Exhibit 10.1


 


GENERAL MOLY, INC.


 


2006 EQUITY INCENTIVE
PLAN, AS AMENDED AND RESTATED


 


Approved by the Board of
Directors:  February 25, 2010


Approved by the
Shareholders:  May 13, 2010


 


1.                                      PURPOSES.


 


(a)                                  General
Purpose.  The Company,
by means of the Plan, seeks to retain the services of Eligible Recipients, to
secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and, if applicable, any of the Company’s parents and subsidiaries.  The Plan was initially approved by the Board
on October 24, 2006 and by the shareholders on December 13,
2006.  The Plan was subsequently amended
by the Board on July 24, 2007 and the amended and restated Plan was
approved by the shareholders on October 4, 2007.


 


(b)                                  Available
Stock Awards.  The purpose
of the Plan is to provide a means by which Eligible Recipients may be given an
opportunity to benefit from increases in value of the Common Stock through the
granting of the following Stock Awards:  (i) Incentive
Stock Options, (ii) Nonstatutory Stock Options, (iii) Restricted
Stock grants, (iv) Restricted Stock Unit grants and (v) Stock
Appreciation Rights.


 


2.                                      DEFINITIONS.


 


“Affiliate” means any Parent or
Subsidiary of the Company, whether now or hereafter existing.


 


“Board” means the Board of Directors of the
Company.  To the extent the Board has
delegated authority to the Committee as provided in Section 3(c),
references in the Plan to the Board shall be deemed to include the Committee or
subcommittee, as appropriate.


 


“Change in Control” means (i) the
consummation of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, if more than 50% of the combined
voting power of the continuing or surviving entity’s securities outstanding
immediately after such merger, consolidation or other reorganization is owned
by persons who were not shareholders of the Company immediately prior to such
merger, consolidation or other reorganization; or (ii) the sale, transfer
or other disposition of all or substantially all of the Company’s assets.  A transaction shall not constitute a Change
in Control if its primary purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction.


 


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


 


“Committee” means a committee of two or
more members of the Board appointed by the Board in accordance with Section 3(c) of
the Plan.


 


“Common Stock” means the common stock of
the Company.


 


“Company” means General Moly, Inc.,
a Delaware corporation.


 


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“Consultant” means any person, including
an advisor, (i) engaged by the Company or an Affiliate to render
consulting or advisory services and who is compensated for such services,
including members of any advisory board constituted by the Company, or (ii) who
is a member of the Board of Directors of an Affiliate.  However, the term “Consultant” shall not
include either Directors who are not compensated by the Company for their
services as Directors or Directors who are merely paid a director’s fee by the
Company for their services as Directors.


 


“Continuous Service” means, with respect to
Employees, service with the Company or an Affiliate that is not interrupted or
terminated.  With respect to Directors or
Consultants, Continuous Service means service with the Company, or a Parent or
Subsidiary of the Company, whether as a Director or Consultant, that is not
interrupted or terminated.  The Board or
the chief executive officer of the Company, in that party’s sole discretion,
may determine whether Continuous Service shall be considered interrupted in the
case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave.


 


“Covered Employee” means the chief executive
officer and the other highest compensated officers of the Company for whom
total compensation is required to be reported to shareholders under the
Exchange Act, as determined for purposes of Section 162(m) of the
Code and the regulations promulgated thereunder from time to time.


 


“Director” means a member of the Board
of Directors of the Company.


 


“Disability” means the permanent and
total disability of a person within the meaning of Section 22(e)(3) of
the Code.


 


“Eligible Recipient” means any Employee, Director
or Consultant of the Company or any Employee, Director or Consultant of a
Parent or Subsidiary of the Company.


 


“Employee” means any person employed
by the Company or an Affiliate.  Mere
service as a Director or payment of a director’s fee by the Company or an
Affiliate shall not be sufficient to constitute “employment” by the Company or
an Affiliate.


 


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


 


“Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:


 


(i)                                    If the Common
Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share
of Common Stock shall be the closing sale price for such stock (or the closing
bid, if no sale was reported) as quoted on such exchange or market (or the
exchange or market with the greatest volume of trading in the Common Stock) on
the day of determination, as reported in The Wall Street Journal  or such other source as the Board (or the
Committee if applicable) deems reliable. 
If there are no reported sales on such date, the closing sale price on
the last preceding date on which sales were reported.


 


(ii)                                In the absence
of such markets for the Common Stock, the Fair Market Value shall be determined
in good faith by the Board (or the Committee if applicable) using a reasonable
valuation method.


 


“Former Plan” shall mean the General Moly, Inc.
2003 Stock Plan.


 


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“Former Plan Shares” has the meaning set forth
in Section 4(b) of the Plan.


 


“Incentive Stock Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.


 


“Independent
Director”  means an
independent director as defined by the stock exchange in which the Company is
then listed, or
any successor rule, as in effect from time to time.


 


“Non-Employee Director”  means a Director who either (i) is
not a current Employee or Officer of the Company or its Parent or a Subsidiary,
does not receive compensation (directly or indirectly) from the Company or its
Parent or a Subsidiary for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would not
be required under Item 404(a) of Regulation S-K), does not possess an
interest in any other transaction as to which disclosure would be required
under Item 404(a) of Regulation S-K and is not engaged in a business
relationship as to which disclosure would be required under Item 404(b) of
Regulation S-K, or (ii) is otherwise considered a “non-employee director”
for purposes of Rule 16b-3.


