Exhibit
10.9


 


INCENTIVE PLAN OF


EDGE PETROLEUM
CORPORATION


 


(AS AMENDED AND RESTATED
EFFECTIVE AS OF JUNE 1, 2004)


 


1. Plan. This Incentive Plan of Edge Petroleum
Corporation (the “Plan”) was adopted by Edge Petroleum Corporation to reward
certain corporate officers and key employees of Edge Petroleum Corporation and
certain independent consultants by enabling them to acquire shares of common
stock of Edge Petroleum Corporation.


 


2. Objectives. This Plan is designed to attract and
retain key employees of the Company and its Subsidiaries (as hereinafter
defined), to attract and retain qualified directors of the Company, to attract
and retain consultants and other independent contractors, to encourage the
sense of proprietorship of such employees, directors and independent
contractors and to stimulate the active interest of such persons in the
development and financial success of the Company and its Subsidiaries. These
objectives are to be accomplished by making Awards (as hereinafter defined)
under this Plan and thereby providing Participants (as hereinafter defined)
with a proprietary interest in the growth and performance of the Company and
its Subsidiaries.


 


3. Definitions. As used herein, the terms set forth
below shall have the following respective meanings:


 


“Annual Director Award Date” means, for each year
beginning on or after the IPO Closing Date, the first business day of the month
next succeeding the date upon which the annual meeting of stockholders of the
Company is held in such year.


 


“Authorized Officer” means the Chairman of the Board
or the Chief Executive Officer of the Company (or any other senior officer of
the Company to whom either of them shall delegate the authority to execute any
Award Agreement).


 


“Award” means an Employee Award, a Director Award or
an Independent Contractor Award.


 


“Award Agreement” means any Employee Award Agreement,
Director Award Agreement or Independent Contractor Award Agreement.


 


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


 


“Cash Award” means an award denominated in cash.


 


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


 


“Committee” means the Compensation Committee of the
Board or such other committee of the Board as is designated by the Board to
administer the Plan.


 


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“Common Stock” means the Common Stock, par value $.01
per share, of the Company.


 


“Company” means Edge Petroleum Corporation, a Delaware
corporation.


 


“Director” means an individual serving as a member of
the Board.


 


“Director Award” means the grant of a Director Option
or a Director Stock Award.


 


“Director Award Agreement” means a written agreement
between the Company and a Participant who is a Nonemployee Director setting
forth the terms, conditions and limitations applicable to a Director Award.


 


“Director Stock Award” means a Stock Award granted to
a Non-employee Director pursuant to the applicable terms, conditions and
limitations specified in paragraph 9(b) hereof.


 


“Disability” means, with respect to a Non-employee
Director, the inability to perform the duties of a Director for a continuous
period of more than three months by reason of any medically determinable
physical or mental impairment.


 


“Dividend Equivalents” means, with respect to shares
of Restricted Stock that are to be issued at the end of the Restriction Period,
an amount equal to all dividends and other distributions (or the economic
equivalent thereof) that are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.


 


“Employee” means an employee of the Company or any of
its Subsidiaries and an individual who has agreed to become an Employee of the
Company or any of its Subsidiaries and actually becomes such an Employee within
the following six months.


 


“Employee Award” means the grant of any Option, SAR,
Stock Award, Cash Award or Performance Award, whether granted singly, in
combination or in tandem, to a Participant who is an Employee pursuant to such
applicable terms, conditions and limitations as the Committee may establish in
order to fulfill the objectives of the Plan.


 


“Employee Award Agreement” means a written agreement
between the Company and a Participant who is an Employee setting forth the
terms, conditions and limitations applicable to an Employee Award.


