Exhibit 10.1








Exhibit 10.1




STEEL VAULT CORPORATION

2009 STOCK INCENTIVE PLAN





1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract
and retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees and Consultants, and to promote the
long-term success of the Company’s business and to link participants’ directly to
stockholder interests through increased stock ownership. Awards granted under the
Plan may be Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Performance Units, Performance Shares, Cash Awards
and Other Stock Based Awards.



2. Definitions. As used herein, the following definitions shall apply:



(a) “Administrator” means the Board or any Committee or Officer as shall be
administering the Plan, in accordance with Section 4 of the Plan.



(b) “Affiliate” means a Parent, a Subsidiary, an entity that is not a Parent or
Subsidiary but which has a direct or indirect ownership interest in the Company or
in which the Company has a direct or indirect ownership interest, an entity that is
a customer or supplier of the Company, an entity that renders services to the
Company, or an entity that has an ownership or business affiliation with any entity
previously described in this Section 2(b).



(c) “Applicable Law” means the legal requirements relating to the
administration of the Plan under applicable federal, state, local and foreign
corporate, tax and securities laws, and the rules and requirements of any stock
exchange or quotation system on which the Common Stock is listed or quoted.



(d) “Award” means an Option, Stock Appreciation Right, Restricted Stock Award,
Performance Unit or Performance Share, Cash Award or Other Stock Based Award granted
under the Plan.



(e) “Award Agreement” means the agreement, notice and/or terms or conditions by
which an Award is evidenced, documented in such form (including by electronic
communication) as may be approved by the Administrator.



(f) “Board” means the Board of Directors of the Company.



(g) “Cash Award” means an award payable in the form of cash.



(h) “Change in Control” means the happening of any of the following:



(i) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any “person” as such term is
used in Section 13(d) and 14(d) of the Exchange Act (other than any trustee or other
fiduciary holding securities under any 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), is
or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 50% of
the combined voting power of the Company’s then outstanding securities entitled
generally to vote in the election of the Board (other than the occurrence of any
contingency);



(ii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation or entity, which is consummated, other than a
merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (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 voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or



(iii) the effective date of a complete liquidation of the Company or the
consummation of an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, which in both cases are approved by the
stockholders of the Company as may be required by law.



 


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(i) “Code” means the Internal Revenue Code of 1986, as amended.



(j) “Committee” means a committee appointed by the Board in accordance with
Section 4 of the Plan.



(k) “Compensation Committee” means the Compensation Committee of the Board.



(l) “Common Stock” means the common stock, $.01 par value, of the Company.



(m) “Company” means Steel Vault Corporation.



(n) “Consultant” means any person, including an advisor, engaged by the Company
or an Affiliate and who is compensated for such services, including without
limitation non-Employee Directors. In addition, as used herein, “consulting
relationship” shall be deemed to include service by a non-Employee Director as such.



(o) “Continuous Status as an Employee or Consultant” means that the employment
or consulting relationship is not interrupted or terminated by the Company or
Affiliate, as applicable. Continuous Status as an Employee or Consultant shall not
be considered interrupted in the case of (i) any leave of absence approved in
writing by the Board, an Officer, or a person designated in writing by the Board or
an Officer as authorized to approve a leave of absence, including sick leave,
military leave, or any other personal leave; provided, however, that for purposes of
Incentive Stock Options, any such leave may not exceed 90 days, unless reemployment
upon the expiration of such leave is guaranteed by contract (including certain
Company policies) or statute, or (ii) transfers between locations of the Company or
between the Company, a Parent, a Subsidiary or successor of the Company; or (iii) a
change in the status of the Grantee from Employee to Consultant or from Consultant
to Employee.



(p) “Covered Stock” means the Common Stock subject to an Award.



(q) “Date of Grant” means the date on which the Administrator makes the
determination granting the Award, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Grantee within
a reasonable time after the Date of Grant.



(r) “Date of Termination” means the date on which a Grantee’s Continuous Status
as an Employee or Consultant terminates.



(s) “Director” means a member of the Board or a member of the Board of
Directors of a Parent or Subsidiary.



(t) “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code.



(u) “Employee” means any person, including Officers and Directors, employed by
the Company or any Affiliate. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by the
Company.



(v) “Exchange Act” means the Securities Exchange Act of 1934, as amended.


 


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(w) “Fair Market Value” means the value of a share of Common Stock. If the
Common Stock is actively traded on any national securities exchange, including, but
not limited to, the NASDAQ Stock Market or the New York Stock Exchange, Fair Market
Value shall mean the closing price at which sales of Common Stock shall have been
sold on the date of determination, as reported by any such exchange
selected by the Administrator on which the shares of Common Stock are then
traded. If the shares of Common Stock are not actively traded on any such exchange,
Fair Market Value shall mean the arithmetic mean of the bid and asked prices for the
 shares of Common Stock on the most recent trading date within a reasonable period
prior to the determination date as reported by such exchange. If there are no bid
and asked prices within a reasonable period or if the shares of Common Stock are not
traded on any exchange as of the determination date, Fair Market Value shall mean
the fair market value of a share of Common Stock as determined by the Administrator
taking into account such facts and circumstances deemed to be material by the
Administrator to the value of the Common Stock in the hands of the Grantee; provided
that, for purposes of granting awards other than Incentive Stock Options, Fair
Market Value of a share of Common Stock may be determined by the Administrator by
reference to the average market value determined over a period certain or as of
specified dates, to a tender offer price for the shares of Common Stock (if
settlement of an award is triggered by such an event) or to any other reasonable
measure of fair market value and provided further that, for purposes of granting
Incentive Stock Options, Fair Market Value of a share of Common Stock shall be
determined in accordance with the valuation principles described in the regulations
promulgated under Code Section 422.



(x) “Grantee” means an individual who has been granted an Award.



(y) “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.



