exv10w2








    Exhibit 10.2



 




    ROYAL GOLD,
    INC.



 




    2004 OMNIBUS
    LONG-TERM INCENTIVE PLAN

    Adopted on November 10, 2004, as amended



 



    Royal Gold, Inc., a Delaware corporation (the
    “Company”), sets forth herein the terms of its 2004
    Omnibus Long-Term Incentive Plan (the “Plan”), as
    follows:



 


		
	
    1.  
	
    PURPOSE




 



    The Plan is intended to enhance the Company’s and its
    Affiliates’ (as defined herein) ability to attract and
    retain highly qualified officers, directors, key employees, and
    other persons, and to motivate such officers, directors, key
    employees, and other persons to serve the Company and its
    Affiliates and to expend maximum effort to improve the business
    results and earnings of the Company, by providing to such
    persons an opportunity to acquire or increase a direct
    proprietary interest in the operations and future success of the
    Company. To this end, the Plan provides for the grant of stock
    options, stock appreciation rights, restricted stock, stock
    units, unrestricted stock, dividend equivalent rights and cash
    awards. Any of these awards may, but need not, be made as
    performance incentives to reward attainment of annual or
    long-term performance goals in accordance with the terms hereof.
    Stock options granted under the Plan may be non-qualified stock
    options or incentive stock options, as provided herein.



 


		
	
    2.  
	
    DEFINITIONS




 



    For purposes of interpreting the Plan and related documents
    (including Award Agreements), the following definitions shall
    apply:



 



    2.1  “Affiliate” means, with respect
    to the Company, any company or other trade or business that
    controls, is controlled by or is under common control with the
    Company within the meaning of Rule 405 of Regulation C
    under the Securities Act, including, without limitation, any
    Subsidiary.



 



    2.2  “Annual Incentive Award” means
    an Award made subject to attainment of performance goals (as
    described in Section 14) over a performance period
    of up to one year (the fiscal year, unless otherwise specified
    by the Committee).



 



    2.3  “Award” means a grant of an
    Option, Stock Appreciation Right, Restricted Stock, Unrestricted
    Stock, Stock Unit, Dividend Equivalent Rights, or cash award
    under the Plan.



 



    2.4  “Award Agreement” means the
    written agreement between the Company and a Grantee that
    evidences and sets out the terms and conditions of an Award.



 



    2.5  “Benefit Arrangement” shall have
    the meaning set forth in Section 15 hereof.



 



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



 



    2.7  “Cause” means, as determined by
    the Board and unless otherwise provided in an applicable
    agreement with the Company or an Affiliate, (i) gross
    negligence or willful misconduct in connection with the
    performance of duties; (ii) conviction of a criminal
    offense (other than minor traffic offenses); or
    (iii) material breach of any term of any employment,
    consulting or other services, confidentiality, intellectual
    property or non-competition agreements, if any, between the
    Service Provider and the Company or an Affiliate.



 



    2.8  “Code” means the Internal
    Revenue Code of 1986, as now in effect or as hereafter amended.



 



    2.9  “Committee” means a committee
    of, and designated from time to time by resolution of, the
    Board, which shall be constituted as provided in
    Section 3.2.



 



    2.10  “Company” means Royal Gold, Inc.




    

    1








 






    2.11  “Corporate Transaction” means
    (i) the dissolution or liquidation of the Company or a
    merger, consolidation, or reorganization of the Company with one
    or more other entities in which the Company is not the surviving
    entity, (ii) a sale of substantially all of the assets of
    the Company to another person or entity, or (iii) any
    transaction (including without limitation a merger or
    reorganization in which the Company is the surviving entity)
    which results in any person or entity (other than persons who
    are stockholders or Affiliates immediately prior to the
    transaction) owning 50% or more of the combined voting power of
    all classes of stock of the Company.



 



    2.12  “Covered Employee” means a
    Grantee who is a Covered Employee within the meaning of
    Section 162(m)(3) of the Code.



 



    2.13  “Disability” means the Grantee
    is unable to perform each of the essential duties of such
    Grantee’s position by reason of a medically determinable
    physical or mental impairment which is potentially permanent in
    character or which can be expected to last for a continuous
    period of not less than 12 months; provided, however, that,
    with respect to rules regarding expiration of an Incentive Stock
    Option following termination of the Grantee’s Service,
    Disability shall mean the Grantee is unable to engage in any
    substantial gainful activity by reason of a medically
    determinable physical or mental impairment which can be expected
    to result in death or which has lasted or can be expected to
    last for a continuous period of not less than 12 months.



 



    2.14  “Dividend Equivalent Right”
    means a right, granted to a Grantee under Section 13
    hereof, to receive cash, Stock, other Awards or other property
    equal in value to dividends paid with respect to a specified
    number of shares of Stock, or other periodic payments.



 



    2.15  “Effective Date” means
    October 6, 2004, the date the Plan is approved by the Board.



 



    2.16  “Exchange Act” means the
    Securities Exchange Act of 1934, as now in effect or as
    hereafter amended.



 



    2.17  “Fair Market Value” means the
    value of a share of Stock, determined as follows: if on the
    Grant Date or other determination date the Stock is listed on an
    established national or regional stock exchange, is admitted to
    quotation on The Nasdaq Stock Market, Inc. or is publicly traded
    on an established securities market, the Fair Market Value of a
    share of Stock shall be the closing price of the Stock on such
    exchange or in such market (if there is more than one such
    exchange or market the Board shall determine the appropriate
    exchange or market) on the Grant Date or such other
    determination date (or if there is no such reported closing
    price, the Fair Market Value shall be the mean between the
    highest bid and lowest asked prices or between the high and low
    sale prices on such trading day) or, if no sale of Stock is
    reported for such trading day, on the next preceding day on
    which any sale shall have been reported. If the Stock is not
    listed on such an exchange, quoted on such system or traded on
    such a market, Fair Market Value shall be the value of the Stock
    as determined by the Board in good faith.



 



    2.18  “Family Member” means a person
    who is a spouse, former spouse, child, stepchild, grandchild,
    parent, stepparent, grandparent, niece, nephew,
    mother-in-law,
    father-in-law,
    son-in-law,
    daughter-in-law,
    brother, sister,
    brother-in-law,
    or
    sister-in-law,
    including adoptive relationships, of the Grantee, any person
    sharing the Grantee’s household (other than a tenant or
    employee), a trust in which any one or more of these persons
    have more than fifty percent of the beneficial interest, a
    foundation in which any one or more of these persons (or the
    Grantee) control the management of assets, and any other entity
    in which one or more of these persons (or the Grantee) own more
    than fifty percent of the voting interests.



 



    2.19  “Grant Date” means, as
    determined by the Board, the latest to occur of (i) the
    date as of which the Board approves an Award, (ii) the date
    on which the recipient of an Award first becomes eligible to
    receive an Award under Section 6 hereof, or
    (iii) such other date as may be specified by the Board.



 



    2.20  “Grantee” means a person who
    receives or holds an Award under the Plan.



 



    2.21  “Incentive Stock Option” means
    an “incentive stock option” within the meaning of
    Section 422 of the Code, or the corresponding provision of
    any subsequently enacted tax statute, as amended from time to
    time.



 



    2.22  “Non-qualified Stock Option”
    means an Option that is not an Incentive Stock Option.



 



    2.23  “Option” means an option to
    purchase one or more shares of Stock pursuant to the Plan.




    

    2








 






    2.24  “Option Price” means the
    exercise price for each share of Stock subject to an Option.



 



    2.25  “Option Proceeds” means, with
    respect to an Option, the sum of (i) the Option Price paid
    in cash, if any, to purchase shares of Stock under such Option,
    plus (ii) the value of all Federal, state, and local
    deductions to which the Company is entitled with respect to the
    exercise of such Option determined using the highest Federal tax
    rate applicable to corporations and a blended tax rate for state
    and local taxes based on the jurisdictions in which the Company
    does business and giving effect to the deduction of state and
    local taxes for Federal tax purposes.



 



    2.26  “Other Agreement” shall have
    the meaning set forth in Section 15 hereof.



 



    2.27  “Outside Director” means a
    member of the Board who is not an officer or employee of the
    Company.



 



    2.28  “Performance Award” means an
    Award made subject to the attainment of performance goals (as
    described in Section 14) over a performance period
    of up to ten (10) years.



