Document:

EX-4.3

 

Exhibit 4.3

RESTRICTED STOCK AGREEMENT

(For Non-Employee Directors)

     THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the ___day of
                     (the “Date of Grant”), between SUPERIOR WELL SERVICES, INC., a Delaware corporation
(the “Company”), and                                          (“Director”).

     1. Award. Pursuant to the SUPERIOR WELL SERVICES, INC. 2005 STOCK INCENTIVE PLAN, as
amended (the “Plan”), as of the Date of Grant, ___shares (the “Restricted Shares”) of the
Company’s common stock, par value $.01 per share, that are held in Treasury shall be issued as
hereinafter provided in Director’s name, subject to certain restrictions thereon in consideration
of Director’s paying to the Company $1.00 per Restricted Share. The Restricted Shares shall be
issued upon acceptance hereof by Director, the payment by Director of the purchase price for the
Restricted Shares, and satisfaction of the conditions of this Agreement. Director acknowledges
receipt of a copy of the Plan and agrees that this award of Restricted Shares shall be subject to
all of the terms and provisions of the Plan, including future amendments thereto, if any, pursuant
to the terms thereof. In the event of any conflict between the terms of this Agreement and the
Plan, the Plan shall control. Capitalized terms used but not defined in this Agreement shall have
the meaning attributed to such terms under the Plan, unless the context requires otherwise.

     2. Restricted Shares. Director hereby accepts the Restricted Shares when issued and
agrees with respect thereto as follows:

        (a) Forfeiture Restrictions. The Restricted Shares may not be sold, assigned,
pledged, exchanged, hypothecated, or otherwise transferred, encumbered, or disposed of to
the extent then subject to the Forfeiture Restrictions (as hereinafter defined), and in the
event of cessation of Director’s service as a member of the Board of Directors of the
Company for any reason other than death, disability (within the meaning of section 22(e)(3)
of the Code), or an “involuntary termination” (as hereinafter defined), Director shall, for
no consideration except as provided in Section 2(c) herein, forfeit to the Company all
Restricted Shares to the extent then subject to the Forfeiture Restrictions. The
prohibition against transfer and the obligation to forfeit and surrender Restricted Shares
to the Company upon termination of services are herein referred to as the “Forfeiture
Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against
any transferee of Restricted Shares. For purposes of this Agreement, an “Involuntary
Termination” shall mean any termination of Director’s service as a member of the Board of
Directors of the Company which does not result from a resignation by Director; provided,
however, that the term “Involuntary Termination” shall not include a termination as a result
of death or disability (within the meaning of section 22(e)(3) of the Code) or a termination
for cause. As used in this paragraph, the term “cause” shall mean Director (i) has been
convicted of a misdemeanor involving moral turpitude or of a felony, (ii) has engaged in
gross negligence or willful misconduct in the performance of the duties of Director’s
service, (iii) has willfully disregarded any

1

 

applicable written corporate policies
established by the Company, or (iv) has materially breached any material provision of any
written agreement between Director and the Company or any of its Affiliates.

     (b) Lapse of Forfeiture Restrictions. Provided that Director has continuously
served as a member of the Board of Directors of the Company from the Date of Grant through
the number of years following the Date of Grant as set forth in the following schedule, the
Forfeiture Restrictions shall lapse with respect to a percentage of the aggregate number of
Restricted Shares in accordance with the following schedule:

	 	 	 	 	 
	 	 	Percentage of Total Number
	 	 	Of Restricted Shares as to Which
	Number of Full Years	 	Forfeiture Restrictions Lapse
	Less than 1 year

	 	 	0	%
	1 year

	 	 	15	%
	2 years

	 	 	30	%
	3 years

	 	 	45	%
	4 years

	 	 	60	%
	5 years or more

	 	 	100	%

Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all of the
Restricted Shares then subject to the Forfeiture Restrictions on the date Director’s
membership on the Board of Directors of the Company is terminated by reason of death,
disability (within the meaning of section 22(e)(3) of the Code), or an Involuntary
Termination.

     (c) Termination of Services. If Director’s service relationship with the
Company is terminated for any reason, then that portion, if any, of the Restricted Shares
for which restrictions have not lapsed as of the date of termination shall become null and
void and such shares shall be forfeited to the Company; provided, however, that the portion
of the Restricted Shares, if any, under this Agreement for which restrictions have lapsed as
of the date of such termination shall survive such termination. In such event, Director
will be repaid the lesser of the Fair Market Value of the Restricted Shares on the date of
termination or the amount (without interest) of cash or consideration Director paid to
acquire the Restricted Shares forfeited pursuant to Section 2.