 


“Nonstatutory Stock Option” means an Option not
intended to qualify as an Incentive Stock Option.


 


“Officer” means a person who is an
officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.


 


“Option” means a stock option
granted pursuant to Section 6 of the Plan.


 


“Option Agreement” means a written agreement
between the Company and an Optionholder evidencing the terms and conditions of
an individual Option grant.  Each Option
Agreement shall be subject to the terms and conditions of the Plan.


 


“Optionholder” means a person to whom an
Option is granted pursuant to the Plan or, if applicable, such other person who
holds an outstanding Option.


 


“Outside Director” means a Director who either
(i) is not a current employee of the Company or an “affiliated corporation”
(within the meaning of Treasury Regulations promulgated under Section 162(m) of
the Code), is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other than benefits
under a tax qualified pension plan), was not an officer of the Company or an “affiliated
corporation” at any time and is not currently receiving direct or indirect
remuneration from the Company or an “affiliated corporation” for services in
any capacity other than as a Director, or (ii) is otherwise considered an “outside
director” for purposes of Section 162(m) of the Code.


 


“Parent”  means a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the Code.


 


“Participant” means a person to whom a
Stock Award is granted pursuant to the Plan or, if applicable, such other
person who holds an outstanding Stock Award.


 


“Performance Criteria” shall have the meaning set
forth in Section 7(a)(iii) of the Plan.


 


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“Plan” means this 2006 Equity Incentive Plan, as
amended from time to time.


 


“Regulation S-K” means Regulation S-K
promulgated pursuant to the Securities Act, as in effect from time to time.


 


“Re-Load Option”  has the meaning
set forth in Section 6(n) of the Plan.


 


“Repurchase Blackout Period” means six months from the
date the Common Stock relating to a Stock Award is issued to the Participant
or, in the case of a Stock Award with vesting restrictions, six months from the
vesting date or, in any case, such longer or shorter period of time as
determined by the Board or the Committee.


 


“Restricted Stock” shall mean a grant of
shares of Common Stock pursuant to Section 7(a) of the Plan.


 


“Restricted Stock Units” shall mean a grant of the
right to receive shares of Common Stock in the future or their cash equivalent
(or both) pursuant to Section 7(a) of the Plan.


 


“Rule 16b-3” means Rule 16b-3
promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time.


 


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


 


“Stand-Alone Stock Appreciation Right” has the
meaning set forth in Section 7(b) of the Plan.


 


“Stock
Appreciation Right” means the right to receive
appreciation in the Common Stock pursuant to the provisions of Section 7(b) of
the Plan.


 


“Stock Award” means any right granted
under the Plan, including an Option, a stock bonus, a Stock Appreciation Right,
a Restricted Stock grant and a Restricted Stock Unit grant.


 


“Stock Award Agreement” means a written agreement
between the Company and a holder of a Stock Award evidencing the terms and
conditions of an individual Stock Award grant. 
Each Stock Award Agreement shall be subject to the terms and conditions
of the Plan.


 


“Subsidiary”  means (i) in the case of an Incentive Stock
Option, a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Code, and (ii) in the case of
any other Stock Award, in addition to a subsidiary corporation as defined in
clause (i), (A) a limited liability company, partnership or other entity
in which the Company controls 50% or more of the voting power or equity
interests, or (B) an entity with respect to which the Company possesses
the power, directly or indirectly, to direct or cause the direction of the
management and policies, whether through the Company’s ownership of voting
securities, by contract or otherwise; provided that no entity shall be a “subsidiary”
if such entity would not constitute, together with the Company, a “service
recipient” pursuant to applicable guidance under Section 409A of the Code.


 


“Tandem Stock Appreciation Right” has the
meaning set forth in Section 7(b) of the Plan.


 


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“Ten Percent Shareholder” means a person who owns (or
is deemed to own pursuant to Section 424(d) of the Code) stock
comprising more than 10% of the total combined voting power of all classes of
stock of the Company or of any of its Affiliates.


 


3.                                      ADMINISTRATION.


 


(a)                                  Administration
by Board.  The Board
shall administer the Plan unless and until the Board delegates administration
to a Committee, as provided in Section 3(c).  Whether or not the Board has delegated
administration, the Board shall have the final power to determine all questions
of policy and expediency that may arise in the administration of the Plan.


 


(b)                                  Powers
of Board.  The Board
(or the Committee) shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:


 


(i)                                    To determine
from time to time which of the persons eligible under the Plan shall be granted
Stock Awards; when and how each Stock Award shall be granted; what type or
combination of types of Stock Award shall be granted; the provisions of each
Stock Award granted (which need not be identical), including the time or times
when a person shall be permitted to receive Common Stock pursuant to a Stock
Award; and the number of shares of Common Stock with respect to which a Stock
Award shall be granted to each such person.


 


(ii)                                To construe and
interpret the Plan and Stock Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration.  The Board, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective.


 


(iii)                            To amend the
Plan or a Stock Award as provided in Section 13.


 


(iv)                               Generally, to
exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company that are not in conflict
with the provisions of the Plan.


