**Exhibit 10.1**

** **

**UAP HOLDING CORP.**

**2007 LONG-TERM INCENTIVE PLAN**

 

1.*Purpose*. The purpose of the UAPHolding Corp. 2007 Long-Term Incentive Plan is to provide a means through whichthe Company and its Affiliates may attract and retain key personnel and to providea means whereby directors, officers, employees, consultants and advisors (andprospective directors, officers, employees, consultants and advisors) of theCompany and its Affiliates can acquire and maintain an equity interest in theCompany, or be paid incentive compensation, which may (but need not) bemeasured by reference to the value of Common Stock, thereby strengthening theircommitment to the welfare of the Company and its Affiliates and aligning theirinterests with those of the Company’s stockholders.

 

2.*Definitions*. The followingdefinitions shall be applicable throughout the Plan:

 

(a) “***Affiliate***” means (i) any person or entity thatdirectly or indirectly controls, is controlled by or is under common controlwith the Company and/or (ii) to the extent provided by the Committee, anyperson or entity in which the Company has a significant interest. The term “control”(including, with correlative meaning, the terms “controlled by” and “undercommon control with”), as applied to any person or entity, means thepossession, directly or indirectly, of the power to direct or cause thedirection of the management and policies of such person or entity, whetherthrough the ownership of voting or other securities, by contract or otherwise.

 

(b) “***Award***” means, individually or collectively, anyIncentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right,Restricted Stock, Restricted Stock Unit, Stock Bonus Award, Dividend EquivalentRights, and Performance Compensation Award granted under the Plan.

 

(c) “***Board***” means the Board of Directors of the Company.

 

(d) “***Business Combination***” has the meaning given such term inthe definition of “Change in Control.”

 

(e) “***Cause***” means, in the case of a particular Award, unlessthe applicable Award agreement states otherwise, (i) the Company or anAffiliate having “cause” to terminate a Participant’s employment or service, asdefined in any employment or consulting agreement between the Participant andthe Company or an Affiliate in effect at the time of such termination or(ii) in the absence of any such employment or consulting agreement (or theabsence of any definition of “Cause” contained therein), (A) theParticipant’s commission of, conviction for, plea of guilty or *nolo contendere* to a felony or a crimeinvolving moral turpitude, or other material act or omission involvingdishonesty or fraud, (B) the Participant’s conduct that brings or isreasonably likely to bring the Company or any of its Affiliates into publicdisgrace or disrepute and that affects the Company’s or any Affiliate’sbusiness in any material way, (C) the Participant’s failure to performduties as reasonably directed by the Company or the Participant’s materialviolation of any rule, regulation, policy or plan for the conduct of any serviceprovider to the Company or its Affiliates or its or their business (which, ifcurable, is not cured within 10 days after notice thereof is provided to theParticipant) or (D) the Participant’s gross negligence, willfulmalfeasance or material act of disloyalty with respect to the Company or itsAffiliates (which, if curable, is not cured within 10 days after notice thereofis provided to the Participant). Any determination of whether Cause existsshall be made by the Committee in its sole discretion.

 

(f) “***Change in Control***” shall, in the case of a particularAward, unless the applicable Award agreement states otherwise or contains adifferent definition of “Change in Control,” be deemed to occur upon:

 

(i) Any individual, entity or group (within the meaningof Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, asamended (the “**Exchange Act**”)) (a “**Person**”) becomes the beneficial owner(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% ormore of either (A) the then- outstanding shares of Common Stock of theCompany (the “**Outstanding**

 

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**Company Common Stock**”) or (B) the combined voting power ofthe then-outstanding voting securities of the Company entitled to votegenerally in the election of directors (the “**OutstandingCompany Voting Securities**”); *provided*,*however*, that, for purposes ofthis Section 2(f), the following acquisitions shall not constitute aChange in Control: (I) any acquisition directly from the Company, (II) anyacquisition by the Company, (III) any acquisition by any employee benefit plan(or related trust) sponsored or maintained by the Company or any Affiliate,(IV) any acquisition by any corporation pursuant to a transaction that complieswith Sections 2(f)(iii)(A), 2(f)(iii)(B) and 2(f)(iii)(C), or (V) anyacquisition involving beneficial ownership of less than 50% of the OutstandingCompany Common Stock or the Outstanding Company Voting Securities that isdetermined by the Board, based on review of public disclosure by the acquiringPerson with respect to its passive investment intent, not to have a purpose oreffect of changing or influencing the control of the Company, *provided*, *however*,that for purposes of this clause (V), any such acquisition in connection with(x) an actual or threatened election contest with respect to the electionor removal of directors or other actual or threatened solicitation of proxiesor consents or (y) any Business Combination shall be presumed to be forthe purpose or with the effect of changing or influencing the control of theCompany;

 

(ii) During any period of five (5) consecutiveyears, individuals who, as of the date hereof, constitute the Board (the “**Incumbent Board**”) cease for any reason toconstitute at least a majority of the Board; *provided*,*however*, that any individualbecoming a director subsequent to the date hereof whose election, or nominationfor election by the Company’s stockholders, was approved by a vote of at leasta majority of the directors then comprising the Incumbent Board shall beconsidered as though such individual were a member of the Incumbent Board, butexcluding, for this purpose, any such individual whose initial assumption ofoffice occurs as a result of an actual or threatened election contest withrespect to the election or removal of directors or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Person other than theBoard;

 

(iii) Consummation of a reorganization (excluding areorganization under either Chapter 7 or Chapter 11 of Title 11 of the UnitedStates Code), merger, statutory share exchange or consolidation or similartransaction involving the Company or any of its subsidiaries, a sale or otherdisposition of all or substantially all of the assets of the Company, or theacquisition of assets or stock of another entity by the Company or any of itssubsidiaries (each, a “**Business Combination**”),in each case unless, following such Business Combination, (A) all orsubstantially all of the individuals and entities that were the beneficialowners of the Outstanding Company Common Stock and the Outstanding CompanyVoting Securities immediately prior to such Business Combination beneficiallyown, directly or indirectly, more than 50% of the then-outstanding shares ofcommon stock (or, for a non-corporate entity, equivalent securities) and thecombined voting power of the then-outstanding voting securities entitled tovote generally in the election of directors (or, for a non-corporate entity, equivalentgoverning body), as the case may be, of the entity resulting from such BusinessCombination (including, without limitation, an entity that, as a result of suchtransaction, owns the Company or all or substantially all of the Company’sassets either directly or through one or more subsidiaries) in substantiallythe same proportions as their ownership immediately prior to such BusinessCombination of the Outstanding Company Common Stock and the Outstanding CompanyVoting Securities, as the case may be, (B) no Person (excluding anycorporation resulting from such Business Combination or any employee benefitplan (or related trust) of the Company or such corporation resulting from suchBusiness Combination) beneficially owns, directly or indirectly, 35% or moreof, respectively, the then-outstanding shares of common stock of thecorporation resulting from such Business Combination or the combined votingpower of the then-outstanding voting securities of such corporation, except tothe extent that such ownership existed prior to the Business Combination, and(C) at least a majority of the members of the board of directors (or, fora non-corporate entity, equivalent governing body) of the entity resulting fromsuch Business Combination were members of the Incumbent Board at the time ofthe execution of the initial agreement or of the action of the Board providingfor such Business Combination; or

 

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(iv) Approval by the stockholders of the Company ofa complete liquidation or dissolution of the Company.

 

(g) “***Code***” means the Internal Revenue Code of 1986, asamended, and any successor thereto. Reference in the Plan to any section of theCode shall be deemed to include any regulations or other interpretative guidanceunder such section, and any amendments or successor provisions to such section,regulations or guidance.

 

(h) “***Committee***” means a committee of at least two people asthe Board may appoint to administer the Plan or, if no such committee has beenappointed by the Board, the Board.

 

(i) “***Common Stock***” means the common stock, par value $0.001per share, of the Company (and any stock or other securities into which suchcommon stock may be converted or into which it may be exchanged).

 

(j) “***Company***” means UAP Holding Corp., a Delawarecorporation, and any successor thereto.

 

(k) “***Date of Grant***” means the date on which the granting ofan Award is authorized, or such other date as may be specified in suchauthorization.

 

(l) “***Dividend Equivalent Right***” means the right of aParticipant, granted at the discretion of the Committee, to receive a credit inan amount equal to the cash dividends paid on one share of Common Stock,whether or not represented by an Award denominated in Common Stock that is heldby such Participant.

 

(m) “***Effective Date***” means June 26, 2007.

 

(n) “***Eligible Director***” means a person who is (i) a “non-employeedirector” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an“outside director” within the meaning of Section 162(m) of the Code and(iii) an “independent director” under the rules of the NASDAQ NationalMarket or any other inter-dealer quotation system or securities exchange onwhich the Common Stock is listed or quoted, or a person meeting any similarrequirement under any successor rule or regulation.

