Document:

Exhibit 10.6.2

 

DEARBORN HOLDINGS CORPORATION

2003 OMNIBUS STOCK INCENTIVE PLAN

NON-QUALIFIED [PERFORMANCE-BASED] STOCK OPTION AGREEMENT

 

This NON-QUALIFIED
[PERFORMANCE-BASED] STOCK OPTION AGREEMENT (this “Option Agreement”), dated as
of the [      ] day of [                      ],
[      ] (the “Date of Grant”), by and between
DEARBORN HOLDINGS CORPORATION, a Delaware corporation (the “Company”), and [                      ]
(the “Optionee”).

 

A.            Pursuant to
Optionee’s Management Agreement with [insert name of sub/the Company], Optionee
is to be granted an option (the “Option”) under the Company’s 2003 Omnibus
Stock Incentive Plan (the “Plan”) to purchase shares of the Company’s common
stock, par value $0.001 per share (the “Common Stock”), on the terms and
subject to the conditions set forth herein in partial consideration of the
mutual representations, warranties, covenants and agreements set forth in the
Management Agreement, including, but not limited to, the confidential
information, non-competition and non-solicitation provisions set forth therein.

 

B.            The Board of
Directors, of the Company (the “Board”), as the administrator of the Plan,
hereby grants such Option.  The Option is not intended to constitute an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the “Code”).

 

Any capitalized terms not
defined herein shall have their respective meanings set forth in the Plan.

 

1.             Number of Shares.  The Option entitles the Optionee to purchase
[        ] shares of the Company’s
Common Stock (the “Option Shares”) at a price of $[insert price corresponding to OCM/GFI purchase price] per
share (the “Option Exercise Price”).

 

2.             Option Term.  The term of the Option and of this Option
Agreement (the “Option Term”) shall commence on the Date of Grant and, unless
the Option is otherwise terminated pursuant to this Option Agreement, shall
terminate upon the tenth anniversary of the Date of Grant.  In no event may the Option be exercised after
expiration of the Option Term.

 

3.             Vesting; Conditions of Exercise.

 

(a)           Subject to Section 7, the Option shall become
vested with respect to all Option Shares upon the earlier of (i) when each of
the OCM/GFI Power Opportunities Fund LP (“GFI”) and the OCM Principal Opportunities
Fund II LP (“OCM”) has achieved at least a twenty-five percent (25%)
internal rate of return and (ii) the seventh anniversary of the Date of Grant; provided
that in the event of a Change of Control Transaction (as defined below) of the
Company:

 

(1)           the Option shall become immediately vested with
respect to all Option Shares if each of GFI and OCM has achieved at least a
twenty-five percent (25%) internal rate of return; and

 

(2)           the Option shall become immediately vested with
respect to a number of Option Shares such that an aggregate of fifty percent
(50%) of the total Option Shares

 

 

shall be vested if (x) each of GFI and OCM
has achieved an internal rate of return of at least fifteen (15%) but less than
twenty-five percent (25%), and (y) the Optionee is terminated by the Company
without Cause (as defined below) or Optionee terminates his or her employment
for Good Reason (as defined below) within two years after [insert date of Closing].

 

(b)           Subject to subsection (i) and (ii) below and
Section 7, this Option shall be fully-exercisable at all times during the
Option Term; provided, however, that in the event Optionee’s
employment or service with the Company or any Parent or Subsidiary is
terminated for any reason, this Option may be exercised only with respect to
vested Option Shares.  Notwithstanding
anything to the contrary, the Option and the Option Shares shall be subject to
the vesting provisions set forth in this Section 3, and to the extent the
Option is exercised before it has become vested, the Option Shares so acquired
shall, until vested in accordance with this Section 3, be Restricted Shares
which shall be subject to repurchase as provided in the applicable Restricted
Stock Purchase Agreement to the same extent the Option would be subject to
forfeiture if no such exercise had occurred. 
For this purpose, an Option shall first be deemed to be exercised with
respect to the vested portion thereof, and thereafter with respect to that
portion which is due to become vested hereunder in the shortest time
frame.  This Option may not be exercised
for a fraction of a Share.

 

(i)            As a condition to exercising this Option, (x) Optionee, the Trust (as
defined in Section 5(a) below) or Optionee’s estate, successors or
beneficiaries, as applicable, shall agree to abide by and be bound as an
Existing Stockholder (as defined in the Stockholders’ Agreement) by the terms
and conditions of the Stockholders’ Agreement and shall deliver to the Company,
an executed writing, substantially in the form of Exhibit A (the “Agreement to
be Bound”), so agreeing and (y) Optionee’s spouse, if any, agrees to abide by
and be bound by the terms and conditions of the Spousal Consent (attached
hereto as Exhibit B) and shall deliver to the Company an executed copy of such
Spousal Consent so agreeing

 

(ii)           As a condition to
exercising this Option for unvested Option Shares, the Optionee or the Trust
shall execute the Restricted Stock Purchase Agreement attached hereto as
Exhibit C.

 

(c)           Definitions.

 

(i)            For purposes of this Agreement, “Cause” shall have the meaning set
forth in the Optionee’s Management Agreement with the [Company], or if Optionee
is not subject to any such agreement, “Cause” shall mean (i) the continued
failure by Executive to substantially perform his duties with the Company or
any Parent or Subsidiary or (ii) the willful engaging by Executive in gross
misconduct materially and demonstrably injurious to the Company or any Parent
or Subsidiary.

 

(ii)           For purposes of
this Agreement, “Change of Control Transaction” shall have the meaning set
forth in the Stockholders’ Agreement by and among the Company and certain of
its stockholders, dated as of [             , 2003] (the “Stockholders’
Agreement”).

 

(iii)          For purposes of
this Agreement, “Good Reason” shall have the meaning set forth in the Optionee’s
Management Agreement with the [Company], or if Optionee is not subject to any
such agreement, “Good Reason” shall mean the Company’s material reduction of
the Optionee’s compensation or duties and responsibilities (without Executive’s
express written consent); provided, that Executive has provided the
Company of written notice of

 

2

 

the material
breach and the Company does not cure such breach within 15 days following the
date Executive provides notice thereof to the Company.

 

4.             Adjustments.  The Option and all rights and obligations
under this Agreement are subject to Section 3 of the Plan, the terms of which
are incorporated herein by this reference.

 

5.             Nontransferability of Option and Shares.

 

(a)           Option.  Except by will or under the laws of descent
and distribution, the Option and this Option Agreement shall not be
transferable and, during the lifetime of Optionee, the Option may be exercised
only by Optionee; provided, however, that Optionee shall be
permitted to transfer this Option to a trust controlled by Optionee during
Optionee’s lifetime for the benefit of Optionee’s immediate family (the “Trust”)
by providing written notice of transfer to the Company in a form provided by
the Company.  Without limiting the
generality of the foregoing, except as otherwise provided herein, the Option
may not be assigned, transferred, exchanged, mortgaged, pledged, hypothecated,
gifted or otherwise disposed of or encumbered (including, without limitation,
by operation of law) and the Optionee may not agree to do any of the
foregoing.  Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to
the provisions hereof, and the levy of any execution, attachment or similar
process upon the Option, shall be null and void and without effect.

