Exhibit 10.1


 


 


TRINITY
CAPITAL CORPORATION


 


2005
STOCK INCENTIVE PLAN


 





















 


TRINITY
CAPITAL CORPORATION


 


2005
STOCK INCENTIVE PLAN


 


Section 1.              Purpose
of the Plan.


 


The TRINITY
CAPITAL CORPORATION 2005 STOCK INCENTIVE PLAN (the “Plan”) is intended to provide a means whereby officers and
employees of TRINITY CAPITAL CORPORATION, a
New Mexico corporation (the “Company”), and
the Related Corporations may sustain a sense of proprietorship and personal
involvement in the continued development and financial success of the Company
and the Related Corporations, and to encourage them to remain with and devote
their best efforts to the Company and the Related Corporations, thereby
advancing the interests of the Company and its stockholders.  Accordingly, the Company may permit certain
officers and employees to acquire Shares or otherwise participate in the
financial success of the Company, on the terms and conditions established
herein.


 


Section 2.              Definitions.


 


The following terms, when
used herein and unless the context clearly requires otherwise, shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):


 


(a)           “Applicable
Laws” means the requirements relating to the administration of stock
option plans under federal and state corporate laws, federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted.


 


(b)           “Award” means individually or collectively,
a grant under the Plan of Options, SARs or Other Stock Based Awards.


 


(c)           “Board” means the board of directors of the Company.


 


(d)           “Cause” means either (i) in the case of an employee with
a then-current written employment agreement with the Company or a Related
Corporation, “Cause” as defined under that agreement, and (ii) in all
other cases, the commission of fraud or an act or acts of dishonesty, the
misappropriation of or intentional material damage to the property or business
of the Company or a Related Corporation, the material failure to fulfill the
duties and responsibilities of a regular position and/or comply with the
Company’s or a Related Corporation’s policies, rules or regulations, or
the conviction of a felony.


 


(e)           “Change of Control” means:


 


(i)            the consummation of
the acquisition by any person (as such term is defined in Section 13(d) or
14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%)
or more 


 


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of the combined voting
power of the then outstanding voting securities of the Company other than
through the receipt of Shares pursuant to the Plan;


 


(ii)           the individuals who, as
of the Effective Date, are members of the Board cease for any reason to
constitute a majority of the Board, unless the election, or nomination for
election by the stockholders of the Company, of any new director was approved
by a vote of a majority of the Board, and such new director shall, for purposes
of the Plan, be considered as a member of the Board; or


 


(iii)          consummation by the
Company of:  (A) a merger or
consolidation if the stockholders of the Company, immediately before such
merger or consolidation, do not, as a result of such merger or consolidation,
own, directly or indirectly, more than fifty percent (50%) of the combined
voting power of the then outstanding voting securities of the entity resulting
from such merger or consolidation; or (B) a complete liquidation or
dissolution or an agreement for the sale or other disposition of two-thirds or
more of the consolidated assets of the Company.


 


Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely because (x) fifty
percent (50%) or more of the combined voting power of the then outstanding
securities of the Company is acquired by a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
the Company or a Related Corporation; or (y) the transaction is a merger or
consolidation effected to implement a recapitalization of the Company in which
no “person”, as defined above, acquires more than 50% of the combined voting
power of the Company’s then-outstanding securities.


 


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


 


(g)           “Committee” means the Compensation Committee of the
Board.  Each member of the Committee
shall be (i) a “non-employee director” for purposes of Section 16 and
Rule 16b-3 of the Exchange Act, and (ii) an “outside director” for
purposes of Section 162(m) of the Code, unless the Board has fewer than
two (2) such outside directors.


 


(h)           “Common Stock” means the common stock of the Company.


 


(i)            “Disability” means (i) in the case of an Incentive Stock
Option, a physical or mental disability (within the meaning of Section 22(e)(3) of
the Code) which impairs the individual’s ability to substantially perform his
or her current duties for a period of at least twelve (12) consecutive months,
as determined by the Committee, and (ii) in all other cases, the person’s
limitation, due to sickness or injury, in performing the material and
substantive duties of his or her position with the Company or a Related
Corporation for a period of six (6) consecutive months.


