Document:

Exhibit 10.23

                          EMPLOYMENT AGREEMENT BETWEEN
                  HIGH PLAINS GAS, LLC AND BRANDON W. HARGETT

     This Employment Agreement (hereinafter the "Agreement"), executed effective
the 1st day of January, 2011 (hereinafter the "Effective Date"), is entered into
by  and  among  High  Plains  Gas, LLC, a Wyoming limited liability company (the
"Employer")  and  Brandon  W.  Hargett  (the  "Employee").  The Employer and the
Employee  may  individually be referred to as a "Party", and collectively as the
"Parties".

WHEREAS,  the  Employer  and  the  Employee  are  desirous of entering into this
Agreement  wherein  the  Employee  shall become employed on a full-time basis on
behalf of the Employer and any affiliates of the Employer at all locations which
may  require  the services of the Employee commencing effective January 1, 2011;
and

WHEREAS, the Employee is willing and able to accept employment with the Employer
on  the  terms  and conditions set forth in this Employment Agreement during the
Term  (as  defined  herein)  of  this  Agreement.

NOW,  THEREFORE,  in  consideration  of  the  payment  of the sum of one hundred
dollars  ($100.00)  by the Employer to the Employee at the time of the execution
of  this Agreement, and of the mutual covenants contained herein and other valid
consideration,  the  sufficiency  of  which  is acknowledged, the Parties hereto
agree  as  follows:

SECTION  1.     EMPLOYMENT.
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     1.1     TERM.  The Employer agrees to employ the Employee, and the Employee
agrees  to  be  employed by the Employer pursuant to this Agreement for a period
commencing on the 1st day of January, 2011 (such date hereinafter referred to as
the  "Effective  Date") and ending on the earlier of:  (i) 12:00 a.m. (midnight)
the  31st  day  of  December,  2011;  or  (ii) the termination of the Employee's
employment  in  accordance  with  Section  3 hereof (the "Term").  Unless either
Party  elects to terminate this Agreement prior to the conclusion of its initial
Term or any renewal Term by providing the other Party notice of such election at
least sixty (60) calendar days prior to the expiration of the then current Term,
this  Agreement  shall  automatically  renew  for successive one (1) year terms,
subject  to  early  termination  as  provided  for  herein,  upon  the terms and
conditions  provided  within  this  Agreement,  commencing  on the day after the
expiration  of  the  then  current  Term.

     1.2     DUTIES.  During  the  Term, the Employee shall serve as a full-time
employee  engaged  in  business  development,  and  shall  perform  such duties,
functions  and responsibilities during the Term commensurate with the Employee's
position  as  reasonably  directed  by  the  Company's  Board of Directors.  The
Employee's  principal  place  of  employment  shall  be  located

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in  Gillette,  Wyoming  provided  that  Employee  shall  travel and shall render
services  at  other locations, both as may reasonably be required to fulfill his
duties  hereunder.

     1.3     EXCLUSIVITY;  OTHER  EMPLOYMENT  AND  INVESTMENTS  DURING  TERM AND
DURING  PERIOD  OF NON-COMPETITION.  Except as otherwise provided herein, during
the  Term, the Employee shall devote his full business time and attention to the
business  and  affairs of the Employer, shall faithfully serve the Employer, and
shall  in  all  material  respects  conform  to  and  comply with the lawful and
reasonable  directions and instructions given to him by the Company's President,
consistent with Section 1.2, herein.  Nothing contained herein shall prevent the
Employee  from  being  involved  in charitable, civic, or other outside business
activities  provided  such  activities  do  not  pose  a conflict of interest or
interfere  with  the  performance of his duties to the Employer pursuant to this
Agreement.

     Notwithstanding  anything to the contrary contained herein, during the Term
and  during the period of non-competition, the Employee's ownership of shares of
stock  and  Membership  Interests/Membership Units or other form of ownership in
the  businesses as identified on the attached  SCHEDULE 1 to this Agreement, and
his  ownership  and  investment  in  any  other  businesses  or  activities  not
affiliated  with the Employer, provided such businesses and activities are not a
"Restricted  Enterprise"  as  defined  within Section 4.2 shall not constitute a
breach  of  this Section 1.3 or any other terms and provisions of this Agreement
provided  such  ownership, investments, or involvement do not interfere with the
Employee's  performance of his duties hereunder.  The Parties agree the Employee
may  become  an  investor, shareholder, member, or otherwise in other businesses
and  investments  during  the  Term  and during the period of non-competition as
provided  herein.

SECTION  2.     COMPENSATION.
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     2.1     SALARY.  As  compensation  for  the  performance  of the Employee's
services  hereunder,  during  the Term, the Employer shall pay to the Employee a
salary  at  an  annual  rate of eighty thousand dollars ($80,000.00), payable in
accordance  with  the  Employer's standard payroll policies (the "Base Salary").

     2.2     BONUS.  The  Employer  may,  from  time  to  time,  in  its  sole
discretion, adopt a stock bonus plan or otherwise determine a bonus amount which
may  be paid to the Employee.  Nothing herein shall obligate the Employer to pay
a  bonus  to  the  Employee.  Any  compensation  paid to the Employee under this
Agreement  shall  be  subject  to  customary withholding for Federal, State, and
other  employment  taxes  as  required  with  respect to compensation paid by an
Employer  to  an  Employee.

     2.3     EMPLOYEE BENEFITS.  During the Term, the Employee shall be eligible
to  participate  in  such  health  and  other group insurance and other employee
benefit plans and programs of the Employer as are in effect from time to time on
the same basis as other senior executives of the Company.  Said health insurance
coverage  and  the  insurance carrier shall be determined and selected by and at
the  Employer's sole discretion and election.  The Employer may terminate health
insurance coverage as it may determine in its sole discretion during the Term of
the  Employee's  employment.  The  Employee  shall  pay  and  contribute  to any
insurance  plans  such  sums  as  are  required  pursuant to the Plan documents.

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     2.4     VACATION  AND  TIME  OFF.  During  the  Term, the Employee shall be
entitled  to  certain  paid  time  off,  paid  holidays,  and  vacation  time in
accordance  with  the  policies and procedures as adopted by the Employer and as
may  be  amended  from  time to time.  Vacation time and other time off shall be
scheduled  by  mutual  agreement  with  the  Employer.

     2.5     BUSINESS  EXPENSES;  MOVING  EXPENSES.  The  Employer  shall pay or
reimburse  the  Employee  for all commercially reasonable out-of-pocket business
expenses the Employee incurs during the Term in performing his duties under this
Agreement  upon presentation of documentation and in accordance with the expense
reimbursement  policy  of  the Employer as approved by the Board of Directors of
the  Company  (the  "Board") (or a committee thereof) and in effect from time to
time.  Notwithstanding  anything  herein to the contrary or otherwise, except to
the  extent  any  expense  or reimbursement described in this Agreement does not
constitute  a  "deferral  of compensation" within the meaning of Section 409A of
the  Internal Revenue Code of 1986, as amended, and the regulations and guidance
thereunder  ("Section  409A"),  any  expense  or reimbursement described in this
Agreement  shall  be  made  in  accordance  with  the policies and procedures as
adopted  by  the  Employer  from  time  to  time.

SECTION  3.     EMPLOYMENT  TERMINATION.
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     3.1     TERMINATION  OF  EMPLOYMENT.  The  Employer  may  terminate  the
Employee's  employment  for  any  reason  during  the Term, and the Employee may
voluntarily  terminate  his  employment  for any reason during the Term, in each
case  (other  than a termination by the Employer for Cause) at any time upon not
less  than  thirty  (30)  days'  notice  to  the  other Party.  The Employer may
immediately  terminate  the  Employee  for  Cause (as defined herein).  Upon the
termination  of  the Employee's employment with the Employer for any reason, the
Employee shall be entitled to any Base Salary earned but unpaid through the date
of  termination, any unreimbursed expenses in accordance with Section 2.5 hereof
and,  to  the  extent  not  theretofore  paid  or provided, any other amounts or
benefits  required  to be paid or provided under any plan, Annual Bonus or other
incentive  compensation  plan,  program,  policy,  practice or other contract or
agreement  of  the  Employer  and  its  affiliated companies through the date of
termination of employment (collectively, the "Accrued Amounts").  All sums to be
paid  for  the Annual Bonus and any incentive compensation plan shall be paid to
the Employee on a pro-rated basis for the entire fiscal year based on the number
of  days  the  Employee  is  employed  by  the  Employer  during  such  year.

     3.2     CERTAIN TERMINATIONS.

          (a)     TERMINATION  BY  THE  EMPLOYER  OTHER  THAN  FOR  CAUSE  OR
DISABILITY;  TERMINATION  BY  THE  EMPLOYEE  FOR GOOD REASON.  If the Employee's
employment is terminated during the Term by the Employer other than for Cause or
Disability,  or  by  the  Employee  for  Good Reason, in addition to the Accrued
Amounts  the Employee shall be entitled to a lump sum payment equal to three (3)
months  of  Base  Salary  at the rate in effect immediately prior to the date of
termination (such payment, the "Severance Payment").  The Employer's obligations
to  make  the  Severance  Payment shall be conditioned upon:  (i) the Employee's
continued compliance with his obligations under Section 4 of this Agreement; and
(ii)  the  Employee's  execution and delivery of a valid and enforceable general
release of claims (the "Release") in the form attached hereto as SCHEDULE 2.  In
the  event  it  is  established  by  a  court  of  competent

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jurisdiction  that  the  Employee has breached any of the covenants set forth in
Section  4  of  this  Agreement,  the  Employee  will  immediately return to the
Employer any portion of the Severance Payment that has been paid to the Employee
pursuant  to  this Section 3.2(a).  Subject to the foregoing and Section 3.2(c),
the  Severance  Payment  will be paid to the Employee on the regularly scheduled
payment  dates  for  payroll  during  the  three  (3)  month  term following the
termination  of  the  Employee's  employment.

