**Exhibit 10.1**

 

**PINNACLE GAS RESOURCES, INC.SECOND AMENDED AND RESTATED STOCK INCENTIVE PLAN**

 

This PinnacleGas Resources, Inc. Second Amended and Restated Stock Incentive Plan (the “***Plan***”) amends and restates theAmended and Restated Stock Incentive Plan (the “***PriorPlan***”), which amended and restated the Company’s Stock IncentivePlan (the “***Original Plan***”).  In addition, the Prior Plan evidenced themerger of the Company’s 2003 Stock Option Plan (the “***SOP***”)with and into the Prior Plan (the “***Plan Merger***”)so that the Prior Plan replaced the SOP with respect to Options granted on orafter the Effective Date (as defined below).

 

# 1.                                       Purpose; Plan Merger.

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## (a)                                  *Purpose.* The purpose of the Plan is to enhance the ability of Pinnacle GasResources, Inc. (the “***Company***”)and its Subsidiaries to attract and retain officers, employees and directors ofoutstanding ability and to provide such Participants with an interest in theCompany parallel to that of the Company’s stockholders.

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## (b)                                 *Plan Merger.* The SOP was merged with and into the Prior Plan, effective as of February 16,2006 (the “***Plan MergerEffective Date***”), and as a result of the Plan Merger: (i) anynew Options (as defined under the SOP) that otherwise may have been grantedunder the SOP on or after the Plan Merger Effective Date shall instead begranted under and subject to the terms of the Plan, (ii) all outstandingOptions granted under the SOP prior to the Plan Merger Effective Date areassumed and continued under the Plan, but nevertheless shall remain subject totheir individual Option Agreements (as defined under the SOP) and the terms ofthe SOP as in effect immediately prior to the Plan Merger Effective Date, and (iii) alloutstanding Options and Awards granted under the Original Plan prior to theEffective Date are assumed and continued under the Plan, but nevertheless shallremain subject to their individual Options or Awards and the terms of theOriginal Plan as in effect immediately prior to the Effective Date.

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# 2.                                       Definitions.

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## (a)                                  ***“Award”*** shall mean an award determinedin accordance with the terms of the Plan.

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## (b)                                 ***“Board”*** shall mean the Board ofDirectors of the Company.

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## (c)                                  ***“Cause”*** means (a) with respect toany person party to a written employment agreement in which such term isdefined, as so defined and (b) with respect to all other persons, as suchterm is defined in the Securityholders Agreement.

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## (d)                                 ***“Changeof Control”***shall have the meaning set forth in the Securityholders Agreement; *provided, that*, to the extent that anyAward granted under the Plan or the Prior Plans is subject to the provisions ofSection 409A of the Code, the definition of Change of Control shall mean achange in the ownership or effective control of the Company, or in theownership of a substantial portion of the assets of the Company within themeaning of Section 409A of the Code.

 

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## (e)                                  ***“Code”*** shall mean the Internal RevenueCode of 1986, as amended.

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## (f)                                    ***“Committee”*** shall mean the Board, unlessand until a committee of one or more members of the Board is appointed by theBoard in accordance with Section 4(c).

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## (g)                                 ***“CommonStock”***shall mean the common stock of the Company.

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## (h)                                 ***“ContinuousService”***means that the Participant’s service as an employee, director or officer withthe Company or a Subsidiary is not interrupted or terminated.  The Participant’s Continuous Service shallnot be deemed to have terminated merely because of a change in the capacity inwhich the Participant renders service to the Company or a Subsidiary as anemployee, director or officer or a change in the entity for which theParticipant renders such service; *provided,that*, there is no interruption or termination of the Participant’sContinuous Service other than an approved leave of absence.  The Committee, in its sole discretion, maydetermine whether Continuous Service shall be considered interrupted.

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## (i)                                     ***“CoveredEmployee”***shall have the meaning set forth in Section 162(m)(3) of the Code.

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## (j)                                     ***“Disability”*** shall have the same meaning asprovided in any long-term disability plan maintained by the Company or anySubsidiary in which a Participant then participates (the “***LTD Plans***”); *provided, that*, if no such plan exists,or, to the extent that any Award granted under the Plan or the Prior Plans issubject to the provisions of Section 409A of the Code and any payment duethereunder is made on account of Disability, it shall have the meaning setforth in Section 22(e)(3) of the Code.

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## (k)                                  ***“ExchangeAct”*** shallmean the Securities Exchange Act of 1934, as amended.

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## (l)                                     ***“FairMarket Value”***shall mean, as of any date, the value of the Common Stock as determined asfollowing:

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### (i)                                 If the Common Stock is listed onany established stock exchange or a national market system, including, withoutlimitation, the NASDAQ National Market or the NASDAQ Capital Market of TheNASDAQ Stock Market, its Fair Market Value will be the closing sales price forsuch stock (or the closing bid, if no sales were reported) as quoted on suchexchange or system for the last market trading day prior to the date ofdetermination, as reported in *The Wall Street Journal*or such other source as the Committee deems reliable;

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### (ii)                              If the Common Stock is regularlyquoted by a recognized securities dealer but selling prices are not reported,its Fair Market Value will be the mean of the closing bid and asked prices forthe Common Stock on the date prior to the date of determination as reported in *The Wall Street Journal* or such other source as theCommittee deems reliable;

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### (iii)                           If the Common Stock is notlisted on any established stock exchange or a national market system, theaverage of the high and low bid quotations for the Common Stock on that dateprior to the date of determination as reported by the National Quotation BureauIncorporated; or

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### (iv)                          In the absence of an establishedmarket for the Common Stock, the Fair Market Value thereof will be determinedin good faith by the Committee considering all factors it reasonably deemsrelevant for such determination, including, without limitation, discounts forminority positions and the absence of an established market for the CommonStock.