 


(c)                                  Delegation
to Committee. The Board may delegate administration of the Plan to
a Committee of two or more members of the Board, each of whom must qualify as a
Non-Employee Director, Outside Director, and Independent Director.  If administration is delegated to such a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, including the power to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise (and references in this Plan to the Board shall
thereafter be deemed to be to the Committee or subcommittee, as appropriate),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board.  Notwithstanding the foregoing, only a
Committee may grant Stock Awards to (i) senior executives of the Company
who are subject to Section 16 of the Exchange Act, (ii) Covered
Employees, or (iii) the chief executive officer or any other executive
officer.  The Board may abolish the
Committee, or any subcommittee, at any time and revest in the Board the
administration of the Plan.  Any awards
under the Plan that are intended to fit within the performance-based awards
exception to Section 162(m) of the Code must be granted by the
Committee, which must consist of at least two or more members of the Board,
each of whom must qualify as a Non-Employee Director, Outside Director, and
Independent Director.


 


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(d)                                  Effect of Board’s Decision. All
determinations, interpretations and constructions made by the Board or the
Committee in good faith shall not be subject to review by any person and shall
be final, binding and conclusive on all persons.


 


4.                                      SHARES
SUBJECT TO THE PLAN.


 


(a)                                  Share
Reserve. Subject to the provisions of Section 12
relating to adjustments upon changes in Common Stock, the Common Stock that may
be issued pursuant to Stock Awards shall not exceed in the aggregate 9,600,000
shares of Common Stock, including 430,000 Former Plan Shares.  The number of shares of Common Stock that may
be issued pursuant to Incentive Stock Options shall be limited to the above
maximum number of shares issuable under the Plan.


 


(b)                                  Reversion
of Shares and Availability of Shares to the Share Reserve.  If any Stock Award granted under the Plan or
under the Former Plan shall for any reason expire or otherwise terminate, in
whole or in part, without having been exercised in full, or if any shares of
Common Stock issued to a Participant pursuant to a Stock Award granted under
the Plan or under the  Former Plan are
forfeited back to or repurchased by the Company, including, but not limited to,
any repurchase or forfeiture caused by the failure to meet a contingency or
condition required for the vesting or exercise of such shares, then the shares
of Common Stock not acquired under such Stock Award (the “Former
Plan Shares”), shall become available for issuance under the
Plan.  Former Plan Shares shall include
reserved shares of Common Stock that are not subject to a grant under the
Former Plan.  The number of shares of
Common Stock underlying a Stock Award not issued as a result of any of the
following actions shall again be available for issuance under the Plan:  (i) a payout of a Stand-Alone Stock
Appreciation Right, or a performance-based award of Restricted Stock or
Restricted Stock Units in the form of cash; (ii) a cancellation,
termination, expiration, forfeiture, or lapse for any reason (with the
exception of the termination of a Tandem Stock Appreciation Right upon exercise
of the related Options, or the termination of a related Option upon exercise of
the corresponding Tandem Stock Appreciation Right) of any Stock Award; (iii) payment
of the Option exercise price and/or payment of any taxes arising upon exercise
of the Option by withholding shares of Common Stock which otherwise would be
acquired on exercise or issued upon such payout; and (iv) upon the
exercise of a Stock Appreciation Right settled in shares of Common Stock, the
number of shares related to the exercise that were not issued to the
Participant.


 


(c)                                  Source
of Shares.  The shares
of Common Stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.


 


5.                                      ELIGIBILITY.


 


(a)                                  Eligibility
for Specific Stock Awards. 
Incentive Stock Options may be granted only to Employees.  Stock Awards other than Incentive Stock
Options may be granted to Eligible Recipients.


 


(b)                                  Ten
Percent Shareholders.  A Ten
Percent Shareholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least 110% of the Fair Market Value of the
Common Stock at the date of grant and the Option is not exercisable after the
expiration of five years from the date of grant.


 


(c)                                  Consultants.  A Consultant shall not be eligible for the
grant of a Stock Award if, at the time of grant, a Form S-8 Registration
Statement under the Securities Act (“Form S-8”)



 


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is
not available to register either the offer or the sale of the Company’s
securities to such Consultant because of the nature of the services that the
Consultant is providing to the Company, or because the Consultant is not a
natural person, or as otherwise provided by the rules governing the use of
Form S-8, unless the Company determines both (i) that such grant (A) shall
be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require
registration under the Securities Act in order to comply with the requirements
of the Securities Act, if applicable, and (ii) that such grant complies
with the securities laws of all other relevant jurisdictions.  Form S-8 generally is available to
consultants and advisors only if (i) they are natural persons, (ii) they
provide bona fide services to the issuer, its parents, its majority-owned
subsidiaries or majority-owned subsidiaries of the issuer’s parent, and (iii) the
services are not in connection with the offer or sale of securities in a
capital-raising transaction, and do not directly or indirectly promote or
maintain a market for the issuer’s securities.


