pay benefits as they come due. The right of the Participant or the
Participant’s duly-authorized transferee to receive benefits hereunder shall be
solely an unsecured claim against the general assets of the Company. Neither the
Participant nor the Participant’s duly-authorized transferee shall have any
claim against or rights in any specific assets, shares, or other funds of the
Company.
V. PERFORMANCE SHARE AWARDS
     5.1 Grant of Performance Share Awards. The Committee, at its discretion,
may grant Performance Share Awards to Participants and may determine, on an
individual or group basis, the performance goals to be attained pursuant to each
Performance Share Award; provided, however, that no Participant may be granted a
Performance Share Award during any one fiscal year (when aggregated with all
other stock-based awards granted under the Plan during such fiscal year), for
more than 500,000 shares of Common Stock (subject to adjustment in accordance
with Section 8.1(a) below).
     5.2 Terms of Performance Share Awards. In general, Performance Share Awards
shall consist of rights to receive cash, Common Stock or a combination of each,
if designated performance goals are achieved. The terms of a Participant’s
Performance Share Award shall be set forth in his individual Performance Share
Agreement. Each Agreement shall specify the performance goals applicable to a
particular Participant or group of Participants, the period over which the
targeted goals are to be attained, the payment schedule if the goals are
attained, and any other general terms and conditions applicable to an individual
Performance Share Award as the Committee shall determine. The Committee, at its
discretion, may waive all or part of the conditions, goals and restrictions
applicable to the receipt of full or partial payment of a Performance Share
Award.
     5.3 Performance Share Awards Granted Under Code Section 162(m). The
Committee, at its discretion, may designate certain Performance Share Awards as
granted pursuant to Code Section 162(m). Such Performance Share Awards must
comply with the following additional requirements, which override any other
provision set forth in this Article V:
          (a) The Committee, at its discretion, may grant Code Section 162(m)
Performance Share Awards based upon pre-established, objective performance goals
that are intended to satisfy the performance-based compensation requirements of
Code Section 162(m) and the regulations promulgated thereunder. Further, at the
discretion of the Committee, a Performance Share Award also may be subject to
goals and restrictions in addition to the performance requirements.

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          (b) Each Code Section 162(m) Performance Share Award shall be based
upon the attainment of specified levels of Company or Subsidiary performance
during a specified performance period, as measured by any or all of the
following: earnings (as measured by net income, net income per share, operating
income, operating income per share, or earnings before interest, taxes,
depreciation and amortization [“EBITDA”]), revenue growth, market
capitalization, and price per share.
          (c) For each designated performance period, the Committee shall
(i) select those Employees who shall be eligible to receive a Code Section
162(m) Performance Share Award, (ii) determine the performance period, which may
be a one to five fiscal year period, (iii) determine the target levels of
Company or Subsidiary performance, and (iv) determine the Performance Share
Award to be paid to each selected Employee. The Committee shall make the
foregoing determinations prior to the commencement of services to which a
Performance Share Award relates (or within the permissible time-period
established under Code Section 162(m)) and while the outcome of the performance
goals and targets is uncertain.
          (d) For each performance period, the Committee shall certify, in
writing: (i) if the Company has attained the performance targets; and (ii) the
cash or number of shares (or combination thereof) pursuant to the Performance
Share Award that shall be paid to each selected Employee (or the number of
shares that are to become freely transferable, if a Performance Share Award is
granted subject to attainment of the designated performance goals). The
Committee, may not waive all or part of the conditions, goals and restrictions
applicable to the receipt of full or partial payment of a Performance Share
Award.
          (e) Code Section 162(m) Performance Share Awards may be granted in two
different forms, at the discretion of the Committee. Under one form, the
Employee shall receive a Performance Share Award that consists of a legended
certificate of Common Stock, restricted from transfer prior to the satisfaction
of the designated performance goals and restrictions, as determined by the
Committee and specified in the Employee’s Performance Share Agreement. Prior to
satisfaction of the performance goals and restrictions, the Employee shall be
entitled to vote the Performance Shares. Further, any dividends paid on such
shares during the performance/restriction period automatically shall be
reinvested on behalf of the Employee in additional Performance Shares under the
Plan, and such additional shares shall be subject to the same performance goals
and restrictions as the other shares under the Performance Share Award. No
shares under a Performance Share Award shall become transferable until the
Committee certifies in writing that the performance goals and restrictions have
been satisfied.
