Unassociated Document


    


    AIRSPAN
NETWORKS, INC.

     

    OMNIBUS
EQUITY COMPENSATION PLAN

     

    TABLE
OF CONTENTS

     

    
      	 
      	 
      	 
      	 
      	 
      
	
              ARTICLE I

            	
                

            	
              GENERAL
      PROVISIONS

            	
                

            	
              1

            
	 
      	 
      	 
      
	
              ARTICLE II

            	
                

            	
              DEFINITIONS

            	
                

            	
              1

            
	 
      	 
      	 
      
	
              ARTICLE III

            	
                

            	
              ADMINISTRATION

            	
                

            	
              5

            
	 
      	 
      	 
      
	
              ARTICLE IV

            	
                

            	
              INCENTIVE
      STOCK OPTIONS

            	
                

            	
              8

            
	 
      	 
      	 
      
	
              ARTICLE V

            	
                

            	
              NONQUALIFIED
      STOCK OPTIONS

            	
                

            	
              10

            
	 
      	 
      	 
      
	
              ARTICLE VI

            	
                

            	
              STOCK
      APPRECIATION RIGHTS

            	
                

            	
              11

            
	 
      	 
      	 
      
	
              ARTICLE VII

            	
                

            	
              INCIDENTS
      OF STOCK OPTIONS AND STOCK RIGHTS

            	
                

            	
              12

            
	 
      	 
      	 
      
	
              ARTICLE VIII

            	
                

            	
              RESTRICTED
      STOCK

            	
                

            	
              14

            
	 
      	 
      	 
      
	
              ARTICLE IX

            	
                

            	
              DEFERRED
      STOCK

            	
                

            	
              16

            
	 
      	 
      	 
      
	
              ARTICLE X

            	
                

            	
              STOCK
      AWARDS

            	
                

            	
              17

            
	 
      	 
      	 
      
	
              ARTICLE XI

            	
                

            	
              PERFORMANCE
      SHARES

            	
                

            	
              18

            
	 
      	 
      	 
      
	
              ARTICLE XII

            	
                

            	
              OTHER
      STOCK-BASED AWARDS

            	
                

            	
              19

            
	 
      	 
      	 
      
	
              ARTICLE XIII

            	
                

            	
              ACCELERATION
      EVENTS

            	
                

            	
              20

            
	 
      	 
      	 
      
	
              ARTICLE XIV

            	
                

            	
              AMENDMENT
      AND TERMINATION

            	
                

            	
              22

            
	 
      	 
      	 
      
	
              ARTICLE XV

            	
                

            	
              MISCELLANEOUS
      PROVISIONS

            	
                

            	
              23

            


    

     

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    ARTICLE
I

     

    GENERAL
PROVISIONS

     

    1.1 The
Plan is designed for the benefit of the directors, executives and key employees
of the Company (i) to attract and retain for the Company personnel of
exceptional ability; (ii) to motivate such personnel through added incentives to
make a maximum contribution to greater profitability; (iii) to develop and
maintain a highly competent management team; and (iv) to be competitive with
other companies with respect to executive compensation.

     

    1.2
Awards under the Plan may be made to Participants in the form of (i) Incentive
Stock Options; (ii) Nonqualified Stock Options; (iii) Stock Appreciation Rights;
(iv) Restricted Stock; (v) Deferred Stock; (vi) Stock Awards; (vii) Performance
Shares; (viii) Other Stock-Based Awards; and (ix) other forms of equity-based
compensation as may be provided and are permissible under this Plan and the
law.

     

    1.3 The
Plan shall be effective March 29, 2004 (the “Effective Date”), subject to the
approval of the Plan by a majority of the votes cast by the holders of the
Company’s Common Stock, which may be voted at the next annual or special
shareholder’s meeting. Any Awards granted under the Plan prior to such approval
shall be effective when made (unless otherwise specified by the Committee at the
time of grant) but shall be conditioned on, and subject to, the approval of the
Plan by the Company’s shareholders.

     

    ARTICLE
II

     

    DEFINITIONS

     

    Except
where the context otherwise indicates, the following definitions
apply:

     

    2.1
“Acceleration Event” means the occurrence of an event defined in Article XIII of
the Plan.

     

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

     

    2.3
“Agreement” means the written agreement evidencing each Award granted to a
Participant under the Plan.

     

    2.4
“Award” means an award granted to a Participant in accordance with the
provisions of the Plan, including, but not limited to, a Stock Option, Stock
Right, Restricted or Deferred Stock, Stock Award, Performance Share, Other
Stock-Based Award, or any combination of the foregoing.

     

    2.5
“Board” means the Board of Directors of the Company.

     

    2.6
“Change in Control” shall have the meaning set forth in Section 13.2 of the
Plan.

     

    2.7
“Change in Control Price” shall have the meaning set forth in Section 13.7 of
the Plan.

     

    2.8
“Code” means the Internal Revenue Code of 1986, as amended.

     

    2.9
“Committee” means the Compensation Committee of the Board.

     

    2.10
“Company” means Airspan Networks, Inc., a Washington Company.

     

    2.11
“Deferral Period” means the period commencing on the date an Award of Deferred
Stock is granted and ending on such date as the Committee shall
determine.

     

    2.12
“Deferred Stock” means the stock awarded under Article IX of the
Plan.

     

    2.13
“Disability” means disability as determined under procedures established by the
Committee or in any Award.

     

    2.14
“Discount Stock Options” means the Nonqualified Stock Options, which provide for
an exercise price of less than the Fair Market Value of the Stock at the date of
the Award.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.15
“Early Retirement” means retirement from active employment with the Company,
with the express consent of the Committee, pursuant to the early retirement
provisions established by the Committee or in any Award.

     

    2.16
“Effective Date” shall have the meaning set forth in Section 1.3 of the
Plan.

     

    2.17
“Elective Deferral Period” shall have the meaning set forth in Section 9.3 of
the Plan.

     

    2.18
“Eligible Participant” means any director, executive or key employee of the
Company, as shall be determined by the Committee, as well as any other person
whose participation the Committee determines is in the best interest of the
Company, subject to limitations as may be provided by the Code, the Act or the
Committee. For purposes of Article IV and Incentive Stock Options that may be
granted hereunder, the term “Eligible Participant” shall be limited to an
executive or other key employee meeting the qualifications for receipt of an
Incentive Stock Option under the provisions of Section 422 of the
Code.

     

    2.19
“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

     

    2.20
“Fair Market Value” means, with respect to any given day, the closing price of
the Stock reported on the Nasdaq National Market tier of The Nasdaq Stock Market
for such day, or if the Stock was not traded on the Nasdaq National Market tier
of The Nasdaq Stock Market on such day, then on the next day on which the Stock
was traded, all as reported by such source as the Committee may select. The
Committee may establish an alternative method of determining Fair Market
Value.

     

    2.21
“Incentive Stock Option” means a Stock Option granted under Article IV of the
Plan, and as defined in Section 422 of the Code.

     

    2.22
“Limited Stock Appreciation Rights” means a Stock Right which is exercisable
only in the event of a Change in Control, as described in Section 6.8 of this
Plan, which provides for an amount payable solely in cash, equal to the excess
of the Stock Appreciation Right Fair Market Value of a share of Stock on the day
the Stock Right is surrendered over the price at which a Participant could
exercise a related Stock Option to purchase the share of Stock.

     

    2.23
“Nonqualified Stock Option” means a Stock Option granted under Article V of the
Plan.

     

    2.24
“Normal Retirement” means retirement from active employment with the Company or
any Subsidiary on or after age 65, or pursuant to such other requirements as may
be established by the Committee or in any Award.

     

    2.25
“Option Grant Date” means, as to any Stock Option, the latest of:

     

    (a) the
date on which the Committee grants the Stock Option to the
Participant;

     

    (b) the
date the Participant receiving the Stock Option becomes an employee of the
Company or its Subsidiaries, to the extent employment status is a condition of
the grant or a requirement of the Code or the Act; or

     

    (c) such
other date (other than the dates described in (i) and (ii) above) as the
Committee may designate.

