ex10-1.htm


    EXHIBIT
10.1

    


    MULTIMEDIA
GAMES, INC.

    CONSOLIDATED
EQUITY INCENTIVE PLAN

    


    1.           Purpose of the
Plan. The
purpose of the Plan is to: (i) attract and retain the best available personnel
for positions of substantial responsibility, (ii) provide additional incentive
to Employees, Directors and Consultants, and (iii) promote the success of the
Company’s business.  Subject to Section 30, the Plan permits the grant
of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation
Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance
Shares, and Other Stock Based Awards.

    


    2.           Definition. As used in this Plan,
the following definitions shall apply:

     

    (a)       “Administrator” means the Board
or any of its Committees that shall be administering the Plan, in accordance
with Section 4 of the Plan.

     

    (b)       “Applicable Laws” means the
requirements relating to the administration of equity-based awards or equity
compensation plans under U.S. federal and state corporate laws, U.S. federal and
state securities laws, the Code, any stock exchange or quotation system on which
the Common Stock is listed or quoted and the applicable laws of any foreign
country or jurisdiction where Awards are, or shall be, granted under the
Plan.

     

    (c)       “Award” means, subject to
Section 30, individually or collectively, a grant under the Plan of Options,
SARs, Restricted Stock, Restricted Stock Units, Performance Units, Performance
Shares or Other Stock Based Awards.

     

    (d)       “Award Agreement” means the
written or electronic agreement setting forth the terms and provisions
applicable to each Award granted under the Plan.  The Award Agreement
is subject to the terms and conditions of the Plan.

     

    (e)       “Awarded Stock” means the
Common Stock subject to an Award.

     

    (f)       “Board” means the Board of
Directors of the Company.

     

    (g)       “Change in Control” means,
except as otherwise provided in the Award Agreement, the occurrence of any of
the following events:

     

    (i)           Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company’s then outstanding voting
securities;

     

    (ii)           the
sale or disposition by the Company of all or substantially all of the Company’s
assets other than (A) the sale or disposition of all or substantially all of the
assets of the Company to a person or persons who beneficially own, directly or
indirectly, at least 50% or more of the combined voting power of the outstanding
voting securities of the Company at the time of the sale or (B) pursuant to a
spin-off type transaction, directly or indirectly, of such assets to the
Company’s shareholders;

     

    (iii)           A
change in the composition of the Board occurring within a two-year period as a
result of which fewer than a majority of the directors are Incumbent
Directors.  “Incumbent Directors” are
directors who either (A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or

     

    (iv)           a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least 50% of the total voting power
represented by the voting securities of the Company or such surviving entity or
its parent outstanding immediately after such merger or
consolidation.

     

    (h)       “Code” means the Internal
Revenue Code of 1986, as amended, and the U.S. Treasury regulations promulgated
thereunder.  Any reference to a section of the Code shall be a
reference to any successor or amended section of the Code.

     

    (i)        
“Committee” means a
committee of Directors or other individuals satisfying Applicable Laws appointed
by the Board in accordance with Section 4 of the Plan

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (j)       “Common Stock” means the
Common Stock of the Company, or in the case of Performance Units, Restricted
Stock Units, and certain Other Stock Based Awards, the cash equivalent thereof,
as applicable.

     

    (k)       “Company” means Multimedia
Games, Inc., a Texas corporation, and any successor to Multimedia Games,
Inc.

     

    (l)       “Consultant” means any person,
including an advisor, engaged by the Company or a Parent or Subsidiary to render
services to such entity.

     

    (m)       “Director” means a member of
the Board.

     

    (n)       “Disability” means total and
permanent disability as defined in Section 22(e)(3) of the Code, provided
that in the case of Awards other than Incentive Stock Options, the Administrator
in its sole discretion may determine whether a permanent and total disability
exists in accordance with uniform and non-discriminatory standards adopted by
the Administrator from time to time.

     

    (o)       “Dividend Equivalent” means a
credit, made at the sole discretion of the Administrator, to the account of a
Participant in an amount equal to the value of dividends paid on one Share for
each Share represented by an Award held by such Participant.  Under no
circumstances shall the payment of a Dividend Equivalent be made contingent on
the exercise of an Option or Stock Appreciation Right.

     

    (p)       “Employee” means any person,
including officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company.  Neither service as a Director nor payment
of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

     

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

     

    (r)       
“Fair Market Value”
means, as of any date, the value of Common Stock determined as
follows:

     

    (i)           If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the NASDAQ Global Select Market, the
NASDAQ Global Market (formerly the NASDAQ National Market) or the NASDAQ Capital
Market (formerly the NASDAQ SmallCap Market) of the NASDAQ Stock Market, the
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the day of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

    


    (ii)           If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock for the day of determination, as reported in The Wall Street Journal or
such other source as the
Administrator deems reliable; or

    


    (iii)          In
the absence of an established market for the Common Stock, the Fair Market Value
shall be determined in good faith by the Administrator.

    


    Notwithstanding
the preceding, for federal, state, and local income tax reporting purposes and
for such other purposes as the Administrator deems appropriate, the Fair Market
Value shall be determined by the Administrator in accordance with uniform and
nondiscriminatory standards adopted by it from time to time.

     

    (s)       “Incentive Stock Option” means
an Option intended to qualify and receive favorable tax treatment as an
incentive stock option within the meaning of Section 422 of the Code, as
designated in the applicable Award Agreement.

     

    (t)       “Nonstatutory Stock Option”
means an Option that by its terms does not qualify or is not intended to qualify
as an Incentive Stock Option.

     

    (u)       “Option” means an option to
purchase Common Stock granted pursuant to the Plan.

     

    (v)       “Other Stock Based Awards”
means any other awards not specifically described in the Plan that are valued in
whole or in part by reference to, or are otherwise based on, Shares and are
created by the Administrator pursuant to Section 12.

