exv10w1






Exhibit 10.1




THIRD AMENDED AND RESTATED




2004 WCA WASTE CORPORATION




INCENTIVE PLAN




(Effective December 31, 2008)




 









 





THIRD AMENDED AND RESTATED

2004 WCA WASTE CORPORATION

INCENTIVE PLAN

(Effective December 31, 2008)




Table of Contents




	 	 	 	 	 
	ARTICLE I INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	1.1 Purpose
	 	 	1	 
	1.2 Definitions
	 	 	1	 
	1.3 Shares Subject to the Plan
	 	 	5	 
	1.4 Administration of the Plan
	 	 	6	 
	1.5 Granting of Awards to Participants
	 	 	7	 
	1.6 Leave of Absence
	 	 	7	 
	1.7 Term of Plan
	 	 	7	 
	1.8 Amendment and Discontinuance of the Plan
	 	 	7	 
	 
	 	 	 	 
	ARTICLE II NON-QUALIFIED OPTIONS
	 	 	8	 
	 
	 	 	 	 
	2.1 Eligibility
	 	 	8	 
	2.2 Exercise Price
	 	 	8	 
	2.3 Terms and Conditions of Non-Qualified Options
	 	 	8	 
	2.4 Option Repricing
	 	 	10	 
	2.5 Vesting
	 	 	10	 
	 
	 	 	 	 
	ARTICLE III NON-EMPLOYEE DIRECTOR OPTIONS
	 	 	10	 
	 
	 	 	 	 
	3.1 Eligibility and Maximum
	 	 	10	 
	3.2 Grants of Non-Employee Director Options
	 	 	10	 
	3.3 Exercise Price
	 	 	10	 
	3.4 Vesting
	 	 	10	 
	 
	 	 	 	 
	ARTICLE IV INCENTIVE OPTIONS
	 	 	11	 
	 
	 	 	 	 
	4.1 Eligibility
	 	 	11	 
	4.2 Exercise Price
	 	 	11	 
	4.3 Dollar Limitation
	 	 	11	 
	4.4 10% Stockholder
	 	 	11	 
	4.5 Incentive Options Not Transferable
	 	 	11	 
	4.6 Compliance with Code Section 422
	 	 	11	 
	4.7 Limitations on Exercise
	 	 	12	 
	 
	 	 	 	 
	ARTICLE V PURCHASED STOCK
	 	 	12	 
	 
	 	 	 	 
	5.1 Eligibility
	 	 	12	 
	5.2 Purchase Price
	 	 	12	 
	5.3 Payment of Purchase Price
	 	 	12	 
	 
	 	 	 	 
	ARTICLE VI BONUS STOCK
	 	 	12	 






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	ARTICLE VII STOCK APPRECIATION RIGHTS AND PHANTOM STOCK
	 	 	12	 
	 
	 	 	 	 
	7.1 Stock Appreciation Rights
	 	 	12	 
	7.2 Phantom Stock Awards
	 	 	13	 
	 
	 	 	 	 
	ARTICLE VIII RESTRICTED STOCK
	 	 	14	 
	 
	 	 	 	 
	8.1 Eligibility
	 	 	14	 
	8.2 Restrictions Restricted Period and Vesting
	 	 	14	 
	8.3 Forfeiture of Restricted Stock
	 	 	15	 
	8.4 Delivery of Shares of Common Stock
	 	 	15	 
	 
	 	 	 	 
	ARTICLE IX PERFORMANCE AWARDS
	 	 	15	 
	 
	 	 	 	 
	9.1 Performance Awards
	 	 	15	 
	9.2 Performance Goals
	 	 	15	 
	 
	 	 	 	 
	ARTICLE X OTHER STOCK OR PERFORMANCE-BASED AWARDS
	 	 	17	 
	 
	 	 	 	 
	ARTICLE XI CERTAIN PROVISIONS APPLICABLE TO ALL AWARDS
	 	 	17	 
	 
	 	 	 	 
	11.1 General
	 	 	17	 
	11.2 Stand-Alone, Additional, Tandem and Substitute Awards
	 	 	18	 
	11.3 Term of Awards
	 	 	18	 
	11.4 Form and Timing of Payment under Awards; Deferrals
	 	 	19	 
	11.5 Vested and Unvested Awards
	 	 	19	 
	11.6 Exemptions from Section 16(b) Liability
	 	 	20	 
	11.7 Securities Requirements
	 	 	20	 
	11.8 Transferability
	 	 	20	 
	11.9 Rights as a Stockholder
	 	 	21	 
	11.10 Listing and Registration of Shares of Common Stock
	 	 	21	 
	11.11 Termination of Employment, Death, Disability and Retirement
	 	 	21	 
	11.12 Change in Control
	 	 	23	 
	 
	 	 	 	 
	ARTICLE XII WITHHOLDING FOR TAXES
	 	 	24	 
	 
	 	 	 	 
	ARTICLE XIII MISCELLANEOUS
	 	 	24	 
	 
	 	 	 	 
	13.1 No Rights to Awards or Uniformity Among Awards
	 	 	24	 
	13.2 Conflicts with Plan
	 	 	25	 
	13.3 No Right to Employment
	 	 	25	 
	13.4 Governing Law
	 	 	25	 
	13.5 Gender, Tense and Headings
	 	 	25	 
	13.6 Severability
	 	 	25	 
	13.7 Other Laws
	 	 	25	 
	13.8 Shareholder Agreements
	 	 	25	 
	13.9 Funding
	 	 	25	 
	13.10 No Guarantee of Tax Consequences
	 	 	26	 







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THIRD AMENDED AND RESTATED

2004 WCA WASTE CORPORATION

INCENTIVE PLAN

(Effective December 31, 2008)




ARTICLE I

INTRODUCTION




     1.1 Purpose. This Third Amended and Restated 2004 WCA Waste Corporation Incentive Plan (the “Plan”) amends
and restates the Second Amended and Restated 2004 WCA Waste Corporation Incentive Plan (the “Prior
Plan”) and is intended to promote the interests of WCA Waste Corporation, a Delaware corporation
(the “Company”), and its stockholders by encouraging Employees, Consultants and
Non-Employee Directors of the Company or its Affiliates (as defined below) to acquire or increase
their equity interests in the Company, thereby giving them an added incentive to work toward the
continued growth and success of the Company. The Board of Directors of the Company (the
“Board”) also contemplates that through the Plan, the Company and its Affiliates will be
better able to compete for the services of the individuals needed for the continued growth and
success of the Company. The Plan provides for payment of various forms of incentive compensation,
and accordingly, is not intended to be a plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended, and shall be administered accordingly.



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



     “Affiliate” means (i) any entity in which the Company, directly or indirectly, owns 50% or
more of the combined voting power, as determined by the Committee, (ii) any “parent corporation” of
the Company (as defined in section 424(e) of the Code), (iii) any “subsidiary corporation” of any
such parent corporation (as defined in section 424(f) of the Code) of the Company and (iv) any
trades or businesses, whether or not incorporated which are members of a controlled group or are
under common control (as defined in Sections 414(b) or (c) of the Code) with the Company; provided,
that, for the purpose of issuing Options or Stock Appreciation Rights, “Affiliate” means any
corporation or other entity in a chain of corporations and/or other entities in which the Company
has a “controlling interest” within the meaning of Treas. Reg. § 1.414(c)-2(b)(2)(i), but using the
threshold of 50% ownership wherever 80% appears.



     “Awards” means, collectively, Options, Purchased Stock, Bonus Stock, Stock Appreciation
Rights, Phantom Stock, Restricted Stock, Performance Awards, or Other Stock or Performance-Based
Awards.



     “Board” means the board of directors described in 1.1 of the Plan.



     “Bonus Stock” means Common Stock described in Article VI of the Plan.