 

(o) “***Eligible Person***” means any (i) individual employedby the Company or an Affiliate; *provided*,however, that no such employee covered by a collective bargaining agreementshall be an Eligible Person unless and to the extent that such eligibility isset forth in such collective bargaining agreement or in an agreement orinstrument relating thereto; (ii) director of the Company or an Affiliate;(iii) consultant or advisor to the Company or an Affiliate who may beoffered securities registrable on Form S-8 under the Securities Act; or(iv) prospective employees, directors, officers, consultants or advisorswho have accepted offers of employment or consultancy from the Company or itsAffiliates (and would satisfy the provisions of clauses (i) through(iii) above once he or she begins employment with or providing services tothe Company or its Affiliates).

 

(p) “***Exchange Act***” has the meaning given such term in thedefinition of “Change in Control,” and any reference in the Plan to any sectionof (or rule promulgated under) the Exchange Act shall be deemed to include anyrules, regulations or other interpretative guidance under such section or rule,and any amendments or successor provisions to such section, rules, regulationsor guidance.

 

(q) “***Exercise Price***” has the meaning given such term inSection 7(b) of the Plan.

 

(r) “***Fair Market Value***” means, on a given date, (i) ifthe Common Stock is quoted in the NASDAQ National Market Reporting System oranother inter-dealer quotation system on a last sale basis, the closing bidprice or, if there is no such sale on that date, then on the last precedingdate on which a sale was reported; (ii) if the Common Stock is not quotedin any inter-dealer quotation system on a last sale basis, but is listed on theNew York Stock Exchange or another national securities exchange, the closingsales price of the Common Stock reported on such national securities exchange,or, if there is no such sale on that date, then on the last preceding date on whichsuch a sale was reported; or (iii) if the Common Stock is not quoted

 

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in an inter-dealer quotation system or a national securities exchangeon a last sale basis, the amount determined by the Committee in good faith tobe the fair market value of the Common Stock.

 

(s) “***Immediate Family Members***” shall have the meaning setforth in Section 15(b).

 

(t) “***Incentive Stock Option***” means an Option that isdesignated by the Committee as an incentive stock option as described inSection 422 of the Code and otherwise meets the requirements set forth inthe Plan.

 

(u) “***Incumbent Board***” has the meaning given such term in thedefinition of “Change in Control.”

 

(v) “***Indemnifiable Person***” shall have the meaning set forthin Section 4(e) of the Plan.

 

(w) “***Mature Shares***” means shares of Common Stock owned by aParticipant that are not subject to any pledge or other security interest andthat have either been previously acquired by the Participant on the open marketor meet such other requirements, if any, as the Committee may determine arenecessary in order to avoid an accounting earnings charge on account of the useof such shares to pay the Exercise Price or satisfy a withholding obligation ofthe Participant.

 

(x) “***Negative Discretion***” shall mean the discretionauthorized by the Plan to be applied by the Committee to eliminate or reducethe size of a Performance Compensation Award consistent withSection 162(m) of the Code.

 

(y) “***Nonqualified Stock Option***” means an Option that is notdesignated by the Committee as an Incentive Stock Option.

 

(z) “***Option***” means an Award granted under Section 7 ofthe Plan.

 

(aa) “***Option Period***” has the meaning given suchterm in Section 7(c) of the Plan.

 

(bb) “***Outstanding Company Common Stock***” has themeaning given such term in the definition of “Change in Control.”

 

(cc) “***Outstanding Company Voting Securities***” hasthe meaning given such term in the definition of “Change in Control.”

 

(dd) “***Participant***” means an Eligible Person who hasbeen selected by the Committee to participate in the Plan and to receive anAward pursuant to Section 6 of the Plan.

 

(ee) “***Performance Compensation Award***” shall meanany Award designated by the Committee as a Performance Compensation Awardpursuant to Section 12 of the Plan.

 

(ff) “***Performance Criteria***” shall mean thecriterion or criteria that the Committee shall select for purposes ofestablishing the Performance Goal(s) for a Performance Period with respect toany Performance Compensation Award under the Plan.

 

(gg) “***Performance Formula***” shall mean, for aPerformance Period, the one or more objective formulae applied against therelevant Performance Goal to determine, with regard to the PerformanceCompensation Award of a particular Participant, whether all, some portion butless than all, or none of the Performance Compensation Award has been earnedfor the Performance Period.

 

(hh) “***Performance Goals***” shall mean, for aPerformance Period, the one or more goals established by the Committee for thePerformance Period based upon the Performance Criteria.

 

(ii) “***Performance Period***” shall mean the one ormore periods of time, as the Committee may select, over which the attainment ofone or more Performance Goals will be measured for the purpose of determining aParticipant’s right to, and the payment of, a Performance Compensation Award.

 

(jj) “***Permitted Transferee***” shall have the meaningset forth in Section 15(b) of the Plan.

 

(kk) “***Person***” has the meaning given such term inthe definition of “Change in Control.”

 

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(ll) “***Plan***” means this UAP Holding Corp. 2007Long-Term Incentive Plan.

 

(mm) “***Prior Plans***” means the Company’s 2004Long-Term Incentive Plan, 2003 Stock Option Plan, and 2004 Non-ExecutiveDirector Stock Option Plan.

 

(nn) “***Restricted Period***” means the period of timedetermined by the Committee during which an Award is subject to restrictionsor, as applicable, the period of time within which performance is measured forpurposes of determining whether an Award has been earned.

 

(oo) “***Restricted Stock Unit***” means an unfunded andunsecured promise to deliver shares of Common Stock, cash, other securities orother property, subject to certain restrictions (including, without limitation,a requirement that the Participant remain continuously employed or providecontinuous services for a specified period of time), granted underSection 9 of the Plan.

 

(pp) “***Restricted Stock***” means Common Stock, subjectto certain specified restrictions (including, without limitation, a requirementthat the Participant remain continuously employed or provide continuousservices for a specified period of time), granted under Section 9 of thePlan.

 

(qq) “***SAR Period***” has the meaning given such termin Section 8(b) of the Plan.

 

(rr) “***Securities Act***” means the Securities Act of1933, as amended, and any successor thereto. Reference in the Plan to anysection of the Securities Act shall be deemed to include any rules, regulationsor other interpretative guidance under such section, and any amendments orsuccessor provisions to such section, rules, regulations or guidance.

 

(ss) “***Stock Appreciation Right***” or “SAR” means anAward granted under Section 8 of the Plan.

 

(tt) “***Stock Bonus Award***” means an Award grantedunder Section 10 of the Plan.

 

(uu) “***Strike Price***” means, except as otherwiseprovided by the Committee in the case of Substitute Awards, (i) in thecase of a SAR granted in tandem with an Option, the Exercise Price of therelated Option, or (ii) in the case of a SAR granted independent of anOption, the Fair Market Value on the Date of Grant.

 

(vv) “***Subsidiary***” means, with respect to anyspecified Person:

 

(1) any corporation, association or other businessentity of which more than 50% of the total voting power of shares of OutstandingCompany Voting Securities (without regard to the occurrence of any contingencyand after giving effect to any voting agreement or stockholders’ agreement thateffectively transfers voting power) is at the time owned or controlled,directly or indirectly, by that Person or one or more of the other Subsidiariesof that Person (or a combination thereof); and

 

(2) any partnership (or any comparable foreignentity (a) the sole general partner (or functional equivalent thereof) orthe managing general partner of which is such Person or Subsidiary of suchPerson or (b) the only general partners (or functional equivalentsthereof) of which are that Person or one or more Subsidiaries of that Person(or any combination thereof).

 

(ww) “***Substitute Award***” has the meaning given suchterm in Section 5(e).

 

3.*Effective Date; Duration*. ThePlan shall be effective as of the Effective Date. The expiration date of thePlan, on and after which date no Awards may be granted hereunder, shall be thetenth anniversary of the Effective Date; *provided*,*however*, that such expirationshall not affect Awards then outstanding, and the terms and conditions of thePlan shall continue to apply to such Awards.

 

4.*Administration*. (a) TheCommittee shall administer the Plan. To the extent required to comply with theprovisions of Rule 16b-3 promulgated under the Exchange Act (if the Board isnot acting as the Committee under the Plan) or necessary to obtain theexception for performance-based compensation under Section 162(m) of theCode, as applicable, it is intended that each member of the Committee shall, atthe time he takes any action with respect to an Award under the Plan, be anEligible Director. However, the fact that a Committee member shall

 

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failto qualify as an Eligible Director shall not invalidate any Award granted bythe Committee that is otherwise validly granted under the Plan. The majority ofthe members of the Committee shall constitute a quorum. The acts of a majorityof the members present at any meeting at which a quorum is present or actsapproved in writing by a majority of the Committee shall be deemed the acts ofthe Committee.