     

    (w)       “Outside Director” means an
“outside director” within the meaning of Section 162(m) of the
Code.

     

    (x)       “Parent” means a “parent
corporation” with respect to the Company, whether now or hereafter existing, as
defined in Section 424(e) of the Code.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (y)       “Participant” means a Service
Provider who has been granted an Award under the Plan.

     

    (z)       “Performance Goals” means
goals which have been established by the Committee in connection with an Award
and are based on one or more of the following criteria, as determined by the
Committee in its absolute and sole discretion: net income; cash flow; cash flow
on investment; pre-tax or post-tax profit levels or earnings; operating income
or earnings; return on investment; earned value added; expense reduction levels;
free cash flow; free cash flow per share; earnings per share; net earnings per
share; net earnings from continuing operations; sales growth; sales volume;
economic profit; expense reduction; controlled expenses; return on assets;
return on net assets; return on equity; return on capital; return on sales;
return on invested capital; organic revenue; growth in managed assets; total
shareholder return; stock price; stock price appreciation; EBITA; adjusted
EBITA; EBITDA; adjusted EBITDA; return in excess of cost of capital; profit in
excess of cost of capital; net operating profit after tax; operating margin;
profit margin; adjusted revenue; revenue; net revenue; operating revenue; net
cash provided by
operating activities; net cash provided by operating activities per share; cash
conversion percentage; new sales; net new sales; cancellations; gross margin;
gross margin percentage; and revenue before deferral.

     

    (aa)       “Performance Period” means the
time period during which the Performance Goals or performance objectives must be
met.

     

    (bb)       “Performance Share” means
Shares issued pursuant to a Performance Share Award under Section 10 of the
Plan.

     

    (cc)       “Performance Unit” means,
pursuant to Section 10 of the Plan, an unfunded and unsecured promise to deliver
Shares, cash or other securities equal to the value set forth in the Award
Agreement.

     

    (dd)       “Period of Restriction” means
the period during which the transfer of Shares of Restricted Stock are subject
to restrictions and therefore, the Shares are subject to a substantial risk of
forfeiture.  Such restrictions may be based on the passage of time,
the achievement of Performance Goals or other target levels of performance, or
the occurrence of other events as determined by the Administrator.

     

    (ee)       “Plan” means this Consolidated
Equity Incentive Plan.  The Plan is the successor to the Prior
Plans.  The Plan was approved by the Board on March 10, 2010 and by
the Company’s shareholders on March 23, 2010.

     

    (ff)       
“Prior Plans” means the
following plans sponsored by the Company: (i) 2000 Stock Option Plan, (ii)
2001 Stock Option Plan, (iii) 2002 Stock Option Plan, (iv) 2003 Outside
Director Stock Option Plan, and (v) 2008 Employment Inducement Award
Plan.

     

    (gg)      “Restricted Stock” means
Shares issued pursuant to a Restricted Stock Award under Section 8 or issued
pursuant to the early exercise of an Option.

     

    (hh)      “Restricted Stock Unit” means,
pursuant to Sections 4 and 11 of the Plan, an unfunded and unsecured promise to
deliver Shares, cash or other securities equal in value to the Fair Market Value
of one Share in the Company on the date of vesting or settlement, or as
otherwise set forth in the Award Agreement.

     

    (ii)      
 “Rule 16b-3” means
Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when
discretion is being exercised with respect to the Plan.

     

    (jj)       
“Section 16(b)” means
Section 16(b) of the Exchange Act.

     

    (kk)      “Service Provider” means an
Employee, Director or Consultant.

     

    (ll)      
 “Share” means a
share of Common Stock, as adjusted in accordance with Section 15 of the
Plan.

     

    (mm)  
 “Stock Appreciation
Right” or “SAR”
means, pursuant to Section 9 of the Plan, an unfunded and unsecured promise to
deliver Shares, cash or other securities equal in value to the difference
between the Fair Market Value of a Share as of the date such SAR is
exercised/settled and the Fair Market Value of a Share as of the date such SAR
was granted, or as otherwise set forth in the Award Agreement.

     

    (nn)    
 “Subsidiary” means
a “subsidiary corporation” with respect to the Company, whether now or hereafter
existing, as defined in Section 424(f) of the Code.

     

    3.           
 Stock Subject to
the Plan.

     

    (a)             Stock Subject to the
Plan.  Subject to the provisions of Section 15 of the Plan, the
maximum aggregate number of Shares that may be issued pursuant to all Awards
under the Plan is 1,161,213 Shares, representing the remaining shares available
for issuance under the Prior Plans, plus the amount of outstanding Common Stock
subject to Lapsed Awards (defined below) under the Prior Plans.  The
maximum number of Shares that may be subject to Incentive Stock Option treatment
is 1,161,213.  Shares shall not be deemed to have been issued pursuant
to the Plan with respect to any portion of an Award that is settled in
cash.  Upon payment in Shares pursuant to the exercise of an Award,
the number of Shares available for issuance under the Plan shall be reduced only
by the number of Shares actually issued in such payment.  If a
Participant pays the exercise price (or purchase price, if applicable) of an
Award through the tender of Shares, or if Shares are tendered or withheld to
satisfy any Company withholding obligations, the number of Shares so tendered or
withheld shall again be available for issuance pursuant to future Awards under
the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)             Lapsed
Awards.  If any outstanding Award expires or is terminated or
canceled without having been exercised or settled in full, or if Shares acquired
pursuant to an Award subject to forfeiture or repurchase are forfeited or
repurchased by the Company, the Shares allocable to the terminated portion of
the Award or the forfeited or repurchased Shares shall again be available for
grant under the Plan (the “Lapsed
Awards”).  Similarly, the shares subject to Lapsed Awards under
the Prior Plans shall add to the maximum number of Shares that are available for
grant under Section 3(a) of the Plan.

