Exhibit 10.1


 


UAP HOLDING CORP.


2007 LONG-TERM INCENTIVE PLAN


 


1.
Purpose. The purpose of the UAP
Holding Corp. 2007 Long-Term Incentive Plan is to provide a means through which
the Company and its Affiliates may attract and retain key personnel and to provide
a means whereby directors, officers, employees, consultants and advisors (and
prospective directors, officers, employees, consultants and advisors) of the
Company and its Affiliates can acquire and maintain an equity interest in the
Company, or be paid incentive compensation, which may (but need not) be
measured by reference to the value of Common Stock, thereby strengthening their
commitment to the welfare of the Company and its Affiliates and aligning their
interests with those of the Company’s stockholders.


 


2.
Definitions. The following
definitions shall be applicable throughout the Plan:


 


(a) “Affiliate” means (i) any person or entity that
directly or indirectly controls, is controlled by or is under common control
with the Company and/or (ii) to the extent provided by the Committee, any
person or entity in which the Company has a significant interest. The term “control”
(including, with correlative meaning, the terms “controlled by” and “under
common control with”), as applied to any person or entity, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person or entity, whether
through the ownership of voting or other securities, by contract or otherwise.


 


(b) “Award” means, individually or collectively, any
Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Stock Bonus Award, Dividend Equivalent
Rights, and Performance Compensation Award granted under the Plan.


 


(c) “Board” means the Board of Directors of the Company.


 


(d) “Business Combination” has the meaning given such term in
the definition of “Change in Control.”


 


(e) “Cause” means, in the case of a particular Award, unless
the applicable Award agreement states otherwise, (i) the Company or an
Affiliate having “cause” to terminate a Participant’s employment or service, as
defined in any employment or consulting agreement between the Participant and
the Company or an Affiliate in effect at the time of such termination or
(ii) in the absence of any such employment or consulting agreement (or the
absence of any definition of “Cause” contained therein), (A) the
Participant’s commission of, conviction for, plea of guilty or nolo contendere to a felony or a crime
involving moral turpitude, or other material act or omission involving
dishonesty or fraud, (B) the Participant’s conduct that brings or is
reasonably likely to bring the Company or any of its Affiliates into public
disgrace or disrepute and that affects the Company’s or any Affiliate’s
business in any material way, (C) the Participant’s failure to perform
duties as reasonably directed by the Company or the Participant’s material
violation of any rule, regulation, policy or plan for the conduct of any service
provider to the Company or its Affiliates or its or their business (which, if
curable, is not cured within 10 days after notice thereof is provided to the
Participant) or (D) the Participant’s gross negligence, willful
malfeasance or material act of disloyalty with respect to the Company or its
Affiliates (which, if curable, is not cured within 10 days after notice thereof
is provided to the Participant). Any determination of whether Cause exists
shall be made by the Committee in its sole discretion.


 


(f) “Change in Control” shall, in the case of a particular
Award, unless the applicable Award agreement states otherwise or contains a
different definition of “Change in Control,” be deemed to occur upon:


 


(i) Any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or
more of either (A) the then- outstanding shares of Common Stock of the
Company (the “Outstanding


 


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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”); provided,
however, that, for purposes of
this Section 2(f), the following acquisitions shall not constitute a
Change in Control: (I) any acquisition directly from the Company, (II) any
acquisition by the Company, (III) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any Affiliate,
(IV) any acquisition by any corporation pursuant to a transaction that complies
with Sections 2(f)(iii)(A), 2(f)(iii)(B) and 2(f)(iii)(C), or (V) any
acquisition involving beneficial ownership of less than 50% of the Outstanding
Company Common Stock or the Outstanding Company Voting Securities that is
determined by the Board, based on review of public disclosure by the acquiring
Person with respect to its passive investment intent, not to have a purpose or
effect of changing or influencing the control of the Company, provided, however,
that for purposes of this clause (V), any such acquisition in connection with
(x) 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 or (y) any Business Combination shall be presumed to be for
the purpose or with the effect of changing or influencing the control of the
Company;


 


(ii) During any period of five (5) consecutive
years, individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of 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;


 


(iii) Consummation of a reorganization (excluding a
reorganization under either Chapter 7 or Chapter 11 of Title 11 of the United
States Code), merger, statutory share exchange or consolidation or similar
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 that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock (or, for a non-corporate entity, equivalent securities) and the
combined voting power of the then-outstanding voting securities entitled to
vote generally in the election of directors (or, for a non-corporate entity, equivalent
governing body), as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, 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 the Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 35% or more
of, respectively, 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 (or, for
a non-corporate entity, equivalent governing body) of the entity 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


 


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


 


(g) “Code” means the Internal Revenue Code of 1986, as
amended, and any successor thereto. Reference in the Plan to any section of the
Code shall be deemed to include any regulations or other interpretative guidance
under such section, and any amendments or successor provisions to such section,
regulations or guidance.


 


(h) “Committee” means a committee of at least two people as
the Board may appoint to administer the Plan or, if no such committee has been
appointed by the Board, the Board.


 


(i) “Common Stock” means the common stock, par value $0.001
per share, of the Company (and any stock or other securities into which such
common stock may be converted or into which it may be exchanged).


 


(j) “Company” means UAP Holding Corp., a Delaware
corporation, and any successor thereto.


 


(k) “Date of Grant” means the date on which the granting of
an Award is authorized, or such other date as may be specified in such
authorization.


 


(l) “Dividend Equivalent Right” means the right of a
Participant, granted at the discretion of the Committee, to receive a credit in
an amount equal to the cash dividends paid on one share of Common Stock,
whether or not represented by an Award denominated in Common Stock that is held
by such Participant.


 


(m) “Effective Date” means June 26, 2007.


 


(n) “Eligible Director” means a person who is (i) a “non-employee
director” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an
“outside director” within the meaning of Section 162(m) of the Code and
(iii) an “independent director” under the rules of the NASDAQ National
Market or any other inter-dealer quotation system or securities exchange on
which the Common Stock is listed or quoted, or a person meeting any similar
requirement under any successor rule or regulation.


 


(o) “Eligible Person” means any (i) individual employed
by the Company or an Affiliate; provided,
however, that no such employee covered by a collective bargaining agreement
shall be an Eligible Person unless and to the extent that such eligibility is
set forth in such collective bargaining agreement or in an agreement or
instrument relating thereto; (ii) director of the Company or an Affiliate;
(iii) consultant or advisor to the Company or an Affiliate who may be
offered securities registrable on Form S-8 under the Securities Act; or
(iv) prospective employees, directors, officers, consultants or advisors
who have accepted offers of employment or consultancy from the Company or its
Affiliates (and would satisfy the provisions of clauses (i) through
(iii) above once he or she begins employment with or providing services to
the Company or its Affiliates).


 


(p) “Exchange Act” has the meaning given such term in the
definition of “Change in Control,” and any reference in the Plan to any section
of (or rule promulgated under) the Exchange Act shall be deemed to include any
rules, regulations or other interpretative guidance under such section or rule,
and any amendments or successor provisions to such section, rules, regulations
or guidance.


 


(q) “Exercise Price” has the meaning given such term in
Section 7(b) of the Plan.


 


(r) “Fair Market Value” means, on a given date, (i) if
the Common Stock is quoted in the NASDAQ National Market Reporting System or
another inter-dealer quotation system on a last sale basis, the closing bid
price or, if there is no such sale on that date, then on the last preceding
date on which a sale was reported; (ii) if the Common Stock is not quoted
in any inter-dealer quotation system on a last sale basis, but is listed on the
New York Stock Exchange or another national securities exchange, the closing
sales price of the Common Stock reported on such national securities exchange,
or, if there is no such sale on that date, then on the last preceding date on which
such a sale was reported; or (iii) if the Common Stock is not quoted


 


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in an inter-dealer quotation system or a national securities exchange
on a last sale basis, the amount determined by the Committee in good faith to
be the fair market value of the Common Stock.


 


(s) “Immediate Family Members” shall have the meaning set
forth in Section 15(b).


