exv10w7



 









Exhibit 10.7




ASSISTED LIVING CONCEPTS, INC.

2006 OMNIBUS INCENTIVE COMPENSATION PLAN





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




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




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




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




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




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




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




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



          (i) the consummation of (A) a merger, consolidation, statutory share exchange or similar form
of corporate transaction involving (x) the Company or (y) any of its subsidiaries, but in the case
of this clause (y) only if Company Voting Securities (as defined below) are issued or issuable in
connection with such transaction (each of the transactions referred to in this clause (A), a
“Reorganization”) or (B) a sale or other disposition of all or substantially all the assets of the
Company to a person that is not an Affiliate of the Company (a “Sale”), in each case, if such
Reorganization or Sale requires the approval of the Company’s stockholders under the law of the
Company’s jurisdiction of organization (whether such approval is required for such Reorganization
or Sale or for the issuance of securities in such Reorganization or Sale), unless, immediately
following such Reorganization or Sale, (1) all or substantially all the persons who were the
“beneficial owners” (as such term is defined in Rule 13d-3 under the Exchange Act) of the
securities











 



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eligible to vote for the election of the Board (“Company Voting Securities”) outstanding
immediately prior to the consummation of such Reorganization or Sale beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then outstanding voting securities of
the corporation or other entity resulting from such Reorganization or Sale (including a corporation
or other entity that as a result of such transaction directly or indirectly owns the Company or all
or substantially all the Company’s assets) (the “Continuing Company”) in substantially the same
proportions as their ownership, immediately prior to the consummation of such Reorganization or
Sale, of the outstanding Company Voting Securities (excluding any outstanding voting securities of
the Continuing Company that such beneficial owners hold immediately following the consummation of
such Reorganization or Sale as a result of their ownership prior to such consummation of voting
securities of any corporation or other entity (other than the Company) involved in or forming part
of such Reorganization or Sale), (2) no Person (excluding (x) any employee benefit plan (or related
trust or fiduciary) sponsored or maintained by the Company or its Affiliates, (y) Scotia and (z)
the Company and its Affiliates) beneficially owns, directly or indirectly, 20% or more of the
combined voting power of the outstanding voting securities of the Continuing Company immediately
following the consummation of such Reorganization or Sale and (3) immediately following the
consummation of such Reorganization or Sale, at least a majority of the members of the board of
directors (or equivalent body) of the Continuing Company are Incumbent Directors;




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




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





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




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




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









 



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




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




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




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




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




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




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




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




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









 



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




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




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




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




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




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




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




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




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




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




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









 



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




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




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




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




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




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




     “Shares” means shares of Class A common stock of the Company, $0.01 par value, or such other
securities of the Company (a) into which such shares shall be changed by reason of a
recapitalization, merger, consolidation, split-up, combination, exchange of shares or other similar
transaction or (b) as may be determined by the Committee pursuant to Section 4(b).




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




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




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









 



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“outside directors” under Section 162(m) of the Code and (ii) meet the independence
requirements of the NYSE.




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




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




     (d) Indemnification. No member of the Board, the Committee or any employee of the
Company (each such person, a “Covered Person”) shall be liable for any action taken or omitted to
be taken or any determination made in good faith with respect to the Plan or any Award hereunder.
Each Covered Person shall be indemnified and held harmless by the Company against and from (i) any
loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon or incurred
by such Covered Person









 



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in connection with or resulting from any action, suit or proceeding to which such Covered
Person may be a party or in which such Covered Person may be involved by reason of any action taken
or omitted to be taken under the Plan or any Award Agreement and (ii) any and all amounts paid by
such Covered Person, with the Company’s approval, in settlement thereof, or paid by such Covered
Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered
Person; provided that the Company shall have the right, at its own expense, to assume and
defend any such action, suit or proceeding, and, once the Company gives notice of its intent to
assume the defense, the Company shall have sole control over such defense with counsel of the
Company’s choice. The foregoing right of indemnification shall not be available to a Covered
Person to the extent that a court of competent jurisdiction in a final judgment or other final
adjudication, in either case not subject to further appeal, determines that the acts or omissions
of such Covered Person giving rise to the indemnification claim resulted from such Covered Person’s
bad faith, fraud or willful criminal act or omission or that such right of indemnification is
otherwise prohibited by law or by the Company’s Amended and Restated Articles of Incorporation or
Bylaws. The foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which Covered Persons may be entitled under the Company’s Amended and Restated
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any other power that the
Company may have to indemnify such persons or hold them harmless.