 

(b)           Shares.  Shares acquired upon exercise of the Option
are subject to the Stockholders Agreement and the restrictions on transfer
described therein.

 

6.             Method of Exercise of Option.  The Option may be exercised by means of
written notice of exercise to the Company in a form provided by the Company
specifying the number of Option Shares to be purchased, accompanied by payment
in full of the aggregate Option Exercise Price of the Common Stock as to which
such Option shall be exercised and any applicable withholding taxes (i) in cash
or by check, (ii) subject to the terms and conditions of applicable law,
including but not limited to the Sarbanes-Oxley Act of 2002, by delivery of a
promissory note of the Optionee bearing interest at the applicable federal
rate, (iii) at the discretion of the Administrator, by means of a cashless
exercise procedure either through a broker or, through withholding of shares of
Common Stock otherwise issuable upon exercise of the Option that have an
aggregate Fair Market Value on the date of surrender in an amount sufficient to
pay the aggregate Option Exercise Price of the Common Stock as to which such
Option shall be exercised and/or the minimum statutory withholding taxes, with
respect thereto, (iv) in the form of unrestricted shares of Common Stock
already owned by the Optionee which, (x) in the case of unrestricted shares of
Common Stock acquired upon exercise of an option, have been owned by Optionee
for more than six months on the date of surrender, and (y) have an aggregate
Fair Market Value on the date of surrender equal to the aggregate Option
Exercise Price of the Common Stock as to which such Option shall be exercised and/or
the minimum statutory withholding taxes with respect thereto, or (v) by any
other means of exercise authorized from time to time in the Plan and/or by the
Board.

 

7.             Effect of Termination of Employment.  Upon the termination of Optionee’s employment
or service with the Company or any Parent or Subsidiary, except as provided in
subsection (b) below, the Option shall immediately terminate as to any Option
Shares that have not previously vested as of the date of such termination (the “Termination
Date”).

 

(a)           Termination by the
Company for Cause.  In the event Optionee’s
employment or service with the Company or any Parent or Subsidiary is
terminated by the Company for Cause, the Option shall terminate in full as of
the Termination Date and shall not be exercisable as to any of the Option
Shares.

 

3

 

(b)           Termination by the
Company without Cause; Termination for Good Reason.  In the event Optionee’s employment or service
with the Company or any Parent or Subsidiary is terminated by the Company
without Cause or by Optionee for Good Reason, any portion of the Option that
has vested as of the Termination Date shall be exercisable in whole or in part
for a period of 90 days following the Termination Date.  Upon expiration of such 90-day period, any
unexercised portion of the Option shall terminate in full.

 

(c)           Termination without
Good Reason.  In the event Optionee terminates
employment or service with the Company or any Parent or Subsidiary without Good
Reason, any portion of the Option that has vested as of the Termination Date
shall be exercisable in whole or in part for a period of 30 days following the
Termination Date.  Upon expiration of
such 30-day period, any unexercised portion of the Option shall terminate in
full.

 

(d)           Termination as a Result of Death or
Disability.  In the event Optionee’s employment or service
with the Company or any Parent or Subsidiary is terminated as a result of
Optionee’s death or Disability, any portion of the Option that has vested as of
the Termination Date shall be exercisable in whole or in part for a period of
one year following the Termination Date. 
Upon expiration of such one-year period, any unexercised portion of the
Option shall terminate in full.

 

8.             Call Option.  Upon termination of Optionee’s employment or
service with the Company or any Parent or Subsidiary for any reason, the
Company shall have the right, but not the obligation, to repurchase all or any
portion of the Shares acquired upon exercise of the Option in accordance with
the terms and conditions set forth in this Section 8 (the “Call Option”).

 

(a)           Right to Repurchase.

 

(i)            Termination for Cause.  In the event Optionee’s employment or service
with the Company or any Parent or Subsidiary is terminated for Cause, the
Company shall have the right, but not the obligation, to repurchase all or any
portion of the Shares previously acquired by Optionee or the Trust through
exercise of the Option.  The purchase
price for each Share shall be the lower of (i) the Option Exercise Price and
(ii) the Fair Market Value of a Share on the date the Company exercises the
Call Option.

 

(ii)           Termination Other Than for Cause.  In the event Optionee’s employment or service
with the Company or any Parent or Subsidiary is terminated for any reason other
than for Cause, the Company shall have the right, but not the obligation, to
repurchase all or any portion of the Shares acquired (whether acquired prior to
or following the Termination Date) by Optionee, the Trust or Optionee’s estate,
successors or beneficiaries, as applicable, through exercise of the
Option.  The purchase price for each
Share shall be equal to the Fair Market Value of a Share on the date the
Company exercises the Call Option.

 

(b)           Exercise of Call Option.  The Company may by giving written notice (the
“Notice”) to the Optionee or any transferee (either, a “Holder”), elect to
purchase all or any portion of the Shares previously acquired through exercise
of the Option, at the purchase price determined in accordance with subsection
(a) above, as applicable, within one year following the later of the (i)
Termination Date or (ii) date that is six months and ten days after the last
date any Shares were acquired upon exercise of the Option.

 

(c)           Payment. 
Payment of the applicable purchase price (as determined in accordance
with subsection (a) above) shall be made, at the option of the Company, in
cash, by check, by cancellation of all or a portion of any outstanding
indebtedness of the Holder to the Company, or by

 

4

 

any combination thereof, within 30 days after
receipt of the Notice or in the manner and at the times set forth in the
Notice.

 

(d)           Termination of Call Option.  In the event of the consummation of any firm
commitment underwritten public offering by the Company of its equity securities
pursuant to an effective registration statement filed under the Securities Act
of 1933, as amended, resulting in gross proceeds to the Company of not less
than $60 million, the Call Option shall immediately terminate as to any Shares
acquired upon exercise of the Option.

 

9.             Put Option.  Upon
termination of Optionee’s employment or service with the Company or any Parent
or Subsidiary as a result of Optionee’s death or Disability, Optionee or his
estate, as the case may be (either, a “Put Holder”), shall have the right, but
not the obligation, to require the Company to repurchase all or any portion of
the Shares acquired upon exercise of the Option in accordance with the terms
and conditions set forth in this Section 9 (the “Put Option”).

 

(a)           Purchase Price.  The purchase price for each Share shall be
the Fair Market Value of a Share on the date the Put Holder exercises the Put
Option.

 

(b)           Exercise of Put
Option.  The Put Holder may by giving
written notice (the “Put Notice”) to the Company within one year following the
later of the (i) Termination Date or (ii) date that is six months and ten
days after the last date any Shares were acquired upon exercise of the Option,
elect to require the Company to repurchase all or any portion of the Shares
previously acquired by the Optionee or his estate, as the case may be, through,
exercise of the Option, at the purchase price determined in accordance with
subsection (a) above.

