exv10w18



 





Exhibit 10.18




PATRIOT COAL CORPORATION




EMPLOYEE STOCK PURCHASE PLAN




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	SECTION 1. INTRODUCTION	 	 	3	 
	1.1
	 	Purpose	 	 	3	 
	1.2
	 	Stock Purchase Plan	 	 	3	 
	1.3
	 	Effective Date and Term	 	 	3	 
	1.4
	 	Participating Subsidiaries	 	 	3	 
	1.5
	 	Stock Subject to Plan	 	 	3	 
	SECTION 2. DEFINITIONS	 	 	4	 
	2.1
	 	“Beneficiary”	 	 	4	 
	2.2
	 	“Board”	 	 	4	 
	2.3
	 	“Change in Control”	 	 	4	 
	2.4
	 	“Code”	 	 	4	 
	2.5
	 	“Committee”	 	 	5	 
	2.6
	 	“Company”	 	 	5	 
	2.7
	 	“Compensation”	 	 	5	 
	2.8
	 	“Custodian”	 	 	5	 
	2.9
	 	“Effective Date”	 	 	5	 
	2.10
	 	“Employee”	 	 	5	 
	2.11
	 	“Fair Market Value”	 	 	5	 
	2.12
	 	“Offering Date”	 	 	5	 
	2.13
	 	“Offering Period”	 	 	5	 
	2.14
	 	“Option”	 	 	6	 
	2.15
	 	“Option Account”	 	 	6	 
	2.16
	 	“Participating Subsidiary”	 	 	6	 
	2.17
	 	“Plan”	 	 	6	 
	2.18
	 	“Stock”	 	 	6	 
	2.19
	 	“Subsidiary”	 	 	6	 
	2.20
	 	“Termination Date”	 	 	6	 
	SECTION 3. ENROLLMENT AND CONTRIBUTIONS	 	 	6	 
	3.1
	 	Eligibility for Enrollment	 	 	6	 
	3.2
	 	Enrollment Procedure	 	 	7	 
	3.3
	 	Contributions	 	 	7	 
	3.4
	 	Option Accounts	 	 	8	 
	3.5
	 	Withdrawal of Contributions	 	 	8	 
	3.6
	 	No Funding of Accounts	 	 	8	 
	SECTION 4. GRANT AND EXERCISE OF OPTION	 	 	9	 
	4.1
	 	Grant of Options; Terms	 	 	9	 
	4.2
	 	Exercise of Option; Exercise Price	 	 	9	 
	4.3
	 	Option Accounts	 	 	10	 
	4.4
	 	No Interest on Account Balances	 	 	10	 
	SECTION 5. TERMINATION OF ENROLLMENT	 	 	10	 
	5.1
	 	Termination of Enrollment	 	 	10	 
	5.2
	 	Distributions to Employee	 	 	11	 
	5.3
	 	Beneficiaries	 	 	12	 






 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	SECTION 6. PLAN ADMINISTRATION	 	 	12	 
	6.1
	 	Committee	 	 	12	 
	6.2
	 	Committee Powers	 	 	12	 
	6.3
	 	Committee Actions	 	 	12	 
	6.4
	 	Member Who is a Participant	 	 	13	 
	6.5
	 	Information Required from Company	 	 	13	 
	6.6
	 	Information Required from Employees	 	 	13	 
	6.7
	 	Uniform Rules and Administration	 	 	13	 
	SECTION 7. AMENDMENT AND TERMINATION	 	 	13	 
	7.1
	 	Amendment	 	 	13	 
	7.2
	 	Termination	 	 	14	 
	7.3
	 	Rights upon Plan Termination	 	 	14	 
	SECTION 8. GENERAL PROVISIONS	 	 	14	 
	8.1
	 	No Transfer or Assignment	 	 	14	 
	8.2
	 	Rights as Stockholder	 	 	15	 
	8.3
	 	Rights as Employee	 	 	15	 
	8.4
	 	Costs	 	 	15	 
	8.5
	 	Application of Funds	 	 	15	 
	8.6
	 	Reports	 	 	15	 
	8.7
	 	Actions by Company	 	 	15	 
	8.8
	 	Governmental Approval	 	 	15	 
	8.9
	 	Stockholder Approval	 	 	15	 
	8.10
	 	Applicable Law	 	 	15	 
	8.11
	 	Gender and Number	 	 	15	 
	8.12
	 	Headings	 	 	15	 






ii 









 






