Document:

Exhibit 10.1

 

AMENDED AND RESTATED

CHRISTOPHER & BANKS
CORPORATION

2006 EQUITY INCENTIVE PLAN

FOR NON-EMPLOYEE DIRECTORS

 

SECTION 1.

DEFINITIONS

 

                As used herein, the following terms shall have the
meanings indicated below:

 

(a)           “Administrator”  shall mean the Board of Directors of the
Company, or one or more Committees appointed by the Board, as the case may be.

 

(b)           “Affiliate(s)” shall mean a Parent or
Subsidiary of the Company.

 

(c)           “Award” shall mean any grant of an
Option, Restricted Stock Award, Restricted Stock Unit Award, Stock Appreciation
Right or Performance Award.

 

(d)           “Change in Control” shall mean:

 

                (i)            the occurrence of an acquisition by an individual, entity
or group (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of a
percentage of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (but excluding (1) any acquisition directly from the Company
(other than an acquisition by virtue of the exercise of a conversion privilege
of a security that was not acquired directly from the Company), (2) any
acquisition by the Company or an Affiliate and (3) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Affiliate) (an “Acquisition”) that is thirty percent (30%) or more of
the Company’s then outstanding voting securities;

 

                (ii)           at any time during a period of two (2) consecutive
years or less, individuals who at the beginning of such period constitute the
Board (and any new directors whose election to the Board or nomination for
election by the Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was so approved) cease for any reason (except for death, disability or
voluntary retirement) to constitute a majority thereof;

 

                (iii)          the consummation of a merger, consolidation, reorganization
or similar corporate transaction, whether or not the Company is the surviving
company in such transaction, other than a merger, consolidation, or
reorganization that would result in the Persons who are beneficial owners of
the Company’s voting securities outstanding immediately prior thereto
continuing to beneficially own, directly or indirectly, in substantially the
same proportions, at least fifty percent (50%) of the combined voting power of
the Company’s voting securities (or the voting securities of the surviving
entity) outstanding immediately after such merger, consolidation or
reorganization;

 

                (iv)          the sale or other disposition of all or substantially all
of the assets of the Company;

 

                (v)           the approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company; or

 

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                (vii)         the occurrence of any transaction or event, or series of
transactions or events, designated by the Board in a duly adopted resolution as
representing a change in the effective control of the business and affairs of
the Company, effective as of the date specified in any such resolution.

 

(e)           “Committee” shall mean a Committee of
two or more directors who shall be appointed by and serve at the pleasure of
the Board.  To the extent necessary for
compliance with Rule 16b-3, or any successor provision, each of the
members of the Committee shall be a “non-employee director.”  Solely for purposes of this Section 1(d),
“non-employee director” shall have the same meaning as set forth in Rule 16b-3,
or any successor provision, as then in effect, of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended.

 

(f)            The “Company” shall mean Christopher &
Banks Corporation, a Delaware corporation.

 

(g)           “Fair Market Value” as of any date
shall mean (i) if such stock is listed on the New York Stock Exchange, any
other established stock exchange, the Nasdaq National Market or Nasdaq SmallCap
Market, the price of such stock at the close of the regular trading session of
such market or exchange on such date, as reported by The Wall Street Journal
or a comparable reporting service, or, if no sale of such stock shall have
occurred on such date, on the next preceding date on which there was a sale of
stock; (ii) if such stock is not so listed on the New York Stock Exchange,
any other established stock exchange, the Nasdaq National Market or Nasdaq
SmallCap Market, the average of the closing “bid” and “asked” prices quoted by
the OTC Bulletin Board, the National Quotation Bureau, or any comparable
reporting service on such date or, if there are no quoted “bid” and “asked”
prices on such date, on the next preceding date for which there are such
quotes; or (iii) if such stock is not publicly traded as of such date, the
per share value as determined by the Board, or the Committee, in its sole
discretion by applying principles of valuation with respect to the Company’s
Common Stock.

 

                (h)           The
“Internal Revenue Code” or “Code” is the Internal Revenue Code of 1986, as
amended from time to time.

 

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

 

                (j)            “Parent”
shall mean any corporation which owns, directly or indirectly in an unbroken
chain, fifty percent (50%) or more of the total voting power of the Company’s
outstanding stock.

 

                (k)           The
“Participant” means (i) a non-employee director of the Company or any
Affiliate to whom a nonqualified stock option has been granted pursuant to Section 9;
(ii) a non-employee director of the Company or any Affiliate to whom a
Restricted Stock Award or Restricted Stock Unit Award has been granted pursuant
to Section 10; (iii) a non-employee director of the Company or any
Affiliate to whom a Performance Award has been granted pursuant to Section 11;
or (iv) a non-employee director of the Company or any Affiliate to whom a
Stock Appreciation Right has been granted pursuant to Section 12.

