exv10w57



 





Exhibit 10.57




NEWPARK RESOURCES, INC.




2006 EQUITY INCENTIVE PLAN




1. Purpose.




          The Newpark Resources, Inc. 2006 Equity Incentive Plan is intended to assist Newpark
Resources, Inc., a Delaware corporation (the “Company”), in attracting, retaining and
motivating designated Employees of the Company and its Subsidiaries and to increase their interest
in the success of the Company in order to promote the Company’s long-term interests. The Plan is
designed to meet this intent by providing eligible Employees with a proprietary interest in
pursuing the long-term growth, profitability and financial success of the Company.




2. Definitions.




          In addition to the terms defined elsewhere in the Plan, Exhibit A, which is
incorporated by reference, defines terms used in the Plan and sets forth certain operational rules
related to those terms.




     3. Administration of the Plan.



          3.1 General. The Plan shall be administered by the Compensation Committee. Each member of the Compensation
Committee shall be a “non-employee director” as that term is defined in Rule 16b-3, an “outside
director” within the meaning of Section 162(m) and an “independent director” under the corporate
governance rules of any stock exchange or similar regulatory authority on which the Common Stock is
then listed, but no action of the Committee shall be invalid if this requirement is not met. The
Compensation Committee shall select one of its members as Chairman and shall act by vote of a
majority of the members present at a meeting at which a quorum is present or by unanimous written
consent. A majority of the members of the Compensation Committee shall constitute a quorum. The
Compensation Committee shall be governed by the provisions of the Company’s Bylaws and of Delaware
law applicable to the Board of Directors, except as otherwise provided herein or determined by the
Board of Directors. The Committee’s decisions and determinations under the Plan need not be
uniform and may be made selectively among Participants, whether or not the Participants are
similarly situated.




          3.2 Authority of the Compensation Committee. The Compensation Committee
shall have full discretionary power and authority, subject to the
general purposes, terms and conditions of the Plan, to implement, carry out and administer the
Plan. Without limiting the generality of the foregoing, the Compensation Committee shall have the
authority to:




          (a) interpret and administrator the Plan, any Award Agreement and any other agreement or
document executed pursuant to the Plan;




          (b) adopt, amend, modify or rescind rules, procedures and forms relating to the Plan;




          (c) select persons to receive Awards;




 









 








          (d) determine the number of Shares subject to Awards, the Fair Market Value of the Common
Stock and the other terms and conditions of each Award (which need not be uniform), including,
without limitation, the type of Award to be granted, vesting schedules, forfeiture restrictions and
other terms and conditions relating to the exercisability of Awards, and all other provisions of
each Award Agreement;




          (e) determine whether Awards will be granted singly, in combination, or in tandem with, in
replacement of, or as alternatives to, other Awards under the Plan or any other incentive or
compensation plan of the Company or any Subsidiary;




          (f) grant waivers of Plan or Award conditions and remove or adjust any restrictions or
conditions upon Awards, including accelerating or otherwise modifying the date on which any Award
becomes vested, exercisable or transferable and extending the term of any Award (subject to the
maximum term limitations set forth in the Plan), including extending the period following the
termination of a Participant’s employment during which any Award may remain outstanding or be
exercised;




          (g) with the consent of the Optionee, amend or terminate any outstanding Award Agreement;




          (h) correct any defect, supply any omission or reconcile any inconsistency in the Plan, any
Award or any Award Agreement;




          (i) determine whether an Award has been earned; and




          (j) make any other determination and take any other action that the Compensation Committee
deems necessary or desirable for administration of the Plan.




All decisions, determinations and other actions of the Compensation Committee made or taken in
accordance with the terms of the Plan shall be final and conclusive and binding upon all parties
having an interest therein.



          3.3 Delegation of Authority. Any of the powers and
responsibilities of the Compensation Committee may delegated to any
subcommittee, in which case the acts of the subcommittee shall be deemed to be acts of the
Compensation Committee hereunder. In addition, the Compensation Committee may delegate to
one or more officers or Employees of the Company or any Subsidiary the authority, subject to such
terms as the Compensation Committee shall determine, to perform such functions, including
administrative functions, as the Compensation Committee may determine, provided that in no case
shall any such officer or Employee be authorized to take any action that would (a) result in the
loss of an exemption under Rule 16b-3 for Awards granted to Section 16 Insiders, (b) cause Awards
intended to qualify as “performance-based compensation” under Section 162(m) to fail to so qualify,
or (c) be inconsistent with Section 157 and other applicable provisions of the Delaware General
Corporation Law. Any action taken by any such officer or Employee within the scope of the
authority delegated by the Compensation Committee shall be deemed for all purposes to have been
taken by the Compensation Committee, and, except as otherwise specifically provided, references in
the Plan to the Compensation Committee shall include any such officer or Employee. The
Compensation Committee and, to the extent it so provides, any subcommittee,




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shall have sole authority to determine whether to review any actions or interpretations of any such officer or
Employee, and if the Compensation Committee shall decide to conduct such a review, any such actions
or interpretations of any such officer or Employee shall be subject to approval, disapproval or
modification by the Compensation Committee.



          3.4 Monitoring Awards. Notwithstanding any delegation of authority by the
Compensation Committee, it shall maintain control of the operation of the Plan. At least annually,
the Compensation Committee, in conjunction with the Audit Committee of the Board of Directors of
the Company, shall conduct or cause the conduct of an audit of the operation of the Plan to verify
that the Plan has been operated and Awards have been documented and maintained by the officers of
the Company in accordance with the directions of the Compensation Committee. Without limiting the
generality of the foregoing, one of the purposes of such an audit will be to determine that the
executed Award Agreements are consistent with the Awards made by the Committee and properly reflect
the names of the Participants to whom such Awards were granted, the applicable Dates of Grant,
vesting provisions and expiration dates, the type and quantity of Awards granted to each
Participant and, if applicable, the applicable exercise prices.  




          3.5 Limitation on Liability.




               3.5.1 The Compensation Committee may employ attorneys, consultants, accountants, agents and
other persons, and the Compensation Committee shall be entitled, in good faith, to rely and act
upon the advice, opinions and valuations of any such persons. In addition, the Compensation
Committee shall be entitled, in good faith, to rely and act upon any report or other information
furnished to it by any officer, director or Employee of the Company.




               3.5.2 No member of the Compensation Committee, nor any person acting pursuant to authority
delegated by the Compensation Committee, nor any officer, director or Employee of the Company
acting at the direction or on behalf of the Compensation Committee, shall be liable for any action,
omission or determination relating to the Plan, and the Company shall, to the fullest extent
permitted by law, indemnify and hold harmless each member of the Compensation Committee, each
person acting pursuant to authority delegated by the Compensation Committee,
and each other officer, director or Employee of the Company to whom
any duty or power relating to the administration or interpretation of the Plan has been delegated
against any cost, expense (including counsel fees), liability or other pecuniary loss (including
any sum paid in settlement of a claim with the approval of the Compensation Committee) arising out
of any action, omission or determination relating to the Plan, unless, in either case, such action,
omission or determination was taken or made by such member, director, Employee or other person in
bad faith and without reasonable belief that it was in the best interests of the Company.




     4. Number of Shares Issuable in Connection with Awards.



          4.1 Shares Subject to the Plan. The maximum number of Shares that may be issued in connection with Awards granted under the Plan
is 2,000,000, and the number of Shares that are subject to Awards outstanding at any one time under
the Plan may not exceed the number of Shares that then remain available for issuance under the
Plan. The maximum number




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of Shares that may be issued in connection with Incentive Stock Options
granted under the Plan is 2,000,000. The Company at all times shall reserve and keep available
sufficient Shares to satisfy the requirements of the Plan. Shares issued under the Plan may be
either authorized and unissued shares or treasury shares.



          4.2 Share Counting Rules. For purposes of Section 4.1, the following Shares shall not be considered to have been issued
under the Plan: (a) Shares remaining under an Award that terminates without having been exercised
in full; (b) Shares that have been forfeited in accordance with the terms of the applicable Award;
and (c) Shares withheld, in satisfaction of the grant or exercise price or tax withholding
requirements, from Shares that would otherwise have been delivered pursuant to an Award. In
addition, to the extent permitted by Applicable Laws, Shares subject to Awards issued in assumption
of, or in substitution for, any outstanding awards of any entity acquired in any form of business
combination by the Company or any of its Subsidiaries shall not be counted against the Shares
available for issuance pursuant to the Plan.