     

    2.26
“Other Stock-Based Award” means an Award under Article XII of the Plan that is
valued in whole or in part by reference to, or is otherwise based on,
Stock.

     

    2.27
“Participant” means an Eligible Participant to whom an Award of equity-based
compensation has been granted and who has entered into an Agreement evidencing
the Award.

     

    2.28
“Performance Share” means an Award under Article XI of the Plan of a unit valued
by reference to a designated number of shares of Stock, which value may be paid
to the Participant by delivery of such property as the Committee shall
determine, including, without limitation, cash, Stock, or any combination
thereof, upon achievement of such Performance Objectives during the Performance
Period as the Committee shall establish at the time of such Award or
thereafter.

     

    2.29
“Performance Objectives” shall have the meaning set forth in Article XI of the
Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.30
“Performance Period” shall have the meaning set forth in Article XI of the
Plan.

     

    2.31
“Plan” means the Airspan Networks, Inc. Omnibus Equity Compensation Plan, as
amended from time to time.

     

    2.32
“Related Stock Appreciation Right” shall have the meaning set forth in Section
6.1 of the Plan.

     

    2.33
“Restricted Stock” means an Award of Stock under Article VIII of the Plan, which
Stock is issued with the restriction that the holder may not sell, transfer,
pledge, or assign such Stock and with such other restrictions as the Committee,
in its sole discretion, may impose (including, without limitation, any
restriction on the right to vote such Stock, and the right to receive any cash
dividends), which restrictions may lapse separately or in combination at such
time or times, in installments or otherwise, as the Committee may deem
appropriate.

     

    2.34
“Restriction Period” means the period commencing on the date an Award of
Restricted Stock is granted and ending on such date as the Committee shall
determine.

     

    2.35
“Retirement” means Normal or Early Retirement.

     

    2.36
“Stock” means shares of common stock par value $.003 per share of the Company,
as may be adjusted pursuant to the provisions of Section 3.11.

     

    2.37
“Stock Appreciation Right” means a Stock Right, as described in Article VI of
this Plan, which provides for an amount payable in Stock and/or cash, as
determined by the Committee, equal to the excess of the Fair Market Value of a
share of Stock on the day the Stock Right is exercised over the price at which
the Participant could exercise a related Stock Option to purchase the share of
Stock.

     

    2.38
“Stock Appreciation Right Fair Market Value” means a value established by the
Committee for the exercise of a Stock Appreciation Right or a Limited Stock
Appreciation Right.

     

    2.39
“Stock Award” means an Award of Stock granted in payment of compensation, as
provided in Article X of the Plan.

     

    2.40
“Stock Option” means an Award under Article IV or V of the Plan of an option to
purchase Stock. A Stock Option may be either an Incentive Stock Option or a
Nonqualified Stock Option.

     

    2.41
“Stock Right” means an Award under Article VI of the Plan. A Stock Right may be
either a Stock Appreciation Right or a Limited Stock Appreciation
Right.

     

    2.42
“Termination of Employment” means the discontinuance of employment of a
Participant with the Company. The determination of whether a Participant has
discontinued employment shall be made by the Committee in its discretion. In
determining whether a Termination of Employment has occurred, the Committee may
provide that service as a consultant or service with a business enterprise in
which the Company has a significant ownership interest shall be treated as
employment with the Company. The Committee shall have the discretion,
exercisable either at the time the Award is granted or at the time the
Participant terminates employment, to establish as a provision applicable to the
exercise of one or more Awards that during the limited period of exercisability
following Termination of Employment, the Award may be exercised not only with
respect to the number of shares of Stock for which it is exercisable at the time
of the Termination of Employment but also with respect to one or more subsequent
installments for which the Award would have become exercisable had the
Termination of Employment not occurred.

     

    ARTICLE
III

     

    ADMINISTRATION

     

    3.1 This
Plan shall be administered by the Committee. Members of the Committee may vote
on any matters affecting the administration of the Plan or the grant of Awards
pursuant to the Plan, except that no such member shall act upon the granting of
an Award to himself or herself, but any such member may be counted in
determining the existence of a quorum at any meeting of the Committee or Board
during which action is taken with respect to the granting of an Award to such
member. The Committee, in its discretion, may delegate to one or more of its
members such of its powers, as it deems appropriate. The Committee also may
limit the power of any member to the extent necessary to comply with Rule 16b-3
under the Act or any other law. The Board, in its discretion, may require that
all or any final actions or determinations by the Committee be made by or be
subject to approval or ratification by the Board before becoming effective. To
the extent all or any decisions, actions, or determinations relating to the
administration of the Plan are made by the Board, the Board shall have all power
and authority granted to the Committee in this Article and otherwise in this
Plan, and for these purposes, all references to the “Committee” herein shall be
deemed to include the Board.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.2 The
Committee shall meet at such times and places as it determines. A majority of
its members shall constitute a quorum, and the decision of a majority of those
present at any meeting at which a quorum is present shall constitute the
decision of the Committee. A unanimous consent signed by all of the members of
the Committee shall constitute the decision of the Committee without necessity,
in such event, for holding an actual meeting.

     

    3.3 The
Committee shall have the exclusive right to interpret, construe and administer
the Plan, to select the persons who are eligible to receive an Award, and to act
in all matters pertaining to the granting of an Award and the contents of the
Agreement evidencing the Award, including, without limitation, the determination
of the number of Stock Options, Stock Rights, shares of Stock or Performance
Shares subject to an Award and the form, terms, conditions and duration of each
Award, and any amendment thereof consistent with the provisions of the Plan. All
acts, determinations and decisions of the Committee made or taken pursuant to
grants of authority under the Plan or with respect to any questions arising in
connection with the administration and interpretation of the Plan, including the
severability of any and all of the provisions thereof, shall be conclusive,
final and binding upon all Participants, Eligible Participants and their
beneficiaries.

     

    3.4 The
Committee may adopt such rules, regulations and procedures of general
application for the administration of this Plan, as it deems
appropriate.

     

    3.5
Without limiting the foregoing Sections 3.1, 3.2, 3.3 and 3.4, and
notwithstanding any other provisions of the Plan, the Committee is authorized to
take such action as it determines to be necessary or advisable, and fair and
equitable to Participants, with respect to an Award in the event of an
Acceleration Event as defined in Article XIII. Such action may include, but
shall not be limited to, establishing, amending or waiving the forms, terms,
conditions and duration of an Award and the Award Agreement, so as to provide
for earlier, later, extended or additional times for exercise or payments,
differing methods for calculating payments, alternate forms and amounts of
payment, an accelerated release of restrictions or other modifications. The
Committee may take such actions pursuant to this Section 3.5 by adopting rules
and regulations of general applicability to all Participants or to certain
categories of Participants, by including, amending or waiving terms and
conditions in an Award and the Award Agreement, or by taking action with respect
to individual Participants.

     

    3.6
Pursuant to an amendment to the Plan that was approved at the Company's May 29,
2008 Annual Meeting of Shareholders, the aggregate number of shares of
Stock, which are reserved for issuance under the Plan, shall be nine
million five hundred thousand (9,500,000). The aggregate number of shares of
stock reserved for issuance under the Plan shall be adjusted in accordance with
Section 3.11.

     

    (a) If,
for any reason, any shares of Stock or Performance Shares awarded or subject to
purchase under the Plan are not delivered or purchased, or are reacquired by the
Company, for reasons including, but not limited to, a forfeiture of Restricted
Stock or termination, expiration or cancellation of a Stock Option, Stock Right
or Performance Share, or any other termination of an Award without payment being
made in the form of Stock (whether or not Restricted Stock), such shares of
Stock or Performance Shares shall not be charged against the aggregate number of
shares of Stock available for Award under the Plan, and shall again be available
for Award under the Plan.

