ex10-01





Exhibit 10.01


AMENDED


STRAYER EDUCATION, INC.


1996 STOCK OPTION PLAN



May 21, 2001




 










TABLE OF CONTENTS




	 	 	 	 	 	 	 
					Page
					

	1.		
PURPOSE
			11	
	
	
	
	

			
ADMINISTRATION
			11	
	
	
	
	

			
2.1. Board
			11	
	
	
	
	

			
2.2. Committee
			12	
	
	
	
	

			
2.3. No Liability
			12	
	
	
	
	

	3.		
STOCK
			12	
	
	
	
	

	4.		
ELIGIBILITY
			13	
	
	
	
	

	5.		
EFFECTIVE DATE AND TERM
			13	
	
	
	
	

			
5.1. Effective Date
			13	
	
	
	
	

			
5.2. Term
			13	
	
	
	
	

	6.		
GRANT OF OPTIONS
			13	
	
	
	
	

			
6.1. General
			13	
	
	
	
	

			
6.2. Eligible Directors (Non-Employee Directors)
			14	
	
	
	
	

	7.		
LIMITATION ON INCENTIVE STOCK OPTIONS
			14	
	
	
	
	

	8.		
OPTION AGREEMENTS
			14	
	
	
	
	

	9.		
OPTION PRICE
			15	
	
	
	
	

	10.		
TERM AND EXERCISE OF OPTIONS
			15	
	
	
	
	

			
10.1. Term
			15	
	
	
	
	

			
10.2. Exercise by Optionee
			16	
	
	
	
	

			
10.3. Option Period and Limitations on Exercise
			16	
	
	
	
	

			
10.4. Method of Exercise
			16	
	
	
	
	

	11.		
TRANSFERABILITY OF OPTIONS
			17	
	
	
	
	

	12.		
TRANSFERABILITY OF STOCK PURCHASED PURSUANT TO INCENTIVE STOCK
OPTION
			17	
	
	
	
	

	13.		
TERMINATION OF EMPLOYMENT
			18	
	
	
	
	

	14.		
RIGHTS IN THE EVENT OF DEATH OR DISABILITY
			18	
	
	
	
	

			
14.1. Death
			18	
	
	
	
	

			
14.2. Disability
			19	
	
	
	
	

	15.		
RESTRICTED STOCK
			19	
	
	
	
	

			
15.1. Grant of Restricted Stock
			19		 
	
	
	
	


			
15.2. Restrictions
			19	
	
	
	
	

			
15.3. Restricted Stock Certificates
			20	
	
	
	
	

			
15.4. Rights of Holders of Restricted Stock
			20	
	
	
	
	

			
15.5. Termination of Employment
			20	
	
	
	
	

			
15.6. Purchase of Restricted Stock
			20	
	
	
	
	

			
15.7. Delivery of Stock
			21	
	
	
	
	

	16.		
USE OF PROCEEDS
			21	
	
	
	
	

	17.		
SECURITIES LAWS
			21	
	
	
	
	

	18.		
EXCHANGE ACT: RULE 16b-3
			22	
	
	
	
	

	19.		
AMENDMENT AND TERMINATION
			22	





 







	 	 	 	 	 	 	 
	20.		
EFFECT OF CHANGES IN CAPITALIZATION
			23	
	
	
	
	

			
20.1. Changes in Stock
			23	
	
	
	
	

			
20.2. Reorganization With Corporation Surviving
			23	
	
	
	
	

			
20.3. Other Reorganizations; Sale of Assets or Stock
			23	
	
	
	
	

			
20.4. Adjustments
			24	
	
	
	
	

			
20.5. No Limitations on Corporation
			24	
	
	
	
	

	21.		
WITHHOLDING
			25	
	
	
	
	

	22.		
DISCLAIMER OF RIGHTS
			25	
	
	
	
	

	23.		
NONEXCLUSIVITY
			25	




 








AMENDED

STRAYER EDUCATION, INC.