 


(d)                                  Foreign Participants.  Notwithstanding any provision of the Plan to
the contrary, in order to comply with the laws in other countries in which the
Company and its subsidiaries operate or have Employees, Directors or
Consultants, the Board, in its sole discretion, shall have the power and
authority to: (i) determine which subsidiaries shall be covered by the
Plan; (ii) determine which Employees, Directors or Consultants outside the
United States are eligible to participate in the Plan; (iii) modify the
terms and conditions of any Stock Award granted to Employees, Directors or
Consultants outside the United States to comply with applicable foreign laws; (iv) establish
subplans and modify exercise procedures and other terms and procedures, to the
extent such actions may be necessary or advisable (any such subplans and/or
modifications shall be attached to this subplan as appendices); provided, however, that no such subplans
and/or modifications shall increase the number of shares reserved for the Plan
as set forth in Section 4 of the Plan; and (v) take any action,
before or after a Stock Award is made, that it deems advisable to obtain
approval or comply with any applicable foreign laws.


 


6.                                      OPTION
PROVISIONS.


 


Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. 
All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for shares of
Common Stock purchased on exercise of each type of Option.  The provisions of separate Options need not
be identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option Agreement or otherwise) the
substance of each of the following provisions:


 


(a)                                  Term.  Subject to the provisions of Section 5(b) regarding
Ten Percent Shareholders, no Option shall be exercisable after the expiration
of ten years from the date it was granted.


 


(b)                                  Exercise
Price of an Incentive Stock Option.  Subject to the provisions of Section 5(b) regarding
Ten Percent Shareholders, the exercise price of each Incentive Stock Option
shall be not less than 100% of the Fair Market Value of the Common Stock
subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Incentive
Stock Option may be granted with an exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of
the Code.


 


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(c)                                  Exercise Price of a Nonstatutory Stock Option.  The exercise price of
Nonstatutory Stock Options shall be not less than 100% of the Fair Market Value
of the Common Stock subject to the Option on the date the Option is granted.


 


(d)                                  Consideration.  The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is
exercised, or (ii) at the discretion of the Board at the time of the grant
of the Option (or subsequently in the case of a Nonstatutory Stock Option) (A) by
delivery to the Company of other Common Stock, (B) according to a deferred
payment or other similar arrangement with the Optionholder, (C) pursuant
to a cashless exercise program implemented by the Company in connection with
the Plan, or (D) in any other form of legal consideration that may be
acceptable to the Board.  Unless
otherwise specifically provided in the Option Agreement, the purchase price of
Common Stock acquired pursuant to an Option that is paid by delivery to the
Company of other Common Stock acquired, directly or indirectly from the
Company, shall be paid only by shares of the Common Stock of the Company that
have been held for more than six months (or such longer or shorter period of
time required by the Board.


 


In the case of any deferred
payment arrangement, interest shall be compounded at least annually and shall
be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other
than amounts stated to be interest under the deferred payment arrangement.


 


(e)                                  Transferability
of an Incentive Stock Option.  An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Optionholder only by the Optionholder.  Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.


 


(f)                                    Transferability
of a Nonstatutory Stock Option.  A Nonstatutory Stock Option shall be
transferable only to the extent provided in the Option Agreement (subject to
applicable securities laws). 
Notwithstanding the foregoing, the Optionholder may, by delivering
written notice to the Company, in a form satisfactory to the Company, designate
a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.


 


(g)                                 Vesting
Generally.  The total
number of shares of Common Stock subject to an Option may, but need not, vest
and therefore become exercisable in periodic installments that may, but need
not, be equal.  The Option may be subject
to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board
may deem appropriate.  The vesting
provisions of individual Options may vary. 
The provisions of this Section 6(g) are subject to any Option
provisions governing the minimum number of shares of Common Stock as to which
an Option may be exercised.


 


(h)                                 Termination
of Continuous Service.  In
the event an Optionholder’s Continuous Service terminates (other than upon the
Optionholder’s death or Disability), the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination) but only within such period of time
ending on the earlier of (i) the date three months following the termination
of the Optionholder’s Continuous Service (or, except with respect to Incentive
Stock Options, such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set


 


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forth
in the Option Agreement.  If, after
termination, the Optionholder does not exercise his or her Option within the
time specified in the Option Agreement, the Option shall terminate.


 


(i)                                    Extension
of Termination Date.  Except with
respect to Incentive Stock Options, an Optionholder’s Option Agreement may also
provide that if the exercise of the Option following the termination of the
Optionholder’s Continuous Service (other than upon the Optionholder’s death or
Disability) would be prohibited at any time solely because the issuance of
shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the
expiration of the term of the Option set forth in Section 6(a), or (ii) the
expiration of a period of thirty days after the termination of the Optionholder’s
Continuous Service during which the exercise of the Option would not be in
violation of such registration requirements.


 


(j)                                    Disability
of Optionholder.  In the event
that an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s Disability, the Optionholder may exercise his or her Option (to
the extent that the Optionholder was entitled to exercise such Option as of the
date of termination), but only within such period of time ending on the earlier
of (i) the date 12 months following such termination (or, except with
respect to Incentive Stock Options, such longer or shorter period specified in
the Option Agreement) or (ii) the expiration of the term of the Option as
set forth in the Option Agreement.  If,
after termination, the Optionholder does not exercise his or her Option within
the time specified herein, the Option shall terminate.


