**Exhibit 4.11****THE MERIDIAN RESOURCE CORPORATION****2007 LONG-TERM INCENTIVE PLAN**
 

 
**THE MERIDIAN RESOURCE CORPORATION****2007 LONG-TERM INCENTIVE PLAN**         **ARTICLE I ESTABLISHMENT, PURPOSE AND DURATION**               1.1 Establishment  1   1.2 Purpose of the Plan  1   1.3 Duration of the Plan  1          **ARTICLE II DEFINITIONS**               2.1 Affiliate  1   2.2 Award  1   2.3 Award Agreement  1   2.4 Board  2   2.5 Code  2   2.6 Committee  2   2.7 Company  2   2.8 Corporate Change  2   2.9 Disability  2   2.10 Dividend Equivalent  2   2.11 Effective Date  2   2.12 Employee  2   2.13 Fair Market Value  2   2.14 Fiscal Year  2   2.15 Holder  2   2.16 ISO  2   2.17 Minimum Statutory Tax Withholding Obligation  2   2.18 NSO  3   2.19 Option  3   2.20 Optionee  3   2.21 Option Price  3   2.22 Parent Corporation  3   2.23 Performance Goals  3   2.24 Performance Stock Award  3   2.25 Performance Unit Award  3   2.26 Period of Restriction  3   2.27 Plan  3   2.28 Restricted Stock  3   2.29 Restricted Stock Award  3   2.30 RSU  3   2.31 RSU Award  3   2.32 SAR  3   2.33 Section 409A  3   2.34 Stock  3   2.35 Subsidiary Corporation  4   2.36 Substantial Risk of Forfeiture  4   2.37 Ten Percent Stockholder  4   2.38 Termination of Employment  4 
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         **ARTICLE III ELIGIBILITY AND PARTICIPATION**               3.1 Eligibility  4   3.2 Participation  4          **ARTICLE IV GENERAL PROVISIONS RELATING TO AWARDS**               4.1 Authority to Grant Awards  4   4.2 Dedicated Shares; Maximum Awards  5   4.3 Shares That Count Against Limit  5   4.4 Non-Transferability  5   4.5 Requirements of Law  6   4.6 Changes in the Company’s Capital Structure  6   4.7 Election Under Section 83(b) of the Code  9   4.8 Forfeiture Events  9   4.9 Award Agreements  9   4.10 Amendments of Award Agreements  9   4.11 Rights as Stockholder  9   4.12 Issuance of Shares of Stock  9   4.13 Restrictions on Stock Received  9   4.14 Compliance With Section 409A  10          **ARTICLE V OPTIONS**               5.1 Authority to Grant Options  10   5.2 Type of Options Available  10   5.3 Option Agreement  10   5.4 Option Price  10   5.5 Duration of Option  10   5.6 Amount Exercisable  10   5.7 Exercise of Option  10   5.8 Notification of Disqualifying Disposition  11   5.9 No Rights as Stockholder  11   5.10 $100,000 Limitation on ISOs  11          **ARTICLE VI STOCK APPRECIATION RIGHTS**               6.1 Authority to Grant SAR Awards  11   6.2 General Terms  11   6.3 SAR Agreement  12   6.4 Term of SAR  12   6.5 Exercise of SAR  12   6.6 Payment of SAR Amount  12   6.7 Termination of Employment  12          **ARTICLE VII RESTRICTED STOCK AWARDS**               7.1 Restricted Stock Awards  12   7.2 Restricted Stock Award Agreement  13   7.3 Holder’s Rights as Stockholder  13          **ARTICLE VIII RESTRICTED STOCK UNIT AWARDS**               8.1 Authority to Grant RSU Awards  13   8.2 RSU Award  13 
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           8.3 RSU Award Agreement  13   8.4 Dividend Equivalents  13   8.5 Form of Payment Under RSU Award  13   8.6 Time of Payment Under RSU Award  13          **ARTICLE IX PERFORMANCE STOCK AWARDS AND PERFORMANCE UNIT AWARDS**               9.1 Authority to Grant Performance Stock Awards and Performance Unit Awards  14   9.2 Performance Goals  14   9.3 Time of Establishment of Performance Goals  15   9.4 Written Agreement  15   9.5 Form of Payment Under Performance Unit Award  15   9.6 Time of Payment Under Performance Unit Award  15   9.7 Holder’s Rights as Stockholder With Respect to a Performance Stock Award  15   9.8 Increases Prohibited  15   9.9 Stockholder Approval  15   9.10 Dividend Equivalents  15          **ARTICLE X SUBSTITUTION AWARDS**             **ARTICLE XI ADMINISTRATION**               11.1 Awards  16   11.2 Authority of the Committee  16   11.3 Decisions Binding  17   11.4 No Liability  17          **ARTICLE XII AMENDMENT OR TERMINATION OF PLAN**               12.1 Amendment, Modification, Suspension, and Termination  17   12.2 Awards Previously Granted  17          **ARTICLE XIII MISCELLANEOUS**               13.1 Unfunded Plan/No Establishment of a Trust Fund  17   13.2 No Employment Obligation  17   13.3 Tax Withholding  18   13.4 Gender and Number  18   13.5 Severability  18   13.6 Headings  18   13.7 Other Compensation Plans  18   13.8 Other Awards  19   13.9 Successors  19   13.10 Law Limitations/Governmental Approvals  19   13.11 Delivery of Title  19   13.12 Inability to Obtain Authority  19   13.13 Investment Representations  19   13.14 Persons Residing Outside of the United States  19   13.15 Governing Law  19 
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**THE MERIDIAN RESOURCE CORPORATION****2007 LONG-TERM INCENTIVE PLAN****ARTICLE I****ESTABLISHMENT, PURPOSE AND DURATION**     1.1 **Establishment.**The Company hereby establishes an incentive compensation plan,to be known as “The Meridian Resource Corporation 2007 Long-Term Incentive Plan,” as set forth inthis document. The Plan permits the grant of Options, SARs, Restricted Stock, RSUs, PerformanceStock Awards and Performance Unit Awards. The Plan shall become effective on the later of (a) thedate the Plan is approved by the Board and (b) the date the Plan is approved by the stockholders ofthe Company (the “*Effective Date*”).     1.2 **Purpose of the Plan.**The Plan is intended to advance the best interests of theCompany, its Affiliates and its stockholders by providing those Employees who have substantialresponsibility for the management and growth of the Company and its Affiliates with additionalperformance incentives and an opportunity to obtain or increase their proprietary interest in theCompany, thereby encouraging them to continue in their employment with the Company or itsAffiliates.     1.3 **Duration of the Plan.**The Plan shall continue indefinitely until it isterminated pursuant to Section 12.1. No ISOs may be granted under the Plan on or after the tenthanniversary of the Effective Date. The applicable provisions of the Plan will continue in effectwith respect to an Award granted under the Plan for as long as such Award remains outstanding.**ARTICLE II****DEFINITIONS**     The words and phrases defined in this Article shall have the meaning set out below throughoutthe Plan, unless the context in which any such word or phrase appears reasonably requires abroader, narrower or different meaning.     2.1 “***Affiliate***” means any corporation, partnership, limited liability company orassociation, trust or other entity or organization which, directly or indirectly, controls, iscontrolled by, or is under common control with, the Company. For purposes of the precedingsentence, “control” (including, with correlative meanings, the terms “controlled by” and “undercommon control with”), as used with respect to any entity or organization, shall mean thepossession, directly or indirectly, of the power (a) to vote more than fifty percent (50%) of thesecurities having ordinary voting power for the election of directors of the controlled entity ororganization, or (b) to direct or cause the direction of the management and policies of thecontrolled entity or organization, whether through the ownership of voting securities or bycontract or otherwise.     2.2 “***Award***” means, individually or collectively, a grant under the Plan of Options,SARs, Restricted Stock, RSUs, Performance Stock Awards and Performance Unit Awards, in each casesubject to the terms and provisions of the Plan.     2.3 “***Award Agreement”***means an agreement that sets forth the terms and conditionsapplicable to an Award granted under the Plan.
