exv10w1













Exhibit 10.1

 




    Fourth
    Amended and Restated

    Basic Energy Services, Inc.

    2003 Incentive Plan



 




    (effective
    May 26, 2009)
    



 




    SECTION 1.  Purpose
    of the Plan.



 



    The Fourth Amended and Restated Basic Energy Services, Inc. 2003
    Incentive Plan (the “Plan”) is intended
    to promote the interests of Basic Energy Services, Inc.
    (formerly named BES Holding Co.), a Delaware corporation (the
    “Company”), by encouraging officers,
    employees, directors and consultants of the Company and its
    Affiliates to acquire or increase their equity interest in the
    Company and to provide a means whereby they may develop a sense
    of proprietorship and personal involvement in the development
    and financial success of the Company, and to encourage them to
    remain with and devote their best efforts to the business of the
    Company thereby advancing the interests of the Company and its
    stockholders. The Plan is also contemplated to enhance the
    ability of the Company and its Affiliates to attract and retain
    the services of individuals who are essential for the growth and
    profitability of the Company.



 



    Effective as of the effective date of the Plan as set forth in
    Section 10 hereunder, all outstanding stock options and
    other Awards granted under the Plan (including Awards previously
    assumed by the Company under predecessor plans) prior to this
    amendment and restatement, are assumed and continued hereunder.
    All outstanding Awards that are assumed and continued under this
    Plan, as amended and restated, shall remain subject to their
    individual Award Agreements for each such outstanding Award.



 




    SECTION 2.  Definitions.



 



    As used in the Plan, the following terms shall have the meanings
    set forth below:



 



    “Affiliate” shall mean (i) any
    entity in which the Company, directly or indirectly, owns 50% or
    more of the combined voting power, as determined by the
    Committee, (ii) any “parent
    corporation” of the Company (as defined in
    Section 424(e) of the Code) and (iii) any
    “subsidiary corporation” of any such parent (as
    defined in Section 424(f) of the Code) thereof.



 



    “Award” shall mean any Option,
    Restricted Stock, Performance Award, Phantom Shares, Bonus
    Shares, Other Stock-Based Award or Cash Award.



 



    “Award Agreement” shall mean any written
    or electronic agreement, contract, or other instrument or
    document evidencing any Award, which may, but need not, be
    executed or acknowledged by a Participant.



 



    “Board” shall mean the Board of
    Directors of the Company.



 



    “Bonus Shares” shall mean an award of
    Shares granted pursuant to Section 6(d) of the Plan.



 



    “Cash Award” shall mean an award payable
    in cash granted pursuant to Section 6(f) of the Plan.



 



    “Change in Control” shall mean the
    occurrence of any one of the following:



 



    (a) the consummation of any transaction (including without
    limitation, any merger, consolidation, tender offer, or exchange
    offer) the result of which is that any individual or
    “person” (as such term is used in
    Sections 13(d)(3) and 14(d)(2), of the Securities Exchange
    Act of 1934 (the “Exchange Act”)), other
    than (i) Southwest Royalties Holdings, Inc. and its
    “affiliates” (as such term is defined in
    Rule 144 under the Exchange Act), (ii) Credit Suisse
    First Boston Corporation and its
    “affiliates” (as such term is defined in
    Rule 144 under the Exchange Act), (iii) the Company or
    any Affiliates controlled by the Company, (iv) any employee
    benefit plan of the Company or any of its Affiliates or
    (v) an underwriter temporarily holding securities pursuant
    to an offering of such securities, becomes the
    “beneficial owner” (as such term is
    defined in
    Rule 13d-3
    and
    Rule 13d-5
    under the Exchange Act), directly or indirectly, of securities
    of the Company representing 40% or more of the combined voting
    power of the Company’s then-outstanding securities;




    

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    (b) the individuals who, as of the effective date of the
    Plan, constitute the Board (the “Incumbent
    Board”), cease for any reason to constitute at
    least a majority of the Board; provided, however, that any
    individual becoming a director subsequent to the date hereof
    whose election, or nomination for election by the Company’s
    stockholders, was approved by a vote of at least a majority of
    the directors then comprising the Incumbent Board shall be
    considered as though such individual were a member of the
    Incumbent Board, but excluding, for this purpose, any such
    individual whose initial assumption of office occurs as a result
    of either (i) an actual or threatened election contest (as
    such terms are used in
    Rule 14a-11
    of Regulation 14A promulgated under the Exchange Act), or
    an actual or threatened solicitation of proxies or consents by
    or on behalf of a Person other than the Board, or (ii) a
    plan or agreement to replace a majority of the members of the
    Board then comprising the Incumbent Board;



 



    (c) the sale, lease, transfer, conveyance or other
    disposition (including by merger or consolidation) in one or a
    series of related transactions, of all or substantially all of
    the assets of the Company to an unrelated person; or



 



    (d) the adoption of a plan relating to the liquidation or
    dissolution of the Company.



 



    Solely with respect to any Award that is subject to
    Section 409A of the Code, this definition is intended to
    comply with the definition of change in control under
    Section 409A of the Code as in effect commencing
    January 1, 2005 and, to the extent that the above
    definition does not so comply, such definition shall be void and
    of no effect and, to the extent required to ensure that this
    definition complies with the requirements of Section 409A
    of the Code, the definition of such term set forth in
    regulations or other regulatory guidance issued under
    Section 409A of the Code by the appropriate governmental
    authority is hereby incorporated by reference into and shall
    form part of this Plan as fully as if set forth herein verbatim
    and the Plan shall be operated in accordance with the above
    definition of Change in Control as modified to the extent
    necessary to ensure that the above definition complies with the
    definition prescribed in such regulations or other regulatory
    guidance insofar as the definition relates to any Award that is
    subject to Section 409A of the Code.



 



    “Code” shall mean the Internal Revenue
    Code of 1986, as amended from time to time, and the rules and
    regulations thereunder.



 



    “Committee” shall mean the committee
    appointed by the Board to administer the Plan or, if none, the
    Board.



 



    “Company” shall mean the corporation
    described in Section 1 of the Plan.



