Exhibit
4.1


GEOKINETICS INC.

2002 STOCK AWARDS PLAN

(as amended through November 30, 2006)


Purpose.  The purpose of the
GEOKINETICS INC. 2002 STOCK AWARDS PLAN (the “Plan”) is to provide a means
through which GEOKINETICS INC., a Delaware corporation (the “Company”),
and its subsidiaries, may attract, retain and motivate employees, directors and
persons affiliated with the Company and to provide a means whereby such persons
can acquire and maintain stock ownership, thereby strengthening their concern
for the welfare of the Company. A further purpose of the Plan is to provide
such participants with additional incentive and reward opportunities designed
to enhance the profitable growth and increase stockholder value of the Company.
Accordingly, the Plan provides for granting Incentive Stock Options, options
that do not constitute Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Phantom Stock Awards, or any combination of the
foregoing, as is best suited to the particular circumstances as provided
herein.


Definitions.  The following definitions
shall be applicable throughout the Plan unless specifically modified by any
paragraph:


                                (a)           “Affiliates”
means any “parent corporation” of the Company and any “subsidiary” of the
Company within the meaning of Code Sections 424(e) and (f), respectively, and
any entity which directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with the Company.


(b)           “Award”
means, individually or collectively, any Option, Restricted Stock Award,
Phantom Stock Award or Stock Appreciation Right.


(c)           “Board”
means the Board of Directors of the Company.


(d)           “Change
of Control” means the occurrence of any of the following events:
(i) the Company shall not be the surviving entity in any merger,
consolidation or other reorganization (or survives only as a subsidiary of an
entity other than a previously wholly- owned subsidiary of the Company),
(ii) the Company sells, leases or exchanges all or substantially all of
its assets to any other person or entity (other than a wholly-owned
subsidiary of the Company), (iii) the Company is to be dissolved and
liquidated, (iv) any person or entity, including a “group” as contemplated
by Section 13(d)(3) of the 1934 Act, acquires or gains ownership or
control (including, without limitation, power to vote) of more than 50% of the
outstanding shares of the Company’s voting stock (based upon voting power), or
(v) as a result of or in connection with a contested election of directors,
the persons who were directors of the Company before such election shall cease
to constitute a majority of the Board.


(e)           “Change
of Control Value” shall mean (i) the per share price offered to
stockholders of the Company in any merger, consolidation, reorganization, sale
of assets or dissolution transaction, (ii) the price per share offered to
stockholders of the Company in any tender offer or exchange offer whereby a
Change of Control takes place, or (iii) if a Change of Control occurs other
than pursuant (i) or (ii) above, the Fair Market Value per share of
the shares into which Awards are exercisable, as determined by the Committee,
whichever is applicable. In the event that the consideration offered to
stockholders of the Company consists of anything other than cash, the Committee
shall determine the fair cash equivalent of the portion of the consideration
offered which is other than cash.










 



(f)            “Code”
means the Internal Revenue Code of 1986, as amended. Reference in the Plan to
any section of the Code shall be deemed to include any amendments or successor
provisions to any section and any regulations under such section.


(g)           “Committee”
means the Board or any Compensation Committee of the Board which shall be
constituted (i) as to permit the Plan to comply with Rule 16b-3, and
(ii) solely of “outside directors,” within the meaning of
Section 162(m) of the Code and applicable interpretive authority
thereunder.


(h)           “Company”
means Geokinetics Inc.


(i)            “Director”
means an individual elected to the Board by the stockholders of the Company or
by the Board under applicable corporate law who is serving on the Board on the
date the Plan is adopted by the Board or is elected to the Board after such
date.


(j)            An “employee”
means any person (including an officer or a Director) in an employment
relationship with the Company or any parent or subsidiary corporation (as
defined in Section 424 of the Code).