(z) “Nonqualified Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.



(aa) “Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.



(bb) “Option” means a stock option granted under the Plan.



(cc) “Other Stock Based Award” means an award that is valued in whole or in
part by reference to, or is otherwise based on, Common Stock.



(dd) “Parent” means a corporation, whether now or hereafter existing, in an
unbroken chain of corporations ending with the Company if each of the corporations
other than the Company holds at least 50 percent of the voting shares of one of the
other corporations in such chain.



(ee) “Performance Based Compensation” means compensation which meets the
requirements of Section 162(m)(4)(C) of the Code.



(ff) “Performance Based Restricted Stock” means an Award of Restricted Stock
which meets the requirements of Section 162(m)(4)(C) of the Code, as described in
Section 8(b) of the Plan.



(gg) “Performance Period” means the time period during which the performance
goals established by the Administrator with respect to a Performance Unit or
Performance Share, pursuant to Section 9 of the Plan, must be met.



(hh) “Performance Share” has the meaning set forth in Section 9 of the Plan.



(ii) “Performance Unit” has the meaning set forth in Section 9 of the Plan.



(jj) “Plan” means this Steel Vault Corporation 2009 Stock Incentive Plan, as
amended and restated.



(kk) “Restricted Stock Award” means Shares that are awarded to a Grantee
pursuant to Section 8 of the Plan.



(ll) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.


 


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(mm) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 13 of the Plan.



(nn) “Stock Appreciation Right” or “SAR” means the right to receive an amount
equal to the appreciation, if any, in the Fair Market Value of a Share from the date
of the grant of the right to the date of its payment, as set forth in Section 7 of
the Plan.



(oo) “Subsidiary” means a corporation, domestic or foreign, of which not less
than 50 percent of the voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired by
the Company or a Subsidiary.



3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan
and except as otherwise provided in this Section 3, the maximum aggregate number of
Shares that may be subject to Awards under the Plan since the Plan became effective
is 2,000,000 Shares, of which 2,000,000 can be issued as Incentive Stock Options.
The Shares may be authorized, but unissued, or reacquired Common Stock. If an Award
expires or becomes unexercisable without having been exercised in full the remaining
Shares that were subject to the Award shall become available for future Awards under
the Plan (unless the Plan has terminated). With respect to Options and Stock
Appreciation Rights, if the payment upon exercise of an Option or SAR is in the form
of Shares, the Shares subject to the Option or SAR shall be counted against the
available Shares as one Share for every Share subject to the Option or SAR,
regardless of the number of Shares used to settle the SAR upon exercise.



4. Administration of the Plan.



(a) Procedure.



(i) Multiple Administrative Bodies. The Plan may be administered by different
bodies with respect to different groups of Employees and Consultants, provided
however, that the administrative authority set forth in items (vii), (viii), (ix),
(xii), (xiii), (xiv), (xv), and (xvi) of Section 4(b) below shall be exercised only
by the Compensation Committee. Except as provided below, the Plan shall be
administered by (A) the Board or (B) a committee designated by the Board and
constituted to satisfy Applicable Law.



(ii) Rule 16b-3. To the extent the Board or the Compensation Committee
considers it desirable for transactions relating to Awards to be eligible to qualify
for an exemption under Rule 16b-3, the transactions contemplated under the Plan
shall be structured to satisfy the requirements for exemption under Rule 16b-3.



(iii) Section 162(m) of the Code. To the extent the Board or the Compensation
Committee considers it desirable for compensation delivered pursuant to Awards to be
eligible to qualify for an exemption from the limit on tax deductibility of
compensation under Section 162(m) of the Code, the transactions contemplated under
the Plan shall be structured to satisfy the requirements for exemption under Section
162(m) of the Code.



(iv) Authorization of Officers to Grant Options. In accordance with Applicable
Law, the Board may, by a resolution adopted by the Board, authorize one or more
Officers to designate Officers and Employees (excluding the Officer so authorized)
to be Grantees of Options and determine the number of Options to be granted to such
Officers and Employees; provided, however, that the resolution adopted by the Board
so authorizing such Officer or Officers shall specify the total number and the terms
(including the exercise price, which may include a formula by which such price may
be determined) of Options such Officer or Officers may so grant.



(b) Powers of the Administrator. Subject to the provisions of the Plan, and in
the case of a Committee or an Officer, subject to the specific duties delegated by
the Board to such Committee or Officer, the Administrator shall have the authority,
in its sole and absolute discretion:



(i) to determine the Fair Market Value of the Common Stock, in accordance with
Section 2(w) of the Plan;



(ii) to select the Grantees to whom Awards will be granted under the Plan;




 


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(iii) to determine whether, when, to what extent and in what types and amounts
Awards are granted under the Plan;



(iv) to determine the number of shares of Common Stock to be covered by each
Award granted under the Plan;



(v) to determine the forms of Award Agreements, which need not be the same for
each grant or for each Grantee, and which may be delivered electronically, for use
under the Plan;



(vi) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted under the Plan. Such terms and conditions, which need
not be the same for each grant or for each Grantee, include, but are not limited to,
the exercise price, the time or times when Options and SARs may be exercised (which
may be based on performance criteria), the extent to which vesting is suspended
during a leave of absence, any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Award or the shares of
Common Stock relating thereto, based in each case on such factors as the
Administrator shall determine;



(vii) to construe and interpret the terms of the Plan and Awards;



(viii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including, without limiting the generality of the foregoing, rules and
regulations relating to the operation and administration of the Plan to accommodate
the specific requirements of local and foreign laws and procedures;



(ix) to modify or amend each Award (subject to Section 15 of the Plan).
However, the Administrator may not modify or amend any outstanding Option or SAR to
reduce the exercise price of such Option or SAR, as applicable, below the exercise
price as of the Date of Grant of such Option or SAR. In addition, no Option or SAR
may be granted in exchange for, or in connection with, the cancellation or surrender
of an Option or SAR or other Award having a lower exercise price;