PATRIOT COAL CORPORATION

EMPLOYEE STOCK PURCHASE PLAN




SECTION 1. INTRODUCTION




     1.1 Purpose. The purpose of the Patriot Coal Corporation Employee Stock Purchase Plan is to
provide eligible employees of Patriot Coal Corporation (the “Company”) and its Participating
Subsidiaries the opportunity to acquire a proprietary interest in the Company and thereby provide
employees with an additional incentive to contribute to the long-term profitability and success of
the Company and its Subsidiaries. The Plan is for the exclusive benefit of eligible employees of
the Company and its Subsidiaries.



     1.2 Stock Purchase Plan. The Plan is a stock purchase plan that is intended to satisfy all
requirements of Section 423 of the Internal Revenue Code of 1986, as amended. Any provision of the
Plan inconsistent with Code Section 423 will, without further act or amendment by the Company, be
deemed reformed to comply with Code Section 423.



     1.3 Effective Date and Term. The Plan is effective on January 1, 2008 (the “Effective Date”).
The Plan shall continue in effect until the earlier of the date the Company terminates the Plan or
the date all of the shares of Stock subject to the Plan, as amended from time to time, are
purchased.



     1.4 Participating Subsidiaries. A Subsidiary of the Company as of the Effective Date will be
deemed to have adopted the Plan for its eligible Employees as of the Effective Date and any
corporation that becomes a Subsidiary after the Effective Date will be deemed to have adopted the
Plan for its eligible Employees immediately upon becoming a Subsidiary, unless the Company acts to
exclude the Subsidiary and its eligible Employees from participation in the Plan.



     1.5 Stock Subject to Plan.




     (a) The Stock subject to purchase under the Plan will be shares of the Company’s
authorized but unissued shares, or previously issued shares of Stock reacquired and held by
the Company, or shares acquired in the market. The aggregate number of shares of Stock that
may be purchased under the Plan shall not exceed one million (1,000,000) shares. All shares
of Stock purchased under the Plan will count against this limitation.




     (b) In case of a reorganization, recapitalization, stock split, reverse stock split,
stock dividend, combination of shares, merger, consolidation, offering of rights or other
change in the capital structure of the Company, the Committee may make such adjustment as it
deems appropriate in the number, kind and purchase price of shares of Stock available for
purchase under the Plan, subject to Section 7.1.



 









 





SECTION 2. DEFINITIONS




     For purposes of this Plan, the following words and phrases, whether or not capitalized, have
the meanings specified below, unless the context plainly requires a different meaning:



     2.1 “Beneficiary” means a person to whom all or a portion of the cash amounts due to the
Employee under this Plan will be paid if the Employee dies before receiving such cash amounts.



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



     2.3 “Change in Control” means any one of the following:




     (a) any Person (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any company owned, directly or
indirectly, by the shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company), becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 50% or more of the combined voting
power of the Company’s then-outstanding securities (provided, however, that if any Person is
considered to own more than 50% of the total voting power of the stock of the Company, the
acquisition of additional stock by the same Person is not considered to cause a change in
the ownership or control of the Company);




     (b) during any period of twelve consecutive months, individuals who at the beginning of
such period constitute the Board, and any new director (other than (i) a director nominated
by a Person who has entered into an agreement with the Company to effect a transaction
described in paragraph (a), (c) or (d), or (ii) a director nominated by any Person
(including the Company) who publicly announces an intention to take or to consider taking
actions (including, but not limited to, an actual or threatened proxy contest) which if
consummated would constitute a Change in Control) whose election by the Board or nomination
for election by the Company’s shareholders was approved by a vote of the shareholders or a
vote of at least three-fourths (3/4) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority of the Board;




     (c) the consummation of any merger, consolidation, plan of arrangement, reorganization
or similar transaction or series of transactions in which the Company is involved, other
than such a transaction or series of transactions that would result in the shareholders of
the Company immediately prior thereto continuing to own (either by remaining outstanding or
by being converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the securities of the Company or such surviving entity (or the
parent, if any) outstanding immediately after such transaction(s) in substantially the same
proportions as their ownership immediately prior to such transaction(s); or



