EX-10.1






Exhibit 10.1




ASSISTED LIVING CONCEPTS, INC.

2006 OMNIBUS INCENTIVE COMPENSATION PLAN

Effective October 31, 2006

Amended and restated April 30, 2009 to reflect March 16, 2009 one-for-five reverse stock split




     SECTION 1. Purpose.  The purpose of this Assisted Living Concepts, Inc. 2006 Omnibus
Incentive Compensation Plan is to promote the interests of Assisted Living Concepts, Inc., a Nevada
corporation (the “Company”), and its stockholders by (a) attracting and retaining exceptional
directors, officers, employees and consultants (including prospective directors, officers,
employees and consultants) of the Company and its Affiliates (as defined below) and (b) enabling
such individuals to participate in the long-term growth and financial success of the Company.



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



     “Affiliate” means (a) any entity that, directly or indirectly, is controlled by, controls or
is under common control with, the Company and (b) any entity in which the Company has a significant
equity interest, in either case following the Initial Distribution and as otherwise determined by
the Committee.



     “Award” means any award that is permitted under Section 6 and granted under the Plan.



     “Award Agreement” means any written agreement, contract or other instrument or document
evidencing any Award, which may, but need not, require execution or acknowledgment by a
Participant.



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



     “Cash Incentive Award” shall have the meaning specified in Section 6(f).



     “Change of Control” shall (a) have the meaning set forth in an Award Agreement or (b) if there
is no definition set forth in an Award Agreement, mean the occurrence of any of the following
events, not including any events occurring prior to or in connection with the Initial Distribution
(including the occurrence of such Initial Distribution):




     (i) the consummation of (A) a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving (x) the Company or (y) any of its
subsidiaries, but in the case of this clause (y) only if Company Voting Securities (as
defined below) are issued or issuable in connection with such transaction (each of the
transactions referred to in this clause (A), a “Reorganization”) or (B) a sale or other
disposition of all or substantially all the assets of the Company to a person that is not an
Affiliate of the Company (a “Sale”), in each case, if such Reorganization or Sale requires
the approval of the Company’s stockholders under the law of the Company’s jurisdiction of
organization (whether such approval is required for such Reorganization or Sale or for the
issuance of securities in such Reorganization or Sale), unless, immediately following such
Reorganization or Sale, (1) all or substantially all the persons who were the “beneficial
owners” (as such term is defined in Rule 13d-3 under the Exchange Act) of the securities
eligible to vote for the election of the Board (“Company Voting Securities”) outstanding
immediately prior to the consummation of such Reorganization or Sale beneficially own,
directly or indirectly, more than 50% of the combined voting power of the then outstanding
voting securities of the corporation or other entity resulting from such Reorganization or
Sale (including a corporation or other entity that as a result of such transaction directly
or indirectly owns the Company or all or substantially all the Company’s assets) (the
“Continuing Company”)



 









 







in substantially the same proportions as their ownership, immediately prior to the
consummation of such Reorganization or Sale, of the outstanding Company Voting Securities
(excluding any outstanding voting securities of the Continuing Company that such beneficial
owners hold immediately following the consummation of such Reorganization or Sale as a
result of their ownership prior to such consummation of voting securities of any corporation
or other entity (other than the Company) involved in or forming part of such Reorganization
or Sale), (2) no Person (excluding (x) any employee benefit plan (or related trust or
fiduciary) sponsored or maintained by the Company or its Affiliates, (y) Scotia and (z) the
Company and its Affiliates) beneficially owns, directly or indirectly, 20% or more of the
combined voting power of the outstanding voting securities of the Continuing Company
immediately following the consummation of such Reorganization or Sale and (3) immediately
following the consummation of such Reorganization or Sale, at least a majority of the
members of the board of directors (or equivalent body) of the Continuing Company are
Incumbent Directors;




     (ii) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company, unless such liquidation or dissolution is part of a transaction
or series of transactions described in paragraph (i) above that does not otherwise
constitute a Change of Control; or




     (iii) any Person or “group” (as used in Section 14(d)(2) of the Exchange Act)
(excluding (x) any employee benefit plan (or related trust or fiduciary) sponsored or
maintained by the Company or its Affiliates, (y) Scotia and (z) the Company and its
Affiliates) becomes the beneficial owner, directly or indirectly, of Company Voting
Securities representing 20% or more of the combined voting power of the then outstanding
Company Voting Securities; provided, however, that, for purposes of this
subparagraph (iv), no acquisition of Company Voting Securities (x) directly from the Company
or (y) by any employee benefit plan (or related trust or fiduciary) sponsored or maintained
by the Company or its Affiliates shall constitute a Change of Control.



     “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated thereunder.



     “Committee” means the Compensation/ Nominating/ Governance committee of the Board, or such
other committee of the Board as may be designated by the Board from time to time to administer the
Plan.



     “EBITDA” means earnings before interest, taxes, depreciation and amortization.



     “Effective Date” has the meaning assigned thereto in the Arrangement Agreement, dated as of
September 12, 2006, among Extendicare Real Estate Investment Trust, the Company and the other
parties thereto.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute
thereto.



     “Exercise Price” means (a) in the case of Options, the price specified in the applicable Award
Agreement as the price-per-Share at which Shares may be purchased pursuant to such Option or (b) in
the case of SARs, the price specified in the applicable Award Agreement as the reference
price-per-Share used to calculate the amount payable to the Participant.



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     “Fair Market Value” means (a) with respect to any property other than Shares, the fair market
value of such property determined by such methods or procedures as shall be established from time
to time by the Committee and (b) with respect to the Shares, as of any date, (i) the mean between
the high and low sales prices of the Shares (A) as reported by the NYSE for such date or (B) if the
Shares are listed on any other national stock exchange, as reported on the stock exchange composite
tape for securities traded on such stock exchange for such date or, with respect to each of clauses
(A) and (B), if there were no sales on such date, on the closest preceding date on which there were
sales of Shares or (ii) in the event there shall be no public market for the Shares on such date,
the fair market value of the Shares as determined in good faith by the Committee.