     “Change of Control” shall be deemed to have occurred upon any of the following events,
except as provided in the last paragraph of this definition:



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     (a) any “person” (as defined in Section 3(a)(9) of the Exchange Act, and as modified in
Section 13(d) and 14(d) of the Exchange Act) other than (i) the Company or any of its subsidiaries,
(ii) any employee benefit plan of the Company or any of its subsidiaries, (iii) any Affiliate, (iv)
a company owned, directly or indirectly, by stockholders of the Company in substantially the same
proportions as their ownership of the Company or (v) an underwriter temporarily holding securities
pursuant to an offering of such securities (a “Person”), becomes the “beneficial owner” (as
defined in Rule l3d-3 of the Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the shares of voting stock of the Company then outstanding;



     (b) the consummation of any merger, organization, business combination or consolidation of the
Company or one of its subsidiaries with or into any other entity, other than a merger,
reorganization, business combination or consolidation which would result in the holders of the
voting securities of the Company outstanding immediately prior thereto holding securities which
represent immediately after such merger, reorganization, business combination or consolidation more
than 50% of the combined voting power of the voting securities of the Company or the surviving
company or the parent of such surviving company;



     (c) the consummation of a sale or disposition by the Company of all or substantially all of
the Company’s assets, other than a sale or disposition if the holders of the voting securities of
the Company outstanding immediately prior thereto hold securities immediately thereafter which
represent more than 50% of the combined voting power of the voting securities of the acquirer, or
parent of the acquirer, of such assets;



     (d) the stockholders of the Company approve a plan of complete liquidation or dissolution of
the Company; or



     (e) individuals who, as of the Effective Date, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the Effective Date whose
election by the Board, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an election contest with respect to the election or removal of
directors or other solicitation of proxies or consents by or on behalf of a person other than the
Board.



     Solely with respect to any Award that constitutes deferred compensation that is subject to
Section 409A of the Code and payment of such Award is contingent upon the occurrence of a Change of
Control, this definition shall be void and of no effect and shall be replaced by a definition set
forth in the Award that complies with the requirements of Section 409A of the Code and regulations
or other regulatory guidance issued under Section 409A of the Code by the appropriate governmental
authority and the Plan and Award shall be operated in accordance with the definition of Change of
Control set forth in the Award that complies with the definition
prescribed in such regulations or other regulatory guidance issued under Section 409A of the Code.



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



     “Committee” means the compensation committee of the Board which shall consist of not less than
two independent members of the Board, each of whom shall qualify as a “nonemployee director” (as
that term is defined in Rule 16b-3 of the General Rules and Regulations under the Exchange Act)
appointed by and serving at the pleasure of the Board to administer the Plan or, if none, the
independent members of the Board; provided, however, that with respect to any Award
granted to a Covered Employee which is intended to be “performance-based compensation” as described
in Section 162(m)(4)(C) of the Code, the Committee shall consist solely of two or more “outside
directors” as described in Section 162(m)(4)(C)(i) of the Code.



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



     “Company” means the corporation described in 1.1 of the Plan or any successor thereto
which assumes and continues the Plan.



     “Consultant” means any individual, other than a Director or an Employee, who renders
consulting or advisory services to the Company or an Affiliate, provided that such services are not
in connection with the offer or sale of securities in a capital-raising transaction.



     “Covered Employee” shall mean for fiscal years ending on or after December 15, 2006,
(i) any of the Chief Executive Officer of the Company and the three (3) highest paid officers
of the Company other than the Chief Executive Officer or the Chief Financial Officer, as described
in Section 162(m)(3) of the Code and (ii) any other person required to be included therein by the
Internal Revenue Service’s interpretation or statutory or regulatory guidance.



     “Disability” means an inability to perform the Employee’s or Non-Employee Director’s material
services for the Company for a period of 90 consecutive days or a total of 180 days, during any
365-day period, in either case as a result of incapacity due to mental or physical illness, which
is determined to be total and permanent. A determination of Disability shall be made by a
physician satisfactory to both the Participant (or his guardian) and the Company, provided that if
the Employee or Non-Employee Director (or his guardian) and the Company do not agree on a
physician, the Employee or Non-Employee Director and the Company shall each select a physician and
these two together shall select a third physician, whose determination as to Disability shall be
final, binding and conclusive with respect to all parties. Notwithstanding the above, eligibility
for disability benefits under any policy for long-term disability benefits provided to the
Participant by the Company shall conclusively establish the Participant’s disability



     Except as otherwise provided in an Award, solely with respect to any Award that provides
deferred compensation that is subject to Section 409A of the Code and payment of such Award is
contingent upon the occurrence of a Disability, the above definition shall be void and
of no effect and is hereby replaced by the definition of such term set forth in Treas. Reg. §
1.409A-3(i)(4), which regulation is hereby incorporated by reference into and shall form part of
this Plan as fully as if set forth herein verbatim and the Plan insofar as it relates to such Award
shall be operated in accordance with this modified definition of Disability.



3









 





     “Effective Date” means, with respect to the Prior Plan, the date that the Prior Plan is (a)
adopted by the Board and (b) approved by shareholders of the Company not more than one year prior
to or after the date of such adoption. This Plan, as adopted by the Board, shall be effective as
of December 31, 2008.



     “Employee” means any employee of the Company or an Affiliate.



     “Employment” includes any period in which a Participant is an Employee of the Company or an
Affiliate.



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



     “Fair Market Value” or “FMV Per Share” mean, with respect to shares of Common Stock, the fair
market value of such shares determined in good faith by the Committee, which may be conclusively
deemed by the Committee to be the closing sales price (or, if applicable, the highest reported bid
price) of a share of Common Stock on the applicable date (or if there is no trading in the Common
Stock on such date, on the next preceding date on which there was trading) as reported in The Wall
Street Journal (or other reporting service approved by the Committee). If such shares are not
publicly traded at the time a determination of its fair market value is required to be made
hereunder, the determination of fair market value shall be made in good faith by the Committee
using any fair and reasonable means selected in the Committee’s discretion.



     “Incentive Option” means any option that satisfies the requirements of Code Section 422 and is
granted pursuant to Article IV of the Plan.



     “Incumbent Board” means the Board described in paragraph (e) of the definition of Change of
Control under 1.2 of the Plan.



     “Non-Employee Director” means a person who is a member of the Board but, who is neither an
Employee nor a Consultant of the Company or any Affiliate.



     “Non-Employee Director Option” means an option not intended to satisfy the requirements of
Code Section 422 and which is granted pursuant to Article III of the Plan.



     “Non-Qualified Option” means an option not intended to satisfy the requirements of Code
Section 422 and which is granted pursuant to Article II of the Plan.



     “Option” means an option to acquire Common Stock granted pursuant to the provisions of the
Plan, and refers to either an Incentive Stock Option or a Non-Qualified Stock Option, or both, as
applicable.



     “Option Expiration Date” means the date determined by the Committee, which shall not be more
than 10 years after the date of grant of an Option.



     “Optionee” means a Participant who has received or will receive an Option.



4









 





     “Other Stock or Performance-Based Award” means an award granted pursuant to Article X
of the Plan that is not otherwise specifically provided for, the value of which is based in whole
or in part upon the value of a share of Common Stock.



     “Participant” means any Non-Employee Director, Employee or Consultant granted an Award under
the Plan.



     “Performance Award” means an Award granted pursuant to Article IX of the Plan, which,
if earned, shall be payable in shares of Common Stock, cash or any combination thereof as
determined by the Committee.



     “Phantom Stock” means an Award, granted pursuant to Article VII of the Plan, of the
right to receive (a) shares of Common Stock issued at the end of a Restricted Period, (b) the Fair
Market Value of shares of Common Stock paid in cash at the end of a Restricted Period or (c) a
combination of shares of Common Stock and cash, as determined by the Committee, at the end of a
Restricted Period.



     “Plan” means the plan described in Section 1.1 of the Plan and set forth in this
document, as amended from time to time.



     “Purchased Stock” means a right to purchase Common Stock granted pursuant to Article V
of the Plan.



     “Restricted Period” means the period established by the Committee with respect to an Award
during which the Award either remains subject to forfeiture or is not exercisable by the
Participant.



     “Restricted Stock” means one or more shares of Common Stock, prior to the lapse of
restrictions thereon, granted under Article VIII of the Plan.



     “Retirement” means termination of Employment of an Employee, or if determined by the
Committee, termination of service of a Non-Employee Director, under circumstances as shall
constitute retirement, as determined by the Committee.



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



     “Spread” means the amount determined pursuant to Section 7.1(a) of the Plan.



     “Stock Appreciation Rights” means an Award granted pursuant to Article VII of the
Plan.



     1.3 Shares Subject to the Plan. The maximum number of shares of Common Stock that
may be issued under the Plan shall be
2,250,000 shares. In addition, during any calendar year, the number of shares of Common Stock
reserved for issuance under the Plan which are subject to Options that may be granted to any one
Participant plus the number of such shares underlying Stock Appreciation Rights that may be granted
to that same Participant shall not exceed 200,000 shares.