 


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


 


“Fair Market Value” of a share of Common Stock means,
as of a particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported on
that date, on


 


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the last preceding date on which such a sale was so reported, (ii) if
shares of Common Stock are not so listed but are quoted on the Nasdaq National
Market, the mean between the highest and lowest sales price per share of Common
Stock reported by the Nasdaq National Market on that date, or, if there shall
have been no such sale so reported on that date, on the last preceding date on
which such a sale was so reported, (iii) if the Common Stock is not so listed
or quoted, the mean between the closing bid and asked price on that date, or,
if there are no quotations available for such date, on the last preceding date
on which such quotations shall be available, as reported by the Nasdaq Stock
Market, or, if not reported by the Nasdaq Stock Market, by the National
Quotation Bureau Incorporated or (iv) if shares of Common Stock are not
publicly traded, the most recent value determined by an independent appraiser
appointed by the Company for such purpose; provided that, notwithstanding the
foregoing, “Fair Market Value” in the case of any Award made in connection with
the IPO, means the price per share to the public of the Common Stock in the
IPO, as set forth in the final prospectus relating to the IPO.


 


“Incentive Option” means an Option that is intended to
comply with the requirements set forth in Section 422 of the Code.


 


“Independent Contractor” means a person providing
services to the Company or any of its Subsidiaries except an Employee or
Non-employee Director.


 


“Independent Contractor Award” means the grant of any
Nonqualified Stock Option, SAR, Stock Award, Cash Award or Performance Award,
whether granted singly, in combination or in tandem, to a Participant who is an
Independent Contractor pursuant to such applicable terms, conditions and
limitations as the Committee may establish in order to fulfill the objectives
of the Plan.


 


“Independent Contractor Award Agreement” means a
written agreement between the Company and a Participant who is an Independent
Contractor setting forth the terms, conditions and limitations applicable to an
Independent Contractor Award.


 


“IPO” means the first time a registration statement
filed under the Securities Act of 1933 and respecting an underwritten primary
offering by the Company of shares of Common Stock is declared effective under
that Act and the shares registered by that registration statement are issued
and sold by the Company (otherwise than pursuant to the exercise of any
over-allotment option).


 


“IPO Closing Date” means the date on which the Company
first receives payment for the shares of Common Stock it sells in the IPO.


 


“Non-employee Director” has the meaning set forth in
paragraph 4(b) hereof.


 


“Nonqualified Stock Option” means an Option that is
not an Incentive Option.


 


“Option” means a right to purchase a specified number
of shares of Common Stock at a specified price.


 


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“Participant” means an Employee, Director or
Independent Contractor to whom an Award has been made under this Plan.


 


“Performance Award” means an award made pursuant to
this Plan to a Participant who is an Employee or Independent Contractor who is
subject to the attainment of one or more Performance Goals.


 


“Performance Goal” means a standard established by the
Committee, to determine in whole or in part whether a Performance Award shall
be earned.


 


“Restricted Stock” means any Common Stock that is
restricted or subject to forfeiture provisions.


 


“Restriction Period” means a period of time beginning
as of the date upon which an Award of Restricted Stock is made pursuant to this
Plan and ending as of the date upon which the Common Stock subject to such
Award is no longer restricted or subject to forfeiture provisions.


 


“Rule 16b-3” means Rule 16b-3 promulgated
under the Exchange Act, or any successor rule.


 


“SAR” means a right to receive a payment, in cash or
Common Stock, equal to the excess of the Fair Market Value or other specified
valuation of a specified number of shares of Common Stock on the date the right
is exercised over a specified strike price, in each case, as determined by the
Committee.


 


“Stock Award” means an award in the form of shares of
Common Stock or units denominated in shares of Common Stock.


 


“Subsidiary” means (i) in the case of a corporation,
any corporation of which the Company directly or indirectly owns shares
representing more than 50% of the combined voting power of the shares of all
classes or series of capital stock of such corporation which have the right to
vote generally on matters submitted to a vote of the stockholders of such
corporation and (ii) in the case of a partnership or other business entity not
organized as a corporation, any such business entity of which the Company
directly or indirectly owns more than 50% of the voting, capital or profits
interests (whether in the form of partnership interests, membership interests
or otherwise).


 


4. Eligibility.


 


(a) Employees. Key Employees eligible for Employee Awards
under this Plan are those who hold positions of responsibility and whose
performance, in the judgment of the Committee, can have a significant effect on
the success of the Company and its Subsidiaries, including those individuals
who are expected to become Employees within six months.


 


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(b) Directors. Directors eligible for Director Awards
under this Plan are those who are not employees of the Company or any of its
Subsidiaries (“Non-employee Directors”).