 



    2.29  “Plan” means this Royal Gold,
    Inc. 2004 Omnibus Long-Term Incentive Plan.



 



    2.30  “Purchase Price” means the
    purchase price for each share of Stock pursuant to a grant of
    Restricted Stock or Unrestricted Stock.



 



    2.31  “Reporting Person” means a
    person who is required to file reports under Section 16(a)
    of the Exchange Act.



 



    2.32  “Restricted Stock” means shares
    of Stock, awarded to a Grantee pursuant to Section 10
    hereof.



 



    2.33  “SAR Exercise Price” means the
    per share exercise price of an SAR granted to a Grantee under
    Section 9 hereof.



 



    2.34  “Securities Act” means the
    Securities Act of 1933, as now in effect or as hereafter amended.



 



    2.35  “Service” means service as a
    Service Provider to the Company or an Affiliate. Unless
    otherwise stated in the applicable Award Agreement, a
    Grantee’s change in position or duties shall not result in
    interrupted or terminated Service, so long as such Grantee
    continues to be a Service Provider to the Company or an
    Affiliate. Subject to the preceding sentence, whether a
    termination of Service shall have occurred for purposes of the
    Plan shall be determined by the Board, which determination shall
    be final, binding and conclusive.



 



    2.36  “Service Provider” means an
    employee, officer or director of the Company or an Affiliate, or
    a consultant or adviser currently providing services to the
    Company or an Affiliate.



 



    2.37  “Stock” means the common stock,
    par value $.01 per share, of the Company.



 



    2.38  “Stock Appreciation Right” or
    “SAR” means a right granted to a Grantee under
    Section 9 hereof.



 



    2.39  “Stock Unit” means a
    bookkeeping entry representing the equivalent of shares of
    Stock, awarded to a Grantee pursuant to Section 10
    hereof.



 



    2.40  “Subsidiary” means any
    “subsidiary corporation” of the Company within the
    meaning of Section 424(f) of the Code.



 



    2.41  “Termination Date” means the
    date upon which an Option shall terminate or expire, as set
    forth in Section 8.3 hereof.



 



    2.42  “Ten Percent Stockholder”
    means an individual who owns more than ten percent (10%) of
    the total combined voting power of all classes of outstanding
    stock of the Company, its parent or any of its Subsidiaries. In
    determining stock ownership, the attribution rules of
    Section 424(d) of the Code shall be applied.



 



    2.43  “Unrestricted Stock” means an
    Award pursuant to Section 11 hereof.




    

    3








 





		
	
    3.  
	
    ADMINISTRATION OF
    THE PLAN




 




         3.1.  Board.



 



    The Board shall have such powers and authorities related to the
    administration of the Plan as are consistent with the
    Company’s certificate of incorporation and by-laws and
    applicable law. The Board shall have full power and authority to
    take all actions and to make all determinations required or
    provided for under the Plan, any Award or any Award Agreement,
    and shall have full power and authority to take all such other
    actions and make all such other determinations not inconsistent
    with the specific terms and provisions of the Plan that the
    Board deems to be necessary or appropriate to the administration
    of the Plan, any Award or any Award Agreement. All such actions
    and determinations shall be by the affirmative vote of a
    majority of the members of the Board present at a meeting or by
    unanimous consent of the Board executed in writing in accordance
    with the Company’s certificate of incorporation and by-laws
    and applicable law. The interpretation and construction by the
    Board of any provision of the Plan, any Award or any Award
    Agreement shall be final, binding and conclusive.



 




         3.2. Committee.



 



    The Board from time to time may delegate to the Committee such
    powers and authorities related to the administration and
    implementation of the Plan, as set forth in Section 3.1
    above and other applicable provisions, as the Board shall
    determine, consistent with the certificate of incorporation and
    by-laws of the Company and applicable law.



 



    (i) Except as provided in Subsection (ii) and except
    as the Board may otherwise determine, the Committee, if any,
    appointed by the Board to administer the Plan shall consist of
    two or more Outside Directors of the Company who:
    (a) qualify as “outside directors” within the
    meaning of Section 162(m) of the Code and who (b) meet
    such other requirements as may be established from time to time
    by the Securities and Exchange Commission for plans intended to
    qualify for exemption under
    Rule 16b-3
    (or its successor) under the Exchange Act and who comply with
    the independence requirements of the stock exchange on which the
    Common Stock is listed.



 



    (ii) The Board may also appoint one or more separate
    committees of the Board, each composed of one or more directors
    of the Company who need not be Outside Directors, who may
    administer the Plan with respect to employees or other Service
    Providers who are not officers or directors of the Company, may
    grant Awards under the Plan to such employees or other Service
    Providers, and may determine all terms of such Awards.



 



    In the event that the Plan, any Award or any Award Agreement
    entered into hereunder provides for any action to be taken by or
    determination to be made by the Board, such action may be taken
    or such determination may be made by the Committee if the power
    and authority to do so has been delegated to the Committee by
    the Board as provided for in this Section. Unless otherwise
    expressly determined by the Board, any such action or
    determination by the Committee shall be final, binding and
    conclusive. To the extent permitted by law, the Committee may
    delegate its authority under the Plan to a member of the Board.



 




         3.3.  Terms
    of Awards.



 



    Subject to the other terms and conditions of the Plan, the Board
    shall have full and final authority to:



 



    (i) designate Grantees,



 



    (ii) determine the type or types of Awards to be made to a
    Grantee,



 



    (iii) determine the number of shares of Stock to be subject
    to an Award,



 



    (iv) establish the terms and conditions of each Award
    (including, but not limited to, the exercise price of any
    Option, the nature and duration of any restriction or condition
    (or provision for lapse thereof) relating to the vesting,
    exercise, transfer, or forfeiture of an Award or the shares of
    Stock subject thereto, and any terms or conditions that may be
    necessary to qualify Options as Incentive Stock Options),



 



    (v) prescribe the form of each Award Agreement evidencing
    an Award, and




    

   4








 






    (vi) amend, modify, or supplement the terms of any
    outstanding Award. Such authority specifically includes the
    authority, in order to effectuate the purposes of the Plan but
    without amending the Plan, to modify Awards to eligible
    individuals who are foreign nationals or are individuals who are
    employed outside the United States to recognize differences in
    local law, tax policy, or custom.



 



    As a condition to any subsequent Award, the Board shall have the
    right, at its discretion, to require Grantees to return to the
    Company Awards previously made under the Plan. Subject to the
    terms and conditions of the Plan, any such new Award shall be
    upon such terms and conditions as are specified by the Board at
    the time the new Award is made. The Board shall have the right,
    in its discretion, to make Awards in substitution or exchange
    for any other award under another plan of the Company, any
    Affiliate, or any business entity to be acquired by the Company
    or an Affiliate. The Company may retain the right in an Award
    Agreement to cause a forfeiture of the gain realized by a
    Grantee on account of actions taken by the Grantee in violation
    or breach of or in conflict with any employment agreement,
    non-competition agreement, any agreement prohibiting
    solicitation of employees or clients of the Company or any
    Affiliate thereof or any confidentiality obligation with respect
    to the Company or any Affiliate thereof or otherwise in
    competition with the Company or any Affiliate thereof, to the
    extent specified in such Award Agreement applicable to the
    Grantee. Furthermore, the Company may annul an Award if the
    Grantee is an employee of the Company or an Affiliate thereof
    and is terminated for Cause as defined in the applicable Award
    Agreement or the Plan, as applicable. The grant of any Award
    shall be contingent upon the Grantee executing the appropriate
    Award Agreement.



 



    Notwithstanding the foregoing, no amendment or modification may
    be made to an outstanding Option or SAR which reduces the Option
    Price or SAR Exercise Price, either by lowering the Option Price
    or SAR Exercise Price or by canceling the outstanding Option or
    SAR and granting a replacement Option or SAR with a lower
    exercise price without the approval of the stockholders of the
    Company, provided, that, appropriate adjustments may be made to
    outstanding Options and SARs pursuant to Section 17.



 




         3.4.  Deferral
    Arrangement.



 



    The Board may permit or require the deferral of any award
    payment into a deferred compensation arrangement, subject to
    such rules and procedures as it may establish, which may include
    provisions for the payment or crediting of interest or dividend
    equivalents, including converting such credits into deferred
    Stock equivalents and restricting deferrals to comply with
    hardship distribution rules affecting 401(k) plans. Any such
    deferrals shall be made in compliance with Code Section 409A.