5









 





     Notwithstanding the above, in the event that at any time after the Effective Date the
outstanding shares of Common Stock are changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of a merger, consolidation, recapitalization,
reclassification, stock split, stock dividend, combination of shares or the like, the aggregate
number and class of securities available under the Plan shall be ratably adjusted by the Committee.
Upon the occurrence of any of the events described in the immediately preceding sentence, in order
to ensure that after such event the shares of Common Stock subject to the Plan and each
Participant’s proportionate interest shall be maintained substantially as before the occurrence of
such event, the Committee shall, in such manner as it may deem equitable, adjust (a) the number of
shares of Common Stock with respect to which Awards may be granted, (b) the number of shares of
Common Stock subject to outstanding Awards and (c) the grant or exercise price with respect to an
Award. Such adjustment in an outstanding Option shall be made (i) without change in the total
price applicable to the Option or any unexercised portion of the Option (except for any change in
the aggregate price resulting from rounding-off of share quantities or prices) and (ii) with any
necessary corresponding adjustment in exercise price per share. The Committee’s determinations
shall be final, binding and conclusive with respect to the Company and all other interested
persons.



     In the event the number of shares to be delivered upon the exercise or payment of any Award
granted under the Plan is reduced for any reason other than the withholding of shares or the
payment of taxes or exercise price, or in the event any Award (or portion thereof) granted under
the Plan can no longer under any circumstances be exercised or paid, the number of shares no longer
subject to such Award shall thereupon be released from such Award and shall thereafter be available
under the Plan for the grant of additional Awards. Shares that cease to be subject to an Award
because of the exercise of the Award, or the vesting of a Restricted Stock Award or similar Award,
shall no longer be subject to or available for any further grant under the Plan. Shares issued
pursuant to the Plan (x) may be treasury shares, authorized but unissued shares or, if applicable,
shares acquired in the open market and (y) shall be fully paid and nonassessable. No fractional
shares shall be issued under the Plan. Payment for any fractional shares that would otherwise be
issuable hereunder in the absence of the immediately preceding sentence shall be made in cash.



     1.4 Administration of the Plan.



     (a) Committee, Meetings, Rule Making and Interpretations. The Plan shall be administered by
the Committee. Subject to the provisions of the Plan, the Committee shall (i) interpret the Plan
and all Awards under the Plan, (ii) make, amend and rescind such rules as it deems necessary for
the proper administration of the Plan, (iii) make all other determinations necessary or advisable
for the administration of the Plan and (iv) correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Award under the Plan in the
manner and to the extent that the Committee deems desirable to effectuate the Plan. Any action
taken or determination made by the Committee pursuant to this and the other paragraphs of the Plan
shall be final, binding and conclusive on all affected persons, including, without limitation, the
Company, any Affiliate, any grantee, holder or beneficiary of an Award, any stockholder and any
Employee, Consultant or Non-Employee Director. No member of the Board or the Committee shall be
liable for any action or determination made in good faith with respect to the Plan or any Award
granted hereunder, and the members of the Board and the Committee shall be



6









 







entitled to
indemnification and reimbursement by the Company and its Affiliates in respect of any claim, loss,
damage or expense (including legal fees) arising therefrom to the fullest extent permitted by law.



     1.5 Granting of Awards to Participants. The Committee shall have the authority to grant, prior to the expiration date of the Plan,
Awards to such Employees, Consultants and Non-Employee Directors as may be selected by it, subject
to the terms and conditions set forth in the Plan. In selecting the persons to receive Awards,
including the type and size of the Award, the Committee may consider the contribution the recipient
has made and/or may make to the growth of the Company or its Affiliates and any other factors that
it may deem relevant. No member of the Committee shall vote or act upon any matter relating solely
to himself. Grants of Awards to members of the Committee must be ratified by the Board. In no
event shall any Employee, Consultant or Non-Employee Director, nor his or its legal
representatives, heirs, legatees, distributees or successors have any right to participate in the
Plan, except to such extent, if any, as permitted under the Plan and as the Committee may
determine.



     1.6 Leave of Absence. If an employee is on military, sick leave or other bona fide leave of absence, such person shall
be considered an “Employee” for purposes of an outstanding Award during the period of such leave,
provided that it does not exceed 90 days (or such longer period as may be determined by the
Committee in its sole discretion), or, if longer, so long as the person’s right to reemployment is
guaranteed either by statute or by contract. If the period of leave exceeds 90 days (or such
longer period as may be determined by the Committee in its sole discretion), the employment
relationship shall be deemed to have terminated on the 91st day (or the 1st
day immediately following any period of leave in excess of 90 days as approved by the Committee) of
such leave, unless the person’s right to reemployment is guaranteed by statute or contract.
Notwithstanding the above provisions of this Section 1.6 to the contrary, with respect to any Award
that provides for nonqualified deferred compensation that is subject to Section 409A of the Code,
termination of a Participant’s employment or service shall mean termination of the Participant’s
employment or service with the Company and all entities required to be aggregated with the Company
and treated as one employer under applicable regulations issued under Section 414(b) or (c) of the
Code using the threshold of 50% ownership wherever 80% appears in the applicable regulations under
circumstances that give rise to a “separation from service” within the meaning given to that term
under Treas. Reg. § 1.409A-1(h), which regulation is hereby incorporated by reference into and
shall form part of this Plan as fully as if set forth herein verbatim and the Plan insofar as it
relates to such Award shall be operated in accordance with such regulation.



     1.7 Term of Plan. If not sooner terminated under the provisions of Section 1.8, the Plan shall terminate
upon, and no further Awards shall be made, after the tenth (10th) anniversary of the Effective Date
of the Prior Plan.



     1.8 Amendment and Discontinuance of the Plan. The Board may amend, suspend or terminate the Plan at any time without prior notice to or
consent of any person; provided, however, that subject to Section 11.12, no
amendment, suspension or termination of the Plan may without the consent of the holder of an Award,
terminate such Award or adversely affect such person’s rights with respect to such Award in any
material respect; and provided further that no amendment shall be effective prior
to its approval by the stockholders of the Company, to



7









 







the extent such approval is required by (a)
applicable legal requirements, (b) the requirements of any securities exchange on which the
Company’s stock may be listed or (c) the requirements of the Nasdaq Stock Market, Inc. on which the
Company’s stock may be listed. Notwithstanding the foregoing, the Board may amend the Plan in such
manner as it deems necessary in order to permit Awards to meet the requirements of the Code or
other applicable laws, or to prevent adverse tax consequences to the Participants.



ARTICLE II

NON-QUALIFIED OPTIONS




     2.1 Eligibility. The Committee may grant Non-Qualified Options to purchase shares of Common Stock to any
Employee, Consultant and Non-Employee Directors according to the terms set forth below. Each
Non-Qualified Option granted under the Plan shall be evidenced by a written agreement between the
Company and the individual to whom such Non-Qualified Option was granted in such form as the
Committee shall provide.



     2.2 Exercise Price. The exercise price to be paid for each share of Common Stock deliverable upon exercise of each
Non-Qualified Option granted under this Article II shall not be less than 100% of the FMV
Per Share on the date of grant of such Non-Qualified Option. The exercise price for each
Non-Qualified Option granted under Article II shall be subject to adjustment as provided in
Section 2.3(e) of the Plan.



     2.3 Terms and Conditions of Non-Qualified Options. Non-Qualified Options shall be in such form as the Committee may from time to time approve,
shall be subject to the following terms and conditions and may contain such additional terms and
conditions, not inconsistent with this Article II, as the Committee shall deem desirable:



     (a) Option Period and Conditions and Limitations on Exercise. No Non-Qualified Option shall
be exercisable later than the Option Expiration Date. To the extent not prohibited by other
provisions of the Plan, each Non-Qualified Option shall be exercisable at such time or
times as the Committee, in its discretion, may determine at the time such Non-Qualified Option
is granted.



     (b) Manner of Exercise. In order to exercise a Non-Qualified Option, the person or persons
entitled to exercise such Non-Qualified Option shall deliver to the Company payment in full for (i)
the shares being purchased and (ii) unless other arrangements have been made with the Committee,
any required withholding taxes. The payment of the exercise price for each Non- Qualified Option
shall either be (x) in cash or by check payable and acceptable to the Company, (y) with the consent
of the Committee, which consent may be granted or withheld in the Committee’s sole discretion, by
tendering to the Company shares of Common Stock owned by the person for more than 6 months having
an aggregate Fair Market Value as of the date of exercise that is not greater than the full
exercise price for the shares with respect to which the Non-Qualified Option is being exercised and
by paying any remaining amount of the exercise price as provided in (x) above or (z) with the
consent of the Committee, which may be granted or withheld in the Committee’s sole discretion, and
upon compliance with such instructions as the Committee may specify, at the person’s written
request the Company may deliver certificates for the shares of Common Stock for which the
Non-Qualified Option is being exercised to a broker




8











 




for sale on behalf of the person, provided that
the person has irrevocably instructed such broker to remit directly to the Company on the person’s
behalf from the proceeds of such sale the full amount of the exercise price, plus all required
withholding taxes. In the event that the person elects to make payment as allowed under clause (y)
above, the Committee may, upon confirming that the Optionee owns the number of shares being
tendered, authorize the issuance of a new certificate for the number of shares being acquired
pursuant to the exercise of the Non-Qualified Option, less the number of shares being tendered upon
the exercise and return to the person (or to require surrender of) the certificate for the shares
being tendered upon the exercise. If the Committee so requires, such person or persons shall also
deliver a written representation that all shares being purchased are being acquired for investment
and not with a view to, or for resale in connection with, any distribution of such shares.