     

    (b) For
all purposes under the Plan, each Performance Share awarded shall be counted as
one share of Stock subject to an Award.

     

    (c) To
the extent a Stock Right granted in connection with a Stock Option is exercised
without payment being made in the form of Stock (whether or not Restricted
Stock), the shares of Stock which otherwise would have been issued upon the
exercise of such related Stock Option shall not be charged against the aggregate
number of shares of Stock subject to an Award under the Plan, and shall again be
available for Award under the Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.7 Each
Award granted under the Plan shall be evidenced by a written Award Agreement.
Each Award Agreement shall be subject to and incorporate (by reference or
otherwise) the applicable terms and conditions of the Plan, and any other terms
and conditions (not inconsistent with the Plan) required by the
Committee.

     

    3.8 The
Company shall not be required to issue or deliver any certificates for shares of
Stock prior to:

     

    (a) the
listing of such shares on any stock exchange on which the Stock may then be
listed; and

     

    (b) the
completion of any registration or qualification of such shares of Stock under
any federal or state law, or any ruling or regulation of any government body
which the Company shall, in its discretion, determine to be necessary or
advisable.

     

    3.9 All
certificates for shares of Stock delivered under the Plan shall also be subject
to such stop-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Stock is then listed
and any applicable federal or state laws, and the Committee may cause a legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions. In making such determination, the Committee may rely upon
an opinion of counsel for the Company.

     

    3.10
Subject to the restrictions on Restricted Stock, as provided in Article VIII of
the Plan and in the Restricted Stock Award Agreement, each Participant who
receives an Award of Restricted Stock shall have all of the rights of a
shareholder with respect to such shares of Stock, including the right to vote
the shares to the extent, if any, such shares possess voting rights and receive
dividends and other distributions. Except as provided otherwise in the Plan or
in an Award Agreement, no Participant awarded a Stock Option, Stock Right,
Deferred Stock, Stock Award or Performance Share shall have any right as a
shareholder with respect to any shares of Stock covered by his or her Stock
Option, Stock Right, Deferred Stock, Stock Award or Performance Share prior to
the date of issuance to him or her of a certificate or certificates for such
shares of Stock.

     

    3.11 If
any reorganization, recapitalization, reclassification, stock split-up, stock
dividend, or consolidation of shares of Stock, merger or consolidation of the
Company or its Subsidiaries or sale or other disposition by the Company or its
Subsidiaries of all or a portion of its assets, any other change in the
Company’s or its Subsidiaries’ corporate structure, or any distribution to
shareholders other than a cash dividend results in the outstanding shares of
Stock, or any securities exchanged therefor or received in their place, being
exchanged for a different number or class of shares of Stock or other securities
of the Company, or for shares of Stock or other securities of any other Company;
or new, different or additional shares or other securities of the Company or of
any other Company being received by the holders of outstanding shares of Stock,
then equitable adjustments shall be made by the Committee in:

     

    (a) the
limitation of the aggregate number of shares of Stock that may be awarded as set
forth in Sections 3.6, 3.16, and 4.1(e) (to the extent permitted under Section
422 of the Code) of the Plan;

     

    (b) the
number of shares and class of Stock that may be subject to an Award, and which
have not been issued or transferred under an outstanding Award;

     

    (c) the
purchase price to be paid per share of Stock under outstanding Stock Options and
the number of shares of Stock to be transferred in settlement of outstanding
Stock Rights; and

     

    (d) the
terms, conditions or restrictions of any Award and Award Agreement, including
the price payable for the acquisition of Stock; provided, however, that all
adjustments made as the result of the foregoing in respect of each Incentive
Stock Option shall be made so that such Stock Option shall continue to be an
Incentive Stock Option, as defined in Section 422 of the Code.

     

    3.12 In
addition to such other rights of indemnification as they may have as directors
or as members of the Committee, the members of the Committee shall be
indemnified by the Company against reasonable expenses, including attorney’s
fees, actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Award granted thereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment or settlement in any such action, suit or
proceeding, except as to matters as to which the Committee member has been
negligent or engaged in misconduct in the performance of his duties; provided,
that within sixty (60) days after institution of any such action, suit or
proceeding, a Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.13 The
Committee may require each person purchasing shares of Stock pursuant to a Stock
Option or other Award under the Plan to represent to and agree with the Company
in writing that he is acquiring the shares of Stock without a view to
distribution thereof. The certificates for such shares of Stock may include any
legend, which the Committee deems appropriate to reflect any restrictions on
transfer.

     

    3.14 The
Committee shall be authorized to make adjustments in a performance based
criteria or in the terms and conditions of other Awards in recognition of
unusual or nonrecurring events affecting the Company or its financial statements
or changes in applicable laws, regulations or accounting principles. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award Agreement in the manner and to the extent
it shall deem desirable to carry it into effect. In the event the Company (or
any Subsidiary, if applicable) shall assume outstanding employee benefit awards
or the right or obligation to make future such awards in connection with the
acquisition of another Company or business entity, the Committee may, in its
discretion, make such adjustments in the terms of Awards under the Plan as it
shall deem appropriate.

     

    3.15 The
Committee shall have full power and authority to determine whether, to what
extent and under what circumstances, any Award shall be canceled or suspended.
In particular, but without limitation, all outstanding Awards to any Participant
shall be canceled if (a) the Participant, without the consent of the Committee,
while employed by the Company or after termination of such employment, becomes
associated with, employed by, renders services to, or owns any interest in
(other than any nonsubstantial interest, as determined by the Committee), any
business that is in competition with the Company or with any business in which
the Company has a substantial interest as determined by the Committee; or (b) is
terminated for cause as determined by the Committee.

     

    3.16
Subject to the limitations of Section 3.6, the maximum number of shares of Stock
with respect to which an Award or Awards of Stock Options and/or Stock Rights
under the Plan may be granted during any calendar year to any participant shall
be five hundred thousand (500,000) shares.

     

    ARTICLE
IV

     

    INCENTIVE
STOCK OPTIONS

     

    4.1 Each
provision of this Article IV and of each Incentive Stock Option granted
hereunder shall be construed in accordance with the provisions of Section 422 of
the Code, and any provision hereof that cannot be so construed shall be
disregarded. Incentive Stock Options shall be granted only to Eligible
Participants, each of whom may be granted one or more such Incentive Stock
Options at such time or times determined by the Committee following the
Effective Date until ________, 2014, subject to the following
conditions:

     

    (a) The
Incentive Stock Option price per share of Stock shall be set in the Award
Agreement, but shall not be less than one hundred percent (100%) of the Fair
Market Value of the Stock at the time of the Option Grant Date.

     

    (b) The
Incentive Stock Option and its related Stock Right, if any, may be exercised in
full or in part from time to time within ten (10) years from the Option Grant
Date, or such shorter period as may be specified by the Committee in the Award;
provided, that in any event, the Incentive Stock Option and related Stock Right
shall lapse and cease to be exercisable upon, or within such period following, a
Termination of Employment as shall have been determined by the Committee and as
specified in the Incentive Stock Option Award Agreement or its related Stock
Right Award Agreement; provided, however, that such period following a
Termination of Employment shall not exceed three (3) months unless employment
shall have terminated:

     

    (i) as a
result of death or Disability, in which event, such period shall not exceed one
year after the date of death or Disability; and

     

    (ii) as a
result of death, if death shall have occurred following a Termination of
Employment and while the Incentive Stock Option or Stock Right was still
exercisable, in which event, such period shall not exceed one year after the
date of death;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    provided,
further, that such period following a Termination of Employment shall in no
event extend the original exercise period of the Incentive Stock Option or any
related Stock Right.