 


(c) Independent Contractors. Independent Contractors
eligible for Independent Contractor Awards under this Plan are those
Independent Contractors providing services to, or who will provide services to,
the Company or any of its Subsidiaries.


 


5. Common Stock Available for Awards. Subject to the
provisions of paragraph 15 hereof, there shall be available for Awards under
this Plan granted wholly or partly in Common Stock (including rights or options
that may be exercised for or settled in Common Stock) an aggregate of 1,700,000
shares of Common Stock, all of which shall be available for Incentive Options.
The number of shares of Common Stock that are the subject of Awards under this
Plan, that are forfeited or terminated, expire unexercised, are settled in cash
in lieu of Common Stock or in a manner such that all or some of the shares
covered by an Award are not issued to a Participant or are exchanged for Awards
that do not involve Common Stock, shall again immediately become available for
Awards hereunder. The Committee may from time to time adopt and observe such
procedures concerning the counting of shares against the Plan maximum as it may
deem appropriate. The Board and the appropriate officers of the Company shall
from time to time take whatever actions are necessary to file any required
documents with governmental authorities, stock exchanges and transaction
reporting systems to ensure that shares of Common Stock are available for
issuance pursuant to Awards.


 


6. Administration.


 


(a) This Plan, as it applies to Participants who are
Employees or Independent Contractors but not with respect to Participants who
are Non-employee Directors, shall be administered by the Committee. To the
extent required in order for Employee Awards to be exempt from Section 16
of the Exchange Act by virtue of the provisions of Rule 16b-3, the
Committee shall consist of at least two members of the Board who meet the
requirements of the definition of “non-employee director” set forth in
Rule 16b-3(b)(3)(i) promulgated under the Exchange Act.


 


(b) Subject to the provisions hereof, insofar as this
Plan relates to the Employee Awards or Independent Contractor Awards, the
Committee shall have full and exclusive power and authority to administer this
Plan and to take all actions that are specifically contemplated hereby or are
necessary or appropriate in connection with the administration hereof. Insofar
as this Plan relates to Employee Awards or Independent Contractor Awards, the
Committee shall also have full and exclusive power to interpret this Plan and
to adopt such rules, regulations and guidelines for carrying out this Plan as
it may deem necessary or proper, all of which powers shall be exercised in the
best interests of the Company and in keeping with the objectives of this Plan.
The Committee may, in its discretion, provide for the extension of the
exercisability of an Employee Award or Independent Contractor Award, accelerate
the vesting or exercisability of an Employee Award or Independent Contractor
Award, eliminate or make less restrictive any restrictions contained in an
Employee Award or Independent Contractor Award, waive any restriction or other
provision of this Plan (insofar as such provision relates to Employee Awards or
to Independent Contractor Awards) or an Employee Award or Independent
Contractor Award or otherwise amend or modify an Employee Award or Independent
Contractor Award in any


 


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manner that is either (i) not adverse to the Participant to whom such
Employee Award or Independent Contractor Award was granted or (ii) consented to
by such Participant. The Committee may make an award to an individual who it
expects to become an Employee of the Company or any of its Subsidiaries within
the next six months, with such award being subject to the individuals actually
becoming an Employee within such time period, and subject to such other terms
and conditions as may be established by the Committee. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in
this Plan or in any Employee Award or Independent Contractor Award in the
manner and to the extent the Committee deems necessary or desirable to further
the Plan purposes. Any decision of the Committee in the interpretation and administration
of this Plan shall lie within its sole and absolute discretion and shall be
final, conclusive and binding on all parties concerned.


 


(c) No member of the Committee or officer of the
Company to whom the Committee has delegated authority in accordance with the
provisions of paragraph 7 of this Plan shall be liable for anything done
or omitted to be done by him or her, by any member of the Committee or by any
officer of the Company in connection with the performance of any duties under
this Plan, except for his or her own willful misconduct or as expressly
provided by statute.


 


7. Delegation of Authority. The Committee may delegate
to the Chief Executive Officer and to other senior officers of the Company its
duties under this Plan pursuant to such conditions or limitations as the
Committee may establish, except that the Committee may not delegate to any
person the authority to grant Awards to, or take other action with respect to,
Participants who are subject to Section 16 of the Exchange Act.