 




         3.5.  No
    Liability.



 



    No member of the Board or of the Committee shall be liable for
    any action or determination made in good faith with respect to
    the Plan or any Award or Award Agreement.



 




         3.6.  Book
    Entry.



 



    Notwithstanding any other provision of this Plan to the
    contrary, the Company may elect to satisfy any requirement under
    this Plan for the delivery of stock certificates through the use
    of book-entry.



 


		
	
    4.  
	
    STOCK SUBJECT TO
    THE PLAN




 



    Stock issued or to be issued under the Plan shall be authorized
    but unissued shares; or, to the extent permitted by applicable
    law, issued shares that have been reacquired by the Company.
    Subject to adjustment as provided in Section 17
    hereof, the number of shares of Stock available for issuance
    under the Plan shall be the sum of one million three hundred
    thousand (1,300,000), and any shares of Stock available for
    grant (including shares which become available due to
    forfeitures of outstanding awards) under the Company’s
    Equity Incentive Plan. Notwithstanding the preceding sentence
    and also subject to adjustment as provided in Section 17
    hereof, the aggregate number of shares of Stock which
    cumulatively may be available for issuance pursuant to Awards
    other than Awards of Options or SARs shall not exceed six
    hundred fifty thousand (650,000), and the aggregate number of
    shares of Stock that may be issued under the Plan shall not
    exceed one million three hundred thousand (1,300,000). If any
    shares covered by an Award are not




    

    5








 






    purchased or are forfeited, or if an Award otherwise terminates
    without delivery of any Stock subject thereto, then the number
    of shares of Stock counted against the aggregate number of
    shares available under the Plan with respect to such Award
    shall, to the extent of any such forfeiture or termination,
    again be available for making Awards under the Plan. If the
    Option Price of any Option granted under the Plan, or if
    pursuant to Section 18.3 the withholding obligation
    of any Grantee with respect to an Option or other Award, is
    satisfied by tendering shares of Stock to the Company (by either
    actual delivery or by attestation) or by withholding shares of
    Stock, the number of shares of Stock issued net of the shares of
    Stock tendered or withheld shall be deemed delivered for
    purposes of determining the maximum number of shares of Stock
    available for delivery under the Plan. The number of shares of
    Stock reserved under this Section 4 shall be
    increased by the number of any shares of Stock that are
    repurchased by the Company with Option Proceeds in respect of
    the exercise of an Option; provided, however, that the number of
    shares of Stock contributed to the number of shares reserved
    under this Section 4 in respect of the use of Option
    Proceeds for repurchase shall not be greater than: (A) the
    amount of such Option Proceeds divided by, (B) the Fair
    Market Value on the date of exercise of the applicable Option.
    The Board shall have the right to substitute or assume Awards in
    connection with mergers, reorganizations, separations, or other
    transactions to which Section 424(a) of the Code applies,
    provided such substitutions and assumptions are permitted by
    Section 424 of the Code and the regulations promulgated
    thereunder. The number of shares of Stock reserved pursuant to
    Section 4 may be increased by the corresponding
    number of Awards assumed and, in the case of a substitution, by
    the net increase in the number of shares of Stock subject to
    Awards before and after the substitution.



 


		
	
    5.  
	
    EFFECTIVE DATE,
    DURATION AND AMENDMENTS




 




         5.1.  Effective
    Date.



 



    The Plan shall be effective as of the Effective Date, subject to
    approval of the Plan by the Company’s stockholders within
    one year of the Effective Date. Upon approval of the Plan by the
    stockholders of the Company as set forth above, all Awards made
    under the Plan on or after the Effective Date shall be fully
    effective as if the stockholders of the Company had approved the
    Plan on the Effective Date. If the stockholders fail to approve
    the Plan within one year after the Effective Date, any Awards
    made hereunder shall be null and void and of no effect.



 




         5.2.  Term.



 



    The Plan shall terminate automatically ten (10) years after
    its adoption by the Board and may be terminated on any earlier
    date as provided in Section 5.3.



 




         5.3.  Amendment
    and Termination of the Plan.



 



    The Board may, at any time and from time to time, amend,
    suspend, or terminate the Plan as to any shares of Stock as to
    which Awards have not been made. An amendment shall be
    contingent on approval of the Company’s stockholders to the
    extent stated by the Board, required by applicable law or
    required by applicable stock exchange listing requirements.



 


		
	
    6.  
	
    AWARD ELIGIBILITY
    AND LIMITATIONS




 




         6.1.  Service
    Providers and Other Persons.



 



    Subject to this Section 6, Awards may be made under
    the Plan to: (i) any Service Provider to the Company or of
    any Affiliate, including any Service Provider who is an officer
    or director of the Company, or of any Affiliate, as the Board
    shall determine and designate from time to time, (ii) any
    Outside Director, and (iii) any other individual whose
    participation in the Plan is determined to be in the best
    interests of the Company by the Board.



 




         6.2.  Successive
    Awards.



 



    An eligible person may receive more than one Award, subject to
    such restrictions as are provided herein.




    

    6








 







         6.3.  Limitation
    on Shares of Stock Subject to Awards and Cash Awards.



 



    During any time when the Company has a class of equity security
    registered under Section 12 of the Exchange Act:



 



    (i) the maximum number of shares of Stock subject to
    Options or SARs that can be awarded under the Plan to any person
    eligible for an Award under Section 6 hereof is one
    hundred thousand (100,000) per calendar year;



 



    (ii) the maximum number of shares that can be awarded under
    the Plan, other than pursuant to an Option or SARs, to any
    person eligible for an Award under Section 6 hereof
    is one hundred thousand (100,000) per calendar year; and



 



    (iii) the maximum amount that may be earned as an Annual
    Incentive Award or other cash Award in any calendar year by any
    one Grantee shall be $1,000,000, and the maximum amount that may
    be earned as a Performance Award or other cash Award in respect
    of a performance period by any one Grantee shall be $2,000,000.



 



    The preceding limitations in this Section 6.3 are
    subject to adjustment as provided in Section 17
    hereof.



 




         6.4.  Stand-Alone,
    Additional, Tandem, and Substitute Awards.



 



    Awards granted under the Plan may, in the discretion of the
    Board, be granted either alone or in addition to, in tandem
    with, or in substitution or exchange for, any other Award or any
    award granted under another plan of the Company, any Affiliate,
    or any business entity to be acquired by the Company or an
    Affiliate, or any other right of a Grantee to receive payment
    from the Company or any Affiliate. Such additional, tandem, and
    substitute or exchange Awards may be granted at any time. If an
    Award is granted in substitution or exchange for another Award,
    the Board shall require the surrender of such other Award in
    consideration for the grant of the new Award. In addition,
    Awards may be granted in lieu of cash compensation, including in
    lieu of cash amounts payable under other plans of the Company or
    any Affiliate, in which the value of Stock subject to the Award
    is equivalent in value to the cash compensation (for example,
    Stock Units or Restricted Stock), or in which the Option Price,
    grant price or purchase price of the Award in the nature of a
    right that may be exercised is equal to the Fair Market Value of
    the underlying Stock minus the value of the cash compensation
    surrendered (for example, Options granted with an Option Price
    “discounted” by the amount of the cash compensation
    surrendered).



 


		
	
    7.  
	
    AWARD
    AGREEMENT




 



    Each Award granted pursuant to the Plan shall be evidenced by an
    Award Agreement, in such form or forms as the Board shall from
    time to time determine. Award Agreements granted from time to
    time or at the same time need not contain similar provisions but
    shall be consistent with the terms of the Plan. Each Award
    Agreement evidencing an Award of Options shall specify whether
    such Options are intended to be Non-qualified Stock Options or
    Incentive Stock Options, and in the absence of such
    specification such options shall be deemed Non-qualified Stock
    Options.



 


		
	
    8.  
	
    TERMS AND
    CONDITIONS OF OPTIONS




 




         8.1.  Option
    Price.



 



    The Option Price of each Option shall be fixed by the Board and
    stated in the Award Agreement evidencing such Option. The Option
    Price of each Option shall be at least the Fair Market Value on
    the Grant Date of a share of Stock; provided, however,
    that in the event that a Grantee is a Ten
    Percent Stockholder, the Option Price of an Option granted
    to such Grantee that is intended to be an Incentive Stock Option
    shall be not less than 110 percent of the Fair Market Value
    of a share of Stock on the Grant Date. In no case shall the
    Option Price of any Option be less than the par value of a share
    of Stock.




