Exhibit 10.7



 







    EXHIBIT 10.7



 




    TRIANGLE
    CAPITAL CORPORATION

    AMENDED AND RESTATED

    2007 EQUITY INCENTIVE PLAN



 




    Section 1.  Purposes.



 



    1.1.  Generally.  This plan shall be
    known as the “Triangle Capital Corporation Amended and
    Restated 2007 Equity Incentive Plan” (the
    “Plan”). The purpose of the Plan is to promote the
    interests of Triangle Capital Corporation, a Maryland
    corporation (the “Company”), its Affiliates (as
    defined herein) and its stockholders by (i) attracting and
    retaining key officers, employees, and directors of, the Company
    and its Affiliates; (ii) motivating such individuals by
    means of individual performance-related incentives to achieve
    long-range performance goals; (iii) encouraging ownership
    of stock in the Company by such individuals; and
    (iv) linking their compensation to the long-term interests
    of the Company and its stockholders. With respect to any awards
    granted under the Plan that are intended to comply with the
    requirements of “performance-based compensation” under
    Section 162(m) of the Code, the Plan shall be interpreted
    in a manner consistent with such requirements.



 



    1.2.  Amendment and
    Restatement.  This Plan amends and restates the
    Triangle Capital Corporation 2007 Equity Incentive Plan adopted
    February 13, 2007 (the “Prior Plan”) in its
    entirety. All Awards (as defined below) granted subsequent to
    the date of this Plan’s adoption by the Company’s
    stockholders shall be subject to the terms of this Plan.



 




    Section 2.  Definitions.



 



    As used in the Plan, the following terms shall have the meanings
    set forth below:



 



    (a) “1940 Act” means the Investment
    Company Act of 1940, as amended.



 



    (b) “Affiliate” shall mean any
    wholly-owned consolidated subsidiary of the Company.



 



    (c) “Award” shall mean any Option or
    Restricted Share Award granted under the Plan, whether singly,
    in combination or in tandem, to a Participant by the Board
    pursuant to such terms, conditions, restrictions
    and/or
    limitations, if any, as the Board may establish or which are
    required by applicable legal requirements.



 



    (d) “Award Agreement” shall mean any
    written agreement, contract or other instrument or document
    evidencing any Award, which may, but need not, be executed or
    acknowledged by a Participant.



 



    (e) “Board” shall mean the Board of
    Directors of the Company.



 



    (f) “Cause” shall mean, unless otherwise
    defined in the applicable Award Agreement, (i) the engaging
    by the Participant in willful misconduct that is injurious to
    the Company or its Affiliates, or (ii) the embezzlement or
    misappropriation of funds or property of the Company or its
    Affiliates by the Participant. For purposes of this paragraph,
    no act, or failure to act, on the Participant’s part shall
    be considered “willful” unless done, or omitted to be
    done, by the Participant not in good faith and without
    reasonable belief that the Participant’s action or omission
    was in the best interest of the Company. Any determination of
    Cause for purposes of the Plan or any Award shall be made by the
    Board in its sole discretion. Any such determination shall be
    final and binding on a Participant.



 



    (g) “Change in Control” shall mean, unless
    otherwise defined in the applicable Award Agreement, any of the
    following events:



 



    (i) any person or entity, including a “group” as
    defined in Section 13(d)(3) of the Exchange Act, other than the
    Company or an Affiliate thereof or any employee benefit plan of
    the Company or any of its Affiliates, becomes the beneficial
    owner of the Company’s securities having 35% or more of the
    combined voting power of the then outstanding securities of the
    Company that may be




    

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    cast for the election of directors of the Company (other than as
    a result of an issuance of securities initiated by the Company
    in the ordinary course of business);



 



    (ii) as the result of, or in connection with, any cash
    tender or exchange offer, merger or other business combination
    or contested election, or any combination of the foregoing
    transactions, less than a majority of the combined voting power
    of the then outstanding securities of the Company or any
    successor company or entity entitled to vote generally in the
    election of the directors of the Company or such other
    corporation or entity after such transaction are held in the
    aggregate by the holders of the Company’s securities
    entitled to vote generally in the election of directors of the
    Company immediately prior to such transaction;



 



    (iii) during any period of two (2) consecutive years,
    individuals who at the beginning of any such period constitute
    the Board cease for any reason to constitute at least a majority
    thereof, unless the election, or the nomination for election by
    the Company’s stockholders, of each Director of the Company
    first elected during such period was approved by a vote of at
    least two-thirds (2/3rds) of the Directors of the Company then
    still in office who were (i) Directors of the Company at
    the beginning of any such period, and (ii) not initially
    (a) appointed or elected to office as result of either an
    actual or threatened election
    and/or proxy
    contest by or on behalf of a Person other than the Board, or
    (b) designated by a Person who has entered into an
    agreement with the Company to effect a transaction described in
    (i) or (ii) above or (iv) or (v) below;



 



    (iv) a complete liquidation or dissolution of the
    Company; or



 



    (v) the sale or other disposition of all or substantially
    all of the assets of the Company to any Person (other than a
    transfer to an Affiliate).



 



    (h) “Code” shall mean the Internal Revenue
    Code of 1986, as amended from time to time.



 



    (i) “Committee” shall mean a committee of
    two or more members of the Board appointed by the Board in
    accordance with Section 3.3.