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## (m)                               ***“GoodReason”***means (a) with respect to any person party to a written employmentagreement in which such term is defined, as so defined and (b) withrespect to all other persons, as such term is defined in the SecurityholdersAgreement.

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## (n)                                 ***“ImmediateFamily Member”***shall mean, except as otherwise determined by the Committee, a Participant’sspouse, ancestors and descendants.

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## (o)                                 ***“IncentiveStock Option”***shall mean a stock option that is intended to meet the requirements of Section 422of the Code.

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## (p)                                 ***“Non-EmployeeDirector”***shall mean a member of the Board who is a “non-employee director” within themeaning of Rule 16b-3 and who is also an “outside director” within themeaning of Section 162(m) of the Code.

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## (q)                                 ***“NonqualifiedStock Option”***shall mean a stock option that is not intended to be an Incentive Stock Option.

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## (r)                                    ***“Option”*** shall mean an Incentive StockOption or a Nonqualified Stock Option.

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## (s)                                  ***“Participant”*** shall mean an officer,employee, director or consultant of the Company or its Subsidiaries who is orhas been selected to participate in the Plan in accordance with Section 5.

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## (t)                                    ***“PerformanceGoals”***shall mean or may be expressed in terms of any of any business criteriaselected by the Committee including, without limitation, revenue, proved oiland gas reserves, oil and gas production, earnings before interest, taxes,depreciation and amortization, funds from operations, funds from operations pershare, operating income, pre or after tax income, cash available fordistribution, cash available for distribution per share, net earnings, earningsper share, return on equity, return on assets, share price performance,improvements in the Company’s attainment of expense levels, and implementing orcompletion of critical projects, or improvement in cash-flow (before or aftertax).  A Performance Goal may be measuredover a Performance Period on a periodic, annual, cumulative or average basisand may be established on a corporate-wide basis or established with respect toone or more operating units, divisions, subsidiaries, acquired businesses,minority investments, partnerships or joint ventures.  Unless otherwise determined by the Committeeby no later than the earlier of the date that is ninety days after thecommencement of the Performance Period or the day prior to the date on whichtwenty-five percent (25%) of the Performance Period has elapsed, thePerformance Goals will be determined by not accounting for a change in GAAPduring a Performance Period.

 

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## (u)                                 ***“PerformanceObjective”***shall mean the level or levels of performance required to be attained withrespect to specified Performance Goals in order for a Participant to becomeentitled to specified rights in connection with an Award of performance shares.

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## (v)                                 ***“PerformancePeriod”***shall mean the calendar year, or such other shorter or longer period designatedby the Committee, during which performance will be measured in order todetermine a Participant’s entitlement to receive payment of an Award.

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## (w)                               ***“PriorPlans”***shall mean the SOP and the Original Plan.

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## (x)                                   ***“Rule 16b-3”*** shall mean Rule 16b-3promulgated under the Exchange Act or any successor to Rule 16b-3, as ineffect from time to time.

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## (y)                                 ***“SecurityholdersAgreement”***shall mean that certain Securityholders Agreement dated as of June 23,2003, among the Company and certain shareholders thereof, as may be amendedand/or restated from time to time.

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## (z)                                   ***“Subsidiary”*** shall mean any entity thatcontrols, is controlled by or is under common control with the Company as maybe determined by the Board; *provided, that*,with respect to Incentive Stock Options, it shall mean any subsidiary of theCompany that is a corporation and which at the time qualifies as a “subsidiarycorporation” within the meaning of Section 424(f) of the Code; and *further**provided**that*, for the purpose of issuingOptions or stock appreciation rights, “Subsidiary” means any corporation orother entity in a chain of corporations and/or other entities in which thecompany has a “controlling interest” within the meaning of Treas. Reg. §1.414(c)-2(b)(2)(i), but using the threshold of 50% ownership wherever 80%appears.

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# 3.                                       Shares Subject to the Plan.  Subject to adjustment in accordance with Section 18,the total of the number of shares of Common Stock which shall be available forthe grant of Awards under the Plan shall not exceed 2,750,000* shares of CommonStock, all of which may be issued pursuant to the exercise of Options; *provided, that*, for purposes of this limitation, any CommonStock subject to an Option which is canceled or expires without exercise shallagain become available for subsequent Awards under the Plan.  Upon forfeiture of Awards in accordance withthe provisions of the Plan and the terms and conditions of the Award, suchshares shall again be available for subsequent Awards under the Plan.  Subject to adjustment in accordance with Section 18,no employee shall be granted, during any calendar year, Options to purchasemore than 625,000* shares of Common Stock, and the number of shares of CommonStock subject to any Awards other than Options granted to any employee duringany calendar year shall not exceed 625,000* shares.  Common Stock available for issue ordistribution under the Plan shall be authorized and unissued shares or sharesreacquired by the Company in any manner.