     “Incentive Stock Option” means an option to purchase Shares from the Company that (a) is
granted under Section 6 and (b) is intended to qualify for special Federal income tax treatment
pursuant to Sections 421 and 422 of the Code, as now constituted or subsequently amended, or
pursuant to a successor provision of the Code, and which is so designated in the applicable Award
Agreement.



     “Independent Director” means a member of the Board who is neither (a) an employee of the
Company nor (b) an employee of any Affiliate, and who, at the time of acting, is a “Non-Employee
Director” under Rule 16b-3.



     “Initial Distribution” means the issuance of shares of Class A common stock and Class B common
stock of the Company to the holders of Extendicare Inc. Subordinate Voting Shares and Multiple
Voting Shares, respectively, on the Effective Date pursuant to the Plan of Arrangement to be filed
by Extendicare Inc. with Canadian authorities in connection with, among other things, the Company’s
separation from Extendicare Inc.



     “IRS” means the Internal Revenue Service or any successor thereto and includes the staff
thereof.



     “Nonqualified Stock Option” means an option to purchase Shares from the Company that (a) is
granted under Section 6 and (b) is not an Incentive Stock Option.



     “NYSE” means the New York Stock Exchange or any successor thereto.



     “Option” means an Incentive Stock Option or a Nonqualified Stock Option or both, as the
context requires.



     “Participant” means any director, officer, employee or consultant (including any prospective
director, officer, employee or consultant) of the Company or its Affiliates who is eligible for an
Award under Section 5 and who is selected by the Committee to receive an Award under the Plan or
who receives a Substitute Award pursuant to Section 4(c).



     “Performance Compensation Award” means any Award designated by the Committee as a Performance
Compensation Award pursuant to Section 6(i).



     “Performance Criteria” means the criterion or criteria that the Committee shall select for
purposes of establishing a Performance Goal for a Performance Period with respect to any
Performance Compensation Award, Performance Unit or Cash Incentive Award under the Plan.



     “Performance Formula” means, for a Performance Period, the one or more objective formulas
applied against the relevant Performance Goal to determine, with regard to the Performance
Compensation Award, Performance Unit or Cash Incentive Award of a particular Participant, whether
all, a portion or none of the Award has been earned for the Performance Period.



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     “Performance Goal” means, for a Performance Period, the one or more goals established by the
Committee for the Performance Period based upon the Performance Criteria.



     “Performance Period” means the one or more periods of time as the Committee may select over
which the attainment of one or more Performance Goals will be measured for the purpose of
determining a Participant’s right to and the payment of a Performance Compensation Award,
Performance Unit or Cash Incentive Award.



     “Performance Unit” means an Award under Section 6(e) that has a value set by the Committee (or
that is determined by reference to a valuation formula specified by the Committee or the Fair
Market Value of Shares), which value may be paid to the Participant by delivery of such property as
the Committee shall determine, including without limitation, cash or Shares, or any combination
thereof, upon achievement of such Performance Goals during the relevant Performance Period as the
Committee shall establish at the time of such Award or thereafter.



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



     “Plan” means this Assisted Living Concepts, Inc. 2006 Omnibus Incentive Compensation Plan, as
in effect from time to time.



     “Restricted Share” means a Share delivered under the Plan that is subject to certain transfer
restrictions, forfeiture provisions and/or other terms and conditions specified herein and in the
applicable Award Agreement.



     “RSU” means a restricted stock unit Award that is designated as such in the applicable Award
Agreement and that represents an unfunded and unsecured promise to deliver Shares, cash, other
securities, other Awards or other property in accordance with the terms of the applicable Award
Agreement.



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



     “SAR” means a stock appreciation right Award that represents an unfunded and unsecured promise
to deliver Shares, cash, other securities, other Awards or other property equal in value to the
excess, if any, of the Fair Market Value per Share over the Exercise Price per Share of the SAR,
subject to the terms of the applicable Award Agreement.



     “Scotia” means, collectively, Scotia Investments Limited, Minas Basin Creditco Limited,
Parrsboro Lumber Company, Minas Basin Investments and BH Investments Limited, and any Person who
would be deemed the same “person” as any such entity for purposes of Sections 13(d) and 14(d) of
the Exchange Act, whether or not applicable or who is directly or indirectly controlled by members
of the family of the late R.A. Jodrey.



     “SEC” means the Securities and Exchange Commission or any successor thereto and shall include
the staff thereof.



     “Shares” means shares of Class A common stock of the Company, $0.01 par value, or such other
securities of the Company (a) into which such shares shall be changed by reason of a
recapitalization,



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merger, consolidation, split-up, combination, exchange of shares or other similar transaction or
(b) as may be determined by the Committee pursuant to Section 4(b).



     “Subsidiary” means any entity in which the Company, directly or indirectly, possesses 50% or
more of the total combined voting power of all classes of its stock.



     “Substitute Awards” shall have the meaning specified in Section 4(c).



     SECTION 3. Administration.



     (a) Composition of Committee. The Plan shall be administered by the Committee, which
shall be composed of one or more directors, as determined by the Board; provided that after
the date of the consummation of the Initial Distribution, to the extent necessary to comply with
the rules of the NYSE and Rule 16b-3 and to satisfy any applicable requirements of Section 162(m)
of the Code and any other applicable laws or rules, the Committee shall be composed of two or more
directors, all of whom shall be Independent Directors and all of whom shall (i) qualify as “outside
directors” under Section 162(m) of the Code and (ii) meet the independence requirements of the
NYSE.



