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  TABLE OF CONTENTS












































 
 

  Exhibit 10.93    
    


          RESACA EXPLOITATION, INC.

2008 STOCK INCENTIVE PLAN  


(As Effective July 10, 2008)  








 








































 

  TABLE OF CONTENTS    
    



 

 






 




							
	 
	 	 
	 	 
	 	Page 
	 SECTION 1.
	 	 GENERAL PROVISIONS RELATING TO PLAN GOVERNANCE, COVERAGE AND BENEFITS
	 	I-1
	 1.1  
	 	  Background and Purpose
	 	I-1
	 1.2  
	 	  Definitions
	 	I-1
	 
	 	 (a)
	 	Authorized Officer	 	I-1
	 
	 	 (b)
	 	Board	 	I-1
	 
	 	 (c)
	 	Cause	 	I-1
	 
	 	 (d)
	 	CEO	 	I-2
	 
	 	 (e)
	 	Change in Control	 	I-2
	 
	 	 (f)
	 	Code	 	I-2
	 
	 	 (g)
	 	Committee	 	I-2
	 
	 	 (h)
	 	Common Stock	 	I-2
	 
	 	 (i)
	 	Company	 	I-2
	 
	 	 (j)
	 	Consultant	 	I-2
	 
	 	 (k)
	 	Covered Employee	 	I-3
	 
	 	 (l)
	 	Disability	 	I-3
	 
	 	 (m)
	 	Employee	 	I-3
	 
	 	 (n)
	 	Employment	 	I-3
	 
	 	 (o)
	 	Exchange Act	 	I-3
	 
	 	 (p)
	 	Fair Market Value	 	I-3
	 
	 	 (q)
	 	Grantee	 	I-4
	 
	 	 (r)
	 	Immediate Family	 	I-4
	 
	 	 (s)
	 	Incentive Agreement	 	I-4
	 
	 	 (t)
	 	Incentive Award	 	I-4
	 
	 	 (u)
	 	Incentive Stock Option or ISO	 	I-4
	 
	 	 (v)
	 	Insider	 	I-4
	 
	 	 (w)
	 	Nonstatutory Stock Option	 	I-4
	 
	 	 (x)
	 	Option Price	 	I-4
	 
	 	 (y)
	 	Other Stock-Based Award	 	I-4
	 
	 	 (z)
	 	Outside Director	 	I-4
	 
	 	 (aa)
	 	Parent	 	I-4
	 
	 	 (bb)
	 	Performance-Based Award	 	I-4
	 
	 	 (cc)
	 	Performance-Based Exception	 	I-4
	 
	 	 (dd)
	 	Performance Criteria	 	I-4
	 
	 	 (ee)
	 	Performance Period	 	I-5
	 
	 	 (ff)
	 	Plan	 	I-5
	 
	 	 (gg)
	 	Plan Year	 	I-5
	 
	 	 (hh)
	 	Publicly Held Corporation	 	I-5
	 
	 	 (ii)
	 	Restricted Stock	 	I-5
	 
	 	 (jj)
	 	Restricted Stock Award	 	I-5
	 
	 	 (kk)
	 	Restricted Stock Unit	 	I-5
	 
	 	 (ll)
	 	Restriction Period	 	I-5
	 
	 	 (mm)
	 	Retirement	 	I-5
	 
	 	 (nn)
	 	Share	 	I-5
	 
	 	 (oo)
	 	Share Pool	 	I-5
	 
	 	 (pp)
	 	Spread	 	I-5
	 
	 	 (qq)
	 	Stock Appreciation Right or SAR	 	I-5
	 
	 	 (rr)
	 	Stock Option or Option	 	I-5





 

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	 	Page 
	 
	 	 (ss)
	 	Subsidiary	 	I-5
	 
	 	 (tt)
	 	Supplemental Payment	 	I-5
	 1.3  
	 	 Plan Administration
	 	I-6
	 
	 	 (a)
	 	Authority of the Committee	 	I-6
	 
	 	 (b)
	 	Meetings	 	I-6
	 
	 	 (c)
	 	Decisions Binding	 	I-6
	 
	 	 (d)
	 	Modification of Outstanding Incentive Awards	 	I-6
	 
	 	 (e)
	 	Delegation of Authority	 	I-6
	 
	 	 (f)
	 	Expenses of Committee	 	I-7
	 
	 	 (g)
	 	Surrender of Previous Incentive Awards	 	I-7
	 
	 	 (h)
	 	Indemnification	 	I-7
	 1.4  
	 	  Shares of Common Stock Available for Incentive Awards
	 	I-7
	 1.5  
	 	 Share Pool Adjustments for Awards and Payouts
	 	I-8
	 1.6  
	 	 Common Stock Available
	 	I-8
	 1.7  
	 	 Participation
	 	I-9
	 
	 	 (a)
	 	Eligibility	 	I-9
	 
	 	 (b)
	 	Incentive Stock Option Eligibility	 	I-9
	 1.8  
	 	 Types of Incentive Awards
	 	I-9
	 SECTION 2.
	 	 STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
	 	

I-9
	 2.1  
	 	 Grant of Stock Options
	 	I-9
	 2.2  
	 	 Stock Option Terms
	 	I-9
	 
	 	 (a)
	 	Written Agreement	 	I-9
	 
	 	 (b)
	 	Number of Shares	 	I-10
	 
	 	 (c)
	 	Exercise Price	 	I-10
	 
	 	 (d)
	 	Term	 	I-10
	 
	 	 (e)
	 	Exercise	 	I-10
	 
	 	 (f)
	 	$100,000 Annual Limit on Incentive Stock Options	 	I-10
	 2.3  
	 	 Stock Option Exercises
	 	I-10
	 
	 	 (a)
	 	Method of Exercise and Payment	 	I-10
	 
	 	 (b)
	 	Restrictions on Share Transferability	 	I-11
	 
	 	 (c)
	 	Notification of Disqualifying Disposition of Shares from Incentive Stock Options	 	I-11
	 
	 	 (d)
	 	Proceeds of Option Exercise	 	I-12
	 2.4  
	 	 Supplemental Payment on Exercise of Nonstatutory Stock Options
	 	I-12
	 2.5  
	 	 Stock Appreciation Rights
	 	I-12
	 
	 	 (a)
	 	Grant	 	I-12
	 
	 	 (b)
	 	General Provisions	 	I-12
	 
	 	 (c)
	 	Exercise	 	I-12
	 
	 	 (d)
	 	Settlement	 	I-12
	 SECTION 3.
	 	 RESTRICTED STOCK
	 	

I-12
	 3.1  
	 	 Award of Restricted Stock
	 	I-12
	 
	 	 (a)
	 	Grant	 	I-12
	 
	 	 (b)
	 	Immediate Transfer Without Immediate Delivery of Restricted Stock	 	I-13
	 3.2  
	 	 Restrictions
	 	I-13
	 
	 	 (a)
	 	Forfeiture of Restricted Stock	 	I-13
	 
	 	 (b)
	 	Issuance of Certificates	 	I-13
	 
	 	 (c)
	 	Removal of Restrictions	 	I-14
	 3.3  
	 	 Delivery of Shares of Common Stock
	 	I-14
	 3.4  
	 	 Supplemental Payment on Vesting of Restricted Stock
	 	I-14





 

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	 	Page 
	 SECTION 4.
	 	 OTHER STOCK-BASED AWARDS
	 	I-14
	 4.1  
	 	 Grant of Other Stock-Based Awards
	 	I-14
	 4.2  
	 	 Other Stock-Based Award Terms
	 	I-15
	 
	 	 (a)
	 	Written Agreement	 	I-15
	 
	 	 (b)
	 	Purchase Price	 	I-15
	 
	 	 (c)
	 	Performance Criteria and Other Terms	 	I-15
	 4.3  
	 	 Supplemental Payment on Other Stock-Based Awards
	 	I-15
	 SECTION 5.
	 	 PERFORMANCE-BASED AWARDS AND PERFORMANCE CRITERIA
	 	

I-16
	 SECTION 6.
	 	 PROVISIONS RELATING TO PLAN PARTICIPATION
	 	

I-17
	 6.1  
	 	 Incentive Agreement
	 	I-17
	 6.2  
	 	 No Right to Employment
	 	I-18
	 6.3  
	 	 Securities Requirements
	 	I-18
	 6.4  
	 	 Transferability
	 	I-18
	 6.5  
	 	 Rights as a Shareholder
	 	I-19
	 
	 	 (a)
	 	No Shareholder Rights	 	I-19
	 
	 	 (b)
	 	Representation of Ownership	 	I-19
	 6.6  
	 	 Change in Stock and Adjustments
	 	I-19
	 
	 	 (a)
	 	Changes in Law or Circumstances	 	I-19
	 
	 	 (b)
	 	Exercise of Corporate Powers	 	I-20
	 
	 	 (c)
	 	Recapitalization of the Company	 	I-20
	 
	 	 (d)
	 	Issue of Common Stock by the Company	 	I-20
	 
	 	 (e)
	 	Assumption under the Plan of Outstanding Stock Options	 	I-20
	 
	 	 (f)
	 	Assumption of Incentive Awards by a Successor	 	I-21
	 6.7  
	 	 Termination of Employment, Death, Disability and Retirement
	 	I-21
	 
	 	 (a)
	 	Termination of Employment	 	I-21
	 
	 	 (b)
	 	Termination of Employment for Cause	 	I-22
	 
	 	 (c)
	 	Retirement	 	I-22
	 
	 	 (d)
	 	Disability or Death	 	I-22
	 
	 	 (e)
	 	Continuation	 	I-22
	 6.8  
	 	 Change in Control
	 	I-23
	 6.9  
	 	 Exchange of Incentive Awards
	 	I-24
	 SECTION 7.
	 	 GENERAL
	 	

I-24
	 7.1  
	 	 Effective Date and Grant Period
	 	I-24
	 7.2  
	 	 Funding and Liability of Company
	 	I-25
	 7.3  
	 	 Withholding Taxes
	 	I-25
	 
	 	 (a)
	 	Tax Withholding	 	I-25
	 
	 	 (b)
	 	Share Withholding	 	I-25
	 
	 	 (c)
	 	Incentive Stock Options	 	I-25
	 7.4  
	 	 No Guarantee of Tax Consequences
	 	I-25
	 7.5  
	 	 Designation of Beneficiary by Participant
	 	I-26
	 7.6  
	 	 Deferrals
	 	I-26
	 7.7  
	 	 Amendment and Termination
	 	I-26
	 7.8  
	 	 Requirements of Law
	 	I-26
	 
	 	 (a)
	 	Governmental Entities and Securities Exchanges	 	I-26
	 
	 	 (b)
	 	Securities Act Rule 701	 	I-27
	 7.9  
	 	 Rule 16b-3 Securities Law Compliance for Insiders
	 	I-27
	 7.10
	 	 Compliance with Code Section 162(m) for Publicly Held Corporation
	 	I-28
	 7.11
	 	 Compliance with Code Section 409A
	 	I-28





 

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	 	Page 
	 7.12
	 	 Notices
	 	I-28
	 
	 	 (a)
	 	Notice From Insiders to Secretary of Change in Beneficial Ownership	 	I-28
	 
	 	 (b)
	 	Notice to Insiders and Securities and Exchange Commission	 	I-28
	 7.13
	 	 Pre-Clearance Agreement with Brokers
	 	I-28
	 7.14
	 	 Successors to Company
	 	I-29
	 7.15
	 	 Miscellaneous Provisions
	 	I-29
	 7.16
	 	 Severability
	 	I-29
	 7.17
	 	 Gender, Tense and Headings
	 	I-29
	 7.18
	 	 Governing Law
	 	I-29





 

 iv








 








































 RESACA EXPLOITATION, INC.

2008 STOCK INCENTIVE PLAN  


 
 

  SECTION 1.    
    
    GENERAL PROVISIONS RELATING TO
  PLAN GOVERNANCE, COVERAGE AND BENEFITS    
    


1.1  Background and Purpose  


        Resaca Exploitation, Inc., a Texas corporation (the "Company"), has adopted this plan document, entitled
Resaca Exploitation, Inc. 2008 Stock Incentive Plan" (the "Plan"), effective as of July 10, 2008 (the "Effective
Date"). 


        The
purpose of the Plan is to foster and promote the long-term financial success of the Company and to increase stockholder value by: (a) encouraging the commitment of
selected key Employees, Consultants and Outside Directors, (b) motivating superior performance of key Employees, Consultants and Outside Directors by means of long-term performance
related incentives, (c) encouraging and providing key Employees, Consultants and Outside Directors with a program for obtaining ownership interests in the Company which link and align their
personal interests to those of the Company's stockholders, (d) attracting and retaining key Employees, Consultants and Outside Directors by providing competitive compensation opportunities, and
(e) enabling key Employees, Consultants and Outside Directors to share in the long-term growth and success of the Company. 