 


(j)            “Effective Date” means April 7, 2005, which was the date
that the Plan was adopted by the Board.


 


(k)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated
thereunder.


 


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(l)            “Fair Market Value” means as of any date, the value of a
share of the Company’s common stock determined as follows:


 


(i)            if such common stock
is then quoted on the American Stock Exchange, its last reported sale price on
the American Stock Exchange on such date or, if no such reported sale takes
place on such date, the average of the closing bid and asked prices;


 


(ii)           if such common stock is
publicly traded and is then listed on a national securities exchange, the last
reported sale price on such date or, if no such reported sale takes place on
such date, the average of the closing bid and asked prices on the principal
national securities exchange on which the common stock is listed or admitted to
trading;


 


(iii)          if such common stock is
publicly traded but is not quoted on the American Stock Exchange nor listed or
admitted to trading on a national securities exchange, the average of the
closing bid and asked prices on such date, as reported by The Wall Street
Journal, for the over-the-counter market; or


 


(iv)          if none of the foregoing
is applicable, by the Board of Directors of the Company in good faith.


 


(m)          “Incentive Stock Option” means an Award under the Plan that
satisfies the general requirements of Section 422 of the Code,
namely:  (i) grantees must be
employees; (ii) the exercise price may not be less than the fair market
value of the underlying Shares at the date of grant; (iii) no more than
$100,000 worth of Shares may become exercisable in any year; (iv) the
maximum duration of an Award may be ten (10) years; (v) Awards must
be exercised within three (3) months after termination of employment,
except in the event of Disability or death; and (vi) Shares received upon
exercise must be retained for the greater of two (2) years from the date
of grant or one (1) year from the date of exercise.


 


(n)           “Other Stock Based Awards” means any other
awards not specifically described in the Plan that are valued in whole or in
part by reference to, or are otherwise based on, Shares and are created by the
Committee pursuant to Section 7.


 


(o)           “Nonqualified Stock Option” means a stock option award under
the Plan that is not an Incentive Stock Option.


 


(p)           “Option” means a stock option granted pursuant to this Plan.


 


(q)           “Optionee” means the holder of an outstanding Incentive Stock
Option, Nonqualified Stock Option or Stock Appreciation Right granted under the
Plan.


 


(r)            “Plan” means this Trinity Capital Corporation 2005 Stock
Incentive Plan.


 


(s)           “Related Corporation” means any corporation, bank or other
entity which would be a parent or subsidiary corporation with respect to the
Company as defined in Section 424(e) or (f), respectively, of the
Code.


 


(t)            “Retirement” means Termination of Service, other than for
Cause, after attainment of age sixty-five (65) for Service Providers.


 


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(u)           “Rule 16b-3” means Rule 16b-3 promulgated under the
Exchange Act, as amended from time to time.


 


(v)           “Service Provider” means an employee or
officer.


 


(w)          “Shares” means shares of the common stock, no par value per
share, of the Company.


 


(x)            “Stock Appreciation Rights” means rights entitling the
grantee to receive the appreciation in the market value of a stated number of
Shares.


 


(y)           “Stock Option Agreement” means a written agreement between
the Company and the Optionee evidencing the terms and restrictions apply to the
grant of Incentive Stock Options or Nonqualified Stock Options. The Stock
Option Agreement is subject to the terms and conditions of the Plan.


 


(z)            “Securities Act” means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder.


 


(aa)         “Termination of Service” means the termination of a person’s
status as an officer or employee of the Company or a Related Corporation.


 


Section 3.              Administration
of the Plan.