          (f) Under the second form, the Employee shall receive a Performance
Share Agreement from the Committee that specifies the performance goals and
restrictions that must be satisfied before the Company shall issue the payment,
which may be cash, a designated number of shares of Common Stock or a
combination of the two. Any certificate for shares under such form of
Performance Share Award shall be issued only after the Committee certifies in
writing that the performance goals and restrictions have been satisfied.
          (g) In addition to any legends placed on certificates pursuant to
Section 5.3(e), each certificate representing shares under a Performance Share
Award shall bear the following legend:

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     The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is subject
to certain restrictions on transfer set forth in the Asset Acceptance Capital
Corp. 2004 Stock Incentive Plan (“Plan”), rules and administrative guidelines
adopted pursuant to such Plan and a Performance Share Agreement dated
                    . A copy of the Plan, such rules and such Performance Share
Agreement may be obtained from the Secretary of Asset Acceptance Capital Corp.
          (h) Except as otherwise provided in this Article V or Section 9.4 of
the Plan, and subject to applicable federal and state securities laws, shares
covered by each Performance Share Award made under the Plan may not be
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
applicable performance targets and other restrictions are satisfied, as shall be
certified in writing by the Committee. At such time, shares covered by the
Performance Share Award shall become freely transferable by the Employee. Once
the shares are released from the restrictions, the Employee shall be entitled to
have the legend required by Section 5.3(g) removed from the applicable Common
Stock certificate.
VI. ANNUAL INCENTIVE AWARDS
     6.1 Grant of Annual Incentive Awards.
          (a) The Committee, at its discretion, may grant Annual Incentive
Awards to such Participants as it may designate from time to time. The terms of
a Participant’s Annual Incentive Award shall be set forth in his individual
Annual Incentive Award Agreement. Each Agreement shall specify such general
terms and conditions as the Committee shall determine, as well as the
Participant’s pre-established, objective performance goals, including those that
are intended to satisfy the performance-based compensation requirements of Code
Section 162(m) and the regulations promulgated thereunder, to the extent
applicable.
          (b) The determination of Annual Incentive Awards for a given year
shall be based upon the attainment of specified levels of Company or Subsidiary
performance as measured by such performance criteria as are determined at the
discretion of the Committee, including any or all of the following: earnings (as
measured by net income, net income per share, operating income, operating income
per share, or earnings before interest, taxes, depreciation and amortization
[“EBITDA”]), revenue growth, market capitalization, and price per share.
          (c) For each fiscal year of the Company, the Committee shall
(i) select those Participants who shall be eligible to receive an Annual
Incentive Award, (ii) determine the performance period, which may be a one to
five fiscal year period, (iii) determine target levels of Company performance,
and (iv) determine the level of Annual Incentive Award to be paid to each
selected Participant upon the achievement of each performance level as provided
below. The Committee shall generally make the foregoing determinations prior to
the commencement of services to which an Annual Incentive Award relates (or
within the permissible time-period established under Code Section 162(m), to the
extent applicable) and while the outcome of the performance goals and targets is
uncertain.

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     6.2 Attainment of Performance Targets.
          (a) For each fiscal year, the Committee shall certify, in writing:
(i) the degree to which the Company has attained the performance targets, and
(ii) the amount of the Annual Incentive Award to be paid to each selected
Participant.
          (b) Notwithstanding anything to the contrary herein, the Committee
may, in its discretion, reduce any Annual Incentive Award based on such factors
as may be determined by the Committee, including, without limitation, a
determination by the Committee that such a reduction is appropriate: (i) in
light of pay practices of competitors; or (ii) in light of the Company’s, a
subsidiary’s, or a selected Employee’s performance relative to competitors
and/or performance with respect to the Company’s strategic business goals.