        The
Plan provides for payment of various forms of compensation. It is not intended to be a plan that is subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Plan will be interpreted, construed and administered consistent with its status as a plan that is not subject to ERISA. 


        The
Plan will remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to  Section 7.7, until all Shares subject to the Plan have been purchased or
acquired according to its provisions. However, in no event may an
Incentive Stock Option be granted under the Plan after the expiration of ten (10) years from the Effective Date to the extent required by Code Section 422(b)(2). 


1.2  Definitions  


        The following terms shall have the meanings set forth below: 


        (a)    Authorized Officer.    The
Chairman of the Board, the CEO or any other senior officer of the Company to whom either of them delegate the authority to execute any Incentive Agreement for and on behalf of the Company. No officer
or director shall be an Authorized Officer with respect to any Incentive Agreement for himself. 


        (b)    Board.    The Board of
Directors of the Company. 


        (c)    Cause.    When used in
connection with the termination of a Grantee's Employment, shall mean the termination of the Grantee's Employment by the Company or any Subsidiary by reason of (i) the conviction of the Grantee
by a court of competent jurisdiction as to which no further appeal can be taken of a crime involving moral turpitude or a felony; (ii) the commission by the Grantee of a material act of fraud
upon the Company or any Subsidiary, or any customer or supplier thereof; (iii) the misappropriation of any funds or property of the Company or any Subsidiary, or any customer or supplier
thereof; (iv) the willful and continued failure by the Grantee to perform the material duties assigned to him that is not cured to the reasonable satisfaction of the Company within
30 days after written notice of such failure is provided to Grantee by the Board or CEO (or by another officer of the 


I-1







 



Company
or a Subsidiary who has been designated by the Board or CEO for such purpose); (v) the engagement by the Grantee in any direct and material conflict of interest with the Company or any
Subsidiary without compliance with the Company's or Subsidiary's conflict of interest policy, if any, then in effect; (vi) the engagement by the Grantee, without the written approval of the
Board or CEO, in any material activity which competes with the business of the Company or any Subsidiary or which would result in a material injury to the business, reputation or goodwill of the
Company or any Subsidiary; or (vii) an event constituting "cause" as defined under the Grantee's current employment agreement. 


        (d)    CEO.    The Chief Executive
Officer of the Company. 


        (e)    Change in Control.    Any of
the events described in and subject to Section 6.8. 


        (f)    Code.    The Internal Revenue
Code of 1986, as amended, and the regulations and other authority promulgated thereunder by the appropriate governmental authority. References herein to any provision of the Code shall refer to any
successor provision thereto. 


        (g)    Committee.    The committee
appointed by the Board to administer the Plan. If the Company is a Publicly Held Corporation, the Plan shall be administered by the Committee appointed by the Board consisting of not less than two
directors who fulfill the "nonemployee director" requirements of Rule 16b-3 under the Exchange Act and the "outside director" requirements of Code Section 162(m). In either
case, the Committee may be the Compensation Committee of the Board, or any subcommittee of the Compensation Committee, provided that the members of the Committee satisfy the requirements of the
previous provisions of this paragraph. 


        The
Board shall have the power to fill vacancies on the Committee arising by resignation, death, removal or otherwise. The Board, in its sole discretion, may bifurcate the powers and
duties of the
Committee among one or more separate committees, or retain all powers and duties of the Committee in a single Committee. The members of the Committee shall serve at the discretion of the Board. 


        Notwithstanding
the preceding paragraphs of this Section 1.2(g), the term "Committee" as used in the Plan with respect to any
Incentive Award for an Outside Director shall refer to the entire Board. In the case of an Incentive Award for an Outside Director, the Board shall have all the powers and responsibilities of the
Committee hereunder as to such Incentive Award, and any actions as to such Incentive Award may be acted upon only by the Board (unless it otherwise designates in its discretion). When the Board
exercises its authority to act in the capacity as the Committee hereunder with respect to an Incentive Award for an Outside Director, it shall so designate with respect to any action that it
undertakes in its capacity as the Committee. 


        (h)    Common Stock.    The common
stock of the Company, $0.01 par value per share, and any class of common stock into which such common shares may hereafter be converted, reclassified or recapitalized. 



        (i)    Company.    Resaca
Exploitation, Inc., a corporation organized under the laws of the State of Texas, and any successor in interest thereto. 


        (j)    Consultant.    An independent
agent, consultant, attorney, or any other individual who is not an Outside Director or employee of the Company (or any Parent or Subsidiary) and who, in the opinion of the Committee, is (i) in
a position to contribute to the growth or financial success of the Company (or any Parent or Subsidiary), (ii) is a natural person and (iii) provides bona
fide services to the Company (or any Parent or Subsidiary), which services are not in connection with the offer or sale of securities in a capital raising transaction, and do
not directly or indirectly promote or maintain a market for the Company's securities. 


I-2







 

        (k)    Covered Employee.    A named
executive officer who is one of the group of covered employees, as defined in Code Section 162(m) and Treasury Regulation Section 1.162-27(c) (or its successor), during any
period that the Company is a Publicly Held Corporation. 


        (l)    Disability.    As determined by
the Committee in its discretion exercised in good faith, means that the Grantee (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result
in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months
under an accident and health plan covering employees of the Company. A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, the Grantee
shall submit to any reasonable examination(s) required in the opinion of such physician. 



        (m)    Employee.    Any employee of
the Company (or any Parent or Subsidiary) within the meaning of Code Section 3401(c) including, without limitation, officers who are members of the Board. 


        (n)    Employment.    Employment means
that the individual is employed as an Employee, or engaged as a Consultant or Outside Director, by the Company (or any Parent or Subsidiary), or by any corporation issuing or assuming an Incentive
Award in any transaction described in Code Section 424(a), or by a parent corporation or a subsidiary corporation of such corporation issuing or assuming such Incentive Award, as the
parent-subsidiary relationship shall be determined at the time of the corporate action described in Code Section 424(a). In this regard, neither the transfer of a Grantee from Employment by the
Company to Employment by any Parent or Subsidiary, nor the transfer of a Grantee from Employment by any Parent or Subsidiary to Employment by the Company, shall be deemed to be a termination of
Employment of the Grantee. Moreover, the Employment of a Grantee shall not be deemed to have been terminated because of an approved leave of absence from active Employment on account of temporary
illness, authorized vacation or granted for reasons of professional advancement, education, or health, or during any period required to be treated as a leave of absence by virtue of any applicable
statute, Company personnel policy or written agreement. 


        The
term "Employment" for purposes of the Plan shall include (i) active performance of agreed services by a Consultant for the Company (or any Parent or Subsidiary) or
(ii) current membership on the Board by an Outside Director. 


        All
determinations regarding Employment, and termination of Employment, shall be made by the Committee in its discretion. 



        (o)    Exchange Act.    The Securities
Exchange Act of 1934, as amended. 


        (p)    Fair Market Value.    If the
Company is a Publicly Held Corporation, the Fair Market Value of one Share on the date in question shall be (i) the closing sales price on such day for a Share as quoted on the London Stock
Exchange's Alternative Investment Market ("AIM") or the securities exchange on which Shares are then principally listed or admitted to trading, or
(ii) if not quoted on AIM or other securities exchange, the average of the closing bid and
asked prices for a Share as quoted by the National Quotation Bureau's "Pink Sheets" or the National Association of Securities Dealers' OTC Bulletin Board System. If there was no public trade of Common
Stock on the date in question, Fair Market Value shall be determined by reference to the last preceding date on which such a trade was so reported. 


        If
the Company is not a Publicly Held Corporation at the time a determination of the Fair Market Value of the Common Stock is required to be made hereunder, the determination of Fair
Market Value for purposes of the Plan shall be made by the Committee in its discretion. In this respect, the Committee may rely on such financial data, appraisals, valuations, experts, and other
sources as, in its 


I-3







 



sole
and absolute discretion, it deems advisable under the circumstances. With respect to Stock Options, SARs, and other Incentive Awards subject to Code Section 409A, such Fair Market Value
shall be determined by the Committee consistent with the requirements of Section 409A in order to satisfy the exception under Section 409A for stock rights. 



        (q)    Grantee.    Any Employee,
Consultant or Outside Director who is granted an Incentive Award under the Plan. 


        (r)    Immediate Family.    With
respect to a Grantee, the Grantee's child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships. 


        (s)    Incentive Agreement.    The
written agreement entered into between the Company and the Grantee setting forth the terms and conditions pursuant to which an Incentive Award is granted under the Plan, as such agreement is further
defined in Section 6.1. 


        (t)    Incentive Award.    A grant of
an award under the Plan to a Grantee, including any Nonstatutory Stock Option, Incentive Stock Option (ISO), Stock Appreciation Right (SAR), Restricted Stock Award, Restricted Stock Unit or Other
Stock-Based Award, as well as any Supplemental Payment with respect thereto. 


        (u)    Incentive Stock Option or
ISO.    A Stock Option granted by the Committee to an Employee under Section 2 which is designated by the
Committee as an Incentive Stock Option and intended to qualify as an Incentive Stock Option under Code Section 422. 



        (v)    Insider.    If the Company is a
Publicly Held Corporation, an individual who is, on the relevant date, an officer, director or ten percent (10%) beneficial owner of any class of the Company's equity securities that is registered
pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act. 


        (w)    Nonstatutory Stock Option.    A
Stock Option granted by the Committee to a Grantee under Section 2 that is not designated by the Committee as an Incentive Stock Option. 


        (x)    Option Price.    The exercise
price at which a Share may be purchased by the Grantee of a Stock Option. 


        (y)    Other Stock-Based Award.    An
award granted by the Committee to a Grantee under Section 4 that is valued in whole or in part by reference to, or is otherwise based upon,
Common Stock. 


        (z)    Outside Director.    A member
of the Board who is not, at the time of grant of an Incentive Award, an employee of the Company or any Parent or Subsidiary. 


        (aa)    Parent.    Any corporation
(whether now or hereafter existing) which constitutes a "parent" of the Company, as defined in Code Section 424(e). 


        (bb)    Performance-Based Award.    A
grant of an Incentive Award under the Plan pursuant to Section 5 that is intended to satisfy the Performance-Based Exception. 


        (cc)    Performance-Based
Exception.    The performance-based exception from the tax deductibility limitations of Code Section 162(m), as prescribed in Code Section 162(m) and
Treasury Regulation Section 1.162-27(e) (or its successor), which is applicable during such period that the Company is a Publicly Held Corporation. 


        (dd)    Performance Criteria.    The
business criteria that are specified by the Committee pursuant to Section 5 for an Incentive Award that is intended to qualify for the
Performance-Based Exception; the satisfaction of such business criteria during the Performance Period being required for the grant and/or vesting of the particular Incentive Award to occur, as
specified in the particular Incentive Agreement. 


I-4







 

        (ee)    Performance Period.    A
period of time determined by the Committee over which performance is measured for the purpose of determining a Grantee's right to, and the payment value of, any Incentive Award that is intended to
qualify for the Performance-Based Exception. 


        (ff)    Plan.    Resaca
Exploitation, Inc. 2008 Stock Incentive Plan, as effective on the Effective Date, which is set forth herein and as it may be amended from time to time. 


        (gg)    Plan Year.    The calendar
year, except for the first Plan Year which shall be a short plan year beginning on the Effective Date, and ending on December 31, 2008. 


        (hh)    Publicly Held
Corporation.    A corporation issuing any class of common equity securities required to be registered under Section 12 of the Exchange Act. 



        (ii)    Restricted Stock.    Common
Stock that is issued or transferred to a Grantee pursuant to Section 3. 


        (jj)    Restricted Stock Award.    An
authorization by the Committee to issue or transfer Restricted Stock to a Grantee pursuant to Section 3. 



        (kk)    Restricted Stock Unit.    A
unit granted to a Grantee pursuant to Section 4 which entitles him to receive a Share or cash on the vesting date, as specified in the Incentive
Agreement. 


        (ll)    Restriction Period.    The
period of time determined by the Committee and set forth in the Incentive Agreement during which the transfer of Restricted Stock by the Grantee is restricted. 



        (mm)    Retirement.    The voluntary
termination of Employment from the Company or any Parent or Subsidiary constituting retirement for age on any date after the Employee attains the normal retirement age of 62 years, or such
other age as may be designated by the Committee in the Employee's Incentive Agreement. 