 

(c)           Payment.  Payment of the applicable purchase price (as
determined in accordance with subsection (a) above) shall be made, at the
option of the Company, in cash, by check, by cancellation of all or a portion
of any outstanding indebtedness of the Put Holder to the Company, or by any
combination thereof, within 30 days after receipt of the Put Notice or in the
manner and at the times set forth in the Put Notice.

 

(d)           Termination of Put
Option.  In the event of the consummation
of any firm commitment underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement filed under
the Securities Act of 1933, as amended, resulting in gross proceeds to the
Company of not less than $60 million, the Put Option shall immediately terminate
as to any Shares acquired upon exercise of the Option.

 

10.           Investment Representation.  The Optionee hereby represents and warrants
to the Company that the Optionee, by reason of the Optionee’s business or
financial experience (or the business or financial experience of the Optionee’s
professional advisors who are unaffiliated with and who are not compensated by
the Company or any affiliate or selling agent of the Company, directly or
indirectly), has the capacity to protect the Optionee’s own interests in
connection with the transactions contemplated under this Option Agreement.

 

11.           Notices.  All
notices and other communications under this Option Agreement shall be in
writing and shall be given by facsimile or first class mail, certified or
registered with return receipt requested, and shall be deemed to have been duly
given three days after mailing or 24 hours after transmission by facsimile to
the respective parties named below:

 

5

 

	
  If to Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention: David Helwig

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  
	
  with copies to:

  	
   

  
	
   

  	
   

  
	
   

  	
  GFI

  
	
   

  	
  11611 San Vicente Boulevard; Suite 710

  
	
   

  	
  Los Angeles, CA 90049

  
	
   

  	
  Attention: Ian Schapiro

  
	
   

  	
  Fax: (310) 442-0540

  
	
   

  	
   

  
	
   

  	
  And

  
	
   

  	
   

  
	
   

  	
  OCM

  
	
   

  	
  333 South Grand Avenue

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Attention: Christopher Brothers

  
	
   

  	
  Fax: (213) 830-6395

  
	
   

  	
   

  
	
   

  	
  And

  
	
   

  	
   

  
	
   

  	
  Skadden, Arps, Slate, Meagher & Flom LLP

  
	
   

  	
  300 South Grand Avenue

  
	
   

  	
  Los Angeles, CA 90071-3144

  
	
   

  	
  Attention: Jeffrey H. Cohen, Esq.

  
	
   

  	
  Fax: (213) 687-5600

  
	
   

  	
   

  
	
  If to the Optionee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Facsimile:

  	
   

  	
   

  
							

 

Either party hereto may change such party’s address for notices by
notice duly given pursuant hereto.

 

12.           Securities Laws Requirements.  The Option shall not be exercisable to any
extent, and the Company shall not be obligated to transfer any Option Shares to
the Optionee upon exercise of such Option, if such exercise, in the opinion of
counsel for the Company, would violate the Securities Act (or any other federal
or state statutes having similar requirements as may be in effect at that time).  Further, the Company may require as a
condition of transfer of any Option Shares pursuant to any exercise of the
Option that the Optionee furnish a written representation that he or she is
purchasing or acquiring the Option Shares for investment and not with a view to
resale or distribution to the public. 
The Optionee hereby represents and warrants that he or she understands
that the Option Shares are “restricted securities,” as defined in Rule 144
under the Securities Act, and that any resale of the Option Shares must be in
compliance with the registration requirements of the Securities Act, or an
exemption therefrom, and with the requirements of applicable state securities
laws.  Each certificate representing Option
Shares shall bear the legend set forth below:

 

THE SECURITIES EVIDENCED BY
THIS CERTIFICATE ARE RESTRICTED SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES

 

6

 

THEREUNDER, AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM.

 

THE SECURITIES EVIDENCED BY
THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF
FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEES(S).  SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST
REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES OF COMMON STOCK.

 

Further, if the Company
decides, in its sole discretion, that the listing or qualification of the
Option Shares under any securities or other applicable law is necessary or
desirable, the Option shall not be exercisable, in whole or in part, unless and
until such listing or qualification, or a consent or approval with respect
thereto, shall have been effected or obtained free of any conditions not
acceptable to the Company.

 

13.           No Obligation to Register Option Shares.  The Company shall be under no
obligation to register the Option Shares.

 

14.           Protections Against Violations of Agreement.  No purported sale, assignment,
mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust
(voting or other) or other disposition of, or creation of a security interest
in or lien on, any of the Option Shares by any holder thereof in violation of
the provisions of this Option Agreement or the Stockholders Agreement or the
Certificate of Incorporation or the Bylaws of the Company, will be valid, and
the Company will not transfer any of said Option Shares on its books nor will
any of said Option Shares be entitled to vote, nor will any dividends be paid
thereon, unless and until there has been full compliance with said provisions
to the satisfaction of the Company.  The
foregoing restrictions are in addition to, and not in lieu of any other,
remedies, legal or equitable, available to enforce said provisions.

 

15.           Withholding Requirements.  The Company’s obligations under this Option
Agreement shall be subject to all applicable tax and other withholding
requirements, and the Company shall, to the extent permitted by law, have the
right to deduct any withholding amounts from any payment or transfer of any
kind otherwise due to the Optionee.

 

16.           Successors and Assigns.  All the terms and provisions of this Option
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto, including the
Optionee’s estate, successors and beneficiaries; provided, however, that,
except as otherwise set forth herein, this Option Agreement may not be assigned
by the Optionee without the prior written consent of the Company.

 

17.           Failure to Enforce Not a Waiver.  The failure of either party to enforce at any
time any provision of this Option Agreement shall in no way be construed to be
a waiver of such provision or of any other provision hereof.

 

18.           Governing Law.  This Option Agreement shall be governed by
and construed according to the laws of the State of Delaware without regard to
its principles of conflict of laws.

 

19.           Incorporation of Plan.  The Plan is hereby incorporated by reference
and made a part hereof, and the Option and this Option Agreement shall be
subject to all terms and conditions of the Plan.

 

20.           Amendments.  This
Option Agreement may be amended or modified at any time only by an instrument
in writing signed by each of the parties hereto.

 

7

 

21.           Rights as a Stockholder.  Neither the Optionee nor any of the Optionee’s
successors in interest shall have any rights as a stockholder of the Company
with respect to any shares of Common Stock subject to the Option until the date
of issuance of a stock certificate for such shares of Common Stock.

 

22.           Agreement Not a Contract of Employment.  Neither the Plan, the granting
of the Option, this Option Agreement nor any other action taken pursuant to the
Plan shall constitute or be evidence of any agreement or understanding, express
or implied, that the Optionee has a right to continue to provide services as an
officer, Board member, employee, consultant or advisor of the Company or any
Parent, Subsidiary or affiliate of the Company for any period of time or at any
specific rate of compensation.

 

23.           Authority of the Board.  The Board shall have full authority to
interpret and construe the terms of the Plan and this Option Agreement.  The determination of the Board as to any such
matter of interpretation or construction shall be final, binding and
conclusive.

