Exhibit 4.1


 


GOLDEN MINERALS
COMPANY



2009 EQUITY INCENTIVE PLAN


 


1.             PURPOSES.


 


(a)           Background. On April 3, 2009, the Board authorized the
Company to establish the Plan, subject to the Company’s receipt of approval of
the Plan by the United States Bankruptcy Court for the Southern District of New
York (the “Bankruptcy Court”) on March 4, 2009 (the “Effective Date”), as
part of the Company’s confirmed plan of reorganization under Chapter 11 of the
U.S. Bankruptcy Code.


 


(b)           Eligible Stock Award
Recipients.  The persons eligible to
receive Stock Awards are the Employees, Directors, Officers and Consultants of
the Company and its Affiliates; provided that in no event shall a Stock Award
be granted unless, with respect to the proposed grantee, the Common Stock qualifies
as “service-recipient stock” for purposes of Section 409A of the Code.


 


(c)           Available Stock Awards.  The purpose of the Plan is to provide a means
by which eligible recipients may be given an opportunity to benefit from
increases in value of the Common Stock through the granting of the following: (i) Incentive
Stock Options, (ii) Nonqualified Stock Options, (iii) restricted
Common Stock, (iv) unrestricted Common Stock and (v) stock
appreciation rights.


 


(d)           General Purpose.  The Company, by means of the Plan, seeks to
retain the services of the group of persons eligible to receive Stock Awards,
to secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the Company
and its Affiliates.


 


2.             DEFINITIONS.


 


(a)           “Affiliate”
means any entity that controls, is controlled by, or is under common control
with the Company.


 


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


 


(c)           “Code”
means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.


 


(d)           “Committee”
means a pre-existing or newly formed committee of members of the Board
appointed by the Board in accordance with subsection 3(c).


 


(e)           “Common
Stock” means the Company’s common stock par value US$0.01 and
other rights with respect to such stock.


 


(f)            “Company”
means Golden Minerals Company, a Delaware corporation.


 


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(g)           “Consultant”
means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for
such services or (ii) who is a member of the Board of Directors of an
Affiliate.


 


(h)           “Continuous
Service” means that the Participant’s service with the Company
or an Affiliate, whether as an Employee, Director, Officer or Consultant, is
not interrupted or terminated.  Unless
otherwise provided in a Stock Award Agreement or Option Agreement, as applicable,
the Participant’s Continuous Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee, Director, Officer or
Consultant or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s service to the Company or an Affiliate as an Employee, Director,
Officer or Consultant.  For example, a
change in status from an Employee of the Company to a Consultant of an
Affiliate may not constitute an interruption of Continuous Service.  The Board, in its sole discretion, may
determine whether Continuous Service shall be considered interrupted in the
case of any leave of absence, including sick leave, military leave or any other
personal leave.


 


(i)            “Covered
Employee” means the Company’s chief executive officer and the
four (4) other highest compensated officers of the Company for whom
total compensation is required to be reported to stockholders under the Exchange
Act, as determined for purposes of Section 162(m) of the Code.


 


(j)            “Director”
means a member of the Board of Directors of the Company.


 


(k)           “Disability”
means the Participant’s inability, due to illness, accident, injury, physical
or mental incapacity or other disability, to carry out effectively the duties
and obligations to the Company and its Affiliates performed by such person
immediately prior to such disability for a period of  at least six (6) months, as determined in the good faith
judgment of the Board.


 


(l)            “Dollars” or
“$” or “US$” means United
States dollars.


 


(m)          “Employee”
means any person employed by the Company or an Affiliate.  Service as a Director or payment of a
director’s fee by the Company or an Affiliate alone shall not be sufficient to
constitute “employment” by the Company or an Affiliate.


 


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


 


(o)           “Fair Market Value”
means, as of any date, the value of the Common Stock determined as follows:


 


(i)            If the Common Stock is listed on any
established stock exchange in the United States, or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share
of Common Stock shall be the closing sales price for such share (or the closing
bid, if no sales were reported) as quoted on such exchange or market (or the
exchange or market with the greatest volume of trading in


 


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Common Stock if such shares are traded on more than
one such exchange or market) on the day of determination, as reported by such
exchange or market or such other source as the Board reasonably deems reliable.


 


(ii)           In the absence of such markets for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Board using a reasonable valuation method in accordance with Treas. Reg. Section 1.409A-1(a)(5)(iv)(B) or
any successor thereto.