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


(l)            “Fair
Market Value” means, as of any specified date, the mean of the high
and low sales prices of the Stock (i) reported by any interdealer
quotation system on which the Stock is quoted on that date or (ii) if the
Stock is listed on a national stock exchange, reported on the stock exchange
composite tape on that date; or, in either case, if no prices are reported on
that date, on the last preceding date on which such prices of the Stock are so
reported. If the Stock is traded over the counter at the time a determination
of its Fair Market Value is required to be made hereunder, its fair market
value shall be deemed to be equal to the average between the reported high and
low or closing bid and asked prices of Stock on the most recent date on which
Stock was publicly traded. In the event Stock is not publicly traded at the
time a determination of its value is required to be made hereunder, the
determination of its fair market value shall be made by the Committee in such
manner as it deems appropriate.


(m)          “Holder”
means a Participant who has been granted an Award.


(n)           “Incentive
Stock Option” means an incentive stock option within the meaning of
Section 422(b) of the Code.


(o)           “Nonqualified
Stock Option” means an option granted under Section 7 of the
Plan to purchase Stock that does not constitute an Incentive Stock Option.


(p)           “Option”
means an Award granted under Section 7 of the Plan and includes both
Incentive Stock Options to purchase Stock and Nonqualified Stock Options to
purchase Stock.


(q)           “Option
Agreement” means a written agreement between the Company and a
Holder with respect to an Option.


(r)            “Participant”
means individually or collectively, an employee, member of the Board of
Directors or person affiliated with the Company or any of its Affiliates, who
participates in the Plan.



 2
 






 



(s)           “Phantom
Stock Award” means an Award granted under Section 10 of the
Plan.


(t)            “Phantom
Stock Award Agreement” means a written agreement between the Company
and a Holder with respect to a Phantom Stock Award.


(u)           “Reload
Option” means the grant of a new Option to a Holder who exercises an
Option(s) as provided in Section 7(f) of the Plan.


(v)           “Restricted
Stock Agreement” means a written agreement between the Company and a
Holder with respect to a Restricted Stock Award.


(w)          “Restricted
Stock Award” means an Award granted under Section 9 of the
Plan.


(x)            “Rule 16b-3”
means Rule 16b-3 promulgated by the Securities and Exchange Commission
under the 1934 Act, as such may be amended from time to time, and any successor
rule, regulation or statute fulfilling the same or a similar function.


(y)           “Spread”
means, in the case of a Stock Appreciation Right, an amount equal to the
excess, if any, of the Fair Market Value of a share of Stock on the date such
right is exercised over the price designated in such Stock Appreciation Right.


(z)            “Stock”
means the Common Stock par value, $.01 per share, of the Company.


(aa)         “Stock
Appreciation Right” means an Award granted under Section 8 of
the Plan.


(bb)         “Stock
Appreciation Rights Agreement” means a written agreement between the
Company and a Holder with respect to an Award of Stock Appreciation Rights.


 3.  Effective Date and Term.  The Plan shall be effective upon its adoption
by the Board, provided that the Plan has been or is approved by the
stockholders of the Company within twelve months of its adoption by the Board.
No further Awards may be granted under the Plan on or after the date which is
ten years following the effective date. The Plan shall remain in effect until
all Awards granted under the Plan have been satisfied or expired.


 4.  Administration.  The Plan shall be administered by the Board
or by the Committee as authorized by the Board (hereinafter where the term “Committee”
is used “Board” shall be substituted, if no Committee has been established).
Subject to the provisions of the Plan, the Committee shall have sole authority,
in its discretion, to determine which Participant shall receive an Award, the
time or times when such Award shall be made, whether an Incentive Stock Option,
Nonqualified Option or Stock Appreciation Right shall be granted, the number of
shares of Stock which may be issued under each Option, Stock Appreciation Right
or Restricted Stock Award, and the value of each Phantom Stock Award. In making
such determinations the Committee may take into account the nature of the
services rendered by the respective Participants, their present and potential
contributions to the Company’s success and such other factors as the Committee
in its discretion shall deem relevant. The Committee shall have such additional
powers as are delegated to it by the other provisions of the Plan. Subject to
the express provisions of the Plan, the Committee is authorized to construe the
Plan and the respective agreements executed thereunder, to prescribe such rules
and regulations relating to the Plan as it may deem advisable to carry out the
Plan, and to determine the terms, restrictions and provisions of each Award,
including such terms, restrictions and provisions as shall be requisite in the
judgment of the Committee to cause designated Options to qualify as Incentive
Stock Options, and to make all other determinations necessary or advisable for
administering the Plan. The Committee may correct any defect or supply any
omission or reconcile any 



 3
 






 



inconsistency in any
agreement relating to an Award in the manner and to the extent it shall deem
expedient to carry it into effect. The determinations of the Committee on the
matters referred to in this Section 4 shall be conclusive.


