Document:

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Exhibit 10.5

CAPITOL BANCORP LIMITED

2007 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

Grant Number:     «RSU_Number»

     Capitol Bancorp Limited (the “Company”) hereby grants you, «First» «Middle» «Last» (the
“Participant”), an award of restricted stock units (“RSUs”) under the Capitol Bancorp 2007 Equity
Incentive Plan (the “Plan”). The date of this Agreement is                     , 200___. Subject to
the provisions of Appendix A (attached) and of the Plan, the principal features of this award are
as follows:

Number of RSUs: «RSU_Shares»

Vesting of RSUs: The RSUs will vest according to the following schedule:

[Insert vesting schedule.]

     Unless otherwise defined herein or in Appendix A, capitalized terms herein or in Appendix A
will have the defined meanings ascribed to them in the Plan.

     Your signature below indicates your agreement and understanding that this Stock Award is
subject to all of the terms and conditions contained in Appendix A and the Plan. For example,
important additional information on vesting and forfeiture of the RSUs is contained in Sections 3
and 4 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS
AND CONDITIONS OF THIS AGREEMENT.

	 	 	 
	 

	 	 
	Capitol Bancorp Limited

	 	Date
	 
	 	 
	 

	 	 
	Participant Name

	 	Date

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APPENDIX A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

Grant #     «RSU_Number»

     1. Grant. The Company hereby grants to the Participant under the Plan an
award of the number of RSUs set forth on the first page, subject to all of the terms and conditions
in this Agreement and the Plan.

     2. Company’s Obligation to Pay. Each RSU represents the right to receive a
share of Common Stock (“Share”) on the date it becomes vested. Unless and until the RSUs will have
vested in the manner set forth in Sections 3 and 4, the Participant will have no right to payment
of any such RSUs. Prior to actual payment of any vested RSUs, such RSUs will represent an
unsecured obligation of the Company, payable (if at all) only from the general assets of the
Company.

     3. Vesting Schedule. Subject to Section 4, the RSUs awarded by this
Agreement will vest in the Participant according to the vesting schedule set forth on the attached
Restricted Stock Unit Agreement, subject to the Participant continuing to be a Service Provider
through each such date.

     4. Forfeiture upon Termination of Status as a Service Provider.
Notwithstanding any contrary provision of this Agreement, if the Participant ceases to be a Service
Provider for any or no reason, the then unvested RSUs awarded by this Agreement will thereupon be
forfeited at no cost to the Company and the Participant will have no further rights thereunder.

     5. Payment after Vesting. Any RSUs that vest in accordance with Section 3
will be paid to the Participant (or in the event of the Participant’s death, pursuant to Section 6
hereof) in whole Shares, provided that to the extent determined appropriate by the Company, any
federal, state and local withholding taxes with respect to such RSUs will be paid by reducing the
number of Shares actually paid to the Participant.

     6. Payments after Death. Any distribution or delivery to be made to the
Participant under this Agreement will, if the Participant is then deceased, be made to the
Participant’s designated beneficiary, or if no beneficiary survives the Participant, administrator
or executor of the Participant’s estate. Any such transferee must furnish the Company with (a)
written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to
establish the validity of the transfer and compliance with any laws or regulations pertaining to
said transfer.

     7. Withholding of Taxes. Notwithstanding any contrary provision of this
Agreement, no certificate representing the Shares will be issued to the Participant, unless and
until satisfactory arrangements (as determined by the Administrator) will have been

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made by the Participant with respect to the payment of income, employment and other taxes
which the Company determines must be withheld with respect to such Shares so issuable. The
Administrator, in its sole discretion and pursuant to such procedures as it may specify from time
to time, may permit the Participant to satisfy such tax withholding obligation, in whole or in part
by one or more of the following: (a) paying cash, (b) electing to have the Company withhold
otherwise deliverable Shares having a Fair Market Value equal to the minimum amount required to be
withheld, (c) delivering to the Company already vested and owned Shares having a Fair Market Value
equal to the amount required to be withheld, or (d) selling a sufficient number of such Shares
otherwise deliverable to Participant through such means as the Company may determine in its sole
discretion (whether through a broker or otherwise) equal to the amount required to be withheld. If
the Participant fails to make satisfactory arrangements for the payment of any required tax
withholding obligations hereunder at the time any applicable Restricted Stock Units otherwise are
scheduled to vest pursuant to Section 3, the Participant will permanently forfeit such Restricted
Stock Units and the Restricted Stock Units will be returned to the Company at no cost to the
Company and the Participant will have no further rights to acquire any Shares with respect thereto.

     8. Rights as Shareholder. Neither the Participant nor any person claiming
under or through the Participant will have any of the rights or privileges of a shareholder of the
Company in respect of any Shares deliverable hereunder unless and until certificates representing
such Shares will have been issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to the Participant.

     9. No Effect on Service. The Participant’s service with the Company and its
Affiliates is on an at-will basis only. Accordingly, the terms of the Participant’s service with
the Company and its Affiliates will be determined from time to time by the Company or the Affiliate
employing or retaining the Participant (as the case may be), and the Company or the Affiliate will
have the right, which is hereby expressly reserved, to terminate or change the terms of the service
of the Participant at any time for any reason whatsoever, with or without Cause.