     

    (c)             Share
Reserve.  The Company, during the term of the Plan, shall at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     

    4.             
Administration of the
Plan.

    


    (a)           Procedure.

    


    (i)       
Multiple
Administrative Bodies.  Different Committees with respect to
different groups of Service Providers may administer the Plan.

    


    (ii)       Section
162(m).  To the extent that the Administrator determines it to
be desirable and necessary to qualify Awards granted under this Plan as
“performance-based compensation” within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more Outside
Directors.

    


    (iii)       Rule 16b-3.  If a
transaction is intended to be exempt under Rule 16b-3 of the Exchange
Act, it shall be structured to satisfy the requirements for exemption under Rule
16b-3.

    


    (iv)       Other
Administration.  Other than as provided above, the Plan shall
be administered by (A) the Board or (B) a Committee constituted to satisfy
Applicable Laws.

    


    (v)        Delegation of Authority for
Day-to-Day Administration.  Except to the extent prohibited by
Applicable Law, the Administrator may delegate to one or more individuals the
day-to-day administration of the Plan and any of the functions assigned to it in
this Plan.  Such delegation may be revoked at any time.

    


    (b)           Powers of the
Administrator.  Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated by the Board
to the Committee, the Administrator shall have the authority, in its discretion
to:

    


    (i)        
determine the Fair Market Value of Awards;

    


    (ii)       
select the Service Providers to whom Awards may be granted under this
Plan;

    


    (iii)       determine
the number of Shares to be covered by each Award granted under this
Plan;

    


    (iv)       approve
forms of Award Agreements for use under the Plan;

    


    (v)       
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted under this Plan, including but not limited to, the exercise
price, the time or times when Awards may be exercised (which may be based on
Performance Goals or other performance criteria), any vesting acceleration or
waiver of forfeiture or repurchase restrictions, and any restriction or
limitation regarding any Award or the Shares relating thereto, based in each
case on such factors as the Administrator, in its sole discretion, shall
determine;

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (vi)       construe
and interpret the terms of the Plan and Awards granted pursuant to the
Plan;

    


    (vii)      prescribe,
amend and rescind rules and regulations relating to the Plan, including rules
and regulations relating to sub-plans;

    


    (viii)     amend
the terms of any outstanding Award, including the discretionary authority to
extend the post-termination exercise period of Awards and accelerate the
satisfaction of any vesting criteria or waiver of forfeiture or repurchase
restrictions, provided that any amendment that would adversely affect the
Participant’s rights under an outstanding Award shall not be made without the
Participant’s written consent; however, except as otherwise provided in Section
15, the Administrator shall not, without prior approval of the Company’s
shareholders (i) amend the exercise price of outstanding Options or SARs,
(ii) cancel and regrant Options or SARs at a lower exercise price, or
(iii) substitute underwater Options for other securities (including buyouts
through issuance of such cash or other means).  Notwithstanding the
foregoing, an amendment shall not be treated as adversely affecting the rights
of the Participant if the amendment causes an Incentive Stock Option to become a
Nonstatutory Stock Option or if the amendment is made to the minimum extent
necessary to avoid the adverse tax consequences of Section 409A of the
Code.

    


    (ix)        allow
Participants to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares or cash to be issued upon exercise or vesting
of an Award that number of Shares or cash having a Fair Market Value equal to
the minimum amount required to be withheld.  The Fair Market Value of
any Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined, and all elections by a Participant to have
Shares or cash withheld for this purpose shall be made in such form and under
such conditions as the Administrator may deem necessary or
advisable;

    


    (x)         authorize
any person to execute on behalf of the Company any instrument required to effect
the grant of an Award previously granted by the Administrator;

    


    (xi)        allow
a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to the Participant under an
Award;

    


    (xii)       determine
whether Awards shall be settled in Shares, cash or in a combination of Shares
and cash;

    


    (xiii)      
determine whether Awards shall be adjusted for Dividend
Equivalents;

    


    (xiv)       create
Other Stock Based Awards for issuance under the Plan;

    


    (xv)        establish
a program whereby Service Providers designated by the Administrator can reduce
compensation otherwise payable in cash in exchange for Awards under the
Plan;

    


    (xvi)       impose
such restrictions, conditions or limitations as it determines appropriate as to
the timing and manner of any resales by a Participant or other subsequent
transfers by the Participant of any Shares issued as a result of or under an
Award, including without limitation, (A) restrictions under an insider trading
policy, and (B) restrictions as to the use of a specified brokerage firm for
such resales or other transfers;

     

    (xvii)       establish
one or more programs under the Plan to permit selected Participants the
opportunity to elect to defer receipt of consideration upon exercise of an
Award, satisfaction of Performance Goals or other performance criteria, or other
event that absent the election, would entitle the Participant to payment or
receipt of Shares or other consideration under an Award; and

     

    (xviii)      make
all other determinations that the Administrator deems necessary or advisable for
administering the Plan.

     

    The
express grant in the Plan of any specific power to the Administrator shall not
be construed as limiting any power or authority of the
Administrator.  However, the Administrator may not exercise any right
or power reserved to the Board.

