Exhibit 10.1


 


AMENDED AND RESTATED


CHRISTOPHER & BANKS
CORPORATION


2006 EQUITY INCENTIVE PLAN


FOR NON-EMPLOYEE DIRECTORS


 


SECTION 1.


DEFINITIONS


 


                As used herein, the following terms shall have the
meanings indicated below:


 


(a)           “Administrator”  shall mean the Board of Directors of the
Company, or one or more Committees appointed by the Board, as the case may be.


 


(b)           “Affiliate(s)” shall mean a Parent or
Subsidiary of the Company.


 


(c)           “Award” shall mean any grant of an
Option, Restricted Stock Award, Restricted Stock Unit Award, Stock Appreciation
Right or Performance Award.


 


(d)           “Change in Control” shall mean:


 


                (i)            the occurrence of an acquisition by an individual, entity
or group (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of a
percentage of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (but excluding (1) any acquisition directly from the Company
(other than an acquisition by virtue of the exercise of a conversion privilege
of a security that was not acquired directly from the Company), (2) any
acquisition by the Company or an Affiliate and (3) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Affiliate) (an “Acquisition”) that is thirty percent (30%) or more of
the Company’s then outstanding voting securities;


 


                (ii)           at any time during a period of two (2) consecutive
years or less, individuals who at the beginning of such period constitute the
Board (and any new directors whose election to the Board or nomination for
election by the Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was so approved) cease for any reason (except for death, disability or
voluntary retirement) to constitute a majority thereof;


 


                (iii)          the consummation of a merger, consolidation, reorganization
or similar corporate transaction, whether or not the Company is the surviving
company in such transaction, other than a merger, consolidation, or
reorganization that would result in the Persons who are beneficial owners of
the Company’s voting securities outstanding immediately prior thereto
continuing to beneficially own, directly or indirectly, in substantially the
same proportions, at least fifty percent (50%) of the combined voting power of
the Company’s voting securities (or the voting securities of the surviving
entity) outstanding immediately after such merger, consolidation or
reorganization;


 


                (iv)          the sale or other disposition of all or substantially all
of the assets of the Company;


 


                (v)           the approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company; or


 


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                (vii)         the occurrence of any transaction or event, or series of
transactions or events, designated by the Board in a duly adopted resolution as
representing a change in the effective control of the business and affairs of
the Company, effective as of the date specified in any such resolution.


 


(e)           “Committee” shall mean a Committee of
two or more directors who shall be appointed by and serve at the pleasure of
the Board.  To the extent necessary for
compliance with Rule 16b-3, or any successor provision, each of the
members of the Committee shall be a “non-employee director.”  Solely for purposes of this Section 1(d),
“non-employee director” shall have the same meaning as set forth in Rule 16b-3,
or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.


 


(f)            The “Company” shall mean Christopher &
Banks Corporation, a Delaware corporation.


 


(g)           “Fair Market Value” as of any date
shall mean (i) if such stock is listed on the New York Stock Exchange, any
other established stock exchange, the Nasdaq National Market or Nasdaq SmallCap
Market, the price of such stock at the close of the regular trading session of
such market or exchange on such date, as reported by The Wall Street Journal
or a comparable reporting service, or, if no sale of such stock shall have
occurred on such date, on the next preceding date on which there was a sale of
stock; (ii) if such stock is not so listed on the New York Stock Exchange,
any other established stock exchange, the Nasdaq National Market or Nasdaq
SmallCap Market, the average of the closing “bid” and “asked” prices quoted by
the OTC Bulletin Board, the National Quotation Bureau, or any comparable
reporting service on such date or, if there are no quoted “bid” and “asked”
prices on such date, on the next preceding date for which there are such
quotes; or (iii) if such stock is not publicly traded as of such date, the
per share value as determined by the Board, or the Committee, in its sole
discretion by applying principles of valuation with respect to the Company’s
Common Stock.


 


                (h)           The
“Internal Revenue Code” or “Code” is the Internal Revenue Code of 1986, as
amended from time to time.


 


                (i)            “Option”
means a nonqualified stock option granted pursuant to the Plan.


 


                (j)            “Parent”
shall mean any corporation which owns, directly or indirectly in an unbroken
chain, fifty percent (50%) or more of the total voting power of the Company’s
outstanding stock.