 



    (j) “Covered Officer” shall mean at any
    date (i) any individual who, with respect to the previous
    taxable year of the Company, was a “covered employee”
    of the Company within the meaning of Section 162(m);
    provided, however, that the term “Covered Officer”
    shall not include any such individual who is designated by the
    Board, in its discretion, at the time of any Award or at any
    subsequent time, as reasonably expected not to be such a
    “covered employee” with respect to the current taxable
    year of the Company and (ii) any individual who is
    designated by the Board, in its discretion, at the time of any
    Award or at any subsequent time, as reasonably expected to be
    such a “covered employee” with respect to the current
    taxable year of the Company or with respect to the taxable year
    of the Company in which any applicable Award will be paid or
    vested.



 



    (k) “Director” shall mean a member of the
    Board.



 



    (l) “Disability” shall mean, unless
    otherwise defined in the applicable Award Agreement, a
    disability that would qualify as a total and permanent
    disability under the Company’s then current long-term
    disability plan.



 



    (m) “Employee” shall mean an officer or
    employee of the Company or of any Affiliate.



 



    (n) “Exchange Act” shall mean the
    Securities Exchange Act of 1934, as amended from time to time.



 



    (o) “Fair Market Value” with respect to
    the Shares, shall mean, for purposes of a grant of an Award as
    of any date, (i) the closing sales price of the Shares on
    the Nasdaq stock market, or any other such exchange on which the
    shares are traded, on such date, or in the absence of reported
    sales on such date, the closing sales price on the immediately
    preceding date on which sales were reported or (ii) in the
    event there is no public market for the Shares on such date, the
    fair market value as determined, in good faith, by the Board in
    its sole discretion (which, for purposes of
    Section 6.2, will in no event will be less than the
    net asset value of such Shares on such date, as determined in
    accordance with the 1940 Act and




    

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    the rules thereunder), and for purposes of a sale of a Share as
    of any date, the actual sales price on that date.



 



    (p) “Incentive Stock Option” shall mean an
    option to purchase Shares from the Company that is granted under
    Section 6 of the Plan and that is intended to meet
    the requirements of Section 422 of the Code or any
    successor provision thereto.



 



    (q) “Non-Qualified Stock Option” shall
    mean an option to purchase Shares from the Company that is
    granted under Sections 6 or 9 of the Plan and
    is not intended to be an Incentive Stock Option.



 



    (r) “Non-Employee Director” shall mean a
    Director who is not an officer or employee of the Company.



 



    (s) “Option” shall mean an Incentive Stock
    Option or a Non-Qualified Stock Option.



 



    (t) “Option Price” shall mean the purchase
    price payable to purchase one Share upon the exercise of an
    Option.



 



    (u) “Participant” shall mean any Employee
    or Director.



 



    (v) “Performance Award” shall mean any
    Award granted under Section 8 of the Plan.



 



    (w) “Person” shall mean any individual,
    corporation, partnership, limited liability company,
    association, joint-stock company, trust, unincorporated
    organization, government or political subdivision thereof or
    other entity.



 



    (x) “Restricted Share” or
    “Restricted Share Award” shall mean any Share
    granted under Sections 7 or 9 of the Plan.



 



    (y) “Retirement” shall mean, unless
    otherwise defined in the applicable Award Agreement, retirement
    of a Participant from the employ or service of the Company or
    any of its Affiliates in accordance with the terms of the
    applicable Company retirement plan or, if a Participant is not
    covered by any such plan, retirement on or after such
    Participant’s 65th birthday.



 



    (z) “SEC” shall mean the Securities and
    Exchange Commission or any successor thereto.



 



    (aa) “Section 16” shall mean
    Section 16 of the Exchange Act and the rules promulgated
    thereunder and any successor provision thereto as in effect from
    time to time.



 



    (bb) “Section 162(m)” shall mean
    Section 162(m) of the Code and the regulations promulgated
    thereunder and any successor provision thereto as in effect from
    time to time.



 



    (cc) “Shares” shall mean shares of the
    common stock, $0.001 par value, of the Company.



 



    (dd) “Substitute Awards” shall mean Awards
    granted solely in assumption of, or in substitution for,
    outstanding awards previously granted by a company acquired by
    the Company or with which the Company combines.



 




    Section 3.  Administration.



 



    3.1.  Administration by the
    Board.  The Board shall administer the Plan unless
    and until it delegates administration to a Committee, as
    provided in Section 3.3 hereof.



 



    3.2.  Powers of the Board.  The Board
    shall have the power, subject to the express provisions of the
    Plan and applicable law:



 



    (a) To determine from time to time which of the persons
    eligible under the Plan shall be granted Awards; when and how
    each Award shall be granted and documented; what type or
    combination of types of Awards shall be granted; the provision
    of each Award granted, including the time or times when a
    Participant shall be permitted to exercise an Award; and the
    number of Shares with respect to which an Award shall be granted
    to each such Participant. Notwithstanding the foregoing powers
    of the Board, any grants of Awards to Non-Employee Directors
    under the Plan shall be automatic and shall not be changed




    

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    without SEC approval, and the issuance of any Award to an
    Employee will be approved by the required majority, as defined
    in Section 57(o) of the 1940 Act, of the Company’s
    directors on the basis that such issuance is in the best
    interests of the Company and its stockholders.



 



    (b) To construe and interpret the Plan and 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 Award documentation, in such manner and to
    such extent as it shall deem necessary or expedient to make the
    Plan fully effective.



