Exhibit 10.12



 





Exhibit 10.12




INNOVIVE PHARMACEUTICALS, INC.

2007 STOCK PLAN




 









 





ARTICLE I




 DEFINITIONS




1.01. Acquiring Person




     Acquiring Person means that a Person, considered alone or as part of a “group” within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, is or becomes
directly or indirectly the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
securities representing at least fifty percent (50%) of either (A) the combined voting power of the
Company’s then outstanding securities or (B) the then outstanding Common Stock of the Company (in
either case other than as a result of an acquisition of securities directly from the Company).



1.02. Affiliate




     Affiliate means any “subsidiary” or “parent” corporation (as such terms are defined in Section
424 of the Code) of the Company.



1.03. Agreement




     Agreement means a written agreement (including any amendment or supplement thereto) between
the Company and a Participant specifying the terms and conditions of a Stock Award, an award of
Performance Shares, an Option, SAR or Other Equity-Based Award granted to such Participant.



1.04. Associate




     Associate, with respect to any Person, is defined in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act. An Associate does not include the Company or a majority-owned
subsidiary of the Company.



1.05. Board




     Board means the Board of Directors of the Company.



1.06. Change in Control




     “Change in Control” means (i) a Person is or becomes an Acquiring Person; provided, however,
that in no event shall a Change in Control be deemed to have occurred upon an initial public
offering or a subsequent public offering of the Common Stock under the Securities Act; (ii) the
closing of any agreement with a Person that involves the sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the Company’s total assets on a consolidated basis, as
reported in the Company’s consolidated financial statements, other than a sale or disposition by
the Company of all



 









 




or substantially all of the Company’s assets to an entity at least 50% (fifty percent) of the
combined voting power of the voting securities of which are owned by Persons in substantially the
same proportion as their ownership of the Company immediately prior to such sale; (iii)
consummation of a transaction pursuant to which the Company will undergo a merger, consolidation,
or statutory share exchange with a Person, regardless of whether the Company is intended to be the
surviving or resulting entity after the merger, consolidation, or statutory share exchange, other
than a transaction that results in the voting securities of the Company carrying the right to vote
in elections of persons to the Board outstanding immediately prior to the closing of the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 50% (fifty percent) of the Company’s voting
securities carrying the right to vote in elections of persons to the Company’s Board, or such
securities of such surviving entity or its ultimate parent corporation, if any, outstanding
immediately after the closing of such transaction; (iv) the Continuing Directors cease for any
reason to constitute a majority of the Board; (v) holders of the securities of the Company entitled
to vote thereon approve a plan of complete liquidation of the Company or an agreement for the
liquidation by the Company of all or substantially all of the Company’s assets (or, if such
approval is not required by applicable law and is not solicited by the Company, the commencement of
actions constituting such a plan or the closing of such an agreement); or (vi) the Board adopts a
resolution to the effect that, in its judgment, as a consequence of any one or more transactions or
events or series of transactions or events, a Change in Control of the Company has effectively
occurred. The Board shall be entitled to exercise its sole and absolute discretion in exercising
its judgment and in the adoption of such resolution, whether or not any such transaction(s) or
event(s) might be deemed, individually or collectively, to satisfy any of the criteria set forth in
subparagraphs (i) through (v) above.




1.07.  Code




     Code means the Internal Revenue Code of 1986, and any amendments thereto.



1.08. Committee




     Committee means the Compensation Committee of the Board. During any period in which awards
under this Plan are subject to Section 16 of the Exchange Act, the Compensation Committee will be
comprised of at least two members who are non-employee directors under Rule 16b-3 under the
Exchange Act. During any period in which the Company is subject to Code section 162(m), the
Compensation Committee will be comprised of members who are outside directors under Code Section
162(m). No action of the Compensation Committee will be invalidated because any member of the
Compensation Committee fails to satisfy the non-employee director or outside director requirements
of Rule 16b-3 or Code Section 162(m), respectively. The Board or a committee appointed by the Board
shall serve as the Committee during any period in which there is no Compensation Committee.



 









 





1.09. Common Stock




     Common Stock means the common stock, par value $0.001 per share, of the Company.



1.10. Company




     Company means Innovive Pharmaceuticals, Inc., a Delaware corporation.



1.11. Continuing Director




     Continuing Director means any member of the Board, while a member of the Board and (i) who was
a member of the Board on the Effective Date or (ii) whose nomination for or election to the Board
was recommended or approved by a majority of the Continuing Directors.



1.12. Control Change Date




     Control Change Date means the date on which a Change in Control occurs. If a Change in Control
occurs on account of a series of transactions, the “Control Change Date” is the date of the last of
such transactions.



1.13. Corresponding SAR




     Corresponding SAR means an SAR that is granted in relation to a particular Option and that can
be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to
which the SAR relates.



1.14. Dividend Equivalent Right




     Dividend Equivalent Right means the right, subject to the terms and conditions prescribed by
the Committee, of a Participant to receive (or have credited) cash, stock or other property in
amounts equivalent to the cash, stock or other property dividends declared on shares of Common
Stock with respect to the specified shares of Common Stock (“Dividend Equivalents”) subject to an
Option, SAR, an Other Equity-Based Award or a Performance Share award, as determined by the
Committee, in its sole discretion. The Committee may provide that such Dividend Equivalents (if
any) shall be deemed to have been reinvested in additional shares of Common Stock or otherwise
reinvested.