     10. Address for Notices. Any notice to be given to the Company under the
terms of this Agreement will be addressed to the Company at One Business & Trade Center, 200
Washington Square North, Lansing, MI 48933, Attn: Equity Incentive Plan Administrator, or at such
other address as the Company may hereafter designate in writing.

     11. Grant is Not Transferable. Except to the limited extent provided in
Section 6, this grant and the rights and privileges conferred hereby will not be transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will
not be subject to sale under execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege
conferred hereby, or upon any attempted sale under any execution,

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attachment or similar process, this grant and the rights and privileges conferred hereby
immediately will become null and void.

     12. Binding Agreement. Subject to the limitation on the transferability of
this grant contained herein, this Agreement will be binding upon and inure to the benefit of the
heirs, legatees, legal representatives, successors and assigns of the parties hereto.

     13. Additional Conditions to Issuance of Stock. If at any time the Company
will determine, in its discretion, that the listing, registration or qualification of the Shares
upon any securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory authority is necessary or desirable as a condition to the issuance of
Shares to the Participant (or his estate), such issuance will not occur unless and until such
listing, registration, qualification, consent or approval will have been effected or obtained free
of any conditions not acceptable to the Company. Where the Company determines that the delivery of
the payment of any Shares will violate federal securities laws or other applicable laws, the
Company will defer delivery until the earliest date at which the Company reasonably anticipates
that the delivery of Shares will no longer cause such violation. The Company will make all
reasonable efforts to meet the requirements of any such state or federal law or securities exchange
and to obtain any such consent or approval of any such governmental authority.

     14. Plan Governs. This Agreement is subject to all terms and provisions of
the Plan. In the event of a conflict between one or more provisions of this Agreement and one or
more provisions of the Plan, the provisions of the Plan will govern.

     15. Administrator Authority. The Administrator will have the power to
interpret the Plan and this Agreement and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent therewith and to interpret or revoke
any such rules (including, but not limited to, the determination of whether or not any RSUs have
vested). All actions taken and all interpretations and determinations made by the Administrator in
good faith will be final and binding upon Participant, the Company and all other interested
persons. No member of the Administrator will be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this Agreement.

     16. Captions. Captions provided herein are for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.

     17. Agreement Severable. In the event that any provision in this Agreement
will be held invalid or unenforceable, such provision will be severable from, and such invalidity
or unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

     18. Electronic Delivery. The Company may, in its sole discretion, decide to
deliver any documents related to RSUs awarded under the Plan or future RSUs that may be awarded
under the Plan by electronic means or request Participant’s consent to

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participate in the Plan by electronic means. Participant hereby consents to receive such
documents by electronic delivery and agrees to participate in the Plan through an online or
electronic system established and maintained by the Company or a third party designated by the
Company.

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Exhibit 10.1

ANNEX A

CAPITOL BANCORP LIMITED 2007 EQUITY INCENTIVE PLAN

     1. PURPOSES OF THE PLAN. The purposes of this Plan are to:

	 	•	 	attract and retain the best available personnel for positions of
substantial responsibility,
	 
	 	•	 	provide incentives to individuals who perform services to the Company, and
	 
	 	•	 	promote the success of the Company’s business.

     The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options,
Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance
Shares and other stock or cash awards as the Administrator may determine.

     2. DEFINITIONS. As used herein, the following definitions will apply:

          (a) “Administrator” means the Board or any of its Committees as will be
administering the Plan, in accordance with Section 4 of the Plan.

          (b) “Affiliate” means any corporation or any other entity (including, but not
limited to, partnerships and joint ventures) controlling, controlled by, or under common control
with the Company.

          (c) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

          (d) “Award” means, individually or collectively, a grant under the Plan of
Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units,
Performance Shares and other stock or cash awards as the Administrator may determine.

          (e) “Award Agreement” means the written or electronic agreement setting forth
the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.

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

          (g) “Cause” means:

               (i) An act of embezzlement, fraud, dishonesty, or breach of fiduciary duty to
the Company; or

               (ii) A deliberate disregard of the rules of the Company which results in loss,
damage or injury to the Company, or

               (iii) Any unauthorized disclosure of any of the secrets or confidential
information of the Company, or

               (iv) Inducing any client or customer of the Company to break any contract with
the Company or inducing any principal for whom the Company acts as agent to terminate such agency
relations; or

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               (v) Engaging in any conduct which constitutes unfair competition with the
Company; or

               (vi) Any act which results in the Participant being removed from any office of
the Company by any bank regulatory agency.

          (h) “Change in Control” means the consummation of any of the following
transactions:

               (i) A merger or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in beneficial owners of the total voting power in
the election of directors represented by the voting securities (“Voting Securities”) of the Company
(as the case may be) outstanding immediately prior thereto continuing to beneficially own
securities representing (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the total Voting Securities of
the Company, or of such surviving entity, outstanding immediately after such merger or
consolidation;

               (ii) The filing of a plan of liquidation or dissolution or the closing of the
sale, lease, exchange or other transfer or disposition by the Company of all or substantially all
of the Company’s assets;

               (iii) Any person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than (A) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, or (B) a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their beneficial ownership of stock in the
Company, is or becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act), directly or indirectly, of the securities of the Company representing fifty percent (50%) or
more of the Voting Securities; or

