exv10w5






Exhibit 10.5




ORCHID ISLAND CAPITAL, INC.




2011 EQUITY INCENTIVE PLAN













 





TABLE OF CONTENTS




	 	 	 	 	 
	Section	 	Page	 
	Article I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.01. Affiliate
	 	 	1	 
	1.02. Agreement
	 	 	1	 
	1.03. Award
	 	 	1	 
	1.04. Board
	 	 	1	 
	1.05. Change in Control
	 	 	1	 
	1.06. Code
	 	 	2	 
	1.07. Committee
	 	 	2	 
	1.08. Common Stock
	 	 	3	 
	1.09. Company
	 	 	3	 
	1.10. Control Change Date
	 	 	3	 
	1.11. Corresponding SAR
	 	 	3	 
	1.12. Dividend Equivalent Right
	 	 	3	 
	1.13. Exchange Act
	 	 	4	 
	1.14. Fair Market Value
	 	 	4	 
	1.15. Incentive Award
	 	 	4	 
	1.16. Initial Value
	 	 	4	 
	1.17. Manager
	 	 	4	 
	1.18. Option
	 	 	4	 
	1.19. Other Equity-Based Award
	 	 	5	 
	1.20. Participant
	 	 	5	 
	1.21. Performance Measure
	 	 	5	 
	1.22. Performance Units
	 	 	5	 
	1.23. Plan
	 	 	5	 
	1.24. REIT
	 	 	6	 
	1.25. SAR
	 	 	6	 
	1.26. Stock Award
	 	 	6	 
	1.27. Ten Percent Stockholder
	 	 	6	 
	 
	 	 	 	 
	Article II PURPOSES
	 	 	6	 
	 
	 	 	 	 
	Article III ADMINISTRATION
	 	 	7	 
	 
	 	 	 	 
	Article IV ELIGIBILITY
	 	 	7	 
	 
	 	 	 	 
	Article V COMMON STOCK SUBJECT TO PLAN
	 	 	8	 
	 
	 	 	 	 
	5.01. Common Stock Issued
	 	 	8	 
	5.02. Aggregate Limit
	 	 	8	 
	5.03. Reallocation of Shares
	 	 	8	 
	5.04. Individual Award Limit
	 	 	9	 
	 
	 	 	 	 
	Article VI OPTIONS
	 	 	9	 
	 
	 	 	 	 
	6.01. Award
	 	 	9	 






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	Section	 	Page	 
	6.02. Option Price
	 	 	9	 
	6.03. Maximum Option Period
	 	 	9	 
	6.04. Nontransferability
	 	 	9	 
	6.05. Transferable Options
	 	 	10	 
	6.06. Employee Status
	 	 	10	 
	6.07. Exercise
	 	 	10	 
	6.08. Payment
	 	 	11	 
	6.09. Stockholder Rights
	 	 	11	 
	6.10. Disposition of Shares
	 	 	11	 
	 
	 	 	 	 
	Article VII SARS
	 	 	11	 
	 
	 	 	 	 
	7.01. Award
	 	 	11	 
	7.02. Maximum SAR Period
	 	 	11	 
	7.03. Nontransferability
	 	 	12	 
	7.04. Transferable SARs
	 	 	12	 
	7.05. Exercise
	 	 	12	 
	7.06. Employee Status
	 	 	13	 
	7.07. Settlement
	 	 	13	 
	7.08. Stockholder Rights
	 	 	13	 
	 
	 	 	 	 
	Article VIII STOCK AWARDS
	 	 	13	 
	 
	 	 	 	 
	8.01. Award
	 	 	13	 
	8.02. Vesting
	 	 	13	 
	8.03. Employee Status
	 	 	14	 
	8.04. Stockholder Rights
	 	 	14	 
	 
	 	 	 	 
	Article IX PERFORMANCE UNIT AWARDS
	 	 	14	 
	 
	 	 	 	 
	9.01. Award
	 	 	14	 
	9.02. Earning the Award
	 	 	14	 
	9.03. Payment
	 	 	15	 
	9.04. Stockholder Rights
	 	 	15	 
	9.05. Nontransferability
	 	 	15	 
	9.06. Transferable Performance Units
	 	 	15	 
	9.07. Employee Status
	 	 	15	 
	 
	 	 	 	 
	Article X OTHER EQUITY—BASED AWARDS
	 	 	16	 
	 
	 	 	 	 
	10.01. Award
	 	 	16	 
	10.02. Terms and Conditions
	 	 	16	 
	10.03. Payment or Settlement
	 	 	16	 
	10.04. Employee Status
	 	 	16	 
	10.05. Stockholder Rights
	 	 	17	 
	 
	 	 	 	 
	Article XI INCENTIVE AWARDS
	 	 	17	 
	 
	 	 	 	 
	11.01. Award
	 	 	17	 
	11.02. Terms and Conditions
	 	 	17	 
	11.03. Nontransferability
	 	 	17	 
	11.04. Employee Status
	 	 	17	 






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	Section	 	Page	 
	11.05. Settlement
	 	 	17	 
	11.06. Stockholder Rights
	 	 	18	 
	 
	 	 	 	 
	Article XII ADJUSTMENT UPON CHANGE IN COMMON STOCK
	 	 	18	 
	 
	 	 	 	 
	Article XIII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
	 	 	18	 
	 
	 	 	 	 
	Article XIV GENERAL PROVISIONS
	 	 	19	 
	 
	 	 	 	 
	14.01. Effect on Employment and Service
	 	 	19	 
	14.02. Unfunded Plan
	 	 	19	 
	14.03. Rules of Construction
	 	 	19	 
	14.04. Withholding Taxes
	 	 	19	 
	14.05. REIT Status
	 	 	20	 
	14.06. Code Section 409A
	 	 	20	 
	 
	 	 	 	 
	Article XV CHANGE IN CONTROL
	 	 	21	 
	 
	 	 	 	 
	15.01. Impact of Change in Control.
	 	 	21	 
	15.02. Assumption Upon Change in Control.
	 	 	21	 
	15.03. Cash-Out Upon Change in Control.
	 	 	21	 
	15.04. Limitation of Benefits
	 	 	22	 
	 
	 	 	 	 
	Article XVI AMENDMENT
	 	 	23	 
	 
	 	 	 	 
	Article XVII DURATION OF PLAN
	 	 	24	 
	 
	 	 	 	 
	Article XVIII EFFECTIVE DATE OF PLAN
	 	 	24	 






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ARTICLE I

DEFINITIONS



1.01. Affiliate




          Affiliate means any entity, whether now or hereafter existing, which controls, is controlled
by, or is under common control with, the Company (including, but not limited to, joint ventures,
limited liability companies and partnerships). For this purpose, the term “control” shall mean
ownership of 50% or more of the total combined voting power or value of all classes of shares or
interests in the entity, or the power to direct the management and policies of the entity, by
contract or otherwise.



