exv4w1







Exhibit 4.1



 




CAPTERRA FINANCIAL GROUP, INC.




2008 EQUITY COMPENSATION PLAN



 




 









 





Table of Contents




	 	 	 	 	 
	1. Purpose
	 	 	3	 
	 
	 	 	 	 
	2. Definitions
	 	 	3	 
	 
	 	 	 	 
	3. Administration
	 	 	6	 
	(a) Authority of the Committee
	 	 	6	 
	(b) Manner of Exercise of Committee Authority
	 	 	6	 
	(c) Conformance to Section 409A of the Code
	 	 	7	 
	(d) Limitation of Liability
	 	 	7	 
	 
	 	 	 	 
	4. Shares Subject to Plan
	 	 	7	 
	 
	 	 	 	 
	(a) Limitation on Overall Number of Shares Available for Delivery Under Plan
	 	 	7	 
	(b) Application of Limitation to Grants of Award
	 	 	7	 
	(c) Availability of Shares Not Delivered under Awards and Adjustments to Limits
	 	 	7	 
	 
	 	 	 	 
	5. Eligibility; Per-Person Award Limitations
	 	 	8	 
	 
	 	 	 	 
	6. Specific Terms of Awards
	 	 	8	 
	 
	 	 	 	 
	(a) General
	 	 	8	 
	(b) Options
	 	 	8	 
	(c) Restricted Stock Awards
	 	 	10	 
	(d) Other Stock-Based Awards
	 	 	11	 
	 
	 	 	 	 
	7. Certain Provisions Applicable to Awards
	 	 	11	 
	 
	 	 	 	 
	(a) Stand-Alone, Additional, Tandem, and Substitute Awards
	 	 	11	 
	(b) Term of Awards
	 	 	12	 
	(c) Form and Timing of Payment Under Awards
	 	 	12	 
	(d) Exemptions from Section 16(b) Liability
	 	 	12	 
	 
	 	 	 	 
	8. Code Section 162(m) Provisions
	 	 	12	 
	 
	 	 	 	 
	(a) Covered Employees
	 	 	12	 
	(b) Performance Criteria
	 	 	12	 
	(c) Performance Period; Timing for Establishing Performance Goals
	 	 	13	 
	(d) Adjustments
	 	 	13	 
	(e) Committee Certification
	 	 	13	 
	 
	 	 	 	 
	9. Change in Control
	 	 	13	 






 









 






	 	 	 	 	 
	(a) Effect of Change in Control
	 	 	13	 
	(b) Definition of Change in Control
	 	 	14	 
	 
	 	 	 	 
	10. General Provisions
	 	 	15	 
	 
	 	 	 	 
	(a) Compliance With Legal and Other Requirements
	 	 	15	 
	(b) Limits on Transferability; Beneficiaries
	 	 	15	 
	(c) Adjustments
	 	 	15	 
	(d) Taxes
	 	 	15	 
	(e) Changes to the Plan and Awards
	 	 	15	 
	(f) Limitation on Rights Conferred Under Plan
	 	 	16	 
	(g) Unfunded Status of Awards; Creation of Trusts
	 	 	16	 
	(h) Nonexclusivity of the Plan
	 	 	16	 
	(i) Fractional Shares
	 	 	16	 
	(j) Section 409A of the Code Section 409A of the Code
	 	 	16	 
	(k) Governing Law
	 	 	16	 
	(l) Non-U.S. Laws
	 	 	16	 
	(m) Plan Effective Date and ShareholderApproval;Termination of Plan
	 	 	16	 






 









 





CAPTERRA FINANCIAL GROUP, INC.




2008 EQUITY COMPENSATION PLAN




     1. Purpose. The purpose of this 2008 EQUITY COMPENSATION PLAN (the “Plan”) is to assist
CAPTERRA FINANCIAL GROUP, INC., a Colorado corporation (the “Company”) and its Related Entities (as
hereinafter defined) in attracting, motivating, retaining and rewarding high-quality executives and
other employees, officers, directors, consultants and other persons who provide services to the
Company or its Related Entities by enabling such persons to acquire or increase a proprietary
interest in the Company in order to strengthen the mutuality of interests between such persons and
the Company’s shareholders, and providing such persons with performance incentives to expend their
maximum efforts in the creation of shareholder value.



     2. Definitions. For purposes of the Plan, the following terms shall be defined as set forth
below, in addition to such terms defined in Section 1 hereof.



          (a) “Award” means any Option or Restricted Stock Award granted to a Participant under the
Plan.




          (b) “Award Agreement” means any written agreement, contract or other instrument or document
evidencing any Award granted by the Committee
hereunder.




          (c) “Beneficiary” means the person, persons, trust or trusts that have been designated by a
Participant in his or her most recent written beneficiary designation filed with the Committee to
receive the benefits specified under the Plan upon such Participant’s death or to which Awards or
other rights are transferred if and to the extent permitted under Section 10(b) hereof. If, upon a
Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary, then
the term Beneficiary means the person, persons, trust or trusts entitled by will or the laws of
descent and distribution to receive such benefits.




          (d) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 under the
Exchange Act and any successor to such Rule.




          (e) “Board” means the Company’s Board of Directors.




          (f) “Cause” shall, with respect to any Participant have the meaning specified in the Award
Agreement. In the absence of any definition in the Award Agreement, “Cause” shall have the
equivalent meaning or the same meaning as “cause” or “for cause” set forth in any employment,
consulting, or other agreement for the performance of services between the Participant and the
Company or a Related Entity or, in the absence of any such agreement or any such definition in such
agreement, such term shall mean (i) the failure by the Participant to perform, in a reasonable
manner, his or her duties as assigned by the Company or a Related Entity, (ii) any violation or
breach by the Participant of his or her employment, consulting or other similar agreement with the
Company or a Related Entity, if any, (iii) any violation or breach by the Participant of any
non-competition, non-solicitation, non-disclosure and/or other similar agreement with the Company
or a Related Entity, (iv) any act by the Participant of dishonesty or bad faith with respect to the
Company or a Related Entity, [(v) use of alcohol, drugs or other similar substances in a manner
that adversely affects the Participant’s work performance], or (vi) the commission by the
Participant of any act, misdemeanor, or crime reflecting unfavorably upon the Participant or the
Company or any Related Entity. The good faith determination by the Committee of whether the
Participant’s Continuous Service was terminated by the Company for “Cause” shall be final and
binding for all purposes hereunder.