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     2.4 “***Board***” means the board of directors of the Company.     2.5 “***Code***” means the United States Internal Revenue Code of 1986, as amended fromtime to time.     2.6 “***Committee***” means the Compensation Committee of the Board.     2.7 “***Company***” means The Meridian Resource Corporation, a Texas corporation, or anysuccessor (by reincorporation, merger or otherwise).     2.8 **"*****Corporate Change*****”**shall have the meaning ascribed to that term in Section4.6(c).     2.9 “***Disability***” means, as determined by the Committee in its discretion exercisedin good faith, a physical or mental condition of the Holder that would entitle him to payment ofdisability income payments under the Company’s long-term disability insurance policy or plan forEmployees as then in effect; or in the event that the Holder is not covered, for whatever reason,under the Company’s long-term disability insurance policy or plan for Employees or in the event theCompany does not maintain such a long-term disability insurance policy, “Disability” means apermanent and total disability as defined in section 22(e)(3) of the Code. A determination ofDisability may be made by a physician selected or approved by the Committee and, in this respect,the Holder shall submit to an examination by such physician upon request by the Committee.     2.10 ***“Dividend Equivalent”***means a payment equivalent in amount to dividends paid tothe Company’s stockholders.     2.11 “***Effective Date***” shall have the meaning ascribed to that term in Section 1.1.     2.12 “***Employee***” means a person employed by the Company or any Affiliate as a commonlaw employee.     2.13 “***Fair Market Value***” of the Stock as of any particular date means (a) if theStock is traded on a stock exchange, the closing sale price of the Stock on that date as reportedon the principal securities exchange on which the Stock is traded, or (b) if the Stock is traded inthe over-the-counter market, the average between the high bid and low asked price on that date asreported in such over-the-counter market; provided that (1) if the Stock is not so traded, (2) ifno closing price or bid and asked prices for the Stock was so reported on that date or (3) if, inthe discretion of the Committee, another means of determining the fair market value of a share ofStock at such date shall be necessary or advisable, the Committee may provide for another means fordetermining such fair market value.     2.14 “***Fiscal Year*****”**means the Company’s fiscal year**.**     2.15 “***Holder***” means a person who has been granted an Award or any person who isentitled to receive shares of Stock or cash under an Award.     2.16 ***“ISO”***means an Option that is intended to be an “incentive stock option” thatsatisfies the requirements of section 422 of the Code.     2.17 “***Minimum Statutory Tax Withholding Obligation”***means, with respect to an Award,the amount the Company or an Affiliate is required to withhold for federal, state and local taxesbased upon the applicable minimum statutory withholding rates required by the relevant taxauthorities.
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     2.18 “***NSO***” means an Option that is intended to be a “nonqualified stock option” thatdoes not satisfy the requirements of section 422 of the Code.     2.19 “***Option***” means an option to purchase Stock granted pursuant to Article V.     2.20 “***Optionee***” means a person who has been granted an Option or any other personwho is entitled to exercise an Option under the Plan.     2.21 “***Option Price***” shall have the meaning ascribed to that term in Section 5.4.     2.22 **"*****Parent Corporation*****”**means any corporation (other than the Company) in anunbroken chain of corporations ending with the Company if, at the time of the action ortransaction, each of the corporations other than the Company owns stock possessing 50 percent ormore of the total combined voting power of all classes of stock in one of the other corporations inthe chain.     2.23 **"*****Performance Goals*****”**means one or more of the criteria described in Section 9.2on which the performance goals applicable to an Award are based.     2.24 “***Performance Stock Award***” means an Award designated as a performance stockaward granted to a Holder pursuant to Article IX.     2.25 “***Performance Unit Award***” means an Award designated as a performance unit awardgranted to a Holder pursuant to Article IX.     2.26 **"*****Period of Restriction*****”**means the period during which Restricted Stock issubject to a substantial risk of forfeiture (based on the passage of time, the achievement ofPerformance Goals, or upon the occurrence of other events as determined by the Committee, in itsdiscretion), as provided in Article VII.     2.27 “***Plan***” means The Meridian Resource Corporation 2007 Long-Term Incentive Plan,as set forth in this document as it may be amended from time to time.     2.28 “***Restricted Stock***” means shares of restricted Stock issued or granted under thePlan pursuant to Article VII.     2.29 “***Restricted Stock Award***” means an authorization by the Committee to issue ortransfer Restricted Stock to a Holder.     2.30 “***RSU***” means a restricted stock unit credited to a Holder’s ledger accountmaintained by the Company pursuant to Article VIII.     2.31 “***RSU Award***” means an Award granted pursuant to Article VIII.     2.32 ***“SAR”***means a stock appreciation right granted under the Plan pursuant toArticle VI.     2.33 ***“Section 409A”***means section 409A of the Code and Department of Treasury rulesand regulations issued thereunder.     2.34 “***Stock***” means the common stock of the Company, $0.01 par value per share (orsuch other par value as may be designated by act of the Company’s stockholders).
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     2.35 ***“Subsidiary Corporation”***means any corporation (other than the Company) in anunbroken chain of corporations beginning with the Company if, at the time of the action ortransaction, each of the corporations other than the last corporation in an unbroken chain ownsstock possessing 50 percent or more of the total combined voting power of all classes of stock inone of the other corporations in the chain.     2.36 ***“Substantial Risk of Forfeiture”***shall have the meaning ascribed to that termin Section 409A.     2.37 ***“Ten Percent Stockholder”***means an individual who, at the time the Option isgranted, owns stock possessing more than ten percent (10%) of the total combined voting power ofall classes of stock or series of the Company or of any Parent Corporation or SubsidiaryCorporation. An individual shall be considered as owning the stock owned, directly or indirectly,by or for his brothers and sisters (whether by the whole or half blood), spouse, ancestors andlineal descendants; and stock owned, directly or indirectly, by or for a corporation, partnership,estate or trust, shall be considered as being owned proportionately by or for its stockholders,partners or beneficiaries.     2.38 “***Termination of Employment***” means, in the case of an Award other than an ISO,the termination of the Award recipient’s employment relationship with the Company and allAffiliates. “*Termination of Employment*” means, in the case of an ISO, the termination of theEmployee’s employment relationship with all of the Company, any Parent Corporation, any SubsidiaryCorporation and any parent or subsidiary corporation (within the meaning of section 422(a)(2) ofthe Code) of any such corporation that issues or assumes an ISO in a transaction to which section424(a) of the Code applies.**ARTICLE III****ELIGIBILITY AND PARTICIPATION**     3.1 **Eligibility.**Except as otherwise specified in this Section 3.1, the persons whoare eligible to receive Awards under the Plan are key Employees of the Company or an Affiliate.Awards other than ISOs, Performance Stock Awards or Performance Units Awards may also be granted toa person who is expected to become a key Employee within six months.     3.2 **Participation.**Subject to the terms and provisions of the Plan, the Committeemay, from time to time, select the eligible persons to whom Awards shall be granted and shalldetermine the nature and amount of each Award.**ARTICLE IV****GENERAL PROVISIONS RELATING TO AWARDS**     4.1 **Authority to Grant Awards**. The Committee may grant Awards to those keyEmployees and other eligible persons as the Committee shall from time to time determine, under theterms and conditions of the Plan. Subject only to any applicable limitations set out in the Plan,the number of shares of Stock or other value to be covered by any Award to be granted under thePlan shall be as determined by the Committee in its sole discretion.