 


8. Employee and Independent Contractor Awards.


 


(a) The Committee shall determine the type or types of
Employee Awards to be made under this Plan and shall designate from time to
time the Employees who are to be the recipients of such Awards. Each Employee Award
may be embodied in an Employee Award Agreement, which shall contain such terms,
conditions and limitations as shall be determined by the Committee in its sole
discretion and shall be signed by the Participant to whom the Employee Award is
made and by an Authorized Officer for and on behalf of the Company. Employee
Awards may consist of those listed in this paragraph 8(a) hereof and may
be granted singly, in combination or in tandem. Employee Awards may also be
made in combination or in tandem with, in replacement of, or as alternatives
to, grants or rights under this Plan or any other employee plan of the Company
or any of its Subsidiaries, including the plan of any acquired entity. An
Employee Award may provide for the grant or issuance of additional, replacement
or alternative Employee Awards upon the occurrence of specified events,
including the exercise of the original Employee Award granted to a Participant.
All or part of an Employee Award may be subject to conditions established by
the Committee, which may include, but are not limited to, continuous service
with the Company and its Subsidiaries, achievement of specific business
objectives, increases in specified indices, attainment of specified growth
rates and other comparable measurements of performance. Upon the termination of
employment by a Participant who is an Employee, any unexercised, deferred,
unvested or unpaid Employee Awards shall be treated as set forth in the
applicable Employee Award Agreement.


 


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(i) Stock Option. An Employee Award may be in the form
of an Option. An Option awarded pursuant to this Plan may consist of an
Incentive Option or a Nonqualified Option. The price at which shares of Common
Stock may be purchased upon the exercise of an Incentive Option shall be not
less than the Fair Market Value of the Common Stock on the date of grant. The
price at which shares of Common Stock may be purchased upon the exercise of a
Nonqualified Option shall be not less than the Fair Market Value of the Common
Stock on the date of grant. Subject to the foregoing provisions, the terms,
conditions and limitations applicable to any Options awarded pursuant to this
Plan, including the term of any Options and the date or dates upon which they become
exercisable, shall be determined by the Committee.


 


(ii) Stock Appreciation Right. An Employee Award may
be in the form of an SAR. The terms, conditions and limitations applicable to
any SARs awarded pursuant to this Plan, including the term of any SARs and the
date or dates upon which they become exercisable, shall be determined by the
Committee.


 


(iii) Stock Award. An Employee Award may be in the
form of a Stock Award. The terms, conditions and limitations applicable to any
Stock Awards granted pursuant to this Plan shall be determined by the
Committee.


 


(iv) Cash Award. An Employee Award may be in the form
of a Cash Award. The terms, conditions and limitations applicable to any Cash
Awards granted pursuant to this Plan shall be determined by the Committee.


 


(v) Performance Award. Without limiting the type or
number of Employee Awards that may be made under the other provisions of this
Plan, an Employee Award may be in the form of a Performance Award. A
Performance Award shall be paid, vested or otherwise deliverable solely on
account of the attainment of one or more pre-established, objective Performance
Goals established by the Committee prior to the earlier to occur of (x) 90 days
after the commencement of the period of service to which the Performance Goal
relates and (y) the lapse of 25% of the period of service (as scheduled in good
faith at the time the goal is established), and in any event while the outcome
is substantially uncertain. A Performance Goal is objective if a third party
having knowledge of the relevant facts could determine whether the goal is met.
Such a Performance Goal may be based on one or more business criteria that
apply to the individual, one or more business units of the Company, or the
Company as a whole, and may include one or more of the following: increased
revenue, net income, stock price, market share, earnings per share, return on
equity, return on assets or decrease in costs. Unless otherwise stated, such a
Performance Goal need not be based upon an increase or positive result under a
particular business criterion and could include, for example, maintaining the
status quo or limiting economic losses (measured, in each case, by reference to
specific business criteria). In interpreting Plan provisions applicable to Performance
Goals and Performance Awards, it is the intent of the Plan to conform with the
standards of Section 162(m) of the Code and Treasury
Regulations 1.16227(e)(2)(i), and the Committee in establishing such goals
and interpreting the Plan shall be guided by such provisions. Prior to the
payment of any compensation based on the achievement of Performance Goals, the
Committee must certify in writing that applicable Performance Goals and any of
the material terms thereof were, in fact, satisfied. Subject to the


 


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foregoing provisions, the terms, conditions and limitations applicable
to any Performance Awards made pursuant to this Plan shall be determined by the
Committee.