     6.3 Payment of Annual Incentive Awards. An Annual Incentive Award shall be
paid only if (i) the Company achieves at least the threshold performance level;
and (ii) the Committee makes the certification described in Section 6.2.
     6.4 Annual Incentive Award Payment Forms.
          (a) Annual Incentive Awards shall be paid in cash and/or shares of
Common Stock of the Company, at the discretion of the Committee. Payments shall
be made within 30 days following (i) a certification by the Committee that the
performance targets were attained, and (ii) a determination by the Committee
that the amount of an Annual Incentive Award shall not be decreased in
accordance with Section 6.2. The aggregate maximum Annual Incentive Award that
may be earned by any Participant on behalf of any one fiscal year (calculated as
of the last day of the fiscal year for which the Annual Incentive Award is
earned) may not exceed $1,000,000.
          (b) The amount of an Annual Incentive Award to be paid upon the
attainment of each targeted level of performance shall equal a percentage of
each Participant’s base salary for the fiscal year or a fixed dollar amount, as
determined by the Committee.
VII. TERMINATION OF EMPLOYMENT OR SERVICES
     7.1. Options and Stock Appreciation Rights.
          (a) If, prior to the date that an Option or Stock Appreciation Right
first becomes Vested, a Participant terminates employment or services for any
reason (other than as provided in Section 8.2, after a Change in Control), the
Participant’s right to exercise the Option or Stock Appreciation Right shall
terminate and all rights thereunder shall cease.
          (b) If, on or after the date that an Option or Stock Appreciation
Right first becomes Vested, a Participant terminates employment or services for
any reason other than death or Disability, the Participant shall have the right,
within the earlier of (i) the expiration of the Option or Stock Appreciation
Right, and (ii) three months after termination of employment/services, to
exercise the Option or Stock Appreciation Right to the extent that it was
exercisable and unexercised on the date of the Participant’s termination of
employment or

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services, subject to any other limitation on the exercise of the Option or Stock
Appreciation Right in effect on the date of exercise. The Committee may
designate in a Participant’s Agreement that an Option or Stock Appreciation
Right shall terminate at an earlier or later time than set forth above.
          (c) If, on or after the date that an Option or Stock Appreciation
Right first becomes Vested, a Participant terminates employment or services due
to death while an Option or Stock Appreciation Right is still exercisable, the
person or persons to whom the Option or Stock Appreciation Right shall have been
transferred by will or by the laws of descent and distribution, shall have the
right within the exercise period specified in the Participant’s Agreement to
exercise the Option or Stock Appreciation Right to the extent that it was
exercisable and unexercised on the Participant’s date of death, subject to any
other limitation on exercise in effect on the date of exercise; provided,
however, that the beneficial tax treatment of an Incentive Stock Option may be
forfeited if the Option is exercised more than one year after a Participant’s
date of death.
          (d) If, on or after the date that an Option or Stock Appreciation
Right first becomes Vested, a Participant terminates employment or services due
to Disability, the Participant shall have the right, within the exercise period
specified in the Participant’s Agreement to exercise the Option or Stock
Appreciation Right to the extent that it was exercisable and unexercised on the
date of the Participant’s termination of employment or services, subject to any
other limitation on the exercise of the Option or Stock Appreciation Right in
effect on the date of exercise. If the Participant dies after termination of
employment/services while the Option or Stock Appreciation Right is still
exercisable, the Option or Stock Appreciation Right shall be exercisable in
accordance with the terms of paragraph (c) above.
          (e) The Committee, at the time of a Participant’s termination of
employment or services, may accelerate a Participant’s right to exercise an
Option or extend the exercise period of an Option or Stock Appreciation Right
(but in no event past the tenth anniversary of the Grant Date of such Option);
provided, however that the extension of the exercise period for an Incentive
Stock Option may cause such Option to forfeit its preferential tax treatment.