     

    (c) The
aggregate Fair Market Value, determined as of the Option Grant Date, of the
shares of Stock with respect to which Incentive Stock Options are exercisable
for the first time during any calendar year by any Eligible Participant shall
not exceed one hundred thousand dollars ($100,000); provided, however, to the
extent permitted under Section 422 of the Code:

     

    (i) if a
Participant’s employment is terminated by reason of death, Disability or
Retirement and the portion of any Incentive Stock Option that is otherwise
exercisable during the post-termination period applied without regard to the one
hundred thousand dollar ($100,000) limitation contained in Section 422 of the
Code is greater than the portion of such option that is immediately exercisable
as an Incentive Stock Option during such post-termination period under Section
422, such excess shall be treated as a Nonqualified Stock Option;
and

     

    (ii) if
the exercise of an Incentive Stock Option is accelerated by reason of an
Acceleration Event, any portion of such Award that is not exercisable as an
Incentive Stock Option by reason of the one hundred thousand dollar ($100,000)
limitation contained in Section 422 of the Code shall be treated as a
Nonqualified Stock Option.

     

    (d)
Incentive Stock Options shall be granted only to an Eligible Participant who, at
the time of the Option Grant Date, does not own Stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company;
provided, however, the foregoing restriction shall not apply if at the time of
the Option Grant Date the option price is at least one hundred ten percent
(110%) of the Fair Market Value of the Stock subject to the Incentive Stock
Option and such Incentive Stock Option by its terms is not exercisable after the
expiration of five (5) years from the Option Grant Date.

     

    (e) The
Committee may adopt any other terms and conditions which it determines should be
imposed for the Incentive Stock Option to qualify under Section 422 of the Code,
as well as any other terms and conditions not inconsistent with this Article IV
as determined by the Committee.

     

    4.2 The
Committee may at any time offer to buy out for a payment in cash, Stock,
Deferred Stock or Restricted Stock an Incentive Stock Option previously granted,
based on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time that such offer is made.

     

    4.3 If
the Incentive Stock Option Award Agreement so provides, the Committee may
require that all or part of the shares of Stock to be issued upon the exercise
of an Incentive Stock Option shall take the form of Deferred or Restricted
Stock, which shall be valued on the date of exercise, as determined by the
Committee, on the basis of the Fair Market Value of such Deferred Stock or
Restricted Stock determined without regard to the deferral limitations and/or
forfeiture restrictions involved.

     

    ARTICLE
V

     

    NONQUALIFIED
STOCK OPTIONS

     

    5.1 One
or more Stock Options may be granted as Nonqualified Stock Options to Eligible
Participants to purchase shares of Stock at such time or times determined by the
Committee, following the Effective Date, subject to the terms and conditions set
forth in this Article V.

     

    5.2 The
Nonqualified Stock Option price per share of Stock shall be established in the
Award Agreement and may be less than one hundred percent (100%) of the Fair
Market Value at the time of the grant, or at such later date as the Committee
shall determine.

     

    5.3 The
Nonqualified Stock Option and its related Stock Right, if any, may be exercised
in full or in part from time to time within such period as may be specified by
the Committee or in the Award Agreement; provided, that, in any event, the
Nonqualified Stock Option and the related Stock Right shall lapse and cease to
be exercisable upon, or within such period following, Termination of Employment
as shall have been determined by the Committee and as specified in the
Nonqualified Stock Option Award Agreement or Stock Right Award Agreement;
provided, however, that such period following Termination of Employment shall
not exceed three (3) months unless employment shall have
terminated:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a) as a
result of Retirement or Disability, in which event, such period shall not exceed
one year after the date of Retirement or Disability, or within such longer
period as the Committee may specify; and

     

    (b) as a
result of death, or if death shall have occurred following a Termination of
Employment and while the Nonqualified Stock Option or Stock Right was still
exercisable, in which event, such period may exceed one year after the date of
death, as provided by the Committee or in the Award Agreement.

     

    5.4 The
Nonqualified Stock Option Award Agreement may include any other terms and
conditions not inconsistent with this Article V or with Article VII, as
determined by the Committee.

     

    ARTICLE
VI

     

    STOCK
APPRECIATION RIGHTS

     

    6.1 A
Stock Appreciation Right may be granted to an Eligible Participant in connection
with an Incentive Stock Option or a Nonqualified Stock Option granted under
Article IV or Article V of this Plan (a “Related Stock Appreciation Right”), or
may be granted independent of any related Incentive or Nonqualified Stock
Option.

     

    6.2 A
Related Stock Appreciation Right shall entitle a holder of a Stock Option,
within the period specified for the exercise of the Stock Option, to surrender
the unexercised Stock Option (or a portion thereof) and to receive in exchange
therefor a payment in cash or shares of Stock having an aggregate value equal to
the amount by which the Fair Market Value of each share of Stock exceeds the
Stock Option price per share of Stock, times the number of shares of Stock under
the Stock Option, or portion thereof, which is surrendered.

     

    6.3 Each
Related Stock Appreciation Right granted hereunder shall be subject to the same
terms and conditions as the related Stock Option, including limitations on
transferability, if any, and shall be exercisable only to the extent such Stock
Option is exercisable and shall terminate or lapse and cease to be exercisable
when the related Stock Option terminates or lapses. The grant of a Related Stock
Appreciation Right related to an Incentive Stock Option must be concurrent with
the grant of the Incentive Stock Option. With respect to Nonqualified Stock
Options, the grant of a Related Stock Appreciation Right either may be
concurrent with the grant of the Nonqualified Stock Option, or subsequent to the
grant of the Nonqualified Stock Option, in connection with a Nonqualified Stock
Option previously granted under Article V, which is unexercised and has not
terminated or lapsed.

     

    6.4 The
Committee shall have the sole discretion to determine, in each case whether the
payment with respect to the exercise of a Stock Appreciation Right shall be made
in the form of all cash, all Stock, or any combination thereof. If payment is to
be made in Stock, the number of shares of Stock shall be determined based on the
Fair Market Value of the Stock on the date of exercise of the Stock Appreciation
Right. If the Committee elects to make full payment in Stock, no fractional
shares of Stock shall be issued and cash payments shall be made in lieu of
fractional shares.

     

    6.5 The
Committee shall have sole discretion as to the timing of any payment made in
cash, Stock, or a combination thereof upon exercise of a Stock Appreciation
Right. Payment may be made in a lump sum, in annual installments or may be
otherwise deferred and the Committee shall have sole discretion to determine
whether any deferred payments may bear amounts equivalent to interest or cash
dividends.

     

    6.6 Upon
the exercise of a Related Stock Appreciation Right, the number of shares of
Stock subject to exercise under any related Stock Option shall automatically be
reduced by the number of shares of Stock represented by the Stock Option or
portion thereof which is surrendered.

     

    6.7 The
Committee, in its sole discretion, may also provide that, in the event of a
Change in Control, the amount to be paid upon the exercise of a Stock
Appreciation Right or Limited Stock Appreciation Right shall be based on the
Change in Control Price, subject to such terms and conditions as the Committee
may specify at grant.

     

    6.8 In
its sole discretion, the Committee may grant Limited Stock Appreciation Rights
under this Article VI. Limited Stock Appreciation Rights shall become
exercisable only in the event of a Change in Control, subject to such terms and
conditions as the Committee, in its sole discretion, may specify at grant. Such
Limited Stock Appreciation Rights shall be settled solely in cash. A Limited
Stock Appreciation Right shall entitle the holder of the related Stock Option to
surrender such Stock Option, or any portion thereof, to the extent unexercised,
in respect of the number of shares of Stock as to which such Limited Stock
Appreciation Right is exercised, and to receive a cash payment equal to the
difference between (a) the Stock Appreciation Right Fair Market Value (at the
date of surrender) of a share of Stock for which the surrendered Stock Option or
portion thereof is then exercisable, and (b) the price at which a Participant
could exercise a related Stock Option to purchase the share of Stock. Such Stock
Option shall, to the extent so surrendered, thereupon cease to be exercisable. A
Limited Stock Appreciation Right shall be subject to such further terms and
conditions as the Committee shall, in its sole discretion, deem
appropriate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
VII

     

    INCIDENTS
OF STOCK OPTIONS AND STOCK RIGHTS

     

    7.1 Each
Stock Option and Stock Right shall be granted subject to such terms and
conditions, if any, not inconsistent with this Plan, as shall be determined by
the Committee, including any provisions as to continued employment as
consideration for the grant or exercise of such Stock Option or Stock Right and
any provisions which may be advisable to comply with applicable laws,
regulations or rulings of any governmental authority.

