EXHIBIT 10.6


 


EXHIBIT A


 


AVENTINE
RENEWABLE ENERGY HOLDINGS, INC.

2003 STOCK INCENTIVE PLAN


 


ARTICLE 1

PURPOSE


 


Aventine Renewable Energy
Holdings, Inc. (the “Company”)
established the Aventine Renewable Energy Holdings, Inc. 2003 Stock Option
Plan effective May 30, 2003, as amended September 6, 2005, and as
further amended and renamed the Aventine Renewable Energy Holdings, Inc.
2003 Stock Incentive Plan, as of December 12, 2005 (as so amended and
restated, the “Plan”). The
purposes of the Plan are to advance the interests of the Company and its
stockholders by providing a means by which the Company and its Subsidiaries can
attract, retain and motivate selected directors, officers, other key employees
and consultants and provide such personnel with an opportunity to participate
in the increased value of the Company which their effort, initiative and skill
have helped produce.


 


ARTICLE 2

DEFINITIONS


 


“Affiliate” of any particular Person means any other
Person controlling, controlled by or under common control with such particular
Person where “control” means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person whether through the ownership of voting securities, by
contract or otherwise.


 


“Award” means any grant of an option, stock appreciation right, share of
restricted stock, restricted stock unit or other equity-based award under the
Plan.


 


“Award Agreement” means any written agreement, contract or
other instrument or document evidencing any Award, which may, but need not (as
determined by the Committee) be required to be executed or acknowledged by a
Participant as a condition precedent to receiving an Award or the benefits
under an Award.


 


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


 


“Cause” means, with respect to any Participant, that such Participant (i) is
convicted of or enters a plea of guilty or nolo
contendere to a felony, or to a crime or offense involving the
property of the Company or any of its Subsidiaries, (ii)


 

















 


commits any act involving dishonesty, fraud or
disloyalty, or breach of his or her fiduciary duty to the Company or any of its
Subsidiaries, which in any such case is of material detriment to the business,
condition (financial or otherwise), reputation, character or standing of the
Company or any of its Subsidiaries, (iii) engages in gross negligence or
willful misconduct with respect to his or her duties on behalf of the Company
or any of its Subsidiaries, or (iv) breaches any of the covenants
contained in the Award Agreement.


 


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


 


“Committee” means either the Board or the Compensation
Committee of the Board, as duly appointed from time to time by the Board.


 


“Covered Employee” means a “covered employee” within the
meaning of Section 162(m)(3) of the Code or any successor provision
thereto.


 


“Disability” means, with respect to any Participant, (i) any
permanent physical or mental incapacity or disability rendering such
Participant unable or unfit to perform effectively the duties and obligations
under his or her employment, directorship or other consulting relationship with
the Company or any of its Subsidiaries, as applicable, or (ii) any
illness, accident, injury, physical or mental incapacity or other disability,
where such condition has rendered such Participant unable or unfit to perform
effectively the duties and obligations under his or her employment,
directorship or other consulting relationship with the Company or any of its
Subsidiaries, as applicable for a period of at least ninety consecutive days or
four months in any twelve-month period (in either case, as determined in the
good faith judgment of the Committee).


 


“Eligible Individual” means any officer, director or employee of,
or consultant to, the Company or a Subsidiary and includes any holders of
Substitute Awards (whether or not employed by the Company or a Subsidiary).


 


“Exercise Price” means (i) in the case of an Option,
the price at which a Share may be purchased by a Participant pursuant to such
Option and (ii) in the case of a Stock Appreciation Right, the base price
of such Stock Appreciation Right.


 


“Fair Market Value” means (i) if the Shares are not listed
or traded on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq Stock Market, or reported by Pink Sheets, LLC, or any similar successor
organization, the fair market value as determined by the Committee in good
faith, and (ii) otherwise, the average of the closing prices of all Shares
(at the end of the regular session, as reported on the Consolidated Tape) on
the New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock
Market, as applicable, or, if there have been no sales on any such exchange on
any day, the


 


2

















 


average of the highest bid and lowest asked prices
on all such applicable exchanges (at the end of the regular session, as
reported on the Consolidated Tape) on such day or, if on any day the Shares are
not so listed, the average of the highest bid and lowest asked prices on such
day in the domestic over-the-counter market as reported by Pink Sheets LLC, or
any similar successor organization, in each case averaged over a 21-day period
consisting of the day as of which the Fair Market Value is being determined and
the 20 consecutive business days prior to such day.


