ex102-plan







A - 1   Appendix A   MAGELLAN PETROLEUM CORPORATION   2012 OMNIBUS INCENTIVE COMPENSATION PLAN   Effective as of January 16, 2013   Table of Contents    





 







A - 2   TABLE OF CONTENTS   SECTION 1 PURPOSES        A-5   SECTION 2 DEFINITIONS        A-5   2.1 Award         A-5   2.2 Award Agreement       A-5   2.3 Beneficiary        A-5   2.4 Board         A-5   2.5 Cash Awards        A-6   2.6 Cause         A-6   2.7 Change in Capitalization      A-6   2.8 Change of Control       A-6   2.9 CNG Committee       A-7   2.10 Code         A-7   2.11 Common Stock       A-8   2.12 Company        A-8   2.13 Consultant        A-8   2.14 Covered Employee       A-8   2.15 Director        A-8   2.16 Effective Date        A-8   2.17 Employee        A-8   2.18 Employer        A-8   2.19 Exchange Act        A-8   2.20 Fair Market Value       A-8   2.21 Full Value Award       A-9   2.22 Good Reason        A-9   2.23 Incentive Award       A-9   2.24 Incentive Stock Option      A-10   2.25 Maximum Grant       A-10   2.26 Nonqualified Option       A-10   2.27 Option         A-10   2.28 Option Price        A-10   2.29 Other Stock-Based Award      A-10   2.30 Participant        A-10   2.31 Performance Goals       A-10   2.32 Performance Period       A-12   2.33 Performance Shares       A-12   2.34 Performance Units       A-12   2.35 Permitted Transferee       A-12   2.36 Plan         A-12   2.37 Plan Administrator       A-12   2.38 Prior Plan        A-12   2.39 Restricted Stock       A-12   2.40 Restricted Stock Units      A-12   2.41 Restriction Period       A-12   2.42 Rule 16b-3        A-12   2.43 Section 16 Insider       A-13   Table of Contents    





 







A - 3   2.44 Section 162(m)       A-13   2.45 Section 409A        A-13   2.46 Securities Act        A-13   2.47 Stock Appreciation Right      A-13   2.48 Subsidiary        A-13   2.49 Termination of Service      A-13   SECTION 3 ADMINISTRATION       A-14   3.1 Plan Administrator       A-14   3.2 Authority of Plan Administrator     A-14   3.3 Indemnification of Plan Administrator    A-15   SECTION 4 ELIGIBILITY        A-15   SECTION 5 SHARES AVAILABLE FOR THE PLAN    A-15   5.1 Aggregate Shares       A-15   5.2 Annual Limitations       A-16   5.3 Adjustments in Authorized Shares     A-17   5.4 Effect of Certain Transactions     A-17   SECTION 6 AWARD AGREEMENTS      A-18   SECTION 7 STOCK OPTIONS       A-18   7.1 Grant of Options       A-18   7.2 Special Provisions Applicable to Incentive Stock Options  A-19   7.3 Terms of Options       A-19   SECTION 8 STOCK APPRECIATION RIGHTS     A-22   8.1 Grant of Stock Appreciation Rights     A-22   8.2 Exercise of Stock Appreciation Rights    A-23   8.3 Special Provisions Applicable to Stock Appreciation Rights  A-23   8.4 No Repricing or Exchange      A-23   SECTION 9 PERFORMANCE SHARES AND PERFORMANCE UNITS  A-24   9.1 Grant of Performance Shares and Performance Units  A-24   9.2 Value of Performance Shares and Performance Units  A-24   9.3 Payment of Performance Shares and Performance Units  A-24   9.4 Form and Timing of Payment      A-24   9.5 Dividend Equivalents       A-25   SECTION 10 RESTRICTED STOCK      A-25   10.1 Grant of Restricted Stock      A-25   10.2 Restriction Period       A-25   10.3 Other Restrictions       A-25   10.4 Voting Rights; Dividends and Other Distributions   A-26   10.5 Issuance of Shares; Settlement of Awards; Forfeiture  A-26   SECTION 11 RESTRICTED STOCK UNITS     A-26   11.1 Grant of Restricted Stock Units     A-26   11.2 Restriction Period       A-26   Table of Contents    





 







A - 4   11.3 Other Restrictions       A-27   11.4 Dividend Equivalents       A-27   11.5 Issuance of Shares; Settlement of Awards; Forfeiture  A-27   SECTION 12 INCENTIVE AWARDS      A-28   12.1 Incentive Awards       A-28   12.2 Performance Goal Certification     A-28   12.3 Discretion to Reduce Awards; Participant's Performance  A-28   12.4 Required Payment of Incentive Awards    A-28   SECTION 13 CASH AWARDS AND OTHER STOCK-BASED AWARDS A-29   13.1 Grant of Cash Awards       A-29   13.2 Other Stock-Based Awards      A-29   13.3 Value of Cash Awards and Other Stock-Based Awards  A-29   13.4 Payment of Cash Awards and Other Stock-Based Awards  A-29   SECTION 14 DEFERRAL ELECTIONS      A-29   SECTION 15 TERMINATION OF SERVICE     A-30   SECTION 16 EFFECT OF A CHANGE OF CONTROL    A-30   SECTION 17 REGULATORY APPROVALS AND LISTING   A-31   SECTION 18 GENERAL PROVISIONS      A-32   18.1 Clawback/Forfeiture Events      A-32   18.2 Nontransferability       A-32   18.3 No Individual Rights       A-32   18.4 Other Compensation       A-32   18.5 Leaves of Absence and Change in Status    A-33   18.6 Transfers        A-33   18.7 Unfunded Obligations       A-33   18.8 Beneficiaries        A-33   18.9 Governing Law       A-34   18.10 Satisfaction of Tax Obligations     A-34   18.11 Participants in Foreign Jurisdictions     A-35   SECTION 19 REGULATORY COMPLIANCE     A-35   19.1 Rule 16b-3 and Section 162(m)     A-35   19.2 Section 409A        A-35   SECTION 20 ESTABLISHMENT AND TERM OF PLAN    A-36   SECTION 21 AMENDMENT, TERMINATION, OR DISCONTINUANCE   OF THE PLAN         A-36   21.1 Amendment of Plan       A-36   21.2 Termination or Suspension of Plan     A-36   21.3 Section 162(m) Approval      A-36   Table of Contents    





 







A - 5   MAGELLAN PETROLEUM CORPORATION   2012 OMNIBUS INCENTIVE COMPENSATION PLAN   SECTION 1 PURPOSES   The purposes of the Magellan Petroleum Corporation 2012 Omnibus Incentive Compensation Plan   (the “Plan”) are to promote the interests of Magellan Petroleum Corporation, a Delaware corporation (the   “Company”), and its stockholders by strengthening its ability to attract, retain, and motivate Employees,   members of the Board, and Consultants of the Company and any Subsidiary by furnishing suitable   recognition of their performance, ability, and experience, to align their interests and efforts to the long-   term interests of the Company's stockholders, and to provide them with a direct incentive to achieve the   Company's strategic and financial goals.  In furtherance of these purposes, the Plan provides for the grant   of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares,   Performance Units, Incentive Awards, Cash Awards, and Other Stock-Based Awards to Participants in   accordance with the terms and conditions set forth below.   SECTION 2 DEFINITIONS   Unless otherwise required by the context, the following terms when used in the Plan shall have the   meanings set forth in this Section 2:   1. Award   Any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance   Share, Performance Unit, Incentive Award, Cash Award, or Other Stock-Based Award, in each case   payable in Common Stock and/or in cash as may be designated by the Plan Administrator.   2. Award Agreement   The written agreement setting forth the terms, conditions, rights, and duties applicable to an Award   granted under the Plan.  All Award Agreements shall be deemed to incorporate the provisions of the Plan.    An Award Agreement need not be identical to other Award Agreements either in form or substance.  The   Plan Administrator may, in its discretion, provide for the use of electronic, internet, or other non-paper   Award Agreements, and provide that execution of an Award Agreement may be evidenced by any   appropriate form of electronic signature or affirmative email or other electronic response attached to or   logically associated with such Award Agreement, which is executed or adopted by a party with an   indication of the intention by such party to execute or adopt such Award Agreement for purposes of   execution thereof.   3. Beneficiary   The person or persons designated by the Participant pursuant to Section 7.3(f) or Section 18.8 of   this Plan to whom payments are to be paid pursuant to the terms of the Plan in the event of the   Participant's death.   4. Board   The Board of Directors of the Company.   Table of Contents    





 







A - 6   5. Cash Awards   As defined in Section 13.1.   6. Cause   “Cause” shall have the meaning ascribed thereto in any employment, consulting, change of control   severance, or similar service agreement between a Participant and an Employer, or, in the absence of such   agreement, a termination of a Participant's employment with the Company and its Subsidiaries resulting   from (a) continued and substantial substandard performance of reasonably assigned work or other service   duties that has not been cured to the Employer's satisfaction; (b) intentional and substantial workplace   misconduct; (c) violation of the Employer's policies, including, without limitation, the Employer's   “Standards of Conduct” or other applicable code of ethics and/or business conduct; (d) fraud or other   dishonesty against the Employer; (e) engagement in conduct that the Participant knows or should know is   materially injurious to the business or reputation of the Employer; (f) falsifying Employer or Employee   records (including an employment application); (g) unauthorized use of Employer equipment or   confidential information of an Employer or third party who has entrusted such information to the   Employer; or (h) conviction of a felony involving moral turpitude.  With respect to a Consultant, Cause   shall also include a breach by the Consultant of the applicable consulting or similar service agreement.    Whether a Participant has been terminated for Cause will be determined by the Board in its sole discretion   with respect to a Section 16 Insider, and, with respect to all other Participants, by the Company's Chief   Executive Officer in his or her sole discretion.   7. Change in Capitalization   Any increase or reduction in the number of shares of Common Stock, any change (including,   without limitation, in the case of a spin-off, dividend, or other distribution in respect of shares, a change in   value) in the shares of Common Stock, or any exchange of shares of Common Stock for a different   number or kind of shares of Common Stock or other securities of the Company or another corporation, by   reason of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off, split-up,   issuance of warrants, rights, or debentures, stock dividend, stock split or reverse stock split, extraordinary   cash dividend, property dividend, combination, or exchange of shares, change in corporate structure, or   otherwise.   8. Change of Control   The occurrence of any of the following after the Effective Date:   (a) any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the   Exchange Act) (a “Person”) acquires beneficial ownership (within the meaning of Rule 13d-3   promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of   Common Stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined   voting power of the then outstanding voting securities of the Company entitled to vote generally in the   election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes   of this subsection (a), the following acquisitions shall not constitute a Change of Control:  (1) any   acquisition directly from the Company or its affiliates, (2) any acquisition by the Company, (3) any   acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or   any corporation controlled by the Company, or (4) any acquisition pursuant to a transaction which   complies with clauses (A), (B), and (C) of Section 2.8(c); or   Table of Contents    





 