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     (d) the consummation of a sale or disposition by the Company of all or substantially
all of the Company’s assets, other than a liquidation of the Company into a wholly owned
subsidiary (provided, however, that a transfer of assets by the Company is not treated as a
change in the ownership of such assets if the assets are transferred to: (i) a shareholder
of the Company (immediately before the asset transfer) in exchange for or with respect to
its stock; (ii) an entity of which the Company owns, directly or indirectly, 50% or more of
the total value or voting power; (iii) a Person, or more than one Person acting as a group,
that owns, directly or indirectly, 50% or more of the total value or voting power of all the
outstanding stock of the Company; or (iv) an entity of which a Person or group described in
clause (iii) above owns, directly or indirectly, at least 50% of the total value or voting
power).



     As used herein, the term “Person” (including a “group”), has the meaning assigned to
such term for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(or any successor section thereto).



     2.4 “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto.



     2.5 “Committee” means the group of individuals appointed by the Board to administer the Plan.



     2.6 “Company” means Patriot Coal Corporation and any successor thereto.



     2.7 “Compensation” means straight-time wages or base salary (inclusively) paid for services
rendered by an Employee to the Company or any Participating Subsidiary during the applicable period
specified in the Plan, including any such amounts contributed by the Employee to any plan or plans
established by the Company or Participating Subsidiary in accordance with Code Section 125 or
401(k). Bonuses, incentive compensation, overtime, commissions and shift premiums paid to an
Employee shall not be included in Compensation.



     2.8 “Custodian” means the custodian for the Plan appointed by the Company.



     2.9 “Effective Date” shall have the meaning set forth in Section 1.3.



     2.10 “Employee” means any employee (as defined for purposes of Code Section 423) of the
Company or a Participating Subsidiary.



     2.11 “Fair Market Value” means the fair market value of one share of Stock as of a particular
day, which shall be the closing price per share of Stock on the New York Stock Exchange on that
day, or, if such day is not a trading day, the last preceding trading day.



     2.12 “Offering Date” means the first day of the Offering Period.



     2.13 “Offering Period” means any of the following time periods: the Effective Date through
June 30, 2008; July 1, 2008 through December 31, 2008; and each consecutive six-month period
thereafter; or such other period designated by the Committee in its sole discretion.



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     2.14 “Option” means an option to purchase shares of Stock under the Plan, based on the
contributions credited to each Employee’s Option Account.



     2.15 “Option Account” means the Account maintained on behalf of the Employee under Section 3.4
to which contributions to the Plan are credited and from which amounts are withdrawn to exercise
options on a Termination Date.



     2.16 “Participating Subsidiary” means a Subsidiary that is participating in the Plan in
accordance with Section 1.4.



     2.17 “Plan” means this Patriot Coal Corporation Employee Stock Purchase Plan, as described in
this document and as amended from time to time.



     2.18 “Stock” means the common stock, $0.01 par value, of the Company.



     2.19 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if each of the corporations, or group of commonly
controlled corporations, other than the last corporation in the unbroken chain owns 50% or more of
the total combined voting power of all classes of stock in one of the other corporations in the
chain.



     2.20 “Termination Date” means the last day of an Offering Period or, if earlier, the date of a
Change in Control that occurs during such Offering Period.



SECTION 3. ENROLLMENT AND CONTRIBUTIONS




     3.1 Eligibility for Enrollment.




     (a) An Employee may enroll in the Plan for an Offering Period unless one of the
following applies:




     (i) The customary employment of the Employee on the Offering Date is twenty
(20) hours or fewer per week; or




     (ii) The customary employment of the Employee on the Offering Date is for not
more than five (5) months in any calendar year; or




     (iii) The Employee is not employed by the Company or a Participating Subsidiary
on the Offering Date; or




     (iv) The Employee would, immediately upon enrollment, own directly or
indirectly, or hold options or rights to acquire, an aggregate of five percent (5%)
or more of the total combined voting power or value of all outstanding shares of all
classes of stock of the Company or any Subsidiary, with ownership determined in
accordance with the rules of Code Section 424(d) and treating stock that the
Employee may purchase under outstanding options as owned by the Employee.