 


(p)           “Incentive
Stock Option” means an Option designated as an incentive stock
option in an Option Agreement and that is granted in accordance with the
requirements of, and that conforms to the applicable provisions of, Section 422
of the Code.  Notwithstanding anything
herein to the contrary, no Option shall
be treated as an “incentive stock option” within the meaning of Section 422
of the Code unless the Plan has been (i) approved by the shareholders of
the Company in a manner intended to comply with the shareholder approval
requirements of Section 422(b)(1) of the Code or (2) a
determination has been made by the Committee that the method of adoption and
approval of the Plan meets the shareholder approval requirements of Section 422
of the Code.  Notwithstanding the
foregoing, any Option intended to be an incentive stock option shall not fail
to be effective solely on account of a failure to obtain such approval, but
rather such Option shall be treated as a nonqualified stock option unless and
until such approval is obtained.


 


(q)           “Independent
Director”  means (i) a Director who satisfies the definition
of Independent Director or similar definition under the applicable United
States stock exchange or Nasdaq rules and regulations upon which the
Common Stock is traded from time to time; 
(ii) a Director who either (A) is not a current employee of
the Company or an “affiliated corporation” (within the meaning of Treasury
Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an “affiliated corporation” receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation”
at any time and is not currently receiving direct or indirect remuneration from
the Company or an “affiliated corporation” for services in any capacity other
than as a Director or (B) is otherwise considered an “outside director”
for purposes of Section 162(m) of the Code; and (iii) a “Non-Employee
Director”, as defined from time to time for purposes of Section 16 of the
Exchange Act.


 


(r)           “Nonqualified
Stock Option” means an Option that is not designated in an
Option Agreement as an Incentive Stock Option or was not granted in accordance
with the requirements of or does not otherwise conform to the applicable
provisions of, Section 422 of the Code.


 


(s)           “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.


 


(t)            “Option”
means an Incentive Stock Option or a Nonqualified Stock Option granted pursuant
to the Plan.


 


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(u)           “Option
Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.


 


(v)            “Optionholder”
means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.


 


(w)           “Participant”
means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.


 


(x)           “Plan”
means this Golden Minerals Company 2009 Equity Incentive Plan.


 


(y)           “Retirement”
means an Employee’s retirement from the Company or an Affilitate, (i) on
or after attaining age 55 and completing at least ten (10) years of
service; or (ii) on or after attaining age 62.


 


(z)           “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3,
as in effect from time to time.


 


(aa)         “Securities
Act” means the Securities Act of 1933, as amended.


 


(bb)         “Stock Award”
means any right granted under the Plan in the form of an Option, restricted
Common Stock, unrestricted Common Stock, or a stock appreciation right.


 


(cc)         “Stock Award
Agreement” means a written agreement between the Company and a
holder of a Stock Award (other than an Option) evidencing the terms and
conditions of an individual Stock Award grant.


 


(dd)         “Ten Percent
Stockholder” means a person who owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any parent corporation or any subsidiary corporation, both as
defined in Section 424 of the Code.


 


3.             ADMINISTRATION.


 


(a)           Administration by
Board.  The Board shall administer the
Plan unless and until the Board delegates administration to a Committee, as
provided in subsection 3(c).  The Board
may, at any time and for any reason in its sole discretion, rescind some or all
of such delegation.


 


(b)           Powers of Board.  The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:


 


(i)            To determine from
time to time which of the persons eligible under the Plan shall be granted
Stock Awards; when and how each Stock Award shall be granted; what type or
combination of types of Stock Award shall be granted; the provisions of each
Stock Award granted (which need not be identical), including the time or times
when a person shall be permitted to receive Common Stock pursuant to a Stock
Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.


 


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(ii)           To construe and
interpret the Plan, Stock Awards granted under it, Option Agreements and Stock
Award Agreements, and to establish, amend and revoke rules and regulations
for their administration.  The Board, in
the exercise of this power, may correct any defect, omission or inconsistency
in the Plan or in any Option Agreement or Stock Award Agreement, in a manner
and to the extent it shall deem necessary or expedient to make the Plan fully
effective.


 


(iii)         To amend the Plan, a
Stock Award, a Stock Award Agreement or an Option Agreement as provided in Section 12.


 


(iv)          Generally, to
exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company which are not in
conflict with the provisions of the Plan.


 


(c)           Delegation to
Committee.