A - 7   (b) individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”)   cease for any reason to constitute at least a majority of the Board; provided, however, that any individual   becoming a director subsequent to the Effective Date whose election, or nomination for election by the   Company's stockholders, was approved by a vote of at least a majority of the directors then comprising   the Incumbent Board shall be considered as though such individual were a member of the Incumbent   Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a   result of an actual or threatened election contest with respect to the election or removal of directors or   other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the   Board; or   (c) consummation by the Company of a reorganization, merger, or consolidation, or sale or   other disposition of all or substantially all of the assets of the Company, or the acquisition of assets of   another entity (a “Business Combination”), in each case, unless, following such Business Combination,   (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of   the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior   to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the   then outstanding shares of Common Stock and the combined voting power of the then outstanding voting   securities entitled to vote generally in the election of directors, as the case may be, of the corporation   resulting from such Business Combination (including, without limitation, a corporation which as a result   of such transaction owns the Company or all or substantially all of the Company's assets either directly or   through one or more subsidiaries) in substantially the same proportions as their ownership, immediately   prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding   Company Voting Securities, as the case may be, (B) no person (excluding any employee benefit plan (or   related trust) of the Company or such corporation resulting from such Business Combination) beneficially   owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of Common Stock   of the corporation resulting from such Business Combination or the combined voting power of the then   outstanding voting securities of such corporation, except to the extent that such ownership existed prior to   the Business Combination, and (C) at least a majority of the members of the board of directors of the   corporation resulting from such Business Combination were members of the Incumbent Board at the time   of the execution of the initial agreement, or of the action of the Board, providing for such Business   Combination; or   (d) approval by the stockholders of the Company of a complete liquidation or dissolution of   the Company.   Notwithstanding the foregoing, with respect to an Award that is (i) subject to Section 409A and   (ii) a Change of Control would accelerate the timing of payment thereunder, the term “Change of Control”   shall mean a change in the ownership or effective control of the Company, or in the ownership of a   substantial portion of the assets of the Company, as defined in Section 409A and the regulations and other   authoritative guidance issued thereunder, but only to the extent inconsistent with the above definition, and   only to the minimum extent necessary to comply with Section 409A as determined by the CNG   Committee.   9. CNG Committee   The Compensation, Nominating and Governance Committee of the Board.   10. Code   Table of Contents    





 







A - 8   The U.S. Internal Revenue Code of 1986, as amended and in effect from time to time, and the   temporary or final regulations of the Secretary of the U.S. Treasury adopted pursuant to the Code.   11. Common Stock   The Common Stock of the Company, $0.01 par value per share, or such other class of shares or   other securities as may be applicable pursuant to the provisions of Section 5.   12. Company   As defined in Section 1.   13. Consultant   Any consultant, agent, advisor, or independent contractor who renders services to the Company or   any Subsidiary and who is a natural person and otherwise qualifies as a consultant under the applicable   rules of the U.S. Securities and Exchange Commission for registration of Common Stock on a Form S-8   Registration Statement.   14. Covered Employee   With respect to any grant of an Award, a Participant who the Plan Administrator deems is or may   become for any year a “covered employee” as defined in Section 162(m).   15. Director   Any individual who is a member of the Board of Directors of the Company or of any Subsidiary.   16. Effective Date   The effective date of the Plan is January 16, 2013, the date on which it was approved by the   stockholders of the Company.   17. Employee   Any officer or other employee of the Company or of any Subsidiary.  An Employee on a leave of   absence for such periods and purposes conforming to the personnel policy of the Company may be   considered still in the employ of the Company or a Subsidiary for purposes of eligibility for participation   in this Plan.   18. Employer   As to any Participant on any date, the Company or a Subsidiary that employs or retains the   Participant on such date.   19. Exchange Act   The U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated   thereunder.   Table of Contents    





 







A - 9   20. Fair Market Value   As of any given date, the closing sales price at which Common Stock is sold on such date as   reported by the NASDAQ Stock Market or any other national securities exchange or comparable service   the Plan Administrator may determine is reliable for such date, or if no Common Stock was traded on   such date, on the next preceding day on which Common Stock was so traded.  If the Fair Market Value of   the Common Stock cannot be determined pursuant to the preceding provisions, the “Fair Market Value” of   the Common Stock shall be determined by the Plan Administrator in such a manner as it deems   appropriate, consistent with the requirements of Section 409A.   21. Full Value Award   An Award other than of Options or Stock Appreciation Rights, which is settled by the issuance of   Common Stock.   22. Good Reason   Unless otherwise provided in an Award Agreement, the term “Good Reason” shall have the   following meaning: (a) to the extent defined in an Employee's written employment agreement or change   of control severance agreement with an Employer, the term “Good Reason” shall have the same meaning   as set forth in such agreement; and (b) in the case of any Employee not covered by clause (a) above, the   term “Good Reason” shall mean the occurrence after a Change of Control of any of the following events   or conditions:   (i) a change in such Employee's status, authority, position, titles, duties, or   responsibilities (including reporting responsibilities) with the Employer which represents a   material diminution or adverse change in, or are materially inconsistent with, such status,   authority, position, titles, duties, or responsibilities in effect at any time within the ninety (90) days   preceding the date upon which a Change of Control occurs or at any time thereafter, excluding for   this purpose (A) an isolated, unsubstantial, and inadvertent action by the Employer not taken in   bad faith and which is remedied by the Employer promptly after receipt of notice thereof given by   such Employee, and (B) any removal or failure to reappoint such Employee to any such position in   connection with the termination of such Employee's employment for death, disability, or Cause;   (ii) any reduction in such Employee's salary or any failure to pay such Employee any   compensation or benefits to which such Employee is entitled within ten (10) business days after   notice thereof;   (iii) the failure by the Employer to provide such Employee with compensation and   benefits, in the aggregate, at least equal (in terms of benefit levels and/or incentive or reward   opportunities) to those provided for under each compensation and employee benefit policy, plan,   program, and practice in which such Employee was participating at any time within the ninety (90)   days preceding the date upon which a Change of Control occurs or at any time thereafter; or   (iv) the Employer's requiring such Employee to be based at any place outside a thirty-   five (35) mile radius from such Employee's location of employment prior to the Change of   Control, except for reasonably required travel for the Employer's business which is not materially   greater than such travel requirements prior to the Change of Control.   Table of Contents    





 







A - 10   23. Incentive Award   A percentage of base salary, a fixed dollar amount, or other measure of compensation which   Participants are eligible to receive, in cash and/or other Awards under the Plan, at the end of a   Performance Period if certain performance measures are achieved.   24. Incentive Stock Option   An Option intended to meet the requirements of an “incentive stock option” as defined in Section   422 of the Code, as in effect at the time of grant of such Option, or any statutory provision that may   hereafter replace such section.   25. Maximum Grant   The maximum grants set forth in Section 5.2.   26. Nonqualified Option   An Option which is not intended to meet the requirements of an “incentive stock option” as   defined in Section 422 of the Code.   27. Option   An Incentive Stock Option or a Nonqualified Option.   28. Option Price   The price per share of Common Stock at which an Option is exercisable.   29. Other Stock-Based Award   As defined in Section 13.2.   30. Participant   An eligible Employee, Director, or a Consultant to whom an Award or Awards are granted under   the Plan as set forth in Section 4.   31. Performance Goals   The Plan Administrator may grant Awards subject to one or more Performance Goals set forth in   the table below (collectively the “Performance Goals”) to any Participant, including, without limitation, to   any Covered Employee.  As to any such Awards, the Plan Administrator shall establish one or more of the   Performance Goals for each Performance Period in writing.  Each Performance Goal selected for a   particular Performance Period shall include any one or more of the following, either individually,   alternatively, or in any combination, applied to either the Company as a whole or to a Subsidiary or a   business unit of the Company or any Subsidiary, either individually, alternatively, or in any combination,   and measured either annually or cumulatively over a period of time, on an absolute basis or relative to the   pre-established target, to previous years' results, or to a designated comparison group, in each case as   specified by the Plan Administrator:   Table of Contents    





 







A - 11   Financial Goals:  - Earnings    - Revenues    - Debt level    - Cost reduction targets    - Interest-sensitivity gap   levels    - EBITDAX or adjusted   EBITDAX    - Debt/average daily   production    - Earnings per share    - Cash flow from   operations    - Equity ratios    - Capital expended    - Weighted average cost of   capital    - Return on assets    - Debt/proved developed   reserves    - Net income    - Free cash flow    - Expenses    - Working capital    - Operating or profit   margin    - Return on equity or   capital employed    - Debt/proved reserves   Operating Goals:  - Amount of oil and gas   reserves    - Lease operating expense/   barrels of oil equivalent    - Oil and gas reserve   additions    - Costs of finding oil and   gas reserves    - Oil and gas replacement   ratios    - Natural gas and/or oil   production or sales   Corporate and Other Goals:  - Total stockholder return    - Asset quality levels    - Investments    - Satisfactory internal or   external audits    - Achievement of balance   sheet or income statement   objectives    - Market share    - Assets    - Asset sale targets    - Value of assets    - Employee retention/   attrition rates    - Improvement of financial   ratings    - Charge-offs    - Non-performing assets    - Fair market value of   common stock    - Regulatory compliance    - Safety targets    - Economic value added    - Production growth per net   debt adjusted share   The Plan Administrator may adjust the Performance Goals to include or exclude extraordinary   charges, gains or losses on the disposition of business units, losses from discontinued operations,   restatements and accounting changes, and other unplanned special charges such as restructuring expenses,   acquisitions, acquisition expenses, including expenses related to goodwill and other intangible assets,   stock offerings, stock repurchases, and loan loss provisions.  The Plan Administrator may also provide for   the manner in which performance will be measured against the Performance Goals (or may adjust the   Performance Goals) to reflect the impact of specified corporate transactions, a Change in Capitalization,   special charges, accounting policy changes, and tax law changes.  In addition, the Plan Administrator may   make such adjustments to the Performance Goals applicable to Participants who are not Covered   Employees as it determines are appropriate.  Such adjustments may occur at the time of the granting of an   Award, or at any time thereafter, but, in the case of Covered Employees, only to the extent permitted by   Section 162(m).  Performance Goals may include a threshold level of performance below which no   Awards shall be earned, target levels of performance at which specific Awards will be earned, and a   maximum level of performance at which the maximum level of Awards will be earned.   In establishing Performance Goals with respect to Covered Employees, the Plan Administrator   shall ensure such Performance Goals (i) are established no later than the end of the first 90 days of the   Performance Period (or such other time as may be required or permitted for “performance-based   compensation” under Section 162(m), if applicable), and (ii) satisfy all other applicable requirements   imposed by Section 162(m), including the requirement that such Performance Goals be stated in terms of   an objective formula or standard, and the Plan Administrator may not in any event increase the amount of   compensation payable to a Covered Employee upon the satisfaction of any Performance Goal.  Prior to   the payment of any “performance-based compensation” within the meaning of Section 162(m), the Plan   Administrator shall certify in writing (which shall be satisfied upon the Plan Administrator's approval of   preambles and resolutions regarding such performance results and payout and without condition with   respect to any subsequent approval of the minutes of the meeting relating to such certification) the extent   to which the applicable Performance Goals were, in fact, achieved and the amounts to be paid, vested, or   delivered as a result thereof; provided, that the Plan Administrator may reduce, but not increase, such   amount.   Table of Contents    





 