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     4.2 **Dedicated Shares; Maximum Awards*****.***     (a) The aggregate number of shares of Stock with respect to which Awards maybe granted under the Plan is 4,000,000.     (b) The aggregate number of shares of Stock with respect to which full valueawards (awards of Stock under the Plan which are not Options or SARs) may be granted underthe Plan is 2,000,000.     (c) The aggregate number of shares of Stock with respect to which ISOs may begranted under the Plan is 200,000.     (d) The maximum number of shares of Stock with respect to which NSOs may begranted to an Employee during a Fiscal Year is 1,000,000. The maximum number of shares ofStock with respect to which SARs may be granted to an Employee during a Fiscal Year is1,000,000. The maximum number of shares of Stock with respect to which Performance StockAwards may be granted to an Employee during a Fiscal Year is 1,000,000. The maximum numberof shares of Stock with respect to which Performance Unit Awards payable in shares of Stockmay be granted to an Employee during a Fiscal Year is 1,000,000. The maximum value of cashwith respect to which Performance Unit Awards payable in cash may be granted to an Employeeduring a Fiscal Year, determined as of the dates of grants of the Performance Unit Awards,is $10,000,000.     (e) Each of the foregoing numerical limits stated in this Section 4.2 shallbe subject to adjustment in accordance with the provisions of Section 4.6.     4.3 **Shares That Count Against Limit.**     (a) If shares of Stock are withheld from payment of an Award to satisfy taxobligations with respect to the Award, such shares of Stock will count against the aggregatenumber of shares of Stock with respect to which Awards may be granted under the Plan.     (b) If shares of Stock are tendered in payment of an Option Price of anOption, such shares of Stock will not be added to the aggregate number of shares of Stockwith respect to which Awards may be granted under the Plan.     (c) To the extent that any outstanding Award is forfeited or cancelled forany reason or is settled in cash in lieu of shares of Stock, the shares of Stock allocableto such portion of the Award may again be subject to an Award granted under the Plan.     (d) When a SAR is settled in shares of Stock, the number of shares of Stocksubject to the SAR under the SAR Award Agreement will be counted against the aggregatenumber of shares of Stock with respect to which Awards may be granted under the Plan as oneshare for every share subject to the SAR, regardless of the number of shares used to settlethe SAR upon exercise.     4.4 **Non-Transferability*****.***Except as specified in the applicable Award Agreements orin domestic relations court orders, an Award shall not be transferable by the Holder (whether forconsideration or otherwise) other than by will or under the laws of descent and distribution, andshall be exercisable, during the Holder’s lifetime, only by him or her. Any attempted assignmentof an Award in violation of this Section 4.4 shall be null and void. In the discretion of theCommittee, any attempt to transfer an Award other than under the terms of the Plan and theapplicable Award Agreement may
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terminate the Award. No ISO granted under the Plan may be sold, transferred, pledged,assigned or otherwise alienated or hypothecated, other than by will or by the laws of descent anddistribution. Further, all ISOs granted to an Employee under the Plan shall be exercisable duringhis or her lifetime only by the Employee, and after that time, by the Employee’s heirs or estate.     4.5 **Requirements of Law.**The Company shall not be required to sell or issue anyshares of Stock under any Award if issuing those shares of Stock would constitute or result in aviolation by the Holder or the Company of any provision of any law, statute or regulation of anygovernmental authority. Specifically, in connection with any applicable statute or regulationrelating to the registration of securities, upon exercise of any Option or pursuant to any otherAward, the Company shall not be required to issue any shares of Stock unless the Committee hasreceived evidence satisfactory to it to the effect that the Holder will not transfer the shares ofStock except in accordance with applicable law, including receipt of an opinion of counselsatisfactory to the Company to the effect that any proposed transfer complies with applicable law.The determination by the Committee on this matter shall be final, binding and conclusive. TheCompany may, but shall in no event be obligated to, register any shares of Stock covered by thePlan pursuant to applicable securities laws of any country or any political subdivision. In theevent the shares of Stock issuable on exercise of an Option or pursuant to any other Award are notregistered, the Company may imprint on the certificate evidencing the shares of Stock any legendthat counsel for the Company considers necessary or advisable to comply with applicable law, or,should the shares of Stock be represented by book or electronic entry rather than a certificate,the Company may take such steps to restrict transfer of the shares of Stock as counsel for theCompany considers necessary or advisable to comply with applicable law. The Company shall not beobligated to take any other affirmative action in order to cause or enable the exercise of anOption or any other Award, or the issuance of shares of Stock pursuant thereto, to comply with anylaw or regulation of any governmental authority.     4.6 **Changes in the Company’s Capital Structure.**     (a) The existence of outstanding Awards shall not affect in any way the rightor power of the Company or its stockholders to make or authorize any or all adjustments,recapitalizations, reorganizations or other changes in the Company’s capital structure orits business, any merger or consolidation of the Company, any issue of bonds, debentures,preferred or prior preference shares ahead of or affecting the Stock or Stock rights, thedissolution or liquidation of the Company, any sale or transfer of all or any part of itsassets or business or any other corporate act or proceeding, whether of a similar characteror otherwise.     (b) If the Company shall effect a subdivision or consolidation of Stock orother capital readjustment, the payment of a Stock dividend, or other increase or reductionof the number of shares of Stock outstanding, without receiving compensation therefor inmoney, services or property, then (1) the number, class or series and per share price ofStock subject to outstanding Options or other Awards under the Plan shall be appropriatelyadjusted (subject to the restriction in Section 4.10 prohibiting repricing) in such a manneras to entitle a Holder to receive upon exercise of an Option or other Award, for the sameaggregate cash consideration, the equivalent total number and class or series of Stock theHolder would have received had the Holder exercised his or her Option or other Award in fullimmediately prior to the event requiring the adjustment, and (2) the number and class orseries of Stock then reserved to be issued under the Plan shall be adjusted by substitutingfor the total number and class or series of Stock then reserved that number and class orseries of Stock that would have been received by the owner of an equal number of outstandingshares of Stock of each class or series of Stock as the result of the event requiring theadjustment.