 


(k)                                Death
of Optionholder.  In the event
(i) an Optionholder’s Continuous Service terminates as a result of the
Optionholder’s death or (ii) the Optionholder dies within the period (if
any) specified in the Option Agreement after the termination of the
Optionholder’s Continuous Service for a reason other than death, then the
Option may be exercised (to the extent the Optionholder was entitled to
exercise such Option as of the date of death) by the Optionholder’s estate, by
a person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the option upon the
Optionholder’s death pursuant to Section 6(e) or 6(f), but only
within the period ending on the earlier of (A) the date 18 months
following the date of death (or, except with respect to Incentive Stock
Options, such longer or shorter period specified in the Option Agreement) or (B) the
expiration of the term of such Option as set forth in the Option
Agreement.  If, after death, the Option
is not exercised within the time specified herein, the Option shall terminate.


 


(l)                                    Early
Exercise.  The Option
may, but need not, include a provision whereby the Optionholder may elect at
any time before the Optionholder’s Continuous Service terminates to exercise
the Option as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of the Option. 
The early purchase of any unvested shares of Common Stock will be
pursuant to an early exercise provision in the Option Agreement which may
provide for a repurchase option in favor of the Company and other restrictions
the Board determines to be appropriate. 
Any repurchase option so provided for will be subject to the repurchase
provisions set forth in Section 11(h).


 


(m)                              Substitution
of Stock Appreciation Rights for Options.  The Board shall have the sole discretion to
substitute without receiving Participants’ permission, Stock Appreciation
Rights paid only in stock for outstanding Options; provided, the terms of the
substituted Stock Appreciation Rights are substantially the same as the terms of
the Options, the number of shares underlying the number of Stock Appreciation
Rights equals the number of shares underlying the Options and the difference
between the Fair Market Value of the underlying shares of Common Stock and the
grant price of the Stock Appreciation Rights is equivalent to the difference
between 


 


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the
Fair Market Value of the underlying shares of Common Stock and the exercise
price of the Options.


 


(n)                                 Re-Load
Options.


 


(i)                                    Without in any
way limiting the authority of the Board to make or not to make grants of
Options hereunder, the Board shall have the authority (but not an obligation)
to include as part of any Option Agreement a provision entitling the
Optionholder to a further Option (a “Re-Load Option”)
in the event the Optionholder exercises the Option evidenced by the Option
Agreement, in whole or in part, by surrendering other shares of Common Stock in
accordance with this Plan and the terms and conditions of the Option Agreement.
Unless otherwise specifically provided in the Option Agreement, the
Optionholder shall not surrender shares of Common Stock acquired, directly or
indirectly from the Company, unless such shares have been held for more than
six months (or such longer or shorter period of time as determined by the
Board).


 


(ii)                                Any such
Re-Load Option shall (i) provide for a number of shares of Common Stock
equal to the number of shares of Common Stock surrendered as part or all of the
exercise price of such Option, (ii) have an expiration date which is the
same as the expiration date of the Option the exercise of which gave rise to
such Re-Load Option, and (iii) have an exercise price which is equal to
100% of the Fair Market Value of the Common Stock subject to the Re-Load Option
on the date of exercise of the original Option. 
Notwithstanding the foregoing, a Re-Load Option shall be subject to the
same exercise price and term provisions heretofore described for Options under
the Plan.


 


Any such Re-Load Option may be an Incentive
Stock Option or a Nonstatutory Stock Option, as the Board may designate at the
time of the grant of the original Option; provided,
however, that the designation of any Re-Load Option as an Incentive
Stock Option shall be subject to the $100,000 annual limitation on the
exercisability of Incentive Stock Options described in Section 11(d) of
the Plan and in Section 422(d) of the Code.  There shall be no Re-Load Options on a
Re-Load Option.  Any such Re-Load Option
shall be subject to the availability of sufficient shares of Common Stock under
Section 4(a) and shall be subject to such other terms and conditions
as the Board may determine that are not inconsistent with the express
provisions of the Plan regarding the terms of Options.


 


7.                                      PROVISIONS
OF STOCK AWARDS OTHER THAN OPTIONS.


 


(a)                                  Restricted
Stock and Restricted Stock Units.


 


(i)                                    Designation.  Restricted Stock or Restricted Stock Units
may be granted under the Plan.  After the
Board determines that it will offer Restricted Stock or Restricted Stock Units,
it will advise the Participant in writing or electronically, by means of a
Stock Award Agreement, of the terms, conditions and restrictions, including
vesting, if any, related to the offer, including the number of shares of Common
Stock that the Participant shall be entitled to receive or purchase, the price
to be paid, if any, and, if applicable, the time within which the Participant
must accept the offer.  The offer shall
be accepted by execution of a Stock Award Agreement or as otherwise directed by
the Board.  The term of each award of
Restricted Stock or Restricted Stock Units shall be at the discretion of the
Board.


 


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(ii)                                Restrictions.  Subject to Section 7(a)(iii), the Board
may impose such conditions or restrictions on the Restricted Stock or
Restricted Stock Units granted pursuant to the Plan as it may determine
advisable, including the achievement of specific performance goals, time based
restrictions on vesting, or others.  If
the Board or the Committee establishes performance goals, the Board or the
Committee shall determine whether a Participant has satisfied the performance
goals.