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     (b) The Committee or its designee will notify an Employee that the Employee is first
eligible to enroll in the Plan and, except as otherwise provided herein with respect to the
Offering Period beginning on the Effective Date, make available to each eligible Employee
the necessary enrollment forms before the Offering Date.



     3.2 Enrollment Procedure.




     (a) To enroll in the Plan for an Offering Period, an Employee must file an enrollment
form with the Company and elect to make contributions under the Plan in accordance with
Section 3.3. The enrollment form must be received by the Company at least fifteen (15)
calendar days prior to the Offering Date and must state the contribution rate elected by the
Employee for the Offering Period. An Employee who does not enroll in the Plan for an
Offering Period will receive no shares of Stock under the Plan for such Offering Period.
Notwithstanding the foregoing, with respect to the Offering Period beginning on the
Effective Date, any Employee eligible to enroll in the Plan as of the Effective Date
pursuant to Section 3.1 shall be automatically enrolled in the Plan at the maximum
contribution rate permitted under Section 3.3(b), subject to such Employee’s right to
increase, decrease or discontinue contributions under Section 3.3(d).




     (b) An Employee whose enrollment in, and contributions under, the Plan continue
throughout an Offering Period will automatically be enrolled in the Plan for the next
Offering Period unless (i) the Employee files with the Company a written notice of
discontinuance of contributions before the Offering Date for the next Offering Period in
accordance with Section 5.1(a)(i), or (ii) on the Offering Date for such Offering Period the
Employee is described in Section 3.1(a). The contribution rate for an Employee who is
automatically enrolled for an Offering Period (other than the Offering Period beginning on
the Effective Date) pursuant to this Section will be the contribution rate in effect for the
immediately preceding Offering Period, unless the Employee files with the Company an amended
enrollment form designating a different contribution rate at least fifteen (15) calendar
days prior to the next Offering Period.



     3.3 Contributions.




     (a) To enroll for the first time in the Plan for an Offering Period (other than the
Offering Period beginning on the Effective Date), an Employee must elect to make a
contribution under the Plan, subject to the terms and conditions described below, by means
of payroll deduction for each payroll period within the Offering Period. Notwithstanding the
foregoing, with respect to the Offering Period beginning on the Effective Date,
contributions to the Plan by any Employee who is automatically enrolled in the Plan pursuant
to Section 3.2(a) shall be made by means of payroll deductions only for payroll periods
within such Offering Period that begin after the date of the effective registration
statement filed on Form S-8 under the Securities Act of 1933, as amended, with respect to
the shares of Stock available under the Plan (the “S-8 Registration Date”). An Employee may
make contributions to the Plan in the form of a check or payroll deductions (including
deductions at a rate higher than the maximum rate permitted under Section 3.3(b)) to make up
for the period from the Effective Date to the end of the pay period in which the S-8
Registration occurs. Such additional contributions may be made



7









 







at any time during the portion of such Offering Period beginning on the S-8
Registration Date and ending on the first Termination Date.




     (b) Except as otherwise provided in Section 3.3(a), an Employee may elect to make
payroll deduction contributions in amounts not less than one percent (1%) of Compensation
per payroll period and not more than the lesser of (i) fifteen percent (15%) of Compensation
per Offering Period (or such other amount as the Committee may establish from time to time
and communicate to Employees before the Offering Date) or (ii) a percentage of Compensation
for each payroll period that ensures that the limit on the purchase of shares of Stock
specified in Section 4.1 is not exceeded for the Offering Period.




     (c) Except as otherwise provided in Section 3.3(a), payroll deductions will commence
with the first payroll period that begins during the Offering Period and will be made in
conformity with the Company’s payroll deduction schedule and practices.




     (d) Except as provided in Section 5.1, an Employee may elect to increase, decrease or
discontinue contributions once each Offering Period as of the first day of the first payroll
period beginning in the Offering Period by giving written notice to the Committee at least
fifteen (15) calendar days before such date. Notwithstanding the foregoing, with respect to
the Offering Period beginning on the Effective Date, any Employee who is automatically
enrolled in the Plan pursuant to Section 3.2(a) shall have one opportunity to increase,
decrease or discontinue contributions at any time during the portion of such Offering Period
beginning on the S-8 Registration Date and ending fifteen (15) calendar days before the end
of such Offering Period.