          (b)     DEFINITIONS.  For  purposes of this Section 3.2, the following
terms  shall  have  the  following  meanings:

               (1)     "Cause" shall mean the Employee's (i) continuing failure,
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for  more than ten (10) days after the Employer's written notice to the Employee
thereof,  to  perform  such  duties as are reasonably requested by the Employer;
(ii)  failure  to  observe material policies generally applicable to officers or
employees  of  the Employer unless such failure is capable of being cured and is
cured  within ten (10) calendar days of the Employee receiving written notice of
such  failure;  (iii)  failure  to  reasonably  cooperate  with  any  internal
investigation  of the Employer unless such failure is capable of being cured and
is  cured within ten (10) calendar days of the Employee receiving written notice
of  such  failure;  (iv)  commission  of  any  act  of fraud, theft or financial
dishonesty  with respect to the Employer or indictment for or conviction or plea
of  guilty  or  nolo  contendre  to  any  felony;  (v) material violation of the
provisions of this Agreement unless such violation is capable of being cured and
is  cured within ten (10) calendar days of the Employee receiving written notice
of  such  violation;  (vi)  chronic absenteeism (unless caused by a Disability);
(vii)  habitual  use  of  alcohol  or  controlled  substance  that  impairs  the
Employee's  ability  to  perform  his  duties  hereunder;  (viii)  the  loss  or
restriction  of  the  Employee's Driver's License or ability to provide services
for  any reason on behalf of the Employer at the locations in which services are
provided;  (ix)  the  inability  of  the  Employer to obtain liability insurance
covering  the Employee's services at regular rates, including but not limited to
the  loss  of  his  Driver's  License and any other insurance policies providing
coverage  for  the  services  provided  by  the Employer; (x) the conduct of the
Employee  which  is  detrimental to the services being provided by the Employer,
violates  ethical  standards,  or  Federal,  State,  or local laws, or adversely
affects the reputation of the Employer; (xi) any representation or warranty made
by the Employee which ceases to be true or was not true when made, or the breach
of  any  provision  of  this  Agreement by the Employee; or (xii) the Employee's
performance  of  services for other individuals or entities in violation of this
Agreement  and  any other agreements existing with the Employer, its affiliates,
and  its  successors  and  assigns.

               (2)     "Disability"  shall  mean  the  Employee  is  entitled to
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receive long-term disability benefits under the long-term disability plan of the
Employer  in  which  Employee  participates,  or,  if there is no such plan, the
Employee's  inability,  as  determined by a physician, due to physical or mental
ill  health,  to  perform the essential functions of the Employee's job, with or
without a reasonable accommodation, for ninety (90) calendar days during any 365
day  period  irrespective  of  whether such days are consecutive, subject to all
other  laws,  rules,  and  regulations.

               (3)     "Good  Reason"  shall  mean:  (i)  a material and adverse
                        ------------
change  in  the  Employee's  duties or responsibilities; (ii) a reduction in the
Employee's  Base  Salary;  or  (iii)

<PAGE>
a  material  breach  by  the Employer of this Agreement that, if curable, is not
cured  within fifteen (15) calendar days after written notice from the Employee.

          (c)     SECTION  409A.  If  the Employee is a "Specified Employee" for
purposes  of  Section  409A  of the Code, and the regulations thereunder, to the
extent  required  to comply with Section 409A of the Code, any Severance Payment
required  to be made pursuant to Section 3.2(a) which is subject to Section 409A
of  the  Code shall not be made until one (1) day after the day which is six (6)
months  from  the  date  of  termination.  For  purposes  of this Agreement, the
Employee's  employment  with the Employer shall be considered to have terminated
when  the  Employee  incurs a "separation from service" with the Employer within
the  meaning  of  Section  409A(a)(2)(A)(i)  of  the  Code,  and  applicable
administrative  guidance  issued  thereunder.

     3.3     EXCLUSIVE  REMEDY.  The  foregoing  payment upon termination of the
Employee's  employment  shall constitute the exclusive severance payment due the
Employee  upon  a termination of his employment under this Employment Agreement.

     3.4     RESIGNATION  FROM  ALL  POSITIONS.  Upon  the  termination  of  the
Employee's  employment  with  the Employer for any reason, the Employee shall be
deemed  to have resigned, as of the date of such termination, from all positions
he  then holds with the Employer as an Officer, Director, Employee and Member of
the Board (and any committee thereof) (as applicable) and the Board of Directors
(and  any  committee  thereof)  of  any  of  the  Employer's  affiliates.

     3.5     COOPERATION.  Following  the  termination  of  the  Employee's
employment  with  the Employer for any reason, the Employee agrees to reasonably
cooperate  with  the  Employer  upon  reasonable  request of the Board and to be
reasonably  available to the Employer with respect to matters arising out of the
Employee's  services  to  the Employer and its subsidiaries.  The Employer shall
pay  the  Employee  a  per diem fee of not less than sixty dollars and ten cents
dollars  ($60.10)  per  hour for any such services, and shall promptly reimburse
the  Employee  for expenses reasonably incurred in connection with such matters.

SECTION  4.     UNAUTHORIZED  DISCLOSURE;  NON-COMPETITION;  NON-SOLICITATION;
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INTERFERENCE  WITH  BUSINESS  RELATIONSHIPS;  PROPRIETARY  RIGHTS.
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     The  Employer  and  the  Employee shall, concurrently with the execution of
this  Agreement,  enter  into  a  Non-Competition  and Confidentiality Agreement
wherein  the  Employee  shall be bound by the terms of such instrument for which
separate  consideration has been paid.  Said Non-Competition and Confidentiality
Agreement  is  attached  hereto and marked as SCHEDULE 3.  The Employee shall be
bound  by the terms of such Non-Competition and Confidentiality Agreement during
the Term of this Agreement, during his employment, and thereafter.  The Employee
agrees  his  employment  and during the Restricted Period (as defined herein) be
restricted  in  accordance  with  the  terms  of  this  Agreement  and  the
Non-Competition  and Confidentiality Agreement.  For purposes of this Section 4,
the  obligations  regarding  unauthorized  disclosure,  non-competition,
non-solicitation,  interference  with  business  relationships,  and proprietary
rights  shall  be  applicable  to  the  Employer,  its affiliates, subsidiaries,
including  but  not  limited  to  High  Plains  Gas,  LLC,  and  its
successors-in-interest.

<PAGE>
     4.1     UNAUTHORIZED  DISCLOSURE.  The Employee agrees and understands that
in  the  Employee's  position with the Employer, the Employee will be exposed to
and  will  receive  information  relating  to  the  confidential  affairs of the
Employer  and  its  affiliates,  including,  without  limitation,  technical
information,  intellectual  property,  business and marketing plans, strategies,
customer  information,  software,  other  information  concerning  the products,
promotions,  development,  financing,  expansion  plans,  business  policies and
practices  of  the  Employer  and  its affiliates and other forms of information
considered  by  the  Employer  and  its  affiliates to be confidential or in the
nature  of  trade  secrets  (including,  without limitation, ideas, research and
development,  know-how,  formulas,  technical  data,  designs,  drawings,
specifications,  customer  and  supplier lists, pricing and cost information and
business  and  marketing  plans  and proposals) (collectively, the "Confidential
Information").  Notwithstanding  the  foregoing,  Confidential Information shall
not  include  information  that  is now in or hereafter enters the public domain
without  a  breach  of  this  Agreement.

     The Employee agrees that at all times during the Employee's employment with
the  Employer  and thereafter, the Employee shall not disclose such Confidential
Information,  either  directly  or  indirectly,  to any individual, corporation,
partnership,  limited  liability  company, association, trust or other entity or
organization,  including  a  government or political subdivision or an agency or
instrumentality  thereof  (each  a  "Person")  other than in connection with the
Employee's employment with the Employer without the prior written consent of the
Employer, and shall not use or attempt to use any such information in any manner
other  than in connection with his employment with the Employer, unless required
by  law  to  disclose such information, in which case the Employee shall provide
the  Employer  with written notice of such requirement as far in advance of such
anticipated  disclosure  as  possible.  This  confidentiality  covenant  has  no
temporal,  geographical  or  territorial  restriction.  Upon  termination of the
Employee's  employment  with the Employer, the Employee shall promptly supply to
the  Employer  all  property,  computers, electronic information or other media,
keys,  notes,  memoranda,  writings,  lists,  files,  reports,  customer  lists,
correspondence,  tapes,  disks,  cards, surveys, maps, logs, machines, technical
data  and  any  other  tangible  product or document which has been produced by,
received  by  or  otherwise  submitted  to  the  Employee  during the Employee's
employment with the Employer, and any copies thereof in his (or capable of being
reduced  to  his)  possession.  The  requirement  regarding  non-disclosure  of
information  shall  exist  during  the  Term  of  the  Employee's employment and
indefinitely  following  his  termination  for  any  reason.

     4.2     NON-COMPETITION.  By  and  in  consideration  of  the  Employer's
entering  into this Agreement and the payments to be made and the benefits to be
provided  hereunder,  and in further consideration of the Employee's exposure to
the  Confidential  Information  of the Employer and its affiliates, the Employee
agrees that the Employee shall not, during the Term of the Employee's employment
with  the  Employer  (whether  during  the  Term  or  thereafter) and, except as
otherwise  provided  herein,  (the "Restricted Period"), directly or indirectly,
own,  manage,  operate,  join,  control,  be  employed by, or participate in the
ownership,  management,  operation  or control of, or be connected in any manner
with,  including,  without  limitation,  holding  any position as a stockholder,
Director,  Officer,  consultant,  independent  contractor, employee, partner, or
investor  in any Restricted Enterprise (as defined herein) in which the Employer
was  engaged  during  the  twenty-four  (24)  months  preceding  the  date  of
termination;  and  provided  further,  that  in  no event shall ownership of one
percent  (1%)  or  less  of  the

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outstanding  securities  of  any  class  of  any  issuer  whose  securities  are
registered  under  the  Securities  Exchange  Act  of 1934, as amended, standing
alone,  which  business  or  enterprise  provides  goods or services which would
otherwise  be  a Restricted Enterprise (as defined herein) be prohibited by this
Section  4.2  so  long as the Employee does not have, or exercise, any rights to
manage, become employed by, provide consulting services, or operate the business
as  such  issuer  other  than  the  rights  as  a stockholder or member thereof.

