Exhibit
10.28


 


MxENERGY HOLDINGS INC.


 


2006 EQUITY INCENTIVE COMPENSATION PLAN


 


1.             Establishment, Purpose, and Types of Awards


 


MxEnergy Holdings Inc. (the “Company”) hereby
establishes this equity-based incentive compensation plan to be known as the “MxEnergy
Holdings Inc. 2006 Equity Incentive Compensation
Plan” (hereinafter referred to as the “Plan”), in order to provide
incentives and awards to select key management employees, directors,
consultants and advisors of the Company and its Affiliates.


 


The Plan
permits the granting of the following types of awards (“Awards”), according to
the Sections of the Plan listed here:


 


	
  Section 6

  	
   

  	
  Options

  
	
  Section
  7

  	
   

  	
  Restricted
  Shares, Restricted Share Units, and Unrestricted Share Awards

  
	
  Section
  8

  	
   

  	
  Phantom
  Shares

  
	
  Section
  9

  	
   

  	
  Dividend
  Equivalent Rights

  
	
  Section
  10

  	
   

  	
  Share
  Appreciation Rights

  
	
  Section
  11

  	
   

  	
  Deferred
  Share Units

  
	
  Section
  12

  	
   

  	
  Performance
  Awards

  



 


The
Plan is not intended to affect and shall not affect any stock options,
equity-based compensation, or other benefits that the Company or its Affiliates
may have provided, or may separately provide in the future pursuant to any
agreement, plan, or program that is independent of this Plan.


 


2.             Defined Terms


 


Terms
in the Plan that begin with an initial capital letter have the defined meaning
set forth in Appendix A,
unless defined elsewhere in this Plan or the context of their use clearly
indicates a different meaning.


 


3.             Shares Subject to the Plan


 


Subject
to the provisions of Section 16 of the Plan, the maximum number of Shares that
the Company may issue for all Awards is 750,000 Shares. For all Awards, the
Shares issued pursuant to the Plan may be authorized but unissued Shares, or
Shares that the Company has reacquired or otherwise holds in treasury.


 


Shares
that are subject to an Award that for any reason expires, is forfeited, is
cancelled, or becomes unexercisable, and Shares that are for any other reason
not paid or delivered under the Plan shall again, except to the extent
prohibited by Applicable Law, be available for subsequent Awards under the Plan.
In addition, the Committee may make future Awards with respect to Shares


 

















 


that the Company retains from otherwise delivering
pursuant to an Award either (i) as payment of the exercise price of an Award,
or (ii) in order to satisfy the withholding or employment taxes due upon the
grant, exercise, vesting, or distribution of an Award. Notwithstanding the
foregoing, but subject to adjustments pursuant to Section 16 below and to the
extent required under applicable tax laws, the number of Shares that are
available for ISO Awards shall equal the number of Shares designated in the
preceding paragraph reduced by the number of Shares issued pursuant to Awards,
provided that any Shares that are either purchased under the Plan and forfeited
back to the Plan or surrendered in payment of the exercise price for an Award
shall be available for issuance pursuant to ISO Awards.


 


4.             Administration


 


(a)           General. The Committee shall administer the Plan in accordance with
its terms, provided that the Board may act in lieu of the Committee on any
matter. The Committee shall hold meetings at such times and places as it may
determine and shall make such rules and regulations for the conduct of its
business as it deems advisable. In the absence of a duly appointed Committee or
if the Board otherwise chooses to act in lieu of the Committee, the Board shall
function as the Committee for all purposes of the Plan.


 


(b)           Committee
Composition. The Committee
shall be comprised of members of the Compensation Committee. If and to the extent permitted by Applicable Law, the
Committee may authorize one or more Reporting Persons (or other officers) to
make Awards to Eligible Persons who are not Reporting Persons (or other
officers whom the Committee has specifically authorized to make Awards). Subject
to the provisions of Section 2.2 of the Company’s Third Amended and Restated
Stockholders’ Agreement, as amended, modified or amended and restated from time
to time, dated as of June 25, 2004 among the Company and the stockholders of
the Company named therein, the Board may at any time appoint additional members
to the Committee, remove and replace members of the Committee with or without
Cause, and fill vacancies on the Committee however caused.


 


(c)           Powers of the Committee. Subject to the provisions of the Plan, the Committee shall have the
authority, in its sole discretion:


 


(i)            to
determine Eligible Persons to whom Awards shall be granted from time to time
and the number of Shares, units, dividend equivalent rights, or SARs to be
covered by each Award;


 


(ii)           to
determine, from time to time, the Fair Market Value of Shares;


 


(iii)          to determine, and to set forth in Award
Agreements, the terms and conditions of all Awards, including any applicable
exercise or purchase price, the installments and conditions under which an
Award shall become vested (which may be based on performance), terminated,
expired, cancelled, or replaced, and the circumstances for vesting acceleration
or waiver of forfeiture restrictions, and other restrictions and limitations;


 


(iv)          to
approve the forms of Award Agreements and all other documents, notices and
certificates in connection therewith which need not be identical either as to
type of Award or among Participants;


 


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(v)           to
construe and interpret the terms of the Plan and any Award Agreement, to
determine the meaning of their terms, and to prescribe, amend, and rescind
rules and procedures relating to the Plan and its administration;


 


(vi)          in
order to fulfill the purposes of the Plan and without amending the Plan,
modify, cancel, or waive the Company’s rights with respect to any Awards, to
adjust or to modify Award Agreements for changes in Applicable Law, and to
recognize differences in foreign law, tax policies, or customs;


 


(vii)         to provide in its discretion that (A) all
stock issued hereunder be initially maintained in a separate brokerage account
for the Participant at  a brokerage firm
selected by, and pursuant to an arrangement with the Company, and (B) in the
case of vested Shares,  the Participant
may move such Shares to another brokerage account of the Participant’s  choosing or request that a stock certificate
be issued and delivered to him or her; and


 


(viii)        to make all other interpretations and to take
all other actions that the Committee may consider necessary or advisable to
administer the Plan or to effectuate its purposes.


 


Subject
to Applicable Law and the restrictions set forth in the Plan, the Committee may
delegate administrative functions to individuals who are Reporting Persons,
officers, or Employees of the Company or its Affiliates.


 


(d)           Deference to Committee Determinations. The
Committee shall have the discretion to interpret or construe ambiguous, unclear,
or implied (but omitted) terms in any fashion it deems to be appropriate in its
sole discretion, and to make any findings of fact needed in the administration
of the Plan or Award Agreements. The Committee’s prior exercise of its
discretionary authority shall not obligate it to exercise its authority in a
like fashion thereafter. The Committee’s interpretation and construction of any
provision of the Plan, or of any Award or Award Agreement, shall be final,
binding, and conclusive. The validity of any such interpretation, construction,
decision or finding of fact shall not be given de novo review if challenged in
court, by arbitration, or in any other forum, and shall be upheld unless
clearly made in bad faith or materially affected by fraud.


 


(e)           No Liability;
Indemnification. Neither the Board nor any Committee member, nor any
Person acting at the direction of the Board or the Committee, shall be liable
for any act, omission, interpretation, construction or determination made in
good faith with respect to the Plan, any Award or any Award Agreement. The
Company and its Affiliates shall pay or reimburse any member of the Committee,
as well as any Director, Employee, or Consultant who takes action in connection
with the Plan, for all expenses incurred with respect to the Plan, and to the
full extent allowable under Applicable Law shall indemnify each and every one
of them for any claims, liabilities, and costs (including reasonable attorney’s
fees) arising out of their good faith performance of duties under the Plan. The
Company and its Affiliates may obtain liability insurance for this purpose.


 


5.             Eligibility


 


(a)           General Rule.
The Committee may grant ISOs only to Employees (including officers who are
Employees) of the Company or an Affiliate that is a “parent corporation” or “subsidiary
corporation” within the meaning of Section 424 of the Code, and may grant all
other Awards to any


 


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Eligible Person. A Participant who has been granted an
Award may be granted an additional Award or Awards if the Committee shall so
determine, if such person is otherwise an Eligible Person and if otherwise in
accordance with the terms of the Plan.


 


(b)           Grant of Awards. Subject to the express
provisions of the Plan, the Committee shall determine from the class of
Eligible Persons those individuals to whom Awards under the Plan may be
granted, the number of Shares subject to each Award, the price (if any) to be
paid for the Shares or the Award and, in the case of Performance Awards, in
addition to the matters addressed in Section 12 below, the specific objectives,
goals and performance criteria that further define the Performance Award. Each
Award shall be evidenced by an Award Agreement signed by the Company and, if
required by the Committee, by the Participant. The Award Agreement shall set
forth the material terms and conditions of the Award established by the
Committee, and each Award shall be subject to the terms and conditions set
forth in Sections 26, 27, and 28 unless otherwise specifically provided in an
Award Agreement.


 


(c)           Replacement Awards. Subject to Applicable
Laws (including any associated Shareholder approval requirements), the
Committee may, in its sole discretion and upon such terms as it deems
appropriate, require as a condition of the grant of an Award to a Participant
that the Participant surrender for cancellation some or all of the Awards that
have previously been granted to the Participant under this Plan or otherwise. An
Award that is conditioned upon such surrender may or may not be the same type
of Award, may cover the same (or a lesser or greater) number of Shares as such
surrendered Award, may have other terms that are determined without regard to
the terms or conditions of such surrendered Award, and may contain any other
terms that the Committee deems appropriate. In the case of Options, these other
terms may not involve an Exercise Price that is lower than the Exercise Price
of the surrendered Option unless the Company’s shareholders approve the grant
itself or the program under which the grant is made pursuant to the Plan.