 


(i)            General.  The Board may delegate administration of the
Plan and its powers and duties thereunder, or any portion thereof, to a
Committee or Committees, and the term “Committee”
shall apply to any person or persons to whom such authority has been
delegated.  Upon such delegation, the
Committee shall have the powers theretofore possessed by the Board, including
the power to delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan to the Board
shall thereafter be deemed to include the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board.  In its absolute discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Committee under this Plan, except respecting matters under Rule 16b-3 of
the Exchange Act or Section 162(m) of the Code, or any rules or
regulations issued thereunder, which are required to be determined in the sole
discretion of the Committee.


 


(ii)           Committee Composition.  A Committee shall consist solely of two or
more Independent Directors.  Within the
scope of its authority, the Board or the Committee may (1) delegate to a
committee of one or more members of the Board who are not Independent
Directors, the authority to grant Stock Awards to eligible persons who are
either (a) not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Stock Award
or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of
the Code, and/or (2) delegate to a committee of one or more members of the
Board who are not Independent Directors or to the Company’s Chief Executive
Officer the authority to grant Stock Awards to eligible persons who are not
then subject to Section 16 of the Exchange Act.


 


(d)           Effect of Board’s Decision; No Liability.   All
determinations, interpretations and constructions relating to this Plan made by
the Board in good faith shall not be subject to review by any person and shall
be final, binding and conclusive on all persons.  No member of the Board or any
Committee or any person to whom duties hereunder have been delegated, including
any member of any committee or subcommittee, shall be liable for any action,
interpretation or determination made in good faith, and such persons shall be
entitled to full


 


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indemnification and
reimbursement consistent with applicable law and in the manner provided in the
Company’s Memorandum and Articles of Association, as the same may be amended
from time to time, or as otherwise provided in any agreement between any such
member and the Company.


 


4.             STOCK SUBJECT TO THE
PLAN.


 


(a)           Stock Reserve.  Subject to the provisions of Section 11
relating to adjustments upon changes in Common Stock, the Common Stock that may
be issued pursuant to Stock Awards  shall
not exceed in the aggregate ten percent (10%) of the Company’s outstanding shares
of Common Stock, as of the grant date, including without limitation, Common Stock issuable upon exercise of
conversion of outstanding warrants, rights, or other exercisable or convertible
securities (other than Stock Awards). 
Stock appreciation rights provided for in Section 7(b) hereof
that are payable only in cash will not reduce the number of Common Stock
available for Stock Awards granted under the Plan.  The Common Stock that may be issued pursuant
to Incentive Stock Options  shall
not exceed in the aggregate ten percent (10%) of the Company’s outstanding
Common Stock, as of the Effective Date, including without limitation, Common Stock issuable upon exercise of
conversion of outstanding warrants, rights, or other exercisable or convertible
securities (other than Stock Awards).


 


(b)           Reversion of Stock to
the Stock Reserve.  If any Stock
Award shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full, the Common Stock not acquired under such
Stock Award shall revert to and again become available for issuance under the
Plan.    If any Common Stock is withheld
to satisfy any tax withholding requirement in connection with any Stock Award,
only the shares issued (if any), net of the shares withheld, will be deemed
delivered for purposes of determining the amount of Common Stock available for
issuance under the Plan.


 


(c)           Source of Stock.  The Common Stock subject to the Plan may be
either authorized and unissued stock or reacquired stock, bought on the market
or otherwise, in the discretion of the Board.


 


5.             ELIGIBILITY.


 


(a)           Eligibility for
Specific Stock Awards.  Incentive
Stock Options may be granted only to Employees. 
Stock Awards other than Incentive Stock Options may be granted to
Employees, Directors, Officers and Consultants.


 


(b)           Ten Percent
Stockholders.  A Ten Percent
Stockholder shall not be granted an Incentive Stock Option unless the exercise
price of such Option is at least one hundred ten percent (110%) of the Fair
Market Value of the Common Stock at the date of grant and the Option is not
exercisable after the expiration of five (5) years from the date of grant.


 


(c)           Limitations on Stock Awards. 
No Participant shall be eligible to be granted Stock Awards covering
more than 150,000 shares of Common Stock during any calendar year.


 


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(d)           Consultants.


 


(i)            A Consultant shall
not be eligible for the grant of a Stock Award if, at the time of grant, a Form S-8
Registration Statement under the Securities Act (“Form S-8”) is not available to register a resale of the
Company’s securities issued to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules governing
the use of Form S-8, unless the Board determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does
not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such
grant complies with the securities laws of all other relevant jurisdictions.


 


(ii)           Form S-8
generally is available to consultants and advisors only if (i) they are
natural persons; (ii) they provide bona fide services to the issuer, its
parents, its majority-owned subsidiaries or majority-owned subsidiaries of the
issuer’s parent; and (iii) the services are not in connection with the
offer or sale of securities in a capital-raising transaction, and do not
directly or indirectly promote or maintain a market for the issuer’s
securities.