     

    7.2 An
Incentive Stock Option and its related Stock Right, if any, shall not be
transferable by the Participant other than by will or by the laws of descent and
distribution, and shall be exercisable during the lifetime of the Participant
only by him or by his guardian or legal representative. A Nonqualified Stock
Option and its related Stock Right, if any, shall be subject to the
transferability and exercisability restrictions of the immediately preceding
sentence unless otherwise determined by the Committee, in its sole discretion,
and set forth in the applicable Award Agreement.

     

    7.3
Shares of Stock purchased upon exercise of a Stock Option shall be paid for in
such amounts, at such times and upon such terms as shall be determined by the
Committee, subject to limitations set forth in the Stock Option Award Agreement.
Without limiting the foregoing, the Committee may establish payment terms for
the exercise of Stock Options which permit the Participant to deliver shares of
Stock (or other evidence of ownership of Stock satisfactory to the Company) with
a Fair Market Value equal to the exercise price of the Stock Option as
payment.

     

    7.4 No
cash dividends shall be paid on shares of Stock subject to unexercised Stock
Options. The Committee may provide, however, that a Participant to whom a Stock
Option has been granted which is exercisable in whole or in part at a future
time shall be entitled to receive an amount per share equal in value to the cash
dividends, if any, paid per share on issued and outstanding Stock, as of the
dividend record dates occurring during the period between the date of the grant
and the time each such share of Stock is delivered pursuant to exercise of such
Stock Option or the related Stock Right. Such amounts (herein called “dividend
equivalents”) may, in the discretion of the Committee, be:

     

    (a) paid
in cash or Stock either from time to time prior to, or at the time of the
delivery of, such Stock, or upon expiration of the Stock Option if it shall not
have been fully exercised; or

     

    (b)
converted into contingently credited shares of Stock (with respect to which
dividend equivalents may accrue) in such manner, at such value, and deliverable
at such time or times, as may be determined by the Committee. Such Stock
(whether delivered or contingently credited) shall be charged against the
limitations set forth in Section 3.6.

     

    7.5 The
Committee, in its sole discretion, may authorize payment of interest equivalents
on dividend equivalents which are payable in cash at a future time.

     

    7.6 In
the event of death or Disability, the Committee, with the consent of the
Participant or his legal representative, may authorize payment, in cash or in
Stock, or partly in cash and partly in Stock, as the Committee may direct, of an
amount equal to the difference at the time between the Fair Market Value of the
Stock subject to a Stock Option and the exercise price of the Option in
consideration of the surrender of the Stock Option.

     

    7.7 If a
Participant is required to pay to the Company an amount with respect to income
and employment tax withholding obligations in connection with exercise of a
Nonqualified Stock Option and/or with respect to certain dispositions of Stock
acquired upon the exercise of an Incentive Stock Option, the Committee, in its
discretion and subject to such rules as it may adopt, may permit the Participant
to satisfy the obligation, in whole or in part, by making an irrevocable
election that a portion of the total Fair Market Value of the shares of Stock
subject to the Nonqualified Stock Option and/or with respect to certain
dispositions of Stock acquired upon the exercise of an Incentive Stock Option,
be paid in the form of cash in lieu of the issuance of Stock and that such cash
payment be applied to the satisfaction of the withholding obligations. The
amount to be withheld shall not exceed the statutory minimum Federal and State
income and employment tax liability arising from the Stock Option exercise
transaction.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.8 The
Committee may permit the voluntary surrender of all or a portion of any Stock
Option granted under the Plan to be conditioned upon the granting to the
Participant of a new Stock Option for the same or a different number of shares
of Stock as the Stock Option surrendered, or may require such voluntary
surrender as a condition precedent to a grant of a new Stock Option to such
Participant. Subject to the provisions of the Plan, such new Stock Option shall
be exercisable at the same price, during such period and on such other terms and
conditions as are specified by the Committee at the time the new Stock Option is
granted. Upon surrender, the Stock Options surrendered shall be canceled and the
shares of Stock previously subject to them shall be available for the grant of
Awards under the Plan.

     

    ARTICLE
VIII

     

    RESTRICTED
STOCK

     

    8.1
Restricted Stock Awards may be made to certain Participants as an incentive for
the performance of future services that will contribute materially to the
successful operation of the Company. Awards of Restricted Stock may be made
either alone, in addition to or in conjunction with other Awards granted under
the Plan and/or cash payments made outside of the Plan.

     

    8.2 With
respect to Awards of Restricted Stock, the Committee shall:

     

    (a)
determine the purchase price, if any, to be paid for such Restricted Stock,
which may be equal to or less than par value and may be zero, subject to such
minimum consideration as may be required by applicable law;

     

    (b)
determine the length of the Restriction Period;

     

    (c)
determine any restrictions applicable to the Restricted Stock such as service or
performance, other than those set forth in this Article VIII;

     

    (d)
determine if the restrictions shall lapse as to all shares of Restricted Stock
at the end of the Restriction Period or as to a portion of the shares of
Restricted Stock in installments during the Restriction Period; and

     

    (e)
determine if dividends and other distributions on the Restricted Stock are to be
paid currently to the Participant or withheld by the Company for the account of
the Participant.

     

    8.3
Awards of Restricted Stock must be accepted within a period of sixty (60) days
(or such shorter periods as the Committee may specify at grant) after the date
of the Award of Restricted Stock, by executing a Restricted Stock Award
Agreement and paying whatever price (if any) is required.

     

    The
prospective recipient of a Restricted Stock Award shall not have any rights with
respect to such Award, unless such recipient has executed a Restricted Stock
Award Agreement and has delivered a fully executed copy thereof to the
Committee, and has otherwise complied with the applicable terms and conditions
of such Award.

     

    8.4
Except when the Committee determines otherwise, or as otherwise provided in the
Restricted Stock Award Agreement, if a Participant terminates employment with
the Company for any reason before the expiration of the Restriction Period, all
shares of Restricted Stock still subject to restriction shall be forfeited by
the Participant and shall be reacquired by the Company.

     

    8.5
Except as otherwise provided in this Article VIII, no shares of Restricted Stock
received by a Participant shall be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of during the Restriction
Period.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8.6 To
the extent not otherwise provided in a Restricted Stock Award Agreement, in
cases of death, Disability or Retirement or in cases of special circumstances,
the Committee, if it finds that a waiver would be appropriate, may elect to
waive any or all remaining restrictions with respect to such Participant’s
Restricted Stock.

     

    8.7 In
the event of hardship or other special circumstances of a Participant whose
employment with the Company is involuntarily terminated (other than for cause),
the Committee may waive in whole or in part any or all remaining restrictions
with respect to any or all of the Participant’s Restricted Stock, based on such
factors and criteria as the Committee may deem appropriate.

     

    8.8 The
certificates representing shares of Restricted Stock may either:

     

    (a) be
held in custody by the Company until the Restriction Period expires or until
restrictions thereon otherwise lapse, and the Participant shall deliver to the
Company a stock power endorsed in blank relating to the Restricted Stock;
and/or

     

    (b) be
issued to the Participant and registered in the name of the Participant, and
shall bear an appropriate restrictive legend and shall be subject to appropriate
stop-transfer orders.