     (e) Notwithstanding anything in the Plan to the contrary, contributions otherwise made
by an Employee to the Plan pursuant to the enrollment procedure described in Section 3.2
shall be automatically suspended to the extent, and for the period of time, required under
Code Section 401(k) and the regulations promulgated thereunder.



     3.4 Option Accounts. All contributions made by an Employee under the Plan will be credited to
an Option Account maintained by the Company or the Custodian on behalf of the Employee. The Company
will make the credit as soon as practicable after the contributions are withheld from the
Employee’s Compensation.



     3.5 Withdrawal of Contributions. An Employee may elect to withdraw contributions made during
an Offering Period by giving written notice to the Committee at least fifteen (15) calendar days
before the end of such Offering Period, in which case the cash credited to the Employee’s Option
Account will be refunded to the Employee without interest as soon as administratively feasible
after the Committee receives such notice, and the Employee may not re-enroll in the Plan until the
next Offering Period.



     3.6 No Funding of Accounts. No cash shall be set aside with respect to an Option Account
until it is credited thereto. Nothing contained in this Plan and no action taken pursuant to the
provisions hereof shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Employee or any other person with respect to an Option
Account. Amounts credited to an Option Account at any time and from time to time shall



8









 







be general assets of the Company. To the extent that any person acquires a right to receive
the benefit of amounts credited to an Option Account, such right shall be that of an unsecured
general creditor of the Company.



SECTION 4. GRANT AND EXERCISE OF OPTION




     4.1 Grant of Options; Terms. Enrollment in the Plan with respect to any Offering Period will
constitute the grant by the Company of an Option to purchase shares of Stock under the Plan during
such Offering Period. All Employees granted Options shall have the same rights and privileges as
required by Code Section 423(b)(5). Each Option will be subject to the following terms:




     (a) The exercise price will be as specified in Section 4.2




     (b) Except as limited in subsection (e) below, the number of shares of Stock subject to
the Option will equal the number of shares of Stock that can be purchased at the exercise
price specified in Section 4.2 with the aggregate amount credited to the Employee’s Option
Account as of the Termination Date.




     (c) The Option with respect to an Offering Period will be exercised on the Termination
Date of such Offering Period.




     (d) The payment by an Employee for the shares of Stock purchased upon exercise of an
Option will be made only through payroll deduction, unless otherwise provided herein with
respect to the Offering Period beginning on the Effective Date, all in accordance with
Section 3.3.




     (e) No Employee shall be granted an Option to the extent the number of shares of Stock
that may be purchased for such Employee (when taken together with all other options
exercisable by such Employee under any other stock purchase plan of the Company or a
Subsidiary that is qualified under Code Section 423) in the aggregate during a calendar year
exceeds twenty-five thousand dollars ($25,000) in Fair Market Value of such shares of Stock
determined on the Offering Date for the Offering Period with respect to which the purchase
is to be made.



     4.2 Exercise of Option; Exercise Price.




     (a) As soon as practicable after the Termination Date of each Offering Period, the
Company or the Custodian will apply to the purchase of the number of shares of Stock the
exercise price of which is covered by the amounts credited to each Employee’s Option Account
as of such Termination Date. In the event that the aggregate amount credited to the
Employees’ Option Accounts as of such Termination Date exceeds the exercise price of the
 shares available for purchase as of such date under this Plan, the Company or Custodian
shall purchase for each Employee his or her proportional share of the shares available for
purchase, based on the percentage that the cash allocated to his or her Option Account
represents of the total cash allocated to the Option Accounts of all Employees for the
Offering Period ending on such date, and the excess of the amount so credited shall be
returned to the Employee without interest. The Stock so purchased shall



9









 







be allocated to the Option Account for each Employee. The Stock shall be held by the
Custodian on behalf of the Employee and registered in the name of a nominee.




     (b) The exercise price of each share of Stock purchased with respect to any Offering
Period shall be the lower of:




     (i) Eighty-five percent (85%) of the Fair Market Value of the Stock on the
Offering Date for such Offering Period, or




     (ii) Eighty-five percent (85%) of the fair market value of the Stock on the
Termination Date for such Offering Period.