     For  purposes  of  this Section 4.2, "Restricted Enterprise" shall mean any
business or enterprise conducted in any geographic area serviced by the Employer
which  materially competes with High Plains Gas, LLC, High Plains Gas, Inc., and
any  other  affiliates or subsidiaries' business of the acquisition, exploration
for,  production,  and  transportation of minerals, including but not limited to
oil,  gas,  coalbed methane gas, and other minerals of any type or nature except
as  otherwise  permitted  during the Term, during any period of non-competition,
and  as  provided  pursuant  to Section 1.3.  At the commencement of the Term of
this  Agreement,  the  geographic areas which are serviced by the Employer shall
include  those  areas  identified  on  the  attached  SCHEDULE  4, hereto.  Such
geographic area may be expanded during the Term of this Agreement and thereafter
shall  include  all geographic areas serviced by the Employer on the date of the
termination  of  the  Employee's  employment.

     Nothing  herein shall prohibit the Employee from owning any interest in the
businesses  and investments as identified within the attached SCHEDULE 1 of this
Agreement,  any  other  businesses  in  which he may become an investor or owner
during  the  Term  and  during the period of non-competition, and any businesses
which  are  not a "Restricted Enterprise".  In the event the Employee becomes an
investor  or  owner  of  a  business  which  is  not  at the time of his initial
investment  or  ownership  a  "Restricted Enterprise", and High Plains Gas, LLC,
High Plains Gas, Inc., or any of its subsidiaries thereafter engage in a similar
business  activity,  such business of the Employee shall not thereafter become a
"Restricted  Enterprise",  and  he  may  continue  to  own  and  invest  in such
businesses.  During  the  Restricted  Period,  upon request of the Employer, the
Employee  shall  notify  the  Employer of the Employee's then-current employment
status.

     4.3     NON-SOLICITATION  OF  EMPLOYEES.  During  the Restricted Period and
for  a  period  of  thirty-six  (36)  months  following  the  termination of the
Employee's  employment  for  any  reason,  the  Employee  shall  not directly or
indirectly  induce  or  solicit  (or assist any Person to induce or solicit) for
employment  any  person  who  is, or within twenty-four (24) months prior to the
date  of  such  solicitation,  was an employee of the Employer, High Plains Gas,
LLC,  or  any  of  its  affiliates.

     4.4     INTERFERENCE  WITH  BUSINESS  RELATIONSHIPS.  During the Restricted
Period  and  for  thirty-six  (36)  months  following  the  termination  of  the
Employee's  employment  for  any  reason,  the  Employee  shall  not directly or
indirectly  induce  or  solicit  (or assist any Person to induce or solicit) any
customer,  supplier,  or client of the Employer or its subsidiaries to terminate
its  relationship or otherwise cease doing business in whole or in part with the
Employer or its subsidiaries, or knowingly directly or indirectly interfere with
(or  assist  any Person to interfere with) any material relationship between the
Employer  or its subsidiaries and any of its or their customers or clients so as
to  cause harm to the Employer or its affiliates.  For purposes hereof, the term
"Customer"  means any individual, person or entity which was or is a customer of
High

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Plains  Gas,  LLC,  High  Plains  Gas,  Inc.,  or its affiliates, and any of its
successors and assigns within two (2) years prior to the date of the termination
of  this  Agreement.  For  purposes  of  hereof,  "Supplier"  shall  mean  any
individual,  Person,  or  entity  which  was  or is a supplier of any product or
service  to  High Plains Gas, LLC, High Plains Gas, Inc., or its affiliates, and
any  successors  and  assigns  within  two  (2)  years  prior to the date of the
termination  of  this  Agreement.

     4.5     EXTENSION OF RESTRICTED PERIOD.  The Restricted Period and any Term
following  the  termination  of the Employee's employment for which restrictions
are applicable shall be tolled for any period during which the Employee is found
by  a  court of competent jurisdiction to have been in breach of any of Sections
4.2,  4.3,  or  4.4  hereof.

     4.6     PROPRIETARY  RIGHTS.  The  Employee  shall disclose promptly to the
Employer  any  and all inventions, discoveries, and improvements (whether or not
patentable  or  registrable  under  copyright  or  similar  Statutes),  and  all
patentable  or copyrightable works, initiated, conceived, discovered, reduced to
practice, or made by him, either alone or in conjunction with others, during the
Employee's  employment  with  the  Employer  and  related  to  the  business  or
activities  of  the Employer and its affiliates (the "Developments").  Except to
the  extent any rights in any Developments constitute a work made for hire under
the  U.S.  Copyright  Act,  17  U.S.C.  Sec.  101  et seq. that are owned by the
Employer and/or its applicable affiliate, the Employee assigns all of his right,
title  and  interest  in  all  Developments (including all intellectual property
rights  therein)  to  the  Employer or its nominee without further compensation,
including  all  rights  or  benefits  therefor, including without limitation the
right  to  sue  and  recover  for  past  and  future infringement.  The Employee
acknowledges  that  any  rights in any Developments constituting a work made for
hire  under  the  U.S.  Copyright  Act, 17 U.S.C Sec. 101 et seq. are owned upon
creation  by  the  Employer  and/or  its  applicable affiliate as the Employee's
employer.

     Whenever requested to do so by the Employer, the Employee shall execute any
and  all applications, assignments or other instruments which the Employer shall
deem  necessary to apply for and obtain trademarks, patents or copyrights of the
United  States  or any foreign country or otherwise protect the interests of the
Employer  and  its  affiliates therein.  These obligations shall continue beyond
the  end  of  the  Employee's  employment  with  the  Employer  with  respect to
inventions,  discoveries,  improvements  or  copyrightable  works  initiated,
conceived  or  made by the Employee while employed by the Employer, and shall be
binding  upon  the  Employee's employers, assigns, executors, administrators and
other  legal  representatives.

     In  connection  with  his  execution  of  this  Agreement, the Employee has
informed  the  Employer  in  writing  of  any  interest  in  any  inventions  or
intellectual property rights that he holds as of the date hereof as set forth on
SCHEDULE  5 hereto (the "Existing Inventions").  Notwithstanding anything to the
contrary herein, the Developments shall not include any Existing Inventions.  If
the  Employer  is  unable for any reason, after reasonable effort, to obtain the
Employee's  signature  on  any  document  needed  in connection with the actions
described  in  this  Section 4.6, the Employee hereby irrevocably designates and
appoints  the  Employer  and  its  duly  authorized  officers  and agents as the
Employee's agent and attorney in fact to act for and on the Employee's behalf to
execute,  verify  and  file  any  such  documents  and  to do all other lawfully

<PAGE>
permitted  acts  to further the purposes of this Section 4.6 with the same legal
force  and  effect  as  if  executed  by  the  Employee.

     4.7     CONFIDENTIALITY  OF  AGREEMENT.  Other  than  with  respect  to
information  required  to  be  disclosed  by applicable law, industry regulating
agencies and stock exchanges, the Parties hereto agree not to disclose the terms
of  this  Agreement  to  any  Person,  provided  the  Employee may disclose this
Agreement  and/or any of its terms to the Employee's immediate family, financial
advisors,  accountants,  and  attorneys  so long as the Employee instructs every
such Person to whom the Employee makes such disclosure not to disclose the terms
of  this  Agreement  further.

     4.8     REMEDIES.  The Employee agrees that any breach of the terms of this
Section  4  may  result  in  irreparable injury and damage to the Employer, High
Plains  Gas,  LLC,  High  Plains  Gas,  Inc.,  its  affiliates,  and
successors-in-interest for which the Employer, High Plains Gas, LLC, High Plains
Gas,  Inc.,  its  affiliates,  and  successors-in-interest  may have no adequate
remedy  at  law;  the  Employee  therefore also agrees that in the event of said
breach  or  any threat of breach, the Employer shall be entitled to an immediate
injunction and restraining order to prevent such breach and/or threatened breach
and/or  continued  breach  by the Employee and/or any and all Persons acting for
and/or  with  the  Employee, without having to prove damages, in addition to any
other  remedies  to  which  the  Employer  may  be entitled at law or in equity,
including,  without  limitation,  the  obligation  of the Employee to return any
Severance  Payment  made  by  the  Employer  to the Employee.  The terms of this
Paragraph  shall  not  prevent  the  Employer  from pursuing any other available
remedies  for  any  breach  or  threatened  breach  hereof,  including,  without
limitation,  the  recovery  of  damages from the Employee.  The Employee and the
Employer  further  agree  that the provisions of the covenants contained in this
Section 4 are reasonable and necessary to protect the businesses of the Employer
and  its affiliates because of the Employee's access to Confidential Information
and  his  material  participation  in  the  operation  of  such  businesses.

SECTION  5.     REPRESENTATION.
-----------     --------------

     The Employee and the Employer each represents and warrants that:  (i) he or
it  is  not subject to any contract, arrangement, policy or understanding, or to
any  Statute, governmental rule or regulation, that in any way limits his or its
ability  to  enter  into  and  fully  perform  his or its obligations under this
Employment  Agreement;  and  (ii)  he  or it is otherwise able to enter into and
fully  perform  his  or  its  obligations  under  this  Agreement.

SECTION  6.     NON-DISPARAGEMENT.
-----------     ------------------

     From  and  after  the  Effective  Date  and  following  termination  of the
Employee's  employment  with  the  Employer, the Employee agrees not to make any
statement  (other  than  statements  made  in  connection  with carrying out his
responsibilities for the Employer and its affiliates) that is intended to become
public,  or  that  should  reasonably  be  expected  to  become public, and that
criticizes,  ridicules, disparages, reflects adversely or encourages any adverse
action against the Employer or any of its affiliates, or is otherwise derogatory
of  the  Employer,  High Plains Gas, LLC or any of its subsidiaries, affiliates,
employees,  officers,  directors  or

<PAGE>
stockholders.  The  provisions of this Section shall not apply to the extent the
Employee  is testifying truthfully under oath pursuant to any lawful court order
or  subpoena, or is otherwise responding to or providing disclosures required by
law.

SECTION  7.     WITHHOLDING.
-----------     ------------

     The  Employer  may  withhold from any amounts payable to the Employee under
this  Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.  The Employee shall
be  solely  responsible  for the payment of all taxes relating to the payment or
provision  of  any  amounts  or  benefits  hereunder.