     (c) Proceeds. The proceeds received from the sale of shares of Common Stock pursuant to
exercise of Non-Qualified Options exercised under the Plan will be used for general corporate
purposes.



     (d) Non-Qualified Options not Transferable. Except as provided below, no Non-Qualified Option
granted hereunder shall be transferable other than by (i) will or by the laws of descent and
distribution or (ii) pursuant to a domestic relations order, and during the lifetime of the
Participant to whom any such Non-Qualified Option is granted, it shall be exercisable only by the
Participant (or his guardian). Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any Non-Qualified Option
granted hereunder, or any right thereunder, contrary to the provisions hereof, shall be void and
ineffective, shall give no right to the purported transferee and shall, at the sole discretion of
the Committee, result in forfeiture of the Non-Qualified Option with respect to the shares involved
in such attempt. With respect to a specific Non-Qualified Option, in accordance with rules and
procedures established by the Committee from time to time, the Participant (or his guardian) may
transfer, for estate planning purposes, all or part of such Non- Qualified Option to one or more
immediate family members or related family trusts or partnerships or similar entities as determined
by the Committee. Any Non-Qualified Option that is transferred in accordance
with the provisions of this Section 2.3(d) may only be exercised by the person or
persons who acquire a proprietary interest in the Non-Qualified Options pursuant to the transfer.



     (e) Adjustment of Non-Qualified Options. In the event that at any time after the Effective
Date the outstanding shares of Common Stock are changed into or exchanged for a different number or
kind of shares or other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of shares or the like,
the Committee shall make appropriate and equitable adjustments to all Non-Qualified Options then
outstanding as provided in Section 1.3.



     (f) Listing and Registration of Shares. Each Non-Qualified Option shall be subject to the
requirement that if at any time the Committee determines, in its discretion, that the listing,
registration or qualification of the shares subject to such Non-Qualified Option under any
securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in connection with,
the issue or purchase of shares thereunder, such Non-Qualified Option may not be exercised in whole
or in part unless such listing, registration, qualification, consent or approval shall have been
effected or obtained and the same shall have been free of any conditions not acceptable to the
Committee.



9









 





     2.4 Option Repricing. With shareholder approval, the Committee, in its absolute discretion, may
grant to holders of outstanding Non-Qualified Options, in exchange for the surrender and
cancellation of such Non-Qualified Options, new Non-Qualified Options having exercise prices lower
(or higher with any required consent) than the exercise price provided in the Non-Qualified Options
so surrendered and canceled and containing such other terms and conditions as the Committee may
deem appropriate.



     2.5 Vesting. See Section 11.11 of the Plan for provisions on vesting in connection with
termination of Employment or service. Also, see Section 11.12 of the Plan relating to
vesting in connection with a Change of Control.



ARTICLE III

NON-EMPLOYEE DIRECTOR OPTIONS




     The terms specified in this Article III shall be applicable to all Non-Employee
Director Options. Except as modified by the provisions of this Article III, all the
provisions of Article II shall be applicable to Non-Employee Director Options.



     3.1 Eligibility and Maximum. Non-Employee Director Options may only be granted to Non-Employees
Directors, and in the aggregate the maximum number of shares of Common Stock that may be issued
pursuant to Non-Employee Director Options shall be 150,000 shares (out of the number set forth in
Section 1.3 of the Plan).



     3.2 Grants of Non-Employee Director Options. The Board or the Committee may, from time to time,
make additional grants of Non-Employee Director Options.



     3.3 Exercise Price. The exercise price to be paid for each share of Common Stock deliverable upon
exercise of each Non-Employee Director Option granted under this Article III shall be the
FMV Per Share on the date of grant of such Non-Employee Director Option. The exercise price for
each Non-Employee Director Option granted under this Article III shall be subject to
adjustment as provided in Section 2.3(e) of the Plan.



     3.4 Vesting. Each Non-Employee Director Option shall be subject to a 3-year vesting schedule,
pursuant to which 1/3 of such Non-Employee Director Option shall become vested on the
1st anniversary of the date of grant, 1/3 of such Non-Employee Director Option shall
become vested on the 2nd anniversary of the date of grant and the remaining 1/3 of such
Non-Employee Director Option shall become vested on the 3rd anniversary of the date of
grant; provided, however, that in the event that an incumbent Non-Employee Director
is not nominated for election to an additional term as a director, all Non- Employee Director
Options held by such incumbent Non-Employee Director shall immediately vest in full upon the
expiration of his then-current term of office. In addition to the foregoing, all Non-Employee
Director Options shall be subject to the provisions of Section 11.11 and Section
11.12 to the extent such provisions do not conflict with the provisions of this Section
3.3.



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ARTICLE IV

INCENTIVE OPTIONS




     The terms specified in this Article IV shall be applicable to all Incentive Options.
Except as modified by the provisions of this Article IV, all the provisions of Article
II shall be applicable to Incentive Options. Options which are specifically designated as
Non-Qualified Options shall not be subject to the terms of this Article IV. No
Incentive Options will be issued after August, 2006.



     4.1 Eligibility. Incentive Options may only be granted to Employees of the Company or its parent
or subsidiary as defined in Section 424 (e) or (f) of the Code, as applicable, while each such
entity is a “corporation” described in Section 7701(a)(3) of the Code and Treas. Reg. §
1.421-1(i)(1).



     4.2 Exercise Price. Subject to Section 4.4, the exercise price per share shall not be less
than 100% of the FMV Per Share on the date of grant of the Incentive Option.



     4.3 Dollar Limitation. The aggregate Fair Market Value (determined as of the respective date or dates of grant) of
shares of Common Stock for which one or more Options granted to any Employee under the Plan (or any
other option plan of the Company or any Affiliate which is a parent or subsidiary as defined in
Code Sections 424(e) or (f), as applicable) may for the first time become exercisable as Incentive
Options during any one calendar year shall not exceed the sum of $100,000. To the extent the
Employee holds two or more such Options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such Options as Incentive Options
shall be applied on the basis of the order in which such Options are granted.



     4.4 10% Stockholder. If any Employee to whom an Incentive Option is granted owns stock possessing
more than 10% of the total combined voting power of all classes of stock of the Company or any
“parent corporation” of the Company (as defined in Section 424(e) of the Code) or any “subsidiary
corporation” of the Company (as defined in Section 424(f) of the Code), then the exercise price per
share under such Incentive Option shall not be less than 110% of the FMV Per Share on the date of
grant, and the Option term shall not exceed 5 years measured from the date of grant. For purposes
of the immediately preceding sentence, the attribution rules under Section 424(d) of the Code shall
apply for purposes of determining an Employee’s ownership.



     4.5 Incentive Options Not Transferable. No Incentive Option granted hereunder (a) shall be
transferable other than by will or by the laws of descent and distribution and (b) except as
permitted in regulations or other guidance issued under Section 422 of the Code, shall be
exercisable during the Optionee’s lifetime by any person other than the Optionee (or his guardian).



     4.6 Compliance with Code Section 422. All Options that are intended to be Incentive Stock Options
described in Code Section 422 shall be designated as such in the Option grant and in all respects
shall be issued in compliance with Code Section 422. No Incentive Stock Options will be granted
after August, 2006.



11









 





     4.7 Limitations on Exercise. No Incentive Option shall be exercisable more than 3 months after the
Optionee ceases to be an Employee for any reason other than death or Disability, or more than one
year after the Optionee ceases to be an Employee due to death or Disability.



ARTICLE V

PURCHASED STOCK




     5.1 Eligibility. The Committee shall have the authority to sell shares of Common Stock to such
Employees, Consultants and Non-Employee Directors of the Company or its Affiliates as may be
selected by it, on such terms and conditions as it may establish, subject to the further provisions
of this Article V. Each issuance of Common Stock under this Article V shall be
evidenced by an
agreement, which shall be subject to applicable provisions of this Plan and to such other
provisions not inconsistent with this Plan as the Committee may approve for the particular sale
transaction.