 


“LLC” means Aventine Renewable Energy Holdings, LLC, a Delaware limited
liability company and its successors.


 


“LLC Agreement” means the Limited Liability Company
Agreement of the LLC dated as of May 30, 2003, as amended from time to
time.


 


“MS” means Morgan Stanley & Co. Incorporated and its successors.


 


“MSCP Funds” means, collectively, Morgan Stanley Dean
Witter Capital Partners IV, L.P., Morgan Stanley Dean Witter Capital Investors
IV, L.P. and MSDW IV 892 Investors, L.P., and any of their Permitted
Transferees.


 


“Option” means an option to purchase Shares granted to an Eligible Individual
under Article 6.


 


“Participant” means an Eligible Individual who receives
an Award under the Plan.


 


“Permitted Transferee” means:


 


(i) with respect to any MSCP Fund or the LLC, (A) any
Affiliate of a MSCP Fund, MS or any Affiliate or member of the LLC, (B) any
general or limited partner of any MSCP Fund (a “MSCP Partner”), (C) any current or former managing director,
general partner, director, limited partner, officer or employee of any MSCP
Fund or any MSCP Partner (collectively, “MSCP
Associates”), (D) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any MSCP Partner or MSCP
Associate and (E) a trust, corporation, partnership, or other entity
substantially all the economic interests of which are held by or for the
benefit of the MSCP Funds, their Affiliates, MSCP Partners, MSCP Associates,
their spouses or their children (whether by birth or adoption); or


 


(ii) with respect to a Participant, (A) a Person to whom
securities are Transferred by the Participant by will or the laws of descent
and distribution and (B) a trust controlled solely by the Participant


 


3

















 


established
for the exclusive benefit of the Participant or his or her issue; provided
that, in the case of clause (B), the Participant retains sole voting control of
the securities that are Transferred.


 


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


 


“Qualified Public Offering” means a firm commitment underwritten public
offering of common equity securities of the Company pursuant to an effective
registration statement under the Securities Act, other than pursuant to a
registration statement on Form S-4 or Form S-8 or any successor or
similar form, that shall realize at least $75,000,000 in gross proceeds to the
Company.


 


“Restricted Stock” means any Share granted to an Eligible
Individual under Article 7.


 


“Restricted Stock Unit” or “RSU”
means a contractual right granted to an Eligible Individual under Article 7
that is denominated in Shares. Each unit represents a right to receive the
value of one Share (or a percentage of such value) upon the terms and
conditions set forth in the Plan and the applicable Award Agreement.


 


“Sale of the Company” means either (i) a sale, lease,
transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries, taken as a whole or (ii) a transaction or series of
transactions (including by way of merger, consolidation, sale of stock or
otherwise) the result of which is that any Person or “group” (as defined in Section 13
of the Securities Exchange Act), other than the LLC, the MSCP Funds or any of
their respective Affiliates (or a group containing any of them), becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 and Rule 13d-5
promulgated under the Securities Exchange Act), directly or indirectly, of more
than 50% of the voting power of the outstanding voting stock of the Company.


 


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


 


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


 


“Shares” means shares of common stock of the Company, par value $0.001 per
share.


 


“SAR” or “Stock Appreciation Right”
means any right granted to an
Eligible Individual under Article 6 to receive, upon exercise by such
individual,


 


4

















 


the excess of (i) the Fair Market Value of one Share
on the date of exercise or at any time during a specified period before the
date of exercise over (ii) the Exercise Price of the right on the date of
grant, or if granted in connection with an outstanding Option, on the date of
grant of the related Option, as specified by the Committee in its sole
discretion.