          4.3 Individual Award Limits. The maximum number of Shares that may be covered by Options and Stock Appreciation Rights (in
the aggregate) granted under the Plan to any single Participant in any calendar year shall not
exceed 200,000, and the maximum number of Shares that may be covered by all other Awards (in the
aggregate) granted under the Plan to any single Participant in any calendar year shall not exceed
100,000. This limitation shall be applied and construed consistently with Section 162(m).




          4.4 Adjustments. The limits provided for in this Section 4 shall be subject to adjustment as provided in Section
15.




     5. Eligibility and Participation.



          The Compensation Committee will select Participants from among those Employees who, in the
opinion of the Compensation Committee, are in a position to make significant contributions to the
long-term performance and growth of the Company and its Subsidiaries. In addition, the
Compensation Committee may grant Awards in connection with the engagement of an Employee who is
expected to make significant contributions to the long-term performance and growth of the Company,
provided that a prospective Employee may not receive any payment or exercise any right relating to
an Award until such person’s employment with the Company has commenced. An Employee on leave of
absence may be considered as still in the employ of the Company for purposes of eligibility for
participation in the Plan, if so determined by the Compensation Committee. Directors of the
Company and its Subsidiaries who are not also employees of the Company or a Subsidiary shall not be
eligible to receive Awards under the Plan.




     6. Award Agreements.



          Each Award granted under the Plan shall be evidenced by an Award Agreement in a form approved
by the Compensation Committee. Each Award Agreement shall be subject to all applicable terms and
conditions of the Plan, shall include such terms and conditions as the Compensation Committee deems
appropriate, consistent with the provisions of the Plan, and shall be executed by the Participant
and a person designated by the Compensation Committee.




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     7. Options.



          7.1 Grant of Options. The Compensation Committee may grant Options in such amounts, at such times and to such
Employees as the Compensation Committee, in its discretion, may determine in accordance with the
eligibility criteria set forth in Section 5. The Compensation Committee shall designate at the
time of grant whether the Option is intended to constitute an Incentive Stock Option or a
Nonstatutory Option.




          7.2 Option Price. The Option Price of the Shares subject to each Option shall be determined by the Compensation
Committee, but shall not be less than the Fair Market Value of the Common Stock on the Date of
Grant, except in the case of replacement or substitute Options issued by the Company in connection
with an acquisition or other corporate transaction.




          7.3 Option Period. The Award Agreement shall specify the term of each Option. The term shall commence on the Date
of Grant and shall be 10 years or such shorter period as is determined by the Compensation
Committee. Each Option shall provide that it is exercisable over its term from the Date of Grant
or over time in such periodic installments, or based on the satisfaction of such criteria
(including, without limitation, upon the satisfaction of Performance Criteria), as the Committee in
its discretion may determine. The vesting provisions for Options granted under the Plan need not
be uniform. Unless the Committee otherwise determines at the time of grant, if an Option is
subject to vesting in periodic installments and a Participant shall not in any period purchase all
of the Shares that the Participant is entitled to purchase in such period, the Participant may
purchase all or any part of such Shares at any time prior to the expiration of the Option.




          7.4 Exercise of Options. Each Option may be exercised in whole or in part (but not as to fractional shares) by the
delivery of an executed Notice of Exercise in the form prescribed from time to time by the
Compensation Committee, accompanied by payment of the Option Price and any amounts required to be
withheld for tax purposes under Section 14. If an Option is exercised by any person other than the
Participant, the Compensation Committee may require satisfactory evidence that the person
exercising the Option has the right to do so. The Compensation Committee may require any partial
exercise of an Option to equal or exceed a specified minimum number of Shares.




          7.5 Payment of Exercise Price. The Option Price shall be paid in full in cash or by check acceptable to the Compensation
Committee or, if and to the extent permitted by the Compensation Committee, (a) through the
delivery of Shares which have been outstanding for at least six months or such other minimum period
as may be required by applicable accounting rules to avoid a charge to the Company’s earnings for
financial reporting purposes (unless the Compensation Committee approves a shorter period) and
which have a Fair Market Value on the date the Option is exercised equal to the Option Price, (b)
to the extent permitted by Applicable Laws, by a Cashless Exercise, or (c) by any combination of
the foregoing permissible forms of payment.




          7.6 Employment Requirements. Unless otherwise provided by the Compensation Committee and except as otherwise provided in
Section 7.7, an Option may not be exercised unless from the Date of Grant to the date of exercise
the Participant remains





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continuously in the employ of the Company. The Compensation Committee
shall determine, in its discretion in the particular case and subject to any requirements of
Applicable Laws, whether and to what the extent the period of continuous employment shall be deemed
to include any period in which the Participant is on leave of absence with the consent of the
Company. Unless the Compensation Committee expressly provides otherwise, a Participant’s service
as an Employee with the Company will be deemed to have ceased upon termination of the Participant’s
employment with the Company and its Subsidiaries (whether or not the Participant continues in the
service of the Company or its Subsidiaries in some capacity other than that of an Employee).



          7.7 Exercise of Options on Termination of Employment.




               7.7.1 Unless otherwise provided by the Compensation Committee, upon the termination of a
Participant’s employment with the Company and its Subsidiaries by reason of death or Disability,
(a) all Options then held by the Participant, to the extent exercisable on the date of termination
of employment, shall remain in full force and effect and may be exercised pursuant to the
provisions thereof at any time until the earlier of the end of the fixed term thereof and the
expiration of 12 months following termination of the Participant’s employment, and (b) all Options
then held by the Participant, to the extent not then presently exercisable, shall terminate as of
the date of such termination of employment and shall not be exercisable thereafter.




               7.7.2 Unless otherwise provided by the Compensation Committee, upon the termination of the
Participant’s employment with the Company and its Subsidiaries for any reason other than the
reasons set forth in Section 7.7.1 or a termination for Cause, (a) all Options then held by the
Participant, to the extent exercisable on the date of termination of employment, shall remain in
full force and effect and may be exercised pursuant to the provisions thereof at any time until the
earlier of the end of the fixed term thereof and the expiration of 90 days following termination of
the Participant’s employment (except that the 90-day period shall be extended to 12 months from the
date of termination if the Participant shall die during such 90-day period), and (b) all Options
then held by the Participant, to the extent not then presently exercisable, shall terminate as of
the date of such termination of employment and shall not be exercisable thereafter.




               7.7.3 Unless otherwise provided by the Compensation Committee, in the event of a Participant’s
termination for Cause, all Options held by the Participant, whether vested or not, shall terminate
concurrently with the first discovery by the Company of any reason for the Participant’s
termination for Cause and shall not be exercisable thereafter. If an Participant’s employment with
the Company or any Subsidiary is suspended pending an investigation of whether there shall be a
termination for Cause, all of the Participant’s rights under any Options then held by the
Participant, including, without limitation, the right to exercise such Options, shall likewise be
suspended during such period of investigation.




          7.8 Incentive Stock Options. Incentive Stock Options shall be subject to the following additional provisions:




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               7.8.1 The aggregate Fair Market Value (determined as of the Date of Grant) of the Common Stock
with respect to which Incentive Stock Options are exercisable for the first time by any individual
Participant during any one calendar year (under all plans of the Company and any parent or
Subsidiary) may not exceed the maximum amount permitted under Section 422 of the Code (currently
$100,000). To the extent any Incentive Stock Option would exceed this limit, the portion of the
Option in excess of such limit shall be treated as a Non-Qualified Stock Option for all purposes.
The provisions of this Section 7.8.1 shall be construed and applied in accordance with
Section 422(d) of the Code and the regulations promulgated thereunder.




               7.8.2 No Incentive Stock Option may be granted to a Participant if, at the time of the
proposed grant, the Participant owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any parent or Subsidiary of the Company, unless
(a) the Option Price is at least 110% of the Fair Market Value of a share of Common Stock on the
Date of Grant, and (bi) the Incentive Stock Option is not exercisable after the expiration of five
years from the Date of Grant.