 


(t) “Incentive Stock Option” means an Option that is
designated by the Committee as an incentive stock option as described in
Section 422 of the Code and otherwise meets the requirements set forth in
the Plan.


 


(u) “Incumbent Board” has the meaning given such term in the
definition of “Change in Control.”


 


(v) “Indemnifiable Person” shall have the meaning set forth
in Section 4(e) of the Plan.


 


(w) “Mature Shares” means shares of Common Stock owned by a
Participant that are not subject to any pledge or other security interest and
that have either been previously acquired by the Participant on the open market
or meet such other requirements, if any, as the Committee may determine are
necessary in order to avoid an accounting earnings charge on account of the use
of such shares to pay the Exercise Price or satisfy a withholding obligation of
the Participant.


 


(x) “Negative Discretion” shall mean the discretion
authorized by the Plan to be applied by the Committee to eliminate or reduce
the size of a Performance Compensation Award consistent with
Section 162(m) of the Code.


 


(y) “Nonqualified Stock Option” means an Option that is not
designated by the Committee as an Incentive Stock Option.


 


(z) “Option” means an Award granted under Section 7 of
the Plan.


 


(aa) “Option Period” has the meaning given such
term in Section 7(c) of the Plan.


 


(bb) “Outstanding Company Common Stock” has the
meaning given such term in the definition of “Change in Control.”


 


(cc) “Outstanding Company Voting Securities” has
the meaning given such term in the definition of “Change in Control.”


 


(dd) “Participant” means an Eligible Person who has
been selected by the Committee to participate in the Plan and to receive an
Award pursuant to Section 6 of the Plan.


 


(ee) “Performance Compensation Award” shall mean
any Award designated by the Committee as a Performance Compensation Award
pursuant to Section 12 of the Plan.


 


(ff) “Performance Criteria” shall mean the
criterion or criteria that the Committee shall select for purposes of
establishing the Performance Goal(s) for a Performance Period with respect to
any Performance Compensation Award under the Plan.


 


(gg) “Performance Formula” shall mean, for a
Performance Period, the one or more objective formulae applied against the
relevant Performance Goal to determine, with regard to the Performance
Compensation Award of a particular Participant, whether all, some portion but
less than all, or none of the Performance Compensation Award has been earned
for the Performance Period.


 


(hh) “Performance Goals” shall mean, for a
Performance Period, the one or more goals established by the Committee for the
Performance Period based upon the Performance Criteria.


 


(ii) “Performance Period” shall mean the one or
more periods of time, as the Committee may select, over which the attainment of
one or more Performance Goals will be measured for the purpose of determining a
Participant’s right to, and the payment of, a Performance Compensation Award.


 


(jj) “Permitted Transferee” shall have the meaning
set forth in Section 15(b) of the Plan.


 


(kk) “Person” has the meaning given such term in
the definition of “Change in Control.”


 


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(ll) “Plan” means this UAP Holding Corp. 2007
Long-Term Incentive Plan.


 


(mm) “Prior Plans” means the Company’s 2004
Long-Term Incentive Plan, 2003 Stock Option Plan, and 2004 Non-Executive
Director Stock Option Plan.


 


(nn) “Restricted Period” means the period of time
determined by the Committee during which an Award is subject to restrictions
or, as applicable, the period of time within which performance is measured for
purposes of determining whether an Award has been earned.


 


(oo) “Restricted Stock Unit” means an unfunded and
unsecured promise to deliver shares of Common Stock, cash, other securities or
other property, subject to certain restrictions (including, without limitation,
a requirement that the Participant remain continuously employed or provide
continuous services for a specified period of time), granted under
Section 9 of the Plan.


 


(pp) “Restricted Stock” means Common Stock, subject
to certain specified restrictions (including, without limitation, a requirement
that the Participant remain continuously employed or provide continuous
services for a specified period of time), granted under Section 9 of the
Plan.


 


(qq) “SAR Period” has the meaning given such term
in Section 8(b) of the Plan.


 


(rr) “Securities Act” means the Securities Act of
1933, as amended, and any successor thereto. Reference in the Plan to any
section of the Securities Act shall be deemed to include any rules, regulations
or other interpretative guidance under such section, and any amendments or
successor provisions to such section, rules, regulations or guidance.


 


(ss) “Stock Appreciation Right” or “SAR” means an
Award granted under Section 8 of the Plan.


 


(tt) “Stock Bonus Award” means an Award granted
under Section 10 of the Plan.


 


(uu) “Strike Price” means, except as otherwise
provided by the Committee in the case of Substitute Awards, (i) in the
case of a SAR granted in tandem with an Option, the Exercise Price of the
related Option, or (ii) in the case of a SAR granted independent of an
Option, the Fair Market Value on the Date of Grant.


 


(vv) “Subsidiary” means, with respect to any
specified Person:


 


(1) any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Outstanding
Company Voting Securities (without regard to the occurrence of any contingency
and after giving effect to any voting agreement or stockholders’ agreement that
effectively transfers voting power) is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and


 


(2) any partnership (or any comparable foreign
entity (a) the sole general partner (or functional equivalent thereof) or
the managing general partner of which is such Person or Subsidiary of such
Person or (b) the only general partners (or functional equivalents
thereof) of which are that Person or one or more Subsidiaries of that Person
(or any combination thereof).


 


(ww) “Substitute Award” has the meaning given such
term in Section 5(e).


 


3.
Effective Date; Duration. The
Plan shall be effective as of the Effective Date. The expiration date of the
Plan, on and after which date no Awards may be granted hereunder, shall be the
tenth anniversary of the Effective Date; provided,
however, that such expiration
shall not affect Awards then outstanding, and the terms and conditions of the
Plan shall continue to apply to such Awards.


 


4.
Administration. (a) The
Committee shall administer the Plan. To the extent required to comply with the
provisions of Rule 16b-3 promulgated under the Exchange Act (if the Board is
not acting as the Committee under the Plan) or necessary to obtain the
exception for performance-based compensation under Section 162(m) of the
Code, as applicable, it is intended that each member of the Committee shall, at
the time he takes any action with respect to an Award under the Plan, be an
Eligible Director. However, the fact that a Committee member shall


 


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fail
to qualify as an Eligible Director shall not invalidate any Award granted by
the Committee that is otherwise validly granted under the Plan. The majority of
the members of the Committee shall constitute a quorum. The acts of a majority
of the members present at any meeting at which a quorum is present or acts
approved in writing by a majority of the Committee shall be deemed the acts of
the Committee.


 


(b) Subject to the provisions of the Plan and
applicable law, the Committee shall have the sole and plenary authority, in
addition to other express powers and authorizations conferred on the Committee
by the Plan, to: (i) designate Participants; (ii) determine the type
or types of Awards to be granted to a Participant; (iii) determine the
number of shares of Common Stock to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with,
Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards
may be settled or exercised in cash, shares of Common Stock, other securities,
other Awards or other property, or canceled, forfeited, or suspended and the
method or methods by which Awards may be settled, exercised, canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under
what circumstances the delivery of cash, Common Stock, other securities, other
Awards or other property and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the Participant or
of the Committee; (vii) interpret, administer, reconcile any inconsistency
in, correct any defect in and/or supply any omission in the Plan and any
instrument or agreement relating to, or Award granted under, the Plan;
(viii) establish, amend, suspend, or waive any rules and regulations and
appoint such agents as the Committee shall deem appropriate for the proper
administration of the Plan; (ix) subject to the restrictions set forth in
Sections 9(c) and 12(c), accelerate the vesting or exercisability of,
payment for or lapse of restrictions on, Awards; and (x) make any other
determination and take any other action that the Committee deems necessary or
desirable for the administration of the Plan.


 


(c) The Committee may delegate to one or more
officers of the Company or any Affiliate the authority to act on behalf of the
Committee with respect to any matter, right, obligation, or election that is
the responsibility of or that is allocated to the Committee herein, and that
may be so delegated as a matter of law, except for grants of Awards to persons
(i) subject to Section 16 of the Exchange Act or (ii) who are,
or who are reasonably expected to be, “covered employees” for purposes of Code
Section 162(m).