    

    7








 







         8.2.  Vesting.



 



    Subject to Sections 8.3 and 17.3 hereof, each
    Option granted under the Plan shall become exercisable at such
    times and under such conditions as shall be determined by the
    Board and stated in the Award Agreement. For purposes of this
    Section 8.2, fractional numbers of shares of Stock
    subject to an Option shall be rounded down to the next nearest
    whole number. No Option shall be exercisable in whole or in part
    prior to the date the Plan is approved by the Stockholders of
    the Company as provided in Section 5.1 hereof.



 




         8.3.  Term.



 



    Each Option granted under the Plan shall terminate, and all
    rights to purchase shares of Stock thereunder shall cease, upon
    the expiration of ten years from the date such Option is
    granted, or under such circumstances and on such date prior
    thereto as is set forth in the Plan or as may be fixed by the
    Board and stated in the Award Agreement relating to such Option
    (the “Termination Date”); provided, however,
    that in the event that the Grantee is a Ten
    Percent Stockholder, an Option granted to such Grantee that
    is intended to be an Incentive Stock Option shall not be
    exercisable after the expiration of five years from its Grant
    Date.



 




         8.4.  Termination
    of Service.



 



    Each Award Agreement shall set forth the extent to which the
    Grantee shall have the right to exercise the Option following
    termination of the Grantee’s Service. Such provisions shall
    be determined in the sole discretion of the Board, need not be
    uniform among all Options issued pursuant to the Plan, and may
    reflect distinctions based on the reasons for termination of
    Service.



 




         8.5.  Limitations
    on Exercise of Option.



 



    Notwithstanding any other provision of the Plan, in no event may
    any Option be exercised, in whole or in part, prior to the date
    the Plan is approved by the stockholders of the Company as
    provided herein or after the occurrence of an event referred to
    in Section 17 hereof which results in termination of
    the Option.



 




         8.6.  Method
    of Exercise.



 



    An Option that is exercisable may be exercised by the
    Grantee’s delivery to the Company of written notice of
    exercise on any business day, at the Company’s principal
    office, on the form specified by the Company. Such notice shall
    specify the number of shares of Stock with respect to which the
    Option is being exercised and shall be accompanied by payment in
    full of the Option Price of the shares for which the Option is
    being exercised plus the amount (if any) of federal
    and/or other
    taxes which the Company may, in its judgment, be required to
    withhold with respect to an Award. The minimum number of shares
    of Stock with respect to which an Option may be exercised, in
    whole or in part, at any time shall be the lesser of
    (i) 100 shares or such lesser number set forth in the
    applicable Award Agreement and (ii) the maximum number of
    shares available for purchase under the Option at the time of
    exercise.



 




         8.7.  Rights
    of Holders of Options.



 



    Unless otherwise stated in the applicable Award Agreement, an
    individual holding or exercising an Option shall have none of
    the rights of a stockholder (for example, the right to receive
    cash or dividend payments or distributions attributable to the
    subject shares of Stock or to direct the voting of the subject
    shares of Stock ) until the shares of Stock covered thereby are
    fully paid and issued to him. Except as provided in
    Section 17 hereof, no adjustment shall be made for
    dividends, distributions or other rights for which the record
    date is prior to the date of such issuance.



 




         8.8.  Delivery
    of Stock Certificates.



 



    Promptly after the exercise of an Option by a Grantee and the
    payment in full of the Option Price, such Grantee shall be
    entitled to the issuance of a stock certificate or certificates
    evidencing his or her ownership of the shares of Stock subject
    to the Option.




    

    8








 







         8.9.  Transferability
    of Options.



 



    Except as provided in Section 8.10, during the
    lifetime of a Grantee, only the Grantee (or, in the event of
    legal incapacity or incompetency, the Grantee’s guardian or
    legal representative) may exercise an Option. Except as provided
    in Section 8.10, no Option shall be assignable or
    transferable by the Grantee to whom it is granted, other than by
    will or the laws of descent and distribution.



 




         8.10.  Family
    Transfers.



 



    If authorized in the applicable Award Agreement, a Grantee may
    transfer, not for value, all or part of an Option which is not
    an Incentive Stock Option to any Family Member. For the purpose
    of this Section 8.10, a “not for value”
    transfer is a transfer which is (i) a gift, (ii) a
    transfer under a domestic relations order in settlement of
    marital property rights; or (iii) a transfer to an entity
    in which more than fifty percent of the voting interests are
    owned by Family Members (or the Grantee) in exchange for an
    interest in that entity. Following a transfer under this
    Section 8.10, any such Option shall continue to be
    subject to the same terms and conditions as were applicable
    immediately prior to transfer. Subsequent transfers of
    transferred Options are prohibited except to Family Members of
    the original Grantee in accordance with this
    Section 8.10 or by will or the laws of descent and
    distribution. The events of termination of Service of
    Section 8.4 hereof shall continue to be applied with
    respect to the original Grantee, following which the Option
    shall be exercisable by the transferee only to the extent, and
    for the periods specified, in Section 8.4.



 




         8.11.  Limitations
    on Incentive Stock Options.



 



    An Option shall constitute an Incentive Stock Option only
    (i) if the Grantee of such Option is an employee of the
    Company or any Subsidiary of the Company; (ii) to the
    extent specifically provided in the related Award Agreement; and
    (iii) to the extent that the aggregate Fair Market Value
    (determined at the time the Option is granted) of the shares of
    Stock with respect to which all Incentive Stock Options held by
    such Grantee become exercisable for the first time during any
    calendar year (under the Plan and all other plans of the
    Grantee’s employer and its Affiliates) does not exceed
    $100,000. This limitation shall be applied by taking Options
    into account in the order in which they were granted.



 


		
	
    9.  
	
    TERMS AND
    CONDITIONS OF STOCK APPRECIATION RIGHTS




 




         9.1.  Right
    to Payment.



 



    An SAR shall confer on the Grantee to whom it is granted a right
    to receive, upon exercise thereof, the excess of (A) the
    Fair Market Value of one share of Stock on the date of exercise
    over (B) the grant price of the SAR as determined by the
    Board. The Award Agreement for an SAR shall specify the grant
    price of the SAR, which may be fixed at the Fair Market Value of
    a share of Stock on the date of grant or may vary in accordance
    with a predetermined formula while the SAR is outstanding. SARs
    may be granted in conjunction with all or part of an Option
    granted under the Plan or at any subsequent time during the term
    of such Option, in conjunction with all or part of any other
    Award or without regard to any Option or other Award.



 




         9.2.  Other
    Terms.



 



    The Board shall determine at the date of grant or thereafter,
    the time or times at which and the circumstances under which an
    SAR may be exercised in whole or in part (including based on
    achievement of performance goals
    and/or
    future service requirements), the time or times at which SARs
    shall cease to be or become exercisable following termination of
    Service or upon other conditions, the method of exercise, method
    of settlement, form of consideration payable in settlement,
    method by or forms in which Stock will be delivered or deemed to
    be delivered to Grantees, whether or not an SAR shall be in
    tandem or in combination with any other Award, and any other
    terms and conditions of any SAR.



 


		
	
    10.  
	
    TERMS AND
    CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS




 




         10.1.  Grant
    of Restricted Stock or Stock Units.



 



    Awards of Restricted Stock or Stock Units may be made for no
    consideration (other than par value of the shares which is
    deemed paid by Services already rendered).