     (b) Authority of Committee. Subject to the terms of the Plan and applicable law, and
in addition to other express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have sole and plenary authority to administer the Plan, including, but not limited
to, the authority to (i) designate Participants, (ii) determine the type or types of Awards to be
granted to a Participant, (iii) determine the number of Shares to be covered by, or with respect to
which payments, rights or other matters are to be calculated in connection with, Awards, (iv)
determine the terms and conditions of any Awards, (v) determine the vesting schedules of Awards
and, if certain performance criteria must be attained in order for an Award to vest or be settled
or paid, establish such performance criteria and certify whether, and to what extent, such
performance criteria have been attained, (vi) determine whether, to what extent and under what
circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or
other property, or canceled, forfeited or suspended and the method or methods by which Awards may
be settled, exercised, canceled, forfeited or suspended, (vii) determine whether, to what extent
and under what circumstances cash, Shares, other securities, other Awards, other property and other
amounts payable with respect to an Award shall be deferred either automatically or at the election
of the holder thereof or of the Committee, (viii) interpret, administer, reconcile any
inconsistency in, correct any default in and supply any omission in, the Plan and any instrument or
agreement relating to, or Award made under, the Plan, (ix) establish, amend, suspend or waive such
rules and regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan, (x) accelerate the vesting or exercisability of, payment for or lapse
of restrictions on, Awards, (xi) amend an outstanding Award or grant a replacement Award for an
Award previously granted under the Plan if, in its sole discretion, the Committee determines that
(A) the tax consequences of such Award to the Company or the Participant differ from those
consequences that were expected to occur on the date the Award was granted or (B) clarifications or
interpretations of, or changes to, tax law or regulations permit Awards to be granted that have
more favorable tax consequences than initially anticipated and (xii) make any other determination
and take any other action that the Committee deems necessary or desirable for the administration of
the Plan.



     (c) Committee Decisions. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with respect to the Plan
or any Award shall be within the sole and plenary discretion of the Committee, may be made at any
time and shall be final, conclusive and binding upon all persons, including the Company, any
Affiliate, any Participant, any holder or beneficiary of any Award and any stockholder.



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     (d) Indemnification. No member of the Board, the Committee or any employee of the
Company (each such person, a “Covered Person”) shall be liable for any action taken or omitted to
be taken or any determination made in good faith with respect to the Plan or any Award hereunder.
Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any
loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon or incurred
by such Covered Person in connection with or resulting from any action, suit or proceeding to which
such Covered Person may be a party or in which such Covered Person may be involved by reason of any
action taken or omitted to be taken under the Plan or any Award Agreement and (ii) any and all
amounts paid by such Covered Person, with the Company’s approval, in settlement thereof, or paid by
such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against
such Covered Person; provided that the Company shall have the right, at its own expense, to
assume and defend any such action, suit or proceeding, and, once the Company gives notice of its
intent to assume the defense, the Company shall have sole control over such defense with counsel of
the Company’s choice. The foregoing right of indemnification shall not be available to a Covered
Person to the extent that a court of competent jurisdiction in a final judgment or other final
adjudication, in either case not subject to further appeal, determines that the acts or omissions
of such Covered Person giving rise to the indemnification claim resulted from such Covered Person’s
bad faith, fraud or willful criminal act or omission or that such right of indemnification is
otherwise prohibited by law or by the Company’s Amended and Restated Articles of Incorporation or
Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which Covered Persons may be entitled under the Company’s Amended and Restated
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any other power that the
Company may have to indemnify such persons or hold them harmless.



     (e) Delegation of Authority to Senior Officers. The Committee may delegate, on such
terms and conditions as it determines in its sole and plenary discretion, to one or more senior
officers of the Company the authority to make grants of Awards to officers (other than executive
officers), employees and consultants of the Company and its Affiliates (including any prospective
officer, employee or consultant) and all necessary and appropriate decisions and determinations
with respect thereto.



     (f) Awards to Independent Directors. Notwithstanding anything to the contrary
contained herein, the Board may, in its sole and plenary discretion, at any time and from time to
time, grant Awards to Independent Directors or administer the Plan with respect to such Awards. In
any such case, the Board shall have all the authority and responsibility granted to the Committee
herein.



     SECTION 4. Shares Available for Awards; Other Limits.



     (a) Shares Available. Subject to adjustment as provided in Section 4(b), the
aggregate number of Shares that may be delivered pursuant to Awards granted under the Plan shall be
800,000, of which the maximum number of Shares that may be delivered pursuant to Incentive Stock
Options granted under the Plan shall be 800,000, provided that each such number of Shares
shall automatically be adjusted to take into account any stock distribution or stock split that
occurs in connection with the Initial Distribution. If, after the effective date of the Plan, any
Award granted under the Plan is forfeited, or otherwise expires, terminates or is canceled without
the delivery of Shares, then the Shares covered by such forfeited, expired, terminated or canceled
Award shall again become available to be delivered pursuant to Awards under the Plan. If Shares
issued upon exercise, vesting or settlement of an Award, or Shares owned by a Participant (which
are not subject to any pledge or other security interest), are surrendered or tendered to the
Company in payment of the Exercise Price of an Award or any taxes required to be withheld in
respect of an Award, in each case, in accordance with the terms and conditions of the Plan and any
applicable Award Agreement, such surrendered or tendered Shares shall again become available to be
delivered pursuant to Awards under the Plan; provided, however, that in no event
shall such Shares increase the number of Shares that may be delivered pursuant to Incentive Stock



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Options granted under the Plan. Subject to adjustment as provided in Section 4(b), (i) the maximum
number of Shares with respect to which Awards may be granted to any Participant in any fiscal year
of the Company shall be 40,000, provided that such number of Shares shall automatically be
adjusted to take into account any stock distribution or stock split that occurs in connection with
the Initial Distribution, and (ii) the maximum aggregate amount of cash and other property (valued
at its Fair Market Value) other than Shares that may be paid or delivered pursuant to Awards to any
Participant in any fiscal year of the Company shall be $2,000,000.



     (b) Adjustments for Changes in Capitalization and Similar Events. In the event that
the Committee determines that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of
Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares
or other securities of the Company, or other similar corporate transaction or event affects the
Shares such that an adjustment is determined by the Committee in its discretion to be appropriate
or desirable, then the Committee may (i) in such manner as it may deem equitable or desirable,
adjust any or all of (A) the number of Shares or other securities of the Company (or number and
kind of other securities or property) with respect to which Awards may be granted, including (1)
the aggregate number of Shares that may be delivered pursuant to Awards granted under the Plan, as
provided in Section 4(a) and (2) the maximum number of Shares or other securities of the Company
(or number and kind of other securities or property) with respect to which Awards may be granted to
any Participant in any fiscal year of the Company and (B) the terms of any outstanding Award,
including (1) the number of Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Awards or to which outstanding Awards relate and (2)
the Exercise Price with respect to any Award, (ii) if deemed appropriate or desirable by the
Committee, make provision for a cash payment to the holder of an outstanding Award in consideration
for the cancellation of such Award, including, in the case of an outstanding Option or SAR, a cash
payment to the holder of such Option or SAR in consideration for the cancellation of such Option or
SAR in an amount equal to the excess, if any, of the Fair Market Value (as of a date specified by
the Committee) of the Shares subject to such Option or SAR over the aggregate Exercise Price of
such Option or SAR and (iii) if deemed appropriate or desirable by the Committee, cancel and
terminate any Option or SAR having a per Share Exercise Price equal to, or in excess of, the Fair
Market Value of a Share subject to such Option or SAR without any payment or consideration
therefor.