 


(d) Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations, and other decisions under or
with respect to the Plan or any Award or any documents evidencing Awards
granted pursuant to the Plan shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive and binding
upon all persons or entities, including, without limitation, the Company, any
Affiliate, any Participant, any holder or beneficiary of any Award, and any
stockholder of the Company.


 


(e) No member of the Board, the Committee, delegate
of the Committee or any employee or agent of the Company (each such person, an “Indemnifiable Person”) shall be liable for
any action taken or omitted to be taken or any determination made in good faith
with respect to the Plan or any Award hereunder. Each Indemnifiable Person
shall be indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense (including attorneys’ fees) that may be
imposed upon or incurred by such Indemnifiable Person in connection with or
resulting from any action, suit or proceeding to which such Indemnifiable
Person may be a party or in which such Indemnifiable Person may be involved by
reason of any action taken or omitted to be taken under the Plan or any Award
agreement and against and from any and all amounts paid by such Indemnifiable
Person with the Company’s approval, in settlement thereof, or paid by such
Indemnifiable Person in satisfaction of any judgment in any such action, suit
or proceeding against such Indemnifiable Person, provided, that the Company shall have the right, at its own
expense, to assume and defend any such action, suit or proceeding and once the
Company gives notice of its intent to assume the defense, the Company shall
have sole control over such defense with counsel of the Company’s choice. The
foregoing right of indemnification shall not be available to an Indemnifiable
Person to the extent that a final judgment or other final adjudication (in
either case not subject to further appeal) binding upon such Indemnifiable
Person determines that the acts or omissions of such Indemnifiable Person
giving rise to the indemnification claim resulted from such Indemnifiable
Person’s bad faith, fraud or willful


 


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criminal act or omission or that such right of indemnification is
otherwise prohibited by law or by the Company’s Certificate of Incorporation or
Bylaws. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such Indemnifiable Persons may be
entitled under the Company’s Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any other power that the Company may have to
indemnify such Indemnifiable Persons or hold them harmless.


 


(f) Notwithstanding anything to the contrary
contained in the Plan, the Board may, in its sole discretion, at any time and
from time to time, grant Awards and administer the Plan with respect to such
Awards. In any such case, the Board shall have all the authority granted to the
Committee under the Plan.


 


5.
Grant of Awards; Shares Subject
to the Plan; Limitations. (a) The Committee may, from time to time, grant
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Dividend Equivalent Rights, Stock Bonus Awards and/or Performance Compensation
Awards to one or more Eligible Persons.


 


(b) Awards granted under the Plan shall be subject
to the following limitations: (i) subject to Section 13 of the Plan,
the Committee is authorized to deliver under the Plan an amount of shares equal
to the sum of (A) and (B), where (A) is the number of shares of
Common Stock available for grant under the Prior Plans as of the date the
Company’s stockholders approve the Plan, and (B) is the difference between
5,500,000 and the amount of shares under clause (A) above;
(ii) subject to Section 13 of the Plan, grants of Options or SARs
under the Plan in respect of no more than 1,000,000 shares of Common Stock may
be made to any single Participant during any calendar year; (iii) subject
to Section 13 of the Plan, no more than 1,500,000 shares of Common Stock
may be earned in respect of Performance Compensation Awards granted pursuant to
Section 12 of the Plan to any single Participant for a single calendar
year during a Performance Period, or in the event such Performance Compensation
Award is paid in cash, other securities, other Awards or other property, no
more than the Fair Market Value of 1,000,000 shares of Common Stock on the last
day of the Performance Period to which such Award relates; and (iv) the
maximum amount that can be paid to any single Participant in any one calendar
year pursuant to a cash bonus Award described in Section 12(a) of the Plan
shall be $5,000,000. Upon the stockholder approval of the Plan, no Awards may
be made under the Prior Plans, and any shares that are forfeited or cancelled,
expire unexercised, or are settled in cash under the Prior Plans shall be
available, subject to the limitations set forth in this Section 5(b), for
grant as Awards hereunder. The Plan employs “fungible share counting,” whereby,
one share of Common Stock subject to an Option or SAR granted hereunder will be
counted against the share reserve set forth in clause (i) of this
Section 5(b) as one share, and one share of Common Stock subject to a
Restricted Stock Award or other stock-based Award (including Restricted Stock
Units, and Stock Bonus Awards and Performance Compensation Awards settled in
Common Stock for which the Participant is not required to pay the Fair Market
Value) will be counted against the share reserve and in Section 5(b) as
1.4 shares. To the extent that a share of Common Stock that was subject to an
Option or an SAR or an option or a stock appreciation right under the Prior
Plans is returned to the Plan as provided in Section 5(c), the share
reserve set forth in Section 5(b)(i) will be credited with one share;
whereas, to the extent that a share of Common Stock that was subject to other
than an Option or an SAR or an option or a stock appreciation right under the
Prior Plans is returned to the Plan as provided in Section 5(c), the share
reserve set forth in Section 5(b)(i) will be credited with 1.4 shares.


 


(c) Use of shares of Common Stock to pay the
required Exercise Price or tax obligations, or shares not issued in connection
with settlement of an Option or SAR or that are used or withheld to satisfy tax
obligations of the Participant shall, notwithstanding anything herein to the contrary,
not be available again for other Awards under the Plan. Shares underlying
Awards under this Plan or under Prior Plans that are forfeited, cancelled,
expire unexercised, or are settled in cash are available again for Awards under
the Plan.


 


(d) Shares of Common Stock delivered by the Company
in settlement of Awards may be authorized and unissued shares, shares held in
the treasury of the Company, shares purchased on the open market or by private
purchase, or a combination of the foregoing.


 


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(e) Awards may, in the sole discretion of the
Committee, be granted under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by an entity acquired by the Company or
with which the Company combines (“Substitute
Awards”). The number of shares of Common Stock underlying any
Substitute Awards shall not be counted against the aggregate number of shares
of Common Stock available for Awards under the Plan.


 


6.
Eligibility. Participation shall
be limited to Eligible Persons who have entered into an Award agreement or who
have received written notification from the Committee, or from a person
designated by the Committee, that they have been selected to participate in the
Plan.


 


7.
Options. (a) Generally. Each
Option granted under the Plan shall be evidenced by an Award agreement (whether
in paper or electronic medium (including email or the posting on a web site
maintained by the Company or a third party under contract with the Company)). Each
Option so granted shall be subject to the conditions set forth in this
Section 7, and to such other conditions not inconsistent with the Plan as
may be reflected in the applicable Award agreement. All Options granted under
the Plan shall be Nonqualified Stock Options unless the applicable Award
agreement expressly states that the Option is intended to be an Incentive Stock
Option. Incentive Stock Options shall be granted only to Eligible Persons who
are employees of the Company and its Affiliates, and no Incentive Stock Option
shall be granted to any Eligible Person who is ineligible to receive an
Incentive Stock Option under the Code. No Option shall be treated as an
Incentive Stock Option unless the Plan has been approved by the stockholders of
the Company in a manner intended to comply with the stockholder approval
requirements of Section 422(b)(1) of the Code, provided that any Option
intended to be an Incentive Stock Option shall not fail to be effective solely
on account of a failure to obtain such approval, but rather such Option shall
be treated as a Nonqualified Stock Option unless and until such approval is
obtained. In the case of an Incentive Stock Option, the terms and conditions of
such grant shall be subject to and comply with such rules as may be prescribed
by Section 422 of the Code. If for any reason an Option intended to be an
Incentive Stock Option (or any portion thereof) shall not qualify as an
Incentive Stock Option, then, to the extent of such nonqualification, such
Option or portion thereof shall be regarded as a Nonqualified Stock Option
appropriately granted under the Plan.


 


(b) Exercise Price. Except as otherwise provided by the
Committee in the case of Substitute Awards, the exercise price (“Exercise Price”) per share of Common Stock
for each Option shall not be less than 100% of the Fair Market Value of such
share (determined as of the Date of Grant); provided, however, that in the case
of an Incentive Stock Option granted to an employee who, at the time of the
grant of such Option, owns stock representing more than 10% of the voting power
of all classes of stock of the Company or any Affiliate, the Exercise Price per
share shall be no less than 110% of the Fair Market Value per share on the Date
of Grant.