     5.2 Purchase Price. The price per share of Common Stock to be purchased by a Participant under
this Article V shall be determined in the sole discretion of the Committee, and may be less
than, but shall not be greater than the FMV Per Share at the time of purchase.



     5.3 Payment of Purchase Price. Payment of the purchase price of Purchased Stock under this
Article V shall be made in full in cash.



ARTICLE VI

BONUS STOCK




     The Committee may, from time to time and subject to the provisions of the Plan, grant shares
of Bonus Stock to Employees, Consultants and Non-Employee Directors. Such grants of Bonus Stock
shall be in consideration of performance of services by the Participant without additional
consideration, except as may be required by the Committee or pursuant to Section 11.1.
Bonus Stock shall be shares of Common Stock that are not subject to a Restricted Period under
Article VIII.



ARTICLE VII

STOCK APPRECIATION RIGHTS AND PHANTOM STOCK




     7.1 Stock Appreciation Rights. The Committee is authorized to grant Stock Appreciation Rights to
Employees, Consultants and Non-Employee Directors on the following terms and conditions.



     (a) Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it
is granted, upon exercise thereof, a right to receive shares of Common Stock, the value of which is
equal to the excess of (i) the FMV Per Share on the date of exercise over (ii) the FMV Per Share on
the date of the grant (such excess, the “Spread”). Notwithstanding the foregoing, the
Committee may provide, in its sole discretion, that the Spread covered by a Stock Appreciation
Right may not exceed a specified amount.



12









 





     (b) Terms. The Committee shall determine at the date of grant the time or times at which and
the circumstances under which a Stock Appreciation Right may be exercised in whole or in part
(including based on achievement of performance goals and/or future service requirements), the
method of exercise, and any other terms and conditions of any Stock Appreciation Right;
provided, however, a Stock Appreciation Right shall not be granted in tandem or in
combination with any other Award if that would (i) cause application of Section 409A of the Code to
the Award or (ii) result in adverse tax consequences under Section 409A of the Code should that
Code section apply to the Award.



     7.2 Phantom Stock Awards. Subject to Section 11.5 of the Plan, the Committee is authorized
to grant Phantom Stock Awards to Employees, Consultants and Non-Employee Directors, which are
rights to receive cash equal to the Fair Market Value of a specified number of shares of Common
Stock at the end of a specified deferral period, subject to the following terms and conditions:



     (a) Award and Restrictions. Satisfaction of a Phantom Stock Award shall occur upon expiration
of the deferral period specified for such Phantom Stock Award by the Committee. In addition,
Phantom Stock Awards shall be subject to such restrictions (which may include a risk of
forfeiture), if any, as the Committee may impose in its sole discretion as set forth in the Award,
which restrictions may lapse at the expiration of the deferral period or at earlier specified times
(including times based on achievement of performance goals and/or future service requirements),
separately or in combination, as the Committee may determine in its sole discretion to be
appropriate or advisable for any Award. Phantom Stock Awards shall not be transferable (other than
by will or the laws of descent and distribution).



     (b) Forfeiture. Except as otherwise determined by the Committee or as may be set forth in any
Award, employment or other agreement pertaining to a Phantom Stock Award, upon termination of
employment or services during the applicable deferral period or portion thereof to which forfeiture
conditions apply, all Phantom Stock Awards that are at that time subject to a deferral period
(other than a deferral at the election of the Participant) shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation or in any Award agreement,
or may determine in any individual case, that restrictions or forfeiture conditions relating to
Phantom Stock Awards shall be waived in whole or in part in the event of terminations resulting
from specified causes, and the Committee may in other cases which it determines appropriate or
advisable waive in whole or in part the forfeiture of Phantom Stock Awards; provided,
however, no such waiver or other change regarding an Award shall (i) cause the application
of Section 162(m) or 409A of the Code to the Award or (ii) create adverse tax consequences under
Section 162(m) or 409A of the Code should either or both of those Code sections apply to the Award.



     (c) Performance Goals. To the extent the Committee determines that any Award granted pursuant
to this Article VII shall constitute performance-based compensation for purposes of Section
162(m) of the Code, the grant or settlement of the Award shall, in the Committee’s discretion, be
subject to the achievement of performance goals determined and applied in a manner consistent with
Section 9.2.



13









 





     (d) Additional Limitations. Notwithstanding any other provision of this Section 7.2
to the contrary, any such Phantom Stock Award granted under the Plan shall contain terms that (i)
are designed to avoid application of Section 409A of the Code to the Award or (ii) are designed to
avoid adverse tax consequences under Section 409A of the Code should that Code section apply to the
Award.



ARTICLE VIII

RESTRICTED STOCK




     8.1 Eligibility. All Employees, Consultants and Non-Employee Directors shall be eligible for
grants of Restricted Stock.



     8.2 Restrictions Restricted Period and Vesting.



     (a) The Restricted Stock shall be subject to such forfeiture restrictions (including, without
limitation, limitations that qualify as a “substantial risk of forfeiture” within the meaning given
to that term under Section 83 of the Code) and restrictions on transfer by the Participant and
repurchase by the Company as the Committee, in its sole discretion, shall determine. Prior to the
lapse of such restrictions, the Participant shall not be permitted to transfer such shares. The
Company shall have the right to repurchase or recover such shares for the amount of cash paid
therefor, if any, if (i) the Participant shall terminate Employment from or services to the Company
prior to the lapse of such restrictions or (ii) the Restricted Stock is forfeited by the
Participant pursuant to the terms of the Award.



     (b) Vesting. See Section 11.11 of the Plan for provisions on vesting in connection
with termination of Employment or service. Also, see Section 11.12 of the Plan relating to
vesting in connection with a Change of Control.



     (c) Immediate Transfer Without Immediate Delivery of Restricted Stock. Each certificate
representing Restricted Stock awarded under the Plan shall be registered in the name of the
Participant and, during the Restricted Period, shall be left on deposit with the Company, or in
trust or escrow pursuant to an agreement satisfactory to the Committee, along with a stock power
endorsed in blank until such time as the restrictions on transfer have lapsed. The grantee of
Restricted Stock shall have all the rights of a stockholder with respect to such shares including
the right to vote and the right to receive dividends or other distributions paid or made with
respect to such shares; provided, however, that the Committee may in the Award
restrict the Participant’s right to dividends until the restrictions on the Restricted Stock lapse.
Any certificate or certificates representing shares of Restricted Stock shall bear a legend
similar to the following:



The shares represented by this certificate have been issued pursuant
to the terms of the 2004 WCA Waste Corporation Incentive Plan, as
amended and restated, and may not be sold, pledged, transferred,
assigned or otherwise encumbered in any manner except as is set
forth in the terms of such award dated                     ,200___.



14









 





     8.3 Forfeiture of Restricted Stock. If, for any reason, the restrictions imposed by the Committee upon Restricted Stock are not
satisfied at the end of the Restricted Period, any Restricted Stock remaining subject to such
restrictions shall thereupon be forfeited by the Participant and reacquired by the Company.



     8.4 Delivery of Shares of Common Stock. Pursuant to Section 11.5 of the Plan and subject
to the withholding requirements of Article XII of the Plan, at the expiration of the
Restricted Period, a stock certificate evidencing the Restricted Stock (to the nearest full share)
with respect to which the Restricted Period has expired shall be delivered without charge to the
Participant, or his personal representative, free of all restrictions under the Plan.



ARTICLE IX

PERFORMANCE AWARDS




     9.1 Performance Awards. The Committee may grant Performance Awards based on performance goals as
set forth in Section 7.2 measured over a period of not
less than 6 months and
not more than 10 years.



     9.2 Performance Goals. The grant and/or settlement of a Performance Award shall be contingent upon
terms set forth in this Section 9.2.



     (a) General. The performance goals for Performance 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. In the case of any Award granted to a Covered Employee,
performance goals shall be designed to be objective and shall otherwise meet the requirements of
Section 162(m) of the Code and regulations thereunder (including Treas. Regs. § 1.162-27 and
successor regulations thereto), including the requirement that the level or levels of performance
targeted by the Committee are such that the achievement of performance goals is “substantially
uncertain” at the time of grant. The Committee may determine that such Performance Awards shall be
granted 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 the grant and/or settlement of such
Performance Awards. Performance goals may differ among Performance Awards granted to any one
Participant or for Performance Awards granted to different Participants.



