exv10w32






Exhibit 10.32




Fortegra Financial Corporation




2010 Omnibus Incentive Plan




Article 1. Establishment & Purpose




     1.1 Establishment. Fortegra Financial Corporation, a Delaware corporation (the
“Company”), hereby establishes the 2010 Omnibus Incentive Plan (the “Plan”) as set
forth herein.



     1.2 Purpose of the Plan. The purpose of this Plan is to attract, retain and motivate
officers, employees, non-employee directors, and other individuals providing services to the
Company and its Subsidiaries and Affiliates and to promote the success of the Company’s business by
providing the Participants with appropriate incentives.



Article 2. Definitions




     Whenever capitalized in the Plan, the following terms shall have the meanings set forth below.



     2.1 “Affiliate” means any entity that the Company, either directly or indirectly, is
in common control with, is controlled by or controls, or any entity that the Company has a
substantial direct or indirect equity interest, as determined by the Board.



     2.2 “Annual Award Limit” shall have the meaning set forth in Section 5.1(b)
hereof.



     2.3 “Award” means any Option, Stock Appreciation Right, Restricted Stock, Other
Stock-Based Award, or Performance-Based Compensation that is granted under the Plan.



     2.4 “Award Agreement” means either (a) a written agreement entered into by the Company
and a Participant setting forth the terms and provisions applicable to an Award granted under this
Plan, or (b) a written statement issued by the Company, a Subsidiary, or Affiliate to a Participant
describing the terms and conditions of the actual grant of such Award.



     2.5 “Board” means the Board of Directors of the Company.



     2.6 “Change of Control” unless otherwise specified in the Award Agreement, means an
event or series of events that results in any of the following:




	 	(a)	 	Change in Ownership of the Company. A change in the ownership
of the Company occurs on the date that any one Person or more than one Person
acting as a group (as determined under Treas. Reg. Section
1.409A-3(i)(5)(v)(B)), other than any Person directly or indirectly owned by
the Company, acquires on an arms length basis ownership of stock of the Company
that, together with stock held by such Person or group, constitutes more than
50% of the total fair market value or total voting power of stock of the
Company. However, if any one Person (or more than one Person acting as a
group) is considered to own more than 50% of the total fair market value or
total voting power of the Company’s stock prior to the acquisition, any
acquisition of additional stock by the same Person or Persons is not considered
to cause a change in the ownership of the Company;




 









 







	 	(b)	 	Change in Board of Directors of the Company. A change in the
effective control of the Company occurs on the date individuals who, as of the
Effective Date, constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board, provided, however,
that if the election, or nomination for election by the Company’s stockholders,
of any new director was approved by a vote of at least a majority of the
Incumbent Board, such new director shall be considered a member of the
Incumbent Board, and provided further that any reductions in the size of the
Board that are instituted voluntarily by the Incumbent Board shall not
constitute a “Change of Control”, and after any such reduction the “Incumbent
Board” shall mean the Board as so reduced; or
	 
	


	 	(c)	 	Change in Ownership of a Substantial Portion of the Company’s
Assets. A change in the ownership of a substantial portion of the Company’s
assets occurs on the date that any one Person, or more than one Person acting
as a group (as determined under Treas. Reg. Section 1.409A-3(i)(5)(v)(B)),
other than any Person directly or indirectly owned by the Company, acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such Person or Persons) assets from the Company that have a
total gross fair market value of more than 50% of the total gross fair market
value of all of the assets of the Company immediately prior to such acquisition
or acquisitions. For this purpose, gross fair market value means the value of
the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such
assets.
	








     2.7 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.



     2.8 “Committee” means the Compensation Committee of the Board or any other committee
designated by the Board to administer this Plan. To the extent applicable, the Committee shall
have at least two members, each of whom shall be (a) a Non-Employee Director, (b) an Outside
Director, and (c) an “independent director” within the meaning of the listing requirements of any
exchange on which the Company is listed.



     2.9 “Covered Employee” means for any Plan Year, a Participant designated by the
Company as a potential “covered employee” as such term is defined in Section 162(m) of the Code.



     2.10 “Director” means a member of the Board who is not an Employee.



     2.11 “Effective Date” means the date set forth in Section 14.14 hereof.



     2.12 “Employee” means an officer or other employee of the Company, a Subsidiary or
Affiliate, including a member of the Board who is an employee of the Company, a Subsidiary or
Affiliate.



     2.13 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.