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     (c) If while unexercised Options or other Awards remain outstanding under thePlan (1) the Company shall not be the surviving entity in any merger, consolidation or otherreorganization (or survives only as a subsidiary of an entity other than an entity that waswholly-owned by the Company immediately prior to such merger, consolidation or otherreorganization), (2) the Company sells, leases or exchanges or agrees to sell, lease orexchange all or substantially all of its assets to any other person or entity (other than anentity wholly-owned by the Company), (3) the Company is to be dissolved or (4) the Companyis a party to any other corporate transaction (as defined under section 424(a) of the Codeand applicable Department of Treasury regulations) that is not described in clauses (1), (2)or (3) of this sentence (each such event is referred to herein as a “*Corporate Change*”),then, except as otherwise provided in an Award Agreement or another agreement between theHolder and the Company (provided that such exceptions shall not apply in the case of areincorporation merger), or as a result of the Committee’s effectuation of one or more ofthe alternatives described below, there shall be no acceleration of the time at which anyAward then outstanding may be exercised, and no later than ten days after the approval bythe stockholders of the Company of such Corporate Change, the Committee, acting in its soleand absolute discretion without the consent or approval of any Holder, shall act to effectone or more of the following alternatives, which may vary among individual Holders and whichmay vary among Awards held by any individual Holder (provided that, with respect to areincorporation merger in which Holders of the Company’s ordinary shares will receive oneordinary share of the successor corporation for each ordinary share of the Company, none ofsuch alternatives shall apply and, without Committee action, each Award shall automaticallyconvert into a similar award of the successor corporation exercisable for the same number ofordinary shares of the successor as the Award was exercisable for ordinary shares of Stockof the Company):     (1) accelerate the time at which some or all of the Awardsthen outstanding may be exercised so that such Awards may be exercised infull for a limited period of time on or before a specified date (before orafter such Corporate Change) fixed by the Committee, after which specifieddate all such Awards that remain unexercised and all rights of Holdersthereunder shall terminate;     (2) require the mandatory surrender to the Company by all orselected Holders of some or all of the then outstanding Awards held by suchHolders (irrespective of whether such Awards are then exercisable under theprovisions of the Plan or the applicable Award Agreement evidencing suchAward) as of a date, before or after such Corporate Change, specified by theCommittee, in which event the Committee shall thereupon cancel such Awardand the Company shall pay to each such Holder an amount of cash per shareequal to the excess, if any, of the per share price offered to stockholdersof the Company in connection with such Corporate Change over the exerciseprices under such Award for such shares;     (3) with respect to all or selected Holders, have some or allof their then outstanding Awards (whether vested or unvested) assumed orhave a new award of a similar nature substituted for some or all of theirthen outstanding Awards under the Plan (whether vested or unvested) by anentity which is a party to the transaction resulting in such CorporateChange and which is then employing such Holder or which is affiliated orassociated with such Holder in the same or a substantially similar manner asthe Company prior to the Corporate
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Change, or a parent or subsidiary of such entity, provided that (A)such assumption or substitution is on a basis where the excess of theaggregate fair market value of the Stock subject to the Award immediatelyafter the assumption or substitution over the aggregate exercise price ofsuch Stock is equal to the excess of the aggregate fair market value of allStock subject to the Award immediately before such assumption orsubstitution over the aggregate exercise price of such Stock, and (B) theassumed rights under such existing Award or the substituted rights undersuch new Award, as the case may be, will have the same terms and conditionsas the rights under the existing Award assumed or substituted for, as thecase may be;     (4) provide that the number and class or series of Stockcovered by an Award (whether vested or unvested) theretofore granted shallbe adjusted so that such Award when exercised shall thereafter cover thenumber and class or series of Stock or other securities or property(including, without limitation, cash) to which the Holder would have beenentitled pursuant to the terms of the agreement or plan relating to suchCorporate Change if, immediately prior to such Corporate Change, the Holderhad been the holder of record of the number of shares of Stock then coveredby such Award; or     (5) make such adjustments to Awards then outstanding as theCommittee deems appropriate to reflect such Corporate Change (provided,however, that the Committee may determine in its sole and absolutediscretion that no such adjustment is necessary).     In effecting one or more of the alternatives set out in paragraphs (3), (4) or (5)immediately above, and except as otherwise may be provided in an Award Agreement, theCommittee, in its sole and absolute discretion and without the consent or approval of anyHolder, may accelerate the time at which some or all Awards then outstanding may beexercised.     (d) In the event of changes in the outstanding Stock by reason ofrecapitalizations, reorganizations, mergers, consolidations, combinations, exchanges orother relevant changes in capitalization occurring after the date of the grant of any Awardand not otherwise provided for by this Section 4.6, any outstanding Award and any AwardAgreement evidencing such Award shall be subject to adjustment by the Committee in its soleand absolute discretion as to the number and price of Stock or other consideration subjectto such Award. In the event of any such change in the outstanding Stock, the aggregatenumber of shares of Stock available under the Plan may be appropriately adjusted by theCommittee, whose determination shall be conclusive.     (e) After a merger of one or more corporations into the Company or after aconsolidation of the Company and one or more corporations in which the Company shall be thesurviving corporation, each Holder shall be entitled to have his Restricted Stockappropriately adjusted based on the manner in which the shares of Stock were adjusted underthe terms of the agreement of merger or consolidation.     (f) The issuance by the Company of stock of any class or series, orsecurities convertible into, or exchangeable for, stock of any class or series, for cash orproperty, or for labor or services either upon direct sale or upon the exercise of rights orwarrants to subscribe for them, or upon conversion or exchange of stock or obligations ofthe Company convertible into, or exchangeable for, stock or other securities, shall notaffect, and no adjustment by reason of such
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issuance shall be made with respect to, the number, class or series, or price of sharesof Stock then subject to outstanding Options or other Awards.     4.7 **Election Under****Section 83(b)****of the Code.**No Holder shall exercise the electionpermitted under section 83(b) of the Code with respect to any Award without the written approval ofthe Chief Financial Officer of the Company. Any Holder who makes an election under section 83(b)of the Code with respect to any Award without the written approval of the Chief Financial Officerof the Company may, in the discretion of the Committee, forfeit any or all Awards granted to him orher under the Plan.     4.8 **Forfeiture Events.**The Committee may specify in an Award Agreement that theHolder’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, inaddition to any otherwise applicable vesting or performance conditions of an Award. Such eventsmay include, but shall not be limited to, Termination of Employment for cause, violation ofmaterial policies of the Company and its Affiliates, breach of noncompetition, confidentiality, orother restrictive covenants that may apply to the Holder, or other conduct by the Holder that isdetrimental to the business or reputation of the Company and its Affiliates.     4.9 **Award Agreements**. Each Award shall be embodied in a written agreement thatshall be subject to the terms and conditions of the Plan. The Award Agreement shall be signed byan executive officer of the Company, other than the Holder, on behalf of the Company, and may besigned by the Holder to the extent required by the Committee. The Award Agreement may specify theeffect of a change in control of the Company on the Award. The Award Agreement may contain anyother provisions that the Committee in its discretion shall deem advisable which are notinconsistent with the terms and provisions of the Plan.     4.10 **Amendments of Award Agreements.**The terms of any outstanding Award under thePlan may be amended from time to time by the Committee in its discretion in any manner that itdeems appropriate and that is consistent with the terms of the Plan. However, no such amendmentshall adversely affect in a material manner any right of a Holder without his or her writtenconsent. Except as specified in Section 4.6(b), the Committee may not directly or indirectly lowerthe exercise price of a previously granted Option or the grant price of a previously granted SAR.     4.11 **Rights as Stockholder.**A Holder shall not have any rights as a stockholderwith respect to Stock covered by an Option, a SAR, an RSU or a Performance Unit Award payable inStock until the date, if any, such Stock is issued by the Company; and, except as otherwiseprovided in Section 4.6, no adjustment for dividends, or otherwise, shall be made if the recorddate therefor is prior to the date of issuance of such Stock.     4.12 **Issuance of Shares of Stock.**Shares of Stock, when issued, may be representedby a certificate or by book or electronic entry.     4.13 **Restrictions on Stock Received.**The Committee may impose such conditionsand/or restrictions on any shares of Stock issued pursuant to an Award as it may deem advisable ordesirable. These restrictions may include, but shall not be limited to, a requirement that theHolder hold the shares of Stock for a specified period of time.