 


6.             Option Awards


 


(a)           Types;
Documentation. The Committee may in its
discretion grant (i) ISOs to any Employee who is a common law employee of the
Company or any “parent corporation” or “subsidiary corporation” as such terms
are defined in Code Section 424, and (ii) Non-ISOs to any Eligible Person. Each
Option shall be evidenced in an Award Agreement that is delivered to the
Participant shall be designated in the Award Agreement as an ISO or a Non-ISO. The
same Award Agreement may grant both types of Options. At the sole discretion of
the Committee, any Option may be exercisable, in whole or in part, immediately
upon the grant thereof, or only after the occurrence of a specified event, or
only in installments, which installments may vary. Options granted under the
Plan may contain such terms and provisions not inconsistent with the Plan that
the Committee shall deem advisable in its sole and absolute discretion.


 


(b)           ISO $100,000
Limitation. To the extent that the aggregate Fair Market Value of
Shares with respect to which Options designated as ISOs first become
exercisable by a Participant in any calendar year (under this Plan and any
other plan of the Company or any Affiliate) exceeds $100,000, such excess
Options shall be treated as Non-ISOs. For purposes of determining whether the
$100,000 limit is exceeded, the Fair Market Value of the Shares subject to an
ISO shall be determined as of the Grant Date. In reducing the number of Options
treated as ISOs to meet the $100,000 limit, the most recently granted Options
shall be reduced first. In the event that Section


 


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422 of the Code is amended to alter the limitation set
forth therein, the limitation of this Section 6(b) shall be automatically
adjusted accordingly.


 


(c)           Term of
Options. Each Award Agreement shall specify a term at the end of
which the Option automatically expires, subject to earlier termination
provisions contained in Section 6(h) hereof; provided, that, the term of any
Option may not exceed ten years from the Grant Date. In the case of an ISO
granted to an Employee who is a Ten Percent Holder on the Grant Date, the term
of the ISO shall not exceed five years from the Grant Date.


 


(d)           Exercise
Price. The exercise price of an Option shall be determined by the
Committee in its discretion and shall be set forth in the Award Agreement,
subject to the following special rules:


 


(i)            ISOs.
If an ISO is granted to an Employee who on the Grant Date is a Ten Percent
Holder, the per Share exercise price shall not be less than 110% of the Fair
Market Value per Share on such Grant Date. If an ISO is granted to any other
Employee, the per Share exercise price shall not be less than 100% of the Fair
Market Value per Share on the Grant Date.


 


(ii)           Non-ISOs.
The per Share exercise price for the Shares to be issued pursuant to the
exercise of a Non-ISO shall not be less than 100% of the Fair Market Value per
Share on the Grant Date.


 


(e)           Exercise of Option. The times,
circumstances and conditions under which an Option shall be exercisable shall be
determined by the Committee in its sole discretion and shall be set forth in
the Award Agreement. The Committee shall have the discretion to determine whether
and to what extent the vesting of Options shall be tolled during any unpaid
leave of absence; provided, however, that in the absence of such determination,
vesting of Options shall be tolled during any such leave approved by the
Company. Neither the Company nor the Committee shall, without shareholder
approval, allow for a repricing within the meaning of federal securities laws
applicable to proxy statement disclosures.


 


(f)            Minimum Exercise Requirements. An Option
may not be exercised for a fraction of a Share. The Committee may require in an
Award Agreement that an Option be exercised as to a minimum number of Shares,
provided that such requirement shall not prevent a Participant from purchasing
the full number of Shares as to which the Option is then exercisable.


 


(g)           Methods of
Exercise. Prior to its expiration pursuant to the terms of the
applicable Award Agreement, and subject to the times, circumstances and
conditions for exercise contained in the applicable Award Agreement, each
Option may be exercised, in whole or in part (provided that the Company shall
not be required to issue fractional shares), by delivery of written notice of
exercise to the secretary of the Company accompanied by the full exercise price
of the Shares being purchased. In the case of an ISO, the Committee shall
determine the acceptable methods of payment on the Grant Date and it shall be
included in the applicable Award Agreement. The methods of payment that the
Committee may in its discretion accept or commit to accept in an Award
Agreement include:


 


(i)            cash
or check payable to the Company (in U.S. dollars);


 


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(ii)           other
Shares that (A) are owned by the Participant who is purchasing Shares pursuant
to an Option, (B) have a Fair Market Value on the date of surrender equal to
the aggregate exercise price of the Shares as to which the Option is being
exercised, (C) were not acquired by such Participant pursuant to the exercise
of an Option, unless such Shares have been owned by such Participant for at
least six months or such other period as the Committee may determine, (D) are
all, at the time of such surrender, free and clear of any and all claims,
pledges, liens and encumbrances, or any restrictions which would in any manner
restrict the transfer of such shares to or by the Company (other than such
restrictions as may have existed prior to an issuance of such Shares by the
Company to such Participant), and (E) are duly endorsed for transfer to the
Company;


 


(iii)          a cashless exercise whereby a Participant may
elect, at any time, to pay some or all of the exercise price upon the exercise
of an Option by surrendering Shares subject to the Option that are sufficient
to pay the exercise price. Upon a cashless exercise, the Company shall issue to
the Participant such number of fully-paid and non-assessable Shares as is
computed using the following formula:


 


(a)           X = Y(A-B)


A


 


(b)           where the formula
elements have the following meanings:


 


(1) X
=  the number of Shares the Company shall
issue to the Participant upon receipt of a Notice of Subscription;


 


(2) Y
=  the 
number of Shares covered by the Award Agreement in respect to which the
election is made pursuant to this Section 6(g);


 


(3) A
=  the Fair Market Value of one Share as
determined in accordance with the Plan; and


 


(4) B
=  the applicable exercise price set
forth in the Award Agreement at the time the cashless exercise election is
made.


 


Any Shares
subject to the Option that are withheld to pay the exercise price shall be
immediately canceled. The Fair Market Value of a Share as of a particular date
shall mean the Fair Market Value of a Share on such date; or


 


(iv)          any
combination of the foregoing methods of payment.


 


The
Company shall not be required to deliver Shares pursuant to the exercise of an
Option until payment of the full exercise price therefor is received by the
Company.


 


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(h)           Termination
of Continuous Service. The Committee
may establish and set forth in the applicable Award Agreement the terms and
conditions on which an Option shall remain exercisable, if at all, following
termination of a Participant’s Continuous Service. The Committee may waive or
modify these provisions at any time. To the extent that a Participant is not
entitled to exercise an Option at the date of his or her termination of
Continuous Service, or if the Participant (or other person entitled to exercise
the Option) does not exercise the Option to the extent so entitled within the
time specified in the Award Agreement or below (as applicable), the Option
shall terminate and the Shares underlying the unexercised portion of the Option
shall revert to the Plan and become available for future Awards. In no event
may any Option be exercised after the expiration of the Option term as set
forth in the Award Agreement.


 


The
following provisions shall apply to the extent an Award Agreement does not
specify the terms and conditions upon which an Option shall terminate when
there is a termination of a Participant’s Continuous Service:


 


(i)            Termination other than Upon Disability or
Death or for Cause. In the event of termination of a Participant’s
Continuous Service (other than as a result of Participant’s death, disability,
retirement or termination for Cause), the Participant shall have the right to
exercise an Option at any time within 90 days following such termination to the
extent the Participant was entitled to exercise such Option at the date of such
termination.


 


(ii)           Disability. In the event of
termination of a Participant’s Continuous Service as a result of his or her being
Disabled, the Participant shall have the right to exercise an Option at any
time within one year following such termination to the extent the Participant
was entitled to exercise such Option at the date of such termination.


 


(iii)          Retirement. In the event of
termination of a Participant’s Continuous Service as a result of Participant’s
retirement, the Participant shall have the right to exercise the Option at any
time within six months following such termination to the extent the Participant
was entitled to exercise such Option at the date of such termination.


 


(iv)          Death.
In the event of the death of a Participant during the period of Continuous
Service since the Grant Date of an Option, or within thirty days following
termination of the Participant’s Continuous Service, the Option may be
exercised, at any time within one year following the date of the Participant’s
death, by the Participant’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent the right to
exercise the Option had vested at the date of death or, if earlier, the date
the Participant’s Continuous Service terminated.


 


(v)           Cause. If the Committee
determines that a Participant’s Continuous Service terminated due to Cause, the
Participant shall immediately forfeit the right to exercise any Option, and it
shall be considered immediately null and void.


 


(i)            Reverse Vesting. The Committee in its sole
discretion may allow a Participant to exercise unvested Options, in which case
the Shares then issued shall be Restricted Shares having analogous vesting
restrictions to the unvested Options.


 


(j)            Buyout
Provisions. The Committee may at any time offer to buy out an
Option, in exchange for a payment in cash or Shares, based on such terms and
conditions as the Committee


 


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shall establish and communicate to the Participant at
the time that such offer is made. In addition, but subject to any Shareholder
approval requirement of Applicable Law, if the Fair Market Value for Shares
subject to an Option is more than 33% below their exercise price for more than
30 consecutive business days, the Committee may unilaterally terminate and
cancel the Option either (i) by paying the Participant, in cash or Shares, an
amount not less than the Black-Scholes value of the vested portion of the
Option, (ii) by irrevocably committing to grant, on any date the Committee
designates, a new Award other than an Option or SAR, or (iii) by irrevocably
committing to grant a new Option, on a designated date more than six months
after such termination and cancellation of such Option (but only if the
Participant’s Continuous Service has not terminated prior to such designated
date), on substantially the same terms as the cancelled Option, provided that
the per Share exercise price for the new Option shall equal the per Share Fair
Market Value of a Share on the date the new grant occurs.