     (d) Certificates. A certificate evidencing the Restricted Shares shall be
issued by the Company in Director’s name, pursuant to which Director shall have all of the
rights of a shareholder of the Company with respect to the Restricted Shares, including,
without limitation, voting rights and the right to receive dividends (provided, however,
that dividends paid in shares of the Company’s stock or other securities shall be

2

 

subject to
the Forfeiture Restrictions and further provided that dividends that are paid other than in shares of the Company’s stock or other securities shall be paid no later than the end of the
calendar year in which the dividend for such class of stock is paid to stockholders of such
class or, if later, the 15th day of the third month following the date the dividend is paid
to stockholders of such class of stock). Director may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of the stock until the Forfeiture Restrictions have
expired and a breach of the terms of this Agreement shall cause a forfeiture of the
Restricted Shares. The certificate shall be delivered upon issuance to the Secretary of the
Company or to such other depository as may be designated by the Committee as a depository
for safekeeping until the forfeiture of such Restricted Shares occurs or the Forfeiture
Restrictions lapse pursuant to the terms of the Plan and this award. On the Date of Grant,
Director shall deliver to the Company a stock power, endorsed in blank, relating to the
Restricted Shares. Upon the lapse of the Forfeiture Restrictions without forfeiture, the
Company shall cause a new certificate or certificates to be issued without legend (except
for any legend required pursuant to applicable securities laws or any other agreement to
which Director is a party) in the name of Director in exchange for the certificate
evidencing the Restricted Shares. However, the Company, in its sole discretion, may elect
to deliver the certificate either in certificate form or electronically to a brokerage
account established for Director’s benefit at a brokerage/financial institution selected by
the Company. Director agrees to complete and sign any documents and take additional action
that the Company may request to enable it to deliver the shares on Director’s behalf.

     (e) Corporate Acts. The existence of the Restricted Shares shall not affect in
any way the right or power of the Board or the shareholders of the Company to make or
authorize any adjustment, recapitalization, reorganization, or other change in the Company’s
capital structure or its business, any merger or consolidation of the Company, any issue of
debt or equity securities, the dissolution or liquidation of the Company or any sale, lease,
exchange, or other disposition of all or any part of its assets or business or any other
corporate act or proceeding. The prohibitions of Section 2(a) hereof shall not apply to
the transfer of Restricted Shares pursuant to a plan of reorganization of the Company,
but the stock, securities, or other property received in exchange therefor shall also become
subject to the Forfeiture Restrictions and provisions governing the lapsing of such
Forfeiture Restrictions applicable to the original Restricted Shares for all purposes of
this Agreement, and the certificates representing such stock, securities or other property
shall be legended to show such restrictions.

       4. Withholding of Tax. To the extent that the receipt of the Restricted Shares or the
lapse of any Forfeiture Restrictions results in compensation income or wages to Director for
federal, state, or local tax purposes, Director shall deliver to the Company at the time of such
receipt or lapse, as the case may be, such amount of money or shares of Stock as the Company may
require to meet its minimum obligation under applicable tax laws or regulations, and if Director
fails to do so, the Company is authorized to withhold from any cash or stock remuneration
(including withholding any Restricted Shares distributable to Director under this Agreement) then
or thereafter payable to Director any tax required to be withheld by reason of

3

 

such resulting
compensation income. Director acknowledges and agrees that the Company is making no representation
or warranty as to the tax consequences to Director as a result of the receipt of the stock, the
lapse of any Forfeiture Restrictions, or the repurchase of any stock pursuant to the Forfeiture
Restrictions.

     5. Lock-Up Provision. Director hereby agrees that in the event of any underwritten
public offering of Common Stock, including an initial public offering of Common Stock, made by the
Company pursuant to an effective registration statement filed under the Securities Act of 1933, as
amended (the “Securities Act”) (whether before or after the lapse of the Forfeiture Restrictions
with respect to any of the Restricted Shares), Director shall not offer, sell, contract to sell,
pledge, hypothecate, grant any option to purchase or make any short sale of, or otherwise dispose
of any shares of Common Stock or any rights to acquire Common Stock for such period of time from
and after the effective date of such registration statement as may be established by the
underwriter(s) for such public offering (the “Lock-Up Period”); provided, however, that such period
of time shall not exceed 180 days from the effective date of the registration statement to be filed
in connection with such public offering; provided further, however, that if (a) during the last 17
days of the initial Lock-Up Period, the Company releases earnings results or material news or a
material event relating to the Company occurs or (b) prior to the expiration of the initial Lock-Up
Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the initial Lock-Up Period, then in each case the Lock-Up Period will
be extended until the expiration of the 18-day period beginning on the date of release of the
earnings results or the occurrence of the material news or material event, as applicable, unless
the managing underwriter(s) of such underwritten public offering waive, in writing, such extension.
Furthermore, Director hereby agrees to enter into a lock-up agreement with the underwriter(s) of
any such underwritten public offering if requested by such underwriter(s); provided, however, that
the terms of such lock-up agreement must be substantially the same as those executed by the
Company’s officers and directors and other stockholders in connection with such underwritten public
offering and the period of time covered by such lock-up agreement shall not exceed that set forth
in this Section 5. The limitations contained in this Section 5 shall not apply to any shares
registered in such public offering under the Securities Act. Director shall be subject to this
Section provided and only if the other officers and directors of the Company are also subject to
similar arrangements.

     6. Status of Stock. Director agrees that the Restricted Shares issued under this
Agreement will not be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable federal or state securities laws. Director also agrees that (i) the
certificates representing the Restricted Shares may bear such legend or legends as the Committee
deems appropriate in order to reflect the Forfeiture Restrictions and to assure compliance with
applicable securities laws, (ii) the Company may refuse to register the transfer of the Restricted
Shares on the stock transfer records of the Company if such proposed transfer would constitute a
violation of the Forfeiture Restrictions or, in the opinion of counsel satisfactory to the Company,
of any applicable securities law, and (iii) the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the Restricted Shares.