 

(b) Subject to the provisions of the Plan andapplicable law, the Committee shall have the sole and plenary authority, inaddition to other express powers and authorizations conferred on the Committeeby the Plan, to: (i) designate Participants; (ii) determine the typeor types of Awards to be granted to a Participant; (iii) determine thenumber of shares of Common Stock to be covered by, or with respect to whichpayments, rights, or other matters are to be calculated in connection with,Awards; (iv) determine the terms and conditions of any Award;(v) determine whether, to what extent, and under what circumstances Awardsmay be settled or exercised in cash, shares of Common Stock, other securities,other Awards or other property, or canceled, forfeited, or suspended and themethod or methods by which Awards may be settled, exercised, canceled,forfeited, or suspended; (vi) determine whether, to what extent, and underwhat circumstances the delivery of cash, Common Stock, other securities, otherAwards or other property and other amounts payable with respect to an Awardshall be deferred either automatically or at the election of the Participant orof the Committee; (vii) interpret, administer, reconcile any inconsistencyin, correct any defect in and/or supply any omission in the Plan and anyinstrument or agreement relating to, or Award granted under, the Plan;(viii) establish, amend, suspend, or waive any rules and regulations andappoint such agents as the Committee shall deem appropriate for the properadministration of the Plan; (ix) subject to the restrictions set forth inSections 9(c) and 12(c), accelerate the vesting or exercisability of,payment for or lapse of restrictions on, Awards; and (x) make any otherdetermination and take any other action that the Committee deems necessary ordesirable for the administration of the Plan.

 

(c) The Committee may delegate to one or moreofficers of the Company or any Affiliate the authority to act on behalf of theCommittee with respect to any matter, right, obligation, or election that isthe responsibility of or that is allocated to the Committee herein, and thatmay be so delegated as a matter of law, except for grants of Awards to persons(i) subject to Section 16 of the Exchange Act or (ii) who are,or who are reasonably expected to be, “covered employees” for purposes of CodeSection 162(m).

 

(d) Unless otherwise expressly provided in the Plan,all designations, determinations, interpretations, and other decisions under orwith respect to the Plan or any Award or any documents evidencing Awardsgranted pursuant to the Plan shall be within the sole discretion of theCommittee, may be made at any time and shall be final, conclusive and bindingupon all persons or entities, including, without limitation, the Company, anyAffiliate, any Participant, any holder or beneficiary of any Award, and anystockholder of the Company.

 

(e) No member of the Board, the Committee, delegateof the Committee or any employee or agent of the Company (each such person, an “**Indemnifiable Person**”) shall be liable forany action taken or omitted to be taken or any determination made in good faithwith respect to the Plan or any Award hereunder. Each Indemnifiable Personshall be indemnified and held harmless by the Company against and from anyloss, cost, liability, or expense (including attorneys’ fees) that may beimposed upon or incurred by such Indemnifiable Person in connection with orresulting from any action, suit or proceeding to which such IndemnifiablePerson may be a party or in which such Indemnifiable Person may be involved byreason of any action taken or omitted to be taken under the Plan or any Awardagreement and against and from any and all amounts paid by such IndemnifiablePerson with the Company’s approval, in settlement thereof, or paid by suchIndemnifiable Person in satisfaction of any judgment in any such action, suitor proceeding against such Indemnifiable Person, *provided*, that the Company shall have the right, at its ownexpense, to assume and defend any such action, suit or proceeding and once theCompany gives notice of its intent to assume the defense, the Company shallhave sole control over such defense with counsel of the Company’s choice. Theforegoing right of indemnification shall not be available to an IndemnifiablePerson to the extent that a final judgment or other final adjudication (ineither case not subject to further appeal) binding upon such IndemnifiablePerson determines that the acts or omissions of such Indemnifiable Persongiving rise to the indemnification claim resulted from such IndemnifiablePerson’s bad faith, fraud or willful

 

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criminal act or omission or that such right of indemnification isotherwise prohibited by law or by the Company’s Certificate of Incorporation orBylaws. The foregoing right of indemnification shall not be exclusive of anyother rights of indemnification to which such Indemnifiable Persons may beentitled under the Company’s Certificate of Incorporation or Bylaws, as amatter of law, or otherwise, or any other power that the Company may have toindemnify such Indemnifiable Persons or hold them harmless.

 

(f) Notwithstanding anything to the contrarycontained in the Plan, the Board may, in its sole discretion, at any time andfrom time to time, grant Awards and administer the Plan with respect to suchAwards. In any such case, the Board shall have all the authority granted to theCommittee under the Plan.

 

5.*Grant of Awards*; Shares Subjectto the Plan; Limitations. (a) The Committee may, from time to time, grantOptions, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,Dividend Equivalent Rights, Stock Bonus Awards and/or Performance CompensationAwards to one or more Eligible Persons.

 

(b) Awards granted under the Plan shall be subjectto the following limitations: (i) subject to Section 13 of the Plan,the Committee is authorized to deliver under the Plan an amount of shares equalto the sum of (A) and (B), where (A) is the number of shares ofCommon Stock available for grant under the Prior Plans as of the date theCompany’s stockholders approve the Plan, and (B) is the difference between5,500,000 and the amount of shares under clause (A) above;(ii) subject to Section 13 of the Plan, grants of Options or SARsunder the Plan in respect of no more than 1,000,000 shares of Common Stock maybe made to any single Participant during any calendar year; (iii) subjectto Section 13 of the Plan, no more than 1,500,000 shares of Common Stockmay be earned in respect of Performance Compensation Awards granted pursuant toSection 12 of the Plan to any single Participant for a single calendaryear during a Performance Period, or in the event such Performance CompensationAward is paid in cash, other securities, other Awards or other property, nomore than the Fair Market Value of 1,000,000 shares of Common Stock on the lastday of the Performance Period to which such Award relates; and (iv) themaximum amount that can be paid to any single Participant in any one calendaryear pursuant to a cash bonus Award described in Section 12(a) of the Planshall be $5,000,000. Upon the stockholder approval of the Plan, no Awards maybe made under the Prior Plans, and any shares that are forfeited or cancelled,expire unexercised, or are settled in cash under the Prior Plans shall beavailable, subject to the limitations set forth in this Section 5(b), forgrant as Awards hereunder. The Plan employs “fungible share counting,” whereby,one share of Common Stock subject to an Option or SAR granted hereunder will becounted against the share reserve set forth in clause (i) of thisSection 5(b) as one share, and one share of Common Stock subject to aRestricted Stock Award or other stock-based Award (including Restricted StockUnits, and Stock Bonus Awards and Performance Compensation Awards settled inCommon Stock for which the Participant is not required to pay the Fair MarketValue) will be counted against the share reserve and in Section 5(b) as1.4 shares. To the extent that a share of Common Stock that was subject to anOption or an SAR or an option or a stock appreciation right under the PriorPlans is returned to the Plan as provided in Section 5(c), the sharereserve set forth in Section 5(b)(i) will be credited with one share;whereas, to the extent that a share of Common Stock that was subject to otherthan an Option or an SAR or an option or a stock appreciation right under thePrior Plans is returned to the Plan as provided in Section 5(c), the sharereserve set forth in Section 5(b)(i) will be credited with 1.4 shares.

 

(c) Use of shares of Common Stock to pay therequired Exercise Price or tax obligations, or shares not issued in connectionwith settlement of an Option or SAR or that are used or withheld to satisfy taxobligations of the Participant shall, notwithstanding anything herein to the contrary,not be available again for other Awards under the Plan. Shares underlyingAwards under this Plan or under Prior Plans that are forfeited, cancelled,expire unexercised, or are settled in cash are available again for Awards underthe Plan.

 

(d) Shares of Common Stock delivered by the Companyin settlement of Awards may be authorized and unissued shares, shares held inthe treasury of the Company, shares purchased on the open market or by privatepurchase, or a combination of the foregoing.

 

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(e) Awards may, in the sole discretion of theCommittee, be granted under the Plan in assumption of, or in substitution for,outstanding awards previously granted by an entity acquired by the Company orwith which the Company combines (“**SubstituteAwards**”). The number of shares of Common Stock underlying anySubstitute Awards shall not be counted against the aggregate number of sharesof Common Stock available for Awards under the Plan.

 

6.*Eligibility*. Participation shallbe limited to Eligible Persons who have entered into an Award agreement or whohave received written notification from the Committee, or from a persondesignated by the Committee, that they have been selected to participate in thePlan.