          (f) Shares subject to Options and Stock Appreciation Rights that are
not exercised in accordance with the provisions of (a) through (e) above shall
expire and be forfeited by the Participant as of their expiration date and shall
become available for new grants and awards under the Plan as of such date.
     7.2 Restricted Stock Grants and Units. If a Participant terminates
employment or services for any reason (other than as provided in Section 8.2,
after a Change in Control), the Participant’s rights to shares of Common Stock
subject to a Restricted Stock grant or Restricted Stock Unit that are still
subject to the Restriction Period automatically shall terminate and be forfeited
by the Participant and, subject to Section 1.6, shall be available for new
grants and awards under the Plan as of such termination date; provided, however,
that the Committee, in its sole discretion, may waive or change the remaining
restrictions or add additional restrictions with respect to any Restricted Stock
grant or Restricted Stock Unit that would otherwise be forfeited, as it deems
appropriate. Notwithstanding the foregoing, the Committee shall not waive

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any restrictions on a Code Section 162(m) Restricted Stock Award or Restricted
Stock Unit, but the Committee may include a provision in an Employee’s Code
Section 162(m) Restricted Stock or Restricted Stock Unit Agreement stating that
upon the Employee’s termination of employment due to (i) death, (ii) Disability,
or (iii) involuntary termination by the Company without cause (as defined in
such agreement) prior to the attainment of the associated performance goals and
the termination of the Restriction Period, that the performance goals and
restrictions shall be deemed to have been satisfied on a pro rata basis, so that
the number of shares that become freely transferable shall be based on the
Employee’s full number of months of employment during the Restriction Period,
and the Employee shall forfeit the remaining shares and his rights to such
forfeited shares shall terminate in full.
     7.3 Performance Shares. Performance Share Awards shall expire and be
forfeited by a Participant upon the Participant’s termination of employment or
services for any reason (other than as provided in Section 8.2, after a Change
in Control), and such shares shall be available for new grants and awards under
the Plan as of such termination date; provided, however, that the Committee, in
its discretion, may waive all or part of the conditions, goals and restrictions
applicable to the receipt of full or partial payment of a Performance Share
Award. Notwithstanding the foregoing, the Committee shall not waive any
restrictions on a Code Section 162(m) Performance Share Award, but the Committee
may include a provision in an Employee’s Code Section 162(m) Performance Share
Agreement stating that upon the Employee’s termination of employment due to
(i) death, (ii) Disability, or (iii) involuntary termination by the Company
without cause (as defined in such agreement) prior to the attainment of the
associated performance goals and restrictions, that the performance goals and
restrictions shall be deemed to have been satisfied on a pro rata basis, so that
the number of shares that become freely transferable shall be based on the
Employee’s full number of months of employment during the employment period, and
the Employee shall forfeit the remaining shares and his rights to such forfeited
shares shall terminate in full.
     7.4 Annual Incentive Awards.
          (a) A Participant who has been granted an Annual Incentive Award and
terminates employment or services due to Retirement, Disability or death prior
to the end of the Company’s fiscal year shall be entitled to a prorated payment
of the Annual Incentive Award, based on the number of full months during the
fiscal year in which the Participant was employed or provided services. Any such
prorated Annual Incentive Award shall be paid at the same time as regular Annual
Incentive Awards or, in the event of the Participant’s death, to the beneficiary
designated by the Participant.
          (b) Except as otherwise determined by the Committee in its discretion,
a Participant who has been granted an Annual Incentive Award and resigns or is
terminated for any reason (other than Retirement, Disability or death), before
the end of the Company’s fiscal year for which the Annual Incentive Award is to
be paid, shall forfeit the right to an Annual Incentive Award payment for that
fiscal year.
     7.5 Other Provisions. The transfer of an Employee from one corporation to
another among the Company and any of its Subsidiaries, or a leave of absence
under the leave policy of the Company or any of its Subsidiaries shall not be a
termination of employment for

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purposes of the Plan, unless a provision to the contrary is expressly stated by
the Committee in a Participant’s Agreement issued under the Plan.