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




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




     SECTION 4. Shares Available for Awards; Other Limits. (a) Shares
Available. Subject to adjustment as provided in Section 4(b), the aggregate number of Shares
that may be delivered pursuant to Awards granted under the Plan shall be 4,000,000, of which the
maximum number of Shares that may be delivered pursuant to Incentive Stock Options granted under
the Plan shall be 4,000,000, provided that each such number of Shares shall automatically
be adjusted to take into account any stock distribution or stock split that occurs in connection
with the Initial Distribution. If, after the effective date of the Plan, any Award granted under
the Plan is forfeited, or otherwise expires, terminates or is canceled without the delivery of
Shares, then the Shares covered by such forfeited, expired, terminated or canceled Award shall
again become available to












 



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be delivered pursuant to Awards under the Plan. If Shares issued upon exercise, vesting or
settlement of an Award, or Shares owned by a Participant (which are not subject to any pledge or
other security interest), are surrendered or tendered to the Company in payment of the Exercise
Price of an Award or any taxes required to be withheld in respect of an Award, in each case, in
accordance with the terms and conditions of the Plan and any applicable Award Agreement, such
surrendered or tendered Shares shall again become available to be delivered pursuant to Awards
under the Plan; provided, however, that in no event shall such Shares increase the
number of Shares that may be delivered pursuant to Incentive Stock Options granted under the Plan.
Subject to adjustment as provided in Section 4(b), (i) the maximum number of Shares with respect to
which Awards may be granted to any Participant in any fiscal year of the Company shall be 200,000,
provided that such number of Shares shall automatically be adjusted to take into account
any stock distribution or stock split that occurs in connection with the Initial Distribution, and
(ii) the maximum aggregate amount of cash and other property (valued at its Fair Market Value)
other than Shares that may be paid or delivered pursuant to Awards to any Participant in any fiscal
year of the Company shall be $2,000,000.




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









 



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




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




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




     SECTION 6. Awards. (a) Types of Awards. Awards may be made under the Plan
in the form of (i) Options, (ii) SARs, (iii) Restricted Shares, (iv) RSUs, (v) Performance Units,
(vi) Cash Incentive Awards and (viii) other equity-based or equity-related Awards that the
Committee determines are consistent with the purpose of the Plan and the interests of the Company.
Awards may be granted in tandem with other Awards. No Incentive Stock Option (other than an
Incentive Stock Option that may be assumed or issued by the Company in connection with a
transaction to which Section 424(a) of the Code applies) may be granted to a person who is
ineligible to receive an Incentive Stock Option under the Code.




     (b) Options. (i) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and plenary authority to determine the Participants to whom Options shall
be granted, the number of Shares to be covered by each Option, whether the Option will be an
Incentive Stock Option or a Nonqualified Stock Option and the conditions and limitations applicable
to the vesting and exercise of the Option. In the case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to and comply with such rules as may be prescribed by
Section 422 of the Code and any regulations related thereto, as may be amended from time to time.
All Options granted under the Plan shall be Nonqualified Stock Options unless the applicable Award
Agreement expressly states that the Option is intended to be an Incentive Stock Option. If an
Option is intended to be an Incentive Stock Option, and if for any reason such









 



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Option (or any portion thereof) shall not qualify as an Incentive Stock Option, then, to the
extent of such nonqualification, such Option (or portion thereof) shall be regarded as a
Nonqualified Stock Option appropriately granted under the Plan; provided that such Option
(or portion thereof) otherwise complies with the Plan’s requirements relating to Nonqualified Stock
Options.