A - 12   32. Performance Period   That period of time during which Performance Goals are evaluated to determine the vesting,   granting, or payout of Awards under the Plan, as the Plan Administrator may determine, provided that the   period is no longer than ten (10) years.   33. Performance Shares   An Award granted under the Plan representing the right to receive a number of shares of Common   Stock for each Performance Share granted, as the Plan Administrator may determine.   34. Performance Units   An Award granted under the Plan representing the right to receive a payment (either in cash or   Common Stock) equal to the value of a Performance Unit, as the Plan Administrator may determine.   35. Permitted Transferee   As defined in Section 7.3(f).   36. Plan   As defined in Section 1.   37. Plan Administrator   The CNG Committee or other committee of the Board appointed and authorized pursuant to   Section 3.1 to administer the Plan.   38. Prior Plan   The Company's 1998 Stock Incentive Plan, as amended.   39. Restricted Stock   Common Stock granted under the Plan that is subject to the requirements of Section 10 and such   other restrictions as the Plan Administrator deems appropriate.  References to Restricted Stock in this Plan   shall include Restricted Stock awarded in conjunction with Incentive Awards pursuant to Section 12,   unless the context otherwise requires.   40. Restricted Stock Units   An Award granted under the Plan representing a right to receive a payment (either in cash or   Common Stock) equal to the value of a share of Common Stock.   41. Restriction Period   As defined in Sections 10.2 and 11.2, as applicable.   42. Rule 16b-3   Rule 16b-3 of the General Rules and Regulations under the Exchange Act.   Table of Contents    





 







A - 13   43. Section 16 Insider   Any person who is selected by the Plan Administrator to receive an Award pursuant to the Plan and   who is or is reasonably expected to become subject to the requirements of Section 16 of the Exchange   Act, and the rules and regulations promulgated thereunder.   44. Section 162(m)   Section 162(m) of the Code.   45. Section 409A   Section 409A of the Code.   46. Securities Act   The U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated   thereunder.   47. Stock Appreciation Right   Any right granted under Section 8.   48. Subsidiary   An entity that is designated by the Plan Administrator as a subsidiary for purposes of the Plan and   that is a corporation, partnership, joint venture, limited liability company, limited liability partnership, or   other entity in which the Company owns directly or indirectly, fifty percent (50%) or more of the voting   power or profit interests, or as to which the Company or one of its affiliates serves as general or managing   partner or in a similar capacity.  Notwithstanding the foregoing, for purposes of Options intended to   qualify as Incentive Stock Options, the term “Subsidiary” shall mean a corporation (or other entity treated   as a corporation for tax purposes) in which the Company directly or indirectly holds fifty percent (50%) or   more of the voting power.   49. Termination of Service   (a) As to an Employee, the time when the employee-employer relationship between a   Participant and the Company or any Employer is terminated for any reason, including, without limitation,   a termination by resignation, discharge, death, disability, or retirement, but excluding terminations where   the Participant simultaneously commences or remains in employment or service with the Company or any   Employer.   (b) As to a Consultant, the time when the engagement of a Participant as a Consultant to the   Company or any Employer is terminated for any reason, with or without Cause, including, without   limitation, by resignation, discharge, death, or retirement, but excluding terminations where the   Consultant simultaneously commences or remains in employment or service with the Company or any   Employer.   Table of Contents    





 







A - 14   SECTION 3 ADMINISTRATION   1. Plan Administrator   (a) The Plan Administrator shall be the CNG Committee, or any other duly authorized   committee of the Board (comprised of two or more members of the Board) that is appointed by the Board   to administer the Plan.  The Plan Administrator (including each individual who is a member thereof) shall   be constituted at all times so as to (i) be “independent” as such term is defined pursuant to the rules of any   stock exchange on which the Common Stock may then be listed, and (ii) meet the non-employee director   standards of Rule 16b-3 and the outside director requirements of Section 162(m), so long as any of the   Company's equity securities are registered pursuant to Section 12(b) or 12(g) of the Exchange Act.   (b) The Plan Administrator may designate appropriate Employees or other agents of the   Company to handle the day-to-day administrative matters of the Plan.   2. Authority of Plan Administrator   Subject to the express terms and conditions set forth herein, the Plan Administrator shall have the   authority and power from time to time to:   (a) select the Participants to whom Awards shall be granted under the Plan and the number of   shares or amount of cash subject to such Awards, and prescribe the terms and conditions (which need not   be identical) of each such Award, including, in the case of Options and Stock Appreciation Rights, the   Option Price, vesting schedule, and duration;   (b) set the terms and conditions of any Award consistent with the terms of the Plan (which may   be based on Performance Goals or other performance measures as the Plan Administrator shall   determine), and make any amendments, modifications, or adjustments to such Awards as are permitted by   the Plan;   (c) construe and interpret the Plan and the Awards granted hereunder, and establish, amend,   and revoke rules and regulations for the administration of the Plan, including, without limitation,   correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any   Award Agreement, in the manner and to the extent it shall deem necessary or advisable, including so that   the Plan and the operation of the Plan comply with Rule 16b-3 and the Code, to the extent applicable, and   other applicable laws, and otherwise to make the Plan fully effective;   (d) exercise its discretion with respect to the powers and rights granted to it as set forth in the   Plan; and   (e) generally exercise such powers and perform such acts as are deemed necessary or   advisable to promote the best interests of the Company with respect to the Plan.   All decisions and determinations by the Plan Administrator in the exercise of the above authority   and powers shall be final, binding, and conclusive upon the Company, a Subsidiary, the Participants, and   all other persons having or claiming any interest therein.  The Plan Administrator shall cause the   Company, at the Company's expense, to take any action related to the Plan which may be necessary to   comply with the provisions of any U.S. federal, state, or foreign law, or any regulations issued thereunder,   which the Plan Administrator determines are intended to be complied with.  All Awards and any   Table of Contents    





 







A - 15   administrative action taken by the Plan Administrator shall be in conformity with all applicable U.S.   federal, state, and local laws and shall not discriminate on the basis of gender, race, color, religion,   national origin, citizenship, age, disability, marital or veterans status, or any other legally protected   categories.   Notwithstanding the foregoing, the Plan Administrator shall not be entitled to exercise any   discretion otherwise authorized hereunder with respect to any Awards held by Covered Employees if the   ability to exercise such discretion or the exercise of such discretion itself would cause the compensation   attributable to such Awards to fail to qualify as performance-based compensation under Section 162(m),   and the Awards were intended to so qualify.   3. Indemnification of Plan Administrator   Each member of any committee acting as Plan Administrator, while serving as such, shall be   entitled, in good faith, to rely or act upon any advice of the Company's independent auditors, counsel, or   consultants hired by the committee, or other agents assisting in the administration of the Plan.  The Plan   Administrator and any Employee of the Company acting at the direction or on behalf of the Company   shall not be personally liable for any action or determination taken or made, or not taken or made, in good   faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected   under the Company's charter or by-laws with respect to any such action or determination.   SECTION 4 ELIGIBILITY   To be eligible to be a Participant, an individual must be an Employee (other than an Employee   who is a member of a unit subject to collective bargaining), or a Consultant to an Employer, or a Director,   as of the date on which the Plan Administrator grants to such individual an Award under the Plan.  Each   grant of an Award under the Plan shall be evidenced by an Award Agreement.   SECTION 5 SHARES AVAILABLE FOR THE PLAN   1. Aggregate Shares   (a) Share Authorization   Subject to adjustment as provided in Section 5.3, the maximum number of shares of Common   Stock available for grant to Participants under this Plan on or after the Effective Date shall be 5,000,000   shares of Common Stock, plus any remaining authorized shares of Common Stock available under the   Prior Plan (and not subject to outstanding awards under the Prior Plan), immediately before the Effective   Date, upon which this Plan shall replace the Prior Plan and no further awards shall be made under the   Prior Plan.  The authorized shares of Common Stock from the Prior Plan is subject to adjustment after the   Effective Date as set forth in subsection (d) below.   (b) Limit on Full Value Awards - Flexible Share Pool   To the extent that a share of Common Stock is issued pursuant to the grant or exercise of a Full   Value Award, it shall reduce the share authorization by two (2) shares of Common Stock; to the extent that   Table of Contents    





 







A - 16   a share of Common Stock is issued pursuant to the grant or exercise of an Award other than a Full Value   Award, it shall reduce the share authorization by one (1) share of Common Stock.   (c) Limit on Incentive Stock Options   Subject to adjustment as provided in Section 5.3, the maximum aggregate number of shares   subject to Incentive Stock Options granted under the Plan shall be 1,000,000.   (d) Share Usage   Shares of Common Stock covered by an Award shall only be counted as used to the extent they are   actually issued.  Any shares of Common Stock related to Awards which terminate by expiration,   forfeiture, cancellation, or otherwise without the issuance of such shares of Common Stock, or are settled   in cash in lieu of shares of Common Stock, shall be available again for grant under this Plan.  In addition,   any shares of Common Stock related to grants or awards made under the Prior Plan that after the Effective   Date may lapse, expire, terminate, or are cancelled or surrendered to the Company, without having been   exercised in full, shall become available for grant under this Plan.  Such shares of Common Stock related   to a Full Value Award under this Plan shall increase the share authorization by two (2) shares of Common   Stock, and such shares of Common Stock related to an Award other than a Full Value Award under this   Plan shall increase the share authorization by one (1) share of Common Stock.  However, the full number   of Stock Appreciation Rights granted that are to be settled by the issuance of shares of Common Stock   shall be counted against the number of shares of Common Stock available for Awards under the Plan,   regardless of the number of shares of Common Stock actually issued upon settlement of such Stock   Appreciation Rights.  In addition, the full number of Incentive Stock Options granted shall be counted   against the number of Incentive Stock Options that may be awarded under the Plan pursuant to Section 5.1   (c), regardless of the number of shares of Common Stock actually issued upon exercise of such Incentive   Stock Options.  The shares of Common Stock available for issuance under this Plan may be authorized   and unissued shares of Common Stock or treasury shares of Common Stock.   2. Annual Limitations   Subject to adjustment as provided in Section 5.3, unless and until the Plan Administrator   determines that an Award to a Covered Employee shall not be designed to qualify as “performance-based   compensation” under Section 162(m), the following limitations shall apply to grants of Awards to Covered   Employees under the Plan:   (a) Options:  The maximum aggregate number of shares of Common Stock subject to Options   granted in any one calendar year to any one Participant shall be 1,000,000.   (b) Stock Appreciation Rights:  The maximum number of shares of Common Stock subject to   Stock Appreciation Rights granted in any one calendar year to any one Participant shall be 1,000,000.   (c) Performance Shares or Performance Units:  The maximum aggregate grant with respect to   Performance Shares or Performance Units that a Participant may receive in any one calendar year shall be   500,000 shares of Common Stock, or equal to the value of 500,000 shares of Common Stock (as of the   time of settlement) if settled in cash.   (d) Restricted Stock or Restricted Stock Units:  The maximum aggregate grant with respect to   Awards of Restricted Stock or Restricted Stock Units in any one calendar year to any one Participant shall   be 500,000 shares of Common Stock, or equal to the value of 500,000 shares of Common Stock (as of the   time of settlement) if settled in cash.   Table of Contents    





 