 


“Subsidiary” means (i) any company during any
period in which it is a “subsidiary corporation” as that term is defined in Section 424(f) of
the Code with respect to the Company, or (ii) any other entity of which
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are directly
or indirectly owned by the Company.


 


“Substitute Award” means an Award granted pursuant to Article 5
in assumption of, or as an alternative to or replacement of, an outstanding
award previously granted by a business or entity all or a portion of which is
acquired by the Company or any Affiliate, or with which the Company or any
Affiliate combines.


 


ARTICLE 3

ADMINISTRATION


 


Section 3.01. Committee. The Plan shall be
administered by the Committee. Following an initial public offering of the
Shares, it is intended that each member of the Committee shall be (a) independent,
within the meaning of and to the extent required by applicable rulings and
interpretations of the Securities and Exchange Commission and the applicable
stock exchange on which the Shares trade or are quoted, (b) a “Non-Employee
Director”, as defined from time to time for purposes of Section 16 of the
Securities Act and the rules promulgated thereunder and (c) an
outside director pursuant to Section 162(m) of the Code, and any
regulations issued thereunder, in each case at such time as the Company becomes
subject to the respective regulatory regime.


 


Section 3.02. Authority of the Committee. Subject to
the provisions of the Plan, the Committee shall have the authority, in its
discretion and on behalf of the Company:


 


(a) to select from
among the Eligible Individuals those persons who shall receive Awards, to
determine the time or times of receipt, to determine the types of Awards and
the number of Shares covered by the Awards, to establish the terms, conditions,
performance criteria, restrictions and other aspects of the Awards and the
provisions of the applicable Award Agreement and to modify, amend, cancel or
suspend Awards;


 


5

















 


(b) to interpret the
Plan;


 


(c) to prescribe, amend
and rescind any rules and regulations relating to the Plan;


 


(d) to determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares, other Awards or other property, including without limitation the
authority to settle Awards in cash or property upon a Sale of the Company or
other similar corporate transaction;


 


(e) to determine
whether, to what extent and under what circumstances cash, Shares, other
Awards, other property and any other amounts payable with respect to an Award
shall or may be deferred either automatically or at the election of the
Participant or of the Committee;


 


(f) to cancel and
regrant, accelerate vesting or otherwise adjust the Exercise Price of an Award
previously granted under the Plan; and


 


(g) to make all other
determinations and findings, including factual findings, deemed necessary or
advisable for the administration of the Plan.


 


Section 3.03. Committee Discretion. In exercising its
authority, the Committee shall have the broadest possible discretion. Unless
otherwise expressly provided in the Plan, all designations, determinations,
interpretations and other decisions made in good faith by the Committee under
or with respect to the Plan, any Award or Award Agreement shall be final,
binding and conclusive on all persons.


 


Section 3.04. Committee Delegation. To the extent
permitted by applicable law or regulation, the Committee may delegate its
authority, or specified items thereof, to one or more designated individuals or
other committees of the Board.


 


ARTICLE 4

SHARES SUBJECT TO THE PLAN


 


Section 4.01. General Limitation. (a) Subject to
the provisions of Section 4.02, the maximum number of Shares that may be
delivered to Participants and their beneficiaries under the Plan shall be
5,001,172 Shares in the aggregate (including all grants made prior to the
amendment of the Plan). Following an initial public offering of the Shares,
notwithstanding the foregoing and subject to adjustment as provided in Section 4.02,
no Covered Employee may be granted Options or SARs under this Plan in any
calendar year that relate to more than 750,000 Shares.


 


6

















 


(b) To the extent any
Shares covered by an Award are not delivered to a Participant or beneficiary
because the Award is forfeited, canceled, expires without being exercised, or
the Shares are not delivered because the Award is settled in cash or used to
satisfy applicable minimum tax withholding obligations or otherwise, such
Shares shall not be deemed to have been delivered for purposes of determining
the maximum number of Shares available for delivery under the Plan.


 


(c) If the Exercise
Price of any Option or SAR granted under the Plan is satisfied by tendering
Shares to the Company (by either actual delivery or by attestation), only the
number of Shares issued net of the Shares tendered shall be deemed delivered
for purposes of determining the maximum number of Shares remaining available
for delivery under the Plan.