 

24.           Dispute Resolution.  The parties agree to use their reasonable
best efforts to resolve any dispute regarding this Option Agreement through
good faith negotiations.  A party hereto
must give written notice of the substance of any dispute regarding this Option
Agreement to any other party to whom such dispute pertains.  Any such dispute that cannot be resolved
within 30 calendar days of receipt of the required notice (or such other time
period to which the parties may agree) will be submitted to an arbitrator
selected by mutual agreement of the parties. 
In the event that, within 50 days of the receipt of the required written
notice, a single arbitrator has not been selected by mutual agreement of the
parties, a panel of three arbitrators will be selected.  Each party to the dispute will select one
arbitrator and the two selected arbitrators will select one additional
arbitrator.  Except as the parties to the
dispute may otherwise agree, such arbitration will be conducted in accordance
with the then-existing rules for Commercial Arbitration of the American
Arbitration Association.  The decision of
the arbitrator or arbitrators, or of a majority thereof, as the case may be,
shall be made in writing and will be final and binding upon the parties hereto
as to the questions submitted.  The
parties will abide by and comply with such decision, which may be entered as an
enforceable judgment in a court of competent jurisdiction; provided, however,
the arbitrator or arbitrators, as the case may be, shall not be empowered to
award punitive damages.  Unless the
decision of the arbitrator or arbitrators, as the case may be, provides for a
different allocation of costs and expenses determined by the arbitrators to be
equitable under the circumstances, the parties in any arbitration under this
Option Agreement will bear their own costs and expenses and will each be
responsible for one half of the arbitrator(s) fees.

 

25.           Market Stand-Off.  In connection with any underwritten public
offering by the Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act of 1933, as amended, for
such period as the Company or its underwriters may request (such period not to
exceed 180 days following the date of the applicable offering), the Optionee
shall not, directly or indirectly, sell, make any short sale of, loan,
hypothecate, pledge, offer, grant of sell any option or other contract for the
purchase of, purchase any option or other contract for the sale of, or
otherwise dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to, any Option Shares acquired under this Option
Agreement without the prior written consent of the Company or its underwriters.

 

8

 

IN WITNESS WHEREOF, the
parties hereto have executed and delivered this Option Agreement on the day and
year first above written.

 

	
  DEARBORN HOLDINGS CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

 

The undersigned hereby accepts and agrees to all the terms and
provisions of the foregoing Option Agreement and to all the terms and
provisions of the Plan, herein incorporated by reference.

 

 

	
  The
  Optionee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

9

 

Exhibit A

 

AGREEMENT TO BE BOUND

 

Reference is made to the
Stockholders’ Agreement, dated as of [__________] __, 2003, by and among
DEARBORN HOLDINGS CORPORATION and certain of its securityholders, as may be
amended or amended and restated from time to time (the “Agreement”).  All capitalized terms used but not otherwise
defined herein are used with the meanings ascribed to such terms in the
Agreement.

The undersigned purchased on
the date hereof ___________ shares of Common Stock (the “Securities”).  The undersigned hereby joins the Agreement as
a party thereto with respect to the Securities, entitled to the rights and
benefits of, and subject to the obligations of, a Stockholder with respect to
the Securities.

 

	 
	
  The
  undersigned’s address for notice is:

  	 

	 
	
   

  	
   

  	 

	 
	
   

  	
   

  	 

	 
	
   

  	 

	 
	
   

  	 

	 
	
  Dated
  this ____ day of ____________, 20___.

  	 

	 
	
   

  	 

	
  By:

  	
   

  	
   

  
					

 

 

Exhibit B

 

SPOUSAL CONSENT

 

The undersigned represents that the undersigned is the spouse of

 

 

	
   

  	
   

  
	
  Name of Employee

  	
   

  

 

 

and that the undersigned is familiar with the terms of the 2003 Omnibus
Stock Incentive Plan (the “Plan”), the Option Agreement and the Stockholders’
Agreement (together with the Option Agreement, the “Agreements”), each of which
the undersigned’s spouse is entering into on today’s date.  The undersigned hereby agrees that the
interest of the undersigned’s spouse in all property which is the subject of
such Plan or Agreements shall be irrevocably bound by the terms of such Plan or
Agreements and by any amendment, modification, waiver or termination signed by
the undersigned’s spouse.  The
undersigned further agrees that, the undersigned’s community property interest
in all property which is the subject of such Plan or Agreements shall be
irrevocably bound by the terms of such Plan or Agreements, and that such Plan
or Agreements shall be binding on the executors, administrators, heirs and
assigns of the undersigned.  The
undersigned further authorizes the undersigned’s spouse to amend, modify or
terminate such Plan or Agreements, or waive any rights thereunder, and that
each such amendment, modification, waiver or termination signed by the
undersigned’s spouse shall be binding on the community property interest of the
undersigned in all property which is the subject of such Plan or Agreements and
on the executors, administrators, heirs and assigns of the undersigned, each as
fully as if the undersigned had signed such amendment, modification, waiver or
termination.

 

 

	
  Dated: ________,20___

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of Spouse:Exhibit 10.7

 

INFRASOURCE SERVICES, INC.

 

2004 OMNIBUS STOCK INCENTIVE PLAN

 

Section 1. General Purpose of Plan;
Definitions.

 

The name of this plan is the InfraSource
Services, Inc. 2004 Omnibus Stock Incentive Plan (the “Plan”). The Plan
was adopted by the Board (defined below) on April 29, 2004, subject to the
approval of the stockholders of the Company (defined below). The purpose of the
Plan is to enable the Company to attract and retain highly qualified personnel
who will contribute to the Company’s success and to provide incentives to
Participants (defined below) that are linked directly to increases in
stockholder value and will therefore inure to the benefit of all stockholders
of the Company.

 

For purposes of the Plan, the following terms
shall be defined as set forth below:

 

(a)           “Administrator” means the Board, or if and
to the extent the Board does not administer the Plan, the Committee in
accordance with Section 2 below.

 

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

 

(c)           “Code” means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.

 

(d)           “Committee” means any committee the Board may appoint to
administer the Plan. To the extent necessary and desirable, the Committee shall
be composed entirely of individuals who meet the qualifications referred to in
Section 162(m) of the Code and Rule 16b-3 under the Exchange Act. If
at any time or to any extent the Board shall not administer the Plan, then the
functions of the Board specified in the Plan shall be exercised by the
Committee.

 

(e)           “Company” means InfraSource Services, Inc., a Delaware
corporation (or any successor corporation).

 

(f)            “Deferred Stock”
means the right to receive Stock at the end of a specified deferral period
granted pursuant to Section 7 below.

 

(g)           “Disability” means with respect to any
Participant, Disability as defined in the Management Agreement between the
Company (or its Subsidiary) and such Participant, or in the absence of any such
Management Agreement defining Disability, the inability of a Participant to
perform substantially his or her duties and responsibilities to the Company or
to any Parent or Subsidiary by reason of a physical or mental disability or
infirmity (i) for a continuous period of six months, or (ii) at such
earlier time as the Participant submits medical evidence satisfactory to the
Administrator that the Participant has a physical or mental disability or
infirmity that will likely prevent the

 

 

Participant from returning to the performance of the Participant’s work
duties for six months or longer. The date of such Disability shall be the last
day of such six-month period or the day on which the Participant submits such
satisfactory medical evidence, as the case may be.