 


6.             OPTION PROVISIONS.


 


Each Option Agreement shall be subject to the terms
and conditions of this Plan.  Each Option
and Option Agreement shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. 
All Options shall be separately designated Incentive Stock Options or
Nonqualified Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for Common Stock
purchased on exercise of each type of Option. 
The provisions of separate Options need not be identical.


 


(a)           Provisions Applicable to All Options.


 


(i)            Exercise Price.  Subject to the provisions of Section 5(b) regarding
Ten Percent Shareholders, the exercise price of each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of the Common Stock
subject to the Option on the date the Option is granted.


 


(ii)           Exercise.  The exercise price of Common Stock acquired
pursuant to an Option shall be paid in by such methods and procedures as the
Board determines from time to time, including without limitation through net physical
settlement or other method of cashless exercise.


 


(iii)         Vesting Generally.  In the discretion of the Board, the total
number of shares of Common Stock subject to an Option may (A) vest, and
therefore become exercisable, in periodic installments that may, but need not,
be equal, or (B) be fully vested at the time of grant.  The Option may be subject to such other terms
and conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Board may deem appropriate.  The vesting provisions, if any, of individual
Options may vary and shall be


 


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set forth in the
applicable Option Agreement.  The
provisions of this subsection 6(a)(iii) are subject to any Option
Agreement provisions governing the minimum number of Common Stock as to which
an Option may be exercised.


 


(iv)          Termination of
Continuous Service.  Unless otherwise
provided in the Option Agreement, in the event an Optionholder’s Continuous
Service terminates (other than upon the Optionholder’s death, Disability,
Retirement or as a result of a Change of Control), all Options held by the
Optionholder shall immediately terminate; provided, however, if
an Optionholder’s Continuous Service is terminated for reasons other than for
cause, as determined by the Board in its discretion, all vested Options held by
such person shall continue to be exercisable until the earlier of the
expiration date of such Option or 180 days after the date of such termination.  All such vested Options not exercised within
the period described in the preceding sentence shall terminate.  Notwithstanding anything herein to the
contrary, in the event an Incentive Stock Option is exercised after the date
which is three months following the date the Optionholder’s employment with the
Company is terminated, other than as a result of Disability or death, such
Incentive Stock Option shall be treated as a Nonqualified Stock Option, but all
other terms and provisions of such Option shall remain the same.


 


(v)            Disability or Death of
Optionholder.  Unless otherwise
provided in the Option Agreement, in the event that an Optionholder’s
Disability or death, all unvested Options shall immediately terminate, and all
vested Options held by such person shall continue to be exercisable until the
earlier of 12 months after the date of such Disability or death or the
expiration date of such Options.  All
such vested Options not exercised within such 12-month period shall terminate.


 


(vi)          Retirement.  Unless
otherwise provided in the Option Agreement, in the event of the Optionholder’s
Retirement, all unvested Options shall automatically vest on the date of such
Retirement and all Options shall be exercisable until the earlier of 24 months
after such Retirement date or the expiration date of such Options.  All such Options not exercised within the
period described in the preceding sentence shall terminate.  Notwithstanding anything herein to the
contrary, in the event an Incentive Stock Option is exercised after the date
which is three months following the date the Optionholder’s employment with the
Company is terminated, other than as a result of Disability or death, such
Incentive Stock Option shall be treated as a Nonqualified Stock Option, but all
other terms and provisions of such Option shall remain the same.


 


(b)           Provisions Applicable to Incentive Stock Options.


 


(i)            Term.  Subject to the provisions of subsection 5(b) regarding
Ten Percent Stockholders, no Incentive Stock Option shall be exercisable after
the expiration of ten (10) years from the date it was granted.  Further, no grant of an Incentive Stock
Option shall be made under this Plan more than ten (10) years after the
date of the satisfaction of the stockholder approval provisions of Section 422(b)(1) of
the Code.


 


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(ii)                                Transferability
of an Incentive Stock Option.  An
Incentive Stock Option shall not be transferable except by will or by the laws
of descent and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder.


 


(iii)                            Incentive
Stock Option $100,000 Limitation. 
Notwithstanding any other provision of the Plan or an Option Agreement,
the aggregate Fair Market Value of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an Optionholder
in any calendar year, under the Plan or any other option plan of the Company or
its Affiliates, shall not exceed $100,000. 
For this purpose, the Fair Market Value of the Common Stock shall be
determined as of the time an Option is granted. 
The Options or portions thereof which exceed such limit (according to
the order in which they were granted) shall be treated as Nonqualified Stock
Options but all other terms and provisions of such Options shall remain the
same.