 


(b) Notwithstanding anything to the contrary contained
in this Plan, the following limitations shall apply to any Employee Awards made
hereunder:


 


(i) no Participant may be granted, during any one-year
period, Employee Awards consisting of Options or SARs that are exercisable for
more than 135,000 shares of Common Stock;


 


(ii) no Participant may be granted, during any
one-year period, Stock Awards covering or relating to more than 135,000 shares
of Common Stock (the limitation set forth in this clause (ii), together with
the limitation set forth in clause (i) above, being hereinafter collectively
referred to as the “Stock Based Awards Limitations”); and


 


(iii) no Participant may be granted Employee Awards
consisting of cash or in any other form permitted under this Plan (other than
Employee Awards consisting of Options or SARs or otherwise consisting of shares
of Common Stock or units denominated in such shares) in respect of any one-year
period having a value determined on the date of grant in excess of $500,000.


 


(c) The Committee shall have the sole responsibility
and authority to determine the type or types of Independent Contractor Awards
to be made under this Plan and may make any such Awards as could be made to an
Employee, other than Incentive Options; provided that the limitations described
in paragraph 8(b) shall be inapplicable to Independent Contractor Awards.


 


9. Director Awards. Each Non-employee Director of the
Company shall be granted Director Awards in accordance with this
paragraph 9 and subject to the applicable terms, conditions and
limitations set forth in this Plan and the applicable Director Award Agreement.
Notwithstanding anything to the contrary contained herein, Director Awards
shall not be made in any year in which a sufficient number of shares of Common
Stock are not available to make such Awards under this Plan.


 


(a) Director Options.


 


(i) On the IPO Closing Date, each Non-employee
Director shall be automatically awarded a Director Option for the number of
shares of Common Stock determined in the following table:


 


	
  Years of Service With the Company or its Predecessors

  	
   

  	
  Number of
  Shares

  Subject to Option

  	
   

  
	
  4 years or
  greater

  	
   

  	
  8,000

  	
   

  
	
  3 to 4 years

  	
   

  	
  6,000

  	
   

  
	
  2 to 3 years

  	
   

  	
  4,000

  	
   

  
	
  2 years or less

  	
   

  	
  2,000

  	
   

  



 


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(ii) Each Non-employee Director who was first
appointed or elected to the Board of Directors during the year ended
December 31, 2002, shall be granted a Director Option that: (A) provides
for the purchase of 5,000 Shares of Common Stock; (B) expires (notwithstanding
any earlier termination of the status of the holder as a Non-employee Director)
as set forth on Annex A hereto; (C) vests and becomes exercisable as set forth
on Annex A; and (D) has a purchase price of each share of Common Stock
subject to such Director Option as set forth on Annex A (which in any
event is equal to or greater than the Fair Market Value as of
February 20, 2003).


 


(iii) Effective beginning February 20, 2003,
on the date of his or her first appointment or election to the Board of
Directors, a Non-employee Director may, in the discretion of the Board of
Directors, be granted a Director Option that provides for the purchase of up to
5,000 shares of Common Stock.


 


(iv) Effective beginning on and including
June 1, 2004, on each Annual Director Award Date, each Non-employee
Director may, in the discretion of the Board, be granted a Director Option that
provides for the purchase of up to 3,000 shares of Common Stock.


 


(v) Except as provided in or pursuant to (ii): (A)
each Director Option shall have a term of ten years from the date of grant,
notwithstanding any earlier termination of the status of the holder as a
Non-employee Director; (B) the purchase price of each share of Common Stock
subject to a Director Option shall be equal to the Fair Market Value of the
Common Stock on the date of grant; and (C) all Director Options granted after
July 27, 1999 shall vest and become exercisable on the second
anniversary of the date of grant.


 


(vi) All unvested Director Options shall be forfeited
if the Non-employee Director resigns as a Director without the consent of a
majority of the other Directors.