     2.14 “Fair Market Value” means, as of any date, the per Share value determined as
follows, in accordance with applicable provisions of Section 409A of the Code:















2









 






	 	(a)	 	The closing price of a Share on a recognized national exchange
or any established over-the-counter trading system on which dealings take
place, or if no trades were made on any such day, the immediately preceding day
on which trades were made; or
	 
	 	(b)	 	In the absence of an established market for the Shares of the
type described in (a) above, the per Share Fair Market Value thereof shall be
determined by the Committee in good faith and in accordance with applicable
provisions of Section 409A of the Code.





     2.15 “Incentive Stock Option” means an Option intended to meet the requirements of an
incentive stock option as defined in Section 422 of the Code and designated as an Incentive Stock
Option.



     2.16 “Non-Employee Director” means a person defined in Rule 16b-3(b)(3) promulgated by
the Securities and Exchange Commission under the Exchange Act, or any successor definition adopted
by the Securities and Exchange Commission.



     2.17 “Nonqualified Stock Option” means an Option that is not an Incentive Stock Option.



     2.18
“Other Stock-Based Award” means
any right granted under Article 9 hereof.



     2.19
“Option” means any stock option granted under Article 6 hereof.



     2.20 “Option Price” means the purchase price per Share subject to an Option, as
determined pursuant to Section 6.2 hereof.



     2.21 “Outside Director” means a member of the Board who is an “outside director”
within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder.



     2.22 “Participant” means any eligible person as set forth in Section 4.1
hereof to whom an Award is granted.



     2.23 “Performance-Based Compensation” means compensation under an Award that is
intended to constitute “qualified performance-based compensation” within the meaning of the
regulations promulgated under Section 162(m) of Code or any successor provision.



     2.24 “Performance Measures” means measures as described in Section 10.2 hereof
on which the performance goals are based in order to qualify Awards as Performance-Based
Compensation.



     2.25 “Performance Period” means the period of time during which the performance goals
must be met in order to determine the degree of payout and/or vesting with respect to an Award.



     2.26 “Person” means any natural person, sole proprietorship, general partnership,
limited partnership, limited liability company, joint venture, trust, unincorporated organization,
association, corporation, governmental authority, or any other organization, irrespective of
whether it is a legal entity and includes any successor (by merger or otherwise) of such entity.



     2.27 “Plan Year” means the applicable fiscal year of the Company.



     2.28 “Restricted Stock” means any Award granted under Article 8 hereof.



3









 





     2.29 “Restriction Period” means the period during which Restricted Stock awarded under
Article 8 of the Plan is subject to forfeiture.



     2.30 “Service” means service as an Employee, Director or other individual service
provider to the Company or any Subsidiary or Affiliate.



     2.31 “Share” means a share of common stock of the Company, par value $0.01 per share,
or such other class or kind of shares or other securities resulting from the application of
Article 12 hereof.



     2.32 “Stock Appreciation Right” means any right granted under Article 7
hereof.



     2.33 “Subsidiary” means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company (or any parent of the Company) if each of the
corporations, other than the last corporation in each unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.



     2.34 “Ten Percent Stockholder” means a person who on any given date owns, either
directly or indirectly (taking into account the attribution rules contained in Section 424(d) of
the Code), stock possessing more than ten percent of the total combined voting power of all classes
of stock of the Company or a Subsidiary or Affiliate.



Article 3. Administration




     3.1 Authority of the Committee. The Plan shall be administered by the Committee, which shall
have full power to interpret and administer the Plan and Award Agreements and full authority to
select the Participants to whom Awards will be granted, and to determine the type and amount of
Awards to be granted to each such Participant and the terms and conditions of Awards and Award
Agreements. Without limiting the generality of the foregoing, the Committee may, in its sole
discretion, but subject to the limitations in Article 11, Section 6.5 and
Section 10.6 hereof, clarify, construe or resolve any ambiguity in any provision of the
Plan or any Award Agreement, extend the term or period of exercisability of any Awards, or waive
any terms or conditions applicable to any Award. Awards may, in the discretion of the Committee,
be made under the Plan in assumption of, or in substitution for, outstanding awards previously
granted by the Company or any of its Subsidiaries or Affiliates or a company acquired by the
Company or with which the Company combines. The Committee shall have full and exclusive
discretionary power to adopt rules, forms, instruments, and guidelines for administering the Plan
as the Committee deems necessary or proper. Notwithstanding anything in this Section 3.1
to the contrary, the Board, or any other committee or sub-committee established by the Board, is
hereby authorized (in addition to any necessary action by the Committee) to grant or approve Awards
as necessary to satisfy the requirements of Section 16 of the Exchange Act and the rules and
regulations thereunder and to act in lieu of the Committee with respect to Awards made to
Non-Employee Directors under the Plan. All actions taken and all interpretations and
determinations made by the Committee or by the Board (or any other committee or sub-committee
thereof), as applicable, shall be final and binding upon the Participants, the Company, and all
other interested individuals.