     (c) Substitute Awards. Awards may, in the discretion of the Committee, be granted
under the Plan in assumption of, or in substitution for, outstanding awards previously granted by
the Company or any of its Affiliates or a company acquired by the Company or any of its Affiliates
or with which the Company or any of its Affiliates combines (“Substitute Awards”). The number of
Shares underlying any Substitute Awards shall be counted against the aggregate number of Shares
available for Awards under the Plan; provided, however, that Substitute Awards
issued in connection with the assumption of, or in substitution for, outstanding awards previously
granted by an entity that is acquired by the Company or any of its Affiliates or with which the
Company or any of its Affiliates combines shall not be counted against the aggregate number of
Shares available for Awards under the Plan; provided further, however, that
Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding
stock options intended to qualify for special tax treatment under Sections 421 and 422 of the Code
that were previously granted by an entity that is acquired by the Company or any of its Affiliates
or with which the Company or any of its Affiliates combines shall be counted against the aggregate
number of Shares available for Incentive Stock Options under the Plan.



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



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     SECTION 5. Eligibility. Any director, officer, employee or consultant (including any
prospective director, officer, employee or consultant) of the Company or any of its Affiliates
shall be eligible to be designated a Participant.



     SECTION 6. Awards.



     (a) Types of Awards. Awards may be made under the Plan in the form of (i) Options,
(ii) SARs, (iii) Restricted Shares, (iv) RSUs, (v) Performance Units, (vi)  Cash Incentive Awards
and (viii) other equity-based or equity-related Awards that the Committee determines are consistent
with the purpose of the Plan and the interests of the Company. Awards may be granted in tandem
with other Awards. No Incentive Stock Option (other than an Incentive Stock Option that may be
assumed or issued by the Company in connection with a transaction to which Section 424(a) of the
Code applies) may be granted to a person who is ineligible to receive an Incentive Stock Option
under the Code.



     (b) Options.




     (i) Grant. Subject to the provisions of the Plan, the Committee shall have
sole and plenary authority to determine the Participants to whom Options shall be granted,
the number of Shares to be covered by each Option, whether the Option will be an Incentive
Stock Option or a Nonqualified Stock Option and the conditions and limitations applicable to
the vesting and exercise of the Option. In the case of Incentive Stock Options, the terms
and conditions of such grants shall be subject to and comply with such rules as may be
prescribed by Section 422 of the Code and any regulations related thereto, as may be amended
from time to time. All Options granted under the Plan shall be Nonqualified Stock Options
unless the applicable Award Agreement expressly states that the Option is intended to be an
Incentive Stock Option. If an Option is intended to be an Incentive Stock Option, and if
for any reason such Option (or any portion thereof) shall not qualify as an Incentive Stock
Option, then, to the extent of such nonqualification, such Option (or portion thereof) shall
be regarded as a Nonqualified Stock Option appropriately granted under the Plan;
provided that such Option (or portion thereof) otherwise complies with the Plan’s
requirements relating to Nonqualified Stock Options.




     (ii) Exercise Price. Except as otherwise established by the Committee at the
time an Option is granted and set forth in the applicable Award Agreement, the Exercise
Price of each Share covered by an Option shall be not less than 100% of the Fair Market
Value of such Share (determined as of the date the Option is granted); provided,
however, that in the case of an Incentive Stock Option granted to an employee who,
at the time of the grant of such Option, owns stock representing more than 10% of the voting
power of all classes of stock of the Company or any Affiliate, the per Share Exercise Price
shall be no less than 110% of the Fair Market Value per Share on the date of the grant.
Options are intended to qualify as “qualified performance-based compensation” under Section
162(m) of the Code.




     (iii) Vesting and Exercise. Each Option shall be vested and exercisable at
such times, in such manner and subject to such terms and conditions as the Committee may, in
its sole and plenary discretion, specify in the applicable Award Agreement or thereafter.
Except as otherwise specified by the Committee in the applicable Award Agreement, an Option
may only be exercised to the extent that it has already vested at the time of exercise.
Except as otherwise specified by the Committee in the Award Agreement, Options shall become
vested and exercisable with respect to one-fourth of the Shares subject to such Options on
each of the first four anniversaries of the date of grant. An Option shall be deemed to be
exercised when written or electronic notice of such exercise has been given to the Company
in accordance with the terms of the Award by the person entitled to exercise the Award and
full payment pursuant to Section 6(b)(iv) for the Shares



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with respect to which the Award is exercised has been received by the Company. Exercise of
an Option in any manner shall result in a decrease in the number of Shares that thereafter
may be available for sale under the Option and, except as expressly set forth in Section
4(c), in the number of Shares that may be available for purposes of the Plan, by the number
of Shares as to which the Option is exercised. The Committee may impose such conditions
with respect to the exercise of Options, including, without limitation, any relating to the
application of Federal or state securities laws, as it may deem necessary or advisable.




     (iv) Payment.




