exv10w1



 





Exhibit 10.1




WHITING PETROLEUM CORPORATION



2003 EQUITY INCENTIVE
PLAN

(as amended through February 23, 2007)




Section 1. Purpose




          The purpose of the Whiting Petroleum Corporation 2003 Equity Incentive Plan (the “Plan”) is to
promote the best interests of Whiting Petroleum Corporation (together with any successor thereto,
the “Company”) and its stockholders by providing key employees and non-employee directors of the
Company and its Affiliates (as defined below) with an opportunity to acquire a proprietary interest
in the Company. It is intended that the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company by those key employees who are
primarily responsible for shaping and carrying out the long-range plans of the Company and securing
the Company’s continued growth and financial success. In addition, by encouraging stock ownership
by directors who are not employees of the Company or its Affiliates, the Company seeks to attract
and retain on its Board of Directors persons of exceptional competence and to provide a further
incentive to serve as a director of the Company.




Section 2. Definitions




          As used in the Plan, the following terms shall have the respective meanings set forth below:




          (a) “Affiliate” shall mean any entity that, directly or through one or more intermediaries, is
controlled by, controls, or is under common control with, the Company.




          (b) “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Performance Share or Performance Unit granted under the Plan.




          (c) “Award Agreement” shall mean any written agreement, contract, or other instrument or
document evidencing any Award granted under the Plan.




          (d) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. Any
reference to a specific provision of the Code shall also be deemed a reference to any successor
provision thereto.




          (e) “Commission” shall mean the United States Securities and Exchange Commission or any
successor agency.




          (f) “Committee” shall mean a committee of the Board of Directors of the Company or a
subcommittee thereof designated by such Board to administer the Plan and comprised solely of not
less than two directors, each of whom will be a “non-employee director” within the meaning of Rule
16b-3 and, to the extent deemed appropriate by the Committee, each of whom will be an “outside
director” within the meaning of Section 162(m)(4)(C) of the Code; provided that the mere fact that
the Committee shall fail to qualify under the foregoing requirements shall not invalidate any Award
made by the Committee that is otherwise validly made under the Plan, unless the Committee is aware
at the time of the Award’s grant of the Committee’s failure to so qualify.




 









 








          (g) “Dividend Equivalent” shall mean a right, granted to a Participating Key Employee or a
Non-Employee Director under the Plan, to receive cash equal to the cash dividends paid with respect
to a specified number of Shares. Dividend Equivalents shall not be deemed to be Awards under the
Plan.




          (h) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.




          (i) “Excluded Items” shall mean any items which the Committee determines shall be excluded in
fixing Performance Goals, including, without limitation, any gains or losses from discontinued
operations, any extraordinary gains or losses and the effects of accounting changes.




          (j) “Fair Market Value” shall mean, with respect to any property (including, without
limitation, any Shares or other securities), the fair market value of such property determined by
such methods or procedures as shall be established from time to time by the Committee.




          (k) “Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that
is intended to meet the requirements of Section 422 of the Code.




          (l) “Key Employee” shall mean any officer or other key employee of the Company or of any
Affiliate who is responsible for or contributes to the management, growth or profitability of the
business of the Company or any Affiliate as determined by the Committee.




          (m) “Non-Employee Director” shall mean a director of the Company or any Affiliate who is not
an employee of the Company or any Affiliate.




          (n) “Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of the Plan
that is not intended to be an Incentive Stock Option.




          (o) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.




          (p) “Participating Key Employee” shall mean a Key Employee designated to be granted an Award
under the Plan.




          (q) “Performance Goals” shall mean each of, or a combination of one or more of, the following
(in all cases after excluding the impact of applicable Excluded Items):





	 	(i)	 	Return on equity;
	 
	 	(ii)	 	Return on investment;
	 
	 	(iii)	 	Return on net assets;
	 
	 	(iv)	 	Return on revenues;
	 
	 	(v)	 	Operating income;
	 
	 	(vi)	 	Performance value added (as defined by the
Committee at the time of selection);
	 
	 	(vii)	 	Pre-tax profits;
	 
	 	(viii)	 	Net income;




 









 












	 
	 	(ix)	 	Net earnings per Share;
	 