4

 

     7. Service Relationship. For purposes of this Agreement, Director shall be considered
to be in the service of the Company as long as Director remains a director of either the Company,
an Affiliate, or any successor corporation. Without limiting the scope of the preceding sentence,
it is expressly provided that Director shall be considered to have ceased service with the Company
at the time of the termination of the “Affiliate” status under the Plan of the entity or other
organization for which Director serves as a member of its board of directors. Any question as to
whether and when there has been a termination of such services, and the cause of such termination,
shall be determined by the Committee, and its determination shall be final.

     8. Notices. Any notices or other communications provided for in this Agreement shall
be sufficient if in writing. In the case of Director, such notices or communications shall be
effectively delivered if hand delivered to Director at his principal place of service or if sent by
registered or certified mail to Director at the last address Director has filed with the Company.
In the case of the Company, such notices or communications shall be effectively delivered if sent
by registered or certified mail to the Company at its principal executive offices.

     9. Entire Agreement; Amendment. This Agreement constitutes the entire agreement of
the parties with regard to the subject matter hereof, and contains all the covenants, promises,
representations, warranties, and agreements between the parties with respect to the subject matter
of this Agreement. Without limiting the scope of the preceding sentence, all prior understandings
and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby
null and void and of no further force and effect. Any modification of this Agreement shall be
effective only if it is in writing and signed by both Director and an authorized officer of the
Company.

     10. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
any successors to the Company and all persons lawfully claiming under Director.

     11. Controlling Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.

5

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer
thereunto duly authorized, and Director has executed this Agreement, all as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	SUPERIOR WELL SERVICES, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[DIRECTOR]
	 
	 	 	 	 	 	 
	 	 	 	 	 

6EX-4.1

 

Exhibit 4.1

REGENT COMMUNICATIONS, INC.

2005 INCENTIVE COMPENSATION PLAN

(As adopted February 3, 2005, subject to shareholder approval)

Article 1. Establishment, Purpose, and Duration

     1.1. Establishment of the Plan . On February 3, 2005, the Board of Directors of Regent
Communications, Inc. (the “Company”) adopted, subject to the approval of stockholders, this
incentive compensation plan known as the “Regent Communications, Inc. 2005 Incentive Compensation
Plan” (hereinafter referred to as the “Plan”), which permits the grant of short-term and long-term
incentive and other stock awards.

     1.2. Purpose of the Plan . The purpose of the Plan is to promote the success of
the Company and its Subsidiaries by providing incentives to Employees of the Company and its
Subsidiaries that will link their personal interests to the financial success of the Company and
its Subsidiaries and to growth in shareholder value. The Plan is designed to provide flexibility
to the Company and its Subsidiaries in their ability to motivate, attract, and retain the services
of Employees upon whose judgment, interest, and special effort the successful conduct of their
operations is largely dependent.

     1.3. Duration of the Plan . The Plan was approved by the Board on February 3,
2005, shall become effective on the date it is approved by the Company’s stockholders (the
“Effective Date”), and shall remain in effect, subject to the right of the Board of Directors to
terminate the Plan at any time pursuant to Article 13 herein, until all Shares subject to it shall
have been purchased or acquired according to the provisions herein. However, in no event may an
Award be granted under the Plan on or after the tenth (10th) anniversary of the Effective Date of
the Plan.

Article 2. Definitions and Construction

     2.1. Definitions . Whenever used in the Plan, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter of the word is
capitalized:

          (a) “Award” means, individually or collectively, a grant under the Plan of Options, Stock
Appreciation Rights or Restricted Stock.

          (b) “Award Agreement” means the agreement or other writing (which may be framed as a plan or
program) that sets forth the terms and conditions of each Award under the Plan, including any
amendment or modification thereof.

          (c) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act.

          (d) “Board” or “Board of Directors” means the Board of Directors of the Company.

 

 

          (e) “Change in Control” shall mean the purchase or other acquisition by any person, entity or
group of persons, within the meaning of section 13(d) or 14(d) of the Securities Exchange Act of
1934 (“Act”), or any comparable successor provisions, of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Act) of 30 percent or more of either the outstanding shares of
common stock or the combined voting power of Regent Communications, Inc.’s then outstanding voting
securities entitled to vote generally, or the approval by the stockholders of Regent
Communications, Inc. of a reorganization, merger, or consolidation, in each case, with respect to
which persons who were stockholders of Regent Communications, Inc. immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more than 50 percent of
the combined voting power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated Regent Communications, Inc.’s then outstanding securities, or a
liquidation or dissolution of Regent Communications, Inc. or of the sale of all or substantially
all of Regent Communications, Inc.’s assets.

          (f) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          (g) “Committee” means the Regent Communications, Inc. Compensation Committee, or such other
committee designated by the Board of Directors to administer this Plan. The Committee shall be
appointed by the Board, shall consist of two or more outside, independent members of the Board, and
in the judgment of the Board, shall be qualified to administer the Plan as contemplated by (i) Rule
16b-3 of the Securities Exchange Act of 1934 (or any successor rule), (ii) Section 162(m) of the
Code, as amended, and the regulations thereunder (or any successor Section and regulations), and
(iii) any rules and regulations of the Nasdaq Stock Market (or such other stock exchange on which
the Stock is traded). Any member of the Committee who does not satisfy the qualifications set out
in the preceding sentence may recuse himself or herself from any vote or other action taken by the
Committee. The Board may, at any time and in its complete discretion, remove any member of the
Committee and may fill any vacancy in the Committee.