(A) No Shares shall be delivered pursuant to any exercise of an Option until payment
in full of the aggregate Exercise Price therefor is received by the Company, and the
Participant has paid to the Company an amount equal to any Federal, state, local and
foreign income and employment taxes required to be withheld. Such payments may be
made in cash (or its equivalent) or, in the Committee’s sole and plenary discretion,
(1) by exchanging Shares owned by the Participant (which are not the subject of any
pledge or other security interest) or (2) if there shall be a public market for the
Shares at such time, subject to such rules as may be established by the Committee,
through delivery of irrevocable instructions to a broker to sell the Shares
otherwise deliverable upon the exercise of the Option and to deliver promptly to the
Company an amount equal to the aggregate Exercise Price, or by a combination of the
foregoing; provided that the combined value of all cash and cash equivalents
and the Fair Market Value of any such Shares so tendered to the Company as of the
date of such tender is at least equal to such aggregate Exercise Price and the
amount of any Federal, state, local or foreign income or employment taxes required
to be withheld.




(B) Wherever in the Plan or any Award Agreement a Participant is permitted to pay
the Exercise Price of an Option or taxes relating to the exercise of an Option by
delivering Shares, the Participant may, subject to procedures satisfactory to the
Committee, satisfy such delivery requirement by presenting proof of beneficial
ownership of such Shares, in which case the Company shall treat the Option as
exercised without further payment and shall withhold such number of Shares from the
Shares acquired by the exercise of the Option.




     (v) Expiration. Except as otherwise set forth in the applicable Award
Agreement, each Option shall expire immediately, without any payment, upon the earlier of
(A) the tenth anniversary of the date the Option is granted and (B) 90 days after the date
the Participant who is holding the Option ceases to be a director, officer, employee or
consultant of the Company or one of its Affiliates. In no event may an Option be
exercisable after the tenth anniversary of the date the Option is granted.



     (c) SARs.




     (i) Grant. Subject to the provisions of the Plan, the Committee shall have
sole and plenary authority to determine the Participants to whom SARs shall be granted, the
number of Shares to be covered by each SAR, the Exercise Price thereof and the conditions
and limitations applicable to the exercise thereof. SARs may be granted in tandem with
another Award, in addition to another Award or freestanding and unrelated to another Award.
SARs granted in tandem with, or in addition to, an Award may be granted either at the same
time as the Award or at a later time.




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     (ii) Exercise Price. Except as otherwise established by the Committee at the
time a SAR is granted and set forth in the applicable Award Agreement, the Exercise Price of
each Share covered by a SAR shall be not less than 100% of the Fair Market Value of such
Share (determined as of the date the SAR is granted). SARs are intended to qualify as
“qualified performance-based compensation” under Section 162(m) of the Code.




     (iii) Exercise. A SAR shall entitle the Participant to receive an amount equal
to the excess, if any, of the Fair Market Value of a Share on the date of exercise of the
SAR over the Exercise Price thereof. The Committee shall determine, in its sole and plenary
discretion, whether a SAR shall be settled in cash, Shares, other securities, other Awards,
other property or a combination of any of the foregoing.




     (iv) Other Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine, at or after the grant of a SAR,
the vesting criteria, term, methods of exercise, methods and form of settlement and any
other terms and conditions of any SAR. Any such determination by the Committee may be
changed by the Committee from time to time and may govern the exercise of SARs granted or
exercised thereafter. The Committee may impose such conditions or restrictions on the
exercise of any SAR as it shall deem appropriate or desirable.



     (d) Restricted Shares and RSUs.




     (i) Grant. Subject to the provisions of the Plan, the Committee shall have
sole and plenary authority to determine the Participants to whom Restricted Shares and RSUs
shall be granted, the number of Restricted Shares and RSUs to be granted to each
Participant, the duration of the period during which, and the conditions, if any, under
which, the Restricted Shares and RSUs may vest or may be forfeited to the Company and the
other terms and conditions of such Awards.




     (ii) Transfer Restrictions. Restricted Shares and RSUs may not be sold,
assigned, transferred, pledged or otherwise encumbered except as provided in the Plan or as
may be provided in the applicable Award Agreement; provided, however, that
the Committee may in its discretion determine that Restricted Shares and RSUs may be
transferred by the Participant. Certificates issued in respect of Restricted Shares shall
be registered in the name of the Participant and deposited by such Participant, together
with a stock power endorsed in blank, with the Company or such other custodian as may be
designated by the Committee or the Company, and shall be held by the Company or other
custodian, as applicable, until such time as the restrictions applicable to such Restricted
Shares lapse. Upon the lapse of the restrictions applicable to such Restricted Shares, the
Company or other custodian, as applicable, shall deliver such certificates to the
Participant or the Participant’s legal representative.




     (iii) Payment/Lapse of Restrictions. Each RSU shall be granted with respect to
one Share or shall have a value equal to the Fair Market Value of one Share. RSUs shall be
paid in cash, Shares, other securities, other Awards or other property, as determined in the
sole and plenary discretion of the Committee, upon the lapse of restrictions applicable
thereto, or otherwise in accordance with the applicable Award Agreement. If a Restricted
Share or an RSU is intended to qualify as “qualified performance-based compensation” under
Section 162(m) of the Code, all requirements set forth in Section 6(i) must be satisfied in
order for the restrictions applicable thereto to lapse.



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     (e) Performance Units.




     (i) Grant. Subject to the provisions of the Plan, the Committee shall have
sole and plenary authority to determine the Participants to whom Performance Units shall be
granted and the terms and conditions thereof.




     (ii) Value of Performance Units. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. The Committee shall set
Performance Goals in its discretion which, depending on the extent to which they are met
during a Performance Period, will determine the number and value of Performance Units that
will be paid out to the Participant.




     (iii) Earning of Performance Units. Subject to the provisions of the Plan,
after the applicable Performance Period has ended, the holder of Performance Units shall be
entitled to receive a payout of the number and value of Performance Units earned by the
Participant over the Performance Period, to be determined by the Committee, in its sole and
plenary discretion, as a function of the extent to which the corresponding Performance Goals
have been achieved.




     (iv) Form and Timing of Payment of Performance Units. Subject to the
provisions of the Plan, the Committee, in its sole and plenary discretion, may pay earned
Performance Units in the form of cash or in Shares (or in a combination thereof) that has an
aggregate Fair Market Value equal to the value of the earned Performance Units at the close
of the applicable Performance Period. Such Shares may be granted subject to any
restrictions in the applicable Award Agreement deemed appropriate by the Committee. The
determination of the Committee with respect to the form and timing of payout of such Awards
shall be set forth in the applicable Award Agreement. If a Performance Unit is intended to
qualify as “qualified performance-based compensation” under Section 162(m) of the Code, all
requirements set forth in Section 6(i) must be satisfied in order for a Participant to be
entitled to payment.