 

7.*Options*. (a) ***Generally***. EachOption granted under the Plan shall be evidenced by an Award agreement (whetherin paper or electronic medium (including email or the posting on a web sitemaintained by the Company or a third party under contract with the Company)). EachOption so granted shall be subject to the conditions set forth in thisSection 7, and to such other conditions not inconsistent with the Plan asmay be reflected in the applicable Award agreement. All Options granted underthe Plan shall be Nonqualified Stock Options unless the applicable Awardagreement expressly states that the Option is intended to be an Incentive StockOption. Incentive Stock Options shall be granted only to Eligible Persons whoare employees of the Company and its Affiliates, and no Incentive Stock Optionshall be granted to any Eligible Person who is ineligible to receive anIncentive Stock Option under the Code. No Option shall be treated as anIncentive Stock Option unless the Plan has been approved by the stockholders ofthe Company in a manner intended to comply with the stockholder approvalrequirements of Section 422(b)(1) of the Code, provided that any Optionintended to be an Incentive Stock Option shall not fail to be effective solelyon account of a failure to obtain such approval, but rather such Option shallbe treated as a Nonqualified Stock Option unless and until such approval isobtained. In the case of an Incentive Stock Option, the terms and conditions ofsuch grant shall be subject to and comply with such rules as may be prescribedby Section 422 of the Code. If for any reason an Option intended to be anIncentive Stock Option (or any portion thereof) shall not qualify as anIncentive Stock Option, then, to the extent of such nonqualification, suchOption or portion thereof shall be regarded as a Nonqualified Stock Optionappropriately granted under the Plan.

 

(b) ***Exercise Price***. Except as otherwise provided by theCommittee in the case of Substitute Awards, the exercise price (“**Exercise Price**”) per share of Common Stockfor each Option shall not be less than 100% of the Fair Market Value of suchshare (determined as of the Date of Grant); provided, however, that in the caseof an Incentive Stock Option granted to an employee who, at the time of thegrant of such Option, owns stock representing more than 10% of the voting powerof all classes of stock of the Company or any Affiliate, the Exercise Price pershare shall be no less than 110% of the Fair Market Value per share on the Dateof Grant.

 

(c) ***Vesting and Expiration***. Options shall vest and becomeexercisable in such manner and on such date or dates determined by theCommittee and shall expire after such period, not to exceed ten years, as maybe determined by the Committee (the “**OptionPeriod**”); *provided*, *however*, that the Option Period shall notexceed five years from the Date of Grant in the case of an Incentive StockOption granted to a Participant who on the Date of Grant owns stockrepresenting more than 10% of the voting power of all classes of stock of the Companyor any Affiliate; *provided*, *further*, that notwithstanding any vestingdates set by the Committee, the Committee may, in its sole discretion,accelerate the exercisability of any Option, which acceleration shall notaffect the terms and conditions of such Option other than with respect toexercisability. Unless otherwise provided by the Committee in an Awardagreement: (i) an Option shall vest and become exercisable with respect to25% of the shares of Common Stock subject to such Option on each of the firstfour anniversaries of the Date of Grant; (ii) the unvested portion of anOption shall expire upon termination of employment or service of theParticipant granted the Option, and the vested portion of such Option shallremain exercisable for (A) one year following termination of employment orservice by reason of such Participant’s death or disability (as determined bythe Committee), but not later than the expiration of the Option Period or(B) 90 days following termination of employment or service for any reasonother than such Participant’s death or disability, and other than suchParticipant’s termination of employment or

 

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service for Cause, but not later than the expiration of the OptionPeriod; and (iii) both the unvested and the vested portion of an Optionshall expire upon the termination of the Participant’s employment or service bythe Company for Cause.

 

(d) ***Method of Exercise and Form of Payment***. No shares ofCommon Stock shall be delivered pursuant to any exercise of an Option untilpayment in full of the Exercise Price therefor is received by the Company andthe Participant has paid to the Company an amount equal to any federal, state,local and non-U.S. income and employment taxes required to be withheld. Optionsthat have become exercisable may be exercised by delivery of written orelectronic notice of exercise to the Company in accordance with the terms ofthe Option accompanied by payment of the Exercise Price. The Exercise Price shallbe payable (i) in cash, check, cash equivalent and/or shares of CommonStock valued at the Fair Market Value at the time the Option is exercised(including, pursuant to procedures approved by the Committee, by means ofattestation of ownership of a sufficient number of shares of Common Stock inlieu of actual delivery of such shares to the Company); *provided*, that such shares of Common Stockare Mature Shares; (ii) by such other method as the Committee may permitin its sole discretion, including without limitation: (A) in otherproperty having a fair market value on the date of exercise equal to theExercise Price or (B) if there is a public market for the shares of CommonStock at such time, by means of a broker-assisted “cashless exercise” pursuantto which the Company is delivered a copy of irrevocable instructions to astockbroker to sell the shares of Common Stock otherwise deliverable upon theexercise of the Option and to deliver promptly to the Company an amount equalto the Exercise Price or (C) by a “net exercise” method whereby theCompany withholds from the delivery of the shares of Common Stock for which theOption was exercised that number of shares of Common Stock having a Fair MarketValue equal to the aggregate Exercise Price for the shares of Common Stock forwhich the Option was exercised. Any fractional shares of Common Stock shall besettled in cash.

 

(e) ***Notification upon Disqualifying Disposition of an Incentive StockOption***. Each Participant awarded an Incentive Stock Option underthe Plan shall notify the Company in writing immediately after the date hemakes a disqualifying disposition of any Common Stock acquired pursuant to theexercise of such Incentive Stock Option. A disqualifying disposition is anydisposition (including, without limitation, any sale) of such Common Stockbefore the later of (A) two years after the Date of Grant of the IncentiveStock Option or (B) one year after the date of exercise of the IncentiveStock Option. The Company may, if determined by the Committee and in accordancewith procedures established by the Committee, retain possession of any CommonStock acquired pursuant to the exercise of an Incentive Stock Option as agentfor the applicable Participant until the end of the period described in thepreceding sentence.

 

(f) ***Compliance With Laws, etc***. Notwithstanding theforegoing, in no event shall a Participant be permitted to exercise an Optionin a manner that the Committee determines would violate the Sarbanes-Oxley Actof 2002, or any other applicable law or the applicable rules and regulations ofthe Securities and Exchange Commission or the applicable rules and regulationsof any securities exchange or inter-dealer quotation system on which thesecurities of the Company are listed or traded.

 

8.*Stock Appreciation Rights*.(a) *Generally*. Each SARgranted under the Plan shall be evidenced by an Award agreement (whether inpaper or electronic medium (including email or the posting on a web sitemaintained by the Company or a third party under contract with the Company)).Each SAR so granted shall be subject to the conditions set forth in thisSection 8, and to such other conditions not inconsistent with the Plan asmay be reflected in the applicable Award agreement. Any Option granted underthe Plan may include tandem SARs. The Committee also may award SARs to EligiblePersons independent of any Option.

 

(b) ***Vesting and Expiration***. A SAR granted in connection withan Option shall become exercisable and shall expire according to the samevesting schedule and expiration provisions as the corresponding Option. A SARgranted independent of an Option shall vest and become exercisable and shallexpire in such manner and on such date or dates determined by the Committee andshall expire after such period, not to exceed ten years, as may be determinedby the Committee (the “**SAR Period**”);provided, however, that notwithstanding any vesting dates set by the Committee,the Committee may, in its sole discretion,

 

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accelerate the exercisability of any SAR, which acceleration shall notaffect the terms and conditions of such SAR other than with respect toexercisability. Unless otherwise provided by the Committee in an Awardagreement: (i) a SAR shall vest and become exercisable with respect to 25%of the shares of Common Stock subject to such SAR on each of the first fouranniversaries of the Date of Grant; (ii) the unvested portion of a SARshall expire upon termination of employment or service of the Participant grantedthe SAR, and the vested portion of such SAR shall remain exercisable for(A) one year following termination of employment or service by reason ofsuch Participant’s death or disability (as determined by the Committee), butnot later than the expiration of the SAR Period or (B) 90 days followingtermination of employment or service for any reason other than such Participant’sdeath or disability, and other than such Participant’s termination ofemployment or service for Cause, but not later than the expiration of the SARPeriod; and (iii) both the unvested and the vested portion of a SAR shallexpire upon the termination of the Participant’s employment or service by theCompany for Cause.

 

(c) ***Method of Exercise***. SARs that have become exercisablemay be exercised by delivery of written or electronic notice of exercise to theCompany in accordance with the terms of the Award, specifying the number ofSARs to be exercised and the date on which such SARs were awarded.Notwithstanding the foregoing, if on the last day of the Option Period (or inthe case of a SAR independent of an option, the SAR Period), the Fair MarketValue exceeds the Strike Price, the Participant has not exercised the SAR orthe corresponding Option (if applicable), and neither the SAR nor the correspondingOption (if applicable) has expired, such SAR shall be deemed to have beenexercised by the Participant on such last day and the Company shall make theappropriate payment therefor.