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# 4.                                       Administration.

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## (a)                                  Administration.  The Plan shall be administered by the Committee.

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# * Reflects and includes the effect of the25-for-1 stock split made effective March 10, 2006.

 

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## (b)                                 Powers of the Committee.  The Committee shall (i) determine whichof the persons eligible under the Plan shall be granted Awards, (ii) determinethe type of Awards to be made to Participants, (iii) determine the numberof shares of Common Stock subject to Awards, (iv) determine the terms andconditions of any Award granted hereunder, which need not be identical(including, but not limited to, any restriction and forfeiture conditions onsuch Award), and (v) have the authority to interpret the Plan, toestablish, amend and rescind any rules and regulations relating to thePlan, to determine the terms and provisions of any agreements entered intohereunder, and to make all other determinations necessary or advisable for theadministration of the Plan.  TheCommittee may correct any defect, supply any omission or reconcile anyinconsistency in the Plan or in any Award in the manner and to the extent itshall deem desirable to carry it into effect.

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## (c)                                  Delegation to Committee.

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### (i)                                     General.  The entire Board may comprise the Committeeor the Board may delegate administration of the Plan to a Committee orCommittees of one or more members of the Board, and the term “***Committee***” shall apply to anyperson or persons to whom such authority has been delegated.  Furthermore, unless one or more Committeeshas been appointed by the Board, any reference to the Committee in the Planshall mean the Board.  If administrationis delegated to a Committee, the Committee shall have, in connection with theadministration of the Plan, the powers theretofore possessed by the Board, includingthe power to delegate to a subcommittee any of the administrative powers theCommittee is authorized to exercise (and references in this Plan to the Boardshall thereafter be to the Committee or subcommittee), subject, however, tosuch resolutions, not inconsistent with the provisions of the Plan, as may beadopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Boardthe administration of the Plan.

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### (ii)                                  Committee Composition whenCommon Stock is Publicly Traded.  At such time as theCommon Stock is publicly traded, in the discretion of the Board, a Committeemay consist solely of two or more Non-Employee Directors.  Committee members shall also meet therequirements of the rules of any exchange or national market system uponwhich the Common Stock is publicly traded. Within the scope of such authority, the Board or the Committee may (1) delegateto a committee of one or more members of the Board who are not “outsidedirectors” within the meaning of Section 162(m) of the Code theauthority to grant Awards to eligible persons who are either (a) not thenCovered Employees and are not expected to be Covered Employees at the time ofrecognition of income resulting from such Award or (b) not persons withrespect to whom the Company wishes to comply with Section 162(m) ofthe Code or (2) delegate to a committee of one or more members of theBoard who are not “non-employee directors” within the meaning of Rule 16b-3the authority to grant Awards to eligible persons who are not then subject to Section 16of the Exchange Act.

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## (d)                                 Effect of Committee’s Decision.  Any action of the Committee shall be final,conclusive and binding on all persons, including the Company and itsSubsidiaries and stockholders, Participants and persons claiming rights from orthrough a Participant.  Members of theCommittee and any officer or employee of the Company or any Subsidiary actingat the direction of, or on behalf of, the Committee shall not be personallyliable for any action or determination taken or made in good faith with respectto the Plan, and shall, to the extent 

 

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## permitted by law, be fully indemnified by theCompany with respect to any such action or determination.

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# 5.                                       Eligibility.  Individuals eligible to receive Awards underthe Plan shall be the officers, employees, directors and consultants of theCompany and its Subsidiaries selected by the Committee; *provided,that*, only employees of the Company and its Subsidiaries may begranted Incentive Stock Options.

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# 6.                                       Awards.  Awards under the Plan may consist of Options,restricted Common Stock, restricted Common Stock units, performance shares,performance share units, purchases, share awards or other awards based on thevalue of the Common Stock.  Awards shallbe subject to the terms and conditions of the Plan and shall be evidenced by anagreement containing such additional terms and conditions, not inconsistentwith the provisions of the Plan, as the Committee shall deem desirable.

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# 7.                                       Options.  Options may be granted under the Plan in suchform as the Committee may from time to time approve pursuant to terms set forthin an Option agreement.

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## (a)                                  Types of Options.  Each Option agreement shall state whether ornot the Option will be treated as an Incentive Stock Option or NonqualifiedStock Option.  The aggregate Fair MarketValue of the Common Stock for which Incentive Stock Options granted to any oneemployee under this Plan or any other incentive stock option plan of theCompany or of any of its Subsidiaries may by their terms first becomeexercisable during any calendar year shall not exceed $100,000, determiningFair Market Value as of the date each respective Option is granted.  In the event such threshold is exceeded inany calendar year, such excess Options shall be automatically deemed to beNonqualified Stock Options.  To theextent that any Option granted under this Plan which is intended to be anIncentive Stock Option fails for any reason to qualify as such at any time,such Option shall be a Nonqualified Stock Option.