1996 STOCK OPTION PLAN


                        STRAYER EDUCATION, INC., a Maryland corporation (the “Corporation”), sets
forth herein the terms of the Amended 1996 Stock Option Plan (the “Plan”) as
follows:


1.       PURPOSE


                        The Plan is intended to advance the interests of the Corporation by
providing eligible individuals (as designated pursuant to Section 4 hereof) an
opportunity to acquire or increase a proprietary interest in the Corporation,
which thereby will create a stronger incentive to expend maximum effort for the
growth and success of the Corporation and its subsidiaries and will encourage
such eligible individuals to remain in the employ of the Corporation or that of
one or more of its subsidiaries. Each stock option granted under the Plan (an
“Option”) is intended to be an “incentive stock option” (“Incentive Stock
Option”) within the meaning of Section 422 of the Internal Revenue Code of
1986, or the corresponding provision of any subsequently enacted tax statute,
as amended from time to time (the “Code”), except (a) to the extent that any
such Option would exceed the limitations set forth in Section 7 hereof, (b) for
Options specifically designated at the time of grant as not being “incentive
stock options” and (c) for Options granted to directors who are not officers or
other employees of the Corporation or any subsidiary.


2.       ADMINISTRATION


            2.1       Board


                        The Plan shall be administered by the board of directors of the
Corporation (the “Board”), which shall have the full power and authority to
take all actions and to make all determinations required or provided for under
the Plan or any Award granted or Award Agreement entered into hereunder and all
such other actions and determinations not inconsistent with the specific terms
and provisions of the Plan deemed by the Board to be necessary or appropriate
to the administration of the Plan or any Award granted or Award Agreement
entered into hereunder. The interpretation and construction by the Board of
any provision of the Plan or of any Award granted or Award Agreement entered
into hereunder shall be final and conclusive. For purposes of the Plan an
Award shall mean the grant of an Option or Restricted Stock and an Award
Agreement shall mean an Option Agreement (as defined in Section 8) or a
Restricted Stock Agreement (as defined in Section 15).



 









            2.2       Committee


                        The Board may from time to time appoint a Stock Option Committee (the
“Committee”) which may, in the discretion of the Board, be the Compensation
Committee of the Board. The Board, in its sole discretion, may provide that
the role of the Committee shall be limited to making recommendations to the
Board concerning any determinations to be made and actions to be taken by the
Board pursuant to or with respect to the Plan, or the Board may delegate to the
Committee such powers and authorities related to the administration of the
Plan, as set forth in Section 2.1 hereof, as the Board shall determine,
consistent with the Certificate of Incorporation and Bylaws of the Corporation
and applicable law. In the event that the Plan or any Award granted or Award
Agreement entered into hereunder provides for any action to be taken by or
determination to be made by the Board, such action may be taken by or such
determination may be made by the Committee if the power and authority to do so
has been delegated to the Committee by the Board as provided for in this
Section 2.2. Unless otherwise expressly determined by the Board, any such action
or determination by the Committee shall be final and conclusive.


            2.3       No Liability


                        No member of the Board or of the Committee shall be liable for any action
or determination made, or any failure to take or make an action or
determination, in good faith with respect to the Plan or any Award granted or
Award Agreement entered into hereunder.


3.       STOCK


                        The stock that may be issued pursuant to Awards granted under the Plan
shall be shares of Common Stock of the Corporation (the “Stock”), which shares
may be treasury shares or authorized but unissued shares. The number of shares
of Stock that may be issued pursuant to Awards granted under the Plan shall not
exceed in the aggregate two million five hundred thousand (2,500,000) shares of
Stock, which number of shares is subject to adjustment as provided in
Section 20 hereof; provided further that no more than twenty percent (20%) of the shares
of Stock may be issued pursuant to the grant of Restricted Stock. If any Award
is forfeited, expires, terminates or is terminated for any reason prior to
exercise in full, the shares of Stock that were subject to the unexercised or
forfeited portion of such Award shall be available for future Awards granted
under the Plan.


 









4.       ELIGIBILITY


                        Awards may be granted under the Plan to any: (i) officer or employee of
the Corporation or any “subsidiary corporation” thereof within the meaning of
Section 424(f) of the Code (a “Subsidiary”), (ii) director (including a
non-employee director), (iii) consultant, or (iv) other person determined to be
in the best interests of the Corporation as the Board shall determine and
designate from time to time prior to expiration or termination of the Plan. An
individual may hold more than one Award, subject to such restrictions as are
provided herein.


5.       EFFECTIVE DATE AND TERM


            5.1       Effective Date


                        The Plan shall become effective as of the date of adoption by the Board,
subject to stockholders’ approval of the Plan within one year of such effective
date; provided, however, that upon approval of the Plan by the stockholders of
the Corporation, all Awards granted under the Plan on or after the effective
date shall be fully effective as if the stockholders of the Corporation had
approved the Plan on the effective date. If the stockholders fail to approve
the Plan within one year of such effective date, any Awards granted hereunder
shall be null, void and of no effect.