1.02. Agreement




          Agreement means a written agreement (including any amendment or supplement thereto) between
the Company and a Participant specifying the terms and conditions of an Award granted to such
Participant.



1.03. Award




          Award means any Option, SAR, Stock Award, Performance Unit, Other Equity-Based Award or
Incentive Award.



1.04. Board




          Board means the Board of Directors of the Company.



1.05. Change in Control




          “Change in Control” shall mean a change in control of the Company which will be deemed to have
occurred after the date hereof if:





	(1)	 	any “person” as such term is used in Section 3(a)(9) of the Exchange Act,
as modified and used in Sections 13(d) and 14(d) thereof except that such term
shall not include (A) the Company or any of its subsidiaries, (B) any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or any of its affiliates, (C) an underwriter temporarily holding
securities pursuant to an offering of such securities, (D) any corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of the Company’s common
stock, or (E) any person or group as used in Rule 13d-1(b) under the Exchange
Act, is or becomes the Beneficial Owner, as such term is defined in Rule 13d-3
under the Exchange Act, directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of outstanding Company
securities;




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	(2)	 	during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other than
(A) a director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (1), (3) or (4) of this
Section 1.05 or (B) a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of the
Company) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
	 
	(3)	 	there is consummated a merger or consolidation of the Company or any direct
or indirect subsidiary of the Company with any other corporation, other than a
merger or consolidation in which the holders of Company voting securities
immediately before the merger or consolidation continue to own more than 50% or
more of the combined voting power of the Company or the surviving entity in the
merger or consolidation or any parent thereof outstanding immediately after
such merger or consolidation; or
	 
	(4)	 	there is consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets (or any transaction
having a similar effect, including a liquidation) other than a sale or
disposition by the Company of all or substantially all of the Company’s assets
to an entity, more than 50% of the combined voting power and common stock of
which is owned by stockholders of the Company in substantially the same
proportions as their ownership of the common stock of the Company immediately
prior to such sale.




If a change in control constitutes a payment event with respect to any Option, SAR, Stock Award,
Performance Unit or Other Equity-Based Award that provides for the deferral of compensation and is
subject to Section 409A of the Code, no payment will be made under that award on account of a
Change in Control unless the event described in (1), (2), (3) or (4) above, as applicable,
constitutes a “change in control event” under Treasury Regulation Section 1.409A-3(i)(5).



1.06. Code



          Code means the Internal Revenue Code of 1986, and any amendments thereto.



1.07. Committee




          Committee means the Compensation Committee of the Board. Unless otherwise determined by the
Board, the Committee shall consist solely of two or more non-employee members of the Board, each of
whom is intended to qualify as a “non-employee director” as






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defined by Rule 16b-3 of the Exchange Act or any successor rule, an “outside director” for
purposes of Section 162(m) of the Code (if awards under the Plan are subject to the deduction
limitation of Section 162(m) of the Code) and an “independent director” under the rules of any
exchange or automated quotation system on which the Common Stock is listed, traded or quoted;
provided, that any action taken by the Committee shall be valid and effective, whether or not the
members of the Committee at the time of such action are later determined not to have satisfied the
foregoing requirements or otherwise provided in any charter of the Committee. If there is no
Compensation Committee, then “Committee” means the Board; and provided, further, that with respect
to awards made to a member of the Board who is not an employee of the Company or an Affiliate,
“Committee” means the Board.



1.08. Common Stock




          Common Stock means the common stock, par value $0.01 per share, of the Company.



1.09. Company




          Company means Orchid Island Capital, Inc., a Maryland corporation.



1.10. Control Change Date




          Control Change Date means the date on which a Change in Control occurs. If a Change in
Control occurs on account of a series of transactions, the “Control Change Date” is the date of the
last of such transactions.



1.11. Corresponding SAR




          Corresponding SAR means an SAR that is granted in relation to a particular Option and that can
be exercised only upon the surrender to the Company, unexercised, of that portion of the Option to
which the SAR relates.



1.12. Dividend Equivalent Right




          Dividend Equivalent Right means the right, subject to the terms and conditions prescribed by
the Committee, of a Participant to receive (or have credited) cash, shares or other property in
amounts equivalent to the cash, shares or other property dividends declared on shares of Common
Stock with respect to specified Performance Units or units denominated in shares of Common Stock or
other Company securities subject to an Other Equity-Based Award, as determined by the Committee, in
its sole discretion. The Committee may provide that such Dividend Equivalents (if any) shall be
distributed only when, and to the extent that, the underlying award is vested or earned and also
may provide that Dividend Equivalents (if any) shall be deemed to have been reinvested in
additional shares of Common Stock or otherwise reinvested.







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1.13. Exchange Act




          Exchange Act means the Securities Exchange Act of 1934, as amended.



1.14. Fair Market Value




          Fair Market Value means, on any given date, the reported “closing” price of a share of Common
Stock on the New York Stock Exchange for such date or, if there is no closing price for a share of
Common Stock on the date in question, the closing price for a share of Common Stock on the last
preceding date for which a quotation exists. If, on any given date, the Common Stock is not listed
for trading on the New York Stock Exchange, then Fair Market Value shall be the “closing” price of
a share of Common Stock on such other exchange on which the Common Stock is listed for trading for
such date (or, if there is no closing price for a share of Common Stock on the date in question,
the closing price for a share of Common Stock on the last preceding date for which such quotation
exists) or, if the Common Stock is not listed on any exchange, the amount determined by the
Committee using any reasonable method in good faith and in accordance with the regulations under
Section 409A of the Code.



1.15. Incentive Award




          Incentive Award means an award awarded under Article XI which, subject to the terms and
conditions prescribed by the Committee, entitles the Participant to receive a payment from the
Company or an Affiliate.



1.16. Initial Value




          Initial Value means, with respect to a Corresponding SAR, the option price per share of the
related Option and, with respect to an SAR granted independently of an Option, the price per share
of Common Stock as determined by the Committee on the date of grant; provided, however, that the
price shall not be less than the Fair Market Value on the date of grant. Except as provided in
Article XII, the Initial Value of an outstanding SAR may not be reduced (by amendment, cancellation
and new grant or otherwise) without the approval of stockholders.



1.17. Manager




          Manager means Bimini Advisors, Inc.



1.18. Option




          Option means a share option that entitles the holder to purchase from the Company a stated
number of shares of Common Stock at the price set forth in an Agreement.