               7.8.3 If a Participant sells or otherwise disposes of any Shares acquired pursuant to the
exercise of an Incentive Stock Option on or before the later of (a) the date two years after the
Date of Grant of the Incentive Stock Option, and (b) the date one year after the exercise of the
Incentive Stock Option (in either case, a “Disqualifying Disposition”), the Participant
shall notify the Company in writing of the Disqualifying Disposition within 10 days of the date
thereof. In the event of a Disqualifying Disposition, the Option will not qualify for incentive
stock option treatment.




               7.8.4 If the Compensation Committee exercises its discretion to permit an Incentive Stock
Option to be exercised by a Participant more than three months after the termination of a
Participant’s employment for any reason other than death or Disability, the Incentive Stock Option
will thereafter be treated as a Non-Qualified Stock Option for all purposes. For purposes of this
Section 7.8.4, a Participant’s employment will be treated as continuing uninterrupted during any
period that the Participant is on military leave, sick leave or another approved leave of absence
if the period of leave does not exceed 90 consecutive days, unless reemployment on the expiration
of such leave is guaranteed by statute or by contract.




               7.8.5 Any Option which is designated by the Compensation Committee as an Incentive Stock
Option but fails, for any reason, to meet the requirements for Incentive Stock Option treatment
shall be treated for tax purposes as a Non-Qualified Stock Option.




          7.9 Additional Terms and Conditions. Each Option, and any shares of Common Stock issued in connection with an Option, shall be
subject to such additional terms and conditions not inconsistent with the Plan as are determined by
the Compensation Committee and set forth in the applicable Award Agreement.




     8. Restricted Stock



          8.1 Grant of Restricted Stock. The Compensation Committee may offer Awards of Restricted Stock in such amounts, at such times
and to such Employees as the




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Compensation Committee, in its discretion, may determine in accordance
with the eligibility criteria set forth in Section 5.



          8.2 Purchase Price. The purchase price of the Shares subject to a Restricted Stock Award shall be determined by the
Compensation Committee and may be less than the Fair Market Value (but not less than the par value)
of the Shares on the Date of Grant. Without limiting the generality of the foregoing, the
Compensation Committee may determine that eligible Employees may be issued Restricted Stock in
consideration for past services actually rendered to the Company and its Subsidiaries having a
value of not less than the par value of the Shares subject to the Award. The Committee shall
determine the methods by which the purchase price may be paid or deemed paid and the form of
payment.




          8.3 Award Agreement; Acceptance by Participant. Promptly following the grant of each Restricted Stock Award, the Compensation Committee shall
cause to be delivered to the applicable Participant an Award Agreement that evidences the Award.
The Participant shall accept the Award by signing and delivering to the Company his or her Award
Agreement, accompanied by full payment of the purchase price, within 30 days from the date the
Award Agreement was delivered to the Participant. If the Participant does not so accept the
Restricted Stock Award within such 30-day period, then the offer of the Award shall terminate
unless the Compensation Committee otherwise determines.




          8.4 Restrictions. At the time of grant of each Restricted Stock Award, the Compensation Committee shall determine
the Restriction Period that will apply to the Award and the forfeiture and vesting restrictions,
restrictions on transferability and other restrictions (including, without limitation, limitations
on the right to vote Restricted Stock or the right to receive dividends on Restricted Stock) that
will apply to the Award during the Restriction Period. These restrictions may lapse separately or
in combination at such times, under such circumstances (including based on achievement of
Performance Criteria or future service requirements or both), in such installments or otherwise, as
the Compensation Committee may determine in its discretion.




          8.5 Forfeiture. Except as otherwise determined by the Compensation Committee, upon termination of the
Participant’s employment during the applicable Restriction Period, Restricted Stock that is at that
time subject to restrictions shall be forfeited and reacquired by the Company or shall be subject
to a repurchase option in favor of the Company, as may be specified in the Award Agreement;
provided, however, that, the Compensation Committee, in its discretion, may (a) provide in any
Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of terminations resulting from specified causes, and (b) in
other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted
Stock.




          8.6 Stock Certificates. Restricted Stock granted under the Plan may be evidenced in such manner as the Compensation
Committee shall determine. If certificates representing Restricted Stock are registered in the
name of the Participant, the Compensation Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical





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possession of thecertificates, and that the Participant deliver a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.



          8.7 Dividend Rights. Unless otherwise set forth in the Award Agreement, (a) any regular cash dividends declared and
paid with respect to Shares subject to a Restricted Stock Award shall be paid to the Participant at
the same time they are paid to all other stockholders of the Company, and (b) Shares distributed in
connection with a stock split or stock dividend, and any other cash or property (including
securities of the Company or other issuers) distributed as a dividend (other than regular cash
dividends), shall be subject to restrictions and forfeiture conditions to the same extent as the
Restricted Stock with respect to which such Shares, cash or other property have been distributed,
and all references to Restricted Stock in the Plan or the applicable Award Agreement shall be
deemed to include such Shares, cash or other property.




          8.8 Voting Rights. Unless otherwise set forth in the Award Agreement, all voting rights appurtenant to the Shares
subject to a Restricted Stock Award shall be exercised by the Participant.




          8.9 Termination of the Restriction Period. Upon satisfaction of the terms and conditions specified in the Award Agreement that apply to a
Restriction Period, (a) the Participant shall be entitled to have the legend referred to in Section
8.6 removed from his or her shares of Restricted Stock after the last day of the Restriction
Period, and (b) if the Company has retained possession of the certificates representing the shares
of Restricted Stock, the Company shall promptly deliver such certificates to the Participant. If
the terms and conditions specified in the Award Agreement that apply to a Restriction Period have
not been satisfied, the Restricted Stock subject to the Award shall be forfeited and reacquired by
the Company or shall be subject to a repurchase option in favor of the Company, as may be specified
in the Award Agreement




          8.10 Additional Terms and Conditions. Each Award of Restricted Stock, and all Shares of Restricted Stock granted or offered for sale
hereunder, shall be subject to such additional terms and conditions not inconsistent with the Plan
as are prescribed by the Compensation Committee and set forth in the applicable Award Agreement.




     9. Restricted Stock Units.



          9.1 Grant of Restricted Stock Units. The Compensation Committee may make Awards of Restricted Stock Units in such amounts, at such
times and to such Employees as the Compensation Committee, in its discretion, may
determine in accordance with the eligibility criteria set forth in Section 5. A Participant
granted Restricted Stock Units shall not have any of the rights of a stockholder with respect to
the Shares subject to an Award of Restricted Stock Units, including any right to vote or to receive
other distributions on the Shares, until certificates for the Shares subject to the Award shall
have been issued in the Participant’s name in accordance with the terms of the applicable Award
Agreement.




          9.2 Vesting and Other Terms. At the time of grant of each Award of Restricted Stock Units, the Compensation Committee shall
determine the Restriction Period that will apply to the Award and shall specify the maturity date
applicable to each grant of Restricted Stock Units, which shall be no earlier than the vesting date
or dates of the Award and may be





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determined at the election of the Participant. During the
Restriction Period, Restricted Stock Units shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions as the Compensation Committee may
impose, which restrictions may lapse separately or in combination at such times, under such
circumstances (including based on achievement of Performance Criteria or future service
requirements or both), in such installments or otherwise as the Committee may determine in its
discretion. If the terms and conditions specified in the Award Agreement have not been satisfied
by the end of the Restriction Period, the Restricted Stock Units subject to the Restriction Period
shall become null and void, and the Participant shall forfeit all rights with respect to such
Award.



          9.3 Termination of Employment. Except as otherwise determined by the Compensation Committee, upon termination of the
Participant’s employment during the applicable Restriction Period, Restricted Stock Units that are
at that time subject to restrictions shall be null and void, and the Participant shall forfeit all
rights with respect to such Awards.