 



    “Consultant” shall mean any individual,
    other than a Director or an Employee, who renders consulting or
    advisory services to the Company or an Affiliate for a fee.



 



    “Covered Person” shall mean any of the
    Chief Executive Officer of the Company and the four
    (4) highest paid officers of the Company other than the
    Chief Executive Officer as described in Section 162(m)(3)
    of the Code.



 



    “Director” shall mean a
    “non-employee director” of the Company,
    as defined in
    Rule 16b-3.



 



    “Employee” shall mean any employee of
    the Company or an Affiliate.



 



    “Exchange Act” shall mean the Securities
    Exchange Act of 1934, as amended.



 



    “Fair Market Value” shall mean, with
    respect to Shares, the fair market value determined in good
    faith by the Committee, which may be conclusively deemed by the
    Committee to be the closing sales price (or, if applicable, the
    highest reported bid price) of a Share on the applicable date
    (or if there is no trading in the Shares on such date, on the
    next preceding date on which there was trading) as reported in
    The Wall Street Journal (or other reporting service
    approved by the Committee). If the Shares are not publicly
    traded at the time a determination of its fair market value is
    required to be made hereunder, the determination of fair market
    value shall be made in good faith by the Committee.



 



    “Option” shall mean an option granted
    under Section 6(a) of the Plan. Options granted under the
    Plan may constitute “incentive stock
    options” for purposes of Section 422 of the
    Code or nonqualified stock options that are not intended to
    satisfy the requirements of Section 422 of the Code.



 



    “Other Stock-Based Award” shall mean an
    award granted pursuant to Section 6(g) of the Plan that is
    not otherwise specifically provided for, the value of which is
    based in whole or in part upon the value of a Share.




    

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    “Participant” shall mean any Director,
    Employee or Consultant granted an Award under the Plan.



 



    “Performance Award” shall mean any right
    granted under Section 6(c) of the Plan.



 



    “Performance Objectives” means the
    objectives, if any, established by the Committee that are to be
    achieved with respect to an Award granted under this Plan, which
    may be described in terms of Company-wide objectives, in terms
    of objectives that are related to performance of a division,
    subsidiary, department or function within the Company or a
    subsidiary in which the Participant receiving the Award is
    employed or in individual or other terms, and which will relate
    to the period of time determined by the Committee. The
    Performance Objectives intended to qualify under
    Section 162(m) of the Code shall be with respect to one or
    more of the following: (i) net earnings;
    (ii) operating income; (iii) earnings before interest
    and taxes (“EBIT”); (iv) earnings
    before interest, taxes, depreciation, and amortization expenses
    (“EBITDA”); (v) earnings before
    taxes and unusual or nonrecurring items; (vi) net income
    before interest, income and franchise taxes, depreciation and
    amortization expenses, and any unusual or non-recurring non-cash
    expenses or income (“Company EBITDA”);
    (vii) revenue; (viii) return on investment;
    (ix) return on equity; (x) return on total capital;
    (xi) return on assets; (xii) total stockholder return;
    (xiii) return on capital employed in the business;
    (xiv) stock price performance; (xv) earnings per share
    growth; and (xvi) cash flows. Which objectives to use with
    respect to an Award, the weighting of the objectives if more
    than one is used, and whether the objective is to be measured
    against a Company-established budget or target, an index or a
    peer group of companies, shall be determined by the Committee in
    its discretion at the time of grant of the Award. A Performance
    Objective need not be based on an increase or a positive result
    under a particular business criterion and may include, for
    example, maintaining the status quo or limiting economic losses.



 



    “Person” shall mean individual,
    corporation, partnership, association, joint-stock company,
    trust, unincorporated organization, government or political
    subdivision thereof or other entity.



 



    “Phantom Shares” shall mean an Award of
    the right to receive Shares issued at the end of a Restricted
    Period (an amount of cash equal to a specified number of Shares,
    or a combination thereof) which is granted pursuant to
    Section 6(e) of the Plan.



 



    “Plan” shall mean the plan described in
    Section 1 of the Plan and set forth in this document, as
    amended from time to time.



 



    “Restricted Period” shall mean the
    period established by the Committee with respect to an Award
    during which the Award either remains subject to forfeiture or
    is not exercisable by the Participant.



 



    “Restricted Stock” shall mean any Share,
    prior to the lapse of restrictions thereon, granted under
    Sections 6(b) of the Plan.



 



    “Rule 16b-3”
    shall mean
    Rule 16b-3
    promulgated by the SEC under the Exchange Act, or any successor
    rule or regulation thereto as in effect from time to time.



 



    “SEC” shall mean the Securities and
    Exchange Commission, or any successor thereto.



 



    “Shares” or “Common
    Shares” or “Common Stock”
    shall mean the common stock of the Company, $.01 par value,
    and such other securities or property as may become the subject
    of Awards under the Plan.



 



    “Termination for Cause” shall mean,
    unless eliminated or otherwise defined by the Committee in a
    Participant’s Award, the occurrence of any of the following
    events:



 



    (i) the commission by Participant of a material act of
    willful misconduct including, but not limited to, the willful
    violation of any material law, rule, regulation or cease and
    desist order applicable to Participant or the Company (other
    than a law, rule or regulation relating to a minor traffic
    violation or similar offense), or an act which constitutes a
    breach of a fiduciary duty owed to the Company by Participant
    involving personal profit;



 



    (ii) the commission by Participant of an act of dishonesty
    relating to the performance of Participant’s duties,
    habitual unexcused absence from work, willful failure to perform
    duties in any material respect (other than any such failure
    resulting from Participant’s incapacity due to physical or
    mental illness or disability), or gross negligence in the
    performance of duties resulting in material damage or injury to
    the Company, its reputation or goodwill (provided, however, that
    in the event of Participant’s willful failure to perform
    duties in




    

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    any material respect, Participant shall be provided with written
    notice of such event and shall be provided with a reasonable
    opportunity, and in no event more than 30 days, to cure
    such failure to perform his duties); or



 



    (iii) any felony conviction of Participant or any
    conviction involving dishonesty, fraud or breach of trust (other
    than for a minor traffic violation or similar offense), whether
    or not in the line of duty.