1.15. Effective Date




     Effective Date has the meaning set forth in Article XVII of this Plan.



 









 





1.16. Exchange Act




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



1.17. Fair Market Value




     Fair Market Value means, on any given date, the reported “closing” price of a share of Common
Stock on the principal exchange on which the Common Stock is listed for trading. If, on any given
date, the Common Stock is not listed for trading on an exchange, then Fair Market Value shall be
determined by the Committee using any reasonable method in good faith.



1.18. Initial Value




     Initial Value means, with respect to a Corresponding SAR, the option price per share of the
related Option and, with respect to an SAR granted independently of an Option, the price per share
of Common Stock as determined by the Committee on the date of grant; provided, however, that the
price shall not be less than the Fair Market Value on the date of grant.



1.19. Option




     Option means a stock option that entitles the holder to purchase from the Company a stated
number of shares of Common Stock at the price set forth in an Agreement.



1.20. Other Equity-Based Award




     Other Equity-Based Award means any award other than an Option, SAR, a Performance Share Award
or a Stock Award which, subject to such terms and conditions as may be prescribed by the Committee,
entitles a Participant to receive shares of Common Stock or rights valued in whole or in part by
reference to, or otherwise based on, shares of Common Stock (including SARs or securities
convertible into shares of Common Stock) or dividends on shares of Common Stock.



1.21. Participant




     Participant means an employee of the Company or an Affiliate, a member of the Board, or a
person or entity that provides significant services to the Company or an Affiliate and who
satisfies the requirements of Article IV and is selected by the Committee to receive an award of
Performance Shares, Stock Award, Option, SAR, Other Equity-Based Award or a combination thereof.



 









 





1.22. Performance Shares




     Performance Shares means an award, in the amount determined by the Committee, stated with
reference to a specified number of shares of Common Stock, that in accordance with the terms of an
Agreement entitles the holder to receive a payment for each specified share equal to the Fair
Market Value of Common Stock on the date of payment or such other amount as provided in the
Agreement.



1.23. Person




     “Person” means any human being, firm, corporation, partnership, or other entity. “Person” also
includes any human being, firm, corporation, partnership, or other entity as defined in sections
13(d)(3) and 14(d)(2) of the Exchange Act. The term “Person” does not include the Company or any
Related Entity, and the term Person does not include any employee-benefit plan maintained by the
Company or any Related Entity, or any person or entity organized, appointed, or established by the
Company or any Related Entity for or pursuant to the terms of any such employee-benefit plan,
unless the Board determines that such an employee-benefit plan or such person or entity is a
“Person.”



1.24. Plan




     Plan means this Innovive Pharmaceuticals, Inc. 2007 Stock Plan.



1.25. Related Entity




     Related Entity means any entity that is part of a controlled group of corporations or is under
common control with the Company within the meaning of Sections 1563(a), 414(b) or 414(c) of the
Code.



1.26. SAR




     SAR means a stock appreciation right that in accordance with the terms of an Agreement
entitles the holder to receive, with respect to each share of Common Stock encompassed by the
exercise of the SAR, the excess, if any, of the Fair Market Value at the time of exercise over the
Initial Value. References to “SARs” include both Corresponding SARs and SARs granted independently
of Options, unless the context requires otherwise.



1.27. Securities Act




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



1.28. Stock Award




     Stock Award means shares of Common Stock awarded to a Participant under Article VIII.



 









 





1.29. Ten Percent Shareholder




     Ten Percent Shareholder means any individual owning (directly or indirectly within the meaning
of Code Section 422) more than ten percent (10%) of the total combined voting power of all classes
of stock of the Company or of an Affiliate. An individual shall be considered to own any voting
stock owned (directly or indirectly) by or for his or her brothers, sisters, spouse, ancestors or
lineal descendants and shall be considered to own proportionately any voting stock owned (directly
or indirectly) by or for a corporation, partnership, estate or trust of which such individual is a
shareholder, partner or beneficiary.



ARTICLE II




 PURPOSES




     The Plan is intended to assist the Company and its Affiliates in recruiting and retaining
individuals and other service providers with ability and initiative by enabling such persons or
entities to participate in the future success of the Company and its Affiliates and to associate
their interests with those of the Company and its stockholders. The Plan is intended to permit the
grant of both Options qualifying under Section 422 of the Code (“incentive stock options”) and
Options not so qualifying, and the grant of SARs, Stock Awards, Performance Shares, and Other
Equity-Based Awards in accordance with the Plan and any procedures that may be established by the
Committee. No Option that is intended to be an incentive stock option shall be invalid for failure
to qualify as an incentive stock option. The proceeds received by the Company from the sale of
shares of Common Stock pursuant to this Plan shall be used for general corporate purposes.