     4.3 Option Accounts.




     (a) All shares of Stock purchased on behalf of an Employee as of a Termination Date
shall be credited to such Employee’s Option Account as of such date. Dividends payable with
respect to shares of Stock credited to the Employee’s Option Account will be credited to the
Employee’s Option Account and, to the extent such dividends are paid in cash, will be used
by the Custodian to purchase additional shares of Stock on the open market as soon as
administratively feasible following receipt of the dividend payment by the Custodian.




     (b) The Committee may determine whether cash in an amount representing the price of a
fractional share shall be carried over to the next Offering Period or applied to the
purchase of a fractional share at the end of an Offering Period; provided that such
determination shall apply uniformly to all Employees for each Offering Period.



     4.4 No Interest on Account Balances. No interest or other earnings will be credited to any
Option Account with respect to (a) amounts credited thereto during an Offering Period or (b)
amounts to be returned to the Employee. Neither the Committee nor the Company shall have any
obligation to invest or otherwise manage amounts credited to an Option Account, other than to apply
such amounts to the purchase of Stock in accordance with the terms of this Plan.



SECTION 5. TERMINATION OF ENROLLMENT




     5.1 Termination of Enrollment.




     (a) An Employee’s enrollment in the Plan will terminate under the following
circumstances:




     (i) as of the beginning of the Offering Period that is at least fifteen (15)
calendar days after the Employee files with the Company a written notice of
discontinuance of contributions (except as provided in Section 5.1(a)(ii));




     (ii) immediately upon the Employee filing with the Company a written notice of
discontinuance of contributions with respect to the Offering Period beginning on the
Effective Date as provided in Section 3.3(d);



10









 






     (iii) upon the Employee’s termination of employment with the Company and all
Participating Subsidiaries;




     (iv) as of the date on which the Employee would own, directly or indirectly, or
hold options or rights to acquire, an aggregate of five percent (5%) or more of the
total combined voting power or value of all outstanding shares of all classes of the
Company or any Subsidiary, determined in accordance with Code Section 424(d); and




     (v) upon termination of the Plan or as of the date the relevant Participating
Subsidiary ceases to be a Subsidiary.




     (b) An Employee whose enrollment in the Plan terminates under this Section, other than
by reason of termination of the Plan, may again enroll in the Plan as of any subsequent
Offering Date if the Employee satisfies the eligibility conditions of Section 3.1 as of such
date.



     5.2 Distributions to Employee.




     (a) Subject to the eighteen (18) month holding period prescribed in subsection 5.2(c),
as soon as administratively feasible after an Employee’s enrollment in the Plan terminates
under Section 5.1:




     (i) The Company will pay to the Employee all cash credited to the Employee’s
Option Account as of the date of termination, without interest; and




     (ii) The Committee will direct the Custodian to distribute to the Employee
shares of Stock then credited to the Employee’s Option Account that have been
credited to the Employee’s Option Account for at least eighteen (18) months in the
form of certificates representing whole shares of Stock (and cash equal to the Fair
Market Value of any fractional share), or a nominee account, as requested by the
Employee or former Employee.




     (b) If an Employee’s enrollment terminates as a result of death, or if the Employee’s
death occurs before the Employee receives a distribution under this Section, all cash
amounts payable under this Section to the Employee will be paid to the Employee’s
Beneficiary; and shares of Stock credited to the Option Account of a deceased Employee may
be distributed to the personal representative of the deceased employee without regard to the
eighteen (18) month holding period described in Section 5.2(c).




     (c) An Employee or former Employee may, from time to time, request distribution of
shares of Stock then credited to the Employee’s Option Account that have been credited to
the Employee’s Option Account for at least eighteen (18) months. Notwithstanding the above,
in the event of a Change in Control an Employee or former Employee may request distribution
of shares of Stock then credited to the Employee’s Option Account. Distribution may be made
as soon as administratively practicable in the form of stock certificates representing whole
shares of Stock (and cash equal to the Fair



11









 







Market Value of any fractional share), or a nominee account, as requested by the
Employee or former Employee.



     5.3 Beneficiaries.




     (a) An Employee may designate a Beneficiary to receive his or her benefits under the
Plan following the Employee’s death. Any such designation must be made on a form provided by
the Company for this purpose, will be effective on the date received by the Company and may
be revoked by the Employee at any time.