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




          (iii) Vesting and Exercise. Each Option shall be vested and exercisable at such times,
in such manner and subject to such terms and conditions as the Committee may, in its sole and
plenary discretion, specify in the applicable Award Agreement or thereafter. Except as otherwise
specified by the Committee in the applicable Award Agreement, an Option may only be exercised to
the extent that it has already vested at the time of exercise. Except as otherwise specified by
the Committee in the Award Agreement, Options shall become vested and exercisable with respect to
one-fourth of the Shares subject to such Options on each of the first four anniversaries of the
date of grant. An Option shall be deemed to be exercised when written or electronic notice of such
exercise has been given to the Company in accordance with the terms of the Award by the person
entitled to exercise the Award and full payment pursuant to Section 6(b)(iv) for the Shares with
respect to which the Award is exercised has been received by the Company. Exercise of an Option in
any manner shall result in a decrease in the number of Shares that thereafter may be available for
sale under the Option and, except as expressly set forth in Section 4(c), in the number of Shares
that may be available for purposes of the Plan, by the number of Shares as to which the Option is
exercised. The Committee may impose such conditions with respect to the exercise of Options,
including, without limitation, any relating to the application of Federal or state securities laws,
as it may deem necessary or advisable.




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










 



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as of the date of such tender is at least equal to such aggregate Exercise Price and the
amount of any Federal, state, local or foreign income or employment taxes required to be withheld.





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



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





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



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




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




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










 



12





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



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




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





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



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




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










 



13




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





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




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




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




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









 



14


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




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




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










 



15




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




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





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




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




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









 



16



earned in the Performance Period, even if applicable Performance Goals have been attained.




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




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




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




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









 



17



     (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee is hereby authorized to make adjustments in the terms and conditions of,
and the criteria included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4(b) or the occurrence of a Change of Control)
affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate,
or of changes in applicable rules, rulings, regulations or other requirements of any governmental
body or securities exchange, accounting principles or law (i) whenever the Committee, in its sole
and plenary discretion, determines that such adjustments are appropriate or desirable, including,
without limitation, providing for a substitution or assumption of Awards, accelerating the
exercisability of, lapse of restrictions on, or termination of, Awards or providing for a period of
time for exercise prior to the occurrence of such event, (ii) if deemed appropriate or desirable by
the Committee, in its sole and plenary discretion, by providing for a cash payment to the holder of
an Award in consideration for the cancellation of such Award, including, in the case of an
outstanding Option or SAR, a cash payment to the holder of such Option or SAR in consideration for
the cancellation of such Option or SAR in an amount equal to the excess, if any, of the Fair Market
Value (as of a date specified by the Committee) of the Shares subject to such Option or SAR over
the aggregate Exercise Price of such Option or SAR and (iii) if deemed appropriate or desirable by
the Committee, in its sole and plenary discretion, by canceling and terminating any Option or SAR
having a per Share Exercise Price equal to, or in excess of, the Fair Market Value of a Share
subject to such Option or SAR without any payment or consideration therefor.




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




     SECTION 9. General Provisions. (a) Nontransferability. Except as otherwise
specified in the applicable Award Agreement, during the Participant’s lifetime each Award (and any
rights and obligations thereunder) shall be exercisable only by the Participant, or, if permissible
under applicable law, by the Participant’s legal guardian or









 



18



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




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




     (c) Share Certificates. All certificates for Shares or other securities of the
Company or any Affiliate delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the Committee may deem
advisable under the Plan, the applicable Award Agreement or the rules, regulations and other
requirements of the SEC, the NYSE or any other stock exchange or quotation system upon which such
Shares or other securities are then listed or reported and any applicable Federal or state laws,
and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.




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




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









 



19



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




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




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




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




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




     (k) Other Laws. The Committee may refuse to issue or transfer any Shares or other
consideration under an Award if, acting in its sole and plenary discretion, it determines that the
issuance or transfer of such Shares or such other consideration might violate any applicable law or
regulation or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and
any payment tendered to the Company by a Participant, other holder or beneficiary in connection
with the exercise of such Award









 



20



shall be promptly refunded to the relevant Participant, holder or beneficiary. Without
limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer
to sell securities of the Company, and no such offer shall be outstanding, unless and until the
Committee in its sole and plenary discretion has determined that any such offer, if made, would be
in compliance with all applicable requirements of the U.S. Federal and any other applicable
securities laws.




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




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




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




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




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









 



21



     SECTION 10. Term of the Plan. (a) Effective Date. The Plan shall be
effective as of the date of its adoption by the Board and approval by the Company’s stockholders;
provided, however, that no Incentive Stock Options may be granted under the Plan
unless it is approved by the Company’s stockholders within twelve (12) months before or after the
date the Plan is adopted by the Board.




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