 


7.             Restricted Shares, Restricted Share Units, and
Unrestricted Shares


 


(a)           Grants. The
Committee may in its discretion grant restricted shares (“Restricted Shares”)
to any Eligible Person and shall evidence such grant in an Award Agreement that
is delivered to the Participant and that sets forth the number of Restricted
Shares, the purchase price for such Restricted Shares (if any), and the terms
upon which the Restricted Shares may become vested. In addition, the Company
may in its discretion grant the right to receive Shares after certain vesting
requirements are met (“Restricted Share Units”) to any Eligible Person and
shall evidence such grant in an Award Agreement that is delivered to the
Participant which sets forth the number of Shares (or formula, that may be
based on future performance or conditions, for determining the number of
Shares) that the Participant shall be entitled to receive upon vesting and the
terms upon which the Shares subject to a Restricted Share Unit may become
vested. The Committee may condition any Award of Restricted Shares or
Restricted Share Units to a Participant on receiving from the Participant such
further assurances and documents as the Committee may require to enforce the
restrictions. In addition, the Committee may grant Awards hereunder in the form
of unrestricted shares (“Unrestricted Shares”), which shall vest in full upon
the date of grant or such other date as the Committee may determine or which
the Committee may issue pursuant to any program under which one or more
Eligible Persons (selected by the Committee in its discretion) elect to receive
Unrestricted Shares in lieu of cash bonuses that would otherwise be paid.


 


(b)           Vesting and
Forfeiture. The Committee shall set forth in an Award Agreement
granting Restricted Shares or Restricted Share Units, the terms and conditions
under which the Participant’s interest in the Restricted Shares or the Shares
subject to Restricted Share Units will become vested and non-forfeitable. Except
as set forth in the applicable Award Agreement or the Committee otherwise
determines, upon termination of a Participant’s Continuous Service for any
other reason, the Participant shall forfeit his or her Restricted Shares and
Restricted Share Units; provided that if a Participant purchases the Restricted
Shares and forfeits them for any reason, the Company shall return the purchase
price to the Participant only if and to the extent set forth in an Award
Agreement.


 


(c)           Issuance of
Restricted Shares Prior to Vesting. The Company shall issue stock
certificates that evidence Restricted Shares pending the lapse of applicable
restrictions, and that bear a legend making appropriate reference to such
restrictions. Except as set forth in the applicable Award Agreement or the
Committee otherwise determines, the Company or a third party that the Company


 


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designates shall hold such Restricted Shares and any
dividends that accrue with respect to Restricted Shares pursuant to Section 7(e)
below.


 


(d)           Issuance of Shares upon Vesting. As soon as
practicable after vesting of a Participant’s Restricted Shares (or Shares
underlying Restricted Share Units) and the Participant’s satisfaction of
applicable tax withholding requirements, the Company shall release to the
Participant, free from the vesting restrictions, one Share for each vested
Restricted Share (or issue one Share free of the vesting restriction for each
vested Restricted Share Unit), unless an Award Agreement provides otherwise. No
fractional shares shall be distributed, and cash shall be paid in lieu thereof.


 


(e)           Dividends Payable
on Restricted Shares and Restricted Share Units. Whenever Shares are
released to a Participant or duly-authorized transferee pursuant to Section
8(d) above as a result of the vesting of Restricted Shares or the Shares
underlying Restricted Share Units are issued to a Participant pursuant to
Section 8(d) above, such Participant or duly-authorized transferee shall also
be entitled to receive (unless otherwise provided in the Award Agreement), with
respect to each Share released or issued, an amount equal to any cash dividends
(plus, in the sole discretion of the Committee, simple interest at a rate as
the Committee may determine) and a number of Shares equal to any stock
dividends, which were declared and paid to the holders of Shares between the
Grant Date and the date such Share is released from the vesting restrictions in
the case of Restricted Shares or issued in the case of Restricted Share Units.


 


(f)            Section 83(b) Elections. A Participant may
make an election under Section 83(b) of the Code (the “Section 83(b) Election”)
with respect to Restricted Shares. If a Participant who has received Restricted
Share Units provides the Committee with written notice of his or her intention
to make a Section 83(b) Election with respect to the Shares subject to such
Restricted Share Units, the Committee may in its discretion convert the
Participant’s Restricted Share Units into Restricted Shares, on a one-for-one
basis, in full satisfaction of the Participant’s Restricted Share Unit Award. The
Participant may then make a Section 83(b) Election with respect to those
Restricted Shares. Shares with respect to which a Participant makes a Section
83(b) Election shall not be eligible for deferral pursuant to Section 11 below.


 


(g)           Deferral
Elections. At any time within the thirty-day period (or other
shorter or longer period that the Committee selects in its sole discretion) in
which an Eligible Person, who either is not an Employee or is an Employee who
is a member of a select group of management or highly compensated Employees,
receives an Award of either Restricted Shares or Restricted Share Units, the
Committee may permit the Participant to irrevocably elect, on a form provided
by and acceptable to the Committee, to defer the receipt of all or a percentage
of the Shares that would otherwise be transferred to the Participant upon the
vesting of such Award. If the Participant makes this election, the Shares
subject to the election, and any associated dividends and interest, shall be
credited to an account established pursuant to Section 11 hereof on the date
such Shares would otherwise have been released or issued to the Participant pursuant
to Section 7(d) above.


 


8.             Phantom Shares.


 


(a)           Grants. The
Committee may in its discretion grant phantom shares (“Phantom Shares”) to any
Eligible Person, and shall evidence each grant in an Award Agreement that sets
forth the number of Shares to which the Award relates, the terms and conditions
under which the Participant’s interest in the Phantom Shares will become vested
and non-forfeitable, and the terms


 


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and conditions of settlement (which shall occur in the
form of cash, based on the Fair Market Value of the underlying Shares). Except as
set forth in the applicable Award Agreement or the Committee otherwise
determines, upon termination of a Participant’s Continuous Service, the
Participant shall forfeit his or her unvested Phantom Shares.


 


(b)           Timing of
Settlement. Unless otherwise provided in an Award Agreement, the
Company shall settle Phantom Shares by making a single-sum cash payment to the
Participant on the first day of the month following the date on which the
Participant earns a vested interest in the Phantom Shares; provided that at any
time within the thirty-day period (or other shorter or longer period that the
Committee selects in its sole discretion) in which an Eligible Person, who
either is not an Employee or is an Employee who is a member of a select group
of management or highly compensated Employees, receives an Award of Phantom
Shares, the Committee may permit the Participant to irrevocably elect, on a
form provided by and acceptable to the Committee (that permits the Participant
to select any combination of a lump sum and annual installments that are
completed no later than ten years following the termination of the Participant’s
Continuous Service or such longer period of time as the Committee may permit),
to defer the settlement of all or a percentage of the Phantom Shares that would
otherwise occur once the Participant vests in the Phantom Shares. The
Participant may change such election through any subsequent election that (i)
is delivered to the Administrator at least one year before the date on which
distributions are otherwise scheduled to commence pursuant to the Participant’s
election, and (ii) defers the commencement of distributions by at least five
years from the originally scheduled commencement date.


 


(c)           Emergency
Withdrawals. In the event a Participant suffers an unforeseeable
emergency within the contemplation of Section 11(e) of this Plan and of Section
409A of the Code, the Participant may apply to the Company for an immediate
distribution of all or a portion of the Participant’s deferred vested Phantom Shares.
The Committee shall determine whether a Participant has a qualifying
unforeseeable emergency and the amount which qualifies for distribution, if
any, in accordance with the terms of Section 11(e) of this Plan and of Section
409A of the Code.


 


(d)           Unsecured
Rights to Deferred Compensation. A Participant’s rights associated
with an Award of Phantom Shares shall at all times constitute an unsecured
promise of the Company to pay benefits in cash as they come due. The right of
the Participant or the Participant’s duly-authorized transferee to receive
benefits hereunder shall be solely an unsecured claim against the general
assets of the Company. Neither the Participant nor the Participant’s
duly-authorized transferee shall have any claim against or rights in any
specific assets, shares, or other funds of the Company. No provision of the
Plan shall be interpreted to confer upon any Participant any voting, dividend
or derivative or other similar rights with respect to any Share that is subject
to a Phantom Share Award.


 


9.             Dividend Equivalent Rights.


 


(a)           Grants.
The Committee may in its discretion grant dividend equivalent rights (“Dividend
Equivalent Rights”) to any Eligible Person, and shall evidence each grant in an
Award Agreement that sets forth the number of Shares to which the Award
relates, its relationship to any other Award, the terms and conditions under
which the Participant’s rights will become vested and non-forfeitable, and the
timing and form of settlement. A Dividend Equivalent Right shall generally
represent the right of the Participant to receive, at the time or times of
settlement, an amount equal


 


10

















 


to the regular cash dividends that the Company has
paid on the number of Shares designated in the Award Agreement during the
period between the date the Award is granted and the settlement date applicable
to the Shares. Interest shall not accrue on such amounts, unless an Award
Agreement provides otherwise.