VIII. ADJUSTMENTS AND CHANGE IN CONTROL
     8.1 Adjustments.
          (a) The total amount of Common Stock and kind of security for which
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Deferred Stock Units, Performance Share Awards and Annual Incentive Awards may
be issued under the Plan, and the number and kind of shares or securities
subject to any such grants or awards (both as to the number of shares of Common
Stock and the Option price), shall be adjusted pro rata for any increase or
decrease in the number of outstanding shares of Common Stock or kind of
securities resulting from a subdivision or combination of shares of Common
Stock, a reclassification of Common Stock, or stock dividend or other
extraordinary distribution (whether in the form of cash, shares of Common Stock,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event that
affects the Common Stock such that an adjustment is determined by the Board to
be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan and awards under
the Plan. Such adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive.
          (b) In the event of a proposed dissolution or liquidation of the
Company, the Committee shall notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. The Committee in its
discretion may provide for a Participant to have the right (i) to exercise his
or her Option or Stock Appreciation Right, in full until ten (10) days prior to
such transaction as to all of the shares of Common Stock covered thereby,
including shares as to which the Option or Stock Appreciation Right, would not
otherwise be exercisable, and (ii) to become fully vested in and to settle in
full any Restricted Stock grant, Restricted Stock Units, Deferred Stock Units,
Performance Share Award, or Annual Incentive Award. In addition, the Committee
may provide that any re-purchase option of the Company applicable to the shares
purchased upon exercise of an Option or Stock Appreciation Right, or received
pursuant to any Restricted Stock grant, Restricted Stock Units, Deferred Stock
Units, Performance Share Award or Annual Incentive Award, shall lapse as to all
such shares, provided that the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. To the extent it has not been
previously exercised or vested, an Option, Stock Appreciation Right, Restricted
Stock grant, Restricted Stock Units, Deferred Stock Units, Performance Share
Award or Annual Incentive Award shall terminate immediately prior to the
consummation of the proposed dissolution or liquidation.
          (c) In the event of a merger of the Company with or into another
corporation, the sale of substantially all of the assets of the Company, or the
reorganization or consolidation of the Company, it is intended that each
outstanding Option, Stock Appreciation

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Right, Restricted Stock grant, Restricted Stock Units, Deferred Stock Units,
Performance Share Award or Annual Incentive Award shall be assumed or an
equivalent option or right substituted by the successor corporation or the
parent or a subsidiary of the successor corporation. In the event that such
successor corporation (or the parent or a subsidiary thereof) refuses to assume
or substitute for the Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Units, Deferred Stock Units, Performance Share Award or Annual
Incentive Award, the Participant shall fully vest in (and in the case of Options
and Stock Appreciation Rights have the right to exercise for at least ten
(10) days prior to such transaction) the Option, Stock Appreciation Right,
Restricted Stock grant, Restricted Stock Units, Deferred Stock Units,
Performance Share Award or Annual Incentive Award in full, including shares
which would not otherwise be vested or exercisable. If an Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Units, Deferred
Stock Units, Performance Share Award or Annual Incentive Award becomes fully
vested and exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Committee shall notify the Participant in writing
or electronically that the Option, Stock Appreciation Right, Restricted Stock
grant, Restricted Stock Units, Deferred Stock Units, Performance Share Award or
Annual Incentive Award shall be fully vested and exercisable for a period of
fifteen (15) days from the date of such notice, and the Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Units, Deferred
Stock Units, Performance Share Award or Annual Incentive Award shall terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Units, Deferred Stock Units, Performance Share Award or Annual Incentive Award
shall be considered assumed if, following the merger, sale of assets,
reorganization or consolidation, the option or right confers the right to
purchase or receive, for each share covered by the Participant’s Option, Stock
Appreciation Right, Restricted Stock grant, Restricted Stock Units, Deferred
Stock Units, Performance Share Award or Annual Incentive Award, immediately
prior to such transaction, the consideration (whether stock, cash, or other
securities or property) received in the merger, sale of assets, reorganization
or consolidation by holders of Common Stock for each share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
shares); provided, however, that if such consideration received in the merger,
sale of assets, reorganization or consolidation is not solely common stock of
the successor corporation (or the parent or a subsidiary thereof), the Committee
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, Stock Appreciation
Right, Restricted Stock grant, Restricted Stock Units, Deferred Stock Units,
Performance Share Award or Annual Incentive Award, for each share of Stock
subject to the Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Units, Deferred Stock Units, Performance Share Award or Annual
Incentive Award to be solely Common Stock of the successor corporation (or the
parent or a subsidiary thereof) equal in Fair Market Value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
          (d) The foregoing adjustments shall be made by the Committee. Any such
adjustment may provide for the elimination of any fractional share which might
otherwise become subject to an Option, Stock Appreciation Right, Restricted
Stock grant, Restricted Stock Units, Deferred Stock Units, Performance Share
Award or Annual Incentive Award.