SECTION  8.     MISCELLANEOUS.
-----------     --------------

     8.1     INDEMNIFICATION.  The  Employer shall indemnify the Employee to the
fullest  extent  provided under the Employer's By-Laws and the laws of the State
of  Wyoming.

8.2     AMENDMENTS AND WAIVERS.  This Agreement and any of the provisions hereof
may  be amended, waived (either generally or in a particular instance and either
retroactively  or prospectively), modified or supplemented, in whole or in part,
only  by  written  agreement  signed  by the Parties hereto; provided, that, the
observance  of  any  provision of this Agreement may be waived in writing by the
Party  that  will lose the benefit of such provision as a result of such waiver.
The  waiver  by  any Party hereto of a breach of any provision of this Agreement
shall  not  operate  or  be  construed as a further or continuing waiver of such
breach  or  as  a  waiver of any other or subsequent breach, except as otherwise
explicitly  provided for in such waiver.  Except as otherwise expressly provided
herein,  no  failure  on  the  part  of  any  Party to exercise, and no delay in
exercising,  any  right,  power  or  remedy hereunder, or otherwise available in
respect hereof at law or in equity, shall operate as a waiver thereof, nor shall
any  single  or  partial  exercise  of such right, power or remedy by such Party
preclude  any  other  or  further  exercise thereof or the exercise of any other
right,  power  or  remedy.

8.3     NOTICES.  Any  notice,  request,  instruction  or  other  document  or
communication  to  be given hereunder shall be in writing and shall be deemed to
have  been  duly  given:  (i)  if  mailed, three (3) calendar days following the
mailing  of  such  notice  in  any general or branch office of the United States
Postal  Service,  enclosed  in  a registered or certified postage-paid envelope;
(ii) if sent by facsimile transmission, when so sent and receipt acknowledged by
an  appropriate  facsimile  receipt;  or (iii) if sent by other means (including
e-mail),  when  actually  received  by  the  Party to which such notice has been
directed, in each case at the respective addresses or numbers set forth below or
such  other  address or number as such Party may have fixed by notice; provided,
however,  that  in  the event of delivery under clauses (ii) or (iii) (otherwise
than  by  receipted  hand  delivery),  such notice shall be promptly followed by
notice  pursuant  to  clause  (i):

     TO  HIGH  PLAINS  GAS,  LLC                  TO  EMPLOYEE

     High  Plains  Gas,  LLC                      Brandon  W.  Hargett
     P.O.  Box  1564                              2754  Shady  Hollow  Loop
     Gillette,  WY  82717                         Lehi,  UT  84003

<PAGE>

     WITH  COPIES  (WHICH  SHALL  NOT
     --------------------------------
     CONSTITUTE  NOTICE)  TO:
     ------------------------

     J.  Stan  Wolfe
     Law  Firm  of  J.  Stan  Wolfe,  P.C.
     222  S.  Gillette  Avenue,  Suite  500
     Gillette,  WY  82716
     Phone:  307.682.2151
     Facsimile:  307.686.3721
     wolfelaw@vcn.com
     ----------------

     Any Party may alter the address to which communications or copies are to be
sent  by  giving  notice  of  such  change  of  address  in  conformity with the
provisions  of  this  Section  for  the  giving  of  notice.

8.4     GOVERNING  LAW.  This  Agreement  shall  be  construed  and  enforced in
accordance  with,  and the rights and obligations of the Parties hereto shall be
governed  by  the  laws  of  the  State  of Wyoming without giving effect to the
conflicts  of  law  principles  thereof.

8.5     SEVERABILITY.  Whenever  possible,  each  provision  or  portion  of any
provision of this Agreement, including those contained in Section 4 hereof, will
be  interpreted in such manner as to be effective and valid under applicable law
but  the  invalidity  or  unenforceability  of  any  provision or portion of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability  of  the  remainder of this Agreement in that jurisdiction or the
validity  or  enforceability  of  this  Agreement,  including  that provision or
portion  of  any  provision,  in  any other jurisdiction.  In addition, should a
court  determine  that  any  provision  or  portion  of  any  provision  of this
Agreement,  including  those contained in Section 4 hereof, is not reasonable or
valid,  either  in  period of time, geographical area, or otherwise, the Parties
hereto  agree  that  such  provision  should  be interpreted and enforced to the
maximum  extent  which  such  court  deems  reasonable  or  valid.

8.6     ENTIRE  AGREEMENT.  This  Agreement  and all attached related agreements
constitutes  the entire agreement between the Parties hereto, and supersedes all
prior  representations,  agreements  and  understandings, both written and oral,
between  the  Parties  hereto  with  respect  to  the  subject  matter  hereof.

8.7     COUNTERPARTS.  This  Agreement  may  be  executed  in  any  number  of
counterparts,  each  of  which  shall  be  deemed  an  original,  but  all  such
counterparts  shall  together  constitute  one  and  the  same  instrument.

8.8     ASSIGNMENT  AND  SUCCESSORS.  The rights and obligations of the Employer
and  its Affiliates under this Agreement may be assigned by it to an individual,
Affiliate,  Company,  Corporation,  limited liability company, limited liability
partnership,  or  other  business  entity.  Such  rights of the Employer and its
Affiliates  under this Agreement may be assigned pursuant to a reorganization of
the  Employer or its Affiliates, and to a transferee (whether by merger, sale of
all  or  substantially all of its assets, sale of securities of the Employer and
its  Affiliates,  or

<PAGE>
otherwise)  of  the  Business.  The  Employee  and  his  Affiliates'  rights and
obligations hereunder may not be assigned to or assumed by any other Person.  No
other  persons  shall  have  any  right,  benefit  or  obligation  hereunder.

     8.9     GENERAL  INTERPRETIVE PRINCIPLES.  The name assigned this Agreement
and  headings of the Sections, Paragraphs, Subparagraphs, clauses and subclauses
of  this  Agreement are for convenience of reference, only, and shall not in any
way affect the meaning or interpretation of any of the provisions hereof.  Words
of  inclusion  shall  not  be  construed  as terms of limitation herein, so that
references  to  "include,"  "includes" and "including" shall not be limiting and
shall  be  regarded  as  references  to  non-exclusive  and  non-characterizing
illustrations.

     8.10     SECTION  409A  COMPLIANCE.  This  Agreement  is intended to comply
with  Section  409A of the Code (to the extent applicable) and, to the extent it
would not adversely impact the Employer, the Employer agrees to interpret, apply
and  administer  this  Agreement  in  the  least restrictive manner necessary to
comply  with  such  requirements  and without resulting in any diminution in the
value  of  payments  or  benefits  to  the  Employee.

     8.11     DEFINITION  OF  "DAY".  As  used  within  this Agreement, the term
"Day"  or  the  term  "Days"  shall  mean  calendar  days.

     8.12     JURISDICTION  FOR  DISPUTES;  REMEDIES.  Any action to enforce the
terms  and  conditions  of  this  Agreement  shall  be  brought  and  venue  and
jurisdiction  shall  lie  with the District Court of the Sixth Judicial District
located  in  Gillette,  Campbell  County,  Wyoming  which  shall  have exclusive
jurisdiction  over  the  Parties  and  the subject matter of any litigation with
regard  to  this  Agreement.

     Should  either  Party  be  required  to  file  an  action  to  enforce this
Agreement,  the  prevailing  Party  shall  be  entitled to his or its reasonable
attorneys'  fees  and  costs,  including  such  fees and costs incurred prior to
litigation,  during  litigation,  and  upon  any  appeal from the non-prevailing
Party.

     IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first  written  above.

HIGH PLAINS GAS, LLC                      EMPLOYEE

_____________________________________     ___________________________________
By: Mark D. Hettinger                     Brandon W. Hargett
Title:  Chairman of the Board             Date Signed:________________________
Date Signed: ___________________________

<PAGE>

STATE  OF  WYOMING          )
                            )SEC.
COUNTY OF CAMPBELL          )

     Sworn, acknowledged, and signed to before me by Mark D. Hettinger, Chairman
of  the Board of High Plains Gas, LLC, known to me (or satisfactorily proven) to
be  the  person  named  in  the  foregoing document, and who acknowledge that he
freely  and  voluntarily executed the same for the purposes stated therein, this
_______  day  of  February,  2011.

     WITNESS my hand and official seal.

                                   ________________________________
                                   Notary Public

My Commission expires:

STATE  OF  WYOMING          )
                         )SEC.
COUNTY OF CAMPBELL          )

     Sworn,  acknowledged,  and signed to before me by Brandon W. Hargett, known
to  me  (or  satisfactorily  proven)  to  be  the  person named in the foregoing
document,  and who acknowledges that he freely and voluntarily executed the same
for  the  purposes  stated  therein,  this  _______  day  of  February,  2011.

     WITNESS my hand and official seal.

                                   ________________________________
                                   Notary Public

My Commission expires:ex-10_1.htm

Wegener Corporation 10-Q

 

 

 

 

 

 

Exhibit 10.1

 

WEGENER CORPORATION

 

2011 INCENTIVE PLAN

 

EFFECTIVE DATE: JANUARY 1, 2011

 

 

 

 

  

A-1

  

WEGENER CORPORATION

 

2011 INCENTIVE PLAN

 

EFFECTIVE: JANUARY 1, 2011

 

Table of Contents

 

	  	  	  	  	  
	

 

Section

 

	  	  	
  

	
Page

	
1.

	  	
Purpose

	
  

	
A-3

	  	  	  
	
2.

	  	
Definitions

	
  

	
A-3

	  	  	  
	
3.

	  	
Shares Subject to the Plan

	
  

	
A-5

	  	  	  
	
4.

	  	
Grant of Awards and Award Agreements

	
  

	
A-6

	  	  	  
	
5.

	  	
Stock Options and Stock Appreciation Rights

	
  

	
A-6

	  	  	  
	
6.

	  	
Performance Units

	
  

	
A-8

	  	  	  
	
7.

	  	
Restricted Stock

	
  

	
A-9

	  	  	  
	
8.