 


(b)           Settlement.   In
the Award Agreement, the Committee shall specify the circumstances under which
the Company will settle Dividend Equivalent Rights (whether by exercise,
at vesting, or upon a different settlement date or dates that the Committee
designates in the Award Agreement). Unless an Award Agreement provides for
settlement in cash or a combination of cash or Shares at the Committee’s
discretion, all Dividend Equivalent Rights shall be settled through the Company’s
issuance of Shares having a Fair Market Value equal to the value of each cash
dividend paid with respect to the Shares underlying the Participant’s Award
during the term of the Dividend Equivalent Right that is being settled.


 


(c)           Effect on
Other Awards. If a Dividend Equivalent Right is granted with respect
to Options that are intended to be qualified performance based compensation for
purposes of Section 162(m) of the Code, such Dividend Equivalent Rights
shall be payable regardless of whether such Options are exercised. If a
Dividend Equivalent Right is granted in respect of any other Award, then,
unless otherwise stated in the Award Agreement, in no event shall the Dividend
Equivalent Right be in effect for a period beyond the time during which the
applicable portion of the underlying Award is in effect.


 


(d)           Other
Restrictions. Unless otherwise provided in an Award Agreement, a
Dividend Equivalent Right is considered a separate arrangement for purposes of
Section 409A of the Code and is exercisable or payable only while the
Participant is an Eligible Person. The Committee may impose any
employment-related terms and conditions on the grant of a Dividend Equivalent
Right as it deems appropriate in its discretion.


 


10.           Share Appreciation Rights (SARs)


 


(a)           Grants.
If the Company’s Shares are traded on an established securities market, the
Committee may in its discretion grant Share Appreciation Rights to any Eligible
Person, in any of the following forms:


 


(i)            SARs
related to Options. The Committee may grant SARs either concurrently with
the grant of an Option or with respect to an outstanding Option, in which case
the SAR shall extend to all or a portion of the Shares covered by the related
Option. An SAR shall entitle the Participant who holds the related Option, upon
exercise of the SAR and surrender of the related Option, or portion thereof, to
the extent the SAR and related Option each were previously unexercised, to
receive payment of an amount determined pursuant to Section 10(e) below. Any
SAR granted in connection with an ISO will contain such terms as may be
required to comply with the provisions of Section 422 of the Code and the
regulations promulgated thereunder.


 


(ii)           SARs
Independent of Options. The Committee may grant SARs which are independent
of any Option subject to such conditions as the Committee may in its discretion
determine, which conditions will be set forth in the applicable Award
Agreement.


 


11

















 


(iii)          Limited
SARs. The Committee
may grant SARs exercisable only upon or in respect of a Change in Control or
any other specified event, and such limited SARs may relate to or operate in
tandem or combination with or substitution for Options or other SARs, or on a
stand-alone basis, and may be payable in cash or Shares based on the spread
between the exercise price of the SAR, and (A) a price based upon or equal to
the Fair Market Value of the Shares during a specified period, at a specified
time within a specified period before, after or including the date of such
event, or (B) a price related to consideration payable to Company’s
shareholders generally in connection with the event.


 


(b)           Exercise
Price. The per Share exercise price of an SAR shall be determined in
the sole discretion of the Committee, shall be set forth in the applicable
Award Agreement, and shall be no less than 100% of the Fair Market Value of one
Share. The exercise price of an SAR related to an Option shall be the same as
the exercise price of the related Option.


 


(c)           Exercise of
SARs. Unless the Award Agreement otherwise provides, an SAR related
to an Option will be exercisable at such time or times, and to the extent, that
the related Option will be exercisable. An SAR may not have a term exceeding
ten years from its Grant Date. An SAR granted independently of any other Award
will be exercisable pursuant to the terms of the Award Agreement. Whether an
SAR is related to an Option or is granted independently, the SAR may only be
exercised when the Fair Market Value of the Shares underlying the SAR exceeds
the exercise price of the SAR.


 


(d)           Payment. Upon
exercise of an SAR related to an Option and the attendant surrender of an
exercisable portion of any related Award, the Participant will be entitled to
receive payment of an amount determined by multiplying –


 


(i)            the
excess of the Fair Market Value of a Share on the date of exercise of the SAR
over the exercise price per Share of the SAR, by


 


(ii)           the
number of Shares with respect to which the SAR has been exercised.


 


Notwithstanding
the foregoing, an SAR granted independently of an Option (i) may limit the
amount payable to the Participant to a percentage, specified in the Award
Agreement but not exceeding one-hundred percent (100%), of the amount
determined pursuant to the preceding sentence, and (ii) shall be subject to any
payment or other restrictions that the Committee may at any time impose in its
discretion, including restrictions intended to conform the SARs with Section
409A of the Code.


 


(e)           Form and
Terms of Payment. Subject to
Applicable Law, the Committee shall settle the amount determined under Section
10(e) above solely in cash. All SARs shall be settled as soon as practicable
after exercise.


 


(f)            Termination
of Employment or Consulting Relationship. The
Committee shall establish and set forth in the applicable Award Agreement the
terms and conditions on which an SAR shall remain exercisable, if at all,
following termination of a Participant’s Continuous Service. The provisions of
Section 6(h) above shall apply to the extent an Award Agreement does not
specify the terms and conditions upon which an SAR shall terminate when there
is a termination of a Participant’s Continuous Service.


 


12

















 


(g)           Repricing and Buy-out. The Committee has
the same discretion to reprice and to buy-out SARs as it has to take such
actions pursuant to Section 6(k) above with respect to Options.


 


11.           Deferred Share Units


 


(a)           Elections to
Defer. The Committee may permit any Eligible Person, who either is
not an Employee or is an Employee who is a member of a select group of management
or highly compensated Employees, to irrevocably elect, on a form provided by
and acceptable to the Committee (the “Election Form”), to forego the receipt of
cash or other compensation (including the Shares deliverable pursuant to any
Award other than Restricted Shares for which a Section 83(b) Election has been
made), and in lieu thereof to have the Company credit to an internal Plan
account (the “Account”) a number of deferred share units (“Deferred Share Units”)
having a Fair Market Value equal to the Shares and other compensation deferred.
These credits will be made at the end of each calendar month (or other period
that the Administrator establishes prospectively) during which compensation is
deferred. Unless, within five business days after the Company receives an
election form, the Company sends the Participant a written notice explaining
why it is invalid, each Election Form shall take effect on the first day of the
next calendar year (or on the first day of the next calendar month in the case
of an initial election by a Participant who first becomes eligible to defer
hereunder) after its delivery to the Company, subject to Section 7(g) regarding
deferral of Restricted Shares and Restricted Share Units and to Section 12(e)
regarding deferral of Performance Awards. Notwithstanding the foregoing
sentence: (i) Election Forms shall be ineffective with respect to any
compensation that a Participant earns before the date on which the Company
receives the Election Form, and (ii) the Committee may unilaterally make awards
in the form of Deferred Share Units, regardless of whether or not the
Participant foregoes other compensation.


 


(b)           Vesting. Unless an Award Agreement expressly provides
otherwise, each Participant shall be 100% vested at all times in any Shares
subject to Deferred Share Units.


 


(c)           Issuances of
Shares. The Company shall provide a Participant with one Share for
each Deferred Share Unit in five substantially equal annual installments that
are issued before the last day of each of the five calendar years that end
after the date on which the Participant’s Continuous Service terminates, unless
–


 


(i)            the
Participant has properly elected a different form of distribution, on a form
approved by the Committee, that permits the Participant to select any
combination of a lump sum and annual installments that are completed within ten
years following termination of the Participant’s Continuous Service or such
longer period of time as the Committee may permit on an election form, and


 


(ii)           the
Company received the Participant’s distribution election form at the time the
Participant elects to defer the receipt of cash or other compensation pursuant
to Section 11(a), provided that (subject to any prospective changes that the
Administrator communicates in writing to a Participant), the Participant may
change such election through any subsequent election that (i) is delivered to
the Administrator at least one year before the date on which distributions are
otherwise scheduled to commence pursuant to the Participant’s election, and
(ii) defers the commencement of distributions by at least five years from the
originally scheduled commencement date.


 


13

















 


Fractional
shares shall not be issued, and instead shall be paid out in cash.


 


(d)           Crediting of Dividends. Whenever Shares
are issued to a Participant pursuant to Section 11(c) above, such Participant
shall also be entitled to receive, with respect to each Share issued, a cash
amount equal to any cash dividends (plus simple interest at a rate of five
percent per annum, or such other reasonable rate as the Committee may determine
in an Award Agreement), and a number of Shares equal to any stock dividends
which were declared and paid to the holders of Shares between the Grant Date
and the date such Share is issued.


 


(e)           Emergency
Withdrawals. In the event a Participant suffers an unforeseeable emergency
within the contemplation of this Section and Section 409A of the Code, the
Participant may apply to the Company for an immediate distribution of all or a
portion of the Participant’s Deferred Share Units. The unforeseeable emergency
must result from a sudden and unexpected illness or accident of the Participant,
the Participant’s spouse, or a dependent (within the meaning of Section 152(a)
of the Code) of the Participant, casualty loss of the Participant’s property,
or other similar extraordinary and unforeseeable conditions beyond the control
of the Participant. Examples of purposes which are not considered unforeseeable
emergencies include post-secondary school expenses or the desire to purchase a
residence. In no event will a distribution be made to the extent the
unforeseeable emergency could be relieved through reimbursement or compensation
by insurance or otherwise, or by liquidation of the Participant’s nonessential
assets to the extent such liquidation would not itself cause a severe financial
hardship. The amount of any distribution hereunder shall be limited to the
amount necessary to relieve the Participant’s unforeseeable emergency plus
amounts necessary to pay taxes reasonably anticipated as a result of the
distribution. The Committee shall determine whether a Participant has a
qualifying unforeseeable emergency and the amount which qualifies for
distribution, if any. The Committee may require evidence of the purpose and
amount of the need, and may establish such application or other procedures as
it deems appropriate.