(x) to authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the Administrator;



(xi) to determine the terms and restrictions applicable to Awards;



(xii) to make such adjustments or modifications to Awards granted to Grantees
who are Employees of foreign Subsidiaries as are advisable to fulfill the purposes
of the Plan or to comply with Applicable Law;



(xiii) to delegate its duties and responsibilities under the Plan with respect
to sub-plans applicable to foreign Subsidiaries, except its duties and
responsibilities with respect to Employees who are also Officers or Directors
subject to Section 16(b) of the Exchange Act;



(xiv) to provide any notice or other communication required or permitted by
the Plan in either written or electronic form;



(xv) to correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, or in any Award Agreement, in the manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective; and



(xvi) to make all other determinations deemed necessary or advisable for
administering the Plan.



(c) Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Grantees and
any other holders of Awards.


 


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5. Eligibility and General Conditions of Awards.



(a) Eligibility. Awards other than Incentive Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to Employees.
If otherwise eligible, an Employee or Consultant who has been granted an Award may
be granted additional Awards.



(b) Maximum Term. Subject to the following provision, the term during which an
Award may be outstanding shall not extend more than ten years after the Date of
Grant, and shall be subject to earlier termination as specified elsewhere in the
Plan or Award Agreement.



(c) Award Agreement. To the extent not set forth in the Plan, the terms and
conditions of each Award, which need not be the same for each grant or for each
Grantee, shall be set forth in an Award Agreement. The Administrator, in its sole
and absolute discretion, may require as a condition to any Award Agreement’s
effectiveness that the Award Agreement be executed by the Grantee, including by
electronic signature or other electronic indication of acceptance, and that the
Grantee agree to such further terms and conditions as specified in the Award
Agreement. Except as otherwise provided in an Agreement, all capitalized terms used
in the Agreement shall have the same meaning as in the Plan, and the Agreement shall
be subject to all of the terms of the Plan.



(d) Termination of Employment or Consulting Relationship. In the event that a
Grantee’s Continuous Status as an Employee or Consultant terminates (other than upon
the Grantee’s Retirement (defined below), death, Disability, or Termination by
Employer Not for Cause (defined below)), then, unless otherwise provided by the
Award Agreement, and subject to Section 13 of the Plan:



(i) the Grantee may exercise his or her unexercised Option or SAR, but only
within such period of time as is determined by the Administrator, and only to the
extent that the Grantee was entitled to exercise it at the Date of Termination (but
in no event later than the expiration of the term of such Option or SAR as set forth
in the Award Agreement). In the case of an Incentive Stock Option, the Administrator
shall determine such period of time (in no event to exceed three months from the
Date of Termination) when the Option is granted. If, at the Date of Termination, the
Grantee is not entitled to exercise his or her entire Option or SAR, the Shares
covered by the unexercisable portion of the Option or SAR shall revert to the Plan.
If, after the Date of Termination, the Grantee does not exercise his or her Option
or SAR within the time specified by the Administrator, the Option or SAR shall
terminate, and the Shares covered by such Option or SAR shall revert to the Plan;



(ii) the Grantee’s Restricted Stock Awards, to the extent forfeitable
immediately before the Date of Termination, shall thereupon automatically be
forfeited;



(iii) the Grantee’s Restricted Stock Awards that were not forfeitable
immediately before the Date of Termination shall promptly be settled by delivery to
the Grantee of a number of unrestricted Shares equal to the aggregate number of the
Grantee’s vested Restricted Stock Awards; and



(iv) any Performance Shares or Performance Units with respect to which the
Performance Period has not ended as of the Date of Termination shall terminate
immediately upon the Date of Termination.



(e) Disability of Grantee. In the event that a Grantee’s Continuous Status as
an Employee or Consultant terminates as a result of the Grantee’s Disability, then,
unless otherwise provided by the Award Agreement, such termination shall have no
effect on the Grantee’s outstanding Awards. The Grantee’s Awards shall continue to
vest and remain outstanding and exercisable until they expire by their terms. In the
case of an Incentive Stock Option, any option not exercised within 12 months of the
date of termination of the Grantee’s Continuous Status as an Employee or Consultant
due to Disability will be treated as a Nonqualified Stock Option.



(f) Death of Grantee. In the event of the death of a Grantee, then, unless
otherwise provided by the Award Agreement, such termination shall have no effect on
Grantee’s outstanding Awards. The Grantee’s Awards shall continue to vest and remain
outstanding and exercisable until they expire by their terms. In the case of an
Incentive Stock Option, any option not exercised within 12 months of the date of
termination of Grantee’s Continuous Status as an Employee or Consultant due to death
will be treated as a Nonqualified Stock Option.


 


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(g) Retirement of Grantee. Except as otherwise provided in Section 5(g)(i)
below, in the event that a Grantee’s Continuous Status as an Employee or Consultant
terminates after the Grantee’s attainment of age 65 (hereinafter, “Retirement”),
then, unless otherwise provided by the Award Agreement, such termination shall have
no effect on Grantee’s outstanding Awards. The Grantee’s Awards shall continue to
vest and remain outstanding and exercisable until they expire by their terms. In the
case of an Incentive Stock Option, any option not exercised within 3 months of the
termination of Grantee’s Continuous Status as an Employee or Consultant due to
Retirement will be treated as a Nonqualified Stock Option.