          (g) “Change in Control” means a Change in Control as defined
with related terms in Section 9(b) of the Plan.




          (h) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations thereto.




          (i) “Committee” means a committee designated by the Board to administer the Plan; provided,
however, that if the Board fails to designate a committee or if there are no longer any members on
the committee so designated by the Board, then the Board shall serve as the Committee. The
Committee shall consist of at least two directors, and each member of the Committee shall be (i)a
“non-employee director” within the meaning of Rule 16b-3 (or any successor rule) under the Exchange
Act, unless administration of the Plan by “non-employee directors” is not then
required in order for exemptions under Rule 16b-3 to apply to





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transactions under the Plan, (ii) an
“outside director” within the meaning of Section 162(m) of the Code, and (iii) “Independent.”




          (j) “Consultant” means any person (other than an Employee or a Director, solely with respect
to rendering services in such person’s capacity as a director) who is engaged by the Company or any
Related Entity to render consulting or advisory services to the Company or such Related Entity.




          (k) “Continuous Service” means the uninterrupted provision of services to the Company or any
Related Entity in any capacity of Employee, Director, Consultant or other service provider.
Continuous Service shall not be considered to be interrupted in the case of (i) any approved leave
of absence, (ii) transfers among the Company, any Related Entities, or any successor entities, in
any capacity of Employee, Director, Consultant or other service provider, or (iii) any change in
status as long as the individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director, Consultant or other service provider (except as otherwise provided
in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or
any other authorized personal leave.




          (l) “Covered Employee” means an Eligible Person who is a “covered employee” within the meaning
of Section 162(m)(3) of the Code, or any successor provision thereto.




          (m) “Director” means a member of the Board or the board of directors of any Related Entity.




          (n) “Disability” means a permanent and total disability (within the meaning of Section 22(e)
of the Code), as determined by a medical doctor satisfactory to the Committee.




          (o) “Effective Date” means the effective date of the Plan, which shall be December 4, 2008.




          (p) “Eligible Person” means each officer, Director, Employee, Consultant and other person who
provides services to the Company or any Related Entity. The foregoing notwithstanding, only
employees of the Company, or any parent corporation or subsidiary corporation of the Company (as
those terms are defined in Sections 424(e) and (f) of the Code, respectively), shall be Eligible
Persons for purposes of receiving any Incentive Stock Options. An Employee on leave of absence may
be considered as still in the employ of the Company or a Related Entity for purposes of eligibility
for participation in the Plan.




          (q) “Employee” means any person, including an officer or Director, who is an employee of the
Company or any Related Entity. The payment of a director’s fee by the Company or a Related Entity
shall not be sufficient to constitute “employment” by the Company.




          (r) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
including rules thereunder and successor provisions and rules thereto.




          (s) “Executive Committee” means the Executive Committee of the Board.




          (t) “Fair Market Value” means the fair market value of Shares, Awards or other property as
determined by the Committee, acting in good faith, believes to be in accordance with Section 409A
of the Code and the Treasury Regulations thereunder. Unless otherwise determined by the Committee,
provided that such determination shall comply with the requirements of Treasury Regulation
§1.409A-1(b)(5)(iv)(A), the Fair Market Value of a Share as of any given date shall be the closing
sale price per Share reported on a consolidated basis for stock listed on the principal stock
exchange or market on which Shares are traded on the date as of which such value is being
determined or, if there is no sale on that date, then on the last previous day on which a sale was
reported.




          (u) “Good Reason” shall, with respect to any Participant, have the meaning specified in the
Award Agreement. In the absence of any definition in the Award Agreement, “Good Reason” shall have
the equivalent meaning or the same meaning as “good reason” or “for good reason” set forth in any
employment, consulting or other agreement for the performance of services between the Participant
and the Company or a Related Entity or, in the absence of any such agreement or any such definition
in such agreement, such term shall mean (i) the





4









 







assignment to the Participant of any duties
inconsistent in any material respect with the Participant’s position, authority,
duties or responsibilities as assigned by the Company or a Related Entity, or any other action by
the Company or a Related Entity which results in a material diminution in such position, authority,
duties or responsibilities, excluding for this purpose any action not taken in bad faith and which
is remedied by the Company or a Related Entity promptly after receipt of notice thereof given by
the Participant; or (ii) any material failure by the Company or a Related Entity to comply with its
obligations to the Participant as agreed upon, other than any failure not occurring in bad faith
and which is remedied by the Company or a Related Entity promptly after receipt of notice thereof
given by the Participant.




          (v) “Incentive Stock Option” means any Option intended to be designated as an incentive stock
option within the meaning of Section 422 of the Code or any successor provision thereto.




          (w) “Independent,” when referring to either the Board or members of the Committee, shall have
the same meaning as used in the rules of the Nasdaq Stock Market or any national securities
exchange on which any securities of the Company are listed for trading, and if not listed for
trading, by the rules of the Nasdaq Stock Market.




          (x) “Incumbent Board” means the Incumbent Board as defined in Section 9(b)(ii) of the Plan.




          (y) “Option” means a right granted to a Participant under Section 6(b) hereof, to purchase
Shares or other Awards at a specified price during specified time periods.




          (z) “Optionee” means a person to whom an Option is granted under this Plan or any person who
succeeds to the rights of such person under this Plan.