A - 17   (e) Incentive Awards:  The maximum aggregate amount awarded or credited in any one   calendar year with respect to an Incentive Award to any one Participant shall be $1,000,000.   (f) Cash Awards:  The maximum aggregate amount awarded to or credited with respect to   Cash Awards to any one Participant in any one calendar year may not exceed the greater of $1,000,000 or   the value of 500,000 shares of Common Stock.   (g) Other Stock-Based Awards:  The maximum aggregate grant with respect to Other Stock-   Based Awards in any one calendar year to any one Participant shall be 500,000 shares of Common Stock.   3. Adjustments in Authorized Shares   (a) In the event of a Change in Capitalization that is not also a Change of Control, the Plan   Administrator shall make such proportionate adjustments, if any, as it determines are appropriate and   equitable, and to the extent such an action does not conflict with the General Corporation Law of the State   of Delaware or other applicable laws or securities exchange rules, to (i) the maximum number and class of   shares of Common Stock or other stock or securities with respect to which Awards may be granted under   the Plan, (ii) the maximum number and class of shares of Common Stock or other stock or securities that   may be issued upon exercise of Nonqualified Options, Incentive Stock Options, and Stock Appreciation   Rights, (iii) the Maximum Grants, (iv) the number and class of shares of Common Stock or other stock or   securities which are subject to outstanding Awards granted under the Plan and the Option Price or exercise   price therefore, if applicable, and (v) the Performance Goals; provided, however, that in the case of an   “equity restructuring” (as that term is used in Financial Accounting Standards Board Accounting   Standards Codification Topic 718), the Board shall make an equitable or appropriate adjustment to   outstanding Awards to reflect such equity restructuring.  Any such adjustment shall be final, binding, and   conclusive on all persons claiming any right or interest under the Plan.   (b) Any such adjustment in the shares of Common Stock or other stock or securities (i) subject   to outstanding Incentive Stock Options (including any adjustments in the exercise price) shall be made in   such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code, and only to   the extent otherwise permitted by Sections 422 and 424 of the Code, or (ii) subject to outstanding Awards   that are intended to qualify as performance-based compensation under Section 162(m) shall be made in   such a manner as not to adversely affect the treatment of the Awards as performance-based compensation.   (c) If, by reason of a Change in Capitalization that is not also a Change of Control, a   Participant shall be entitled to, or shall be entitled to exercise an Option or Stock Appreciation Right with   respect to, new, additional, or different shares of stock or securities of the Company or any other   corporation, such new, additional, or different shares shall thereupon be subject to all of the conditions,   restrictions, and performance criteria which were applicable to the shares of Common Stock that such   shares replaced or to the Option or Stock Appreciation Right, as the case may be, prior to such Change in   Capitalization.   (d) No adjustments made under this Section 5.3 shall be made with respect to a Participant's   Award if such adjustment would result in adverse taxation to such Participant under Section 409A.   4. Effect of Certain Transactions   Following (a) the liquidation or dissolution of the Company or (b) a merger or consolidation of the   Company (a “Transaction”), (i) each outstanding Award shall be treated as provided for in the agreement   entered into in connection with the Transaction (which treatment may be different as among different   Table of Contents    





 







A - 18   types of Awards and different holders thereof) or (ii) if not so provided in such agreement, each   Participant shall be entitled to receive in respect of each share of Common Stock subject to any   outstanding Awards, upon exercise of any Option or Stock Appreciation Right or payment or transfer in   respect of any other Award, the same number and kind of stock, securities, cash, property, or other   consideration that each holder of a share of Common Stock was entitled to receive in the Transaction in   respect of a share of Common Stock; provided, however, that such stock, securities, cash, property, or   other consideration shall remain subject to all of the conditions, restrictions, and performance criteria   which were applicable to Awards prior to such Transaction, but giving effect to any applicable provision   of this Plan or any Award Agreement if the Transaction is a Change of Control.  Without limiting the   generality of the foregoing, the treatment of outstanding Options and Stock Appreciation Rights pursuant   to clause (i) of this Section 5.4 in connection with a Transaction in which the consideration paid or   distributed to the Company's stockholders is not entirely shares of common stock of the acquiring or   resulting corporation may include the cancellation of outstanding Options and Stock Appreciation Rights   upon consummation of the Transaction provided either (x) the holders of affected Options and Stock   Appreciation Rights have been given a period of at least fifteen (15) days prior to the date of the   consummation of the Transaction to exercise the Options and Stock Appreciation Rights (whether or not   they were otherwise exercisable) or (y) the holders of the affected Options and Stock Appreciation Rights   are paid (in cash or cash equivalents) in respect of each share of Common Stock covered by the Options   or Stock Appreciation Rights being cancelled an amount equal to the excess, if any, of the per share price   paid or distributed to stockholders in the Transaction (the value of any non-cash consideration to be   determined by the Plan Administrator in its sole discretion) over the exercise price thereof.  For   clarification and avoidance of doubt, (1) the cancellation of Options and Stock Appreciation Rights   pursuant to clause (y) of the preceding sentence may be effected notwithstanding anything to the contrary   contained in this Plan or any Award Agreement and (2) if the amount determined pursuant to clause (y) of   the preceding sentence is zero or less, the affected Options and Stock Appreciation Rights may be   cancelled without any payment therefor.  The treatment of any Award as provided in this Section 5.4 shall   be conclusively presumed to be appropriate for purposes of Section 5.3.   SECTION 6 AWARD AGREEMENTS   Upon a determination by the Plan Administrator that an Award is to be granted to a Participant   pursuant to Section 7, 8, 9, 10, 11, 12, or 13 of this Plan, an Award Agreement shall be provided to such   Participant as soon as practicable specifying, without limitation, the terms, conditions, rights, and duties   related thereto, including terms requiring forfeiture of Awards in the event of a Termination of Service by   the Participant, and terms relating to Clawback/Forfeiture Events under Section 18.1 of this Plan.  Each   Award Agreement shall be subject to the terms and conditions of the Plan.   SECTION 7 STOCK OPTIONS   1. Grant of Options   Options may be granted to eligible Participants in such number, and at such times during the term   of the Plan, as the Plan Administrator shall determine.  The Plan Administrator may grant an Option or   provide for the grant of an Option, either from time to time in the discretion of the Plan Administrator or   automatically upon the occurrence of specified events, including, without limitation, the achievement of   Performance Goals or other performance measures, or the satisfaction of an event or condition within the   Table of Contents    





 







A - 19   control of the recipient of the Option or within the control of others.  The granting of an Option shall take   place when the Plan Administrator by resolution, written consent, or other appropriate action determines   to grant such an Option to a particular Participant at the Option Price.  Each Option granted under the Plan   shall be identified in the Award Agreement as either an Incentive Stock Option or a Nonqualified Option   (or if no such identification is made, then it shall be a Nonqualified Option).  No Incentive Stock Option   shall be granted to any Participant who is not an Employee of the Company or any “subsidiary   corporation” of the Company (as defined in Section 424(f) of the Code).   2. Special Provisions Applicable to Incentive Stock Options   Each provision of the Plan and each Incentive Stock Option granted thereunder shall be construed   so that each such Option shall qualify as an Incentive Stock Option, and any provision thereof that cannot   be so construed shall be disregarded, unless the Employee agrees otherwise.  Incentive Stock Options, in   addition to complying with the other provisions of the Plan relating to Options generally, shall be subject   to the following conditions:   (a) Ten Percent (10%) Stockholders   An Employee must not, immediately before an Incentive Stock Option is granted to him or her,   own stock representing more than ten percent (10%) of the voting power or value of all classes of stock of   the Company or of a Subsidiary.  This requirement is waived if (i) the Option Price of the Incentive Stock   Option to be granted is at least one hundred ten percent (110%) of the Fair Market Value of the stock   subject to the Option, determined at the time the Option is granted, and (ii) the Option is not exercisable   more than five (5) years from the date the Option is granted.   (b) Annual Limitation   To the extent that the aggregate Fair Market Value (determined at the time of the grant of the   Option) of the stock with respect to which Incentive Stock Options are exercisable for the first time by the   Employee during any calendar year exceeds One Hundred Thousand Dollars ($100,000), such Options   shall be treated as Nonqualified Options.  In applying the limitation in the preceding sentence in the case   of multiple Option grants, unless otherwise required by applicable law, Options which were intended to be   Incentive Stock Options shall be treated as Nonqualified Options according to the order in which they   were granted such that the most recently granted Options are first treated as Nonqualified Options.   (c) Additional Terms   Any other terms and conditions which the Plan Administrator determines, upon advice of counsel,   must be imposed for the Option to be an Incentive Stock Option.   (d) Notice of Disqualifying Disposition   If an Employee makes any disposition of shares of Common Stock issued pursuant to an Incentive   Stock Option under the circumstances described in Section 421(b) of the Code (relating to disqualifying   dispositions), the Employee shall notify the Company of such disposition within twenty (20) days thereof.   3. Terms of Options   Except as otherwise provided in the Award Agreement and Section 7.2 of this Plan, all Incentive   Stock Options and Nonqualified Options under the Plan shall be granted subject to the following terms   and conditions:   Table of Contents    





 







A - 20   (a) Option Price   The Option Price shall be determined by the Plan Administrator in any reasonable manner, but   shall not be less than the Fair Market Value of the Common Stock on the date the Option is granted,   except in the case of Options that are granted in assumption of, or in substitution for, outstanding awards   previously granted by (i) a company acquired by the Company or a Subsidiary, or (ii) a company with   which the Company or a Subsidiary combines.   (b) Duration of Options   Options shall be exercisable at such time and under such conditions as set forth in the Award   Agreement, but in no event shall any Option (whether a Nonqualified Option or an Incentive Stock   Option) be exercisable later than the tenth (10th) anniversary of the date of its grant.   (c) Exercise of Options   Common Stock covered by an Option may be purchased at one time or in such installments over   the option period as may be provided in the Award Agreement.  Any Common Stock not purchased on an   applicable installment date may be purchased thereafter at any time prior to the expiration of the Option in   accordance with its terms.  To the extent that the right to purchase Common Stock has accrued thereunder,   an Option may be exercised from time to time by notice to the Company setting forth the amount of   Common Stock with respect to which the Option is being exercised.   (d) Payment   The purchase price of Common Stock purchased under Options shall be paid in full to the   Company upon the exercise of the Option, by delivery of consideration equal to the product of the Option   Price and the Common Stock purchased (the “Purchase Price”).  The Purchase Price of Common Stock   acquired pursuant to the exercise of an Option shall be paid, to the extent permitted by applicable laws   and regulations (including, without limitation, U.S. federal tax and securities laws and regulations, and   applicable state corporate law), and as determined by the Plan Administrator in its sole discretion, by any   combination of the methods of payment set forth below.  The Plan Administrator shall have the authority   to grant Options that do not permit all of the following methods of payment (or otherwise restrict the   ability to use certain methods), and to grant Options that require the consent of the Company to utilize a   particular method of payment.  The permitted methods of payment are as follows:   (i) by cash, check, bank draft, or money order payable to the Company;   (ii) pursuant to a broker-assisted cashless exercise program developed under Regulation T as   promulgated by the U.S. Federal Reserve Board that, prior to the issuance of the Common Stock   subject to the Option, results in delivery of a properly executed exercise notice together with   irrevocable instructions to a broker approved by the Company to promptly deliver to the Company   sufficient proceeds from the sale of Common Stock to pay the aggregate Purchase Price;   (iii)  by delivery to the Company (either by actual delivery or attestation presenting satisfactory   proof of beneficial ownership of such Common Stock) of shares of Common Stock already owned by   the Participant, with the Fair Market Value of such Common Stock as delivered to be determined as of   the day of exercise;   (iv)  by a “net exercise” arrangement pursuant to which the Company will reduce the number   of shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair   Table of Contents    





 