 


(iii)                            Performance
Criteria.  Restricted
Stock and Restricted Stock Units granted pursuant to the Plan that are intended
to qualify as “performance based compensation” under Section 162(m) of
the Code shall be subject to the attainment of performance goals relating to
the Performance Criteria selected by the Committee specified at the time such
Restricted Stock and Restricted Stock Units are granted.  For purposes of this Plan, “Performance Criteria” means one or
more of the following (as selected by the Board or the Committee: (1) cash
flow; (2) earnings per share; (3) earnings before interest, taxes,
and amortization; (4) return on equity; (5) total shareholder return;
(6) share price performance; (7) return on capital; (8) return
on assets or net assets; (9) revenue; (10) revenue growth; (11)
earnings growth; (12) operating income; (13) operating profit; (14) profit
margin; (15) return on operating revenue; (16) return on invested capital; (17)
market price; (18) brand recognition; (19) customer satisfaction; (20)
operating efficiency; or (21) productivity. 
Any of these Performance Criteria may be used to measure the performance
of the Company as a whole or any business unit or division of the Company.  For Stock Awards not intended to be
performance-based compensation for purposes of Section 162(m) of the
Code, the Board or the Committee may designate such other performance criteria
as it deems appropriate.


 


(iv)                               Transferability.  Restricted Stock and Restricted Stock Units
shall be transferable by the Participant only upon such terms and conditions as
are set forth in the Stock Award Agreement, as the Board shall determine in its
discretion.


 


(v)                                   Vesting.  Unless the Board determines otherwise, the
Stock Award Agreement shall provide for the forfeiture of the non-vested shares
of Common Stock underlying Restricted Stock or the termination of unvested
Restricted Stock Units upon termination of a Participant’s Continuous
Service.  To the extent that the
Participant purchased the shares of Common Stock granted under any such
Restricted Stock award and any such shares of Common Stock remain non-vested at
the time of termination of a Participant’s Continuous Service, the termination
of Participant’s Continuous Service shall cause an immediate sale of such
non-vested shares of Common Stock to the Company at the original price per
share of Common Stock paid by the Participant.


 


(b)                                  Stock
Appreciation Rights.  Grants of Stock Appreciation Rights shall be
pursuant to a Stock Award Agreement, which shall be in such form and shall
contain such terms and conditions, as the Board deems appropriate.  The Board may grant Stock Appreciation Rights
in connection with all or any part of an Option (“Tandem
Stock Appreciation Rights”) to a Participant or in a stand-alone
grant (“Stand-Alone Stock Appreciation Rights”).  The terms and conditions of a Stock
Appreciation Right shall include (through incorporation of the provisions
hereof by reference in the Stock Award Agreement or otherwise) the substance of
each of the following provisions:


 


(i)                                    Calculation of Appreciation.  Each Stock Appreciation Right will be
denominated in shares of Common Stock equivalents.  The appreciation distribution payable on the
exercise of a Stock Appreciation Right will be not greater than an amount 


 


11

















 


equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number
of shares of Common Stock equivalents in which the Participant is vested under
such Stock Appreciation Right and with respect to which the Participant is
exercising the Stock Appreciation Right on such date, over (B) an amount
that will be determined by the Board at the time of grant of the Stock
Appreciation Right (which amount shall not be less than the Fair Market Value
of such shares of Common Stock at the time of grant of the Stock Appreciation
Rights).


 


(ii)                                Vesting.  At the time
of the grant of a Stock Appreciation Right, the Board may impose such
restrictions or conditions to the vesting of such Stock Appreciation Right as it
deems appropriate.


 


(iii)                            Exercise.  To exercise
any outstanding Stock Appreciation Right, the Participant must provide written
notice of exercise to the Company in compliance with the provisions of the
Stock Award Agreement evidencing such Stock Appreciation Right.


 


(iv)                               Payment. The appreciation distribution in respect of a
Stock Appreciation Right may be paid in Common Stock, in cash, or any
combination of the two, as the Board deems appropriate.


 


(v)                                   Termination of Continuous Service.  If a Participant’s Continuous Service
terminates for any reason, any unvested Stock Appreciation Rights shall be
forfeited and any vested Stock Appreciation Rights shall be automatically
redeemed.


 


(vi)                               Transferability.  Stock Appreciation Rights shall be
transferable by the Participant only upon such terms and conditions as are set
forth in the Stock Award Agreement, as the Board shall determine in its
discretion.


 


(vii)                           Tandem
Stock Appreciation Rights.  A Tandem Stock Appreciation Right
shall be exercisable only to the extent that the related Option is exercisable
and a Tandem Stock Appreciation Right shall expire no later than the date on
which the related Option expires.


 


8.                                      COVENANTS
OF THE COMPANY.


 


(a)                                  Availability
of Shares.  During the
terms of the Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Stock Awards.


 


(b)                                  Securities
Law Compliance.  The Company
shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to grant Stock
Awards and to issue and sell shares of Common Stock upon exercise of the Stock
Awards; provided, however, that
this undertaking shall not require the Company to register under the Securities
Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant
to any such Stock Award.  If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock
upon exercise of such Stock Awards unless and until such authority is obtained.


 


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9.                                      USE OF
PROCEEDS FROM STOCK.


 


Proceeds from the sale of
Common Stock pursuant to Stock Awards shall constitute general funds of the
Company.