 



    (c) To amend the Plan or an Award as provided in
    Section 13.



 



    (d) To terminate or suspend the Plan as provided in
    Section 13.



 



    (e) 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 and that are not in conflict with
    the provisions of the Plan.



 



    3.3. Delegation to Committee.  The Board
    may delegate administration of the Plan to a Committee or
    Committees of three (3) or more members of the Board, and
    the term “Committee” shall apply to any persons to
    whom such authority has been delegated. If administration is
    delegated to 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, other than the Board reference at the end of this
    sentence and Board references in the last sentence of this
    Section 3.3 shall thereafter be to the Committee or
    subcommittee), subject, however, to such resolutions, not
    inconsistent with the provisions of the Plan, as may be adopted
    from time to time by the Board. The Board may abolish the
    Committee at any time and revest in the Board the administration
    of the Plan.



 



    3.4.  Effects of Board’s
    Decision.  Determinations, interpretations and
    constructions made by the Board in good faith shall not be
    subject to review by any person and shall be final, binding and
    conclusive on all persons.



 




    Section 4.  Shares
    Available For Awards.



 



    4.1.  Shares Available.  Subject to
    the provisions of Section 4.5 hereof, the stock to
    be subject to Awards under the Plan shall be the Shares of the
    Company and the maximum number of Shares with respect to which
    Awards may be granted under the Plan shall be 900,000. If, after
    the effective date of the Plan, any Shares covered by an Award
    granted under this Plan, or to which such an Award relates, are
    forfeited, or if such an Award is settled for cash or otherwise
    terminates, expires unexercised or is canceled or settled
    without the delivery of Shares or with the delivery of a reduced
    number of Shares, then the Shares covered by such Award, or to
    which such Award relates, or the number of Shares otherwise
    counted against the aggregate number of Shares with respect to
    which Awards may be granted, to the extent of any such
    settlement, reduction, forfeiture, termination, expiration or
    cancellation, shall again become Shares with respect to which
    Awards may be granted. In the event that any Award granted
    hereunder is exercised through the delivery of Shares or in the
    event that withholding tax liabilities arising from such Award
    are satisfied by the withholding of Shares by the Company, the
    number of Shares available for Awards under the Plan shall be
    increased by the number of Shares so surrendered or withheld.



 



    4.2.  Limits on Grants of Individual Awards.



 



    (a) No individual Participant shall be granted Options
    under the Plan in any calendar year that relate to more than
    100,000 Shares.



 



    (b) No individual Participant shall be granted Awards under
    the Plan relating to more than 25% of the Shares reserved for
    issuance.



 



    4.3.  Limits on Grants of Restricted
    Shares.  The combined maximum amount of Restricted
    Shares that may be issued under the Plan will be 10% of the
    outstanding Shares on the Effective Date (as defined in




    

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    Section 15.1 below) plus 10% of the number of Shares
    issued or delivered by the Company (other than pursuant to
    compensation plans) during the term of the Plan.



 



    4.4.  Limits on Number of
    Awards.  The amount of voting securities that
    would result from the exercise of all of the Company’s
    outstanding warrants, options and rights, together with any
    Restricted Shares issued pursuant to the Plan, at the time of
    issuance shall not exceed 25% of the outstanding voting
    securities of the Company, except that if the amount of voting
    securities that would result from the exercise of all of the
    Company’s outstanding warrants, options, and rights issued
    to the Company’s directors, officers, and employees,
    together with any Restricted Shares issued pursuant to the Plan,
    would exceed 15% of the outstanding voting securities of the
    Company, then the total amount of voting securities that would
    result from the exercise of all outstanding warrants, options,
    and rights, together with any Restricted Shares issued pursuant
    to the Plan, at the time of issuance shall not exceed 20% of the
    outstanding voting securities of the Company.



 



    4.5.  Adjustments.  In the event that
    any dividend or other distribution (whether in the form of cash,
    Shares, other securities or other property), recapitalization,
    stock split, reverse stock split, reorganization, merger,
    consolidation,
    split-up,
    spin-off, combination, repurchase or exchange of Shares or other
    securities of the Company, issuance of warrants or other rights
    to purchase Shares or other securities of the Company, or other
    similar corporate transaction or event affects the Shares, then
    the Board shall in an equitable and proportionate manner (and,
    as applicable, in such manner as is consistent with
    Sections 422 and 409A of the Code and the regulations
    thereunder and with Section 162(m)) either: (i) adjust
    any or all of (1) the aggregate number of Shares or other
    securities of the Company (or number and kind of other
    securities or property) with respect to which Awards may be
    granted under the Plan; (2) the number of Shares or other
    securities of the Company (or number and kind of other
    securities or property) subject to outstanding Awards under the
    Plan, provided that the number of shares subject to any Award
    shall always be a whole number; (3) the grant or exercise
    price with respect to any Award under the Plan (but only
    provided that the SEC has issued an exemptive order or the
    SEC’s staff has provided written confirmation allowing the
    Company to do so); and (4) the limits on the number of
    Shares that may be granted to Participants under the Plan in any
    calendar year; (ii) provide for an equivalent award in
    respect of securities of the surviving entity of any merger,
    consolidation or other transaction or event having a similar
    effect; or (iii) make provision for a cash payment to the
    holder of an outstanding Award.



 



    4.6.  Substitute Awards.  Any Shares
    issued by the Company as Substitute Awards in connection with
    the assumption or substitution of outstanding grants from any
    acquired corporation shall not reduce the Shares available for
    Awards under the Plan.