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1.19. Other Equity-Based Award




          Other Equity-Based Award means any award other than an Option, SAR, a Performance Unit or a
Stock Award which, subject to such terms and conditions as may be prescribed by the Committee,
entitles a Participant to receive Common Stock or rights or units valued in whole or in part by
reference to, or otherwise based on, Common Stock (including securities convertible into Common
Stock) or other equity interests.



1.20. Participant




          Participant means an employee or officer of the Company or an Affiliate, an employee or
officer of the Manager or an affiliate of the Manager, including but not limited to Bimini Capital
Management, Inc., who provides services to the Company or an Affiliate by virtue of employment with
the Manager or an affiliate of the Manager, and a member of the Board, and in each case who
satisfies the requirements of Article IV and is selected by the Committee to receive an Award.



1.21. Performance Measure




          Performance Measure means with respect to the Company or an Affiliate: (i) return on equity,
(ii) total earnings, (iii) earnings growth, (iv) return on capital, (v) return on capital employed,
(vi) Fair Market Value, (vii) appreciation in Fair Market Value, (viii) capital raised in the sale
of common equity, (ix) net interest margin, (x) comparison of Common Stock performance with market
indices or peer groups, (xi) earnings per share, (xii) dividends per share, (xiii) income from
continuing operations or core earnings, i.e., net interest income less direct operating expenses
and general and administrative expenses but disregarding items specified by the Committee (e.g.,
items related to discontinued operations, extraordinary items, non-recurring items, the effects of
changes in tax laws or regulations or changes in applicable accounting standards), (xiv) assets
under management (with or without leverage limitations prescribed by the Committee), (xv) book
value per share of Common Stock or growth in book value per share of Common Stock or (xvi)
maintenance of book value per share of Common Stock.



1.22. Performance Units




          Performance Units means an award, in the amount determined by the Committee, stated with
reference to a specified number of shares of Common Stock, that in accordance with the terms of an
Agreement entitles the holder to receive a payment for each specified unit equal to the value of
the Performance Unit on the date of payment.



1.23. Plan




          Plan means this Orchid Island Capital, Inc. 2011 Equity Incentive Plan.







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1.24. REIT




          REIT means a real estate investment trust within the meaning of Sections 856 through 860 of
the Code.



1.25. SAR




          SAR means a share appreciation right that in accordance with the terms of an Agreement
entitles the holder to receive, with respect to each share of Common Stock encompassed by the
exercise of the SAR, the excess, if any, of the Fair Market Value at the time of exercise over the
Initial Value. References to “SARs” include both Corresponding SARs and SARs granted independently
of Options, unless the context requires otherwise.



1.26. Stock Award




          Stock Award means Common Stock awarded to a Participant under Article VIII.



1.27. Ten Percent Stockholder




          Ten Percent Stockholder means any individual owning more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of a “parent corporation” or
“subsidiary corporation” (as such terms are defined in Section 424 of the Code) of the Company. An
individual shall be considered to own any voting shares owned (directly or indirectly) by or for
his or her brothers, sisters, spouse, ancestors or lineal descendants and shall be considered to
own proportionately any voting shares owned (directly or indirectly) by or for a corporation,
partnership, estate or trust of which such individual is a stockholder, partner or beneficiary.




ARTICLE II

PURPOSES




          The Plan is intended to assist the Company and its Affiliates in recruiting and retaining
employees, directors and other service providers with ability and initiative by enabling such
persons or entities to participate in the future success of the Company and its Affiliates and to
associate their interests with those of the Company and its stockholders. The Plan is intended to
permit the grant of both Options qualifying under Section 422 of the Code (“incentive stock
options”) and Options not so qualifying, and the grant of SARs, Stock Awards, Performance Units,
Other Equity-Based Awards and Incentive Awards in accordance with the Plan and any procedures that
may be established by the Committee. No Option that is intended to be an incentive stock option
shall be invalid for failure to qualify as an incentive stock option (and shall be considered a
nonstatutory option in the event, and to the extent, of such failure). The proceeds received by
the Company from the sale of Common Stock pursuant to this Plan shall be used for general corporate
purposes.







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ARTICLE III

ADMINISTRATION




          The Plan shall be administered by the Committee. The Committee shall have authority to grant
Awards upon such terms (not inconsistent with the provisions of this Plan), as the Committee may
consider appropriate. Such terms may include, but are not limited to, conditions (in addition to
those contained in this Plan) on the exercisability of all or any part of an Option or SAR or on
the transferability or forfeitability of an Award. Notwithstanding any such conditions, the
Committee may, in its discretion, accelerate the time at which any Option or SAR may be exercised,
or the time at which a Stock Award or Other Equity-Based Award may become transferable or
nonforfeitable or the time at which an Other Equity-Based Award, Performance Units or an Incentive
Award may be settled. In addition, the Committee shall have complete authority to interpret all
provisions of this Plan; to prescribe the form of Agreements; to adopt, amend and rescind rules and
regulations pertaining to the administration of the Plan (including rules and regulations that
require or allow Participants to defer the payment of benefits under the Plan); and to make all
other determinations necessary or advisable for the administration of this Plan. The Committee’s
determinations under the Plan (including without limitation, determinations of the individuals to
receive awards under the Plan, the form, amount and timing of such awards, the terms and provisions
of such awards and the Agreements) need not be uniform and may be made by the Committee selectively
among individuals who receive, or are eligible to receive, awards under the Plan, whether or not
such persons are similarly situated. The express grant in the Plan of any specific power to the
Committee shall not be construed as limiting any power or authority of the Committee. Any decision
made, or action taken, by the Committee in connection with the administration of this Plan shall be
final and conclusive. The members of the Committee shall not be liable for any act done in good
faith with respect to this Plan, any Agreement or any Award. All expenses of administering this
Plan shall be borne by the Company.




ARTICLE IV

ELIGIBILITY



          Any employee of the Company or an Affiliate (including a trade or business that becomes an
Affiliate after the adoption of this Plan) and any member of the Board is eligible to participate
in this Plan. In addition, any other individual who provides services to the Company or an
Affiliate by virtue of employment with the Manager or an affiliate of the Manager, including but
not limited to Bimini Capital Management, Inc., is eligible to participate in this Plan if the
Committee, in its sole discretion, determines that the participation of such individual is in the
best interest of the Company.







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ARTICLE V

COMMON STOCK SUBJECT TO PLAN



5.01. Common Stock Issued




          Upon the award of Common Stock pursuant to a Stock Award, an Other Equity-Based Award or in
settlement of an Incentive Award or Performance Units, the Company may deliver to the Participant
shares of Common Stock from its treasury shares or authorized but unissued Common Stock. Upon the
exercise of any Option, SAR or Other Equity-Based Award denominated in Common Stock, the Company
may deliver to the Participant (or the Participant’s broker if the Participant so directs), shares
of Common Stock from its treasury shares or authorized but unissued Common Stock.