A - 21   Market Value (determined as of the same day as the exercise of the Option) that does not exceed the   aggregate Purchase Price; provided, however, that the Company shall accept a cash or other payment   from the Participant to the extent of any remaining balance of the aggregate Purchase Price not   satisfied by such reduction in the number of whole shares of Common Stock to be issued; provided,   further, that shares of Common Stock will no longer be outstanding under an Option and will not be   exercisable thereafter to the extent that (A) shares are used to pay the Purchase Price pursuant to the   “net exercise,” (B) are delivered to the Participant as a result of such exercise, and (C) shares are   withheld to satisfy tax withholding obligations; or   (v) in any other form of legal consideration that may be acceptable to the Plan Administrator in   its sole discretion and permissible under applicable laws and regulations.   A Participant shall have none of the rights of a stockholder with respect to shares of Common   Stock subject to an Option until the shares of Common Stock are issued to the Participant upon exercise of   the Option.   (e) Restrictions   The Plan Administrator shall determine and reflect in the Award Agreement, with respect to each   Option, the nature and extent of the restrictions, if any, to be imposed on the Common Stock which may   be purchased thereunder, including, without limitation, restrictions on the transferability of such Common   Stock acquired through the exercise of such Options for such periods as the Plan Administrator may   determine.  In addition, to the extent permitted by applicable laws and regulations, the Plan Administrator   may require that a Participant who wants to effectuate a cashless exercise of Options be required to sell   the Common Stock acquired in the associated exercise to the Company, or in the open market through the   use of a broker selected by the Company, at such price and on such terms as the Plan Administrator may   determine at the time of grant, or otherwise.  Without limiting the foregoing, the Plan Administrator may   impose such restrictions, conditions, or limitations as it determines appropriate as to the timing and   manner of any resales by the Participant or other subsequent transfers by the Participant of any Common   Stock issued as a result of the exercise of an Option, including, without limitation, (i) restrictions under an   insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales   by one or more Participants, and (iii) restrictions as to the use of a specified brokerage firm for such   resales or other transfers.   (f) Transferability of Options   Notwithstanding Section 18.2 and only if allowed by the Plan Administrator in its discretion,   Nonqualified Options may be transferred to a Participant's immediate family members, directly or   indirectly or by means of a trust, corporate entity, or partnership (with a person who thus acquires such   Nonqualified Options by such transfer, a “Permitted Transferee”).  A transfer of a Nonqualified Option   may only be effected by the Company at the request of the Participant and shall become effective upon the   Permitted Transferee agreeing to such terms as the Plan Administrator may require and only when   recorded in the Company's record of outstanding Options.  In the event an Option is transferred as   contemplated hereby, the Option may not be subsequently transferred by the Permitted Transferee, except   for a transfer back to the Participant or by will or the laws of descent and distribution.  A transferred   Option may be exercised by a Permitted Transferee to the same extent as, and subject to the same terms   and conditions as, the Participant (except as otherwise provided herein), as if no transfer had taken place.    As used herein, “immediate family member” shall mean, with respect to any person, such person's child,   stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-   in-law, daughter-in-law, brother-in-law, and sister-in-law, and shall include adoptive relationships.  In the   Table of Contents    





 







A - 22   event of exercise of a transferred Option by a Permitted Transferee, any amounts due to (or to be withheld   by) the Company upon exercise of the Option shall be delivered by (or withheld from amounts due to) the   Participant, the Participant's estate, or the Permitted Transferee, in the reasonable discretion of the   Company.   In addition, to the extent permitted by applicable law and Rule 16b-3, the Plan Administrator may   permit a recipient of a Nonqualified Option to designate in writing during the Participant's lifetime a   Beneficiary to receive and exercise the Participant's Nonqualified Options in the event of such   Participant's death.   (g) Purchase for Investment   The Plan Administrator shall have the right to require that each Participant or other person who   shall exercise an Option under the Plan, and each person into whose name the Common Stock shall be   issued pursuant to the exercise of an Option, represent and agree that any and all Common Stock   purchased pursuant to such Option is being purchased for investment only and not with a view to the   distribution or resale thereof, and that such Common Stock will not be sold except in accordance with   such restrictions or limitations as may be set forth in the Option or by the Plan Administrator.  This   Section 7.3(g) shall be inoperative during any period of time when the Company has obtained all   necessary or advisable approvals from governmental agencies and has completed all necessary or   advisable registrations or other qualifications of the Common Stock as to which Options may from time to   time be granted, as contemplated in Section 17.   (h) No Repricing or Exchange   Except as provided in the Plan or upon approval of the Company's stockholders, the Options   granted under this Plan shall not be repriced.  In particular, the Plan Administrator may not take any action   (i) to amend the terms of an outstanding Option to reduce the Option Price thereof, cancel an Option and   replace it with a new Option with a lower Option Price, or that has an economic effect that is the same as   any such reduction or cancellation, or (ii) to cancel an outstanding Option having an Option Price above   the then-current Fair Market Value of the Common Stock, in exchange for the grant of another type of   Award, without, in each such case, first obtaining approval of the Company's stockholders of such action.   SECTION 8 STOCK APPRECIATION RIGHTS   1. Grant of Stock Appreciation Rights   Stock Appreciation Rights may be granted to Participants in such number, and at such times during   the term of the Plan, as the Plan Administrator shall determine.  The Plan Administrator may grant a Stock   Appreciation Right or provide for the grant of a Stock Appreciation Right, either from time to time in the   discretion of the Plan Administrator or automatically upon the occurrence of specified events, including,   without limitation, the achievement of Performance Goals or other performance measures, or the   satisfaction of an event or condition within the control of the recipient of the Stock Appreciation Right or   within the control of others.  The granting of a Stock Appreciation Right shall take place when the Plan   Administrator by resolution, written consent, or other appropriate action determines to grant such a Stock   Appreciation Right to a particular Participant at a particular price.  A Stock Appreciation Right may be   granted freestanding or in tandem or in combination with any other Award under the Plan.   Table of Contents    





 







A - 23   2. Exercise of Stock Appreciation Rights   A Stock Appreciation Right may be exercised upon such terms and conditions and for such term as   the Plan Administrator shall determine; provided, however, no Stock Appreciation Right shall be   exercisable later than the tenth (10th) anniversary of the date of its grant.  Upon exercise of a Stock   Appreciation Right, a Participant shall be entitled to receive Common Stock, or the cash equivalent, with   an aggregate Fair Market Value determined by multiplying (i) the difference between the Fair Market   Value of a share of Common Stock on the date of exercise of the Stock Appreciation Right over the price   determined by the Plan Administrator on the date of grant (which price shall not be less than 100% of the   Fair Market Value of a share of Common Stock on the date of grant, except in the case of Stock   Appreciation Rights that are granted in assumption of, or in substitution for, outstanding awards   previously granted by (x) a company acquired by the Company or a Subsidiary, or (y) a company with   which the Company or a Subsidiary combines) times (ii) the number of shares of Common Stock with   respect to which the Stock Appreciation Right is exercised.  The value of any fractional shares shall be   paid in cash.   3. Special Provisions Applicable to Stock Appreciation Rights   Stock Appreciation Rights are subject to the following restrictions:   (a) A Stock Appreciation Right granted in tandem with any other Award under the Plan shall   be exercisable at such time or times as the Award to which it relates shall be exercisable, or at such other   times as the Plan Administrator may determine.   (b) The right of a Participant to exercise a Stock Appreciation Right granted in tandem with   any other Award under the Plan shall be canceled if and to the extent the related Award is exercised or   canceled.  To the extent that a Stock Appreciation Right is exercised, the related Award shall be deemed to   have been surrendered unexercised and canceled.   (c) A holder of Stock Appreciation Rights shall have none of the rights of a stockholder with   respect to the Common Stock subject thereto until the Common Stock, if any, is issued to such holder   pursuant to such holder's exercise of such rights.   (d) The acquisition of Common Stock pursuant to the exercise of a Stock Appreciation Right   shall be subject to the same restrictions as would apply to the acquisition of Common Stock acquired upon   exercise of an Option, as set forth in Section 7.3.   4. No Repricing or Exchange   Except as provided in the Plan or upon approval of the Company's stockholders, the Stock   Appreciation Rights granted under this Plan shall not be repriced.  In particular, the Plan Administrator   may not take any action (i) to amend the terms of an outstanding Stock Appreciation Right to reduce the   grant price thereof, cancel a Stock Appreciation Right and replace it with a new Stock Appreciation Right   with a lower grant price, or that has an economic effect that is the same as any such reduction or   cancellation, or (ii) to cancel an outstanding Stock Appreciation Right having a grant price above the then-   current Fair Market Value of the Common Stock, in exchange for the grant of another type of Award,   without, in each such case, first obtaining approval of the Company's stockholders of such action.   Table of Contents    





 







A - 24   SECTION 9 PERFORMANCE SHARES AND PERFORMANCE UNITS   1. Grant of Performance Shares and Performance Units   Subject to the limitations in Section 5.2, Performance Shares or Performance Units may be granted   to Participants at any time and from time to time as the Plan Administrator shall determine.  The Plan   Administrator shall have complete discretion in determining the number of Performance Shares or   Performance Units granted to each Participant and the terms and conditions thereof.  Performance Shares   and Performance Units may be granted alone or in combination with any other Award under the Plan.   2. Value of Performance Shares and Performance Units   The Plan Administrator shall establish Performance Goals for any specified Performance Periods.    In no event shall a Performance Period be less than one (1) year with respect to grants of Performance   Shares or Performance Units.  Prior to each grant of Performance Shares or Performance Units, the Plan   Administrator shall establish an initial amount of Common Stock for each Performance Share and an   initial value for each Performance Unit granted to each Participant for that Performance Period.  Prior to   each grant of Performance Shares or Performance Units, the Plan Administrator also shall set the   Performance Goals that will be used to determine the extent to which the Participant receives Common   Stock for the Performance Shares or payment of the value of the Performance Units awarded for such   Performance Period.  With respect to each such Performance Goal utilized during a Performance Period,   the Plan Administrator may assign percentages or other relative values to various levels of performance   which shall be applied to determine the extent to which the Participant shall receive a payout of the   number of Performance Shares or value of Performance Units awarded.   3. Payment of Performance Shares and Performance Units   After a Performance Period has ended, the holder of a Performance Share or Performance Unit   shall be entitled to receive the value thereof as determined by the Plan Administrator.  The Plan   Administrator shall make this determination by first determining the extent to which the Performance   Goals set pursuant to Section 9.2 have been met.  The Plan Administrator shall then determine the   applicable percentage or other relative value to be applied to, and will apply such percentage or other   relative value to, the number of Performance Shares or value of Performance Units to determine the   payout to be received by the Participant.  In addition, with respect to Performance Shares and   Performance Units granted to each Participant, no payout shall be made hereunder except upon written   certification by the Plan Administrator that the applicable Performance Goals have been satisfied to a   particular extent.   4. Form and Timing of Payment   The payment described in Section 9.3 shall be made in Common Stock, or in cash, or partly in   Common Stock and partly in cash, at the discretion of the Plan Administrator and set forth in the Award   Agreement.  The value of any fractional shares shall be paid in cash.  Payment shall be made in a lump   sum or installments as prescribed by the Plan Administrator or the Award Agreement, as applicable, and   consistent with Section 409A.  If Common Stock is to be converted into an amount of cash on any date, or   if an amount of cash is to be converted into Common Stock on any date, such conversion shall be done at   the then-current Fair Market Value of the Common Stock on such date.   Table of Contents    