 



    4.7.  Sources of Shares Deliverable Under
    Awards.  Any Shares delivered pursuant to an Award
    may consist, in whole or in part, of authorized and unissued
    Shares or of issued Shares which have been reacquired by the
    Company.



 



    4.8.  No Grants in Contravention of 1940
    Act.  No Award may be granted under the Plan if
    the grant of such Award would cause the Company to violate
    Section 61(a)(3) of the Act, and, if otherwise approved for
    grant, shall be void and of no effect. The grants of Awards
    under the Plan to Non-Employee Directors shall be automatic and
    shall not be changed without SEC approval.



 




    Section 5.  Eligibility.



 



    Any Employee or Director shall be eligible to be designated a
    Participant; provided, however, that Non-Employee Directors
    shall only be eligible to receive Awards granted consistent with
    Section 9.



 




    Section 6.  Stock
    Options.



 



    6.1.  Grant.  The Board shall have
    sole and complete authority to determine the Participants to
    whom Options shall be granted, the number of Shares subject to
    each Award, the exercise price (subject to
    Section 6.2 below) and the conditions and
    limitations applicable to the exercise of each Option. The Board
    shall have the authority to grant Incentive Stock Options, and
    to grant Non-Qualified Stock Options. In the




    

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    case of Incentive Stock Options, the terms and conditions of
    such grants shall be subject to and comply with Section 422
    of the Code, as from time to time amended, and any regulations
    implementing such statute. A person who has been granted an
    Option under this Plan may be granted additional Options under
    the Plan if the Board shall so determine; provided, however,
    that to the extent the aggregate Fair Market Value (determined
    at the time the Incentive Stock Option is granted) of the Shares
    with respect to which all Incentive Stock Options are
    exercisable for the first time by an Employee during any
    calendar year (under all plans described in of
    Section 422(d) of the Code of the Employee’s employer
    corporation and its parent and Affiliates) exceeds $100,000,
    such Options shall be treated as Non-Qualified Stock Options.



 



    6.2.  Price.  The Board in its sole
    discretion shall establish the Option Price at the time each
    Option is granted. Except in the case of Substitute Awards, the
    Option Price of an Option may not be less than one hundred
    percent (100%) of the Fair Market Value of the Shares with
    respect to which the Option is granted on the date of grant of
    such Option. Once established, the Option Price of any Option
    may not be changed absent an exemptive order from the SEC or
    written confirmation from its staff allowing the Company to do
    so.



 



    6.3.  Term.  Subject to the
    Board’s authority under Section 3.2 and the
    provisions of Section 6.5, each Option and all rights and
    obligations thereunder shall expire on the date determined by
    the Board and specified in the Award Agreement. The Board shall
    be under no duty to provide terms of like duration for Options
    granted under the Plan. Notwithstanding the foregoing, no Option
    shall be exercisable after the expiration of ten (10) years
    from the date such Option was granted.



 



    6.4.  Exercise.



 



    (a) Each Option shall be exercisable at such times and
    subject to such terms and conditions as the Board may, in its
    sole discretion, specify in the applicable Award Agreement or
    thereafter. The Board shall have full and complete authority to
    determine, subject to Section 6.5 herein, whether an
    Option will be exercisable in full at any time or from time to
    time during the term of the Option, or to provide for the
    exercise thereof in such installments, upon the occurrence of
    such events and at such times during the term of the Option as
    the Board may determine.



 



    (b) The Board may impose such conditions with respect to
    the exercise of Options, including without limitation, any
    relating to the application of federal, state or foreign
    securities laws or the Code, as it may deem necessary or
    advisable. The exercise of any Option granted hereunder shall be
    effective only at such time as the sale of Shares pursuant to
    such exercise will not violate any state or federal securities
    or other laws.



 



    (c) An Option may be exercised in whole or in part at any
    time, with respect to whole Shares only, within the period
    permitted thereunder for the exercise thereof, and shall be
    exercised by written notice of intent to exercise the Option,
    delivered to the Company at its principal office, and payment in
    full to the Company at the direction of the Board of the amount
    of the Option Price for the number of Shares with respect to
    which the Option is then being exercised.



 



    (d) Payment of the Option Price shall be made in cash or
    cash equivalents, or, at the discretion of the Board,
    (i) by transfer, either actually or by attestation, to the
    Company of Shares that have been held by the Participant for at
    least six (6) months (or such lesser period as may be
    permitted by the Board), valued at the Fair Market Value of such
    Shares on the date of exercise (or next succeeding trading date,
    if the date of exercise is not a trading date), together with
    any applicable withholding taxes, such transfer to be upon such
    terms and conditions as determined by the Board, or (ii) by
    a combination of such cash (or cash equivalents) and such
    Shares; provided, however, that the optionee shall not be
    entitled to tender Shares pursuant to successive, substantially
    simultaneous exercises of an Option or any other stock option of
    the Company. Subject to applicable securities laws, an Option
    may also be exercised by delivering a notice of exercise of the
    Option and simultaneously selling the Shares thereby acquired,
    pursuant to a brokerage or similar agreement approved in advance
    by proper officers of the Company, using the proceeds of such
    sale as payment of the Option Price, together with any
    applicable withholding taxes. Until the optionee has been issued
    the Shares subject to such exercise, he or she shall possess no
    rights as a stockholder with respect to such Shares.