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     4.14 **Compliance With Section 409A.**Awards shall be designed, granted andadministered in such a manner that they are either exempt from the application of, or comply with,the requirements of Section 409A.**ARTICLE V****OPTIONS**     5.1 **Authority to Grant Options.**Subject to the terms and provisions of the Plan,the Committee, at any time, and from time to time, may grant Options under the Plan to eligiblepersons in such number and upon such terms as the Committee shall determine.     5.2 **Type of Options Available.**Options granted under the Plan may be NSOs or ISOs.     5.3 **Option Agreement.**Each Option grant under the Plan shall be evidenced by anAward Agreement that shall specify (a) whether the Option is intended to be an ISO or an NSO, (b)the Option Price, (c) the duration of the Option, (d) the number of shares of Stock to which theOption pertains, (e) the exercise restrictions applicable to the Option and (f) such otherprovisions as the Committee shall determine that are not inconsistent with the terms and provisionsof the Plan. Notwithstanding the designation of an Option as an ISO in the applicable OptionAgreement, to the extent the limitations of Section 5.10 of the Plan are exceeded with respect tothe Option, the portion of the Option in excess of the limitation shall be treated as a NSO. AnOption granted under the Plan may not be granted with any Dividend Equivalents rights.     5.4 **Option Price.**The price at which shares of Stock may be purchased under anOption (the “*Option Price*”) shall not be less than 100 percent (100%) of the Fair Market Value ofthe shares of Stock on the date the Option is granted. However, in the case of a Ten PercentStockholder, the Option Price for an ISO shall not be less than 110 percent (110%) of the FairMarket Value of the shares of Stock on the date the ISO is granted. Subject to the limitations setforth in the preceding sentences of this Section 5.4, the Committee shall determine the OptionPrice for each grant of an Option under the Plan.     5.5 **Duration of Option.**An Option shall not be exercisable after the earlier of (i)the general term of the Option specified in the applicable Award Agreement (which shall not exceedten years) or (ii) the period of time specified in the applicable Award Agreement that follows theHolder’s Termination of Employment or severance of affiliation relationship with the Company.Unless the applicable Award Agreement specifies a shorter term, in the case of an ISO granted to aTen Percent Stockholder, the Option shall expire on the fifth anniversary of the date the Option isgranted.     5.6 **Amount Exercisable.**Each Option may be exercised at the time, in the manner andsubject to the conditions the Committee specifies in the Award Agreement in its sole discretion.     5.7 **Exercise of Option.**     (a) *General Method of Exercise*. Subject to the terms and provisions of thePlan and the applicable Award Agreement, Options may be exercised in whole or in part fromtime to time by the delivery of written notice in the manner designated by the Committeestating (1) that the Holder wishes to exercise such Option on the date such notice is sodelivered, (2) the number of shares of Stock with respect to which the Option is to beexercised and (3) the address to which any certificate representing such shares of Stockshould be mailed. Except in the case of exercise by a third party broker as provided below,in order for the notice to be effective the notice must
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be accompanied by payment of the Option Price by any combination of the following: (a)cash, certified check, bank draft or postal or express money order for an amount equal tothe Option Price under the Option, (b) an election to make a cashless exercise through aregistered broker-dealer (if approved in advance by the Committee or an executive officer ofthe Company) or (c) any other form of payment which is acceptable to the Committee.     (b) *Exercise Through Third-Party Broker*. The Committee may permit a Holderto elect to pay the Option Price and any applicable tax withholding resulting from suchexercise by authorizing a third-party broker to sell all or a portion of the shares of Stockacquired upon exercise of the Option and remit to the Company a sufficient portion of thesale proceeds to pay the Option Price and any applicable tax withholding resulting from suchexercise.     5.8 **Notification of Disqualifying Disposition**. If any Optionee shall make anydisposition of shares of Stock issued pursuant to the exercise of an ISO under the circumstancesdescribed in section 421(b) of the Code (relating to certain disqualifying dispositions), suchOptionee shall notify the Company of such disposition within ten (10) days thereof.     5.9 **No Rights as Stockholder.**An Optionee shall not have any rights as astockholder with respect to Stock covered by an Option until the date a stock certificate for suchStock is issued by the Company; and, except as otherwise provided in Section 4.6, no adjustment fordividends, or otherwise, shall be made if the record date therefor is prior to the date of issuanceof such certificate.     5.10 **$100,000 Limitation on ISOs**. To the extent that the aggregate Fair MarketValue of Stock with respect to which ISOs first become exercisable by a Holder in any calendar yearexceeds $100,000, taking into account both shares of Stock subject to ISOs under the Plan and Stocksubject to ISOs under all other plans of the Company, such Options shall be treated as NSOs. Forthis purpose, the “Fair Market Value” of the Stock subject to Options shall be determined as of thedate the Options were awarded. In reducing the number of Options treated as ISOs to meet the$100,000 limit, the most recently granted Options shall be reduced first. To the extent areduction of simultaneously granted Options is necessary to meet the $100,000 limit, the Committeemay, in the manner and to the extent permitted by law, designate which shares of Stock are to betreated as shares acquired pursuant to the exercise of an ISO.**ARTICLE VI****STOCK APPRECIATION RIGHTS**     6.1 **Authority to Grant SAR Awards.**Subject to the terms and provisions of the Plan,the Committee, at any time, and from time to time, may grant SARs under the Plan to eligiblepersons in such number and upon such terms as the Committee shall determine. Subject to the termsand conditions of the Plan, the Committee shall have complete discretion in determining the numberof SARs granted to each Holder and, consistent with the provisions of the Plan, in determining theterms and conditions pertaining to such SARs.     6.2 **General Terms.**Subject to the terms and conditions of the Plan, a SAR grantedunder the Plan shall confer on the recipient a right to receive, upon exercise thereof, an amountequal to the excess of (a) the Fair Market Value of one share of the Stock on the date of exerciseover (b) the grant price of the SAR, which shall not be less than one hundred percent (100%) of theFair Market Value of one share of the Stock on the date of grant of the SAR. A SAR granted underthe Plan may not be granted with any Dividend Equivalents rights.
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     6.3 **SAR Agreement.**Each Award of SARs granted under the Plan shall be evidenced byan Award Agreement that shall specify (a) the grant price of the SAR, (b) the term of the SAR, (c)the vesting and termination provisions of the SAR and (d) such other provisions as the Committeeshall determine that are not inconsistent with the terms and provisions of the Plan. The Committeemay impose such additional conditions or restrictions on the exercise of any SAR as it may deemappropriate.     6.4 **Term of SAR.**The term of a SAR granted under the Plan shall be determined bythe Committee, in its sole discretion; provided that no SAR shall be exercisable on or after thetenth anniversary date of its grant.     6.5 **Exercise of SAR.**Subject to the terms and provisions of the Plan and theapplicable Award Agreement, SARs may be exercised in whole or in part from time to time by thedelivery of written notice in the manner designated by the Committee stating (1) that the Holderwishes to exercise such SAR on the date such notice is so delivered, (2) the number of shares ofStock with respect to which the SAR is to be exercised and (3) the address to which the payment dueunder such SAR should be mailed. In accordance with applicable law, a SAR may be exercised uponwhatever additional terms and conditions the Committee, in its sole discretion, imposes.     6.6 **Payment of SAR Amount.**Upon the exercise of a SAR, a Holder shall be entitledto receive payment from the Company in an amount determined by multiplying the excess of the FairMarket Value of a share of Stock on the date of exercise over the grant price of the SAR by thenumber of shares of Stock with respect to which the SAR is exercised. At the discretion of theCommittee, the payment upon SAR exercise may be in cash, in Stock of equivalent value, in somecombination thereof or in any other manner approved by the Committee in its sole discretion. TheCommittee’s determination regarding the form of SAR payout shall be set forth in the AwardAgreement pertaining to the grant of the SAR.     6.7 **Termination of Employment.**Each Award Agreement shall set forth the extent towhich the Holder of a SAR shall have the right to exercise the SAR following the Holder’sTermination of Employment. Such provisions shall be determined in the sole discretion of theCommittee, may be included in the Award Agreement entered into with the Holder, need not be uniformamong all SARs issued pursuant to the Plan, and may reflect distinctions based on the reasons fortermination.**ARTICLE VII****RESTRICTED STOCK AWARDS**     7.1 **Restricted Stock Awards*****.***The Committee may make Awards of Restricted Stock toeligible persons selected by it. The amount of, the vesting and the transferability restrictionsapplicable to any Restricted Stock Award shall be determined by the Committee in its solediscretion. If the Committee imposes vesting or transferability restrictions on a Holder’s rightswith respect to Restricted Stock, the Committee may issue such instructions to the Company’s sharetransfer agent in connection therewith as it deems appropriate. The Committee may also cause thecertificate for shares of Stock issued pursuant to a Restricted Stock Award to be imprinted withany legend which counsel for the Company considers advisable with respect to the restrictions or,should the shares of Stock be represented by book or electronic entry rather than a certificate,the Company may take such steps to restrict transfer of the shares of Stock as counsel for theCompany considers necessary or advisable to comply with applicable law.