ARTICLE III




ADMINISTRATION




     The Plan shall be administered by the Committee. The Committee shall have authority to grant
SARs, Stock Awards, Performance Shares, Options and Other Equity-Based Awards upon such terms (not
inconsistent with the provisions of this Plan), as the Committee may consider appropriate. Such
terms may include conditions (in addition to those contained in this Plan), on the exercisability
of all or any part of an Option or SAR or on the transferability or forfeitability of a Stock
Award, an award of Performance Shares or an Other Equity-Based Award. Notwithstanding any such
conditions, the Committee may, in its discretion, accelerate the time at which any Option or SAR
may be exercised, or the time at which a Stock Award or Other Equity-Based Award may become
transferable or nonforfeitable or the time at which an Other Equity-Based Award or an award of
Performance Shares may be settled. In addition, the Committee shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to adopt, amend, and
rescind rules and regulations pertaining to the



 









 




administration of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee. Any decision made, or
action taken, by the Committee in connection with the administration of this Plan shall be final
and conclusive. The members of the Committee shall not be liable for any act done in good faith
with respect to this Plan or any Agreement, Option, SAR, Stock Award, Other Equity-Based Award or
award of Performance Shares. All expenses of administering this Plan shall be borne by the Company.




ARTICLE IV




ELIGIBILITY




     Any employee of the Company or an Affiliate (including a corporation that becomes an Affiliate
after the adoption of this Plan) and any member of the Board is eligible to participate in this
Plan. In addition, any other person or entity that provides significant services to the Company or
an Affiliate is eligible to participate in this Plan if the Committee, in its sole discretion,
determines that the participation of such person or entity is in the best interest of the Company.



ARTICLE V




COMMON STOCK SUBJECT TO PLAN




5.01. Common Stock Issued




     Upon the award of shares of Common Stock pursuant to a Stock Award, an Other Equity-Based
Award or in settlement of an award of Performance Shares, the Company may deliver to the
Participant shares of Common Stock from its treasury shares or from its authorized but unissued
Common Stock. Upon the exercise of any Option, SAR or Other Equity-Based Award denominated in
shares of Common Stock, the Company may deliver to the Participant (or the Participant’s broker if
the Participant so directs), shares of Common Stock from its treasury shares or from its authorized
but unissued Common Stock.



5.02. Aggregate Limit




     (a) The maximum aggregate number of shares of Common Stock that may be issued under this Plan
pursuant to the exercise of Options and SARs, the grant of Stock Awards or Other Equity-Based
Awards and the settlement of Performance Shares is equal to 1,500,000.



     (b) The maximum number of shares of Common Stock that may be issued under this Plan in
accordance with Section 5.02(a) shall be subject to adjustment as provided in Article XI.



 









 





5.03. Reallocation of Shares




     If (i) any award or grant under the Plan expires or is terminated without having been
exercised or paid (whether in cash or Common Stock) or (ii) any shares of Common Stock are tendered
by a Participant to pay the exercise price of, or are withheld or delivered to satisfy tax
obligations in respect of, any award or grant under this Plan, then any shares of Common Stock
covered by such lapsed, cancelled, expired or settled portion of such award or grant and any such
withheld or tendered shares of Common Stock shall be available for the grant of other Options,
SARs, Stock Awards, Other Equity-Based Awards and settlement of Performance Shares under this Plan.



5.04. Section 162(m) Award Limits.




     The following limits shall apply to the grant of any award under the Plan if, at the time of
grant, the Company is a “publicly held corporation” within the meaning of Section 162(m) of the
Code.



     (a) Options and Stock Agreement Rights. Subject to adjustment as provided in Article XI, no
employee shall be granted within any fiscal year of the Company one or more Options or SARs which
in the aggregate are for more than one-third (1/3) of the shares of Common Stock for issuance under
the Plan.



     (b) Other Awards. Subject to adjustment as provided in Article XI, no employee shall be
granted within any fiscal year of the Company one or more awards (other than options or SARs)
subject to vesting based on the attainment of performance goals as described in Section 9.09, for
more than one-third (1/3) of the shares of Common Stock in the aggregate under the Plan.



ARTICLE VI




OPTIONS




6.01. Award




     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Option is to be granted and will specify the number of shares of Common Stock covered by
such awards.



6.02. Option Price




     The price per share of Common Stock purchased on the exercise of an Option shall be determined
by the Committee on the date of grant, but shall not be less than the Fair Market Value on the date
the Option is granted. Notwithstanding the preceding sentence, the price per share for Common Stock
purchased on the exercise of any Option that is an incentive stock option granted to an individual
who is a Ten Percent



 









 




Shareholder on the date such option is granted, shall not be less than one hundred ten percent
(110%) of the Fair Market Value on the date the Option is granted.




6.03. Maximum Option Period




     The maximum period in which an Option may be exercised shall be determined by the Committee on
the date of grant, except that no Option shall be exercisable after the expiration of ten years
from the date such Option was granted. In the case of an incentive stock option granted to a
Participant who is a Ten Percent Shareholder on the date of grant, such Option shall not be
exercisable after the expiration of five years from the date of grant. The terms of any Option may
provide that it is exercisable for a period less than such maximum period.



6.04. Nontransferability




     Except as provided in Section 6.05, each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR
that relates to such Option must be transferred to the same person or persons or entity or
entities. Except as provided in Section 6.05, during the lifetime of the Participant to whom the
Option is granted, the Option may be exercised only by the Participant. No right or interest of a
Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.



6.05. Transferable Options




     Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option that is not
an incentive stock option may be transferred by a Participant to the Participant’s children,
grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be
permitted under the rules of Form S-8 as in effect from time to time. The holder of an Option
transferred pursuant to this Section shall be bound by the same terms and conditions that governed
the Option during the period that it was held by the Participant; provided, however, that such
transferee may not transfer the Option except by will or the laws of descent and distribution. In
the event of any transfer of an Option (by the Participant or his transferee), the Option and any
Corresponding SAR that relates to such Option must be transferred to the same person or persons or
entity or entities.