    

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    6.5.  Ten Percent Stock
    Rule.  Notwithstanding any other provisions in the
    Plan, if at the time an Option is otherwise to be granted
    pursuant to the Plan, the optionee or rights holder owns
    directly or indirectly (within the meaning of
    Section 424(d) of the Code) Shares of the Company
    possessing more than ten percent (10%) of the total combined
    voting power of all classes of Stock of the Company or its
    parent or Affiliate corporations (within the meaning of
    Section 422(b)(6) of the Code), then any Incentive Stock
    Option to be granted to such optionee or rights holder pursuant
    to the Plan shall satisfy the requirement of
    Section 422(c)(5) of the Code, and the Option Price shall
    be not less than one hundred ten percent (110%) of the Fair
    Market Value of the Shares of the Company, and such Option by
    its terms shall not be exercisable after the expiration of five
    (5) years from the date such Option is granted.



 




    Section 7.  Restricted
    Shares.



 



    7.1.  Grant.



 



    (a) Subject to the provisions of the Plan and other
    applicable legal requirements, the Board shall have sole and
    complete authority to determine the Participants to whom
    Restricted Shares shall be granted, the number of Restricted
    Shares to be granted to each Participant, the duration of the
    period during which, and the conditions under which, the
    Restricted Shares may be forfeited to the Company, and the other
    terms and conditions of such Awards. The Restricted Share Awards
    shall be evidenced by Award Agreements in such form as the Board
    shall from time to time approve, which agreements shall comply
    with and be subject to the terms and conditions provided
    hereunder and any additional terms and conditions established by
    the Board that are consistent with the terms of the Plan.



 



    (b) Each Restricted Share Award made under the Plan shall
    be for such number of Shares as shall be determined by the Board
    and set forth in the Award Agreement containing the terms of
    such Restricted Share Award. Such agreement shall set forth a
    period of time during which the grantee must remain in the
    continuous employment of the Company in order for the forfeiture
    and transfer restrictions to lapse. If the Board so determines,
    the restrictions may lapse during such restricted period in
    installments with respect to specified portions of the Shares
    covered by the Restricted Share Award. The Award Agreement may
    also, in the discretion of the Board, set forth performance or
    other conditions that will subject the Shares to forfeiture and
    transfer restrictions. The Board may, at its discretion, waive
    all or any part of the restrictions applicable to any or all
    outstanding Restricted Share Awards.



 



    (c) Notwithstanding Sections 7.1(a) and
    7.1(b) hereof, any grants of Restricted Shares to
    Non-Employee Directors under the Plan shall be automatic and
    shall not be changed without SEC approval.



 



    7.2.  Delivery of Shares and Transfer
    Restrictions.  At the time of a Restricted Share
    Award, a certificate representing the number of Shares awarded
    thereunder shall be registered in the name of the grantee. Such
    certificate shall be held by the Company or any custodian
    appointed by the Company for the account of the grantee subject
    to the terms and conditions of the Plan, and shall bear such a
    legend setting forth the restrictions imposed thereon as the
    Board, in its discretion, may determine. The applicable Award
    Agreement will specify whether a grantee has the right to
    receive dividends with respect to the Restricted Shares prior to
    the lapsing of transfer restrictions. Unless otherwise provided
    in the applicable Award Agreement, the grantee shall have all
    other rights of a stockholder with respect to the Restricted
    Shares, including the right to vote such Shares, subject to the
    following restrictions: (i) the grantee shall not be
    entitled to delivery of the stock certificate until the
    expiration of the restricted period and the fulfillment of any
    other restrictive conditions set forth in the Award Agreement
    with respect to such Shares; (ii) none of the Shares may be
    transferred except for disposition by gift, will or the laws of
    descent and distribution during such restricted period or until
    after the fulfillment of any such other restrictive conditions;
    and (iii) except as otherwise determined by the Board at or
    after grant, all of the Shares shall be forfeited and all rights
    of the grantee to such Shares shall terminate, without further
    obligation on the part of the Company, unless the grantee
    remains in the continuous employment of the Company for the
    entire restricted period in relation to which such Shares were
    granted and unless any other restrictive conditions relating to
    the Restricted Share Award are met. Unless otherwise provided in
    the applicable Award Agreement, any Shares, any other securities
    of the Company and any other property (except for cash
    dividends) distributed with respect to the




    

    7








 






    Shares subject to Restricted Share Awards shall be subject to
    the same restrictions, terms and conditions as such restricted
    Shares.



 



    7.3.  Termination of
    Restrictions.  At the end of the restricted period
    and provided that any other restrictive conditions of the
    Restricted Share Award are met, or at such earlier time as
    otherwise determined by the Board, all restrictions set forth in
    the Award Agreement relating to the Restricted Share Award or in
    the Plan shall lapse as to the restricted Shares subject
    thereto, and a stock certificate for the appropriate number of
    Shares, free of the restrictions and restricted stock legend,
    shall be delivered to the Participant or the Participant’s
    beneficiary or estate, as the case may be.



 




    Section 8.  Performance
    Awards.



 



    8.1.  Grant.  The Board shall have
    sole and complete authority to determine the Employees who shall
    receive a Performance Award, which shall consist of a right that
    is (i) denominated in cash or Shares (including but not
    limited to Restricted Shares), (ii) valued, as determined
    by the Board, in accordance with the achievement of such
    Employees’ individual performance goals during such
    performance periods as the Board shall establish, and
    (iii) payable at such time and in such form as the Board
    shall determine.