 


(f)            Unsecured
Rights to Deferred Compensation. A Participant’s right to Deferred
Share Units shall at all times constitute an unsecured promise of the Company
to pay benefits as they come due. The right of the Participant or the
Participant’s duly-authorized transferee to receive benefits hereunder shall be
solely an unsecured claim against the general assets of the Company. Neither
the Participant nor the Participant’s duly-authorized transferee shall have any
claim against or rights in any specific assets, shares, or other funds of the
Company.


 


12.           Performance Awards


 


(a)           Performance Units. Subject to the
limitations set forth in paragraph (c) hereof, the Committee may in its
discretion grant Performance Units to any Eligible Person and shall evidence
such grant in an Award Agreement that is delivered to the Participant which
sets forth the terms and conditions of the Award. A Performance Unit is an
Award which is based on the achievement of specific goals with respect to the
Company or any Affiliate or individual performance of the Participant, or a
combination thereof, over a specified period of time.


 


(b)           Performance Compensation Awards. Subject
to the limitations set forth in paragraph (c) hereof, the Committee may, at the
time of grant of a Performance Unit, designate such Award as a “Performance
Compensation Award” in order that such Award constitutes “qualified
performance-based compensation” under Code Section 162(m), in which event the
Committee shall have the power to grant such Performance Compensation Award
upon terms and conditions that qualify it as


 


14

















 


“qualified performance-based compensation” within the
meaning of Code Section 162(m). With respect to each such Performance
Compensation Award, the Committee shall establish, in writing within the time
required under Code Section 162(m), a “Performance Period,” “Performance
Measure(s)”, and “Performance Formula(e)” (each such term being hereinafter
defined). Once established for a Performance Period, the Performance Measure(s)
and Performance Formula(e) shall not be amended or otherwise modified to the
extent such amendment or modification would cause the compensation payable
pursuant to the Award to fail to constitute qualified performance-based
compensation under Code Section 162(m).


 


A
Participant shall be eligible to receive payment in respect of a Performance
Compensation Award only to the extent that the Performance Measure(s) for such
Award is achieved and the Performance Formula(e) as applied against such
Performance Measure(s) determines that all or some portion of such Participant’s
Award has been earned for the Performance Period. As soon as practicable after
the close of each Performance Period, the Committee shall review and certify in
writing whether, and to what extent, the Performance Measure(s) for the
Performance Period have been achieved and, if so, determine and certify in
writing the amount of the Performance Compensation Award to be paid to the
Participant and, in so doing, may use negative discretion to decrease, but not
increase, the amount of the Award otherwise payable to the Participant based
upon such performance.


 


(c)           Limitations on Awards. The Committee shall
have the discretion to provide in any Award Agreement that any amounts earned
in excess of these limitations will either be credited as Deferred Share Units,
or as deferred cash compensation under a separate plan of the Company (provided
in the latter case that such deferred compensation either bears a reasonable
rate of interest or has a value based on one or more predetermined actual
investments and such deferral is permissible under Code Section 409A). Any
amounts for which payment to the Participant is deferred pursuant to the
preceding sentence shall be paid to the Participant in a future year or years
not earlier than, and only to the extent that, the Participant is either not
receiving compensation in excess of these limits for a Performance Period, or
is not subject to the restrictions set forth under Section 162(b) of the Code.


 


(d)           Definitions.


 


(i)            “Performance
Formula” means, for a Performance Period, one or more objective formulas or
standards established by the Committee for purposes of determining whether or
the extent to which an Award has been earned based on the level of performance
attained or to be attained with respect to one or more Performance Measure(s). Performance
Formulae may vary from Performance Period to Performance Period and from
Participant to Participant and may be established on a stand-alone basis, in
tandem or in the alternative.


 


(ii)           “Performance
Measure” means one or more of the following selected by the Committee to
measure Company, Affiliate, and/or business unit performance for a Performance
Period, whether in absolute or relative terms (including, without limitation,
terms relative to a peer group or index): 
basic, diluted, or adjusted earnings per share; sales or revenue;
earnings before interest, taxes, and other adjustments (in total or on a per
share basis); basic or adjusted net income; returns on equity, assets, capital,
revenue or similar measure; economic value added; working capital; total
shareholder return; and product


 


15

















 


development,
product market share, research, licensing, litigation, human resources,
information services, mergers, acquisitions, sales of assets of Affiliates or
business units. Each such measure shall be, to the extent applicable,
determined in accordance with generally accepted accounting principles as
consistently applied by the Company (or such other standard applied by the
Committee) and, if so determined by the Committee, and in the case of a
Performance Compensation Award, to the extent permitted under Code Section
162(m), adjusted to omit the effects of extraordinary items, gain or loss on
the disposal of a business segment, unusual or infrequently occurring events
and transactions and cumulative effects of changes in accounting principles. Performance
Measures may vary from Performance Period to Performance Period and from
Participant to Participant, and may be established on a stand-alone basis, in
tandem or in the alternative.


 


(iii)          “Performance Period” means one or more
periods of time (of not less than one fiscal year of the Company), as the
Committee may designate, over which the attainment of one or more Performance
Measure(s) will be measured for the purpose of determining a Participant’s
rights in respect of an Award.


 


(e)           Deferral
Elections. At any time prior to the date that is at least six months
before the close of a Performance Period (or shorter or longer period that the
Committee selects) with respect to an Award of either Performance Units or
Performance Compensation, the Committee may permit a Participant who is a
member of a select group of management or highly compensated employees to
irrevocably elect, on a form provided by and acceptable to the Committee, to
defer the receipt of all or a percentage of the cash or Shares that would
otherwise be transferred to the Participant upon the vesting of such Award. If
the Participant makes this election, the cash or Shares subject to the
election, and any associated interest and dividends, shall be credited to an
account established pursuant to Section 11 hereof on the date such cash or
Shares would otherwise have been released or issued to the Participant pursuant
to Section 12(a) or Section 12(b) above.


 


13.           Other Stock-Based Awards.


 


The Board may authorize the
granting of other awards based upon Shares and subject to terms and conditions as
the Board may determine at the time of grant, including, without limitation,
the grant of securities convertible into Shares.


 


14.           Taxes


 


(a)           General.
As a condition to the issuance or distribution of Shares pursuant to the Plan, or
the payment of cash pursuant to any Award, the Participant (or in the case of
the Participant’s death, the person who succeeds to the Participant’s rights)
shall make such arrangements as the Company may require for the satisfaction of
any applicable federal, state, local or foreign withholding tax obligations
that may arise in connection with the Award and the issuance of Shares. The
Company shall not be required to issue any Shares until such obligations are
satisfied. If the Committee allows the withholding or surrender of Shares to
satisfy a Participant’s tax withholding obligations, the Committee shall not
allow Shares to be withheld in an amount that exceeds the minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes.


 


(b)           Default Rule
for Employees. In the absence of any other arrangement, an Employee
shall be deemed to have directed the Company to withhold or collect from his or
her cash compensation


 


16

















 


an amount sufficient to satisfy such tax obligations
from the next payroll payment otherwise payable after the date of the exercise
of an Award.


 


(c)           Special
Rules. In the case of a Participant other than an Employee (or in
the case of an Employee where the next payroll payment is not sufficient to
satisfy such tax obligations, with respect to any remaining tax obligations),
in the absence of any other arrangement and to the extent permitted under
Applicable Law, the Participant shall be deemed to have elected to have the
Company withhold from the Shares or cash to be issued pursuant to an Award that
number of Shares having a Fair Market Value determined as of the applicable Tax
Date (as defined below) or cash equal to the amount required to be withheld. For
purposes of this Section 14, the Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined under the Applicable Law (the “Tax Date”).


 


(d)           Surrender of
Shares. If permitted by the Committee, in its discretion, a
Participant may satisfy the minimum applicable tax withholding and employment
tax obligations associated with an Award by surrendering Shares to the Company
(including Shares that would otherwise be issued pursuant to the Award) that
have a Fair Market Value determined as of the applicable Tax Date equal to the
amount required to be withheld. In the case of Shares previously acquired from
the Company that are surrendered under this Section 14, such Shares must have
been owned by the Participant for more than six months on the date of surrender
(or such longer period of time the Company may in its discretion require).


 


(e)           Income
Taxes and Deferred Compensation. Participants are solely
responsible and liable for the satisfaction of all taxes and penalties that may
arise in connection with Awards (including any taxes arising under Section 409A
of the Code), and the Company shall not have any obligation to indemnify or
otherwise hold any Participant harmless from any or all of such taxes. The
Administrator shall have the discretion to organize any deferral program, to
require deferral election forms, and to grant or to unilaterally modify any
Award in a manner that (i) conforms with the requirements of Section 409A of
the Code, (ii) voids any Participant election to the extent it would violate
Section 409A of the Code, and (iii) for any distribution event or election that
could be expected to violate Section 409A of the Code, make the distribution
only upon the earliest of the first to occur of a “permissible
distribution event” within the meaning of Section 409A of the Code, or a
distribution event that the Participant elects in accordance with Section 409A
of the Code. The Administrator shall have the sole discretion to interpret the
requirements of the Code, including Section 409A, for purposes of the Plan and
all Awards.