6.06. Employee Status




     For purposes of determining the applicability of Section 422 of the Code (relating to
incentive stock options), or in the event that the terms of any Option provide that it may be
exercised only during employment or continued service or within a specified period of time after
termination of employment or continued service, the Committee may decide to what extent leaves of
absence for governmental or military service, illness,



 









 




temporary disability, or other reasons shall not be deemed interruptions of continuous employment
or service.




6.07. Exercise




     Subject to the provisions of this Plan and the applicable Agreement, an Option may be
exercised in whole at any time or in part from time to time at such times and in compliance with
such requirements as the Committee shall determine; provided, however, that incentive stock options
(granted under the Plan and all plans of the Company and its Affiliates) may not be first
exercisable in a calendar year for shares of Common Stock having a Fair Market Value (determined as
of the date an Option is granted) exceeding $100,000; any excess will be treated as a nonstatutory
stock option. An Option granted under this Plan may be exercised with respect to any number of
whole shares less than the full number for which the Option could be exercised. A partial exercise
of an Option shall not affect the right to exercise the Option from time to time in accordance with
this Plan and the applicable Agreement with respect to the remaining shares subject to the Option.
The exercise of an Option shall result in the termination of any Corresponding SAR to the extent of
the number of shares with respect to which the Option is exercised.



6.08. Payment




     Subject to rules established by the Committee and unless otherwise provided in an Agreement,
payment of all or part of the Option price may be made in cash, certified check, by tendering
shares of Common Stock (or for other lawful consideration), by a broker-assisted cashless exercise.
If shares of Common Stock are used to pay all or part of the Option price, the sum of the cash and
cash equivalent and the Fair Market Value (determined as of the day preceding the date of exercise)
of the shares surrendered must not be less than the Option price of the shares for which the Option
is being exercised.



6.09. Change in Control




     Section 6.07 to the contrary notwithstanding, the Committee shall have the authority to cause
any or all of the Options outstanding as of any Control Change Date to become fully exercisable on
and after such Control Change Date.



6.10. Stockholder Rights




     No Participant shall have any rights as a stockholder with respect to shares subject to an
Option until the date of exercise of such Option. Notwithstanding the foregoing, the Committee may
provide in an Agreement that the holder of an Option is entitled to Dividend Equivalents during the
period beginning on the date of the award and ending on the date the Option is exercised.



 









 





6.11. Disposition of Shares




     A Participant shall notify the Company of any sale or other disposition of shares of Common
Stock acquired pursuant to an Option that was an incentive stock option if such sale or disposition
occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of
shares of Common Stock to the Participant. Such notice shall be in writing and directed to the
Secretary of the Company.



ARTICLE VII




SARS




7.01. Award




     In accordance with the provisions of Article IV, at the time of grant, the Committee will
designate each individual to whom SARs are to be granted, will specify the number of shares of
Common Stock covered by such awards and will specify whether each SAR is to be settled in shares of
Common Stock or in cash. No Participant may be granted Corresponding SARs (under the Plan and all
plans of the Company and its Affiliates) that are related to incentive stock options which are
first exercisable in any calendar year for shares of Common Stock having an aggregate Fair Market
Value (determined as of the date the related Option is granted) that exceeds $100,000.



7.02. Maximum SAR Period




     The term of each SAR shall be determined by the Committee on the date of grant, except that no
SAR shall have a term of more than ten years from the date of grant. In the case of a Corresponding
SAR that is related to an incentive stock option and is granted to a Participant who is a Ten
Percent Shareholder on the date of grant, such Corresponding SAR shall not be exercisable after the
expiration of five years from the date of grant. The terms of any SAR may provide that it has a
term that is less than such maximum period.



7.03. Nontransferability




     Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable
except by will or by the laws of descent and distribution. In the event of any such transfer, a
Corresponding SAR and the related Option must be transferred to the same person or persons or
entity or entities. Except as provided in Section 7.04, during the lifetime of the Participant to
whom the SAR is granted, the SAR may be exercised only by the Participant. No right or interest of
a Participant in any SAR shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.



7.04. Transferable SARs




     Section 7.03 to the contrary notwithstanding, if the Agreement provides, an SAR, other than a
Corresponding SAR that is related to an incentive stock option, may be transferred by a Participant
to the Participant’s children, grandchildren, spouse, one or



 









 




more trusts for the benefit of such family members or a partnership in which such family members
are the only partners, on such terms and conditions as may be permitted under the rules of Form S-8
as in effect from time to time. The holder of an SAR transferred pursuant to this Section shall be
bound by the same terms and conditions that governed the SAR during the period that it was held by
the Participant; provided, however, that such transferee may not transfer the SAR except by will or
the laws of descent and distribution. In the event of any transfer of a Corresponding SAR (by the
Participant or his transferee), the Corresponding SAR and the related Option must be transferred to
the same person or person or entity or entities.