(h) Termination by Employer Not for Cause. In the event that a Grantee’s
Continuous Status as an Employee or Consultant is terminated by the Employer without
Cause (hereinafter, “Termination by Employer Not for Cause”), then, unless otherwise
provided by the Award Agreement, such termination shall have no effect on Grantee’s
outstanding Awards. Grantee’s Awards shall continue to vest and remain outstanding
and exercisable until they expire by their terms. In the case of an Incentive Stock
Option, any option not exercised within 3 months of the date of will be treated as a
Nonqualified Stock Option. In the case of a Grantee who is a Director, the Grantee’s
service as a Director shall be deemed to have been terminated without Cause if the
Participant ceases to serve in such a position solely due to the failure to be
reelected or reappointed, as the case may be, and such failure is not a result of an
act or omission which would constitute Cause.



(i) Termination for Cause. Notwithstanding anything herein to the contrary, if
a Grantee is an Employee of the Company and is “Terminated for Cause”, as defined
herein below, or violates any of the terms of their employment after they have
become vested in any of their rights herein, the Grantee’s full interest in such
rights shall terminate on the date of such termination of employment and all rights
thereunder shall cease. Whether a Participant’s employment is Terminated for Cause
shall be determined by the Board. Cause shall mean gross negligence, willful
misconduct, flagrant or repeated violations of the Company’s policies, rules or
ethics, a material breach by the Grantee of any employment agreement between the
Grantee and the Company, intoxication, substance abuse, sexual or other unlawful
harassment, disclosure of confidential or proprietary information, engaging in a
business competitive with the Company, or dishonest, illegal or immoral conduct.



(j) Nontransferability of Awards.



(i) Except as provided in Section 5(j)(iii) below, each Award, and each right
under any Award, shall be exercisable only by the Grantee during the Grantee’s
lifetime, or, if permissible under Applicable Law, by the Grantee’s guardian or
legal representative.



(ii) Except as provided in Section 5(j)(iii) below, no Award (prior to the
time, if applicable, Shares are issued in respect of such Award), and no right under
any Award, may be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by a Grantee otherwise than by will or by the laws of
descent and distribution (or in the case of Restricted Stock Awards, to the Company)
and any such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company or any Subsidiary;
provided, that the designation of a beneficiary shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or encumbrance.



(iii) To the extent and in the manner permitted by Applicable Law, and to the
extent and in the manner permitted by the Administrator, and subject to such terms
and conditions as may be prescribed by the Administrator, a Grantee may transfer an
Award to:



(A) a child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law of the Grantee (including adoptive
relationships);



(B) any person sharing the employee’s household (other than a tenant or
employee);



(C) a trust in which persons described in (A) and (B) have more than 50 percent
of the beneficial interest;


 


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(D) a foundation in which persons described in (A) or (B) or the Grantee
control the management of assets; or



(E) any other entity in which the persons described in (A) or (B) or the
Grantee own more than 50 percent of the voting interests;



provided such transfer is not for value. The following shall not be considered
transfers for value: a transfer under a domestic relations order in settlement of
marital property rights, and a transfer to an entity in which more than 50 percent
of the voting interests are owned by persons described in (A) above or the Grantee,
in exchange for an interest in such entity.



6. Stock Options.



(a) Limitations.



(i) Each Option shall be designated in the Award Agreement as either an
Incentive Stock Option or a Nonqualified Stock Option. Any Option designated as an
Incentive Stock Option:



(A) shall not have an aggregate Fair Market Value (determined for each
Incentive Stock Option at the Date of Grant) of Shares with respect to which
Incentive Stock Options are exercisable for the first time by the Grantee during any
calendar year (under the Plan and any other employee stock option plan of the
Company or any Parent or Subsidiary (“Other Plans”)), determined in accordance with
the provisions of Section 422 of the Code, that exceeds $100,000 (the “$100,000
Limit”);



(B) shall, if the aggregate Fair Market Value of Shares (determined on the Date
of Grant) with respect to the portion of such grant that is exercisable for the
first time during any calendar year (“Current Grant”) and all Incentive Stock
Options previously granted under the Plan and any Other Plans that are exercisable
for the first time during a calendar year (“Prior Grants”) would exceed the $100,000
Limit, be exercisable as follows:



(1) The portion of the Current Grant that would, when added to any Prior
Grants, be exercisable with respect to Shares that would have an aggregate Fair
Market Value (determined as of the respective Date of Grant for such Options) in
excess of the $100,000 Limit shall, notwithstanding the terms of the Current Grant,
be exercisable for the first time by the Grantee in the first subsequent calendar
year or years in which it could be exercisable for the first time by the Grantee
when added to all Prior Grants without exceeding the $100,000 Limit; and



(2) If, viewed as of the date of the Current Grant, any portion of a Current
Grant could not be exercised under the preceding provisions of this
Section 6(a)(i)(B) during any calendar year commencing with the calendar year in
which it is first exercisable through and including the last calendar year in which
it may by its terms be exercised, such portion of the Current Grant shall not be an
Incentive Stock Option, but shall be exercisable as a separate Option at such date
or dates as are provided in the Current Grant.



(ii) No Employee shall be granted, in any fiscal year of the Company, Options
to purchase more than 1,000,000 Shares. The limitation described in this
Section 6(a)(ii) shall be adjusted proportionately in connection with any change in
the Company’s capitalization as described in Section 13 of the Plan. If an Option is
canceled in the same fiscal year of the Company in which it was granted (other than
in connection with a transaction described in Section 13 of the Plan), the canceled
Option will be counted against the limitation described in this Section 6(a)(ii).



(b) Term of Option. The term of each Option shall be stated in the Award
Agreement; provided, however, that the term shall be 10 years from the date of grant
or such shorter term as may be provided in the Award Agreement. Moreover, in the
case of an Incentive Stock Option granted to a Grantee who, at the time the
Incentive Stock Option is granted, owns stock representing more than 10 percent of
the voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Incentive Stock Option shall be five years from the date of grant or
such shorter term as may be provided in the Award Agreement.


 


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(c) Option Exercise Price and Consideration.



(i) Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be determined by the Administrator and,
except as otherwise provided in this Section 6(c)(i), shall be no less than
100 percent of the Fair Market Value per Share on the Date of Grant.