 


                (k)           The
“Participant” means (i) a non-employee director of the Company or any
Affiliate to whom a nonqualified stock option has been granted pursuant to Section 9;
(ii) a non-employee director of the Company or any Affiliate to whom a
Restricted Stock Award or Restricted Stock Unit Award has been granted pursuant
to Section 10; (iii) a non-employee director of the Company or any
Affiliate to whom a Performance Award has been granted pursuant to Section 11;
or (iv) a non-employee director of the Company or any Affiliate to whom a
Stock Appreciation Right has been granted pursuant to Section 12.


 


                (l)            “Performance
Award” shall mean any Performance Shares or Performance Units granted pursuant
to Section 11 hereof.


 


                (m)          “Performance
Objective(s)” shall mean one or more performance objectives established by the
Administrator, in its sole discretion, for Awards granted under this Plan.  Performance Objectives may include, but shall
not be limited to, any one, or a combination of, (i) revenue, (ii) net
income, (iii) earnings per share, (iv) return on equity, (v) return
on assets, (vi) increase in revenue, (vii) increase in share price or
earnings, (viii) return on investment, or (ix) increase in market
share, in all cases including, if selected by the Administrator, threshold,
target and maximum levels.


 


                (n)           “Performance
Period” shall mean the period, established at the time any Performance Award is
granted or at any time thereafter, during which any Performance Objectives
specified by the Administrator with respect to such Performance Award are to be
measured.


 


                (o)           “Performance
Share” shall mean any grant pursuant to Section 11 hereof of an Award,
which value, if any, shall be paid to a Participant by delivery of shares of
Common Stock of the Company upon 


 


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achievement of such
Performance Objectives during the Performance Period as the Administrator shall
establish at the time of such grant or thereafter.


 


                (p)           “Performance
Unit” shall mean any grant pursuant to Section 11 hereof of an Award,
which value, if any, shall be paid to a Participant by delivery of cash upon
achievement of such Performance Objectives during the Performance Period as the
Administrator shall establish at the time of such grant or thereafter.


 


                (q)           The
“Plan” means the Amended and Restated Christopher & Banks Corporation
2006 Equity Incentive Plan For Non-Employee Directors, as amended hereafter
from time to time, including the form of Agreements as they may be modified by
the Administrator from time to time.


 


                (r)            “Restricted
Stock Award” or “Restricted Stock Unit Award” shall mean any grant of
restricted shares of Stock of the Company or the grant of any restricted stock
units pursuant to Section 10 hereof.


 


                (s)           “Stock,”
“Option Stock” or “Common Stock” shall mean Common Stock of the Company
(subject to adjustment as described in Section 13) reserved for Options
and Awards pursuant to this Plan.


 


                (t)            “Stock
Appreciation Right” shall mean a grant pursuant to Section 12 hereof.


 


                (u)           A “Subsidiary”
shall mean any corporation of which fifty percent (50%) or more of the total
voting power of the Company’s outstanding Stock is owned, directly or
indirectly in an unbroken chain, by the Company.


 


SECTION 2.


PURPOSE


 


                The purpose of the Plan is to promote the success of
the Company and its Affiliates by facilitating the engagement and retention of
competent directors and by furnishing incentive to directors upon whose efforts
the success of the Company and its Affiliates will depend to a large degree.


 


                It is the intention of the Company to carry out the
Plan through the granting of “nonqualified stock options” pursuant to Section 9
of this Plan; through the granting of Restricted Stock Awards and Restricted
Stock Unit Awards pursuant to Section 10 of this Plan; through the
granting of Performance Awards pursuant to Section 11 of this Plan; and
through the granting of Stock Appreciation Rights pursuant to Section 12
of this Plan.  Adoption of this Plan
shall be and is expressly subject to the condition of approval by the
shareholders of the Company within twelve (12) months before or after the
adoption of the Plan by the Board of Directors. 
Any Awards granted prior to the date this Plan is approved by the
shareholders of the Company shall be expressly subject to receipt of such
approval.


 


SECTION 3.


EFFECTIVE DATE OF PLAN


 


                The Plan shall be effective following its adoption by
the Board of Directors, and its approval by the stockholders of the Company on
the date of the 2008 Annual Meeting of Stockholders, as required in Section 2.