     3.2 Delegation. The Committee may delegate to one or more of its members, one or more
officers of the Company or any of its Subsidiaries or Affiliates, and one or more agents or
advisors such administrative duties or powers as it may deem advisable; provided that the Committee
shall not delegate to officers of the Company or any of its Subsidiaries or Affiliates the power to
make grants of Awards to officers of the Company or any of its Subsidiaries or Affiliates;
provided, further, that no delegation shall be permitted under the Plan that is prohibited by
applicable law.



4









 





Article 4. Eligibility and Participation




     4.1 Eligibility. Participants will consist of such Employees, Directors and other individuals
providing services to the Company or any Subsidiary or Affiliate as the Committee in its sole
discretion determines and whom the Committee may designate from time to time to receive Awards.
Designation of a Participant in any year shall not require the Committee to designate such person
to receive an Award in any other year or, once designated, to receive the same type or amount of
Award as granted to the Participant in any other year.



     4.2 Type of Awards. Awards under the Plan may be granted in any one or a combination of: (a)
Options, (b) Stock Appreciation Rights, (c) Restricted Stock, (d) Other Stock-Based Awards, and (e)
Performance-Based Compensation Awards. The Plan sets forth the performance goals and procedural
requirements to permit the Company to design Awards that qualify as Performance-Based Compensation,
as described in Article 10 hereof. Awards granted under the Plan shall be evidenced by
Award Agreements (which need not be identical) that provide additional terms and conditions
associated with such Awards, as determined by the Committee in its sole discretion; provided,
however, that in the event of any conflict between the provisions of the Plan and any such Award
Agreement, the provisions of the Plan shall prevail.



Article 5. Shares Subject to the Plan and Maximum Awards




     5.1 Number of Shares Available for Awards.




	



	 	(a)	 	General. Subject to adjustment as provided in Article
12 hereof, the maximum number of Shares available for issuance to
Participants pursuant to Awards under the Plan shall be 4,000,000 Shares. The
number of Shares available for granting Incentive Stock Options under the Plan
shall not exceed 4,000,000 Shares, subject to Article 12 hereof and the
provisions of Sections 422 and 424 of the Code and any successor provisions.
The Shares available for issuance under the Plan may consist, in whole or in
part, of authorized and unissued Shares or treasury Shares. Any Shares
delivered to the Company as part or full payment for the purchase price of an
Award, or to satisfy the Company’s withholding obligation with respect to an
Award, shall again be available for Awards to the extent the Committee
determines that the availability of Incentive Stock Options will not be
compromised; provided, however, that such Shares shall continue to be counted
as outstanding for purposes of determining whether an Annual Award Limit has
been attained.
	



	 
	



	 	(b)	 	Annual Award Limits. The maximum number of Shares with respect
to Awards denominated in Shares that may be granted to any Participant in any
Plan Year shall be 1,000,000 Shares, subject to adjustments made in accordance with
Article 12 hereof (the “Annual Award Limit”).
	



	 
	 	(c)	 	Additional Shares. In the event that any outstanding Award
expires, is forfeited, cancelled or otherwise terminated without the issuance
of Shares or is otherwise settled for cash, the Shares subject to such Award,
to the extent of any such forfeiture, cancellation, expiration, termination or
settlement for cash, shall again be available for Awards. If the Committee
authorizes the assumption under this Plan, in connection with any merger,
consolidation, acquisition of property or stock, or reorganization, of awards
granted under another plan, such assumption shall not (i) reduce the maximum
number of Shares available for




5









 










	 	 	 	issuance under this Plan or (ii) be subject to or counted against a
Participant’s Annual Award Limit.









Article 6. Stock Options




     6.1 Grant of Options. The Committee is hereby authorized to grant Options to Participants.
Each Option shall permit a Participant to purchase from the Company a stated number of Shares at an
Option Price established by the Committee, subject to the terms and conditions described in this
Article 6 and to such additional terms and conditions, as established by the Committee, in
its sole discretion, that are consistent with the provisions of the Plan. Options shall be
designated as either Incentive Stock Options or Nonqualified Stock Options, provided that Options
granted to Directors shall be Nonqualified Stock Options. An Option granted as an Incentive Stock
Option shall, to the extent it fails to qualify as an Incentive Stock Option, be treated as a
Nonqualified Stock Option. Neither the Committee nor the Company or any of its Subsidiaries or
Affiliates shall be liable to any Participant or to any other Person if it is determined that an
Option intended to be an Incentive Stock Option does not qualify as an Incentive Stock Option.
Each Option shall be evidenced by Award Agreements which shall state the number of Shares covered
by such Option. Such Award Agreements shall conform to the requirements of the Plan, and may
contain such other provisions, as the Committee shall deem advisable.