     (b) Business Criteria. One or more of the following business criteria for the Company, on a
consolidated basis, and/or for specified subsidiaries, divisions or business or geographical units
of the Company (except with respect to the total stockholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for Performance Awards
granted to a Participant: (i) earnings per share; (ii) increase in price per share, (iii) increase
in revenues; (iv) increase in cash flow; (v) return on net assets; (vi) return on assets; (vii)
return on investment; (viii) return on equity; (ix) economic value added; (x) gross margin; (xi)
net income; (xii) pretax earnings; (xiii) pretax earnings before interest, depreciation, depletion
and amortization; (xiv) pretax operating earnings after interest expense and before
incentives, service fees, and extraordinary or special items; (xv) operating income; (xvi)
total stockholder return; (xvii) debt reduction; and (xviii) any of the above goals determined on
the absolute or relative basis or as compared to the performance of a published or special index



15









 







deemed applicable by the Committee including, but not limited to, the Standard & Poor’s 500 Stock
Index or components thereof or a group of comparable companies.



     (c) Performance Period; Timing for Establishing Performance Goals. Achievement of performance
goals in respect of Performance Awards shall be measured over a performance period of not less than
6 months and not more than 10 years, as specified by the Committee. Performance goals in the case
of any Award granted to a Participant shall be established not later than 90 days after the
beginning of any performance period applicable to such Performance Awards, or at such other date as
may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.



     (d) Settlement of Performance Awards; Other Terms. After the end of each performance period,
the Committee shall determine the amount, if any, of Performance Awards payable to each Participant
based upon achievement of business criteria over a performance period. Except as may otherwise be
required under Section 409A of the Code, payment described in the immediately preceding sentence
shall be made by the later of (i) the date that is 21/2 months after the end of the Participant’s
1st taxable year in which the Performance Award is earned and payable under the Plan and
(ii) the date that is 21/2 months after the end of the Company’s 1st taxable year in which
the Performance Award is earned and payable under the Plan, and such payment shall not be subject
to any election by the Participant to defer the payment to a later period. The Committee may not
exercise discretion to increase any such amount payable in respect of a Performance Award which is
intended to comply with Section 162(m) of the Code. The Committee shall specify the circumstances
in which such Performance Awards shall be paid or forfeited in the event of termination of
employment by the Participant prior to the end of a performance period or settlement of Performance
Awards.



     (e) Written Determinations. All determinations by the Committee as to the establishment of
performance goals, the amount of any Performance Award and the achievement of performance goals
relating to Performance Awards shall be made in a written agreement or other document covering the
Performance Award. The Committee may not delegate any responsibility relating to such Performance
Awards.



     (f) Status of Performance Awards under Section 162(m) of the Code. It is the intent of the
Company that Performance Awards granted to persons who are designated by the Committee as likely to
be Covered Employees within the meaning of Section 162(m) of the Code and regulations thereunder
(including Treas. Regs. § 1.162-27 and successor regulations thereto) shall constitute
“performance-based compensation” within the meaning of Section 162(m) of the Code and regulations
thereunder. Accordingly, the terms of this Section 9.2 shall be interpreted in a manner
consistent with Section 162(m) of the Code and regulations thereunder. Notwithstanding the
foregoing, because the Committee cannot determine with certainty whether a given Participant 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 a Performance Award, who is likely to be a Covered Employee with respect to that fiscal
year. If any provision of the Plan as in
effect on the date of adoption or any agreements relating to Performance Awards that are
intended to comply with Section 162(m) of the Code does not comply or is inconsistent with the



16









 







requirements of Section 162(m) of the Code or regulations thereunder, such provision shall be
construed or deemed amended to the extent necessary to conform to such requirements.



ARTICLE X

OTHER STOCK OR PERFORMANCE-BASED AWARDS




     The Committee is hereby authorized to grant to Employees, Non-Employee Directors and
Consultants of the Company or its Affiliates, Other Stock or Performance-Based Awards, which shall
consist of a right which (a) is not an Award described in any other Article and (b) is denominated
or payable in, valued in whole or in part by reference to, or otherwise based on or related to,
shares of Common Stock (including, without limitation, units or securities convertible into shares
of Common Stock) or cash as are deemed by the Committee to be consistent with the purposes of the
Plan. Subject to the terms of the Plan, the Committee shall determine the terms and conditions of
any such Other Stock or Performance-Based Awards, which shall be contained in a written agreement
or other document covering such Awards. Notwithstanding any other provision of the Plan to the
contrary, any Other Stock-Based Award granted after December 31, 2004 shall contain terms that (i)
are designed to avoid application of Section 409A of the Code or (ii) are designed to avoid adverse
tax consequences under Section 409A should that Code section apply to such Award.



ARTICLE XI

CERTAIN PROVISIONS APPLICABLE TO ALL AWARDS




     11.1 General. Awards shall be evidenced by a written agreement or other document and may be
granted on the terms and conditions set forth herein. In addition, the Committee may impose on any
Award or the exercise thereof, such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of
Awards in the event of termination of employment by the Participant and terms permitting a
Participant to make elections relating to his or her Award; provided, that any such election would
not (i) cause the application of Section 409A of the Code to the Award or (ii) create adverse tax
consequences under Section 409A of the Code should Section 409A apply to the Award. The terms,
conditions and/or restrictions contained in an Award may differ from the terms, conditions and
restrictions contained in any other Award. The Committee may amend an Award; provided,
however, that, subject to Section 11.12, no amendment of an Award may, without the
consent of the holder of the Award, adversely affect such person’s rights with respect to such
Award in any material respect. The Committee shall retain full power and discretion to accelerate
or waive, at any time, any term or condition of an Award that is not mandatory under the Plan;
provided, however, that, subject to Section 11.12, the Committee shall not
have any discretion to accelerate or waive any term or condition of an Award (i) if such discretion
would cause the Award to have adverse tax consequences to the Participant under Section 409A of the
Code or (ii) if the Award is intended to qualify as “performance-based compensation” for purposes
of Section 162(m) of the Code if such discretion would cause the Award not to so qualify. Except
in cases in which the Committee is authorized to require other forms of consideration under the
Plan, or to the extent
other forms of consideration must be paid to satisfy the requirements of the Delaware Corporation
Law, no consideration other than services may be required for the grant of any Award.



17









 





     11.2 Stand-Alone, Additional, Tandem and Substitute Awards. Subject to Section 2.4 of the
Plan, Awards granted under the Plan may, in the discretion of the Committee, 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 Participant to receive payment
from the Company or any Affiliate; provided, however, no Award shall be issued
under the Plan if issuance of the Award would result in adverse tax consequences under Section 409A
of the Code. 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 Committee shall require
the surrender of such other Award for cancellation 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. Any such action contemplated under this
Section 11.2 shall be effective only to the extent that such action will not cause (i) the
holder of the Award to lose the protection of Section 16(b) of the Exchange Act and rules and
regulations promulgated thereunder, (ii) any Award that is designed to qualify payments thereunder
as performance-based compensation as defined in Section 162(m) of the Code to fail to qualify as
such performance-based compensation or (iii) any Award that is subject to Section 409A of the Code
to result in adverse consequences under Section 409A of the Code.



     11.3 Term of Awards. The term or Restricted Period of each Award that is an Option, Stock
Appreciation Right, Phantom Stock or Restricted Stock shall be for such period as may be determined
by the Committee; provided, however, that in no event shall the term of any such
Award exceed a period of 10 years (or such shorter terms as may be required in respect of an
Incentive Stock Option under Section 422 of the Code).



18









 





     11.4 Form and Timing of Payment under Awards; Deferrals.



     (a) General Provisions. Subject to the terms of the Plan and any applicable Award
agreement, payments to be made by the Company or an Affiliate upon the exercise of an Option or
other Award or settlement of an Award may be made in a single payment or transfer, in installments
or on a deferred basis. The settlement of any Award may, subject to any limitations set forth in
the Award agreement, be accelerated and cash paid in lieu of shares in connection with such
settlement, in the discretion of the Committee or upon occurrence of one or more specified events;
provided, however, that such discretion may not be exercised by the Committee if
the exercise of such discretion would result in adverse tax consequences to the Participant under
Section 409A of the Code. In the discretion of the Committee, Awards granted pursuant to
Article VII or Article IX of the Plan may be payable in shares to the extent
permitted by the terms of the applicable Award agreement. Installment or deferred payments may be
required by the Committee (subject to Section 1.8 of the Plan and the consent provisions of
the Plan in the case of any deferral of an outstanding Award not provided for in the original Award
agreement) on terms and conditions established by the Committee; provided, however,
that no deferral shall be required by the Committee if such deferral would result in adverse tax
consequences to the Participant under Section 409A of the Code. Payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on installment or
deferred payments or the grant or crediting of amounts in respect of installment or deferred
payments denominated in shares. Any deferral shall only be allowed as is provided in a separate
deferred compensation plan adopted by the Company. The Plan shall not constitute any “employee
benefit plan” for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended.