 

(d) ***Payment***. Upon the exercise of a SAR, the Company shallpay to the Participant an amount equal to the number of shares subject to theSAR that are being exercised multiplied by the excess, if any, of the FairMarket Value of one share of Common Stock on the exercise date over the StrikePrice, less an amount equal to any federal, state, local and non-U.S. incomeand employment taxes required to be withheld. The Company shall pay such amountin cash, in shares of Common Stock valued at Fair Market Value, or anycombination thereof, as determined by the Committee. Any fractional shares ofCommon Stock shall be settled in cash.

 

9.*Restricted Stock and Restricted Stock Units*.(a) *Generally*. Each grant ofRestricted Stock and Restricted Stock Units shall be evidenced by an Awardagreement (whether in paper or electronic medium (including email or theposting on a web site maintained by the Company or a third party under contractwith the Company)). Each such grant shall be subject to the conditions setforth in this Section 9, and to such other conditions not inconsistentwith the Plan as may be reflected in the applicable Award agreement.

 

(b) ***Stock Certificates; Escrow or Similar Arrangement***. Uponthe grant of Restricted Stock, the Committee shall cause a stock certificateregistered in the name of the Participant to be issued and, if the Committeedetermines that the Restricted Stock shall be held by the Company or in escrowrather than delivered to the Participant pending the release of the applicablerestrictions, the Committee may require the Participant to additionally executeand deliver to the Company (i) an escrow agreement satisfactory to theCommittee, if applicable, and (ii) the appropriate stock power (endorsedin blank) with respect to the Restricted Stock covered by such agreement. If aParticipant shall fail to execute an agreement evidencing an Award ofRestricted Stock and, if applicable, an escrow agreement and blank stock powerwithin the amount of time specified by the Committee, the Award shall be nulland void. Subject to the restrictions set forth in this Section 9 andSection 11 and the applicable Award agreement, the Participant generallyshall have the rights and privileges of a stockholder as to such RestrictedStock, including without limitation the right to vote such Restricted Stock. Tothe extent shares of Restricted Stock are forfeited, any stock certificatesissued to the Participant evidencing such shares shall be returned to theCompany, and all rights of the Participant to such shares and as a stockholderwith respect thereto shall terminate without further obligation on the part ofthe Company.

 

(c) ***Vesting; Acceleration of Lapse of Restrictions***. Exceptas provided below: (i) the Restricted Period shall lapse no more quicklythan ratably over the three years following the Date of Grant; and(ii) the

 

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unvested portion of Restricted Stock and Restricted Stock Units shallterminate and be forfeited upon termination of employment or service of theParticipant granted the applicable Award; *provided*,*however*, that Awards ofRestricted Stock and Restricted Stock Units provided to an Eligible Director,an Eligible Person identified in Section 2(p)(iii) or as Substitute Awardsshall not be subject to clause (i) hereof. The Committee may not use its discretionto accelerate the lapse of restrictions for Restricted Stock and RestrictedStock Units, except upon the death, disability (as defined in CodeSection 22(e)), Change in Control, or retirement after age 62 of theParticipant *provided*, that accelerationshall not affect any other terms and conditions of such Awards.

 

(d) ***Delivery of Restricted Stock and Settlement of Restricted Stock Units***.(i) Upon the expiration of the Restricted Period with respect to anyshares of Restricted Stock, the restrictions set forth in the applicable Awardagreement shall be of no further force or effect with respect to such shares,except as set forth in the applicable Award agreement. If an escrow arrangementis used, upon such expiration, the Company shall deliver to the Participant, orhis beneficiary, without charge, the stock certificate evidencing the shares ofRestricted Stock that have not then been forfeited and with respect to whichthe Restricted Period has expired (rounded down to the nearest full share). Dividends,if any, that may have been withheld by the Committee and attributable to anyparticular share of Restricted Stock shall be distributed to the Participant incash or, at the sole discretion of the Committee, in shares of Common Stockhaving a Fair Market Value equal to the amount of such dividends, upon therelease of restrictions on such share and, if such share is forfeited, theParticipant shall have no right to such dividends.

 

(ii) Unless otherwise provided by the Committee inan Award agreement, upon the expiration of the Restricted Period with respectto any outstanding Restricted Stock Units, the Company shall deliver to theParticipant, or his beneficiary, without charge, one share of Common Stock foreach such outstanding Restricted Stock Unit; *provided*,*however*, that the Committee may,in its sole discretion, elect to (i) pay cash or part cash and part CommonStock in lieu of delivering only shares of Common Stock in respect of suchRestricted Stock Units or (ii) defer the delivery of Common Stock (or cashor part Common Stock and part cash, as the case may be) beyond the expirationof the Restricted Period. If a cash payment is made in lieu of deliveringshares of Common Stock, the amount of such payment shall be equal to the FairMarket Value of the Common Stock as of the date on which the Restricted Periodlapsed with respect to such Restricted Stock Units, less an amount equal to anyfederal, state, local and non-U.S. income and employment taxes required to bewithheld.

 

(e) ***Legends on Restricted Stock***. Each certificaterepresenting Restricted Stock awarded under the Plan shall bear a legendsubstantially in the form of the following in addition to any other informationthe Company deems appropriate until the lapse of all restrictions with respectto such Common Stock:

 

TRANSFEROF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TOTHE TERMS OF THE UAP HOLDING CORP. 2007 LONG-TERM INCENTIVE PLAN AND ARESTRICTED STOCK AWARD AGREEMENT, BETWEEN UAP HOLDING CORP. AND PARTICIPANT. ACOPY OF SUCH PLAN AND AWARD AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVEOFFICES OF UAP HOLDING CORP.

 

10.*Stock Bonus Awards*. The Committeemay issue unrestricted Common Stock, or other Awards denominated in CommonStock, under the Plan to Eligible Persons in such amounts as the Committeeshall from time to time in its sole discretion determine; *provided*, that if the Eligible Person isnot an Eligible Director or an Eligible Person identified inSection 2(p)(iii) or such Award is a Substitute Award, then such EligiblePerson must pay an amount equal to the aggregate Fair Market Value of theshares of Common Stock subject to such Award. Each Stock Bonus Award grantedunder the Plan shall be evidenced by an Award agreement (whether in paper orelectronic medium (including email or the posting on a web site maintained bythe Company or a third party under contract with the Company)). Each StockBonus Award so granted shall be subject to such conditions not inconsistentwith the Plan as may be reflected in the applicable Award agreement.

 

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11.D*ividends and Dividend Equivalents.*Exceptas otherwise may be provided in the Plan or by the Committee in an Awardagreement, no Participant shall be entitled to dividends paid on shares ofCommon Stock subject to an Award (except for a Stock Bonus Award that is notsubject to any vesting conditions and is settled in shares of Common stock atthe Date of Grant. Notwithstanding the above, the Committee may provide aParticipant with dividend rights or Dividend Equivalent Rights, payable incash, shares of Common Stock, or other property, on a current or deferredbasis, on such terms and conditions as may be determined by the Committee inits sole discretion, including without limitation, payment directly to theParticipant, withholding of such amounts by the Company subject to vesting ofthe Award or reinvestment in additional shares of Common Stock, RestrictedStock or other Awards. The Committee can award a dividend right or DividendEquivalent Right, either alone or in tandem with other Awards (includingOptions and SARs). The Committee may impose such restrictions and conditions onany dividend right or Dividend Equivalent Right as it, in its sole discretion,may determine, including, without limitation, setting a date or dates forpayments due thereunder and the date that any such dividend right or DividendEquivalent Right will terminate.

 

12.*Performance Compensation Awards*.(a) *Generally*. The Committeeshall have the authority, at the time of grant of any Award described inSections 7 through 11 of the Plan, to designate such Award as aPerformance Compensation Award intended to qualify as “performance-basedcompensation” under Section 162(m) of the Code. The Committee shall havethe authority to make an award of a cash bonus to any Participant and designatesuch Award as a Performance Compensation Award intended to qualify as “performance-basedcompensation” under Section 162(m) of the Code.

 

(b) ***Discretion of Committee with Respect to Performance Compensation Awards***.With regard to a particular Performance Period, the Committee shall have solediscretion to select the length of such Performance Period, the type(s) ofPerformance Compensation Awards to be issued, the Performance Criteria thatwill be used to establish the Performance Goal(s), the kind(s) and/orlevel(s) of the Performance Goals(s) that is (are) to apply and the PerformanceFormula. Within the first 90 days of a Performance Period (or, if longer orshorter, within the maximum period allowed under Section 162(m) of the Code),the Committee shall, with regard to the Performance Compensation Awards to beissued for such Performance Period, exercise its discretion with respect toeach of the matters enumerated in the immediately preceding sentence and recordthe same in writing.