 5.  Shares Subject to the Plan.  Subject to Section 11, the aggregate
number of shares of Stock that may be issued under the Plan shall be 800,000
shares. The Stock to be offered pursuant to the grant of an Award may be
authorized but unissued Stock or Stock previously issued and outstanding and
reacquired by the Company. Shares of Stock shall be deemed to have been issued
under the Plan only to the extent actually issued and delivered pursuant to an
Award. To the extent that an Award lapses or the rights of its Holder terminate
or the Award is paid in cash, any shares of Stock subject to such Award shall
again be available for the grant of an Award. Separate stock certificates shall
be issued by the Company for those shares acquired pursuant to the exercise of
an Incentive Stock Option and for those shares acquired pursuant to the
exercise of a Nonqualified Stock Option.


 6.  Eligibility.  Awards may be granted only to persons who, at
the time of grant, are employees, members of the Board or persons affiliated
with the Company or any of its Affiliates. An Award may be granted on more than
one occasion to the same person, and, subject to the limitations set forth in
the Plan, such Award may include an Incentive Stock Option or a Nonqualified
Stock Option, a Stock Appreciation Right, a Restricted Stock Award, a Phantom
Stock Award or any combination thereof.


 7.  Stock Options.


(a)  Option
Period.  The term of each
Option shall be as specified by the Committee at the date of grant.


(b)  Limitations
on Exercise of Option.  An
Option shall be exercisable in whole or in such installments and at such times
as determined by the Committee.


(c)  Special
Limitations on Incentive Stock Options.  Incentive Stock Options may only be granted
to employees of the Company and a parent or subsidiary thereof which is an
Affiliate. To the extent that the aggregate Fair Market Value (determined at
the time the respective Incentive Stock Option is granted) of Stock with
respect to which Incentive Stock Options are exercisable for the first time by
an individual during any calendar year (under all “incentive stock option”
plans of the Company and its parent and subsidiary corporations) exceeds
$100,000, the Incentive Stock Options covering shares of Stock in excess of
$100,000 (but not Incentive Stock Options covering Stock up to $100,000) shall
be treated as Nonqualified Stock Options as determined by the Committee. The
Committee shall determine, in accordance with applicable provisions of the
Code, Treasury Regulations and other administrative pronouncements, which of an
optionee’s Incentive Stock Options will not constitute Incentive Stock Options
because of such limitation and shall notify the optionee of such determination
as soon as practicable after such determination. No Incentive Stock Option
shall be granted to an individual if, at the time the Option is granted, such
individual owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent or subsidiary
corporation, within the meaning of Section 422(b)(6) of the Code, unless
(i) at the time such Option is granted the option price is at least 110%
of the Fair Market Value of the Stock subject to the Option and (ii) such
Option by its terms is not exercisable after the expiration of five years from
the date of grant.


(d)  Option
Agreement.  Each Option shall
be evidenced by an Option Agreement in such form and containing such provisions
not inconsistent with the provisions of the Plan as the Committee from time to
time shall approve, including, without limitation, provisions to qualify an
Incentive Stock Option under Section 422 of the Code. An Option Agreement
may provide for the payment of the option price, in whole or in part, by the
delivery of a number of shares of Stock (plus cash if necessary) having a 



 4
 






 