 


(iv)                               Disposition During the Holding Period.  Any participant who disposes of Common Stock
acquired upon the exercise of an Incentive Stock Option either (i) within
two years after the date of grant of such Incentive Stock Option, or (ii) within
one year after the transfer of such shares to the Participant, shall notify the
Company of such disposition and of the amount realized upon such disposition.


 


(c)                                  Provisions Applicable to Nonqualified Stock
Options.


 


(i)                                    Transferability
of a Nonqualified Stock Option. A Nonqualified Stock Option shall be
transferable, if at all, to the extent provided in the Option Agreement.  If the Option Agreement does not provide for
transferability, then the Nonqualified Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.


 


7.                                      PROVISIONS OF STOCK
AWARDS OTHER THAN OPTIONS.


 


(a)                                  Restricted
and Unrestricted Common Stock Awards. 
Each Stock Award Agreement evidencing a grant of restricted or
unrestricted Common Stock shall be in such form and shall contain such
restrictions, terms and conditions, if any, as the Board shall deem appropriate
and shall be subject to the terms and conditions of this Plan.  The terms and conditions of restricted Common
Stock may change from time to time, and the terms and conditions of separate
restricted Common Stock awards need not be identical, but each Stock Award
Agreement evidencing a grant of restricted or unrestricted Common Stock shall include
(through incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:


 


(i)                                    Consideration.  A restricted or unrestricted Common Stock
award may be awarded in consideration for past services actually rendered, or
for future services to be rendered, to the Company or an Affiliate for its
benefit.


 


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(ii)                                Vesting.  Common Stock awarded under the Stock Award
Agreement may (A) be subject to a vesting schedule to be determined by the
Board (i.e. restricted Common Stock), or (B) be fully vested at the time
of grant (i.e. unrestricted Common Stock).


 


(iii)                            Termination
of Participant’s Continuous Service. 
Unless otherwise provided in the Stock Award Agreement, in the event a
Participant’s Continuous Service terminates prior to a vesting date set forth
in the Stock Award Agreement, any unvested restricted Common Stock shall be
forfeited and automatically transferred to and reacquired by the Company at no
cost to the Company, and neither the Participant nor his or her heirs,
executors, administrators or successors shall have any right or interest in
such restricted Common Stock. 
Notwithstanding the foregoing, unless otherwise provided in the Stock
Award Agreement, in the event a Participant’s Continuous Service terminates as
a result of (A) being terminated by the Company for reasons other than for
cause, (B) death, (C) Disability, (D) Retirement, or (E) a
Change of Control (subject to the provisions of Section 11(c) hereof),
then any unvested restricted Common Stock shall vest immediately upon such
date.


 


(iv)                               Transferability.  Rights to acquire Common Stock under the
Stock Award Agreement shall be transferable by the Participant only upon such terms
and conditions as are set forth in the Stock Award Agreement, as the Board
shall determine in its discretion, so long as Common Stock awarded under the
Stock Award Agreement remains subject to the terms of the Stock Award
Agreement.


 


(b)                                  Grant of Stock Appreciation Rights.  Stock appreciation rights to receive in cash
(or its equivalent in Common Stock) the excess of the Fair Market Value of
Common Stock on the date the rights are surrendered over the Fair Market Value
of Common Stock on the date of grant may be granted to any Employee, Director,
Officer or Consultant selected by the Board. 
A stock appreciation right may be granted (i) in connection and
simultaneously with the grant of another Stock Award, (ii) with respect to
a previously granted Stock Award, or (iii) independent of another Stock
Award.  A stock appreciation right shall
be subject to such terms and conditions not inconsistent with this Plan as the
Board shall impose and shall be evidenced by a written Stock Award Agreement,
which shall be executed by the Participant and an authorized officer of the
Company.  The Board, in its discretion,
may determine whether a stock appreciation right is to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of
the Code and Stock Award Agreements evidencing stock appreciation rights
intended to so qualify shall contain such terms and conditions as may be
necessary to meet the applicable provisions of Section 162(m) of the
Code.  The Board may, in its discretion
and on such terms as it deems appropriate, require as a condition of the grant
of a stock appreciation right that the Participant surrender for cancellation
some or all of the Stock Awards previously granted to such person under this
Plan or otherwise, provided that such action does not result in a violation of Section 409A
of the Code.  A stock appreciation right,
the grant of which is conditioned upon such surrender, may have an exercise
price lower (or higher) than the exercise price of the surrendered Stock Award,
may contain such other terms as the Board deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Stock Award.