          (aa) “Option Proceeds” means the cash actually received by the Company for the exercise price
in connection with the exercise of Options that are exercised after the Effective Date of the Plan,
plus the maximum tax benefit that could be realized by the Company as a result of the exercise of
such Options, which tax benefit shall be determined by multiplying (i) the amount that is
deductible for Federal income tax purposes as a result of any such option exercise (currently,
equal to the amount upon which the Participant’s withholding tax obligation is calculated), times
(ii) the maximum Federal corporate income tax rate for the year of exercise. With respect to
Options, to the extent that a Participant pays the exercise price and/or withholding taxes with
Shares, Option Proceeds shall not be calculated with respect to the amounts so paid in Shares.




          (bb) “Outside Director” means a member of the Board who is not an Employee.




          (cc) “Participant” means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible Person.




          (dd) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, and shall include a “group” as defined in Section
13(d) thereof.




          (ee) “Related Entity” means any Subsidiary, and any business, corporation, partnership,
limited liability company or other entity designated by Board in which the Company or a Subsidiary
holds a substantial ownership interest, directly or indirectly.




          (ff) “Restricted Stock” means any Share issued with the restriction that the holder may not
sell, transfer, pledge or assign such Share and with such risks of forfeiture and other
restrictions as the Committee, in its sole discretion, may impose (including any restriction on the
right to vote such Share and the right to receive any dividends), which restrictions may lapse
separately or in combination at such time or times, in installments or otherwise, as the Committee
may deem appropriate.




          (gg) “Restricted Stock Award” means an Award granted to a Participant under Section 6(c)
hereof.





5









 








          (hh) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to the Plan
and Participants, promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act.




          (ii) “Shareholder Approval Date” means the date on which this Plan is approved shareholders of
the Company eligible to vote in the election of directors, by a vote sufficient to meet the
requirements of Code Sections 162(m) (if applicable) and 422, Rule 16b-3 under the Exchange Act (if
applicable), applicable requirements under the rules of any stock exchange or automated quotation
system on which the Shares may be listed on quoted, and other laws, regulations and obligations of
the Company applicable to the Plan.




          (jj) “Shares” means the shares of common stock of the Company, par value $.001 per share, and
such other securities as may be substituted (or resubstituted) for Shares pursuant to Section 10(c)
hereof.




          (kk) “Subsidiary” means any corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined voting power of the then
outstanding securities or interests of such corporation or other entity entitled to vote generally
in the election of directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% or more of the assets on liquidation or dissolution.




          (ll) “Substitute Awards” shall mean Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted, or the right or
obligation to make future awards, by a company acquired by the Company or any Related Entity or
with which the Company or any Related Entity combines.




     3. Administration.



          (a) Authority of the Committee. The Plan shall be administered by the Committee, except to the
extent the Board elects to administer the Plan, in which case the Plan shall be administered by
only those directors who are Independent Directors, in which case references herein to the
“Committee” shall be deemed to include references to the Independent members of the Board. The
Committee shall have full and final authority, subject to and consistent with the provisions of the
Plan, to select Eligible Persons to become Participants, grant Awards, determine the type, number
and other terms and conditions of, and all other matters relating to, Awards, prescribe Award
Agreements (which need not be identical for each Participant) and rules and regulations for the
administration of the Plan, construe and interpret the Plan and Award Agreements and correct
defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and
determinations as the Committee may deem necessary or advisable for the administration of the Plan.
In exercising any discretion granted to the Committee under the Plan or pursuant to any Award, the
Committee shall not be required to follow past practices, act in a manner consistent with past
practices, or treat any Eligible Person or Participant in a manner consistent with the treatment of
other Eligible Persons or Participants.




          (b) Manner of Exercise of Committee Authority. The Committee, and not the Board, shall
exercise sole and exclusive discretion on any matter relating to a Participant then subject to
Section 16 of the Exchange Act with respect to the Company to the extent necessary in order that
transactions by such Participant shall be exempt under Rule 16b-3 under the Exchange Act. Any
action of the Committee shall be final, conclusive and binding on all persons, including the
Company, its Related Entities, Participants, Beneficiaries, transferees under Section 10(b) hereof
or other persons claiming rights from or through a Participant, and shareholders. The express grant
of any specific power to the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may delegate to
officers or managers of the Company or any Related Entity, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to perform such functions, including
administrative functions as the Committee may determine to the extent that such delegation will not
result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants
subject to Section 16 of the Exchange Act in respect of the Company and will not cause Awards
intended to qualify as “performance-based compensation” under Code Section 162(m) to fail to so
qualify. The Committee may appoint agents to assist it in administering the Plan.




6









 








          (c) Conformance to Section 409A of the Code. If, at any time, tax advisors to the Company
determine that the terms of any outstanding Award result in additional tax or interest to the
holder under Section 409A of the Code, the Committee shall have the authority to enter into an
amendment of such Award, consistent with this Plan, that is designed to avoid such additional tax
or interest. If any Award constitutes deferred compensation within the
meaning of Section 409A of the Code, any acceleration of the payment of such Award upon a
Change in Control as provided under this Plan shall occur only if the Change in Control
constitutes, in the good-faith determination of the Committee, a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion of the assets of the
Company, under Section 409A of the Code. If any other payment under this Plan constitutes deferred
compensation within the meaning of Section 409A of the Code and if the Plan fails to satisfy the
requirements of Section 409A(a)(2), (3) or (4) of the Code with respect to such payment, such
provision shall be operated in a manner that, in the good-faith determination of the Committee,
seeks to bring the provision into compliance with those requirements while preserving as closely as
possible the original intent of the provision.




   (d) Limitation of Liability. The Committee and the Board, and each member thereof, shall be
entitled to, in good faith, rely or act upon any report or other information furnished to him or
her by any officer or Employee, the Company’s independent auditors, Consultants or any other agents
assisting in the administration of the Plan. Members of the Committee and the Board, and any
officer or Employee acting at the direction or on behalf of the Committee or the Board, shall not
be personally liable for any action or determination taken or made in good faith with respect to
the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination.