            5.2       Term


                        The Plan shall terminate on May 21, 2011.


6.       GRANT OF OPTIONS


            6.1       General


                        The Plan shall become effective as of the date of adoption by the Board.
Subject to the terms and conditions of the Plan, the Board may, at any time and
from time to time prior to the date of termination of the Plan, grant to such
eligible individuals as the Board may determine (“Optionees”) Options to
purchase such number of shares of the Stock on such terms and conditions as the
Board may determine, including any terms or conditions which may be necessary
to qualify such Options as “incentive stock options” under Section 422 of the
Code. Without limiting the foregoing, the Board may at any time, with the
consent of the Optionee, amend the terms of outstanding Options or issue new
Options in exchange for the surrender and cancellation of outstanding Options.
The date on which the Board approves the grant of an Option (or such later date
as is specified by the Board)


 









shall be considered the date on which such Option is granted. The maximum
number of shares of Stock subject to Options that can be awarded under the Plan
to any person in a single calendar year is 350,000 shares; which number shall
be subject to adjustment in accordance with Section 20.


            6.2       Eligible Directors (Non-Employee Directors)


                        For
purposes of this Section 6.2 an “Eligible Director” means a person
elected to serve on the Board at or after the 2001 meeting of the Corporation’s
stockholders who is not an officer or other salaried employee of the
Corporation or any Subsidiary; provided, that, partners and employees of
preferred stockholders of the Corporation shall not be Eligible Directors.
Each Eligible Director shall be granted an Option to purchase 10,000 shares on
the 10th trading day after the date of the first annual meeting of the
Corporation’s stockholders following the Eligible Director’s initial election
to the Board. This Award of 10,000 shares shall be made automatically and
shall not require any further Board action. The Option Price of this Award
shall be the average of the closing prices of the Corporation’s Stock for the
first 10 trading days after the annual meeting multiplied by the sum of one (1)
plus the interest rate on five year treasury notes applicable on that day. The
foregoing number of shares shall be subject to adjustment pursuant to
Section 20
below.


7.       LIMITATION ON INCENTIVE STOCK OPTIONS


                        An Option (other than an Option described in Section 1(b) hereof) shall
constitute an Incentive Stock Option only to the extent that the aggregate fair
market value (determined at the time the Option is granted) of the Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Optionee during any calendar year (under the Plan and all other plans of
the Optionee’s employer corporation and its parent and subsidiary corporations
within the meaning of Section 422(d) of the Code) does not exceed $100,000.
This limitation shall be applied by taking Options into account in the order in
which such Options were granted.


8.       OPTION AGREEMENTS


                        All Options granted pursuant to the Plan shall be evidenced by written
agreements (“Option Agreements”) to be executed by the Corporation and the
Optionee, in such form or forms as the Board shall from time to time determine.
Option Agreements covering Options granted from time to time or at the same
time need not contain similar provisions; provided, however, that all such
Option

 








Agreements shall comply with all terms of the Plan and any applicable
employment agreement.


9.       OPTION PRICE


                        The purchase price of each share of the Stock subject to an Option (the
“Option Price”) shall be fixed by the Board, shall be not less than the fair
market value of a share of the Stock covered by the Option and shall be stated
in each Option Agreement. In the case of an Option that is intended to
constitute an Incentive Stock Option, the Option Price shall be not less than
the fair market value of a share of the Stock covered by the Option; provided,
however, that in the event the Optionee would otherwise be ineligible to
receive an Incentive Stock Option by reason of the provisions of Sections
422(b)(6) and 424(d) of the Code (relating to stock ownership of more than 10
percent), the Option Price of an Option which is intended to be an Incentive
Stock Option shall be not less than the greater of par value or 110 percent of
the fair market value of a share of the Stock covered by the Option at the time
such Option is granted.


                        In the event that the Stock is listed on an established national or
regional stock exchange, is admitted to quotation on the National Association
of Securities Dealers Automated Quotation System, or is publicly traded in an
established securities market, in determining the fair market value of the
Stock, the Board shall use the closing price of the Stock on such exchange or
system or in such market (the highest such closing price if there is more than
one such exchange or market) on the date the Option is granted (or, if there is
no such closing price, then the Board shall use the mean between the highest
bid and lowest asked prices or between the high and low prices on such date),
or, if no sale of the Stock has been made on such day, on the next preceding
day on which any such sale shall have been made.