5.02. Aggregate Limit




          (a) The maximum aggregate number of shares of Common Stock that may be issued under this Plan
pursuant to the exercise of Options and SARs, the grant of Stock Awards or Other Equity-Based
Awards and the settlement of Incentive Awards and Performance Units is equal to 4,000,000 shares.




          (b) The maximum number of shares of Common Stock that may be issued under this Plan in
accordance with Section 5.02(a) shall be subject to adjustment as provided in Article XII.




          (c) All of the shares of Common Stock that may be issued under this Plan may be issued in the
form of incentive stock options or Corresponding SARs that are related to incentive stock options.



5.03. Reallocation of Shares




          If any Award expires, is forfeited or is terminated without having been exercised or is paid
in cash without delivery of Common Stock, then any shares of Common Stock covered by such lapsed,
cancelled, expired, unexercised or cash-settled portion of such Award or grant shall be available
for the grant or settlement of other Awards under this Plan. Any shares of Common Stock tendered
or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any
Award shall not increase the number of shares available for future grants of Awards. If shares of
Common Stock are issued in settlement of an SAR, the number of shares of Common Stock available
under the Plan shall be reduced by the number of shares of Common Stock for which the SAR was
exercised rather than the number of shares of Common Stock issued in settlement of the SAR. To the
extent permitted by applicable law or the rules of any exchange on which the shares of Common Stock
are listed for trading, shares of Common Stock issued in assumption of, or in substitution for, any
outstanding awards of any entity acquired in any form of combination by the Company or any
Affiliate shall not reduce the number of shares of Common Stock available for issuance under the
Plan.







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5.04. Individual Award Limit




          No individual may be granted Awards in any calendar year covering, or with respect to, more
than 250,000 shares of Common Stock. The preceding sentence shall not apply to an Incentive Award
that is not granted with reference to a number of shares of Common Stock and that will be settled
in cash.




ARTICLE VI

OPTIONS



6.01. Award




          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Option is to be granted and will specify the number of shares of Common Stock covered by
such Awards; provided, however, that an Option may be granted only to an individual who provides
direct services to the Company or an Affiliate.



6.02. Option Price




          The price per share of Common Stock purchased on the exercise of an Option shall be determined
by the Committee on the date of grant, but shall not be less than the Fair Market Value on the date
the Option is granted. Notwithstanding the preceding sentence, the price per share of Common Stock
purchased on the exercise of any Option that is an incentive stock option granted to an individual
who is a Ten Percent Stockholder on the date such option is granted, shall not be less than one
hundred ten percent (110%) of the Fair Market Value on the date the Option is granted. Except as
provided in Article XII, the price per share of an outstanding Option may not be reduced (by
amendment, cancellation and new grant or otherwise) without the approval of stockholders.



6.03. Maximum Option Period




          The maximum period in which an Option may be exercised shall be determined by the Committee on
the date of grant except that no Option shall be exercisable after the expiration of ten years from
the date such Option was granted. In the case of an incentive stock option granted to a
Participant who is a Ten Percent Stockholder on the date of grant, such Option shall not be
exercisable after the expiration of five years from the date of grant. The terms of any
Option may provide that it is exercisable for a period less than such maximum period.



6.04. Nontransferability




          Except as provided in Section 6.05, each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In the event of any
transfer of an Option (by the Participant or his transferee), the Option and any Corresponding SAR
that relates to such Option must be transferred to the same person or persons or entity or






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entities. Except as provided in Section 6.05, during the lifetime of the Participant to whom
the Option is granted, the Option may be exercised only by the Participant. No right or interest
of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.



6.05. Transferable Options




          Notwithstanding anything to the contrary in Section 6.04, if the Agreement provides, an Option
that is not an incentive stock option may be transferred by a Participant to the Participant’s
children, grandchildren, spouse, one or more trusts for the benefit of such family members or a
partnership in which such family members are the only partners, on such terms and conditions as may
be permitted under Rule 16b-3 under the Exchange Act as in effect from time to time. The holder of
an Option transferred pursuant to this Section shall be bound by the same terms and conditions that
governed the Option during the period that it was held by the Participant; provided, however, that
such transferee may not transfer the Option except by will or the laws of descent and distribution.
In the event of any transfer of an Option (by the Participant or his transferee), the Option and
any Corresponding SAR that relates to such Option must be transferred to the same person or persons
or entity or entities. Notwithstanding the foregoing, an Option may not be transferred for
consideration absent stockholder approval.



6.06. Employee Status




          For purposes of determining the applicability of Section 422 of the Code (relating to
incentive stock options), or in the event that the terms of any Option provide that it may be
exercised only during employment or continued service or within a specified period of time after
termination of employment or continued service, the Committee may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability, or other reasons shall
not be deemed interruptions of continuous employment or service.



6.07. Exercise




          Subject to the provisions of this Plan and the applicable Agreement, an Option may be
exercised in whole at any time or in part from time to time at such times and in compliance with
such requirements as the Committee shall determine; provided, however, that incentive stock options
(granted under the Plan and all plans of the Company and its Affiliates) may not be first
exercisable in a calendar year for shares of Common Stock having a Fair Market Value (determined as
of the date an Option is granted) exceeding $100,000. An Option granted under this Plan may be
exercised with respect to any number of whole shares less than the full number for which the Option
could be exercised. A partial exercise of an Option shall not affect the right to exercise the
Option from time to time in accordance with this Plan and the applicable Agreement with respect to
the remaining shares subject to the Option. The exercise of an Option shall result in the
termination of any Corresponding SAR to the extent of the number of shares with respect to which
the Option is exercised.







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6.08. Payment




          Subject to rules established by the Committee and unless otherwise provided in an Agreement,
payment of all or part of the Option price may be made in cash, certified check, by tendering
shares of Common Stock (or by attestation of ownership of Common Stock), by a broker-assisted
cashless exercise or in such other form or manner acceptable to the Committee. If shares of Common
Stock are used to pay all or part of the Option price, the sum of the cash and cash equivalent and
the date of exercise Fair Market Value of the shares surrendered must not be less than the Option
price of the shares for which the Option is being exercised.



6.09. Stockholder Rights




          No Participant shall have any rights as a stockholder with respect to the shares of Common
Stock subject to an Option until the date of exercise of such Option.



6.10. Disposition of Shares




          A Participant shall notify the Company of any sale or other disposition of shares of Common
Stock acquired pursuant to an Option that was an incentive stock option if such sale or disposition
occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of
the shares of Common Stock to the Participant. Such notice shall be in writing and directed to the
Secretary of the Company.