     4. Shares Subject to Plan.



          (a) Limitation on Overall Number of Shares Available for Delivery Under Plan. Subject to
adjustment as provided in Section 10(c) hereof, the total number of Shares reserved and available
for delivery under the Plan shall be 2,700,000. Any Shares delivered under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares.




          (b) Application of Limitation to Grants of Award. No Award may be granted if the number of
Shares to be delivered in connection with such an Award or, in the case of an Award relating to
Shares but settled only in cash, the number of Shares to which such Award relates, exceeds the
number of Shares remaining available for delivery under the Plan, minus the number of Shares
deliverable in settlement of or relating to then outstanding Awards. The Committee may adopt
reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for
example, in the case of substitute awards) and make adjustments if the number of Shares actually
delivered differs from the number of Shares previously counted in connection with an Award.




          (c) Availability of Shares Not Delivered under Awards and
Adjustments to Limits.




               (i) If any Shares subject to an Award are forfeited, expire or otherwise terminate without
issuance of such Shares, or any Award is settled for cash or otherwise does not result in the
issuance of all or a portion of the Shares subject to such Award, such Shares shall, to the extent
of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available
for Awards under the Plan.



               (ii) In the event that any Option or other Award granted hereunder is exercised through the
tendering of Shares (either actually or by attestation) or by the withholding of Shares by the
Company, or withholding tax liabilities arising from such option or other award are satisfied by
the tendering of Shares (either actually or by attestation) or by the withholding of Shares by the
Company, then only the number of Shares issued net of the Shares tendered or withheld shall be
counted for purposes of determining the maximum number of Shares available for grant under the
Plan.



               (iii) Shares reacquired by the Company on the open market using Option Proceeds shall be
available for Awards under the Plan. The increase in Shares available



7









 




pursuant to the repurchase of
Shares with Option Proceeds shall not be greater than the amount of such proceeds divided by the
Fair Market Value of a Share on the date of exercise of the Option giving rise to such Option
Proceeds.




               (iv) Substitute Awards shall not reduce the Shares authorized for grant under the Plan or
authorized for grant to a Participant in any period. Additionally, in the event that a company
acquired by the Company or any Related Entity or with which the Company or any Related Entity
combines has shares available under a pre-existing plan approved by shareholders and not adopted in
contemplation of such acquisition or combination, the shares available for delivery pursuant to the
terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio
or other adjustment or valuation ratio or formula used in such acquisition or combination to
determine the consideration payable to the holders of common stock of the entities party to such
acquisition or combination) may, subject to the provisions of the Plan, be used for Awards under
the Plan and shall not reduce the Shares authorized for delivery under the Plan; provided that
Awards using such available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or combination, and
shall only be made to individuals who were not Employees or Directors prior to such acquisition or
combination.



               (v) [Reserved]



               (vi) Notwithstanding anything in this Section 4(c) to the contrary and solely for purposes of
determining whether Shares are available for the delivery of Incentive Stock Options, the maximum
aggregate number of shares that may be granted under this Plan shall be determined without regard
to any Shares restored pursuant to this Section 4(c) that, if taken into account, would cause the
Plan to fail the requirement under Code Section 422 that the Plan designate a maximum aggregate
number of shares that may be issued.



     5. Eligibility; Per-Person Award Limitations. Awards may be granted under the Plan only to
Eligible Persons.



     6. Specific Terms of Awards.



          (a) General. Awards may be granted on the terms and conditions set forth in this Section 6. In
addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or
thereafter (subject to Section 10(e)), such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of termination of the Participant’s Continuous Service and terms permitting
a Participant to make elections relating to his or her Award; provided that any such election may
not adjust the exercise price of the Award or result in the deferral of compensation. Subject to
the provisions of this Section 6, the Committee shall retain full power and discretion to
accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory
under the Plan. Except in cases in which the Committee is authorized to require other forms of
consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy
the requirements of Colorado law, no consideration other than services may be required for the
grant (but not the exercise) of any Award.




          (b) Options. The Committee is authorized to grant Options to any Eligible Person on the
following terms and conditions:




               (i) Exercise Price. Other than in connection with Substitute Awards, the exercise price per
Share purchasable under an Option shall not be less than 100% of the Fair Market Value of a Share
on the date of grant of the Option and shall not, in any event, be less than the par value of a
Share on the date of grant of the Option. If an Employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company (or any parent corporation or subsidiary corporation
of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively)
and an Incentive Stock Option is granted to such Employee, the exercise price of such Incentive
Stock Option (to the extent required by the Code at the time of grant) shall be no less than 110%
of the Fair Market Value a Share on the date such Incentive Stock Option is granted.



8









 





               (ii) Time and Method of Exercise. The Committee shall determine the time or times at which or
the circumstances under which an Option may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the time or times at which
Options shall cease to be or become exercisable following termination of Continuous Service or upon
other conditions, the methods by which the exercise price may be paid or deemed
to be paid (including in the discretion of the Committee a cashless exercise procedure) and the
form of such payment.



               (iii) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan
shall comply in all respects with the provisions of Section 422 of the Code. Anything in the Plan
to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify either the Plan or any Incentive Stock Option under Section 422 of
the Code, unless the Participant has first requested, or consents to, the change that will result
in such disqualification. Thus, if and to the extent required to comply with Section 422 of the
Code, Options granted as Incentive Stock Options shall be subject to the following special terms
and conditions:



                    (A) the Option shall not be exercisable more than ten years after the date such Incentive
Stock Option is granted; provided, however, that if a Participant owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company (or any parent corporation or subsidiary corporation
of the Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively)
and the Incentive Stock Option is granted to such Participant, the term of the Incentive Stock
Option shall be (to the extent required by the Code at the time of the grant) for no more than five
years from the date of grant;



                    (B) The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is
granted) of the Shares with respect to which Incentive Stock Options granted under the Plan and all
other option plans of the Company (and any parent corporation or subsidiary corporation of the
Company, as those terms are defined in Sections 424(e) and (f) of the Code, respectively) during
any calendar year exercisable for the first time by the Participant during any calendar year shall
not (to the extent required by the Code at the time of the grant) exceed $100,000; and


(C) The maximum aggregate number of Shares that may be issued as Incentive Stock Options shall be
2,700,000.