 


10.                               EFFECTIVE
DATE OF PLAN.


 


The Plan shall become
effective as determined by the Board, but no Stock Award shall be exercised
(or, in the case of a stock bonus, shall be granted) unless and until the Plan
has been approved by the shareholders of the Company, which approval shall be
within twelve months before or after the date the Plan is adopted by the Board.


 


11.                               MISCELLANEOUS.


 


(a)                                  Acceleration
of Exercisability and Vesting.  The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which
a Stock Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Stock Award stating the time at which it
may first be exercised or the time during which it will vest.


 


(b)                                  Shareholder
Rights.  No Participant shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares of Common Stock subject to such Stock Award unless and until such
Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.


 


(c)                                  No Employment
or other Service Rights. 
Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without
notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an
Affiliate, or (iii) the service of a Director pursuant to the Bylaws of
the Company or an Affiliate, and any applicable provisions of the corporate law
of the state in which the Company or the Affiliate is incorporated, as the case
may be.


 


(d)                                  Incentive
Stock Option $100,000 Limitation.  To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionholder
during any calendar year (under all plans of the Company and its Affiliates)
exceeds $100,000, the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.


 


(e)                                  Maximum
Award Amounts.  In no event
shall a Participant receive a Stock Award or Stock Awards during any one
calendar year covering in the aggregate more than 1,000,000  shares of Common Stock.


 


(f)                                    Investment
Assurances.  The Company
may require a Participant, as a condition of exercising or acquiring Common
Stock under any Stock Award (i) to give written assurances satisfactory to
the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or 


 


13

















 


she
is capable of evaluating, alone or together with the purchaser representative,
the merits and risks of exercising the Stock Award, and (ii) to give
written assurances satisfactory to the Company stating that the Participant is
acquiring Common Stock subject to the Stock Award for the Participant’s own account
and not with any present intention of selling or otherwise distributing the
Common Stock.  The foregoing
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (A) the issuance of the shares of Common Stock upon the
exercise or acquisition of Common Stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act, or (B) as to any particular requirement, a determination
is made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws.  The Company may, upon advice of counsel to
the Company, place legends on stock certificates issued under the Plan as such
counsel deems necessary or appropriate in order to comply with applicable
securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.


 


(g)                                 Withholding
Obligations.  To the
extent provided by the terms of a Stock Award Agreement, the Participant may
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of
such means:  (i) tendering a cash
payment, (ii) authorizing the Company to withhold shares of Common Stock
from the shares of Common Stock otherwise issuable to the Participant as a
result of the exercise or acquisition of Common Stock under the Stock Award, provided, however, that no shares of
Common Stock are withheld with a value exceeding the minimum amount of tax
required to be withheld by law, or (iii) delivering to the Company owned
and unencumbered shares of Common Stock.


 


(h)                                 Repurchase
Provisions.  The Company
shall exercise any repurchase option specified in the Stock Award by giving the
holder of the Stock Award written notice of intent to exercise the repurchase
option.  Payment may be cash or
cancellation of purchase money indebtedness for the Common Stock.  The terms of any repurchase option shall be
specified in the Stock Award and may be either at Fair Market Value at the time
of repurchase or at not less than the original purchase price.


 


(i)                                    Plan Unfunded.  The Plan shall
be unfunded.  Except for the Board’s
reservation of a sufficient number of authorized shares to the extent required
by law to meet the requirements of the Plan, the Company shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure payment of any Stock Award under the Plan.


 


12.                               ADJUSTMENTS
UPON CHANGES IN STOCK.


 


(a)                                  Capitalization
Adjustments.  In the event that any dividend or other
distribution (whether in the form of cash, shares of the Common Stock, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, exchange of Common Stock or other securities of the Company, or
other change in the corporate structure of the Company affecting the Common
Stock occurs, the Board, in order to prevent diminution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
shall appropriately adjust the number and class of Common Stock that may be
delivered under the Plan and/or the number, class, and price of Common Stock
covered by each outstanding Stock Award; provided however that no such
adjustment shall be made to any Stock Award to the extent that it would, in the
view of the Company, cause such Stock Award to be subject to Section 409A
of the Code. The Board shall 


 


14

















 


provide
holders of Restricted Stock Units a dividend equivalent right, pursuant to a
separate arrangement between the Company and any such holder, in the form of
additional shares of Common Stock or units, with respect to the unvested shares
of Common Stock or unvested units the Participant shall be entitled to receive
or purchase.


 


(b)                                  Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Board will notify each Participant as soon as
practicable prior to the effective date of such proposed transaction.  To the extent it has not been previously
exercised, a Stock Award will terminate immediately prior to the consummation
of such proposed action.


 


(c)                                  Change
in Control.  In the event of
Change in Control, then, to the extent permitted by applicable law:  (i) any surviving corporation may assume
any Stock Awards outstanding under the Plan or may substitute similar stock
awards (including an award to acquire the same consideration paid to the
shareholders in the transaction described in this Section 12(c)) for those
outstanding under the Plan, or (ii) in the event any surviving corporation
does not assume or continue such Stock Awards, or to substitute similar stock
awards for those outstanding under the Plan in accordance with the preceding
clause, then the time during which such Stock Awards may be exercised
automatically will be accelerated and become fully vested and exercisable
immediately prior to the consummation of such transaction, and the Stock Awards
shall automatically terminate upon consummation of such transaction if not
exercised prior to such event.