        (nn)    Share.    A share of the
Common Stock of the Company. 


        (oo)    Share Pool.    The number of
shares authorized for issuance under Section 1.4, as adjusted for (i) awards and payouts under  Section 1.5 and (ii) changes and
adjustments as described in Section 6.6. 


        (pp)    Spread.    The difference
between the exercise price per Share specified in a SAR grant and the Fair Market Value of a Share on the date of exercise of the SAR. 


        (qq)    Stock Appreciation Right or
SAR.    A Stock Appreciation Right as described in Section 2.5. 


        (rr)    Stock Option or
Option.    Pursuant to Section 2, (i) an Incentive Stock Option granted to an Employee, or (ii) a
Nonstatutory Stock Option granted to an Employee, Consultant or Outside Director, whereunder such option the Grantee has the right to purchase Shares of Common Stock. In accordance with Code
Section 422, only an Employee may be granted an Incentive Stock Option. 


        (ss)    Subsidiary.    Any company
(whether a corporation, partnership, joint venture or other form of entity) in which the Company or a corporation in which the Company owns a majority of the shares of capital stock, directly or
indirectly, owns a greater than 50% equity interest except that, with respect to the issuance of Incentive Stock Options, the term "Subsidiary" shall have the same meaning as the term "subsidiary
corporation" as defined in Code Section 424(f) as required by Code Section 422. 


        (tt)    Supplemental Payment.    Any
amount, as described in Sections 2.4, 3.4 and/or 4.3, that is dedicated to payment of income taxes which are payable by the Grantee resulting
from an Incentive Award. 


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1.3  Plan Administration  


        (a)    Authority of the
Committee.    Except as may be limited by law and subject to the provisions herein, the Committee shall have the complete power and authority to (i) select
Grantees who shall participate in the Plan; (ii) determine the sizes, duration and types of Incentive Awards; (iii) determine the terms and conditions of Incentive Awards and Incentive
Agreements; (iv) determine whether any Shares subject to Incentive Awards will be subject to any restrictions on transfer; (v) construe and interpret the Plan and any Incentive Agreement
or other agreement entered into under the Plan; and (vi) establish, amend, or waive rules for the Plan's administration. Further, the Committee shall make all other determinations which may be
necessary or advisable for the administration of the Plan. 


        (b)    Meetings.    The Committee
shall designate a chairman from among its members who shall preside at its meetings, and shall designate a secretary, without regard to whether that person is a member of the Committee, who shall keep
the minutes of the proceedings and all records, documents, and data pertaining to its administration of the Plan. Meetings shall be held at such times and places as shall be determined by the
Committee and the Committee may hold telephonic meetings. The Committee may take any action otherwise proper under the Plan by the affirmative vote, taken with or without a meeting, of a majority of
its members. The Committee may authorize any one or more of its members or any officer of the Company to execute and deliver documents on behalf of the Committee. 


        (c)    Decisions Binding.    All
determinations and decisions of the Committee shall be made in its discretion pursuant to the provisions of the Plan, and shall be final, conclusive and binding on all persons including the Company,
its shareholders, Employees, Grantees, and their estates and beneficiaries. The Committee's decisions and determinations with respect to any
Incentive Award need not be uniform and may be made selectively among Incentive Awards and Grantees, whether or not such Incentive Awards are similar or such Grantees are similarly situated. 


        (d)    Modification of Outstanding Incentive
Awards.    Subject to the shareholder approval requirements of Section 7.7 if applicable, the Committee may, in
its discretion, provide for the extension of the exercisability of an Incentive Award, accelerate the vesting or exercisability of an Incentive Award, eliminate or make less restrictive any
restrictions contained in an Incentive Award, waive any restriction or other provisions of an Incentive Award, or otherwise amend or modify an Incentive Award in any manner that (i) is not
adverse to the Grantee to whom such Incentive Award was granted, (ii) is consented to by such Grantee, (iii) does not cause the Incentive Award to provide for the deferral of
compensation in a manner that does not comply with Code Section 409A (unless otherwise determined by the Committee), or (iv) does not contravene the requirements of the Performance-Based
Exception under Code Section 162(m). With respect to an Incentive Award that is an ISO, no adjustment thereto shall be made to the extent constituting a "modification" within the meaning of
Code Section 424(h)(3) unless otherwise agreed to by the Grantee in writing. Notwithstanding the above provisions of this subsection, no amendment or modification of an Incentive Award shall be
made to the extent such modification results in any Stock Option with an exercise price less than 100% of the Fair Market Value per Share on the date of grant (110% for Grantees of ISOs who are 10% or
greater shareholders pursuant to Section 1.7(b)). 


        (e)    Delegation of Authority.    The
Committee may delegate to designated officers or other employees of the Company any of its duties and authority under the Plan pursuant to such conditions or limitations as the Committee may establish
from time to time, including, without limitation, the authority to recommend Grantees and the forms and terms of their Incentive Awards; provided, however, the Committee may not delegate to any person
the authority (i) to grant Incentive Awards, (ii) if the Company is a Publicly Held Corporation, to take any action which would contravene the requirements of
Rule 16b-3 under the Exchange Act, the Performance-Based Exception under Code Section 162(m), or the Sarbanes-Oxley Act of 2002, or (iii) to recommend himself as a
Grantee, or to determine the form or terms of his own Incentive Award. 


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        (f)    Expenses of Committee.    The
Committee may employ legal counsel, including, without limitation, independent legal counsel and counsel regularly employed by the Company, and other agents as the Committee may deem appropriate for
the administration of the Plan. The Committee may rely upon any opinion or computation received from any such counsel or agent. All expenses incurred by the Committee in interpreting and administering
the Plan, including, without limitation, meeting expenses and professional fees, shall be paid by the Company. 


        (g)    Surrender of Previous Incentive
Awards.    The Committee may, in its discretion, grant Incentive Awards to Grantees on the condition that such Grantees
surrender to the Committee for cancellation such other Incentive Awards (including, without limitation, Incentive Awards with higher exercise prices) as the Committee directs. Incentive Awards granted
on the condition precedent of surrender of outstanding Incentive Awards shall not count against the limits set forth in Section 1.4 until such
time as such previous Incentive Awards are surrendered and cancelled. No surrender of Incentive Awards shall be made under this Section 1.3(g) if
such surrender causes any Incentive Award to provide for the deferral of compensation in a manner that is subject to taxation under Code Section 409A (unless otherwise determined by the
Committee). 


        (h)    Indemnification.    Each person
who is or was a member of the Committee shall be indemnified by the Company against and from any damage, loss, liability, cost and expense that may be imposed upon or reasonably incurred by him in
connection with or resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by reason of any action taken or failure to act under the Plan,
except for any such act or omission constituting willful misconduct or gross negligence. Each such person shall be indemnified by the Company for all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of any judgment in any such action, suit, or proceeding against him, provided he shall give the Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which
such persons may be entitled (i) under the Company's Articles or Certificate of Incorporation or Bylaws, (ii) pursuant to any separate indemnification or hold harmless agreement with the
Company, (iii) as a matter of law, contract or otherwise, or (iv) any power that the Company may have to indemnify them or hold them harmless. 


1.4  Shares of Common Stock Available for Incentive Awards  


        Subject to adjustment under Section 6.6, there shall be available for Incentive Awards that are granted
wholly or partly in Common Stock (including rights or Stock Options that may be exercised for or settled in Common Stock) nine million two hundred twenty-five thousand eight hundred
seventy-four (9,225,874) Shares of Common Stock. Pursuant to Section 1.5, the number of Shares that are the subject of Incentive
Awards under this Plan, which are forfeited or terminated, expire unexercised, are settled in cash in lieu of Common Stock or in a manner such that all or some of the Shares covered by an Incentive
Award are not issued to a Grantee or are exchanged for Incentive Awards that do not involve Common Stock, shall again immediately become available for Incentive Awards hereunder. The aggregate number
of Shares which may be issued upon exercise of ISOs shall be all of the Shares reserved pursuant to the first sentence of this paragraph. For purposes of counting Shares against the ISO maximum number
of reserved Shares, the net number of Shares issued pursuant to the exercise of an ISO shall be counted. The Committee may from time to time adopt and observe such procedures concerning the counting
of Shares against the Plan maximum as it may deem appropriate. 


        During
any period that the Company is a Publicly Held Corporation, then unless the Committee determines that a particular Incentive Award granted to a Covered Employee is not intended to
comply 


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with
the Performance-Based Exception, the following rules shall apply to grants of Incentive Awards to Covered Employees: 


        (a)   Subject
to adjustment as provided in Section 6.6, the maximum aggregate number of Shares of Common Stock
attributable to Incentive Awards paid out in Shares that may be granted (in the case of Stock Options and SARs) or that may vest (in the case of Restricted Stock, Restricted Stock Units or Other
Stock-Based Awards), as applicable, in any calendar year pursuant to any Incentive Award held by any individual Covered Employee shall be two million seven hundred sixty-seven thousand seven hundred
sixty-two (2,767,762). 


        (b)   The
maximum aggregate cash payout (with respect to any Incentive Awards paid out in cash) in any calendar year which may be made to any Covered Employee shall be two
million dollars ($2,000,000.00). 


        (c)   With
respect to any Stock Option or SAR granted to a Covered Employee that is canceled or repriced, the number of Shares subject to such Stock Option or SAR shall
continue to count against the maximum number of Shares that may be the subject of Stock Options or SARs granted to such Covered Employee hereunder and, in this regard, such maximum number shall be
determined in accordance with Code Section 162(m). 


        (d)   The
limitations of subsections (a), (b) and (c) above shall be construed and administered so as to comply with the Performance-Based Exception. 


1.5  Share Pool Adjustments for Awards and Payouts  



        The following Incentive Awards and payouts shall reduce, on a one Share for one Share basis, the number of Shares authorized for issuance under the Share
Pool: 



	(a)
	Stock
Option;



	(b)
	SAR;



	(c)
	Restricted
Stock Award; and



	(d)
	A
payout of a Restricted Stock Unit or Other Stock-Based Award in Shares. 




        The
following transactions shall restore, on a one Share for one Share basis, the number of Shares authorized for issuance under the Share Pool: 



        (a)   A
payout of a Restricted Stock Award, Restricted Stock Unit, SAR, or Other Stock-Based Award in the form of cash and not Shares (but not the "cashless" exercise of a
Stock Option with a broker, as provided in Section 2.3(a)); 


        (b)   A
cancellation, termination, expiration, forfeiture, or lapse for any reason of any Shares subject to an Incentive Award; and 


        (c)   Payment
of an Option Price by withholding Shares which otherwise would be acquired on exercise (i.e., the Share Pool
shall be increased by the number of Shares withheld in payment of the Option Price). 


1.6  Common Stock Available  


        The Common Stock available for issuance or transfer under the Plan shall be made available from Shares now or hereafter (a) held in the treasury of the
Company, (b) authorized but unissued shares, or (c) Shares to be purchased or acquired by the Company. No fractional shares shall be issued under the Plan; payment for fractional shares
shall be made in cash. 


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1.7  Participation  


        (a)    Eligibility.    The Committee
shall from time to time designate those Employees, Consultants and/or Outside Directors, if any, to be granted Incentive Awards under the Plan, the type of Incentive Awards granted, the number of
Shares, Stock Options, rights or units, as the case may be, which shall be granted to each such person, and any other terms or conditions relating to the Incentive Awards as it may deem appropriate to
the extent consistent with the provisions of the Plan. A Grantee who has been granted an Incentive Award may, if otherwise eligible, be granted additional Incentive Awards at any time. 


        (b)    Incentive Stock Option
Eligibility.    No Consultant or Outside Director shall be eligible for the grant of any Incentive Stock Option. In addition, no Employee shall be eligible for the
grant of any Incentive Stock Option who owns or would own immediately before the grant of such Incentive Stock Option, directly or indirectly, stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, or any Parent or Subsidiary. This restriction does not apply if, at the time such Incentive Stock Option is granted, the Incentive Stock
Option exercise price is at least one hundred and ten percent (110%) of the Fair Market Value on the date of grant and the Incentive Stock Option by its terms is not exercisable after the expiration
of five (5) years from the date of grant. For the purpose of the immediately preceding sentence, the attribution rules of Code Section 424(d) shall apply for the purpose of determining
an Employee's percentage ownership in the Company or any Parent or Subsidiary. This paragraph shall be construed consistent with the requirements of Code Section 422. 