          (h) “Company” means Regent Communications, Inc., a Delaware corporation, or any successor
thereto as provided in Article 15 herein.

          (i) “Covered Employee” means any Participant who is or may be a “covered employee” within the
meaning of Section 162(m)(3) of the Code in the year in which an Award becomes taxable to such
Participant.

          (j) “Director” means a director of the Company or a Subsidiary.

          (k) “Disability” means totally and permanently disabled as from time to time defined under the
long-term disability plan of the Company or a Subsidiary applicable to Employee, or in the case
where there is no applicable plan, permanent and total disability as defined in Section 22(e)(3) of
the Code (or any successor Section).

          (l) “Effective Date” means the date this Plan is approved by the Company’s stockholders.

          (m) “Employee” means an employee of the Company or any of its Subsidiaries, including an
employee who is an officer or a Director.

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

2

 

          (o) “Existing Plan(s)” means the Regent Communications, Inc. 1998 Management Stock Option
Plan, as from time to time amended, and/or the Regent Communications, Inc. 2001 Directors’ Stock
Option Plan, as from time to time amended, as the context so indicates.

          (p) As used in this Plan (unless a different method of calculation is required by applicable
law) “Fair Market Value” on or as of any date shall mean (i) the closing price of the Stock as
reported by the Nasdaq Stock Market (or, if the Stock is not listed for trading on the Nasdaq Stock
Market, then on such other national exchange upon which the Stock is then listed) for such date, or
if there are no sales on such date, on the next following business day on which there were sales,
or (ii) in the event that the Stock is no longer listed for trading on a national exchange, an
amount determined in accordance with standards adopted by the Committee.

          (q) “Incentive Stock Option” or “ISO” means an option to purchase Stock, granted under Article
8 herein, which is designated as an incentive stock option and is intended to meet the requirements
of Section 422 of the Code (or any successor Section).

          (r) “Nonqualified Stock Option” or “NQSO” means an option to purchase Stock, granted under
Article 8 herein, which is not intended to be an Incentive Stock Option.

          (s) “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

          (t) “Participant” means an Employee who has been granted an Award under the Plan.

          (u) “Period of Restriction” means the period during which the transfer of Shares of Restricted
Stock is restricted, during which the Participant is subject to a substantial risk of forfeiture,
pursuant to Article 7 herein.

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

          (w) “Plan” means this Regent Communications, Inc. 2005 Incentive Compensation Plan, as herein
described and as hereafter from time to time amended.

          (x) “Previously-Acquired Shares” means shares of Stock acquired by the Participant or any
beneficiary of a Participant, which Shares have been held for a period of not less than six months,
or such longer or shorter period as the Committee may require or permit.

          (y) “Restricted Stock” means an Award of Stock granted to a Participant pursuant to Article 7
herein.

          (z) “Stock” or “Shares” means the common stock without par value of the Company.

          (aa) “Stock Appreciation Right” or “SAR” means an Award, granted to a Participant pursuant to
Article 6 herein.

          (bb) “Subsidiary” shall mean any corporation which is a subsidiary corporation of the Company,
as that term is defined in Section 424(f)of the Code.

3

 

          (cc) “Voting Stock” shall mean securities of any class or classes of stock of a corporation,
the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority
of the corporate directors.

     2.2. Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall include the singular,
and the singular shall include the plural.

     2.3. Severability. In the event any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not
been included.

Article 3. Administration

     3.1. Authority of the Committee.

          (a) The Plan shall be administered by the Committee. Subject to the provisions of the
Plan, the Committee shall have all powers vested in it by the term of the Plan, such powers to
include the authority to:

               (i) Select the persons to be granted Awards under the Plan;

               (ii) Determine the terms, conditions, form and amount of Awards to be made to each
person selected;

               (iii) Determine the time when Awards are to be made and any conditions which must be
satisfied before an Award is made;

               (iv) To establish objectives and conditions for earning Awards;

               (v) To determine the terms of each Award Agreement and any amendments or modifications
thereof (which shall not be inconsistent with the Plan); and

               (vi) To determine the guidelines and/or procedures for the payment or exercise of
Awards.

     Notwithstanding the foregoing, no action of the Committee (other than pursuant to Section 4.2
hereof) may, without the consent of the person or persons entitled to exercise any outstanding
Option or
Stock Appreciation Right, adversely affect the rights of such person or persons with
respect to such Awards.

     3.2. Decisions Binding . The Committee shall have full power and authority to
administer and interpret the Plan and to adopt or establish such rules, regulations, agreements,
guidelines, procedures and instruments, which are not contrary to the terms of the Plan and which,
in its opinion, may be necessary or advisable for the administration and operation of the Plan.
All determinations and decisions made by the Committee pursuant to the provisions of the Plan and
all related orders or resolutions of the Board of Directors shall be final, conclusive and binding
on all persons, including the Company and its Subsidiaries, its stockholders, employees, and
Participants and their estates and beneficiaries, and such determinations and decisions shall not
be reviewable.