Fair Market Value equal
to such option price. Payment in full or in part may also be made by reduction
in the number of shares of Stock issuable upon the exercise of an Option, based
on the Fair Market Value of the shares of Stock on the date the Option is
exercised. Each Option Agreement shall provide that the Option may not be
exercised earlier than 30 days from the date of grant and shall specify
the effect of termination of employment or service on the exercisability of the
Option. Moreover, an Option Agreement may provide for a “cashless exercise” of
the Option by establishing procedures whereby the Holder, by a properly-executed
written notice, directs (i) an immediate market sale or margin loan
respecting all or a part of the shares of Stock to which he is entitled upon
exercise pursuant to an extension of credit by the Company to the Holder of the
option price, (ii) the delivery of the shares of Stock from the Company
directly to a brokerage firm and (iii) the delivery of the option price
from the sale or margin loan proceeds from the brokerage firm directly to the
Company. Such Option Agreement may also include, without limitation, provisions
relating to (i) vesting of Options, subject to the provisions hereof
accelerating such vesting on a Change of Control, (ii) tax matters
(including provisions (y) permitting the delivery of additional shares of
Stock or the withholding of shares of Stock from those acquired upon exercise
to satisfy federal or state income tax withholding requirements and (z) dealing
with any other applicable employee wage withholding requirements), and
(iii) any other matters not inconsistent with the terms and provisions of
this Plan that the Committee shall in its sole discretion determine. The terms
and conditions of the respective Option Agreements need not be identical.


(e)  Option Price
and Payment.  The price at
which a share of Stock may be purchased upon exercise of an Option shall be
determined by the Committee, but such purchase price shall not be less than, in
the case of Incentive Stock Options, the Fair Market Value of Stock subject to
an Option on the date the Option is granted and (ii) such purchase price
shall be subject to adjustment as provided in Section 11. The Option or
portion thereof may be exercised by delivery of an irrevocable notice of
exercise to the Company. The purchase price of the Option or portion thereof
shall be paid in full in the manner prescribed by the Committee.


(f)  Reload
Options.  The Committee shall
have the authority to and, in its sole discretion may, specify at or after the
time of grant of a Nonqualified Stock Option, that a Holder shall be
automatically granted a Reload Option in the event such Holder exercises all or
part of an original option (“Original Option”) within five years of the date of
grant of the Original Option, by means of, in accordance with Section 7(d)
of this Plan, (i) a cashless exercise, (ii) a reduction in the number
of shares of Stock issuable upon such exercise sufficient to pay the purchase
price and the applicable withholding taxes, based on the Fair Market Value of
the shares of Stock on the date the Option is exercised, or
(iii) surrendering to the Company already owned shares of Stock in full or
partial payment of the purchase price under the Original Option and the applicable
withholding taxes. The grant of Reload Options shall be subject to the
availability of shares of Stock under this Plan at the time of exercise of the
Original Option and to the limits provided for in Section 5 of this Plan.
The Committee shall have the authority to determine the terms of any Reload
Options granted.


(g)  Stockholder
Rights and Privileges.  The
Holder shall be entitled to all the privileges and rights of the stockholder
only with respect to such shares of Stock as have been purchased under the
Option and for which certificates of stock have been registered in the Holder’s
name.


(h)  Options and
Rights in Substitution for Stock Options Granted by Other Corporations.  Options and Stock Appreciation Rights may be
granted under the Plan from time to time in substitution for stock options held
by individuals employed by corporations who become employees as a result of a
merger or consolidation of the employing corporation with the Company or any
subsidiary, or the acquisition by the Company or a subsidiary of the assets of
the employing corporation, or the acquisition by the Company or a subsidiary of
stock of the employing corporation with the result that such employing
corporation becomes a subsidiary.



 5
 






 



 8.  Stock Appreciation Rights.


(a)  Stock
Appreciation Rights.  A Stock
Appreciation Right is the right to receive an amount equal to the Spread with
respect to a share of Stock upon the exercise of such Stock Appreciation Right.
Stock Appreciation Rights may be granted in connection with the grant of an
Option, in which case the Option Agreement will provide that the Stock
Appreciation Right shall be cancelled when and to the extent the related Option
is exercised and that exercise of Stock Appreciation Rights will result in the
surrender of the right to purchase the shares under the Option as to which the
Stock Appreciation Rights were exercised. Alternatively, Stock Appreciation
Rights may be granted independently of Options in which case each Award of
Stock Appreciation Rights shall be evidenced by a Stock Appreciation Rights
Agreement which shall contain such terms and conditions as may be approved by
the Committee. The Spread with respect to a Stock Appreciation Right shall be
payable in cash, shares of Stock with a Fair Market Value equal to the Spread
or in a combination of cash and shares of Stock, at the election of the Holder.
With respect to Stock Appreciation Rights that are subject to Section 16
of the 1934 Act, however, the Committee shall, except as provided in
Section 11(c), retain sole discretion (i) to determine the form in
which payment of the Stock Appreciation Right will be made (i.e., cash,
securities or a combination thereof) or (ii) to approve an election by a
Holder to receive cash in full or partial settlement of Stock Appreciation
Rights. Each Stock Appreciation Rights Agreement shall provide that the Stock
Appreciation Rights may not be exercised earlier than 30 days from the
date of grant and shall specify the effect of termination of employment on the
exercisability of the Stock Appreciation Rights.