 

(c) ***Performance Criteria***. The Performance Criteria that willbe used to establish the Performance Goal(s) shall be based on the attainmentof specific levels of performance of the Company (and/or one or moreAffiliates, divisions or operational units, or any combination of theforegoing) and shall include the following: (i) net earnings or net income(before or after taxes); (ii) basic or diluted earnings per share (beforeor after taxes); (iii) net revenue or revenue growth; (iv) grossprofit or gross profit growth; (v) operating profit (before or aftertaxes); (vi) return measures (including, but not limited to, return onassets, capital, invested capital, equity, or sales); (vii) cash flow(including, but not limited to, operating cash flow, free cash flow, and cashflow return on capital); (viii) earnings before or after taxes, interest,depreciation and/or amortization; (ix) gross or operating margins;(x) productivity ratios; (xi) share price (including, but not limitedto, growth measures and total stockholder return); (xii) expense targets;(xiii) margins; (xiv) operating efficiency; (xv) objectivemeasures of customer satisfaction; (xvi) working capital targets; (xvii) measuresof economic value added; (xviii) inventory control; (xix) enterprisevalue; (xx) sales; (xxi) debt levels and net debt; (xxii) timelylaunch of new facilities; (xxiii) client retention; (xxiv) employeeretention; (xxv) timely completion of new product rollouts; and(xxvi) objective measures of personal targets, goals or completion ofprojects. Any one or more of the Performance Criteria may be used on anabsolute or relative basis to measure the performance of the Company and/or oneor more Affiliates as a whole or any business unit(s) of the Company and/or oneor more Affiliates or any combination thereof, as the Committee may deemappropriate, or any of the above Performance Criteria may be compared to theperformance of a selected group of comparison companies, or a published orspecial index that the Committee, in its sole discretion, deems appropriate, oras compared to various stock market indices. The Committee also has theauthority to provide for accelerated vesting of any Award based on theachievement of Performance Goals pursuant to the Performance Criteria specifiedin this paragraph,

 

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except in no event shall Performance Compensation Awards that may besettled in Common Stock (including, without limitation, any Restricted Stock orRestricted Stock Units that are subject to performance-based vesting) beaccelerated by the Committee unless at least one year has elapsed since grant(except in the event of death, disability, Change in Control or retirementafter age 62). To the extent required under Section 162(m) of the Code,the Committee shall, within the first 90 days of a Performance Period (or, iflonger or shorter, within the maximum period allowed under Section 162(m) ofthe Code), define in an objective fashion the manner of calculating thePerformance Criteria it selects to use for such Performance Period andthereafter promptly communicate such Performance Criteria to the Participant.

 

(d) ***Modification of Performance Goal(s)***. In the event thatapplicable tax and/or securities laws change to permit Committee discretion toalter the governing Performance Criteria without obtaining stockholder approvalof such alterations, the Committee shall have sole discretion to make such alterationswithout obtaining stockholder approval. The Committee is authorized at any timeduring the first 90 days of a Performance Period (or, if longer or shorter,within the maximum period allowed under Section 162(m) of the Code), or atany time thereafter to the extent the exercise of such authority at such timewould not cause the Performance Compensation Awards granted to any Participantfor such Performance Period to fail to qualify as “performance-basedcompensation” under Section 162(m) of the Code, in its sole discretion, toadjust or modify the calculation of a Performance Goal for such PerformancePeriod, based on and in order to appropriately reflect the following events:(i) asset write-downs; (ii) litigation or claim judgments or settlements;(iii) the effect of changes in tax laws, accounting principles, or otherlaws or regulatory rules affecting reported results; (iv) anyreorganization and restructuring programs; (v) extraordinary nonrecurringitems as described in Accounting Principles Board Opinion No. 30 (or anysuccessor pronouncement thereto) and/or in management’s discussion and analysisof financial condition and results of operations appearing in the Company’sannual report to stockholders for the applicable year; (vi) acquisitionsor divestitures; (vii) any other specific unusual or nonrecurring events,or objectively determinable category thereof; (viii) foreign exchangegains and losses; and (ix) a change in the Company’s fiscal year.

 

(e) ***Payment of Performance Compensation Awards***. (i) *Condition to Receipt of Payment*. Unlessotherwise provided in the applicable Award agreement, a Participant must beemployed by the Company on the last day of a Performance Period to be eligiblefor payment in respect of a Performance Compensation Award for such PerformancePeriod.

 

(ii) ***Limitation***. A Participant shall be eligible to receivepayment in respect of a Performance Compensation Award only to the extent that:(A) the Performance Goals for such period are achieved; and (B) allor some of the portion of such Participant’s Performance Compensation Award hasbeen earned for the Performance Period based on the application of thePerformance Formula to such achieved Performance Goals.

 

(iii) ***Certification***. Following the completion of aPerformance Period, the Committee shall review and certify in writing whether,and to what extent, the Performance Goals for the Performance Period have beenachieved and, if so, calculate and certify in writing that amount of thePerformance Compensation Awards earned for the period based upon thePerformance Formula. The Committee shall then determine the amount of eachParticipant’s Performance Compensation Award actually payable for thePerformance Period and, in so doing, may apply Negative Discretion.

 

(iv) ***Use of Negative Discretion***. In determining the actualamount of an individual Participant’s Performance Compensation Award for aPerformance Period, the Committee may reduce or eliminate the amount of thePerformance Compensation Award earned under the Performance Formula in thePerformance Period through the use of Negative Discretion if, in its solejudgment, such reduction or elimination is appropriate. The Committee shall nothave the discretion to (A) grant or provide payment in respect ofPerformance Compensation Awards for a Performance Period if the PerformanceGoals for such Performance Period have not been attained; or (B) increasea Performance Compensation Award above the applicable limitations set forth inSection 5 of the Plan.

 

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(f) ***Timing of Award Payments***. Performance CompensationAwards granted for a Performance Period shall be paid to Participants as soonas administratively practicable following completion of the certificationsrequired by this Section 12, but in no event later than two-and-one-halfmonths following the end of the fiscal year during which the Performance Periodis completed.

 

13.*Changes in Capital Structure and SimilarEvents*. In the event of (a) any dividend or other distribution(whether in the form of cash, shares of Common Stock, other securities or otherproperty), recapitalization, stock split, reverse stock split, reorganization,merger, consolidation, split-up, split-off, combination, repurchase or exchangeof shares of Common Stock or other securities of the Company, issuance ofwarrants or other rights to acquire shares of Common Stock or other securitiesof the Company, or other similar corporate transaction or event (including,without limitation, a Change in Control) that affects the shares of CommonStock, or (b) unusual or nonrecurring events (including, withoutlimitation, a Change in Control) affecting the Company, any Affiliate, or thefinancial statements of the Company or any Affiliate, or changes in applicablerules, rulings, regulations or other requirements of any governmental body orsecurities exchange or inter-dealer quotation system, accounting principles orlaw, such that in either case an adjustment is determined by the Committee inits sole discretion to be necessary or appropriate, then the Committee shallmake any such adjustments in such manner as it may deem equitable, includingwithout limitation any or all of the following:

 

(i) adjusting any or all of (A) the number ofshares of Common Stock or other securities of the Company (or number and kindof other securities or other property) that may be delivered in respect ofAwards or with respect to which Awards may be granted under the Plan(including, without limitation, adjusting any or all of the limitations underSection 5 of the Plan) and (B) the terms of any outstanding Award,including, without limitation, (1) the number of shares of Common Stock orother securities of the Company (or number and kind of other securities orother property) subject to outstanding Awards or to which outstanding Awardsrelate, (2) the Exercise Price or Strike Price with respect to any Awardor (3) any applicable performance measures (including, without limitation,Performance Criteria and Performance Goals);

 

(ii) providing for a substitution or assumption ofAwards, accelerating the exercisability of, lapse of restrictions on, ortermination of, Awards or providing for a period of time for exercise prior tothe occurrence of such event; and

 

(iii) cancelling any one or more outstanding Awardsand causing to be paid to the holders thereof, in cash, shares of Common Stock,other securities or other property, or any combination thereof, the value ofsuch Awards, if any, as determined by the Committee (which if applicable may bebased upon the price per share of Common Stock received or to be received byother stockholders of the Company in such event), including without limitation,in the case of an outstanding Option or SAR, a cash payment in an amount equalto the excess, if any, of the Fair Market Value (as of a date specified by theCommittee) of the shares of Common Stock subject to such Option or SAR over theaggregate Exercise Price or Strike Price of such Option or SAR, respectively(it being understood that, in such event, any Option or SAR having a per shareExercise Price or Strike Price equal to, or in excess of, the Fair Market Valueof a share of Common Stock subject thereto may be canceled and terminatedwithout any payment or consideration therefor);

 

*provided*, *however*, that in thecase of any “equity restructuring” (within the meaning of the FinancialAccounting Standards Board Statement of Financial Accounting StandardsNo. 123 (revised 2004)), the Committee shall make an equitable orproportionate adjustment to outstanding Awards to reflect such equityrestructuring. Any adjustment in Incentive Stock Options under thisSection 13 (other than any cancellation of Incentive Stock Options) shallbe made only to the extent not constituting a “modification” within the meaningof Section 424(h)(3) of the Code, and any adjustments under thisSection 13 shall be made in a manner that does not adversely affect theexemption provided pursuant to Rule 16b-3 under the Exchange Act. The Companyshall give each Participant notice of an adjustment hereunder and, upon notice,such adjustment shall be conclusive and binding for all purposes.