 


SECTION 4.


ADMINISTRATION


 


                The Plan shall be administered by the Board of
Directors of the Company (hereinafter referred to as the “Board”) or by a
Committee which may be appointed by the Board from time to time to administer
the Plan (hereinafter collectively referred to as the “Administrator”).  Except as otherwise provided herein, the
Administrator shall have all of the powers vested in it under the provisions of
the Plan, including but not limited to exclusive authority to determine, in its
sole discretion, whether an Award shall be granted; the individuals to whom,
and the 


 


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time or times at which,
Awards shall be granted; the number of shares subject to each Award; the option
price; and the performance criteria, if any, and any other terms and conditions
of each Award.  The Administrator shall
have full power and authority to administer and interpret the Plan, to make and
amend rules, regulations and guidelines for administering the Plan, to
prescribe the form and conditions of the respective agreements evidencing each
Award (which may vary from Participant to Participant), and to make all other
determinations necessary or advisable for the administration of the Plan.  The Administrator’s interpretation of the
Plan, and all actions taken and determinations made by the Administrator
pursuant to the power vested in it hereunder, shall be conclusive and binding
on all parties concerned.


 


                No member of the Board or the Committee shall be
liable for any action taken or determination made in good faith in connection
with the administration of the Plan.  In
the event the Board appoints a Committee as provided hereunder, any action of
the Committee with respect to the administration of the Plan shall be taken
pursuant to a majority vote of the Committee members or pursuant to the written
resolution of all Committee members.


 


SECTION 5.


PARTICIPANTS


 


                The Administrator shall from time to time, at its
discretion and without approval of the shareholders, designate those
non-employee directors of the Company or of any Affiliate to whom Awards shall
be granted under this Plan.  The
Administrator may grant additional Awards, including incentive stock options,
under this Plan to some or all Participants then holding Awards, or may grant
Awards solely or partially to new Participants. In designating Participants,
the Administrator shall also determine the number of shares to be optioned or
awarded to each such Participant and the performance criteria applicable to
each Performance Award. The Administrator may from time to time designate
individuals as being ineligible to participate in the Plan.


 


SECTION 6.


STOCK


 


                The Stock to be optioned under this Plan shall
consist of authorized but unissued shares of Common Stock.  Six Hundred Twenty-Five Thousand (625,000)
shares of Common Stock shall be reserved and available for Awards under the
Plan; provided, however, that the total number of shares of Common Stock
reserved for Awards under this Plan shall be subject to adjustment as provided
in Section 13 of the Plan.  The
following shares of Stock shall continue to be reserved and available for
Awards granted pursuant to the Plan: (i) any outstanding Award that
expires for any reason, (ii) any portion of an outstanding Option or Stock
Appreciation Right that is terminated prior to exercise, (iii) any portion
of an Award that is terminated prior to the lapsing of the risks of forfeiture
on such Award, (iv) shares of Stock used to pay the exercise price under
any Award, whether such shares are withheld by the Company upon exercise of the
Award or are tendered by the Participant from previously owned shares; and (v) shares
of Stock covered by an Award to the extent the Award is settled in cash.


 


SECTION 7.


DURATION OF PLAN


 


                Awards may be granted pursuant to the Plan from time
to time until May 25, 2016, which is the tenth anniversary of the Plan’s
adoption by the Board of Directors.


 


SECTION 8.


PAYMENT


 


                Participants may pay for shares upon exercise of
Options or Stock Appreciation Rights granted pursuant to this Plan with cash,
personal check, certified check or, if approved by the Administrator in its
sole discretion, previously-owned shares of the Company’s Common Stock, or any
combination thereof.  Any stock so
tendered as 


 


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part of such payment
shall be valued at such stock’s then Fair Market Value, or such other form of
payment as may be authorized by the Administrator.  The Administrator may, in its sole
discretion, limit the forms of payment available to the Participant and may
exercise such discretion any time prior to the termination of the Option or
Stock Appreciation Right granted to the Participant or upon any exercise of the
Option or Stock Appreciation Right by the Participant.  “Previously-owned shares” means shares of the
Company’s Common Stock which the Participant has owned for at least six (6) months
prior to the exercise of the Option, or for such other period of time as may be
required by generally accepted accounting principles.