7.05. Exercise




     Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised
in whole at any time or in part from time to time at such times and in compliance with such
requirements as the Committee shall determine; provided, however, that a Corresponding SAR that is
related to an incentive stock option may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value exceeds the option price of the related Option. An
SAR granted under this Plan may be exercised with respect to any number of whole shares less than
the full number for which the SAR could be exercised. A partial exercise of an SAR shall not affect
the right to exercise the SAR from time to time in accordance with this Plan and the applicable
Agreement with respect to the remaining shares subject to the SAR. The exercise of a Corresponding
SAR shall result in the termination of the related Option to the extent of the number of shares
with respect to which the SAR is exercised.



7.06. Change in Control




     Section 7.05 to the contrary notwithstanding, the Committee shall have the authority to cause
any or all of the SARs outstanding as of any Control Change Date to become fully exercisable on and
after such Control Change Date.



7.07. Employee Status




     If the terms of any SAR provide that it may be exercised only during employment or continued
service or within a specified period of time after termination of employment or continued service,
the Committee may decide to what extent leaves of absence for governmental or military service,
illness, temporary disability or other reasons shall not be deemed interruptions of continuous
employment or service.



7.08. Settlement




     At the Committee’s discretion, the amount payable as a result of the exercise of an SAR may be
settled in cash, shares of Common Stock, or a combination of cash and Common Stock. No fractional
share will be deliverable upon the exercise of an SAR but a cash payment will be made in lieu
thereof.



 









 





7.09. Stockholder Rights




     No Participant shall, as a result of receiving an SAR, have any rights as a stockholder of the
Company or any Affiliate until the date that the SAR is exercised and then only to the extent that
the SAR is settled by the issuance of Common Stock. Notwithstanding the foregoing, the Committee
may provide in an Agreement that the holder of an SAR is entitled to Dividend Equivalents during
the period beginning on the date of the award and ending on the date the SAR is exercised.



ARTICLE VIII




STOCK AWARDS




8.01. Award




     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom a Stock Award is to be made and will specify the number of shares of Common Stock covered
by such awards.



8.02. Vesting




     The Committee, on the date of the award, may prescribe that a Participant’s rights in a Stock
Award shall be forfeitable or otherwise restricted for a period of time or subject to such
conditions as may be set forth in the Agreement. By way of example and not of limitation, the
Committee may prescribe that a Participant’s rights in a Stock Award shall be forfeitable or
otherwise restricted subject to the attainment of objectives stated with reference to the
Company’s, an Affiliate’s or a business unit’s attainment of objectives stated with respect to
performance criteria established by the Committee.



8.03. Employee Status




     In the event that the terms of any Stock Award provide that shares may become transferable and
nonforfeitable thereunder only after completion of a specified period of employment or continuous
service, the Committee may decide in each case to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be deemed interruptions
of continuous employment or service.



8.04. Change in Control




     Sections 8.02 and 8.03 to the contrary notwithstanding, the Committee shall have the authority
to cause any or all of the Stock Awards outstanding as of any Control Change Date to become
nonforfeitable and transferable on and after such Control Change Date.



 









 





8.05. Stockholder Rights




     Unless otherwise specified in accordance with the applicable Agreement, while the shares of
Common Stock granted pursuant to the Stock Award may be forfeited or are nontransferable, a
Participant will have all rights of a stockholder with respect to a Stock Award, including the
right to receive dividends and vote the shares; provided, however, that during such period (i) a
Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares
granted pursuant to a Stock Award, (ii) the Company shall retain custody of the certificates
evidencing shares granted pursuant to a Stock Award, and (iii) the Participant will deliver to the
Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set
forth in the preceding sentence shall not apply after the shares granted under the Stock Award are
transferable and are no longer forfeitable.



ARTICLE IX




 PERFORMANCE SHARE AWARDS




9.01. Award




     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an award of Performance Shares is to be made and will specify the number of shares of
Common Stock covered by such awards.



9.02. Earning the Award




     The Committee, on the date of the grant of an award, shall prescribe that the Performance
Shares will be earned, and the Participant will be entitled to receive payment pursuant to the
award of Performance Shares, only upon the satisfaction of performance objectives and such other
criteria as may be prescribed by the Committee, including those described in Section 9.09.



9.03. Payment




     In the discretion of the Committee as set forth in the Agreement at time of grant, the amount
payable when an award of Performance Shares is earned may be settled in cash, by the issuance of
shares of Common Stock, or a combination thereof. A fractional share of Common Stock shall not be
deliverable when an award of Performance Shares is earned, but a cash payment will be made in lieu
thereof. Performance Awards may be paid in a lump sum or in installments following the close of the
performance measuring period or, in accordance with procedures established by the Committee, on a
deferred basis.



 









 





9.04. Stockholder Rights




     A Participant, as a result of receiving an award of Performance Shares, shall not have any
rights as a stockholder until, and then only to the extent that, the award of Performance Shares is
earned and settled in shares of Common Stock. After an award of Performance Shares is earned and
settled in shares, a Participant will have all the rights of a stockholder as described in Section
8.05. Notwithstanding the foregoing, the Committee may provide in an Agreement that the holder of
an award of Performance Shares is entitled to Dividend Equivalents beginning on the date of the
award and ending on the date the Performance Shares are earned and settled.



9.05. Nontransferability




     Except as provided in Section 9.06, Performance Shares granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. No right or interest of
a Participant in any Performance Shares shall be liable for, or subject to, any lien, obligation,
or liability of such Participant.