(A) In the case of an Incentive Stock Option granted to an Employee who on the
Date of Grant owns stock representing more than 10 percent of the voting power of
all classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110 percent of the Fair Market Value per Share
on the Date of Grant.



(B) Any Option that is (1) granted to a Grantee in connection with the
acquisition (“Acquisition”), however effected, by the Company of another corporation
or entity (“Acquired Entity”) or the assets thereof, (2) associated with an option
to purchase shares of stock or other equity interest of the Acquired Entity or an
affiliate thereof (“Acquired Entity Option”) held by such Grantee immediately prior
to such Acquisition, and (3) intended to preserve for the Grantee the economic value
of all or a portion of such Acquired Entity Option, may be granted with such
exercise price as the Administrator determines to be necessary to achieve such
preservation of economic value.



(d) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and
shall determine any conditions that must be satisfied before the Option may be
exercised. An Option shall be exercisable only to the extent that it is vested
according to the terms of the Award Agreement.



(e) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment. In
the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. The acceptable form of
consideration may consist of any combination of the following: cash; pursuant to
procedures approved by the Administrator, through the sale of the Shares acquired on
exercise of the Option through a broker-dealer to whom the Grantee has submitted an
irrevocable notice of exercise and irrevocable instructions to deliver promptly to
the Company the amount of sale or loan proceeds sufficient to pay the exercise
price, together with, if requested by the Company, the amount of federal, state,
local or foreign withholding taxes payable by the Grantee by reason of such exercise
(a “cashless exercise”) or; subject to the approval of the Administrator:



(i) by the surrender of all or part of an Award (including the Award being
exercised);



(ii) by the tender to the Company of Shares owned by the Grantee and registered
in his name having a Fair Market Value equal to the amount due to the Company;



(iii) in other property, rights and credits deemed acceptable by the
Administrator, including the Participant’s promissory note; or



(iv) such other consideration and method of payment for the issuance of Shares
to the extent permitted by Applicable Law and deemed acceptable by the
Administrator.



(f) Exercise of Option.



(i) Procedure for Exercise; Rights as a Shareholder.



(A) Any Option granted hereunder shall be exercisable according to the terms of
the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Award Agreement.



(B) An Option may not be exercised for a fraction of a Share.



 


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(C) An Option shall be deemed exercised when the Company receives:



(1) written or electronic notice of exercise (in accordance with the Award
Agreement and any action taken by the Administrator pursuant to Section 4(b) of the
Plan or otherwise) from the person entitled to exercise the Option, and



(2) full payment for the Shares with respect to which the Option is exercised.



(D) Shares issued upon exercise of an Option shall be issued in the name of the
Grantee or, if requested by the Grantee, in the name of the Grantee and his or her
spouse. Until the stock certificate evidencing such Shares is issued (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be
issued) such stock certificate promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 13 of the Plan.



(E) Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised.



7. Stock Appreciation Rights.



(a) Grant of SARs. Subject to the terms and conditions of the Plan, the
Administrator may grant SARs in tandem with an Option or alone and unrelated to an
Option. Tandem SARs shall expire no later than the expiration of the underlying
Option. In no event shall the term of a SAR exceed ten years from the Date of Grant.



(b) Exercise of SARs. SARs shall be exercised by the delivery of a written or
electronic notice of exercise (in accordance with the Award Agreement and any action
taken by the Administrator pursuant to Section 4(b) of the Plan or otherwise),
setting forth the number of Shares over which the SAR is to be exercised. Tandem
SARs may be exercised:



(i) with respect to all or part of the Shares subject to the related Option
upon the surrender of the right to exercise the equivalent portion of the related
Option;



(ii) only with respect to the Shares for which its related Option is then
exercisable; and



(iii) only when the Fair Market Value of the Shares subject to the Option
exceeds the exercise price of the Option.



The value of the payment with respect to the tandem SAR may be no more than
100 percent of the difference between the exercise price of the underlying Option
and the Fair Market Value of the Shares subject to the underlying Option at the time
the tandem SAR is exercised.



(c) Payment of SAR Benefit. Upon exercise of a SAR, the Grantee shall be
entitled to receive payment from the Company in an amount determined by multiplying:



(i) the excess of the Fair Market Value of a Share on the date of exercise over
the SAR exercise price; by



(ii) the number of Shares with respect to which the SAR is exercised;



provided, that the Administrator may provide in the Award Agreement that the benefit
payable on exercise of a SAR shall not exceed such percentage of the Fair Market
Value of a Share on the Date of Grant, or any other limitation, as the Administrator
shall specify. The payment upon exercise of a SAR shall be in Shares that have an
aggregate Fair Market Value (as of the date of exercise of the SAR) equal to the
amount of the payment.


 


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(d) No Employee shall be granted, in any fiscal year, SARs with respect to more
than 1,000,000 Shares. The limitation described in this Section 7(d) shall be
adjusted proportionately in connection with
any change in the Company’s capitalization as described in Section 13 of the
Plan. If a SAR is canceled in the same fiscal year of the Company in which it was
granted (other than in connection with a transaction described in Section 13 of the
Plan), the canceled SAR will be counted against the limitation described in this
Section 7(d).



8. Restricted Stock Awards. Subject to the terms of the Plan, the Administrator may
grant Restricted Stock Awards to any Eligible Recipient, in such amount and upon
such terms and conditions as shall be determined by the Administrator.



(a) Administrator Action. The Administrator acting in its sole and absolute
discretion shall have the right to grant Restricted Stock to Eligible Recipients
under the Plan from time to time. Each Restricted Stock Award shall be evidenced by
a Restricted Stock Agreement, and each Restricted Stock Agreement shall set forth
the conditions, if any, which will need to be timely satisfied before the grant will
be effective and the conditions, if any, under which the Grantee’s interest in the
related Stock will be forfeited. The Administrator may make grants of
Performance-Based Restricted Stock and grants of Restricted Stock that are not
Performance-Based Restricted Stock; provided, however, that only the Compensation
Committee may serve as the Administrator with respect to grants of Performance-Based
Restricted Stock.