     6.2 Terms of Option Grant. The Option Price shall be determined by the Committee at the time
of grant, but shall not be less than 100% of the Fair Market Value of a Share on the date of grant.
In the case of any Incentive Stock Option granted to a Ten Percent Stockholder, the Option Price
shall not be less than 110% of the Fair Market Value of a Share on the date of grant.



     6.3 Option Term. The term of each Option shall be determined by the Committee at the time of
grant and shall be stated in the Award Agreement, but in no event shall such term be greater than
ten years (or, in the case on an Incentive Stock Option granted to a Ten Percent Stockholder, five
years).



     6.4 Method of Exercise. Except as otherwise provided in the Plan or in an Award Agreement, an
Option may be exercised for all, or from time to time any part, of the Shares for which it is then
exercisable. For purposes of this Article 6, the exercise date of an Option shall be the
later of the date a notice of exercise is received by the Company and, if applicable, the date
payment is received by the Company pursuant to clauses (a), (b), (c) (d), or (e) in the following
sentence (including the applicable tax withholding pursuant to Section 14.3 hereof). The
aggregate Option Price for the Shares as to which an Option is exercised shall be paid to the
Company in full at the time of exercise at the election of the Participant (a) in cash or its
equivalent (e.g., by cashier’s check), (b) to the extent permitted by the Committee, in Shares
(whether or not previously owned by the Participant) having a Fair Market Value equal to the
aggregate Option Price for the Shares being purchased and satisfying such other requirements as may
be imposed by the Committee, (c) partly in cash and, to the extent permitted by the Committee,
partly in such Shares (as described in (b) above), or (d) if there is a public market for the
Shares at such time, subject to such requirements as may be imposed by the Committee, through the
delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the
Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to
the aggregate Option Price for the Shares being purchased. The Committee may prescribe any other
method of payment that it determines to be consistent with applicable law and the purpose of the
Plan.



     6.5 Limitations on Incentive Stock Options. Incentive Stock Options may be granted only to
employees of the Company or of a “parent corporation” or “subsidiary corporation” (as such terms
are














6









 




defined in Section 424 of the Code) at the date of grant. The aggregate Fair Market Value
(generally determined as of the time the Option is granted) of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by a Participant during any calendar
year under all plans of the Company and of any “parent corporation” or “subsidiary corporation”
shall not exceed $100,000, or the Option shall be treated as a Nonqualified Stock Option. For
purposes of the preceding sentence, Incentive Stock Options will be taken into account generally in
the order in which they are granted. Each provision of the Plan and each Award Agreement relating
to an Incentive Stock Option shall be construed so that each Incentive Stock Option shall be an
incentive stock option as defined in Section 422 of the Code, and any provisions of the Award
Agreement thereof that cannot be so construed shall be disregarded.




Article 7. Stock Appreciation Rights




     7.1 Grant of Stock Appreciation Rights. The Committee is hereby authorized to grant Stock
Appreciation Rights to Participants. Stock Appreciation Rights shall be evidenced by Award
Agreements that shall conform to the requirements of the Plan and may contain such other
provisions, as the Committee shall deem advisable. Subject to the terms of the Plan and any
applicable Award Agreement, a Stock Appreciation Right granted under the Plan shall confer on the
holder thereof a right to receive, upon exercise thereof, the excess of (a) the Fair Market Value
of a specified number of Shares on the date of exercise over (b) the grant price of the right as
specified by the Committee on the date of the grant. Such payment may be in the form of cash,
Shares, other property or any combination thereof, as the Committee shall determine in its sole
discretion.



     7.2 Terms of Stock Appreciation Right. Subject to the terms of the Plan and any applicable
Award Agreement, the grant price (which shall not be less than 100% of the Fair Market Value of a
Share on the date of grant), term, methods of exercise, methods of settlement, and any other terms
and conditions of any Stock Appreciation Right shall be as determined by the Committee. The
Committee may impose such other conditions or restrictions on the exercise of any Stock
Appreciation Right as it may deem appropriate. No Stock Appreciation Right shall have a term of
more than ten years from the date of grant.