 


(a)           Authority of the
Committee.  The Plan shall be
administered by the Committee.  The Committee
shall have sole authority to:


 


(i)            select the Service
Providers to whom Awards shall be
granted under the Plan;


 


(ii)           establish the amount
and conditions of each Award;


 


(iii)          prescribe any legend to
be affixed to certificates representing such Awards;


 


(iv)          interpret the Plan and
Award agreement;


 


(v)           to the extent it deems
desirable to qualifying under Rule 16b-3, structure any Award to satisfy
the requirements for exception under Rule 16b-3.


 


(vi)          correct any defect,
supply any omission, or reconcile any inconsistency in the Plan, any Award or
any agreement related thereto; and


 


(vii)         adopt such rules,
regulations, forms and agreements, not inconsistent with the provisions of the
Plan, as it may deem advisable to carry out the Plan.


 


All decisions made by the
Committee in administering the Plan shall be subject to Board review.


 


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(b)           Delegation by
Committee.  Except to the extent prohibited by applicable law, the
applicable rules of a stock exchange or the Plan, or as necessary to
comply with the exemptive provisions of Rule 16b-3 under the Exchange Act,
the Committee may allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of
its responsibilities and powers to any person or persons selected by it,
including:  (a) delegating to a
committee of one or more members of the Board who are not “independent
directors” within the meaning of Code Section 162(m), the authority to
grant Awards under the Plan to eligible persons who are either:  (i) not then “covered employees,” within
the meaning of Code Section 162(m) and are not expected to be “covered
employees” at the time of recognition of income resulting from such Award; or (ii) not
persons with respect to whom the Company wishes to comply with Code Section 162(m);
and/or (b) delegating to a committee of one or more members of the Board
who are not “non-employee directors,” within the meaning of Rule 16b-3,
the authority to grant Awards under the Plan to eligible persons who are not
then subject to Section 16 of the Exchange Act.  Any such allocation
or delegation may be revoked by the Committee at any time.  To the extent
permitted by applicable law and resolution of the Board, the Committee may
delegate all or any part of its responsibilities to any officer of the Company.


 


(c)           Limitation of
Liability.  In addition to such other
rights of indemnification as they have as directors or as members of the
Committee, the members of the Committee shall be indemnified by the Company
against reasonable expenses (including, without limitation, attorney’s fees)
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal, to which they or any of them may be a party by
reason of any action taken or failure to act in connection with the Plan or any
Award granted hereunder, and against all amounts paid by them in settlement
(provided such settlement is approved to the extent required by and in the
manner provided by the Certificate of Incorporation or Bylaws of the Company
relating to indemnification of directors) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that the
Committee member shall not be indemnified as provided by the Certificate of
Incorporation or Bylaws of the Company relating to indemnification of
directors.


 


Section 4.              Shares
Subject to the Plan.


 


The aggregate number of
Shares that may be obtained by Service Providers under the Plan shall be 500,000
Shares.  The Shares may be authorized,
but unissued, or reacquired common stock. 
Subject to adjustment as provided in Section 14, no person may be
granted Options and SARS under this Plan that, considered together, relate to
more than 100,000 Shares during any calendar year.  The maximum number of Shares that may be
subject to Other Stock Based Awards described under Section 7 which are
granted to any one Participant during any calendar year and are intended to be “performance-based
compensation” (as that term is used for purposes of Code Section 162(m)),
shall be One Hundred Thousand Shares (100,000). 
Shares shall not be deemed to have been issued pursuant to the Plan with
respect to any portion of an Award that is settled in cash.  Upon payment in Shares pursuant to an
exercise of an Award, the number of Shares available for issuance under the
Plan shall be reduced only by the number of Shares actually issued in such
payment.  If a Participant pays the exercise
price (or purchase price, if applicable) of an Award through the tender of
Shares, or if Shares are tendered or 


 


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withheld to satisfy any
Company withholding obligations, the number of Shares so tendered or withheld
shall again be available for issuance pursuant to future Awards under the
Plan.  Upon the expiration, termination,
forfeiture, or cancellation (in whole or in part) of unexercised Awards, Shares
subject thereto shall again be available for issuance hereunder.  Any Shares that remain unissued at the
termination of the Plan shall cease to be subject to the Plan, but until
termination of the Plan, the Company shall at all times make available
sufficient Shares to meet the requirements of the Plan.