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     8.2 Change in Control. The Committee in its discretion may provide in a
Participant’s Agreement, notwithstanding anything contained herein to the
contrary, that in the event of a Participant’s Change in Position subsequent to
a Change in Control, any or all of the following will occur: (i) any outstanding
Option or Stock Appreciation Right granted to such Participant hereunder
immediately shall become fully Vested and exercisable in full, regardless of any
installment provision applicable to such Option or Stock Appreciation Right;
(ii) the remaining Restriction Period on any shares of Common Stock subject to a
Restricted Stock grant or Restricted Stock Unit hereunder immediately shall
lapse and the shares shall become fully transferable, subject to any applicable
federal or state securities laws; (iii) all performance goals and conditions
shall be deemed to have been satisfied and all restrictions shall lapse on any
outstanding Performance Share Awards granted to such Participant hereunder, and
such Awards shall become payable in full; (iv) for purposes of any Annual
Incentive Awards granted to such Participant hereunder, the determination of
whether the performance targets have been achieved shall be made as of the date
of the Change in Control and payments due should become immediately payable; and
(v) all Deferred Stock Units shall be settled through their conversion, on a
one-for-one basis of units for shares, into shares that are shall become fully
transferable, subject to any applicable federal or state securities laws.
IX. MISCELLANEOUS
     9.1 Partial Exercise/Fractional Shares. The Committee may permit, and shall
establish procedures for, the partial exercise of Options and Stock Appreciation
Rights granted under the Plan. No fractional shares shall be issued in
connection with the exercise of a Stock Appreciation Right or payment of a
Performance Share Award or Annual Incentive Award; instead, the Fair Market
Value of the fractional shares shall be paid in cash, or at the discretion of
the Committee, the number of shares shall be rounded down to the nearest whole
number of shares and any fractional shares shall be disregarded.
     9.2 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on the exercise of an Option or
Stock Appreciation Right (including, without limitation, the right of the
Committee to limit the time of exercise to specified periods), or the grant of
Restricted Stock, Restricted Stock Unit, Deferred Stock Unit, or the payment of
a Performance Share Award or Annual Incentive Award, as may be required to
satisfy the requirements of Rule 16b-3 of the Exchange Act.
     9.3 Rights Prior to Issuance of Shares. Unless otherwise provided in the
Plan, no Participant shall have any rights as a shareholder with respect to
shares covered by an Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Units, Deferred Stock Units, Performance Share Award or Annual
Incentive Award until the issuance of a stock certificate for such shares. No
adjustment shall be made for dividends or other rights with respect to such
shares for which the record date is prior to the date the certificate is issued.