 


(d) Any Shares covered
by a Substitute Award shall not be deemed to have been delivered for purposes
of determining the maximum number of Shares remaining available for delivery
under the Plan.


 


Section 4.02. Adjustments. In the event that the
Committee determines that any corporate transaction or distribution (including,
without limitation, any stock split, stock dividend, extraordinary cash
dividend, issuance of warrants or other rights to purchase Shares or other
securities of the Company, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, repurchase, combination or exchange of
Shares or other securities of the Company) affects the Shares such that an
adjustment is determined by the 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, then the Committee may, in such manner as it may
deem equitable, adjust any or all of (i) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
with respect to which Awards may be granted under Section 4.01; (ii) the
number of Shares or other securities of the Company (or number and kind of
other securities and property) subject to outstanding Awards; and (iii) the
grant, purchase or exercise price or other terms and conditions of any Award or,
if deemed appropriate, the Committee may make provision for a cash payment to
the holder of an outstanding Award in full satisfaction of such Award.


 


ARTICLE 5

ELIGIBILITY AND PARTICIPATION


 


Subject to the terms and
conditions of the Plan, the Committee shall determine and designate, from time
to time, from among the Eligible Individuals those persons who will be granted
one or more Awards under the Plan and thereby become Participants in the Plan.
Awards may be granted on conditions


 


7

















 


specified by the Committee. Awards may be granted as
alternatives to or in replacement of Awards outstanding under the Plan or any
other plan or arrangement of the Company or an Affiliate (including a plan or
arrangement of a business or entity, all or a portion of which is acquired by
or combines with the Company or an Affiliate).


 


ARTICLE 6

OPTIONS AND STOCK APPRECIATION RIGHTS


 


Section 6.01. Options. The Committee is hereby
authorized to grant Options to Participants. Options granted pursuant to the
Plan may be either “incentive stock options” within the meaning of Section 422
of the Code or nonqualified stock options. “Incentive stock options” may only
be granted to officers and other key employees of the Company or its Subsidiaries.
Any Option granted under the Plan may be evidenced by an Award Agreement and
shall contain terms and conditions not inconsistent with the following
limitations and conditions.


 


Section 6.02. Stock Appreciation Rights. The Committee
is hereby authorized to grant Stock Appreciation Rights to Participants with
terms and conditions as the Committee shall determine not inconsistent with the
provisions of the Plan. SARs may be granted hereunder to Participants either
alone or in addition to other Awards granted under the Plan and may, but need
not, relate to a specific Option granted under this Article 6. Any SAR
granted under the Plan may be evidenced by an Award Agreement.


 


Section 6.03. Exercise Price. The Exercise Price of
each Option and each SAR shall be established by the Committee at the time of
grant. Unless otherwise determined by the Committee and specified in the Award
Agreement, the Exercise Price shall be the Fair Market Value of a Share on the
date of grant of the Option or SAR, as applicable.


 


Section 6.04. Vesting. Unless the Committee determines
otherwise, 20% of the Shares subject to an Option or SAR shall vest on each of
the first five anniversaries of the date of grant of such Option or SAR, as
applicable; provided that the
Participant remains a director, employee or consultant of the Company or the
Subsidiaries on each such date.


 


Section 6.05. Terms of Exercise. An Option or SAR
shall be exercisable only in accordance with the terms and conditions and
during such periods as may be established by the Committee in the Award
Agreement or otherwise in accordance with the Plan and the Award Agreement. The
Committee may, in its discretion, provide that such an Option or SAR may be
exercised in whole or in part, in installments, cumulative or otherwise, for
any period of time specified by


 


8

















 


the Committee or based on performance or other
criteria established by the Committee.


 


Section 6.06. Payment. No Shares shall be delivered
pursuant to any exercise of an Option until payment in full of the Exercise
Price, or adequate provision therefor (in the discretion of the Committee), is
received by the Company. The Committee shall determine the method or methods by
which such payment shall be made, and the form or forms of such payment, which
shall include: (i) cash, (ii) Shares owned by the Participant for at
least six months or in Shares which may be received by the Participant upon
exercise of the Option or SAR (in each case, the value of such Shares shall be
their Fair Market Value on the date of exercise), or (iii) any combination
thereof.