               (iv) Any person (as such term is used in Sections 13(d) or 14(d) of the Exchange
Act), other than (A) a trustee or other fiduciary holding securities under an employee benefit plan
of the Company, or (B) a corporation owned directly or indirectly by the shareholders of the
Company in substantially the same proportions as their ownership of stock in the Company, is or
becomes the beneficial owner (within the meaning or Rule 13d-3 under the Exchange Act), directly or
indirectly, of the securities of the Company representing twenty-five percent (25%) or more of the
Voting Securities of such corporation, and within twelve (12) months of the occurrence of such
event, a change in the composition of the Board occurs as a result of which sixty percent (60%) or
fewer of the Directors are Incumbent Directors. For purposes of this definition, Incumbent
Directors will mean Directors who either (A) are Directors as of the date hereof, (B) are elected,
or nominated for election, to the Board with the affirmative votes of at least a majority of the
Directors who are Incumbent Directors described in (A) above at the time of such election or
nomination, or (C) are elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of the Directors who are Incumbent Directors described in (A) or (B) above
at the time of such election or nomination. Notwithstanding the foregoing, “Incumbent Directors”
will not include an individual whose election or nomination to the Board occurs in order to provide
representation for a person or group of related persons who have initiated or encouraged an actual
or threatened proxy contest relating to the election of Directors.

          The Administrator may, in its sole discretion and without Participant consent, amend the
definition of “Change in Control” to conform to the definition of “Change in Control” under Section
409A of the Code.

          (i) “Code” means the Internal Revenue Code of 1986, as amended. Any reference
to a section of the Code herein will be a reference to any successor or amended section of the
Code.

          (j) “Committee” means a committee of Directors or of other individuals
satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

          (k) “Common Stock” means the common stock of the Company.

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          (l) “Company” means Capitol Bancorp Limited, a Michigan corporation, or any
successor thereto.

          (m) “Consultant” means any person, including an advisor, engaged by the Company
or its Affiliates to render services to such entity.

          (n) “Determination Date” means the latest possible date that will not
jeopardize the qualification of an Award granted under the Plan as “performance-based compensation”
under Section 162(m) of the Code.

          (o) “Director” means a member of the Board.

          (p) “Disability” means total and permanent disability as defined in Section
22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the
Administrator in its discretion may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by the Administrator from time to
time. The Administrator may, in its sole discretion and without Participant consent, amend the
definition of “Disability” to conform to the definition of “Disability” under Section 409A of the
Code.

          (q) “Employee” means any person, including Officers and Directors, employed by
the Company or its Affiliates. Neither service as a Director nor payment of a director’s fee by
the Company will be sufficient to constitute “employment” by the Company.

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

          (s) “Fair Market Value” means, as of any date, the value of Common Stock as the
Administrator may determine in good faith by reference to the price of such stock on any
established stock exchange or a national market system on the day of determination if the Common
Stock is so listed on any established stock exchange or a national market system. If the Common
Stock is not listed on any established stock exchange or a national market system, the value of the
Common Stock will be determined by the Administrator in good faith.

          (t) “Fiscal Year” means the fiscal year of the Company.

          (u) “Incentive Stock Option” means an Option that by its terms qualifies and is
otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

          (v) “Inside Director” means a Director who is an Employee.

          (w) “Nonstatutory Stock Option” means an Option that by its terms does not
qualify or is not intended to qualify as an Incentive Stock Option.

          (x) “Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

          (y) “Option” means a stock option granted pursuant to the Plan.

          (z) “Outside Director” means a Director who is not an Employee.

          (aa) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

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          (bb) “Participant” means the holder of an outstanding Award.

          (cc) “Performance Goals” will have the meaning set forth in Section 11 of the
Plan.

          (dd) “Performance Period” means any Fiscal Year of the Company or such other
period as determined by the Administrator in its sole discretion.

          (ee) “Performance Share” means an Award denominated in Shares which may be
earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the
Administrator may determine pursuant to Section 10.

          (ff) “Performance Unit” means an Award which may be earned in whole or in part
upon attainment of Performance Goals or other vesting criteria as the Administrator may determine
and which may be settled for cash, Shares or other securities or a combination of the foregoing
pursuant to Section 10.

          (gg) “Period of Restriction” means the period during which the transfer of Shares
of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a
substantial risk of forfeiture. Such restrictions may be based on the passage of time, the
achievement of target levels of performance, or the occurrence of other events as determined by the
Administrator.

          (hh) “Plan” means this Capitol Bancorp Limited 2007 Equity Incentive Plan.

          (ii) “Restricted Stock” means Shares issued pursuant to an Award of Restricted
Stock under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.

          (jj) “Restricted Stock Unit” means a bookkeeping entry representing an amount
equal to the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock
Unit represents an unfunded and unsecured obligation of the Company.

          (kk) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule
16b-3, as in effect when discretion is being exercised with respect to the Plan.

          (ll) “Section 16(b)” means Section 16(b) of the Exchange Act.

          (mm) “Section 409A” means Section 409A of the Code and the Department of Treasury
regulations and other interpretive guidance promulgated thereunder.

          (nn) “Service Provider” means an Employee, Director or Consultant.

          (oo) “Share” means a share of the Common Stock, as adjusted in accordance with
Section 14 of the Plan.

          (pp) “Stock Appreciation Right” means an Award, granted alone or in connection
with an Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.

          (qq) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.

          (rr) “Successor Corporation” has the meaning given to such term in Section 14(c)
of the Plan.