 


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8.                                      AVAILABILITY OF STOCK.  During
the terms of the Stock Awards, the Company shall keep available at all times
the number of Common Stock required to satisfy such Stock Awards.


 


9.                                      USE OF PROCEEDS FROM
STOCK.


 


Proceeds from the sale of Common Stock pursuant to
Stock Awards shall constitute general funds of the Company.


 


10.                               MISCELLANEOUS.


 


(a)                                  Exercise of
Awards.  Stock Awards shall be exercisable at
such times, or upon the occurrence of such event or events as the Board shall
determine at or subsequent to grant. 
Stock Awards may be exercised in whole or in part.  Common Stock purchased upon the exercise of a
Stock Award shall be paid for in full at the time of such purchase.


 


(b)                                  Acceleration
of Exercisability and Vesting.  The
Board shall have the power to accelerate the time at which a Stock Award may
first be exercised or the time during which a Stock Award or any part thereof
will vest in accordance with the Plan, notwithstanding the provisions in the
Stock Award stating the time at which it may first be exercised or the time
during which it will vest.


 


(c)                                  Stockholder
Rights.


 


(i)                                    Options.  Unless otherwise provided in and upon the
terms and conditions in the Option Agreement, no Participant shall be deemed to
be the holder of, or to have any of the rights of a holder with respect to, any
Common Stock subject to an Option unless and until such Participant has
satisfied all requirements for exercise of, and has exercised, the Option
pursuant to its terms.


 


(ii)                                Restricted Common Stock.  Unless otherwise provided in and
upon the terms and conditions in the Stock Award Agreement, a Participant shall
have the right to receive all dividends and other distributions paid or made
respecting such restricted Common Stock, provided, however, no unvested
restricted Common Stock shall have any voting rights of a stockholder
respecting such unvested restricted Common Stock unless and until such unvested
restricted Common Stock become vested.


 


(d)                                  No
Employment or other Service Rights. 
Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted, or any other capacity, or shall affect the right of
the Company or an Affiliate to terminate with or without notice and with or
without cause (i) the employment of an Employee, (ii) the service of
a Consultant to the Company or an Affiliate or (iii) the service of a
Director of the Company or an Affiliate.


 


(e)                                  Withholding
Obligations.  If the Company has or
will have a legal obligation to withhold the taxes related to the grant,
vesting or exercise of the Stock Award, such Award may


 


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not be granted, vested or
exercised in whole or in part, unless such tax obligation is first satisfied in
a manner satisfactory to the Company.  To
the extent provided by the terms of a Stock Award Agreement or Option
Agreement, the Participant may satisfy any federal, state or local tax
withholding obligation relating to the exercise or acquisition of Common Stock
under a Stock Award by any of the following means (in addition to the Company’s
right to withhold from any compensation paid to the Participant by the Company)
or by a combination of such means:  (i) tendering
a cash payment in Dollars; (ii) authorizing the Company to withhold Common
Stock from the Common Stock otherwise issuable to the Participant as a result
of the exercise or acquisition of Common Stock under the Stock Award, provided,
however, that no Common Stock is withheld with a value exceeding the minimum
amount of tax required to be withheld by law; or (iii) delivering to the
Company owned and unencumbered Common Stock.


 


(f)                                    Substitutions and Repricings.  The
Board may, in its discretion, issue new Stock Awards in substitution for
outstanding Stock Awards previously granted to Participants, or approve a
repricing (within the meaning of U.S. generally accepted accounting practices
or any applicable stock exchange rule) of Stock Awards issued under this Plan,
in each case without the stockholders of the Company expressly approving such
substitution or repricing.


 


(g)                                 Listing and
Qualification of Stock.  This Plan and grant and exercise of
Stock Awards hereunder, and the obligation of the Company to sell and deliver
Common Stock under such Stock Awards, shall be subject to all applicable United
States federal and state laws, rules and regulations and to such approvals
by any government or regulatory agency as may be required. The Company, in its
discretion, may postpone the issuance or delivery of Common Stock upon any
exercise of a Stock Award until completion of any stock exchange listing, or
other qualification of such Common Stock under any United States federal or
state law rule or regulation as the Company may consider appropriate, and
may require any individual to whom a Stock Award is granted, such individual’s
beneficiary or legal representative, as applicable, to make such
representations and furnish such information as the Board may consider
necessary, desirable or advisable in connection with the issuance or delivery
of the Common Stock in compliance with applicable laws, rules and
regulations.