 


Section 6.07. Expiration and Termination. An Option or
SAR and all rights and obligations thereunder shall expire on the date to be
determined by the Committee and set forth in the Award Agreement, which shall
not be greater than ten years from the date of grant of such Option or SAR, as
applicable. Except as otherwise determined by the Committee at the time of
grant or thereafter, upon any termination of a Participant’s employment or
service with the Company or the Subsidiaries, the unvested portion of an Option
or SAR, as applicable, held by such Participant shall be deemed immediately
forfeited and cancelled without any payment or consideration being due from the
Company.


 


ARTICLE 7

RESTRICTED STOCK AND RESTRICTED STOCK UNITS


 


Section 7.01. Restricted Stock and Restricted Stock Units. (a) The
Committee is hereby authorized to grant Awards of Restricted Stock and
Restricted Stock Units to Participants. Restricted Stock and Restricted Stock
Units shall be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may impose
(including, without limitation, any limitation on the right to vote Shares
underlying the Restricted Stock or the right to receive any dividend, other
rights or property), which restrictions may lapse separately or in combination
at such times, under such circumstances (including future service
requirements), in such installments or otherwise and under such other
circumstances as the Committee may determine at the date of grant or
thereafter. Awards of Restricted Stock and Restricted Stock Units may be issued
to Participants for no consideration, for such minimum consideration as may be required
by applicable law or for other consideration, as determined by the Committee in
its sole discretion.


 


(b) Forfeiture. Except as otherwise determined
by the Committee, upon termination of employment or service during the
applicable restriction period, Restricted Stock or Restricted Stock Units that
are at that time subject to


 


9

















 


restrictions shall be forfeited and reacquired by
the Company; provided that the
Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock and Restricted Stock Units will lapse
in whole or in part on certain events, including in the event of terminations resulting
from specified causes.


 


(c) Certificates for Stock. Restricted Stock
granted under the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are registered in the
name of the Participant, the 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
possession of the certificates, and that the Participant deliver a stock power
to the Company, endorsed in blank, relating to the Restricted Stock.


 


ARTICLE 8

OTHER STOCK-BASED AWARDS


 


The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such
other Awards that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Shares. The Committee
shall determine the terms and conditions of such Awards, which shall be
consistent with the terms of the Plan. Shares or other securities delivered
pursuant to an Award in the nature of a purchase right granted under this Article 8
shall be purchased for such consideration, which may be paid by such method or
methods and in such form or forms, including, without limitation, cash, Shares,
other securities, other Awards, or other property, or any combination thereof,
as the Committee shall determine.


 


ARTICLE 9

OTHER PROVISIONS APPLICABLE TO ALL AWARDS


 


Section 9.01. Sale of the Company. Unless otherwise
determined by the Committee and specified in the Award Agreement, upon a Sale
of the Company, any unvested Awards shall become fully vested and
nonforfeitable.


 


Section 9.02. Settlement of Award. Shares delivered
pursuant to the exercise of an Option or SAR or upon settlement of any other
Award shall be subject to such conditions, restrictions and contingencies as
the Committee may establish pursuant to the Plan and any Award Agreement, in
addition to the conditions set forth herein.


 


10

















 


Section 9.03. Cancellation of Awards. Any provision of
this Plan or any Award Agreement to the contrary notwithstanding, the Committee
may cause any Option or SAR granted hereunder to be canceled in consideration
of a cash payment to the holder of such Option or SAR equal in value to the
product of (i) the number of Shares subject to such Option or SAR,
multiplied by (ii) the excess of the Fair Market Value of a Share as of
the date of such cancellation over the Exercise Price with respect to such canceled
Option or SAR. Any other Awards may be canceled in consideration of a cash
payment to the holder of such Award equal in value to the product of (i) the
number of Shares underlying such Award, multiplied by the excess of (ii) the
Fair Market Value of a Share as of the date of such cancellation over the
amount paid for such Award (if any).