 

(h)           “Eligible Recipient” means an officer,
director, employee, consultant or advisor of the Company or of any Parent or
Subsidiary.

 

(i)            “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time.

 

(j)            “Fair Market Value” means, as of any given
date, with respect to any awards granted hereunder, (A) the closing sale
price of a share of Stock on such date on the principal securities exchange on
which the Company’s equity securities are listed or traded, (B) the fair
market value of a share of Stock as determined in accordance with a method
prescribed in the agreement evidencing any award hereunder, or (C) the
fair market value of a share of Stock as otherwise determined by the
Administrator in the good faith exercise of its discretion.

 

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

 

(l)            “Non-Qualified Stock Option” means any
Stock Option that is not an Incentive Stock Option, including any Stock Option
that provides (as of the time such Stock Option is granted) that it will not be
treated as an Incentive Stock Option.

 

(m)          “Parent” means any corporation (other than
the Company) in an unbroken chain of corporations ending with the Company, if
each of the corporations in the chain (other than the Company) owns stock
possessing 50% or more of the combined voting power of all classes of stock in
one of the other corporations in the chain.

 

(n)           “Participant” means any Eligible Recipient selected by
the Administrator, pursuant to the Administrator’s authority in
Section 2 below, to receive grants of Stock Options, Stock Appreciation
Rights, awards of Restricted Stock, Deferred Stock, or Performance Shares or
any combination of the foregoing.

 

(o)           “Performance Shares” means shares of Stock
that are subject to restrictions based upon the attainment of specified
performance objectives granted pursuant to Section 7 below.

 

(p)           “Registration Statement” means the
registration statement on Form S-1 filed with the Securities and Exchange
Commission for the initial underwritten public offering of the Company’s Stock.

 

(q)           “Restricted Stock” means shares of Stock
subject to certain restrictions granted pursuant to Section 7 below.

 

2

 

(r)            “Stock” means the common stock, par value $0.001 per share,
of the Company.

 

(s)           “Stock Appreciation Right” means the right
pursuant to an award granted under Section 6 below to receive an amount
equal to the excess, if any, of (A) the Fair Market Value, as of the date
such Stock Appreciation Right or portion thereof is surrendered, of the shares
of Stock covered by such right or such portion thereof, over (B) the
aggregate exercise price of such right or such portion thereof.

 

(t)            “Stock Option”
means an option to purchase shares of Stock granted pursuant to Section 5
below.

 

(u)           “Subsidiary” means any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
Company, if each of the corporations (other than the last corporation) in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.

 

Section 2. Administration.

 

The Plan shall be administered in accordance
with the requirements of Section 162(m) of the Code (but only to the
extent necessary and desirable to maintain qualification of awards under the
Plan under Section 162(m) of the Code) and, to the extent applicable,
Rule 16b-3 under the Exchange Act (“Rule 16b-3”), by the Board or, at
the Board’s sole discretion, by the Committee, which shall be appointed by the
Board, and which shall serve at the pleasure of the Board.

 

Pursuant to the terms of the Plan, the
Administrator shall have the power and authority to grant to Eligible
Recipients pursuant to the terms of the Plan: (a) Stock Options,
(b) Stock Appreciation Rights, (c) awards of Restricted Stock,
Deferred Stock or Performance Shares or (d) any combination of the
foregoing. The Administrator shall have the authority:

 

(a)           to
select those Eligible Recipients who shall be Participants;

 

(b)           to
determine whether and to what extent Stock Options, Stock Appreciation Rights,
awards of Restricted Stock, Deferred Stock or Performance Shares or a
combination of any of the foregoing, are to be granted hereunder to
Participants;

 

(c)           to
determine the number of shares of Stock to be covered by each award granted
hereunder;

 

(d)           to
determine the terms and conditions, not inconsistent with the terms of the
Plan, of each award granted hereunder (including, but not limited to,
(x) the restrictions applicable to awards of Restricted Stock or Deferred
Stock and the conditions under which restrictions applicable to such awards of
Restricted Stock or Deferred Stock shall lapse, and (y) the performance
goals and periods applicable to awards of Performance Shares);

 

3

 

(e)           to
determine the terms and conditions, not inconsistent with the terms of the
Plan, which shall govern all written instruments evidencing Stock Options,
Stock Appreciation Rights, awards of Restricted Stock, Deferred Stock or
Performance Shares or any combination of the foregoing granted hereunder; and

 

(f)            to
reduce the option price of any Stock Option to the then current Fair Market
Value if the Fair Market Value of the Stock covered by such Stock Option has
declined since the date such Stock Option was granted.

 

The Administrator shall have the authority,
in its sole discretion, to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to time deem
advisable; to interpret the terms and provisions of the Plan and any award
issued under the Plan (and any agreements relating thereto); and to otherwise
supervise the administration of the Plan.

 

All decisions made by the Administrator
pursuant to the provisions of the Plan shall be final, conclusive and binding
on all persons, including the Company and the Participants.

 

Section 3. Stock Subject to Plan.

 

The total number of shares of Stock reserved
and available for issuance under the Plan shall be 800,000 shares; provided,
however, that commencing on the first day of the Company’s fiscal year
beginning in calendar year 2005, the number of shares reserved and available
for issuance shall be increased annually by an amount equal to the lesser of
(i) 1,000,000 shares or (ii) two percent (2%) of the number of
outstanding shares of Common Stock on the last day of the immediately preceding
fiscal year.  Such shares may consist, in
whole or in part, of authorized and unissued shares or treasury shares.  The aggregate number of shares of Stock as to
which Stock Options, Stock Appreciation Rights, and awards of Restricted Stock,
Deferred Stock and Performance Shares may be granted to any Participant during
any calendar year may not, subject to adjustment as provided in this
Section 3, exceed 800,000 shares of Stock reserved for the purposes of the
Plan.

 

To the extent that (i) a Stock Option
expires or is otherwise terminated without being exercised, or (ii) any
shares of Stock subject to any award of Restricted Stock, Deferred Stock or
Performance Shares granted hereunder are forfeited, such shares of Stock shall
again be available for issuance in connection with future awards granted under
the Plan. If any shares of Stock have been pledged as collateral for
indebtedness incurred by a Participant in connection with the exercise of a
Stock Option and such shares of Stock are returned to the Company in
satisfaction of such indebtedness, such shares of Stock shall again be
available for issuance in connection with future awards granted under the Plan.