4

 

     3.3. Delegation of Certain Responsibilities. The Committee may, subject to the
terms of the Plan and applicable law, appoint such agents as it deems necessary or advisable for
the proper administration of the Plan under this Article 3. Notwithstanding the foregoing,
however, the Committee may not delegate its authority to grant Awards under the Plan, or to correct
errors, omissions or inconsistencies in the Plan, except that the Committee may delegate to the
Company’s Chief Executive Officer and/or to other executive officers of the Company its authority
to grant Awards and/or the exercise of discretion with respect to Awards to Employees who, at the
time of such action, are neither (a) Covered Employees nor (b) officers of the Company or its
Subsidiaries who are subject to the reporting requirements of Section 16(a) of the Exchange Act.
All authority delegated by the Committee under this Section 3.3 shall be exercised in accordance
with the provisions of the Plan and any guidelines for the exercise of such authority that may from
time to time be established by the Committee.

     3.4. Procedures of the Committee. Except as may otherwise be provided in the
charter or similar governing document applicable to the Committee, (a) all determinations of the
Committee shall be made by not less than a majority of its members present at the meeting (in
person or otherwise) at which a quorum is present; (b) a majority of the entire Committee shall
constitute a quorum for the transaction of business; and (c) any action required or permitted to be
taken at a meeting of the Committee may be taken without a meeting if a unanimous written consent,
which sets forth the action, is signed by each member of the Committee and filed with the minutes
for proceedings of the Committee. Service on the Committee shall constitute service as a director
of the Company so that members of the Committee shall be entitled to indemnification, limitation of
liability and reimbursement of expenses with respect to their services as members of the Committee
to the same extent that they are entitled under the Company’s Certificate of Incorporation, as
amended from time to time, and Delaware law for their services as directors of the Company.

     3.5. Award Agreements. Each Award under the Plan shall be evidenced by an Award
Agreement which shall be signed by an authorized officer of the Company and, if required, by the
Participant, and shall contain
such terms and conditions as may be authorized or approved by the Committee. Such terms and
conditions need not be the same in all cases.

     3.6. Rule 16b-3 Requirements. Not withstanding any other provision of the Plan,
the Board or the Committee may impose such conditions on any Award (including, without limitation,
the right of the Board or the Committee to limit the time of exercise to specified periods) as may
be required to satisfy the requirements of Rule 16b-3 (or any successor rule), under the Exchange
Act (“Rule 16b-3”).

Article 4.
Stock Subject to the Plan

     4.1. Number of Shares.

          (a) Subject to adjustment as provided in Section 4.2 herein, the aggregate number of
Shares that may be delivered under this Plan at any time shall not exceed Two Million (2,000,000)
Shares. Stock delivered under this Plan may consist, in whole or in part, of authorized and
unissued Shares or treasury Shares. To the extent that Shares subject to an outstanding Award
under this Plan are not issued by reason of the forfeiture, termination, surrender, cancellation or
expiration while unexercised of such award, by reason of the tendering or withholding of Shares (by
either actual delivery or by

5

 

attestation) to pay all or a portion of the purchase price or to
satisfy all or a portion of the tax withholding obligations relating to an Award, by reason of
being settled in cash in lieu of Stock or settled in a manner such that some or all of the Shares
covered by the Award are not issued to a Participant, or being exchanged for a grant under this
Plan that does not involve Stock, then such shares shall immediately again be available for
issuance under this Plan. The Committee may from time to time adopt and observe such procedures
concerning the counting of Shares against the Plan maximum as it may deem appropriate.

          (b) Shares of Stock issued in connection with the Existing Plans and/or awards that are
assumed, converted or substituted pursuant to a merger, acquisition or similar transaction entered
into by the Company or any of its Subsidiaries shall not reduce the number of Shares available for
issuance under this Plan.

          (c) Subject to Section 4.2, the following limitations shall apply to Awards under the Plan:

               (i) With respect to Awards of Restricted Stock, not more than 50% of the total number
of Shares that may be issued under this Plan may be issued pursuant to such Awards.

               (ii) The maximum number of Shares that may be covered by Awards granted under this Plan
to any single Participant shall be 200,000 Shares during any one calendar year.

     4.2. Adjustments in Authorized Shares . In the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, Stock dividend, split-up, share
combination, or other change in the corporate structure of the Company affecting the Stock, such
adjustment shall be made in the number and
class of shares which may be delivered under the Plan, in the maximum number of Shares set forth in
paragraph 4.1(c) above, and in the number and class of and/or price of shares subject to
outstanding Awards granted under the Plan, as may be determined to be appropriate and equitable by
the Committee, in its sole discretion, to prevent dilution or enlargement of rights; and provided
that the number of shares subject to any Award shall always be a whole number. Any adjustment of
an Incentive Stock Option under this paragraph shall be made in such a manner so as not to
constitute a modification within the meaning of Section 424(h)(3) of the Code.

Article 5.
Eligibility and Participation

     5.1. Eligibility. Persons eligible to participate in the Plan include all Employees.

     5.2. Actual Participation. Subject to the provisions of the Plan, the Committee
may from time to time select those Employees to whom Awards shall be granted and determine the
nature and amount of each Award. No Employee shall have any right to be granted a subsequent Award
under the Plan if previously granted an Award.

Article 6. Stock Appreciation Rights

     6.1. Grant of Stock Appreciation Rights . Subject to the terms and conditions of the
Plan, Stock Appreciation Rights may be granted to Employees at any time and from time to time, at
the discretion of the Committee. Subject to the immediately preceding sentence, the Committee

6

 

shall have the sole discretion, subject to the requirements of the Plan, to determine the actual
number of Shares subject to SARs granted to any Participant.