 


Section 5.              Stock
Options.


 


(a)           Type of Options.  The Board may issue options that constitute
Incentive Stock Options and Nonqualified Options to officers or employees of the Company and the Related
Corporations; provided further that an Award (other than an Award of an
Incentive Stock Option) may be granted to an individual prior to the date on
which he or she first performs services as an employee, provided that such
Award does not become vested prior to the date such individual commences such
services.  Each grant of options shall be
confirmed by a Stock Option Agreement that shall be executed by the Company and
the Optionee as soon as practicable after such grant.  The Stock Option Agreement shall expressly
state or incorporate by reference the provisions of the Plan and state whether
the option is an Incentive Stock Option or a Nonqualified Stock Option.


 


(b)           Terms of Options.  Except as provided in paragraphs (c) and
(d) of this Section, each option granted under the Plan shall be subject
to the terms and conditions set forth by the Committee in the Stock Option Agreement
including, without limitation, option price, vesting schedule and option
term.


 


(c)           Additional Terms
Applicable to All Options.  Each
option shall be subject to the following terms and conditions:


 


(i)            Written Notice.  An option may be exercised only by giving
written notice to the Company specifying the number of Shares to be
purchased.  An option may be exercised
only to the extent it is vested on the date of exercise.  The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an option;
provided that the minimum number will not prevent the option holder from
exercising an option for the full number of Shares for which it is then exercisable.


 


(ii)           Method of Exercise.
Except as otherwise provided in any written option agreement, the exercise
price of an option shall be paid in full in cash or, subject to limitations
imposed by applicable law, by such means as the Committee from time to time may
permit, including, (i) in Common Stock, either actually or by attestation,
valued at its Fair Market Value on the date of exercise, provided it has been
owned by the Optionee for at least six (6) months prior to the exercise; (ii) in
cash by an unaffiliated broker-dealer to whom the holder of the option has
submitted an exercise notice consisting of a fully endorsed option; or (iii) by
any combination of cash and/or clauses (i) or (ii) above, as the Optionee
shall elect.  In the case of payment pursuant
to clauses (i) or (ii) above, the Optionee’s election must be made on
or prior to the date of exercise of the option and must be irrevocable.  In lieu of a separate election


 


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governing each exercise
of an option, an Optionee may file a blanket election that shall govern all
future exercises of options until revoked by the Optionee.


 


(iii)          Term of Option.  An option shall be exercisable as provided
under the Plan or by the Committee.


 


(iv)          Disability, Death or
Retirement of Optionee.  If an Optionee’s
Termination of Service occurs due to Retirement, Disability or death prior to
exercise in full of any options, he or she, or his or her beneficiary,
executor, administrator or personal representative, shall have the right to
exercise the options within a period of twelve (12) months after the date of
such termination to the extent that the right was vested and exercisable at the
date of such termination as provided in the stock option agreement, or as may otherwise
be provided by the Committee.


 


(v)           Transferability.  No option may be transferred, assigned or
encumbered by an Optionee, except:  (A) by
will or the laws of descent and distribution; (B) by gifting for the
benefit of descendants for estate planning purposes; or (C) pursuant to a
certified domestic relations order.


 


(vi)          Repricing is Subject
to Stockholder Approval.  Except for adjustments pursuant to Section 14
(relating to the adjustment of shares), and reductions of the exercise price
approved by the Company’s stockholders, the exercise price for any outstanding
option may not be decreased after the date of grant nor may an outstanding
option granted under the Plan be surrendered to the Company as consideration
for the grant of a replacement option with a lower exercise price.