     (b) Section 409A Limits on Payments to Specified Employees. Notwithstanding any other
provision of the Plan or an Award to the contrary, if a Participant is a “key employee,” as defined
in Section 416(i) of the Code (without regard to paragraph 5 thereof), except to the extent
permitted under Section 409A of the Code, no benefit or payment that is subject to Section 409A of
the Code (after taking into account all applicable exceptions to Section 409A of the Code,
including but not limited to the exceptions for short-term deferrals and for “separation pay only
upon an involuntary separation from service”) shall be made under this Plan or the affected Award
granted thereunder on account of the Participant’s “separation from service,” as defined in Section
409A of the Code, with the Company and its Affiliates until the later of the date prescribed for
payment in this Plan or the affected Award granted thereunder and the first (1st) day of
the seventh (7th) calendar month that begins after the date of the Participant’s
separation from service (or, if earlier, the date of death of the Participant). Unless otherwise
provided in the Award, any amount that is otherwise payable within the delay period described in
the immediately preceding sentence will be aggregated and paid in a lump sum without interest.



     11.5 Vested and Unvested Awards. After the satisfaction of all of the terms and conditions set by
the Committee with respect to an Award of (a) Restricted Stock, a certificate, without the legend
set forth in Section 8.2(c) for the number of shares that are no longer subject to such
restrictions, terms and conditions shall be
delivered to the Employee, (b) Phantom Stock, to the extent not paid in cash, a certificate for the
number of shares equal to the number of shares of Phantom Stock earned and (c) Stock Appreciation
Rights or Performance Awards, cash and/or a certificate for the number of shares equal in value to
the number of Stock Appreciation Rights



19









 







or amount of Performance Awards vested shall be delivered
to the person. The number of shares of Common Stock which shall be issuable upon exercise of a
Stock Appreciation Right or earning of a Performance Award shall be determined by dividing (1) by
(2) where (1) is the number of shares of Common Stock as to which the Stock Appreciation Right is
exercised multiplied by the Spread or the amount of Performance Award that is earned and payable,
as applicable, and (2) is the FMV Per Share of Common Stock on the date of exercise of the Stock
Appreciation Right or the date the Performance Award is earned and payable, as applicable. Upon
termination, resignation or removal of a Participant under circumstances that do not cause such
Participant to become fully vested, any remaining unvested Options, shares of Restricted Stock,
Phantom Stock, Stock Appreciation Rights or Performance Awards, as the case may be, shall either be
forfeited back to the Company or, if appropriate under the terms of the Award, shall continue to be
subject to the restrictions, terms and conditions set by the Committee with respect to such Award.



     11.6 Exemptions from Section 16(b) Liability. It is the intent of the Company that the grant of
any Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange
Act shall be exempt from Section 16(b) of the Exchange Act pursuant to an applicable exemption
(except for transactions acknowledged by the Participant in writing to be non-exempt).
Accordingly, if any provision of this Plan or any Award agreement does not comply with the
requirements of Rule 16b-3 as then applicable to any such transaction, such provision shall be
construed or deemed amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 so that such Participant shall avoid liability under Section 16(b) of the Exchange Act.



     11.7 Securities Requirements. No shares of Common Stock will be issued or transferred pursuant to
an Award unless and until all then-applicable requirements imposed by federal and state securities
and other laws, rules and regulations and by any regulatory agencies having jurisdiction and by any
stock market or exchange upon which the Common Stock may be listed, have been fully met. As a
condition precedent to the issuance of shares pursuant to the grant or exercise of an Award, the
Company may require the grantee to take any reasonable action to meet such requirements. The
Company shall not be obligated to take any affirmative action in order to cause the issuance or
transfer of shares pursuant to an Award to comply with any law or regulation described in the
second preceding sentence.



     11.8 Transferability.



     (a) Non-Transferable Awards and Options. Except as otherwise specifically provided in the
Plan, no Award and no right under the Plan, contingent or otherwise, other than Purchased Stock,
Bonus Stock or Restricted Stock as to which restrictions have lapsed, will be
(i) assignable, saleable or otherwise transferable by a Participant except by will or by the
laws of descent and distribution or pursuant to a qualified domestic relations order or (ii)
subject to any encumbrance, pledge or charge of any nature. No transfer by will or by the laws of
descent and distribution shall be effective to bind the Company unless the Committee shall have
been furnished with a copy of the deceased Participant’s will or such other evidence as the
Committee may deem necessary to establish the validity of the transfer. Any attempted transfer in
violation of this Section 11.8(a) shall be void and ineffective for all purposes.



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     (b) Ability to Exercise Rights. Except as otherwise specifically provided under the Plan,
only the Participant or his guardian (if the Participant becomes Disabled), or in the event of his
death, his legal representative or beneficiary, may exercise Options, receive cash payments and
deliveries of shares or otherwise exercise rights under the Plan. The executor or administrator of
the Participant’s estate, or the person or persons to whom the Participant’s rights under any Award
will pass by will or the laws of descent and distribution, shall be deemed to be the Participant’s
beneficiary or beneficiaries of the rights of the Participant hereunder and shall be entitled to
exercise such rights as are provided hereunder.



     11.9 Rights as a Stockholder.



     (a) No Stockholder Rights. Except as otherwise provided in Section 11.9(b), a
Participant who has received a grant of an Award or a transferee of such Participant shall have no
rights as a stockholder with respect to any shares of Common Stock until such person becomes the
holder of record. Except as otherwise provided in Section 11.9(b), no adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date such stock certificate
is issued.



     (b) Holder of Restricted Stock. Unless otherwise approved by the Committee prior to the grant
of a Restricted Stock Award, a Participant who has received a grant of Restricted Stock or a
permitted transferee of such Participant shall not have any rights of a stockholder until such time
as a stock certificate has been issued with respect to all, or a portion of, such Restricted Stock
Award.



     11.10 Listing and Registration of Shares of Common Stock. The Company, in its discretion, may
postpone the issuance and/or delivery of shares of Common Stock upon any exercise of an Award until
completion of such stock exchange listing, registration or other qualification of such shares under
any state and/or federal law, rule or regulation as the Company may consider appropriate, and may
require any Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of the shares in compliance with
applicable laws, rules and regulations.



     11.11 Termination of Employment, Death, Disability and Retirement.



     (a) Termination of Employment. Unless otherwise provided in the Award, if Employment of an
Employee or service of a Non-Employee Director is terminated for any reason whatsoever other than
death, Disability or Retirement, or if service of a Consultant is terminated for any reason
whatsoever other than death, any nonvested Award granted pursuant to the Plan outstanding at the
time of such termination and all rights thereunder shall wholly and completely terminate and no
further vesting shall occur, and the Employee, Consultant or Non-Employee Director shall be
entitled to exercise his or her rights with respect to the portion of the Award vested as of the
date of termination for a period that shall end on the earlier of (i) the expiration date set forth
in the Award with respect to the vested portion of such Award or (ii) the date that occurs 6 months
after such termination date 3 months after the date of termination in the case of an Incentive
Option).



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     (b) Retirement. Unless otherwise provided in the Award, upon the Retirement of an Employee
or, if applicable, Non-Employee Director:




     (i) any nonvested portion of any outstanding Award shall immediately terminate and no
further vesting shall occur; and




     (ii) any vested Award shall expire on the earlier of (A) the expiration date set forth
in the Award or (B) the expiration of (x) 12 months after the date of Retirement in the case
of any Award other than an Incentive Option and (y) 3 months after the date of Retirement in
the case of an Incentive Option.



     (c) Disability or Death. Unless otherwise provided in the Award, upon termination of
Employment or service from the Company or any Affiliate that is a parent or subsidiary of the
Company as a result of Disability of an Employee or Non-Employee Director or death of an Employee,
Non-Employee Director or Consultant, or with respect to a Participant who is either a retired
former Employee or Non-Employee Director who dies during the period described in Section
11.11(b), hereinafter the “Applicable Retirement Period,” or a disabled former Employee
or Non-Employee Director who dies during the period that expires on the earlier of the expiration
date set forth in any applicable outstanding Award or the 1st anniversary of the
person’s termination of Employment or service due to Disability, hereinafter the “Applicable
Disability Period,”




     (i) any nonvested portion of any outstanding Award that has not already terminated
shall immediately terminate and no further vesting shall occur; and




     (ii) any vested Award shall expire upon the earlier of (A) the expiration date set
forth in the Award or (B) the later of (1) the 1st anniversary of such
termination of Employment as a result of Disability or death or (2) the 1st
anniversary of such person’s death during the Applicable Retirement Period or the Applicable
Disability Period.