    

    9








 







         10.2.  Restrictions.



 



    At the time a grant of Restricted Stock or Stock Units is made,
    the Board may, in its sole discretion, establish a period of
    time (a “restricted period”) applicable to such
    Restricted Stock or Stock Units. Each Award of Restricted Stock
    or Stock Units may be subject to a different restricted period.
    The Board may, in its sole discretion, at the time a grant of
    Restricted Stock or Stock Units is made, prescribe restrictions
    in addition to or other than the expiration of the restricted
    period, including the satisfaction of corporate or individual
    performance objectives, which may be applicable to all or any
    portion of the Restricted Stock or Stock Units in accordance
    with Section 14.1 and 14.2. Notwithstanding
    the foregoing and except in the case of accelerated vesting for
    Grantees whose age plus years of Service total at least
    sixty-five (65), (i) Restricted Stock that vests solely by
    the passage of time shall not vest in full in less than three
    (3) years from the Grant Date and (ii) Restricted
    Stock for which vesting may be accelerated by achieving
    performance targets shall not vest in full in less than one
    (1) year from the Grant Date. Neither Restricted Stock nor
    Stock Units may be sold, transferred, assigned, pledged or
    otherwise encumbered or disposed of during the restricted period
    or prior to the satisfaction of any other restrictions
    prescribed by the Board with respect to such Restricted Stock or
    Stock Units.



 




         10.3.  Restricted
    Stock Certificates.



 



    The Company shall issue, in the name of each Grantee to whom
    Restricted Stock has been granted, stock certificates
    representing the total number of shares of Restricted Stock
    granted to the Grantee, as soon as reasonably practicable after
    the Grant Date. The Board may provide in an Award Agreement that
    either (i) the Secretary of the Company shall hold such
    certificates for the Grantee’s benefit until such time as
    the Restricted Stock is forfeited to the Company or the
    restrictions lapse, or (ii) such certificates shall be
    delivered to the Grantee, provided, however, that such
    certificates shall bear a legend or legends that comply with the
    applicable securities laws and regulations and makes appropriate
    reference to the restrictions imposed under the Plan and the
    Award Agreement.



 




         10.4.  Rights
    of Holders of Restricted Stock.



 



    Unless the Board otherwise provides in an Award Agreement,
    holders of Restricted Stock shall have the right to vote such
    Stock and the right to receive any dividends declared or paid
    with respect to such Stock. The Board may provide that any
    dividends paid on Restricted Stock must be reinvested in shares
    of Stock, which may or may not be subject to the same vesting
    conditions and restrictions applicable to such Restricted Stock.
    All distributions, if any, received by a Grantee with respect to
    Restricted Stock as a result of any stock split, stock dividend,
    combination of shares, or other similar transaction shall be
    subject to the restrictions applicable to the original Grant.



 




         10.5.  Rights
    of Holders of Stock Units.



 




              10.5.1.  Voting
    and Dividend Rights.



 



    Unless the Board otherwise provides in an Award Agreement,
    holders of Stock Units shall have no rights as stockholders of
    the Company. The Board may provide in an Award Agreement
    evidencing a grant of Stock Units that the holder of such Stock
    Units shall be entitled to receive, upon the Company’s
    payment of a cash dividend on its outstanding Stock, a cash
    payment for each Stock Unit held equal to the per-share dividend
    paid on the Stock. Such Award Agreement may also provide that
    such cash payment will be deemed reinvested in additional Stock
    Units at a price per unit equal to the Fair Market Value of a
    share of Stock on the date that such dividend is paid.



 




              10.5.2.  Creditor’s
    Rights.



 



    A holder of Stock Units shall have no rights other than those of
    a general creditor of the Company. Stock Units represent an
    unfunded and unsecured obligation of the Company, subject to the
    terms and conditions of the applicable Award Agreement.




    

    10








 







         10.6.  Termination
    of Service.



 



    Unless the Board otherwise provides in an Award Agreement or in
    writing after the Award Agreement is issued, upon the
    termination of a Grantee’s Service, any Restricted Stock or
    Stock Units held by such Grantee that have not vested, or with
    respect to which all applicable restrictions and conditions have
    not lapsed, shall immediately be deemed forfeited. Upon
    forfeiture of Restricted Stock or Stock Units, the Grantee shall
    have no further rights with respect to such Award, including but
    not limited to any right to vote Restricted Stock or any right
    to receive dividends with respect to shares of Restricted Stock
    or Stock Units.



 




         10.7.  Purchase
    of Restricted Stock.



 



    The Grantee shall be required, to the extent required by
    applicable law, to purchase the Restricted Stock from the
    Company at a Purchase Price equal to the greater of (i) the
    aggregate par value of the shares of Stock represented by such
    Restricted Stock or (ii) the Purchase Price, if any,
    specified in the Award Agreement relating to such Restricted
    Stock. The Purchase Price shall be payable in a form described
    in Section 12 or, in the discretion of the Board, in
    consideration for past Services rendered to the Company or an
    Affiliate.



 




         10.8.  Delivery
    of Stock.



 



    Upon the expiration or termination of any restricted period and
    the satisfaction of any other conditions prescribed by the
    Board, the restrictions applicable to shares of Restricted Stock
    or Stock Units settled in Stock shall lapse, and, unless
    otherwise provided in the Award Agreement, a stock certificate
    for such shares shall be delivered, free of all such
    restrictions, to the Grantee or the Grantee’s beneficiary
    or estate, as the case may be.



 


		
	
    11.  
	
    TERMS AND
    CONDITIONS OF UNRESTRICTED STOCK AWARDS




 



    The Board may, in its sole discretion, grant (or sell at par
    value or such other higher purchase price determined by the
    Board) an Unrestricted Stock Award to any Grantee pursuant to
    which such Grantee may receive shares of Stock free of any
    restrictions (“Unrestricted Stock”) under the Plan.
    Unrestricted Stock Awards may be granted or sold as described in
    the preceding sentence in respect of past services and other
    valid consideration, or in lieu of, or in addition to, any cash
    compensation due to such Grantee.



 


		
	
    12.  
	
    FORM OF
    PAYMENT FOR OPTIONS AND RESTRICTED STOCK




 




         12.1.  General
    Rule.



 



    Payment of the Option Price for the shares purchased pursuant to
    the exercise of an Option or the Purchase Price for Restricted
    Stock shall be made in cash or in cash equivalents acceptable to
    the Company.



 




         12.2.  Surrender
    of Stock.



 



    To the extent the Award Agreement so provides, payment of the
    Option Price for shares purchased pursuant to the exercise of an
    Option or the Purchase Price for Restricted Stock may be made
    all or in part through the tender to the Company of shares of
    Stock, which shares, if acquired from the Company and if so
    required by the Company, shall have been held for at least six
    months at the time of tender and which shall be valued, for
    purposes of determining the extent to which the Option Price or
    Purchase Price has been paid thereby, at their Fair Market Value
    on the date of exercise or surrender.



 




         12.3.  Cashless
    Exercise.



 



    With respect to an Option only (and not with respect to
    Restricted Stock), to the extent permitted by law and to the
    extent the Award Agreement so provides, payment of the Option
    Price for shares purchased pursuant to the exercise of an Option
    may be made all or in part by delivery (on a form acceptable to
    the Board) of an irrevocable direction to a licensed securities
    broker acceptable to the Company to sell shares of Stock and to
    deliver all or part of the sales proceeds to the Company in
    payment of the Option Price and any withholding taxes described
    in Section 18.3.




    

    11








 







         12.4.  Other
    Forms of Payment.



 



    To the extent the Award Agreement so provides, payment of the
    Option Price for shares purchased pursuant to exercise of an
    Option or the Purchase Price for Restricted Stock may be made in
    any other form that is consistent with applicable laws,
    regulations and rules.



 


		
	
    13.  
	
    TERMS AND
    CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS




 




         13.1.  Dividend
    Equivalent Rights.



 



    A Dividend Equivalent Right is an Award entitling the recipient
    to receive credits based on cash distributions that would have
    been paid on the shares of Stock specified in the Dividend
    Equivalent Right (or other award to which it relates) if such
    shares had been issued to and held by the recipient. A Dividend
    Equivalent Right may be granted hereunder to any Grantee as a
    component of another Award or as a freestanding award. The terms
    and conditions of Dividend Equivalent Rights shall be specified
    in the grant. Dividend equivalents credited to the holder of a
    Dividend Equivalent Right may be paid currently or may be deemed
    to be reinvested in additional shares of Stock, which may
    thereafter accrue additional equivalents. Any such reinvestment
    shall be at Fair Market Value on the date of reinvestment.
    Dividend Equivalent Rights may be settled in cash or Stock or a
    combination thereof, in a single installment or installments,
    all determined in the sole discretion of the Board. A Dividend
    Equivalent Right granted as a component of another Award may
    provide that such Dividend Equivalent Right shall be settled
    upon exercise, settlement, or payment of, or lapse of
    restrictions on, such other award, and that such Dividend
    Equivalent Right shall expire or be forfeited or annulled under
    the same conditions as such other award. A Dividend Equivalent
    Right granted as a component of another Award may also contain
    terms and conditions different from such other award.