 


(d)           Additional Terms
Applicable to Incentive Options. 
Each Incentive Stock Option shall be subject to the following terms and
conditions:


 


(i)            Option Price.  The option price per Share shall be 100% of
the fair market value of a Share on the date the option is granted.  Notwithstanding the preceding sentence, the
option price per Share granted to an individual who, at the time such option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company (a “10% Stockholder”)
shall not be less than 110% of the fair market value of a Share on the date the
option is granted.


 


(ii)           Term of Option.  No option may be exercised more than ten (10) years
after the date of grant.  No option
granted to a 10% Stockholder may be exercised more than five (5) years
after the date of grant.  Notwithstanding
any other provisions hereof, no option may be exercised more than three (3) months
after the Optionee terminates employment with the Company, except in the event
of death or Disability, in which case the option may be exercised as provided
in subparagraph (c)(iv) of this Section.  In the case of Retirement, the option may be
exercised as provided in subparagraph (c)(iv) of this of this Section, but
if exercised beyond the three (3) month period following Retirement, the
option will not be an Incentive Stock Option and will be treated for all
purposes as a Nonqualified Option.


 


(iii)          Annual Exercise Limit.  The aggregate fair market value of Shares
which first become exercisable during any calendar year shall not exceed
$100,000.  For purposes of the preceding
sentence, the fair market value of each Share shall be determined on the date
the option with respect to such Share is granted.


 


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(iv)          Transferability.  No option may be transferred, assigned or
encumbered by an Optionee, except by will or the laws of descent and
distribution, and during the Optionee’s lifetime an option may only be
exercised by him or her.


 


(v)           Notice of
Disqualifying Dispositions.  If an Optionee
sells or otherwise disposes of any Shares acquired pursuant to the exercise of
an Incentive Stock Option on or before the later of (1) the date two (2) years
after the date of grant, and (2) the date one year after the exercise of
the Incentive Stock Option (in either case, a “Disqualifying Disposition”), the Optionee must immediately
notify the Company in writing of such disposition.  The Optionee may be subject to income tax
withholding by the Company on the compensation income recognized by the Optionee
from the Disqualifying Disposition.


 


Section 6.              Stock
Appreciation Rights.


 


(a)           Grants.  An Award of Stock Appreciation Rights under
the Plan (“SARs”) may be granted separately
or in tandem with or by reference to an Option granted prior to or
simultaneously with the grant of Stock Appreciation Rights, to such eligible
officers and employees as may be
selected by the Committee, and shall be evidenced by a written agreement in
such form and consistent with the Plan as the Committee shall approve from time
to time.


 


(b)           Terms of Grant.  SARs may be granted in tandem with or with
reference to a related option, in which event the grantee may elect to exercise
either the option or the SAR, but not both, as to the same Share subject to the
option and the SAR, or the SAR may be granted independently of a related
option.  SARs shall not be transferable,
except:  (i) by will or the laws of
descent and distribution; (ii) by gifting for the benefit of descendants
for estate planning purposes; or (iii) pursuant to a certified domestic
relations order.


 


(c)           Payment on Exercise.  Upon exercise of a SAR, the grantee shall be
paid the excess of the then fair market value of the number of Shares to which
the SAR relates over the fair market value of such number of Shares at the date
of grant of the SAR or of the related option, as the case may be.  Such excess shall be paid in cash, in Shares
of equivalent value, or in some combination thereof.


 


Section 7.              Other
Stock Based Awards.


 


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


 


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Section 8.              Performance-Based Compensation.


 


(a)           In General.  Any Award under the Plan which is intended to
be “performance-based compensation” within the meaning of Code Section 162(m)
shall be conditioned on the achievement of one or more objective performance
measures, to the extent required by Code Section 162(m) as may be
determined by the Committee.