 


                With respect to payment in the form of Common Stock
of the Company, the Administrator may require advance approval or adopt such rules as
it deems necessary to assure compliance with Rule 16b-3, or any successor
provision, as then in effect, of the General Rules and Regulations under
the Securities Exchange Act of 1934, if applicable.


 


SECTION 9.


TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS


 


                Each nonqualified stock option granted pursuant to
this Section 9 shall be evidenced by a written nonqualified stock option
agreement (the “Option Agreement”).  The
Option Agreement shall be in such form as may be approved from time to time by
the Administrator and may vary from Participant to Participant; provided,
however, that each Participant and each Option Agreement shall comply with and
be subject to the following terms and conditions:


 


                (a)           Number
of Shares and Option Price.  The
Option Agreement shall state the total number of shares covered by the
nonqualified stock option.  The option
price per share shall be one hundred percent (100%) of the per share Fair
Market Value of the Common Stock on the date the Administrator grants the
Option.


 


                (b)           Term
and Exercisability of Nonqualified Stock Option.  The term during which any nonqualified stock
option granted under the Plan may be exercised shall be established in each
case by the Administrator.  The Option
Agreement shall state when the nonqualified stock option becomes exercisable
and shall also state the maximum term during which the Option may be
exercised.  If the Stock Option is not
exercisable immediately, the Administrator may accelerate the exercisability of
any Stock Option granted hereunder in the event of the death or disability of
the Participant or provide for such acceleration in the Option Agreement.


 


                (c)           Transferability.  The Administrator may, in its sole
discretion, permit the Participant to transfer any or all nonqualified stock
options to any member of the Participant’s “immediate family” as such term is
defined in Rule 16a-1(e) promulgated under the Securities Exchange
Act of 1934, or any successor provision, or to one or more trusts whose
beneficiaries are members of such Participant’s “immediate family” or
partnerships in which such family members are the only partners; provided,
however, that the Participant cannot receive any consideration for the transfer
and such transferred nonqualified stock option shall continue to be subject to
the same terms and conditions as were applicable to such nonqualified stock
option immediately prior to its transfer.


 


                (d)           No
Rights as Shareholder.  A Participant
(or the Participant’s successor or successors) shall have no rights as a
shareholder with respect to any shares covered by a nonqualified stock option
until the date of the issuance of a stock certificate evidencing such
shares.  No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is actually issued (except as otherwise
provided in Section 13 of the Plan).


 


                (e)           Repricing
Prohibited.  Subject to the
anti-dilution adjustment provisions contained in Section 13 hereof,
without the prior approval of the Company’s shareholders, evidenced by a
majority of votes cast, the Administrator shall not cause the cancellation,
substitution or amendment of a Stock Option that would have the effect of
reducing the exercise price of such a Stock Option previously granted under the
Plan, or otherwise approve any modification to such a Stock Option that would
be treated as a “repricing” under the then applicable rules, regulations or
listing requirements adopted by the New York Stock Exchange.


 


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                (f)            Other
Provisions.  The Option Agreement
authorized under this Section 9 shall contain such other provisions as the
Administrator shall deem advisable.


 


SECTION 10.


RESTRICTED
STOCK AND RESTRICTED STOCK UNIT AWARDS


 


                Each Restricted Stock Award or Restricted Stock Unit
Award granted pursuant to the Plan shall be evidenced by a written restricted
stock or restricted stock unit agreement (the “Restricted Stock Agreement” or “Restricted
Stock Unit Agreement,” as the case may be). 
The Restricted Stock Agreement or Restricted Stock Unit Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each
Participant and each Restricted Stock Agreement or Restricted Stock Unit
Agreement shall comply with and be subject to the following terms and
conditions:


 


(a)           Number of Shares.  The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall state the total number of shares of Stock covered by
the Restricted Stock Award or Restricted Stock Unit Award.