 

In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend or other change in corporate
structure affecting the Stock, an equitable substitution or proportionate
adjustment shall be made in (i) the aggregate number of shares of Stock
reserved for issuance under the Plan and the maximum number of shares of Stock
that may be granted to any Participant in any calendar year, (ii) the
kind, number and option price of shares of Stock subject to outstanding Stock
Options and Stock Appreciation Rights granted under the Plan, and

 

4

 

(iii) the
kind, number and purchase price of shares of Stock subject to outstanding
awards of Restricted Stock, Deferred Stock and Performance Shares granted under
the Plan, in each case as may be determined by the Administrator, in its sole
discretion. Such other substitutions or adjustments shall be made as may be
determined by the Administrator, in its sole discretion. An adjusted option
price shall also be used to determine the amount payable by the Company upon
the exercise of any Stock Appreciation Right related to any Stock Option. In
connection with any event described in this paragraph, the Administrator may
provide, in its sole discretion, for the cancellation of any outstanding awards
and payment in cash or other property therefor.

 

Section 4. Eligibility.

 

Eligible Recipients shall be eligible to be
granted Stock Options, Stock Appreciation Rights, awards of Restricted Stock,
Deferred Stock or Performance Shares or any combination of the foregoing
hereunder. The Participants under the Plan shall be selected from time to time
by the Administrator, in its sole discretion, from among the Eligible
Recipients, and the Administrator shall determine, in its sole discretion, the
number of shares of Stock covered by each such award.

 

Section 5. Stock Options.

 

Stock Options may be granted alone or in
addition to other awards granted under the Plan. Any Stock Option granted under
the Plan shall be in such form as the Administrator may from time to time
approve, and the provisions of Stock Option awards need not be the same with
respect to each Participant. Participants who are granted Stock Options shall
enter into a subscription and/or award agreement with the Company, in such form
as the Administrator shall determine, which agreement shall set forth, among
other things, the option price of the Stock Option, the term of the Stock
Option and provisions regarding exercisability of the Stock Option granted
thereunder.

 

The Stock Options granted under the Plan may
be of two types: (i) Incentive Stock Options and (ii) Non-Qualified
Stock Options.

 

The Administrator shall have the authority to
grant to any officer or employee of the Company or of any Parent or Subsidiary
(including directors who are also officers of the Company) Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options (in each
case with or without Stock Appreciation Rights). Directors who are not also
officers of the Company or of any Parent or Subsidiary, consultants or advisors
to the Company or to any Parent or Subsidiary may only be granted Non-Qualified
Stock Options (with or without Stock Appreciation Rights). To the extent that
any Stock Option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option. More than one Stock Option
may be granted to the same Participant and be outstanding concurrently
hereunder.

 

Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Administrator shall deem desirable:

 

(a)           Option Price.    The option price per
share of Stock purchasable under a Stock Option shall be determined by the
Administrator in its sole discretion at the time of

 

5

 

grant but shall not, (i) in the case of Incentive Stock Options,
be less than 100% of the Fair Market Value of the Stock on such date,
(ii) in the case of Non-Qualified Stock Options intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, be less
than 100% of the Fair Market Value of the Stock on such date and (iii) in
any event, be less than the par value (if any) of the Stock. If a Participant
owns or is deemed to own (by reason of the attribution rules applicable under
Section 424(d) of the Code) more than 10% of the combined voting power of
all classes of stock of the Company or of any Parent or Subsidiary and an
Incentive Stock Option is granted to such Participant, the option price of such
Incentive Stock Option (to the extent required at the time of grant by the Code
shall be no less than 110% of the Fair Market Value of the Stock on the date
such Incentive Stock Option is granted.

 

(b)           Option Term.    The
term of each Stock Option shall be fixed by the Administrator, but no Stock
Option shall be exercisable more than ten years after the date such Stock
Option is granted; provided, however,
that if an employee owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company or of any Parent or Subsidiary and
an Incentive Stock Option is granted to such employee, the term of such
Incentive Stock Option (to the extent required by the Code at the time of
grant) shall be no more than five years from the date of grant.

 

(c)           Exercisability.    Stock
Options shall be exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Administrator at or after the time
of grant. The Administrator may provide at the time of grant, in its sole
discretion, that any Stock Option shall be exercisable only in installments,
and the Administrator may waive such installment exercise provisions at any
time, in whole or in part, based on such factors as the Administrator may
determine, in its sole discretion, including but not limited to in connection
with any “change in control” of the Company (as defined in the agreement
evidencing such Stock Option).

 

(d)           Method of Exercise.    Subject
to paragraph (c) of this Section 5, Stock Options may be exercised in
whole or in part at any time during the option period, by giving written notice
of exercise to the Company specifying the number of shares of Stock to be
purchased, accompanied by payment in full of the purchase price in cash or its
equivalent, as determined by the Administrator. As determined by the
Administrator, in its sole discretion, payment in whole or in part may also be
made (i) by means of any cashless exercise procedure approved by the
Administrator, (ii) in the form of unrestricted Stock already owned by the
Participant which, (x) in the case of unrestricted Stock acquired upon
exercise of an option, have been owned by the Participant for more than six
months on the date of surrender, and (y) has a Fair Market Value on the
date of surrender equal to the aggregate option price of the Stock as to which
such Stock Option shall be exercised and the minimum statutory withholding
taxes with respect thereto, (iii) any other form of consideration approved
by the Administrator and permitted by applicable law or (iv) any
combination of the foregoing. A Participant shall generally have the rights to
dividends and any other rights of a stockholder with respect to the Stock subject
to the Stock Option only after the Participant has given written notice of

 

6

 

exercise, has paid in full for such shares, and, if requested, has
given the representation described in paragraph (b) of Section 10
below.

 

Notwithstanding anything to the contrary
contained herein, a Stock Option may not be exercised for a fraction of a share
of Stock.

 

The Administrator may require the surrender
of all or a portion of any Stock Option granted under the Plan as a condition
precedent to the grant of a new Stock Option. Subject to the provisions of the
Plan, such new Stock Option shall be exercisable at the price, during such
period and on such other terms and conditions as are specified by the
Administrator at the time the new Stock Option is granted. Consistent with the
provisions of Section 162(m), to the extent applicable, upon their
surrender, Stock Options shall be canceled and the shares of Stock previously
subject to such canceled Stock Options shall again be available for future
grants of Stock Options and other awards hereunder.

 

(e)           Non-Transferability of Options.    Except
under the laws of descent and distribution or as otherwise permitted by the
Administrator, the Participant shall not be permitted to sell, transfer, pledge
or assign any Option, and all Options shall be exercisable, during the
Participant’s lifetime, only by the Participant; provided, however, that the
Participant shall be permitted to transfer one or more Non-Qualified Stock
Options to a trust, partnership, limited liability company or corporation (or
other entity approved by the Administrator in its sole discretion) controlled
by the Participant during the Participant’s lifetime for estate planning
purposes.

 

(f)            Termination of Employment or Service.    If
a Participant’s employment with or service as a director, consultant or advisor
to the Company or to any Parent or Subsidiary terminates by reason of his or
her death, Disability or for any other reason, the Stock Option may thereafter
be exercised to the extent provided in the agreement evidencing such Stock
Option, or as otherwise determined by the Administrator.