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## (b)                                 Option Price.  The purchase price per share of the CommonStock purchasable under an Option shall be determined by the Committee; *provided, however,* the exercise price foreach share of the Common Stock subject to Options will be not less than 100% ofthe Fair Market Value per share of the Common Stock on the date of the grantand in the case of Incentive Stock Options granted to an employee owning stockpossessing more than 10% of the total combined voting power of all classes of sharesof the Company and its Subsidiaries (a “***10% Stockholder***”) the price per sharespecified in the agreement relating to such Option shall not be less than 110%of the Fair Market Value per share of the Common Stock on the date ofgrant.  With stockholder approval, exceptas would violate the requirements of Section 409A of the Code, the Companyspecifically reserves the right under this Plan to directly or indirectlyreprice Options granted hereunder by reducing the exercise price of any suchOption or awarding substitute Options with a lower exercise price under suchterms as it may determine to be appropriate.

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## (c)                                  Option Period.  The term of each Option shall be fixed by theCommittee, but no Option shall be exercisable after the expiration of seven yearsfrom the date the Option is granted; *provided,that*, in the case of Incentive Stock Options granted to 10%Stockholders, the term of such Option shall not exceed five years from the dateof grant.

 

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## (d)                                 Exercisability.  Each Option shall vest and become exercisableat a rate determined by the Committee on the date of grant.

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## (e)                                  Method of Exercise.  Options may be exercised, in whole or inpart, by giving written notice of exercise to the Company in a form approved bythe Company specifying the number shares of Common Stock to be purchased.  Such notice shall be accompanied by thepayment in full (i) of the Option exercise price and (ii) unlessother arrangements have been made with the Committee, any required withholdingtaxes.  The exercise price of the Optionmay be paid by (i) cash or certified or bank check, (ii) surrender ofCommon Stock held by the Optionee for at least six (6) months prior toexercise (or such longer or shorter period as may be required to avoid a chargeto earnings for financial accounting purposes) or the attestation of ownershipof such shares, in either case, if so permitted by the Company, where suchCommon Stock has a Fair Market Value equal to the aggregate exercise price ofthe Option at the time of exercise, (iii) if established by the Company,through a “same day sale” commitment from optionee and a broker-dealer that isacceptable to the Company that is a member of the National Association ofSecurities Dealers (an “***NASDDealer***”) whereby the optionee irrevocably elects to exercise theOption and to sell a portion of the shares so purchased sufficient to pay forthe total exercise price and whereby the NASD Dealer irrevocably commits uponreceipt of such shares to forward the total exercise price plus all requiredwithholding taxes directly to the Company, (iv) retention of Shares whichwould otherwise be delivered upon exercise of this Option, (v) non-cashconsideration having a fair market value equal to the exercise price of theOption at the time of exercise, (vi) through additional methods prescribedby the Committee, all under such terms and conditions as deemed appropriate bythe Committee in its discretion, or (vii) by any combination of theforegoing, and, in all instances, to the extent permitted by applicablelaw.  A Participant’s subsequent transferor disposition of any Common Stock acquired upon exercise of an Option shall besubject to any Federal and state laws then applicable, specifically securitieslaw, and the terms and conditions of this Plan.

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# 8.                                       Restricted Common Stock.  The Committee may from time to time awardrestricted Common Stock under the Plan to eligible Participants.  Shares of restricted Common Stock may not besold, assigned, transferred or otherwise disposed of, or pledged orhypothecated as collateral for a loan or as security for the performance of anyobligation or for any other purpose, for such period (the “***Restricted Period***”) as theCommittee shall determine.  The Committeemay define the Restricted Period in terms of the passage of time or in anyother manner it deems appropriate.  TheCommittee may alter or waive at any time any term or condition of restrictedCommon Stock that is not mandatory under the Plan.  Unless otherwise determined by the Committee,upon termination of a Participant’s Continuous Service with the Company for anyreason prior to the end of the Restricted Period, the restricted Common Stockshall be forfeited and the Participant shall have no right with respect to theAward.  Except as restricted under theterms of the Plan and any Award agreement, any Participant awarded restrictedCommon Stock shall have all the rights of a stockholder including, withoutlimitation, the right to vote restricted Common Stock and the right to receivedividends or other distributions paid or made with respect to such shares;provided, however, the Committee may in the Award restrict the Participant’sright to dividends until the Restricted Period lapses.  If a share certificate is issued in respectof restricted Common Stock, the certificate shall be registered in the name ofthe Participant, but shall be held by the Company for the account of theParticipant along with a stock power endorsed in blank until the end of theRestricted Period.  The 

 

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# Committee may also award restricted CommonStock in the form of restricted Common Stock units having a value equal to anidentical number of shares of Common Stock. Payment of restricted Common Stock units shall be made in Common Stockor in cash or in a combination thereof (based upon the Fair Market Value of theCommon Stock on the day the Restricted Period expires), all as determined bythe Committee in its sole discretion.

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# 9.                                       Performance Shares.

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## (a)                                  Type of Awards.  Performance shares may be granted in the formof actual shares of Common Stock or Common Stock units having a value equal toan identical number of shares of Common Stock. In the event that a share certificate is issued in respect ofperformance shares, such certificate shall be registered in the name of theParticipant, but shall be held by the Company along with a stock power endorsedin blank until the time the performance shares are earned.  The Performance Objectives and the length ofthe Performance Period shall be determined by the Committee.  The Committee shall determine in its solediscretion whether performance shares granted in the form of Common Stock unitsshall be paid in cash, Common Stock or a combination of cash and Common Stock.