 


(b)           Risks of Forfeiture.  The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall set forth the risks of forfeiture, if any, including
risks of forfeiture based on Performance Objectives, which shall apply to the
shares of Stock covered by the Restricted Stock Award or Restricted Stock Unit
Award, and shall specify the manner in which such risks of forfeiture shall
lapse.  The Administrator may, in its
sole discretion, modify the manner in which such risks of forfeiture shall
lapse but only with respect to those shares of Stock which are restricted as of
the effective date of the modification. 
The Administrator may accelerate the lapse of the risks of forfeiture in
the event of the death or disability of the Participant or provide for such
acceleration in the Restricted Stock Agreement or the Restricted Stock Unit
Agreement.


 


(c)                                  Issuance of Shares; Rights as Shareholder.


 


                                (i)            With respect to a Restricted Stock
Award, the Company shall cause to be issued a stock certificate representing
such shares of Stock in the Participant’s name, and shall hold such certificate
as custodian for the Participant until the risks of forfeiture applicable to
the certificate have lapsed, at which time the Company shall deliver the
certificate to the Participant.  The
Company shall place a legend on such certificate describing the risks of
forfeiture and other transfer restrictions set forth in the Participant’s
Restricted Stock Agreement and providing for the cancellation of such
certificate if the shares of Stock subject to the Restricted Stock Award are
forfeited.  Until the risks of forfeiture
have lapsed or the shares subject to such Restricted Stock Award have been
forfeited, the Participant shall be entitled to vote the shares of Stock
represented by such stock certificates and shall receive all dividends attributable
to such shares, but the Participant shall not have any other rights as a
shareholder with respect to such shares.


 


(ii)           With respect to a Restricted Stock
Unit Award, as the risks of forfeiture on the restricted stock units lapse, the
Participant shall be entitled to payment of the restricted stock units.  The Administrator may, in its sole
discretion, pay restricted stock units in cash, shares of Stock or any
combination thereof.  If payment is made
in shares of Stock, the Administrator shall cause to be issued one or more
stock certificates in the Participant’s name and shall deliver such
certificates to the Participant in satisfaction of such restricted stock
units.  Until the risks of forfeiture on
the restricted stock units have lapsed, the Participant shall not be entitled
to vote any shares of stock which may be acquired through the restricted stock
units, shall not receive any dividends attributable to such shares, and shall
not have any other rights as a shareholder with respect to such shares.


 


(d)           Nontransferability.  No Restricted Stock Award or Restricted Stock
Unit Award shall be transferable, in whole or in part, by the Participant,
other than by will or by the laws of descent and distribution, prior to the
date the risks of forfeiture described in the Restricted Stock Agreement or
Restricted Stock Unit Agreement have lapsed. 
If the Participant shall attempt any transfer of any Restricted Stock
Award or Restricted Stock Unit Award granted under the Plan prior to such date,
such transfer shall be void and the Restricted Stock Award or Restricted Stock
Unit Award shall terminate.


 


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                (e)           Other
Provisions.  The Restricted Stock
Agreement or Restricted Stock Unit Agreement authorized under this Section 10
shall contain such other provisions as the Administrator shall deem advisable.


 


SECTION 11.


PERFORMANCE
AWARDS


 


                Each Performance Award granted pursuant to this Section 11
shall be evidenced by a written performance award agreement (the “Performance
Award Agreement”).  The Performance Award
Agreement shall be in such form as may be approved from time to time by the
Administrator and may vary from Participant to Participant; provided, however,
that each Participant and each Performance Award Agreement shall comply with
and be subject to the following terms and conditions:


 


                (a)           Awards.  Performance Awards in the form of Performance
Units or Performance Shares may be granted to any Participant in the Plan.
Performance Units shall consist of monetary awards which may be earned or
become vested in whole or in part if the Company or the Participant achieves
certain Performance Objectives established by the Administrator over a
specified Performance Period.  Performance
Shares shall consist of shares of Stock or other Awards denominated in shares
of Stock that may be earned or become vested in whole or in part if the Company
or the Participant achieves certain Performance Objectives established by the
Administrator over a specified Performance Period.  The Administrator may accelerate the earning
or vesting of the shares or monetary award subject to a Performance Award in
the event of the death or disability of the Participant or provide for such
acceleration in the Performance Award Agreement.