     (b) If the Employee fails to designate a Beneficiary or if no designated Beneficiary
survives the Employee, then any amounts due to the Employee under the Plan shall be paid to
the Employee’s estate.



SECTION 6. PLAN ADMINISTRATION




     6.1 Committee. The Plan will be administered by the Committee.



     6.2 Committee Powers.




     (a) The Committee will have all powers appropriate to administer the Plan, including,
but not limited to, the following:




     (i) To resolve all questions that may arise under the Plan, including the power
to determine the rights or eligibility of Employees or their Beneficiaries;




     (ii) To construe the terms of the Plan and to remedy ambiguities,
inconsistencies or omissions;




     (iii) To adopt such rules of procedure and prescribe such forms that it
considers appropriate for the proper administration of the Plan and that are
consistent with the Plan;




     (iv) To enforce the Plan provisions and the rules of procedure that the
Committee adopts;




     (v) To employ agents, attorneys, accountants, actuaries or other persons, and
to allocate or delegate to them such powers, rights and duties as the Committee
considers appropriate for the proper administration of the Plan.




     (b) The Committee will have such further powers and duties as may be specified
elsewhere in the Plan.



     6.3 Committee Actions. The actions of the Committee may be taken at a meeting by a majority
of its members, in writing without a meeting if a majority of its members sign such writing or by
the use of a conference telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other and participation in such a



12









 







meeting in this manner shall constitute attendance and presence in person at the meeting of
the person or persons so participating for all purposes. In taking action:




     (a) The Committee may allocate authority to a specific member or specific members of
the Committee to carry out such duties as the Committee may assign;




     (b) A member of the Committee may delegate, in writing, any or all of such member’s
rights, powers, duties and discretion to any other member of the Committee, with the consent
of such other member;




     (c) The Committee may delegate to any agents such duties and powers as it deems
appropriate, by an instrument in writing that specifies which duties are so delegated and to
whom each such duty is so delegated; and




     (d) When there is an even division of opinion among the members of the Committee as to
a matter, the Board of Directors of the Company will resolve the matter, provided, however,
that no member of the Board of Directors may vote on such a matter if it concerns such
member’s individual rights, privileges or obligations under the Plan.



     6.4 Member Who is a Participant. If a member of the Committee is an Employee, such member may
not decide any matter relating to the member’s participation or Option Account or how the Option
Account is to be paid to the member that the member would not have the right to decide in the
absence of membership on the Committee. No Employee will receive any compensation for services as
a member of the Committee.



     6.5 Information Required from Company. The Company will furnish the Committee with such data
and information as the Committee deems appropriate to administer the Plan. The records of the
Company as to an Employee’s Compensation will be conclusive and binding on all persons unless
determined by the Committee to be clearly incorrect.



     6.6 Information Required from Employees. Each person entitled to benefits under the Plan must
furnish the Company from time to time in writing such person’s mailing address, each change of
mailing address and such other data and information as the Committee deems appropriate to
administer the Plan. Any communication, statement or notice mailed with postage prepaid to any
person at the last mailing address filed with the Company will be binding upon such person for all
purposes of the Plan.



     6.7 Uniform Rules and Administration. The Committee will administer the Plan on a
nondiscriminatory basis and will apply uniform rules to all persons similarly situated.



SECTION 7. AMENDMENT AND TERMINATION




     7.1 Amendment.




     (a) The Company reserves the right to amend the Plan from time to time subject to the
following limitations:




     (i) To the extent necessary to comply with or obtain an exemption from any
provision of the Code, including regulations thereunder, or of the



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Securities Exchange Act of 1934, as amended, no amendment will be made without
the prior approval of the stockholders of the Company if the amendment will (A)
increase the number of shares of Stock reserved for purchase under the Plan, or (B)
materially modify the eligibility conditions or materially increase the benefits
available under the Plan.




     (ii) No amendment will make any change in a previously granted and outstanding
Option that adversely affects the rights of an Employee with respect to such Option.




     (iii) No amendment will reduce the amount of an Employee’s Option Account
balance.




     (b) The Company may delegate to the Committee or its officers the power to amend the
Plan as the Company deems appropriate, subject to the limitations of this Section.