Article 8. Restricted Stock




     8.1 Grant of Restricted Stock. The Committee is hereby authorized to grant Restricted Stock
to Participants. An Award of Restricted Stock is a grant by the Committee of a specified number of
Shares to the Participant, which Shares are subject to forfeiture upon the occurrence of specified
events. Participants shall be awarded Restricted Stock in exchange for consideration not less than
the minimum consideration required by applicable law. Restricted Stock shall be evidenced by an
Award Agreement, which shall conform to the requirements of the Plan and may contain such other
provisions, as the Committee shall deem advisable.



     8.2 Terms of Restricted Stock Awards. Each Award Agreement evidencing a Restricted Stock
grant shall specify the period(s) of restriction, the number of Shares of Restricted Stock subject
to the Award, the performance, employment or other conditions (including the termination of a
Participant’s Service whether due to death, disability or other reason) under which the Restricted
Stock may be forfeited to the Company and such other provisions as the Committee shall determine.
Any Restricted Stock granted under the Plan shall be evidenced in such manner as the Committee may
deem appropriate, including book-entry registration or issuance of a stock certificate or
certificates (in which case, the certificate(s) representing such Shares shall be legended as to
sale, transfer, assignment, pledge or other encumbrances during the Restriction Period and
deposited by the Participant, together with a stock power endorsed in blank, with the Company, to
be held in escrow during the Restriction Period). At the end of the Restriction Period, the
restrictions imposed hereunder and under the Award Agreement shall lapse



7









 




with respect to the number of Shares of Restricted Stock as determined by the Committee, and
the legend shall be removed and such number of Shares delivered to the Participant (or, where
appropriate, the Participant’s legal representative).




     8.3 Voting and Dividend Rights. The Committee shall determine and set forth in a
Participant’s Award Agreement whether or not a Participant holding Restricted Stock granted
hereunder shall have the right to exercise voting rights with respect to the Restricted Stock
during the Restriction Period (the Committee may require a Participant to grant an irrevocable
proxy and power of substitution) and/or have the right to receive dividends on the Restricted Stock
during the Restriction Period (and, if so, on what terms).



     8.4 Performance Goals. The Committee may condition the grant of Restricted Stock or the
expiration of the Restriction Period upon the Participant’s achievement of one or more performance
goal(s) specified in the Award Agreement. If the Participant fails to achieve the specified
performance goal(s), the Committee shall not grant the Restricted Stock to such Participant or the
Participant shall forfeit the Award of Restricted Stock to the Company, as applicable.



     8.5 Section 83(b) Election. If a Participant makes an election pursuant to Section 83(b) of
the Code concerning Restricted Stock, the Participant shall be required to file promptly a copy of
such election with the Company.



Article 9. Other Stock-Based Awards




     The Committee, in its sole discretion, may grant Awards of Shares and Awards that are valued,
in whole or in part, by reference to, or are otherwise based on the Fair Market Value of Shares
(the “Other Stock-Based Awards”), including without limitation, restricted stock units,
dividend equivalent rights, and other phantom awards. Such Other Stock-Based Awards shall be in
such form, and dependent on such conditions, as the Committee shall determine, including, without
limitation, the right to receive one or more Shares (or the equivalent cash value of such Shares)
upon the completion of a specified period of Service, the occurrence of an event and/or the
attainment of performance objectives. Other Stock-Based Awards may be granted alone or in addition
to any other Awards granted under the Plan. Subject to the provisions of the Plan, the Committee
shall determine to whom and when Other Stock-Based Awards will be made, the number of Shares to be
awarded under (or otherwise related to) such Other Stock-Based Awards, whether such Other
Stock-Based Awards shall be settled in cash, Shares or a combination of cash and Shares, and all
other terms and conditions of such Awards (including, without limitation, the vesting provisions
thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid and
non-assessable).



Article 10. Performance-Based Compensation




     10.1 Grant of Performance-Based Compensation. To the extent permitted by Section 162(m) of
the Code, the Committee is authorized to design any Award so that the amounts or Shares payable or
distributed pursuant to such Award are treated as “qualified performance-based compensation” within
the meaning of Section 162(m) of the Code and related regulations.