(b) Performance-Based Restricted Stock.



(i) Effective Date. A grant of Performance-Based Restricted Stock shall be
effective as of the date the Compensation Committee certifies that the applicable
conditions described in Section 8(b)(iii) of the Plan have been timely satisfied.



(ii) Share Limitation. No more than 1,000,000 shares of Performance-Based
Restricted Stock may be granted to an Eligible Recipient in any calendar year.



(iii) Grant Conditions. The Compensation Committee, acting in its sole and
absolute discretion, may select from time to time Eligible Recipients to receive
grants of Performance-Based Restricted Stock in such amounts as the Compensation
Committee may, in its sole and absolute discretion, determine, subject to any
limitations provided in the Plan. The Compensation Committee shall make each grant
subject to the attainment of certain performance targets. The Compensation Committee
shall determine the performance targets which will be applied with respect to each
grant of Performance-Based Restricted Stock at the time of grant, but in no event
later than 90 days after the commencement of the period of service to which the
performance targets relate. The performance criteria applicable to Performance-Based
Restricted Stock grants will be one or more of the following criteria: (1) stock
price; (2) average annual growth in earnings per share; (3) increase in shareholder
value; (4) earnings per share; (5) net income; (6) return on assets; (7) return on
shareholders’ equity; (8) increase in cash flow; (9) operating profit or operating
margins; (10) revenue growth of the Company; and (11) operating expenses. Each
performance target applicable to a Cash Award intended to be Performance Based
Compensation and the deadline for satisfying each such target shall be stated in the
Agreement between the Company and the Employee. The Compensation Committee must
certify in writing that each such target has been satisfied before the Performance
Based Compensation award is paid.



The related Restricted Stock Agreement shall set forth the applicable performance
criteria and the deadline for satisfying the performance criteria.



(iv) Forfeiture Conditions. The Compensation Committee may make each
Performance-Based Restricted Stock grant (if, when and to the extent that the grant
becomes effective) subject to one, or more than one, objective employment,
performance or other forfeiture condition which the Compensation Committee acting in
its sole and absolute discretion deems appropriate under the circumstances for
Eligible Recipients generally or for a Grantee in particular, and the related
Restricted Stock Agreement shall set forth each such condition and the deadline for
satisfying each such forfeiture condition. A Grantee’s nonforfeitable interest in
the Shares related to a Performance-Based Restricted Stock grant shall depend on the
extent to which each such condition is timely satisfied. A Stock certificate shall
be issued (subject to the conditions, if any, described in this Section 8(b)) to, or
for the benefit of, the Grantee with respect to the number of shares for which a
grant has become effective as soon as practicable after the date the grant becomes
effective.


 


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(c) Restricted Stock Other Than Performance-Based Restricted Stock.



(i) Effective Date. A Restricted Stock grant which is not a grant of
Performance-Based Restricted Stock shall be effective (a) as of the date set by the
Administrator when the grant is made or, if the grant is made subject to one, or
more than one, condition, (b) as of the date the Administrator determines that such
conditions have been timely satisfied.



(ii) Grant Conditions. The Administrator acting in its sole and absolute
discretion may make the grant of Restricted Stock which is not Performance-Based
Restricted Stock to a Grantee subject to the satisfaction of one, or more than one,
objective employment, performance or other grant condition which the Administrator
deems appropriate under the circumstances for Eligible Recipients generally or for a
Grantee in particular, and the related Restricted Stock Agreement shall set forth
each such condition and the deadline for satisfying each such grant condition.



(iii) Forfeiture Conditions. The Administrator may make each grant of
Restricted Stock which is not a grant of Performance-Based Restricted Stock (if,
when and to the extent that the grant becomes effective) subject to one, or more
than one, objective employment, performance or other forfeiture condition which the
Administrator acting in its sole and absolute discretion deems appropriate under the
circumstances for Eligible Recipients generally or for a Grantee in particular, and
the related Restricted Stock Agreement shall set forth each such condition and the
deadline for satisfying each such forfeiture condition. A Grantee’s nonforfeitable
interest in the Shares related to a grant of Restricted Stock which is not a grant
of Performance-Based Restricted Stock shall depend on the extent to which each such
condition is timely satisfied. A Stock certificate shall be issued (subject to the
conditions, if any, described in this Section 8(c)) to, or for the benefit of, the
Grantee with respect to the number of shares for which a grant has become effective
as soon as practicable after the date the grant becomes effective.



(d) Dividends and Voting Rights. Each Restricted Stock Agreement shall state
whether the Grantee shall have a right to receive any cash dividends which are paid
with respect to his or her Restricted Stock after the date his or her Restricted
Stock grant has become effective and before the first day that the Grantee’s
interest in such stock is forfeited completely or becomes completely nonforfeitable.
If a Restricted Stock Agreement provides that a Grantee has no right to receive a
cash dividend when paid, such agreement shall set forth the conditions, if any,
under which the Grantee will be eligible to receive one, or more than one, payment
in the future to compensate the Grantee for the fact that he or she had no right to
receive any cash dividends on his or her Restricted Stock when such dividends were
paid. If a Restricted Stock Agreement calls for any such payments to be made, the
Company shall make such payments from the Company’s general assets, and the Grantee
shall be no more than a general and unsecured creditor of the Company with respect
to such payments. If a stock dividend is declared on such a Share after the grant is
effective but before the Grantee’s interest in such Stock has been forfeited or has
become nonforfeitable, such stock dividend shall be treated as part of the grant of
the related Restricted Stock, and a Grantee’s interest in such stock dividend shall
be forfeited or shall become nonforfeitable at the same time as the Share with
respect to which the stock dividend was paid is forfeited or becomes nonforfeitable.
If a dividend is paid other than in cash or stock, the disposition of such dividend
shall be made in accordance with such rules as the Administrator shall adopt with
respect to each such dividend. A Grantee shall have the right to vote the Shares
related to his or her Restricted Stock grant after the grant is effective with
respect to such Shares but before his or her interest in such Shares has been
forfeited or has become nonforfeitable.