(b)  Other Terms
and Conditions.  At the time
of such Award, the Committee, may in its sole discretion, prescribe additional
terms, conditions or restrictions relating to Stock Appreciation Rights,
including but not limited to rules pertaining to termination of employment (by
retirement, disability, death or otherwise) or termination of service of a
Holder prior to the expiration of such Stock Appreciation Rights. Such
additional terms, conditions or restrictions shall be set forth in the Stock
Appreciation Rights Agreement made in conjunction with the Award. Such Stock
Appreciation Rights Agreements may also include, without limitation, provisions
relating to (i) vesting of Awards, subject to the provisions hereof accelerating
vesting on a Change of Control, (ii) tax matters (including provisions
covering applicable wage withholding requirements), and (iii) any other
matters not inconsistent with the terms and provisions of this Plan, that the
Committee shall in its sole discretion determine. The terms and conditions of
the respective Stock Appreciation Rights Agreements need not be identical.


(c)  Award Price.  The award price of each Stock Appreciation
Right shall be determined by the Committee, but such award price (i) shall
not be less than the Fair Market Value of a share of Stock on the date the
Stock Appreciation Right is granted (or such greater exercise price as may be
required if such Stock Appreciation Right is granted in connection with an
Incentive Stock Option that must have an exercise price equal to 110% of the
Fair Market Value of the Stock on the date of grant pursuant to
Section 7(c)), and (ii) shall be subject to adjustment as provided in
Section 11.


(d)  Exercise
Period.  The term of each
Stock Appreciation Right shall be as specified by the Committee at the date of
grant.


(e)  Limitations
on Exercise of Stock Appreciation Right.  A Stock Appreciation Right shall be
exercisable in whole or in such installments and at such times as determined by
the Committee.


 9.  Restricted Stock Awards.


(a)  Forfeiture
Restrictions to be Established by the Committee.  Shares of Stock that are the subject of a
Restricted Stock Award shall be subject to restrictions on disposition by the
Holder and 



 6
 






 



an obligation of the
Holder to forfeit and surrender the shares to the Company under certain
circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions
shall be determined by the Committee in its sole discretion, and the Committee
may provide that the Forfeiture Restrictions shall lapse upon (i) the
attainment of business objectives established by the Committee that are based
on (1) the price of a share of Stock, (2) the Company’s earnings per
share, (3) the Company’s revenue, (4) the revenue of a business unit
of the Company designated by the Committee, (5) the return on stockholders’
equity achieved by the Company, (6) the Company’s pre-tax cash flow from
operations, or (7) similar criteria established by the Committee,
(ii) the Holder’s continued employment with the Company for a specified
period of time, or (iii) other measurements of individual, business unit
or Company performance. Each Restricted Stock Award may have different
Forfeiture Restrictions, in the discretion of the Committee. The Forfeiture
Restrictions applicable to a particular Restricted Stock Award shall not be
changed except as permitted by Section 9(b) or Section 11.