     6.2. Exercise of SARs. SARs may be exercised upon whatever terms and conditions
the Committee, in its sole discretion, imposes upon the SARs, which may include, but are not
limited to, a corresponding proportional reduction in Options or other Awards granted in tandem
with such SARs.

     6.3. Payment of SAR Amount. Upon exercise of the SAR, the holder shall be
entitled to receive payment of an amount determined by multiplying:

          (a) The difference between the Fair Market Value of a Share on the date of exercise over
the price fixed by the Committee at the date of grant (which price shall not be less than 100% of
the Fair Market Value of a Share on the date of grant); by

          (b) The number of Shares with respect to which the SAR is exercised.

     6.4. Form of Payment. Payment to a Participant of the amount due upon SAR exercise
will be made in Shares having a Fair Market Value as of the date of exercise equal to the amount
determined under Section 6.3 above, except as the Committee may otherwise provide for the payment
in cash in the applicable Award Agreement or any amendment or modification thereof.

     6.5. Duration of SAR. Each SAR shall expire at such time as the Committee shall
determine in the Award Agreement, however, no SAR shall be exercisable later than the tenth
(10th) anniversary of the date of its grant.

     6.6.
Termination of Employment. The disposition of SARs held by a Participant at
the time of termination of employment shall be determined in accordance with Article 9 below.

     6.7. Nontransferability of SARs. Except as the Committee may permit, no SAR
granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and distribution. Further, all SARs
granted to a Participant under the Plan shall be exercisable during his lifetime only by such
Participant.

Article 7. Restricted Stock

     7.1. Grant of Restricted Stock. Subject to the terms and conditions of the Plan, the
Committee, at any time and from time to time, may grant Restricted Stock under the Plan to such
Employees and in such amounts and on such terms and conditions as it shall determine.

     7.2. Transferability. Except as the Committee may permit, the Shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the termination of the applicable Period of Restriction or for such
period of time as shall be established by the Committee and as shall be specified in the Award
Agreement, or upon earlier satisfaction of other conditions (which may include the attainment of
performance goals) as specified by the Committee in its sole discretion and set forth in the Award
Agreement, otherwise than by will or by the laws of descent and distribution. All rights

7

 

with
respect to the Restricted Stock granted to a Participant under the Plan shall be exercisable during
his lifetime only by such Participant.

     7.3. Other Restrictions. The Committee shall impose such other restrictions on
any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable and the
Committee may legend certificates
representing Restricted Stock or record stop transfer orders with respect to uncertificated Shares
to give appropriate notice of such restrictions.

     7.4. End of Period of Restriction. Except as otherwise provided in this Article,
after the last day of the Period of Restriction, Shares of Restricted Stock covered by each
Restricted Stock grant made under the Plan shall become freely transferable by the Participant.
Once the Shares are released from the restrictions, the Participant shall be entitled to have the
legend or stop transfer order removed.

     7.5. Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those
Shares, unless otherwise specified in the applicable Award Agreement.

     7.6. Dividends and Other Distributions. Except as otherwise provided by the
Committee, during the Period of Restriction, Participants holding Shares of Restricted Stock shall
be entitled to receive all dividends and other distributions paid with respect to those Shares
while they are so held. If any such dividends or distributions are paid in Shares, the Shares
shall be subject to the same restrictions on transferability as the Shares of Restricted Stock with
respect to which they were paid.

     7.7. Termination of Employment . The disposition of Restricted Stock held by a
Participant at the time of termination of employment shall be determined in accordance with Article
9 below.

Article 8. Options

     8.1. Grant of Options. Subject to the terms and provisions of the Plan, Options may
be granted to Employees at any time and from time to time as shall be determined by the Committee.
The Committee shall have the sole discretion, subject to the requirements of the Plan, to determine
the actual number of Shares subject to Options granted to any Participant. The Committee may grant
any type of Option to purchase Stock that is permitted by law at the time of grant including, but
not limited to, ISOs and NQSOs. Only Employees may receive an Award of Incentive Stock Options.

     8.2. Option Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the type of Option granted, the Option price, the duration of the
Option, the number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. Unless the Option Agreement shall specify that the Option is intended
to be an Incentive Stock Option within the meaning of Section 422 of the Code, the Option shall be
a Nonqualified Stock Option whose grant is not intended to be subject to the provisions of Code
Section 422.

8

 

     8.3. Option Price. The purchase price per share of Stock covered by an Option
shall be determined by the Committee but shall not be less than 100% of the Fair Market Value of
such Stock on the date the Option is granted. Notwithstanding the authority granted to the
Committee pursuant to Section 3.1 of the Plan, once an Option is granted, the Committee shall have
no authority to reduce the Option price, nor may any Option granted under the Plan be surrendered
to the Company as consideration for the grant of a new Option with a lower exercise price without
the approval of the Company’s stockholders, except pursuant to Section 4.2 of the Plan related to
an adjustment in the number of Shares.

     8.4. Duration of Options. Each Option shall expire at such time as the Committee
shall determine in the Award Agreement, however, no Option shall be exercisable later than the
tenth (10th) anniversary date of its grant.

     8.5. Exercise of Options. To the extent exercisable and not expired, forfeited,
cancelled or otherwise terminated, Options granted under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as provided in the Award Agreement, which
need not be the same for all Participants.