10.       TERM AND EXERCISE OF OPTIONS


            10.1     Term


                        Each Option granted under the Plan shall terminate and all rights to
purchase shares thereunder shall cease upon the expiration of 10 years from the
date such Option is granted, or on such date prior thereto as may be fixed by
the Board and stated in the Option Agreement relating to such Option; provided,
however, that in the event the Optionee would otherwise be ineligible to
receive an Incentive Stock Option by reason of the provisions of Sections
422(b)(6) and 424(d) of the Code (relating to stock ownership of more than 10
percent), an Option

 








granted to such Optionee which is intended to be an Incentive Stock Option
shall in no event be exercisable after the expiration of five years from the
date it is granted.


            10.2     Exercise by Optionee


                        Only the Optionee receiving an Option (or, in the event of the Optionee’s
legal incapacity or incompetency, the Optionee’s guardian or legal
representative, and in the case of the Optionee’s death, the Optionee’s estate)
may exercise the Option.


            10.3     Option Period and Limitations on Exercise


                        Each Option granted under the Plan shall be exercisable in whole or in
part at any time and from time to time over a period commencing on or after the
date of grant of the Option and ending upon the expiration or termination of
the Option, as the Board shall determine and set forth in the Option Agreement
relating to such Option. Without limitation of the foregoing, the Board,
subject to the terms and conditions of the Plan, may in its sole discretion
provide that an Option may not be exercised in whole or in part for any period
or periods of time during which such Option is outstanding as the Board shall
determine and set forth in the Option Agreement relating to such Option. Any
such limitation on the exercise of an Option contained in any Option Agreement
may be rescinded, modified or waived by the Board, in its sole discretion, at
any time and from time to time after the date of grant of such Option, so as to
accelerate the time at which the Option may be exercised. Notwithstanding any
other provisions of the Plan, no Option shall be exercisable in whole or in
part prior to the date the Plan is approved by the stockholders of the
Corporation as provided in Section 5.1 hereof.


            10.4     Method of Exercise


                        An Option that is exercisable hereunder may be exercised by delivery to
the Corporation on any business day, at its principal office addressed to the
attention of the Board, of written notice of exercise, which notice shall
specify the number of shares for which the Option is being exercised, and shall
be accompanied by payment in full of the Option Price of the shares for which
the Option is being exercised. Payment of the Option Price for the shares of
Stock purchased pursuant to the exercise of an Option shall be made, as
determined by the President and set forth in the Option Agreement pertaining to
an Option, (a) in cash or by certified check payable to the order of the
Corporation; (b) through the tender to the Corporation of shares of Stock,
which shares shall be valued, for purposes of determining the extent to which
the Option Price has been paid thereby, at their fair market value (determined
in the manner described in Section 9 hereof ) (“Fair Market Value”) on the date
of exercise; or (c) by a combination of the methods

 








described in Sections 10.4(a) and 10.4 (b) hereof; provided, however, that the
Board may in its discretion impose and set forth in the Option Agreement
pertaining to an Option such limitations or prohibitions on the use of shares
of Stock to exercise Options as it deems appropriate. Payment in full of the
Option Price need not accompany the written notice of exercise provided the
notice directs that the Stock certificate or certificates for the shares for
which the Option is exercised be delivered to a licensed broker acceptable to
the Corporation as the agent for the individual exercising the Option and, at
the time such Stock certificate or certificates are delivered, the broker
tenders to the Corporation cash (or cash equivalents acceptable to the
Corporation) equal to the Option Price; provided, further, that additional
shares of Stock may be withheld upon a broker-assisted cashless exercise for
the purpose of paying withholding taxes in accordance with Section 21. An
attempt to exercise any Option granted hereunder other than as set forth above
shall be invalid and of no force and effect.


                        Promptly after the exercise of an Option and the payment in full of the
Option Price of the shares of Stock covered thereby, the individual exercising
the Option shall be entitled to the issuance of a Stock certificate or
certificates evidencing such individual’s ownership of such shares. A separate
Stock certificate or certificates shall be issued for any shares purchased
pursuant to the exercise of an Option which is an Incentive Stock Option, which
certificate or certificates shall not include any shares which were purchased
pursuant to the exercise of an Option which is not an Incentive Stock Option.
An individual holding or exercising an Option shall have none of the rights of
a stockholder until the shares of Stock covered thereby are fully paid and
issued to such individual and, except as provided in Section 20 hereof, no
adjustment shall be made for dividends or other rights for which the record
date is prior to the date of such issuance.