          9.4 Settlement. On the maturity date, the Company shall, subject to the terms of the Plan and the Award
Agreement, transfer to the Participant one Share for each Restricted Stock Unit scheduled to be
paid out on such date and not previously forfeited. The Compensation Committee shall specify the
purchase price, if any, to be paid by the Participant to the Company for such Shares and shall
determine the methods by which the purchase price may be paid or deemed paid and the form of the
payment. The Compensation Committee may permit a Participant to elect to defer receipt of payment
of all or part of any Award of Restricted Stock Units pursuant to such rules and regulations as may
be adopted by the Compensation Committee or as may be specified in the applicable Award Agreement,
provided any such deferral shall satisfy the requirements of Section 409A of the Code and any
regulations or rulings promulgated by the Internal Revenue Service thereunder.




          9.5 Additional Terms and Conditions. Each Award of Restricted Stock Units, and all Shares issued in settlement of Restricted Stock
Units, shall be subject to such additional terms and conditions not inconsistent with the Plan as
are prescribed by the Compensation Committee and set forth in the applicable Award Agreement.




     10. Stock Appreciation Rights.



          10.1 Grant of Stock Appreciation Rights. The Compensation Committee may make Awards of Stock Appreciation Rights in such amounts, at such
times and to such Employees as the Compensation Committee, in its discretion, may determine in
accordance with the eligibility criteria set forth in Section 5. If a Stock Appreciation Right is
granted to a Section 16(b) Insider, the Award Agreement shall incorporate all the terms and
conditions at the time necessary to assure that the subsequent exercise of the Stock Appreciation
Right shall qualify for the safe-harbor exemption from short-swing profit liability provided by
Rule 16b-3.




          10.2 General Terms. A Stock Appreciation Right shall confer on the Participant the right to receive in Shares, cash
or a combination thereof (as may be determined by the Compensation Committee in its discretion) the
value equal to the excess of the Fair Market Value of one Share on the date of exercise over the
exercise price for the Stock Appreciation Right, with respect to every Share for which the Stock
Appreciation Right is




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granted (the “SAR Settlement Value”). At the time of grant, the
Stock Appreciation Right must be designated by the Compensation Committee as either a tandem Stock
Appreciation Right or a stand-alone Stock Appreciation Right and, if not so designated, shall be
deemed to be a stand-alone Stock Appreciation Right. A tandem Stock Appreciation Right is a Stock
Appreciation Right that is granted in tandem with an Option and only may be granted at the same
time as the Option to which it relates. The exercise of a tandem Stock Appreciation Right shall
cancel the related Option for a like number of Shares, and the exercise of the related Option
similarly shall cancel the tandem Stock Appreciation Right for a like number of Shares. Tandem
Stock Appreciation Rights shall, except as specifically set forth in this Section 10 or in the
applicable Award Agreement, be subject to the same terms and conditions as apply to the related
Option. Stand-alone Stock Appreciation Rights shall, except as specifically set forth in this
Section 10 or in the applicable Award Agreement, be subject to the same terms and conditions
generally applicable to Nonstatutory Stock Options as set forth in Section 7.



          10.3 Exercise Price. The exercise price of each Stock Appreciation Right shall be determined by the Compensation
Committee, but shall not be less than the Fair Market Value of the Common Stock on the Date of
Grant.




          10.4 Other Terms. The Compensation Committee shall determine the term of each Stock Appreciation Right. The term
shall commence on the Date of Grant and shall be 10 years or such shorter period as is
determined by the Compensation Committee. The Compensation Committee also shall determine the time
or times at which and the circumstances under which a Stock Appreciation Right may be exercised in
whole or in part, the method of exercise, the method of settlement and the form of consideration
payable in settlement. The Compensation Committee may provide for Stock Appreciation Rights to
become exercisable at one time or from time to time, periodically or otherwise (including, without
limitation, upon the satisfaction of Performance Criteria), as to such number of Shares or
percentage of the Shares subject to the Stock Appreciation Right as the Compensation Committee
determines.




          10.5 Exercise. Each Stock Appreciation Right may be exercised in whole or in part (but not as to fractional
shares) by the delivery of an executed Notice of Exercise in the form prescribed from time to time
by the Compensation Committee, accompanied by payment of any amounts required to be withheld for
tax purposes under Section 14. If a Stock Appreciation Right is exercised by any person other than
the Participant, the Compensation Committee may require satisfactory evidence that the person
exercising the Option has the right to do so. Upon the exercise of a Stock Appreciation Right, the
Participant shall be entitled to receive the SAR Settlement Value from the Company for each Share
as to which the Stock Appreciation Right has been exercised. The Company shall pay the SAR
Settlement Value in Shares valued at Fair Market Value on the exercise date, in cash or any
combination thereof, as determined by the Compensation Committee. The Compensation Committee may
permit a Participant to elect to defer receipt of payment of all or part of the SAR Settlement
Value pursuant to such rules and regulations as may be adopted by the Compensation Committee or as
may be specified in the applicable Award Agreement, provided any such deferral shall satisfy the
requirements of Section 409A of the Code and any regulations or rulings promulgated by the Internal
Revenue Service thereunder. The Compensation Committee may require any partial exercise of a Stock
Appreciation Right to equal or exceed a specified minimum number of Shares.




11









 








          10.6 Additional Terms and Conditions. Each Award of Stock Appreciation Rights, and all Shares issued in settlement of Stock
Appreciation Rights, shall be subject to such additional terms and conditions not inconsistent with
the Plan as are prescribed by the Compensation Committee and set forth in the applicable Award
Agreement.




     11. Other Stock-Based Awards.



          The Compensation Committee may grant to Employees equity-based or equity-related Awards not
otherwise described herein, alone or in tandem with other Awards, in such amounts and subject to
such terms and conditions as the Compensation Committee shall determine from time to time in its
sole discretion (“Other Stock-Based Awards”). Without limiting the generality of the
foregoing, Other Stock-Based Awards may (a) involve the transfer of restricted or unrestricted
shares of Common Stock to Participants, either at the time of grant or thereafter, or payment in
cash or otherwise of amounts based on the value of shares of CommonStock, (b) be subject to performance-based or service-based conditions, (c) be granted as, or
in payment of, a bonus, or to provide incentives or recognize special achievements or
contributions, (d) be designed to comply with Applicable Laws of jurisdictions other than the
United States, and (e) be designed to qualify for the performance-based compensation exception
under Section 162(m); provided, that each Other Stock-Based Award shall be denominated in, or shall
have a value determined by reference to, a number of shares of Common Stock that is specified at
the time of the grant of the Award. Cash awards, as an element of or supplement to any other Award
under the Plan, also may be granted pursuant to this Section 11.




     12. Performance Based Awards.



          12.1 Performance Criteria. Awards made pursuant to the Plan may be made
subject to the attainment of performance goals
relating to one or more business criteria (“Performance Criteria”). For purposes of Awards
that are intended to qualify for the performance-based compensation exception under Section 162(m),
the Performance Criteria shall (a) be objective business criteria and otherwise meet the
requirements of Section 162(m), including the requirement that the level or levels of performance
targeted by the Compensation Committee result in the achievement of performance goals being
“substantially uncertain,” and (b) relate to one or more of the following performance measures: (i)
revenues or net sales; (ii) earnings before or after deduction for all or any portion of interest,
taxes, depreciation, amortization or other items, whether or not on a continuing operations or an
aggregate or per share basis; (iii) return on equity, investment, capital or assets; (iv) margins;
(v) one or more operating ratios; (vi) borrowing levels, leverage ratios or credit ratings; (vii)
market share; (viii) capital expenditures; (ix) cash flow; (x) stock price, growth in stockholder
value relative to one or more stock indices or total stockholder return; (xi) budget and expense
management; (xii) working capital turnover and targets; (xiii) sales of particular products or
services, market penetration, geographic expansion or new concept development; (xiv) customer
acquisition, expansion and retention; (xv) acquisitions and divestitures (in whole or in part),
joint ventures, strategic alliances, spin-offs, split-ups and the like; (xvi) reorganizations,
recapitalizations, restructurings and financings (debt or equity); (xvii) transactions that would
constitute a Change in Control; or (xviii) any combination of the foregoing. Performance Criteria
measures, and targets with respect thereto, determined by the Compensation Committee need not be
based upon an increase, a positive or improved result or avoidance of loss.