               (iv) Grants to Outside Directors and Executive Committee Members.



                    (A) The Company reserves the right to grant Options as follows: (1) each Outside Director who
serves as a member of the Board may receive an Option as determined by the Committee, (2) each
member of the Executive Committee who serves as a member of the Executive Committee may receive an
Option as determined by the Committee; and (3) the person who serves as the Chairman of the
Executive Committee may receive, in addition to any Options granted pursuant to (1) and (2) above,
an Option as determined by the Committee. A Participant who serves in more than one capacity shall
be eligible for the foregoing awards applicable to each capacity in which the individual serves.
Options granted under this Section 6(b)(iv)(A) shall become exercisable in such equal installments
on each of the anniversaries of the date on which the Option is granted as may be determined by the
Committee. An Outside Director or member of the Executive Committee who previously was an Employee
shall be eligible to receive grants under this Section 6(b)(iv)(A).



                    (B) Exercise Price. The exercise price under all Options granted to an Outside Director or
member of the Executive Committee under this Section 6(b)(iv) shall be equal to 100% of the Fair
Market Value of a Share on the date on which the Option is granted, payable in one of the forms
determined by the Committee.



                    (C) Term. All Options granted to an Outside Director or member of the Executive Committee
under this Section 6(b)(iv) shall terminate on the earliest of (a) the 10th anniversary of the date
on which the Option is granted, (b) the date three (3) months after the termination of the service
of the Outside Director or member of the Executive



9









 




Committee for any reason other than death or
total and permanent Disability or (c) the date 12 months after the termination of such service
because of death or total and permanent Disability.




                    (D) Other Awards. Outside Directors and members of the Executive Committee shall be eligible
to receive any other Options or other Awards awarded by the Committee pursuant to this Plan.



     (v) Unless otherwise provided in any Option Agreement, the Committee may change the terms of
Options outstanding under this Plan, with respect to the option price or the number of Shares
subject to the Options, or both, when, in the Committee’s sole discretion, such adjustments become
appropriate so as to preserve benefits under the Plan; provided, however, that any such change
shall not:



               (i) reduce the exercise price of an Option below the Fair Market Value of the Share subject to
such Option on the date of issuance of the Option;



               (ii) modify the Option within the meaning of Treasury Regulations § 1.409A-1(b)(5)(v)(B);



               (iii) create a feature for the deferral of compensation that is inconsistent with Treasury
Regulations § 1.409A-1(b)(5); or



     (iv) reduce or limit a participant’s rights or benefits under the Plan or any award agreement.



          (c) Restricted Stock Awards. The Committee is authorized to
grant Restricted Stock Awards to any Eligible Person on the following terms and conditions:




               (i) Grant and Restrictions. Restricted Stock Awards shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, or
as otherwise provided in this Plan, covering a period of time specified by the Committee (the
“Restriction Period”). The terms of any Restricted Stock Award granted under the Plan shall be set
forth in a written Award Agreement which shall contain provisions determined by the Committee and
not inconsistent with the Plan. The restrictions may lapse separately or in combination at such
times, under such circumstances (including based on achievement of performance goals and/or future
service requirements), in such installments or otherwise, as the Committee may determine at the
date of grant. Except to the extent restricted under the terms of the Plan and any Award Agreement
relating to a Restricted Stock Award or as otherwise set forth in an Award Agreement, a Participant
granted Restricted Stock shall have all of the rights of a shareholder, including the right to vote
the Restricted Stock and the right to receive dividends thereon (subject to any mandatory
reinvestment or other requirement imposed by the Committee). In the absence of any mandatory
reinvestment or other requirement, dividends shall be paid no later than March 15 following the
calendar year in which such dividends are declared. During the Restriction Period, subject to
Section 10(b) below, the Restricted Stock may not be sold, transferred, pledged, hypothecated,
margined or otherwise encumbered by the Participant.



               (ii) Forfeiture. Except as otherwise determined by the Committee or as set forth in an Award
Agreement, upon termination of a Participant’s Continuous Service during the applicable Restriction
Period, the Participant’s Restricted Stock that is at that time subject to a risk of forfeiture
that has not lapsed or otherwise been satisfied shall be forfeited and reacquired by the Company;
provided that the Committee may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that forfeiture conditions relating to Restricted Stock Awards
shall be waived in whole or in part in the event of terminations resulting from specified causes.



               (iii) Certificates for Stock. Restricted Stock granted under the Plan may be evidenced in such
manner as the Committee shall determine. If certificates representing Restricted Stock are
registered in the name of the Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions applicable to such
Restricted Stock, that the Company retain physical possession



10









 




of the certificates, and that the
Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted
Stock.




               (iv) Dividends and Splits. As a condition to the grant of a Restricted Stock Award, the
Committee may require or permit a Participant to elect that any cash dividends paid on a Share of
Restricted Stock be automatically reinvested in additional Shares of Restricted Stock or applied to
the purchase of additional Awards under the Plan. Unless otherwise determined by the Committee,
Shares distributed in connection with a stock split or stock dividend, and other property
distributed as a dividend, shall be subject to restrictions and a risk of forfeiture
to the same extent as the Restricted Stock with respect to which such Shares or other property have
been distributed. Any Shares distributed in connection with a stock split or stock dividend that
are not subject to the restrictions and risk of forfeiture that apply to the related Restricted
Stock shall be paid or distributed no later than March 15 following the calendar year in which such
dividends are declared.