 

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14.*Amendments and Termination*.(a) *Amendment and Termination of thePlan*. The Board may amend, alter, suspend, discontinue, or terminatethe Plan or any portion thereof at any time; *provided*,that (i) no amendment to Section 12(c) or Section 14(b) (to theextent required by the proviso in such Section 14(b)) shall be madewithout stockholder approval and (ii) no such amendment, alteration,suspension, discontinuation or termination shall be made without stockholderapproval if such approval is necessary to comply with any tax or regulatoryrequirement applicable to the Plan (including, without limitation, as necessaryto comply with any rules or requirements of any securities exchange orinter-dealer quotation system on which the shares of Common Stock may be listedor quoted or to prevent the Company from being denied a tax deduction under Section 162(m)of the Code); *provided*, *further*, that any such amendment,alteration, suspension, discontinuance or termination that would materially andadversely affect the rights of any Participant or any holder or beneficiary ofany Award theretofore granted shall not to that extent be effective without theconsent of the affected Participant, holder or beneficiary.

 

(b) ***Amendment of Award Agreements***. The Committee may, to theextent consistent with the terms of any applicable Award agreement, waive any conditionsor rights under, amend any terms of, or alter, suspend, discontinue, cancel orterminate, any Award theretofore granted or the associated Award agreement,prospectively or retroactively; *provided*that any such waiver, amendment, alteration, suspension, discontinuance,cancellation or termination that would materially and adversely affect therights of any Participant with respect to any Award theretofore granted shallnot to that extent be effective without the consent of the affected Participant;*provided*, *further*, that without stockholderapproval, except as otherwise permitted under Section 13 of the Plan,(i) no amendment or modification may reduce the Exercise Price of anyOption or the Strike Price of any SAR, (ii) the Committee may not cancelany outstanding Option or SAR and replace it with a new Option or SAR, anotherAward or cash and (iii) the Committee may not take any other action thatis considered a “repricing” for purposes of the stockholder approval rules ofthe applicable securities exchange or inter-dealer quotation system on whichthe Common Stock is listed or quoted.

 

15.*General*. (a) *Award Agreements*. Each Award under thePlan shall be evidenced by an Award agreement, which shall be delivered to theParticipant (whether in paper or electronic medium (including email or theposting on a web site maintained by the Company or a third party under contractwith the Company)) and shall specify the terms and conditions of the Award anyrules applicable thereto, including without limitation, the effect on suchAward of the death, disability or termination of employment or service of aParticipant, or of such other events as may be determined by the Committee.

 

(b) ***Nontransferability***. (i) Each Award shall beexercisable only by a Participant during the Participant’s lifetime, or, ifpermissible under applicable law, by the Participant’s legal guardian orrepresentative. No Award may be assigned, alienated, pledged, attached, sold orotherwise transferred or encumbered by a Participant other than by will or bythe laws of descent and distribution and any such purported assignment,alienation, pledge, attachment, sale, transfer or encumbrance shall be void andunenforceable against the Company or an Affiliate; provided that thedesignation of a beneficiary shall not constitute an assignment, alienation,pledge, attachment, sale, transfer or encumbrance.

 

(ii) Notwithstanding the foregoing, the Committeemay, in its sole discretion, permit Awards (other than Incentive Stock Options)to be transferred by a Participant, without consideration, subject to suchrules as the Committee may adopt consistent with any applicable Award agreementto preserve the purposes of the Plan, to: (A) any person who is a “familymember” of the Participant, as such term is used in the instructions to FormS-8 under the Securities Act (collectively, the “**Immediate Family Members**”); (B) a trust solely for thebenefit of the Participant and his or her Immediate Family Members; or(C) a partnership or limited liability company whose only partners orstockholders are the Participant and his or her Immediate Family Members; (eachtransferee described in clauses (A), (B) and (C) above is hereinafterreferred to as a “**Permitted Transferee**”);*provided*, that the Participantgives the Committee advance written notice describing the terms and conditionsof the proposed transfer and the Committee notifies the Participant in writingthat such a transfer would comply with the requirements of the Plan.

 

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(iii) The terms of any Award transferred inaccordance with the immediately preceding sentence shall apply to the PermittedTransferee and any reference in the Plan, or in any applicable Award agreement,to a Participant shall be deemed to refer to the Permitted Transferee, exceptthat (A) Permitted Transferees shall not be entitled to transfer anyAward, other than by will or the laws of descent and distribution;(B) Permitted Transferees shall not be entitled to exercise anytransferred Option unless there shall be in effect a registration statement onan appropriate form covering the shares of Common Stock to be acquired pursuantto the exercise of such Option if the Committee determines, consistent with anyapplicable Award agreement, that such a registration statement is necessary orappropriate; (C) the Committee or the Company shall not be required toprovide any notice to a Permitted Transferee, whether or not such notice is orwould otherwise have been required to be given to the Participant under thePlan or otherwise; and (D) the consequences of the termination of theParticipant’s employment by, or services to, the Company or an Affiliate underthe terms of the Plan and the applicable Award agreement shall continue to beapplied with respect to the Participant, including, without limitation, that anOption shall be exercisable by the Permitted Transferee only to the extent, andfor the periods, specified in the Plan and the applicable Award agreement.

 

(c) ***Tax Withholding***. (i) A Participant shall berequired to pay to the Company or any Affiliate, and the Company or anyAffiliate shall have the right and is hereby authorized to withhold, from anycash, shares of Common Stock, other securities or other property deliverableunder any Award or from any compensation or other amounts owing to aParticipant, the amount (in cash, Common Stock, other securities or otherproperty) of any required withholding taxes in respect of an Award, itsexercise, or any payment or transfer under an Award or under the Plan and totake such other action as may be necessary in the opinion of the Committee orthe Company to satisfy all obligations for the payment of such withholding andtaxes.

 

(ii) Without limiting the generality of clause(i) above, the Committee may, in its sole discretion, permit a Participantto satisfy, in whole or in part, the foregoing withholding liability by(A) the delivery of shares of Common Stock (which are not subject to anypledge or other security interest and are Mature Shares) owned by theParticipant having a Fair Market Value equal to such withholding liability or(B) having the Company withhold from the number of shares of Common Stockotherwise issuable or deliverable pursuant to the exercise or settlement of theAward a number of shares with a Fair Market Value equal to such withholdingliability (but no more than the minimum required statutory withholdingliability).

 

(d) ***No Claim to Awards; No Rights to Continued Employment; Waiver***.No employee of the Company or an Affiliate, or other person, shall have anyclaim or right to be granted an Award under the Plan or, having been selectedfor the grant of an Award, to be selected for a grant of any other Award. Thereis no obligation for uniformity of treatment of Participants or holders orbeneficiaries of Awards. The terms and conditions of Awards and the Committee’sdeterminations and interpretations with respect thereto need not be the samewith respect to each Participant and may be made selectively amongParticipants, whether or not such Participants are similarly situated. Neitherthe Plan nor any action taken hereunder shall be construed as giving anyParticipant any right to be retained in the employ or service of the Company oran Affiliate, nor shall it be construed as giving any Participant any rights tocontinued service on the Board. The Company or any of its Affiliates may at anytime dismiss a Participant from employment or discontinue any consultingrelationship, free from any liability or any claim under the Plan, unlessotherwise expressly provided in the Plan or any Award agreement. By acceptingan Award under the Plan, a Participant shall thereby be deemed to have waivedany claim to continued exercise or vesting of an Award or to damages orseverance entitlement related to non-continuation of the Award beyond theperiod provided under the Plan or any Award agreement, notwithstanding anyprovision to the contrary in any written employment contract or other agreementbetween the Company and its Affiliates and the Participant, whether any suchagreement is executed before, on or after the Date of Grant.

 

(e) ***International Participants***. With respect to Participantswho reside or work outside of the United States of America and who are not (andwho are not expect to be) “covered employees” within the meaning ofSection 162(m) of the Code, the Committee may in its sole discretion amendthe terms of the Plan or

 

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outstanding Awards with respect to such Participants in order toconform such terms with the requirements of local law or to obtain morefavorable tax or other treatment for a Participant, the Company or itsAffiliates.

 

(f) ***Designation and Change of Beneficiary***. Each Participantmay file with the Committee a written designation of one or more persons as thebeneficiary(ies) who shall be entitled to receive the amounts payable withrespect to an Award, if any, due under the Plan upon his death. A Participantmay, from time to time, revoke or change his beneficiary designation withoutthe consent of any prior beneficiary by filing a new designation with theCommittee. The last such designation received by the Committee shall becontrolling; *provided*, *however*, that no designation, or change orrevocation thereof, shall be effective unless received by the Committee priorto the Participant’s death, and in no event shall it be effective as of a dateprior to such receipt. If no beneficiary designation is filed by a Participant,the beneficiary shall be deemed to be his or her spouse or, if the Participantis unmarried at the time of death, his or her estate.