ARTICLE VII

SARS



7.01. Award




          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom SARs are to be granted and will specify the number of shares of Common Stock covered by
such Awards; provided, however, that an SAR may be granted only to an individual who provides
direct services to the Company or an Affiliate. No Participant may be granted Corresponding SARs
(under the Plan and all plans of the Company and its Affiliates) that are related to incentive
stock options which are first exercisable in any calendar year for shares of Common Stock having an
aggregate Fair Market Value (determined as of the date the related Option is granted) that exceeds
$100,000.



7.02. Maximum SAR Period




          The term of each SAR shall be determined by the Committee on the date of grant, except that no
SAR shall have a term of more than ten years from the date of grant. In the case of a
Corresponding SAR that is related to an incentive stock option granted to a Participant who is a
Ten Percent Stockholder on the date of grant, such Corresponding SAR shall not be exercisable






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after the expiration of five years from the date of grant. The terms of any SAR may provide
that it has a term that is less than such maximum period.



7.03. Nontransferability




          Except as provided in Section 7.04, each SAR granted under this Plan shall be nontransferable
except by will or by the laws of descent and distribution. In the event of any such transfer, a
Corresponding SAR and the related Option must be transferred to the same person or persons or
entity or entities. Except as provided in Section 7.04, during the lifetime of the Participant to
whom the SAR is granted, the SAR may be exercised only by the Participant. No right or interest of
a Participant in any SAR shall be liable for, or subject to, any lien, obligation, or liability of
such Participant.



7.04. Transferable SARs




          Notwithstanding anything to the contrary in Section 7.03, if the Agreement provides, an SAR,
other than a Corresponding SAR that is related to an incentive stock option, may be transferred by
a Participant to the Participant’s children, grandchildren, spouse, one or more trusts for the
benefit of such family members or a partnership in which such family members are the only partners,
on such terms and conditions as may be permitted under Rule 16b-3 under the Exchange Act as in
effect from time to time. The holder of an SAR transferred pursuant to this Section shall be bound
by the same terms and conditions that governed the SAR during the period that it was held by the
Participant; provided, however, that such transferee may not transfer the SAR except by will or the
laws of descent and distribution. In the event of any transfer of a Corresponding SAR (by the
Participant or his transferee), the Corresponding SAR and the related Option must be transferred to
the same person or person or entity or entities. Notwithstanding the foregoing, in no event may an
SAR be transferred for consideration absent stockholder approval.



7.05. Exercise




          Subject to the provisions of this Plan and the applicable Agreement, an SAR may be exercised
in whole at any time or in part from time to time at such times and in compliance with such
requirements as the Committee shall determine; provided, however, that a Corresponding SAR that is
related to an incentive stock option may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value exceeds the option price of the related Option. An
SAR granted under this Plan may be exercised with respect to any number of whole shares less than
the full number for which the SAR could be exercised. A partial exercise of an SAR shall not
affect the right to exercise the SAR from time to time in accordance with this Plan and the
applicable Agreement with respect to the remaining shares subject to the SAR. The exercise of a
Corresponding SAR shall result in the termination of the related Option to the extent of the number
of shares with respect to which the SAR is exercised.







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7.06. Employee Status




          If the terms of any SAR provide that it may be exercised only during employment or continued
service or within a specified period of time after termination of employment or continued service,
the Committee may decide to what extent leaves of absence for governmental or military service,
illness, temporary disability or other reasons shall not be deemed interruptions of continuous
employment or service.



7.07. Settlement




          At the Committee’s discretion, the amount payable as a result of the exercise of an SAR may be
settled in cash, shares of Common Stock, or a combination of cash and Common Stock. No fractional
share will be deliverable upon the exercise of an SAR but a cash payment will be made in lieu
thereof.



7.08. Stockholder Rights




          No Participant shall, as a result of receiving an SAR, have any rights as a stockholder of the
Company or any Affiliate until the date that the SAR is exercised and then only to the extent that
the SAR is settled by the issuance of shares of Common Stock.




ARTICLE VIII

STOCK AWARDS



8.01. Award




          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom a Stock Award is to be made and will specify the number of shares of Common Stock covered
by such Awards.



8.02. Vesting




          The Committee, on the date of the award, may prescribe that a Participant’s rights in a Stock
Award shall be forfeitable or otherwise restricted for a period of time or subject to such
conditions as may be set forth in the Agreement. By way of example and not of limitation, the
Committee may prescribe that a Participant’s rights in a Stock Award shall be forfeitable or
otherwise restricted subject to the attainment of objectives stated with reference to the
Company’s, an Affiliate’s or a business unit’s attainment of objectives stated with respect to
performance criteria established by the Committee, including criteria or objectives stated with
reference to one or more Performance Measures.







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8.03. Employee Status




          In the event that the terms of any Stock Award provide that shares may become transferable and
nonforfeitable thereunder only after completion of a specified period of employment or continuous
service, the Committee may decide in each case to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be deemed interruptions
of continuous employment or service.



8.04. Stockholder Rights




          Unless otherwise specified in accordance with the applicable Agreement, while the shares of
Common Stock granted pursuant to the Stock Award may be forfeited or are nontransferable, a
Participant will have all rights of a stockholder with respect to a Stock Award, including the
right to receive dividends and vote the shares; provided, however, that the Committee may prescribe
that dividends paid on a Stock Award shall be accumulated and paid when, and to the extent that,
the Stock Award becomes nonforfeitable and transferable. In addition, during the period that the
shares of Common Stock granted pursuant to a Stock Award are forfeitable or nontransferable (i) a
Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares
granted pursuant to a Stock Award, (ii) the Company shall retain custody of the certificates
evidencing shares granted pursuant to a Stock Award, and (iii) the Participant will deliver to the
Company a stock power, endorsed in blank, with respect to each Stock Award. The limitations set
forth in the preceding sentence shall not apply after the shares granted under the Stock Award are
transferable and are no longer forfeitable.




ARTICLE IX

PERFORMANCE UNIT AWARDS



9.01. Award




          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom Performance Units are granted and will specify the number of shares of Common Stock covered
by such Awards. The Committee also will specify whether Dividend Equivalent Rights are granted in
conjunction with the Performance Units.



9.02. Earning the Award




          The Committee, on the date of the grant of an award, shall prescribe any terms and conditions
that must be satisfied in order for the Performance Units to be earned. By way of example and not
of limitation, the Committee may prescribe that the Performance Units will be earned, and the
Participant will be entitled to receive payment pursuant to the Performance Units, only upon the
satisfaction of performance objectives and such other criteria as may be prescribed by the
Committee including criteria or objectives stated with reference to one or more Performance
Measures.