 


(vii) Any Award of Director Options shall be embodied
in a Director Award Agreement, which shall contain the terms, conditions and
limitations set forth above and shall be signed by the Participant to whom the
Director Options are granted and by an Authorized Officer for and on behalf of
the Company.


 


(b) Director Stock Awards. Effective beginning on and
including June 1, 2004, on each Annual Director Award Date, each
Non-employee Director who was serving as such on the date immediately preceding
the most recent annual meeting of stockholders, may, in the discretion of the
Board, be awarded shares of Common Stock in respect of all or a portion of the
annual retainer to be paid to the Non-employee Director for the preceding
twelve months.  The Board may provide
that all or a portion of any such shares of Common Stock be Restricted Stock
and specify the restrictions thereon (unless otherwise specified by the Board,
no shares of Common Stock issued as a retainer shall be Restricted Stock).


 


10. Payment of Awards.


 


(a) General. Payment of Employee Awards or Independent
Contractor Awards may be made in the form of cash or Common Stock, or a
combination thereof, and may include such restrictions as the Committee shall
determine, including, in the case of Common Stock,


 


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restrictions on transfer and forfeiture provisions. If payment of an
Employee Award or Independent Contractor Award is made in the form of
Restricted Stock, the applicable Award Agreement relating to such shares shall
specify whether they are to be issued at the beginning or end of the
Restriction Period. In the event that shares of Restricted Stock are to be issued
at the beginning of the Restriction Period, the certificates evidencing such
shares (to the extent that such shares are so evidenced) shall contain
appropriate legends and restrictions that describe the terms and conditions of
the restrictions applicable thereto. In the event that shares of Restricted
Stock are to be issued at the end of the Restricted Period, the right to
receive such shares shall be evidenced by book entry registration or in such
other manner as the Committee may determine.


 


(b) Deferral. With the approval of the Committee,
amounts payable in respect of Employee Awards or Independent Contractor Awards
may be deferred and paid either in the form of installments or as a lump sum
payment. The Committee may permit selected Participants to elect to defer
payments of some or all types of Employee Awards or Independent Contractor
Awards in accordance with procedures established by the Committee. Any deferred
payment of an Employee Award or Independent Contractor Award, whether elected
by the Participant or specified by the Award Agreement or by the Committee, may
be forfeited if and to the extent that the Award Agreement so provides.


 


(c) Dividends and Interest. Rights to dividends or
Dividend Equivalents may be extended to and made part of any Employee Award or
Independent Contractor Award consisting of shares of Common Stock or units
denominated in shares of Common Stock, subject to such terms, conditions and
restrictions as the Committee may establish. The Committee may also establish
rules and procedures for the crediting of interest on deferred cash payments
and Dividend Equivalents for Employee Awards or Independent Contractor Awards
consisting of shares of Common Stock or units denominated in shares of Common
Stock.


 


(d) Substitution of Awards. At the discretion of the
Committee, a Participant who is an Employee or Independent Contractor may be
offered an election to substitute an Employee Award or Independent Contractor
Award for another Employee Award or Independent Contractor Award or Employee
Awards or Independent Contractor Awards of the same or different type.


 


11. Stock Option Exercise. The price at which shares
of Common Stock may be purchased under an Option shall be paid in full at the
time of exercise in cash or, if elected by the optionee, the optionee may
purchase such shares by means of tendering Common Stock or surrendering another
Award, including Restricted Stock or Director Restricted Stock, valued at Fair
Market Value on the date of exercise, or any combination thereof. The Committee
shall determine acceptable methods for Participants who are Employees or
Independent Contractors to tender- Common Stock or other Employee Awards or
Independent Contractor Awards; provided that any Common Stock that is or was
the subject of an Employee Award or Independent Contractor Award may be so
tendered only if it has been held by the Participant for six months. The
Committee may provide for procedures to permit the exercise or purchase of such
Awards by use of the proceeds to be received from the sale of Common Stock
issuable pursuant to an Employee Award or Independent Contractor Award. Unless
otherwise provided in the applicable Award Agreement, in the event shares of
Restricted Stock are tendered as consideration for the


 


10

















 


exercise of an Option, a number of the shares issued upon the exercise
of the Option, equal to the number of shares of Restricted Stock or Director
Restricted Stock used as consideration therefore, shall be subject to the same
restrictions as the Restricted Stock or Director Restricted Stock so submitted
as well as any additional restrictions that may be imposed by the Committee.