     10.2 Performance Measures. The vesting, crediting and/or payment of Performance-Based
Compensation shall be based on the achievement of objective performance goals based on one or more
of the following Performance Measures: (a) consolidated earnings before or after taxes (including
earnings before interest, taxes, depreciation and amortization); (b) net income; (c) operating
income; (d) earnings per Share; (e) book value per Share; (f) return on stockholders’ equity; (g)
expense management; (h) return on investment; (i) improvements in capital structure; (j)
profitability of an identifiable business unit



8









 




or product; (k) maintenance or improvement of profit margins; (l) stock price; (m) market
share; (n) revenues or sales; (o) costs; (p) cash flow; (q) working capital; (r) return on assets
(s) return on stockholders’ equity, (t) customer satisfaction, (u) measurable achievement in
quality and compliance initiatives, (v) working capital, (w) debt, (x) business expansion, (y)
objectively determinable measure of non-financial operating and management performance objectives,
(z) stockholder returns, dividends and/or other distributions, (aa) operating efficiency, or (bb)
profit margin. Any Performance Measure may be (i) used to measure the performance of the Company
and/or any of the Subsidiaries or Affiliates as a whole, any business unit thereof or any
combination thereof against any goal including past performance or (ii) compared to the performance
of a group of comparable companies, or a published or special index, in each case that the
Committee, in its sole discretion, deems appropriate. Subject to Section 162(m) of the Code, the
Committee may adjust the performance goals (including to prorate goals and payments for a partial
Plan Year) in the event of the following occurrences: (A) non-recurring events, including
divestitures, spin-offs, or changes in accounting standards or policies; (B) mergers and
acquisitions; and (C) financing transactions, including selling accounts receivable.




     10.3 Establishment of Performance Goals for Covered Employees. No later than 90 days after
the commencement of a Performance Period (but in no event after 25% of such Performance Period has
elapsed), the Committee shall establish in writing: (a) the performance goals applicable to the
Performance Period; (b) the Performance Measures to be used to measure the performance goals in
terms of an objective formula or standard; (c) the formula for computing the amount of compensation
payable to the Participant if such performance goals are obtained; and (d) the Participants or
class of Participants to which such performance goals apply. The outcome of such performance goals
must be substantially uncertain when the Committee establishes the goals.



     10.4 Adjustment of Performance-Based Compensation. Awards that are designed to qualify as
Performance-Based Compensation may not be adjusted upward. The Committee shall retain the
discretion to adjust such Awards downward, either on a formula or discretionary basis or any
combination, as the Committee determines.



     10.5 Certification of Performance. Except for Awards that pay compensation attributable
solely to an increase in the value of Shares, no Award designed to qualify as Performance-Based
Compensation shall be vested, credited or paid, as applicable, with respect to any Participant
until the Committee certifies in writing that the performance goals and any other material terms
applicable to such Performance Period have been satisfied.



     10.6 Interpretation. Each provision of the Plan and each Award Agreement relating to
Performance-Based Compensation shall be construed so that each such Award shall be “qualified
performance-based compensation” within the meaning of Section 162(m) of the Code and related
regulations, and any provisions of the Award Agreement thereof that cannot be so construed shall be
disregarded.



Article 11. Compliance with Section 409A of the Code




     11.1 General. The Company intends that all Awards be structured, interpreted, operated and
administered to comply with or satisfy an exemption from Section 409A of the Code and all
regulations, guidance, compliance programs and other interpretative authority thereunder
(“Section 409A”), such that there are no adverse tax consequences, interest, or penalties
under Section 409A as a result of the Awards. Notwithstanding the Company’s intention, in the
event any Award is subject to Section 409A, the Committee may, in its sole discretion and without a
Participant’s prior consent, amend the Plan and/or Awards, adopt policies and procedures, or take
any other actions (including amendments, policies, procedures and actions with retroactive effect)
as are necessary or appropriate to (a) exempt the Plan



9









 




and/or any Award from the application of Section 409A, (b) preserve the intended tax treatment
of any such Award, or (c) comply with the requirements of Section 409A, including without
limitation any such regulations guidance, compliance programs and other interpretative authority
that may be issued after the date of the grant of an Award.




     11.2 Payments to Specified Employees. Notwithstanding any contrary provision in the Plan or
Award Agreement, any payment(s) of nonqualified deferred compensation (within the meaning of
Section 409A) that are otherwise required to be made under the Plan to a “specified employee” (as
defined under Section 409A) as a result of his or her separation from service (other than a payment
that is not subject to Section 409A) shall be delayed for the first six months following such
separation from service (or, if earlier, the date of death of the specified employee) and shall
instead be paid (in a manner set forth in the Award Agreement) on the day that immediately follows
the end of such six-month period or within fifteen days thereafter (but in no event later than the
end of the applicable taxable year).