 







A - 25   5. Dividend Equivalents   The Plan Administrator may provide that Performance Shares or Performance Units awarded   under the Plan shall be entitled to an amount per Performance Share or Performance Unit equal in value to   the cash dividend, if any, paid per share of Common Stock on issued and outstanding shares, on the   dividend payment dates (“Dividend Payment Date”) occurring during the period between the date on   which the Performance Shares or Performance Units are granted to the Participant and the date on which   such Performance Shares or Performance Units are settled, cancelled, forfeited, waived, surrendered, or   terminated under the Plan.  Such paid amounts, called “dividend equivalents,” shall be accrued and paid in   cash and/or Common Stock (including reinvestment in additional shares of Common Stock) and paid at   such time as the Performance Share or Performance Unit to which it relates vests and settles as the Plan   Administrator shall determine.  The number of shares of Common Stock to be issued and/or reinvested   shall be determined based on the Fair Market Value on the Dividend Payment Date.  In the event the   dividend equivalents are deferred, they shall be payable in accordance with the requirements of Section   409A.   SECTION 10 RESTRICTED STOCK   1. Grant of Restricted Stock   Subject to the limitations in Section 5.2, Restricted Stock may be granted to Participants in such   number and at such times during the term of the Plan as the Plan Administrator shall determine.  The Plan   Administrator may grant Restricted Stock or provide for the grant of Restricted Stock, either from time to   time in the discretion of the Plan Administrator or automatically upon the occurrence of specified events.   2. Restriction Period   Except as permitted by the Plan Administrator and specified in the Award Agreement, during a   period following the date of grant, as determined by the Plan Administrator, which in no event shall be   less than one (1) year with respect to Restricted Stock subject to restrictions based upon time and one (1)   year with respect to Restricted Stock subject to restrictions based upon the achievement of specific   Performance Goals or other performance measures (the “Restriction Period”), the Restricted Stock shall   be subject to Section 18.2.  During the Restriction Period, the Plan Administrator shall evidence the   restrictions on the shares of Restricted Stock in such a manner as it determines is appropriate (including,   without limitation, (i) by means of appropriate legends on certificates for shares of Restricted Stock that   have been certificated, and (ii) by means of appropriate stop-transfer orders for shares of Restricted Stock   credited to book-entry accounts).   3. Other Restrictions   The Plan Administrator shall impose such other restrictions on Restricted Stock granted pursuant   to the Plan as it may deem advisable, including Performance Goals or other performance measures.  The   Plan Administrator may require, under such terms and conditions as it deems appropriate or desirable, that   the certificates for Restricted Stock delivered under the Plan may be held in custody by a bank or other   institution, or that the Company may itself hold such shares in custody, until the Restriction Period expires   or until restrictions thereon otherwise lapse, and may require, as a condition of any issuance of Restricted   Stock, that the Participant shall have delivered a stock power endorsed in blank relating to the shares of   Restricted Stock.   Table of Contents    





 







A - 26   4. Voting Rights; Dividends and Other Distributions   A Participant receiving a grant of Restricted Stock shall be recorded as a stockholder of the   Company with respect to such Restricted Stock.  Except as otherwise provided under the terms of the Plan   or an Award Agreement, a Participant who receives a grant of Restricted Stock shall have the rights of a   stockholder with respect to such shares (except as provided in the restrictions on transferability), including   the right to vote the shares and receive dividends and other distributions paid with respect to the   underlying shares of Common Stock.  The Plan Administrator may require that any cash dividend paid on   a share of Common Stock subject to the Restricted Stock be (i) paid in cash on or about the Dividend   Payment Date or accrued and paid at such time as the Restricted Stock to which it relates vests and settles,   (ii) paid in Common Stock on or about the Dividend Payment Date or accrued and/or reinvested in   additional shares of Common Stock and paid at such time as the Restricted Stock to which it relates vests   and settles, or (iii) paid in any combination thereof of cash or Common Stock and paid at such times as   the Plan Administrator shall determine.  The number of shares of Common Stock to be issued and/or   reinvested shall be determined based on the Fair Market Value on the Dividend Payment Date.  In the   event the dividends are deferred, they shall be payable in accordance with the requirements of Section   409A.   5. Issuance of Shares; Settlement of Awards; Forfeiture   When the restrictions imposed by Section 10.2 expire or otherwise lapse with respect to one or   more shares of Restricted Stock, the Participant shall be obligated to return to the Company any certificate   (s) representing shares of Restricted Stock (if applicable), and the Company shall deliver to the Participant   one (1) share of Common Stock (which may be delivered in book-entry or certificated form) in   satisfaction of each share of Restricted Stock, which shares so delivered shall not contain any legend.  The   delivery of shares pursuant to this Section 10.5 shall be subject to any required share withholding to   satisfy tax withholding obligations pursuant to Section 18.10.  Any fractional shares subject to such   Restricted Stock shall be paid to the Participant in cash.  To the extent that the restrictions imposed by   Section 10.2 do not expire or otherwise lapse during or upon the end of the Restriction Period with respect   to one or more shares of Restricted Stock pursuant to the terms and conditions thereof, such shares of   Restricted Stock shall be forfeited to the Company, and the Participant shall be obligated to return to the   Company for cancellation any certificate(s) representing shares of such Restricted Stock (if applicable).   SECTION 11 RESTRICTED STOCK UNITS   1. Grant of Restricted Stock Units   Subject to the limitations in Section 5.2, Restricted Stock Units may be granted to Participants in   such number and at such times during the term of the Plan as the Plan Administrator shall determine.  The   Plan Administrator may grant Restricted Stock Units or provide for the grant of Restricted Stock Units,   either from time to time in the discretion of the Plan Administrator or automatically upon the occurrence   of specified events.   2. Restriction Period   Except as permitted by the Plan Administrator and specified in the Award Agreement, during a   period following the date of grant, as determined by the Plan Administrator, which in no event shall be   less than one (1) year with respect to Restricted Stock Units subject to restrictions based upon time and   Table of Contents    





 







A - 27   one (1) year with respect to Restricted Stock Units subject to restrictions based upon the achievement of   specific Performance Goals or other performance measures (the “Restriction Period”), the Restricted   Stock Units shall be subject to Section 18.2.   3. Other Restrictions   The Plan Administrator shall impose such other restrictions on Restricted Stock Units granted   pursuant to the Plan as it may deem advisable, including the requirement that certain pre-established   Performance Goals be met.  A Participant receiving a grant of Restricted Stock Units shall not be recorded   as a stockholder of the Company with respect to shares of Common Stock that may be issued in settlement   of such Restricted Stock Units, and shall not acquire any rights of a stockholder with respect thereto,   unless or until the Participant is issued shares of Common Stock in settlement of such Restricted Stock   Units.   4. Dividend Equivalents   The Plan Administrator may provide that Restricted Stock Units awarded under the Plan shall be   entitled to an amount per Restricted Stock Unit equal in value to the cash dividend, if any, paid per share   of Common Stock on issued and outstanding shares, on the Dividend Payment Dates occurring during the   period between the date on which the Restricted Stock Units are granted to the Participant and the date on   which such Restricted Stock Units are settled, cancelled, forfeited, waived, surrendered, or terminated   under the Plan.  Such paid amounts, called “dividend equivalents,” shall be (i) paid in cash on or about the   Dividend Payment Date or accrued and paid at such time as the Restricted Stock Unit to which it relates   vests and settles, (ii) paid in Common Stock on or about the Dividend Payment Date or accrued and/or   reinvested in additional shares of Common Stock and paid at such time as the Restricted Stock Units to   which it relates vests and settles, or (iii) paid in any combination thereof of cash or Common Stock and   paid at such times as the Plan Administrator shall determine.  The number of shares of Common Stock to   be issued and/or reinvested shall be determined based on the Fair Market Value on the Dividend Payment   Date.  In the event the dividend equivalents are deferred, they shall be payable in accordance with the   requirements of Section 409A.   5. Issuance of Shares; Settlement of Awards; Forfeiture   When the restrictions imposed by Section 11.2 expire or otherwise lapse with respect to one or   more Restricted Stock Units, Restricted Stock Units shall be settled (i) in cash, or (ii) by the delivery to   the Participant of the number of shares of Common Stock equal to the number of the Participant's   Restricted Stock Units that are vested, or any combination thereof, as the Plan Administrator shall   determine and is in accordance with Section 409A.  The delivery of shares pursuant to this Section 11.5   shall be subject to any required share withholding to satisfy tax withholding obligations pursuant to   Section 18.10.  Any fractional shares subject to such Restricted Stock Units shall be paid to the Participant   in cash.  To the extent that the restrictions imposed by Section 11.2 do not expire or otherwise lapse   during or upon the end of the Restriction Period with respect to one or more Restricted Stock Units   pursuant to the terms and conditions thereof, such Restricted Stock Units shall be forfeited and cancelled.   Table of Contents    





 







A - 28   SECTION 12 INCENTIVE AWARDS   1. Incentive Awards   Prior to the beginning of each Performance Period, or not later than ninety (90) days following the   commencement of the relevant fiscal year (or such other time as may be required or permitted for   “performance-based compensation” under Section 162(m), if applicable), the Plan Administrator shall   establish Performance Goals or other performance measures which must be achieved for any Participant   to receive an Incentive Award for that Performance Period.  The Performance Goals or other performance   measures may be based on any combination of corporate and business unit Performance Goals or other   performance measures.  The Plan Administrator may also establish one or more Company-wide   Performance Goals or other performance measures which must be achieved for any Participant to receive   an Incentive Award for that Performance Period.  Such Performance Goals or other performance measures   may include a threshold level of performance below which no Incentive Award shall be earned, target   levels of performance at which specific Incentive Awards will be earned, and a maximum level of   performance at which the maximum level of Incentive Awards will be earned.  Each Incentive Award shall   specify the amount of cash and the amount of any other Awards subject to such Incentive Award.   2. Performance Goal Certification   An Incentive Award shall become payable to the extent provided herein and in the related Award   Agreement in the event that the Plan Administrator certifies in writing prior to payment of the Incentive   Award that the Performance Goals or other performance measures selected for a particular Performance   Period have been attained.  In no event will an Incentive Award be payable under this Plan if the threshold   level of performance set for each Performance Goal or other performance measure for the applicable   Performance Period is not attained.   3. Discretion to Reduce Awards; Participant's Performance   The Plan Administrator, in its sole and absolute discretion and only prior to a Change of Control,   may reduce the amount of any Incentive Award otherwise payable to a Participant upon attainment of any   Performance Goal or other performance measure for the applicable Performance Period.  A Participant's   individual performance must be satisfactory as determined by the Plan Administrator, regardless of the   Company's performance and the attainment of Performance Goals or other performance measures, before   he or she may be paid an Incentive Award.  In evaluating a Participant's performance, the Plan   Administrator shall consider the Performance Goals or other performance measures, the Participant's   responsibilities and accomplishments, and such other factors as it deems appropriate.   4. Required Payment of Incentive Awards   The Plan Administrator shall make a determination, as soon as administratively possible after the   information that is necessary to make such a determination is available for a particular Performance   Period, whether the Performance Goals or other performance measures for the Performance Period have   been achieved, the amount of the Incentive Award for each Participant, and whether the Incentive Award   shall be paid in cash and/or other Awards under the Plan.  The Plan Administrator shall certify the   foregoing determinations in writing as provided in Section 2.30.  In the absence of an election by the   Participant pursuant to Section 14, the Incentive Award shall be paid as soon as practicable after the end of   Table of Contents    