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     3. STOCK SUBJECT TO THE PLAN.

          (a) Stock Subject to the Plan. Subject to the provisions of Section 14 of the
Plan, the maximum aggregate number of Shares that may be awarded and sold under the Plan is three
hundred fifty thousand (350,000).

          (b) Automatic Share Reserve Increase. The number of Shares available for
issuance under the Plan shall be increased on the first day of each Fiscal Year beginning with the
2008 Fiscal Year, in an amount equal to two percent (2%) of the outstanding Shares on the last day
of the immediately preceding Fiscal Year.

          (c) Full Value Awards. Any Shares subject to Awards granted with an exercise
price less than the Fair Market Value on the date of grant of such Awards will be counted against
the numerical limits of this Section 3 as two (2) Shares for every one (1) Share subject thereto.
Further, if Shares acquired pursuant to any such Award are forfeited or repurchased by the Company
and would otherwise return to the Plan pursuant to Section 3(c), two (2) times the number of Shares
so forfeited or repurchased will return to the Plan and will again become available for issuance.

          (d) Lapsed Awards. If an Award expires or becomes unexercisable without having
been exercised in full, or, with respect to Restricted Stock, Restricted Stock Units, Performance
Shares or Performance Units, is forfeited to or repurchased by the Company, the unpurchased Shares
(or for Awards other than Options and Stock Appreciation Rights, the forfeited or repurchased
Shares) which were subject thereto will become available for future grant or sale under the Plan
(unless the Plan has terminated). With respect to Stock Appreciation Rights, all of the Shares
covered by the Award (that is, Shares actually issued pursuant to a Stock Appreciation Right, as
well as the Shares that represent payment of the exercise price) will cease to be available under
the Plan. However, Shares that have actually been issued under the Plan under any Award will not
be returned to the Plan and will not become available for future distribution under the Plan;
provided, however, that if unvested Shares of Restricted Stock, Restricted Stock Units, Performance
Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such
Shares will become available for future grant under the Plan. Shares used to pay the tax and
exercise price of an Award will not become available for future grant or sale under the Plan. To
the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will
not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding
the foregoing and, subject to adjustment provided in Section 14, the maximum number of Shares that
may be
issued upon the exercise of Incentive Stock Options will equal the aggregate Share number
stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code, any Shares
that become available for issuance under the Plan under this Section 3(c).

     4. ADMINISTRATION OF THE PLAN.

          (a) Procedure.

               (i) Multiple Administrative Bodies. Different Committees with respect to
different groups of Service Providers may administer the Plan.

               (ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as
exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.

               (iv) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy
Applicable Laws.

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          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated by the Board to such Committee,
the Administrator will have the authority, in its discretion:

               (i) to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Awards may be granted hereunder;

               (iii) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder;

               (iv) to construe and interpret the terms of the Plan and Awards granted
pursuant to the Plan;

               (v) to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans established for the purpose of
satisfying applicable foreign laws;

               (vi) to modify or amend each Award (subject to Section 19(c) of the Plan).
Notwithstanding the previous sentence, the Administrator may not: (A) modify or amend an Option or
Stock Appreciation Right to reduce the exercise price of such Option or Stock Appreciation Right
after it has been granted (except for adjustments made pursuant to Section 14), (B) cancel any
outstanding Option or Stock Appreciation Right and immediately replace it with a new Option or
Stock Appreciation Right with a lower exercise price, or (C) accelerate the vesting provisions
contained in Sections 8(e), 9(b), or 10(c) other than upon or in connection with a Change in
Control or upon or in connection with a
Participant’s termination of service due to death, Disability or retirement, as permitted
under Section 409A of the Code;

               (vii) to authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the Administrator;

               (viii) to allow a Participant to defer the receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant under an Award pursuant to such
procedures as the Administrator may determine and as permitted under Section 409A of the Code; and

               (ix) to make all other determinations deemed necessary or advisable for
administering the Plan.

          (c) Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations will be final and binding on all Participants and any other
holders of Awards.

     5. ELIGIBILITY. Nonstatutory Stock Options, Restricted Stock, Restricted Stock
Units, Stock Appreciation Rights, Performance Units, Performance Shares and such other cash or
stock awards as the Administrator determines may be granted to Service Providers. Incentive Stock
Options may be granted only to employees of the Company or any Parent or Subsidiary of the Company.

     6. STOCK OPTIONS.

          (a) Limitations.

               (i) Each Option will be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation,
to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first

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time by the Participant during any calendar year (under all plans of the Company and any
Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated
as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be
taken into account in the order in which they were granted. The Fair Market Value of the Shares
will be determined as of the time the Option with respect to such Shares is granted.

               (ii) The following limitations will apply to grants of Options:

                    (1) No Service Provider will be granted, in any Fiscal Year, Options to
purchase more than two hundred fifty thousand (250,000) Shares.

                    (2) In connection with his or her initial service, a Service Provider may be
granted Options to purchase up to an additional two hundred fifty thousand (250,000) Shares, which
will not count against the limit set forth in Section 6(a)(2)(ii)(1) above.

                    (3) The foregoing limitations will be adjusted proportionately in connection
with any change in the Company’s capitalization as described in Section 14.

                    (4) If an Option is cancelled in the same Fiscal Year in which it was granted
(other than in connection with a transaction described in Section 14), the cancelled Option, as
applicable, will be counted against the limits set forth in subsections (1) and (2) above.