1.8  Types of Incentive Awards  


        The types of Incentive Awards under the Plan are Stock Options, Stock Appreciation Rights and Supplemental Payments as described in  Section 2, Restricted Stock Awards and Supplemental Payments as described in Section 3,
Restricted Stock Units and Other Stock-Based Awards and Supplemental Payments as described in Section 4, or any combination of the foregoing. 


 
 

  SECTION 2.    
    
    STOCK OPTIONS AND STOCK APPRECIATION RIGHTS    
    


2.1  Grant of Stock Options  


        The Committee is authorized to grant (a) Nonstatutory Stock Options to Employees, Consultants and/or Outside Directors and (b) Incentive Stock
Options to Employees only, in accordance with the terms and conditions of the Plan, and with such additional terms and conditions, not inconsistent with the Plan, as the Committee shall determine in
its discretion. Successive grants may be made to the same Grantee regardless whether any Stock Option previously granted to such person remains unexercised. Any Stock Options granted under the Plan
are intended to satisfy the requirements of Code Section 409A to the effect that such Stock Options do not provide for the deferral of compensation that is subject to taxation under Code
Section 409A. 



2.2  Stock Option Terms  


        (a)    Written Agreement.    Each
grant of a Stock Option shall be evidenced by a written Incentive Agreement. Among its other provisions, each Incentive Agreement shall set forth the extent to which the Grantee shall have the right
to exercise the Stock Option following termination of the Grantee's Employment. Such provisions shall be determined in the discretion of the Committee, shall be included in the Grantee's Incentive
Agreement, and need not be uniform among all Stock Options issued pursuant to the Plan. 


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        (b)    Number of Shares.    Each Stock
Option shall specify the number of Shares of Common Stock to which it pertains, which number is fixed upon the date of grant except as provided under  Section 6.6. 


        (c)    Exercise Price.    The exercise
price per Share of Common Stock under each Stock Option shall be (i) never less than 100% of the Fair Market Value per Share on the date the Stock Option is granted and (ii) specified in
the Incentive Agreement; provided, however, if the Grantee of an ISO is a 10% or greater shareholder pursuant to Section 1.7(b), the exercise
price for the ISO shall never be less than 110% of the Fair Market Value on the date of grant. Each Stock Option shall specify the method of exercise which shall be consistent with  Section 2.3(a).



        (d)    Term.    In the Incentive
Agreement, the Committee shall fix the term of each Stock Option which shall not be more than (i) ten (10) years from the date of grant, or (ii) five (5) years from the
date of grant for an ISO granted to 10% or greater shareholder pursuant to Section 1.7(b). 


        (e)    Exercise.    The Committee
shall determine the time or times at which a Stock Option may be exercised, in whole or in part. Each Stock Option may specify the required period of continuous Employment and/or the Performance
Criteria to be achieved before the Stock Option or portion thereof will become exercisable. Each Stock Option, the exercise of which, or the timing of the exercise of which, is dependent, in whole or
in part, on the achievement of designated Performance Criteria, may specify a minimum level of achievement in respect of the specified Performance Criteria below which no Stock Options will be
exercisable and a method for determining the number of Stock Options that will be exercisable if performance is at or above such minimum but short of full achievement of the Performance Criteria. All
such terms and conditions shall be set forth in the Incentive Agreement. 


        (f)    $100,000 Annual Limit on Incentive Stock
Options.    Notwithstanding any contrary provision in the Plan, a Stock Option designated as an ISO shall be an ISO only to the extent that the aggregate Fair Market
Value (determined as of the time the ISO is granted) of the Shares of Common Stock with respect to which ISOs are exercisable for the first time by the Grantee during any single calendar year (under
the Plan and any other stock option plans of the Company and its Subsidiaries or Parent) does not exceed $100,000. This limitation shall be applied by taking ISOs into account in the order in which
they were granted and shall be construed in accordance with Section 422(d) of the Code. To the extent that a Stock Option intended to constitute an ISO exceeds the $100,000 limitation (or any
other limitation under Code Section 422), the portion of the Stock Option that exceeds the $100,000 limitation (or violates any other limitation under Code Section 422) shall be deemed a
Nonstatutory Stock Option. In such event, all other terms and provisions of such Stock Option grant shall remain unchanged. 


2.3  Stock Option Exercises  


        (a)    Method of Exercise and
Payment.    Stock Options shall be exercised by the delivery of a signed written notice of exercise to the Company, which must be received as of a date set by the
Company in advance of the effective date of the proposed exercise. The notice shall set forth the number of Shares with respect to which the Stock Option is to be exercised, accompanied by full
payment for the Shares. 


        The
Option Price upon exercise of any Stock Option shall be payable to the Company in full either: (i) in cash or its equivalent; or (ii) subject to prior approval by the
Committee in its discretion, by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the Option Price, (iii) subject to prior approval by
the Committee in its discretion, by withholding Shares which otherwise would be acquired on exercise having an aggregate Fair Market Value at the time of exercise equal to the total Option Price; or
(iv) subject to prior approval by the Committee in its discretion, by a combination of (i), (ii), and (iii) above. 


        Any
payment in Shares shall be effected by the surrender of such Shares to the Company in good form for transfer and shall be valued at their Fair Market Value on the date when the Stock
Option is 


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exercised.
Unless otherwise permitted by the Committee in its discretion, the Grantee shall not surrender, or attest to the ownership of, Shares in payment of the Option Price if such action would
cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Stock Option for financial accounting reporting purposes. 


        The
Committee, in its discretion, also may allow the Option Price to be paid with such other consideration as shall constitute lawful consideration for the issuance of Shares (including,
without limitation, effecting a "cashless exercise" with a broker of the Option), subject to applicable securities law restrictions and tax withholdings, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law. At the direction of the Grantee, the broker will either (i) sell all of the Shares received when the Option is exercised
and pay the Grantee the proceeds of the sale (minus the Option Price, withholding taxes and any fees due to the broker); or (ii) sell enough of the Shares received upon exercise of the Option
to cover the Option Price, withholding taxes and any fees due the broker and deliver to the Grantee (either directly or through the Company) a stock certificate for the remaining Shares. Dispositions
to a broker effecting a cashless exercise are not exempt under Section 16 of the Exchange Act if the Company is a Publicly Held Corporation. Moreover, in no event will the Committee allow the
Option Price to be paid with a form of consideration, including a loan or a "cashless exercise," if such form of consideration would violate the Sarbanes-Oxley Act of 2002 as determined by the
Committee. 


        As
soon as practicable after receipt of a written notification of exercise and full payment, the Company shall deliver, or cause to be delivered, to or on behalf of the Grantee, in the
name of the Grantee or other appropriate recipient, evidence of ownership for the number of Shares purchased under the Stock Option. 


        Subject
to Section 6.4, during the lifetime of a Grantee, each Option granted to the Grantee shall be exercisable only by the
Grantee (or his legal guardian in the event of his Disability) or by a broker-dealer acting on his behalf pursuant to a cashless exercise under the foregoing provisions of this  Section 2.3(a).




        (b)    Restrictions on Share
Transferability.    The Committee may impose such restrictions on any grant of Stock Options or on any Shares acquired pursuant to the exercise of a Stock Option as
it may deem advisable, including, without limitation, restrictions under (i) any shareholders' agreement, buy/sell agreement, right of first refusal, non-competition, and any other
agreement between the Company and any of its securities holders or employees; (ii) any applicable federal securities laws; (iii) the requirements of any stock exchange or market upon
which such Shares are then listed and/or traded; or (iv) any blue sky or state securities law applicable to such Shares. Any certificate issued to evidence Shares issued upon the exercise of an
Incentive Award may bear such legends and statements as the Committee shall deem advisable to assure compliance with applicable federal and state laws and regulations. 


        Any
Grantee or other person exercising an Incentive Award shall be required, if requested by the Committee, to give a written representation that the Incentive Award and the Shares
subject to the Incentive Award will be acquired for investment and not with a view to public distribution; provided, however, that the Committee, in its discretion, may release any person receiving an
Incentive Award from any such representations either prior to or subsequent to the exercise of the Incentive Award. 



        (c)    Notification of Disqualifying Disposition of Shares from
Incentive Stock Options.    Notwithstanding any other provision of the Plan, a Grantee who disposes of Shares of Common Stock acquired upon the exercise of an
Incentive Stock Option by a sale or exchange either (i) within two (2) years after the date of the grant of the Incentive Stock Option under which the Shares were acquired or
(ii) within one (1) year after the transfer of such Shares to him pursuant to exercise, shall promptly notify the Company of such disposition, the amount realized and his adjusted basis
in such Shares. 


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        (d)    Proceeds of Option
Exercise.    The proceeds received by the Company from the sale of Shares pursuant to Stock Options exercised under the Plan shall be used for general corporate
purposes. 


2.4  Supplemental Payment on Exercise of Nonstatutory Stock Options  



        The Committee, either at the time of grant or exercise of any Nonstatutory Stock Option, may provide in the Incentive Agreement for a Supplemental Payment by the
Company to the Grantee with respect to the exercise of any Nonstatutory Stock Option. The Supplemental Payment shall be in the amount specified by the Committee, which amount shall not exceed the
amount necessary to pay the federal and state income tax payable with respect to both the exercise of the Nonstatutory Stock Option and the receipt of the Supplemental Payment, assuming the holder is
taxed at either the maximum effective income tax rate applicable thereto or at a lower tax rate as deemed appropriate by the Committee in its discretion. No Supplemental Payments will be made with
respect to any SARs or ISOs. 


2.5  Stock Appreciation Rights  


        (a)    Grant.    The Committee may
grant Stock Appreciation Rights to any Employee, Consultant or Outside Director. Any SARs granted under the Plan are intended to satisfy the requirements under Code Section 409A to the effect
that such SARs do not provide for the deferral of compensation that is subject to taxation under Code Section 409A. 



        (b)    General Provisions.    The
terms and conditions of each SAR shall be evidenced by an Incentive Agreement. The exercise price per Share shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the
grant date of the SAR. The term of the SAR shall be determined by the Committee but shall not be greater than ten (10) years from the date of grant. The Committee cannot include any feature for
the deferral of compensation other than the deferral of recognition of income until exercise of the SAR. 



        (c)    Exercise.    SARs shall be
exercisable subject to such terms and conditions as the Committee shall specify in the Incentive Agreement for the SAR grant. No SAR granted to an Insider may be exercised prior to six
(6) months from the date of grant, except in the event of his death or Disability which occurs prior to the expiration of such six-month period if so permitted under the Incentive
Agreement. 


        (d)    Settlement.    Upon exercise of
the SAR, the Grantee shall receive an amount equal to the Spread. The Spread, less applicable withholdings, shall be payable only in cash or in Shares, or a combination of both, as specified in the
Incentive Agreement, within 30 calendar days of the exercise date. In addition, the Incentive Agreement under which such SARs are awarded, or any other agreements or arrangements, shall not provide
that the Company will purchase any Shares delivered to the Grantee as a result of the exercise or vesting of a SAR. 


 
 

  SECTION 3.    
    
    RESTRICTED STOCK    
    


3.1  Award of Restricted Stock  


        (a)    Grant.    With respect to a
Grantee who is an Employee, Consultant or Outside Director, Shares of Restricted Stock, which may be designated as a Performance-Based Award in the discretion of the Committee, may be awarded by the
Committee with such restrictions during the Restriction Period as the Committee shall designate in its discretion. Any such restrictions may differ with respect to a particular Grantee. Restricted
Stock shall be awarded for no additional consideration or such additional consideration as the Committee may determine, which consideration may be less than, equal to or more than the Fair Market
Value of the shares of Restricted Stock on the grant date. The terms 


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and
conditions of each grant of Restricted Stock shall be evidenced by an Incentive Agreement and, during the Restriction Period, such Shares of Restricted Stock must remain subject to a "substantial
risk of forfeiture" within the meaning given to such term under Code Section 83. Any Restricted Stock granted under the Plan is intended to satisfy the requirements of Code Section 409A
to the effect that such Restricted Stock does not provide for the deferral of compensation that is subject to taxation under Code Section 409A. Any Restricted Stock Award may, at the time of
grant, be designated by the Committee as a Performance-Based Award that is intended to qualify for the Performance-Based Exception. 


        (b)    Immediate Transfer Without Immediate Delivery of Restricted
Stock.    Unless otherwise specified in the Grantee's Incentive Agreement, each Restricted Stock Award shall constitute an immediate transfer of the record and
beneficial ownership of the Shares of Restricted Stock to the Grantee in consideration of the performance of services as an Employee, Consultant or Outside Director, as applicable, entitling such
Grantee to all voting and other ownership rights in such Shares. 