 

                (l)            “Performance
Award” shall mean any Performance Shares or Performance Units granted pursuant
to Section 11 hereof.

 

                (m)          “Performance
Objective(s)” shall mean one or more performance objectives established by the
Administrator, in its sole discretion, for Awards granted under this Plan.  Performance Objectives may include, but shall
not be limited to, any one, or a combination of, (i) revenue, (ii) net
income, (iii) earnings per share, (iv) return on equity, (v) return
on assets, (vi) increase in revenue, (vii) increase in share price or
earnings, (viii) return on investment, or (ix) increase in market
share, in all cases including, if selected by the Administrator, threshold,
target and maximum levels.

 

                (n)           “Performance
Period” shall mean the period, established at the time any Performance Award is
granted or at any time thereafter, during which any Performance Objectives
specified by the Administrator with respect to such Performance Award are to be
measured.

 

                (o)           “Performance
Share” shall mean any grant pursuant to Section 11 hereof of an Award,
which value, if any, shall be paid to a Participant by delivery of shares of
Common Stock of the Company upon 

 

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achievement of such
Performance Objectives during the Performance Period as the Administrator shall
establish at the time of such grant or thereafter.

 

                (p)           “Performance
Unit” shall mean any grant pursuant to Section 11 hereof of an Award,
which value, if any, shall be paid to a Participant by delivery of cash upon
achievement of such Performance Objectives during the Performance Period as the
Administrator shall establish at the time of such grant or thereafter.

 

                (q)           The
“Plan” means the Amended and Restated Christopher & Banks Corporation
2006 Equity Incentive Plan For Non-Employee Directors, as amended hereafter
from time to time, including the form of Agreements as they may be modified by
the Administrator from time to time.

 

                (r)            “Restricted
Stock Award” or “Restricted Stock Unit Award” shall mean any grant of
restricted shares of Stock of the Company or the grant of any restricted stock
units pursuant to Section 10 hereof.

 

                (s)           “Stock,”
“Option Stock” or “Common Stock” shall mean Common Stock of the Company
(subject to adjustment as described in Section 13) reserved for Options
and Awards pursuant to this Plan.

 

                (t)            “Stock
Appreciation Right” shall mean a grant pursuant to Section 12 hereof.

 

                (u)           A “Subsidiary”
shall mean any corporation of which fifty percent (50%) or more of the total
voting power of the Company’s outstanding Stock is owned, directly or
indirectly in an unbroken chain, by the Company.

 

SECTION 2.

PURPOSE

 

                The purpose of the Plan is to promote the success of
the Company and its Affiliates by facilitating the engagement and retention of
competent directors and by furnishing incentive to directors upon whose efforts
the success of the Company and its Affiliates will depend to a large degree.

 

                It is the intention of the Company to carry out the
Plan through the granting of “nonqualified stock options” pursuant to Section 9
of this Plan; through the granting of Restricted Stock Awards and Restricted
Stock Unit Awards pursuant to Section 10 of this Plan; through the
granting of Performance Awards pursuant to Section 11 of this Plan; and
through the granting of Stock Appreciation Rights pursuant to Section 12
of this Plan.  Adoption of this Plan
shall be and is expressly subject to the condition of approval by the
shareholders of the Company within twelve (12) months before or after the
adoption of the Plan by the Board of Directors. 
Any Awards granted prior to the date this Plan is approved by the
shareholders of the Company shall be expressly subject to receipt of such
approval.

 

SECTION 3.

EFFECTIVE DATE OF PLAN

 

                The Plan shall be effective following its adoption by
the Board of Directors, and its approval by the stockholders of the Company on
the date of the 2008 Annual Meeting of Stockholders, as required in Section 2.

 

SECTION 4.

ADMINISTRATION

 

                The Plan shall be administered by the Board of
Directors of the Company (hereinafter referred to as the “Board”) or by a
Committee which may be appointed by the Board from time to time to administer
the Plan (hereinafter collectively referred to as the “Administrator”).  Except as otherwise provided herein, the
Administrator shall have all of the powers vested in it under the provisions of
the Plan, including but not limited to exclusive authority to determine, in its
sole discretion, whether an Award shall be granted; the individuals to whom,
and the 

 

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time or times at which,
Awards shall be granted; the number of shares subject to each Award; the option
price; and the performance criteria, if any, and any other terms and conditions
of each Award.  The Administrator shall
have full power and authority to administer and interpret the Plan, to make and
amend rules, regulations and guidelines for administering the Plan, to
prescribe the form and conditions of the respective agreements evidencing each
Award (which may vary from Participant to Participant), and to make all other
determinations necessary or advisable for the administration of the Plan.  The Administrator’s interpretation of the
Plan, and all actions taken and determinations made by the Administrator
pursuant to the power vested in it hereunder, shall be conclusive and binding
on all parties concerned.