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     7.2 **Restricted Stock Award Agreement.**Each Restricted Stock Award shall beevidenced by an Award Agreement that contains any vesting, transferability restrictions and otherprovisions not inconsistent with the Plan as the Committee may specify.     7.3 **Holder’s Rights as Stockholder.**Subject to the terms and conditions of thePlan, each recipient of a Restricted Stock Award shall have all the rights of a stockholder withrespect to the shares of Restricted Stock included in the Restricted Stock Award during the Periodof Restriction established for the Restricted Stock Award. Dividends paid with respect toRestricted Stock in cash or property other than shares of Stock or rights to acquire shares ofStock shall be paid to the recipient of the Restricted Stock Award currently. Dividends paid inshares of Stock or rights to acquire shares of Stock shall be added to and become a part of theRestricted Stock. During the Period of Restriction, certificates representing the Restricted Stockshall be registered in the Holder’s name and bear a restrictive legend to the effect that ownershipof such Restricted Stock, and the enjoyment of all rights appurtenant thereto, are subject to therestrictions, terms, and conditions provided in the Plan and the applicable Award Agreement. Suchcertificates shall be deposited by the recipient with the Secretary of the Company or such otherofficer of the Company as may be designated by the Committee, together with all stock powers orother instruments of assignment, each endorsed in blank, which will permit transfer to the Companyof all or any portion of the Restricted Stock which shall be forfeited in accordance with the Planand the applicable Award Agreement.**ARTICLE VIII****RESTRICTED STOCK UNIT AWARDS**     8.1 **Authority to Grant RSU Awards.**Subject to the terms and provisions of the Plan,the Committee, at any time, and from time to time, may grant RSU Awards under the Plan to eligiblepersons in such amounts and upon such terms as the Committee shall determine. The amount of, thevesting and the transferability restrictions applicable to any RSU Award shall be determined by theCommittee in its sole discretion. The Committee shall maintain a bookkeeping ledger account whichreflects the number of RSUs credited under the Plan for the benefit of a Holder.     8.2 **RSU Award.**An RSU Award shall be similar in nature to a Restricted Stock Awardexcept that no shares of Stock are actually transferred to the Holder until a later date specifiedin the applicable Award Agreement. Each RSU shall have a value equal to the Fair Market Value of ashare of Stock.     8.3 **RSU Award Agreement.**Each RSU Award shall be evidenced by an Award Agreementthat contains any Substantial Risk of Forfeiture, transferability restrictions, form and time ofpayment provisions and other provisions not inconsistent with the Plan as the Committee mayspecify.     8.4 **Dividend Equivalents.**An Award Agreement for an RSU Award may specify that theHolder shall be entitled to the payment of Dividend Equivalents under the Award.     8.5 **Form of Payment Under RSU Award.**Payment under an RSU Award shall be made ineither cash or shares of Stock as specified in the applicable Award Agreement.     8.6 **Time of Payment Under RSU Award.**A Holder’s payment under an RSU Award shall bemade at such time as is specified in the applicable Award Agreement. The Award Agreement shallspecify that the payment will be made (1) by a date that is no later than the date that is two andone-half
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(2 1/2) months after the end of the Fiscal Year in which the RSU Award payment is no longersubject to a Substantial Risk of Forfeiture or (2) at a time that is permissible under Section409A.**ARTICLE IX****PERFORMANCE STOCK AWARDS AND****PERFORMANCE UNIT AWARDS**     9.1 **Authority to Grant Performance Stock Awards and Performance Unit Awards.**Subject to the terms and provisions of the Plan, the Committee, at any time, and from time to time,may grant Performance Stock Awards and Performance Unit Awards under the Plan to eligible personsin such amounts and upon such terms as the Committee shall determine. The amount of, the vestingand the transferability restrictions applicable to any Performance Stock Award and Performance UnitAward shall be based upon the attainment of such Performance Goals as the Committee may determine;provided, however, that the performance period for any Performance Stock Award or Performance UnitAward shall not be less than one year. If the Committee imposes vesting or transferabilityrestrictions on a Holder’s rights with respect to Performance Stock Awards or Performance UnitAwards, the Committee may issue such instructions to the Company’s share transfer agent inconnection therewith as it deems appropriate. The Committee may also cause the certificate forshares of Stock issued pursuant to a Performance Stock Award or Performance Unit Award to beimprinted with any legend which counsel for the Company considers advisable with respect to therestrictions or, should the shares of Stock be represented by book or electronic entry rather thana certificate, the Company may take such steps to restrict transfer of the shares of Stock ascounsel for the Company considers necessary or advisable to comply with applicable law.     9.2 **Performance Goals.**A Performance Goal must be objective such that a third partyhaving knowledge of the relevant facts could determine whether the goal is met. Such a PerformanceGoal may be based on one or more business criteria that apply to the Holder, one or more businessunits of the Company, or the Company as a whole, with reference to one or more of the following:earnings per share, total shareholder return, cash return on capitalization, increased revenue,revenue ratios (per employee or per customer), net income, stock price, market share, return onequity, return on assets, return on capital, return on capital compared to cost of capital, returnon capital employed, return on invested capital, shareholder value, net cash flow, operatingincome, earnings before interest and taxes, cash flow, cash flow from operations, cost reductions,cost ratios (per employee or per customer). Goals may also be based on performance relative to apeer group of companies. Unless otherwise stated, such a Performance Goal need not be based uponan increase or positive result under a particular business criterion and could include, forexample, maintaining the status quo or limiting economic losses (measured, in each case, byreference to specific business criteria). Performance Goals may be determined by including orexcluding, in the Committee’s discretion, items that are determined to be extraordinary, unusual innature, infrequent in occurrence, related to the disposal or acquisition of a segment of abusiness, or related to a change in accounting principal, in each case, based on Opinion No. 30 ofthe Accounting Principles Board (APB Opinion No. 30) or other applicable accounting rules, orconsistent with Company accounting policies and practices in effect on the date the PerformanceGoal is established. In interpreting Plan provisions applicable to Performance Goals andPerformance Stock Awards or Performance Unit Awards, it is intended that the Plan will conform withthe standards of section 162(m) of the Code and Treasury Regulations § 1.162-27(e)(2)(i), and theCommittee in establishing such goals and interpreting the Plan shall be guided by such provisions.Prior to the payment of any compensation based on the achievement of Performance Goals, theCommittee must certify in writing that applicable Performance Goals and any of the material termsthereof were, in fact, satisfied. Subject to the foregoing provisions, the terms, conditions andlimitations applicable to any Performance Stock or Performance Unit Awards made pursuant to thePlan shall be determined by the Committee.