     

    (c)            Effect of Administrator’s
Decision.  The Administrator’s decisions, determinations,
actions and interpretations shall be final, conclusive and binding on all
persons having an interest in the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)           Indemnification.  The
Company shall defend and indemnify members of the Board, officers and Employees
of the Company or of a Parent or Subsidiary whom authority to act for the Board,
the Administrator or the Company is delegated (“Indemnitees”) to the maximum
extent permitted by law against (i) all reasonable expenses, including
reasonable attorneys’ fees incurred in connection with the defense of any claim,
investigation, action, suit or proceeding, or in connection with any appeal
therein (collectively, a “Claim”), to which any of them
is a party by reason of any action taken or failure to act in connection with
the Plan, or in connection with any Award granted under the Plan; and (ii) all
amounts required to be paid by them in settlement the Claim (provided the
settlement is approved by the Company) or required to be paid by them in
satisfaction of a judgment in any Claim.  However, no person shall be
entitled to indemnification to the extent he is determined in such Claim to be
liable for gross negligence, bad faith or intentional misconduct.  In
addition, to be entitled to indemnification, the Indemnitee must, within 30 days
after written notice of the Claim, offer the Company, in writing, the
opportunity, at the Company’s expense, to defend the Claim.  The right
to indemnification shall be in addition to all other rights of indemnification
available to the Indemnitee.

     

    5.           Eligibility.  Nonstatutory
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Units, Performance Shares, and Other Stock Based Awards may
be granted to Service Providers.  Incentive Stock Options may be
granted only to Employees.

     

    6.           Limitations.

     

    (a)           $100,000 Limitation for
Incentive Stock Options.  Each Option shall be designated in
the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.  However, notwithstanding such designation, to the extent that
the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by a Participant during any
calendar year (under all plans of the Company and any Parent or Subsidiary)
exceeds $100,000, such Options shall be treated as Nonstatutory Stock
Options.  For purposes of this Section 6(a), Incentive Stock Options
shall be taken into account in the order in which they were
granted.  The Fair Market Value of the Shares shall be determined as
of the time the Options with respect to such Shares are granted.

     

    (b)           Special Annual
Limits.  Subject to Section 15 of the Plan, the maximum number
of Shares that may be subject to Options or Stock Appreciation Rights granted to
any Service Provider in any calendar year shall equal 580,606 Shares and contain
an exercise price equal to the Fair Market Value of the Common Stock as of the
date of grant.  Subject to Section 15 of the Plan, the maximum number
of Shares that may be subject to Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units and Other Stock Based Awards, Other Stock
Based Awards granted to any Service Provider in any calendar year shall equal
580,606 Shares.  Subject to Section 15 of the Plan, the maximum dollar
amount that may be subject to cash awards granted to any Service Provider in any
calendar year shall equal $2,000,000.

     

    7.           Options

     

    (a)           Term of
Option.  The term of each Option shall be stated in the Award
Agreement.  In the case of an Incentive Stock Option, the term shall
be 10 years from the date of grant or such shorter term as may be provided in
the Award Agreement.  Moreover, in the case of an Incentive Stock
Option granted to a Participant who, at the time the Incentive Stock Option is
granted, owns stock representing more than 10% of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five years from the date of grant or
such shorter term as may be provided in the Award Agreement.

     

    (b)           Option Exercise Price and
Consideration.

     

    (i)           Exercise
Price.  The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

     

    (1)           In
the case of an Incentive Stock Option

     

    (A)           granted
to an Employee who, at the time the Incentive Stock Option is granted, owns
stock representing more than 10% of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.

     

    (B)           
granted to any Employee other than an Employee described in paragraph (A)
immediately above, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.

     

    (2)           In
the case of a Nonstatutory Stock Option, the per Share exercise price shall be
determined by the Administrator, but shall not be less than Fair Market Value
for those subject to U.S. taxation.  In the case of a Nonstatutory
Stock Option intended to qualify as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of
grant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (3)           Notwithstanding
the foregoing, Incentive Stock Options may be granted with a per Share exercise
price of less than 100% of the Fair Market Value per Share on the date of grant
pursuant to a transaction described in, and in a manner consistent with, Section
424(a) of the Code.

     

    (ii)           Waiting Period and Exercise
Dates.  At the time an Option is granted, the Administrator
shall fix the period within which the Option may be exercised and shall
determine any conditions that must be satisfied before the Option may be
exercised.  The Administrator, in its sole discretion, may accelerate
the satisfaction of such conditions at any time.

     

    (c)           Form of
Consideration.  The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment.  In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the time
of grant.  Such consideration, to the extent permitted by Applicable
Laws, may consist entirely of:

     

    (i)           
cash;

     

    (ii)           check;

     

    (iii)          other
Shares which meet the conditions established by the Administrator to avoid
adverse accounting consequences (as determined by the
Administrator);

     

    (iv)          consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan;

     

    (v)           a
reduction in the amount of any Company liability to the Participant, including
any liability attributable to the Participant’s participation in any
Company-sponsored deferred compensation program or arrangement;

     

    (vi)          any
combination of the foregoing methods of payment; or

     

    (vii)         any
other consideration and method of payment for the issuance of Shares permitted
by Applicable Laws.

     

    (d)           Exercise of
Option.

     

    (i)          Procedure for Exercise;
Rights as a Shareholder.  Any Option granted under this Plan
shall be exercisable according to the terms of the Plan and at such times and
under such conditions as determined by the Administrator and set forth in the
Award Agreement.  An Option shall be deemed exercised when the Company
receives: (x) written or electronic notice of exercise (in accordance with the
Award Agreement) from the person entitled to exercise the Option, and (y) full
payment for the Shares with respect to which the Option is exercised (including
provision for any applicable tax withholding).  Full payment may
consist of any consideration and method of payment authorized by the
Administrator and permitted by the Award Agreement and the
Plan.  Shares issued upon exercise of an Option shall be issued in the
name of the Participant or, if requested by the Participant, in the name of the
Participant and his spouse.  Until the Shares are issued (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Awarded Stock,
notwithstanding the exercise of the Option.  The Company shall issue
(or cause to be issued) such Shares promptly after the Option is
exercised.  No adjustment shall be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 15 of the Plan or the applicable Award
Agreement.  Exercising an Option in any manner shall decrease the
number of Shares thereafter available for sale under the Option, by the number
of Shares as to which the Option is exercised.