 


(c) Vesting and Expiration. Options shall vest and become
exercisable in such manner and on such date or dates determined by the
Committee and shall expire after such period, not to exceed ten years, as may
be determined by the Committee (the “Option
Period”); provided, however, that the Option Period shall not
exceed five years from the Date of Grant in the case of an Incentive Stock
Option granted to a Participant who on the Date of Grant owns stock
representing more than 10% of the voting power of all classes of stock of the Company
or any Affiliate; provided, further, that notwithstanding any vesting
dates set by the Committee, the Committee may, in its sole discretion,
accelerate the exercisability of any Option, which acceleration shall not
affect the terms and conditions of such Option other than with respect to
exercisability. Unless otherwise provided by the Committee in an Award
agreement: (i) an Option shall vest and become exercisable with respect to
25% of the shares of Common Stock subject to such Option on each of the first
four anniversaries of the Date of Grant; (ii) the unvested portion of an
Option shall expire upon termination of employment or service of the
Participant granted the Option, and the vested portion of such Option shall
remain exercisable for (A) one year following termination of employment or
service by reason of such Participant’s death or disability (as determined by
the Committee), but not later than the expiration of the Option Period or
(B) 90 days following termination of employment or service for any reason
other than such Participant’s death or disability, and other than such
Participant’s termination of employment or


 


8

















 


service for Cause, but not later than the expiration of the Option
Period; and (iii) both the unvested and the vested portion of an Option
shall expire upon the termination of the Participant’s employment or service by
the Company for Cause.


 


(d) Method of Exercise and Form of Payment. No shares of
Common Stock shall be delivered pursuant to any exercise of an Option until
payment in full of the Exercise Price therefor is received by the Company and
the Participant has paid to the Company an amount equal to any federal, state,
local and non-U.S. income and employment taxes required to be withheld. Options
that have become exercisable may be exercised by delivery of written or
electronic notice of exercise to the Company in accordance with the terms of
the Option accompanied by payment of the Exercise Price. The Exercise Price shall
be payable (i) in cash, check, cash equivalent and/or shares of Common
Stock valued at the Fair Market Value at the time the Option is exercised
(including, pursuant to procedures approved by the Committee, by means of
attestation of ownership of a sufficient number of shares of Common Stock in
lieu of actual delivery of such shares to the Company); provided, that such shares of Common Stock
are Mature Shares; (ii) by such other method as the Committee may permit
in its sole discretion, including without limitation: (A) in other
property having a fair market value on the date of exercise equal to the
Exercise Price or (B) if there is a public market for the shares of Common
Stock at such time, by means of a broker-assisted “cashless exercise” pursuant
to which the Company is delivered a copy of irrevocable instructions to a
stockbroker to sell the shares of Common Stock otherwise deliverable upon the
exercise of the Option and to deliver promptly to the Company an amount equal
to the Exercise Price or (C) by a “net exercise” method whereby the
Company withholds from the delivery of the shares of Common Stock for which the
Option was exercised that number of shares of Common Stock having a Fair Market
Value equal to the aggregate Exercise Price for the shares of Common Stock for
which the Option was exercised. Any fractional shares of Common Stock shall be
settled in cash.


 


(e) Notification upon Disqualifying Disposition of an Incentive Stock
Option. Each Participant awarded an Incentive Stock Option under
the Plan shall notify the Company in writing immediately after the date he
makes a disqualifying disposition of any Common Stock acquired pursuant to the
exercise of such Incentive Stock Option. A disqualifying disposition is any
disposition (including, without limitation, any sale) of such Common Stock
before the later of (A) two years after the Date of Grant of the Incentive
Stock Option or (B) one year after the date of exercise of the Incentive
Stock Option. The Company may, if determined by the Committee and in accordance
with procedures established by the Committee, retain possession of any Common
Stock acquired pursuant to the exercise of an Incentive Stock Option as agent
for the applicable Participant until the end of the period described in the
preceding sentence.


 


(f) Compliance With Laws, etc. Notwithstanding the
foregoing, in no event shall a Participant be permitted to exercise an Option
in a manner that the Committee determines would violate the Sarbanes-Oxley Act
of 2002, or any other applicable law or the applicable rules and regulations of
the Securities and Exchange Commission or the applicable rules and regulations
of any securities exchange or inter-dealer quotation system on which the
securities of the Company are listed or traded.


 


8.
Stock Appreciation Rights.
(a) Generally. Each SAR
granted under the Plan shall be evidenced by an Award agreement (whether in
paper or electronic medium (including email or the posting on a web site
maintained by the Company or a third party under contract with the Company)).
Each SAR so granted shall be subject to the conditions set forth in this
Section 8, and to such other conditions not inconsistent with the Plan as
may be reflected in the applicable Award agreement. Any Option granted under
the Plan may include tandem SARs. The Committee also may award SARs to Eligible
Persons independent of any Option.


 


(b) Vesting and Expiration. A SAR granted in connection with
an Option shall become exercisable and shall expire according to the same
vesting schedule and expiration provisions as the corresponding Option. A SAR
granted independent of an Option shall vest and become exercisable and shall
expire in such manner and on such date or dates determined by the Committee and
shall expire after such period, not to exceed ten years, as may be determined
by the Committee (the “SAR Period”);
provided, however, that notwithstanding any vesting dates set by the Committee,
the Committee may, in its sole discretion,


 


9

















 


accelerate the exercisability of any SAR, which acceleration shall not
affect the terms and conditions of such SAR other than with respect to
exercisability. Unless otherwise provided by the Committee in an Award
agreement: (i) a SAR shall vest and become exercisable with respect to 25%
of the shares of Common Stock subject to such SAR on each of the first four
anniversaries of the Date of Grant; (ii) the unvested portion of a SAR
shall expire upon termination of employment or service of the Participant granted
the SAR, and the vested portion of such SAR shall remain exercisable for
(A) one year following termination of employment or service by reason of
such Participant’s death or disability (as determined by the Committee), but
not later than the expiration of the SAR Period or (B) 90 days following
termination of employment or service for any reason other than such Participant’s
death or disability, and other than such Participant’s termination of
employment or service for Cause, but not later than the expiration of the SAR
Period; and (iii) both the unvested and the vested portion of a SAR shall
expire upon the termination of the Participant’s employment or service by the
Company for Cause.


 


(c) Method of Exercise. SARs that have become exercisable
may be exercised by delivery of written or electronic notice of exercise to the
Company in accordance with the terms of the Award, specifying the number of
SARs to be exercised and the date on which such SARs were awarded.
Notwithstanding the foregoing, if on the last day of the Option Period (or in
the case of a SAR independent of an option, the SAR Period), the Fair Market
Value exceeds the Strike Price, the Participant has not exercised the SAR or
the corresponding Option (if applicable), and neither the SAR nor the corresponding
Option (if applicable) has expired, such SAR shall be deemed to have been
exercised by the Participant on such last day and the Company shall make the
appropriate payment therefor.


 


(d) Payment. Upon the exercise of a SAR, the Company shall
pay to the Participant an amount equal to the number of shares subject to the
SAR that are being exercised multiplied by the excess, if any, of the Fair
Market Value of one share of Common Stock on the exercise date over the Strike
Price, less an amount equal to any federal, state, local and non-U.S. income
and employment taxes required to be withheld. The Company shall pay such amount
in cash, in shares of Common Stock valued at Fair Market Value, or any
combination thereof, as determined by the Committee. Any fractional shares of
Common Stock shall be settled in cash.


 


9.
Restricted Stock and Restricted Stock Units.
(a) Generally. Each grant of
Restricted Stock and Restricted Stock Units shall be evidenced by an Award
agreement (whether in paper or electronic medium (including email or the
posting on a web site maintained by the Company or a third party under contract
with the Company)). Each such grant shall be subject to the conditions set
forth in this Section 9, and to such other conditions not inconsistent
with the Plan as may be reflected in the applicable Award agreement.