     9.4 Non-Assignability. Except as otherwise determined by the Committee in
its discretion, the following restrictions on assignability of any award under
the Plan shall apply to all Participants: (i) no Option, Stock Appreciation
Right, Restricted Stock grant, Restricted Stock Units, Deferred Stock Units,
Performance Share Award or Annual Incentive Award shall

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be transferable by a Participant except by will or the laws of descent and
distribution; (ii) during the lifetime of a Participant, an Option, Stock
Appreciation Right, Restricted Stock grant, or Restricted Stock Unit or Deferred
Stock Unit shall be exercised or settled only by the Participant, except in the
event of the Participant’s Disability, in which case the Participant’s legal
guardian or the individual designated in the Participant’s durable power of
attorney may exercise or settle the Option, Stock Appreciation Right, Restricted
Stock grant, Restricted Stock Unit, or Deferred Stock Unit; and (iii) any
transferee of the Option, Stock Appreciation Right, Restricted Stock grant,
Restricted Stock Unit, Deferred Stock Unit, Performance Share Award or Annual
Incentive Award shall take the same subject to the terms and conditions of this
Plan. No transfer of an Option, Stock Appreciation Right, Restricted Stock
grant, Restricted Stock Units, Deferred Stock Units, Performance Share Award or
Annual Incentive Award by will or the laws of descent and distribution, or as
otherwise permitted by the Committee, shall be effective to bind the Company
unless the Company shall have been furnished with written notice thereof and a
copy of the will and/or such evidence as the Company may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions of the Option, Stock Appreciation Right,
Restricted Stock grant, Restricted Stock Units, Deferred Stock Units,
Performance Share Award or Annual Incentive Award.
     9.5. Securities Laws.
          (a) Anything to the contrary herein notwithstanding, the Company’s
obligation to sell and deliver Common Stock pursuant to the exercise of an
Option or Stock Appreciation Right or deliver Common Stock pursuant to a
Restricted Stock grant, Restricted Stock Units, Deferred Stock Units,
Performance Share Award or Annual Incentive Award is subject to such compliance
with federal and state laws, rules and regulations applying to the
authorization, issuance or sale of securities as the Company deems necessary or
advisable. The Company shall not be required to sell and deliver or issue Common
Stock unless and until it receives satisfactory assurance that the issuance or
transfer of such shares shall not violate any of the provisions of the
Securities Act of 1933 or the Securities Exchange Act of 1934, or the rules and
regulations of the Securities Exchange Commission promulgated thereunder or
those of the Stock Exchange or any stock exchange on which the Common Stock may
be listed, the provisions of any state laws governing the sale of securities, or
that there has been compliance with the provisions of such acts, rules,
regulations and laws.
          (b) The Committee may impose such restrictions on any shares of Common
Stock acquired pursuant to the exercise of an Option or Stock Appreciation Right
or the grant of Restricted Stock, Restricted Stock Units, or Deferred Stock
Units, or the payment of a Performance Share Award or Annual Incentive Award
under the Plan as it may deem advisable, including, without limitation,
restrictions (i) under applicable federal securities laws, (ii) under the
requirements of the Stock Exchange or any other securities exchange, recognized
trading market or quotation system upon which such shares of Common Stock are
then listed or traded, and (iii) under any blue sky or state securities laws
applicable to such shares. No shares shall be issued until counsel for the
Company has determined that the Company has complied with all requirements under
appropriate securities laws.

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     9.6 Withholding Taxes.
          (a) The Company shall have the right to withhold from a Participant’s
compensation or require a Participant to remit sufficient funds to satisfy
applicable withholding for income and employment taxes upon the exercise of an
Option or Stock Appreciation Right or the lapse of the Restriction Period on
shares of Common Stock subject to a Restricted Stock grant or Restricted Stock
Unit or the payment of a Performance Share Award or Annual Incentive Award or
the settlement of a Deferred Stock Unit Award. A Participant may make a written
election to tender previously-acquired shares of Common Stock or have shares of
stock withheld from the exercise or settlement of a Restricted Stock grant,
Restricted Stock Unit, Deferred Stock Unit, Performance Share Award, or Annual
Incentive Award, provided that the shares have an aggregate Fair Market Value
sufficient to satisfy in whole or in part the applicable withholding taxes. The
cashless exercise procedure of Section 2.4 may be utilized to satisfy the
withholding requirements related to the exercise of an Option. At no point shall
the Company withhold from the exercise of an Option or Stock Appreciation Right,
or the settlement of a Restricted Stock grant, Restricted Stock Unit, Deferred
Stock Unit, Performance Share Award or Annual Incentive Award, more shares than
are necessary to meet the minimum established tax withholding requirements of
federal, state and local obligations.