 




         13.2.  Termination
    of Service.



 



    Except as may otherwise be provided by the Board either in the
    Award Agreement or in writing after the Award Agreement is
    issued, a Grantee’s rights in all Dividend Equivalent
    Rights or interest equivalents shall automatically terminate
    upon the Grantee’s termination of Service for any reason.



 


		
	
    14.  
	
    TERMS AND
    CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS




 




         14.1.  Performance
    Conditions.



 



    The right of a Grantee to exercise or receive a grant or
    settlement of any Award, and the timing thereof, may be subject
    to such performance conditions as may be specified by the Board.
    The Board may use such business criteria and other measures of
    performance as it may deem appropriate in establishing any
    performance conditions, and may exercise its discretion to
    reduce the amounts payable under any Award subject to
    performance conditions, except as limited under
    Sections 14.2 hereof in the case of a Performance Award or
    Annual Incentive Award intended to qualify under Code
    Section 162(m). If and to the extent required under Code
    Section 162(m), any power or authority relating to a
    Performance Award or Annual Incentive Award intended to qualify
    under Code Section 162(m), shall be exercised by the
    Committee and not the Board.



 




         14.2.  Performance
    or Annual Incentive Awards Granted to Designated Covered
    Employees.



 



    If and to the extent that the Committee determines that a
    Performance or Annual Incentive Award to be granted to a Grantee
    who is designated by the Committee as likely to be a Covered
    Employee should qualify as “performance-based
    compensation” for purposes of Code Section 162(m), the
    grant, exercise
    and/or
    settlement of such Performance or Annual Incentive Award shall
    be contingent upon achievement of pre-established performance
    goals and other terms set forth in this Section 14.2.



 




              14.2.1.  Performance
    Goals Generally.



 



    The performance goals for such Performance or Annual Incentive
    Awards shall consist of one or more business criteria and a
    targeted level or levels of performance with respect to each of
    such criteria, as specified by the Committee consistent with
    this Section 14.2. Performance goals shall be
    objective and shall otherwise meet the requirements of Code
    Section 162(m) and regulations thereunder including the




    

    12








 






    requirement that the level or levels of performance targeted by
    the Committee result in the achievement of performance goals
    being “substantially uncertain.” The Committee may
    determine that such Performance or Annual Incentive Awards shall
    be granted, exercised
    and/or
    settled upon achievement of any one performance goal or that two
    or more of the performance goals must be achieved as a condition
    to grant, exercise
    and/or
    settlement of such Performance or Annual Incentive Awards.
    Performance goals may differ for Performance or Annual Incentive
    Awards granted to any one Grantee or to different Grantees.



 




              14.2.2.  Business
    Criteria.



 



    One or more of the following business criteria for the Company,
    on a consolidated basis,
    and/or
    specified subsidiaries or business units of the Company (except
    with respect to the total stockholder return and earnings per
    share criteria), shall be used exclusively by the Committee in
    establishing performance goals for such Performance or Annual
    Incentive Awards: (1) total stockholder return;
    (2) such total stockholder return as compared to total
    return (on a comparable basis) of a publicly available index
    such as, but not limited to, the Standard &
    Poor’s 500 Stock Index; (3) net income;
    (4) pretax earnings; (5) earnings before interest
    expense, taxes, depreciation and amortization; (6) pretax
    operating earnings after interest expense and before bonuses,
    service fees, and extraordinary or special items;
    (7) operating margin; (8) earnings per share;
    (9) return on equity; (10) return on capital;
    (11) return on investment; (12) operating earnings;
    (13) working capital; (14) ratio of debt to
    stockholders’ equity; (15) revenue and (16) free
    cash flow and free cash flow per share. Business criteria may be
    measured on an absolute basis or on a relative basis (i.e.,
    performance relative to peer companies) and on a GAAP or
    non-GAAP basis.



 




              14.2.3.  Timing
    For Establishing Performance Goals.



 



    Performance goals shall be established not later than
    90 days after the beginning of any performance period
    applicable to such Performance or Annual Incentive Awards, or at
    such other date as may be required or permitted for
    “performance-based compensation” under Code
    Section 162(m).



 




              14.2.4.  Performance
    or Annual Incentive Award Pool.



 



    The Committee may establish a Performance or Annual Incentive
    Award pool, which shall be an unfunded pool, for purposes of
    measuring Company performance in connection with Performance or
    Annual Incentive Awards.



 




              14.2.5.  Settlement
    of Performance or Annual Incentive Awards; Other
    Terms.



 



    Settlement of such Performance or Annual Incentive Awards shall
    be in cash, Stock, other Awards or other property, in the
    discretion of the Committee. The Committee may, in its
    discretion, reduce the amount of a settlement otherwise to be
    made in connection with such Performance or Annual Incentive
    Awards. The Committee shall specify the circumstances in which
    such Performance or Annual Incentive Awards shall be paid or
    forfeited in the event of termination of Service by the Grantee
    prior to the end of a performance period or settlement of
    Performance Awards.



 




         14.3.  Written
    Determinations.



 



    All determinations by the Committee as to the establishment of
    performance goals, the amount of any Performance Award pool or
    potential individual Performance Awards and as to the
    achievement of performance goals relating to Performance Awards,
    and the amount of any Annual Incentive Award pool or potential
    individual Annual Incentive Awards and the amount of final
    Annual Incentive Awards, shall be made in writing in the case of
    any Award intended to qualify under Code Section 162(m). To
    the extent required to comply with Code Section 162(m), the
    Committee may delegate any responsibility relating to such
    Performance Awards or Annual Incentive Awards.



 




         14.4.  Status
    of Section 14.2 Awards Under Code
    Section 162(m).



 



    It is the intent of the Company that Performance Awards and
    Annual Incentive Awards under Section 14.2 hereof granted
    to persons who are designated by the Committee as likely to be
    Covered Employees within the meaning of Code Section 162(m)
    and regulations thereunder shall, if so designated by




    

    13








 






    the Committee, constitute “qualified performance-based
    compensation” within the meaning of Code
    Section 162(m) and regulations thereunder. Accordingly, the
    terms of Section 14.2, including the definitions of Covered
    Employee and other terms used therein, shall be interpreted in a
    manner consistent with Code Section 162(m) and regulations
    thereunder. The foregoing notwithstanding, because the Committee
    cannot determine with certainty whether a given Grantee will be
    a Covered Employee with respect to a fiscal year that has not
    yet been completed, the term Covered Employee as used herein
    shall mean only a person designated by the Committee, at the
    time of grant of Performance Awards or an Annual Incentive
    Award, as likely to be a Covered Employee with respect to that
    fiscal year. If any provision of the Plan or any agreement
    relating to such Performance Awards or Annual Incentive Awards
    does not comply or is inconsistent with the requirements of Code
    Section 162(m) or regulations thereunder, such provision
    shall be construed or deemed amended to the extent necessary to
    conform to such requirements.



 


		
	
    15.  
	