 


(b)           Performance Measures.  Such performance measures may be
based on any one or more of the following: earnings (e.g., earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; or earnings per share);
financial return ratios (e.g., return
on investment, return on invested capital, return on equity or return on
assets); increase in revenue, operating or net cash flows; cash flow return on
investment; total stockholder return; market share; net operating income,
operating income or net income; debt load reduction; expense management;
economic value added; stock price; assets, asset quality level, charge offs,
loan reserves, non-performing assets, loans, deposits, growth of loans,
deposits or assets; interest sensitivity gap levels, regulatory compliance,
improvement of financial rating, achievement of balance sheet or income statement
objectives, and strategic business objectives, consisting of one or more
objectives based on meeting specific cost targets, business expansion goals and
goals relating to acquisitions or divestitures.  Performance measures may
be based on the performance of the Company as a whole or of any one or more
Subsidiaries or business units of the Company or a Subsidiary and may be
measured relative to a peer group, an index or a business plan.


 


(c)           Partial Achievement. 
The terms of any Award may provide that partial achievement of the performance
measures may result in a payment or vesting based upon the degree of
achievement.


 


(d)           Extraordinary Items. 
In establishing any performance measures, the Committee may provide for the
exclusion of the effects of the following items, to the extent identified in
the audited financial statements of the Company, including footnotes, or in the
Management Discussion and Analysis section of the Company’s annual
report:  (i) extraordinary, unusual,
and/or nonrecurring items of gain or loss; (ii) gains or losses on the
disposition of a business; (iii) changes in tax or accounting principles,
regulations or laws; or (iv) mergers or acquisitions.  To the extent
not specifically excluded, such effects shall be included in any applicable
performance measure.


 


Section 9.              Deferral of Payment.


 


(a)           In General.  Subject to subsection (b), to the extent
permitted by the Committee or the terms of any Award under the Plan, a
Participant may defer receipt of the cash or Shares otherwise payable under the
Award and be credited with interest or dividend equivalents with respect
thereto; provided, however, that any Award
otherwise payable in Shares shall continue to be payable only in Shares.


 


(b)           Code Section 409A.  Any stock option, SAR, or Other Stock Based
Award and any deferrals of such Awards under this Section 9, which
constitutes “deferred compensation” under Code Section 409A (“409A Award”), and any rules and
regulations promulgated


 


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thereunder, shall be subject to the following:


 


(i)            All 409A Award
documents and agreements, or rules and regulations created by the
Committee pertaining to 409A Awards, shall provide for the required procedures
under Code Section 409A, including the timing of deferral elections and
the timing and method of payment distributions.


 


(ii)           With respect to all
409A Awards, the Committee and its delegates shall operate the Plan at all
times in conformity with the known rules, regulations and guidance promulgated
under Code Section 409A, and the Committee shall reserve the right
(including the right to delegate such right) to unilaterally amend any 409A
Award granted under the Plan, without the consent of the Participant, to
maintain compliance with Code Section 409A.  A Participant’s acceptance of any Award under
the Plan constitutes acknowledgement and consent to such rights of the
Committee.


 


Section 10.            Amendment
or Termination of the Plan.


 


The Board or the
Committee may amend, alter, suspend, discontinue or terminate the Plan or the
Committee’s authority to grant Awards under the Plan without the consent of
Company stockholders or Service Providers, except that any amendment or
alteration to the Plan shall be subject to the approval of the Company’s
stockholders not later than the annual meeting next following such Board action
if such stockholders approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation
system on which the Shares may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit other such changes to the
Plan to stockholders for approval. 
Notwithstanding the foregoing, no such action may materially and
adversely affect the rights of such Service Providers under any previously
granted and outstanding Award, without the consent of an affected Service
Provider.  The Committee may waive any
conditions or rights under, or amend, alter, suspend, discontinue or terminate
any Award theretofore granted and any Award agreement relating thereto, except
as otherwise provided in the Plan; provided that, without the consent of an
affected Service Provider, no such Committee action may materially adversely
affect the rights of such Service Providers under such Award.


 


Section 11.            Term
of Plan.