               (v) Grants to Outside Directors and Executive Committee Members. The Company reserves the
right to grant an award of Restricted Stock as follows: (1) each Outside Director who serves as a
member of the Board may receive a Restricted Stock Award as determined by the Committee, (2) each
member of the Executive Committee who serves as a member of the Executive Committee may receive a
Restricted Stock Award as determined by the Committee; and (3) the person who serves as the
Chairman of the Executive Committee may receive, in addition to any Restricted Stock Awards granted
pursuant to (1) and (2) above, a Restricted Stock Award as determined by the Committee. A
Participant who serves in more than one capacity shall be eligible for the foregoing awards
applicable to each capacity in which the individual serves. Restricted Stock Awards granted under
this Section shall become exercisable in such equal installments on each of the anniversaries of
the date on which the Restricted Stock Award is granted as may be determined by the Company. An
Outside Director or member of the Executive Committee who previously was an Employee shall be
eligible to receive grants under this Section.



          (d) Other Stock-Based Awards. The Committee is authorized, subject to limitations under
applicable law and conditioned upon the Committee obtaining the advice of counsel that such grant
is not likely to result in additional tax and interest under Section 409A, to grant to any Eligible
Person such other Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the Committee to be
consistent with the purposes of the Plan. Other Stock-based Awards may be granted to Participants
either alone or in addition to other Awards granted under the Plan, and such other Stock-based
Awards shall also be available as a form of payment in the settlement of other Awards granted under
the Plan. The Committee shall determine the terms and conditions of such Awards. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this Section 6(d) shall be
purchased for such consideration (including, without limitation, loans from the Company or a
Related Entity provided that such loans are not in violation of the Sarbanes Oxley Act of 2002, or
any rule or regulation adopted thereunder or any other applicable law) paid for at such times, by
such methods, and in such forms, including, without limitation, cash, Shares, other Awards or other
property, as the Committee shall determine.




     7. Certain Provisions Applicable to Awards.



          (a) Substitute and Exchanged Awards. Awards granted under the Plan may, in the discretion of
the Committee, be granted either in substitution or exchange for, any other Award or any award
granted under another plan of the Company, any Related Entity, or any business entity to be
acquired by the Company or a Related Entity, or any other right of a Participant to receive payment
from the Company or any Related Entity. Such substitute or exchange Awards may be granted at any
time; provided, however, that the ratio of the exercise price to the Fair Market Value of the
Shares subject to the Stock right immediately after the substitution or exchange is no greater than
the ratio of the exercise price to the Fair Market Value of the Shares subject to the Stock right
immediately before the substitution or exchange. If an Award is granted in substitution or exchange
for another Award or award, the Committee shall require the surrender of such other Award or award
in consideration for the grant of the new Award. In addition, Awards may be granted in lieu of cash
compensation, including in lieu of cash amounts payable under other plans of the Company or any
Related Entity, in which the value of Stock





11









 







subject to the Award is equivalent in value to the cash
compensation (for example, Restricted Stock), or in which the exercise price, grant price or
purchase price of the Award in the nature of a right that may be exercised is equal to the Fair
Market Value of the underlying Stock minus the value of the cash compensation surrendered (for
example, Options granted with an exercise price or grant price “discounted” by the amount of the
cash compensation surrendered).




          (b) Term of Awards. The term of each Award shall be for such period as may be determined by
the Committee; provided that in no event shall the term of any Option exceed a period of ten
years (or in the case of an Incentive Stock Option such shorter term as may be required under
Section 422 of the Code).




          (c) Form and Timing of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Related Entity upon the
exercise of an Option or other Award or settlement of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Shares, other Awards or other
property, and may be made in a single payment or transfer.




          (d) Exemptions from Section 16(b) Liability. It is the intent of the Company that the grant of
any Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange
Act shall be exempt from Section 16 pursuant to an applicable exemption (except for transactions
acknowledged in writing to be non-exempt by such Participant). Accordingly, if any provision of
this Plan or any Award Agreement does not comply with the
requirements of Rule 16b-3 then applicable to any such transaction, such provision shall be
construed or deemed amended to the extent necessary to conform to the applicable requirements of
Rule 16b-3 so that such Participant shall avoid liability under Section 16(b).




     8. Code Section 162(m) Provisions.



          (a) Covered Employees. The Committee, in its discretion, may determine at the time an Award is
granted to an Eligible Person who is, or is likely to be, as of the end of the tax year in which
the Company would claim a tax deduction in connection with such Award, a Covered Employee, that the
provisions of this Section 8 shall be applicable to such Award.




          (b) Performance Criteria. If an Award is subject to this Section 8, then the lapsing of
restrictions thereon and the distribution of cash, Shares or other property pursuant thereto, as
applicable, shall be contingent upon achievement of one or more objective performance goals.
Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of
the Code and regulations thereunder including the requirement that the level or levels of
performance targeted by the Committee result in the achievement of performance goals being
“substantially uncertain.” One or more of the following business criteria for the Company, on a
consolidated basis, and/or for Related Entities, or for business or geographical units of the
Company and/or a Related Entity (except with respect to the total shareholder return and earnings
per share criteria), shall be used by the Committee in establishing performance goals for such
Awards: (1) earnings per share; (2) revenues or margins; (3) cash flow; (4) operating margin; (5)
return on net assets, investment, capital, or equity; (6) economic value added; (7) direct
contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; earnings after interest expense and before
extraordinary or special items; operating income; income before interest income or expense, unusual
items and income taxes, local, state or federal and excluding budgeted and actual bonuses which
might be paid under any ongoing bonus plans of the Company; (9) working capital; (10) management of
fixed costs or variable costs; (11) identification or consummation of investment opportunities or
completion of specified projects in accordance with corporate business plans, including strategic
mergers, acquisitions or divestitures; (12) total shareholder return; and (13) debt reduction. Any
of the above goals may be determined on an absolute or relative basis or as compared to the
performance of a published or special index deemed applicable by the Committee including, but not
limited to, the Standard & Poor’s 500 Stock Index or a group of companies that are comparable to
the Company. The Committee may exclude the impact of an event or occurrence which the Committee
determines should appropriately be excluded, including without limitation (i) restructurings,
discontinued operations, extraordinary items, and other unusual or non-





12









 







recurring charges, (ii) an
event either not directly related to the operations of the Company or not within the reasonable
control of the Company’s management, or (iii) a change in accounting standards required by
generally accepted accounting principles.