        As
specified in the Incentive Agreement, a Restricted Stock Award may limit the Grantee's dividend rights during the Restriction Period in which the shares of Restricted Stock are
subject to a "substantial risk of forfeiture" (within the meaning given to such term under Code Section 83) and restrictions on transfer. In the Incentive Agreement, the Committee may apply any
restrictions to the dividends that the Committee deems appropriate. Without limiting the generality of the preceding sentence, if the grant or vesting of Shares of a Restricted Stock Award granted to
a Covered Employee, is designed to comply with the requirements of the Performance-Based Exception, the Committee may apply any restrictions it deems appropriate to the payment of dividends declared
with respect to such Shares of Restricted Stock, such that the dividends and/or the Shares of Restricted Stock maintain eligibility for the Performance-Based Exception. In the event that any dividend
constitutes a derivative security or an equity security pursuant to the rules under Section 16 of the Exchange Act, if applicable, such dividend shall be subject to a vesting period equal to
the remaining vesting period of the Shares of Restricted Stock with respect to which the dividend is paid. 


        Shares
awarded pursuant to a grant of Restricted Stock, whether or not under a Performance-Based Award, may be issued in the name of the Grantee and held, together with a stock power
endorsed in blank, by the Committee or Company (or their delegates) or in trust or in escrow pursuant to an agreement satisfactory to the Committee, as determined by the Committee, until such time as
the restrictions on transfer have expired. All such terms and conditions shall be set forth in the particular
Grantee's Incentive Agreement. The Company or Committee (or their delegates) shall issue to the Grantee a receipt evidencing the certificates held by it which are registered in the name of the
Grantee. 


3.2  Restrictions  


        (a)    Forfeiture of Restricted
Stock.    Restricted Stock awarded to a Grantee may be subject to the following restrictions until the expiration of the Restriction Period: (i) a restriction
that constitutes a "substantial risk of forfeiture" (as defined in Code Section 83), and a restriction on transferability; (ii) unless otherwise specified by the Committee in the
Incentive Agreement, the Restricted Stock that is subject to restrictions which are not satisfied shall be forfeited and all rights of the Grantee to such Shares shall terminate; and (iii) any
other restrictions that the Committee determines in advance are appropriate, including, without limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted
Stock to a continuing substantial risk of forfeiture in the hands of any transferee. Any such restrictions shall be set forth in the particular Grantee's Incentive Agreement. 



        (b)    Issuance of
Certificates.    Reasonably promptly after the date of grant with respect to Shares of Restricted Stock, the Company shall cause to be issued a stock certificate,
registered in the name of the Grantee to whom such Shares of Restricted Stock were granted, evidencing such Shares; provided, 


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however,
that the Company shall not cause to be issued such a stock certificate unless it has received a stock power duly endorsed in blank with respect to such Shares. Each such stock certificate
shall bear the following legend or any other legend approved by the Company: 



The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture and restrictions
against transfer) contained in the Resaca Exploitation, Inc. 2008 Stock Incentive Plan and an Incentive Agreement entered into between the registered owner of such shares and Resaca
Exploitation, Inc. A copy of the Plan and Incentive Agreement are on file in the main corporate office of Resaca Exploitation, Inc.




Such
legend shall not be removed from the certificate evidencing such Shares of Restricted Stock unless and until such Shares vest pursuant to the terms of the Incentive Agreement. 


        (c)    Removal of Restrictions.    The
Committee, in its discretion, shall have the authority to remove any or all of the restrictions on the Restricted Stock if it determines that, by reason of a change in applicable law or another change
in circumstance arising after the grant date of the Restricted Stock, such action is necessary or appropriate. 



3.3  Delivery of Shares of Common Stock  


        Subject to withholding taxes under Section 7.3 and to the terms of the Incentive Agreement, a stock
certificate evidencing the Shares of Restricted Stock with respect to which the restrictions in the Incentive Agreement have been satisfied shall be delivered to the Grantee or other appropriate
recipient free of restrictions. 


3.4  Supplemental Payment on Vesting of Restricted Stock  


        The Committee, either at the time of grant or vesting of Restricted Stock, may provide for a Supplemental Payment by the Company to the holder in an amount
specified by the Committee, which amount shall not exceed the amount necessary to pay the federal and state income tax payable with respect to both the vesting of the Restricted Stock and receipt of
the Supplemental Payment, assuming the Grantee is taxed at either the maximum effective income tax rate applicable thereto or at a lower tax rate as deemed appropriate by the Committee in its
discretion. The Supplemental Payment, if granted, shall be paid in a lump sum at the time specified in the Grantee's Incentive Agreement. 


 
 

  SECTION 4.    
    
    OTHER STOCK-BASED AWARDS    
    


4.1  Grant of Other Stock-Based Awards  


        Other Stock-Based Awards may be awarded by the Committee to Grantees that are payable in Shares or in cash, as determined in the discretion of the Committee to be
consistent with the goals of the Company. Other types of Stock-Based Awards that are payable in Shares include, without limitation, purchase rights, Shares awarded that are not subject to any
restrictions or conditions, Shares awarded subject to the satisfaction of specified Performance Criteria, convertible or exchangeable debentures, other rights convertible into Shares, Incentive Awards
valued by reference to the performance of a specified Subsidiary, division or department of the Company, and settlement in cancellation of rights of any person with a vested interest in any other
plan, fund, program or arrangement that is or was sponsored, maintained or participated in by the Company (or any Parent or Subsidiary). As is the case with other types of Incentive Awards, Other
Stock-Based Awards may be awarded either alone or in addition to or in conjunction with any other Incentive Awards. Other Stock-Based Awards that are payable in Shares are not intended to be deferred
compensation subject to taxation under Code Section 409A, unless otherwise determined by the Committee at the time of grant and specified in the Grantee's Incentive Agreement, which shall set
forth the time and form of 


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payment
thereunder, in addition to such other terms that are required for deferred compensation subject to Code Section 409A. 


        In
addition to Other Stock-Based Awards that are payable in Shares, the Committee may award Restricted Stock Units to a Grantee that are payable in Shares or cash, or in a combination
thereof. Restricted Stock Units are not intended to be deferred compensation that is subject to Code Section 409A. During the period beginning on the date such Incentive Award is granted and
ending on the payment date specified in the Incentive Agreement, the Grantee's right to payment under the Incentive Agreement must remain subject to a "substantial risk of forfeiture" within the
meaning of such term under Code Section 409A. In addition, payment to the Grantee under the Incentive Agreement shall be made within two and one-half months (21/2)
months following the end of the calendar year in which the substantial risk of forfeiture lapses unless an earlier payment date is specified in the Incentive Agreement. 


4.2  Other Stock-Based Award Terms  



        (a)    Written Agreement.    The terms
and conditions of each grant of an Other Stock-Based Award shall be evidenced by an Incentive Agreement. 


        (b)    Purchase Price.    Except to
the extent that an Other Stock-Based Award is granted in substitution for an outstanding Incentive Award or is delivered upon exercise of a Stock Option, the amount of consideration required to be
received by the Company shall
be either (i) no consideration other than services rendered (in the case of authorized and unissued shares), or to be rendered, by the Grantee, or (ii) as otherwise specified in the
Incentive Agreement. 


        (c)    Performance Criteria and Other
Terms.    The Committee may specify Performance Criteria for (i) vesting in Other Stock-Based Awards and (ii) payment thereof to the Grantee, as it may
determine in its discretion. The extent to which any such Performance Criteria have been met shall be determined and certified by the Committee in accordance with the requirements to qualify for the
Performance-Based Exception under Code Section 162(m). All terms and conditions of Other Stock-Based Awards shall be determined by the Committee and set forth in the Incentive Agreement. 


4.3  Supplemental Payment on Other Stock-Based Awards  


        The Committee, either at the time of grant or vesting of an Other Stock-Based Award, may provide for a Supplemental Payment by the Company to the holder in an
amount specified by the Committee, which amount shall not exceed the amount necessary to pay the federal and state income tax payable with respect to both the vesting of the Other Stock-Based Award
and receipt of the Supplemental Payment, assuming the Grantee is taxed at either the maximum effective income tax rate applicable thereto or at a lower tax rate as deemed appropriate by the Committee
in its discretion. The Supplemental Payment, if granted, shall be paid in a lump sum at the time specified within the Grantee's Incentive Agreement. 


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  SECTION 5.    
    
    PERFORMANCE-BASED AWARDS AND PERFORMANCE CRITERIA    
    


        As determined by the Committee at the time of grant, Performance-Based Awards may be granted subject to performance objectives relating
to one or more of the following within the meaning of Code Section 162(m) (the "Performance Criteria") in order to qualify for the
Performance-Based Exception: 



	(a)
	profits
(including, but not limited to, profit growth, net operating profit or economic profit);



	(b)
	profit-related
return ratios;



	(c)
	return
measures (including, but not limited to, return on assets, capital, equity, investment or sales);



	(d)
	cash
flow (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital or investments);



	(e)
	earnings
(including but not limited to, total shareholder return, earnings per share or earnings before or after taxes);



	(f)
	net
sales growth;



	(g)
	net
earnings or income (before or after taxes, interest, depreciation and/or amortization);



	(h)
	gross,
operating or net profit margins;



	(i)
	productivity
ratios;



	(j)
	share
price (including, but not limited to, growth measures and total shareholder return);



	(k)
	turnover
of assets, capital, or inventory;



	(l)
	expense
targets;



	(m)
	margins;



	(n)
	measures
of health, safety or environment;



	(o)
	operating
efficiency;



	(p)
	customer
service or satisfaction;



	(q)
	market
share;



	(r)
	credit
quality;



	(s)
	debt
ratios (e.g., debt to equity and debt to total capital);



	(t)
	working
capital targets;



	(u)
	oil
and gas reserve growth;



	(v)
	oil
and gas production targets; and



	(w)
	acquisition,
disposition or transaction completion. 




        Performance
Criteria may be stated in absolute terms or relative to comparison companies or indices to be achieved during a Performance Period. In the Incentive Agreement, the Committee
shall establish
one or more Performance Criteria for each Incentive Award that is intended to qualify for the Performance-Based Exception on its grant date. 



        In
establishing the Performance Criteria for each applicable Incentive Award, the Committee may provide that the effect of specified extraordinary or unusual events will be included or
excluded 


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(including,
but not limited to, items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence, or related to the disposal of a segment of business or a
change in accounting principle, each as determined in accordance with the standards under Opinion No. 30 of the Accounting Principles Board (APB Opinion 30) or any successor or other
authoritative financial accounting standards, as determined by the Committee). The terms of the stated Performance Criteria for each applicable Incentive Award, whether for a Performance Period of one
(1) year or multiple years, must preclude the Committee's discretion to increase the amount payable to any Grantee that would otherwise be due upon attainment of the Performance Criteria, but
may permit the Committee to reduce the amount otherwise payable to the Grantee in the Committee's discretion. 


        The
Performance Criteria specified in any Incentive Agreement need not be applicable to all Incentive Awards, and may be particular to an individual Grantee's function or business unit.
The Committee may establish the Performance Criteria of the Company (or any entity which is affiliated by common ownership with the Company) as determined and designated by the Committee, in its
discretion, in the Incentive Agreement. 


        Performance-Based
Awards will be granted in the discretion of the Committee and will be (a) sufficiently objective so that an independent person or entity having knowledge of the
relevant facts could determine the amount payable to Grantee, if applicable, and whether the pre-determined goals have been achieved with respect to the Incentive Award,
(b) established at a time when the performance outcome is substantially uncertain, (c) established in writing no later than ninety (90) days after the commencement of the
Performance Period to which they apply, and (d) based on operating earnings, performance against peers, earnings criteria or such other criteria as provided in this  Section 5. 


 
 

  SECTION 6.    
    
    PROVISIONS RELATING TO PLAN PARTICIPATION    
    



6.1  Incentive Agreement  


        Each Grantee to whom an Incentive Award is granted shall be required to enter into an Incentive Agreement with the Company, in such a form as is provided by the
Committee. The Incentive Agreement shall contain specific terms as determined by the Committee, in its discretion, with respect to the Grantee's particular Incentive Award. Such terms need not be
uniform among all Grantees or any similarly situated Grantees. The Incentive Agreement may include, without limitation, vesting, forfeiture and other provisions particular to the particular Grantee's
Incentive Award, as well as, for example, provisions to the effect that the Grantee (a) shall not disclose any confidential information acquired during Employment with the Company,
(b) shall abide by all the terms and conditions of the Plan and such other terms and conditions as may be imposed by the Committee, (c) shall not interfere with the Employment or other
service of any employee, (d) shall not compete with the Company or become involved in a conflict of interest with the interests of the Company, (e) shall forfeit an Incentive Award if
terminated for Cause, (f) shall not be permitted to make an election under Code Section 83(b) when applicable, and (g) shall be subject to any other agreement between the Grantee
and the Company regarding Shares that may be acquired under an Incentive Award including, without limitation, a shareholders' agreement, buy-sell agreement, or other agreement restricting
the transferability of Shares by Grantee. An Incentive Agreement shall include such terms and conditions as are determined by the Committee, in its discretion, to be appropriate with respect to any
individual Grantee. The Incentive Agreement shall be signed by the Grantee to whom the Incentive Award is made and by an Authorized Officer. 