11.       TRANSFERABILITY OF OPTIONS


                        No Option shall be assignable or transferable by the Optionee to whom it
is granted, other than by will or the laws of descent and distribution.


12.       TRANSFERABILITY OF STOCK PURCHASED PURSUANT TO INCENTIVE STOCK OPTION


                        An Optionee shall be required to give notice to the Corporation if Stock
acquired pursuant to an Incentive Stock Option is sold, pledged, assigned,
transferred or otherwise disposed of by the Optionee within two years from the
date of grant of such Incentive Stock Option or within one year after the
transfer of such Stock to the Optionee; provided, however that a transfer to a
trustee, receiver, or other fiduciary in any insolvency proceeding, as
described in Section 422(c)(3) of the Code shall not be deemed to be such a
disposition.


 









13.       TERMINATION OF EMPLOYMENT


                        The Board may provide, by inclusion of appropriate language in any Option
Agreement or applicable employment agreement, that an Optionee may (subject to
the general limitations on exercise set forth in Section 10.3 hereof), in the
event of termination of employment of the Optionee with the Corporation or a
Subsidiary, exercise an Option, in whole or in part, at any time subsequent to
such termination of employment and prior to termination of the Option pursuant
to Section 10.2 hereof, either subject to or without regard to any installment
limitation on exercise imposed pursuant to Section 10.3 hereof, as the Board, in
its sole and absolute discretion, shall determine and set forth in the Option
Agreement. Whether a leave of absence or leave on military or government
service shall constitute a termination of employment for purposes of the Plan
shall be determined by the Board, which determination shall be final and
conclusive. For purposes of the Plan only and unless otherwise stated in the
applicable Award Agreement, an Optionee’s change in position or duties shall
not result in interrupted or terminated employment, so long as such Grantee
continues to be an employee, officer, director of, or consultant to the
Corporation or a Subsidiary.


14.       RIGHTS IN THE EVENT OF DEATH OR DISABILITY


            14.1     Death


                        If an Optionee dies while employed by the Corporation or a Subsidiary or
within the period following the termination of employment during which the
Option is exercisable under Section 13 or 14.2 hereof, the executors,
administrators, legatees or distributees of such Optionee’s estate shall have
the right (subject to the general limitations on exercise set forth in Section
10.3 hereof), at any time within one year after the date of such Optionee’s death
and prior to termination of the Option pursuant to Section 10.1 hereof, to
exercise any Option held by such Optionee at the date of such Optionee’s death,
to the extent such Option was exercisable immediately prior to such Optionee’s
death; provided, however, that the Board may provide by inclusion of
appropriate language in any Option Agreement or applicable employment agreement
that, in the event of the death of an Optionee, the executors, administrators,
legatees or distributees of such Optionee’s estate may exercise an Option
(subject to the general limitations on exercise set forth in
Section 10.3 hereof),
in whole or in part, at any time subsequent to such Optionee’s death and prior
to termination of the Option pursuant to Section 10.1 hereof, either subject to or
without regard to any installment limitation on exercise imposed pursuant to
Section 10.3 hereof, as the Board, in its sole and absolute discretion, shall
determine and set forth in the Option Agreement.


 









            14.2     Disability


                        If an Optionee terminates employment with the Corporation or a Subsidiary
by reason of the “permanent and total disability” (within the meaning of
Section 22(e) (3) of the Code) of such Optionee, then such Optionee shall have
the right (subject to the general limitations on exercise set forth in Section
10.3 hereof), at any time within one year after such termination of employment and
prior to termination of the Option pursuant to Section 10.1 hereof, to exercise,
in whole or in part, any Option held by such Optionee at the date of such
termination of employment, to the extent such Option was exercisable
immediately prior to such termination of employment; provided, however, that
the Board may provide, by inclusion of appropriate language in any Option
Agreement or applicable employment agreement, that an Optionee may (subject to
the general limitations on exercise set forth in Section 10.3 hereof), in the
event of the termination of employment of the Optionee with the Corporation or
a Subsidiary by reason of the “permanent and total disability” (within the
meaning of Section 22(e)(3) of the Code) of such Optionee, exercise an Option,
in whole or in part, at any time subsequent to such termination of employment
and prior to termination of the Option pursuant to Section 10.1 hereof, either
subject to or without regard to any installment limitation on exercise imposed
pursuant to Section 10.3 hereof, as the Board, in its sole and absolute
discretion, shall determine and set forth in the Option Agreement. Whether a
termination of employment is to be considered by reason of “permanent and total
disability” for purposes of the Plan shall be determined by the Board, which
determination shall be final and conclusive.