 


                (b)           Performance
Objectives, Performance Period and Payment. 
The Performance Award Agreement shall set forth:


 


                                (i)            the
number of Performance Units or Performance Shares subject to the Performance
Award, and the dollar value of each Performance Unit;


 


                                (ii)           one
or more Performance Objectives established by the Administrator;


 


                                (iii)          the
Performance Period over which Performance Units or Performance Shares may be
earned or may become vested;


 


                                (iv)          the
extent to which partial achievement of the Performance Objectives may result in
a payment or vesting of the Performance Award, as determined by the
Administrator; and


 


                                (v)           the
date upon which payment of Performance Units will be made or Performance Shares
will be issued, as the case may be, and the extent to which such payment or the
receipt of such Performance Shares may be deferred.


 


                (c)           Nontransferability.  No Performance Award shall be transferable,
in whole or in part, by the Participant, other than by will or by the laws of
descent and distribution.  If the
Participant shall attempt any transfer of any Performance Award granted under
the Plan, such transfer shall be void and the Performance Award shall
terminate.


 


                (d)           No
Rights as Shareholder.  A Participant
(or the Participant’s successor or successors) shall have no rights as a
shareholder with respect to any shares covered by a Performance Award until the
date of the issuance of a stock certificate evidencing such shares.  No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such stock
certificate is actually issued (except as otherwise provided in Section 13
of the Plan).


 


                (e)           Other
Provisions.  The Performance Award
Agreement authorized under this Section 11 shall contain such other
provisions as the Administrator shall deem advisable.


 


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SECTION 12.


STOCK APPRECIATION RIGHTS


 


                Each Stock Appreciation Right granted pursuant to
this Section 12 shall be evidenced by a written stock appreciation right
agreement (the “Stock Appreciation Right Agreement”).  The Stock Appreciation Right Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each
Participant and each Stock Appreciation Right Agreement shall comply with and
be subject to the following terms and conditions:


 


                (a)           Awards.  A Stock Appreciation Right shall entitle the
Participant to receive, upon exercise, cash, shares of Stock, or any
combination thereof, having a value equal to the excess of (i) the Fair
Market Value of a specified number of shares of Stock on the date of such
exercise, over (ii) a specified exercise price.  The specified exercise price shall not be
less than 100% of the Fair Market Value of such shares of Stock on the date of
grant of the Stock Appreciation Right.  A
Stock Appreciation Right may be granted independent of or in tandem with a previously
or contemporaneously granted Option.


 


                (b)           Term
and Exercisability.  The term during
which any Stock Appreciation Right granted under the Plan may be exercised
shall be established in each case by the Administrator.  The Stock Appreciation Right Agreement shall
state when the Stock Appreciation Right becomes exercisable and shall also
state the maximum term during which such Stock Appreciation Right may be
exercised.  The manner of exercise of
such Stock Appreciation Right shall be specified in the Stock Appreciation
Right Agreement.  If a Stock Appreciation
Right is granted in tandem with an Option, the Stock Appreciation Right
Agreement shall set forth the extent to which the exercise of all or a portion
of the Stock Appreciation Right shall cancel a corresponding portion of the
Option, and the extent to which the exercise of all or a portion of the Option
shall cancel a corresponding portion of the Stock Appreciation Right.  The Administrator may accelerate the
exercisability of any Stock Appreciation Right granted hereunder in the event
of the death or disability of the Participant or provide for such acceleration
in the Stock Appreciation Right Agreement.


 


                (c)           Nontransferability.  No Stock Appreciation Right shall be
transferable, in whole or in part, by the Participant, other than by will or by
the laws of descent and distribution.  If
the Participant shall attempt any transfer of any Stock Appreciation Right
granted under the Plan, such transfer shall be void and the Stock Appreciation
Right shall terminate.


 


                (d)           No
Rights as Shareholder.  A Participant
(or the Participant’s successor or successors) shall have no rights as a
shareholder with respect to any shares covered by a Stock Appreciation Right
until the date of the issuance of a stock certificate evidencing such
shares.  No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is actually issued (except as otherwise
provided in Section 13 of the Plan).


 


                (e)           Repricing
Prohibited.  Subject to the
anti-dilution adjustment provisions contained in Section 13 hereof,
without the prior approval of the Company’s shareholders, evidenced by a
majority of votes cast, the Administrator shall not cause the cancellation,
substitution or amendment of a Stock Appreciation Right that would have the
effect of reducing the exercise price of such a Stock Appreciation Right
previously granted under the Plan, or otherwise approve any modification to
such a Stock Appreciation Right that would be treated as a “repricing” under
the then applicable rules, regulations or listing requirements adopted by the
New York Stock Exchange.