 


Section 9.04. Amendment to Awards. The Committee may
waive any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Award theretofore granted, prospectively
or retroactively.


 


Section 9.05. Repurchase of Options or Other Awards. (a) Upon
any termination of a Participant’s employment or service with the Company or
the Subsidiaries, the unvested portion of any Options or SAR or any other Award
held by such Participant shall be deemed immediately forfeited and cancelled
and the vested portion of any Options or SARs or any other Award held by the
Participant shall, at the Company’s election after such termination, be subject
to purchase by the Company for an amount equal to the Fair Market Value of the
Shares subject to such Options or other Award on the date of termination of
employment or service, less, in the case of an Option or SAR, the aggregate
Exercise Price with respect to such Option or SAR, and in the case of any other
Award, the aggregate amount paid for such Award (if any). In the event that the
amount determined according to the preceding sentence shall be zero or less,
the repurchase of such Awards shall be effected by the delivery by the Company
to the Participant of a written notice stating that the value thereof is zero
and that such Awards are cancelled.


 


(b) If the Company
elects to purchase Options or SARs or other Awards pursuant to this Section 9.05,
the Company shall deliver written notice (a “Purchase
Notice”) to such Participant to such effect. Each Award subject to
being purchased shall be deemed to be expired and cancelled automatically upon
receipt of the Purchase Notice and the purchase price calculated as set forth
in Section 9.05(a). Payment of the purchase price may be made by delivery
of a check or by wire transfer.


 


Section 9.06. Repurchase of Shares. (a) Upon any
termination of a Participant’s employment or service with the Company or the Subsidiaries,
the Company will be entitled to repurchase at the Company’s election all or any
of the Shares held by a Participant (whether or not previously acquired by the
Participant in connection with the exercise of an Option or SAR or upon


 


11

















 


settlement of any other Award) (the “Repurchase Option”). If the Company elects
to exercise the Repurchase Option with respect to Shares held by any
Participant pursuant to this Section 9.06, it shall deliver written notice
(the “Repurchase Notice”) to such
Participant to such effect within 90 days after the occurrence of the event
giving rise to the Repurchase Option.


 


(b) The repurchase
price (the “Repurchase Price”) for
a Participant’s Shares to be repurchased (the “Surrendered Securities”) shall be the Fair Market Value of
such Surrendered Securities on the date of termination of employment or
service. Notwithstanding the foregoing, in the case of a termination of a
Participant’s employment or service involving a breach of any of the covenants
contained in the Award Agreement (including any covenants relating to
non-competition, non-solicitation and confidentiality), the Repurchase Price
shall be the lesser of the Fair Market Value of the Surrendered Securities on
the date of termination of employment or service and the original Exercise
Price (or other amount paid with respect to an Award, if any, in the case of
Awards other than Options and SARs) paid for such Surrendered Securities or the
Fair Market Value of such Surrendered Securities on the original date of
purchase, as applicable.


 


(c) (i) Within 10
business days after the Repurchase Price for the Surrendered Securities has
been determined, the Company shall send a notice to such holder of the
Surrendered Securities setting forth the consideration to be paid for such
securities and the time and place for the closing of the transaction, which
date shall not be more than 20 days nor less than five days after the delivery
of such notice. At such closing, the holder of the Surrendered Securities shall
deliver all certificates (if any exist) evidencing the Surrendered Securities
to be repurchased to the Company, and the Company shall pay for the Surrendered
Securities to be repurchased pursuant to the Repurchase Option by delivery of a
check or wire transfer in the aggregate amount of the Repurchase Price for such
securities.


 


(ii) The Company shall
be entitled to receive customary representations and warranties from such
holder that he or she is the record and beneficial owner of the Surrendered
Securities free and clear of any liens, and that he or she will transfer and
deliver valid title to such securities free and clear of any liens.