 



    8.2.  Terms and Conditions.  Subject
    to the terms of the Plan and any applicable Award Agreement, the
    Board shall determine the performance goals to be achieved
    during any performance period, the length of any performance
    period, the amount of any Performance Award and the amount and
    kind of any payment or transfer to be made pursuant to any
    Performance Award, and may amend specific provisions of the
    Performance Award; provided, however, that such amendment may
    not adversely affect existing Performance Awards made within a
    performance period commencing prior to implementation of the
    amendment.



 



    8.3.  Payment of Performance
    Awards.  Performance Awards may be paid in a lump
    sum or in installments following the close of the performance
    period or, in accordance with the procedures established by the
    Board, on a deferred basis. Termination of employment prior to
    the end of any performance period, other than for reasons of
    death or Disability, will result in the forfeiture of the
    Performance Award, and no payments will be made. An
    employee’s rights to any Performance Award may not be sold,
    assigned, transferred, pledged, hypothecated or otherwise
    encumbered or disposed of in any manner, except by will or the
    laws of descent and distribution,
    and/or
    except as the Board may determine at or after grant.



 




    Section 9.  Non-Employee
    Director Awards.



 



    9.1.  Each Non-Employee Director shall receive a grant
    of Restricted Shares at the beginning of each one-year term of
    service on the Board, for which forfeiture restrictions will
    lapse at the end of that year. The number of Restricted Shares
    granted to each Non-Employee Director shall be the equivalent of
    $30,000 worth of Shares based on the market value at the close
    of the Nasdaq stock market on the date of grant. Notwithstanding
    the foregoing, and subject to Sections 9.2 and
    9.3 below, the Board may provide that all or a portion of
    a Non-Employee Director’s annual retainer, meeting fees
    and/or other
    awards or compensation as determined by the Board, be payable
    (either automatically or at the election of a Non-Employee
    Director) in the form of Non-Qualified Stock Options, Restricted
    Shares or unrestricted Shares; provided, however, that the
    Company has received an order from the SEC that permits such
    Award. The Board shall determine the terms and conditions of any
    such Awards, including the terms and conditions which shall
    apply upon a termination of the Non-Employee Director’s
    service as a member of the Board, and shall have full power and
    authority in its discretion to administer such Awards, subject
    to the terms of the Plan and applicable law.



 



    9.2.  Subject to applicable legal requirements and
    Section 9.3 below, the Board may also grant Awards
    to Non-Employee Directors pursuant to the terms of the Plan,
    including any Award described in Sections 6 or
    7 above.



 



    9.3.  Any grants of Awards to Non-Employee Directors
    under the Plan shall be automatic and shall not be changed
    without SEC approval.




    

    8








 







    Section 10.  Provisions
    Applicable To Covered Officers And Performance Awards.



 



    10.1.  Notwithstanding anything in the Plan to the
    contrary, unless the Board determines that a Performance Award
    to be granted to a Covered Officer should not qualify as
    “performance-based compensation” for purposes of
    Section 162(m), Performance Awards granted to Covered
    Officers shall be subject to the terms and provisions of this
    Section 10. Accordingly, unless otherwise determined
    by the Board, if any provision of the Plan or any Award
    Agreement relating to such an Award does not comply or is
    inconsistent with Section 162(m), such provision shall be
    construed or deemed amended to the extent necessary to conform
    to such requirements, and no provision shall be deemed to confer
    upon the Board discretion to increase the amount of compensation
    otherwise payable to a Covered Officer in connection with any
    such Award upon the attainment of the performance criteria
    established by the Board.



 



    10.2.  With respect to any Covered Officer, the
    maximum annual number of Shares in respect of which all
    Performance Awards may be granted under Section 8 of
    the Plan is 100,000 and the maximum amount of all Performance
    Awards that are settled in cash and that may be granted under
    Section 8 of the Plan in any year is $1,000,000.



 



    10.3.  To the extent necessary to comply with
    Section 162(m), with respect to grants of Performance
    Awards, no later than 90 days following the commencement of
    each performance period (or such other time as may be required
    or permitted by Section 162(m) of the Code), the Board
    shall, in writing, (1) select the individual performance
    goal or goals applicable to the performance period,
    (2) establish the various targets and bonus amounts which
    may be earned for such performance period, and (3) specify
    the relationship between performance goals and targets and the
    amounts to be earned by each Covered Officer for such
    performance period. Following the completion of each performance
    period, the Board shall certify in writing whether the
    applicable performance targets have been achieved and the
    amounts, if any, payable to Covered Officers for such
    performance period. In determining the amount earned by a
    Covered Officer for a given performance period, subject to any
    applicable Award Agreement, the Board shall have the right to
    reduce (but not increase) the amount payable at a given level of
    performance to take into account additional factors that the
    Board may deem relevant in its sole discretion to the assessment
    of individual performance for the performance period.



 




    Section 11.  Termination
    Of Employment.



 



    The Board shall have the full power and authority to determine
    the terms and conditions that shall apply to any Award upon a
    termination of employment with the Company and Affiliates,
    including a termination by the Company with or without Cause, by
    a Participant voluntarily, or by reason of death, Disability or
    Retirement, and may provide such terms and conditions in the
    Award Agreement or in such rules and regulations as it may
    prescribe.