	 	(x)	 	Working capital as a percent of net revenues;
	 
	 	(xi)	 	Net cash provided by operating activities;
	 
	 	(xii)	 	Market price per Share;
	 
	 	(xiii)	 	Total stockholder return;
	 
	 	(xiv)	 	Cash flow or cash flow per share;
	 
	 	(xv)	 	Reserve value or reserve value per share;
	 
	 	(xvi)	 	Net asset value or net asset value per share;
	 
	 	(xvii)	 	Production volumes;
	 
	 	(xviii)	 	Reserve addition; and
	 
	 	(xix)	 	Finding and development costs.




measured in each case for the Performance Period (aa) for the Company on a consolidated basis, (bb)
for any one or more Affiliates or divisions of the Company, where appropriate, and/or (cc) for any
other business unit or units of the Company or any Affiliate, where appropriate, as defined by the
Committee at the time of selection; provided that it shall only be appropriate to measure net
earnings per Share and market price per Share on a consolidated basis.




          (r) “Performance Period” shall mean, in relation to Performance Shares or Performance Units,
any period for which a Performance Goal or Goals have been established; provided, however, that
such period shall not be less than one year.




          (s) “Performance Share” shall mean any right granted under Section 6(e) of the Plan that will
be paid out in cash, as a Share (which, in specified circumstances, may be a Share of Restricted
Stock) or as a Restricted Stock Unit, which right is contingent on the achievement of one or more
Performance Goals during a specified Performance Period.




          (t) “Performance Unit” shall mean any right granted under Section 6(e) of the Plan to receive
a designated dollar value amount in cash, Shares (which, in specified circumstances, may be a
designated dollar value amount of Shares of Restricted Stock) or Restricted Stock Units, which
right is contingent on the achievement of one or more Performance Goals during a specified
Performance Period.




          (u) “Person” shall mean any individual, corporation, partnership, association, joint-stock
company, trust, unincorporated organization, or government or political subdivision thereof.




          (v) “Released Securities” shall mean Shares of Restricted Stock with respect to which all
applicable restrictions have expired, lapsed, or been waived.




          (w) “Restricted Securities” shall mean Awards of Restricted Stock or other Awards under which
issued and outstanding Shares are held subject to certain restrictions.




 









 








          (x) “Restricted Stock” shall mean any Share granted under Section 6(c) of the Plan or, in
specified circumstances, a Share paid in connection with another Award, with such Share subject to
risk of forfeiture and restrictions on transfer or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service by the Key Employee or
Non-Employee Director or the achievement of performance or other objectives, as determined by the
Committee.




          (y) “Restricted Stock Unit” shall mean any right to receive Shares in the future granted under
Section 6(d) of the Plan or paid in connection with another Award, with such right subject to risk
of forfeiture and restrictions on transfer or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service by the Key Employee or
Non-Employee Director or the achievement of performance or other objectives, as determined by the
Committee.




          (z) “Rule 16b-3” shall mean Rule 16b-3 as promulgated by the Commission under the Exchange
Act, or any successor rule or regulation thereto.




          (aa) “Shares” shall mean shares of common stock of the Company, $.001 par value, and such
other securities or property as may become subject to Awards pursuant to an adjustment made under
Section 4(b) of the Plan.




          (bb) “Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.




Section 3. Administration




          The Plan shall be administered by the Committee; provided, however, that if at any time the
Committee shall not be in existence, the functions of the Committee as specified in the Plan shall
be exercised by a committee consisting of those members of the Board of Directors of the Company
who qualify as “non-employee directors” under Rule 16b-3 and as “outside directors” under Section
162(m)(4)(C) of the Code. To the extent permitted by applicable law, the Committee may delegate to
one or more executive officers of the Company any or all of the authority and responsibility of the
Committee with respect to the Plan, other than with respect to Persons who are subject to Section
16 of the Exchange Act. To the extent the Committee has so delegated to one or more executive
officers the authority and responsibility of the Committee, all references to the Committee herein
shall include such officer or officers.