     8.6. Payment. To the extent exercisable and not expired or forfeited, cancelled
or otherwise terminated, Options shall be exercised by the delivery of a written notice to the
Company setting forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. The Option price upon exercise of any Option shall be
payable to the Company in full either (a) in cash or its equivalent, including, but not limited to,
delivery of a properly completed exercise notice, together with irrevocable instructions to a
broker to promptly deliver to the Company the amount of sale proceeds from the sale of the Shares
subject to the Option exercise or to deliver loan proceeds from such broker to pay the exercise
price and any withholding taxes due, (b) by delivery or deemed delivery through attestation of
Previously-Acquired Shares having a Fair Market Value at the time of exercise equal to the total
Option price, (c) by a combination of (a) or (b), or (d) such other methods as the Committee deems
appropriate. The proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes. As soon as practicable after receipt of written
notification and payment, the Company shall deliver to the Participant Stock certificates in an
appropriate amount based upon the number of Options exercised, issued in the Participant’s name.

     8.7. Restrictions on Stock Transferability. The Committee shall impose such
restrictions on any Shares acquired pursuant to the exercise of an Option under the Plan as it may
deem advisable, including, without limitation, restrictions under applicable Federal securities
law, under the requirements of any stock exchange upon
which such Shares are then listed and under any blue sky or state securities laws applicable to
such Shares.

     8.8. Special Provisions Applicable to Incentive Stock Options. To the extent
provided or required under Section 422 of the Code or regulations thereunder (or any successor
Section or regulations) the Award of Incentive Stock Options shall be subject to the following:

9

 

          (a) In the event that the aggregate Fair Market Value of the Stock (determined at the
time the Options are granted) subject to ISOs held by a Participant that first becomes exercisable
during any calendar year exceeds $100,000 then the portion of such ISOs equal to such excess shall
be NQSOs;

          (b) An Incentive Stock Option granted to an Employee who, at the time of grant, owns (within
the meaning of Section 424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of Stock of the Company, shall have an exercise price which is at least
110% of the Fair Market Value of the Stock subject to the Option; and

          (c) No ISO granted to an Employee who, at the time of grant, has (within the meaning of
Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, shall be exercisable later than the fifth (5th) anniversary
date of its grant.

     8.9. Termination of Employment. The disposition of Options held by a Participant at
the time of termination of employment shall be determined in accordance with Article 9 below.

     8.10. Nontransferability of Options. Except as the Committee may permit, no
Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, otherwise than by will or by the laws of descent and distribution. Further, all
Options granted to a Participant under the Plan shall be exercisable during his lifetime only by
such Participant. The Committee may impose additional restrictions on transferability, and
establish such operational procedures regarding transferability, as it may deem appropriate,
necessary, or advisable.

Article 9. Termination of Employment

     9.1. Termination of Employment Other Than Due to Death or Disability. Subject to
Section 9.4 below, if the employment of a Participant shall terminate for any reason other than
death or Disability:

          (a) Each SAR shall be immediately cancelled and terminated;

          (b) Any shares of Restricted Stock, still subject to restrictions as of the date of such
termination, shall automatically be forfeited and returned to the Company or cancelled, as
applicable; and

          (c) Each Option shall be cancelled and terminated if not exercised within the 90 day period
immediately following the date of termination of employment.

     9.2. Termination Due to Death or Disability. Subject to Section 9.3 below, in the
event the employment or service of a Participant is terminated by reason of death or Disability:

          (a) Each SAR and Option held by the Participant (whether or not exercisable prior to the
date of termination) may be exercised on or before the earlier of the expiration date of the SAR or
Option or within the applicable period provided by the Code for termination due to death or
permanent disability; and

10

 

          (b) Any remaining Period of Restriction applicable to Restricted Stock Units pursuant to
Section 7.2 herein shall automatically terminate and the Shares of Restricted Stock shall thereby
be free of restrictions and be fully transferable.

     9.3. Effect of Termination of Employment. The disposition of each Award held by a
Participant in the event of termination of employment shall be as determined by the Committee and
set forth in the applicable Award Agreement and any amendment or modification thereof, which
disposition may differ from the provisions of Sections 9.1 and 9.2 above. To the extent the
applicable Award Agreement or an amendment or modification thereof does not expressly provide for
such disposition, the disposition of the Award shall be determined in accordance with Sections 9.1
and 9.2.

Article 10. Beneficiary Designation

     Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively and who may include a trustee under a will or living
trust) to whom any benefit under the Plan is to be paid in case of his death before he receives any
or all of such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Committee, and will be effective only when filed
by the Participant in writing with the Committee during his lifetime. In the absence of any such
designation or if all designated beneficiaries predecease the Participant, benefits remaining
unpaid at the Participant’s death shall be paid to the Participant’s estate.

Article 11. Rights of Participants

     11.1. Employment. Nothing in the Plan shall interfere with or limit in any way the
right of the Company or any of its Subsidiaries to terminate any Participant’s employment, nor
confer upon any Participant any right to continue in the employ of the Company or any of its
Subsidiaries.

     11.2. Participation. No Employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.

     11.3. No Implied Rights. Neither the establishment of the Plan nor any amendment
thereof shall be construed as giving any Participant, beneficiary, or any other person any legal or
equitable right unless such right shall be specifically provided for in the Plan or conferred by
specific action of the Committee in accordance with the terms and provisions of the Plan. Except
as expressly provided in this Plan, neither the Company nor any of its Subsidiaries shall be
required or be liable to make any payment under the Plan.