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6.2  No Right to Employment  


        Nothing in the Plan or any instrument executed pursuant to the Plan shall create any Employment rights (including without limitation, rights to continued
Employment) in any Grantee or affect the right of the Company to terminate the Employment of any Grantee at any time without regard to the existence of the Plan. 


6.3  Securities Requirements  


        The Company shall be under no obligation to effect the registration of any Shares to be issued hereunder pursuant to the Securities Act of 1933 or to effect
similar compliance under any state
securities laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing Shares pursuant to the Plan unless
and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with federal securities laws or other applicable laws, provided that payment shall
be made at the earliest date at which the Company reasonably anticipates that the making of the payment will not cause a violation of such laws. The Committee may require, as a condition of the
issuance and delivery of certificates evidencing Shares pursuant to the terms hereof, that the recipient of such Shares make such covenants, agreements and representations, and that such certificates
bear such legends, as the Committee, in its discretion, deems necessary to comply with federal securities laws or other applicable law. 


        The
Committee may, in its discretion, defer the effectiveness of any exercise of an Incentive Award in order to allow the issuance of Shares to be made pursuant to registration or an
exemption from registration or other methods for compliance available under federal or state securities laws. The Committee shall inform the Grantee in writing of its decision to defer the
effectiveness of the exercise of an Incentive Award. During the period that the effectiveness of the exercise of an Incentive Award has been deferred, the Grantee may, by written notice to the
Committee, withdraw such exercise and obtain the refund of any amount paid with respect thereto. 


        If
the Shares issuable on exercise of an Incentive Award are not registered under the Securities Act of 1933, the Company may imprint on the certificate for such Shares the following
legend or any other legend which counsel for the Company considers necessary or advisable to comply with the Securities Act of 1933: 



THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO ANY APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT AND SUCH LAWS OR PURSUANT TO A WRITTEN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 




6.4  Transferability  


        Incentive Awards granted under the Plan shall not be transferable or assignable other than: (a) by will or the laws of descent and distribution or
(b) pursuant to a qualified domestic relations order (as defined under Code Section 414(p)); provided, however, only with respect to Incentive Awards consisting of Nonstatutory Stock
Options, the Committee may, in its discretion, authorize all or a portion of the Nonstatutory Stock Options to be granted on terms which permit transfer by the Grantee to (i) the members of the
Grantee's Immediate Family, (ii) a trust or trusts for the exclusive benefit of Immediate Family members, (iii) a partnership in which such Immediate Family members are 


I-18







 



the
only partners, or (iv) any other entity owned solely by Immediate Family members; provided that (A) there may be no consideration for any such transfer, (B) the Incentive
Agreement pursuant to which such Nonstatutory Stock Options are granted must be approved by the Committee, and must expressly provide for transferability in a manner consistent with this  Section 6.4, (C) subsequent transfers of transferred Nonstatutory Stock Options shall be prohibited except in accordance with
clauses (a) and (b) (above) of this sentence, and (D) there may be no transfer of any Incentive Award in a listed transaction as described in IRS Notice 2003-47.
Following any permitted transfer, the Nonstatutory Stock Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that the term
"Grantee" shall be deemed to refer to the transferee. The events of termination of employment, as set out in Section 6.7 and in the Incentive
Agreement, shall continue to be applied with respect to the original Grantee, and the Incentive Award shall be exercisable by the transferee only to the extent, and for the periods, specified in the
Incentive Agreement. 


        Except
as may otherwise be permitted under the Code, in the event of a permitted transfer of a Nonstatutory Stock Option hereunder, the original Grantee shall remain subject to
withholding taxes upon exercise. In addition, the Company and the Committee shall have no obligation to provide any notices to any Grantee or transferee thereof, including, for example, notice of the
expiration of an Incentive Award following the original Grantee's termination of employment. 



        The
designation by a Grantee of a beneficiary of an Incentive Award shall not constitute transfer of the Incentive Award. No transfer by will or by the laws of descent and distribution
shall be effective to bind the Company unless the Committee has been furnished with a copy of the deceased Grantee's enforceable will or such other evidence as the Committee deems necessary to
establish the validity of the transfer. Any attempted transfer in violation of this Section 6.4 shall be void and ineffective. All determinations
under this Section 6.4 shall be made by the Committee in its discretion. 


6.5  Rights as a Shareholder  


        (a)    No Shareholder
Rights.    Except as otherwise provided in Section 3.1(b) for grants of Restricted Stock, a Grantee of an
Incentive Award (or a permitted transferee of such Grantee) shall have no rights as a shareholder with respect to any Shares of Common Stock until the issuance of a stock certificate or other record
of ownership for such Shares. 


        (b)    Representation of
Ownership.    In the case of the exercise of an Incentive Award by a person or estate acquiring the right to exercise such Incentive Award by reason of the death or
Disability of a Grantee, the Committee may require reasonable evidence as to the ownership of such Incentive Award or the authority of such person. The Committee may also require such consents and
releases of taxing authorities as it deems advisable. 



6.6  Change in Stock and Adjustments  


        (a)    Changes in Law or
Circumstances.    Subject to Section 6.8 (which only applies in the event of a Change in Control), in the event
of any change in applicable law or any change in circumstances which results in or would result in any dilution of the rights granted under the Plan, or which otherwise warrants an equitable
adjustment because it interferes with the intended operation of the Plan, then, if the Board or Committee should so determine, in its absolute discretion, that such change equitably requires an
adjustment in the number or kind of shares of stock or other securities or property theretofore subject, or which may become subject, to issuance or transfer under the Plan or in the terms and
conditions of outstanding Incentive Awards, such adjustment shall be made in accordance with such determination. Such adjustments may include changes with respect to (i) the aggregate number of
Shares that may be issued under the Plan, (ii) the number of Shares subject to Incentive Awards, and (iii) the Option Price or other price per Share for outstanding Incentive Awards, but
shall 


I-19







 

not
result in the grant of any Stock Option with an exercise price less than 100% of the Fair Market Value per Share on the date of grant. The Board or Committee shall give notice to each applicable
Grantee of such adjustment which shall be effective and binding. 


        (b)    Exercise of Corporate
Powers.    The existence of the Plan or outstanding Incentive Awards hereunder shall not affect in any way the right or power of the Company or its shareholders to
make or authorize any or all adjustments, recapitalization, reorganization or other changes in the Company's capital structure or its business or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or proceeding whether of a similar character or otherwise. 


        (c)    Recapitalization of the
Company.    Subject to Section 6.8 (which only applies in the event of a Change in Control), if while there are
Incentive Awards outstanding, the Company shall effect any subdivision or consolidation of Shares of Common Stock or other capital readjustment, the payment of a stock dividend, stock split,
combination of Shares, recapitalization or other increase or reduction in the number of Shares outstanding, without receiving compensation therefor in money, services or property, then the number of
Shares available under the Plan and the number of Incentive Awards which may thereafter be exercised shall (i) in the event of an increase in the number of Shares outstanding, be
proportionately increased and the Option Price or Fair Market Value of the Incentive Awards awarded shall be proportionately reduced; and (ii) in the event of a reduction in the number of
Shares outstanding, be proportionately reduced, and the Option Price or Fair Market Value of the Incentive Awards awarded shall be proportionately increased. The Board or Committee shall take such
action and whatever other action it deems appropriate, in its discretion, so that the value of each outstanding Incentive Award to the Grantee shall not be adversely affected by a Corporate Event
described in this Section 6.6(c). 


        (d)    Issue of Common Stock by the
Company.    Except as hereinabove expressly provided in this Section 6.6 and subject to  Section 6.8 in the event of a Change in Control, the issue by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon any conversion of shares or
obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of, or Option Price or Fair
Market Value of, any Incentive Awards then outstanding under previously granted Incentive Awards; provided, however, in such event, outstanding Shares of Restricted Stock shall be treated the same as
outstanding unrestricted Shares of Common Stock. 


        (e)    Assumption under the Plan of Outstanding Stock
Options.    Notwithstanding any other provision of the Plan, the Board or Committee, in its discretion, may authorize the assumption and continuation under the Plan
of outstanding and unexercised stock options or other types of stock-based incentive awards that were granted under a stock option plan (or other type of stock incentive plan or agreement) that is or
was maintained by a corporation or other entity that was merged into, consolidated with, or whose stock or assets were acquired by, the Company as the surviving corporation. Any such action shall be
upon such terms and conditions as the Board or Committee, in its discretion, may deem appropriate, including provisions to preserve the holder's rights under the previously granted and unexercised
stock option or other stock-based incentive award; such as, for example, retaining an existing exercise price under an outstanding stock option. Any such assumption and continuation of any such
previously granted and unexercised incentive award shall be treated as an outstanding Incentive Award under the Plan and shall thus count against the number of Shares reserved for issuance pursuant to  Section 1.4. In addition, any Shares issued by the Company through the assumption or substitution of outstanding grants from an acquired company
shall reduce the Shares available for grants under Section 1.4. 


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        (f)    Assumption of Incentive Awards by a
Successor.    Subject to the accelerated vesting and other provisions of Section 6.8 that apply in the event of
a Change in Control, in the event of a Corporate Event (defined below), each Grantee shall be entitled to receive, in lieu of the number of Shares subject to Incentive Awards, such shares of capital
stock or other securities or property as may be issuable or payable with respect to or in exchange for the number of Shares which Grantee would have received had he exercised the Incentive Award
immediately prior to such Corporate Event, together with any adjustments (including, without limitation, adjustments to the Option Price and the number of Shares issuable on exercise of outstanding
Stock Options). For this purpose, Shares of Restricted Stock shall be treated the same as unrestricted outstanding Shares of Common Stock. A "Corporate Event" means any of the following: (i) a
dissolution or liquidation of the Company, (ii) a sale of all or substantially all of the Company's assets, or (iii) a merger, consolidation or combination involving the Company (other
than a merger, consolidation or combination (A) in which the Company is the continuing or surviving corporation and (B) which does not result in the outstanding Shares being converted
into or exchanged for different securities, cash or other property, or any combination thereof). The Board or Committee shall take whatever other action it deems appropriate to preserve the rights of
Grantees holding outstanding Incentive Awards. 


        Notwithstanding
the previous paragraph of this Section 6.6(f), but subject to the accelerated vesting and other provisions of  Section 6.8 that apply in the event
of a Change in Control, in the event of a Corporate Event (described in the previous paragraph), the Board or
Committee, in its discretion, shall have the right and power to: 



          (i)  cancel,
effective immediately prior to the occurrence of the Corporate Event, each outstanding Incentive Award (whether or not then exercisable) and, in full
consideration of such cancellation, pay to the Grantee an amount in cash equal to the excess of (A) the value, as determined by the Board or Committee, of the property (including cash) received
by the holders of Common Stock as a result of such Corporate Event over (B) the exercise price of such Incentive Award, if any; provided, however, this subsection (i) shall be
inapplicable to an Incentive Award granted within six (6) months before the occurrence of the Corporate Event if the Grantee is an Insider and such disposition is not exempt under
Rule 16b-3 (or other rules preventing liability of the Insider under Section 16(b) of the Exchange Act) and, in that event, the provisions hereof shall be applicable to such
Incentive Award after the expiration of six (6) months from the date of grant; or 


         (ii)  provide
for the exchange or substitution of each Incentive Award outstanding immediately prior to such Corporate Event (whether or not then exercisable) for another
award with respect to the Common Stock or other property for which such Incentive Award is exchangeable and, incident thereto, make an equitable adjustment as determined by the Board or Committee, in
its discretion, in the Option Price or exercise price of the Incentive Award, if any, or in the number of Shares or amount of property (including cash) subject to the Incentive Award; or 



        (iii)  provide
for assumption of the Plan and such outstanding Incentive Awards by the surviving entity or its parent. 




        The
Board or Committee, in its discretion, shall have the authority to take whatever action it deems to be necessary or appropriate to effectuate the provisions of this  Section 6.6(f). 