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     9.3 **Time of Establishment of Performance Goals.**A Performance Goal for a particularPerformance Stock Award or Performance Unit Award must be established by the Committee prior to theearlier to occur of (a) 90 days after the commencement of the period of service to which thePerformance Goal relates or (b) the lapse of 25 percent of the period of service, and in any eventwhile the outcome is substantially uncertain.     9.4 **Written Agreement.**Each Performance Stock Award and Performance Unit Awardshall be evidenced by an Award Agreement that contains any vesting, transferability restrictionsand other provisions not inconsistent with the Plan as the Committee may specify.     9.5 **Form of Payment Under Performance Unit Award.**Payment under a Performance UnitAward shall be made in cash and/or shares of Stock as specified in the Holder’s Award Agreement.     9.6 **Time of Payment Under Performance Unit Award.**A Holder’s payment under aPerformance Unit Award shall be made at such time as is specified in the applicable AwardAgreement. The Award Agreement shall specify that the payment will be made (a) by a date that isno later than the date that is two and one-half (2 1/2) months after the end of the calendar yearin which the Performance Unit Award payment is no longer subject to a Substantial Risk ofForfeiture or (b) at a time that is permissible under Section 409A.     9.7 **Holder’s Rights as Stockholder With Respect to a Performance Stock Award*****.***Subject to the terms and conditions of the Plan, each Holder of a Performance Stock Award shallhave all the rights of a stockholder with respect to the shares of Stock issued to the Holderpursuant to the Award during any period in which such issued shares of Stock are subject toforfeiture and restrictions on transfer, including without limitation, the right to vote suchshares of Stock.     9.8 **Increases Prohibited.**None of the Committee or the Board may increase theamount of compensation payable under a Performance Stock Award or Performance Unit Award. If thetime at which a Performance Stock Award or Performance Unit Award will vest or be paid isaccelerated for any reason, the number of shares of Stock subject to, or the amount payable under,the Performance Unit Award shall be reduced pursuant to Department of Treasury Regulation §1.162-27(e)(2)(iii) to reasonably reflect the time value of money.     9.9 **Stockholder Approval.**No payments of Stock or cash will be made pursuant tothis Article IX unless the stockholder approval requirements of Department of Treasury Regulation §1.162-27(e)(4) are satisfied.     9.10 **Dividend Equivalents.**An Award Agreement for a Performance Unit Award mayspecify that the Holder shall be entitled to the payment of Dividend Equivalents under the Award.**ARTICLE X****SUBSTITUTION AWARDS**     Awards may be granted under the Plan from time to time in substitution for stock options andother awards held by employees of other entities who are about to become Employees, or whoseemployer is about to become an Affiliate as the result of a merger or consolidation of the Companywith another corporation, or the acquisition by the Company of substantially all the assets ofanother corporation, or the acquisition by the Company of at least fifty percent (50%) of theissued and outstanding stock of another corporation as the result of which such other corporationwill become a
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subsidiary of the Company. The terms and conditions of the substitute Awards so granted mayvary from the terms and conditions set forth in the Plan to such extent as the Board at the time ofgrant may deem appropriate to conform, in whole or in part, to the provisions of the Award insubstitution for which they are granted.**ARTICLE XI****ADMINISTRATION**     11.1 **Awards.**The Plan shall be administered by the Committee or, in the absence ofthe Committee, the Plan shall be administered by the Board. The members of the Committee shallserve at the discretion of the Board. The Committee shall have full and exclusive power andauthority to administer the Plan and to take all actions that the Plan expressly contemplates orare necessary or appropriate in connection with the administration of the Plan with respect toAwards granted under the Plan.     11.2 **Authority of the Committee.**The Committee shall have full and exclusive powerto interpret and apply the terms and provisions of the Plan and Awards made under the Plan, and toadopt such rules, regulations and guidelines for implementing the Plan as the Committee may deemnecessary or proper, all of which powers shall be exercised in the best interests of the Companyand in keeping with the objectives of the Plan. A majority of the members of the Committee shallconstitute a quorum for the transaction of business, and the vote of a majority of those memberspresent at any meeting shall decide any question brought before that meeting. Any decision ordetermination reduced to writing and signed by a majority of the members shall be as effective asif it had been made by a majority vote at a meeting properly called and held. All questions ofinterpretation and application of the Plan, or as to Awards granted under the Plan, shall besubject to the determination, which shall be final and binding, of a majority of the wholeCommittee. No member of the Committee shall be liable for any act or omission of any other memberof the Committee or for any act or omission on his own part, including but not limited to theexercise of any power or discretion given to him under the Plan, except those resulting from hisown gross negligence or willful misconduct. In carrying out its authority under the Plan, theCommittee shall have full and final authority and discretion, including but not limited to thefollowing rights, powers and authorities to (a) determine the persons to whom and the time or timesat which Awards will be made; (b) determine the number and exercise price of shares of Stockcovered in each Award subject to the terms and provisions of the Plan (including, but not limitedto, the provisions of Section 4.10 which prohibit repricing); (c) determine the terms, provisionsand conditions of each Award, which need not be identical and need not match the default terms setforth in the Plan; (d) accelerate the time at which any outstanding Award will vest; (e) prescribe,amend and rescind rules and regulations relating to administration of the Plan; and (f) make allother determinations and take all other actions deemed necessary, appropriate or advisable for theproper administration of the Plan.     The Committee may correct any defect or supply any omission or reconcile any inconsistency inthe Plan or in any Award to a Holder in the manner and to the extent the Committee deems necessaryor desirable to further the Plan’s objectives. Further, the Committee shall make all otherdeterminations that may be necessary or advisable for the administration of the Plan. As permittedby law and the terms and provisions of the Plan, the Committee may delegate its authority asidentified in this Section 11.2. The Committee may employ attorneys, consultants, accountants,agents, and other persons, any of whom may be an Employee, and the Committee, the Company, and itsofficers and Board shall be entitled to rely upon the advice, opinions, or valuations of any suchpersons.