15.       RESTRICTED STOCK


            15.1     Grant of Restricted Stock


                        The Board may from time to time grant shares of Stock subject to
restrictions (“Restricted Stock”) to persons eligible to receive Awards under
Section 4 hereof (“Grantees”), subject to such restrictions, conditions and
other terms, if any, as the Board may determine. Awards of Restricted Stock
may be made for no consideration (other than par value of the shares which is
deemed paid by services already rendered).


            15.2     Restrictions.


                        At the time a grant of Restricted Stock is made, the Board may, in its
sole discretion, establish a period of time (a “restricted period”) applicable
to such Restricted Stock. Each Award of Restricted Stock may be subject to a
different restricted period. The Board may, in its sole discretion, at the
time a grant of Restricted Stock is made, prescribe restrictions in addition to
or other than the expiration of the restricted period, including the
satisfaction of corporate or individual

 








performance objectives. Restricted Stock may not be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the restricted
period or prior to the satisfaction of any other restrictions prescribed by the
Board with respect to such Restricted Stock.


            15.3     Restricted Stock Certificates.


                        The Corporation shall issue, in the name of each Grantee to whom
Restricted Stock has been granted, stock certificates representing the total
number of shares of Restricted Stock granted to the Grantee, as soon as
reasonably practicable after the Grant Date. The Board may provide in an Award
Agreement that either (i) the Secretary of the Corporation shall hold such
certificates for the Grantee’s benefit until such time as the Restricted Stock
is forfeited to the Corporation or the restrictions lapse, or (ii) such
certificates shall be delivered to the Grantee, provided, however, that such
certificates shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference to the
restrictions imposed under the Plan and the Award Agreement.


            15.4     Rights of Holders of Restricted Stock.


                        Unless the Board otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such Stock and the right to
receive any dividends declared or paid with respect to such Stock. The Board
may provide that any dividends paid on Restricted Stock must be reinvested in
shares of Stock, which may or may not be subject to the same vesting conditions
and restrictions applicable to such Restricted Stock. All distributions, if
any, received by a Grantee with respect to Restricted Stock as a result of any
stock split, stock dividend, combination of shares, or other similar
transaction shall be subject to the restrictions applicable to the original
Grant.


            15.5     Termination of Employment.


                        Unless the Board otherwise provides in an Award Agreement, in applicable
employment agreement, or in writing after the Award Agreement is issued, upon
the termination of a Grantee’s employment with the Corporation or a Subsidiary,
any shares Restricted Stock held by such Grantee that have not vested, or with
respect to which all applicable restrictions and conditions have not lapsed,
shall immediately be deemed forfeited. Upon forfeiture of Restricted Stock,
the Grantee shall have no further rights with respect to such Award, including
but not limited to any right to vote Restricted Stock or any right to receive
dividends with respect to shares of Restricted Stock.


            15.6     Purchase of Restricted Stock.


                        The Grantee shall be required, to the extent required by applicable law,
to purchase the Restricted Stock from the Corporation at a purchase price equal
to the greater of (i) the aggregate par value of the shares of Stock
represented

 








by such Restricted Stock or (ii) the purchase price, if any, specified in the
Award Agreement relating to such Restricted Stock.


            15.7     Delivery of Stock.


                        Upon the expiration or termination of any restricted period and the
satisfaction of any other conditions prescribed by the Board, the restrictions
applicable to shares of Restricted Stock, and, unless otherwise provided in the
Award Agreement, a stock certificate for such shares shall be delivered, free
of all such restrictions, to the Grantee or the Grantee’s beneficiary or
estate, as the case may be.


16.       USE OF PROCEEDS


                        The proceeds received by the Corporation from the sale of Stock pursuant
to Options or Restricted Stock granted under the Plan shall constitute general
funds of the Corporation.