                    (5) The exercise price for an Option may not be reduced. This will include,
without limitation, a repricing of the Option as well as an Option exchange program whereby the
Participant agrees to cancel an existing Option in exchange for an Option, Stock Appreciation Right
or other Award.

          (b) Term of Option. The Administrator will determine the term of each Option
in its sole discretion. Any Option granted under the Plan will not be exercisable after the
expiration of seven (7) years from the date of grant or such shorter term as may be provided in the
Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who,
at the time the Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or
such shorter term as may be provided in the Award Agreement.

          (c) Option Exercise Price and Consideration.

               (i) Exercise Price. The per share exercise price for the Shares to be issued
pursuant to exercise of an Option will be determined by the Administrator, but will be no less than
one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition,
in the case of an Incentive Stock Option granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will
be no less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant. Notwithstanding the foregoing provisions of this Section 6(c), Options may be granted with
a per Share exercise price of less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant pursuant to a transaction described in, and in a manner consistent with,
Section 424(a) of the Code.

               (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.

               (iii) Form of Consideration. The Administrator will determine the acceptable
form of consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock

A-7

 

Option, the Administrator will determine the acceptable form of consideration at the time of
grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory note, (4)
other Shares, provided Shares acquired directly or indirectly from the Company, (A) have been owned
by the Participant and not subject to substantial risk of forfeiture for more than six months on
the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said Option will be exercised; (5) consideration
received by the Company under a broker-assisted (or other) cashless exercise program implemented by
the Company in connection with the Plan; (6) any combination of the foregoing methods of payment;
or (7) such other consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws.

          (d) Exercise of Option.

               (i) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder will be exercisable according to the terms of the Plan and at such times and under such
conditions as determined by the Administrator and set forth in the Award Agreement. An Option may
not be exercised for a fraction of a Share. An Option will be deemed exercised when the Company
receives: (i) notice of exercise (in such form as the Administrator specifies from time to time)
from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect
to which the Option is exercised (together with applicable withholding taxes). No adjustment will
be made for a dividend or other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 14 of the Plan.

               (ii) Termination of Relationship as a Service Provider. If a Participant
ceases to be a Service Provider, other than upon the Participant’s termination for Cause or as the
result of the Participant’s death or Disability, the Participant may exercise his or her Option
within such period of time as is specified in the Award Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of the term of such
Option as set forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for three (3) months following the Participant’s
termination. Unless otherwise provided by the Administrator, if on the date of termination the
Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan. If after termination the Participant does not
exercise his or her Option within the time specified by the Administrator, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.

               (iii) Disability of Participant. If a Participant ceases to be a Service
Provider as a result of the Participant’s Disability, the Participant may exercise his or her
Option within such period of time as is specified in the Award Agreement to the extent the Option
is vested on the date of termination (but in no event later than the expiration of the term of such
Option as set forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s
termination. Unless otherwise provided by the Administrator, if on the date of termination the
Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan. If after termination the Participant does not
exercise his or her Option within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.

               (iv) Death of Participant. If a Participant dies while a Service Provider, the
Option may be exercised following the Participant’s death within such period of time as is
specified in the Award Agreement to the extent that the Option is vested on the date of death (but
in no event may the option be exercised later than the expiration of the term of such Option as set
forth in the Award Agreement), by the Participant’s designated beneficiary, provided such
beneficiary has been designated prior to Participant’s death in a form acceptable to the
Administrator. If no such beneficiary has been designated by the Participant, then such Option may
be exercised by the personal representative of the Participant’s estate or by the person(s) to whom
the Option is transferred pursuant to the Participant’s will or in accordance with the laws of
descent and distribution. In the absence of a specified time in the Award Agreement, the Option
will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise
provided by the Administrator, if at the time of death Participant is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option will immediately

A-8

 

revert to the Plan. If the Option is not so exercised within the time specified herein, the
Option will terminate, and the Shares covered by such Option will revert to the Plan.

               (v) Termination for Cause. If a Participant’s status as a Service Provider is
terminated for Cause, then the Option will immediately terminate, and the Shares covered by such
Option will revert to and again become available for issuance under the Plan.

               (vi) Other Termination. A Participant’s Award Agreement may also provide that
if the exercise of the Option following the termination of Participant’s status as a Service
Provider (other than upon the Participant’s death or Disability) would result in liability under
Section 16(b), then the Option will terminate on the earlier of (A) the expiration of the term of
the Option set forth in the Award Agreement, or (B) the tenth (10th) day after the last
date on which such exercise would result in such liability under Section 16(b). Finally, a
Participant’s Award Agreement may also provide that if the exercise of the Option following the
termination of the Participant’s status as a Service Provider (other than upon the Participant’s
death or disability) would be prohibited at any time solely because the issuance of Shares would
violate the registration requirements under the Securities Act, then the Option will terminate on
the earlier of (A) the expiration of the term of the Option, or (B) the expiration of a period of
three (3) months after the termination of the Participant’s status as a Service Provider during
which the exercise of the Option would not be in violation of such registration requirements.

     7. STOCK APPRECIATION RIGHTS.

          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of
the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time
to time as will be determined by the Administrator, in its sole discretion.