     (f) Cash Incentive Awards. Subject to the provisions of the Plan, the Committee, in
its sole and plenary discretion, shall have the authority to grant Cash Incentive Awards. The
Committee shall establish Cash Incentive Award levels to determine the amount of a Cash Incentive
Award payable upon the attainment of Performance Goals. If a Cash Incentive Award is intended to
qualify as “qualified performance-based compensation” under Section 162(m) of the Code, all
requirements set forth in Section 6(i) must be satisfied in order for a Participant to be entitled
to payment.



     (g) Other Stock-Based Awards. Subject to the provisions of the Plan, the Committee
shall have the sole and plenary authority to grant to Participants other equity-based or
equity-related Awards (including, but not limited to, fully-vested Shares) in such amounts and
subject to such terms and conditions as the Committee shall determine. If such an Award is
intended to qualify as “qualified performance-based compensation” under Section 162(m) of the Code,
all requirements set forth in Section 6(i) must be satisfied in order for a Participant to be
entitled to payment.



     (h) Dividend Equivalents. In the sole and plenary discretion of the Committee, an
Award, other than an Option, SAR or Cash Incentive Award, may provide the Participant with
dividends or dividend equivalents, payable in cash, Shares, other securities, other Awards or other
property, on a current or deferred basis, on such terms and conditions as may be determined by the
Committee in its sole and plenary discretion, including, without limitation, payment directly to
the Participant, withholding of such amounts by the Company subject to vesting of the Award or
reinvestment in additional Shares, Restricted Shares or other Awards.



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     (i) Performance Compensation Awards.




     (i) General. The Committee shall have the authority, at the time of grant of
any Award, to designate such Award (other than Options and SARs) as a Performance
Compensation Award in order to qualify such Award as “qualified performance-based
compensation” under Section 162(m) of the Code. Options and SARs granted under the Plan
shall not be included among Awards that are designated as Performance Compensation Awards
under this Section 6(i).




     (ii) Eligibility. The Committee shall, in its sole discretion, designate
within the first 90 days of a Performance Period (or, if shorter, within the maximum period
allowed under Section 162(m) of the Code) which Participants will be eligible to receive
Performance Compensation Awards in respect of such Performance Period. However, designation
of a Participant eligible to receive an Award hereunder for a Performance Period shall not
in any manner entitle the Participant to receive payment in respect of any Performance
Compensation Award for such Performance Period. The determination as to whether or not such
Participant becomes entitled to payment in respect of any Performance Compensation Award
shall be decided solely in accordance with the provisions of this Section 6(i). Moreover,
designation of a Participant eligible to receive an Award hereunder for a particular
Performance Period shall not require designation of such Participant eligible to receive an
Award hereunder in any subsequent Performance Period and designation of one person as a
Participant eligible to receive an Award hereunder shall not require designation of any
other person as a Participant eligible to receive an Award hereunder in such period or in
any other period.




     (iii) Discretion of Committee with Respect to Performance Compensation Awards.
With regard to a particular Performance Period, the Committee shall have full discretion to
select the length of such Performance Period, the types of Performance Compensation Awards
to be issued, the Performance Criteria that will be used to establish the Performance Goals,
the kinds and levels of the Performance Goals that are to apply to the Company or any of its
Subsidiaries, Affiliates, divisions or operational units, or any combination of the
foregoing, and the Performance Formula. Within the first 90 days of a Performance Period
(or, if shorter, within the maximum period allowed under Section 162(m) of the Code), the
Committee shall, with regard to the Performance Compensation Awards to be issued for such
Performance Period, exercise its discretion with respect to each of the matters enumerated
in the immediately preceding sentence and record the same in writing.




     (iv) Performance Criteria. Notwithstanding the foregoing, the Performance
Criteria that will be used to establish the Performance Goals shall be based on the
attainment of specific levels of performance of the Company or any of its Subsidiaries,
Affiliates, divisions or operational units, or any combination of the foregoing, and shall
be limited to the following: (A) net income before or after taxes, (B) earnings before or
after taxes (including EBITDA), (C) operating income, (D) earnings per share, (E) return on
stockholders’ equity, (F) return on investment or capital, (G) return on assets, (H) level
or amount of acquisitions, (I) share price, (J) profitability and profit margins (including
EBITDA margins), (K) market share, (L) revenues or sales (based on units or dollars), (M)
costs, (N) cash flow, (O) working capital and (P) project completion time and budget goals.
Such performance criteria may be applied on an absolute basis and/or be relative to one or
more peer companies of the Company or indices or any combination thereof. To the extent
required under Section 162(m) of the Code, the Committee shall, within the first 90 days of
the applicable Performance Period (or, if shorter, within the maximum period allowed under
Section 162(m) of the Code), define in an objective manner the method of calculating the
Performance Criteria it selects to use for such Performance Period.



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     (v) Modification of Performance Goals. The Committee is authorized at any time
during the first 90 days of a Performance Period (or, if shorter, within the maximum period
allowed under Section 162(m) of the Code), or any time thereafter (but only to the extent
the exercise of such authority after such 90-day period (or such shorter period, if
applicable) would not cause the Performance Compensation Awards granted to any Participant
for the Performance Period to fail to qualify as “qualified performance-based compensation”
under Section 162(m) of the Code), in its sole and plenary discretion, to adjust or modify
the calculation of a Performance Goal for such Performance Period to the extent permitted
under Section 162(m) of the Code (A) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event or development affecting the Company or any
of its Affiliates, Subsidiaries, divisions or operating units (to the extent applicable to
such Performance Goal) or (B) in recognition of, or in anticipation of, any other unusual or
nonrecurring events affecting the Company or any of its Affiliates, Subsidiaries, divisions
or operating units (to the extent applicable to such Performance Goal), or the financial
statements of the Company or any of its Affiliates, Subsidiaries, divisions or operating
units (to the extent applicable to such Performance Goal), or of changes in applicable
rules, rulings, regulations or other requirements of any governmental body or securities
exchange, accounting principles, law or business conditions.