     

    (ii)          Termination of Relationship
as a Service Provider.  If a Participant ceases to be a Service
Provider, other than upon the Participant’s death or Disability, the Participant
may exercise his Option within such period of time as is specified in the Award
Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement).  In the absence of a specified time in
the Award Agreement, the Option shall remain exercisable for 30 days following
the Participant’s termination after which the Option shall
terminate.  Unless otherwise provided by the Administrator, if on the
date of termination the Participant is not vested as to his entire Option, the
Shares covered by the unvested portion of the Option shall revert to the
Plan.  If the Participant does not exercise his Option as to all of
the vested Shares within the time specified by the Award Agreement, the Option
shall terminate, and the remaining Shares covered by the Option shall revert to
the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (iii)          Disability of
Participant.  If a Participant ceases to be a Service Provider
as a result of his Disability, the Participant may exercise his Option, to the
extent vested, within the time specified in the Award Agreement (but in no event
later than the expiration of the term of the Option as set forth in the Award
Agreement).  If no time for exercise of the Option on Disability is
specified in the Award Agreement, the Option shall remain exercisable for 24
months following the Participant’s termination for Disability.  Unless
otherwise provided by the Administrator, on the date of termination for
Disability, the unvested portion of the Option shall revert to the
Plan.  If after termination for Disability, the Participant does not
exercise his Option as to all of the vested Shares within the time specified by
the Award Agreement, the Option shall terminate and the remaining Shares covered
by such Option shall revert to the Plan.

     

    (iv)          Death of
Participant.  If a Participant dies while a Service Provider,
the Option, to the extent vested, may be exercised within the time specified in
the Award Agreement (but in no event may the Option be exercised later than the
expiration of the term of the Option as set forth in the Award Agreement), by
the beneficiary designated by the Participant prior to his death; provided that
such designation must be acceptable to the Administrator.  If no
beneficiary has been designated by the Participant, then the Option may be
exercised by the personal representative of the Participant’s estate, or by the
persons to whom the Option is transferred pursuant to the Participant’s will or
in accordance with the laws of descent and distribution.  If the Award
Agreement does not specify a time within which the Option must be exercised
following a Participant's death, it shall be exercisable for 24 months following
his death.  Unless otherwise provided by the Administrator, if at the
time of death, the Participant is not vested as to his entire Option, the Shares
covered by the unvested portion of the Option shall immediately revert to the
Plan.  If the Option is not exercised as to all of the vested Shares
within the time specified by the Administrator, the Option shall terminate, and
the remaining Shares covered by such Option shall revert to the
Plan.

     

    8.           Restricted
Stock.

     

    (a)           Grant of Restricted
Stock.  Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted
Stock to Service Providers in such amounts as the Administrator, in its sole
discretion, shall determine.

     

    (b)           Restricted Stock
Agreement.  Each Award of Restricted Stock shall be evidenced
by an Award Agreement that shall specify the Period of Restriction, the number
of Shares granted, and such other terms and conditions as the Administrator, in
its sole discretion, shall determine.  Unless the Administrator
determines otherwise, Shares of Restricted Stock shall be held by the Company as
escrow agent until the restrictions on the Shares have lapsed.

     

    (c)           Removal of
Restrictions.  Except as otherwise provided in this Section 8,
Shares of Restricted Stock covered by each Award made under the Plan shall be
released from escrow as soon as practical after the last day of the Period of
Restriction.  The Administrator, in its sole discretion, may
accelerate the time at which any restrictions shall lapse or be
removed.

     

    (d)           Voting
Rights.  During the Period of Restriction, Service Providers
holding Shares of Restricted Stock may exercise full voting rights with respect
to those Shares, unless the Administrator determines otherwise.

     

    (e)           Dividends and Other
Distributions.  During the Period of Restriction, Service
Providers holding Shares of Restricted Stock shall be entitled to receive all
dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement.  If any dividends or
distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

     

    (f)           Return of Restricted Stock
to Company.  On the date set forth in the Award Agreement, the
Restricted Stock for which restrictions have not lapsed shall revert to the
Company and again shall become available for grant under the Plan.

     

    9.           Stock Appreciation
Rights

     

    (a)           Grant of
SARs.  Subject to the terms and conditions of the Plan, a SAR
may be granted to Service Providers at any time and from time to time as shall
be determined by the Administrator, in its sole discretion.  The
Administrator shall have complete discretion to determine the number of SARs
granted to any Service Provider.  The Administrator, subject to the
provisions of the Plan, shall have complete discretion to determine the terms
and conditions of SARs granted under the Plan, including the sole discretion to
accelerate exercisability at any time.

     

    (b)           SAR
Agreement.  Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term, the conditions of
exercise, and such other terms and conditions as the Administrator, in its sole
discretion, shall determine.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)           Expiration of
SARs.  A SAR granted under the Plan shall expire upon the date
determined by the Administrator, in its sole discretion, as set forth in the
Award Agreement.  Notwithstanding the foregoing, the rules of Sections
7(d)(ii), 7(d)(iii) and 7(d)(iv) shall also apply to SARs.

     

    (d)           Payment of SAR
Amount.  Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

     

    (i)           The
difference between the Fair Market Value of a Share on the date of exercise over
the exercise price; times

     

    (ii)          The
number of Shares with respect to which the SAR is exercised.

     

    At the
sole discretion of the Administrator, the payment upon the exercise of a SAR may
be in cash, in Shares of equivalent value, or in some combination
thereof.