17.       SECURITIES LAWS


                        The Corporation shall not be required to sell or issue any shares of Stock
under any Award if the sale or issuance of such shares would constitute a
violation by the individual exercising the Award or by the Corporation of any
provisions of any law or regulation of any governmental authority, including,
without limitation, any federal or state securities laws or regulations. If at
any time the Corporation shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to the Award upon any
securities exchange or under any state or federal law, or the consent of any
government regulatory body, is necessary or desirable as a condition of, or in
connection with, the issuance or purchase of shares, the Award may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Corporation, and any delay caused thereby shall in no way
affect the date of termination of the Award. Specifically in connection with
the Securities Act of 1933, as amended (the “Securities Act”), upon exercise of
any Award or the lapse of restrictions of any Award, unless a registration
statement under the Securities Act is in effect with respect to the shares of
Stock covered by such Award, the Corporation shall not be required to sell or
issue such shares unless the Corporation has received evidence satisfactory to
the Corporation that the Optionee may acquire such shares pursuant to an
exemption from registration under the Securities Act. Any determination in
this connection by the Corporation shall be final and conclusive. The
Corporation may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act. The Corporation shall not be
obligated to take any affirmative action in order to cause the exercise of an
Award or the issuance of

 








shares pursuant to an Award to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly imposes the
requirement that an Option shall not be exercisable unless and until the shares
of Stock covered by such Option are registered or are subject to an available
exemption from registration, the exercise of such Option (under circumstances
in which the laws of such jurisdiction apply) shall be deemed conditioned upon
the effectiveness of such registration or the availability of such an
exemption.


18.       EXCHANGE ACT: RULE 16b-3


                        During any time when the Corporation has a class of equity security
registered under Section 12 of the Securities Exchange Act of 1934 it is the
intent of the Company that Awards pursuant to the Plan and the exercise of
Options granted hereunder will qualify for the exemption provided by Rule 16b-3
under the Exchange Act. To the extent that any provision of the Plan or action
by the Board does not comply with the requirements of Rule 16b-3, it shall be
deemed inoperative to the extent permitted by law and deemed advisable by the
Board, and shall not affect the validity of the Plan. In the event that Rule
16b-3 is revised or replaced, the Board may exercise its discretion to modify
this Plan in any respect necessary to satisfy the requirements of, or to take
advantage of any features of, the revised exemption or its replacement.


19.       AMENDMENT AND TERMINATION


                        The Board may, at any time and from time to time, amend, suspend or
terminate the Plan as to any shares of Stock as to which Awards have not been
granted. The Corporation also may retain the right in an Award Agreement to
cause a forfeiture of the shares or gain realized by an Optionee or Grantee on
account of the Optionee taking actions in “competition with the Corporation,”
as defined in the applicable Award Agreement. Furthermore, the Corporation
may, in the Award Agreement, retain the right to annul the grant of an Option
if the holder of such grant was an employee of the Corporation or a Subsidiary
and is terminated “for cause,” as defined in the applicable Award Agreement.
Except as permitted under Section 20 hereof, no amendment, suspension or
termination of the Plan shall, without the consent of the Optionee or Grantee,
alter or impair rights or obligations under any Award theretofore granted under
the Plan.


 









20.       EFFECT OF CHANGES IN CAPITALIZATION


            21.1     Changes in Stock


                        If the number of outstanding shares of Stock is increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Corporation by reason of any recapitalization,
reclassification, stock split-up, combination of shares, exchange of shares,
stock dividend or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration
by the Corporation, occurring after the effective date of the Plan, a
proportionate and appropriate adjustment shall be made by the Corporation in
the number and kind of shares for which Awards are outstanding, so that the
proportionate interest of the Optionee or Grantee immediately following such
event shall, to the extent practicable, be the same as immediately prior to
such event. Any such adjustment in outstanding Options shall not change the
aggregate Option Price payable with respect to shares subject to the
unexercised portion of the Option outstanding but shall include a corresponding
proportionate adjustment in the Option Price per share.


            21.2     Reorganization With Corporation Surviving


                        Subject
to Section 20.3 hereof, if the Corporation shall be the surviving
corporation in any reorganization, merger or consolidation of the Corporation
with one or more other corporations, any Award theretofore granted pursuant to
the Plan shall pertain to and apply to the securities to which a holder of the
number of shares of Stock subject to such Award would have been entitled
immediately following such reorganization, merger or consolidation, with a
corresponding proportionate adjustment of the Option Price per share so that
the aggregate Option Price thereafter shall be the same as the aggregate Option
Price of the shares remaining subject to the Option immediately prior to such
reorganization, merger or consolidation.