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9.03. Payment




          In the discretion of the Committee, the amount payable when Performance Units are earned may
be settled in cash, by the issuance of shares of Common Stock or a combination thereof. A
fractional share of Common Stock shall not be deliverable when Performance Units are earned, but a
cash payment will be made in lieu thereof. The amount payable when Performance Units are earned
shall be paid in a lump sum.



9.04. Stockholder Rights




          A Participant, as a result of receiving Performance Units, shall not have any rights as a
stockholder until, and then only to the extent that, the Performance Units are earned and settled
in Common Stock. After Performance Units are earned and settled in shares of Common Stock, a
Participant will have all the rights of a stockholder as described in Section 8.05.



9.05. Nontransferability




          Except as provided in Section 9.06, Performance Units granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. No right or interest of
a Participant in any Performance Units shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.



9.06. Transferable Performance Units




          Notwithstanding anything to the contrary in Section 9.05, if the Agreement provides,
Performance Units may be transferred by a Participant to the Participant’s children, grandchildren,
spouse, one or more trusts for the benefit of such family members or a partnership in which such
family members are the only partners, on such terms and conditions as may be permitted under Rule
16b-3 under the Exchange Act as in effect from time to time. The holder of Performance Units
transferred pursuant to this Section shall be bound by the same terms and conditions that governed
the Performance Units during the period that they were held by the Participant; provided, however
that such transferee may not transfer Performance Units except by will or the laws of descent and
distribution. Notwithstanding the foregoing, in no event may a Performance Unit be transferred for
consideration absent stockholder approval.



9.07. Employee Status




          In the event that the terms of any Performance Unit provides that no payment will be made
unless the Participant completes a stated period of employment or continued service, the Committee
may decide to what extent leaves of absence for government or military service, illness, temporary
disability, or other reasons shall not be deemed interruptions of continuous employment or service.







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ARTICLE X

OTHER EQUITY—BASED AWARDS



10.01. Award




          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Other Equity-Based Award is to be made and will specify the number of shares of Common
Stock or other equity interests covered by such Awards. The Committee also will specify whether
Dividend Equivalent Rights are granted in conjunction with the Other Equity-Based Award.



10.02. Terms and Conditions




          The Committee, at the time an Other Equity-Based Award is made, shall specify the terms and
conditions which govern the award. The terms and conditions of an Other Equity-Based Award may
prescribe that a Participant’s rights in the Other Equity-Based Award shall be forfeitable,
nontransferable or otherwise restricted for a period of time or subject to such other conditions as
may be determined by the Committee, in its discretion and set forth in the Agreement including the
attainment of objectives stated with reference to one or more Performance Measures. Other
Equity-Based Awards may be granted to Participants, either alone or in addition to other awards
granted under the Plan, and Other Equity-Based Awards may be granted in the settlement of other
Awards granted under the Plan.



10.03. Payment or Settlement




          Other Equity-Based Awards valued in whole or in part by reference to, or otherwise based on,
shares of Common Stock, shall be payable or settled in Common Stock, cash or a combination of
Common Stock and cash, as determined by the Committee in its discretion. Other Equity-Based Awards
denominated as equity interests other than shares of Common Stock may be paid or settled in shares
or units of such equity interests or cash or a combination of both as determined by the Committee
in its discretion.



10.04. Employee Status




          If the terms of any Other Equity-Based Award provides that it may be earned or exercised only
during employment or continued service or within a specified period of time after termination of
employment or continued service, the Committee may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability or other reasons shall not be
deemed interruptions of continuous employment or service.







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10.05. Stockholder Rights




          A Participant, as a result of receiving an Other Equity-Based Award, shall not have any rights
as a stockholder until, and then only to the extent that, the Other Equity-Based Award is earned
and settled in shares of Common Stock.




ARTICLE XI

INCENTIVE AWARDS



11.01. Award




          In accordance with the provisions of Article IV, the Committee will designate each individual
to whom an Incentive Award is to be made. The maximum amount payable to a Participant in any
calendar year under Incentive Awards that are not granted with reference to a number of shares of
Common Stock and that will be settled in cash is $_____.



11.02. Terms and Conditions




          The Committee, at the time an Incentive Award is made, shall specify the terms and conditions
that govern the award. Such terms and conditions may prescribe that the Incentive Award shall be
earned only to the extent that the Participant, the Company or an Affiliate, during a performance
period of at least one year, achieves objectives stated with reference to one or more performance
measures or criteria prescribed by the Committee including objectives stated with respect to one or
more Performance Measures.



11.03. Nontransferability




          Incentive Awards granted under this Plan shall be nontransferable except by will or by the
laws of descent and distribution. No right or interest of a Participant in an Incentive Award
shall be liable for, or subject to, any lien, obligation, or liability of such Participant.



11.04. Employee Status




          If the terms of an Incentive Award provide that a payment will be made thereunder only if the
Participant completes a stated period of employment or continued service, the Committee may decide
to what extent leaves of absence for governmental or military service, illness, temporary
disability or other reasons shall not be deemed interruptions of continuous employment or service.



11.05. Settlement




          An Incentive Award that is earned shall be settled with a single lump sum payment which may be
in cash, Common Stock or a combination of cash and Common Stock, as determined by the Committee.







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11.06. Stockholder Rights




          No Participant shall, as a result of receiving an Incentive Award, have any rights as a
stockholder of the Company or an Affiliate until the date that the Incentive Award is settled and
then only to the extent that the Incentive Award is settled by the issuance of shares of Common
Stock.




ARTICLE XII

ADJUSTMENT UPON CHANGE IN COMMON STOCK




          The maximum number of shares of Common Stock that may be issued under the Plan, the limitation
of Section 5.04 on the Awards that may be granted to any Participant and the terms of outstanding
Awards shall be adjusted as the Board determines is equitably required in the event that (i) the
Company (a) effects one or more nonreciprocal transactions between the Company and its stockholders
such as a stock dividend, extra-ordinary cash dividend, stock split-up, subdivision or
consolidation of shares that affects the number or kind of shares of Common Stock (or other
securities of the Company) or the Fair Market Value (or the value of other Company securities) and
causes a change in the Fair Market Value of the Common Stock subject to outstanding awards or (b)
engages in a transaction to which Section 424 of the Code applies or (ii) there occurs any other
event which, in the judgment of the Board necessitates such action. Any determination made under
this Article XII by the Board shall be nondiscretionary, final and conclusive.




          The issuance by the Company of shares of any class, or securities convertible into shares of
any class, for cash or property, or for labor or services, either upon direct sale or upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the maximum number of shares that may
be issued under the Plan, the limitation of Section 5.04 on the Awards that may be granted to any
Participant or the terms of Awards.