9.06. Transferable Performance Shares




     Section 9.05 to the contrary notwithstanding, if the Agreement provides, an award of
Performance Shares may be transferred by a Participant to the Participant’s children,
grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership
in which such family members are the only partners, on such terms and conditions as may be
permitted under Rule 16b-3 under the Exchange Act as in effect from time to time. The holder of
Performance Shares transferred pursuant to this Section shall be bound by the same terms and
conditions that governed the Performance Shares during the period that they were held by the
Participant; provided, however that such transferee may not transfer Performance Shares except by
will or the laws of descent and distribution.



9.07. Employee Status




     In the event that the terms of any Performance Share award provide that no payment will be
made unless the Participant completes a stated period of employment or continued service, the
Committee may decide to what extent leaves of absence for government or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of continuous employment
or service.



9.08. Change in Control




     Section 9.02 to the contrary notwithstanding, on and after a Control Change Date, the
Committee shall have the authority to cause any or all of the Stock Awards outstanding as of any
Control Change Date to become nonforfeitable on such Control Change Date and settled with
nonforfeitable and transferable shares of Common Stock.



 









 





9.09. Performance Measures.




     The Committee may make the vesting of awards, including Performance Share Awards, subject to
performance goals. The committee, in its discretion, may base performance goals on one or more of
the following such measures with respect to the Company or any business unit of the Company: gross
margin, operating margin, operating income, pre-tax profit, earnings before stock-based
compensation expense, interest, taxes, depreciation and amortization, net income, funds from
operations, expenses, the market price of our common stock, earnings per share, return on
stockholder equity, return on capital, return on net assets, economic value added, market share,
customer service, customer satisfaction, total stockholder return, free cash flow, net operating
income, operating cash flow, return on investment, employee satisfaction, employee retention,
balance of cash, cash equivalents and marketable securities, completion of an identified
development or redevelopment project, completion of a joint venture or other corporate transaction,
or other measures as determined by the Committee. The target levels with respect to these
performance measures may be expressed on an absolute basis or relative to a standard specified by
the Committee. The degree of attainment of performance measures will be calculated in accordance
with generally accepted accounting principles, but prior to the accrual or payment of any
performance award for the same performance period, and, according to criteria established by the
Committee, excluding the effect (whether positive or negative) of changes in accounting standards
or any extraordinary, unusual or nonrecurring item occurring after the establishment of the
performance goals applicable to a performance award.



ARTICLE X




 OTHER EQUITY–BASED AWARDS




10.01. Award




     In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Other Equity-Based Award is to be made and will specify the number of shares of Common
Stock or other equity interests covered by such awards.



10.02. Terms and Conditions




     The Committee, at the time an Other Equity-Based Award is made, shall specify the terms and
conditions which govern the award; provided, however, that the terms and conditions of an Other
Equity-Based Award that is an SAR shall be consistent with the terms and conditions set forth in
Article VII. The terms and conditions of an Other Equity-Based Award may prescribe that a
Participant’s rights in the Other Equity-Based Award shall be forfeitable, nontransferable or
otherwise restricted for a period of time or subject to such other conditions as may be determined
by the Committee, in its discretion and set forth in the Agreement. Other Equity-Based Awards may
be granted to Participants, either alone or in addition to other awards granted under the Plan, and
Other



 









 




Stock-Based Awards may be granted in the settlement of other Awards granted under the Plan.




10.03. Payment or Settlement




     Other Equity-Based Awards valued in whole or in part by reference to, or otherwise based on,
shares of Common Stock, shall be payable or settled in shares of Common Stock, cash or a
combination of Common Stock and cash, as determined by the Committee in its discretion. Other
Equity-Based Awards denominated as equity interests other than shares of Common Stock may be paid
or settled in shares or units of such equity interests or cash or a combination of both as
determined by the Committee in its discretion.



10.04. Change in Control




     Section 10.02 to the contrary notwithstanding, the Committee shall have the authority to cause
any or all of the Other Equity-Based Awards outstanding as of any Control Change Date to be earned
in full, nonforfeitable and transferable on and after such Control Change Date.



10.05. Employee Status




     If the terms of any Other Equity-Based Award provides that it may be earned or exercised only
during employment or continued service or within a specified period of time after termination of
employment or continued service, the Committee may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability or other reasons shall not be
deemed interruptions of continuous employment or service.



10.06. Stockholder Rights




     A Participant, as a result of receiving an Other Equity-Based Award, shall not have any rights
as a stockholder until, and then only to the extent that, the Other Equity-Based Award is earned
and settled in shares of Common Stock.



ARTICLE XI




ADJUSTMENT UPON CHANGE IN COMMON STOCK




     The maximum number of shares as to which Options, SARs, Performance Shares, Stock Awards and
Other Equity-Based Awards may be granted and the terms, including the exercise price per share, of
outstanding Stock Awards, Options, SARs, Performance Shares and Other Equity-Based Awards; shall be
adjusted as the Board shall determine to be equitably required in the event that (i) the Company
(a) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares
or (b) engages in a transaction to which Section 424 of the Code applies or (ii) there occurs any
other event



 









 




which, in the judgment of the Board necessitates such action. Any determination made under this
Article XI by the Board shall be final and conclusive.