     (d) Continuation. Notwithstanding any other provision of the Plan, the Committee, in its
discretion, may provide for the continuation of any Award for such period and upon such terms and
conditions as are determined by the Committee in the event that a Participant ceases to be an
Employee, Consultant or Non-Employee Director.



     Notwithstanding the above provisions of this Section 11.11 to the contrary, with respect to
any Award that provides for nonqualified deferred compensation that is subject to Section 409A of
the Code, termination of a Participant’s employment or service shall mean termination of the
Participant’s employment or service with the Company and all entities required to be aggregated
with the Company and treated as one employer under applicable regulations issued under Section
414(b) or (c) of the Code using the threshold of 50% ownership wherever 80% appears in the
applicable regulations under circumstances that give rise to a “separation from service” within the
meaning given to that term under Treas. Reg. § 1.409A-1(h), which regulation is hereby incorporated
by reference into and shall form part of this Plan as fully as if set forth herein verbatim and the
Plan insofar as it relates to such Award shall be operated in accordance with such regulation.



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     11.12 Change in Control.



     (a) Change in Control. Unless otherwise provided in the Award, in the event of a Change in
Control described in clauses (b), (c) or (d) of the definition of Change in Control under
Section 1.2 of the Plan:




     (i) the Committee may accelerate vesting and the time at which all Options and Stock
Appreciation Rights then outstanding may be exercised so that those types of Awards may be
exercised in full for a limited period of time on or before a specified date fixed by the
Committee, after which specified date all unexercised Options and Stock Appreciation Rights
and all rights of Participants thereunder shall terminate, or the Committee may accelerate
vesting and the time at which Options and Stock Appreciation Rights may be exercised so that
those types of Awards may be exercised in full for their then remaining term;




     (ii) the Committee may waive all restrictions and conditions of all Restricted Stock
and Phantom Stock then outstanding with the result that those types of Awards shall be
deemed satisfied, and the Restriction Period or other limitations on payment in full with
respect thereto shall be deemed to have expired, as of the date of the Change in Control or
such other date as may be determined by the Committee; and




     (iii) the Committee may determine to amend Performance Awards and Other Stock or
Performance-Based Awards, or substitute new Performance Awards and Other Stock or
Performance-Based Awards in consideration of cancellation of outstanding Performance Awards
and any Other Stock or Performance-Based Awards, in order to ensure that such Awards shall
become fully vested, deemed earned in full and promptly paid to the Participants as of the
date of the Change in Control or such other date as may be determined by the Committee,
without regard to payment schedules and notwithstanding that the applicable performance
cycle, retention cycle or other restrictions and conditions shall not have been completed or
satisfied.


Notwithstanding the above provisions of this Section 11.12(a), the Committee shall not be
required to take any action described in the preceding provisions of this Section 11.12(a),
and any decision made by the Committee, in its sole discretion, not to take some or all of the
actions described in the preceding provisions of this Section 11.12(a) shall be final,
binding and conclusive with respect to the Company and all other interested persons.
Notwithstanding the foregoing, the Committee shall not have the right to take action otherwise
permitted hereunder if the existence or exercise of such right would result in any impermissible
acceleration or substitution under Section 409A of the Code or any other violation of Section 409A
of the Code that would result in adverse tax consequences to the Participant under Section 409A of
the Code.




     (b) Right of Cash-Out. If approved by the Board prior to or within 30 days after such time as
a Change in Control shall be deemed to have occurred, the Board shall have the right for a 45-day
period immediately following the date that the Change in Control is deemed to have occurred to
require all, but not less than all, Participants to transfer and deliver to the Company all Awards
previously granted to the Participants in exchange for an amount equal to the “cash value” (defined
below) of the Awards. Such right shall be exercised by written notice to all



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Participants. For
purposes of this Section 11.12(b), the cash value of an Award shall equal the sum of (i)
the cash value of all benefits to which the Participant would be entitled upon settlement or
exercise of any Award which is not an Option or Restricted Stock and (ii) in the case of any Award
that is an Option or Restricted Stock, the excess of the “market value” (defined below) per share
over the option price, or the market value (defined below) per share of Restricted Stock,
multiplied by the number of shares subject to such Award. For purposes of the preceding sentence,
“market value” per share shall mean the higher of (x) the average of the Fair Market Value per
share of Common Stock on each of the 5 trading days immediately following the date a Change in
Control is deemed to have occurred or (y) the highest price, if any, offered in connection with the
Change in Control. The amount payable to each Participant by the Company pursuant to this
Section 11.12(b) shall be in cash or by certified check and shall be reduced by any taxes
required to be withheld. Notwithstanding the foregoing, neither the Board, the Company nor the
Committee shall have the right to cash-out any Award, if the existence or exercise of such right
would result in any impermissible acceleration or substitution under Section 409A of the Code or
any other violation of Section 409A of the Code that would result in adverse tax consequences to
the Participant pursuant to Section 409A of the Code.



ARTICLE XII

WITHHOLDING FOR TAXES




     Any issuance of Common Stock pursuant to the exercise of an Option or in payment of any other
Award under the Plan shall not be made until appropriate arrangements satisfactory to the Company
have been made for the payment of any tax amounts (federal, state, local or other) that may be
required to be withheld or paid by the Company with respect thereto at the minimum statutory rate.
Such arrangements may, at the discretion of the Committee, include allowing the person to tender to
the Company shares of Common Stock owned by the person, or to request the Company to withhold
shares of Common Stock being acquired pursuant to the Award, whether through the exercise of an
Option or as a distribution pursuant to the Award, which have an aggregate FMV Per Share as of the
date of such withholding that is not greater than the sum of all tax amounts to be withheld with
respect thereto, together with payment of any remaining portion of such tax amounts in cash or by
check payable and acceptable to the Company.



     Notwithstanding the foregoing, if on the date of an event giving rise to a tax withholding
obligation on the part of the Company the person is an officer or individual subject to Rule
16b--3, such person may direct that such tax withholding be effectuated by the Company
withholding the necessary number of shares of Common Stock (at the minimum statutory tax rate
required by the Code) from such Award payment or exercise.



ARTICLE XIII

MISCELLANEOUS




     13.1 No Rights to Awards or Uniformity Among Awards. No Participant or other person shall have any
claim to be granted any Award; there is no obligation for uniformity of treatment of Participants,
or holders or beneficiaries of Awards; and the terms and conditions of Awards need not be the same
with respect to each recipient.



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     13.2 Conflicts with Plan. In the event of any inconsistency or conflict between the terms of the
Plan and an Award, the terms of the Plan shall govern.



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



     13.4 Governing Law. The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with applicable federal law and
the laws of the State of Delaware, without regard to any principles of conflicts of law.



     13.5 Gender, Tense and Headings. Whenever the context requires such, words of the masculine gender
used herein shall include the feminine and neuter, and words used in the singular shall include the
plural. Section headings as used herein are inserted solely for convenience and reference and
constitute no part of the Plan.



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



     13.7 Other Laws. The Committee may refuse to issue or transfer any shares or other consideration
under an Award if, acting in its sole discretion, it determines that the issuance or transfer of
such shares or such other consideration might violate any applicable law.



     13.8 Shareholder Agreements. The Committee may condition the grant, exercise or payment of any
Award upon such person entering into a stockholders’ or repurchase agreement in such form as
approved from time to time by the Board.



     13.9 Funding. Except as provided under Article VIII of the Plan, no provision of the Plan
shall require or permit the Company, for the purpose of satisfying any obligations under the Plan,
to purchase assets or place any assets in a trust or other entity to which contributions are made
or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books,
records or other evidence of the existence of a segregated or separately maintained or administered
fund for such purposes. Participants shall have no rights under the Plan other than as unsecured
general creditors of the Company, except that insofar as they may have become entitled to payment
of additional compensation by performance of services, they shall have the same rights as other
Employees, Consultants or Non-Employee Directors under general law.



25









 





     13.10 No Guarantee of Tax Consequences. Neither the Board, nor the Company nor the Committee makes
any commitment or guarantee that any federal, state or local tax treatment will apply or be
available to any person participating or eligible to participate hereunder.




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