 







A - 29   the calendar year, but in no event later than March 15 following the end of the calendar year in which the   foregoing determinations have been made.   SECTION 13 CASH AWARDS AND OTHER STOCK-BASED AWARDS   1. Grant of Cash Awards   Subject to the terms and provisions of this Plan, the Plan Administrator, at any time and from time   to time, may grant cash awards to Participants in such amounts and upon such terms, including the   achievement of Performance Goals or other specific performance measures, as the Plan Administrator   may determine (each, a “Cash Award”).   2. Other Stock-Based Awards   The Plan Administrator may grant other types of equity-based or equity-related Awards not   otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted shares of   Common Stock, Awards in lieu of obligations to pay cash or deliver other property, or Common Stock) in   such amounts and subject to such terms and conditions, as the Plan Administrator shall determine (each,   an “Other Stock-Based Award”).  Such Other Stock-Based Awards may involve the transfer of Common   Stock to Participants, or payment in cash or otherwise of amounts based on or valued in whole or in part   by reference to the value of Common Stock.   3. Value of Cash Awards and Other Stock-Based Awards   Each Cash Award granted pursuant to this Section 13 shall specify a payment amount or payment   range as determined by the Plan Administrator.  Each Other Stock-Based Award shall be expressed in   terms of Common Stock or units based on Common Stock, as determined by the Plan Administrator.  The   Plan Administrator may establish performance measures applicable to such Awards in its discretion.  If the   Plan Administrator exercises its discretion to establish performance measures, the number and/or value of   such cash awards or Other Stock-Based Awards that will be paid out to the Participant will depend on the   extent to which the performance measures are met.   4. Payment of Cash Awards and Other Stock-Based Awards   Payment, if any, with respect to a Cash Award or an Other Stock-Based Award shall be made in   accordance with the terms of the Award, in cash or Common Stock as the Plan Administrator determines,   and in accordance with Section 409A so as not to be treated as payment made pursuant to a nonqualified   deferred compensation plan.  The value of any fractional shares shall be paid in cash.   SECTION 14 DEFERRAL ELECTIONS   The Plan Administrator may, to the extent permitted by applicable law, permit Employees to defer   Awards under the Plan.  Any such deferrals shall be subject to such terms, conditions, and procedures that   the Company may establish from time to time in its sole discretion and consistent with the advance and   subsequent deferral election requirements of Section 409A.   Table of Contents    





 







A - 30   SECTION 15 TERMINATION OF SERVICE   The Award Agreement applicable to each Award shall set forth the effect of a Termination of   Service upon such Award; provided, however, that, unless explicitly set forth otherwise in an Award   Agreement or as determined by the Plan Administrator, (i) all of a Participant's unvested and/or   unexercisable Awards shall automatically be forfeited upon a Termination of Service for any reason, and,   as to Awards consisting of Options or Stock Appreciation Rights, the Participant shall be permitted to   exercise the vested portion of the Option or Stock Appreciation Right for at least three months following   termination of his or her employment, and (ii) all of a Participant's Awards (whether vested or unvested,   exercisable or unexercisable) shall automatically be forfeited upon termination of the Participant's   employment for Cause.  Provisions relating to the effect of a Termination of Service upon an Award shall   be determined in the sole discretion of the Plan Administrator, and need not be uniform among all Awards   or among all Participants.  Unless the Plan Administrator determines otherwise in accordance with Section   409A, the transfer of employment of a Participant as between the Company and a Subsidiary shall not   constitute a Termination of Service.  The Plan Administrator shall have the discretion to determine the   effect, if any, that a sale or other disposition of an Employer will have on the Participant's Awards.   SECTION 16 EFFECT OF A CHANGE OF CONTROL   Notwithstanding any other provision of the Plan to the contrary and unless otherwise provided in   the Award Agreement, in the event of a Change of Control:   (a) Any Options and Stock Appreciation Rights outstanding which are not then exercisable and   vested, shall become fully exercisable and vested upon the termination of the Participant's employment   without Cause or for Good Reason during the Applicable Period (as defined below).   (b) The restrictions applicable to any Restricted Stock or Restricted Stock Unit Award which   are not performance based shall lapse, and such Restricted Stock or Restricted Stock Unit shall become   free of all restrictions and become fully vested and transferable upon the termination of the Participant's   employment without Cause or for Good Reason during the Applicable Period.   (c) The restrictions applicable to any Performance Share or Performance Unit Award and any   performance-based Restricted Stock or Restricted Stock Unit Award granted pursuant to Sections 9, 10, or   11 shall become free of all restrictions and become fully vested and transferable upon the termination of   the Participant's employment without Cause or for Good Reason during the Applicable Period.   (d) Any restrictions applicable to Cash Awards and Other Stock-Based Awards shall   immediately lapse and become payable within twenty (20) days following the termination of the   Participant's employment without Cause or for Good Reason during the Applicable Period.   For purposes of this Section 16 and unless otherwise provided in the Award Agreement, the term   “Applicable Period” shall have the following meaning:  (i) to the extent provided in an Employee's   employment agreement, severance, or other individual agreement, the term “Applicable Period” shall   mean the protection period following a Change of Control provided in such agreement with respect to   such Employee; and (ii) in the case of an Employee not covered by clause (i) above, the term “Applicable   Period” shall mean the protection period of six (6) months following a Change of Control.   Table of Contents    





 







A - 31   In addition to the Plan Administrator's authority set forth in Sections 5.3, in order to maintain the   Participants' rights in the event of any Change of Control, the Plan Administrator, as constituted before   such Change of Control, is hereby authorized, and has sole discretion, as to any Award, either at the time   such Award is made hereunder or any time thereafter, to take any one or more of the following actions:  (i)   provide for the purchase of any such Award for an amount of cash equal to the amount that could have   been attained upon the exercise of such Award or realization of the Participant's rights had such Award   been currently exercisable or payable, as long as such purchase does not result in taxation to the   Participant under Section 409A; or (ii) cause any such Award then outstanding to be assumed, or new   rights substituted therefor, by the acquiring or surviving corporation after such Change of Control.  The   Plan Administrator may, in its discretion, include such further provisions and limitations in any Award   Agreement as it may deem equitable and in the best interests of the Company.   SECTION 17 REGULATORY APPROVALS AND LISTING   The Company shall not be required to issue any certificate or create a book-entry account for   shares of Common Stock under the Plan prior to:   (a) obtaining any approval or ruling from the U.S. Securities and Exchange Commission, the   U.S. Internal Revenue Service, or any other governmental agency which the Company, in its sole   discretion, shall determine to be necessary or advisable;   (b) listing of such shares on any stock exchange on which the Common Stock may then be   listed; and   (c) completing any registration or other qualification of such shares under any federal or state   laws, rulings, or regulations of any governmental body which the Company, in its sole discretion, shall   determine to be necessary or advisable.   All certificates, or book-entry accounts, for shares of Common Stock delivered under the Plan   shall also be subject to such stop-transfer orders and other restrictions as the Plan Administrator may deem   advisable under the rules, regulations, and other requirements of the U.S. Securities and Exchange   Commission, any stock exchange upon which the Common Stock is then listed, and any applicable federal   or state securities laws, and the Plan Administrator may cause a legend or legends to be placed on any   such certificates, or notations on such book-entry accounts, to make appropriate reference to such   restrictions.  The foregoing provisions of this paragraph shall not be effective if and to the extent that the   shares of Common Stock delivered under the Plan are covered by an effective and current registration   statement under the Securities Act of 1933, as amended, and if and so long as the Plan Administrator   determines that application of such provisions are no longer required or desirable.  In making such   determination, the Plan Administrator may rely upon an opinion of counsel for the Company.  Without   limiting the foregoing, the Plan Administrator may impose such restrictions, conditions, or limitations as it   determines to be appropriate as to the timing and manner of any resales by a Participant or other   subsequent transfers by a Participant of any shares of Common Stock issued under this Plan, including,   without limitation, (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or   coordinate the timing and manner of sales by one or more Participants, and (iii) restrictions as to the use   of a specified brokerage firm for such resales or other transfers.   Table of Contents    





 







A - 32   SECTION 18 GENERAL PROVISIONS   1. Clawback/Forfeiture Events   (a) If required by Company policy, by the Sarbanes-Oxley Act of 2002, and/or by the Dodd-   Frank Wall Street Reform and Consumer Protection Act of 2010 or other applicable laws, each   Participant's Award shall be conditioned on repayment or forfeiture in accordance with such applicable   laws, Company policy, and any relevant provisions in the related Award Agreement.   (b) The Plan Administrator may specify in an Award Agreement or otherwise that a   Participant's rights, payments, and benefits with respect to an Award shall be subject to reduction,   cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any   otherwise applicable vesting or performance conditions of an Award.  Such events may include, without   limitation, termination of employment for Cause, violation of material policies that may apply to the   Participant, breach of noncompetition, confidentiality, or other restrictive covenants that may apply to the   Participant, or other conduct by the Participant that is detrimental to the business or reputation of the   Company or a Subsidiary.   2. Nontransferability   Unless otherwise provided in the Plan and permitted by law, including but not limited to the Code,   the right of a Participant or Beneficiary to the payment of any Award granted under the Plan, and the   rights and privileges conferred thereby, shall not be subject to execution, attachment, or similar process,   and may not be transferred, assigned, pledged, or hypothecated in any manner (whether by operation of   law or otherwise), other than by will or by the applicable laws of descent and distribution, unless the   Participant has received the Plan Administrator's prior written consent.  Except as otherwise provided for   under the Plan, if any Participant attempts to transfer, assign, pledge, hypothecate, or otherwise dispose of   any Award under the Plan, or of any right or privilege conferred thereby, contrary to the provisions of the   Plan or such Award, or suffers the sale or levy or any attachment or similar process upon the rights or   privileges conferred thereby, all affected Awards held by such Participant shall be immediately forfeited.   3. No Individual Rights   Nothing contained in the Plan, or in any Award granted pursuant to the Plan, shall confer upon any   Participant any right to continue in the employ of, or as a Consultant for, the Company or a Subsidiary,   nor interfere in any way with the right of the Company or a Subsidiary to terminate the employment or   service of such Participant at any time with or without assigning any reason therefor, except to the extent   expressly provided otherwise in a written agreement between the Participant and the Company or any   Employer.   4. Other Compensation   Unless determined otherwise by the Plan Administrator or required by contractual obligations, the   grant, vesting, or payment of Awards under the Plan shall not be considered as part of an Employee's   salary or used for the calculation of any other pay, allowance, pension, or other benefit, unless otherwise   permitted by other benefit plans provided by the Company or a Subsidiary, or required by law or by   contractual obligations of the Company or a Subsidiary.   Table of Contents    





 