	  	
Deferred Stock

	
  

	
A-9

	  	  	  
	
9.

	  	
Certificates for Awards of Stock

	
  

	
A-10

	  	  	  
	
10.

	  	
Beneficiary

	
  

	
A-11

	  	  	  
	
11.

	  	
Administration of the Plan

	
  

	
A-11

	  	  	  
	
12.

	  	
Amendment or Discontinuance

	
  

	
A-12

	  	  	  
	
13.

	  	
Adjustments in Event of Change in Common Stock

	
  

	
A-12

	  	  	  
	
14.

	  	
Change in Control Event

	
  

	
A-12

	  	  	  
	
15.

	  	
Miscellaneous

	
  

	
A-13

 

  

A-2

  

 

WEGENER CORPORATION

2011 INCENTIVE PLAN

EFFECTIVE DATE: JANUARY 1, 2011

 

	
1.

	
Purpose.

 

The Wegener Corporation 2011 Incentive Plan has been adopted for the purpose of attracting and retaining persons of ability as directors, employees or consultants or advisors of Wegener Corporation and its subsidiaries, motivate and reward good performance, encourage such employees to continue to exert their best efforts on behalf of the Company and its subsidiaries and provide opportunities for stock ownership by such employees in order to increase their proprietary interest in the Company by providing incentive awards to Key Employees (as hereinafter defined), whose responsibilities and decisions directly affect the performance of the Company and its subsidiaries. Such incentive awards may, in the discretion of the Board or Committee, consist of common stock of the Company (subject to such restrictions as the Board or Committee may determine or as provided herein), performance units or stock appreciation rights payable in such stock or cash, or incentive or nonqualified stock options to purchase such stock, or any combination of the foregoing, all as the Board or Committee may determine.

 

	
2.

	
Definitions.

 

When used herein, the following terms shall have the following meanings:

 

“Award” means an award granted to any Eligible Participant or Key Employee in accordance with the provisions of the Plan in the form of Options, SARS, Restricted Stock, Deferred Stock or Performance Units, or any combination of the foregoing.

“Beneficiary” means the beneficiary or beneficiaries designated pursuant to Section 10 to receive the amount, if any, payable under the Plan upon the death of an Eligible Participant or Key Employee.

 

“Board” means the Board of Directors of the Company.

“Change in Control Event” shall be as defined in Code §409A (as such Section shall be amended and further explained from time to time), which generally provides as set forth below.

 

(a) Change in Ownership. The acquisition by any individual, entity or group (a “Person”) of ownership of stock of the Company that, together with stock held by such Person, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. However, if any Person is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person is not considered to cause a change in ownership of the Company (or to cause a change in the effective control of the Company). An increase in the percentage of stock owned by any one Person as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph. This paragraph applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction.

 

(b) Change in Effective Control. (i) The acquisition by any individual, entity or group during the 12-month period ending on the date of the most recent acquisition by such Person, of ownership of stock of the Company possessing 35% or more of the total voting power of the stock of the Company; or (ii) the replacement of a majority of members of the Board during any 12-month period by directors whose appointment or election is not endorsed by two-thirds ( 2/3) of the members of the Board prior to the date of the appointment or election.

 

A change in effective control also may occur in any transaction in which either of the two corporations involved in the transaction has a “Change in Ownership” or “Change in Ownership of a Substantial Portion of the Company’s Assets.” If any one Person is considered to effectively control the Company, the acquisition of additional control of the Company by the same Person is not considered to cause a change in the effective control of the Company (or to cause a “Change in Ownership” of the Company within the meaning of this Section).

 

 

  

A-3

  

 

(c) Change in Ownership of a Substantial Portion of Assets. The acquisition by any Person during the 12-month period ending on the date of the most recent acquisition by such Person, of assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition(s). For this purpose, “gross fair market value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

In the event of any conflict between the summary contained in this Section and the definition of “Change in Control” as defined in Code Section 409A, Code Section 409A shall govern. No Change in Control Event shall be deemed to have occurred in the event of a transfer to an entity that is controlled by the shareholders of the transferring corporation immediately after the transfer, within the meaning of IRS Notice 2005-1, Q&A-14(b).

 

“Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended (All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered).

 

“Committee” means the Committee, if any, appointed by the Board pursuant to Section 11. If no Committee is appointed by the Board, the Board shall function as and in place of the Committee.

 

“Company” means Wegener Corporation and its successors and assigns.

 

“Deferred Stock” means Stock credited to an Eligible Participant or Key Employee under the Plan subject to the requirements of Section 8 and such other restrictions as the Committee deems appropriate or desirable.

 

“Eligible Participant(s)” shall mean directors, officers, Key Employees of the Company and its subsidiaries, consultants, advisors and other persons who may not otherwise be eligible to receive qualified incentive stock options under Section 422 of the Code.

 

“Fair Market Value” shall mean:

 

(a) if the Stock is actively traded on any national securities exchange, the closing price at which sales of Stock shall have been sold on the most recent trading date immediately prior to the date of determination, as reported by any such exchange selected by the Committee on which the shares of Stock are then traded; or

 

(b) if the shares of Stock are not actively traded on any such national securities exchange, the average of the closing high “bid” and low “asked” prices for the shares of Stock on the over-the-counter market on the most recent trading date immediately prior to the determination date as determined by the Committee and reported by such system; or

 

 (c) if there are no “bid” and “asked” prices available or if the shares of Stock are not traded on the over-the-counter market, the fair market value of a share of Stock as determined in good faith by the Committee in compliance with Code Section 409A taking into account such relevant facts and circumstances deemed by the Committee to be material to the value of the Stock in the hands of the Eligible Participant or Key Employee, which may include opinions or reports prepared by independent experts; provided, however, that at the time of grant of any Award other than an incentive stock option, the Committee, in its sole discretion, may elect to, and if it so elects, shall irrevocably specify its commitment to, determine Fair Market Value for all purposes under the Plan with respect to such Award, based on the “average selling price” of the Stock, within the meaning of Code Section 409A, as of the date of determination and a period of up to nine trading days immediately preceding such date, which period must be specified in the Award.

 

Notwithstanding the above, Fair Market Value of a share of Stock shall be determined in accordance with all applicable laws, including in the case of incentive stock options the valuation principles described in Code Section 422 and in all cases in accordance with Code Section 409A.

 

 

  

A-4

  

 

“Key Employee” means an officer or other key employee of any Participating Company who, in the judgment of the Committee, is responsible for or contributes to the management, growth or profitability of the business of any Participating Company.

 

 “Option” means an option to purchase Stock, including Restricted Stock but not Deferred Stock, if the Committee so determines, subject to the applicable provisions of Section 5 and awarded in accordance with the terms of the Plan and which may be an incentive stock option qualified under Section 422 of the Code or a nonqualified stock option.

 

“Participating Company” means the Company or any subsidiary or other affiliate of the Company; provided, however, for incentive stock options only, “Participating Company” means the Company or any corporation which at the time such option is granted under the Plan qualifies as a subsidiary of the Company under the definition of “subsidiary corporation” contained in Section 425(f) of the Code; and provided further, for nonqualified stock options only, “Participating Company” means the Company or any other corporation if the Company is an “eligible issuer of service recipient stock” within the meaning of Treasury Regulation Section 1.409A-1(b)(5)(iii)(E) with respect to the Eligible Participants and/or Key Employees of such corporation.

 

“Non-Employee Director” shall mean each such person who is a member of the Board of Directors of the Company but who is not a full-time employee of the Company.

 

“Performance Unit” means a performance unit subject to the requirements of Section 6 and awarded in accordance with the terms of the Plan.

 

“Plan” means the Wegener Corporation 2011 Incentive Plan, as the same may be amended, administered or interpreted from time to time.

 

“Restricted Stock” means Stock delivered under the Plan subject to the requirements of Section 7 and such other restrictions as the Committee deems appropriate or desirable; provided, however, in all events, restrictions placed on such Restricted Stock shall result in the Restricted Stock being substantially nonvested within the meaning of Treasury Regulation Section 1.83-3(b).

 “SAR” means a stock appreciation right subject to the appropriate requirements under Section 5 and awarded in accordance with the terms of the Plan.

 

“Stock” means the $.01 par value common stock of the Company.

 

“Total Disability” means an Eligible Participant or Key Employee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.

 

	
3.

	
Shares Subject to the Plan.

 

The aggregate number of shares of Stock which may be awarded under the Plan or subject to purchase by exercising an Option shall not exceed one million two hundred fifty thousand (1,250,000) shares. The maximum total number of shares of Restricted Stock, Deferred Stock and/or Performance Units that may be granted at full value shall not exceed five hundred thousand (500,000) shares. Such shares shall be made available from authorized and unissued shares. No repurchased shares may be issued or delivered under the Plan. The Committee may, in its discretion, decide to award other securities issued by the Company that are convertible into Stock or make such other securities subject to purchase by an Option, in which event the maximum number of shares of Stock into which such other securities may be converted shall be used in applying the aggregate share limit under this Section 3 and all provisions of the Plan relating to Stock shall apply with full force and effect with respect to such convertible securities. If any shares of Stock awarded or subject to purchase by exercising an Option under the Plan are not delivered or are reacquired by the Company, for reasons including, but not limited to, a forfeiture of Restricted Stock or Deferred Stock or termination, expiration or a cancellation with the consent of a participant of an Option, SAR or a Performance Unit, such shares of Stock shall again become available for award under the Plan; provided, however, that if the Option price of any Option granted under the Plan is satisfied by tendering shares of the Company’s Stock to the Company (by either actual delivery or by attestation) or if shares of the Company’s Stock are tendered or are withheld upon the exercise of the Option to satisfy any applicable tax withholding, such tendered or withheld Stock will not be available for re-issuance under the Plan.

 

  

A-5

  

	
4.

	
Grant of Awards and Award Agreements.