 



    “Termination for Good Reason” shall
    mean, unless eliminated or otherwise defined by the Committee in
    a Participant’s Award, any nonconsentual (i) material
    reduction in the Participant’s authority, duties or
    responsibilities; (ii) reduction in the Participant’s
    compensation by more than 20 percent from the compensation
    (excluding Awards pursuant to this Plan or other stock-based
    compensation) paid by the Company during the completed fiscal
    year prior to the Change of Control; or (iii) change caused
    by the Company in the Participant’s office location of more
    than 35 miles from its location on the date of the Change
    in Control; provided, however, that the Participant terminates
    his employment with the Company and its Affiliates hereunder
    within 120 days following the date on which the Participant
    has actual notice of the event that gives rise to the
    Termination for Good Reason.



 




    SECTION 3.  Administration.



 



    (a) General.  The Plan shall be
    administered by the Committee. Should any class of Common Stock
    be registered under Section 12(g) of the Exchange Act, the
    Committee shall be composed of not less than two
    (2) members of the Board, each of whom shall meet the
    definition of “nonemployee director” for
    purposes of
    Rule 16b-3
    promulgated by the SEC under the Exchange Act and an
    “outside director” under
    Section 162(m) of the Code. A majority of the Committee
    shall constitute a quorum, and the acts of a majority of the
    members of the Committee who are present at any meeting thereof
    at which a quorum is present, or the acts unanimously approved
    by the members of the Committee in writing, shall be the acts of
    the Committee.



 



    (b) Committee Authority.  Subject to the
    terms of the Plan and applicable law, and in addition to other
    express powers and authorizations conferred on the Committee by
    the Plan, the Committee shall have full power and authority to:
    (i) designate Participants; (ii) determine the type or
    types of Awards to be granted to a Participant;
    (iii) determine the number of Shares to be covered by, or
    with respect to which payments, 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 Awards may
    be settled or exercised in cash, Shares, other securities, other
    Awards or other property, or canceled, forfeited, or suspended
    and the method or methods by which Awards may be settled,
    exercised, canceled, forfeited, or suspended;
    (vi) determine whether, to what extent, and under what
    circumstances cash, Shares, other securities, other Awards,
    other property, and other amounts payable with respect to an
    Award shall be deferred either automatically or at the election
    of the holder thereof or of the Committee; (vii) interpret
    and administer the Plan and any instrument or agreement relating
    to an Award made under the Plan; (viii) establish, amend,
    suspend, or waive such rules and regulations and appoint such
    agents as it shall deem appropriate for the proper
    administration of the Plan; and (ix) make any other
    determination and take any other action that the Committee deems
    necessary or desirable for the administration of the Plan;
    provided, however, the Committee shall not take any action
    otherwise authorized under this Section 3(b) to the extent
    that (i) such action would cause (A) the application
    of Section 162(m) or 409A of the Code to the Award or
    (B) create adverse tax consequences under
    Section 162(m) or 409A of the Code should either or both of
    those Code sections apply to the Award or (ii) materially
    reduce the benefit to the Participant without the consent of the
    Participant. No member of the Committee shall vote or act upon
    any matter relating solely to himself and grants of Awards to
    members of the Committee must be ratified by the Board. Unless
    otherwise expressly provided in the Plan, all designations,
    determinations, interpretations, and other decisions under or
    with respect to the Plan or any Award shall be within the sole
    discretion of the Committee, may be made at any time and shall
    be final, conclusive, and binding upon all Persons, including
    the Company, any Affiliate, any Participant, any holder or
    beneficiary of any Award, any stockholder and any Employee. No
    member of the Board or Committee shall be liable for any action
    or determination made in good faith with respect to the Plan or
    any Award granted hereunder and the members of the Board and
    Committee shall be entitled to indemnification and reimbursement
    by the Company and its Affiliates in respect of any claim, loss,
    damage or expense (including legal fees) arising therefrom to
    the full extent permitted by law.




    

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    SECTION 4.  Shares
    Available for Awards.



 



    (a) Shares Available.  Subject to
    adjustment as provided in Section 4(c), the aggregate
    number of Shares with respect to which Awards may be granted
    under the Plan shall be up to 7,100,000 Shares (including
    after giving effect to a
    5-for-1
    stock split effected as a stock dividend on September 26,
    2005). Except for withholding of Shares for payment of taxes or
    exercise price, if any Award is exercised, paid, forfeited,
    terminated or canceled without the delivery of Shares, then the
    Shares covered by such Award, to the extent of such payment,
    exercise, forfeiture, termination or cancellation, shall again
    be Shares with respect to which Awards may be granted. Awards
    will not reduce the number of Shares that may be issued pursuant
    to the Plan if the settlement of the Award will not require the
    issuance of Shares, as, for example, an Other Stock-Based Award
    that can be satisfied only by the payment of cash.



 



    (b) Sources of Shares Deliverable Under
    Awards.  Any Shares delivered pursuant to an Award
    may consist, in whole or in part, of authorized and unissued
    Shares or of treasury Shares and shall be fully paid and
    nonassessable.



 



    (c) Adjustments.  In the event that the
    Committee determines that any dividend or other distribution
    (whether in the form of cash, Shares, other securities, or other
    property), recapitalization, stock split, reverse stock split,
    reorganization, merger, consolidation,
    split-up,
    spin-off, combination, repurchase, or exchange of Shares or
    other securities of the Company, issuance of warrants or other
    rights to purchase Shares or other securities of the Company, or
    other similar corporate transaction or event affects the Shares
    such that an adjustment is determined by the Committee to be
    appropriate in order to prevent dilution or enlargement of the
    benefits or potential benefits intended to be made available
    under the Plan, then the Committee shall, in such manner as it
    may deem equitable, adjust any or all of (i) the number and
    type of Shares (or other securities or property) with respect to
    which Awards may be granted, (ii) the maximum number and
    type of Shares (or other securities or property) with respect to
    which Awards may be granted to any single individual during any
    calendar year, (iii) the number and type of Shares (or
    other securities or property) subject to outstanding Awards, and
    (iv) the grant or exercise price with respect to any Award
    or, if deemed appropriate, make provision for a cash payment to
    the holder of an outstanding Award.