12









 








          12.2 Additional Provisions Applicable to Performance Criteria. Any Performance
Criteria may be used to measure the performance of the Company as a whole or
with respect to any business unit, Subsidiary or business segment of the Company, either
individually, alternatively or in any combination, and may be measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a pre-established target,
to previous period results or to a designated comparison group, in each case as specified by the
Compensation Committee in the Award. To the extent required by Section 162(m), prior to the
payment of any compensation under an Award intended to qualify as performance-based
compensation under Section 162(m), the Compensation Committee shall certify the extent to which any
such Performance Criteria and any other material terms under such Award have been satisfied (other
than in cases where such Performance Criteria relate solely to the increase in the value of the
Common Stock). To the extent Section 162(m) is applicable, the Compensation Committee may not in
any event increase the amount of compensation payable to a Participant subject to Section 162(m)
upon the satisfaction of any Performance Criteria.




          12.3 Adjustments to Performance Criteria. The Compensation Committee may, with respect to any Performance Period, make such adjustments to
Performance Criteria as it may deem appropriate to compensate for, or reflect, (a) asset
write-downs or write-ups; (b) litigation, claims, judgments or settlements; (c) the effect of
changes in tax law, accounting principles or other laws or provisions affecting reported results;
(d) discontinued operations and divestitures; (e) mergers, acquisitions and accruals for
reorganization and restructuring programs; and (f) extraordinary or other unusual or non-recurring
item; provided, however, with respect to Awards intended to qualify as performance-based
compensation under Section 162(m), such adjustments shall be made only to the extent that the
Compensation Committee determines that such adjustments may be made without a loss of deductibility
of the compensation includible with respect to the Awards under Section 162(m).




          12.4 Performance Periods. The attainment of Performance Criteria shall be measured over performance periods of one year or
more (“Performance Periods”), as may be established by the Compensation Committee.
Performance Criteria for any Performance Period shall be established not later than the earlier of
(a) 90 days after the beginning of the Performance Period, or (b) the time 25% of the Performance
Period has elapsed.




          12.5 Right of Recapture. If, at any time after the date on which a Participant has been granted or becomes vested in or
paid an Award pursuant to the achievement of Performance Criteria, the Compensation Committee
determines that the earlier determination as to the achievement of the Performance Criteria was
based on incorrect data and that in fact the Performance Criteria had not been achieved or had been
achieved to a lesser extent than originally determined and a portion of the Award would not have
been granted, vested or paid given the correct data, then (a) any portion of the Award that was so
granted shall be forfeited and any related Shares (or, if such Shares were disposed of, the cash
equivalent) shall be returned to the Company, (b) any portion of the Award that became so vested
shall be deemed to be not vested and any related Shares (or, if such Shares were disposed of, the
cash equivalent) shall be returned to the Company, and (c) any portion of the Award so paid to the
Participant shall be repaid by the Participant to the Company upon notice from the Company, in each
case as and to the extent provided by the Compensation Committee.




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          12.6 Section 162(m). In the case of an Award intended to be eligible for the performance-based compensation exception
under Section 162(m), the Plan and such Award shall be construed to the maximum extent permitted by
law in a manner consistent with qualifying the Award for such exception.




     13. Restrictions on Transfer.



          13.1 Restrictions on Transfer. Subject to the further provisions of this Section 13.1, Awards may not be transferred other than
by will or by the laws of descent and distribution, and during a Participant’s lifetime an Award
requiring exercise may be exercised only by the Participant (or in the event of the Participant’s
incapacity, the person or persons legally appointed to act on the Participant’s behalf). No Award
or any interest therein shall be subject to attachment, execution, garnishment, sequestration, the
laws of bankruptcy or any other legal or equitable process. The foregoing notwithstanding, Awards
(other than Incentive Stock Options and Stock Appreciation Rights granted in tandem therewith) may
be transferred to one or more transferees during the lifetime of the Participant, and may be
exercised by such transferees in accordance with the terms of such Award, but only if and to the
extent such transfers are permitted by the Compensation Committee in its discretion, subject to any
terms and conditions which the Committee may impose thereon. If a transfer is approved by the
Compensation Committee, the transfer shall only be effective upon written notice to the Company
given in such form and manner as may be prescribed by the Compensation Committee. Anything herein
to the contrary notwithstanding, transfers of an Award by a Participant for consideration are
prohibited.




          13.2 Designation and Change of Beneficiary. Each Participant may file with the Compensation Committee a written designation of one or more
persons as the beneficiary who shall be entitled to receive the rights or amounts payable with
respect to an Award due under the Plan upon the Participant’s death. A Participant may, from time
to time, revoke or change his or her beneficiary designation without the consent of any prior
beneficiary by filing a new designation with the Compensation Committee. The last such designation
received by the Compensation Committee shall be controlling; provided, however, that no
designation, or change or revocation thereof, shall be effective unless received by the
Compensation Committee prior to the Participant’s death, and in no event shall it be effective as
of a date prior to such receipt. If no beneficiary designation is filed by the Participant, the
beneficiary shall be deemed to be the Participant’s estate.




          13.3 Provisions Applicable to Transferees. A beneficiary, transferee or other person claiming any rights under the Plan from or through any
Participant shall be subject to all terms and conditions of the Plan and any Award Agreement or
other document applicable to the Participant, except as otherwise determined by the Compensation
Committee, and to any additional terms and conditions deemed necessary or appropriate by the
Compensation Committee. The Compensation Committee shall have full and exclusive authority to
interpret and apply the provisions of the Plan to transferees to the extent not specifically
addressed herein.




     14. Withholding and Other Tax Provisions.



          14.1 Withholding. The Company may require the Participant to pay to the Company the amount of any taxes that the
Company is required by applicable federal, state,



14









 





foreign, local or other law to withhold with
respect to the grant, vesting, exercise or settlement of an Award. The Company shall not be
required to issue any Shares under the Plan until such obligations are satisfied in full. The
Compensation Committee may, in its sole and absolute discretion in the particular case, permit or
require a Participant to satisfy his or her tax withholding obligations by any of the following
means (or a combination of any of the following means): (a) by paying cash to the Company, (b) by
having the Company withhold a number of Shares that would otherwise be issued to the Participant
(or become vested in the case of Restricted Shares) having a Fair Market Value equal to the tax
withholding obligations, (c) surrendering a number of Shares the Participant already owns having a
Fair Market Value equal to the tax withholding obligations, or (d) entering into such other
arrangement as is acceptable to the Compensation Committee in its sole discretion. The value of
any Shares withheld or surrendered may not exceed the employer’s minimum tax withholding obligation
and, to the extent such Shares were acquired by the Participant from the Company as compensation,
the Shares must have been held for the minimum period required by applicable accounting rules to
avoid a charge to the Company’s earnings for financial reporting purposes. The Company shall also
have the right to deduct from any and all cash payments otherwise owed to a Participant any
federal, state, foreign, local or other taxes required to be withheld with respect to the
Participant’s participation in the Plan.



          14.2 Required Consent to and Notification of Section 83(b) Election. 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 the laws of a
jurisdiction outside the United States may be made in connection with an Award unless expressly
permitted by the terms of the Award Agreement or by action of the Committee in writing prior to the
making of such election. In any case in which a Participant is so permitted to make such an
election, the Participant shall notify the Company of such election within 10 days of filing notice
of the election with the Internal Revenue Service 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 provisions of any tax law.



     15. Effect of Certain Corporate Changes and Changes in Control.



          15.1 Basic Adjustment Provisions. In the event the Compensation Committee determines that any stock dividend, stock split,
combination of shares, extraordinary dividend of cash or assets, merger, consolidation, spin-off,
recapitalization (other than the conversion of convertible securities according to their terms),
reorganization, liquidation, dissolution or other similar corporate change, or any other increase,
decrease or change in the Common Stock without receipt or payment of consideration by the Company,
in the Compensation Committee’s sole discretion, affects the Common Stock such that an adjustment
to the Awards or the Plan is determined by the Compensation Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Award, then the Compensation Committee shall, in such manner
as it may deem equitable, adjust any or all of:




          (a) The number and kind of shares of Common Stock (or other securities or property) with
respect to which an Award may be granted under the Plan (including, but not limited to, adjustments
of the limitations in Section 4.1 on the maximum number and kind of





15









 








Shares which may be issued under the Plan and the limitations in Section 4.3 on the maximum number of Shares that may be
covered by Awards granted under the Plan to any single Participant in any calendar year);



          (b) The number and kind of shares of Common Stock (or other securities or property) subject to
outstanding Awards;




          (c) The grant, exercise or other purchase price per Share under any outstanding Awards; and




          (d) The terms and conditions of any outstanding Awards (including, without limitation, any
applicable Performance Criteria specified in an Award Agreement).