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## (b)                                 Performance Objectives.  The Committee shall establish the PerformanceObjectives for each Award of performance shares, consisting of one or morebusiness criteria permitted as Performance Goals hereunder, one or more levelsof performance with respect to each such criteria, and the amount or amountspayable or other rights that the Participant will be entitled to uponachievement of such levels of performance. The Performance Objectives shall be established by the Committee priorto, or reasonably promptly following the inception of, a Performance Periodbut, to the extent required by Section 162(m) of the Code, by nolater than the earlier of the date that is ninety days after the commencementof the Performance Period or the day prior to the date on which twenty-fivepercent of the Performance Period has elapsed. More than one Performance Goal may be incorporated in a PerformanceObjective, in which case achievement with respect to each Performance Goal maybe assessed individually or in combination with each other.  The Committee may, in connection with theestablishment of Performance Objectives for a Performance Period, establish amatrix setting forth the relationship between performance on two or morePerformance Goals and the amount of the Award of performance shares payable forthat Performance Period.  The level orlevels of performance specified with respect to a Performance Goal may beestablished in absolute terms, as objectives relative to performance in priorperiods, as an objective compared to the performance of one or more comparablecompanies or an index covering multiple companies, or otherwise as theCommittee may determine.  PerformanceObjectives shall be objective and shall otherwise meet the requirements of Section 162(m) ofthe Code.  Performance Objectives maydiffer for performance shares granted to any one Participant or to differentParticipants.  An Award of performanceshares to a Participant who is a Covered Employee shall (unless the Committeedetermines otherwise) provide that in the event of the Participant’stermination of Continuous Service prior to the end of the Performance Periodfor any reason, such Award will be payable only (1) if the applicablePerformance Objectives are achieved and (ii) to the extent, if any, as theCommittee shall determine.

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## (c)                                  Certification.  Following the completion of each PerformancePeriod, the Committee shall certify in writing, in accordance with therequirements of Section 162(m) of the 

 

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## Code, whether the Performance Objectives andother material terms of an Award of performance shares have been achieved ormet.  Unless the Committee determinesotherwise, performance shares shall not be settled until the Committee has madethe certification specified under this Section 9(c).

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## (d)                                 Adjustment.  The Committee may, in its discretion, reduceor eliminate the amount of payment with respect to an Award of performanceshares to a Covered Employee, notwithstanding the achievement of a specifiedPerformance Objective; *provided, that*,no such adjustment shall be made if such adjustment would adversely impact aParticipant following a Change of Control.

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## (e)                                  Maximum Amount Payable.  Subject to Section 18, themaximum number of performance shares subject to any Award to a Covered Employeeis 25,000 for each 12 months during the Performance Period (or, to the extentthe Award is paid in cash, the maximum dollar amount of any such Award is theequivalent cash value, based on the Fair Market Value of the Common Stock, ofsuch number of shares of Common Stock on the last day of the PerformancePeriod).

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# 10.                                 Share Purchases.  The Committee may authorize eligibleindividuals to purchase Common Stock in the Company at a price equal to, belowor above the Fair Market Value of the Common Stock at the time of grant.  Any such offer may be subject to theconditions and terms the Committee may impose.

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# 11.                                 Share Awards.  Subject to such performance and employmentconditions as the Committee may determine, awards of Common Stock or awardsbased on the value of the Common Stock may be granted either alone or inaddition to other Awards granted under the Plan.  Any Awards under this Section 11and any Common Stock covered by any such Award may be forfeited to the extentso provided in the Award agreement, as determined by the Committee.  Payment of Common Stock awards made underthis Section 11 which are based on the value of Common Stock may bemade in Common Stock or in cash or in a combination thereof (based upon theFair Market Value of the Common Stock on the date of payment), all asdetermined by the Committee in its sole discretion.

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# 12.                                 Termination.

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## (a)                                  In any Option agreement, theCommittee may provide that in the event of a termination of Participant’sContinuous Service for any reason, the unvested Option granted to suchParticipant or former Participant shall be immediately and automaticallyterminated.

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## (b)                                 In any Option agreement, theCommittee may provide that in the event (i) of a termination ofParticipant’s Continuous Service for Cause or (ii) of a termination ofParticipant’s Continuous Service for any reason other than Good Reason, andwithin 90 days after such termination, Participant accepts employment with anentity the Board reasonably considers a significant competitor of the Companyor any Subsidiary, the Option granted to such Participant or former Participantshall be immediately and automatically terminated.

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## (c)                                  In any Option agreement, theCommittee may provide that in the event of a termination of Participant’sContinuous Service for any reason other than Cause, Disability or 

 

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## death, then Participant may exercise theOption (to the extent entitled to do as of the date of termination) but onlywithin such period of time ending on the date that is 90 days following atermination.

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## (d)                                 In any Option agreement, theCommittee may provide that in the event of a termination of Participant’sContinuous Service as a result of Participant’s Disability, then Participantmay exercise the Option (to the extent entitled to do as of the date oftermination), but only within such period of time ending on the earlier of (i) thedate that is 12 months following the termination or (ii) the expiration ofthe term of the Option as set forth in the Option agreement.