 


(b) Stock Certificates; Escrow or Similar Arrangement. Upon
the grant of Restricted Stock, the Committee shall cause a stock certificate
registered in the name of the Participant to be issued and, if the Committee
determines that the Restricted Stock shall be held by the Company or in escrow
rather than delivered to the Participant pending the release of the applicable
restrictions, the Committee may require the Participant to additionally execute
and deliver to the Company (i) an escrow agreement satisfactory to the
Committee, if applicable, and (ii) the appropriate stock power (endorsed
in blank) with respect to the Restricted Stock covered by such agreement. If a
Participant shall fail to execute an agreement evidencing an Award of
Restricted Stock and, if applicable, an escrow agreement and blank stock power
within the amount of time specified by the Committee, the Award shall be null
and void. Subject to the restrictions set forth in this Section 9 and
Section 11 and the applicable Award agreement, the Participant generally
shall have the rights and privileges of a stockholder as to such Restricted
Stock, including without limitation the right to vote such Restricted Stock. To
the extent shares of Restricted Stock are forfeited, any stock certificates
issued to the Participant evidencing such shares shall be returned to the
Company, and all rights of the Participant to such shares and as a stockholder
with respect thereto shall terminate without further obligation on the part of
the Company.


 


(c) Vesting; Acceleration of Lapse of Restrictions. Except
as provided below: (i) the Restricted Period shall lapse no more quickly
than ratably over the three years following the Date of Grant; and
(ii) the


 


10

















 


unvested portion of Restricted Stock and Restricted Stock Units shall
terminate and be forfeited upon termination of employment or service of the
Participant granted the applicable Award; provided,
however, that Awards of
Restricted Stock and Restricted Stock Units provided to an Eligible Director,
an Eligible Person identified in Section 2(p)(iii) or as Substitute Awards
shall not be subject to clause (i) hereof. The Committee may not use its discretion
to accelerate the lapse of restrictions for Restricted Stock and Restricted
Stock Units, except upon the death, disability (as defined in Code
Section 22(e)), Change in Control, or retirement after age 62 of the
Participant provided, that acceleration
shall not affect any other terms and conditions of such Awards.


 


(d) Delivery of Restricted Stock and Settlement of Restricted Stock Units.
(i) Upon the expiration of the Restricted Period with respect to any
shares of Restricted Stock, the restrictions set forth in the applicable Award
agreement shall be of no further force or effect with respect to such shares,
except as set forth in the applicable Award agreement. If an escrow arrangement
is used, upon such expiration, the Company shall deliver to the Participant, or
his beneficiary, without charge, the stock certificate evidencing the shares of
Restricted Stock that have not then been forfeited and with respect to which
the Restricted Period has expired (rounded down to the nearest full share). Dividends,
if any, that may have been withheld by the Committee and attributable to any
particular share of Restricted Stock shall be distributed to the Participant in
cash or, at the sole discretion of the Committee, in shares of Common Stock
having a Fair Market Value equal to the amount of such dividends, upon the
release of restrictions on such share and, if such share is forfeited, the
Participant shall have no right to such dividends.


 


(ii) Unless otherwise provided by the Committee in
an Award agreement, upon the expiration of the Restricted Period with respect
to any outstanding Restricted Stock Units, the Company shall deliver to the
Participant, or his beneficiary, without charge, one share of Common Stock for
each such outstanding Restricted Stock Unit; provided,
however, that the Committee may,
in its sole discretion, elect to (i) pay cash or part cash and part Common
Stock in lieu of delivering only shares of Common Stock in respect of such
Restricted Stock Units or (ii) defer the delivery of Common Stock (or cash
or part Common Stock and part cash, as the case may be) beyond the expiration
of the Restricted Period. If a cash payment is made in lieu of delivering
shares of Common Stock, the amount of such payment shall be equal to the Fair
Market Value of the Common Stock as of the date on which the Restricted Period
lapsed with respect to such Restricted Stock Units, less an amount equal to any
federal, state, local and non-U.S. income and employment taxes required to be
withheld.


 


(e) Legends on Restricted Stock. Each certificate
representing Restricted Stock awarded under the Plan shall bear a legend
substantially in the form of the following in addition to any other information
the Company deems appropriate until the lapse of all restrictions with respect
to such Common Stock:


 


TRANSFER
OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO
THE TERMS OF THE UAP HOLDING CORP. 2007 LONG-TERM INCENTIVE PLAN AND A
RESTRICTED STOCK AWARD AGREEMENT, BETWEEN UAP HOLDING CORP. AND PARTICIPANT. A
COPY OF SUCH PLAN AND AWARD AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF UAP HOLDING CORP.


 


10.
Stock Bonus Awards. The Committee
may issue unrestricted Common Stock, or other Awards denominated in Common
Stock, under the Plan to Eligible Persons in such amounts as the Committee
shall from time to time in its sole discretion determine; provided, that if the Eligible Person is
not an Eligible Director or an Eligible Person identified in
Section 2(p)(iii) or such Award is a Substitute Award, then such Eligible
Person must pay an amount equal to the aggregate Fair Market Value of the
shares of Common Stock subject to such Award. Each Stock Bonus Award granted
under the Plan shall be evidenced by an Award agreement (whether in paper or
electronic medium (including email or the posting on a web site maintained by
the Company or a third party under contract with the Company)). Each Stock
Bonus Award so granted shall be subject to such conditions not inconsistent
with the Plan as may be reflected in the applicable Award agreement.


 


11

















 


11.
Dividends and Dividend Equivalents. Except
as otherwise may be provided in the Plan or by the Committee in an Award
agreement, no Participant shall be entitled to dividends paid on shares of
Common Stock subject to an Award (except for a Stock Bonus Award that is not
subject to any vesting conditions and is settled in shares of Common stock at
the Date of Grant. Notwithstanding the above, the Committee may provide a
Participant with dividend rights or Dividend Equivalent Rights, payable in
cash, shares of Common Stock, or other property, on a current or deferred
basis, on such terms and conditions as may be determined by the Committee in
its sole discretion, including without limitation, payment directly to the
Participant, withholding of such amounts by the Company subject to vesting of
the Award or reinvestment in additional shares of Common Stock, Restricted
Stock or other Awards. The Committee can award a dividend right or Dividend
Equivalent Right, either alone or in tandem with other Awards (including
Options and SARs). The Committee may impose such restrictions and conditions on
any dividend right or Dividend Equivalent Right as it, in its sole discretion,
may determine, including, without limitation, setting a date or dates for
payments due thereunder and the date that any such dividend right or Dividend
Equivalent Right will terminate.


 


12.
Performance Compensation Awards.
(a) Generally. The Committee
shall have the authority, at the time of grant of any Award described in
Sections 7 through 11 of the Plan, to designate such Award as a
Performance Compensation Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code. The Committee shall have
the authority to make an award of a cash bonus to any Participant and designate
such Award as a Performance Compensation Award intended to qualify as “performance-based
compensation” under Section 162(m) of the Code.


 


(b) Discretion of Committee with Respect to Performance Compensation Awards.
With regard to a particular Performance Period, the Committee shall have sole
discretion to select the length of such Performance Period, the type(s) of
Performance Compensation Awards to be issued, the Performance Criteria that
will be used to establish the Performance Goal(s), the kind(s) and/or
level(s) of the Performance Goals(s) that is (are) to apply and the Performance
Formula. Within the first 90 days of a Performance Period (or, if longer or
shorter, within the maximum period allowed under Section 162(m) of the Code),
the Committee shall, with regard to the Performance Compensation Awards to be
issued for such Performance Period, exercise its discretion with respect to
each of the matters enumerated in the immediately preceding sentence and record
the same in writing.