6.7  Termination of Employment, Death, Disability and Retirement  


        (a)    Termination of
Employment.    Unless otherwise expressly provided in the Grantee's Incentive Agreement or the Plan, if the Grantee's Employment is terminated for any reason other
than due to his death, Disability, Retirement or for Cause, any non-vested portion of any Stock Option or other Incentive Award at the time of such termination shall automatically expire
and terminate and no further vesting shall occur after the termination date. In such event, except as otherwise expressly 


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provided
in his Incentive Agreement, the Grantee shall be entitled to exercise his rights only with respect to the portion of the Incentive Award that was vested as of his termination of Employment
date for a period that shall end on the earlier of (i) the expiration date set forth in the Incentive Agreement or (ii) ninety (90) days after the date of his termination of
Employment. 


        (b)    Termination of Employment for
Cause.    Unless otherwise expressly provided in the Grantee's Incentive Agreement or the Plan, in the event of the termination of a Grantee's Employment for Cause,
all vested and non-vested Stock Options and other Incentive Awards granted to such Grantee shall immediately expire, and shall not be exercisable to any extent, as of 12:01 a.m.
(CST) on the date of such termination of Employment. 


        (c)    Retirement.    Unless otherwise
expressly provided in the Grantee's Incentive Agreement or the Plan, upon the termination of Employment due to the Grantee's Retirement: 



          (i)  any
non-vested portion of any outstanding Option or other Incentive Award shall immediately terminate and no further vesting shall occur; and 


         (ii)  any
vested Option or other Incentive Award shall expire on the earlier of (A) the expiration date set forth in the Incentive Agreement for such Incentive Award;
or (B) the expiration of (1) the one year anniversary of the Grantee's termination of Employment due to Retirement in the case of any Incentive Award other than an Incentive Stock Option
or (2) three months after his termination date in the case of an Incentive Stock Option. 




        (d)    Disability or Death.    Unless
otherwise expressly provided in the Grantee's Incentive Agreement or the Plan, upon termination of Employment as a result of the Grantee's Disability or death: 



          (i)  any
non-vested portion of any outstanding Option or other Incentive Award shall immediately terminate upon termination of Employment and no further vesting
shall occur; and 



         (ii)  any
vested Incentive Award shall expire on the earlier of either (A) the expiration date set forth in the Incentive Agreement or (B) the one year
anniversary date of the Grantee's termination of Employment date. 




        In
the case of any vested Incentive Stock Option held by an Employee following termination of Employment, notwithstanding the definition of "Disability" in  Section 1.2, whether the Employee has
incurred a "Disability" for purposes of determining the length of the Option exercise period following
termination of Employment under this Section 6.7(d) shall be determined by reference to Code Section 22(e)(3) to the extent required by
Code Section 422(c)(6). The Committee shall determine whether a Disability for purposes of this Section 6.7(d) has occurred. 


        (e)    Continuation.    Subject to the
conditions and limitations of the Plan and applicable law and regulation in the event that a Grantee ceases to be an Employee, Outside Director or Consultant, as applicable, for whatever reason, the
Committee and Grantee may mutually agree with respect to any outstanding Option or other Incentive Award then held by the Grantee (i) for an acceleration or other adjustment in any vesting
schedule applicable to the Incentive Award; (ii) for a continuation of the exercise period following termination for a longer period than is otherwise provided under such Incentive Award; or
(iii) to any other change in the terms and conditions of the Incentive Award. In the event of any such change to an outstanding Incentive Award, a written
amendment to the Grantee's Incentive Agreement shall be required. No amendment to a Grantee's Incentive Award shall be made to the extent compensation payable pursuant thereto as a result of such
amendment would be considered deferred compensation subject to taxation under Code Section 409A, unless otherwise determined by the Committee. 


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6.8  Change in Control  


        Notwithstanding any contrary provision in the Plan, in the event of a Change in Control (as defined below), the following actions shall automatically occur as of
the day immediately preceding the Change in Control date unless expressly provided otherwise in the individual Grantee's Incentive Agreement: 


        (a)   all
of the Stock Options and Stock Appreciation Rights then outstanding shall become 100% vested and immediately and fully exercisable; 



        (b)   all
of the restrictions and conditions of any Restricted Stock Awards, Restricted Stock Units and any Other Stock-Based Awards then outstanding shall be deemed
satisfied, and the Restriction Period with respect thereto shall be deemed to have expired, and thus each such Incentive Award shall become free of all restrictions and fully vested; and 


        (c)   all
of the Performance-Based Awards shall become fully vested, deemed earned in full, and promptly paid within thirty (30) days to the affected Grantees without
regard to payment schedules and notwithstanding that the applicable performance cycle, retention cycle or other restrictions and conditions have not been completed or satisfied. 



        For
all purposes of this Plan, a "Change in Control" of the Company means the occurrence of any one or more of the following events: 


        (a)   The
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
"Person")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or
more of either (i) the then outstanding shares of Common Stock of the Company (the "Outstanding Company Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company or any
Subsidiary, (ii) any acquisition by the Company or any Subsidiary or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, or
(iii) any acquisition by any corporation pursuant to a reorganization, merger, consolidation or similar business combination involving the Company (a
"Merger"), if, following such Merger, the conditions described in Section 6.8(c) (below) are
satisfied; 


        (b)   Individuals
who, as of the Effective Date, constitute the Board of Directors of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board during a 12-month period; provided, however, that any individual becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Company's shareholders, 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 either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; 


        (c)   Approval
by the shareholders of the Company of a Merger, unless immediately following such Merger, (i) substantially all of the holders of the Outstanding Company
Voting Securities immediately prior to Merger beneficially own, directly or indirectly, more than 50% of the common stock of the corporation resulting from such Merger (or its parent corporation) in
substantially the same proportions as their ownership of Outstanding Company Voting Securities immediately prior to such Merger and (ii) at least a majority of the members of the board of
directors of the corporation resulting from such Merger (or its parent corporation) were members of the Incumbent Board at the time of the execution of the initial agreement providing for such Merger; 


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        (d)   The
sale or other disposition of all or substantially all of the assets of the Company, unless immediately following such sale or other disposition,
(i) substantially all of the holders of the Outstanding Company Voting Securities immediately prior to the consummation of such sale or other disposition beneficially own, directly or
indirectly, more than 50% of the common stock of the corporation acquiring such assets in substantially the same proportions as their ownership of Outstanding Company Voting Securities immediately
prior to the consummation of such sale or disposition, and (ii) at least a majority of the members of the board of directors of such corporation (or its parent corporation) were members of the
Incumbent Board at the time of execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company; or 


        (e)   The
adoption of any plan or proposal for the liquidation or dissolution of the Company. 



        Notwithstanding
the occurrence of any of the foregoing events set out in this Section 6.8 which would otherwise result in a Change
in Control, the Board may determine in its discretion, if it deems it to be in the best interest of the Company, that an event or events otherwise constituting or reasonably leading to a Change in
Control shall not be deemed a Change in Control hereunder. Such determination shall be effective only if it is made by the Board (i) prior to the occurrence of an event that otherwise would be,
or reasonably lead to, a Change in Control, or (ii) after such event only if made by the Board a majority of which is composed of directors who were members of the Board immediately prior to
the event that otherwise would be, or reasonably lead to, a Change in Control. 



        Notwithstanding
the foregoing provisions of this Section 6.8, to the extent that any payment or acceleration hereunder is subject
to Code Section 409A for deferred compensation, then the term Change in Control hereunder shall be construed to have the meaning as set forth in Code Section 409A(2)(A)(v), but only to
the extent inconsistent with the foregoing provisions of the Change in Control definition (above) as determined by the Committee. 


6.9  Exchange of Incentive Awards  


        The Committee may, in its discretion, permit any Grantee to surrender outstanding Incentive Awards in order to exercise or realize his rights under other
Incentive Awards or in exchange for the grant of new Incentive Awards, or require holders of Incentive Awards to surrender outstanding Incentive Awards (or comparable rights under other plans or
arrangements) as a condition precedent to the grant of new Incentive Awards. No exchange of Incentive Awards shall be made under this Section 6.9
if such surrender causes any Incentive Award to provide for the deferral of compensation in a manner that is subject to taxation under Code Section 409A unless otherwise determined by the
Committee. 


 
 

  SECTION 7.    
    
    GENERAL    
    


7.1  Effective Date and Grant Period  


        The Plan shall be subject to the approval of the shareholders of the Company within twelve (12) months after the Effective Date. Incentive Awards may be
granted under the Plan at any time prior to receipt of such shareholder approval; provided, however, if the requisite shareholder approval is not obtained within such 12-month period, any
Incentive Awards granted hereunder shall automatically become null and void and of no force or effect. Notwithstanding the foregoing, any Incentive Award that is intended to satisfy the
Performance-Based Exception shall not be granted until the terms of the Plan are disclosed to, and approved by, shareholders of the Company in accordance with the requirements of the Performance-Based
Exception. 


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  7.2  Funding and Liability of Company  



        No provision of the Plan shall require 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. In addition, the Company shall not be required to maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or administered fund for purposes of the Plan. Although bookkeeping accounts may be established with respect to Grantees who are
entitled to cash, Common Stock or rights thereto under the Plan, any such accounts shall be used merely as a bookkeeping convenience. The Company shall not be required to segregate any assets that may
at any time be represented by cash, Common Stock or rights thereto. The Plan shall not be construed as providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be
a trustee of any cash, Common Stock or rights thereto. Any liability or obligation of the Company to any Grantee with respect to an Incentive Award shall be based solely upon any contractual
obligations that may be created by this Plan and any Incentive Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. The Company, Board, and Committee shall not be required to give any security or bond for the performance of any obligation that may be created by the Plan. 


7.3  Withholding Taxes  


        (a)    Tax Withholding.    The Company
shall have the power and the right to deduct or withhold, or require a Grantee to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required
by law or regulation to be withheld with respect to any taxable event arising as a result of the Plan or an Incentive Award hereunder.
Upon the lapse of restrictions on Restricted Stock, the Committee, in its discretion, may elect to satisfy the tax withholding requirement, in whole or in part, by having the Company withhold Shares
having a Fair Market Value on the date the tax is to be determined equal to the minimum withholding taxes which could be imposed on the transaction as determined by the Committee. 


        (b)    Share Withholding.    With
respect to tax withholding required upon the exercise of Stock Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any other taxable event arising as a result of any Incentive
Awards, Grantees may elect, subject to the approval of the Committee in its discretion, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair
Market Value on the date the tax is to be determined equal to the minimum withholding taxes which could be imposed on the transaction as determined by the Committee. All such elections shall be made
in writing, signed by the Grantee, and shall be subject to any restrictions or limitations that the Committee, in its discretion, deems appropriate. 


        (c)    Incentive Stock
Options.    With respect to Shares received by a Grantee pursuant to the exercise of an Incentive Stock Option, if such Grantee disposes of any such Shares within
(i) two years from the date of grant of such Option or (ii) one year after the transfer of such shares to the Grantee, the Company shall have the right to withhold from any salary, wages
or other compensation payable by the Company to the Grantee an amount sufficient to satisfy the minimum withholding taxes which could be imposed with respect to such disqualifying disposition. 


7.4  No Guarantee of Tax Consequences  


        The Company, Board and the Committee do not make any commitment or guarantee that any federal, state, local or foreign tax treatment will apply or be available to
any person participating or eligible to participate hereunder. 


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7.5  Designation of Beneficiary by Participant  


        Each Grantee may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is
to be paid in case of his death before he receives any or all of such benefit. Each such designation shall revoke all prior designations
by the same Grantee, shall be in a form prescribed by the Committee, and will be effective only when filed by the Grantee in writing with the Committee (or its delegate), and received and accepted
during the Grantee's lifetime. In the absence of any such designation, benefits remaining unpaid at the Grantee's death shall be paid to the Grantee's estate. 


7.6  Deferrals  


        The Committee shall not permit a Grantee to defer such Grantee's receipt of the payment of cash or the delivery of Shares under the terms of his Incentive
Agreement that would otherwise be due and payable by virtue of the lapse or waiver of restrictions with respect to Restricted Stock or another form of Incentive Award, or the satisfaction of any
requirements or goals with respect to any Incentive Awards. 