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## (e)                                  In any Option agreement, theCommittee may provide that in the event of a termination of Participant’sContinuous Service as a result of Participant’s death, the Option may beexercised (to the extent entitled to do so as of the date of death) byParticipant’s estate, by a person who acquired the right to exercise the Optionby bequest or inheritance or by a person designated to exercise the Option uponParticipant’s death, but only within the period ending on the earlier of (i) thedate that is 12 months following the date of death or (ii) the expirationof the term of the Option as set forth in the Option agreement.

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# 13.                                 Forfeiture.  Notwithstanding anything in the Plan to thecontrary and unless otherwise specifically provided in an Award agreement, inthe event of (a) a serious breach of conduct by a Participant or formerParticipant (including, without limitation, any conduct prejudicial to or inconflict with the Company or any Subsidiary) or (b) a termination ofParticipant’s Continuous Service for Cause, the Committee may, if such conductor activity or termination occurs within one year following the exercise orpayment of an Award, require such Participant or former Participant to repay tothe Company any gain realized or payment received upon the exercise or paymentof such Award (with such gain or payment valued as of the date of exercise orpayment).  Such cancellation or repaymentobligation shall be effective as of the date specified by the Committee.  Any repayment obligation shall be satisfiedin cash or, if permitted in the sole discretion of the Committee, it may besatisfied in shares of Common Stock (based upon the Fair Market Value of theshare of Common Stock on the date of payment), and the Committee may providefor an offset to any future payments owed by the Company or any Subsidiary tothe Participant or former Participant if necessary to satisfy the repaymentobligation.  The determination of whethera Participant or former Participant has engaged in a serious breach of conductor any activity in competition with any of the businesses of the Company or anySubsidiary shall be determined by the Committee in good faith and in its solediscretion.

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# 14.                                 Withholding.  Upon (a) disposition of shares of CommonStock acquired pursuant to the exercise of an Incentive Stock Option grantedpursuant to the Plan within two years of the grant of the Incentive StockOption or within one year after exercise of the Incentive Stock Option, or (b) exerciseof a Nonqualified Stock Option (or an Incentive Stock Option treated as aNonqualified Stock Option), exercise of a stock appreciation right or thevesting or payment of any other Award under the Plan, or (c) under any othercircumstances determined by the Committee in its sole discretion, the Companyshall have the right to require any Participant, and such Participant byaccepting the Awards granted under the Plan agrees, to pay to the Company theamount of any taxes which the Company shall be required to withhold at theminimum 

 

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# statutory rate with respect thereto.  In the event of clauses (a), (b) or(c), with the consent of the Committee, at its sole discretion, such Participantmay elect to pay to the Company an amount equal to the amount of the taxeswhich the Company shall be required to withhold by delivering to the Companyshares of Common Stock having a Fair Market Value equal to the amount of thewithholding tax obligation as determined by the Company; *provided,however*, that no shares of Common Stock are withheld with a valueexceeding the minimum amount of tax required to be withheld by law.  Such shares so delivered to satisfy theminimum withholding obligation may be either shares withheld by the Companyupon the exercise of the Option or other shares.  At the Committee’s sole discretion, aParticipant may elect to have additional taxes withheld and satisfy suchwithholding with cash or shares of Common Stock held for at least six (6) monthsprior to exercise, if, in the opinion of the Company’s outside accountants,doing so, would not result in a charge against earnings.

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# 15.                                 Nontransferability,Beneficiaries.  Unless otherwise determined by the Committeewith respect to the transferability of Nonqualified Stock Options by aParticipant to his Immediate Family Members (or to trusts or partnerships orlimited liability companies established for such family members), no Awardshall be assignable or transferable by the Participant, otherwise than by willor the laws of descent and distribution or pursuant to a beneficiarydesignation, and Options shall be exercisable, during the Participant’slifetime, only by the Participant (or by the Participant’s legal representativesin the event of the Participant’s incapacity). Each Participant may designate a beneficiary to exercise any Option heldby the Participant at the time of the Participant’s death or to be assigned anyother Award outstanding at the time of the Participant’s death.  If no beneficiary has been named by adeceased Participant, any Award held by the Participant at the time of deathshall be transferred as provided in his will or by the laws of descent anddistribution.  Except in the case of theholder’s incapacity, an Option may only be exercised by the holder thereof.

#  

# 16.                                 No Right to Continuous Service.  Nothing contained in the Plan or in any Awardunder the Plan shall confer upon any Participant any right with respect to thecontinuation of service with the Company or any of its Subsidiaries, orinterfere in any way with the right of the Company or its Subsidiaries toterminate his or her Continuous Service at any time.  Nothing contained in the Plan shall conferupon any Participant or other person any claim or right to any Award under thePlan.

#  

# 17.                                 Governmental Compliance.  Each Award under the Plan shall be subject tothe requirement that if at any time the Committee shall determine that thelisting, registration or qualification of any shares issuable or deliverablethereunder upon any securities exchange or under any Federal or state law, orthe consent or approval of any governmental regulatory body, is necessary ordesirable as a condition thereof, or in connection therewith, no such grant oraward may be exercised or shares issued or delivered unless such listing,registration, qualification, consent or approval shall have been effected orobtained free of any conditions not acceptable to the Committee.