(e) Satisfaction of Forfeiture Conditions. A Share shall cease to be Restricted
Stock at such time as a Grantee’s interest in such Share becomes nonforfeitable
under the Plan, and the certificate representing such share shall be reissued as
soon as practicable thereafter without any further restrictions related to Section
8(b) or Section 8(c) and shall be transferred to the Grantee.



 


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9. Performance Units and Performance Shares.



(a) Grant of Performance Units and Performance Shares. Subject to the terms of
the Plan, the Administrator may grant Performance Units or Performance Shares to any
Eligible Recipient in such amounts and upon such terms as the Administrator shall
determine.



(b) Value/Performance Goals. Each Performance Unit shall have an initial value
that is established by the Administrator on the Date of Grant. Each Performance
Share shall have an initial value equal to the Fair Market Value of a Share on the
Date of Grant. The Administrator shall set performance goals that, depending upon
the extent to which they are met, will determine the number or value of Performance
Units or Performance Shares that will be paid to the Grantee.



(c) Payment of Performance Units and Performance Shares.



(i) Subject to the terms of the Plan, after the applicable Performance Period
has ended, the holder of Performance Units or Performance Shares shall be entitled
to receive a payment based on the number and value of Performance Units or
Performance Shares earned by the Grantee over the Performance Period, to the extent
the corresponding performance goals have been achieved.



(ii) If a Grantee is promoted, demoted or transferred to a different business
unit of the Company during a Performance Period, then, to the extent the
Administrator determines appropriate, the Administrator may adjust, change or
eliminate the performance goals or the applicable Performance Period as it deems
appropriate in order to make them appropriate and comparable to the initial
performance goals or Performance Period.



(d) Form and Timing of Payment of Performance Units and Performance Shares.
Payment of earned Performance Units or Performance Shares shall be made in a lump
sum following the close of the applicable Performance Period. The Administrator may
pay earned Performance Units or Performance Shares in cash or in Shares (or in a
combination thereof) that have an aggregate Fair Market Value equal to the value of
the earned Performance Units or Performance Shares at the close of the applicable
Performance Period. Such Shares may be granted subject to any restrictions deemed
appropriate by the Administrator. The form of payout of such Awards shall be set
forth in the Award Agreement pertaining to the grant of the Award.



10. Cash Awards. The Administrator may grant Cash Awards at such times and in such
amounts as it deems appropriate.



(a) Annual Limits. Notwithstanding the foregoing, the amount of any Cash Award
in any Fiscal Year to any Grantee shall not exceed the greater of $100,000 or 100%
of his cash compensation (excluding any Cash Award under the Plan) for such Fiscal
Year.



(b) Restrictions. Cash Awards may be subject or not subject to conditions (such
as an investment requirement), restricted or nonrestricted, vested or subject to
forfeiture and may be payable currently or in the future or both. The Administrator
may make grants of Cash Awards that are intended to be Performance Based
Compensation and grants of Cash Awards that are not intended to be Performance Based
Compensation; provided, however, that only the Compensation Committee may serve as
the Administrator with respect to grants of Cash Awards that are intended to be
Performance-Based Compensation.



The Compensation Committee shall determine the performance targets which will be
applied with respect to each grant of Cash Awards that are intended to be
Performance Based Compensation at the time of grant, but in no event later than
90 days after the beginning of the period of service to which the performance
targets relate. The performance criteria applicable to Performance Based
Compensation awards will be one or more of the following: (1) stock price;
(2) average annual growth in earnings per share; (3) increase in shareholder value;
(4) earnings per share; (5) net income; (6) return on assets; (7) return on
shareholders’ equity; (8) increase in cash flow; (9) operating profit or operating
margins; (10) revenue growth of the Company; and (11) operating expenses. Each
performance target applicable to a Cash Award intended to be Performance Based
Compensation and the deadline for satisfying each such target shall be stated in the
Agreement between the Company and the Employee. The Compensation Committee must
certify in writing that each such target has been satisfied before the Performance
Based Compensation award is paid.


 


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11. Other Stock Based Awards. The Administrator shall have the right to grant Other
Stock Based Awards which may include, without limitation, the grant of Shares based
on certain conditions, the
payment of cash based on the performance of the Common Stock, and the grant of
securities convertible into Shares.



12. Tax Withholding. The Company shall deduct from all cash distributions under the
Plan any taxes required to be withheld by federal, state, local or foreign
government. Whenever the Company proposes or is required to issue or transfer Shares
under the Plan, the Company shall have the right to require the recipient to remit
to the Company an amount sufficient to satisfy any federal, state, local and foreign
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. A Grantee may pay the withholding tax in cash, or, if
the applicable Award Agreement provides, a Grantee may elect to have the number of
Shares he is to receive reduced by the smallest number of whole Shares that, when
multiplied by the Fair Market Value of the Shares determined as of the Tax Date
(defined below), is sufficient to satisfy federal, state, local and foreign, if any,
withholding taxes arising from exercise or payment of a grant under the Plan (a
“Withholding Election”). A Grantee may make a Withholding Election only if the
Withholding Election is made on or prior to the date on which the amount of tax
required to be withheld is determined (the “Tax Date”) by executing and delivering
to the Company a properly completed notice of Withholding Election as prescribed by
the Administrator. The Administrator may in its sole and absolute discretion
disapprove and give no effect to the Withholding Election.