Notwithstanding the foregoing, (x) with respect to Incentive Stock Options, any such adjustments
shall be made in accordance with Section 424(h) of the Code, (b) the Committee shall consider the
impact of Section 409A of the Code on any such adjustments, and (z) no such adjustments may
materially change the value of benefits available to a Participant under a previously granted
Award.




          15.2 Change in Control. The Compensation Committee may provide with respect to any transaction that results in a Change
in Control, either at the time an Award is granted or by action taken prior to the occurrence of
the Change in Control, that a Change in Control shall have such effect as is specified by the
Compensation Committee, or no effect, as the Compensation Committee in its sole discretion may
provide. Without limiting the foregoing, the Compensation Committee may provide, either at the
time an Award is granted or by action taken prior to the occurrence of the Change in Control, and
without the consent or approval of any Participant, for one or more of the following actions or
combination of actions with respect to some or all outstanding Awards (which actions may vary among
individual Participants and may be subject to such terms and conditions as the Compensation
Committee deems appropriate):




          (a) Acceleration of the time at which Awards then outstanding vest and (as applicable) may be
exercised in full for a limited period of time on or before a specified date fixed by the
Compensation Committee (which will permit the Participant to participate with the Common Stock
received upon exercise of an Award in the Change in Control transaction), after which specified
date all unexercised Awards and all rights of Participants thereunder shall terminate;




          (b) Acceleration of the time at which Awards then outstanding vest (and, in the case of
Options, Stock Appreciation Rights and other applicable Awards, may be exercised so that such
Options, Stock Appreciation Rights and other applicable Awards may be exercised in full for their
then remaining term);




          (c) The assumption of Awards (or any portion thereof) by the successor or survivor
corporation, or a parent or Subsidiary thereof, or the substitution of awards covering the stock of
the successor or survivor corporation, or a parent or Subsidiary thereof, for then outstanding
Awards that have been issued under the Plan, with appropriate adjustments as to the number and kind
of shares and grant, exercise or other purchase prices;




16









 






          (d) The mandatory surrender to the Company for cancellation of any outstanding Awards and the
purchase of the surrendered Awards for an amount of cash, securities or other property equal to the
excess of the Fair Market Value of the vested shares of Common Stock subject to any such Award
immediately prior to the occurrence of the Change in Control (and such additional portion of the
Award as the Compensation Committee may determine) over the aggregate exercise or other purchase
price (if any) of such shares; and




          (e) The termination of any Award (or any portion thereof) concurrently with the closing or
other consummation of the Change in Control transaction. If the Compensation Committee provides
that an Award shall terminate concurrently with the closing or other consummation of the Change in
Control transaction, each Participant shall have the right up to the closing or other consummation
of the transaction to exercise all or any part of the Participant’s vested Awards.




          15.3 Determination of Adjustments. All determination of the Compensation Committee pursuant to this Section 15 shall be conclusive
and binding on all persons for all purposes of the Plan.




          15.4 No Restriction on Right of Company to Effect Corporate Changes. The Plan shall not affect in any way the right or power of the Company to make or authorize any
adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure
or its business, any merger or consolidation, any issue of stock or of options, warrants or rights
to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or that are convertible into or
exchangeable for Common Stock, the dissolution or liquidation of the Company, any sale or transfer
of all or any part of the assets or business of the Company or any of its Subsidiaries, or any
other corporate act or proceeding, whether of a similar character or otherwise. Except as
specifically provided in this Section 15 and authorized by the Compensation Committee, a
Participant shall have no rights by reason of any such corporate act or proceeding, and no
adjustment by reason thereof shall be made with respect to any outstanding Award or the Plan.




     16. Regulatory Compliance.



          16.1 Conditions to Obligations of the Company. The Company may, to the extent deemed necessary or advisable by the Compensation Committee,
postpone the issuance or delivery of Shares or the payment of other benefits under any Award until:




          (a) The completion of any registration or other qualification of such Shares under any state
or federal securities law or under the rules and regulations of the Securities and Exchange
Commission or any other governmental regulatory body, which the Compensation Committee shall, in
its sole discretion, deem necessary or advisable;




          (b) The admission to listing of, or other required action with respect to, such Shares on any
and all stock exchanges or automated quotation systems upon which the Common Stock or other
securities of the Company are then listed or quoted; and




          (c) The compliance with all other requirements of Applicable Laws, as the Compensation
Committee shall, in its sole discretion, deem necessary or advisable;




17









 








The Compensation Committee also may require any Participant to make such representations, furnish
such information and comply with or be subject to such other conditions as the Compensation
Committee shall, in its sole discretion, deem necessary or advisable to comply with any
requirements of Applicable Laws in connection with the grant of any Award or the issuance or
delivery of Shares or the payment of other benefits under any Award. Without limiting the
generality of the foregoing, if the Shares offered for sale or sold under the Plan are offered or
sold pursuant to an exemption from registration under federal, state or foreign securities laws,
(x) the Company may require the Participant to represent and agree at the time of grant or
exercise, as the case may be, that such Shares are being acquired for investment, and not with a
view to the sale or distribution thereof, and to make such other representations as are deemed
necessary or appropriate by the Company and its counsel, and (y) the Company may restrict the
transfer of such Shares, issue stop-transfer instructions and legend the certificates representing
such Shares, in each case in such manner as it deems advisable to ensure the availability of any
such exemption.



          16.2 Limitation on Company Obligations. The inability of the Company (after reasonable efforts) to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the
lawful issuance or sale of any Awards or Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Awards or Shares as to which such
requisite authority shall not have been obtained. Nothing contained herein shall be construed to
impose on the Company any obligation to register for offering or resale under the Securities Act,
or to register or qualify under any other state, federal or foreign securities laws, any Shares,
securities or interests in a security paid or issued under, or created by, the Plan, or to continue
in effect any such registrations or qualifications if made, and the Company shall have no liability
for any inability or failure to do so.




          16.3 Provisions Applicable to a Change in Control. Anything in this Section 16 to the contrary notwithstanding, in connection with a Change in
Control, the Company shall not take or cause to be taken any action, and shall not undertake or
permit to arise any legal or contractual obligation, that results or would result in any
postponement of the issuance or delivery of Shares or the payment of benefits under any Award or
the imposition of any other conditions on such issuance, delivery or payment, to the extent that
such postponement or other condition would represent a greater burden on a Participant than existed
on the 90th day preceding the effective date of the Change in Control.




          16.4 Exchange Act. Notwithstanding anything contained in the Plan or any Award Agreement to the contrary,
if the consummation of any transaction under the Plan would result in the possible imposition of
liability on a Participant pursuant to Section 16(b) of the Exchange Act, the Compensation
Committee shall have the right, in its sole discretion, but shall not be obligated, to defer such
transaction to the extent necessary to avoid such liability.




     17. Amendment or Termination of the Plan.



          The Board of Directors may at any time and from time to time amend, suspend or terminate the
Plan in whole or in part; provided that no such amendment may, without the approval of the
stockholders of the Company, increase the number of shares of Common Stock




18









 








that may be issued under the Plan (except for adjustments pursuant to Section 15) or effectuate a change for which
stockholder approval is required: (a) in order for the Plan to continue to qualify under Section
422 of the Code; (b) under the corporate governance standards of any national securities exchange
or automated quotation system applicable to the Company; or (c) for Awards to be eligible for the
performance-based compensation exception under Section 162(m). In addition, no termination or
amendment of the Plan shall materially alter or adversely affect the rights of any Participant in
any outstanding Awards, without the consent of the Participant to whom the Awards have been
granted.