(b)  Other Terms
and Conditions.  Stock awarded
pursuant to a Restricted Stock Award shall be represented by a stock
certificate registered in the name of the Holder of such Restricted Stock
Award. The Holder shall have the right to receive dividends with respect to
Stock subject to a Restricted Stock Award, to vote Stock subject thereto and to
enjoy all other stockholder rights, except that (i) the Holder shall not
be entitled to delivery of the stock certificate until the Forfeiture
Restrictions shall have expired, (ii) the Company shall retain custody of
the Stock until the Forfeiture Restrictions shall have expired, (iii) the
Holder may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the Stock until the Forfeiture Restrictions shall have expired, and
(iv) a breach of the terms and conditions established by the Committee
pursuant to the Restricted Stock Agreement, shall cause a forfeiture of the
Restricted Stock Award. At the time of such Award, the Committee may, in its
sole discretion, prescribe additional terms, conditions or restrictions
relating to Restricted Stock Awards, including, but not limited to, rules
pertaining to the termination of employment (by retirement, disability, death
or otherwise) or termination of service of a Holder prior to expiration of the
Forfeiture Restrictions. Such additional terms, conditions or restrictions
shall be set forth in a Restricted Stock Agreement made in conjunction with the
Award. Such Restricted Stock Agreement may also include, without limitation,
provisions relating to (i) subject to the provisions hereof accelerating
vesting on a Change of Control, vesting of Awards, (ii) tax matters
(including provisions (y) covering any applicable employee wage
withholding requirements and (z) prohibiting an election by the Holder
under Section 83(b) of the Code), and (iii) any other matters not
inconsistent with the terms and provisions of this Plan that the Committee
shall in its sole discretion determine. The terms and conditions of the
respective Restricted Stock Agreements need not be identical.


(c)  Payment for
Restricted Stock.  The
Committee shall determine the amount and form of any payment for Stock received
pursuant to a Restricted Stock Award, provided that in the absence of such a
determination, a Holder shall not be required to make any payment for Stock
received pursuant to a Restricted Stock Award, except to the extent otherwise
required by law.


(d)  Agreements.  At the time any Award is made under this
Section 9, the Company and the Holder shall enter into a Restricted Stock
Agreement setting forth each of the matters as the Committee may determine to
be appropriate. The terms and provisions of the respective Restricted Stock
Agreements need not be identical.


 10.  Phantom Stock Awards.


(a)  Phantom Stock
Awards.  Phantom Stock Awards
are rights to receive an amount equal to the Fair Market Value of Stock over a
specified period of time, which vest over a period of time or upon the
occurrence of an event (including without limitation a Change of Control) as
established by the Committee, without payment of any amounts by the Holder
thereof (except to the extent otherwise 



 7
 






 



required by law). Each
Phantom Stock Award may have a maximum value established by the Committee at
the time of such Award.


(b)  Award Period.  The Committee shall establish, with respect
to and at the time of each Phantom Stock Award, a period over which or the
event upon which the Award shall vest with respect to the Holder.


(c)  Awards
Criteria.  In determining the
value of Phantom Stock Awards, the Committee shall take into account a
Participant’s responsibility level, performance, potential, other Awards and
such other considerations as it deems appropriate.


(d)  Payment.  Following the end of the vesting period for a
Phantom Stock Award, the Holder of a Phantom Stock Award shall be entitled to
receive payment of an amount, not exceeding the maximum value of the Phantom
Stock Award, based on the then vested value of the Award. Payment of a Phantom
Stock Award may be made in cash, Stock or a combination thereof as determined
by the Committee. Payment shall be made in a lump sum or in installments as prescribed
by the Committee in its sole discretion. Any payment to be made in Stock shall
be based on the Fair Market Value of the Stock on the payment date. Cash
dividend equivalents may be paid during or after the vesting period with
respect to a Phantom Stock Award, as determined by the Committee and as
provided in the Phantom Stock Award Agreement. If a payment of cash is to be
made on a deferred basis, the Committee shall establish whether interest shall
be credited, the rate thereof and any other terms and conditions applicable
thereto.


(e)  Termination
of Employment or Service.  A
Phantom Stock Award shall terminate if the Holder does not remain continuously
in the employ or in the service of the Company at all times during the
applicable vesting period, except as may be otherwise determined by the
Committee or as set forth in the Award at the time of grant.


(f)  Agreements.  At the time any Award is made under this
Section 10, the Company and the Holder shall enter into a Phantom Stock
Award Agreement setting forth each of the matters contemplated hereby and such
matters described in this Section 10 as the Committee may determine to be
appropriate. The terms and provisions of the respective agreements need not be
identical.