 

(a) Subject to the provisions of the Plan and compliance with Code Section 409A, the Committee shall, (i) determine and designate from time to time those Eligible Participants and Key Employees or groups of Eligible Participants and Key Employees to whom Awards are to be granted; (ii) determine the form or forms of Award to be granted to any Eligible Participant or Key Employee; (iii) determine the amount or number of shares of Stock, including Restricted Stock or Deferred Stock if the Committee so determines, subject to each Award; (iv) determine the terms and conditions of each Award; (v) determine whether and to what extent Eligible Participants and Key Employees shall be allowed or required to defer receipt of any Awards or other amounts payable under the Plan to the occurrence of a specified date or event; provided, however, that no Award shall be granted after the expiration of ten years from the effective date of the Plan.

 

(b) Each Award granted under the Plan shall be evidenced by a written Award Agreement, in a form approved by the Committee. Such agreement shall be subject to and incorporate the express terms and conditions, if any, required under the Plan or as required by the Committee for the form of Award granted and such other terms and conditions as the Committee may specify.

	
5.

	
Stock Options and Stock Appreciation Rights.

 

(a) With respect to Options and SARS, the Committee shall (i) authorize the grant of incentive stock options, nonqualified stock options, SARs or a combination of incentive stock options, nonqualified stock options and SARS; (ii) determine the number of shares of Stock subject to each Option or the number of shares of Stock that shall be used to determine the value of an SAR; (iii) determine whether such Stock shall be Restricted Stock (but not Deferred Stock), in the Committee’s discretion; (iv) determine the time or times when and the manner in which each Option shall be exercisable and the duration of the exercise period; and (v) determine whether or not all or part of each Option may be canceled by the exercise of an SAR; provided, however, that (A) no Option shall be granted after the expiration of ten years from the effective date of the Plan and (B) the aggregate Fair Market Value (determined as of the date an Option is granted) of the Stock (disregarding any restrictions in the case of Restricted Stock) for which incentive stock options granted to any Key Employee under this Plan may first become exercisable in any calendar year shall not exceed $100,000. The Committee’s determinations made pursuant to (ii) through (v) of this paragraph shall be set forth in the Award Agreement granting any Option.

 

 (b) The exercise period for a nonqualified stock option shall not exceed ten years and one day from the date of grant, and the exercise period for an incentive stock option or SAR, including any extension which the Committee may from time to time decide to grant, shall not exceed ten years from the date of grant; provided, however, that, in the case of an incentive stock option granted to a Key Employee who, at the time of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company (a “Ten Percent Stockholder”), such period, including extensions, shall not exceed five years from the date of grant.

 

(c) The Option or SAR exercise price per share shall be determined by the Committee at the time any Option is granted and set forth in the Award Agreement granting such Option and shall be not less than (i) in the case of incentive stock options and any tandem SARs, 100% of the Fair Market Value, or in the case of an incentive stock option and any tandem SARs granted to a Ten Percent Stockholder, 110% of the Fair Market Value, on the date the Option and any tandem SARs are granted; or (ii) in the case of any other Options or SARS, at least 100% of Fair Market Value, disregarding any restrictions in the case of Restricted Stock, on the date the Option or SAR is granted.

 

(d) No part of any Option or SAR may be exercised until (i) the Eligible Participant or Key Employee who has been granted the Award shall have remained in the employ or service of a Participating Company for such period, if any, after the date on which the Option or SAR is granted, as the Committee may specify, or (ii) achievement of such performance or other criteria, if any, by the Eligible Participant or Key Employee, the Company or any subsidiary, affiliate or division of the Company, as the Committee may specify, and the Committee may further require exercisability in installments.

 

  

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(e) Subject to Section 10(c), except as otherwise provided in the Plan, the purchase price of the shares as to which an Option shall be exercised shall be paid to the Company at the time of exercise in the form specified in the Award Agreement covering such Option, which may provide for payment either in cash or in such other consideration as the Committee deems appropriate, including Stock, or, with respect to nonqualified options, Restricted Stock (but not Deferred Stock), already owned by the optionee, having a total Fair Market Value equal to the purchase price, or a combination of cash and such other consideration having a total Fair Market Value equal to the purchase price; provided, however, that if payment of the exercise price is made in whole or in part in the form of Restricted Stock, the Stock received upon the exercise of the Option shall be Restricted Stock, as the case may be, at least with respect to the same number of shares and subject to the same restrictions or other limitations as the Restricted Stock paid on the exercise of the Option.

 

 (f) (i) If a Key Employee who has been granted an Option or SAR dies (A) while an employee of any Participating Company, or (B) within three months after termination of his or her employment because of his or her Total Disability, his or her Options or SARs may be exercised, to the extent that the Key Employee shall have been entitled to do so on the date of his or her death or such termination of employment, by the person or persons to whom the rights under the option or SAR pass by will, or if no such person has such right, by his or her executors or administrators, at any time, or from time to time, within 12 months after the date of death or within such other period, and subject to such terms and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(b) above.

 

(ii) If the Key Employee’s employment by any Participating Company terminates because of his or her Total Disability and such participant has not died within the following three months, he or she may exercise his or her Options or SARS, to the extent that he or she shall have been entitled to do so at the date of the termination of his or her employment, at any time, or from time to time, within 12 months after the date of the termination of his or her employment within such other period, and subject to such terms and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(b) above.

 

(iii) If the Key Employee’s employment terminates for any other reason, he or she may exercise his or her Options or SARs to the extent that he or she shall have been entitled to do so at the date of the termination of his or her employment, at any time, or from time to time, within three months after the date of the termination of his or her employment or within such other period, and subject to such terms and conditions as the Committee may specify, but not later than the expiration date specified in Section 5(b) above.

 

 (g) No Option or SAR granted under the Plan shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the optionee, an Option shall be exercisable only by him or her.

 

(h) With respect to an incentive stock option, the Committee shall specify such terms and provisions as the Committee may determine to be necessary or desirable in order to qualify such Option as an incentive stock option within the meaning of Section 422 of the Code.

 

(i) Upon exercise of an SAR, the Eligible Participant or Key Employee shall be entitled, subject to such terms and conditions as the Committee may specify, to receive upon exercise thereof the excess of (i) the Fair Market Value of a specified number of shares of Stock at the time of exercise, as determined by the Committee, over (ii) a specified amount set forth in the Award Agreement granting such SAR which shall not, subject to Section 5(j), be less than the Fair Market Value of such specified number of shares of Stock at the time the SAR is granted. Upon exercise of an SAR, payment of such excess shall be made as the Committee shall specify in the Award Agreement at the time of the grant of the SAR (A) in cash, (B) through the issuance or transfer of whole shares of Stock, including Restricted Stock (but not Deferred Stock), with a Fair Market Value, disregarding any restrictions in the case of Restricted Stock, at such time equal to any such excess, or (C) a combination of cash and shares of Stock with a combined Fair Market Value at such time equal to any such excess, all as determined by the Committee; provided, however, a fractional share of Stock shall be paid in cash equal to the Fair Market Value of the fractional share of Stock, disregarding any restrictions in the case of Restricted Stock, at such time. If the full amount of such value is not paid in Stock, then the shares of Stock representing such portion of the value of the SAR not paid in Stock shall again become available for award under the Plan.

 

  

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 (j) If the Award granted to an Eligible Participant or Key Employee allows such person to elect to cancel all or any portion of an unexercised option by exercising a related SAR, then the Option price per share of Stock shall be used as the specified price in Section 5(i), to determine the value of the SAR upon such exercise, and, in the event of the exercise of such SAR, the Company’s obligation in respect of such Option or such portion thereof will be discharged by payment of the SAR so exercised. Any shares of Stock reserved but not required for such exercise shall be cancelled and shall not be added back into the total shares available for Awards under the Plan. Any such SAR shall be transferable only by will or by the laws of descent and distribution. During the lifetime of the optionee, such SAR shall be exercisable only by him or her.

	
6.

	
Performance Units.

 

(a) Upon the Award of a Performance Unit to an Eligible Participant or a Key Employee, the Committee shall determine a performance period (the “Performance Period”) of one or more years and shall determine the performance objectives for such Award of a Performance Unit. Performance objectives may vary from Eligible Participant/Key Employee to Eligible Participant/Key Employee and shall be based upon such performance criteria or combination of factors as the Committee may deem appropriate, including, but not limited to, minimum earnings per share, return on equity or performance by a subsidiary or division of the Company; provided, however, in all events such performance criteria shall constitute a substantial risk of forfeiture within the meaning of Code Section 409A. Performance Periods may overlap and Eligible Participants and/or Key Employees may participate simultaneously with respect to Performance Units for which different Performance Periods are prescribed. The applicable Performance Period and performance objectives for such Award shall be specified in the written Award Agreement granting such Performance Unit.

 

(b) Upon the Award of a Performance Unit to an Eligible Participant or a Key Employee at the beginning of a Performance Period, the Committee shall determine for each Eligible Participant or Key Employee or group of Eligible Participants and/or Key Employees eligible for Performance Units with respect to that Performance Period the range of dollar values, if any, which may be fixed or may vary in accordance with such performance or other criteria specified by the Committee, which shall be paid to an Eligible Participant or Key Employee with respect to such Performance Unit if the relevant measure of Company performance for the Performance Period is met. Such range of dollar values shall be set forth in the Award Agreement granting such Performance Unit.

 

 (c) If during the course of a Performance Period there shall occur a significant event or events (a “Significant Event”) as determined by the Committee, including, but not limited to, a reorganization of the Company, which the Committee expects to have a substantial effect on a performance objective during such Performance Period, the Committee may revise such objective; provided, however, in all events such revised objective shall constitute a substantial risk of forfeiture within the meaning of Code Section 409A.

 

(d) If an Eligible Participant or Key Employee terminates service with all Participating Companies during a Performance Period because of death, Total Disability, retirement on or after age 65, or at an earlier age with the consent of the Company, or a Significant Event, as determined by the Committee, that Eligible Participant or Key Employee shall be entitled, at the end of such Performance Period, to payment in settlement of each Performance Unit awarded to such Eligible Participant or Key Employee for such Performance Period (i) based upon the performance objectives satisfied at the end of such Performance Period and (ii) prorated for the portion of the Performance Period during which the Eligible Participant or Key Employee was employed or retained by any Participating Company. If an Eligible Participant or Key Employee terminates service with all Participating Companies during a Performance Period for any other reason, such Eligible Participant or Key Employee shall not be entitled to any payment with respect to that Performance Period unless the Committee shall otherwise provide at the time of the Award of such Eligible Participant’s or Key Employee’s Performance Unit for such Performance Period.