 




    SECTION 5.  Eligibility.



 



    Any Employee, Director or Consultant shall be eligible to be
    designated a Participant and receive an Award under the Plan.



 




    SECTION 6.  Awards.



 



    (a) Options.  Subject to the provisions of
    the Plan, the Committee shall have the authority to determine
    the Participants to whom Options shall be granted, the number of
    Shares to be covered by each Option, the purchase price therefor
    and the conditions and limitations applicable to the exercise of
    the Option, including the following terms and conditions and
    such additional terms and conditions, as the Committee shall
    determine, that are not inconsistent with the provisions of the
    Plan.



 



    (i) Exercise Price.  The purchase price
    per Share purchasable under an Option shall be determined by the
    Committee at the time the Option is granted, but shall not be
    less than the Fair Market Value per Share on such grant date.



 



    (ii) Time and Method of Exercise.  The
    Committee shall determine the time or times at which an Option
    may be exercised in whole or in part (which may include the
    achievement of one or more Performance Objectives), and the
    method or methods by which, and the form or forms, in which
    payment of the exercise price with respect thereto may be made
    or deemed to have been made (which may include, without
    limitation, cash, check acceptable to the Company, Shares held
    for the period required to avoid a charge to the Company’s
    reported financial earnings and owned free and clear of any
    liens, claims, encumbrances or security interests, outstanding
    Awards, a “cashless-broker” exercise
    (through procedures approved by the Committee and the Company),
    other securities or other property, notes approved by the
    Committee, or any combination thereof, having a Fair Market
    Value on the exercise date equal to the relevant exercise
    price); provided, however, in




    

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    order to exercise an Option, the Person or Persons entitled to
    exercise the Option shall deliver to the Company payment in full
    for the Shares being purchased and, unless other arrangements
    have been made with, or procedures have been established and
    approved by, the Committee, any required withholding taxes.



 



    (iii) Incentive Stock Options.  The terms
    of any Option granted under the Plan intended to be an incentive
    stock option shall comply in all respects with the provisions of
    Section 422 of the Code, or any successor provision, and
    any regulations promulgated thereunder. Incentive stock options
    may be granted only to employees of the Company and its parent
    corporation and subsidiary corporations, within the meaning of
    Section 424 of the Code while each such entity is a
    “Corporation” described in Section 7701(a)(3) of
    the Code and Treas. Reg.
    Section 1.421-1(i)(1).
    To the extent the aggregate Fair Market Value of the Shares
    (determined as of the date of grant) of an Option to the extent
    exercisable for the first time during any calendar year (under
    all plans of the Company and its parent and subsidiary
    corporations) exceeds $100,000, such Option Shares in excess of
    $100,000 shall be nonqualified stock options. No Option that is
    an incentive stock option shall be exercisable after the
    expiration of 10 years from its date of grant.
    Notwithstanding anything herein to the contrary, in no event
    shall any person owning stock possessing more than 10% of the
    total combined voting power of the Company and its Affiliates be
    granted an incentive stock option hereunder unless (1) the
    Option exercise price shall be at least 110% of the Fair Market
    Value of the Shares subject to such Option at the time the
    Option is granted and (2) the term during which such Option
    is exercisable does not exceed five years from its date of grant.



 



    (iv) Limits.  Subject to adjustment as
    provided in Section 4(c), the maximum number of Options that may
    be granted to any Participant during any calendar year shall not
    exceed 300,000 Shares.



 



    (b) Restricted Stock.  Subject to the
    provisions of the Plan, the Committee shall have the authority
    to determine the Participants to whom Restricted Stock shall be
    granted, the number of Shares of Restricted Stock to be granted
    to each such Participant, the duration of the Restricted Period
    during which, and the conditions, including Performance
    Objectives, if any, under which if not achieved, the Restricted
    Stock may be forfeited to the Company, and the other terms and
    conditions of such Awards.



 



    (i) Dividends.  Dividends paid on
    Restricted Stock may be paid directly to the Participant, may be
    subject to risk of forfeiture
    and/or
    transfer restrictions during any period established by the
    Committee or sequestered and held in a bookkeeping cash account
    (with or without interest) or reinvested on an immediate or
    deferred basis in additional shares of Common Stock, which
    account or shares may be subject to the same restrictions as the
    underlying Award or such other restrictions, all as determined
    by the Committee in its discretion.



 



    (ii) Registration.  Any Restricted Stock
    may be evidenced in such manner as the Committee shall deem
    appropriate, including, without limitation, book-entry
    registration or issuance of a stock certificate or certificates.
    In the event any stock certificate is issued in respect of
    Restricted Stock granted under the Plan, such certificate shall
    be registered in the name of the Participant and shall bear an
    appropriate legend referring to the terms, conditions, and
    restrictions applicable to such Restricted Stock.



 



    (iii) Forfeiture and Restrictions
    Lapse.  Except as otherwise determined by the
    Committee or the terms of the Award that granted the Restricted
    Stock, upon termination of a Participant’s employment (as
    determined under criteria established by the Committee) for any
    reason during the applicable Restricted Period, all Restricted
    Stock shall be forfeited by the Participant and reacquired by
    the Company. Unrestricted Shares, evidenced in such manner as
    the Committee shall deem appropriate, shall be issued to the
    holder of Restricted Stock promptly after the applicable
    restrictions have lapsed or otherwise been satisfied.



 



    (iv) Transfer Restrictions.  During the
    Restricted Period, Restricted Stock will be subject to the
    limitations on transfer as provided in Section 6(h)(i).



 



    (v) Limits.  Subject to adjustment as
    provided in Section 4(c), the maximum number of Shares of
    Restricted Stock that may be granted to any Participant during
    any calendar year shall not exceed 300,000 Shares of
    Restricted Stock.