            21.3     Other Reorganizations; Sale of Assets or Stock


                        Upon the dissolution or liquidation of the Corporation, or upon a merger,
consolidation or reorganization of the Corporation with one or more other
corporations in which the Corporation is not the surviving corporation, or upon
a sale of substantially all of the assets of the Corporation to another
corporation, or upon any transaction (including, without limitation, a merger
or reorganization in which the Corporation is the surviving corporation)
approved by the Board that results in any person or entity (other than persons
who are holders of stock of the Corporation at the time the Plan is approved by
the Stockholders and other than an Affiliate) owning 80 percent or more of the
combined voting power of all classes of

 








stock of the Corporation, the Plan and all Options outstanding hereunder
shall terminate, except to the extent provision is made in connection with such
transaction for the assumption of the Options theretofore granted, or for the
substitution for such Options of new options covering the stock of a successor
corporation, or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kinds of shares and exercise prices, in which event the Plan
and Options theretofore granted shall continue in the manner and under the
terms so provided.


                        In the event of any such termination of the Plan, each Optionee shall have
the right (subject to the general limitations on exercise set forth in Section
10.3 hereof and except as otherwise specifically provided in the Option Agreement
relating to such Option), immediately prior to the occurrence of such
termination and during such period occurring prior to such termination as the
Board in its sole discretion shall designate, to exercise such Option in whole
or in part, whether or not such Option was otherwise exercisable at the time
such termination occurs, but subject to any additional limitations that the
Board may, in its sole discretion, include in any Option Agreement. The Board
shall send written notice of an event that will result in such a termination to
all Optionees not later than the time at which the Corporation gives notice
thereof to its stockholders. Unless otherwise provided in the applicable
Restricted Stock Agreement, all restrictions applicable to Awards of Restricted
Stock shall lapse immediately prior to the occurrence of an event described in
the first paragraph of this Section 20.3.


            21.4     Adjustments


                        Adjustments
under this Section 20 relating to stock or securities of the
Corporation shall be made by the Board, whose determination in that respect
shall be final and conclusive. No fractional shares of Stock or units of other
securities shall be issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share or unit.


            21.5     No Limitations on Corporation


                        The grant of an Award pursuant to the Plan shall not affect or limit in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.


 









22.       WITHHOLDING


                        The Corporation shall have the right to withhold, or require an Optionee
or Grantee to remit to the Corporation, an amount sufficient to satisfy any
applicable federal, state or local withholding tax requirements imposed with
respect to exercise of Options or lapse of restrictions or other taxable event
with respect to Restricted Stock. To the extent permissible under applicable
tax, securities and other laws and authorized by the Corporation in the Award
Agreement or at the time of such payment, the Optionee or Grantee may satisfy a
tax withholding requirement by directing the Corporation to apply shares of
Stock to which the Optionee or Grantee is entitled as a result of the exercise
of an Option or grant of Restricted Stock to satisfy withholding requirements
under this Section 21.


23.       DISCLAIMER OF RIGHTS


                        No provision in the Plan or in any Award granted or Award Agreement
entered into pursuant to the Plan shall be construed to confer upon any
individual the right to remain in the employ of the Corporation or any
Subsidiary, or to interfere in any way with the right and authority of the
Corporation or any Subsidiary either to increase or decrease the compensation
of any individual at any time, or to terminate any employment or other
relationship between any individual and the Corporation or any Subsidiary. The
obligation of the Corporation to pay any benefits pursuant to the Plan shall be
interpreted as a contractual obligation to pay only those amounts described
herein, in the manner and under the conditions prescribed herein. The Plan
shall in no way be interpreted to require the Corporation to transfer any
amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any participant or beneficiary under the terms of the
Plan.


24.       NONEXCLUSIVITY


                        Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Corporation for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or specifically to a
particular individual or individuals) as the Board in its discretion determines
desirable, including, without limitation, the granting of stock options or
restricted stock otherwise than under the Plan.


* * *


 









                        The Plan was duly adopted and approved by the Board on July 24, 1996 and
was duly approved by the stockholders of the Corporation on July 24, 1996. On
March 16, 2001, the Board and stockholders of the Corporation approved an
amendment to the Plan increasing the maximum number of shares of Common Stock
that may be issued pursuant to awards granted under the Plan to 2,500,000. The
Plan was further amended by the Board on April 23, 2001, and approved by the
stockholders of the Corporation on May 21, 2001.