 


15.           Non-Transferability of Awards


 


(a)           General. Except
as set forth in this Section 15, or as otherwise approved by the Committee for
a select group of management or highly compensated Employees, Awards may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in any manner
other than by will or by the laws of descent or distribution. The designation
of a beneficiary by a Participant will not constitute a transfer. An Award may
be exercised, during the lifetime of the holder of an Award, only by such
holder, the duly-authorized legal representative of a Participant who is
Disabled, or a transferee permitted by this Section 15.


 


(b)           Limited
Transferability Rights. Notwithstanding anything else in this
Section 15, the Committee may in its discretion provide in an Award Agreement that
an Award, other than an ISO,


 


17

















 


Phantom Share or Deferred Share Unit, may be
transferred, on such terms and conditions as the Committee deems appropriate, either
(i) by instrument to the Participant’s “Immediate Family” (as defined below), (ii)
by instrument to an inter vivos or testamentary trust (or other entity) in
which the Award is to be passed to the Participant’s designated beneficiaries,
or (iii) by gift to charitable institutions. Any transfer of the Participant’s
rights shall succeed and be subject to all the terms of the applicable Award
Agreement and the Plan. “Immediate Family” means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive relationships. Any transferee of a Participant’s rights shall succeed to and be
subject to all of the terms of the Plan and the Award Agreement (and
any amendments thereto) granting the transferred Award.


 


16.           Adjustments Upon Changes in Capitalization, Merger or
Certain Other Transactions


 


(a)           Changes in
Capitalization. The Committee shall equitably adjust the number of
Shares covered by each outstanding Award, and the number of Shares that have
been authorized for issuance under the Plan but as to which no Awards have yet
been granted or that have been returned to the Plan upon cancellation,
forfeiture, or expiration of an Award, as well as the exercise or purchase
price per Share covered by each such outstanding Award, to reflect any increase
or decrease in the number of issued Shares resulting from a stock-split,
reverse stock-split, stock dividend, combination, recapitalization or
reclassification of the Shares, or any other increase or decrease in the number
of issued Shares effected without receipt of consideration by the Company. In
the event of any such transaction or event, the Committee may provide in
substitution for any or all outstanding Options under the Plan such alternative
consideration (including securities of any surviving entity) as it may in good
faith determine to be equitable under the circumstances and may require in
connection therewith the surrender of all Options so replaced. In any case,
such substitution of securities shall not require the consent of any person who
is granted Options pursuant to the Plan. Except as expressly provided herein or
in an Award Agreement, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be required to be made with
respect to, the number or price of Shares subject to any Award.


 


(b)           Dissolution
or Liquidation. In the event of the dissolution or liquidation of
the Company other than as part of a Change of Control, each Award will
terminate immediately prior to the consummation of such action, subject to the ability
of the Committee to exercise any discretion authorized in the case of a Change
in Control.


 


(c)           Change in
Control. In the event of a Change in Control, the Committee may in
its sole and absolute discretion and authority, without obtaining the approval
or consent of the Company’s shareholders or any Participant with respect to his
or her outstanding Awards, take one or more of the following actions:


 


(i)            arrange
for or otherwise provide that each outstanding Award shall be assumed or a
substantially similar award shall be substituted by a successor corporation or
a parent or subsidiary of such successor corporation (the “Successor
Corporation”);


 


18

















 


(ii)           accelerate
the vesting of Awards so that Awards shall vest (and, to the extent applicable,
become exercisable) as to the Shares that otherwise would have been unvested
and provide that repurchase rights of the Company with respect to Shares issued
upon exercise of an Award shall lapse as to the Shares subject to such
repurchase right;


 


(iii)          arrange or otherwise provide for the payment
of cash or other consideration to Participants in exchange for the satisfaction
and cancellation of outstanding Awards;


 


(iv)          terminate
upon the consummation of the transaction, provided that the Committee may in
its sole discretion provide for vesting of all or some outstanding Awards in
full as of a date immediately prior to consummation of the Change in Control. To
the extent that an Award is not exercised prior to consummation of a
transaction in which the Award is not being assumed or substituted, such Award
shall terminate upon such consummation; or


 


(v)           make
such other modifications, adjustments or amendments to outstanding Awards or
this Plan as the Committee deems necessary or appropriate, subject however to
the terms of Section 18(a) below.


 


Notwithstanding
the above, in the event a Participant holding an Award assumed or substituted
by the Successor Corporation in a Change in Control is Involuntarily Terminated
by the Successor Corporation in connection with, or within 12 months following consummation of, the Change in Control, then any
assumed or substituted Award held by the terminated Participant at the time of
termination shall accelerate and become fully vested (and exercisable in full
in the case of Options and SARs), and any repurchase right applicable to any
Shares shall lapse in full, unless an Award Agreement provides for a more
restrictive acceleration or vesting schedule or more restrictive limitations on
the lapse of repurchase rights or otherwise places additional restrictions,
limitations and conditions on an Award. The acceleration of vesting and lapse
of repurchase rights provided for in the previous sentence shall occur
immediately prior to the effective date of the Participant’s termination,
unless an Award Agreement provides otherwise.


 


(d)           Certain
Distributions. In the event of any distribution to the Company’s
shareholders of securities of any other entity or other assets (other than
dividends payable in cash or stock of the Company) without receipt of
consideration by the Company, the Committee may, in its discretion,
appropriately adjust the price per Share covered by each outstanding Award to
reflect the effect of such distribution.


 


17.           Time of Granting Awards.


 


The date of grant (“Grant Date”) of an Award shall
be the date specifically set forth in an Award Agreement as the date on which
the Committee communicated the key terms of the Award to the
Participant, subject to the Committee’s discretion to identify a separate date
as the Grant Date.


 


19

















 


18.           Modification of Awards and Substitution of Options.


 


(a)           Modification,
Extension, and Renewal of Awards. Within the limitations of the
Plan, the Committee may modify an Award to accelerate the rate at which the Award
may be exercised (including without limitation permitting an Option or SAR to
be exercised in full without regard to the installment or vesting provisions of
the applicable Award Agreement or whether the Option or SAR is at the time
exercisable, to the extent it has not previously been exercised), to accelerate
the vesting of any Award, to extend or renew outstanding Awards, or to accept
the cancellation of outstanding Awards to the extent not previously exercised
either for the granting of new Awards or for other consideration in substitution
or replacement thereof. Notwithstanding the foregoing provision, no
modification of an outstanding Award shall materially and adversely affect such
Participant’s rights thereunder, unless either the Participant provides written
consent or there is an express Plan provision permitting the Committee to act
unilaterally to make the modification. The Committee may limit the modification
of Awards as it deems necessary to avoid negative tax affects under Code
Section 409A.


 


(b)           Substitution of Options. Notwithstanding
any inconsistent provisions or limits under the Plan, in the event the Company
or an Affiliate acquires (whether by purchase, merger or otherwise) all or
substantially all of outstanding capital stock or assets of another corporation
or in the event of any reorganization or other transaction qualifying under
Section 424 of the Code, the Committee may, in accordance with the provisions
of that Section, substitute Options for options under the plan of the acquired
company provided (i) the excess of the aggregate fair market value of the
shares subject to an option immediately after the substitution over the
aggregate option price of such shares is not more than the similar excess immediately
before such substitution and (ii) the new option does not give persons
additional benefits, including any extension of the exercise period.


 


19.           Term of Plan.


 


The
Plan shall continue in effect for a term of ten years from its effective date
as determined under Section 23 below, unless the Plan is sooner terminated
under Section 20 below.


 


20.           Amendment and Termination of the Plan.


 


(a)           Authority to
Amend or Terminate. Subject to Applicable Laws, the Board may from
time to time amend, alter, suspend, discontinue, or terminate the Plan.


 


(b)           Effect of
Amendment or Termination. No amendment, suspension, or termination
of the Plan shall materially and adversely affect Awards already granted unless
either it relates to an adjustment pursuant to Section 16 above, or it is
otherwise mutually agreed between the Participant and the Committee, which
agreement must be in writing and signed by the Participant and the Company. Notwithstanding
the foregoing, the Committee may amend the Plan to eliminate provisions which
are no longer necessary as a result of changes in tax or securities laws or
regulations, or in the interpretation thereof.


 


21.           Conditions Upon Issuance of Shares.


 


Notwithstanding
any other provision of the Plan or any agreement entered into by the Company
pursuant to the Plan, the Company shall not be obligated, and shall have no
liability for failure, to issue or deliver any Shares under the Plan unless
such issuance or delivery would comply with Applicable Law, with such
compliance determined by the Company in consultation with its legal counsel.


 


20

















 


22.           Reservation of Shares.


 


The
Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.


 


23.           Effective Date.


 


This Plan shall become
effective on the date of its approval by the Board; provided that this Plan
shall be submitted to the Company’s shareholders for approval, and if not
approved by the shareholders in accordance with Applicable Law (as determined
by the Committee in its discretion) within one year from the date of approval
by the Board, this Plan and any Awards shall be null, void, and of no force and
effect. Awards granted under this Plan before approval of this Plan by the
shareholders shall be granted subject to such approval, and no Shares shall be
distributed before such approval.


 


24.           Controlling Law.


 


All
disputes relating to or arising from the Plan shall be governed by the internal
substantive laws (and not the laws of conflicts of laws) of the State of Delaware,
to the extent not preempted by United States federal law. If any provision of
this Plan is held by a court of competent jurisdiction to be invalid and
unenforceable, the remaining provisions shall continue to be fully effective.