    

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    (c) Performance Awards.  The Committee
    shall have the authority to determine the Participants who shall
    receive a Performance Award, which shall be denominated as a
    cash amount (e.g., $100 per award unit) at the time of grant and
    confer on the Participant the right to receive payment of such
    Award, in whole or in part, upon the achievement of such
    Performance Objectives during such performance periods as the
    Committee shall establish with respect to the Award.



 



    (i) Terms and Conditions.  Subject to the
    terms of the Plan and any applicable Award Agreement, the
    Committee shall determine the Performance Objectives to be
    achieved during any performance period, the length of any
    performance period, the amount of any Performance Award and the
    amount of any payment or transfer to be made pursuant to any
    Performance Award. In the case of any Performance Award granted
    to a Covered Employee in any calendar year in which any class of
    Common Stock is registered under Section 12(g) of the
    Exchange Act, performance goals shall be designed to be
    objective and shall otherwise meet the requirements of
    Section 162(m) of the Code and regulations issued
    thereunder (including Treasury
    Regulation Section 1.162-27
    and any successor regulation thereto), including the requirement
    that the level or levels of performance targeted by the
    Committee are such that the achievement of performance goals is
    “substantially uncertain” at the time of grant. In
    addition, achievement of performance goals in respect of
    Performance Awards shall be measured over a performance period
    of not less than six (6) months and not more than ten
    (10) years, as specified by the Committee. Performance
    goals in the case of any Performance Award granted to a Covered
    Person in any year in which any class of Common Stock is
    registered under Section 12(g) of the Exchange Act shall be
    established not later than ninety (90) days after the
    beginning of any performance period applicable to such
    Performance Award, or at such other date as may be required or
    permitted for “performance-based
    compensation” under Section 162(m) of the
    Code. Subject to Section 8, the Committee shall not
    exercise discretion to increase any amount payable in respect of
    a Performance Award which is intended to comply with
    Section 162(m) of the Code.



 



    (ii) Payment of Performance
    Awards.  Performance Awards, to the extent earned
    and vested, shall be paid (in cash
    and/or in
    Shares, in the sole discretion of the Committee) in a lump sum
    following the close of the performance period. Except as may
    otherwise be required under Section 409A of the Code, cash
    payments or tendered stock certificates described in the
    immediately preceding sentence shall be made by the later of
    (i) the date that is
    21/2
    months after the end of the Participant’s first taxable
    year in which the Performance Award is earned and payable under
    the Plan and (ii) the date that is
    21/2
    months after the end of the Company’s first taxable year in
    which the Performance Award is earned and payable under the
    Plan, and such payment shall not be subject to any election by
    the Participant to defer the payment to a later period. To the
    extent that the final settlement of a vested Award is to be made
    in Shares, the amount payable under a Performance Award shall be
    divided by the FMV Per Share of Common Stock on the
    determination date and a stock certificate evidencing the
    resulting shares of Common Stock (to the nearest full share)
    shall be delivered to the Participant, or his personal
    representative, and the value of any fractional shares will be
    paid in cash. The Company will also retain the right under any
    of its deferred compensation plans to make additional
    contributions related to these Awards into a deferred
    compensation plan, which Award will not vest until retirement or
    certain conditions of termination as provided by that plan.



 



    (iii) Limits.  The maximum value of
    Performance Awards that may be granted to any Participant during
    any calendar year shall not exceed $2,000,000 calculated as of
    the date of grant.



 



    (d) Bonus Shares.  The Committee shall
    have the authority, in its discretion, to grant Bonus Shares to
    Participants. Each Bonus Share shall constitute a transfer of an
    unrestricted Share to the Participant, without other payment
    therefor, as additional compensation for the Participant’s
    services to the Company. Bonus Shares shall be in lieu of a cash
    bonus that otherwise would be granted.



 



    (e) Phantom Shares.  The Committee shall
    have the authority to grant Awards of Phantom Shares to
    Participants upon such terms and conditions as the Committee may
    determine.



 



    (i) Terms and Conditions.  Each Phantom
    Share Award shall constitute an agreement by the Company to
    issue or transfer a specified number of Shares or pay an amount
    of cash equal to a specified number of Shares, or a combination
    thereof to the Participant in the future, subject to the
    fulfillment during the Restricted Period of such conditions,
    including Performance Objectives, if any, as the Committee may
    specify at the date




    

    7








 






    of grant. Payment shall be made in a lump sum no later than
    21/2 months
    after the end of the Restricted Period. During the Restricted
    Period, the Participant shall not have any right to transfer any
    rights under the subject Award, shall not have any rights of
    ownership in the Phantom Shares and shall not have any right to
    vote such shares.



 



    (ii) Dividends.  Any Phantom Share award
    may provide that an amount equal to any or all dividends or
    other distributions paid on Shares during the Restricted Period
    be credited in a cash bookkeeping account (without interest) or
    that equivalent additional Phantom Shares be awarded, which
    account or shares may be subject to the same restrictions as the
    underlying Award or such other restrictions as the Committee may
    determine.



 



    (iii) Limits.  Subject to adjustment as
    provided in Section 4(c), the maximum number of Phantom Shares
    that may be granted to any Participant during any calendar year
    shall not exceed 300,000 Phantom Shares.



 



    (iv) Additional
    Limitations.  Notwithstanding any other provision
    of this Section 6(e) to the contrary, any such Phantom
    Shares Award granted under the Plan shall contain terms that
    (i) are designed to avoid application of Section 409A
    of the Code to the Award or (ii) are designed to avoid
    adverse tax consequences under Section 409A of the Code
    should that Code section apply to the Award.