 


                (f)            Other
Provisions.  The Stock Appreciation
Right Agreement authorized under this Section 12 shall contain such other
provisions as the Administrator shall deem advisable, including but not limited
to any restrictions on the exercise of the Stock Appreciation Right which may
be necessary to comply with Rule 16b-3 of the Securities Exchange Act of
1934, as amended.


 


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SECTION 13.


RECAPITALIZATION, SALE, MERGER, EXCHANGE


OR LIQUIDATION


 


                In the event of an increase or decrease in the number
of shares of Common Stock resulting from a stock dividend, stock split, reverse
split, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company, the number of shares of Stock
reserved under Section 6 hereof, the number of shares of Stock covered by
each outstanding Award and Option and the price per share thereof shall be
appropriately adjusted to reflect such change. 
Additional shares which may become covered by the Award or Option
pursuant to such adjustment shall be subject to the same restrictions as are
applicable to the shares with respect to which the adjustment relates.


 


                Unless otherwise provided in the agreement evidencing
an Award, in the event of a Change of Control, the Board may provide for one or
more of the following:


 


(a)           the equitable acceleration of the
exercisability of any outstanding Options or Stock Appreciation Rights, the
vesting and payment of any Performance Awards, or the lapsing of the risks of
forfeiture on any Restricted Stock Awards or Restricted Stock Unit Awards;


 


(b)           the complete termination of this
Plan, the cancellation of outstanding Options or Stock Appreciation Rights not
exercised prior to a date specified by the Board (which date shall give
Participants a reasonable period of time in which to exercise such Option or
Stock Appreciation Right prior to the effectiveness of such transaction), the
cancellation of any Performance Award and the cancellation of any Restricted
Stock Awards or Restricted Stock Unit Awards for which the risks of forfeiture
have not lapsed;


 


(c)           that Participants holding outstanding
Options and Stock Appreciation Rights receive, with respect to each share of Stock
subject to such Option or Stock Appreciation Right, as of the effective date of
any such transaction, shares of Common Stock of the Company or shares of stock
of any corporation succeeding the Company by reason of such transaction with a
value equal to the excess of the Fair Market Value of the Stock subject to such
Option or Stock Appreciation Right on the date immediately preceding the
effective date of such transaction over the price per share of such Options or
Stock Appreciation Rights;


 


(d)           that Participants holding outstanding
Restricted Stock Awards, Restricted Stock Unit Awards and Performance Share
Awards receive, with respect to each share of Stock subject to such Awards, as
of the effective date of any such transaction, shares of Common Stock of the
Company or shares of stock of any corporation succeeding the Company by reason
of such transaction with a value equal to the Fair Market Value of the Stock
subject to such Awards on the date immediately preceding the effective date of
such transaction;


 


(e)           the continuance of the Plan with
respect to the exercise of Options or Stock Appreciation Rights which were
outstanding as of the date of adoption by the Board of such plan for such
transaction and the right to exercise such Options and Stock Appreciation
Rights as to an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction; and


 


                (f)            the
continuance of the Plan with respect to Restricted Stock Awards or Restricted
Stock Unit Awards for which the risks of forfeiture have not lapsed as of the
date of adoption by the Board of such plan for such transaction and the right
to receive an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction.


 


                (g)           the
continuance of the Plan with respect to Performance Awards and, to the extent
applicable, the right to receive an equivalent number of shares of stock of the
corporation succeeding the Company by reason for such transaction.


 


                The Board may condition any acceleration of
exercisability or other right to which Participant is not entitled upon any
additional agreements from Participant, including, without limitation, a
Participant agreeing to additional restrictive covenants (e.g.,
confidentiality, noncompetition, non-solicitation, non-circumvention, etc.) and



 


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Participant agreeing to
continue to perform services for the Company, a successor or purchaser of all
or any portion of the Company’s business or related assets for substantially
the same base salary for a period of up to six months.