 


(d) Notwithstanding
anything to the contrary contained in this Plan, all repurchases of Surrendered
Securities by the Company shall be subject to applicable state and federal laws
and regulations and, to the extent applicable, the Company’s debt and equity
financing agreements. If any of the foregoing prohibits (in the discretion of the
Company) the repurchase of Surrendered Securities which are otherwise permitted
or required hereunder, the time periods provided in this Section 9.06
shall be suspended, and the Company may make such repurchases as soon as it is
permitted to do so under such restrictions, unless


 


12

















 


by such time such Repurchase Option has terminated
pursuant to Section 9.07 provided that, notwithstanding the foregoing, in
no event shall the time periods provided in this Section 9.06 be suspended
for more than 6 months.


 


(e) In the event the
Company delivers a Repurchase Notice to a Participant but does not elect to
repurchase all Shares held by such Participant, the Shares held by such
Participant which the Company has not elected to repurchase in the Repurchase
Notice shall no longer be subject to the Repurchase Option, but shall continue
to be subject to Article 12 hereof.


 


Section 9.07. Termination Of Certain Company Rights. The
Company’s rights under Sections 9.03, 9.05 and 9.06 shall terminate upon the
consummation of a Qualified Public Offering so long as Participant is a
director, employee or consultant of the Company or the Subsidiaries immediately
prior to such Qualified Public Offering and upon a Sale of the Company.


 


Section 9.08. Other Provisions. The grant of any Award
may also be subject to such other provisions as the Committee deems appropriate
(whether or not applicable to any Award granted to any other Participant),
including the treatment of Awards and Shares upon the occurrence of any
corporate transaction or distribution involving the Company, including any
merger, reorganization, recapitalization or other similar corporate event.


 


ARTICLE 10

DEFERRALS


 


The Committee, in an Award
Agreement or otherwise, may permit a Participant to defer such Participant’s
receipt of the payment of cash or delivery of Shares that would otherwise be
due to such Participant by virtue of the exercise of an Option or SAR or the
settlement of any other Award made under this Plan.


 


ARTICLE 11

TAX WITHHOLDING


 


All distributions under the
Plan are subject to withholding of all applicable taxes, and the Committee may
condition the delivery of Shares or other benefits upon satisfaction of all
applicable withholding requirements. The Committee, in its discretion and
subject to such requirements as it may prescribe, may permit such withholding
obligations to be satisfied through any combination of the following: (i) cash
payment by the Participant, (ii) payroll withholding of the Participant’s
salary, wages or other compensation, (iii) surrender of Shares which the
Participant already owns (either by actual surrender or attestation), or (iv) surrender
of Shares or other benefits to which the Participant is otherwise entitled


 


13

















 


(e.g.,
upon exercise of an Option or SAR or the settlement of any other Award made
under this Plan) under the terms of the Plan.


 


ARTICLE 12

TRANSFERABILITY


 


Section 12.01. Transferability of Options and Other Awards. Except
as otherwise expressly provided in an Award Agreement, no Award granted under
this Plan may be anticipated, assigned, attached, garnished, optioned,
transferred or made subject to any creditor’s process, whether voluntarily,
involuntarily or by operation of law. An Option or any other Award granted
under this Plan may be exercised during the lifetime of the Participant only by
him or her or by his or her legal representative.


 


Section 12.02. Transferability of Shares. Except as
otherwise expressly provided in an Award Agreement, Shares delivered pursuant
to the exercise of an Option or SAR or upon settlement of any other Award
granted under this Plan may not be anticipated, assigned, attached, garnished,
optioned, transferred or made subject to any creditor’s process, whether
voluntarily, involuntarily or by operation of law.


 


ARTICLE 13

LIMITATION ON IMPLIED RIGHTS


 


Section 13.01. Property Rights. Neither a Participant
nor any other Person shall, by reason of participation in the Plan, acquire any
right in or title to any assets, funds or property of the Company or any
Affiliate whatsoever including without limitation, any specific funds, assets
or other property which the Company or any Affiliate, in its or their sole
discretion, may set aside in anticipation of a liability under the Plan.
Subject to the terms of the Plan, a Participant shall have only a contractual
right to the Shares or amounts, if any, payable under the Plan, unsecured by
any assets of the Company or any Affiliate, and nothing contained in the Plan
shall constitute a representation or guarantee that the assets of the Company
or any Affiliate shall be sufficient to pay any benefits to any Person.