     

    8.9
Except as provided in this Article VIII, a Participant receiving a Restricted
Stock Award shall have, with respect to the shares of Restricted Stock covered
by any Award, all of the rights of a shareholder of the Company, including the
right to vote the shares to the extent, if any, such shares possess voting
rights, and the right to receive any dividends; provided, however, the Committee
may require that any dividends on such shares of Restricted Stock shall be
automatically deferred and reinvested in additional Restricted Stock subject to
the same restrictions as the underlying Award, or may require that dividends and
other distributions on Restricted Stock shall be withheld by the Company for the
account of the Participant. The Committee shall determine whether interest shall
be paid on amounts withheld, the rate of any such interest, and the other terms
applicable to such withheld amounts.

     

    8.10 If
and when the Restriction Period expires without a prior forfeiture of the
Restricted Stock subject to such Restriction Period, unrestricted certificates
for such shares shall be delivered to the Participant.

     

    8.11 In
order to better ensure that Award grants actually reflect the performance of the
Company and the service of the Participant, the Committee may provide, in its
sole discretion, for a tandem performance-based or other Award designed to
guarantee a minimum value, payable in cash or Stock to the recipient of a
Restricted Stock Award, subject to such performance, future service, deferral
and other terms and conditions as may be specified by the
Committee.

     

    ARTICLE
IX

     

    DEFERRED
STOCK

     

    9.1
Shares of Deferred Stock (together with cash dividend equivalents, if so
determined by the Committee) may be issued either alone or in addition to other
Awards granted under the Plan in the discretion of the Committee. The Committee
shall determine the individuals to whom, and the time or times at which, such
Awards will be made, the number of shares to be awarded, the price (if any) to
be paid by the recipient of a Deferred Stock Award, the time or times within
which such Awards may be subject to forfeiture, and all other conditions of the
Awards. The Committee may condition Awards of Deferred Stock upon the attainment
of specified performance goals or such other factors or criteria as the
Committee may determine.

     

    9.2
Deferred Stock Awards shall be subject to the following terms and
conditions:

     

    (a)
Subject to the provisions of this Plan and the applicable Deferred Stock Award
Agreement, Deferred Stock Awards may not be sold, transferred, pledged, assigned
or otherwise encumbered during the Deferral Period. At the expiration of the
Deferral Period (or the Elective Deferral Period defined in Section 9.3), share
certificates shall be delivered to the Participant, or his legal representative,
in a number equal to the number of shares of Stock covered by the Deferred Stock
Award. Notwithstanding the foregoing, based on service, performance and/or such
other factors or criteria as the Committee may determine, the Committee, at or
after the date of the grant, may accelerate the vesting of all or any part of
any Deferred Stock Award and/or waive the deferral limitations for all or any
part of such Deferred Stock Award.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
Unless otherwise determined by the Committee, amounts equal to any dividends
that would have been payable during the Deferral Period with respect to the
number of shares of Stock covered by a Deferred Stock Award if such shares of
Stock had been outstanding shall be automatically deferred and deemed to be
reinvested in additional Deferred Stock, subject to the same deferral
limitations as the underlying Deferred Stock Award.

     

    (c)
Except to the extent otherwise provided in this Plan or in the applicable
Deferred Stock Award Agreement, upon Termination of Employment during the
Deferral Period for a given Award, the Deferred Stock covered by such Award
shall be forfeited by the Participant; provided, however, the Committee may
provide for accelerated vesting in the event of Termination of Employment due to
death, Disability or Retirement, or in the event of hardship or other special
circumstances as the Committee deems appropriate.

     

    (d) The
Committee may require that a designated percentage of the total Fair Market
Value of the shares of Deferred Stock held by one or more Participants be paid
in the form of cash in lieu of the issuance of Stock and that such cash payment
be applied to the satisfaction of the federal and state income and employment
tax withholding obligations that arise at the time the Deferred Stock becomes
free of all restrictions. The designated percentage shall be equal to the income
and employment tax withholding rate in effect at the time under federal and
applicable state laws.

     

    (e) The
Committee may provide one or more Participants subject to the mandatory cash
payment with an election to receive an additional percentage of the total value
of the Deferred Stock in the form of a cash payment in lieu of the issuance of
Deferred Stock. The additional percentage shall not exceed the difference
between fifty percent (50%) and the designated percentage cash
payment.

     

    (f) The
Committee may impose such further terms and conditions on partial cash payments
with respect to Deferred Stock as it deems appropriate.

     

    9.3 A
Participant may elect to further defer receipt of Deferred Stock for a specified
period or until a specified event (the “Elective Deferral Period”), subject in
each case to the Committee’s approval and to such terms as are determined by the
Committee. Subject to any exceptions adopted by the Committee, such election
must generally be made at least twelve (12) months prior to completion of the
Deferral Period for the Deferred Stock Award in question (or for the applicable
installment of such an Award).

     

    9.4 Each
Award shall be confirmed by, and subject to the terms of, a Deferred Stock Award
Agreement.

     

    9.5 In
order to better ensure that the Award actually reflects the performance of the
Company and the service of the Participant, the Committee may provide, in its
sole discretion, for a tandem performance-based or other Award designed to
guarantee a minimum value, payable in cash or Stock to the recipient of a
Deferred Stock Award, subject to such performance, future service, deferral and
other terms and conditions as may be specified by the Committee.

     

    ARTICLE
X

     

    STOCK
AWARDS

     

    10.1 A
Stock Award shall be granted only in payment of compensation that has been
earned or as compensation to be earned, including, without limitation,
compensation awarded concurrently with or prior to the grant of the Stock
Award.

     

    10.2 For
the purposes of this Plan, in determining the value of a Stock Award, all shares
of Stock subject to such Stock Award shall be valued at not less than one
hundred percent (100%) of the Fair Market Value of such shares of Stock on the
date such Stock Award is granted, regardless of whether or when such shares of
Stock are issued or transferred to the Participant and whether or not such
shares of Stock are subject to restrictions which affect their
value.

     

    10.3
Shares of Stock subject to a Stock Award may be issued or transferred to the
Participant at the time the Stock Award is granted, or at any time subsequent
thereto, or in installments from time to time, as the Committee shall determine.
If any such issuance or transfer shall not be made to the Participant at the
time the Stock Award is granted, the Committee may provide for payment to such
Participant, either in cash or shares of Stock, from time to time or at the time
or times such shares of Stock shall be issued or transferred to such
Participant, of amounts not exceeding the dividends which would have been
payable to such Participant in respect of such shares of Stock (as adjusted
under Section 3.11) if such shares of Stock had been issued or transferred to
such Participant at the time such Stock Award was granted. Any issuance payable
in shares of Stock under the terms of a Stock Award, at the discretion of the
Committee, may be paid in cash on each date on which delivery of shares of Stock
would otherwise have been made, in an amount equal to the Fair Market Value on
such date of the shares of Stock which would otherwise have been
delivered.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.4 A
Stock Award shall be subject to such terms and conditions, including, without
limitation, restrictions on the sale or other disposition of the Stock Award or
of the shares of Stock issued or transferred pursuant to such Stock Award, as
the Committee shall determine; provided, however, that upon the issuance or
transfer of shares pursuant to a Stock Award, the Participant, with respect to
such shares of Stock, shall be and become a shareholder of the Company fully
entitled to receive dividends, to vote to the extent, if any, such shares
possess voting rights and to exercise all other rights of a shareholder except
to the extent otherwise provided in the Stock Award. Each Stock Award shall be
evidenced by a written Award Agreement in such form as the Committee shall
determine.

     

    ARTICLE
XI

     

    PERFORMANCE
SHARES

     

    11.1
Awards of Performance Shares may be made to certain Participants as an incentive
for the performance of future services that will contribute materially to the
successful operation of the Company. Awards of Performance Shares may be made
either alone, in addition to or in tandem with other Awards granted under the
Plan and/or cash payments made outside of the Plan.