 


(d)                                  No Limitations.  The
grant of Stock Awards will in no way affect the Company’s right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.


 


13.                               AMENDMENT
OF THE PLAN AND STOCK AWARDS.


 


(a)                                  Amendment
of Plan.  The Board at
any time, and from time to time, may amend the Plan.  However, except as provided in Section 12
relating to adjustments upon changes in Common Stock, no amendment shall be
effective unless approved by the shareholders of the Company to the extent
shareholder approval is necessary to satisfy the applicable requirements of Section 422
or 162(m) of the Code and the Treasury Regulations thereunder, Rule 16b-3
or any Nasdaq or securities exchange listing requirements.  For purposes of clarity, any increase in the
number of shares reserved for issuance hereunder in accordance with the
provisions of Section 4(a) shall not be deemed to be an amendment to
the Plan; provided that any such adjustment that would increase the number of
shares of Common Stock that may be issued pursuant to Incentive Stock Options
(other than an increase merely reflecting a change in the number of outstanding
shares, such as a stock dividend or stock split), shall constitute an amendment
to the Plan requiring shareholder approval.


 


(b)                                  Contemplated
Amendments.  It is
expressly contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to Incentive Stock Options
and/or to bring the Plan and/or Incentive Stock Options granted under it into
compliance therewith.


 


15

















 


(c)                                  No
Impairment of Rights. 
Rights under any Stock Award granted before amendment of the Plan shall
not be impaired by any amendment of the Plan unless (i) the Company
requests the consent of the Participant and (ii) the Participant consents
in writing.


 


(d)                                  Amendment
of Stock Awards.  The Board at
any time, and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that the rights under
any Stock Award shall not be impaired by any such amendment unless (i) the
Company requests the consent of the Participant and (ii) the Participant
consents in writing.


 


14.                               TERMINATION
OR SUSPENSION OF THE PLAN.


 


(a)                                  Plan
Term.  The Board may suspend or
terminate the Plan at any time.  Unless
sooner terminated, the Plan shall terminate on the day before the tenth
anniversary of the date the Plan is adopted by the Board or approved by the
shareholders of the Company, whichever is later.  No Stock Awards may be granted under the Plan
while the Plan is suspended or after it is terminated.


 


(b)                                  No
Impairment of Rights. 
Suspension or termination of the Plan shall not impair rights and
obligations under any Stock Award granted while the Plan is in effect except
with the written consent of the Participant.


 


15.                               CHOICE
OF LAW.


 


The law of the State of
Delaware shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state’s conflict of laws
rules.


 


16.                               SECTION 409A.


 


(a)                                  Time
and Form of Payment. 
Notwithstanding anything contained in this Plan or in a Stock Award
Agreement to the contrary, the time and form of payment of a Stock Award that
is subject to the limitations imposed by Section 409A of the Code, shall
be set forth in the applicable Stock Award Agreement on or before the time at
which the Participant obtains a legally binding right to the Stock Award (or
such other time permitted under Section 409A of the Code) and such time
and form of payment shall comply with the requirements of Section 409A of
the Code.


 


(b)                                  Delay
in Payment. 
Notwithstanding anything contained in this Plan or a Stock Award
Agreement to the contrary, if the Participant is deemed by the Company at the
time of the Participant’s “separation from service” with the Company to be a “specified
employee” as determined under Section 409A of the Code, any “nonqualified
deferred compensation” to which the Participant is entitled in connection with
such separation from service after taking into account all applicable
exceptions from Section 409A, shall not be paid or commence payment until
the date that is the first business day following the six month period after
the Participant’s separation from service (or if earlier, the Participant’s
death).  Such delay in payment shall only
be effected with respect to each separate payment to the extent required to
avoid adverse tax treatment to the Participant under Section 409A of the
Code.  Any compensation which would have
otherwise been paid during the delay period (whether in a lump sum or in
installments) in the absence of this Section 16(b) shall be paid to
the Participant (or his or her beneficiary or estate) in a lump sum payment on
the first business day following the expiration of the delay period.


 


16

















 


(c)                                  Key
Definitions.  For purposes
of this Plan, the term “termination of employment” shall mean “separation from
service” and the terms “separation from service,” “specified employee” and “nonqualified
deferred compensation” shall have the meanings ascribed to the terms pursuant
to Section 409A and other applicable guidance.


 


(d)                                  Amendments.  Notwithstanding anything in the Plan to the
contrary, the Plan and Stock Awards granted under the Plan are intended to be
eligible for certain regulatory exceptions to the limitations of, or to comply
with, the requirements of Section 409A of the Code.  The Committee, in the exercise of its sole discretion
and without the consent of the Participant, may amend or modify the terms of a
Stock Award in any manner and delay the payment of any amounts payable pursuant
to a Stock Award to the minimum extent necessary to reasonably comply with the
requirements of Section 409A of the Code, provided that the Company shall
not be required to assume any increased economic burden.  No action taken by the Committee with respect
to the requirements of Section 409A of the Code shall be deemed to
adversely affect a Participant’s rights with respect to a Stock Award or to
require the consent of such Participant. 
The Committee reserves the right to make additional changes to the Plan
and Stock Awards from time to time to the extent it deems necessary with
respect to Section 409A of the Code.


 


17