 


25.           Other Jurisdictions.


 


To facilitate the making
of any grant of an Award under this Plan, the Committee may provide for such
special terms for Awards to Participants who are foreign nationals or who are
employed by the Company or any Affiliate outside of the United States of
America as the Committee may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. The Company may adopt rules and
procedures relating to the operation and administration of this Plan to
accommodate the specific requirements of local laws and procedures of
particular countries. Without limiting the foregoing, the Company is
specifically authorized to adopt rules and procedures regarding the conversion
of local currency, taxes, withholding procedures and handling of stock
certificates which vary with the customs and requirements of particular
countries. The Company may adopt sub-plans and establish escrow accounts and
trusts as may be appropriate or applicable to particular locations and
countries.


 


26.           No Shareholder Rights. Neither a
Participant nor any transferee of a Participant shall have any rights as a
shareholder of the Company with respect to any Shares underlying any Award
until the date of issuance of a share certificate to a Participant or a
transferee of a Participant for such Shares in accordance with the Company’s
governing instruments and Applicable Law. Prior to the issuance of Shares
pursuant to an Award, a Participant shall not have the right to vote or to
receive dividends or any other rights as a shareholder with respect to the
Shares underlying the Award, notwithstanding its exercise in the case of
Options and SARs. No adjustment will be made for a dividend or other right that
is determined based on a record date prior to the date the stock certificate is
issued, except as otherwise specifically provided for in this Plan.


 


27.           No Employment Rights.
The Plan shall not confer upon any Participant any right to continue an
employment, service or consulting relationship with the Company, nor shall it
affect in


 


21

















 


any way a Participant’s right or the Company’s right
to terminate the Participant’s employment, service, or consulting relationship
at any time, with or without Cause.


 


28.           Termination, Rescission and Recapture.


 


(a)           Each Award under the
Plan is intended to align the Participant’s long-term interest with those of
the Company. If the Participant engages in certain activities discussed below,
either during employment or after employment with the Company terminates for
any reason, the Participant is acting contrary to the long-term interests of
the Company. Accordingly, except as otherwise expressly provided in the Award
Agreement, the Company may terminate any outstanding, unexercised, unexpired,
unpaid, or deferred Awards (“Termination”), rescind any exercise, payment or
delivery pursuant to the Award (“Rescission”), or recapture any Common Stock
(whether restricted or unrestricted) or proceeds from the Participant’s sale of
Shares issued pursuant to the Award (“Recapture”), if the Participant does not
comply with the conditions of subsections (b) and (c) hereof (collectively, the
“Conditions”).


 


(b)           A Participant shall
not, without the Company’s prior written authorization, disclose to anyone
outside the Company, or use in other than the Company’s business, any
proprietary or confidential information or material, as those or other similar
terms are used in any applicable patent, confidentiality, inventions, secrecy,
or other agreement between the Participant and the Company with regard to any
such proprietary or confidential information or material.


 


(c)           Pursuant to
any agreement between the Participant and the Company with regard to
intellectual property (including but not limited to patents, trademarks,
copyrights, trade secrets, inventions, developments, improvements, proprietary
information, confidential business and personnel information), a Participant
shall promptly disclose and assign to the Company or its designee all right, title, and interest in such
intellectual property, and shall take all reasonable steps necessary to enable
the Company to secure all right, title and interest in such intellectual
property in the United States and in any foreign country.


 


(d)           Upon exercise, payment,
or delivery of cash or Common Stock pursuant to an Award, the Participant shall
certify on a form acceptable to the Company that he or she is in compliance
with the terms and conditions of the Plan and, if a severance of Continuous
Service has occurred for any reason, shall state the name and address of the
Participant’s then-current employer or any entity for which the Participant
performs business services and the Participant’s title, and shall identify any
organization or business in which the Participant owns a
greater-than-five-percent equity interest.


 


(e)           If the Company
determines, in its sole and absolute discretion, that (i) a Participant has
violated any of the Conditions or (ii) during his or her Continuous Service, or
within three years after its termination for any reason, a Participant (a) has
rendered services to or otherwise directly or indirectly engaged in or
assisted, any organization or business that, in the judgment of the Company in
its sole and absolute discretion, is or is working to become competitive with
the Company; (b) has solicited any non-administrative employee of the Company
to terminate employment with the Company; or (c) has engaged in activities which
are materially prejudicial to or in conflict with the interests of the Company,
including any breaches of fiduciary duty or the duty of loyalty, then the
Company may, in its sole and absolute discretion, impose a Termination,
Rescission, and/or Recapture with respect to any or all of the Participant’s
relevant Awards, Shares, and the proceeds


 


22

















 


thereof. Within ten days after receiving notice from the Company of any such activity, the
Participant shall deliver to the
Company the Shares acquired pursuant to the Award, or, if Participant
has sold the Shares, the gain realized, or payment received as a result of the
rescinded exercise, payment, or delivery; provided, that if the Participant
returns Shares that the Participant purchased pursuant to the exercise of an
Option (or the gains realized from the sale of such Common Stock), the Company shall promptly refund the
exercise price, without earnings, that the Participant paid for the Shares. Any
payment by the Participant to the
Company pursuant to this Section 28(e) shall be made either in cash or
by returning to the Company the
number of Shares that the Participant received in connection with the rescinded
exercise, payment, or delivery. It shall not be a basis for Termination,
Rescission or Recapture if after termination of a Participant’s Continuous
Service, the Participant purchases, as an investment or otherwise, stock or
other securities of such an organization or business, so long as (i) such stock
or other securities are listed upon a recognized securities exchange or traded
over-the-counter, and (ii) such investment does not represent more than a five
percent equity interest in the organization or business.


 


(f)            Notwithstanding the
foregoing provisions of this Section, the Company has sole and absolute
discretion not to require Termination, Rescission and/or Recapture, and its
determination not to require Termination, Rescission and/or Recapture with
respect to any particular act by a particular Participant or Award shall not in
any way reduce or eliminate the Company’s authority to require Termination,
Rescission and/or Recapture with respect to any other act or Participant or
Award. Nothing in this Section shall be construed to impose obligations on the
Participant to refrain from engaging in lawful competition with the Company
after the termination of employment that does not violate subsections (b) or
(c) of this Section, other than any obligations that are part of any separate
agreement between the Company and the Participant or that arise under
applicable law.


 


(g)           All administrative and
discretionary authority given to the Company under this Section shall be
exercised by the most senior human resources executive of the Company or such
other person or committee (including without limitation the Committee) as the
Committee may designate from time to time.


 


(h)           Notwithstanding any
provision of this Section, if any provision of this Section is determined to be
unenforceable or invalid under any applicable law, such provision will be
applied to the maximum extent permitted by applicable law, and shall
automatically be deemed amended in a manner consistent with its objectives to
the extent necessary to conform to any limitations required under applicable
law. Furthermore, if any provision of this Section is illegal under any
applicable law, such provision shall be null and void to the extent necessary
to comply with applicable law.


 


Notwithstanding
the foregoing, but subject to any contrary terms set forth in any Award
Agreement, this Section shall not be applicable:  (i) to any Participant who is not, on the
Award Date, an Employee of the Company or its Affiliates; and (ii) to any
Participant from and after his or her termination of Continuous Service after a
Change in Control.


 


23

















 


MxEnergy
Holdings Inc.


 


2006
Equity Incentive Compensation Plan


 










 


Appendix
A: Definitions


 






 


As used in the Plan, the following definitions shall
apply:


 


“Affiliate”
means, with respect to any Person (as defined below), any other Person that
directly or indirectly controls or is controlled by or under common control
with such Person. For the purposes of this definition, “control,” when used
with respect to any Person, means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of such
Person or the power to elect directors, whether through the ownership of voting
securities, by contract or otherwise; and the terms “affiliated,” “controlling”
and “controlled” have meanings correlative to the foregoing.


 


“Applicable
Law” means the legal requirements relating to the
administration of options and share-based plans under applicable U.S. federal
and state laws, the Code, any applicable stock exchange or automated quotation
system rules or regulations, and the applicable laws of any other country or
jurisdiction where Awards are granted, as such laws, rules, regulations and
requirements shall be in place from time to time.


 


“Award”
means any award made pursuant to the Plan, including awards made in the form of
an Option, an SAR, a Restricted Share, a Restricted Share Unit, an Unrestricted
Share, a Deferred Share Unit and a Performance Award, or any combination
thereof, whether alternative or cumulative, authorized by and granted under
this Plan.


 


“Award
Agreement” means any written document setting forth the
terms of an Award that has been authorized by the Committee. The Committee
shall determine the form or forms of documents to be used, and may change them
from time to time for any reason.


 


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


 


“Cause”
for termination of a Participant’s Continuous Service will
exist if the Participant is terminated from employment or other service with
the Company or an Affiliate for any of the following reasons: (i) the
Participant’s willful failure to substantially perform his or her duties and
responsibilities to the Company or deliberate violation of a material Company
policy; (ii) the Participant’s commission of any material act or acts of fraud,
embezzlement, dishonesty, or other willful misconduct; (iii) the Participant’s
material unauthorized use or disclosure of any proprietary information or trade
secrets of the Company or any other party to whom the Participant owes an
obligation of nondisclosure as a result of his or her relationship with the
Company; or (iv) Participant’s willful and material breach of any of his or her
obligations under any written agreement or covenant with the Company.