 


(c) Performance Criteria. The Performance Criteria that will
be used to establish the Performance Goal(s) shall be based on the attainment
of specific levels of performance of the Company (and/or one or more
Affiliates, divisions or operational units, or any combination of the
foregoing) and shall include the following: (i) net earnings or net income
(before or after taxes); (ii) basic or diluted earnings per share (before
or after taxes); (iii) net revenue or revenue growth; (iv) gross
profit or gross profit growth; (v) operating profit (before or after
taxes); (vi) return measures (including, but not limited to, return on
assets, capital, invested capital, equity, or sales); (vii) cash flow
(including, but not limited to, operating cash flow, free cash flow, and cash
flow return on capital); (viii) earnings before or after taxes, interest,
depreciation and/or amortization; (ix) gross or operating margins;
(x) productivity ratios; (xi) share price (including, but not limited
to, growth measures and total stockholder return); (xii) expense targets;
(xiii) margins; (xiv) operating efficiency; (xv) objective
measures of customer satisfaction; (xvi) working capital targets; (xvii) measures
of economic value added; (xviii) inventory control; (xix) enterprise
value; (xx) sales; (xxi) debt levels and net debt; (xxii) timely
launch of new facilities; (xxiii) client retention; (xxiv) employee
retention; (xxv) timely completion of new product rollouts; and
(xxvi) objective measures of personal targets, goals or completion of
projects. Any one or more of the Performance Criteria may be used on an
absolute or relative basis to measure the performance of the Company and/or one
or more Affiliates as a whole or any business unit(s) of the Company and/or one
or more Affiliates or any combination thereof, as the Committee may deem
appropriate, or any of the above Performance Criteria may be compared to the
performance of a selected group of comparison companies, or a published or
special index that the Committee, in its sole discretion, deems appropriate, or
as compared to various stock market indices. The Committee also has the
authority to provide for accelerated vesting of any Award based on the
achievement of Performance Goals pursuant to the Performance Criteria specified
in this paragraph,


 


12

















 


except in no event shall Performance Compensation Awards that may be
settled in Common Stock (including, without limitation, any Restricted Stock or
Restricted Stock Units that are subject to performance-based vesting) be
accelerated by the Committee unless at least one year has elapsed since grant
(except in the event of death, disability, Change in Control or retirement
after age 62). To the extent required under Section 162(m) of the Code,
the Committee shall, within the first 90 days of a Performance Period (or, if
longer or shorter, within the maximum period allowed under Section 162(m) of
the Code), define in an objective fashion the manner of calculating the
Performance Criteria it selects to use for such Performance Period and
thereafter promptly communicate such Performance Criteria to the Participant.


 


(d) Modification of Performance Goal(s). In the event that
applicable tax and/or securities laws change to permit Committee discretion to
alter the governing Performance Criteria without obtaining stockholder approval
of such alterations, the Committee shall have sole discretion to make such alterations
without obtaining stockholder approval. The Committee is authorized at any time
during the first 90 days of a Performance Period (or, if longer or shorter,
within the maximum period allowed under Section 162(m) of the Code), or at
any time thereafter to the extent the exercise of such authority at such time
would not cause the Performance Compensation Awards granted to any Participant
for such Performance Period to fail to qualify as “performance-based
compensation” under Section 162(m) of the Code, in its sole discretion, to
adjust or modify the calculation of a Performance Goal for such Performance
Period, based on and in order to appropriately reflect the following events:
(i) asset write-downs; (ii) litigation or claim judgments or settlements;
(iii) the effect of changes in tax laws, accounting principles, or other
laws or regulatory rules affecting reported results; (iv) any
reorganization and restructuring programs; (v) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 (or any
successor pronouncement thereto) and/or in management’s discussion and analysis
of financial condition and results of operations appearing in the Company’s
annual report to stockholders for the applicable year; (vi) acquisitions
or divestitures; (vii) any other specific unusual or nonrecurring events,
or objectively determinable category thereof; (viii) foreign exchange
gains and losses; and (ix) a change in the Company’s fiscal year.


 


(e) Payment of Performance Compensation Awards. (i) Condition to Receipt of Payment. Unless
otherwise provided in the applicable Award agreement, a Participant must be
employed by the Company on the last day of a Performance Period to be eligible
for payment in respect of a Performance Compensation Award for such Performance
Period.


 


(ii) Limitation. A Participant shall be eligible to receive
payment in respect of a Performance Compensation Award only to the extent that:
(A) the Performance Goals for such period are achieved; and (B) all
or some of the portion of such Participant’s Performance Compensation Award has
been earned for the Performance Period based on the application of the
Performance Formula to such achieved Performance Goals.


 


(iii) Certification. Following the completion of a
Performance Period, the Committee shall review and certify in writing whether,
and to what extent, the Performance Goals for the Performance Period have been
achieved and, if so, calculate and certify in writing that amount of the
Performance Compensation Awards earned for the period based upon the
Performance Formula. The Committee shall then determine the amount of each
Participant’s Performance Compensation Award actually payable for the
Performance Period and, in so doing, may apply Negative Discretion.


 


(iv) Use of Negative Discretion. In determining the actual
amount of an individual Participant’s Performance Compensation Award for a
Performance Period, the Committee may reduce or eliminate the amount of the
Performance Compensation Award earned under the Performance Formula in the
Performance Period through the use of Negative Discretion if, in its sole
judgment, such reduction or elimination is appropriate. The Committee shall not
have the discretion to (A) grant or provide payment in respect of
Performance Compensation Awards for a Performance Period if the Performance
Goals for such Performance Period have not been attained; or (B) increase
a Performance Compensation Award above the applicable limitations set forth in
Section 5 of the Plan.


 


13

















 


(f) Timing of Award Payments. Performance Compensation
Awards granted for a Performance Period shall be paid to Participants as soon
as administratively practicable following completion of the certifications
required by this Section 12, but in no event later than two-and-one-half
months following the end of the fiscal year during which the Performance Period
is completed.


 


13.
Changes in Capital Structure and Similar
Events. In the event of (a) any dividend or other distribution
(whether in the form of cash, shares of Common Stock, other securities or other
property), recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, split-off, combination, repurchase or exchange
of shares of Common Stock or other securities of the Company, issuance of
warrants or other rights to acquire shares of Common Stock or other securities
of the Company, or other similar corporate transaction or event (including,
without limitation, a Change in Control) that affects the shares of Common
Stock, or (b) unusual or nonrecurring events (including, without
limitation, a Change in Control) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or changes in applicable
rules, rulings, regulations or other requirements of any governmental body or
securities exchange or inter-dealer quotation system, accounting principles or
law, such that in either case an adjustment is determined by the Committee in
its sole discretion to be necessary or appropriate, then the Committee shall
make any such adjustments in such manner as it may deem equitable, including
without limitation any or all of the following:


 


(i) adjusting any or all of (A) the number of
shares of Common Stock or other securities of the Company (or number and kind
of other securities or other property) that may be delivered in respect of
Awards or with respect to which Awards may be granted under the Plan
(including, without limitation, adjusting any or all of the limitations under
Section 5 of the Plan) and (B) the terms of any outstanding Award,
including, without limitation, (1) the number of shares of Common Stock or
other securities of the Company (or number and kind of other securities or
other property) subject to outstanding Awards or to which outstanding Awards
relate, (2) the Exercise Price or Strike Price with respect to any Award
or (3) any applicable performance measures (including, without limitation,
Performance Criteria and Performance Goals);


 


(ii) providing for a substitution or assumption of
Awards, accelerating the exercisability of, lapse of restrictions on, or
termination of, Awards or providing for a period of time for exercise prior to
the occurrence of such event; and


 


(iii) cancelling any one or more outstanding Awards
and causing to be paid to the holders thereof, in cash, shares of Common Stock,
other securities or other property, or any combination thereof, the value of
such Awards, if any, as determined by the Committee (which if applicable may be
based upon the price per share of Common Stock received or to be received by
other stockholders of the Company in such event), including without limitation,
in the case of an outstanding Option or SAR, a cash payment in an amount equal
to the excess, if any, of the Fair Market Value (as of a date specified by the
Committee) of the shares of Common Stock subject to such Option or SAR over the
aggregate Exercise Price or Strike Price of such Option or SAR, respectively
(it being understood that, in such event, any Option or SAR having a per share
Exercise Price or Strike Price equal to, or in excess of, the Fair Market Value
of a share of Common Stock subject thereto may be canceled and terminated
without any payment or consideration therefor);


 


provided, however, that in the
case of any “equity restructuring” (within the meaning of the Financial
Accounting Standards Board Statement of Financial Accounting Standards
No. 123 (revised 2004)), the Committee shall make an equitable or
proportionate adjustment to outstanding Awards to reflect such equity
restructuring. Any adjustment in Incentive Stock Options under this
Section 13 (other than any cancellation of Incentive Stock Options) shall
be made only to the extent not constituting a “modification” within the meaning
of Section 424(h)(3) of the Code, and any adjustments under this
Section 13 shall be made in a manner that does not adversely affect the
exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company
shall give each Participant notice of an adjustment hereunder and, upon notice,
such adjustment shall be conclusive and binding for all purposes.