          The Committee may make Awards in substitution for performance shares, phantom shares, stock
awards, stock options, stock appreciation rights, or similar awards held by an individual who
becomes an employee of the Company or an Affiliate in connection with a transaction described in
the first paragraph of this Article XII. Notwithstanding any provision of the Plan, the terms of
such substituted Awards shall be as the Committee, in its discretion, determines is appropriate.




ARTICLE XIII

COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES



          No Option or SAR shall be exercisable, no shares of Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall be made under this
Plan except in compliance with all applicable federal and state laws and regulations






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(including, without limitation, withholding tax requirements), any listing agreement to which
the Company is a party, and the rules of all domestic stock exchanges on which the Company’s shares
may be listed. The Company shall have the right to rely on an opinion of its counsel as to such
compliance. Any certificate issued to evidence shares of Common Stock when a Stock Award is
granted, a Performance Unit, Incentive Award or Other Equity-Based Award is settled or for which an
Option or SAR is exercised may bear such legends and statements as the Committee may deem advisable
to assure compliance with federal and state laws and regulations. No Option or SAR shall be
exercisable, no Stock Award or Performance Unit shall be granted, no shares of Common Stock shall
be issued, no certificate for shares of Common Stock shall be delivered, and no payment shall be
made under this Plan until the Company has obtained such consent or approval as the Committee may
deem advisable from regulatory bodies having jurisdiction over such matters.




ARTICLE XIV

GENERAL PROVISIONS



14.01. Effect on Employment and Service




          Neither the adoption of this Plan, its operation, nor any documents describing or referring to
this Plan (or any part thereof), shall confer upon any individual or entity any right to continue
in the employ or service of the Company or an Affiliate or in any way affect any right and power of
the Company or an Affiliate to terminate the employment or service of any individual or entity at
any time with or without assigning a reason therefor.



14.02. Unfunded Plan




          This Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be
required to segregate any assets that may at any time be represented by grants under this Plan.
Any liability of the Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on,
any property of the Company.



14.03. Rules of Construction




          Headings are given to the articles and sections of this Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation or other provision of law shall be
construed to refer to any amendment to or successor of such provision of law.



14.04. Withholding Taxes




          Each Participant shall be responsible for satisfying any income and employment tax withholding
obligations attributable to participation in the Plan. Unless otherwise provided by the Agreement,
any such withholding tax obligations may be satisfied in cash (including from






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any cash payable in settlement of Performance Units, SARs, Incentive Awards or Other
Equity-Based Award) or a cash equivalent acceptable to the Committee. Except to the extent
prohibited by Treasury Regulation Section 1.409A-3(j), any minimum statutory federal, state,
district or city withholding tax obligations also may be satisfied (a) by surrendering to the
Company shares of Common Stock previously acquired by the Participant; (b) by authorizing the
Company to withhold or reduce the number of shares of Common Stock otherwise issuable to the
Participant upon the exercise of an Option or SAR, the settlement of a Performance Unit, Incentive
Award or an Other Equity-Based Award (if applicable) or the grant or vesting of a Stock Award; or
(c) by any other method as may be approved by the Committee. If shares of Common Stock are used to
pay all or part of such withholding tax obligation, the Fair Market Value of the shares
surrendered, withheld or reduced shall be determined as of the day the tax liability arises and the
number of shares of Common Stock which may be withheld or surrendered shall be limited to the
number of shares which have a Fair Market Value on the day preceding the date of withholding equal
to the aggregate amount of such liabilities based on the minimum statutory withholding rates for
federal, state, local and foreign income tax and payroll tax purposes that are applicable to such
supplemental taxable income.



14.05. REIT Status




          The Plan shall be interpreted and construed in a manner consistent with the Company’s status
as a REIT. No award shall be granted or awarded, and with respect to any award granted under the
Plan, such award shall not vest, be exercisable or be settled (i) to the extent that the grant,
vesting, exercise or settlement could cause the Participant or any other person to be in violation
of the capital stock ownership limit or aggregate capital stock ownership limit prescribed by the
Company’s Articles of Incorporation or Charter, as amended from time to time) or (ii) if, in the
discretion of the Committee, the grant, vesting, exercise or settlement of the award could impair
the Company’s status as a REIT.



14.06. Code Section 409A




          All Awards made under this Plan are intended to comply with, or otherwise be exempt from,
Section 409A of the Code (“Section 409A”), after giving effect to the exemptions in Treasury
Regulation sections 1.409A-1(b)(3) through (b)(12). This Plan and all Agreements shall be
administered, interpreted and construed in a manner consistent with Section 409A. If any provision
of this Plan or any Agreement is found not to comply with, or otherwise not be exempt from, the
provisions of Section 409A, it shall be modified and given effect, in the sole discretion of the
Committee and without requiring the Participant’s consent, in such manner as the Committee
determines to be necessary or appropriate to comply with, or effectuate an exemption from, Section
409A. Each payment under an Award granted under this Plan shall be treated as a separate
indentified payment for purposes of Section 409A.




          If a payment obligation under an Award or an Agreement arises on account of the Participant’s
termination of employment and such payment obligation constitutes “deferred






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compensation” (as defined under Treasury Regulation section 1.409A-1(b)(1), after giving
effect to the exemptions in Treasury Regulations sections 1.409A-1(b)(3) through (b)(12)), it shall
be payable only after the Participant’s “separation from service” (as defined under Treasury
Regulation section 1.409A-1(h)); provided, however, that if the Participant is a “specified
employee” (as defined under Treasury Regulation section 1.409A-1(i)), any such payment that is
scheduled to be paid within six months after such separation from service shall accrue without
interest and shall be paid on the first day of the seventh month beginning after the date of the
Participant’s separation from service or, if earlier, within fifteen days after the appointment of
the personal representative or executor of the Participant’s estate following the Participant’s
death.




ARTICLE XV

CHANGE IN CONTROL



15.01. Impact of Change in Control.




          Upon a Change in Control, the Committee is authorized to cause (i) outstanding Options and
SARs to become fully exercisable, (ii) outstanding Stock Awards to become transferable and
nonforfeitable and (iii) outstanding Performance Units, Incentive Awards and Other Equity-Based
Awards to become earned and nonforfeitable in their entirety.



15.02. Assumption Upon Change in Control.




          In the event of a Change in Control, the Committee, in its discretion and without the need for
a Participant’s consent, may provide that an outstanding Award shall be assumed by, or a substitute
award granted by, the surviving entity in the Change in Control. Such assumed or substituted award
shall be of the same type of award as the original Award being assumed or substituted. The assumed
or substituted award shall have a value, as of the Control Change Date, that is substantially equal
to the value of the original Award (or the difference between the Fair Market Value and the option
price or Initial Value in the case of Options and SARs) as the Committee determines is equitably
required and such other terms and conditions as may be prescribed by the Committee.