     11.4. No Right to Company Assets . Neither the Participant nor any other person
shall acquire, by reason of the Plan, any right in or title to any assets, funds or property of the
Company or any of its Subsidiaries whatsoever including, without limiting the generality of the
foregoing, any specific funds, assets, or other property which the Company or any of its
Subsidiaries, in its sole discretion, may set aside in anticipation of a liability hereunder. Any
benefits which become payable hereunder shall be paid from the general assets of the Company or the
applicable subsidiary. The Participant shall have only a contractual right to the amounts, if any,
payable hereunder unsecured by any asset of the Company or any of its Subsidiaries. Nothing
contained in the Plan constitutes a guarantee by the Company or any of its Subsidiaries

11

 

that the
assets of the Company or the applicable subsidiary shall be sufficient to pay any benefit to any
person.

     11.5. Rights as Shareholder; Fractional Shares.  Except as otherwise provided
under the Plan, a Participant or Beneficiary shall have no rights as a holder of Shares with
respect to Awards hereunder, unless and until Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company).
Fractional Shares shall not be issued or transferred under an Award, but the Committee may
authorize payment of cash in lieu of a fraction, or round the fraction down. To the extent the
Stock is uncertificated, references in this Plan to certificates shall be deemed to include
references to any book-entry evidencing such Shares.

     11.6. Other Restrictions and Limitations. The Committee may impose such
restrictions and limitations on any Awards granted pursuant to the Plan as it may deem advisable,
including, without limitation, restrictions under applicable Federal or state securities laws,
Share ownership or holding period requirements, or requirements to enter into or to comply with
confidentiality, non-competition and/or other restrictive or similar covenants, and may legend the
certificates issued in connection with an Award to give appropriate notice of any such
restrictions.

Article 12. Change in Control

     Notwithstanding any other provisions of the Plan, and except as otherwise provided in the
Award Agreement, in the event of a Change in Control all Awards granted under this Plan shall
immediately vest 100% in each Participant, including Incentive Stock Options, Nonqualified Stock
Options, Stock Appreciation Rights and Restricted Stock.

Article 13. Amendment, Modification, and Termination

     13.1. Amendment, Modification and Termination of Plan . The Board may terminate the
Plan or any portion thereof at any time, and may amend or modify the Plan from time to time in such
respects as the Board may deem advisable in order that any Awards thereunder shall conform to any
change in applicable laws or regulations or in any other respect the Board may deem to be in the
best interests of the Company; provided, however, that no such amendment or modification shall,
without stockholder approval, (i) except as provided in Section 4.2, increase the number of shares
of Stock which may be issued under the Plan, (ii) expand the types of Awards available to
Participants under the Plan, (iii) materially expand the class of persons eligible to participate
in the Plan; (iv) delete or limit the provisions in Section 8.3 prohibiting the repricing of
Options or reduce the price at which Shares may be offered under Options; or (v) extend the
termination date for making Awards under the Plan. In addition, the Plan shall not be amended
without approval of such amendment by the Company’s stockholders if such amendment is required
under (1) the rules and regulations of the Nasdaq Stock Market or an other national exchange on
which the Stock is then listed, or (2) other applicable law, rules or regulations.

     13.2. Amendment or Modification of Awards. The Committee may amend or modify any
outstanding Awards in any manner to the extent that the Committee would have had the authority
under the Plan initially to make such Award as so modified or amended, including

12

 

without
limitation, to change the date or dates as of which Awards may be exercised, to remove the
restrictions on Awards, or to modify the manner in which Awards are determined and paid.

     13.3. Effect on Outstanding Awards.  No such amendment, modification or
termination of the Plan pursuant to Section 13.1 above, or amendment or modification of an Award
pursuant to Section 13.2 above, shall materially adversely alter or impair any outstanding Awards
without the consent of the Participant affected thereby.

Article 14. Withholding

     14.1. Tax Withholding. The Company and any of its Subsidiaries shall have the power
and the right to deduct or withhold, or require a Participant to remit to the Company or any of its
Subsidiaries, an amount sufficient to satisfy Federal, state and local taxes (including the
Participant’s FICA obligation) required by law to be withheld with respect to any grant, exercise,
or payment made under or as a result of this Plan.

     14.2. Stock Delivery or Withholding.  With respect to withholding required upon
the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any
other taxable event arising as a result of Awards
granted hereunder, Participants may elect to satisfy the withholding requirement, in whole or in
part, by delivering to the Company Shares of Stock previously owned by the Participant or, if
permitted by the Committee, having the Company withhold Shares of Stock, in each case having a Fair
Market Value on the date the tax is to be determined equal to the minimum (or such greater amount
as the Committee may permit) statutory total tax which would be imposed on the transaction. All
such elections shall be irrevocable, made in writing, signed by the Participant, and shall be
subject to any restrictions or limitations that the Committee, in its sole discretion, deems
appropriate. Stock withholding elections made by Participants who are subject to the short-swing
profit restrictions of Section 16 of the Exchange Act must comply with the additional restrictions
of Section 16 and Rule 16b-3 in making their elections.

Article 15. Successors

     All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall
be binding on any successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all
of the business and/or assets of the Company.

Article 16. Requirements of Law

     16.1. Requirements of Law. The granting of Awards and the issuance of Shares of Stock
under this Plan shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may be required.

     16.2. Governing Law.  The Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of Delaware.

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}]]