 



    (f) Cash Awards.  The Committee shall have
    the authority to determine the Participants to whom Cash Awards
    shall be granted, the amount, whether the Cash Awards may be
    voluntarily or shall be involuntarily deferred in a Company
    deferred compensation plan, and the terms or conditions, if any,
    as additional compensation or as deferred compensation for the
    Participant’s services to the Company or its Affiliates. If
    granted, a Cash Award shall be granted (simultaneously or
    subsequently) in tandem with another Award and shall entitle a
    Participant to receive a specified amount of cash from the
    Company upon such other Award becoming taxable to the
    Participant, which cash amount may be based on a formula
    relating to the anticipated taxable income associated with such
    other Award and the payment of the Cash Award; provided,
    however, a Cash Award shall not be granted in tandem or in
    combination with any other Award if that would (i) cause
    application of Section 409A of the Code to either Award or
    (ii) result in adverse tax consequences under
    Section 409A of the Code should that Code section apply to
    either Award.



 



    (g) Other Stock-Based Awards.  The
    Committee may also grant to Participants an Other Stock-Based
    Award, which shall consist of a right which is an Award
    denominated or payable in, valued in whole or in part by
    reference to, or otherwise based on or related to, Shares as is
    deemed by the Committee to be consistent with the purposes of
    the Plan. Subject to the terms of the Plan, including the
    Performance Objectives, if any, applicable to such Award, the
    Committee shall determine the terms and conditions of any such
    Other Stock-Based Award. Notwithstanding any other provision of
    the Plan to the contrary, any Other Stock-Based Award shall
    contain terms that (i) are designed to avoid application of
    Section 409A of the Code or (ii) are designed to avoid
    adverse tax consequences under Section 409A should that
    Code section apply to such Award. Payment shall be made in a
    lump sum, or Share certificates issued, no later than
    21/2 months
    after the date such Other Stock-Based Award becomes vested.
    Subject to adjustment as provided in Section 4(c) insofar
    as that provision relates to Shares, the maximum number of
    Shares or value for which Other Stock-Based Awards may be
    granted to any Participant during any calendar year shall not
    exceed 300,000 Shares, if the Award is in Shares, or
    $500,000, if the Award is in dollars.



 



    (h) General.



 



    (i) Limits on Transfer of Awards.



 


			
	 	    A.  
	
    Except as provided in (C) below, each Award, and each right
    under any Award, shall be exercisable only by the Participant
    during the Participant’s lifetime, or by the person to whom
    the Participant’s rights shall pass by will or the laws of
    descent and distribution.




 


			
	 	    B.  
	
    Except as provided in (C) below, no Award and no right
    under any such Award may be assigned, alienated, pledged,
    attached, sold or otherwise transferred or encumbered by a
    Participant otherwise than by will or by the laws of descent and
    distribution (or, in the case of Restricted Stock, to the
    Company). Any such attempted or purported assignment,
    alienation, pledge,





    

    8








 





			
	 	
	
    attachment, sale, transfer or encumbrance shall be void,
    ineffective and unenforceable against the Company or any
    Affiliate, and shall give no right to the purported transferee,
    and shall at the sole discretion of the Committee result in the
    forfeiture of the Award with respect to the Award involved in
    such attempted or perpetual transfer or encumbrance.




 


			
	 	    C.  
	
    Notwithstanding anything in the Plan to the contrary, to the
    extent specifically provided by the Committee with respect to a
    grant, (1) a nonqualified stock option may be transferred
    to immediate family members or related family trusts, or similar
    entities on such terms and conditions as the Committee may
    establish, and (2) an Award other than an Incentive Stock
    Option may be transferred pursuant to a qualified domestic
    relations order described in Section 414(p) of the Code.




 



    (ii) Term of Awards.  Subject to the terms
    of the Plan, the term of each Award shall be for such period as
    may be determined by the Committee; provided, that in no event
    shall the term of any Award exceed a period of 10 years
    from the date of its grant.



 



    (iii) Share Certificates.  All
    certificates for Shares or other securities of the Company
    delivered under the Plan pursuant to any Award or the exercise
    thereof shall be subject to such stop transfer orders and other
    restrictions as the Committee may deem advisable under the Plan
    or the rules, regulations, and other requirements of the SEC,
    any stock exchange upon which such Shares or other securities
    are then listed, and any applicable federal or state laws, and
    the Committee may cause a legend or legends to be put on any
    such certificates to make appropriate reference to such
    restrictions.



 



    (iv) Consideration for Grants.  Awards may
    be granted for no cash consideration or for such consideration
    as the Committee determines including, without limitation, such
    minimal cash consideration as may be required by applicable law.



 



    (v) Delivery of Shares or other Securities upon Payment
    by Participant of Consideration.  No Shares or
    other securities shall be delivered pursuant to any Award until
    payment in full of any amount required to be paid pursuant to
    the Plan or the applicable Award Agreement is received by the
    Company (including Shares being withheld in accordance with
    Section 8(b) or any applicable Award agreement).



 



    (vi) Section 409A
    Considerations.  Notwithstanding any other
    provision of the Plan to the contrary, any Award granted after
    December 31, 2004 shall contain terms that (i) are
    designed to avoid application of Section 409A of the Code
    to the Award or (ii) are designed to avoid adverse tax
    consequences under Section 409A of the Code should that
    Code Section apply to the Award. Dividend payments under any
    Award (which are paid directly to any Participant and which are
    otherwise subject to Section 409A) shall be made monthly
    (if any) as of the last business day of each month, which
    payment date is intended to be a fixed time or schedule under
    Treasury
    Regulation 1.409A-3(a)(4).



 



    (vii) 409A Specified Employee.  If the
    Participant is a “specified employee,” as defined in
    409A and the applicable regulations, except to the extent
    permitted under Section 409A of the Code, no payment of any
    Award that is subject to Section 409A of the Code (after
    taking into account all applicable exceptions to
    Section 409A of the Code, including but not limited to the
    exceptions for short-term deferrals and for “separation pay
    only upon an involuntary separation from service”) shall be
    made under the Plan on account of the Participant’s
    “separation from service,” as defined in
    Section 409A of the Code, with the Company until the later
    of the date prescribed for payment in the Award and the first
    day of the seventh calendar month that begins after the date of
    the Participant’s separation from service (or, if earlier,
    the date of death of the Participant). Any such amounts shall be
    aggregated and paid in a lump sum.



 




    SECTION 7.  Amendment
    and Termination.