     18. Term of the Plan.



          The Plan shall continue until terminated by the Board of Directors pursuant to Section 17 or
as otherwise set forth in the Plan, and no further Awards shall be made hereunder after the date of
such termination. Unless earlier terminated, the Plan shall terminate 10 years after its initial
approval by the Board of Directors (provided that Awards granted before termination shall continue
in accordance with their terms).




     19. No Right to Awards or Continued Employment.



          No person shall have any claim or right to receive grants of Awards under the Plan, and
neither the Plan nor any action taken or omitted to be taken hereunder shall create or confer on
any Participant the right to continued employment with the Company or its Subsidiaries or interfere
with or to limit in any way the right of the Company or its Subsidiaries
to terminate the employment of any Participant at any time or for any reason. The loss of any
existing or potential profit in Awards shall not constitute an element of damages in the event of
the termination of the employment of any Participant for any reason, even if the termination is in
violation of an obligation of the Company or its Subsidiaries to the Participant. No Participant
shall have any rights as a stockholder with respect to any Shares covered by or relating to any
Award until the date of the issuance of a stock certificate with respect to such Shares.




     20. Effect of Plan Upon Other Awards and Compensation Plans.



          Nothing in the Plan shall be construed to limit the right of the Company or any of its
Subsidiaries (a) to establish any other forms of incentives or compensation for Employees, or (b)
to grant or assume options, restricted stock or other equity-based awards otherwise than under the
Plan in connection with any proper corporate purpose, including, but not by way of limitation, the
grant or assumption of options, restricted stock or other awards in connection with the acquisition
of the business, securities or assets of any corporation, firm or business. The adoption of the
Plan shall not affect any other compensation or incentive plans in effect for the Company or any of
its Subsidiaries, and no payment under the Plan shall be taken into account in determining any
benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of
the Company except as otherwise specifically provided in such other plan.




     21. General Provisions.



          21.1 Other Documents. All documents prepared, executed or delivered in connection
with the Plan shall be, in substance and form, as established and modified by the Compensation
Committee or by persons under its direction and supervision; provided, however,




19









 








that all such documents shall be subject in every respect to the provisions of the Plan, and in the event of any
conflict between the terms of any such document and the Plan, the provisions of the Plan shall
prevail.



          21.2 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant
to the Plan or any Award. The Compensation Committee shall determine whether cash or other
property shall be issued or paid in lieu of fractional shares of Common Stock or whether such
fractional shares of Common Stock and any rights thereto shall be forfeited or otherwise eliminated
(including by rounding to the nearest whole Share).




          21.3 Payments in the Event of Forfeitures. Unless otherwise determined by the
Compensation Committee or otherwise specified in the applicable Award Agreement, in the event of
the forfeiture of an Award with respect to which a Participant paid cash consideration, the
Participant shall be repaid the amount of such cash consideration within 10 days of the date of
forfeiture or as soon thereafter as practicable.




          21.4 Limitation on Repricing. The Compensation Committee shall not, without the
approval of the stockholders of the Company, amend or replace previously granted Options or Stock
Appreciation Rights in a transaction that constitutes a “repricing,” as such term is used
in Section 303A.08 of the Listed Company Manual of the New York Stock Exchange or the rules
and regulations of the Securities and Exchange Commission.




          21.5 Misconduct of a Participant. Notwithstanding any other provision of the Plan or
an Award Agreement, if a Participant commits fraud or dishonesty toward the Company or wrongfully
uses or discloses any trade secret, confidential data or other information proprietary to the
Company, or intentionally takes any other action materially inimical to the best interests of the
Company, as determined by the Compensation Committee, in its sole and absolute discretion, such
Participant shall forfeit all rights and benefits under the Plan and any outstanding Awards.




          21.6 Restrictive Legends. The certificates for Shares delivered under the Plan shall
include such legends, and shall be subject to such stop-transfer instructions, as the Compensation
Committee deems appropriate to reflect any restrictions on the Shares.




          21.7 Successors in Interest. The provisions of the Plan, the terms and conditions of any Award and the actions of the
Compensation Committee shall be binding upon the successors and assigns of the Company and
permitted successors and assigns, heirs, executors, administrators and other legal representatives
of Participants.




          21.8 Severability. If any provision of the Plan or any Award is determined to be invalid, illegal or
unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award
under any law deemed applicable by the Compensation 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 Compensation Committee’s determination, materially altering the intent of the Plan
or the Award, such provision shall be 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.




20









 








          21.9 Headings. The headings of sections and subsections herein are included solely for convenience of
reference and shall not affect the meaning of any of the provisions of the Plan.




          21.10 Governing Law. To the extent not preempted by federal law, the Plan and all rights hereunder shall be governed
by and construed in accordance with the laws of the State of Delaware, without reference to rules
relating to conflicts of law.




          21.11 Compliance With Section 162(m). If any provision of the Plan or any Award
Agreement relating to an Award that is designated as intended to comply with Section 162(m) does
not comply or is inconsistent with the requirements of Section 162(m), such
provision shall be construed or deemed amended to the extent necessary to conform to such
requirements.




          21.12 Compliance With Section 409A. Awards under the Plan are intended either to (a) qualify as compensatory arrangements that do
not constitute “deferred compensation” subject to Section 409A of the Code, or (b) satisfy the
requirements of Section 409A of the Code so that Participants will not be liable for the payment of
interest or additional tax thereunder, and the Plan and all Awards shall be construed accordingly.
Any provision of the Plan or an Award Agreement that would cause the grant of an Award, or the
payment, settlement or deferral thereof, to fail to satisfy Section 409A of the Code shall be
amended to comply with Section 409A of the Code on a timely basis, which may be made on a
retroactive basis, in accordance with regulations and other guidance issued under Section 409A of
the Code.




          21.13 Administration of the Plan in Foreign Countries. The Compensation Committee may take any action consistent with the terms of the Plan,
either before or after an Award has been granted, which the Compensation Committee deems necessary
or advisable in order for the administration of the Plan and the grant of Awards thereunder to
comply with the Applicable Laws of any foreign country, including but not limited to, modifying or
amending the terms and conditions governing any Awards, modifying exercise procedures and other
terms and procedures and establishing local country plans as sub-plans to the Plan.




          21.14 Effective Date. The Plan shall become effective upon adoption by the Board of Directors, subject to approval by
the stockholders of the Company. The Plan will be submitted for the approval of the Company’s
stockholders within 12 months of the date of the Board of Director’s initial adoption of the Plan.
No Award may be exercised to any extent unless and until the Plan is so approved by the
stockholders, and if such approval has not been obtained by the end of said 12-month period, the
Plan and all Awards theretofore granted shall thereupon be canceled and become null and void.




[Signature page follows]




21









 








     IN
WITNESS WHEREOF, this document has been executed as of the 22nd day of November, 2006.



	 	 	 	 	 
	 	NEWPARK RESOURCES, INC.

 	 
	 	By:  	/s/ Paul L. Howes
 	 
	 	 	Paul L. Howes,  	 
	 	 	President and Chief Executive Officer 	 



22









 






	 	 	 	 	 



Exhibit A




DEFINITIONS





     The following terms, when used in the Plan, shall have the meanings, and shall be subject to
the provisions, set forth below:



     “Award” means an Option, Restricted Stock award, Restricted Stock Unit award, Stock
Appreciation Right or Other Stock-Based Award granted to a Participant pursuant to the Plan.



     “Award Agreement” means any written agreement, contract or other instrument or
document evidencing an Award.



     “Applicable Laws” means the requirements relating to the administration of stock
option and restricted stock plans under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any other country or jurisdiction where Awards are
granted under the Plan.



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



     “Cashless Exercise” means the exercise of an Option through (a) the delivery of
irrevocable instructions to a broker (i) to make a sale of a number of Shares issuable upon the
exercise of the Option that results in proceeds in the amount required to pay the aggregate Option
Price for all the shares as to which the Option is being exercised (and any required withholding
tax, if authorized by the Compensation Committee) and (ii) to deliver such proceeds to the Company
in satisfaction of such aggregate Option Price (and withholding tax obligation, if applicable), or
(b) any other surrender to the Company of Shares issuable upon the exercise of the Option or vested
Options in satisfaction of such aggregate Option Price (and withholding tax obligation, if
applicable).