 


(h)                                 Non-Uniform
Determinations.  The Board’s
determinations under this Plan (including, without limitation, determinations
of the persons to receive Stock Awards, the form, term, provisions, amount and
timing of the grant of such Stock Awards and of the agreements evidencing the
same) need not be uniform and may be made by it selectively among persons who
receive, or are eligible to receive, Stock Awards under this Plan, whether or
not such persons are similarly situated.


 


11.                               ADJUSTMENTS UPON
CHANGES IN STOCK.


 


(a)                                  Capitalization
Adjustments.  If any change is made
in the Common Stock subject to the Plan, or subject to any Stock Award, without
the receipt of consideration by the Company  (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction), the Plan will be appropriately adjusted in the
class(es) and maximum number of securities subject to the Plan


 


12

















 


pursuant to subsection 4(a) and
the maximum number of securities subject to award to any person pursuant to
subsection 5(c), and the outstanding Stock Awards will be appropriately
adjusted in the class(es) and number of securities and price per share of
Common Stock subject to such outstanding Stock Awards.  The Board shall make such adjustments, and
its determination shall be final, binding and conclusive.  (The conversion of any convertible securities
of the Company shall not be treated as a transaction “without receipt of
consideration” by the Company.)


 


(b)                                  Asset
Sale, Merger, Consolidation or Reverse Merger.  In the event of (i) a sale, lease or
other disposition of all or substantially all of the assets of the Company, (ii) a
merger or consolidation of the Company with or into any other corporation or
entity or person, or any other corporate reorganization, in which the
stockholders of the Company immediately prior to such consolidation, merger or
reorganization, own less than 50% of the Company’s outstanding voting power of
the surviving entity (or its parent) following the consolidation, merger, or
reorganization or (iii) any transaction (or series of related transactions
involving a person or entity, or a group of affiliated persons or entities) in
which in excess of fifty percent (50%) of the Company’s outstanding voting
power is transferred (individually, a “Change
of Control”), then any unvested Stock Awards shall vest immediately
prior to the closing of the Change of Control, and the Board shall have the power and discretion to
provide for the Participant’s election alternatives regarding the terms and
conditions for the exercise of, or modification of, any outstanding Stock
Awards granted hereunder, provided, however, such alternatives shall not affect
the then current exercise provisions without such Participant’s consent.  The Board may provide that Stock Awards
granted hereunder must be exercised in connection with the closing of such
transaction, and that if not so exercised such Stock Awards will expire.  Any such determinations by the Board may be
made generally with respect to all Participants, or may be made on a case-by-case
basis with respect to particular Participants. 
The provisions of this Section 11(c) shall not apply to any
transaction undertaken for the purpose of reincorporating the Company under the
laws of another jurisdiction, if such transaction does not materially affect
the beneficial ownership of the Company’s capital stock.


 


12.                               AMENDMENT OF THE PLAN
AND STOCK AWARDS.


 


(a)                                  Amendment
of Plan.  The Board at any time, and
from time to time, may amend the Plan, provided that such amendment does not
result in a violation of Section 409A of the Code.  However, except as provided in Section 11
relating to adjustments upon changes in Common Stock, no amendment shall be
effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary to satisfy the requirements of applicable law
(including, without limitation, Section 422 of the Code or Rule 16b-3)
or any applicable Nasdaq or securities exchange listing requirements.


 


(b)                                  Stockholder
Approval.  The Board may, in its sole
discretion, submit any other amendment to the Plan for stockholder approval,
including, but not limited to, amendments to the Plan intended to satisfy the
requirements of Section 162(m) of the Code and the regulations
thereunder regarding the exclusion of performance-based compensation from the
limit on corporate deductibility of compensation paid to certain executive
officers.


 


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(c)                                  Contemplated
Amendments.  It is expressly
contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible Employees with the maximum benefits
provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the
Plan and/or Incentive Stock Options granted under it into compliance therewith.


 


(d)                                  No
Impairment of Rights.  Rights under
any Stock Award granted before amendment of the Plan shall not be impaired by
any amendment of the Plan unless the Participant consents in writing.


 


(e)                                  Amendment
of Stock Awards.  The Board at any
time, and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that the rights under any Stock Award shall not be
impaired by any such amendment unless the applicable Participant consents in
writing and provided further that such amendment does not result in a violation
of Section 409A of the Code.