 


Section 13.02. Employment Rights. Nothing in this Plan
nor in any Award Agreement shall confer upon any Participant any promise or
commitment by the Company or an Affiliate regarding employment, employment
positions, work assignments, compensation or any other term or condition of
employment or affiliation.


 


14

















 


Section 13.03. No Implied Rights or Obligations. The
Company, in establishing and maintaining this Plan as a voluntary and
unilateral undertaking, expressly disavows the creation of any rights in
Participants or others claiming entitlement under the Plan or any obligations
on the part of the Company, any Affiliate or the Committee, except as expressly
provided herein. In particular, unless otherwise expressly provided for in the
Award Agreement, no third-party beneficiary rights shall be created under the
Plan.


 


Section 13.04. No Trust or Fund Created. Neither the
Plan nor any Award shall create or be construed to create a trust or separate
fund of any kind or a fiduciary relationship between the Company or any
Affiliate and a Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Affiliate pursuant
to an Award, such right shall be no greater than the right of any unsecured
general creditor of the Company or any Affiliate.


 


Section 13.05. Rights as a Shareholder. No Participant
or holder of any Option or of any other Award under this Plan shall have any
rights as a shareholder with respect to any Shares to be issued with respect to
any Option or other Award under the Plan until he or she shall have become the
holder of such Shares in accordance with the terms of the Plan.


 


ARTICLE 14

GOVERNMENT AND STOCK EXCHANGE REGULATIONS


 


The Committee may refuse to
issue or transfer any Shares or other consideration under an Award if, acting
in its sole discretion, it determines that the issuance or transfer of such
Shares or such other consideration might violate any applicable law or
regulation or entitle the Company to recover the same under Section 16(b) of
the Exchange Act, and any payment tendered to the Company by a Participant,
other holder or beneficiary in connection with the exercise of such Award shall
be promptly refunded to the relevant Participant, holder or beneficiary.
Without limiting the generality of the foregoing, no Award granted hereunder
shall be construed as an offer to sell securities of the Company, and no such
offer shall be outstanding, unless and until the Committee in its sole
discretion has determined that any such offer, if made, would be in compliance
with all applicable requirements of the U.S. federal and state securities laws
and any other laws to which such offer, if made, would be subject.


 


Upon the exercise of an
Option or settlement of any other Award under this Plan at a time when there is
not in effect a registration statement under the Securities Act relating to the
Shares issuable upon exercise or payment thereof and available for delivery a
prospectus meeting the requirements of Section 10(a)(3) of the
Securities Act or if the rules or interpretations of the Securities and


 


15

















 


Exchange Commission so require, the Shares may be
issued only if the holder represents and warrants in writing to the Company
that the Shares purchased are being acquired for investment and not with a view
to distribution thereof.


 


The Company is under no duty
to ensure that Shares may legally be delivered under the Plan, and shall have
no liability to Award recipients in the event such delivery of Shares may not
be made.


 


ARTICLE 15

AMENDMENTS,  SUSPENSIONS
OR TERMINATION OF PLAN


 


The Board may at any time
suspend or terminate the Plan and may amend it from time to time in such
respects as the Board may deem advisable in order that Awards granted
thereunder shall conform to any change in the law, or in any other respect
which the Board may deem to be in the best interests of the Company; provided, however, that no such amendment
shall, without the approval of holders of a majority of the voting power
represented by the securities of the Company entitled to vote, increase the
maximum number of Shares for which Awards may be granted under the Plan (in the
aggregate or to any single individual), except as specified in Section 4.02,
or change the class of employees eligible to participate in the Plan.


 


ARTICLE 16

TERMINATION


 


The Plan shall continue in
effect until May 29, 2013, unless earlier terminated by the Board pursuant
to Article 15.


 


ARTICLE 17

GOVERNING LAW


 


The validity, construction
and effect of the Plan, the Award Agreements and any rules, regulations or
procedures relating thereto shall be determined in accordance with the laws of
the State of Delaware, without application of the conflict of laws principles
thereof.


 


16