 

(g) ***Termination of Employment***. Unless determined otherwiseby the Committee at any point following such event: (i) neither atemporary absence from employment or service due to illness, vacation or leaveof absence nor a transfer from employment or service with the Company toemployment or service with an Affiliate (or vice-versa) shall be considered atermination of employment or service with the Company or an Affiliate; and(ii) if a Participant’s employment with the Company and its Affiliatesterminates, but such Participant continues to provide services to the Companyand its Affiliates in a non-employee capacity (or vice-versa), such change instatus shall not be considered a termination of employment or service with theCompany or an Affiliate.

 

(h) ***No Rights as a Stockholder***. Except as otherwisespecifically provided in the Plan or any Award agreement, no person shall beentitled to the privileges of ownership in respect of shares of Common Stockthat are subject to Awards hereunder until such shares have been issued ordelivered to that person.

 

(i) ***Government and Other Regulations***. (i) Theobligation of the Company to settle Awards in Common Stock or other considerationshall be subject to all applicable laws, rules, and regulations, and to suchapprovals by governmental agencies as may be required. Notwithstanding anyterms or conditions of any Award to the contrary, the Company shall be under noobligation to offer to sell or to sell, and shall be prohibited from offeringto sell or selling, any shares of Common Stock pursuant to an Award unless suchshares have been properly registered for sale pursuant to the Securities Actwith the Securities and Exchange Commission or unless the Company has receivedan opinion of counsel, satisfactory to the Company, that such shares may beoffered or sold without such registration pursuant to an available exemptiontherefrom and the terms and conditions of such exemption have been fullycomplied with. The Company shall be under no obligation to register for saleunder the Securities Act any of the shares of Common Stock to be offered orsold under the Plan. The Committee shall have the authority to provide that allcertificates for shares of Common Stock or other securities of the Company orany Affiliate delivered under the Plan shall be subject to such stop transferorders and other restrictions as the Committee may deem advisable under thePlan, the applicable Award agreement, the federal securities laws, or therules, regulations and other requirements of the Securities and ExchangeCommission, any securities exchange or inter-dealer quotation system upon whichsuch shares or other securities are then listed or quoted and any otherapplicable federal, state, local or non-U.S. laws, and, without limiting thegenerality of Section 9 of the Plan, the Committee may cause a legend orlegends to be put on any such certificates to make appropriate reference tosuch restrictions. Notwithstanding any provision in the Plan to the contrary,the Committee reserves the right to add any additional terms or provisions toany Award granted under the Plan that it in its sole discretion deems necessaryor advisable in order that such Award complies with the legal requirements ofany governmental entity to whose jurisdiction the Award is subject.

 

(ii) The Committee may cancel an Award or anyportion thereof if it determines, in its sole discretion, that legal orcontractual restrictions and/or blockage and/or other market considerationswould make the Company’s acquisition of shares of Common Stock from the publicmarkets, the Company’s issuance of Common Stock to the Participant, theParticipant’s acquisition of Common

 

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Stock from the Company and/or the Participant’s sale of Common Stock tothe public markets, illegal, impracticable or inadvisable. If the Committeedetermines to cancel all or any portion of an Award in accordance with the foregoing,the Company shall pay to the Participant an amount equal to the excess of(A) the aggregate Fair Market Value of the shares of Common Stock subjectto such Award or portion thereof canceled (determined as of the applicableexercise date, or the date that the shares would have been vested or delivered,as applicable), over (B) the aggregate Exercise Price or Strike Price (inthe case of an Option or SAR, respectively) or any amount payable as acondition of delivery of shares of Common Stock (in the case of any otherAward). Such amount shall be delivered to the Participant as soon aspracticable following the cancellation of such Award or portion thereof.

 

(j) ***Payments to Persons Other Than Participants***. If theCommittee shall find that any person to whom any amount is payable under thePlan is unable to care for his affairs because of illness or accident, or is aminor, or has died, then any payment due to such person or his estate (unless aprior claim therefor has been made by a duly appointed legal representative)may, if the Committee so directs the Company, be paid to his spouse, child,relative, an institution maintaining or having custody of such person, or anyother person deemed by the Committee to be a proper recipient on behalf of suchperson otherwise entitled to payment. Any such payment shall be a completedischarge of the liability of the Committee and the Company therefor.

 

(k) ***Nonexclusivity of the Plan***. Neither the adoption of thisPlan by the Board nor the submission of this Plan to the stockholders of theCompany for approval shall be construed as creating any limitations on thepower of the Board to adopt such other incentive arrangements as it may deemdesirable, including, without limitation, the granting of stock options otherwisethan under this Plan, and such arrangements may be either applicable generallyor only in specific cases.

 

(l) ***No Trust or Fund Created***. Neither the Plan nor any Awardshall create or be construed to create a trust or separate fund of any kind ora fiduciary relationship between the Company or any Affiliate, on the one hand,and a Participant or other person or entity, on the other hand. No provision ofthe Plan or any Award shall require the Company, for the purpose of satisfyingany obligations under the Plan, to purchase assets or place any assets in atrust or other entity to which contributions are made or otherwise to segregateany assets, nor shall the Company maintain separate bank accounts, books,records or other evidence of the existence of a segregated or separatelymaintained or administered fund for such purposes. Participants shall have norights under the Plan other than as unsecured general creditors of the Company,except that insofar as they may have become entitled to payment of additionalcompensation by performance of services, they shall have the same rights asother employees under general law.

 

(m) ***Reliance on Reports***. Each member of the Committee andeach member of the Board shall be fully justified in acting or failing to act,as the case may be, and shall not be liable for having so acted or failed toact in good faith, in reliance upon any report made by the independent publicaccountant of the Company and its Affiliates and/or any other informationfurnished in connection with the Plan by any agent of the Company or theCommittee or the Board, other than himself.

 

(n) ***Relationship to Other Benefits***. No payment under thePlan shall be taken into account in determining any benefits under any pension,retirement, profit sharing, group insurance or other benefit plan of theCompany except as otherwise specifically provided in such other plan.

 

(o) ***Governing Law***. The Plan shall be governed by andconstrued in accordance with the internal laws of the State of Delawareapplicable to contracts made and performed wholly within the State of Delaware,without giving effect to the conflict of laws provisions thereof.

 

(p) ***Severability***. If any provision of the Plan or any Awardor Award agreement is or becomes or is deemed to be invalid, illegal, orunenforceable in any jurisdiction or as to any person or entity or Award, orwould disqualify the Plan or any Award under any law deemed applicable by theCommittee, such provision shall be construed or deemed amended to conform tothe applicable laws, or if it cannot be construed or deemed amended without, inthe determination of the Committee, materially altering the intent of the Plan

 

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or the Award, such provision shall be construed or deemed stricken asto such jurisdiction, person or entity or Award and the remainder of the Planand any such Award shall remain in full force and effect.

 

(q) ***Obligations Binding on Successors***. The obligations ofthe Company under the Plan shall be binding upon any successor corporation ororganization resulting from the merger, consolidation or other reorganizationof the Company, or upon any successor corporation or organization succeeding tosubstantially all of the assets and business of the Company.

 

(r) ***Code Section 162(m) Re-approval***. If so determinedby the Committee, the provisions of the Plan regarding Performance CompensationAwards shall be submitted for re-approval by the stockholders of the Company nolater than the first stockholder meeting that occurs in the fifth yearfollowing the year in which stockholders previously approved such provisions,in each case for purposes of exempting certain Awards granted after such timefrom the deduction limitations of Section 162(m) of the Code.

 

(s) ***Expenses; Gender; Titles and Headings***. The expenses ofadministering the Plan shall be borne by the Company and its Affiliates.Masculine pronouns and other words of masculine gender shall refer to both menand women. The titles and headings of the sections in the Plan are forconvenience of reference only, and in the event of any conflict, the text ofthe Plan, rather than such titles or headings shall control.

 

(t) ***Other Agreements***. Notwithstanding the above, theCommittee may require, as a condition to the grant of and/or the receipt ofshares of Common Stock under an Award, that the Participant execute lock-up,stockholder or other agreements, as it may determine in its sole and absolutediscretion.

 

(u) ***Payments***. Participants shall be required to pay, to theextent required by applicable law, any amounts required to receive shares ofCommon Stock under any Award made under the Plan.

 

(v) ***Directors Deferred Compensation Plan***. The Company’sDirectors Deferred Compensation Plan shall be a subsidiary plan of the Plan, andany shares awarded thereunder shall be subject to the limitations set forth inSection 5(b) above.

 

*   *   *

 

 

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