 11. 
Recapitalization and Reorganization.


(a)           The shares with respect to which
Awards may be granted are shares of Stock as presently constituted, but if, and
whenever, prior to the expiration of an Award theretofore granted, the Company
shall effect a subdivision or consolidation by the Company of the shares of
Stock, then the number of shares of Stock with respect to which such Award may
thereafter be exercised or satisfied, as applicable, (i) in the event of
an increase in the number of outstanding shares, shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares,
shall be proportionately reduced, and the purchase price per share shall be
proportionately increased.


(b)           If the Company recapitalizes or
otherwise changes its capital structure, thereafter upon any exercise or
satisfaction, as applicable, of an Award theretofore granted, the Holder shall
be entitled to (or entitled to purchase, if applicable) under such Award, in
lieu of the number of shares of Stock then covered by such Award, the number
and class of shares of stock and securities to which the Holder would have been
entitled pursuant to the terms of the recapitalization if, immediately prior to
such recapitalization, the Holder had been the holder of record of the number
of shares of Stock then covered by such Award.



 8
 






 



(c)           In the event of a Change of Control,
all outstanding Awards shall immediately vest and become exercisable or
satisfiable, as applicable. The Committee, in its discretion, may determine
that upon the occurrence of a Change of Control, each Award other than an
Option outstanding hereunder shall terminate within a specified number of days
after notice to the Holder, and such Holder shall receive, with respect to each
share of Stock subject to such Award, cash in an amount equal to the excess, if
any, of the Change of Control Value over the exercise price, if any, applicable
to the Award. Further, in the event of a Change of Control, the Committee, in
its discretion shall act to effect one or more of the following alternatives
with respect to outstanding Options, which may vary among individual Holders
and which may vary among Options held by any individual Holder:
(i) determine a limited period of time on or before a specified date
(before or after such Change of Control) after which specified date all
unexercised Options and all rights of Holders thereunder shall terminate,
(2) require the mandatory surrender to the Company by selected Holders of
some or all of the outstanding Options held by such Holders (irrespective of
whether such Options are then exercisable under the provisions of the Plan) as
of a date, before or after such Change of Control, specified by the Committee,
in which event the Committee shall thereupon cancel such Options and the
Company shall pay to each Holder an amount of cash per share equal to the
excess, if any, of the Change of Control Value of the shares subject to such
Option over the exercise price(s) under such Options for such shares,
(3) make such adjustments to Options then outstanding as the Committee
deems appropriate to reflect such Change of Control (provided, however, that
the Committee may determine in its sole discretion that no adjustment is
necessary to Options then outstanding) or (4) provide that thereafter upon
any exercise of an Option theretofore granted the Holder shall be entitled to
purchase under such Option, in lieu of the number of shares of Stock then
covered by such Option the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which the
Holder would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets and dissolution if, immediately prior to
such merger, consolidation or sale of assets and dissolution the Holder has
been the holder of record of the number of shares of Stock then covered by such
Option. The provisions contained in this paragraph shall not terminate any
rights of the Holder to further payments pursuant to any other agreement with
the Company following a Change of Control.


(d)           In the event of changes in the
outstanding Stock by reason of recapitalization, reorganizations, mergers,
consolidations, combinations, exchanges or other relevant changes in
capitalization occurring after the date of the grant of any Award and not
otherwise provided for by this Section 11, any outstanding Awards and any
agreements evidencing such Awards shall be subject to adjustment by the
Committee at its discretion as to the number and price of shares of Stock or
other consideration subject to such Awards. In the event of any such change in
the outstanding Stock, the aggregate number of shares available under the Plan
may be appropriately adjusted by the Committee, whose determination shall be
conclusive.


(e)           The existence of the Plan and the
Awards granted hereunder shall not affect in any way the right or power of the
Board or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any
issue of debt or equity securities ahead of or affecting Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.


(f)            Any adjustment provided for in
Subparagraphs (a), (b), (c) or (d) above shall be subject to any required
stockholder action.


(g)           Except as hereinbefore expressly
provided, the issuance by the Company of shares of stock of any class or
securities convertible into shares of stock of any class, for cash, property, 



 9
 






 



labor or services, upon
direct sale, upon the exercise of rights or warrants to subscribe therefore or
the granting of any later Awards under the Plan or any other stock plan, or
upon conversion of shares of obligations of the Company convertible into such
shares or other securities, and in any case whether or not for fair value,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to Awards theretofore granted
or the purchase price per share, if applicable.