 


12. Taxes. The Company shall have the right to deduct
applicable taxes from any Employee Award payment and withhold, at the time of
delivery or vesting of cash or shares of Common Stock under this Plan, an
appropriate amount of cash or number of shares of Common Stock or a combination
thereof for payment of taxes required by law or to take such other action as
may be necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. The Committee may also permit withholding to be
satisfied by the transfer to the Company of shares of Common Stock theretofore
owned by the holder of the Employee Award with respect to which withholding is
required. If shares of Common Stock are used to satisfy tax withholding, such
shares shall be valued based on the Fair Market Value when the tax withholding
is required to be made. The Committee may provide for loans, on either a short
term or demand basis, from the Company to a Participant who is an Employee or
Independent Contractor to permit the payment of taxes required by law.


 


13. Amendment, Modification, Suspension or
Termination. The Board may amend, modify, suspend or terminate this Plan for
the purpose of meeting or addressing any changes in legal requirements or for
any other purpose permitted by law, except that (i) no amendment or alteration
that would adversely affect the rights of any Participant under any Award
previously granted to such Participant shall be made without the consent of
such Participant and (ii) no amendment or alteration shall be effective prior
to its approval by the stockholders of the Company to the extent such approval
is then required pursuant to Rule 16b-3 in order to preserve the
applicability of any exemption provided by such rule to any Award then
outstanding (unless the holder of such Award consents) or to the extent
stockholder approval is otherwise required by applicable legal requirements.


 


14. Assignability. Unless otherwise determined by the
Committee and provided in the Award Agreement, no Award or any other benefit
under this Plan constituting a derivative security within the meaning of
Rule 16a-1(c) under the Exchange Act shall be assignable or otherwise
transferable except by will or the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act, or the rules thereunder. The
Committee may prescribe and include in applicable Award Agreements other
restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this paragraph 14 shall be null and
void.


 


15. Adjustments.


 


(a) The existence of outstanding Awards shall not
affect in any manner the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the capital stock of the Company or its business or any merger
or consolidation of the Company, or any issue of bonds, debentures, preferred
or prior preference stock (whether or not such issue is prior to, on a parity
with or junior to the Common


 


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Stock) or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding of any kind, whether or not of a character similar to that of
the acts or proceedings enumerated above.


 


(b) In the event of any subdivision or consolidation
of outstanding shares of Common Stock, declaration of a dividend payable in
shares of Common Stock or other stock split, then, except with respect to the
Existing Options, (i) the number of shares of Common Stock reserved under this
Plan, (ii) the number of shares of Common Stock covered by outstanding Awards
in the form of Common Stock or units denominated in Common Stock, (iii) the
exercise or other price in respect of such Awards, (iv) the appropriate Fair
Market Value and other price determinations for such Awards, (v) the number of
shares of Common Stock covered by Director Options granted pursuant to
paragraph 9(a) hereof and (vi) the Stock Based Awards Limitations shall each be
proportionately adjusted by the Board to reflect such transaction. In the event
of any other recapitalization or capital reorganization of the Company, any
consolidation or merger of the Company with another corporation or entity, the
adoption by the Company of any plan of exchange affecting the Common Stock or
any distribution to holders of Common Stock of securities or property (other
than normal cash dividends or dividends payable in Common Stock), the Board shall
make appropriate adjustments to (i) the number of shares of Common Stock
covered by Awards in the form of Common Stock or units denominated in Common
Stock, (ii) the exercise or other price in respect of such Awards, (iii) the
appropriate Fair Market Value and other price determinations for such Awards,
(iv) the number of shares of Common Stock covered by Director Options granted
pursuant to paragraph 9(a) hereof and (v) the Stock Based Awards Limitations to
give effect to such transaction shall each be proportionately adjusted by the
Board to reflect such transaction; provided that such adjustments shall only be
such as are necessary to maintain the proportionate interest of the holders of
the Awards and preserve, without exceeding, the value of such Awards. In the
event of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be authorized to
issue or assume Awards by means of substitution of new Awards, as appropriate,
for previously issued Awards or to assume previously issued Awards as part of
such adjustment.