     The issuance by the Company of stock of any class, or securities convertible into stock of any
class, for cash or property, or for labor or services, either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of stock or obligations of the
Company convertible into such stock or other securities, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the maximum number of shares as to which Options,
SARs, Performance Shares, Stock Awards and Other Equity-Based Awards may be granted or the terms of
outstanding Stock Awards, Options, SARs, Performance Shares or Other Equity-Based Awards.



     The Committee may make Stock Awards and may grant Options, SARs, Performance Shares or Other
Equity-Based Awards in substitution for performance shares, phantom shares, stock awards, stock
options, stock appreciation rights, or similar awards held by an individual who becomes an employee
of the Company or an Affiliate in connection with a transaction described in the first paragraph of
this Article XI. Notwithstanding any provision of the Plan (other than the limitation of Section
5.02), the terms of such substituted Stock Awards, SARs, Other Equity-Based Awards, Options or
Performance Shares shall be as the Committee, in its discretion, determines is appropriate.



ARTICLE XII




COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES




     No Option or SAR shall be exercisable, no shares of Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall be made under this
Plan except in compliance with all applicable federal and state laws and regulations (including,
without limitation, withholding tax requirements), any listing agreement to which the Company is a
party, and the rules of all domestic stock exchanges on which the Company’s shares may be listed.
The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any
stock certificate issued to evidence shares of Common Stock when a Stock Award is granted, a
Performance Share or Other Equity-Based Award is settled or for which an Option or SAR is exercised
may bear such legends and statements as the Committee may deem advisable to assure compliance with
federal and state laws and regulations. No Option or SAR shall be exercisable, no Stock Award or
Performance Share shall be granted, no shares of Common Stock shall be issued, no certificate for
shares of Common Stock shall be delivered, and no payment shall be made under this Plan until the
Company has obtained such consent or approval as the Committee may deem advisable from regulatory
bodies having jurisdiction over such matters.



 









 





ARTICLE XIII




GENERAL PROVISIONS




13.01. Effect on Employment and Service




     Neither the adoption of this Plan, its operation, nor any documents describing or referring to
this Plan (or any part thereof), shall confer upon any individual or entity any right to continue
in the employ or service of the Company or an Affiliate or in any way affect any right and power of
the Company or an Affiliate to terminate the employment or service of any individual or entity at
any time with or without assigning a reason therefor.



13.02. Unfunded Plan




     This Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be
required to segregate any assets that may at any time be represented by grants under this Plan. Any
liability of the Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on,
any property of the Company.



13.03. Rules of Construction




     Headings are given to the articles and sections of this Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation, or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.



13.04. Withholding Taxes




     Each Participant shall be responsible for satisfying any income and employment tax withholding
obligations attributable to participation in the Plan. Unless otherwise provided by the Agreement,
any such withholding tax obligations may be satisfied in cash (including from any cash payable in
settlement of an award of Performance Shares, SARs or Other Equity-Based Award) or a cash
equivalent acceptable to the Committee. Any withholding tax obligations also may be satisfied (a)
by surrendering to the Company shares of Common Stock previously acquired by the Participant; (b)
by authorizing the Company to withhold or reduce the number of shares of Common Stock otherwise
issuable to the Participant upon the exercise of an Option or SAR, the settlement of a Performance
Share award or an Other Equity-Based Award (if applicable) or the grant or vesting of a Stock
Award; or (c) by any other method as may be approved by the Committee. If shares of Common Stock
are used to pay all or part of such withholding tax obligation, the Fair Market Value of the shares
surrendered, withheld or reduced shall be determined as of the day the tax liability arises.



 









 





13.05. Dividends and Dividend Equivalents




     At the discretion of the Committee, a grant of an Option, SAR or Performance Shares may
include Dividend Equivalent rights, payable in cash or shares of Common Stock on a current or
deferred basis. All Dividend Equivalents which are not paid currently may, at the Committee’s
discretion, accrue interest, be reinvested in additional shares of Common Stock and paid if, when,
and to the extent that the underlying awards are earned and paid. The total number of shares of
Common Stock available for grant under the Plan shall not be reduced on account of any Dividend
Equivalents that are reinvested and credited as additional Stock Awards, Performance Share awards,
SARs or Other Equity-Based Awards, as applicable.



ARTICLE XIV




LIMITATION ON BENEFITS




14.01. Impact of Change in Control.




     Upon a Change in Control, the Committee may, in its discretion, cause (i) outstanding Options
and SARs to become fully exercisable thereafter, (ii) outstanding Stock Awards to become
transferable and nonforfeitable thereafter and (iii) outstanding Other Equity-Based Awards to
become earned in their entirety.



14.02. Assumption Upon Change in Control.




     In the event of a Change in Control the Committee, in its discretion and without the need for
a Participant’s consent, may provide that an outstanding Option, SAR, Stock Award, Performance Unit
or Other Equity-Based Award shall be assumed or continued by, or a substitute award granted by,
the surviving entity in the Change in Control. Such assumed or substituted award shall be of the
same type of award as the original Option, SAR, Stock Award, Performance Share or Other
Equity-Based Award being assumed or substituted. The assumed or substituted award shall have a
value, as of the Control Change Date, that is substantially equal to the value of the original
award (or the difference between the Fair Market Value and the option price or Initial Value in the
case of Options and SARs) as the Committee determines is equitably required and such other terms
and conditions as may be prescribed by the Committee. To the extent an award is not assumed,
continued or substituted for, such award will terminate immediately prior to the Change in Control.