     “Cause” means, with respect to any Participant, (a) “cause” as defined in an
employment or consulting agreement applicable to the Participant, or (b) in the case of a
Participant who does not have an employment or consulting agreement that defines “cause”: (i) any
act or omission that constitutes a material breach by the Participant of any of his or her
obligations under any agreement with the Company or any of its Subsidiaries; (ii) the willful and
continued failure or refusal of the Participant substantially to perform the duties required of him
or her as an Employee, or performance significantly below the level required or expected of the
Participant, as determined by the Compensation Committee; (iii) the Participant’s willful
misconduct, gross negligence or breach of fiduciary duty that, in each case or in the aggregate,
results in material harm to the Company or any of its Subsidiaries; (iv) any willful violation by
the Participant of any federal, state or foreign law or regulation applicable to the business of
the Company or any of its Subsidiaries, or the Participant’s commission of any felony or other
crime involving moral turpitude, or the Participant’s commission of an act of fraud, embezzlement
or misappropriation; or (iv) any other misconduct by the Participant that is materially injurious
to the financial condition or business reputation of, or is otherwise materially injurious to, the
Company or any of its Subsidiaries. The Compensation Committee shall determine whether there has
been a termination of employment for Cause, and each Participant shall agree, by acceptance of the
grant of an Award and the execution of an Award Agreement, that the Compensation Committee’s
determination is conclusive and binding on all persons for all purposes of the Plan.



 









 





     “Change in Control” means the occurrence of any one of the following:



          (a) Any election of directors of the Company takes place (whether by the directors then in
office or by the stockholders at a meeting or by written consent) and a majority of the directors
in office following such election are individuals who were not nominated by a vote of two-thirds of
the members of the Board of Directors immediately preceding such election;




          (b) One or more occurrences or events as a result of which any “person” (as such term is used
in Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the “beneficial owner” (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 30% or more of the
combined voting power of the Company’s then outstanding securities;




          (c) A merger or consolidation of the Company with, or an acquisition of the Company or all or
substantially all of its assets by, any other entity, other than a merger, consolidation or
acquisition in which the individuals who were members of the Board of Directors of the Company
immediately prior to such transaction continue to constitute a majority of the Board of Directors
of the surviving corporation (or, in the case of an acquisition involving a holding company,
constitute a majority of the Board of Directors of the holding company) for a period of not less
than 12 months following the closing of such transaction; or




          (d) The stockholders of the Company approve a plan of complete liquidation or dissolution of
the Company.




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



     “Common Stock” means shares of Common Stock, par value $0.01 per share, of the Company
and any other equity securities of the Company that may be substituted or resubstituted for such
Common Stock pursuant to Section 15.



     “Company” means Newpark Resources, Inc., a Delaware corporation, and any successor.



     “Compensation Committee” means the Compensation Committee of the Board of Directors.



     “Date of Grant” means the date of grant of an Award as set forth in the applicable
Award Agreement.



     “Disqualifying Disposition” has the meaning set forth in Section 7.8.3.



     “Disability” means, with respect to any Participant who has an employment or
consulting agreement that defines such term or a similar term, “disability” as defined in such
agreement or, in the case of a Participant who does not have an employment or consulting agreement
that defines such term or a similar term, the inability of the Participant to perform substantially
all his duties as an Employee by reason of illness or incapacity for a period of more than six
months, or six months in the aggregate during any 12-month period, established by medical evidence
reasonably satisfactory to the Compensation Committee.



     “Employee” means any person who is employed by the Company or one of its Subsidiaries,
provided, however, that the term “Employee” does not include a non-employee



 









 





Director or an individual performing services for the Company or a Subsidiary who is treated
for tax purposes as an independent contractor at the time of performance of the services, whether
such person is so employed at the time this Plan is adopted or becomes so employed subsequent to
the adoption of this Plan. For purposes of awards of Incentive Stock Options, “Employee” means any
person, including an officer, who is so employed by the Company or any “parent corporation” or
“subsidiary corporation” of the Company as defined in Sections 424(e) and 424(f) of the Code,
respectively. An Employee shall not cease to be an Employee in the case of (a) any leave of
absence approved by the Company, or (b) transfers between locations of the Company or between the
Company, any of its Subsidiaries or any successor.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.



     “Fair Market Value” means, as of any given date, the value of a share of Common Stock
determined as follows:



          (a) If the Common Stock is listed on an established stock exchange or a national market
system, the Fair Market Value of a share of Common Stock shall be the closing sales price for such
stock (or the closing bid, if no sales were reported), as quoted on the principal exchange or
system on which the Common Stock is then traded and as reported in The Wall Street Journal or such
other source as the Compensation Committee deems reliable, on such date or, if such date is not a
trading day, on the trading day immediately preceding such date;




          (b) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock, as reported in The Wall Street Journal or
such other source as the Compensation Committee deems reliable, on such date or, if such date is
not a trading day, on the trading day immediately preceding such date; or




          (c) In all other cases, the “fair market value” as determined by the Compensation Committee in
good faith and using such financial sources as it deems relevant and reliable (but in any event not
less than fair market value within the meaning of Section 409A of the Code).




     “Incentive Stock Option” means an Option which qualifies as an “incentive stock
option” under Section 422 of the Code and is designated as an Incentive Stock Option by the
Compensation Committee. For avoidance of doubt, no Option awarded under the Plan will be an
Incentive Stock Option unless the Compensation Committee expressly provides for Incentive Stock
Option treatment in the applicable Award Agreement.



     “Non-Qualified Stock Option” means an Option which is not an “incentive stock option”
under Section 422 of the Code and includes any Option which is designated as a Non-Qualified Stock
Option by the Compensation Committee.



     “Option” means a right to purchase Shares upon payment of the Option Price.



     “Option Price” means the purchase price per Share deliverable upon the exercise of an
Option in order for the Option (or applicable portion thereof) to be exchanged for Shares.



     “Other Stock-Based Awards” has the meaning set forth in Section 11.



     “Participant” means any Employee who has been granted an Award.



 









 





     “Performance Criteria” has the meaning set forth in Section 12.1 of the Plan.



     “Performance Period” has the meaning set forth in Section 12.4 of the Plan.



     “Plan” means the Newpark Resources, Inc. 2006 Equity Incentive Plan.



     “Restricted Stock” means Shares awarded to a Participant under Section 8, the rights
of ownership of which are subject to restrictions prescribed by the Compensation Committee.



     “Restricted Stock Unit” means a right granted to a Participant under Section 9 to
receive Shares upon the satisfaction of Performance Criteria or other criteria specified by the
Compensation Committee, such as continuous service, at the end of a specified Restriction Period.



     “Restriction Period” means the period or periods during which any forfeiture or
vesting restrictions, restrictions on transferability or other restrictions shall apply to any
Award, as determined by the Compensation Committee in its discretion, consistent with the
provisions of the Plan.



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



     “SAR Settlement Value” has the meaning set forth in Section 10.2.



     “Section 16(b) Insider” means an officer or director of the Company or any other
person whose transactions in the Company’s Common Stock are subject to Section 16 of the Exchange
Act.



     “Section 162(m)” means Section 162(m) of the Code and the regulations promulgated
thereunder.



     “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.



     “Shares” means shares of the Company’s Common Stock reserved for issuance under the
Plan, as adjusted pursuant to Sections 15, and any successor security.



     “Stock Appreciation Right” means a right granted to a Participant under Section 10
that entitles the Participant to receive a payment in Shares, cash or a combination thereof
measured by the increase in the Fair Market Value of a Share over the exercise price of the Stock
Appreciation Right, as established by the Compensation Committee on the Date of Grant.



     “Subsidiary” means any “subsidiary” within the meaning of Rule 405 under the
Securities Act; provided, however, for purposes of Awards of Incentive Stock Options, “Subsidiary”
means any entity that is a subsidiary of the Company within the meaning of Section 424(f) of the
Code.