 


14

















 


14.
Amendments and Termination.
(a) Amendment and Termination of the
Plan. The Board may amend, alter, suspend, discontinue, or terminate
the Plan or any portion thereof at any time; provided,
that (i) no amendment to Section 12(c) or Section 14(b) (to the
extent required by the proviso in such Section 14(b)) shall be made
without stockholder approval and (ii) no such amendment, alteration,
suspension, discontinuation or termination shall be made without stockholder
approval if such approval is necessary to comply with any tax or regulatory
requirement applicable to the Plan (including, without limitation, as necessary
to comply with any rules or requirements of any securities exchange or
inter-dealer quotation system on which the shares of Common Stock may be listed
or quoted or to prevent the Company from being denied a tax deduction under Section 162(m)
of the Code); provided, further, that any such amendment,
alteration, suspension, discontinuance or termination that would materially and
adversely affect the rights of any Participant or any holder or beneficiary of
any Award theretofore granted shall not to that extent be effective without the
consent of the affected Participant, holder or beneficiary.


 


(b) Amendment of Award Agreements. The Committee may, to the
extent consistent with the terms of any applicable Award agreement, waive any conditions
or rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted or the associated Award agreement,
prospectively or retroactively; provided
that any such waiver, amendment, alteration, suspension, discontinuance,
cancellation or termination that would materially and adversely affect the
rights of any Participant with respect to any Award theretofore granted shall
not to that extent be effective without the consent of the affected Participant;
provided, further, that without stockholder
approval, except as otherwise permitted under Section 13 of the Plan,
(i) no amendment or modification may reduce the Exercise Price of any
Option or the Strike Price of any SAR, (ii) the Committee may not cancel
any outstanding Option or SAR and replace it with a new Option or SAR, another
Award or cash and (iii) the Committee may not take any other action that
is considered a “repricing” for purposes of the stockholder approval rules of
the applicable securities exchange or inter-dealer quotation system on which
the Common Stock is listed or quoted.


 


15.
General. (a) Award Agreements. Each Award under the
Plan shall be evidenced by an Award agreement, which shall be delivered to the
Participant (whether in paper or electronic medium (including email or the
posting on a web site maintained by the Company or a third party under contract
with the Company)) and shall specify the terms and conditions of the Award any
rules applicable thereto, including without limitation, the effect on such
Award of the death, disability or termination of employment or service of a
Participant, or of such other events as may be determined by the Committee.


 


(b) Nontransferability. (i) Each Award shall be
exercisable only by a Participant during the Participant’s lifetime, or, if
permissible under applicable law, by the Participant’s legal guardian or
representative. No Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant other than by will or by
the laws of descent and distribution and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or an Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance.


 


(ii) Notwithstanding the foregoing, the Committee
may, in its sole discretion, permit Awards (other than Incentive Stock Options)
to be transferred by a Participant, without consideration, subject to such
rules as the Committee may adopt consistent with any applicable Award agreement
to preserve the purposes of the Plan, to: (A) any person who is a “family
member” of the Participant, as such term is used in the instructions to Form
S-8 under the Securities Act (collectively, the “Immediate Family Members”); (B) a trust solely for the
benefit of the Participant and his or her Immediate Family Members; or
(C) a partnership or limited liability company whose only partners or
stockholders are the Participant and his or her Immediate Family Members; (each
transferee described in clauses (A), (B) and (C) above is hereinafter
referred to as a “Permitted Transferee”);
provided, that the Participant
gives the Committee advance written notice describing the terms and conditions
of the proposed transfer and the Committee notifies the Participant in writing
that such a transfer would comply with the requirements of the Plan.


 


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(iii) The terms of any Award transferred in
accordance with the immediately preceding sentence shall apply to the Permitted
Transferee and any reference in the Plan, or in any applicable Award agreement,
to a Participant shall be deemed to refer to the Permitted Transferee, except
that (A) Permitted Transferees shall not be entitled to transfer any
Award, other than by will or the laws of descent and distribution;
(B) Permitted Transferees shall not be entitled to exercise any
transferred Option unless there shall be in effect a registration statement on
an appropriate form covering the shares of Common Stock to be acquired pursuant
to the exercise of such Option if the Committee determines, consistent with any
applicable Award agreement, that such a registration statement is necessary or
appropriate; (C) the Committee or the Company shall not be required to
provide any notice to a Permitted Transferee, whether or not such notice is or
would otherwise have been required to be given to the Participant under the
Plan or otherwise; and (D) the consequences of the termination of the
Participant’s employment by, or services to, the Company or an Affiliate under
the terms of the Plan and the applicable Award agreement shall continue to be
applied with respect to the Participant, including, without limitation, that an
Option shall be exercisable by the Permitted Transferee only to the extent, and
for the periods, specified in the Plan and the applicable Award agreement.


 


(c) Tax Withholding. (i) A Participant shall be
required to pay to the Company or any Affiliate, and the Company or any
Affiliate shall have the right and is hereby authorized to withhold, from any
cash, shares of Common Stock, other securities or other property deliverable
under any Award or from any compensation or other amounts owing to a
Participant, the amount (in cash, Common Stock, other securities or other
property) of any required withholding taxes in respect of an Award, its
exercise, or any payment or transfer under an Award or under the Plan and to
take such other action as may be necessary in the opinion of the Committee or
the Company to satisfy all obligations for the payment of such withholding and
taxes.


 


(ii) Without limiting the generality of clause
(i) above, the Committee may, in its sole discretion, permit a Participant
to satisfy, in whole or in part, the foregoing withholding liability by
(A) the delivery of shares of Common Stock (which are not subject to any
pledge or other security interest and are Mature Shares) owned by the
Participant having a Fair Market Value equal to such withholding liability or
(B) having the Company withhold from the number of shares of Common Stock
otherwise issuable or deliverable pursuant to the exercise or settlement of the
Award a number of shares with a Fair Market Value equal to such withholding
liability (but no more than the minimum required statutory withholding
liability).


 


(d) No Claim to Awards; No Rights to Continued Employment; Waiver.
No employee of the Company or an Affiliate, or other person, shall have any
claim or right to be granted an Award under the Plan or, having been selected
for the grant of an Award, to be selected for a grant of any other Award. There
is no obligation for uniformity of treatment of Participants or holders or
beneficiaries of Awards. The terms and conditions of Awards and the Committee’s
determinations and interpretations with respect thereto need not be the same
with respect to each Participant and may be made selectively among
Participants, whether or not such Participants are similarly situated. Neither
the Plan nor any action taken hereunder shall be construed as giving any
Participant any right to be retained in the employ or service of the Company or
an Affiliate, nor shall it be construed as giving any Participant any rights to
continued service on the Board. The Company or any of its Affiliates may at any
time dismiss a Participant from employment or discontinue any consulting
relationship, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or any Award agreement. By accepting
an Award under the Plan, a Participant shall thereby be deemed to have waived
any claim to continued exercise or vesting of an Award or to damages or
severance entitlement related to non-continuation of the Award beyond the
period provided under the Plan or any Award agreement, notwithstanding any
provision to the contrary in any written employment contract or other agreement
between the Company and its Affiliates and the Participant, whether any such
agreement is executed before, on or after the Date of Grant.


 


(e) International Participants. With respect to Participants
who reside or work outside of the United States of America and who are not (and
who are not expect to be) “covered employees” within the meaning of
Section 162(m) of the Code, the Committee may in its sole discretion amend
the terms of the Plan or


 


16

















 


outstanding Awards with respect to such Participants in order to
conform such terms with the requirements of local law or to obtain more
favorable tax or other treatment for a Participant, the Company or its
Affiliates.