#  

# 18.                                 Corporate Events.

#  

## (a)                                  In the event of anyrecapitalization, reclassification, stock split, reverse stock split,reorganization, merger, consolidation, split-up, spin-off, combination,repurchase, 

 

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##  

## liquidation, dissolution, or sale, transfer,exchange or other disposition of all or substantially all of the assets of theCompany, or exchange of Common Stock or other securities of the Company, orother similar corporate transaction or event (an “***Event***”), and in the Committee’s opinion,such event affects the Common Stock such that an adjustment is determined bythe Committee to be appropriate in order to prevent dilution or enlargement ofthe benefits or potential benefits intended to be made available under the Planor Prior Plans or with respect to an Award, then the Committee shall, in suchmanner as it may deem equitable, including, without limitation, adjust any orall of the following: (1) the number and kind of shares of Common Stock(or other securities or property) with respect to which Awards may be grantedor awarded; (ii) the number and kind of shares of Common Stock (or othersecurities or property) subject to outstanding Awards; and (iii) the grantor exercise price with respect to any Award. Any such adjustment made to an Incentive Stock Option shall be made inaccordance with Section 424(a) of the Code unless otherwisedetermined by the Committee in its sole discretion.  The Committee’s determination under this Section 18(a) shallbe final, binding and conclusive.

##  

## (b)                                 Upon the occurrence of an Eventin which outstanding Awards are not to be assumed or otherwise continuedfollowing such an Event, except as would violate the requirements of Section 409Aof the Code, the Committee may, in its discretion, terminate any outstanding Awardwithout a Participant’s consent and (i) provide for either (1) thepurchase of any such Award for an amount of cash equal to the amount that couldhave been attained upon the exercise of such Award or realization of theParticipant’s rights had such Award been currently exercisable or payable orfully vested or (2) the replacement of such Award with other rights orproperty selected by the Committee in its sole discretion and/or (ii) providethat such Award shall be exercisable (whether or not vested) as to all sharescovered thereby for at least 30 days prior to such Event.

##  

## (c)                                  The existence of the Plan, theAward agreement and the Awards granted hereunder shall not affect or restrictin any way the right or power of the Company or the stockholders of the Companyto make or authorize any adjustment, recapitalization, reorganization or otherchange in the Company’s capital structure or its business, any merger orconsolidation of the Company, any issue of stock or of options, warrants orrights to purchase stock or of bonds, debentures, preferred or prior preferencestocks whose rights are superior to or affect the Common Stock or the rightsthereof or which are convertible into or exchangeable for Common Stock, or thedissolution or liquidation of the Company, or any sale or transfer of all orany part of its assets or business, or any other corporate act or proceeding,whether of a similar character or otherwise.

##  

# 19.                                 Award Agreement.  Each Award under the Plan shall be evidencedby an agreement setting forth the terms and conditions, as determined by theCommittee, which shall apply to such Award, in addition to the terms andconditions specified in the Plan.

#  

# 20.                                 Amendment.  The Board may amend, suspend or terminate thePlan or any portion thereof at any time, *provided, that*,(a) no amendment shall be made without stockholder approval if suchapproval is necessary to comply with any applicable law, regulation or stockexchange or market rule and (b) except as provided in Section 18,no amendment shall be made that would adversely affect the rights of aParticipant under an Award theretofore granted, without such Participant’swritten consent.

 

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#  

# 21.                                 Change of Control.  The Committee may, in its discretion, providein any Award agreement or amendment thereto, whether, upon the occurrence of aChange in Control, all Options represented by such Award agreement mayautomatically become vested and exercisable in full, and all restrictions orperformance conditions, if any, on any Restricted Stock Award or PerformanceShare Award granted hereunder will automatically lapse.  The Committee may, in its discretion, includesuch further provisions and limitations in any agreement documenting suchAwards as it may deem equitable and in the best interests of the Company.

#  

# 22.                                 General Provisions.

#  

## (a)                                  The Committee may require eachParticipant purchasing or acquiring shares pursuant to an Award under the Planto (i) agree in writing to be bound by all of the conditions andprovisions of the Securityholders Agreement as a stockholder and (ii) representto and agree with the Company in writing that such Participant is acquiring theshares for investment and without a view to distribution thereof.

##  

## (b)                                 All certificates for CommonStock delivered under the Plan pursuant to any Award shall be subject to suchstock-transfer orders and other restrictions as the Committee may deemadvisable under the rules, regulations, and other requirements of theSecurities and Exchange Commission, any stock exchange upon which the CommonStock is then listed, and any applicable Federal or state securities law, andthe Committee may cause a legend or legends to be put on any such certificatesto make appropriate reference to such restrictions.  If the Committee determines that the issuanceof Common Stock hereunder is not in compliance with, or subject to an exemptionfrom, any applicable Federal or state securities laws, such shares shall not beissued until such time as the Committee determines that the issuance ispermissible.