15.03. Cash-Out Upon Change in Control.




          In the event of a Change in Control, the Committee, in its discretion and without the need of
a Participant’s consent, may provide that each Award shall be cancelled in exchange for a payment.
The payment may be in cash, shares of Common Stock or other securities or consideration received by
stockholders in the Change in Control transaction or, in the case of an Incentive Award, the entire
amount that can be paid under the Award (and, if the amount payable in settlement of an Incentive
Award is based on the value of Common Stock, that value shall be the price per share received by
stockholders for each share of Common Stock in the Change in Control transaction). Except as
provided in the preceding sentence with respect to Incentive Awards, the amount of the payment
shall be an amount that is substantially equal to (i) the






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amount by which the price per share received by stockholders in the Change in Control exceeds
the option price or Initial Value in the case of an Option and SAR, or (ii) the price per share
received by stockholders for each share of Common Stock subject to a Stock Award, Performance Unit
or Other Equity-Based Award or (iii) the value of the other securities or property in which the
Performance Unit or Other Equity-Based award is denominated. If the option price or Initial Value
exceeds the price per share received by stockholders in the Change in Control transaction, the
Option or SAR may be cancelled under this Section 15.03 without any payment to the Participant.



15.04. Limitation of Benefits




          The benefits that a Participant may be entitled to receive under this Plan and other benefits
that a Participant is entitled to receive under other plans, agreements and arrangements (which,
together with the benefits provided under this Plan, are referred to as “Payments”), may constitute
Parachute Payments (as hereinafter defined), that are subject to Code Sections 280G and 4999. As
provided in this Section 15.04, the Parachute Payments will be reduced pursuant to this Section
15.04 if, and only to the extent that, a reduction will allow a Participant to receive a greater
Net After Tax Amount (as hereinafter defined), than a Participant would receive absent a reduction.




          The Accounting Firm (as hereinafter defined), will first determine the amount of any Parachute
Payments that are payable to a Participant. The Accounting Firm also will determine the Net After
Tax Amount attributable to the Participant’s total Parachute Payments.




          The Accounting Firm will next determine the largest amount of Payments that may be made to the
Participant without subjecting the Participant to tax under Code Section 4999 (the “Capped
Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable
to the Capped Payments.




          The Participant will receive the total Parachute Payments or the Capped Payments, whichever
provides the Participant with the higher Net After Tax Amount. If the Participant will receive the
Capped Payments, the total Parachute Payments will be adjusted by first reducing the amount of any
benefits under this Plan or any other plan, agreement or arrangement that are not subject to
Section 409A of the Code (with the source of the reduction to be directed by the Participant) and
then by reducing the amount of any benefits under this Plan or any other plan, agreement or
arrangement that are subject to Section 409A of the Code (with the source of the reduction to be
directed by the Participant) in a manner that results in the best economic benefit to the
Participant (or, to the extent economically equivalent, in a pro rata manner). The Accounting Firm
will notify the Participant and the Company if it determines that the Parachute Payments must be
reduced to the Capped Payments and will send the Participant and the Company a copy of its detailed
calculations supporting that determination.







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          As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time
that the Accounting Firm makes its determinations under this Section 15.04, it is possible that
amounts will have been paid or distributed to the Participant that should not have been paid or
distributed under this Section 15.04 (“Overpayments”), or that additional amounts should be paid or
distributed to the Participant under this Section 15.04 (“Underpayments”). If the Accounting Firm
determines, based on either the assertion of a deficiency by the Internal Revenue Service against
the Company or the Participant, which assertion the Accounting Firm believes has a high probability
of success or controlling precedent or substantial authority, that an Overpayment has been made,
the Participant must repay such amount to the Company, without interest; provided, however, that no
loan will be deemed to have been made and no amount will be payable by the Participant to the
Company unless, and then only to the extent that, the deemed loan and payment would either reduce
the amount on which the Participant is subject to tax under Code Section 4999 or generate a refund
of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon controlling
precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will
notify the Participant and the Company of that determination and the amount of that Underpayment
will be paid to the Participant promptly by the Company.




          For purposes of this Section 15.04, the term “Accounting Firm” means the independent
accounting firm engaged by the Company immediately before the Control Change Date. For purposes of
this Section 15.04, the term “Net After Tax Amount” means the amount of any Parachute Payments or
Capped Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and
any State or local income taxes applicable to the Participant on the date of payment. The
determination of the Net After Tax Amount shall be made using the highest combined effective rate
imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped
Payments, as applicable, in effect on the date of payment. For purposes of this Section 15.04, the
term “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined
in accordance with Code Section 280G and the regulations promulgated or proposed thereunder.




          Notwithstanding any other provision of this Section 15.04, the limitations and provisions of
this Section 15.04 shall not apply to any Participant who, pursuant to an agreement with the
Company or the terms of another plan maintained by the Company, is entitled to indemnification for
any liability that the Participant may incur under Code Section 4999. In addition, nothing in this
Section 15.04 shall limit or otherwise supersede the provisions of any other agreement or plan
which provides that a Participant cannot receive Payments in excess of the Capped Payments.




ARTICLE XVI

AMENDMENT




          The Board may amend or terminate this Plan at any time; provided, however, that no amendment
may adversely impair the rights of Participants with respect to outstanding Awards.






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In addition, an amendment will be contingent on approval of the Company’s stockholders if such
approval is required by law or the rules of any exchange on which the Common Stock is listed or if
the amendment would materially increase the benefits accruing to Participants under the Plan,
materially increase the aggregate number of shares of Common Stock that may be issued under the
Plan or reduce the option price of an outstanding Option or reduce the Initial Value of an
outstanding SAR (in each case other than an adjustment pursuant to Article XII) or materially
modify the requirements as to eligibility for participation in the Plan.




ARTICLE XVII

DURATION OF PLAN




          No Award may be granted under this Plan after the day before the tenth anniversary of the
earlier of the date the Plan is adopted by the Board or the date the Plan is approved by
stockholders in accordance with Article XVIII. Awards granted before such date shall remain valid
in accordance with their terms.




ARTICLE XVIII

EFFECTIVE DATE OF PLAN



          Awards may be granted under this Plan on and after the date that the Plan is adopted by
the Board, provided that no Award shall be exercisable, vested or settled unless, within twelve
months after the Board’s adoption of the Plan, the Plan is approved by holders of a majority of the
outstanding Common Stock entitled to vote and present or represented by properly executed and
delivered proxies at a duly held stockholders’ meeting at which a quorum is present or by unanimous
consent of the stockholders.





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