14.03. Cash-Out Upon Change in Control.




     In the event of a Change in Control the Committee, in its discretion and without the need of a
Participant’s consent, may provide that each Option, SAR, Stock Award and Performance Share award
and Other Equity-Based Award shall be cancelled in exchange for a payment. The payment may be in
cash, shares of Common Stock or other securities or consideration received by stockholders in the
Change in Control transaction.



 









 




The amount of the payment shall be an amount that is substantially equal to (i) the amount by which
the price per share received by stockholders in the Change in Control exceeds the Option price or
Initial Value in the case of an Option and SAR, or (ii) the price per share received by
stockholders for each share of Common Stock subject to a Stock Award, Performance Share award or
Other Equity-Based Award or (iii) the value of the other securities or property in which the
Performance Share or Other Equity-Based award is denominated.




14.04. Limitation of Benefits




     The benefits that a Participant may be entitled to receive under this Plan and other benefits
that a Participant is entitled to receive under other plans, agreements and arrangements (which,
together with the benefits provided under this Plan, are referred to as “Payments”), may constitute
Parachute Payments that are subject to Code Sections 280G and 4999. As provided in this Article XI,
the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow a
Participant to receive a greater Net After Tax Amount than a Participant would receive absent a
reduction.



     The Accounting Firm (as defined below) will first determine the amount of any Parachute
Payments that are payable to a Participant. The Accounting Firm also will determine the Net After
Tax Amount attributable to the Participant’s total Parachute Payments.



     The Accounting Firm will next determine the largest amount of Payments that may be made to the
Participant without subjecting the Participant to tax under Code Section 4999 (the “Capped
Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to
the Capped Payments.



     The Participant will receive the total Parachute Payments or the Capped Payments, whichever
provides the Participant with the higher Net After Tax Amount. If the Participant will receive the
Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any
noncash benefits under this Plan or any other plan, agreement or arrangement (with the source of
the reduction to be directed by the Participant) and then by reducing the amount of any cash
benefits under this Plan or any other plan, agreement or arrangement (with the source of the
reduction to be directed by the Participant). The Accounting Firm will notify the Participant and
the Company if it determines that the Parachute Payments must be reduced to the Capped Payments and
will send the Participant and the Company a copy of its detailed calculations supporting that
determination.



     As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time
that the Accounting Firm makes its determinations under this Article XIV, it is possible that
amounts will have been paid or distributed to the Participant that should not have been paid or
distributed under this Article XIV (“Overpayments”), or that additional amounts should be paid or
distributed to the Participant under this Article XIV (“Underpayments”). If the Accounting Firm
determines, based on either the assertion of a



 









 




deficiency by the Internal Revenue Service against the Company or the Participant, which assertion
the Accounting Firm believes has a high probability of success or controlling precedent or
substantial authority, that an Overpayment has been made, the Participant must repay to the
Company, without interest; provided, however, that no loan will be deemed to have been made and no
amount will be payable by the Participant to the Company unless, and then only to the extent that,
the deemed loan and payment would either reduce the amount on which the Participant is subject to
tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999. If the
Accounting Firm determines, based upon controlling precedent or substantial authority, that an
Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that
determination and the amount of that Underpayment will be paid to the Participant promptly by the
Company.




     For purposes of this Article XIV, the term “Accounting Firm” means the independent accounting
firm engaged by the Company immediately before the Control Change Date. For purposes of this
Article XIV, the term “Net After Tax Amount” means the amount of any Parachute Payments or Capped
Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any State
or local income taxes applicable to the Participant on the date of payment. The determination of
the Net After Tax Amount shall be made using the highest combined effective rate imposed by the
foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as
applicable, in effect on the date of payment. For purposes of this Article XIV, the term “Parachute
Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance
with Code Section 280G and the regulations promulgated or proposed thereunder.



     Notwithstanding any other provision of this Article XIV, the limitations and provisions of
this Article XIV shall not apply to any Participant who, pursuant to an agreement with the Company
or the terms of another plan maintained by the Company, is entitled to indemnification for any
liability that the Participant may incur under Code Section 4999.



ARTICLE XV




 AMENDMENT




     The Board may amend or terminate this Plan at any time; provided, however, that no amendment
may adversely impair the rights of Participants with respect to outstanding awards. In addition, an
amendment will be contingent on approval of the Company’s stockholders, to the extent that the
absence of such approval would cause the Plan to fail to comply with any applicable legal
requirement or the rules of any exchange on which the Common Stock is listed.



 









 





ARTICLE XVI




DURATION OF PLAN




     No Stock Award, Performance Share Award, Option, SAR or Other Equity-Based Award may be
granted under this Plan after the tenth anniversary of the date that the Plan is adopted by the
Board of Directors. Stock Awards, Performance Share awards, Options, SARs and Other Equity-Based
Awards granted before such date shall remain valid in accordance with their terms.



ARTICLE XVII




EFFECTIVE DATE OF PLAN




     Options, Stock Awards, Performance Shares and Other Equity-Based Awards may be granted under
this Plan on and after the Effective Date, provided that, this Plan shall not be effective unless
approved by a majority of the stockholders of Common Stock entitled to vote and present or
represented by properly executed and delivered proxies at a duly held stockholders’ meeting at
which a quorum is present or by consent of the stockholders, within twelve months of the Effective
Date. The Effective Date is                      ___, 2007.