     7.2 Termination. The Plan is entirely voluntary on the part of the Company and the
continuance of the Plan should not be construed as a contractual obligation of the Company.
Accordingly, the Company reserves the right to terminate the Plan at any time. Unless sooner
terminated by the Company, the Plan shall terminate on the date all of the shares of Stock
specified in Section 1.5(a) are purchased, unless additional shares of Stock are authorized for the
Plan by the stockholders of the Company. No Option may be granted under the Plan after the Plan is
terminated.



     7.3 Rights upon Plan Termination.




     (a) If the Plan terminates, the Committee may elect to terminate all outstanding
Options either immediately or upon completion of the purchase of shares of Stock on the next
following Termination Date.




     (b) If the Committee terminates an Option prior to the expiration of the Option, all
amounts contributed to the Plan that remain in an Employee’s Option Account will be returned
to the Employee as soon as reasonably practicable.



SECTION 8. GENERAL PROVISIONS




     8.1 No Transfer or Assignment. The rights of an Employee under the Plan may not be sold,
pledged, assigned or transferred, voluntarily or involuntarily, in any manner other than by will or
the laws of descent and distribution. Any such attempted sale, pledge, assignment or transfer shall
be without effect. An Employee’s rights and all Options granted under the Plan shall be exercisable
only by such Employee during his or her lifetime.



     Furthermore, except as provided in Section 5.2(b), shares purchased for an Employee as of a
Termination Date may not be sold, exchanged, assigned, transferred, pledged, or otherwise disposed
of in any way by the Employee, other than by will or the laws of descent and distribution, until
after eighteen (18) months after such Termination Date. The Company may place controls on the
Account of the Employee to which such shares are credited as necessary or



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appropriate to enforce such restrictions. Any such attempted assignment, transfer, pledge or
other disposition shall be without effect.



     8.2 Rights as Stockholder. The grant of an Option to purchase shares of Stock under the Plan
will not confer upon an Employee any rights as a stockholder of the Company with respect to shares
of Stock subject to the Option. An Employee will become a stockholder with respect to shares of
Stock subject to an Option under the Plan only when the purchase of such shares of Stock is
completed as of a Termination Date.



     8.3 Rights as Employee. The Plan is not a contract of employment, and the grant of an Option
to purchase shares of Stock under the Plan will not confer upon any Employee the right to be
retained in the employ of the Company or any Subsidiary.



     8.4 Costs. All costs and expenses incurred in the administration of the Plan will be paid by
the Company and its Subsidiaries. Any brokerage fees for the sale of shares of Stock by an Employee
will be borne by the Employee.



     8.5 Application of Funds. All proceeds received by the Company from the sale of Stock under
the Plan will be used for general corporate purposes.



     8.6 Reports. The Company will provide or cause to be provided to each Employee an annual
report of the Employee’s contributions under the Plan for each Plan Year and the shares of Stock
purchased with such contributions.



     8.7 Actions by Company. Any action taken by the Company with respect to the Plan will be by
resolution of its Board of Directors or by a person or persons authorized by resolution of its
Board of Directors.



     8.8 Governmental Approval. The Plan and any offering or sale made to Employees under the Plan
is subject to any governmental approvals or consents that are or may become applicable in
connection herewith.



     8.9 Stockholder Approval. The Plan is subject to approval by the holders of a majority of the
shares present in person or by proxy and voting at the meeting at which the Plan is considered and
shall not be effective without such approval within twelve (12) months before or after the adoption
of the Plan by the Board of Directors.



     8.10 Applicable Law. The Plan will be governed by the laws of the State of Delaware, without
regard to the law of conflicts of such state, to the extent that federal law does not preempt such
laws.



     8.11 Gender and Number. When the context permits, words in the Plan used in the masculine
gender include the feminine gender, words in the singular include the plural and words in the
plural include the singular.



     8.12 Headings. All headings in the Plan are included solely for ease of reference and do not
bear on the interpretation of the text.



[ADOPTION CERTIFICATION PAGE FOLLOWS]




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     The undersigned hereby certifies that this Plan was duly adopted by the shareholders of the
Company on October 12, 2007.



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Richard M. Whiting
 	 
	 	 	Title: 	President & Chief Executive Officer 
	 	 	Date: 	October 22, 2007 
	 




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