 


The Plan shall be
effective upon the date of its adoption by the Board; provided that Incentive
Stock Options may be granted only if the Plan is approved by the stockholders
within twelve (12) months before or after the date of adoption by the
Board.  Unless sooner terminated under
the provisions of Section 10 above,
Awards shall not be granted under the Plan after the expiration of ten (10) years
from the most recent approval of the Plan by the Company’s stockholders.  However, Awards may be exercisable after the
end of the term of the Plan.


 


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Section 12.            Rights
as Stockholder.


 


Upon delivery of any
Share to an officer or employee, such person shall have all of the rights of a
stockholder of the Company with respect to such Share, including the right to
vote such Share and to receive all dividends or other distributions paid with
respect to such Share.


 


Section 13.            Change
of Control.


 


Subject to the provisions
of Section 14 (relating to the adjustment of shares), and except as
otherwise provided in the Plan or in the terms of any Award Agreement:


 


(a)           Upon a Change of
Control, all Options and SARs held by Service Providers who have not incurred a
Termination of Service prior to the Change of Control shall become fully
exercisable immediately prior to the Change of Control (subject to the
expiration provisions otherwise applicable to the option or SAR).


 


(b)           Upon a Change of
Control all other Stock Based Awards described in Section 7 held by
Service Providers who have not incurred a Termination of Service prior to the
Change of Control shall be fully earned and vested.


 


(c)           Notwithstanding the
forgoing, if the vesting of an outstanding Award is conditioned upon the
achievement of performance measures, then the Award shall be subject to the
following:


 


(i)            If, at the time of the
Change of Control, the established performance measures are less than fifty
percent (50%) attained (as determined in the sole discretion of the Committee,
based upon a pro rata determination through the date of the Change of Control),
then such Award shall become vested and exercisable on a fractional basis with
the numerator being equal to the percentage of attainment and the denominator
being fifty percent (50%).


 


(ii)           If at the time of the
Change of Control, the established performance measures are at least fifty
percent (50%) attained (as determined in the sole discretion of the Committee,
based upon a pro rata determination through the date of the Change of Control),
then such Award shall become fully vested and exercisable.


 


For purposes of the Plan,
unless otherwise provided in an Award Agreement, the term “Change of Control” shall be deemed to have
occurred on the earliest of the following dates:


 


(a)           the consummation of the
acquisition by any person (as such term is defined in Section 13(d) or
14(d) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of fifty-one percent (51%) or more of the
combined voting power of the then outstanding voting securities of the Company;
or


 


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(b)           the individuals who, as
of the date hereof, are members of the Board cease for any reason to constitute
a majority of the Board, unless the election or nomination for election by the
stockholders of any new director was approved by a vote of a majority of the
Board, in which case such new director shall for purposes of this Plan be
considered as a member of the Board; or


 


(c)           the consummation by the
Company of:  (i) a merger or
consolidation if the Company’s stockholders, immediately before such merger or
consolidation, do not, as a result of such merger or consolidation, own,
directly or indirectly, more than fifty-one percent (51%) of the combined
voting power of the then outstanding voting securities of the entity resulting
from such merger or consolidation in substantially the same proportion as their
ownership of the combined voting power of the voting securities of the Company
outstanding immediately before such merger or consolidation; or (ii) a
complete liquidation or dissolution or an agreement for the sale or other
disposition of all or substantially all of the assets of the Company.


 


Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely because
fifty-one percent (51%) or more of the combined voting power of the then
outstanding securities of the Company are acquired by:  (x) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained for employees of
the entity; or (y) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders in the same
proportion as their ownership of stock immediately prior to such acquisition.


 


Section 14.            Changes
in Capital and Corporate Structure.