    PARACHUTE
    LIMITATIONS




 



    Notwithstanding any other provision of this Plan or of any other
    agreement, contract, or understanding heretofore or hereafter
    entered into by a Grantee with the Company or any Affiliate,
    except an agreement, contract, or understanding hereafter
    entered into that expressly modifies or excludes application of
    this paragraph (an “Other Agreement”), and
    notwithstanding any formal or informal plan or other arrangement
    for the direct or indirect provision of compensation to the
    Grantee (including groups or classes of Grantees or
    beneficiaries of which the Grantee is a member), whether or not
    such compensation is deferred, is in cash, or is in the form of
    a benefit to or for the Grantee (a “Benefit
    Arrangement”), if the Grantee is a “disqualified
    individual,” as defined in Section 280G(c) of the
    Code, any Option, Restricted Stock or Stock Unit held by that
    Grantee and any right to receive any payment or other benefit
    under this Plan shall not become exercisable or vested
    (i) to the extent that such right to exercise, vesting,
    payment, or benefit, taking into account all other rights,
    payments, or benefits to or for the Grantee under this Plan, all
    Other Agreements, and all Benefit Arrangements, would cause any
    payment or benefit to the Grantee under this Plan to be
    considered a “parachute payment” within the meaning of
    Section 280G(b)(2) of the Code as then in effect (a
    “Parachute Payment”) and (ii) if, as a
    result of receiving a Parachute Payment, the aggregate after-tax
    amounts received by the Grantee from the Company under this
    Plan, all Other Agreements, and all Benefit Arrangements would
    be less than the maximum after-tax amount that could be received
    by the Grantee without causing any such payment or benefit to be
    considered a Parachute Payment. In the event that the receipt of
    any such right to exercise, vesting, payment, or benefit under
    this Plan, in conjunction with all other rights, payments, or
    benefits to or for the Grantee under any Other Agreement or any
    Benefit Arrangement would cause the Grantee to be considered to
    have received a Parachute Payment under this Plan that would
    have the effect of decreasing the after-tax amount received by
    the Grantee as described in clause (ii) of the preceding
    sentence, then the Grantee shall have the right, in the
    Grantee’s sole discretion, to designate those rights,
    payments, or benefits under this Plan, any Other Agreements, and
    any Benefit Arrangements that should be reduced or eliminated so
    as to avoid having the payment or benefit to the Grantee under
    this Plan be deemed to be a Parachute Payment, provided,
    however, that in order to comply with Code Section 409A,
    the reduction or elimination will be performed in the order in
    which each dollar of value subject to an Award reduces the
    Parachute Payment to the greatest extent.



 


		
	
    16.  
	
    REQUIREMENTS OF
    LAW




 




         16.1.  General.



 



    The Company shall not be required to sell or issue any shares of
    Stock under any Award if the sale or issuance of such shares
    would constitute a violation by the Grantee, any other
    individual exercising an Option, or the Company of any provision
    of any law or regulation of any governmental authority,
    including without limitation any federal or state securities
    laws or regulations. If at any time the Company shall determine,
    in its discretion, that the listing, registration or
    qualification of any shares subject to an Award upon any
    securities exchange or under any governmental regulatory body is
    necessary or desirable as a condition of, or in connection with,
    the issuance or purchase of shares hereunder, no shares of Stock
    may be issued or sold to the Grantee or any other individual
    exercising an Option pursuant to such Award unless such listing,




    

    14








 






    registration, qualification, consent or approval shall have been
    effected or obtained free of any conditions not acceptable to
    the Company, and any delay caused thereby shall in no way affect
    the date of termination of the Award. Specifically, in
    connection with the Securities Act, upon the exercise of any
    Option or the delivery of any shares of Stock underlying an
    Award, unless a registration statement under such Act is in
    effect with respect to the shares of Stock covered by such
    Award, the Company shall not be required to sell or issue such
    shares unless the Board has received evidence satisfactory to it
    that the Grantee or any other individual exercising an Option
    may acquire such shares pursuant to an exemption from
    registration under the Securities Act. Any determination in this
    connection by the Board shall be final, binding, and conclusive.
    The Company may, but shall in no event be obligated to, register
    any securities covered hereby pursuant to the Securities Act.
    The Company shall not be obligated to take any affirmative
    action in order to cause the exercise of an Option or the
    issuance of shares of Stock pursuant to the Plan to comply with
    any law or regulation of any governmental authority. As to any
    jurisdiction that expressly imposes the requirement that an
    Option shall not be exercisable until the shares of Stock
    covered by such Option are registered or are exempt from
    registration, the exercise of such Option (under circumstances
    in which the laws of such jurisdiction apply) shall be deemed
    conditioned upon the effectiveness of such registration or the
    availability of such an exemption.



 




         16.2.  Rule 16b-3.



 



    During any time when the Company has a class of equity security
    registered under Section 12 of the Exchange Act, it is the
    intent of the Company that Awards pursuant to the Plan and the
    exercise of Options granted hereunder will qualify for the
    exemption provided by
    Rule 16b-3
    under the Exchange Act. To the extent that any provision of the
    Plan or action by the Board does not comply with the
    requirements of
    Rule 16b-3,
    it shall be deemed inoperative to the extent permitted by law
    and deemed advisable by the Board, and shall not affect the
    validity of the Plan. In the event that
    Rule 16b-3
    is revised or replaced, the Board may exercise its discretion to
    modify this Plan in any respect necessary to satisfy the
    requirements of, or to take advantage of any features of, the
    revised exemption or its replacement.



 


		
	
    17.  
	
    EFFECT OF CHANGES
    IN CAPITALIZATION




 




         17.1.  Changes
    in Stock.



 



    If the number of outstanding shares of Stock is increased or
    decreased or the shares of Stock are changed into or exchanged
    for a different number or kind of shares or other securities of
    the Company on account of any recapitalization,
    reclassification, stock split, reverse split, combination of
    shares, exchange of shares, stock dividend or other distribution
    payable in capital stock, or other increase or decrease in such
    shares effected without receipt of consideration by the Company
    occurring after the Effective Date, the number and kinds of
    shares for which grants of Options and other Awards may be made
    under the Plan shall be adjusted proportionately and accordingly
    by the Company. In addition, the number and kind of shares for
    which Awards are outstanding shall be adjusted proportionately
    and accordingly so that the proportionate interest of the
    Grantee immediately following such event shall, to the extent
    practicable, be the same as immediately before such event. Any
    such adjustment in outstanding Options or SARs shall not change
    the aggregate Option Price or SAR Exercise Price payable with
    respect to shares that are subject to the unexercised portion of
    an outstanding Option or SAR, as applicable, but shall include a
    corresponding proportionate adjustment in the Option Price or
    SAR Exercise Price per share. The conversion of any convertible
    securities of the Company shall not be treated as an increase in
    shares effected without receipt of consideration.
    Notwithstanding the foregoing, in the event of any distribution
    to the Company’s stockholders of securities of any other
    entity or other assets (including an extraordinary cash dividend
    but excluding a non-extraordinary dividend payable in cash or in
    stock of the Company) without receipt of consideration by the
    Company, the Company may, in such manner as the Company deems
    appropriate, adjust (i) the number and kind of shares
    subject to outstanding Awards
    and/or
    (ii) the exercise price of outstanding Options and Stock
    Appreciation Rights to reflect such distribution.




    

    15








 







         17.2.  Reorganization
    in Which the Company Is the Surviving Entity Which does not
    Constitute a Corporate Transaction.



 



    Subject to Section 17.3 hereof, if the Company shall
    be the surviving entity in any reorganization, merger, or
    consolidation of the Company with one or more other entities
    which does not constitute a Corporate Transaction, any Option or
    SAR theretofore granted pursuant to the Plan shall pertain to
    and apply to the securities to which a holder of the number of
    shares of Stock subject to such Option or SAR would have been
    entitled immediately following such reorganization, merger, or
    consolidation, with a corresponding proportionate adjustment of
    the Option Price or SAR Exercise Price per share so that the
    aggregate Option Price or SAR Exercise Price thereafter shall be
    the same as the aggregate Option Price or SAR Exercise Price of
    the shares remaining subject to the Option or SAR immediately
    prior to such reorganization, merger, or consolidation. Subject
    to any contrary language in an Award Agreement evidencing an
    Award, any restrictions applicable to such Award shall apply as
    well to any replacement shares received by the Grantee as a
    result of the reorganization, merger or consolidation. In the
    event of a transaction described in this Section 17.2,
    Stock Units shall be adjusted so as to apply to the securities
    that a holder of the number of shares of Stock subject to the
    Stock Units would have been entitled to receive immediately
    following such transaction.



 




         17.3.  Corporate
    Transaction.



 



    Subject to the exceptions set forth in the last sentence of this
    Section 17.3 and the last sentence of
    Section 17.4:



 



    (i) upon the occurrence of a Corporate Transaction, all
    outstanding shares of Restricted Stock and all Stock Units shall
    be deemed to have vested, and all restrictions and conditions
    applicable to such shares of Restricted Stock shall be deemed to
    have lapsed and the shares of stock subject to such Stock Units
    shall be delivered, immediately prior to the occurrence of such
    Corporate Transaction, and



 



    (ii) either of the following two actions shall be taken:



 



    (A) fifteen days prior to the scheduled consummation of a
    Corporate Transaction, all Options and SARs outstanding
    hereunder shall become immediately exercisable and shall remain
    exercisable for a period of fifteen days, or



 



    (B) the Board may elect, in its sole discretion, to cancel
    any outstanding Awards of Options, Restricted Stock, Stock Units
    and/or SARs
    and pay or deliver, or cause to be paid or delivered, to the
    holder thereof an amount in cash or securities having a value
    (as determined by the Board acting in good faith), in the case
    of Restricted Stock or Stock Units, equal to the formula or
    fixed price per share paid to holders of shares of Stock and, in
    the case of Options or SARs, equal to the product of the number
    of shares of Stock subject to the Option or SAR (the “Award
    Shares”) multiplied by the amount, if any, by which
    (I) the formula or fixed price per share paid to holders of
    shares of Stock pursuant to such transaction exceeds
    (II) the Option Price or SAR Exercise Price applicable to
    such Award Shares.