     

    10.           Performance Units and Performance
Shares.

     

    (a)           Grant of Performance Units
and Performance Shares.  Subject to the terms and conditions of
the Plan, Performance Units and Performance Shares may be granted to Service
Providers at any time and from time to time, as shall be determined by the
Administrator in its sole discretion.  The Administrator shall have
complete discretion in determining the number of Performance Units and
Performance Shares granted to each Service Provider.

     

    (b)           Value of Performance Units
and Performance Shares.  Each Performance Unit shall have an
initial value established by the Administrator on or before the date of
grant.  Each Performance Share shall have an initial value equal to
the Fair Market Value of a Share on the date of grant.

     

    (c)           Performance Objectives and
Other Terms.  The Administrator shall set Performance Goals or
other performance objectives in its sole discretion which, depending on the
extent to which they are met, shall determine the number or value of Performance
Units and Performance Shares that shall be paid out to the
Participant.  Each award of Performance Units or Performance Shares
shall be evidenced by an Award Agreement that shall specify the Performance
Period and such other terms and conditions as the Administrator in its sole
discretion shall determine.  The Administrator may set Performance
Goals or performance objectives based upon the achievement of Company-wide,
divisional, or individual goals (including solely continued service), applicable
federal or state securities laws, or any other basis determined by the
Administrator in its sole discretion.

     

    (d)           Earning of Performance Units
and Performance Shares.  After the applicable Performance
Period has ended, the holder of Performance Units or Performance Shares shall be
entitled to receive a payout of the number of Performance Units or Performance
Shares earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding Performance Goals or
performance objectives have been achieved.  After the grant of
Performance Units or Performance Shares, the Administrator, in its sole
discretion, may reduce or waive any performance objectives for the Performance
Unit or Performance Share.

     

    (e)           Form and Timing of Payment
of Performance Units and Performance Shares.  Payment of earned
Performance Units and Performance Shares shall be made after the expiration of
the applicable Performance Period at the time determined by the
Administrator.  The Administrator, in its sole discretion, may pay
earned Performance Units and Performance Shares in the form of cash, in Shares
(which have an aggregate Fair Market Value equal to the value of the earned
Performance Units or Performance Shares, as applicable, at the close of the
applicable Performance Period) or in a combination of cash and
Shares.

     

    (f)           Cancellation of Performance
Units or Performance Shares.  On the date set forth in the
Award Agreement, all unearned or unvested Performance Units and Performance
Shares shall be forfeited to the Company, and again shall be available for grant
under the Plan.

     

    11.           Restricted Stock
Units.  Restricted Stock Units shall consist of a Restricted
Stock, Performance Share or Performance Unit Award that the Administrator, in
its sole discretion permits to be paid out in a lump sum, installments or on a
deferred basis, in accordance with rules and procedures established by the
Administrator

     

    12.           Other Stock Based
Awards.  Other Stock Based Awards may be granted either alone,
in addition to, or in tandem with, other Awards granted under the Plan and/or
cash awards made outside of the Plan.  The Administrator shall have
authority to determine the Service Providers to whom and the time or times at
which Other Stock Based Awards shall be made, the amount of such Other Stock
Based Awards, and all other conditions of the Other Stock Based Awards,
including any dividend or voting rights and whether the Award should be paid in
cash.

     

    13.           Leaves of
Absence.  Unless the Administrator provides otherwise, vesting
of Awards granted under this Plan shall be suspended during any unpaid leave of
absence and shall resume on the date the Participant returns to work on a
regular schedule as determined by the Company; provided, however, that no
vesting credit shall be awarded for the time vesting has been suspended during
such leave of absence.  A Service Provider shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent,
or any Subsidiary.  For purposes of Incentive Stock Options, no leave
of absence may exceed 90 days, unless reemployment upon expiration of such leave
is guaranteed by statute or contract.  If reemployment upon expiration
of a leave of absence approved by the Company is not guaranteed by statute or
contract, then at the end of three months following the expiration of the leave
of absence, any Incentive Stock Option held by the Participant shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    14.           Non-Transferability of
Awards.  Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by shall or by the laws of descent or distribution
and may be exercised, during the lifetime of the Participant, only by the
Participant.  If the Administrator makes an Award transferable, such
Award shall contain such additional terms and conditions as the Administrator
deems appropriate.

     

    15.           Adjustments; Dissolution or
Liquidation; Change in Control.

     

    (a)           Adjustments.  In
the event of any change in the outstanding Shares of Common Stock by reason of
any stock split, stock dividend or other non-recurring dividends or
distributions, recapitalization, merger, consolidation, spin-off, combination,
repurchase or exchange of stock, reorganization, liquidation, dissolution or
other similar corporate transaction that affects the Common Stock, an adjustment
shall be made, as the Administrator deems necessary or appropriate, in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan.  Such adjustment may include an
adjustment to the number and class of Shares which may be delivered under the
Plan, the number, class and price of Shares subject to outstanding Awards, the
number and class of Shares issuable pursuant to Options, and the numerical
limits in Sections 3 and 6(b).  Notwithstanding the preceding, the
number of Shares subject to any Award always shall be a whole
number.

     

    (b)           Dissolution or
Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as
soon as practical prior to the effective date of the proposed
transaction.  The Administrator, in its sole discretion, may provide
for a Participant to have the right to exercise his Award, to the extent
applicable, until 10 days prior to the transaction as to all of the Awarded
Stock covered thereby, including Shares as to which the Award would not
otherwise be exercisable.  In addition, the Administrator may provide
that any Company repurchase option or forfeiture rights applicable to any Award
shall lapse 100%, and that any Award vesting shall accelerate 100%, provided the
proposed dissolution or liquidation takes place at the time and in the manner
contemplated.  To the extent it has not been previously exercised or
vested, an Award shall terminate immediately prior to the consummation of such
proposed action.