7.7  Amendment and Termination  


        The Board shall have the power and authority to terminate or amend the Plan at any time; provided, however, the Board shall not, without the approval of the
shareholders of the Company within the time period required by applicable law: 



        (a)   except
as provided in Section 6.6, increase the maximum number of Shares which may be issued under the Plan
pursuant to Section 1.4; 


        (b)   amend
the requirements as to the class of Employees eligible to purchase Common Stock under the Plan; 


        (c)   extend
the term of the Plan; or, 


        (d)   if
the Company is a Publicly Held Corporation (i) increase the maximum limits on Incentive Awards to Covered Employees as set for compliance with the
Performance-Based Exception or (ii) decrease the authority granted to the Committee under the Plan in contravention of Rule 16b-3 under the Exchange Act to the extent
Section 16 of the Exchange Act is applicable to the Company. 


        No
termination, amendment, or modification of the Plan shall adversely affect in any material way any outstanding Incentive Award previously granted to a Grantee under the Plan, without
the written consent of such Grantee or other designated holder of such Incentive Award. 


        In
addition, to the extent that the Committee determines that (a) the listing for qualification requirements of any securities exchange or quotation system on which the Company's
Common Stock is then listed or quoted, if applicable, or (b) the Code (or regulations promulgated thereunder), require shareholder approval in order to maintain compliance with such listing
requirements or to maintain any favorable tax advantages or qualifications, then the Plan shall not be amended in such respect without approval of the Company's shareholders. 


7.8  Requirements of Law  


        (a)    Governmental Entities and Securities
Exchanges.    The granting of Incentive Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or securities exchanges as may be required. Certificates evidencing Shares delivered under the Plan (to the extent that such shares are so evidenced) may be
subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules and regulations of the Securities and Exchange Commission, any securities exchange or 


I-26







 

transaction
reporting system upon which the Common Stock is then listed or to which it is admitted for quotation, and any applicable federal or state securities law or regulation. The Committee may
cause a legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions. 


        The
Company shall not be required to sell or issue any Shares under any Incentive Award if the sale or issuance of such Shares would constitute a violation by the Grantee or any other
individual exercising the Incentive Award, or the Company, of any provision of any law or regulation of any governmental authority, including without limitation, any federal or state securities law or
regulation. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any Shares subject to an Incentive Award upon any securities exchange or
under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of Shares hereunder, no Shares may be issued or sold to the Grantee
or any other individual pursuant to an Incentive Award unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable
to the Company, and any delay caused thereby shall in no way affect the date of termination of the Incentive Award. The Company shall not be obligated to take any affirmative action in order to cause
the exercise of an Incentive
Award or the issuance of Shares pursuant to the Plan to comply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the requirement that an Incentive
Award shall not be exercisable until the Shares covered thereby are registered or are exempt from registration, the exercise of such Incentive Award (under circumstances in which the laws of such
jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption. 


        (b)    Securities Act
Rule 701.    If no class of the Company's securities is registered under Section 12 of the Exchange Act, then unless otherwise determined by the
Committee, grants of Incentive Awards to "Rule 701 Grantees" (as defined below) and issuances of the underlying shares of Common Stock, if any, on the exercise or conversion of such Incentive
Awards are intended to comply with all applicable conditions of Securities Act Rule 701 ("Rule 701"), including, without limitation, the restrictions as to the amount of securities that
may be offered and sold in reliance on Rule 701, so as to qualify for an exemption from the registration requirements of the Securities Act. Any ambiguities or inconsistencies in the
construction of an Incentive Award or the Plan shall be interpreted to give effect to such intention. In accordance with Rule 701, each Grantee shall receive a copy of the Plan on or before the
date an Incentive Award is granted to him, as well as the additional disclosure required by Rule 701 (e) if the aggregate sales price or amount of securities sold during any consecutive
12-month period exceeds $5,000,000 as determined under Rule 701(e). If Rule 701 (or any successor provision) is amended to eliminate or otherwise modify any of the
requirements specified in Rule 701, then the provisions of this Section 7.8(b) shall be interpreted and construed in accordance with
Rule 701 as so amended. For purposes of this Section 7.8(b), as determined in accordance with Rule 701, "Rule 701 Grantees"
shall mean any Grantee other than a director of the Company, the Company's chairman, CEO, president, chief financial officer, controller and any vice president of the Company, and any other key
employee of the Company who generally has access to financial and other business related information and possesses sufficient sophistication to understand and evaluate such information. 


7.9  Rule 16b-3 Securities Law Compliance for Insiders  


        If the Company is a Publicly Held Corporation, transactions under the Plan with respect to Insiders are intended to comply with all applicable conditions of
Rule 16b-3 under the Exchange Act to the extent Section 16 of the Exchange Act is applicable to the Company. Any ambiguities or inconsistencies in the construction of an
Incentive Award or the Plan shall be interpreted to give effect to such intention, and to the extent any provision of the Plan or action by the Committee fails to so 


I-27







 



comply,
it shall be deemed null and void to the extent permitted by law and deemed advisable by the Committee in its discretion. 


7.10  Compliance with Code Section 162(m) for Publicly Held Corporation  


        If the Company is a Publicly Held Corporation, unless otherwise determined by the Committee with respect to any particular Incentive Award, it is intended that
the Plan shall comply fully with the applicable requirements so that any Incentive Awards subject to Section 162(m) that are granted to Covered Employees shall qualify for the Performance-Based
Exception. If any provision of the Plan or an Incentive Agreement would disqualify the Plan or would not otherwise permit the Plan or Incentive Award to comply with the Performance-Based Exception as
so intended, such provision shall be construed or deemed to be amended to conform to the requirements of the Performance-Based Exception to the extent permitted by applicable law and deemed advisable
by the Committee; provided, however, no such construction or amendment shall have an adverse effect on the prior grant of an Incentive Award or the economic value to a Grantee of any outstanding
Incentive Award. 



7.11  Compliance with Code Section 409A  


        It is intended that Incentive Awards granted under the Plan shall be exempt from, or in compliance with, Code Section 409A, unless otherwise determined by
the Committee at the time of grant. In that respect, the Company, by action of its Board, reserves the right to amend the Plan, and the Board and the Committee each reserve the right to amend any
outstanding Incentive Agreement, to the extent deemed necessary or appropriate either to exempt such Incentive Award from Section 409A or to comply with the requirements of Section 409A.
Further, Grantees who are "Specified Employees" (as defined under Section 409A), shall be required to delay payment of an Incentive Award for six (6) months after separation from
service, but only to the extent such Incentive Award is governed by Section 409A and such delay is required thereunder. 


7.12  Notices  


        (a)    Notice From Insiders to Secretary of Change in Beneficial
Ownership.    To the extent Section 16 of the Exchange Act is applicable to the Company, within two business days after the date of a change in beneficial
ownership of the Common Stock issued or delivered pursuant to this Plan, an Insider should report to the Secretary of the Company any such change to the beneficial ownership of Common Stock that is
required to be reported with respect to such Insider under Rule 16(a)-3 promulgated pursuant to the Exchange Act. Whenever reasonably feasible, Insiders will provide the Committee
with advance notification of such change in beneficial ownership. 


        (b)    Notice to Insiders and Securities and Exchange
Commission.    To the extent applicable, the Company shall provide notice to any Insider, as well as to the Securities and Exchange Commission, of any "blackout
period," as defined in Section 306(a)(4) of the Sarbanes-Oxley Act of 2002, in any case in which Insider is subject to the requirements of Section 304 of said Act in connection with such
"blackout period." 


7.13  Pre-Clearance Agreement with Brokers  


        Notwithstanding anything in the Plan to the contrary, no Shares issued pursuant to the Plan will be delivered to a broker or dealer that receives such Shares for
the account of an Insider unless and until the broker or dealer enters into a written agreement with the Company whereby such broker or dealer agrees to report immediately to the Secretary of the
Company (or other designated person) a change in the beneficial ownership of such Shares. 


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7.14  Successors to Company  


        All obligations of the Company under the Plan with respect to Incentive Awards granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. 


7.15  Miscellaneous Provisions  


        (a)   No
Employee, Consultant, Outside Director, or other person shall have any claim or right to be granted an Incentive Award under the Plan. Neither the Plan, nor any
action taken hereunder, shall be construed as giving any Employee, Consultant, or Outside Director any right to be retained in the Employment or other service of the Company or any Parent or
Subsidiary. 


        (b)   The
expenses of the Plan shall be borne by the Company. 


        (c)   By
accepting any Incentive Award, each Grantee and each person claiming by or through him shall be deemed to have indicated his acceptance of the Plan. 


        (d)   The
proceeds received from the sale of Common Stock pursuant to the Plan shall be used for general corporate purposes of the Company. 



7.16  Severability  


        In the event that any provision of this Plan shall be held illegal, invalid or unenforceable for any reason, such provision shall be fully severable, but shall
not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced as if the illegal, invalid, or unenforceable provision was not included herein. 


7.17  Gender, Tense and Headings  


        Whenever the context so requires, 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 interpretation or construction of the Plan. 


7.18  Governing Law  


        The Plan shall be interpreted, construed and constructed in accordance with the laws of the State of Texas without regard to its conflicts of law provisions,
except as may be superseded by applicable laws of the United States. 


        [Signature page follows.]


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        IN
WITNESS WHEREOF, the Company has caused this Plan to be duly executed in its name and on its behalf by its duly authorized officer, effective as of the Effective Date. 

 






 



					
	 	 	 RESACA EXPLOITATION, INC.
	

 	
 	
  By:	
 	
/s/ MARY LOU FRY






  Mary Lou Fry

Vice President




 

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   FIRST AMENDMENT TO

RESACA EXPLOITATION, INC.

2008 STOCK INCENTIVE PLAN  


        This FIRST AMENDMENT TO THE RESACA EXPLOITATION, INC. 2008 STOCK INCENTIVE PLAN (this
"Amendment") is hereby made and entered into this 6 day of May, 2009 by the board of directors (the
"Board") of Resaca Exploitation, Inc., a Texas corporation (the "Company"). Terms used in this
Amendment with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the 2008 Stock Incentive Plan (the
"Plan"). 


 RECITALS  


        WHEREAS, Section 7.7 of the Plan provides that the Board may amend the Plan at
any time without shareholder approval, unless such amendment (i) increases the maximum number of shares which may be issued under the Plan, (ii) amends the requirements as to the class
of employees eligible to purchase Common Stock under the Plan; (iii) extends the term of the Plan; or (iv) increases the maximum limits on certain incentive awards or decreases the
authority granted under the Plan in contravention of Rule 16b-3 of the Securities Exchange Act of 1934, as amended; and 



        WHEREAS, the Board deems it advisable and in the best interests of the Company to amend the Plan to permit the Board to authorize one or
more officers of the Company to (i) designate officers and employees of the Company or any subsidiary of the Company to receive stock appreciation rights and options under the Plan and
(ii) designate the number of shares subject to such awards of stock appreciation rights or options under the Plan. 


        NOW, THEREFORE, this First Amendment ("Amendment") is hereby made with all the amendments
set forth herein, as follows: 


        1.     Section 1.3(e)
is deleted, in its entirety, and replaced as follows: 



        (e)    Delegation of Authority.    The Board and the Committee, to the extent permitted by
applicable law, may delegate to designated officers or other employees (each a "Designated Officer") of the Company, in its discretion and by a
resolution adopted by the Board or Committee, any of their duties and authority under the Plan pursuant to such conditions or limitations as the Board or Committee may establish from time to time,
including, without limitation, the authority to designate one or more newly hired Employees as eligible persons to whom Stock Options or Stock Appreciation Rights will be granted under the Plan and to
determine the number of Shares that will be subject to such Stock Options or Stock Appreciation Rights; provided, however, that the resolution granting such authority shall (x) specify the
total number of Shares that may be made subject to the Stock Options and Stock Appreciation Rights, and (z) not authorize a Designated Officer to designate himself as a recipient of any Stock
Options or Stock Appreciation Rights. Notwithstanding the foregoing, the Committee may not delegate to any person the authority (i) if the Company is a Publicly Held Corporation, to take any
action which would contravene the requirements of Rule 16b-3 under the Exchange Act, the Performance-Based Exception under Code Section 162(m), or the Sarbanes-Oxley Act of
2002, or (ii) to recommend himself as a Grantee, or to determine the form or terms of his own Incentive Award. 




        2.     As
expressly amended hereby, the Agreement is ratified and confirmed in all respects and shall remain in full force and effect. 


[Signature page follows.]


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        IN WITNESS WHEREOF, the undersigned, being a duly authorized officer of the Company has approved, ratified and executed this Amendment,
effective as of May 6, 2009. 

 










					
	

 	
 	

 	
 	

 
	 	 	 RESACA EXPLOITATION, INC.
	

 	
 	
By:	
 	
/s/ MARY LOU FRY







 
	 	 	Name:	 	Mary Lou Fry







 
	 	 	Title:	 	Vice President







 




 

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