          Subject to the terms of the Plan and without limitation by reason of enumeration, the
Committee shall have full discretionary power and authority to: (i) designate Participating Key
Employees and select Non-Employee Directors to be participants under the Plan; (ii) determine the
type or types of Awards to be granted to each Participating Key Employee and Non-Employee Director
under the Plan; (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 granted to
Participating Key Employees or Non-Employee Directors; (iv) determine the terms and conditions of
any Award granted to a Participating Key Employee or Non-Employee Director (provided, however, that
the exercise price of any Option shall not be less than 100% of the Fair Market Value of a Share on
the date of grant of such Option); (v) determine whether, to what extent, and under what
circumstances Awards granted to Participating Key Employees or Non-Employee Directors may be
settled or exercised in cash, Shares, other securities, other Awards, or other property, and the
method or methods by which Awards may be settled, exercised, cancelled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash, Shares, other Awards,
and other amounts payable with respect to an Award granted to Participating Key Employees of
Non-Employee Directors under the Plan shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan (including, without limitation, any Award
Agreement); (viii) 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; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for the administration of the
Plan. 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 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 Participating Key Employee, any
Non-Employee Director, any holder or beneficiary of any Award, any stockholder, and any employee of
the Company or of any Affiliate.




Section 4. Shares Available for Award




          (a) Shares Available. Subject to adjustment as provided in 0:





               (i) Number of Shares Available. The number of Shares with respect to which Awards may
be granted under the Plan shall be 2,000,000 Shares. If, after the effective date of the
Plan, any Shares covered by an Award granted under the Plan, or to which any Award relates,
are forfeited or if an Award otherwise terminates, expires or is cancelled prior to the
delivery of all of the Shares or of other consideration issuable or payable pursuant to such
Award, then the number of Shares counted against the number of Shares available under the
Plan in connection with the grant of such Award, to the extent of any such forfeiture,
termination, expiration or cancellation, shall again be available for granting of additional
Awards under the Plan.




               (ii) Limitations on Awards to Individual Participants. No Participating Key Employee
shall be granted, during any calendar year, Options for more than 300,000 Shares, Stock
Appreciation Rights with respect to more than 300,000 Shares, more than 150,000 Shares of
Restricted Stock, more than 150,000 Restricted Stock Units, more than 150,000 Performance
Shares nor more than 150,000 Performance Units under the Plan. In all cases, determinations
under this 0 shall be made in a manner that is consistent with the exemption for
performance-based compensation provided by Section 162(m) of the Code and any regulations
promulgated thereunder.




               (iii) Accounting for Awards. The number of Shares covered by an Award under the Plan,
or to which such Award relates, shall be counted on the date of grant of such Award against
the number of Shares available for granting Awards under the Plan.




               (iv) 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.



          (b) Adjustments. In the event that the Committee shall determine 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 to be appropriate, then the Committee may, in such manner as it may
deem equitable, adjust any or all of (i) the number and type of Shares subject to the Plan and
which thereafter may be made the subject of Awards under the Plan, (ii) the number and type of
Shares subject to the individual participant limits of Section 4(a)(ii), (iii) the number and type
of Shares subject to outstanding Awards, and (iv) the grant, purchase, or exercise price with
respect to any Award to reflect such transaction or event; or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award in exchange for cancellation of
such Award or in lieu of any or all of the foregoing adjustments; provided, however, in each case,
that with respect to Awards of Incentive Stock Options no




 









 







such adjustment shall be authorized to the extent that such authority would cause the Plan to
violate Section 422(b) of the Code; and provided further that the number of Shares subject to any
Award payable or denominated in Shares shall always be a whole number.




Section 5. Eligibility




          The Committee may designate any Key Employee as a Participating Key Employee. All
Non-Employee Directors shall be eligible to receive, at the discretion of the Committee, Awards of
Non-Qualified Stock Options pursuant to Section 6(a), Restricted Stock pursuant to Section 6(c) and
Restricted Stock Units pursuant to Section 6(d).



Section 6. Awards




          (a) Option Awards. The Committee may grant Options to Key Employees and Non-Employee Directors with the terms and conditions as set forth below and with such additional terms and conditions, in either case not
inconsistent with the provisions of the Plan, as the committee shall
determine.