 

(g)           Annual Limit on
Incentive Stock Options.    To the extent that
the aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of shares of Stock with respect to which Incentive Stock
Options granted to a Participant under this Plan and all other option plans of the Company or of
any Parent or Subsidiary become exercisable for the first time by the
Participant during any calendar year exceeds $100,000 (as determined in
accordance with Section 422(d) of the Code), the portion of such Incentive
Stock Options in excess of $100,000 shall be treated as Non-Qualified Stock
Options.

 

Section 6. Stock Appreciation Rights.

 

Stock Appreciation Rights may be granted
either alone (“Free Standing Rights”) or in conjunction with all or part of any
Stock Option granted under the Plan (“Related Rights”). In the case of a
Non-Qualified Stock Option, Related Rights may be granted either at or after
the time of the grant of such Stock Option. In the case of an Incentive Stock
Option, Related Rights may be granted only at the time of the grant of the
Incentive Stock Option. The Administrator shall determine the Eligible
Recipients to whom, and the time or times at which, grants of Stock

 

7

 

Appreciation
Rights shall be made; the number of shares of Stock to be awarded, the exercise
price, and all other conditions of Stock Appreciation Rights. The provisions of
Stock Appreciation Rights need not be the same with respect to each
Participant.

 

Stock Appreciation Rights granted under the
Plan shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Administrator shall deem desirable:

 

(a)           Awards.    The
prospective recipient of a Stock Appreciation Right shall not have any rights
with respect to such award, unless and until such recipient has executed an
agreement evidencing the award (a “Stock Appreciation Right Agreement”) and
delivered a fully executed copy thereof to the Company, within a period of
sixty days (or such other period as the Administrator may specify) after the
award date. Participants who are granted Stock Appreciation Rights shall have
no rights as stockholders of the Company with respect to the grant or exercise
of such rights.

 

(b)           Exercisability.

 

(i)            Stock
Appreciation Rights that are Free Standing Rights (“Free Standing Stock
Appreciation Rights”) shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Administrator at or
after grant; provided, however,
that no Free Standing Stock Appreciation Right shall be exercisable during the
first six months of its term, except that this additional limitation shall not
apply in the event of a Participant’s death or Disability prior to the
expiration of such six-month period.

 

(ii)           Stock
Appreciation Rights that are Related Rights (“Related Stock Appreciation Rights”)
shall be exercisable only at such time or times and to the extent that the
Stock Options to which they relate shall be exercisable in accordance with the
provisions of Section 5 above and this Section 6 of the Plan; provided, however, that a Related Stock
Appreciation Right granted in connection with an Incentive Stock Option shall
be exercisable only if and when the Fair Market Value of the Stock subject to
the Incentive Stock Option exceeds the option price of such Stock Option; provided, further, that no Related Stock
Appreciation Right shall be exercisable during the first six months of its
term, except that this additional limitation shall not apply in the event of a
Participant’s death or Disability prior to the expiration of such six-month
period.

 

(c)           Payment Upon Exercise.

 

(i)            Upon
the exercise of a Free Standing Stock Appreciation Right, the Participant shall
be entitled to receive up to, but not more than, an amount in cash or that
number of shares of Stock (or any combination of cash and shares of Stock)
equal in value to the excess of the Fair Market Value of one share of Stock as
of the date of exercise over the price per share specified in the Free Standing
Stock Appreciation Right (which price shall be no less than 100% of the Fair
Market Value of the Stock on the date of grant) multiplied by the number of

 

8

 

shares of Stock in respect of which the Free Standing Stock Appreciation
Right is being exercised, with the Administrator having the right to determine
the form of payment.

 

(ii)           A
Related Right may be exercised by a Participant by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
Participant shall be entitled to receive up to, but not more than, an amount in
cash or that number of shares of Stock (or any combination of cash and shares
of Stock) equal in value to the excess of the Fair Market Value of one share of
Stock as of the date of exercise over the option price per share specified in
the related Stock Option multiplied by the number of shares of Stock in respect
of which the Related Stock Appreciation Right is being exercised, with the
Administrator having the right to determine the form of payment. Stock Options
which have been so surrendered, in whole or in part, shall no longer be
exercisable to the extent the Related Rights have been so exercised.

 

(d)           Non-Transferability.

 

(i)            Free
Standing Stock Appreciation Rights shall be transferable only when and to the
extent that a Stock Option would be transferable under Section 5 of the
Plan.

 

(ii)           Related
Stock Appreciation Rights shall be transferable only when and to the extent
that the underlying Stock Option would be transferable under Section 5 of
the Plan.

 

(e)           Termination of Employment or Service.

 

(i)            In
the event of the termination of employment or service of a Participant who has
been granted one or more Free Standing Stock Appreciation Rights, such rights
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Administrator at or after grant.

 

(ii)           In
the event of the termination of employment or service of a Participant who has
been granted one or more Related Stock Appreciation Rights, such rights shall
be exercisable at such time or times and subject to such terms and conditions
as set forth in the related Stock Options.

 

(f)            Term.

 

(i)            The
term of each Free Standing Stock Appreciation Right shall be fixed by the
Administrator, but no Free Standing Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.

 

(ii)           The
term of each Related Stock Appreciation Right shall be the term of the Stock
Option to which it relates, but no Related Stock Appreciation Right shall be
exercisable more than ten years after the date such right is granted.

 

9

 

Section 7. Restricted Stock, Deferred Stock and Performance
Shares.

 

Awards of Restricted Stock, Deferred Stock or
Performance Shares may be issued either alone or in addition to other awards
granted under the Plan. The Administrator shall determine the Eligible
Recipients to whom, and the time or times at which, awards of Restricted Stock,
Deferred Stock or Performance Shares shall be made; the number of shares to be
awarded; the price, if any, to be paid by the Participant for the acquisition
of Restricted Stock, Deferred Stock or Performance Shares; the Restricted
Period (as defined in paragraph (b) of this Section 7) applicable to
awards of Restricted Stock or Deferred Stock; the performance objectives
applicable to awards of Deferred Stock or Performance Shares; and all other
conditions of the awards of Restricted Stock, Deferred Stock and Performance
Shares. Subject to the requirements of Section 162(m) of the Code, as
applicable, the Administrator may also condition the grant of the award of
Restricted Stock, Deferred Stock or Performance Shares upon the exercise of Stock
Options, or upon such other criteria as the Administrator may determine, in its
sole discretion. The provisions of the awards of Restricted Stock, Deferred
Stock or Performance Shares need not be the same with respect to each
Participant.

 

(a)           Awards and Certificates.    The
prospective recipient of awards of Restricted Stock, Deferred Stock or
Performance Shares shall not have any rights with respect to any such award,
unless and until such recipient has executed an agreement evidencing the award
(a “Restricted Stock Award Agreement,” “Deferred Stock Award Agreement” or “Performance
Shares Award Agreement,” as appropriate) and delivered a fully executed copy
thereof to the Company, within a period of sixty days (or such other period as
the Administrator may specify) after the award date. Except as otherwise
provided below in this Section 7(b), (i) each Participant who is
granted an award of Restricted Stock or Performance Shares shall be issued a
stock certificate in respect of such shares of Restricted Stock or Performance
Shares; and (ii) such certificate shall be registered in the name of the
Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to any such award.