 

  

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 (e) Each Performance Unit may be paid as specified in the Award Agreement granting such Performance Unit, which may provide for payment (i) all in cash, (ii) in Stock, not including Restricted Stock or Deferred Stock, (together with any cash representing fractional shares of Stock,) with a combined Fair Market Value at such time equal to the dollar value of such Performance Unit except that any fractional share of Stock payable shall be paid in cash equal to the Fair Market Value of the fractional Share of Stock, or (iii) a combination of Stock and cash, and either as a lump sum payment or in annual installments, each commencing as soon as practicable after the end of the relevant Performance Period. If and to the extent the full value of a Performance Unit is not paid in Stock, then the shares of Stock representing the portion of the value of the Performance Unit not paid in Stock shall again become available for award under the Plan.

 

	
7.

	
Restricted Stock.

 

(a) Restricted Stock may be received by an Eligible Participant or Key Employee either as an Award or, if the Award Agreement granting an Option or SAR so specifies, as the result of an exercise of an Option or SAR. Restricted Stock shall be subject to a restriction period (after which restrictions shall lapse) which shall mean a period commencing on the date the Award is granted and ending on such date or upon the achievement of such performance or other criteria as the Committee shall determine (the “Restriction Period”). The Committee may provide for the lapse of restrictions in installments where deemed appropriate.

 

(b) Except as otherwise provided in this Section 7, no shares of Restricted Stock received by an Eligible Participant or Key Employee shall be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Restriction Period; provided, however, the Restriction Period for any recipient of Restricted Stock shall expire and all restrictions on shares of Restricted Stock shall lapse upon the recipient’s death, Total Disability, retirement on or after age 65 or an earlier age specified in the Award Agreement granting such Restricted Stock.

 

(c) Except as otherwise provided in Section 7(b) above, if an Eligible Participant or Key Employee terminates employment or service with all Participating Companies for any reason before the expiration of the Restriction Period, all shares of Restricted Stock still subject to restriction shall, unless the Committee otherwise determines, be forfeited by the recipient and shall be reacquired by the Company, and, in the case of Restricted Stock purchased through the exercise of an Option, the Company shall refund the purchase price paid on the exercise of the Option. Upon such forfeiture, such forfeited shares of Restricted Stock shall again become available for award under the Plan.

 

(d) The Committee may require, under such terms and conditions as it deems appropriate or desirable, that the certificates for Restricted Stock delivered under the Plan be held in custody by a bank or other institution, or that the Company may itself hold such shares in custody until the Restriction Period expires or until restrictions thereon otherwise lapse, and may require, as a condition of any receipt of Restricted Stock, that the recipient shall have delivered a stock power endorsed in blank relating to the Restricted Stock.

 

(e) Nothing in this Section 7 shall preclude a recipient of Restricted Stock from exchanging any shares of Restricted Stock subject to the restrictions contained herein for any other shares of Stock that are similarly restricted.

 

	
8.

	
Deferred Stock.

 

(a) Deferred Stock may be credited to an Eligible Participant or Key Employee as an Award. Deferred Stock shall be subject to a deferral period set forth in the Award Agreement granting such Deferred Stock, which period shall commence on the date the Award is granted and end on such date or upon the achievement of such performance or other criteria as the Committee shall determine (the “Deferral Period”); provided, however, in all events such performance or other criteria shall constitute a substantial risk of forfeiture within the meaning of Code Section 409A. The Committee may provide in the Award Agreement at the time of the Award of Deferred Stock for the expiration of the Deferral Period in installments where deemed appropriate.

 

  

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 (b) Except as otherwise provided in this Section 8, no Deferred Stock awarded hereunder shall be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Deferral Period; provided, however, the Deferral Period shall expire upon the recipient’s death, Total Disability, retirement on or after age 65 or an earlier age specified in the Award Agreement at the time the Deferred Stock is awarded or on a date or dates that are nondiscretionary and objectively determinable that is/are set forth in the Award Agreement at the time the Deferred Stock is Awarded.

 

(c) At the expiration of the Deferral Period, the recipient of Deferred Stock shall be entitled to receive a certificate pursuant to Section 9 for the number of shares of Stock equal to the number of shares of Deferred Stock credited on his or her behalf.

 

(d) Except as otherwise provided in Section 8(b), if an Eligible Participant or Key Employee terminates employment or service with all Participating Companies for any reason before the expiration of the Deferral Period, all shares of Deferred Stock shall, unless the Committee otherwise determines, be forfeited by the Key Employee or Eligible Participant. Upon such forfeiture, such forfeited shares of Deferred Stock shall again become available for award under the Plan.

 

	
9.

	
Certificates for Awards of Stock; Uncertificated Shares.

 

(a) Subject to Section 7(d), each Eligible Participant or Key Employee entitled to receive shares of Stock under the Plan shall be issued a certificate for such shares. Such certificate shall be registered in the name of the Eligible Participant or Key Employee and shall bear an appropriate legend reciting the terms, conditions and restrictions, if any, applicable to such shares and shall be subject to appropriate stop-transfer orders.

 

(b) The Company shall not be required to issue or deliver any certificates for shares of Stock prior to (i) the listing of such shares on any stock exchange or quotation system on which the Stock may then be listed and (ii) the completion of any registration or qualification of such shares under any Federal or state law, or any ruling or regulation of any government body which the Company shall, in its sole discretion, determine to be necessary or advisable.

 

(c) All certificates for shares of Stock delivered under the Plan shall also be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange or quotation system upon which the Stock is then listed and any applicable Federal or state securities laws; and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. The foregoing provisions of this Section 9(c) shall not be effective if and to the extent that the shares of Stock delivered under the Plan are covered by an effective and current registration statement under the Securities Act of 1933, or if and so long as the Committee determines that application of such provisions is no longer required or desirable. In making such determination, the Committee may rely upon an opinion of counsel for the Company.

 

(d) Except for the restrictions on Restricted Stock or Deferred Stock under Sections 7 and 8, each Eligible Participant or Key Employee who receives an Award of Stock shall have all of the rights of a stockholder with respect to such Stock, including the right to vote the Stock and receive dividends and other distributions; provided, however, no Eligible Participant or Key Employee awarded an Option, an SAR, Performance Unit or Deferred Stock shall have any right as a stockholder with respect to any shares subject to such Award prior to the date of issuance to him or her of a certificate or certificates for such shares.

 

 (e) Notwithstanding anything in this Plan to the contrary, the Company may, in its sole discretion, issue shares of Stock or Restricted Stock upon the grant, exercise, vesting or settlement of an Award pursuant to the direct registration system, and, in lieu of the issuance of certificated shares, may issue uncertificated shares, to the account of the Eligible Participant or Key Employee. Any prior references in this Section 9 to share certificates shall, in such event, be deemed to refer to uncertificated shares.

 

  

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 10.

	
Beneficiary.

 

(a) Each Eligible Participant or Key Employee, as the case may be, shall file with the Committee a written designation, signed by the Eligible Participant or Key Employee, of one or more persons as the Beneficiary who shall be entitled to receive the Award, if any, payable under the Plan upon his or her death, and the designation may name one or more persons as contingent Beneficiaries. An Eligible Participant or Key Employee may from time to time revoke or change his or her Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Committee. The last such designation received by the Committee shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by the Committee prior to the Eligible Participant’s or Key Employee’s death, and in no event shall it be effective as of a date prior to such receipt. Any such designation, or revocation or change of such designation, shall be in such form and manner as the Committee shall determine.

 

 (b) If no such Beneficiary designation is in effect at the time of an Eligible Participant’s or Key Employee’s death, or if no designated Beneficiary survives the Eligible Participant or Key Employee or if such Beneficiary is not located by the Committee within one year of the death of the Eligible Participant or Key Employee or if such designation conflicts with law, such person’s estate shall be entitled to receive the Award, if any, payable under the Plan upon his or her death. If the Committee is in doubt as to the right of any person to receive such Award, the Company may retain such Award, without liability for any interest thereon, until the Committee determines the rights thereto, or the Company may pay such Award into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Company therefore.

 

(c) Wherever in this Plan the Committee is directed or authorized to pay an Award to an estate of a deceased participant, the Committee shall pay such Award to the personal representative of such estate, if any has qualified within 12 months of death, and if not, then to the persons who would be entitled to receive the Award under the laws of descent and distribution of the State of Georgia in effect at the date of death of the participant if he or she had died intestate owning such property in fee simple. The determination by the Committee shall be final and the Committee shall be fully protected in paying the Award to the person or persons determined by the Committee in good faith to be entitled thereto irrespective of whether such payments are made to the person or persons who are in fact entitled to receive such Award.

	
11.

	
Administration of the Plan.

 

(a) The Plan shall be administered by a Committee composed of two or more persons, as appointed by the Board and serving at the Board’s pleasure, but unless and until the Committee is actually appointed by the Board, the Board shall function as and in place of the Committee. Each member of the Committee shall be a “Non-Employee Director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 or successor rule or regulation.

 

 (b) All decisions, determinations or actions of the Committee made or taken pursuant to grants of authority under the Plan shall be made or taken in the sole discretion of the Committee and shall be final, conclusive and binding on all persons for all purposes.

 

(c) The Committee shall have full power, discretion and authority to interpret, construe, act and administer the Plan and any part thereof, and its interpretations and constructions thereof and actions taken thereunder shall be final, conclusive and binding on all persons for all purposes.

 

(d) The Committee’s decisions and determinations under the Plan need not be uniform and may be made selectively among participants in the Plan, whether or not such participants are similarly situated.

 

(e) The Committee shall keep minutes of its actions under the Plan. The act of a majority of the members present at a meeting duly called and held shall be the act of the Committee. Any decision or determination reduced to writing and signed by all members of the Committee shall be fully as effective as if made by unanimous vote at a meeting duly called and held.

 

  

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(f) The Committee may employ such legal counsel, including, without limitation, independent legal counsel and counsel regularly employed by the Company, consultants and agents as the Committee may deem appropriate for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computations received from any such consultant or agent. All expenses incurred by the Committee in interpreting and administering the Plan, including, without limitation, meeting fees and expenses and professional fees, shall be paid by the Company.