 


13.                               TERMINATION OR
SUSPENSION OF THE PLAN.


 


(a)                                  Plan
Term.  The Board may suspend or
terminate the Plan at any time.  Unless
sooner terminated, the Plan shall terminate on the tenth anniversary of the Effective Date, after which no grants of
Incentive Awards may be made; provided, that administration of the Plan shall
continue in effect until all matters relating to Stock Awards previously
granted have been settled.


 


(b)                                  No
Impairment of Rights.  Suspension or
termination of the Plan shall not impair rights and obligations under any Stock
Award granted while the Plan is in effect except with the written consent of
the Participant.


 


(c)                                  Savings Clause.  This Plan is intended to comply in all
aspects with applicable laws and regulations. In case any one more of the
provisions of this Plan shall be held invalid, illegal or unenforceable in any
respect under applicable law or regulation, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the invalid, illegal or unenforceable provision shall be
deemed null and void; however, to the extent permissible by law, any provision
which could be deemed null and void shall first be construed, interpreted or
revised retroactively to permit this Plan to be construed in compliance with
all applicable laws so as to foster the intent of this Plan.


 


14.                               CHOICE OF LAW.


 


The law of the Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.


 


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15.                               PERFORMANCE-BASED COMPENSATION
UNDER SECTION 162(M).


 


Notwithstanding
anything herein to the contrary, the performance criteria for any Stock Award
that is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code shall be established
by the Committee based on one or more Qualifying Performance Criteria selected
by the Committee and specified in writing in accordance with the regulations
pursuant to Section 162(m).


 


(a)                                  Qualifying
Performance Criteria.  For purposes of this Plan, the term “Qualifying
Performance Criteria” shall mean any one or more of the following performance
criteria, applied to either the Company as a whole or to a business segment,
subsidiary or Affiliate, and measured either annually or cumulatively over a period
of years, on an absolute basis or relative to a pre-established target, to
previous years’ results or to a designated comparison group, in each case as
specified by the Committee in the applicable Option Agreement or Stock Award
Agreement: revenue; revenue growth; operating income (before or after taxes);
pre- or after-tax income (before or after allocation of corporate overhead and
bonus); earnings per share; return on equity; total stockholder return; return
on assets or net assets; appreciation in and/or maintenance of the price of the
Common Stock or any other publicly-traded securities of the Company; gross
profits; earnings (including earnings before taxes, earnings before interest
and taxes or earnings before interest, taxes, depreciation and amortization);
economic value-added models or equivalent metrics; comparisons with various
stock market indices; reductions in costs; cash flow, cash flow per share or
cash flow from operations; return on capital; improvement in or attainment of
expense levels or working capital levels; operating margins, gross margins or
cash margin; year-end cash; debt reductions; stockholder equity; regulatory
achievements (including submitting or filing applications or other documents
with regulatory authorities or receiving approval of any such applications or
other documents); financing and other capital raising transactions (including
sales of the Company’s equity or debt securities); implementation, completion
or attainment of objectives with respect to exploration, development,
production or costs, acquisitions and divestitures, operational objectives,
including those relating to environmental, health and safety requirements,
recruiting and maintaining personnel, and joint venture or similar
arrangements.


 


(b)                                  Certification. 
Before payment of any compensation under a Stock Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Committee shall
certify, in writing, the extent to which any Qualifying Performance Criteria
and any other material terms under such Stock Award have been satisfied (other
than in cases where such relate solely to the price of Common Stock).


 


(c)                                  Discretionary
Adjustments Pursuant to Section 162(m).   Notwithstanding
satisfaction or completion of any Qualifying Performance Criteria, to the
extent specified at the time of grant of a Stock Award to Covered Employees,
the number of shares of Common Stock or other benefits granted, issued,
retained, or vested under a Stock Award on account of satisfaction of such
Qualifying Performance Criteria may be reduced by the Committee on the basis of
such further considerations as the Committee in its sole discretion shall
determine.  In addition, in the event
that the requirements of Section 162(m) of the Code and the
regulations 


 


15

















 


thereunder change
to permit the Committee discretion to alter the Qualifying Performance Criteria
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval.  Furthermore, in the event that the Committee
determines that it is advisable to grant Stock Awards that shall not qualify as
performance-based compensation and/or to amend previously granted Stock Awards
in a way that would disqualify them as performance-based compensation, the
Committee may make such grants without satisfying the requirements of Section 162(m) of
the Code and may base vesting on performance measures other than those set
forth above and/or make such amendments.


 


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