 



    With respect to the Company’s establishment of an exercise
    window, (i) any exercise of an Option or SAR during such
    fifteen-day
    period shall be conditioned upon the consummation of the event
    and shall be effective only immediately before the consummation
    of the event, and (ii) upon consummation of any Corporate
    Transaction the Plan, and all outstanding but unexercised
    Options and SARs shall terminate. The Board shall send written
    notice of an event that will result in such a termination to all
    individuals who hold Options and SARs not later than the time at
    which the Company gives notice thereof to its stockholders.



 



    This Section 17.3 shall not apply to any Corporate
    Transaction to the extent that provision is made in writing in
    connection with such Corporate Transaction for the assumption or
    continuation of the Options, SARs, Restricted Stock and Stock
    Units theretofore granted, or for the substitution for such
    Options, SARs, Restricted Stock and Stock Units for new common
    stock options and stock appreciation rights and new common stock
    restricted stock and stock units relating to the stock of a
    successor entity, or a parent or subsidiary thereof, with
    appropriate adjustments as to the number of shares (disregarding
    any consideration that is not common stock) and option and stock
    appreciation right exercise prices, in which event the Plan,




    

    16








 






    Options, SARs, Restricted Stock and Stock Units theretofore
    granted shall continue in the manner and under the terms so
    provided.



 




         17.4.  Adjustments.



 



    Adjustments under this Section 17 related to shares
    of Stock or securities of the Company shall be made by the
    Board, whose determination in that respect shall be final,
    binding and conclusive. No fractional shares or other securities
    shall be issued pursuant to any such adjustment, and any
    fractions resulting from any such adjustment shall be eliminated
    in each case by rounding downward to the nearest whole share.
    The Board shall determine the effect of a Corporate Transaction
    upon Awards other than Options, SARs, Stock Units and Restricted
    Stock, and such effect shall be set forth in the appropriate
    Award Agreement. The Board may provide in the Award Agreements
    at the time of grant, or any time thereafter with the consent of
    the Grantee, for different provisions to apply to an Award in
    place of those described in Sections 17.1, 17.2 and
    17.3.



 




         17.5.  No
    Limitations on Company.



 



    The making of Awards pursuant to the Plan shall not affect or
    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, consolidate,
    dissolve, or liquidate, or to sell or transfer all or any part
    of its business or assets.



 


		
	
    18.  
	
    GENERAL
    PROVISIONS




 




         18.1.  Disclaimer
    of Rights.



 



    No provision in the Plan or in any Award or Award Agreement
    shall be construed to confer upon any individual the right to
    remain in the employ or service of the Company or any Affiliate,
    or to interfere in any way with any contractual or other right
    or authority of the Company either to increase or decrease the
    compensation or other payments to any individual at any time, or
    to terminate any employment or other relationship between any
    individual and the Company. In addition, notwithstanding
    anything contained in the Plan to the contrary, unless otherwise
    stated in the applicable Award Agreement, no Award granted under
    the Plan shall be affected by any change of duties or position
    of the Grantee, so long as such Grantee continues to be a
    director, officer, consultant or employee of the Company or an
    Affiliate. The obligation of the Company to pay any benefits
    pursuant to this Plan shall be interpreted as a contractual
    obligation to pay only those amounts described herein, in the
    manner and under the conditions prescribed herein. The Plan
    shall in no way be interpreted to require the Company to
    transfer any amounts to a third party trustee or otherwise hold
    any amounts in trust or escrow for payment to any Grantee or
    beneficiary under the terms of the Plan.



 




         18.2.  Nonexclusivity
    of the Plan.



 



    Neither the adoption of the Plan nor the submission of the Plan
    to the stockholders of the Company for approval shall be
    construed as creating any limitations upon the right and
    authority of the Board to adopt such other incentive
    compensation arrangements (which arrangements may be applicable
    either generally to a class or classes of individuals or
    specifically to a particular individual or particular
    individuals) as the Board in its discretion determines
    desirable, including, without limitation, the granting of stock
    options otherwise than under the Plan.



 




         18.3.  Withholding
    Taxes.



 



    The Company or an Affiliate, as the case may be, shall have the
    right to deduct from payments of any kind otherwise due to a
    Grantee any federal, state, or local taxes of any kind required
    by law to be withheld with respect to the vesting of or other
    lapse of restrictions applicable to an Award or upon the
    issuance of any shares of Stock upon the exercise of an Option
    or pursuant to an Award. At the time of such vesting, lapse, or
    exercise, the Grantee shall pay to the Company or the Affiliate,
    as the case may be, any amount that the Company or the Affiliate
    may reasonably determine to be necessary to satisfy such
    withholding obligation. Subject to the prior approval of the
    Company or the Affiliate, which may be withheld by the Company
    or the Affiliate, as the case may be, in its sole discretion,
    the Grantee may elect to satisfy such obligations, in whole




    

    17








 






    or in part, (i) by causing the Company or the Affiliate to
    withhold shares of Stock otherwise issuable to the Grantee or
    (ii) by delivering to the Company or the Affiliate shares
    of Stock already owned by the Grantee. The shares of Stock so
    delivered or withheld shall have an aggregate Fair Market Value
    equal to such withholding obligations. In no case shall the
    shares withheld or delivered exceed the minimum required
    federal, state, and FICA statutory withholding rates. The Fair
    Market Value of the shares of Stock used to satisfy such
    withholding obligation shall be determined by the Company or the
    Affiliate as of the date that the amount of tax to be withheld
    is to be determined. A Grantee who has made an election pursuant
    to this Section 18.3 may satisfy his or her
    withholding obligation only with shares of Stock that are not
    subject to any repurchase, forfeiture, unfulfilled vesting, or
    other similar requirements.



 




         18.4.  Captions.



 



    The use of captions in this Plan or any Award Agreement is for
    the convenience of reference only and shall not affect the
    meaning of any provision of the Plan or such Award Agreement.



 




         18.5.  Other
    Provisions.



 



    Each Award granted under the Plan may contain such other terms
    and conditions not inconsistent with the Plan as may be
    determined by the Board, in its sole discretion.



 




         18.6.  Number
    and Gender.



 



    With respect to words used in this Plan, the singular form shall
    include the plural form, the masculine gender shall include the
    feminine gender, etc., as the context requires.



 




         18.7.  Severability.



 



    If any provision of the Plan or any Award Agreement shall be
    determined to be illegal or unenforceable by any court of law in
    any jurisdiction, the remaining provisions hereof and thereof
    shall be severable and enforceable in accordance with their
    terms, and all provisions shall remain enforceable in any other
    jurisdiction.



 




         18.8.  Governing
    Law.



 



    The validity and construction of this Plan and the instruments
    evidencing the Award hereunder shall be governed by the laws of
    the State of Delaware, other than any conflicts or choice of law
    rule or principle that might otherwise refer construction or
    interpretation of this Plan and the instruments evidencing the
    Awards granted hereunder to the substantive laws of any other
    jurisdiction.



 




    Section 18.9.
    Section 409A



 



    The Board intends to comply with Code Section 409A, or an
    exemption to Code Section 409A, with regard to Grants
    hereunder that constitute nonqualified deferred compensation
    within the meaning of Code Section 409A. To the extent that
    the Board determines that a Grantee would be subject to the
    additional 20% tax imposed on certain nonqualified deferred
    compensation plans pursuant to Code Section 409A as a
    result of any provision of any Grant granted under this Plan,
    such provision shall be deemed amended to the minimum extent
    necessary to avoid application of such additional tax. The
    nature of any such amendment shall be determined by the Board.




    

   18