     (vi) Payment of Performance Compensation Awards.




          (A) Condition to Receipt of Payment. A Participant must be employed by
the Company on the last day of a Performance Period to be eligible for payment in
respect of a Performance Compensation Award for such Performance Period.
Notwithstanding the foregoing, in the discretion of the Committee, Performance
Compensation Awards may be paid to Participants who have retired or whose employment
has terminated prior to the last day of a Performance Period for which a Performance
Compensation Award is made or to the designee or estate of a Participant who has
died prior to the last day of a Performance Period.




          (B) Limitation. A Participant shall be eligible to receive payments in
respect of a Performance Compensation Award only to the extent that (1) the
Performance Goals for such period are achieved and certified by the Committee in
accordance with Section 6(i)(vi)(C) and (2) the Performance Formula as applied
against such Performance Goals determines that all or some portion of such
Participant’s Performance Compensation Award has been earned for the Performance
Period.




          (C) Certification. Following the completion of a Performance Period,
the Committee shall meet to review and certify in writing whether, and to what
extent, the Performance Goals for the Performance Period have been achieved and, if
so, to calculate and certify in writing that amount of the Performance Compensation
Awards earned for the period based upon the Performance Formula. The Committee
shall then determine the actual size of each Participant’s Performance Compensation
Award for the Performance Period and, in so doing, may apply negative discretion as
authorized by Section 6(i)(vi)(D).




          (D) Negative Discretion. In determining the actual size of an
individual Performance Compensation Award for a Performance Period, the Committee
may, in its sole and plenary discretion, reduce or eliminate the amount of the Award
earned in the Performance Period, even if applicable Performance Goals have been
attained.



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          (E) Timing of Award Payments. The Performance Compensation Awards
granted for a Performance Period shall be paid to Participants as soon as
administratively possible following completion of the certifications required by
Section 6(i)(vi)(C), unless the Committee shall determine that any Performance
Compensation Award shall be deferred.




          (F) Discretion. In no event shall any discretionary authority granted
to the Committee by the Plan be used to (1) grant or provide payment in respect of
Performance Compensation Awards for a Performance Period if the Performance Goals
for such Performance Period have not been attained, (2) increase a Performance
Compensation Award for any Participant at any time after the first 90 days of the
Performance Period (or, if shorter, the maximum period allowed under Section 162(m))
or (3) increase a Performance Compensation Award above the maximum amount payable
under Section 4(a) of the Plan.



     SECTION 7. Amendment and Termination.



     (a) Amendments to the Plan. Subject to any applicable law or government regulation,
to any requirement that must be satisfied if the Plan is intended to be a stockholder approved plan
for purposes of Section 162(m) of the Code and to the rules of the NYSE or any successor exchange
or quotation system on which the Shares may be listed or quoted, the Plan may be amended, modified
or terminated by the Board without the approval of the stockholders of the Company except that
stockholder approval shall be required for any amendment that would (i) increase the maximum number
of Shares for which Awards may be granted under the Plan or increase the maximum number of Shares
that may be delivered pursuant to Incentive Stock Options granted under the Plan; provided,
however, that any adjustment under Section 4(b) shall not constitute an increase for
purposes of this Section 7(a) or (ii) change the class of employees or other individuals eligible
to participate in the Plan. No modification, amendment or termination of the Plan may, without the
consent of the Participant to whom any Award shall theretofor have been granted, materially and
adversely affect the rights of such Participant (or his or her transferee) under such Award, unless
otherwise provided by the Committee in the applicable Award Agreement.



     (b) Amendments to Awards. The Committee may waive any conditions or rights under,
amend any terms of, or alter, suspend, discontinue, cancel or terminate any Award theretofor
granted, prospectively or retroactively; provided, however, that, except as set
forth in the Plan, unless otherwise provided by the Committee in the applicable Award Agreement,
any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination
that would materially and adversely impair the rights of any Participant or any holder or
beneficiary of any Award theretofor granted shall not to that extent be effective without the
consent of the impaired Participant, holder or beneficiary.



     (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee is hereby authorized to make adjustments in the terms and conditions of,
and the criteria included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4(b) or the occurrence of a Change of Control)
affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate,
or of changes in applicable rules, rulings, regulations or other requirements of any governmental
body or securities exchange, accounting principles or law (i) whenever the Committee, in its sole
and plenary discretion, determines that such adjustments are appropriate or desirable, including,
without limitation, providing for a substitution or assumption of Awards, accelerating the
exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of
time for exercise prior to the occurrence of such event, (ii) if deemed appropriate or desirable by
the Committee, in its sole and plenary discretion, by providing for a cash payment to the holder of
an Award in consideration for the cancellation of such Award, including, in the




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case of an outstanding Option or SAR, a cash payment to the holder of such Option or SAR in
consideration for the cancellation of such Option or SAR in an amount equal to the excess, if any,
of the Fair Market Value (as of a date specified by the Committee) of the Shares subject to such
Option or SAR over the aggregate Exercise Price of such Option or SAR and (iii) if deemed
appropriate or desirable by the Committee, in its sole and plenary discretion, by canceling and
terminating any Option or SAR having a per Share Exercise Price equal to, or in excess of, the Fair
Market Value of a Share subject to such Option or SAR without any payment or consideration
therefor.




     SECTION 8. Change of Control. Unless otherwise provided in the applicable Award
Agreement, in the event of a Change of Control after the date of the adoption of the Plan, unless
provision is made in connection with the Change of Control for (a) assumption of Awards previously
granted or (b) substitution for such Awards of new awards covering stock of a successor corporation
or its “parent corporation” (as defined in Section 424(e) of the Code) or “subsidiary corporation”
(as defined in Section 424(f) of the Code) with appropriate adjustments as to the number and kinds
of shares and the Exercise Prices, if applicable, (i) any outstanding Options or SARs then held by
Participants that are unexercisable or otherwise unvested shall automatically be deemed exercisable
or otherwise vested, as the case may be, as of immediately prior to such Change of Control, (ii)
all Performance Units and Cash Incentive Awards shall be paid out as if the date of the Change of
Control were the last day of the applicable Performance Period and “target” performance levels had
been attained and (iii) all other outstanding Awards (i.e., other than Options, SARs,
Performance Units and Cash Incentive Awards) then held by Participants that are unexercisable,
unvested or still subject to restrictions or forfeiture, shall automatically be deemed exercisable
and vested and all restrictions and forfeiture provisions related thereto shall lapse as of
immediately prior to such Change of Control.