               (i) Type of Option. The Committee shall determine whether an Option granted to a
Participating Key Employee is to be an Incentive Stock Option or Non-Qualified Stock Option;
provided, however, that Incentive Stock Options may be granted only to Key Employees of the
Company, a parent corporation (within the meaning of Code Section 424(e)) or a subsidiary
corporation (within the meaning of Code Section 424(f)). All Options granted to
Non-Employee Directors shall be Non-Qualified Stock Options.




               (ii) Exercise Price. The exercise price per Share of an Option granted pursuant to
this 0 shall be determined by the Committee; provided, however, that such exercise price
shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such
Option.




               (iii) Option Term. The term of each Option shall be fixed by the Committee; provided,
however, that in no event shall the term of any Option exceed a period of ten years from the
date of its grant.




               (iv) Exercisability and Method of Exercise. An Option shall become exercisable in such
manner and within such period or periods and in such installments or otherwise as shall be
determined by the Committee; provided, however, that no Option may vest and become
exercisable within a period that is less than one year from the date of grant of such Option
(subject to acceleration of vesting, to the extent permitted by the Committee, in the event
of the Participating Key Employee’s or Non-Employee Director’s death, disability, retirement
or involuntary termination or in the event of a change in control of the Company (as defined
by the Committee)). The Committee also shall determine the method or methods by which, and
the form or forms, including, without limitation, cash, Shares, other securities, other
Awards, or other property, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price, in which payment of the exercise price
with respect to any Option may be made or deemed to have been made.




               (v) Incentive Stock Options. The terms of any Incentive Stock Option granted to a Key
Employee under the Plan shall comply in all respects with the provisions of Section 422 of
the Code and any regulations promulgated thereunder. Notwithstanding any provision in the
Plan to the contrary, no Incentive Stock Option may be granted hereunder after the tenth
anniversary of the adoption of the Plan by the Board of Directors.



 









 





          (b) Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights to Key
Employees. Non-Employee Directors are not eligible to be granted Stock Appreciation Rights under
the Plan. Subject to the terms of the Plan and any applicable Award Agreement, a Stock
Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive,
upon exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise
over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which
shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock
Appreciation Right. Subject to the terms of the Plan, the grant price, term, methods of exercise,
methods of settlement (including whether the Participating Key Employee will be paid in cash,
Shares, other securities, other Awards, or other property, or any combination thereof), and any
other terms and conditions of any Stock Appreciation Right shall be determined by the Committee.
The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.




          (c) Restricted Stock Awards.





               (i) Issuance. The Committee may grant Awards of Restricted Stock to Key Employees and
Non-Employee Directors.




               (ii) Restrictions. Shares of Restricted Stock granted to Participating Key Employees
and Non-Employee Directors shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a Share of Restricted
Stock or the right to receive any dividend or other right or property), which restrictions
may lapse separately or in combination at such time or times, in such installments or
otherwise, as the Committee may deem appropriate.




               (iii) Registration. Any Restricted Stock granted under the Plan to a Participating Key
Employee or Non-Employee Director may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in respect of
Shares of Restricted Stock granted under the Plan to a Participating Key Employee or
Non-Employee Director, such certificate shall be registered in the name of the Participating
Key Employee or Non-Employee Director and shall bear an appropriate legend (as determined by
the Committee) referring to the terms, conditions, and restrictions applicable to such
Restricted Stock.




               (iv) Payment of Restricted Stock. At the end of the applicable restriction period
relating to Restricted Stock granted to a Participating Key Employee or Non-Employee
Director, one or more stock certificates for the appropriate number of Shares, free of
restrictions imposed under the Plan, shall be delivered to the Participating Key Employee or
Non-Employee Director, or, if the Participating Key Employee or Non-Employee Director
received stock certificates representing the Restricted Stock at the time of grant, the
legends placed on such certificates shall be removed.




               (v) Forfeiture. Except as otherwise determined by the Committee, upon termination of
employment of a Participating Key Employee or service as a director of a Non-Employee
Director (as determined under criteria established by the Committee) for any reason during
the applicable restriction period, all Shares of Restricted Stock still subject to
restriction shall be forfeited by the Participating Key Employee or Non-Employee Director;
provided, however, that the Committee may, when it finds that a waiver would be in the best
interests of the Company, waive in whole or in part any or all remaining restrictions with
respect to Shares of Restricted Stock held by a Participating Key Employee or Non-Employee
Director.