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     11.3 **Decisions Binding.**All determinations and decisions made by the Committee orthe Board, as the case may be, pursuant to the provisions of the Plan and all related orders andresolutions of the Committee or the Board, as the case may be, shall be final, conclusive andbinding on all persons, including the Company, its stockholders, Holders and the estates andbeneficiaries of Holders.     11.4 **No Liability.**Under no circumstances shall the Company, the Board or theCommittee incur liability for any indirect, incidental, consequential or special damages (includinglost profits) of any form incurred by any person, whether or not foreseeable and regardless of theform of the act in which such a claim may be brought, with respect to the Plan or the Company’s,the Committee’s or the Board’s roles in connection with the Plan.**ARTICLE XII****AMENDMENT OR TERMINATION OF PLAN**     12.1 **Amendment, Modification, Suspension, and Termination**. Subject to Section 12.2,the Committee may, at any time and from time to time, alter, amend, modify, suspend, or terminatethe Plan and any Award Agreement in whole or in part; provided, however, that, without the priorapproval of the Company’s stockholders and except as provided in Section 4.6, the Committee shallnot directly or indirectly lower the Option Price of a previously granted Option, and no amendmentof the Plan shall be made without stockholder approval if stockholder approval is required byapplicable law or stock exchange rules.     12.2 **Awards Previously Granted**. Notwithstanding any other provision of the Plan tothe contrary, no termination, amendment, suspension, or modification of the Plan or an AwardAgreement shall adversely affect in any material way any Award previously granted under the Plan,without the written consent of the Holder holding such Award.**ARTICLE XIII****MISCELLANEOUS**     13.1 **Unfunded Plan/No Establishment of a Trust Fund.**Holders shall have no right,title, or interest whatsoever in or to any investments that the Company or any of its Affiliatesmay make to aid in meeting obligations under the Plan. Nothing contained in the Plan, and noaction taken pursuant to its provisions, shall create or be construed to create a trust of anykind, or a fiduciary relationship between the Company and any Holder, beneficiary, legalrepresentative, or any other person. To the extent that any person acquires a right to receivepayments from the Company under the Plan, such right shall be no greater than the right of anunsecured general creditor of the Company. All payments to be made hereunder shall be paid fromthe general funds of the Company and no special or separate fund shall be established and nosegregation of assets shall be made to assure payment of such amounts, except as expressly setforth in the Plan. No property shall be set aside nor shall a trust fund of any kind beestablished to secure the rights of any Holder under the Plan. The Plan is not intended to besubject to the Employee Retirement Income Security Act of 1974, as amended.     13.2 **No Employment Obligation.**The granting of any Award shall not constitute anemployment contract, express or implied, nor impose upon the Company or any Affiliate anyobligation to employ or continue to employ, or utilize the services of, any Holder. The right ofthe Company or any Affiliate to terminate the employment of any person shall not be diminished oraffected by reason of the fact that an Award has been granted to him, and nothing in the Plan or anAward Agreement shall
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interfere with or limit in any way the right of the Company or its Affiliates to terminate anyHolder’s employment at any time or for any reason not prohibited by law.     13.3 **Tax Withholding.**The Company or any Affiliate shall be entitled to deduct fromother compensation payable to each Holder any sums required by federal, state or local tax law tobe withheld with respect to the vesting or exercise of an Award or lapse of restrictions on anAward. In the alternative, the Company may require the Holder (or other person validly exercisingthe Award) to pay such sums for taxes directly to the Company or any Affiliate in cash or by checkwithin one day after the date of vesting, exercise or lapse of restrictions. In the discretion ofthe Committee, and with the consent of the Holder, the Company may reduce the number of shares ofStock issued to the Holder upon such Holder’s exercise of an Option to satisfy the tax withholdingobligations of the Company or an Affiliate; provided that the Fair Market Value of the shares ofStock held back shall not exceed the Company’s or the Affiliate’s Minimum Statutory Tax WithholdingObligation. The Committee may, in its discretion, permit a Holder to satisfy any Minimum StatutoryTax Withholding Obligation arising upon the vesting of an Award by delivering to the Holder areduced number of shares of Stock in the manner specified herein. If permitted by the Committeeand acceptable to the Holder, at the time of vesting of shares under the Award, the Company shall(a) calculate the amount of the Company’s or an Affiliate’s Minimum Statutory Tax WithholdingObligation on the assumption that all such shares of Stock vested under the Award are madeavailable for delivery, (b) reduce the number of such shares of Stock made available for deliveryso that the Fair Market Value of the shares of Stock withheld on the vesting date approximates theCompany’s or an Affiliate’s Minimum Statutory Tax Withholding Obligation and (c) in lieu of thewithheld shares of Stock, remit cash to the United States Treasury and/or other applicablegovernmental authorities, on behalf of the Holder, in the amount of the Minimum Statutory TaxWithholding Obligation. The Company shall withhold only whole shares of Stock to satisfy itsMinimum Statutory Tax Withholding Obligation. Where the Fair Market Value of the withheld sharesof Stock does not equal the amount of the Minimum Statutory Tax Withholding Obligation, the Companyshall withhold shares of Stock with a Fair Market Value slightly less than the amount of theMinimum Statutory Tax Withholding Obligation and the Holder must satisfy the remaining minimumwithholding obligation in some other manner permitted under this Section 13.3. The withheld sharesof Stock not made available for delivery by the Company shall be retained as treasury shares orwill be cancelled and the Holder’s right, title and interest in such shares of Stock shallterminate. The Company shall have no obligation upon vesting or exercise of any Award or lapse ofrestrictions on an Award until the Company or an Affiliate has received payment sufficient to coverthe Minimum Statutory Tax Withholding Obligation with respect to that vesting, exercise or lapse ofrestrictions. Neither the Company nor any Affiliate shall be obligated to advise a Holder of theexistence of the tax or the amount which it will be required to withhold.     13.4 **Gender and Number.**If the context requires, words of one gender when used inthe Plan shall include the other and words used in the singular or plural shall include the other.     13.5 **Severability**. In the event any provision of the Plan shall be held illegal orinvalid for any reason, the illegality or invalidity shall not affect the remaining parts of thePlan, and the Plan shall be construed and enforced as if the illegal or invalid provision had notbeen included.     13.6 **Headings.**Headings of Articles and Sections are included for convenience ofreference only and do not constitute part of the Plan and shall not be used in construing the termsand provisions of the Plan.     13.7 **Other Compensation Plans.**The adoption of the Plan shall not affect any otheroption, incentive or other compensation or benefit plans in effect for the Company or anyAffiliate, nor shall the
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Plan preclude the Company from establishing any other forms of incentive compensationarrangements for Employees.     13.8 **Other Awards.**The grant of an Award shall not confer upon the Holder the rightto receive any future or other Awards under the Plan, whether or not Awards may be granted tosimilarly situated Holders, or the right to receive future Awards upon the same terms or conditionsas previously granted.     13.9 **Successors.**All obligations of the Company under the Plan with respect toAwards granted hereunder shall be binding on any successor to the Company, whether the existence ofsuch successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,of all or substantially all of the business and/or assets of the Company.     13.10 **Law Limitations/Governmental Approvals**. The granting of Awards and theissuance of shares of Stock under the Plan shall be subject to all applicable laws, rules, andregulations, and to such approvals by any governmental agencies or national securities exchanges asmay be required.     13.11 **Delivery of Title**. The Company shall have no obligation to issue or deliverevidence of title for shares of Stock issued under the Plan prior to (a) obtaining any approvalsfrom governmental agencies that the Company determines are necessary or advisable; and (b)completion of any registration or other qualification of the Stock under any applicable national orforeign law or ruling of any governmental body that the Company determines to be necessary oradvisable.     13.12 **Inability to Obtain Authority**. The inability of the Company to obtainauthority from any regulatory body having jurisdiction, which authority is deemed by the Company’scounsel to be necessary to the lawful issuance and sale of any shares of Stock hereunder, shallrelieve the Company of any liability in respect of the failure to issue or sell such shares ofStock as to which such requisite authority shall not have been obtained.     13.13 **Investment Representations**. The Committee may require any person receivingStock pursuant to an Award under the Plan to represent and warrant in writing that the person isacquiring the shares of Stock for investment and without any present intention to sell ordistribute such Stock.     13.14 **Persons Residing Outside of the United States.**Notwithstanding any provisionof the Plan to the contrary, in order to comply with the laws in other countries in which theCompany or any of its Affiliates operates or has Employees, the Committee, in its sole discretion,shall have the power and authority to (a) determine which Affiliates shall be covered by the Plan;(b) determine which persons employed outside the United States are eligible to participate in thePlan; (c) amend or vary the terms and provisions of the Plan and the terms and conditions of anyAward granted to persons who reside outside the United States; (d) establish subplans and modifyexercise procedures and other terms and procedures to the extent such actions may be necessary oradvisable — any subplans and modifications to Plan terms and procedures established under thisSection 13.14 by the Committee shall be attached to the Plan document as Appendices; and (e) takeany action, before or after an Award is made, that it deems advisable to obtain or comply with anynecessary local government regulatory exemptions or approvals. Notwithstanding the above, theCommittee may not take any actions hereunder, and no Awards shall be granted, that would violatethe Securities Exchange Act of 1934, as amended, the Code, any securities law or governing statuteor any other applicable law.     13.15 **Governing Law.**The provisions of the Plan and the rights of all personsclaiming thereunder shall be construed, administered and governed under the laws of the State ofTexas.
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