 


The aggregate number of
Shares and interests awarded and which may be awarded under the Plan (including
the specified share limitations set forth in Section 4)
and the exercise price thereof shall be adjusted to reflect a change in the
outstanding Shares of the Company by reason of a recapitalization,
reclassification, reorganization, stock split, reverse stock split, combination
of shares, stock dividend or similar transaction.  The adjustment shall be made in an equitable
manner which will cause the Awards and the economic benefits thereof to remain
unchanged as a result of the applicable transaction.  The adjustment may include (a) adjustment
of the number and kind of shares which have been and may be delivered under the
Plan, (b) replacement of Awards with other awards which the Committee
determines have comparable value and which are based on stock of a company
resulting from the transaction, and (c) cancellation of the Award in
return for cash payment of the current value of the Award, determined as though
the Award were fully vested at the time of payment, provided that in the case
of an option or SAR, the amount of such payment shall be no less than the
excess of the value of the Stock subject to the option or SAR at the time of
the transaction over the exercise price.


 


Section 15.            Assumption
of Awards by the Company.


 


The Company, from time to
time, may substitute or assume outstanding Awards granted by it or another
company, whether in connection with an acquisition of another company or
otherwise, by either (a) granting an Award under the Plan in substitution
of such other company’s 


 


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award, or (b) assuming
such Award as if it had been granted under the Plan if the terms of such
assumed Award could be applied to an Award granted under the Plan.  Such substitution or assumption shall be
permissible if the holder of the substituted or assumed Award would have been
eligible to be granted an Award under the Plan if the other company had applied
the rules of the Plan to such grant. 
In the event the Company assumes an Award granted by another company,
the terms and conditions of such Award shall remain unchanged (except that the
exercise price and the number and nature of Shares issuable upon exercise of
any such option will be adjusted appropriately pursuant to Section 424(a) of
the Code).  In the event the Company
elects to grant a new option rather than assuming an existing option, such new
option may be granted with a similarly adjusted exercise price.


 


Section 16.            Service.


 


An individual shall be
considered to be in the service of the Company or a Related Corporation as long
as he or she remains an officer or employee of
the Company or such Related Corporation. 
Nothing herein shall confer on any individual the right to continued
service with the Company or a Related Corporation or affect the right of the
Company or such Related Corporation to terminate such service.


 


Section 17.            Withholding
of Tax.


 


(a)           Generally.  To the extent the award, issuance, vesting or
exercise of an Award results in the receipt of compensation by an officer or
employee, the Company may require the officer or employee to pay to the Company or the grantee may
authorize the Company to withhold a portion of any cash compensation then or
thereafter payable to such person, an amount, sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate for the Shares.  If an Award
is to be paid in cash, the payment will be net of an amount sufficient to
satisfy such tax withholding obligations.


 


(b)           Stock Withholding.  To the extent a grantee incurs tax liability
in connection with the exercise or vesting of any Award that is subject to tax
withholding and the grantee is obligated to pay the Company the amount required
to be withheld, the Committee may, in its sole discretion, allow the grantee to
satisfy the minimum withholding tax obligation by electing to have the Company
withhold from the Shares to be issued that number of Shares having a Fair
Market Value equal to the minimum amount required to be withheld, determined on
the date that the amount of tax to be withheld is to be determined.  All elections by a grantee to have Shares
withheld for this purpose shall be made in writing in a form acceptable to the
Committee.


 


Section 18.            Delivery
and Registration of Stock.


 


The Company’s obligation
to deliver Shares with respect to an Award shall, if the Committee so requests,
be conditioned upon the receipt of a representation as to the investment


 


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intention of the
individual to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act or any other federal, state or local
securities legislation or regulation.  It
may be provided that any representation requirement shall become inoperative
upon a registration of the Shares or other action eliminating the necessity of
such representation under securities legislation.  The Company shall not be required to deliver
any Shares under the Plan prior to:  (a) the
admission of such Shares to listing on any stock exchange on which Shares may
then be listed, and (b) the completion of such registration or other
qualification of such Shares under any state or federal law, rule or
regulation, as the Committee shall determine to be necessary or advisable.  The Plan is intended to comply with Rule 16b-3,
if applicable.  Any provision of the Plan
which is inconsistent with said rule shall, to the extent of such
inconsistency, be inoperative and shall not affect the validity of the
remaining provisions of the Plan.


 


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