     

    (c)           Change in
Control.  This Section 15(c) shall apply except as otherwise
provided in the Award Agreement.

     

    (i)          Stock Options and
SARs.  In the Award Agreement, in the event of a Change in
Control, each outstanding Option and SAR shall be assumed or an equivalent
option or SAR substituted by the successor corporation or a Parent or Subsidiary
of the successor corporation.  Unless determined otherwise by the
Administrator, if the successor corporation refuses to assume or substitute for
the Option or SAR, the Participant shall fully vest in and have the right to
exercise the Option or SAR as to all of the Awarded Stock, including Shares as
to which it would not otherwise be vested or exercisable.  If an
Option or SAR is not assumed or substituted on the Change in Control, the
Administrator shall notify the Participant in writing or electronically that the
Option or SAR shall be exercisable, to the extent vested, for a period of up to
15 days from the date of such notice, and the Option or SAR shall terminate upon
the expiration of such period.  For the purposes of this Section
15(c)(i), the Option or SAR shall be considered assumed if, following the Change
in Control, the option or SAR confers the right to purchase or receive, for each
Share of Awarded Stock subject to the Option or SAR immediately prior to the
Change in Control, the consideration (whether securities, cash, or property)
received in the Change in Control by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority
of the outstanding Shares).  However, if the consideration received in
the Change in Control is not solely common stock of the successor corporation or
its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of
the Option or SAR, for each share of Awarded Stock subject to the Option or SAR,
to be solely common stock of the successor corporation or its Parent equal in
Fair Market Value to the per share consideration received by holders of Common
Stock in the Change in Control.  Notwithstanding anything in this Plan
to the contrary, an Award that vests, is earned, or is paid-out upon the
satisfaction of one or more performance objectives shall not be considered
assumed if the Company or its successor modifies any of the performance
objectives without the Participant’s consent; provided, however, a modification
to performance objectives only to reflect the successor corporation’s
post-Change in Control corporate structure shall not be deemed to invalidate an
otherwise valid Award assumption.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii)           Restricted Stock,
Performance Shares, Performance Units, Restricted Stock Units and Other Stock
Based Awards.  In the event of a Change in Control, each
outstanding Award of Restricted Stock, Restricted Stock Unit, Performance Share,
Performance Unit, and Other Stock Based Award shall be assumed or an equivalent
Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit,
and Other Stock Based Award shall be substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation.  Unless
determined otherwise by the Administrator, if the successor corporation refuses
to assume or substitute for the Award, the Participant shall fully vest in the
Award, including as to Shares or Units that would not otherwise be vested, all
applicable restrictions shall lapse, and all performance objectives and other
vesting criteria shall be deemed achieved at targeted levels.  For the
purposes of this Section 15(c)(ii), an Award of Restricted Stock, Restricted
Stock Units, Performance Shares, Performance Units, and Other Stock Based Awards
shall be considered assumed if, following the Change in Control, the award
confers the right to purchase or receive, for each Share subject to the Award
immediately prior to the Change in Control (and if a Restricted Stock Unit or
Performance Unit, for each Share as determined based on the then current value
of the unit), the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares).  However, if the consideration
received in the Change in Control is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide that the consideration to be received for each
Share (and if a Restricted Stock Unit or Performance Unit, for each Share as
determined based on the then current value of the unit) be solely common stock
of the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the Change in
Control.  Notwithstanding anything in this Plan to the contrary, an
Award that vests, is earned, or is paid-out upon the satisfaction of one or more
performance objectives shall not be considered assumed if the Company or its
successor modifies any of the performance objectives without the Participant’s
consent; provided, however, a modification to the performance objectives only to
reflect the successor corporation’s post-Change in Control corporate structure
shall not be deemed to invalidate an otherwise valid Award
assumption.

     

    (iii)           Outside Director
Awards.  Notwithstanding any provision of Sections 15(c)(i) or
15(c)(ii) to the contrary, with respect to Awards granted to an Outside Director
that are assumed or substituted for, if on the date of or following the
assumption or substitution, the Participant’s status as a Director or a director
of the successor corporation, as applicable, is terminated other than upon a
voluntary resignation by the Participant, then the Participant shall fully vest
in and have the right to exercise his Options and Stock Appreciation Rights as
to all of the Award, including Shares as to which such Awards would not
otherwise be vested or exercisable, and all restrictions on Restricted Stock and
Restricted Stock Units, as applicable, shall lapse, and, with respect to
Performance Shares, Performance Units, and Other Stock Based Awards, all
performance goals and other vesting criteria shall be deemed achieved at target
levels and all other terms and conditions met.

     

    16.           Date of
Grant.  The date of grant of an Award shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or a later date as is determined by the
Administrator.  Notice of the determination shall be provided to each
Participant within a reasonable time after the date of such grant.

     

    17.           Shareholder Approval and
Term of Plan.  The Plan became effective on March 23, 2010 and
thereafter shall continue in effect for a term of two years unless terminated
earlier under Section 18 of the Plan.

     

    18.           Amendment and Termination of
the Plan.

     

    (a)           Amendment and
Termination.  The Board may at any time amend, alter, suspend
or terminate the Plan.

     

    (b)           Shareholder
Approval.  The Company shall obtain shareholder approval of any
Plan amendment to the extent necessary to comply with Applicable
Laws.

     

    (c)           Effect of Amendment or
Termination.  No amendment, alteration, suspension, or
termination of the Plan shall materially or adversely impair the rights of any
Participant, unless otherwise mutually agreed upon by the Participant and the
Administrator, which agreement must be in writing and signed by the Participant
and the Company.  Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it under this Plan
with respect to Awards granted under the Plan prior to the date of
termination.