 

(g) No member or former member of the Committee or the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it. Each member or former member of the Committee or the Board shall be indemnified and held harmless by the Company against all costs or expenses (including counsel fees) or liabilities (including any sum paid in settlement of a claim with the approval of the Board) arising out of any act or omission to act in connection with the Plan unless arising out of such member’s own fraud or bad faith. The Company shall pay any member or former member of the Committee or the Board who is entitled to indemnification under this section the expenses (including attorney’s fees) incurred in defending any such action taken against him or her in advance of its final disposition (“hereinafter an “Advancement of Expenses”); provided, however, that, if the Delaware General Corporation Law requires, an Advancement of Expenses to any current Committee or Board member shall be paid only upon receipt by the Company of an undertaking, by or on behalf of such person, to repay such amounts if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such person is not entitled to be indemnified for such expenses pursuant to this section. Such indemnification shall be in addition to any rights of indemnification the members or former members may have as Directors or under the Bylaws of the Company

 

	
12.

	
Amendment or Discontinuance.

 

The Board may at any time amend or terminate the Plan. The Plan may also be amended by the Committee, provided that all such amendments shall be reported to the Board. No amendment shall, without being approved by the affirmative vote of holders of a majority of the shares voted on such amendment at a meeting of the stockholders at which a quorum is present, (i) alter the group of persons eligible for qualified incentive stock options under the Plan, or (ii) increase the maximum number of shares of Stock which are available for Awards under the Plan. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or SARs or cancel outstanding Options or SARs in exchange for cash, other awards or Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs without shareholder approval. No amendment or termination shall retroactively impair the rights of any person with respect to an Award. On or after the occurrence of a Change in Control Event, the Plan may not be amended or terminated until all payments required by Section 14 are made. All such amendments shall be made in compliance with Code Section 409A.

 

	
13.

	
Adjustments in Event of Change in Common Stock.

 

Subject to compliance with Code Section 409A, in the event of any recapitalization, reclassification, split-up or consolidation of shares of Stock, merger or consolidation of the Company or sale by the Company of all or a substantial portion of its assets, or other event which could distort the implementation of the Plan or the realization of its objectives, the Committee may make such appropriate adjustments in the Stock subject to Awards, including Stock subject to purchase by an Option, or the terms, conditions or restrictions on Stock or Awards as the Committee deems equitable; provided, however, that no such adjustments shall be made on or after the occurrence of a Change in Control Event without the affected participant’s consent.

 

	
14.

	
Change in Control Event.

 

Notwithstanding anything else herein to the contrary, the Committee may in its discretion take any of the following actions with respect to the occurrence of a Change in Control Event:

 

  

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(a) All or any portion of any Option or SAR that has not expired and has not otherwise been exercised shall be cashed out in a lump sum cash payment equal to the excess, if any, of the Fair Market Value determined on the date of the Change in Control Event of the shares of Stock, including Restricted Stock, subject to the Option or SAR that is to be cashed out over the exercise price for such shares subject to the Option or SAR as specified in the respective Award Agreement.

 

(b) The Performance Period applicable to any Performance Unit shall end and the Company shall pay the participant in full settlement of such participant’s Performance Unit a lump sum amount in cash equal to the dollar value of such participant’s Performance Unit; provided, however, if the Committee elects to so provide, the Committee must so specify in the Award Agreement awarding the Performance Unit at the time of grant.

 

(c) All Restriction Periods applicable to any outstanding Restricted Stock shall end and the Company shall pay the holder of such Restricted Stock a lump sum amount in cash equal to the Current Market Value of the Restricted Stock held by, or on behalf of, the participant in exchange for such Restricted Stock.

 

(d) All Deferral Periods applicable to any Deferred Stock credited to a participant shall end and the Company shall pay to such participant an amount in cash equal to the Current Market Value of the number of shares of Deferred Stock credited to such participant in full settlement of such Deferred Stock; provided, however, if the Committee elects to so provide, the Committee must so specify in the Award Agreement awarding the Deferred Stock at the time of grant.

 

 (e) For purposes of this Section 14, “Current Market Value” means the highest Closing Price (defined below) during the period (the “Reference Period”) commencing 30 days prior to the Change in Control Event and ending 30 days after the Change in Control Event; provided, that if the Change in Control Event occurs as a result of a tender offer or exchange offer, or a merger, purchase of assets or stock or other transaction approved by stockholders of the Company, Current Market Value shall mean the higher of (i) the highest Closing Price during the Reference Period or (ii) the highest price paid per share pursuant to such tender offer, exchange offer or transaction. The “Closing Price” on any day during the Reference Period means: (i) if the Stock is actively traded on any national securities exchange, the closing price at which sales of Stock shall have been sold on the most recent trading date immediately prior to the date of determination, as reported by any such exchange selected by the Committee on which the shares of Stock are then traded; or (ii) if the shares of Stock are not actively traded on any such exchange, the average of the closing high “bid” and low “asked” prices for the shares of Stock on the over-the-counter market on the most recent trading date immediately prior to the determination date as determined by the Committee and reported by such system; or (iii) if there are no “bid” and “asked” prices available or if the shares of Stock are not traded on the over-the-counter market, the fair market value of a share of Stock as determined in good faith by the Committee in compliance with Code Section 409A taking into account such relevant facts and circumstances deemed by the Committee to be material to the value of the Stock in the hands of the Eligible Participant or Key Employee, which may include opinions or reports prepared by independent experts.

 

(f) Any payment arising pursuant to this Section 14 shall be made as soon as practicable after the occurrence of a Change in Control Event, but in no event later than the close of the calendar year during which the Change in Control Event occurs.

 

	
15.

	
Miscellaneous.

 

(a) Nothing in this Plan or any Award granted hereunder shall confer upon any employee any right to continue in the employ of any Participating Company or interfere in any way with the right of any Participating Company to terminate his or her employment at any time.

 

(b) No Award payable under the Plan shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of any Participating Company for the benefit of its employees unless the Company shall determine otherwise.

 

  

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(c) No participant shall have any claim to an Award until it is actually granted under the Plan. To the extent that any person acquires a right to receive payments from the Company under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments of awards provided for under the Plan shall be paid in cash from the general funds of the Company; provided, however, that such payments shall be reduced by the amount of any payments made to the participant or his or her dependents, beneficiaries or estate from any trust or special or separate fund established by the Company to assure such payments. The Company shall not be required to establish a special or separate fund or other segregation of assets to assure such payments, and, if the Company shall make any investments to aid it in meeting its obligations hereunder, the participant shall have no right, title or interest whatever in or to any such investments except as may otherwise be expressly provided in a separate written instrument relating to such investments. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind between the Company and any participant. To the extent that any participant acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.

 

 (d) Absence on leave approved by a duly constituted officer of the Company shall not be considered interruption or termination of employment for any purposes of the Plan; provided, however, (i) such leave does not exceed six months, or if longer, so long as the individual retains a right to reemployment with the Participating Company under an applicable statute or by contract, and (ii) that no Award may be granted to an employee while he or she is absent on leave.

 

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

 

(f) The right of any person to any Award payable under the Plan may not be assigned, transferred, pledged or encumbered, either voluntarily or by operation of law, except as provided in Section 10 with respect to the designation of a Beneficiary or as may otherwise be required by law. If, by reason of any attempted assignment, transfer, pledge or encumbrance or any bankruptcy or other event happening at any time, any amount payable under the Plan would be made subject to the debts or liabilities of the participant or his or her Beneficiary or would otherwise devolve upon anyone else and not be enjoyed by the participant or his or her Beneficiary, then the Committee may terminate such person’s interest in any such payment and direct that the same be held and applied to or for the benefit of the participant, his or her Beneficiary or any other persons deemed to be the natural objects of his or her bounty, taking into account the expressed wishes of the participant (or, in the event of his or her death, those of his or her Beneficiary) in such manner as the Committee may deem proper.

 

(g) Copies of the Plan and all amendments, administrative rules and procedures and interpretations shall be made available to all participants’ at all reasonable times at the Company’s headquarters.

 

(h) The Committee may cause to be made, as a condition precedent to the payment of any Award, or otherwise, appropriate arrangements with the participant or his or her Beneficiary, for the withholding of any federal, state, local or foreign taxes.

 

(i) The Plan and the grant of Awards shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required.

 

 (j) All elections, designations, requests, notices, instructions and other communications from an Eligible Participant or Key Employee, Beneficiary or other person to the Committee, required or permitted under the Plan, shall be in such form as is prescribed from time to time by the Committee and shall be mailed by first class mail or delivered to such location as shall be specified by the Committee.

 

(k) The terms of the Plan shall be binding upon the Company and its successors and assigns.

 

(l)  Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

 

  

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(m) The Plan and all Awards granted hereunder shall comply at all times with all laws and regulations of any governmental authority which may be applicable thereto (including Code Section 409A). To the extent that an award granted hereunder is designated as an incentive stock option, it shall comply with Code Section 422, and all provisions of the Plan and the Award Agreement for such Option shall be construed in such manner as to effectuate that intent. Any provision of the Plan or any Award Agreement notwithstanding, a participant shall not be entitled to receive the benefits of Awards and the Company shall not be obligated to pay any benefits to such participant if such exercise, delivery, receipt or payment of benefits would constitute a violation by such individual or the Company of any provision of any such law or regulation. Any reference herein to “compliance with the requirements of Code Section 409A” or words of similar import shall be interpreted to mean application of the terms of the Plan or any Award, or administration of the Plan or any Award, as the case may be, in such a manner that no additional income tax is imposed on a participant pursuant to Code Section 409A(1)(a); provided, however, that this provision shall not limit the application of the $100,000 limit on incentive stock options set forth in Section 5(a). If additional guidance is issued under or modifications are made to Code Section 409A or any other law affecting the awards issued hereunder, the Committee shall take such actions (including amending the Plan or any Award Agreement without the necessity of obtaining the participant’s consent) as it deems necessary, in its sole discretion, to ensure continued compliance with Code Section 409A.

 

 

  

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