          (c) Performance Period; Timing For Establishing Performance Goals. Achievement of performance
goals in respect of such Performance Awards shall be measured over a Performance Period no shorter
than 12 months and no longer than five years, as specified by the Committee. Performance goals
shall be established not later than 90 days after the beginning of any
Performance Period applicable to such Performance Awards, or at such other date as may be required
or permitted for “performance-based compensation” under Code Section 162(m).




          (d) Adjustments. The Committee may, in its discretion, reduce the amount of a settlement
otherwise to be made in connection with Awards subject to this Section 8, but may not exercise
discretion to increase any such amount payable to a Covered Employee in respect of an Award subject
to this Section 8. At the time of grant of an Award, the Committee shall specify the circumstances
in which such Awards shall be paid or forfeited in the event of termination of Continuous Service
by the Participant.




          (e) Committee Certification. No Participant shall receive any payment under the Plan unless
the Committee has certified, by resolution or other appropriate action in writing, that the
performance criteria and any other material terms previously established by the Committee or set
forth in the Plan, have been satisfied to the extent necessary to qualify as “performance based
compensation” under Code Section 162(m).




     9. Change in Control.



          (a) Effect of “Change in Control.” Subject to Section 9(a)(iv), upon the occurrence of a
“Change in Control,” as defined in Section 9(b):




               (i) Any Option that was not previously vested and exercisable as of the time of the Change in
Control, shall become immediately vested and exercisable, subject to applicable restrictions set
forth in Section 10(a) hereof.



               (ii) Any restrictions and forfeiture conditions applicable to a Restricted Stock Award subject
only to future service requirements granted under the Plan shall lapse and such Awards shall be
deemed fully vested as of the time of the Change in Control.



               (iii) With respect to any outstanding Award subject to achievement of performance goals and
conditions under the Plan, the Committee shall determine whether the applicable performance goals
and conditions have been satisfied in connection with the Change in Control.



               (iv) Notwithstanding the foregoing, if in the event of a Change in Control the successor
company assumes or substitutes for an Option or Restricted Stock Award, then each outstanding
Option or Restricted Stock Award shall not be accelerated as described in Sections 9(a)(i), (ii)
and (iii). For the purposes of this Section 9(a)(iv), an Option or Restricted Stock Award shall be
considered assumed or substituted for if following the Change in Control the award confers the
right to purchase or receive, for each Share subject to the Option or Restricted Stock Award
immediately prior to the Change in Control, the consideration (whether stock, cash or other
securities or property) received in the transaction constituting a Change in Control by holders of
Shares for each Share held on the effective date of such transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a majority of the
outstanding shares); provided, however, that if such consideration received in the transaction
constituting a Change in Control is not solely common stock of the successor company or its parent
or subsidiary, the Committee may, with the consent of the successor company or its parent or
subsidiary, provide that the consideration to be received upon the exercise or vesting of an Option
or Restricted Stock Award for each Share subject thereto, will be solely common stock of the
successor company or its parent or subsidiary substantially equal in fair market value to the per
share consideration received by holders of Shares in the transaction constituting a Change in
Control. The determination of such substantial equality of value of consideration shall be made by
the Committee. Any assumption or substitution of an Option pursuant to this Section 9(a)(iv) shall
be designed to meet the requirements of Treas. Reg. § 1.409A-1(b)(5)(v)(D).



13









 





          (b) Definition of “Change in Control.” Unless otherwise specified in an Award Agreement, a
“Change in Control” shall mean the occurrence of any of the following:




               (i) The acquisition by any Person of Beneficial Ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of either (A) the then
outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B)
the combined voting power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting Securities)
(the foregoing Beneficial Ownership hereinafter being referred to as a “Controlling Interest”);
provided, however, that for purposes of this Section 9(b), the following acquisitions shall not
constitute or result in a Change of Control: (v) any acquisition directly from the Company; (w) any
acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date owns
Beneficial Ownership of a Controlling Interest or any acquisition of any common shares by BOCO
Investments, LLC or GDBA Investments, LLLP;(y) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary; or (z) any acquisition by
any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) below; or



               (ii) During any period of two (2) consecutive years (not including any period prior to the
Effective Date) individuals who constitute the Board on the Effective Date (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or



               (iii) Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or any of its Subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its Subsidiaries (each a “Business
Combination”), in each case, unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the Beneficial Owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%)
of the then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including, without limitation,
a corporation which as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination or any Person that as of the Effective Date owns
Beneficial Ownership of a Controlling Interest) beneficially owns, directly or indirectly, fifty
percent (50%) or more of the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed prior to the
Business Combination and (C) at least a majority of the members of the Board of Directors of the
corporation resulting from such Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board, providing for such
Business Combination; or



               (iv) Approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company.



14









 





     10. General Provisions.



          (a) Compliance With Legal and Other Requirements. The Company may, to the extent deemed
necessary or advisable by the Committee, postpone the issuance or delivery of Shares or payment of
other benefits under any Award until completion of such registration or qualification of such
Shares or other required action under any federal or state law, rule or regulation, listing or
other required action with respect to any stock exchange or automated quotation system upon which
the Shares or other Company securities are listed or quoted, or compliance with any other
obligation of the Company, as the Committee, may consider appropriate, and may require any
Participant to make such representations, furnish such information and comply with or be subject to
such other conditions as it may consider appropriate in connection with the
issuance or delivery of Shares or payment of other benefits in compliance with applicable laws,
rules, and regulations, listing requirements, or other obligations.




          (b) Limits on Transferability; Beneficiaries. No Award or other right or interest granted
under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien,
obligation or liability of such Participant to any party, or assigned or transferred by such
Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon
the death of a Participant, and such Awards or rights that may be exercisable shall be exercised
during the lifetime of the Participant only by the Participant or his or her guardian or legal
representative, except that Awards and other rights (other than Incentive Stock Options) may be
transferred to one or more Beneficiaries or other transferees during the lifetime of the
Participant, and may be exercised by such transferees in accordance with the terms of such Award
Agreement. A Beneficiary, transferee, or other person claiming any rights under the Plan from or
through any Participant shall be subject to all terms and conditions of the Plan and any Award
Agreement applicable to such Participant, except as otherwise determined by the Committee.