     

    11.2 With
respect to Awards of Performance Shares, which may be issued for no
consideration or such minimum consideration as is required by applicable law,
the Committee shall:

     

    (a)
determine and designate from time to time those Participants to whom Awards of
Performance Shares are to be made;

     

    (b)
determine the performance period (the “Performance Period”) and/or performance
objectives (the “Performance Objectives”) applicable to such
Awards;

     

    (c)
determine the form of settlement of a Performance Share; and

     

    (d)
generally determine the terms and conditions of each such Award. At any date,
each Performance Share shall have a value equal to the Fair Market Value,
determined as set forth in Section 2.15.

     

    11.3
Performance Periods may overlap, and Participants may participate simultaneously
with respect to Performance Shares for which different Performance Periods are
prescribed.

     

    11.4 The
Committee shall determine the Performance Objectives of Awards of Performance
Shares. Performance Objectives may vary from Participant to Participant and
between Awards and shall be based upon such performance criteria or combination
of factors as the Committee may deem appropriate, including for example, but not
limited to, minimum earnings per share or return on equity. If during the course
of a Performance Period there shall occur significant events which the Committee
expects to have a substantial effect on the applicable Performance Objectives
during such period, the Committee may revise such Performance
Objectives.

     

    11.5 The
Committee shall determine for each Participant the number of Performance Shares
which shall be paid to the Participant if the applicable Performance Objectives
are exceeded or met in whole or in part.

     

    11.6 If a
Participant terminates service with the Company during a Performance Period
because of death, Disability, Retirement or under other circumstances in which
the Committee in its discretion finds that a waiver would be appropriate, that
Participant, as determined by the Committee, may be entitled to a payment of
Performance Shares at the end of the Performance Period based upon the extent to
which the Performance Objectives were satisfied at the end of such period and
pro rated for the portion of the Performance Period during which the Participant
was employed by the Company; provided, however, the Committee may provide for an
earlier payment in settlement of such Performance Shares in such amount and
under such terms and conditions as the Committee deems appropriate or desirable.
If a Participant terminates service with the Company during a Performance Period
for any other reason, then such Participant shall not be entitled to any payment
with respect to that Performance Period unless the Committee shall otherwise
determine.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    11.7 Each
Award of a Performance Share shall be paid in whole shares of Stock, or cash, or
a combination of Stock and cash as the Committee shall determine, with payment
to be made as soon as practicable after the end of the relevant Performance
Period.

     

    11.8 The
Committee shall have the authority to approve requests by Participants to defer
payment of Performance Shares on terms and conditions approved by the Committee
and set forth in a written Award Agreement between the Participant and the
Company entered into in advance of the time of receipt or constructive receipt
of payment by the Participant.

     

    ARTICLE
XII

     

    OTHER
STOCK-BASED AWARDS

     

    12.1
Other awards of Stock and other awards that are valued in whole or in part by
reference to, or are otherwise based on, Stock (“Other Stock-Based Awards”),
including, without limitation, convertible preferred stock, convertible
debentures, exchangeable securities, phantom stock and Stock awards or options
valued by reference to book value or performance, may be granted either alone or
in addition to or in tandem with Stock Options, Stock Rights, Restricted Stock,
Deferred Stock or Stock Awards granted under the Plan and/or cash awards made
outside of the Plan. Subject to the provisions of the Plan, the Committee shall
have authority to determine the Eligible Participants to whom and the time or
times at which such Awards shall be made, the number of shares of Stock subject
to such Awards, and all other conditions of the Awards. The Committee also may
provide for the grant of shares of Stock upon the completion of a specified
Performance Period. The provisions of Other Stock-Based Awards need not be the
same with respect to each recipient.

     

    12.2
Other Stock-Based Awards made pursuant to this Article XII shall be subject to
the following terms and conditions:

     

    (a)
Subject to the provisions of this Plan and the Award Agreement, shares of Stock
subject to Awards made under this Article XII may not be sold, assigned,
transferred, pledged or otherwise encumbered prior to the date on which the
shares are issued, or, if later, the date on which any applicable restriction,
performance or deferral period lapses.

     

    (b)
Subject to the provisions of this Plan and the Award Agreement and unless
otherwise determined by the Committee at the time of the Award, the recipient of
an Award under this Article XII shall be entitled to receive, currently or on a
deferred basis, interest or dividends or interest or dividend equivalents with
respect to the number of shares covered by the Award, as determined at the time
of the Award by the Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested in
additional Stock or otherwise reinvested.

     

    (c) Any
Award under this Article XII and any Stock covered by any such Award shall vest
or be forfeited to the extent so provided in the Award Agreement, as determined
by the Committee, in its sole discretion.

     

    (d) Upon
the Participant’s Retirement, Disability or death, or in cases of special
circumstances, the Committee may, in its sole discretion, waive in whole or in
part any or all of the remaining limitations imposed hereunder (if any) with
respect to any or all of an Award under this Article XII.

     

    (e) Each
Award under this Article XII shall be confirmed by, and subject to the terms of,
an Award Agreement.

     

    (f) Stock
(including securities convertible into Stock) issued on a bonus basis under this
Article XII may be issued for no cash consideration.

     

    12.3
Other Stock-Based Awards may include a phantom stock Award, which is subject to
the following terms and conditions:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (a) The
Committee shall select the Eligible Participants who may receive phantom stock
Awards. The Eligible Participant shall be awarded a phantom stock unit, which
shall be the equivalent to a share of Stock.

     

    (b) Under
an Award of phantom stock, payment shall be made on the dates or dates as
specified by the Committee or as stated in the Award Agreement and phantom stock
Awards may be settled in cash, Stock, or some combination thereof.

     

    (c) The
Committee shall determine such other terms and conditions of each Award as it
deems necessary in its sole discretion.

     

    ARTICLE
XIII

     

    ACCELERATION
EVENTS

     

    13.1 For
the purposes of the Plan, an Acceleration Event shall occur in the event of a
“Change in Control”.

     

    13.2 A
“Change in Control” shall be deemed to have occurred if:

     

    (a) Any
“Person” as defined in Section 3(a)(9) of the Act, including a “group” (as that
term is used in Sections 13(d)(3) and 14(d)(2) of the Act), but excluding the
Company and any employee benefit plan sponsored or maintained by the Company and
(including any trustee of such plan acting as trustee) who:

     

     (i)
makes a tender or exchange offer for any shares of the Company’s Stock (as
defined below) pursuant to which any shares of the Company’s Stock are purchased
(an “Offer”); or

     

    (ii)
together with its “affiliates” and “associates” (as those terms are defined in
Rule 12b-2 under the Act) becomes the “Beneficial Owner” (within the meaning of
Rule 13d-3 under the Act) of at least fifty percent (50%) of the Company’s Stock
(an “Acquisition”);

     

    (b) The
shareholders of the Company approve a definitive agreement or plan (i) to merge
or consolidate the Company with or into another Company and (x) the Company
shall not be the surviving corporation or (y) the Company shall be the surviving
corporation and in connection therewith, all or part of the outstanding stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, (ii) to sell or otherwise dispose of 50%
or more of its assets, or (iii) to liquidate the Company;

     

    (c) The
Company shall be a party to a statutory share exchange with any other Person
after which the Company is a subsidiary of any other Person; or

     

    (d) When,
as a result of, or in connection with, any tender or exchange offer, merger or
other business combination, sale of assets or contested election, or any
combination of the foregoing, the individuals who, prior to such transaction,
constitute the Board (the “Incumbent Directors”) cease for any reason other than
death to constitute at least a majority thereof.

     

    13.3 Upon
the occurrence of an Acceleration Event, the Committee may, in its discretion,
declare that all then outstanding Performance Shares with respect to which the
applicable Performance Period has not been completed shall be paid as soon as
practicable as follows:

     

    (a) all
Performance Objectives applicable to the Award of Performance Shares shall be
deemed to have been satisfied to the extent necessary to result in payment of
one hundred percent (100%) of the Performance Shares covered by the Award;
and

     

    (b) the
applicable Performance Period shall be deemed to have ended on the date of the
Acceleration Event;

     

    (c) the
payment to the Participant shall be the amount determined either by the
Committee, in its sole discretion, or in the manner stated in the Award
Agreement. This amount shall then be multiplied by a fraction, the numerator of
which is the number of full calendar months of the applicable Performance Period
that have elapsed prior to the date of the Acceleration Event, and the
denominator of which is the total number of months in the original Performance
Period; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) upon
the making of any such payment, the Award Agreement as to which it relates shall
be deemed canceled and of no further force and effect.