 

















 


The
Committee shall in its discretion determine whether or not a Participant is
being terminated for Cause. The Committee’s determination shall, unless
arbitrary and capricious, be final and binding on the Participant, the Company,
and all other affected persons. The foregoing definition does not in any way
limit the Company’s ability to terminate a Participant’s employment or
consulting relationship at any time, and the term “Company” will be interpreted
herein to include any Affiliate
or successor thereto, if appropriate.


 


“Change in Control” means,
unless another definition is set forth in an Award Agreement, the first of the
following to occur after the effective date of this Plan (as set forth in
Section 23 hereto):


 


(i)            Acquisition
of Controlling Interest. Any Person (other than Persons who are Employees at any time more
than one year before a transaction) becomes the Beneficial
Owner, directly or indirectly, of securities of the Company representing [50%] or more of the
combined voting power of the Company’s then outstanding securities. In applying
the preceding sentence, (i) securities acquired directly from the Company or
its Affiliates by or for the Person shall not be taken into account, and (ii)
an agreement to vote securities shall be disregarded unless its ultimate
purpose is to cause what would otherwise be a Change in Control, as reasonably
determined by the Board.


 


(ii)           Change in
Board Control. During a consecutive two-year period commencing after
the date of adoption of this Plan, individuals who constituted the Board at the
beginning of the period (or their approved replacements, as defined in the next
sentence) cease for any reason to constitute a majority of the Board. A new
Director shall be considered an “approved replacement” Director if his or her
election (or nomination for election) was approved by a vote of at least a
majority of the Directors then still in office who either were Directors at the
beginning of the period or were themselves approved replacement Directors, but
in either case excluding any Director whose initial assumption of office
occurred as a result of an actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board.


 


(iii)          Merger.
The Company consummates a merger, or consolidation of the Company with any
other corporation unless: (a) the voting securities of the Company outstanding
immediately before the merger or consolidation would continue to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) at least 50% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; and (b) no Person (other than Persons who are Employees
at any time more than one year before a transaction) becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 50%
or more of the combined voting power of the Company’s then outstanding
securities.


 


(iv)          Sale of Assets.
The stockholders of the Company approve an agreement for the sale or
disposition by the Company of all, or substantially all, of the Company’s
assets.


 


(v)           Liquidation
or Dissolution. The stockholders of the Company approve a plan or
proposal for liquidation or dissolution of the Company.


 


25

















 


(vi)          Initial
Public Offering. The stockholders of the Company approve an IPO.


 


Notwithstanding the
foregoing, a “Change in Control” shall not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated transactions
immediately following which the record holders of the common stock of the
Company immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Company immediately
following such transaction or series of transactions.


 


“Code”
means the U.S. Internal Revenue Code of 1986, as amended.


 


“Committee”
means the Compensation Committee of the Board appointed by the Board to
administer the Plan in accordance with Section 4 above. Notwithstanding the
foregoing, with respect to any decision involving an Award intended to satisfy
the requirements of Section 162(m) of the Code, the Committee shall consist of
two or more Directors of the Company who are “outside directors” within the
meaning of Section 162(m) of the Code. With respect to any decision relating to
a Reporting Person, the Committee shall consist of two or more Directors who
are disinterested within the meaning of Rule 16b-3.


 


“Company”
means MxEnergy Holdings Inc., a Delaware corporation; provided, however, that
in the event the Company reincorporates to another jurisdiction, all references
to the term “Company” shall refer to the Company in such new jurisdiction.


 


“Consultant”
means any person, including an advisor, who is engaged by the Company or any
Affiliate to render services and is compensated for such services.


 


“Continuous
Service” means the absence of any interruption or
termination of service as an Employee, Director, Consultant or employee of the
Company. Continuous Service shall not be considered interrupted in the case
of:  (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Committee, provided that
such leave is for a period of not more than 90 days, unless reemployment upon
the expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time;
(iv) changes in status from Director to advisory director or emeritus
status; or (iv) in the case of transfers between locations of the Company
or between the Company, its Affiliates or their respective successors. Changes
in status between service as an Employee, Director, and a Consultant will not
constitute an interruption of Continuous Service.


 


“Deferred
Share Units” mean Awards pursuant to Section 11 of the
Plan.


 


“Director”
means a member of the Board, or a member of the board of
directors of an Affiliate.


 


“Disabled”
means a condition under which a Participant  —


 


(a)           is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, or


 


26

















 


(b)           is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, received income replacement benefits for a period of not less
than three months under an accident or health plan covering employees of the
Company.


 


“Dividend
Equivalent Rights” means a right awarded under Section 9
of the Plan to receive (or have credited) the equivalent value of dividends
paid on Common Stock.


 


“Eligible Person” means any
Consultant, Director or Employee and includes non-Employees to whom an offer of
employment has been extended.


 


“Employee”
means any person whom the Company or any Affiliate classifies as an employee
(including an officer) for employment tax purposes, whether or not that
classification is correct, provided that, for purposes of ISO Awards, an
Employee is a person who is a common law employee of the Company or any “parent
corporation” or “subsidiary corporation” as such terms are defined in Code
Section 424. The payment by the Company of a director’s fee to a Director shall
not be sufficient to constitute “employment” of such Director by the Company.


 


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


 


“Fair
Market Value” means, as of any date (the “Determination
Date”) means: (i) the closing price of a Share on the New York Stock
Exchange or the American Stock Exchange (collectively, the “Exchange”), on the
Determination Date, or, if shares were not traded on the Determination Date,
then on the nearest preceding trading day during which a sale occurred; or
(ii) if such stock is not traded on the Exchange but is quoted on NASDAQ
or a successor quotation system, (A) the last sales price (if the stock is then
listed as a National Market Issue under The Nasdaq National Market System) or
(B) the mean between the closing representative bid and asked prices (in all
other cases) for the stock on the Determination Date as reported by NASDAQ or
such successor quotation system; or (iii) if such stock is not traded on
the Exchange or quoted on NASDAQ but is otherwise traded in the
over-the-counter, the mean between the representative bid and asked prices on
the Determination Date; or (iv) if subsections (i)-(iii) do not apply, the
fair market value established in good faith by the Board.


 


“Grant
Date” has the meaning set forth in Section 14 of the
Plan.


 


“Incentive
Share Option or ISO” hereinafter means an Option intended
to qualify as an incentive stock option within the meaning of Section 422 of
the Code, as designated in the applicable Award Agreement.


 


“Initial
Public Offering or IPO” means a firm commitment
underwritten public offering of Common Stock pursuant to a registration
statement filed with and declared effective by the SEC.


 


“Involuntary
Termination” means termination of a Participant’s
Continuous Service under the following circumstances occurring on or after a
Change in Control:  (i) termination
without Cause by the Company or an Affiliate or successor thereto, as
appropriate; or (ii) voluntary termination by the Participant within 60
days following (A) a material reduction in the Participant’s job
responsibilities, provided that neither a mere change in title alone nor
reassignment to a


 


27

















 


substantially similar position shall constitute a
material reduction in job responsibilities; (B) an involuntary relocation
of the Participant’s work site to a facility or location more than 50 miles
from the Participant’s principal work site at the time of the Change in
Control; or (C) a material reduction in Participant’s total compensation
other than as part of an reduction by the same percentage amount in the
compensation of all other similarly-situated Employees, Directors or
Consultants.


 


“Non-ISO”
means an Option not intended to qualify as an ISO, as designated in the applicable
Award Agreement.


 


“Option”
means any stock option granted pursuant to Section 6 of the Plan.


 


“Participant”
means any holder of one or more Awards, or the Shares issuable or issued upon
exercise of such Awards, under the Plan.


 


“Performance Awards” mean
Performance Units and Performance Compensation Awards granted pursuant to
Section 12.


 


“Performance Compensation Awards” mean Awards granted pursuant to Section 12(b) of
the Plan.


 


“Performance Unit” means Awards
granted pursuant to Section 10(a) of the Plan which may be paid in cash, in
Shares, or such combination of cash and Shares as the Committee in its sole
discretion shall determine.


 


“Person”
means any natural person, association, trust, business trust, cooperative,
corporation, general partnership, joint venture, joint-stock company, limited
partnership, limited liability company, real estate investment trust,
regulatory body, governmental agency or instrumentality, unincorporated
organization or organizational entity.


 


“Phantom
Shares” means Phantom Shares granted pursuant to Section
8 of the Plan.


 


“Phantom
Share Value” means the Fair Market Value of a Share of
Class A Common Stock, or if so provided by the Committee, such Fair Market
Value to the extent in excess of a base value established by the Committee at
the time of grant.


 


“Plan”
means this MxEnergy Holdings Inc. 2006 Equity Incentive Compensation Plan.


 


“Reporting
Person” means an officer, Director, or greater than ten
percent shareholder of the Company within the meaning of Rule 16a-2 under the
Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the
Exchange Act.


 


“Restricted
Shares” mean Shares subject to restrictions imposed
pursuant to Section 7 of the Plan.


 


“Restricted
Share Units” mean Awards pursuant to Section 7 of the
Plan.


 


“Rule
16b-3” means Rule 16b-3 promulgated under the Exchange
Act, as amended from time to time, or any successor provision.


 


28

















 


“SAR” or “Share Appreciation Right” means
Awards granted pursuant to Section 10 of the Plan.


 


 “Share” means a share
of common stock of the Company, par value $0.0001, as adjusted in accordance
with Section 16 of the Plan.


 


“Ten
Percent Holder” means a person who owns stock
representing more than ten percent (10%) of the combined voting power of all
classes of stock of the Company or any Affiliate.


 


“Unrestricted
Shares” mean Shares awarded pursuant to Section 7 of the
Plan.


 


29