A - 33   5. Leaves of Absence and Change in Status   Leaves of absence for such periods and purposes conforming to the personnel policy of the   Company, or of a Subsidiary, as applicable, shall not be deemed a Termination of Service, unless a   Participant commences a leave of absence from which he or she is not expected to return to active   employment or service with the Company or a Subsidiary.  The foregoing notwithstanding, with respect to   Incentive Stock Options, employment shall not be deemed to continue beyond the first ninety (90) days of   such leave unless the Participant's reemployment rights are guaranteed by statute or contract.  With respect   to any Participant who, after the date an Award is granted under this Plan, ceases to be employed by or   provide services to the Company or a Subsidiary on a full-time basis but continues to be employed or   provide services on a part-time basis, the Plan Administrator may make appropriate adjustments, as   determined in its sole discretion, as to the number of shares issuable under, the vesting schedule of, or the   amount payable under any unvested Awards held by such Participant.   6. Transfers   In the event a Participant is transferred from the Company to a Subsidiary, or vice versa, or is   promoted or given different responsibilities, Awards granted to the Participant prior to such date shall not   be affected by such event.   7. Unfunded Obligations   Any amounts (deferred or otherwise) to be paid to Participants pursuant to the Plan are unfunded   obligations.  Neither the Company nor any Subsidiary is required to segregate any monies from its general   funds, to create any trusts, or to make any special deposits with respect to this obligation.  The Plan   Administrator, in its sole discretion, may direct the Company to share with a Subsidiary the costs of a   portion of the Incentive Awards paid to Participants who are executives of those companies.  Beneficial   ownership of any investments, including trust investments which the Company may make to fulfill this   obligation, shall at all times remain in the Company.  Any investments and the creation or maintenance of   any trust or any Participant account shall not create or constitute a trust or a fiduciary relationship between   the Plan Administrator, the Company, or any Subsidiary, and a Participant, or otherwise create any vested   or beneficial interest in any Participant or the Participant's Beneficiary or the Participant's creditors in any   assets of the Company or a Subsidiary whatsoever.  The Participants shall have no claim against the   Company for any changes in the value of any assets which may be invested or reinvested by the Company   with respect to the Plan.   8. Beneficiaries   The designation of a Beneficiary shall be on a form provided by the Company, executed by the   Participant (with the consent of the Participant's spouse, if required by the Company for reasons of   community property or otherwise), and delivered to a designated representative of the Company.  The   Company may, in its discretion, utilize an electronic process for Beneficiary designations.  A Participant   may change his or her Beneficiary designation at any time.  A designation by a Participant under any   predecessor plans shall remain in effect under the Plan, unless such designation is revoked or changed   under the Plan.  In the event that a Participant becomes divorced, a Beneficiary designation under this   Plan or a predecessor plan in favor of his or her divorced spouse shall become void as of the effective date   of the divorce, unless the Participant re-designates the former spouse as his or her Beneficiary following   the effective date of the divorce.  If no Beneficiary is designated, if the designation is ineffective, or if the   Beneficiary dies before the balance of a Participant's benefit is paid, the balance shall be paid to the   Participant's spouse, or if there is no surviving spouse, to the Participant's estate.  Notwithstanding the   Table of Contents    





 







A - 34   foregoing, however, a Participant's Beneficiary shall be determined under applicable state law if such state   law does not recognize Beneficiary designations under plans of this sort and is not preempted by laws   which recognize the provisions of this Section 18.8.  In the event that the Plan Administrator determines   that two or more claims are made by claimed Beneficiaries against the Plan for an Award, the Plan   Administrator may initiate an interpleader action in a court of competent jurisdiction to resolve the   controversy.   In the event that an Award has vested, its restrictions have lapsed, or it has been exercised and the   underlying shares of Common Stock relating to such award have been transferred to a brokerage account,   it is the responsibility of the Participant to establish and maintain beneficiary designations with that   broker.   9. Governing Law   The Plan and all Award Agreements hereunder shall be construed and governed in accordance with   the laws of the State of Colorado, excluding any conflicts or choice of law principles which might   otherwise result in construction or interpretation of the Plan or an Award Agreement under the substantive   law of another jurisdiction; provided, however, that all corporate law matters with respect to the Company   shall be governed by the General Corporation Law of the State of Delaware.   10. Satisfaction of Tax Obligations   Appropriate provision shall be made for all taxes required to be withheld in connection with the   grant, vesting, exercise, or other taxable event with respect to Awards under the applicable laws and   regulations of any governmental authority, whether federal, state, or local and whether domestic or   foreign, including, without limitation, the required withholding of a sufficient amount of Common Stock   otherwise issuable to an Employee to satisfy such required tax withholding obligations.  To the extent   provided by the Plan Administrator, an Employee is permitted to deliver Common Stock (including shares   acquired pursuant to the exercise of an Option or Stock Appreciation Right other than the Option or Stock   Appreciation Right currently being exercised, to the extent permitted by applicable regulations) for   payment of withholding taxes on the exercise of an Option or Stock Appreciation Right, upon the grant or   vesting of Restricted Stock or Restricted Stock Units, or upon the payout of Performance Shares,   Performance Units, or Incentive Awards.  Common Stock may be required to be withheld from the shares   issuable to the Employee upon the exercise of an Option or Stock Appreciation Right, upon the vesting of   Restricted Stock or Restricted Stock Units, or upon the payout of Performance Shares or Performance   Units, to satisfy such required tax withholding obligations.  The Fair Market Value of Common Stock as   delivered pursuant to this Section 18.10 shall be determined as of the day of such delivery, and shall be   calculated in accordance with Section 2.20.   Any Participant who makes a Section 83(b) election under the Code shall, within ten (10) days of   making such election, notify the Company in writing of such election and shall provide the Company or   such Participant's Employer with a copy of such election form filed with the U.S. Internal Revenue   Service.   A Participant is solely responsible for obtaining, or failing to obtain, tax advice with respect to   participation in the Plan prior to the Participant's (i) entering into any transaction under or with respect to   the Plan, (ii) designating or choosing the times of distributions under the Plan, (iii) the making of any   elections applicable to the Participant in connection with any Award under the Plan, including, without   limitation, an election under Section 83(b) of the Code, or (iv) disposing of any Common Stock issued   under the Plan.   Table of Contents    





 







A - 35   11. Participants in Foreign Jurisdictions   The Plan Administrator shall have the authority to adopt such modifications, procedures, and   subplans as may be necessary or desirable to comply with provisions of the laws of any countries in which   the Company or any Subsidiary may operate, to ensure the viability of the benefits from Awards granted   to Participants employed in such countries, to meet the requirements of applicable foreign laws that permit   the Plan to operate in a qualified or tax-efficient manner, to comply with applicable foreign laws, and to   meet the objectives of the Plan; provided, however, that no such action taken pursuant to this Section   18.11 shall result in a “material revision” of the Plan under applicable securities exchange corporate   governance rules.   SECTION 19 REGULATORY COMPLIANCE   1. Rule 16b-3 and Section 162(m)   The Company's intention is that, so long as any of the Company's equity securities are registered   pursuant to Section 12(b) or 12(g) of the Exchange Act, the Plan shall comply in all respects with the rules   of any exchange on which the Common Stock is traded and with Rule 16b-3.  In addition, it is the   Company's intention that, as to Covered Employees, unless otherwise indicated in an Award Agreement,   Options, Stock Appreciation Rights, Performance Shares, Performance Units, and Incentive Awards shall   be designed to qualify as performance-based compensation under Section 162(m).  If any Plan provision   is determined not to be in compliance with the foregoing intentions, that provision shall be deemed   modified as necessary to meet the requirements of any such exchange, Rule 16b-3, and Section 162(m).   2. Section 409A   The Plan is intended to be administered, operated, and construed in compliance with Section 409A   and any regulations or other guidance issued thereunder.  Notwithstanding this or any other provision of   the Plan to the contrary, the Board or the Plan Administrator may amend the Plan in any manner, or take   any other action, that either of them determines, in its sole discretion, is necessary, appropriate, or   advisable to cause the Plan to comply with Section 409A and any regulations or other guidance issued   thereunder.  Any such action, once taken, shall be deemed to be effective from the earliest date necessary   and applicable to avoid a violation of Section 409A, and shall be final, binding, and conclusive on all   Employees and other individuals having or claiming any right or interest under the Plan.   Notwithstanding the provisions of the Plan or any Award Agreement, if a Participant is a   “specified employee” upon his or her “separation from service” (within the meaning of such terms in   Section 409A under such definitions and procedures as established by the Company in accordance with   Section 409A), any portion of a payment, settlement, or other distribution made upon such a “separation   from service” that would cause the acceleration of, or an addition to, any taxes pursuant to Section 409A   will not commence or be paid until a date that is six (6) months and one (1) day following the applicable   “separation from service.”  Any payments, settlements, or other distributions that are delayed pursuant to   this Section 19.2 following the applicable “separation from service” shall be accumulated and paid to the   Participant in a lump sum without interest on the first business day immediately following the required   delay period.   Table of Contents    





 







A - 36   SECTION 20 ESTABLISHMENT AND TERM OF PLAN   The Plan was adopted by the Board on November 6, 2012, and is subject to approval by the   Company's stockholders.  If approved by the stockholders, this Plan will replace the Prior Plan, and no   further Awards will be made under the Prior Plan.  This Plan shall become effective on the Effective Date,   and shall remain in effect, subject to the right of the Board to terminate the Plan at any time pursuant to   Section 21, until all Common Stock subject to it shall have been purchased or acquired according to the   provisions herein.  However, in no event may an Award be granted under the Plan on or after the tenth   (10th) anniversary of the Effective Date.  After this Plan is terminated, no future Awards may be granted   pursuant to the Plan, but Awards previously granted shall remain outstanding in accordance with their   applicable terms and conditions and this Plan's terms and conditions.   SECTION 21 AMENDMENT, TERMINATION, OR DISCONTINUANCE OF THE PLAN   1. Amendment of Plan   Subject to approval of the Board with respect to amendments that are required by law or regulation   or stock exchange rules to be submitted to the stockholders of the Company for approval, the Board or the   CNG Committee may from time to time make such amendments to the Plan as it may deem proper and in   the best interests of the Company, including, without limitation, any amendment necessary to ensure that   the Company may obtain any regulatory approval referred to in Section 17; provided, however, that (i) to   the extent required by applicable law, regulation, or stock exchange rule, stockholder approval shall be   required, and (ii) except as otherwise provided in the Plan, no change in any Award previously granted   under the Plan may be made without the consent of the Participant if such change would impair the right   of the Participant under the Award to acquire or retain Common Stock or cash that the Participant may   have acquired as a result of the Plan.   2. Termination or Suspension of Plan   The Board or CNG Committee may at any time suspend the operation of or terminate the Plan   with respect to any Common Stock or rights which are not at that time subject to any Award outstanding   under the Plan.   3. Section 162(m) Approval   If so determined by the Plan Administrator, the provisions of the Plan relating to Performance   Goals and Awards that are intended to constitute “performance-based compensation” under Section 162   (m) shall be disclosed to, and reapproved by, the Company's stockholders no later than the first   stockholder meeting that occurs in the fifth year following the year in which the Effective Date occurs (or   at any such other time as may be required or allowed by Section 162(m)) in order for Awards that are   intended to constitute “performance-based compensation” under Section 162(m) granted after such time to   be exempt from the deduction limitations of Section 162(m).   *     *     *     *     *   [Signature page follows]   Table of Contents    





 







A - 37   IN WITNESS WHEREOF, the Company has caused this 2012 Omnibus Incentive Compensation   Plan to be executed effective as of January 16, 2013.   MAGELLAN PETROLEUM CORPORATION   ______________________________________   J. Thomas Wilson   President and Chief Executive Officer   Table of Contents