 12.  Amendment and Termination.  The Board in its discretion may terminate the
Plan at any time with respect to any shares for which Awards have not
theretofore been granted. The Board shall have the right to alter or amend the
Plan or any part thereof from time to time; provided that no change in any
Award theretofore granted may be made which would impair the rights of the
Holder without the consent of the Holder (unless such change is required in
order to cause the benefits under the Plan to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code and
applicable interpretive authority thereunder).


 13.  Miscellaneous.


(a)  No Right to
An Award.  Neither the
adoption of the Plan by the Company nor any action of the Board or the
Committee shall be deemed to give a Participant any right to be granted an
Award to purchase Stock, a right to a Stock Appreciation Right, a Restricted
Stock Award or a Phantom Stock Award or any of the rights hereunder except as
may be evidenced by an Award or by an Option Agreement, Stock Appreciation
Rights Agreement, Restricted Stock Agreement or Phantom Stock Award Agreement
on behalf of the Company, and then only to the extent and on the terms and
conditions expressly set forth therein. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of funds or assets to assure the payment of any Award.


(b)  No Employment
Rights Conferred.  Nothing
contained in the Plan shall (i) confer upon any Participant any right to
continue as an employee or person affiliated with the Company or any subsidiary
or (ii) interfere in any way with the right of the Company or any
subsidiary to terminate his or her employment or consulting arrangement at any
time.


(c)  Other Laws;
Withholding.  The Company
shall not be obligated to issue any Stock pursuant to any Award granted under
the Plan at any time when the shares covered by such Award have not been
registered under the Securities Act of 1933 and such other state and federal
laws, rules or regulations as the Company or the Committee deems applicable
and, in the opinion of legal counsel for the Company, there is no exemption
from the registration requirements of such laws, rules or regulations available
for the issuance and sale of such shares. No fractional shares of Stock shall
be delivered, nor shall any cash in lieu of fractional shares be paid. The
Company shall have the right to deduct in connection with all Awards any taxes
required by law to be withheld and to require any payments required to enable
it to satisfy its withholding obligations.


(d)  No
Restriction on Corporate Action. 
Nothing contained in the Plan shall be construed to prevent the Company
or any subsidiary from taking any corporate action which is deemed by the
Company or such subsidiary to be appropriate or in its best interest, whether
or not such action would have an adverse effect on the Plan or any Award made
under the Plan. No Participant, beneficiary or other person shall have any claim
against the Company or any subsidiary as a result of any such action.


(e)  Restrictions
on Transfer.  Except as
otherwise determined by the Committee in cases other than in connection with
Incentive Stock Options, an Award shall not be transferable otherwise than by
will or the laws of descent and distribution or pursuant to a “qualified
domestic relations order” as 



 10
 






 



defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder, and shall be exercisable during the Holder’s lifetime
only by such Holder or the Holder’s guardian or legal representative.


(f)  Rule 16b-3.  It is intended that the Plan and any grant of
an Award made to a person subject to Section 16 of the 1934 Act meet all
of the requirements of Rule 16b-3. If any provision of the Plan or any
such Award would disqualify the Plan or such Award under, or would otherwise
not comply with, Rule 16b-3, such provision or Award shall be construed or
deemed amended to conform to Rule 16b-3.


(g)  Section 162(m).  If the Plan is subject to Section 162(m)
of the Code, it is intended that the Plan comply fully with and meet all the
requirements of Section 162(m) of the Code so that Options and Stock Appreciation
Rights granted hereunder and, if determined by the Committee, Restricted Stock
Awards, shall constitute “performance-based” compensation within the
meaning of such section. If any provision of the Plan would disqualify the Plan
or would not otherwise permit the Plan to comply with Section 162(m) as so
intended, such provision shall be construed or deemed amended to conform to the
requirements or provisions of Section 162(m); provided that no such
construction or amendment shall have an adverse effect on the economic value to
a Holder of any Award previously granted hereunder.


(h)  Governing
Law.  This Plan shall be
construed in accordance with the laws of the State of Delaware.


 



 11