 


(c) In the event of a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation,
the Board may make such adjustments to outstanding Awards or other provisions
for the disposition of outstanding Awards as it deems equitable, and shall be
authorized, in its discretion, (i) to provide for the substitution of a new
Award or other arrangement (which, if applicable, may be exercisable for such
property or stock as the Board determines) for an outstanding Award or the
assumption of an outstanding Award, regardless of whether in a transaction to
which Section 424(a) of the Code applies, (ii) to provide, prior to the
transaction, for the acceleration of the vesting and exercisability of, or
lapse of restrictions with respect to, the outstanding Award and, if the
transaction is a cash merger, to provide for the termination of any portion of
the Award that remains unexercised at the time of such transaction or (iii) to
provide for the acceleration of the vesting and exercisability of an
outstanding Award and the cancellation thereof in exchange for such payment as
shall be mutually agreeable to the Participant and the Board.


 


12

















 


16. Restrictions. No Common Stock or other form of
payment shall be issued with respect to any Award unless the Company shall be
satisfied based on the advice of its counsel that such issuance will be in
compliance with applicable federal and state securities laws. It is the intent
of the Company that grants of Awards under this Plan comply with
Rule 16b-3 with respect to persons subject to Section 16 of the
Exchange Act unless otherwise provided herein or in an Award Agreement, that
any ambiguities or inconsistencies in the construction of such an Award or this
Plan be interpreted to give effect to such intention. Certificates evidencing
shares of Common Stock delivered under this Plan (to the extent that such shares
are so evidenced) may be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any
securities exchange or transaction reporting system upon which the Common Stock
is then listed or to which it is admitted for quotation and any applicable
federal or state securities law. The Committee may cause a legend or legends to
be placed upon such certificates (if any) to make appropriate reference to such
restrictions.


 


17. Unfunded Plan. Insofar as it provides for Awards
of cash, Common Stock or rights thereto, this Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are
entitled to cash, Common Stock or rights thereto under this Plan, any such
accounts shall be used merely as a bookkeeping convenience. The Company shall
not be required to segregate any assets that may at any time be represented by
cash, Common Stock or rights thereto, nor shall this Plan be construed as
providing for such segregation, nor shall the Company, the Board or the
Committee be deemed to be a trustee of any cash, Common Stock or rights thereto
to be granted under this Plan. Any liability or obligation of the Company to
any Participant with respect to an Award of cash, Common Stock or rights
thereto under this Plan shall be based solely upon any contractual obligations
that may be created by this Plan and any Award Agreement, and no such liability
or obligation of the Company shall be deemed to be secured by any pledge or
other encumbrance on any property of the Company. Neither the Company nor the
Board nor the Committee shall be required to give any security or bond for the
performance of any obligation that may be created by this Plan.


 


18. Governing Law. This Plan and all determinations
made and actions taken pursuant hereto, to the extent not otherwise governed by
mandatory provisions of the Code or the securities laws of the United States,
shall be governed by and construed in accordance with the laws of the State of
Delaware.


 


19. Effectiveness. The Plan as hereby amended and
restated shall be effective as of June 1, 2004.


 


13

















 


ANNEX A


 


	
  NAME

  	
   

  	
  EXPIRATION DATE

  	
   

  	
  VESTING/ EXERCISABILITY (1)

  	
   

  	
  PER SHARE PURCHASE PRICE

  	
   

  
	
  Joseph
  R. Musolino

  	
   

  	
  06/03/2012

  	
   

  	
  06/03/2004

  	
   

  	
  $

  	
  5.69

  	
   

  
	
  Thurmon Andress

  	
   

  	
  01/23/2013

  	
   

  	
  01/23/2005

  	
   

  	
  $

  	
  3.88

  	
   

  
	
  David F. Work

  	
   

  	
  01/23/2013

  	
   

  	
  01/23/2005

  	
   

  	
  $

  	
  3.88

  	
   

  



 












(1) Options vest and become exercisable in full on the date set forth
opposite the name of the applicable Non-employee Director.


 


A-1