     

    13.4 Upon
the occurrence of an Acceleration Event, the Committee, in its discretion, may
declare that 50% of all then outstanding Stock Options not previously
exercisable and vested as immediately exercisable and fully vested, in whole or
in part. Notwithstanding the foregoing sentence, the percentage of outstanding
Stock Options which may become immediately exercisable and fully vested upon the
Acceleration Event may, in the Committee’s discretion, be higher or lower than
50%.

     

    13.5 Upon
the occurrence of an Acceleration Event, the Committee, in its discretion, may
declare the restrictions applicable to Awards of Restricted Stock, Deferred
Stock or Other Stock- Based Awards to have lapsed, in which case the Company
shall remove all restrictive legends and stop-transfer orders applicable to the
certificates for such shares of Stock, and deliver such certificates to the
Participants in whose names they are registered.

     

    13.6 The
value of all outstanding Stock Option, Stock Rights, Restricted Stock, Deferred
Stock, Performance Shares, Stock Awards and Other Stock-Based Awards, in each
case to the extent vested, shall, unless otherwise determined by the Committee
in its sole discretion at or after grant but prior to any Change in Control, be
cashed out on the basis of the “Change in Control Price,” as defined in Section
13.9 as of the date such Change in Control is determined to have occurred or
such other date as the Committee may determine prior to the Change in
Control.

     

    13.7 For
purposes of Section 13.7, “Change in Control Price” means the highest price per
share of Stock paid in any transaction reported on the Nasdaq National Market
tier of The Nasdaq Stock Market, or paid or offered in any bona fide transaction
related to a Potential or actual Change in Control of the Company at any time
during the sixty (60) day period immediately preceding the occurrence of the
Change in Control, in each case as determined by the Committee except that, in
the case of Incentive Stock Options and Stock Appreciation Rights (or Limited
Stock Appreciation Rights) relating to such Incentive Stock Options, such price
shall be based only on transactions reported for the date on which the optionee
exercises such Stock Appreciation Rights (or Limited Stock Appreciation
Rights).

     

    ARTICLE
XIV

     

    AMENDMENT
AND TERMINATION

     

    14.1 The
Board, upon recommendation of the Committee, or otherwise, at any time and from
time to time, may amend or terminate the Plan as may be necessary or desirable
to implement or discontinue this Plan or any provision thereof. No amendment,
without approval by the Company’s shareholders, shall:

     

    (a) alter
the group of persons eligible to participate in the Plan;

     

    (b)
except as provided in Sections 3.6 and 3.11, increase the maximum number of
shares of Stock or Stock Options or Stock Rights which are available for Awards
under the Plan or increase the maximum number of shares with respect to which
Stock Options or Stock Rights may be granted to any employee under the
Plan;

     

    (c)
extend the period during which Incentive Stock Option Awards may be granted
beyond June 12, 2006;

     

     (d)
limit or restrict the powers of the Board and the Committee with respect to the
administration of this Plan; or

     

    (e)
change any of the provisions of this Article XIV.

     

    14.2 No
amendment to or discontinuance of this Plan or any provision thereof by the
Board or the shareholders of the Company shall, without the written consent of
the Participant, adversely affect, as shall be determined by the Committee, any
Award theretofore granted to such Participant under this Plan; provided,
however, the Committee retains the right and power to:

     

    (a) annul
any Award if the Participant competes against the Company or any Subsidiary or
is terminated for cause as determined by the Committee;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
provide for the forfeiture of shares of Stock or other gain under an Award as
determined by the Committee for competing against the Company or any Subsidiary;
and

     

    (c)
convert any outstanding Incentive Stock Option to a Nonqualified Stock
Option.

     

    14.3 If
an Acceleration Event has occurred, no amendment or termination shall impair the
rights of any person with respect to an outstanding Award as provided in Article
XIII.

     

    ARTICLE
XV

     

    MISCELLANEOUS
PROVISIONS

     

    15.1
Nothing in the Plan or any Award granted hereunder shall confer upon any
Participant any right to continue in the employ of the Company (or to serve as a
director thereof) or interfere in any way with the right of the Company to
terminate his or her employment at any time. Unless specifically provided
otherwise, no Award granted under the Plan shall be deemed salary or
compensation for the purpose of computing benefits under any employee benefit
plan or other arrangement of the Company or its Subsidiaries for the benefit of
its employees unless the Company shall determine otherwise. No Participant shall
have any claim to an Award until it is actually granted under the Plan. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall, except as otherwise provided by the Committee,
be no greater than the right of an unsecured general creditor of the Company.
All payments to be made hereunder shall be paid from the general funds of the
Company, and no special or separate fund shall be established and no segregation
of assets shall be made to assure payment of such amounts, except as provided in
Article VIII with respect to Restricted Stock and except as otherwise provided
by the Committee.

     

    15.2 The
Company may make such provisions and take such steps as it may deem necessary or
appropriate for the withholding of any taxes which the Company or any Subsidiary
is required by any law or regulation of any governmental authority, whether
federal, state or local, domestic or foreign, to withhold in connection with any
Stock Option or the exercise thereof, any Stock Right or the exercise thereof,
or in connection with any other type of equity- based compensation provided
hereunder or the exercise thereof, including, but not limited to, the
withholding of payment of all or any portion of such Award or another Award
under this Plan until the Participant reimburses the Company for the amount the
Company is required to withhold with respect to such taxes, or canceling any
portion of such Award or another Award under this Plan in an amount sufficient
to reimburse itself for the amount it is required to so withhold, or selling any
property contingently credited by the Company for the purpose of paying such
Award or another Award under this Plan, in order to withhold or reimburse itself
for the amount it is required to so withhold.

     

    15.3 The
Plan and the grant of Awards shall be subject to all applicable federal and
state laws, rules, and regulations and to such approvals by any government or
regulatory agency as may be required. Any provision herein relating to
compliance with Rule 16b-3 under the Act shall not be applicable with respect to
participation in the Plan by Participants who are not subject to Section 16(b)
of the Act.

     

    15.4 The
terms of the Plan shall be binding upon the Company, its Subsidiaries, and their
successors and assigns.

     

    15.5
Neither a Stock Option, Stock Right, nor any other type of equity-based
compensation provided for hereunder, shall be transferable except as provided
for herein. If any Participant makes such a transfer in violation hereof, any
obligation of the Company shall forthwith terminate.

     

    15.6 This
Plan and all actions taken hereunder shall be governed by the laws of the State
of North Carolina, except to the extent preempted by ERISA.

     

    15.7 The
Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company. In its sole
discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver shares of
Stock or payments in lieu of or with respect to Awards hereunder; provided,
however, that, unless the Committee otherwise determines with the consent of the
affected Participant, the existence of such trusts or other arrangements is
consistent with the “unfunded” status of the Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    15.8 Each
Participant exercising an Award hereunder agrees to give the Committee prompt
written notice of any election made by such Participant under Section 83(b) of
the Code, or any similar provision thereof.

     

    15.9 If
any provision of this Plan or an Award Agreement is or becomes or is deemed
invalid, illegal or unenforceable in any jurisdiction, or would disqualify the
Plan or any Award Agreement under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to applicable
laws or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award Agreement, it shall be stricken and the remainder of the Plan or the
Award Agreement shall remain in full force and effect.

     

    
      
        	 	 
	 
      	
                AIRSPAN
      NETWORKS, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                 

              
	 	 	Authorized
      Officer
	
                      

              	
                 

              


      

    

     

    ATTEST:

     

    (Corporate
Seal)

     

     

    ___________________________________

    Secretary