     11.3 Separation from Service. A termination of Service shall not be deemed to have occurred
for purposes of any provision of the Plan or any Award Agreement providing for the payment of any
amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon
or following a termination of Service, unless such termination is also a “separation from service”
within the meaning of Section 409A and the payment thereof prior to a “separation from service”
would violate Section 409A. For purposes of any such provision of the Plan or any Award Agreement
relating to any such payments or benefits, references to a “termination,” “termination of
employment,” “termination of service,” or like terms shall mean “separation from service.”



Article 12. Adjustments




     12.1 Adjustments in Authorized Shares. In the event of any corporate event or transaction
involving the Company, a Subsidiary and/or an Affiliate (including, but not limited to, a change in
the Shares of the Company or the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, stock dividend, stock split, reverse stock split,
split up, spin-off, combination of Shares, exchange of Shares, dividend in kind, amalgamation, or
other like change in capital structure (other than regular cash dividends to stockholders of the
Company), or any similar corporate event or transaction, the Committee, to prevent dilution or
enlargement of Participants’ rights under the Plan, shall substitute or adjust, in its sole
discretion, the number and kind of Shares or other property that may be issued under the Plan or
under particular forms of Awards, the number and kind of Shares or other property subject to
outstanding Awards, the Option Price, grant price or purchase price applicable to outstanding
Awards, the Annual Award Limits, and/or other value determinations applicable to the Plan or
outstanding Awards.



     12.2 Change of Control. Upon the occurrence of a Change of Control after the Effective Date,
unless otherwise specifically prohibited under applicable laws or by the rules and regulations of
any governing governmental agencies or national securities exchanges, or unless the Committee shall
determine otherwise in the Award Agreement, the Committee is authorized (but not obligated) to make
adjustments in the terms and conditions of outstanding Awards, including without limitation the
following (or any combination thereof): (a) continuation or assumption of such outstanding Awards
under the Plan by the Company (if it is the surviving company or corporation) or by the surviving
company or corporation or its parent; (b) substitution by the surviving company or corporation or
its parent of awards with substantially the same terms for such outstanding Awards; (c) accelerated
exercisability, vesting and/or lapse of restrictions under outstanding Awards immediately prior to
the occurrence of such event; (d) upon written notice, provide that any outstanding Awards must be
exercised, to the extent then exercisable, during a reasonable period of time immediately prior to
the scheduled consummation of the event, or such other period as determined by the Committee
(contingent upon the consummation of the



10









 




event), and at the end of such period, such Awards shall terminate to the extent not so
exercised within the relevant period; and (e) cancellation of all or any portion of outstanding
Awards for fair value (as determined in the sole discretion of the Committee and which may be zero)
which, in the case of Options and Stock Appreciation Rights or similar Awards, may equal the
excess, if any, of the value of the consideration to be paid in the Change of Control transaction
to holders of the same number of Shares subject to such Awards (or, if no such consideration is
paid, Fair Market Value of the Shares subject to such outstanding Awards or portion thereof being
canceled) over the aggregate Option Price or grant price, as applicable, with respect to such
Awards or portion thereof being canceled.




Article 13. Duration, Amendment, Modification, Suspension, and Termination




     13.1 Duration of the Plan. Unless sooner terminated as provided in Section 13.2
hereof, the Plan shall terminate on the tenth anniversary of the Effective Date.



     13.2 Amendment, Modification, Suspension, and Termination of Plan. Subject to the terms of
the Plan, the Committee may amend, alter, suspend, discontinue or terminate this Plan or any
portion thereof or any Award (or Award Agreement) hereunder at any time, in its sole discretion.



Article 14. General Provisions




     14.1 No Right to Service. The granting of an Award under the Plan shall impose no obligation
on the Company, any Subsidiary or any Affiliate to continue the Service of a Participant and shall
not lessen or affect any right that the Company, any Subsidiary or any Affiliate may have to
terminate the Service of such Participant. No Participant or other Person shall have any claim to
be granted any Award, and there is no obligation for uniformity of treatment of Participants, or
holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same with respect to each
Participant (whether or not such Participants are similarly situated).



     14.2 Settlement of Awards; Fractional Shares. Each Award Agreement shall establish the form
in which the Award shall be settled. The Committee shall determine whether cash, Awards, other
securities or other property shall be issued or paid in lieu of fractional Shares or whether such
fractional Shares or any rights thereto shall be rounded, forfeited or otherwise eliminated.