          (b) A Participant subject to the insider trading restrictions of
Section 16(b) of the Exchange Act may use Common Stock to satisfy the applicable
withholding requirements only if such disposition is approved in accordance with
Rule 16b-3 of the Exchange Act. Any election by a Participant to utilize Common
Stock for withholding purposes is further subject to the discretion of the
Committee.
          (c) Participants are solely responsible and liable for the
satisfaction of all taxes and penalties that may arise in connection with Awards
(including any taxes arising under Section 409A of the Code), and the Company
shall not have any obligation to indemnify or otherwise hold any Participant
harmless from any or all of such taxes. The Committee shall have the discretion
to organize any deferral program, to require deferral election forms, and to
grant or to unilaterally modify any Award in a manner that (i) conforms with the
requirements of Section 409A of the Code with respect to compensation that is
deferred and/or that vests after December 31, 2004, (ii) that voids any
Participant election to the extent it would violate Section 409A of the Code,
and (iii) for any distribution election that would violate Section 409A of the
Code, to make distributions pursuant to the Award at the earliest to occur of a
distribution event that is allowable under Section 409A of the Code or any
distribution event that is both allowable under Section 409A of the Code and is
elected by the Participant, subject to any valid second election to defer,
provided that the Committee permits second elections to defer in accordance with
Section 409A(a)(4)(C). The Committee shall have the sole discretion to interpret
the requirements of the Code, including Section 409A, for purposes of the Plan
and all Awards.
     9.7 Termination and Amendment.
          (a) The Board may terminate the Plan, or the granting of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Deferred
Stock Units,

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Performance Share Awards or Annual Incentive Awards under the Plan, at any time.
No new grants or awards shall be made under the Plan after the tenth anniversary
of the initial adoption of this Plan by the Board, or approval by the
shareholders, whichever is earlier, as noted in Section 1.1.
          (b) The Board may amend or modify the Plan at any time and from time
to time, but any amendment or modification shall be subject to the approval of
the shareholders of the Company to the extent required by applicable law, as
well as to the extent the Board determines that shareholder approval is
desirable for tax, securities, stock exchange, or other purposes.
          (c) No amendment, modification, or termination of the Plan shall in
any manner adversely affect any Option, Stock Appreciation Right, Restricted
Stock grant, Restricted Stock Units, Deferred Stock Units, Performance Share
Award or Annual Incentive Award granted under the Plan without the consent of
the Participant holding the Option, Stock Appreciation Right, Restricted Stock
grant, Restricted Stock Units, Deferred Stock Units, Performance Share Award or
Annual Incentive Award, except as set forth in any Agreement relating to such
Option, Stock Appreciation Right, Restricted Stock grant, Restricted Stock
Units, Deferred Stock Units, Performance Share Award or Annual Incentive Award
granted under the Plan (with such effect being presumed to arise from a
modification that would trigger a violation of Section 409A of the Code).
     9.8 Effect on Employment. Neither the adoption of the Plan nor the granting
of any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock
Units, Deferred Stock Units, Performance Share Award or Annual Incentive Award
pursuant to the Plan shall be deemed to create any right in any individual to be
retained or continued in the employment, or as a non-employee director or
consultant, of the Company or a Subsidiary.
     9.9 Use of Proceeds. The proceeds received from the sale of Common Stock
pursuant to the Plan will be used for general corporate purposes of the Company.
     9.10 Approval of Plan. Unless this Plan has been approved by the
shareholders of the Company within 12 months after adoption of the Plan by the
Board, as required by Section 422 of the Code, this Plan, and any grants or
awards made hereunder, shall be of no further force or effect.

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