 


                The Board may restrict the rights of or the
applicability of this Section 13 to the extent necessary to comply with Section 16(b) of
the Securities Exchange Act of 1934, the Internal Revenue Code or any other
applicable law or regulation.  The grant
of an Award pursuant to the Plan shall not limit in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, exchange or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.


 


SECTION 14.


INVESTMENT PURPOSE


 


                No shares of Stock shall be issued pursuant to the
Plan unless and until there has been compliance, in the opinion of Company’s
counsel, with all applicable legal requirements, including without limitation,
those relating to securities laws and stock exchange listing requirements.  As a condition to the issuance of Stock to
Participant, the Administrator may require Participant to (a) represent
that the shares of Stock are being acquired for investment and not resale and
to make such other representations as the Administrator shall deem necessary or
appropriate to qualify the issuance of the shares as exempt from the Securities
Act of 1933 and any other applicable securities laws, and (b) represent
that Participant shall not dispose of the shares of Stock in violation of the
Securities Act of 1933 or any other applicable securities laws.


 


                As a further condition to the grant of any Option or
the issuance of Stock to Participant, Participant agrees to the following:


 


                (a)           In
the event the Company advises Participant that it plans an underwritten public
offering of its Common Stock in compliance with the Securities Act of 1933, as
amended, and the underwriter(s) seek to impose restrictions under which
certain shareholders may not sell or contract to sell or grant any option to
buy or otherwise dispose of part or all of their stock purchase rights of the
Common Stock underlying Awards, Participant will not, for a period not to
exceed 180 days from the prospectus, sell or contract to sell or grant an
option to buy or otherwise dispose of any Option granted to Participant
pursuant to the Plan or any of the underlying shares of Common Stock without
the prior written consent of the underwriter(s) or its representative(s).


 


                (b)           In
the event the Company makes any public offering of its securities and
determines in its sole discretion that it is necessary to reduce the number of
issued but unexercised stock purchase rights so as to comply with any state’s
securities or Blue Sky law limitations with respect thereto, the Board of
Directors of the Company shall have the right (i) to accelerate the
exercisability of any Option or Stock Appreciation Right and the date on which
such Option or Stock Appreciation Right must be exercised, provided that the
Company gives Participant prior written notice of such acceleration, and (ii) to
cancel any Options, Stock Appreciation Rights or portions thereof which
Participant does not exercise prior to or contemporaneously with such public
offering.


 


                (c)           In
the event of a transaction (as defined in Section 13 of the Plan),
Participant will comply with Rule 145 of the Securities Act of 1933 and
any other restrictions imposed under other applicable legal or accounting
principles if Participant is an “affiliate” (as defined in such applicable
legal and accounting principles) at the time of the transaction, and Participant
will execute any documents necessary to ensure compliance with such rules.


 


                The Company reserves the right to place a legend on
any stock certificate issued in connection with an Award pursuant to the Plan
to assure compliance with this Section 14.


 


SECTION 15.


AMENDMENT OF THE PLAN


 


                The Board may from time to time, insofar as permitted
by law, suspend or discontinue the Plan or revise or amend it in any respect;
provided, however, that no such revision or amendment, except as is authorized
in Section 13, shall impair the terms and conditions of any Award which is
outstanding on the date of such revision or 


 


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amendment to the material
detriment of the Participant without the consent of the Participant.  Notwithstanding the foregoing, no such
revision or amendment shall (i) increase the number of shares subject to
the Plan except as provided in Section 13 hereof, (ii) change the
designation of the class of Participants eligible to receive Awards, (iii) decrease
the price at which Options may be granted, or (iv) materially increase the
benefits accruing to Participants under the Plan without the approval of the
shareholders of the Company if such approval is required for compliance with
the requirements of any applicable law or regulation.  Furthermore, the Plan may not, without the
approval of the shareholders, be amended in any manner that will cause
incentive stock options to fail to meet the requirements of Section 422 of
the Internal Revenue Code.


 


SECTION 16.


NO
OBLIGATION TO EXERCISE OPTION


 


                The granting of an Option or Stock Appreciation Right
shall impose no obligation upon the Participant to exercise such Option or
Stock Appreciation Right.  Further, the
granting of an Award hereunder shall not impose upon the Company or any
Affiliate any obligation to retain the Participant in its employ for any
period.


 


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