     SECTION 9. General Provisions.



     (a) Nontransferability. Except as otherwise specified in the applicable Award
Agreement, during the Participant’s lifetime each Award (and any rights and obligations thereunder)
shall be exercisable only by the Participant, or, if permissible under applicable law, by the
Participant’s legal guardian or representative, and no Award (or any rights and obligations
thereunder) may be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of descent and distribution, and
any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall
be void and unenforceable against the Company or any Affiliate; provided that (i) the
designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance and (ii) the Board or the Committee may permit further
transferability, on a general or specific basis, and may impose conditions and limitations on any
permitted transferability; provided, however, that Incentive Stock Options granted
under the Plan shall not be transferable in any way that would violate Section 1.422-2(a)(2) of the
Treasury Regulations. All terms and conditions of the Plan and all Award Agreements shall be
binding upon any permitted successors and assigns.



     (b) No Rights to Awards. No Participant or other Person shall have any claim to be
granted any Award, and there is no obligation for uniformity of treatment of Participants or
holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same with respect to each
Participant and may be made selectively among Participants, whether or not such Participants are
similarly situated.



     (c) Share Certificates. All certificates for Shares or other securities of the
Company or any Affiliate delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan, the applicable Award Agreement or the rules, regulations and other
requirements of the SEC, the NYSE or



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any other stock exchange or quotation system upon which such Shares or other securities are then
listed or reported and any applicable Federal or state laws, and the Committee may cause a legend
or legends to be put on any such certificates to make appropriate reference to such restrictions.



     (d) Withholding. A Participant may be required to pay to the Company or any
Affiliate, and the Company or any Affiliate shall have the right and is hereby authorized to
withhold from any Award, from any payment due or transfer made under any Award or under the Plan or
from any compensation or other amount owing to a Participant, the amount (in cash, Shares, other
securities, other Awards or other property) of any applicable withholding taxes in respect of an
Award, its exercise or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Committee or the Company to satisfy all
obligations for the payment of such taxes.



     (e) Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement,
which shall be delivered to the Participant and shall specify the terms and conditions of the Award
and any rules applicable thereto, including, but not limited to, the effect on such Award of the
death, disability or termination of employment or service of a Participant and the effect, if any,
of such other events as may be determined by the Committee.



     (f) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall
prevent the Company or any Affiliate from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of options, restricted stock, shares
and other types of equity-based awards (subject to stockholder approval if such approval is
required), and such arrangements may be either generally applicable or applicable only in specific
cases.



     (g) No Right to Employment. The grant of an Award shall not be construed as giving a
Participant the right to be retained as a director, officer, employee or consultant of or to the
Company or any Affiliate, nor shall it be construed as giving a Participant any rights to continued
service on the Board. Further, the Company or an Affiliate may at any time dismiss a Participant
from employment or discontinue any consulting relationship, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.



     (h) No Rights as Stockholder. No Participant or holder or beneficiary of any Award
shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan
until he or she has become the holder of such Shares. In connection with each grant of Restricted
Shares, except as provided in the applicable Award Agreement, the Participant shall not be entitled
to the rights of a stockholder in respect of such Restricted Shares. Except as otherwise provided
in Section 4(b), Section 7(c) or the applicable Award Agreement, no adjustments shall be made for
dividends or distributions on (whether ordinary or extraordinary, and whether in cash, Shares,
other securities or other property), or other events relating to, Shares subject to an Award for
which the record date is prior to the date such Shares are delivered.



     (i) Governing Law. The validity, construction and effect of the Plan and any rules
and regulations relating to the Plan and any Award Agreement shall be determined in accordance with
the laws of the State of Nevada, without giving effect to the conflict of laws provisions thereof.



     (j) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee, materially altering
the intent of the Plan or the Award,



-16-









 







such provision shall be construed or deemed stricken as to such jurisdiction, Person or Award and
the remainder of the Plan and any such Award shall remain in full force and effect.



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



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



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



     (n) Requirement of Consent and Notification of Election Under Section 83(b) of the Code or
Similar Provision. No election under Section 83(b) of the Code (to include in gross income in
the year of transfer the amounts specified in Section 83(b) of the Code) or under a similar
provision of law may be made unless expressly permitted by the terms of the applicable Award
Agreement or by action of the Committee in writing prior to the making of such election. If an
Award recipient, in connection with the acquisition of Shares under the Plan or otherwise, is
expressly permitted under the terms of the applicable Award Agreement or by such Committee action
to make such an election and the Participant makes the election, the Participant shall notify the
Committee of such election within ten days of filing notice of the election with the IRS or other
governmental authority, in addition to any filing and notification required pursuant to regulations
issued under Section 83(b) of the Code or other applicable provision.



     (o) Requirement of Notification Upon Disqualifying Disposition Under Section 421(b) of the
Code. If any Participant shall make any disposition of Shares delivered pursuant to the
exercise of an Incentive Stock Option under the circumstances described in Section 421(b) of the
Code (relating to certain disqualifying dispositions) or any successor provision of the Code, such
Participant shall notify the Company of such disposition within ten days of such disposition.



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



     SECTION 10. Term of the Plan.



     (a) Effective Date. The Plan shall be effective as of the date of its adoption by the
Board and approval by the Company’s stockholders; provided, however, that no
Incentive Stock Options may be



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granted under the Plan unless it is approved by the Company’s stockholders within twelve (12)
months before or after the date the Plan is adopted by the Board.



     (b) Expiration Date. No Award shall be granted under the Plan after the tenth
anniversary of the date the Plan is approved under Section 10(a). Unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted hereunder may, and the
authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate
any such Award or to waive any conditions or rights under any such Award shall, nevertheless
continue thereafter.




-18-