          (b) Number of Shares. The Administrator will have complete discretion to
determine the number of Stock Appreciation Rights granted to any Participant, provided that during
any Fiscal Year, no Participant will be granted Stock Appreciation Rights covering more than two
hundred fifty thousand (250,000) Shares. Notwithstanding the foregoing limitation, in connection
with a Participant’s initial service as an Employee, an Employee may be granted Stock Appreciation
Rights covering up to an additional two hundred fifty thousand (250,000) Shares.

          (c) Exercise Price and Other Terms. The Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and conditions of
Stock Appreciation Rights granted under the Plan, provided, however, that the exercise price will
be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date of
grant.

          (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant
will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock
Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.

          (e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right
granted under the Plan will expire upon the date determined by the Administrator, in its sole
discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of
Section 6(d) also will apply to Stock Appreciation Rights.

          (f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock
Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount
determined by multiplying:

               (i) The difference between the Fair Market Value of a Share on the date of
exercise over the exercise price; times

A-9

 

               (ii) The number of Shares with respect to which the Stock Appreciation Right is
exercised.

          At the discretion of the Administrator, the payment upon Stock Appreciation Right
exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

     8. RESTRICTED STOCK.

          (a) Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to
Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

          (b) Restricted Stock Agreement. Each Award of Restricted Stock will be
evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares
granted, and such other terms and conditions as the Administrator, in its sole discretion, will
determine. Notwithstanding the foregoing sentence, during any Fiscal Year no Participant will
receive more than an aggregate of one hundred twenty-five thousand (125,000) Shares of Restricted
Stock; provided, however, that in connection with a Participant’s initial service as an Employee,
an Employee may be granted an aggregate of up to an additional two hundred fifty thousand (250,000)
Shares of Restricted Stock. Unless the Administrator determines otherwise, Shares of Restricted
Stock will be held by the Company as escrow agent until the restrictions on such Shares have
lapsed.

          (c) Transferability. Except as provided in this Section 8, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable Period of Restriction.

          (d) Other Restrictions. The Administrator, in its sole discretion, may impose
such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

          (e) Removal of Restrictions. Except as otherwise provided in this Section 8,
Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be
released from escrow as soon as practicable after the last day of the Period of Restriction. The
restrictions will lapse at a rate determined by the Administrator; provided, however, that, except
as otherwise provided in Section 14(c), Shares of Restricted Stock will not vest more rapidly than
one-third (1/3) of the total number of Shares of Restricted Stock subject to an Award each year
from the date of grant (or, if applicable, the date a Participant begins providing services to the
Company or any Parent or Subsidiary of the Company), unless the Administrator determines that the
Award is to vest upon the achievement of performance criteria and the period for measuring such
performance will cover at least twelve (12) months. Notwithstanding the foregoing sentence, the
Administrator, in its sole discretion, may provide at the time of or following the date of grant
for accelerated vesting for an Award of Restricted Stock upon or in connection with a Change in
Control or upon or in connection with a Participant’s termination of service due to death,
Disability or retirement.

          (f) Voting Rights. During the Period of Restriction, Service Providers holding
Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those
Shares, unless the Administrator determines otherwise.

          (g) Dividends and Other Distributions. During the Period of Restriction,
Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and
other distributions paid with respect to such Shares unless otherwise provided in the Award
Agreement. If any such dividends or distributions are paid in Shares, the Shares will be subject
to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock
with respect to which they were paid.

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          (h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.

     9. RESTRICTED STOCK UNITS.

          (a) Grant. Restricted Stock Units may be granted at any time and from time to
time as determined by the Administrator. Each Restricted Stock Unit grant will be evidenced by an
Award Agreement that will specify such other terms and conditions as the Administrator, in its sole
discretion, will determine, including all terms, conditions, and restrictions related to the grant,
the number of Restricted Stock Units and the form of payout, which, subject to Section 9(d), may be
left to the discretion of the Administrator. Notwithstanding the anything to the contrary in this
subsection (a), during any Fiscal Year of the Company, no Participant will receive more than an
aggregate of one hundred twenty-five thousand (125,000) Restricted Stock Units; provided, however,
that in connection with a Participant’s initial service as an Employee, an Employee may be granted
an aggregate of up to an additional two hundred fifty thousand (250,000) Restricted Stock Units.

          (b) Vesting Criteria and Other Terms. The Administrator will set vesting
criteria in its discretion, which, depending on the extent to which the criteria are met, will
determine the number of Restricted Stock Units that will be paid out to the Participant. Each
Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the
vesting criteria, and such other terms and conditions as the Administrator, in its sole discretion,
will determine; provided, however, that, except as otherwise provided in Section 14(c), an Award of
Restricted Stock Units will not vest more rapidly than one-third (1/3) of the total number of
Restricted Stock Units subject to an Award each year from the date of grant (or, if applicable, the
date a Participant begins providing services to the Company or any Parent or Subsidiary of the
Company), unless the Administrator determines that the Award is to vest upon the achievement of
performance criteria and the period for measuring such performance will cover at least twelve (12)
months. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may
provide at the time of or following the date of grant for accelerated vesting for an Award of
Restricted Stock Units upon or in connection with a Change in Control or upon or in connection with
a Participant’s termination of service due to death, Disability or retirement.

          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting
criteria, the Participant will be entitled to receive a payout as specified in the Award Agreement.