 



    Except to the extent prohibited by applicable law and unless
    otherwise expressly provided in an Award Agreement or in the
    Plan:



 



    (a) Amendments to the Plan.  Except as
    required by applicable law or the rules of the principal
    securities exchange or market on which the shares are traded and
    subject to Section 7(b) below, the Board or the Committee




    

    9








 






    may amend, alter, suspend, discontinue, or terminate the Plan
    without the consent of any stockholder, Participant, other
    holder or beneficiary of an Award, or other Person.



 



    (b) Amendments to Awards.  Subject to
    (d) below, the Committee may waive any conditions or rights
    under, amend any terms of, or alter any Award theretofore
    granted, provided no change, other than pursuant to
    Section 7(c), in any Award shall reduce the benefit to
    Participant without the consent of such Participant. In no event
    shall the Committee, if not the Board, take action without the
    approval of the Board that constitutes a
    “repricing” of an Option for financial
    accounting purposes, and any Board-approved repricing shall be
    inoperative and ineffective unless and until approved by the
    stockholders.



 



    (c) Adjustment of Awards Upon the Occurrence of Certain
    Unusual or Nonrecurring Events.  Subject to
    (d) below, the Committee is hereby authorized to make
    adjustments in the terms and conditions of, and the criteria
    included in, Awards in recognition of unusual or nonrecurring
    events (including, without limitation, the events described in
    Section 4(c) of the Plan) affecting the Company, any
    Affiliate, or the financial statements of the Company or any
    Affiliate, or of changes in applicable laws, regulations, or
    accounting principles, whenever the Committee determines that
    such adjustments are appropriate in order to prevent dilution or
    enlargement of the benefits or potential benefits intended to be
    made available under the Plan; provided, that any such election
    would not (i) cause the application of Section 409A of
    the Code to the Award or (ii) create adverse tax
    consequences under Section 409A of the Code should
    Section 409A apply to the Award.



 



    (d) Section 162(m).  The Committee,
    in its sole discretion and without the consent of the
    Participant, in addition to adjustments that may be made
    pursuant to Section 7(c) above, may amend (i) any
    stock-based Award to reflect (1) a change in corporate
    capitalization, such as a stock split or dividend, (2) a
    corporate transaction, such as a corporate merger, a corporate
    consolidation, any corporate separation (including a spinoff or
    other distribution of stock or property by a corporation), any
    corporate reorganization (whether or not such reorganization
    comes within the definition of such term in Section 368 of
    the Code), (3) any partial or complete corporate
    liquidation, or (4) a change in accounting rules required
    by the Financial Accounting Standards Board and (ii) any
    Award that is not intended to meet the requirements of the
    performance based compensation exception to Section 162(m)
    of the Code, to reflect a significant event that the Committee,
    in its sole discretion, believes to be appropriate to reflect
    the original intent in the grant of the Award. With respect to
    an Award that is subject to Section 162(m) of the Code,
    subject to Section 8, the Committee (i) shall not take
    any action that would disqualify such Award as performance based
    compensation and (ii) must first certify that the
    Performance Objectives, if applicable, have been achieved before
    the Award may be paid.



 




    SECTION 8.  Change
    in Control.



 



    (a) Awards Granted on or Prior to March 1,
    2005.  Notwithstanding any other provision of this
    Plan to the contrary, in the event of a Change in Control of the
    Company all outstanding Awards granted on or prior to
    March 1, 2005 shall automatically become fully vested
    immediately prior to such Change in Control (or such earlier
    time as set by the Committee), all restrictions, if any, with
    respect to such Awards shall lapse, and all performance
    criteria, if any, with respect to such Awards shall be deemed to
    have been met in full (at the highest level).



 



    (b) Awards Granted After March 1,
    2005.  With respect to Awards granted after
    March 1, 2005, notwithstanding any other provision of this
    Plan to the contrary, in the event that a Participant’s
    employment with the Company (or a successor) and all of its
    Affiliates terminates within 2 years after a Change in
    Control of the Company and (i) such termination of
    employment was initiated by the Company (or a successor) other
    than for a Termination for Cause or (ii) such termination
    of employment was initiated by a Participant after determining
    in the Participant’s good faith reasonable judgment that
    the termination is a Termination for Good Reason, all such
    Awards of each affected Participant shall become fully vested
    immediately as of such employment termination date, all
    restrictions, if any, with respect to such Awards shall lapse,
    and all performance criteria, if any, with respect to such
    Awards shall be deemed to have been met in full (at the highest
    or maximum level). Unless the Company survives as an independent
    publicly traded company, all Options outstanding at the time of
    the events that give rise to each affected Participant’s
    right to Change in Control benefits hereunder shall terminate
    and the Optionee shall be paid, with respect to each Option, an
    amount in cash equal to the excess of the Fair Market Value of a
    Share over the Option’s exercise price (if the Option
    exercise price exceeds the Fair Market Value of a Share on such
    date, the




    

    10








 






    Optionee shall be paid an amount in cash equal to the lesser of
    $1.00 or the Black-Scholes value of the cancelled Option as
    determined in good faith by the Board), unless and except to the
    extent provision is made in writing in connection with such
    Change in Control event or transaction for the continuation of
    the Plan
    and/or the
    assumption of the Options theretofore granted, or for the
    substitution for such Options of new options covering the stock
    of a successor entity, or the parent or subsidiary thereof, with
    appropriate adjustments as to the number and kinds of shares and
    exercise prices, in which event the Plan and Options theretofore
    granted shall continue as fully vested and immediately
    exercisable Options in the manner and under the terms so
    provided.



 




    SECTION 9.  General
    Provisions.



 



    (a) No Rights to Awards.  No Director,
    Employee, Consultant or other Person shall have any claim to be
    granted any Award. There is no obligation for uniformity of
    treatment of Participants or holders or beneficiaries of Awards,
    and the terms and conditions of Awards need not be the same with
    respect to each recipient.