 


(f) Designation and Change of Beneficiary. Each Participant
may file with the Committee a written designation of one or more persons as the
beneficiary(ies) who shall be entitled to receive the amounts payable with
respect to an Award, if any, due under the Plan upon his death. A Participant
may, from time to time, revoke or change his beneficiary designation without
the consent of any prior beneficiary by filing a new designation with the
Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or
revocation thereof, shall be effective unless received by the Committee prior
to the Participant’s death, and in no event shall it be effective as of a date
prior to such receipt. If no beneficiary designation is filed by a Participant,
the beneficiary shall be deemed to be his or her spouse or, if the Participant
is unmarried at the time of death, his or her estate.


 


(g) Termination of Employment. Unless determined otherwise
by the Committee at any point following such event: (i) neither a
temporary absence from employment or service due to illness, vacation or leave
of absence nor a transfer from employment or service with the Company to
employment or service with an Affiliate (or vice-versa) shall be considered a
termination of employment or service with the Company or an Affiliate; and
(ii) if a Participant’s employment with the Company and its Affiliates
terminates, but such Participant continues to provide services to the Company
and its Affiliates in a non-employee capacity (or vice-versa), such change in
status shall not be considered a termination of employment or service with the
Company or an Affiliate.


 


(h) No Rights as a Stockholder. Except as otherwise
specifically provided in the Plan or any Award agreement, no person shall be
entitled to the privileges of ownership in respect of shares of Common Stock
that are subject to Awards hereunder until such shares have been issued or
delivered to that person.


 


(i) Government and Other Regulations. (i) The
obligation of the Company to settle Awards in Common Stock or other consideration
shall be subject to all applicable laws, rules, and regulations, and to such
approvals by governmental agencies as may be required. Notwithstanding any
terms or conditions of any Award to the contrary, the Company shall be under no
obligation to offer to sell or to sell, and shall be prohibited from offering
to sell or selling, any shares of Common Stock pursuant to an Award unless such
shares have been properly registered for sale pursuant to the Securities Act
with the Securities and Exchange Commission or unless the Company has received
an opinion of counsel, satisfactory to the Company, that such shares may be
offered or sold without such registration pursuant to an available exemption
therefrom and the terms and conditions of such exemption have been fully
complied with. The Company shall be under no obligation to register for sale
under the Securities Act any of the shares of Common Stock to be offered or
sold under the Plan. The Committee shall have the authority to provide that all
certificates for shares of Common Stock or other securities of the Company or
any Affiliate delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
Plan, the applicable Award agreement, the federal securities laws, or the
rules, regulations and other requirements of the Securities and Exchange
Commission, any securities exchange or inter-dealer quotation system upon which
such shares or other securities are then listed or quoted and any other
applicable federal, state, local or non-U.S. laws, and, without limiting the
generality of Section 9 of the Plan, the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions. Notwithstanding any provision in the Plan to the contrary,
the Committee reserves the right to add any additional terms or provisions to
any Award granted under the Plan that it in its sole discretion deems necessary
or advisable in order that such Award complies with the legal requirements of
any governmental entity to whose jurisdiction the Award is subject.


 


(ii) The Committee may cancel an Award or any
portion thereof if it determines, in its sole discretion, that legal or
contractual restrictions and/or blockage and/or other market considerations
would make the Company’s acquisition of shares of Common Stock from the public
markets, the Company’s issuance of Common Stock to the Participant, the
Participant’s acquisition of Common


 


17

















 


Stock from the Company and/or the Participant’s sale of Common Stock to
the public markets, illegal, impracticable or inadvisable. If the Committee
determines to cancel all or any portion of an Award in accordance with the foregoing,
the Company shall pay to the Participant an amount equal to the excess of
(A) the aggregate Fair Market Value of the shares of Common Stock subject
to such Award or portion thereof canceled (determined as of the applicable
exercise date, or the date that the shares would have been vested or delivered,
as applicable), over (B) the aggregate Exercise Price or Strike Price (in
the case of an Option or SAR, respectively) or any amount payable as a
condition of delivery of shares of Common Stock (in the case of any other
Award). Such amount shall be delivered to the Participant as soon as
practicable following the cancellation of such Award or portion thereof.


 


(j) Payments to Persons Other Than Participants. If the
Committee shall find that any person to whom any amount is payable under the
Plan is unable to care for his affairs because of illness or accident, or is a
minor, or has died, then any payment due to such person or his estate (unless a
prior claim therefor has been made by a duly appointed legal representative)
may, if the Committee so directs the Company, be paid to his spouse, child,
relative, an institution maintaining or having custody of such person, or any
other person deemed by the Committee to be a proper recipient on behalf of such
person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Committee and the Company therefor.


 


(k) Nonexclusivity of the Plan. Neither the adoption of this
Plan by the Board nor the submission of this Plan to the stockholders of the
Company for approval shall be construed as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options otherwise
than under this Plan, and such arrangements may be either applicable generally
or only in specific cases.


 


(l) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or
a fiduciary relationship between the Company or any Affiliate, on the one hand,
and a Participant or other person or entity, on the other hand. No provision of
the Plan or any Award shall require the Company, for the purpose of satisfying
any obligations under the Plan, to purchase assets or place any assets in a
trust or other entity to which contributions are made or otherwise to segregate
any assets, nor shall the Company maintain separate bank accounts, books,
records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants shall have no
rights under the Plan other than as unsecured general creditors of the Company,
except that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.


 


(m) Reliance on Reports. Each member of the Committee and
each member of the Board shall be fully justified in acting or failing to act,
as the case may be, and shall not be liable for having so acted or failed to
act in good faith, in reliance upon any report made by the independent public
accountant of the Company and its Affiliates and/or any other information
furnished in connection with the Plan by any agent of the Company or the
Committee or the Board, other than himself.


 


(n) Relationship to Other Benefits. No payment under the
Plan shall be taken into account in determining any benefits under any pension,
retirement, profit sharing, group insurance or other benefit plan of the
Company except as otherwise specifically provided in such other plan.


 


(o) Governing Law. The Plan shall be governed by and
construed in accordance with the internal laws of the State of Delaware
applicable to contracts made and performed wholly within the State of Delaware,
without giving effect to the conflict of laws provisions thereof.


 


(p) Severability. If any provision of the Plan or any Award
or Award agreement is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction or as to any person or entity or Award, or
would disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
the applicable laws, or if it cannot be construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan


 


18

















 


or the Award, such provision shall be construed or deemed stricken as
to such jurisdiction, person or entity or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.


 


(q) Obligations Binding on Successors. The obligations of
the Company under the Plan shall be binding upon any successor corporation or
organization resulting from the merger, consolidation or other reorganization
of the Company, or upon any successor corporation or organization succeeding to
substantially all of the assets and business of the Company.


 


(r) Code Section 162(m) Re-approval. If so determined
by the Committee, the provisions of the Plan regarding Performance Compensation
Awards shall be submitted for re-approval by the stockholders of the Company no
later than the first stockholder meeting that occurs in the fifth year
following the year in which stockholders previously approved such provisions,
in each case for purposes of exempting certain Awards granted after such time
from the deduction limitations of Section 162(m) of the Code.


 


(s) Expenses; Gender; Titles and Headings. The expenses of
administering the Plan shall be borne by the Company and its Affiliates.
Masculine pronouns and other words of masculine gender shall refer to both men
and women. The titles and headings of the sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of
the Plan, rather than such titles or headings shall control.


 


(t) Other Agreements. Notwithstanding the above, the
Committee may require, as a condition to the grant of and/or the receipt of
shares of Common Stock under an Award, that the Participant execute lock-up,
stockholder or other agreements, as it may determine in its sole and absolute
discretion.


 


(u) Payments. Participants shall be required to pay, to the
extent required by applicable law, any amounts required to receive shares of
Common Stock under any Award made under the Plan.


 


(v) Directors Deferred Compensation Plan. The Company’s
Directors Deferred Compensation Plan shall be a subsidiary plan of the Plan, and
any shares awarded thereunder shall be subject to the limitations set forth in
Section 5(b) above.


 


*   *   *


 


 


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