 









 





          (d) Restricted Stock Units.





               (i) Issuance. The Committee may grant Awards of Restricted Stock Units to Key
Employees or Non-Employee Directors.




               (ii) Restrictions. Restricted Stock Units granted to Participating Key Employees or
Non-Employee Directors shall be subject to such restrictions as the Committee may impose,
which restrictions may lapse separately or in combination at such time or times, in such
installments or otherwise, as the Committee may deem appropriate.




               (iii) Payment of Shares. At the end of the applicable restriction period relating to
Restricted Stock Units granted to a Participating Key Employee or Non-Employee Director, one
or more stock certificates for the number of Shares equal to the corresponding number of
Restricted Stock Units, free of restrictions imposed under the Plan, shall be delivered to
the Participating Key Employee or Non-Employee Director.




               (iv) Forfeiture. Except as otherwise determined by the Committee, upon termination of
employment of a Participating Key Employee or service as a director of a Non-Employee
Director (as determined under criteria established by the Committee) for any reason during
the applicable restriction period, all unvested Restricted Stock Units shall be forfeited by
the Participating Key Employee or Non-Employee Director; provided, however, that the
Committee may, when it finds that a waiver would be in the best interests of the Company,
waive in whole or in part any or all remaining restrictions with respect to Restricted Stock
Units held by a Participating Key Employee or Non-Employee Director.



          (e) Performance Shares and Performance Units.





               (i) Issuance. The Committee may grant Awards of Performance Shares and/or Performance
Units to Key Employees. Non-Employee Directors are not eligible to be granted Performance
Shares or Performance Units under the Plan.




               (ii) Performance Goals and Other Terms. The Committee shall determine the Performance
Period, the Performance Goal or Goals (and the performance level or levels related thereto)
to be achieved during any Performance Period, the proportion of payments, if any, to be made
for performance between the minimum and full performance levels for any Performance Goal
and, if applicable, the relative percentage weighting given to each of the selected
Performance Goals. The Committee shall also determine the restrictions applicable to Shares
of Restricted Stock or Restricted Stock Units received upon payment of Performance Shares or
Performance Units if Performance Shares or Performance Units are paid in such manner, and
any other terms, conditions and rights relating to a grant of Performance Shares or
Performance Units. The Committee shall have sole discretion to choose among the selected
Performance Goals set forth in 0. Subject to stockholder approval to the extent required to
qualify the Award for the performance-based exemption provided by Section 162(m) of the
Code, the Committee shall have sole discretion to choose Performance Goals in addition to
those set forth in 0. Notwithstanding the foregoing, in the event the Committee determines
it is advisable to grant Performance Shares or Performance Units which do not qualify for
the performance-based exemption under Section 162(m) of the Code, the Committee may make
such grants without satisfying the requirements thereof.




               (iii) No Voting Rights. Participating Key Employees shall have no voting rights with
respect to Performance Shares or Shares underlying Performance Units held by them during the
applicable Performance Period.



 









 






               (iv) Payment. As soon as is reasonably practicable following the end of the applicable
Performance Period, and subject to the Committee certifying in writing as to the
satisfaction of the requisite Performance Goal or Goals if such certification is required in
order to qualify the Award for the performance-based exemption provided by Section 162(m) of
the Code, payment of earned Performance Shares and/or Performance Units shall be made. The
Committee, in its sole discretion, may pay earned Performance Shares and Performance Units
in the form of cash, Shares (which may be Shares of Restricted Stock), Restricted Stock
Units or a combination of cash, Shares (which may be Shares of Restricted Stock) and/or
Restricted Stock Units, which have an aggregate Fair Market Value equal to the value of the
earned Performance Shares and Shares underlying earned Performance Units at the close of the
applicable Performance Period. Any Shares of Restricted Stock payable in connection with
Performance Shares or Performance Units shall, pending the expiration, lapse, or waiver of
the applicable restrictions, be evidenced in the manner as set forth in 0 hereof.



          (f) General.





               (i) No Consideration for Awards. Awards shall be granted to Participating Key
Employees and Non-Employee Directors for no cash consideration unless otherwise determined
by the Committee.