 



    (b) Withholding.  The Company or any
    Affiliate is authorized to withhold from any Award, from any
    payment due or transfer made under any Award or under the Plan
    or from any compensation or other amount owing to a Participant
    the amount (in cash, Shares, other securities, Shares that would
    otherwise be issued pursuant to such Award, other Awards or
    other property) of any applicable taxes payable at the minimum
    statutory rate in respect of an Award, its exercise, the lapse
    of restrictions thereon, or any payment or transfer under an
    Award or under the Plan and to take such other action as may be
    necessary in the opinion of the Company to satisfy all
    obligations for the payment of such taxes at the minimum
    statutory rate. In addition, the Committee may provide, in an
    Award Agreement, that the Participant shall have the right to
    direct the Company to satisfy the Company’s actual tax
    withholding obligation through the “constructive”
    tender of already-owned Shares or the withholding of Shares
    otherwise to be acquired upon the exercise or payment of such
    Award.



 



    (c) No Right to Employment.  The grant of
    an Award shall not be construed as giving a Participant the
    right to be retained in the employ of the Company or any
    Affiliate. Further, the Company or an Affiliate may at any time
    dismiss a Participant from employment or other service
    relationship at any time, free from any liability or any claim
    under the Plan, unless otherwise expressly provided in the Plan
    or in any Award Agreement.



 



    (d) Governing Law.  The validity,
    construction, and effect of the Plan and any rules and
    regulations relating to the Plan shall be governed by and
    construed in accordance with the laws of the State of Delaware
    and applicable federal law.



 



    (e) 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 the applicable
    laws, or if it cannot be 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.



 



    (f) Other Laws.  The Committee may refuse
    to issue or transfer any Shares or other consideration under an
    Award if, acting in its sole discretion, it determines that the
    issuance of transfer or such Shares or such other consideration
    might violate any applicable law or regulation or entitle the
    Company to recover the same under Section 16(b) of the
    Exchange Act, and any payment tendered to the Company by a
    Participant, other holder or beneficiary in connection with the
    exercise of such Award shall be promptly refunded to the
    relevant Participant, holder or beneficiary.



 



    (g) Unfunded Plan.  Neither the Plan nor
    the Award shall create or be construed to create a trust or
    separate fund or funds. Neither the Plan nor any Award shall
    establish any kind of a fiduciary relationship between the
    Company or any Affiliate and a Participant or any other Person.
    To the extent that any Person acquires a right to receive
    payments from the Company or any Affiliate pursuant to an Award,
    such right shall be no greater than the right of any general
    unsecured creditor of the Company or any Affiliate.



 



    (h) No Fractional Shares.  No fractional
    Shares shall be issued or delivered pursuant to the Plan or any
    Award, and the Committee shall determine whether cash, other
    securities, or other property shall be paid or




    

    11








 






    transferred in lieu of any fractional Shares or whether such
    fractional Shares or any rights thereto shall be canceled,
    terminated or otherwise eliminated.



 



    (i) Substitute Awards.  Awards may be
    granted from time to time in substitution for similar awards
    held by employees or directors of other corporations who become
    Employees or Directors of the Company or its Affiliates as the
    result of a merger or consolidation of such director or
    employee’s employing corporation with the Company or any
    Affiliate, or the acquisition by the Company or any Affiliate of
    the assets of such director or employee’s employing
    corporation, or the acquisition by the Company or any Affiliate
    of the stock of such director or employee’s employing
    corporation. The terms and conditions of substitute Awards
    granted shall comport with the terms and conditions set forth in
    the Plan.



 



    (j) Shareholder Agreements.  The Committee
    may condition the grant, exercise or payment of any Award upon
    such person entering into a stockholders’ agreement or
    repurchase agreement in such form as approved from time to time
    by the Board.



 



    (k) Gender, Tense and Headings.  Whenever
    the context requires, words of the masculine gender used herein
    shall include the feminine and neuter and words used in the
    singular shall include the plural. Headings are given to the
    Sections and subsections of the Plan solely as a convenience to
    facilitate reference. Such headings shall not be deemed in any
    way material or relevant to the construction or interpretation
    of the Plan or any provision thereof.



 



    (l) No Guarantee of Tax
    Consequences.  None of the Board, the Company nor
    the Committee makes any commitment or guarantee that any
    federal, state or local tax treatment will apply or be available
    to any person participating or eligible to participate hereunder.



 



    (m) Section 162(m) Special Transition
    Rule.  Should any class of Common Stock be
    registered under Section 12(g) of the Exchange Act, the
    Plan is intended to qualify for the transition relief provided
    under Treasury Regulation § 1.162-27(f). Accordingly,
    all compensation realized by Participants in connection with
    Awards granted under the Plan within the reliance period
    described therein is intended to be exempt from the limitation
    on tax deductibility under Section 162(m) of the Code. For
    purposes of the Plan, the reliance period will expire on the
    earlier of (i) the expiration of the Plan, (ii) a
    “material modification” of the Plan (within the
    meaning of Treasury Regulation § 1.162-27(h)(1)(iii)),
    (iii) the issuance of all Common Stock that has been
    allocated under the Plan, or (iv) the first meeting of
    stockholders of the Company at which directors are to be elected
    that occurs after the close of the third calendar year following
    the calendar year in which the Common Stock is first registered
    under Section 12(g) of the Exchange Act.



 




    SECTION 10.  Effective
    Date of the Plan.



 



    The Plan, as hereby amended and restated, shall be effective on
    the date it is approved and adopted by the Board, including with
    respect to all Awards granted on or after March 1, 2005,
    except as otherwise provided in the Plan.



 




    SECTION 11.  Term
    of the Plan.



 



    No Award shall be granted under the Plan after the
    10th anniversary of the earlier of the date this Plan is
    adopted by the Board or the date the Plan is approved by the
    stockholders of the Company. However, unless otherwise expressly
    provided in the Plan or in an applicable Award Agreement, any
    Award granted prior to such termination, and the authority of
    the Board or the Committee to amend, alter, adjust, suspend,
    discontinue, or terminate any such Award or to waive any
    conditions or rights under such Award, shall extend beyond such
    termination date.




    

    12