     

    19.           Conditions upon issuance of
shares.

     

    (a)           Legal
Compliance.  Shares shall not be issued pursuant to the
exercise of an Award unless the exercise of the Award and the issuance and
delivery of such Shares shall comply with Applicable Laws and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)           Investment
Representations.  As a condition to the exercise or receipt of
an Award, the Company may require the person exercising or receiving the Award
to represent and warrant at the time of any such exercise or receipt that the
Shares are being purchased only for investment and without any present intention
to sell or distribute the Shares if, in the opinion of counsel for the Company,
such a representation is required.

     

    (c)           Taxes.  No
Shares shall be delivered under the Plan to any Participant or other person
until the Participant or other person has made arrangements acceptable to the
Administrator for the satisfaction of any non-U.S., U.S.-federal, U.S.-state, or
local income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares.  Upon
exercise or vesting of an Award, the Company shall withhold or collect from the
Participant an amount sufficient to satisfy such tax obligations, including, but
not limited to, by surrender of the whole number of Shares covered by the Award
sufficient to satisfy the minimum applicable tax withholding obligations
incident to the exercise or vesting of an Award.

     

    20.           Severability.  Notwithstanding
any contrary provision of the Plan or an Award to the contrary, if any one or
more of the provisions (or any part thereof) of this Plan or the Awards shall be
held invalid, illegal, or unenforceable in any respect, such provision shall be
modified so as to make it valid, legal, and enforceable, and the validity,
legality, and enforceability of the remaining provisions (or any part thereof)
of the Plan or Award, as applicable, shall not in any way be affected or
impaired thereby.

     

    21.           Inability to obtain
authority.  The inability of the company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
company’s counsel to be necessary to the lawful issuance and sale of any shares
hereunder, shall relieve the company of any liability in respect of the failure
to issue or sell such shares as to which such requisite authority shall not have
been obtained.

     

    22.           No rights to
awards.  No eligible service provider or other person shall
have any claim to be granted any award pursuant to the plan, and neither the
company nor the administrator shall be obligated to treat participants or any
other person uniformly.

     

    23.           No shareholder
rights.  Except as otherwise provided in an award agreement, a
participant shall have none of the rights of a shareholder with respect to
shares covered by an award until the participant becomes the record owner of the
shares.

     

    24.           Fractional
shares.  No fractional shares shall be issued and the
administrator shall determine, in its sole discretion, whether cash shall be
given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.

     

    25.           Governing
law.  The plan, all award agreements, and all related matters,
shall be governed by the laws of the state of Texas, without regard to choice of
law principles that direct the application of the laws of another
state.

     

    26.           No effect on terms of
employment or consulting relationship.  The plan shall not
confer upon any participant any right as a service provider, nor shall it
interfere in any way with his right or the right of the company or a parent or
subsidiary to terminate the participant’s service at any time, with or without
cause, and with or without notice.

     

    27.           Unfunded
obligation.  Participants shall have the status of general
unsecured creditors of the company.  Any amounts payable to
participants pursuant to the plan shall be unfunded and unsecured obligations
for all purposes, including, without limitation, title i of the employee
retirement income security act of 1974, as amended.  Neither the
company nor any parent or subsidiary shall be required to segregate any monies
from its general funds, or to create any trusts, or establish any special
accounts with respect to such obligations.  The company shall retain
at all times beneficial ownership of any investments, including trust
investments, which the company may make to fulfill its payment obligations under
this plan.  Any investments or the creation or maintenance of any
trust for any participant account shall not create or constitute a trust or
fiduciary relationship between the administrator, the company or any parent or
subsidiary and participant, or otherwise create any vested or beneficial
interest in any participant or the participant’s creditors in any assets of the
company or parent or subsidiary.  The participants shall have no claim
against the company or any parent or subsidiary for any changes in the value of
any assets that may be invested or reinvested by the company with respect to the
plan.

     

    28.           Section
409A.  It is the intention of the Company that no Award shall
be “deferred compensation” subject to Section 409A of the Code, unless and to
the extent that the Administrator specifically determines otherwise, and the
Plan and the terms and conditions of all Awards shall be interpreted
accordingly.  The following rules shall apply to Awards intended to be
subject to Section 409A of the Code (“409A Awards”):

     

    (a)           Any
distribution of a 409A Award following a separation from service that would be
subject to Section 409A(a)(2)(A)(i) of the Code as a distribution following a
separation from service of a “specified employee” (as defined under Section
409A(a)(2)(B)(i) of the Code) shall occur no earlier than the expiration of the
six-month period following such separation from service.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)           In
the case of a 409A Award providing for distribution or settlement upon vesting
or lapse of a risk of forfeiture, if the time of such distribution or settlement
is not otherwise specified in the Plan or Award Agreement or other governing
document, the distribution or settlement shall be made no later than March 15 of
the calendar year following the calendar year in which such 409A Award vested or
the risk of forfeiture lapsed.

     

    (c)           In
the case of any distribution of any other 409A Award, if the timing of such
distribution is not otherwise specified in the Plan or Award Agreement or other
governing document, the distribution shall be made not later than the end of the
calendar year during which the settlement of the 409A Award is specified to
occur.

     

    29.           Construction.  Headings
in this Plan are included for convenience and shall not be considered in the
interpretation of the Plan.  References to sections are to Sections of
this Plan unless otherwise indicated.  Pronouns shall be construed to
include the masculine, feminine, neutral, singular or plural as the identity of
the antecedent may require.  This Plan shall be construed according to
its fair meaning and shall not be strictly construed against the
Company.

     

    30.           No Full Value Awards for Two
Years Without Shareholder Approval.  Notwithstanding anything
in the Plan to the contrary, after shareholder approval of the Plan and before
expiration of the initial two year term set forth in Section 17, no full value
Awards shall be granted without further approval of such Awards by the Company's
shareholders.

     

    *     *     *     *     *