          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will
be made as soon as practicable after the date(s) set forth in the Award Agreement. The
Administrator, in its sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a
combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash
again will be available for grant under the Plan.

          (e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.

     10. PERFORMANCE UNITS AND PERFORMANCE SHARES.

          (a) Grant of Performance Units/Shares. Performance Units and Performance
Shares may be granted to Service Providers at any time and from time to time, as will be determined
by the Administrator, in its sole discretion. The Administrator will have complete discretion in
determining the number of Performance Units/Shares granted to each Participant provided that during
any Fiscal Year, (a) no Participant will receive Performance Units having an initial value greater
than one million dollars ($1,000,000), and (b) no Participant will receive more than one hundred
twenty-five thousand (125,000) Performance Shares. Notwithstanding the foregoing limitation, in
connection with a Participant’s initial
service as an Employee, an Employee may be granted up to an additional two hundred fifty
thousand (250,000) Performance Shares.

A-11

 

          (b) Value of Performance Units/Shares. Each Performance Unit will have an
initial value that is established by the Administrator on or before the date of grant. Each
Performance Share will have an initial value equal to the Fair Market Value of a Share on the date
of grant.

          (c) Performance Objectives and Other Terms. The Administrator will set
performance objectives or other vesting provisions (including, without limitation, continued status
as a Service Provider) in its discretion which, depending on the extent to which they are met, will
determine the number or value of Performance Units/Shares that will be paid out to the Participant.
The Administrator may set performance objectives based upon the achievement of Company-wide,
divisional, or individual goals, or any other basis determined by the Administrator in its
discretion. Each Award of Performance Units/Shares will be evidenced by an Award Agreement that
will specify the Performance Period, and such other terms and conditions as the Administrator, in
its sole discretion, will determine; provided, however, that, except as otherwise provided in
Section 14(c), Performance Units/Shares will not vest more rapidly than one-third (1/3) of the
total number of Performance Units/Shares subject to an Award each year from the date of grant (or,
if applicable, the date a Participant begins providing services to the Company or any Parent or
Subsidiary of the Company), unless the Administrator determines that the Award is to vest upon the
achievement of performance criteria and the period for measuring such performance will cover at
least twelve (12) months. Notwithstanding the foregoing sentence, the Administrator, in its sole
discretion, may provide at the time of or following the date of grant for accelerated vesting for
an Award of Performance Units/Shares upon or in connection with a Change in Control or upon or in
connection with a Participant’s termination of service due to death, Disability or retirement.

          (d) Earning of Performance Units/Shares. After the applicable Performance
Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of
the number of Performance Units/Shares earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding performance objectives or other
vesting provisions have been achieved.

          (e) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the expiration of the applicable
Performance Period. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or
in a combination thereof.

          (f) Cancellation of Performance Units/Shares. On the date set forth in the
Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the
Company, and again will be available for grant under the Plan.

     11. PERFORMANCE GOALS. Awards of Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units and other incentives under the Plan may be made subject to
the attainment of performance goals relating to one or more business criteria within the meaning of
Section 162(m) of the Code and may provide for a targeted level or levels of achievement
(“Performance Goals”) including assets; bond rating; cash flow; cash position; earnings before
interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per
Share; economic profit; economic value added; equity or shareholder’s equity; growth in earnings;
growth in revenue; market share; net income; net profit; net sales; noninterest income as percent
of total income; operating earnings; operating income; profit before tax; ratio of debt to debt
plus equity; ratio of operating earnings to capital spending; results of regulatory reviews and
examinations; return on equity; return on net assets; return on sales; revenue; sales growth; or
total return to shareholders. Any Performance Goals may be used to measure the performance of the
Company as a whole or a business unit of the Company and may be measured relative to a peer group
or
index. The Performance Goals may differ from Participant to Participant and from Award to
Award. Prior to the Determination Date, the Administrator will determine whether any significant
element(s) will be included in or excluded from the calculation of any Performance Goal with
respect to any Participant. In all other respects, Performance Goals will be calculated in
accordance with the Company’s financial statements, generally accepted accounting principles, or
under a methodology established by the Administrator prior to the issuance of an Award, which is
consistently applied and identified in the financial statements, including footnotes, or the
management discussion and analysis section of the Company’s annual report.

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     12. LEAVES OF ABSENCE. Unless the Administrator provides otherwise,
vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A
Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved
by the Company or (ii) transfers between locations of the Company or between the Company and its
Affiliates. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days,
unless reemployment upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed,
then three (3) months following the ninety-first (91st) day of such leave any Incentive
Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will
be treated for tax purposes as a Nonstatutory Stock Option.

     13. TRANSFERABILITY OF AWARDS. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Participant, only by the Participant. If the Administrator makes an
Award transferable, such Award will contain such additional terms and conditions as the
Administrator deems appropriate.

     14. ADJUSTMENTS; DISSOLUTION OR LIQUIDATION; MERGER OR CHANGE IN CONTROL.

          (a) Adjustments. In the event that any dividend or other distribution (whether
in the form of cash, Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, or other change in the
corporate structure of the Company affecting the Shares occurs, the Administrator, in order to
prevent diminution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, shall adjust the number and class of Shares that may be delivered under
the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the
numerical Share limits set forth in Sections 3, 6, 7, 8, 9 and 10.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.