 




    Section 12.  Change
    In Control.



 



    The Board may specify in the applicable Award Agreement at or
    after grant, or otherwise by resolution prior to a Change in
    Control, that all or a portion of the outstanding Awards shall
    vest, become immediately exercisable or payable and have all
    restrictions lifted upon a Change in Control.



 




    Section 13.  Amendment
    And Termination.



 



    13.1.  Amendments to the Plan.  The
    Board may amend, alter, suspend, discontinue or terminate the
    Plan or any portion thereof at any time; provided that no such
    amendment, alteration, suspension, discontinuation or
    termination shall be made without stockholder approval if such
    approval is necessary to comply with any tax or regulatory
    requirement.



 



    13.2.  Amendments to Awards.  Subject
    to the restrictions of Section 6.2 above and
    Section 13.5 below, the Board may waive any
    conditions or rights under, amend any terms of or alter,
    suspend, discontinue, cancel or terminate, any Award theretofore
    granted, prospectively or retroactively; provided that any such
    waiver, amendment, alteration, suspension, discontinuance,
    cancellation or termination that would materially and




    

    9








 






    adversely affect the rights of any Participant or any holder or
    beneficiary of any Award theretofore granted shall not to that
    extent be effective without the consent of the affected
    Participant, holder or beneficiary.



 



    13.3.  Adjustments of Awards Upon the Occurrence of
    Certain Unusual or Nonrecurring Events.  The Board
    is hereby authorized to make equitable and proportionate
    adjustments in the terms and conditions of, and the criteria
    included in, Awards in recognition of unusual or nonrecurring
    events (and shall make such adjustments for events described in
    Section 4.5 hereof) affecting the Company or any
    Affiliate, or the financial statements of the Company or any
    Affiliate, or of changes in applicable laws, regulations or
    accounting principles.



 



    13.4.  Section 409A
    Compliance.  No Award (or modification thereof)
    shall provide for deferral of compensation that does not comply
    with Section 409A of the Code unless the Board, at the time
    of grant, specifically provides that the Award is not intended
    to comply with Section 409A of the Code. Notwithstanding
    any provision of this Plan to the contrary, if one or more of
    the payments or benefits received or to be received by a
    Participant pursuant to an Award would cause the Participant to
    incur any additional tax or interest under Section 409A of
    the Code, the Board may reform such provision to maintain to the
    maximum extent practicable the original intent of the applicable
    provision without violating the provisions of Section 409A
    of the Code.



 



    13.5.  Exercise Price of
    Awards.  Once established, the exercise price of
    an Award shall not be changed absent an exemptive order from the
    SEC or written confirmation from its staff that the Company may
    do so.



 




    Section 14.  General
    Provisions.



 



    14.1.  Limited Transferability of
    Awards.  Except as otherwise provided in the Plan,
    no Award shall be assigned, alienated, pledged, attached, sold
    or otherwise transferred or encumbered by a Participant, except
    by gift, will or the laws of descent and distribution. In
    addition, no transfer or disposition of an Award shall be
    effective to bind the Company unless the Company shall have been
    furnished with written notice thereof and an authenticated copy
    of the gift affidavit, will
    and/or such
    other evidence as the Board may deem necessary or appropriate to
    establish the validity of the transfer.



 



    14.2.  Dividends.  In the sole and
    complete discretion of the Board, an Award may provide the
    Participant with dividends, payable in cash, Shares, other
    securities or other property on a current or deferred basis. All
    dividends which are not paid currently may, at the Board’s
    discretion, accrue interest, be reinvested into additional
    Shares, or, in the case of dividends credited in connection with
    Performance Awards, be credited as additional Performance Awards
    and paid to the Participant if and when, and to the extent that,
    payment is made pursuant to such Award. The total number of
    Shares available for grant under Section 4 shall not
    be reduced to reflect any dividends that are reinvested into
    additional Shares or credited as Performance Awards.



 



    14.3.  No Rights to Awards.  No
    Person shall have any claim to be granted any Award, and there
    is no obligation for uniformity of treatment of Participants or
    holders or beneficiaries of Awards. The terms and conditions of
    Awards need not be the same with respect to each Participant.



 



    14.4.  Share Certificates.  All
    certificates for Shares or other securities of the Company or
    any Affiliate delivered under the Plan pursuant to any Award or
    the exercise thereof shall be subject to such stop transfer
    orders and other restrictions as the Board may deem advisable
    under the Plan or the rules, regulations and other requirements
    of the SEC or any state securities commission or regulatory
    authority, any stock exchange or other market upon which such
    Shares or other securities are then listed, and any applicable
    Federal or state laws, and the Board may cause a legend or
    legends to be put on any such certificates to make appropriate
    reference to such restrictions.



 



    14.5.  Withholding.  A Participant
    may be required to pay to the Company or any Affiliate and the
    Company or any Affiliate shall have the right and is hereby
    authorized to withhold from any Award, from any payment due or
    transfer made under any Award or under the Plan, or from any
    compensation or other amount owing to a Participant the amount
    (in cash, Shares, other securities, other Awards or other
    property) of any applicable withholding or other tax-related
    obligations in respect of an Award, its exercise or any other




    

    10








 






    transaction involving an Award, or any payment or transfer under
    an Award or under the Plan and to take such other action as may
    be necessary in the opinion of the Company to satisfy all
    obligations for the payment of such taxes. The Board may provide
    for additional cash payments to holders of Options to defray or
    offset any tax arising from the grant, vesting, exercise or
    payment of any Award.