          (c) Adjustments. In the event that any extraordinary dividend or other distribution (whether
in the form of cash, Shares, or other property), recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or event affects the Shares and/or
such other securities of the Company, then the Committee shall, in such manner as it deems
equitable, substitute, exchange or adjust any or all of (A) the number and kind of Shares which may
be delivered in connection with Awards granted thereafter, (B) the number and kind of Shares by
which annual per-person Award limitations are measured under Section 5 hereof, (C) the number and
kind of Shares subject to or deliverable in respect of outstanding Awards and (D) the exercise
price, grant price or purchase price relating to any Award and/or make provision for payment of
cash or other property in respect of any outstanding Award; provided, however, that the ratio of
the exercise price to the Fair Market Value of the Shares subject to the Stock right immediately
after the substitution, exchange or adjustment is no greater than the ratio of the exercise price
to the Fair Market Value of the Shares subject to the Stock right immediately before the
substitution, exchange or adjustment.




          (d) Taxes. The Company and any Related Entity are authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a distribution of Shares,
or any payroll or other payment to a Participant, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company or any Related Entity and
Participants to satisfy obligations for the payment of withholding taxes and other tax obligations
relating to any Award.




          (e) Changes to the Plan and Awards. The Board may amend, alter, suspend, discontinue or
terminate the Plan, or the Committee’s authority to grant Awards under the Plan, without the
consent of shareholders or Participants, except that any amendment or alteration to the Plan shall
be subject to the approval of the Company’s shareholders not later than the annual meeting next
following such Board action if such shareholder approval is required by any federal or state law or
regulation (including, without limitation, Rule 16b-3 or Code Section 162(m)) or the rules of any
stock exchange or automated quotation system on which the Shares may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to
shareholders for approval; provided that, without the consent of an affected Participant, no such
Board action may materially and adversely affect the rights of such Participant under any
previously granted and outstanding Award. The Committee may waive any conditions or rights under,
or amend, alter, suspend, discontinue or





15









 







terminate any Award theretofore granted and any Award
Agreement relating thereto, except as otherwise provided in the Plan; provided that, without the
consent of an affected Participant, no such Committee or the Board action may materially and
adversely affect the rights of such Participant under such Award.




          (f) Limitation on Rights Conferred Under Plan. Neither the Plan nor any action taken hereunder
shall be construed as (i) giving any Eligible Person or Participant the right to continue as an
Eligible Person or Participant or in the employ or service of the Company or a Related Entity; (ii)
interfering in any way with the right of the Company or a Related Entity to terminate any Eligible
Person’s or Participant’s Continuous Service at any time, (iii) giving an Eligible
Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly
with other Participants and Employees, or (iv) conferring on a Participant any of the rights of a
shareholder of the Company unless and until the Participant is duly issued or transferred Shares in
accordance with the terms of an Award.




          (g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not yet made to a
Participant or obligation to deliver Shares pursuant to an Award, nothing contained in the Plan or
any Award shall give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the creation of trusts and
deposit therein cash, Shares, other Awards or other property, or make other arrangements to meet
the Company’s obligations under the Plan. Such trusts or other arrangements shall be consistent
with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent
of each affected Participant. The trustee of such trusts may be authorized to dispose of trust
assets and reinvest the proceeds in alternative investments, subject to such terms and conditions
as the Committee may specify and in accordance with applicable law.




          (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or a committee thereof to adopt such other incentive
arrangements as it may deem desirable including incentive arrangements and awards which do not
qualify under Section 162(m) of the Code.




          (i) Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan
or any Award. The Committee shall determine whether cash, other Awards or other property shall be
issued or paid in lieu of such fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.




(j) Section 409A of the Code. The Plan shall be administered, operated, and interpreted such that
all Awards granted hereunder are not considered deferred compensation subject to Section 409A of
the Code and the Committee shall have the discretion, subject to the written consent of an affected
Participant, to modify or amend any Award granted hereunder and any Award Agreement (and may do so
retroactively); provided that any such modification or amendment is necessary to cause such Award
to be exempt from Section 409A of the Code and does not materially and adversely affect the rights
of such affected Participant.




          (k) Governing Law. The validity, construction and effect of the Plan, any rules and
regulations under the Plan, and any Award Agreement shall be determined in accordance with the laws
of the State of Colorado without giving effect to principles of conflict of laws, and applicable
federal law.




          (l) Non-U.S. Laws. The Committee shall have the authority to adopt such modifications,
procedures, and sub-plans as may be necessary or desirable to comply with provisions of the laws of
foreign countries in which the Company or its Subsidiaries may operate to assure the viability of
the benefits from Awards granted to Participants performing services in such countries and to meet
the objectives of the Plan.




          (m) Plan Effective Date and Shareholder Approval; Termination of Plan. The Plan shall become
effective on the Effective Date, subject to subsequent approval, within 12 months of its adoption
by the Board, by shareholders of the Company eligible to vote in the election of directors, by a
vote sufficient to meet the requirements of Code Sections 162(m) (if applicable) and 422, Rule
16b-3 under the Exchange Act (if applicable), applicable requirements





16









 







under the rules of any stock
exchange or automated quotation system on which the Shares may be listed or quoted, and other laws,
regulations, and obligations of the Company applicable to the Plan. Awards may be granted subject
to shareholder approval, but may not be exercised or otherwise settled in the event the shareholder
approval is not obtained. The Plan shall terminate at the earliest of (a) such time as no Shares
remain available for issuance under the Plan, (b) termination of this Plan by the Board, or (c) the
tenth anniversary of the Effective Date. Awards outstanding upon expiration of the Plan shall
remain in effect until they have been exercised or terminated, or have expired.






17