               (ii) Award Agreements. Each Award granted under the Plan shall be evidenced by an
Award Agreement in such form (consistent with the terms of the Plan) as shall have been
approved by the Committee.




               (iii) Awards May Be Granted Separately or Together. Awards to Participating Key
Employees under the Plan may be granted either alone or in addition to, in tandem with, or
in substitution for any other Award or any award granted under any other plan of the Company
or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in
addition to or in tandem with awards granted under any other plan of the Company or any
Affiliate, may be granted either at the same time as or at a different time from the grant
of such other Awards or awards.




               (iv) Forms of Payment Under Awards. Subject to the terms of the Plan and of any
applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate
upon the grant, exercise, or payment of an Award to a Participating Key Employee or
Non-Employee Director may be made in such form or forms as the Committee shall determine,
and may be made in a single payment or transfer, in installments, or on a deferred basis, in
each case in accordance with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the payment or crediting of
interest on installment or deferred payments.




               (v) Limits on Transfer of Awards. Except as otherwise provided by the Committee, no
Award (other than Released Securities), and no right under any such Award, shall be
assignable, alienable, saleable, or transferable by a Participating Key Employee or
Non-Employee Director otherwise than by will or by the laws of descent and distribution (or,
in the case of an Award of Restricted Securities, to the Company); provided, however, that a
Participating Key Employee or Non-Employee Director at the discretion of the Committee may
be entitled, in the manner established by the Committee, to designate a beneficiary or
beneficiaries to exercise his or her rights, and to receive any property distributable, with
respect to any Award upon the death of the Participating Key Employee or Non-Employee
Director, as the case may be. Each Award, and each right under any Award, shall be
exercisable, during the lifetime of the Participating Key Employee or Non-Employee Director,
only by such individual or, if permissible under applicable law, by such



 









 







individual’s guardian or legal representative. Except as otherwise provided by the
Committee, no Award (other than Released Securities), and no right under any such Award, may
be pledged, alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment, or encumbrance thereof shall be void and unenforceable against the
Company or any Affiliate.




               (vi) Term of Awards. Except as otherwise provided in the Plan, the term of each Award
shall be for such period as may be determined by the Committee.




               (vii) Share Certificates; Representation. In addition to the restrictions imposed
pursuant to 0 and 0 hereof, all certificates for Shares 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 or the rules, regulations,
and other requirements of the Commission, any stock exchange or other market upon which such
Shares are then listed or traded, and any applicable federal or state securities laws, and
the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions. The Committee may require each Participating
Key Employee, Non-Employee Director or other Person who acquires Shares under the Plan by
means of an Award originally made to a Participating Key Employee or Non-Employee Director
to represent to the Company in writing that such Participating Key Employee, Non-Employee
Director or other Person is acquiring the Shares without a view to the distribution thereof.



          (g) Dividend Equivalents. In addition to Awards granted under the Plan, the Committee may
grant Dividend Equivalents to Participating Key Employees and Non-Employee Directors, entitling the
Participating Key Employees and Non-Employee Directors to receive cash equal to cash dividends paid
with respect to a specified number of Shares. Dividend Equivalents may only be granted in
connection with an Award granted to the Participating Key Employee or Non-Employee Director under
the Plan. The Committee may provide that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in such investment vehicles as determined by the
Committee, subject to such restrictions and risks of forfeiture as the Committee may impose.




          (h) No Repricing of Options. Except adjustments made pursuant to 0 or adjustments made with
prior approval of the Company’s stockholders, the Committee shall not have the authority to effect
(i) the repricing of any outstanding Options under the Plan or (ii) the modification of an Option
or entering into a transaction or series of transactions which modification or transaction(s) would
be deemed to constitute a repricing of an Option pursuant to Financial Accounting Standards Board
Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, March
2000, as amended or supplemented from time to time. The provisions of this 0 cannot be amended
unless the amendment is approved by the Company’s stockholders.