##  

## (c)                                  It is the intent of the Companythat the Plan satisfy, and be interpreted in a manner that satisfies, theapplicable requirements of Rule 16b-3 as promulgated under Section 16of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3,or any other rule promulgated under Section 16 of the Exchange Act,and will not be subject to short-swing liability under Section 16 of theExchange Act.  Accordingly, if theoperation of any provision of the Plan would conflict with the intent expressedin this Section 22(c), such provision to the extent possible shallbe interpreted and/or deemed amended so as to avoid such conflict.

##  

## (d)                                 Except as otherwise provided bythe Committee in the applicable grant or Award agreement, a Participant shallhave no rights as a stockholder with respect to any shares of Common Stockssubject to an Award until a certificate or certificates evidencing shares ofCommon Stock shall have been issued to the Participant and, subject to Section 18,no adjustment shall be made for dividends or distributions or other rights inrespect of any share for which the record date is prior to the date on whichParticipant shall become the holder of record thereof.

##  

## (e)                                  The law of the State of Delawareshall apply to all Awards and interpretations under the Plan regardless of theeffect of such state’s conflict of laws principles.

##  

## (f)                                    Where the context requires,words in any gender shall include any other gender.

 

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##  

## (g)                                 Headings of Sections areinserted for convenience and reference; they do not constitute any part of thisPlan.

##  

## (h)                                 The Committee shall have thepower to accelerate the time at which an Award shall be exercisable or vestnotwithstanding the terms of any Award agreement.

##  

## (i)                                     No payment pursuant to the Planshall be taken into account in determining any benefits pursuant to anypension, retirement, savings, profit sharing, group insurance, welfare or otherbenefit plan of the Company or any Subsidiary except to the extent otherwiseexpressly provided in writing in such other plan or an agreement thereunder.

##  

## (j)                                     The expenses of administeringthe Plan shall be borne by the Company and its Subsidiaries.

##  

## (k)                                  No fractional shares of CommonStock shall be issued and the Committee shall determine, in its discretion,whether cash shall be given in lieu of fractional shares or whether suchfractional shares shall be eliminated by rounding up or down as appropriate.

##  

## (l)                                     The Plan is intended toconstitute an “unfunded” plan for incentive compensation.  With respect to any payments not yet made toa Participant pursuant to an Award, nothing contained in the Plan or any Awardagreement shall give the Participant any rights that are greater than those ofa general unsecured creditor of the Company or any Subsidiary.  To the extent applicable, the Plan isintended to comply with Section 409A of the Code and the Committee shallinterpret the Plan in accordance therewith.

##  

# 23.                                 Expiration of the Plan.  Subject to earlier termination pursuant to Section 20,no Award may be granted following the seven year anniversary of the EffectiveDate and except with respect to outstanding Awards, this Plan shall terminate.

#  

# 24.                                 Effective Date; Approval ofStockholders.  The effective date of the Prior Plan shall bethe date it was adopted by the Board (the “***Effective Date***”). This Plan, as adopted by the Board, shall be effective as of December 31,2008.  Unless the Company determines tosubmit Section 9 of the Plan and the definition of Performance Goalto the Company’s stockholders at the first stockholder meeting that occurs inthe fifth year following the year in which the Prior Plan was last approved bystockholders (or any earlier meeting designated by the Board), in accordancewith the requirements of Section 162(m) of the Code, and suchstockholder approval is obtained, then no further performance shares shall bemade to Covered Employees under Section 9 after the date of suchannual meeting, but the remainder of the Plan shall continue in effect.

 

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#  

# 25.                                 Code Section 409A Standards.  The Plan, and all Awards and Award Agreementspursuant to the Plan, shall be effected, interpreted, and applied in a mannerconsistent with the standards for nonqualified deferred compensation plansestablished by Code Section 409A and its interpretive regulations (the “***Section 409A Standards***”).  To the extent that any terms of the Plan, anAward Agreement, or an Award would subject any Participant to gross incomeinclusion, interest, or additional tax pursuant to, or would be prohibited by,Code Section 409A, those terms are to that extent superseded by theapplicable Section 409A Standards. To the extent that any Award is subject to Code Section 409A, suchamount shall be paid within 2 1/2 months after the Award vests as set forth inthe Award Agreement.

#  

# 26.                                 Section 409A Limits onPayments to Specified Employees.  Notwithstanding anyother provision of the Plan or an Award to the contrary, if a Participant is a “keyemployee,” as defined in Section 416(i) of the Code (without regardto paragraph 5 thereof), except to the extent permitted under Section 409Aof the Code, no benefit or payment that is subject to Section 409A of theCode (after taking into account all applicable exceptions to Section 409Aof the Code, including but not limited to the exceptions for short-termdeferrals and for “separation pay only upon an involuntary separation fromservice”) shall be made under this Plan or the affected Award grantedthereunder on account of the Participant’s “separation from service,” asdefined in Section 409A of the Code, with the Company and its Affiliatesuntil the later of the date prescribed for payment in this Plan or the affectedAward granted thereunder and the first (1st) day of the seventh (7th) calendarmonth that begins after the date of the Participant’s separation from service(or, if earlier, the date of death of the Participant).  Unless otherwise provided in the Award, anyamount that is otherwise payable within the delay period described in theimmediately preceding sentence will be aggregated and paid in a lump sumwithout interest.

#  

Prior Planadopted by the Board of Directors as of  February 16,2006.

 

Plan adoptedby the Board of Directors as of  November 11,2008.

 

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