     14.3 Tax Withholding. The Company shall have the power and the right to deduct or withhold
automatically from any amount deliverable under the Award or otherwise, or require a Participant to
remit to the Company, the minimum statutory amount to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan. With respect to required withholding, Participants may elect
(subject to the Company’s automatic withholding right set out above), subject to the approval of
the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the
minimum statutory total tax that could be imposed on the transaction.



     14.4 No Guarantees Regarding Tax Treatment. Participants (or their beneficiaries) shall be
responsible for all taxes with respect to any Awards under the Plan. The Committee and the Company
make no guarantees to any Person regarding the tax treatment of Awards or payments made under the
Plan. Neither the Committee nor the Company has any obligation to take any action to prevent the
assessment of any tax on any Person with respect to any Award under Section 409A of the Code or
Section 457A of the Code or otherwise and none of the Company, any of its Subsidiaries or
Affiliates, or any of their employees or representatives shall have any liability to a Participant
with respect thereto.



11









 





     14.5 Non-Transferability of Awards. Unless otherwise determined by the Committee, an Award
shall not be transferable or assignable by the Participant except in the event of his death
(subject to the applicable laws of descent and distribution) and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate. No transfer shall be permitted for value or consideration.
An award exercisable after the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant. Any permitted transfer of the Awards to heirs
or legatees of the Participant shall not be effective to bind the Company unless the Committee
shall have been furnished with written notice thereof and a copy of such evidence as the Committee
may deem necessary to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof.



     14.6 Conditions and Restrictions on Shares. The Committee may impose such other conditions or
restrictions on any Shares received in connection with an Award as it may deem advisable or
desirable. These restrictions may include, but shall not be limited to, a requirement that the
Participant hold the Shares received for a specified period of time or a requirement that a
Participant represent and warrant in writing that the Participant is acquiring the Shares for
investment and without any present intention to sell or distribute such Shares. The certificates
for Shares may include any legend which the Committee deems appropriate to reflect any conditions
and restrictions applicable to such Shares.



     14.7 Awards to Non-U.S. Employees or Directors. To comply with the laws in countries other
than the United States in which the Company or any of its Subsidiaries or Affiliates operates or
has Employees, Directors or other service providers, the Committee, in its sole discretion, shall
have the power and authority to: (a) modify the terms and conditions of any Award granted to
Participants outside the United States to comply with applicable foreign laws, (b) take any action,
before or after an Award is made, that it deems advisable to obtain approval or comply with any
necessary local government regulatory exemptions or approvals; and (c) establish subplans and
modify exercise procedures and other terms and procedures, to the extent such actions may be
necessary or advisable.



     14.8 Rights as a Stockholder. Except as otherwise provided herein or in the applicable Award
Agreement, a Participant shall have none of the rights of a stockholder with respect to Shares
covered by any Award until the Participant becomes the record holder of such Shares.



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



     14.10 Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to
any investments that the Company or any of its Subsidiaries or Affiliates may make to aid it in
meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant, beneficiary, legal representative,
or any other Person. To the extent that any Person acquires a right to receive payments from the
Company under the Plan, such right shall be no greater than the right of an unsecured general
creditor of the Company. All payments to be made hereunder shall be paid from the general funds of
the Company and no special or separate fund shall be established and no segregation of assets shall
be made to assure payment of such amounts. The Plan is not subject to the U.S. Employee Retirement
Income Security Act of 1974, as amended from time to time.



12









 





     14.11 No Constraint on Corporate Action. Nothing in the Plan shall be construed to (a) limit,
impair, or otherwise affect the Company’s right or power to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or consolidate, or
dissolve, liquidate, sell, or transfer all or any part of its business or assets, or (b) limit the
right or power of the Company to take any action which such entity deems to be necessary or
appropriate.



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



     14.13 Governing Law. The Plan and each Award Agreement shall be governed by the laws of the
State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of the Plan to the substantive law of another jurisdiction.



     14.14 Effective Date. The Plan shall be effective as of the date of adoption by the Board,
which date is set forth below (the “Effective Date”).



     14.15 Stockholder Approval. The Plan will be submitted for approval by the stockholders of
the Company at an annual meeting or any special meeting of stockholders of the Company within
twelve months of the Effective Date. Any Awards granted under the Plan prior to such approval of
stockholders shall be effective as of the date of grant, but no such Award may be exercised or
settled and no restrictions relating to any Award may lapse prior to such stockholder approval, and
if stockholders fail to approve the Plan as specified hereunder, the Plan and any Award shall be
terminated and cancelled without consideration.



*           *           *




     This Plan was duly adopted and approved by the Board of Directors of the Company by unanimous
written consent on [___].




13