          (c) Change in Control. In the event of a Change in Control, each outstanding
Award will be assumed or an equivalent option or right substituted by the successor corporation or
a Parent or Subsidiary of the successor corporation (the “Successor Corporation”). In the event
that the Successor Corporation refuses to assume or substitute for the Award, the Participant will
fully vest in and have the right to exercise all of his or her outstanding Options and Stock
Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or
exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Restricted Stock
Units, Performance Shares and Performance Units, all Performance Goals or other vesting criteria
will be deemed achieved at target levels and all other terms and conditions met. In addition, if
an Option or Stock Appreciation Right becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a Change in Control, the Administrator will notify the Participant in
writing or electronically that the Option or Stock Appreciation Right will be fully vested and
exercisable for a period of time determined by the Administrator in its sole discretion, and
the Option or Stock Appreciation Right will terminate upon the expiration of such period.

          For the purposes of this subsection (c), an Award will be considered assumed if,
following the Change in Control, the Award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the Change in Control, the consideration (whether stock,
cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the
exercise of which the Administrator determines to pay cash or a Performance Share or Performance
Unit which the Administrator can determine to pay in cash, the fair market value of the
consideration received in the merger or Change in Control by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not
solely common stock of the Successor Corporation, the Administrator may, with the consent of the
Successor Corporation, provide for the consideration to be received upon

A-13

 

the exercise of an Option or Stock Appreciation Right or upon the payout of a Performance
Share or Performance Unit, for each Share subject to such Award (or in the case of Performance
Units, the number of implied shares determined by dividing the value of the Performance Units by
the per share consideration received by holders of Common Stock in the Change in Control), to be
solely common stock of the Successor Corporation equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in Control.

          Notwithstanding anything in this Section 14(c) to the contrary, an Award that vests, is
earned or paid-out upon the satisfaction of one or more Performance Goals will not be considered
assumed if the Company or its successor modifies any of such Performance Goals without the
Participant’s consent; provided, however, a modification to such Performance Goals only to reflect
the Successor Corporation’s post-Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.

     15. TAX WITHHOLDING.

          (a) Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).

          (b) Withholding Arrangements. The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a Participant to
satisfy such tax withholding obligation, in whole or in part by (i) paying cash, (ii) electing to
have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to
the amount required to be withheld, (iii) delivering to the Company already owned Shares having a
Fair Market Value equal to the amount required to be withheld, or (iv) selling a sufficient number
of Shares otherwise deliverable to the Participant through such means as the Administrator may
determine in its sole discretion (whether through a broker or otherwise) equal to the amount
required to be withheld. The amount of the withholding requirement will be deemed to include any
amount which the Administrator agrees may be withheld at the time the election is made, not to
exceed the amount determined by using the maximum federal, state or local marginal income tax rates
applicable to the Participant with respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will
be determined as of the date that the taxes are required to be withheld.

     16. NO EFFECT ON EMPLOYMENT OR SERVICE. Neither the Plan nor any Award will
confer upon a Participant any right with respect to continuing the Participant’s relationship as a
Service Provider with the Company, nor will they interfere in any way with the Participant’s right
or the Company’s right to terminate such relationship at any time, with or without cause, to the
extent permitted by Applicable Laws.

     17. DATE OF GRANT. The date of grant of an Award will be, for all purposes,
the date on which the Administrator makes the determination granting such Award, or such other
later date as is determined by the Administrator. Notice of the determination will be provided to
each Participant within a reasonable time after the date of such grant.

     18. TERM OF PLAN. Subject to Section 22 of the Plan, the Plan will become
effective upon its adoption by the Board. It will continue in effect for a term of ten (10) years
unless terminated earlier under Section 19 of the Plan.

A-14

 

     19. AMENDMENT AND TERMINATION OF THE PLAN.

          (a) Amendment and Termination. The Administrator may at any time amend, alter,
suspend or terminate the Plan.

          (b) Shareholder Approval. The Company will obtain shareholder approval of any
Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension
or termination of the Plan will impair the rights of any Participant, unless mutually agreed
otherwise between the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company. Termination of the Plan will not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

     20. CONDITIONS UPON ISSUANCE OF SHARES.

          (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such Shares will comply
with Applicable Laws and will be further subject to the approval of counsel for the Company with
respect to such compliance.

          (b) Investment Representations. As a condition to the exercise of an Award,
the Company may require the person exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

     21. INABILITY TO OBTAIN AUTHORITY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the
Company of any liability in respect of the failure to issue or sell such Shares as to which such
requisite authority will not have been obtained.

     22. SHAREHOLDER APPROVAL. The Plan will be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is adopted. Such
shareholder approval will be obtained in the manner and to the degree required under Applicable
Laws.

     23. SECTION 409A. To the extent that the Administrator determines that any
Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing
such Award shall incorporate the terms and conditions necessary to avoid the consequences described
in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall
be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations
and other interpretive guidance promulgated thereunder, including without limitation any such
regulations or other guidance that may hereafter be issued or amended. Notwithstanding any
provision of the Plan to the contrary, in the event that the Administrator determines that any
Award may be subject to Section 409A of the Code, the Administrator may adopt such amendments to
the Plan and the applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other actions, that the
Administrator determines are necessary or appropriate to (i) exempt the Award from Section 409A of
the Code and/or preserve the intended tax treatment of the benefits provided with respect to the
Award, or (ii) comply with the requirements of Section 409A of the Code.

A-15

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