 

The Company may require that the stock
certificates evidencing Restricted Stock or Performance Shares granted
hereunder be held in the custody of the Company until the restrictions thereon
shall have lapsed, and that, as a condition of any award of Restricted Stock or
Performance Shares, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Stock covered by such award.

 

With respect to awards of Deferred Stock, at
the expiration of the Restricted Period, stock certificates in respect of such
shares of Deferred Stock shall be delivered to the Participant, or his legal
representative, in a number equal to the number of shares of Stock covered by
the Deferred Stock award.

 

(b)           Restrictions and Conditions.    The
awards of Restricted Stock, Deferred Stock and Performance
Shares granted pursuant to this Section 7 shall be subject to the
following restrictions and conditions:

 

(i)            Subject
to the provisions of the Plan and the Restricted Stock Award Agreement,
Deferred Stock Award Agreement or Performance Shares

 

10

 

Award Agreement, as appropriate, governing any such award, during such
period as may be set by the Administrator commencing on the date of grant (the “Restricted
Period”), the Participant shall not be permitted to sell, transfer, pledge or
assign shares of Restricted Stock, Deferred Stock or Performance Shares awarded
under the Plan; provided, however,
that the Administrator may, in its sole discretion, provide for the lapse of
such restrictions in installments and may accelerate or waive such restrictions
in whole or in part based on such factors and such circumstances as the
Administrator may determine, in its sole discretion, including, but not limited
to, the attainment of certain performance related goals, the Participant’s
termination of employment or service as a director, consultant or advisor to
the Company or any Parent or Subsidiary, the Participant’s death or Disability
or the occurrence of a “change in control” as defined in the Restricted Stock
Award Agreement, Deferred Stock Award Agreement or Performance Shares Award
Agreement, as appropriate, evidencing such award.

 

(ii)           Except
as provided in paragraph (b)(i) of this Section 7, the
Participant shall generally have the rights of a stockholder of the Company
with respect to Restricted Stock or Performance Shares during the Restricted
Period. The Participant shall generally not have the rights of a stockholder
with respect to Stock subject to awards of Deferred Stock during the Restricted
Period; provided, however, that
dividends declared during the Restricted Period with respect to the number of
shares of Stock covered by Deferred Stock shall be paid to the Participant.
Certificates for shares of unrestricted Stock shall be delivered to the
Participant promptly after, and only after, the Restricted Period shall expire
without forfeiture in respect of such awards of Restricted Stock, Deferred
Stock or Performance Shares except as the Administrator, in its sole
discretion, shall otherwise determine.

 

(iii)          The
rights of Participants granted awards of Restricted Stock, Deferred Stock or
Performance Shares upon termination of employment or service as a director,
consultant or advisor to the Company or to any Parent or Subsidiary terminates
for any reason during the Restricted Period shall be set forth in the
Restricted Stock Award Agreement, Deferred Stock Award Agreement or Performance
Shares Award Agreement, as appropriate, governing such awards.

 

Section 8. Amendment and Termination.

 

The Board may amend, alter or discontinue the
Plan, but no amendment, alteration, or discontinuation shall be made that would
impair the rights of a Participant under any award theretofore granted without
such Participant’s consent, or that, without the approval of the stockholders
(as described below), would:

 

(a)           except
as provided in Section 3 of the Plan, increase the total number of shares
of Stock reserved for issuance under the Plan;

 

11

 

(b)           change
the class of officers, directors, employees, consultants and advisors eligible
to participate in the Plan; or

 

(c)           extend
the maximum option period under paragraph (b) of Section 5 of the
Plan.

 

Notwithstanding the foregoing, stockholder
approval under this Section 8 shall only be required at such time and
under such circumstances as stockholder approval would be required under
Sections 162(m) and 422 of the Code, stock exchange rules or other applicable
law or regulation with respect to any material amendment to an employee benefit
plan of the Company.

 

The Administrator may amend the terms of any
award theretofore granted, prospectively or retroactively, but, subject to
Section 3 of Plan, no such amendment shall impair the rights of any
Participant without his or her consent.

 

Section 9. Unfunded Status of Plan.

 

The Plan is intended to constitute an “unfunded”
plan for incentive compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.

 

Section 10. General Provisions.

 

(a)           Shares
of Stock shall not be issued pursuant to the exercise of any award granted
hereunder unless the exercise of such award and the issuance and delivery of
such shares of Stock pursuant thereto shall comply with all relevant provisions
of law, including, without limitation, the Securities Act of 1933, as amended,
the Exchange Act and the requirements of any stock exchange upon which the
Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

 

(b)           The
Administrator may require each person acquiring shares of Stock hereunder to
represent to and agree with the Company in writing that such person is
acquiring the shares of Stock without a view to distribution thereof. The
certificates for such shares of Stock may include any legend which the
Administrator deems appropriate to reflect any restrictions on transfer.

 

All certificates for shares of Stock
delivered under the Plan shall be subject to such stop-transfer orders and
other restrictions as the Administrator may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Stock is then listed, and any applicable
Federal or state securities law, and the Administrator may cause a legend or
legends to be placed on any such certificates to make appropriate reference to
such restrictions.

 

(c)           Nothing
contained in the Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval, if such approval is
required; and such arrangements may be either generally applicable or

 

12

 

applicable only in specific cases. The adoption of the Plan shall not
confer upon any Eligible Recipient any right to continued employment or service
with the Company or any Parent or Subsidiary, as the case may be, nor shall it
interfere in any way with the right of the Company or any Parent or Subsidiary
to terminate the employment or service of any of its Eligible Recipients at any
time.

 

(d)           Each
Participant shall, no later than the date as of which the value of an award first
becomes includible in the gross income of the Participant for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such award. The obligations
of the Company under the Plan shall be conditional on the making of such
payments or arrangements, and the Company shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant.

 

(e)           No
member of the Board or the Administrator, nor any officer or employee of the
Company acting on behalf of the Board or the Administrator, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board or the
Administrator and each and any officer or employee of the Company acting on
their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Company in respect of any such action, determination or
interpretation.

 

Section 11. Stockholder Approval; Effective Date of Plan.

 

(a)           The
grant of any award hereunder shall be contingent upon stockholder approval of
the Plan being obtained within 12 months before or after the date the
Board adopts the Plan.

 

(b)           Subject
to the approval of the Plan by the stockholders of the Company within twelve
(12) months before or after the date the Plan is adopted by the Board, the
Plan shall be effective as of the date and time on which the Securities and
Exchange Commission declares the Company’s Registration Statement effective
(the “Effective Date”).

 

Section 12. Term of Plan.

 

No Stock Option, Stock Appreciation Right, or
awards of Restricted Stock, Deferred Stock or Performance Shares shall be
granted pursuant to the Plan on or after the tenth anniversary of the Effective
Date, but awards theretofore granted may extend beyond that date.

 

13

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