13. Adjustments Upon Changes in Capitalization or Change in Control.




(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Covered Shares, and the number of shares
of Common Stock which have been authorized for issuance under the Plan but as to
which no Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per share of Covered
Stock, shall be proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the number or
price of shares of Covered Stock.



(b) Change in Control. In the event of a Change in Control, then the following
provisions shall apply:



(i) all outstanding Options shall become fully exercisable, except to the
extent that the right to exercise the Option is subject to restrictions established
in connection with a SAR that is issued in tandem with the Option;



(ii) all outstanding SARs shall become immediately payable, except to the
extent that the right to exercise the SAR is subject to restrictions established in
connection with an Option that is issued in tandem with the SAR;



(iii) all Shares of Restricted Stock shall become fully vested;



(iv) all Performance Shares and Performance Units shall be deemed to be fully
earned and shall be paid out in such manner as determined by the Compensation
Committee; and



(v) all Cash Awards, Other Stock Based Awards and other Awards shall become
fully vested and/or earned and paid out in such manner as determined by the
Compensation Committee.



In addition to the provisions of Section 13(b) above and to the extent not
inconsistent therewith the Compensation Committee, in its sole discretion, may:
(1) provide for the purchase of any Award for an amount of cash equal to the amount
which could have been attained upon the exercise or realization of such Award had
such Award been currently exercisable or payable; (2) make such adjustment to the
Awards then outstanding as the Compensation Committee deems appropriate to reflect
such transaction or change; and/or (3) cause the Awards then outstanding to be
assumed, or new Awards substituted therefore, by the surviving corporation in such
change.


 


14









 





14. Term of Plan. The Plan shall become effective upon its approval by the
shareholders of the Company. Such shareholder approval shall be obtained in the
manner and to the degree required under applicable federal and state law. The Plan
shall continue in effect until the tenth anniversary of adoption of the Plan by the
Board, unless terminated earlier under Section 15 of the Plan.



15. Amendment and Termination of the Plan.



(a) Amendment and Termination. The Board may at any time amend, alter, suspend
or terminate the Plan.



(b) Shareholder Approval. The Company shall obtain shareholder approval of any
Plan amendment to the extent necessary and desirable to comply with Rule 16b-3 or
with Section 422 or Section 162(m) of the Code (or any successor rule or statute) or
other Applicable Law. Such shareholder approval, if required, shall be obtained in
such a manner and to such a degree as is required by the Applicable Law.



(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Grantee, unless mutually
agreed otherwise between the Grantee and the Administrator, which agreement must be
in writing and signed by the Grantee and the Company.



16. Conditions Upon Issuance of Shares.



(a) Legal Compliance. Shares shall not be issued pursuant to an Award unless
the exercise, if applicable, of such Award and the issuance and delivery of such
Shares shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable Law, and the requirements of any
stock exchange or quotation system upon which the Shares may then be listed or
quoted, and any insider trading policy adopted by the Company, and shall be further
subject to the approval of counsel for the Company with respect to such compliance.



(b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the
time of any such exercise that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.



17. Liability of Company.



(a) Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is deemed by
the Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure to
issue or sell such Shares as to which such requisite authority shall not have been
obtained.



(b) Grants Exceeding Allotted Shares. If the Covered Stock covered by an Award
exceeds, as of the date of grant, the number of Shares that may be issued under the
Plan without additional shareholder approval, such Award shall be void with respect
to such excess Covered Stock, unless shareholder approval of an amendment
sufficiently increasing the number of Shares subject to the Plan is timely obtained
in accordance with Section 15 of the Plan.



18. Reservation of Shares. The Company, during the term of the Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.


 


15









 





19. Rights of Employees. Neither the Plan nor any Award shall confer upon a Grantee
any right with respect to continuing the Grantee’s employment relationship with the
Company, nor shall they interfere in
any way with the Grantee’s right or the Company’s right to terminate such employment
relationship at any time, with or without cause.



20. Sub-plans for Foreign Subsidiaries. The Board may adopt sub-plans applicable to
particular foreign Subsidiaries. All Awards granted under such sub-plans shall be
treated as grants under the Plan. The rules of such sub-plans may take precedence
over other provisions of the Plan, with the exception of Section 3, but unless
otherwise superseded by the terms of such sub-plan, the provisions of the Plan shall
govern the operation of such sub-plan.



21. Construction. The Plan shall be construed under the laws of the State of
Delaware, to the extent not preempted by federal law, without reference to the
principles of conflict of laws.



22. Certain Limitations on Awards to Ensure Compliance with Code Section 409A. For
purposes of this Plan, references to an award term or event (including any authority
or right of the Company or a Grantee) being “permitted” under Code Section 409A
mean, for a 409A Award (meaning an Award that constitutes a deferral of compensation
under Code Section 409A and regulations thereunder), that the term or event will not
cause the Grantee to be liable for payment of interest or a tax penalty under Code
Section 409A and, for a Non-409A Award (meaning all Awards other than 409A Awards),
that the term or event will not cause the Award to be treated as subject to Code
Section 409A. Other provisions of the Plan notwithstanding, the terms of any 409A
Award and any Non-409A Award, including any authority of the Company and rights of
the Grantee with respect to the Award, shall be limited to those terms permitted
under Code Section 409A, and any terms not permitted under Code Section 409A shall
be automatically modified and limited to the extent necessary to conform with Code
Section 409A. For this purpose, other provisions of the Plan notwithstanding, the
Company shall have no authority to accelerate distributions relating to 409A Awards
in excess of the authority permitted under Code Section 409A, and any distribution
subject to Code
Section 409A(a)(2)(A)(i) (separation from service) to a “key
employee” as defined under Code Section 409A(a)(2)(B)(i), shall not occur earlier
than the earliest time permitted under Code Section 409A(a)(2)(B)(i).


 


16