 



    14.6.  Award Agreements.  Each Award
    hereunder shall be evidenced by an Award Agreement that shall be
    delivered to the Participant and may specify the terms and
    conditions of the Award and any rules applicable thereto. In the
    event of a conflict between the terms of the Plan and any Award
    Agreement, the terms of the Plan shall prevail. The Board shall,
    subject to applicable law, determine the date an Award is deemed
    to be granted. The Board or, except to the extent prohibited
    under applicable law, its delegate(s) may establish the terms of
    agreements or other documents evidencing Awards under this Plan
    and may, but need not, require as a condition to any such
    agreement’s or document’s effectiveness that such
    agreement or document be executed by the Participant, including
    by electronic signature or other electronic indication of
    acceptance, and that such Participant agree to such further
    terms and conditions as specified in such agreement or document.
    The grant of an Award under this Plan shall not confer any
    rights upon the Participant holding such Award other than such
    terms, and subject to such conditions, as are specified in this
    Plan as being applicable to such type of Award (or to all
    Awards) or as are expressly set forth in the agreement or other
    document evidencing such Award.



 



    14.7.  No Limit on Other Compensation
    Arrangements.  Nothing contained in the Plan shall
    prevent the Company or any Affiliate from adopting or continuing
    in effect other compensation arrangements, which may, but need
    not, provide for the grant of Options or Restricted Shares.



 



    14.8.  No Right to Employment.  The
    grant of an Award shall not be construed as giving an Employee
    the right to be retained in the employ of the Company or any
    Affiliate. Further, the Company or an Affiliate may at any time
    dismiss an Employee from employment, free from any liability or
    any claim under the Plan, unless otherwise expressly provided in
    an Award Agreement.



 



    14.9.  No Rights as
    Stockholder.  Subject to the provisions of the
    Plan and the applicable Award Agreement, no Participant or
    holder or beneficiary of any Award shall have any rights as a
    stockholder with respect to any Shares to be distributed under
    the Plan until such person has become a holder of such Shares.
    Notwithstanding the foregoing, in connection with each grant of
    Restricted Shares hereunder, the applicable Award Agreement
    shall specify if and to what extent the Participant shall not be
    entitled to the rights of a stockholder in respect of such
    Restricted Shares.



 



    14.10.  Governing Law.  The validity,
    construction and effect of the Plan and any rules and
    regulations relating to the Plan and any Award Agreement shall
    be determined in accordance with the laws of the State of
    Maryland without giving effect to conflicts of laws principles.



 



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



 



    14.12.  Other Laws.  The Board may
    refuse to issue or transfer any Shares or other consideration
    under an Award if, acting in its sole discretion, it determines
    that the issuance or transfer of such Shares or such other
    consideration might violate any applicable law or regulation
    (including applicable
    non-U.S. laws
    or regulations) or entitle the Company to recover the same under
    Exchange Act Section 16(b), and any payment tendered to the
    Company by a Participant, other holder or beneficiary in
    connection with the exercise of such Award shall be promptly
    refunded to the relevant Participant, holder or beneficiary.



 



    14.13.  No Trust or
    Fund Created.  Neither the Plan nor any Award
    shall create or be construed to create a trust or separate fund
    of any kind or a fiduciary relationship between the Company or
    any Affiliate and a Participant or any other Person. To the
    extent that any Person acquires a right to receive payments from




    

    11








 






    the Company or any Affiliate pursuant to an Award, such right
    shall be no greater than the right of any unsecured general
    creditor of the Company or any Affiliate.



 



    14.14.  No Fractional Shares.  No
    fractional Shares shall be issued or delivered pursuant to the
    Plan or any Award, and the Board shall determine whether cash,
    other securities or other property shall be paid or transferred
    in lieu of any fractional Shares or whether such fractional
    Shares or any rights thereto shall be canceled, terminated or
    otherwise eliminated.



 



    14.15.  Headings.  Headings are given
    to the sections and subsections of the Plan solely as a
    convenience to facilitate reference. Such headings shall not be
    deemed in any way material or relevant to the construction or
    interpretation of the Plan or any provision thereof.



 



    14.16.  1940 Act.  No provision of
    this Plan shall contravene any portion of the 1940 Act, and in
    the event of any conflict between the provisions of the Plan or
    any Award and the 1940 Act, the applicable section of the 1940
    Act shall control and all Awards under the Plan shall be so
    modified. All Participants holding such modified Awards shall be
    notified of the changes to their Awards and such change shall be
    binding on such Participant.



 




    Section 15.  Term
    Of The Plan.



 



    15.1.  Effective Date.  The Plan
    shall become effective upon approval by the stockholders of the
    Company and the Board; provided, however, that the Plan shall
    not be effective with respect to any Award to a Non-Employee
    Director or any award of Restricted Shares unless the Company
    has received an order from the SEC that permits such Award.



 



    15.2.  Expiration Date.  No new
    Awards shall be granted under the Plan after the tenth
    anniversary of the Effective Date. Unless otherwise expressly
    provided in the Plan or in an applicable Award Agreement, any
    Award granted hereunder may, and the authority of the Board to
    amend, alter, adjust, suspend, discontinue or terminate any such
    Award or to waive any conditions or rights under any such Award
    shall, continue after the tenth anniversary of the Effective
    Date.




    

    12