Section 7. Amendment and Termination of the Plan; Correction of Defects and Omissions




          (a) Amendments to and Termination of the Plan. Except as otherwise provided herein, the Board
of Directors of the Company may at any time amend, alter, suspend, discontinue, or terminate the
Plan; provided, however, that stockholder approval of any amendment of the Plan shall also be
obtained (i) if such amendment (A) increases the number of Shares with respect to which Awards may
be granted under the Plan (other than increases related to adjustments made as provided in 0
hereof), (B) expands the class of persons eligible to participate under the Plan or (C) otherwise
increases in any material respect the benefits payable under the Plan; or (ii) if otherwise
required by (A) the Code or any rules promulgated thereunder (in order to allow for Incentive Stock
Options to be granted under the Plan), or (B) the listing requirements of the New York Stock
Exchange or any principal securities exchange or market on which the Shares are then traded (in
order to maintain the listing of the Shares thereon). Termination of the




 









 







Plan shall not affect the rights of Participating Key Employees or Non-Employee Directors with
respect to Awards previously granted to them, and all unexpired Awards shall continue in force and
effect after termination of the Plan except as they may lapse or be terminated by their own terms
and conditions.




          (b) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any
defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Award
Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect.




Section 8. General Provisions




          (a) No Rights to Awards. No Key Employee, Participating Key Employee, Non-Employee Director
or other Person shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Key Employees, Participating Key Employees, Non-Employee
Directors or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards
need not be the same with respect to each Participating Key Employee or Non-Employee Director.




          (b) Withholding. No later than the date as of which tax withholding is first required with
respect to any Award under the Plan, the Participating Key Employee shall pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of, any federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations arising with respect to Awards to
Participating Key Employees under the Plan may be settled with Shares (other than Restricted
Securities), including Shares that are part of, or are received upon exercise of, the Award that
gives rise to the withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and any Affiliate shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment otherwise due to the
Participating Key Employee. The Committee may establish such procedures as it deems appropriate
for the settling of withholding obligations with Shares, including, without limitation, the
establishment of such procedures as may be necessary to satisfy the requirements of Rule 16b-3.




          (c) 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 or additional compensation
arrangements, and such arrangements may be either generally applicable or applicable only in
specific cases.




          (d) Rights and Status of Recipients of Awards. The grant of an Award shall not be construed
as giving a Participating Key Employee the right to be retained in the employ of the Company or any
Affiliate. Further, the Company or any Affiliate may at any time dismiss a Participating Key
Employee from employment, free from any liability, or any claim under the Plan, unless otherwise
expressly provided in the Plan or in any Award Agreement. The grant of an Award to a Non-Employee
Director pursuant to Section 6(a) of the Plan shall confer no right on such Non-Employee Director
to continue as a director of the Company or any Affiliate. Except for rights accorded under the
Plan and under any applicable Award Agreement, Participating Key Employees and Non-Employee
Directors shall have no rights as holders of Shares as a result of the granting of Awards
hereunder.




          (e) No Compensation for Benefit Plans. No Award payable under this Plan shall be deemed
salary or compensation for the purpose of computing benefits under any benefit plan or other
arrangement of the Company or any Affiliate for the benefit of its employees or directors unless
the Company or appropriate Affiliate shall determine otherwise.




          (f) Approval of Material Terms of Performance Goals. Notwithstanding anything herein to the
contrary, if so determined by the Board of Directors, the Plan provisions specifying the material




 









 







terms of the Plan’s performance goals (within the meaning of Code Section 162(m)) shall be
submitted to the stockholders of the Company for re-approval no later than the first stockholder
meeting that occurs in the fifth year following the year in which stockholders previously approved
such Plan provisions.




          (g) Unfunded Status of the Plan. Unless otherwise determined by the Committee, the Plan shall
be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds.
The Plan shall not establish any fiduciary relationship between the Company and any Participating
Key Employee, Non-Employee Director or other Person. To the extent any Person holds any right by
virtue of a grant under the Plan, such right (unless otherwise determined by the Committee) shall
be no greater than the right of a general unsecured creditor of the Company.




          (h) Governing Law. The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the internal laws of the
State of Delaware, without reference to conflict of law principles thereof, and applicable federal
law.




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




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




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




Section 9. Effective Date of the Plan




          The Plan shall be effective on the day immediately following its approval by the sole
stockholder of the Company provided that such approval is obtained within twelve months following
the date of adoption of the Plan by the Board of Directors of the Company.