 

                No member of the Board or the Committee shall be
liable for any action taken or determination made in good faith in connection
with the administration of the Plan.  In
the event the Board appoints a Committee as provided hereunder, any action of
the Committee with respect to the administration of the Plan shall be taken
pursuant to a majority vote of the Committee members or pursuant to the written
resolution of all Committee members.

 

SECTION 5.

PARTICIPANTS

 

                The Administrator shall from time to time, at its
discretion and without approval of the shareholders, designate those
non-employee directors of the Company or of any Affiliate to whom Awards shall
be granted under this Plan.  The
Administrator may grant additional Awards, including incentive stock options,
under this Plan to some or all Participants then holding Awards, or may grant
Awards solely or partially to new Participants. In designating Participants,
the Administrator shall also determine the number of shares to be optioned or
awarded to each such Participant and the performance criteria applicable to
each Performance Award. The Administrator may from time to time designate
individuals as being ineligible to participate in the Plan.

 

SECTION 6.

STOCK

 

                The Stock to be optioned under this Plan shall
consist of authorized but unissued shares of Common Stock.  Six Hundred Twenty-Five Thousand (625,000)
shares of Common Stock shall be reserved and available for Awards under the
Plan; provided, however, that the total number of shares of Common Stock
reserved for Awards under this Plan shall be subject to adjustment as provided
in Section 13 of the Plan.  The
following shares of Stock shall continue to be reserved and available for
Awards granted pursuant to the Plan: (i) any outstanding Award that
expires for any reason, (ii) any portion of an outstanding Option or Stock
Appreciation Right that is terminated prior to exercise, (iii) any portion
of an Award that is terminated prior to the lapsing of the risks of forfeiture
on such Award, (iv) shares of Stock used to pay the exercise price under
any Award, whether such shares are withheld by the Company upon exercise of the
Award or are tendered by the Participant from previously owned shares; and (v) shares
of Stock covered by an Award to the extent the Award is settled in cash.

 

SECTION 7.

DURATION OF PLAN

 

                Awards may be granted pursuant to the Plan from time
to time until May 25, 2016, which is the tenth anniversary of the Plan’s
adoption by the Board of Directors.

 

SECTION 8.

PAYMENT

 

                Participants may pay for shares upon exercise of
Options or Stock Appreciation Rights granted pursuant to this Plan with cash,
personal check, certified check or, if approved by the Administrator in its
sole discretion, previously-owned shares of the Company’s Common Stock, or any
combination thereof.  Any stock so
tendered as 

 

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part of such payment
shall be valued at such stock’s then Fair Market Value, or such other form of
payment as may be authorized by the Administrator.  The Administrator may, in its sole
discretion, limit the forms of payment available to the Participant and may
exercise such discretion any time prior to the termination of the Option or
Stock Appreciation Right granted to the Participant or upon any exercise of the
Option or Stock Appreciation Right by the Participant.  “Previously-owned shares” means shares of the
Company’s Common Stock which the Participant has owned for at least six (6) months
prior to the exercise of the Option, or for such other period of time as may be
required by generally accepted accounting principles.

 

                With respect to payment in the form of Common Stock
of the Company, the Administrator may require advance approval or adopt such rules as
it deems necessary to assure compliance with Rule 16b-3, or any successor
provision, as then in effect, of the General Rules and Regulations under
the Securities Exchange Act of 1934, if applicable.

 

SECTION 9.

TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS

 

                Each nonqualified stock option granted pursuant to
this Section 9 shall be evidenced by a written nonqualified stock option
agreement (the “Option Agreement”).  The
Option Agreement shall be in such form as may be approved from time to time by
the Administrator and may vary from Participant to Participant; provided,
however, that each Participant and each Option Agreement shall comply with and
be subject to the following terms and conditions:

 

                (a)           Number
of Shares and Option Price.  The
Option Agreement shall state the total number of shares covered by the
nonqualified stock option.  The option
price per share shall be one hundred percent (100%) of the per share Fair
Market Value of the Common Stock on the date the Administrator grants the
Option.

 

                (b)           Term
and Exercisability of Nonqualified Stock Option.  The term during which any nonqualified stock
option granted under the Plan may be exercised shall be established in each
case by the Administrator.  The Option
Agreement shall state when the nonqualified stock option becomes exercisable
and shall also state the maximum term during which the Option may be
exercised.  If the Stock Option is not
exercisable immediately, the Administrator may accelerate the exercisability of
any Stock Option granted hereunder in the event of the death or disability of
the Participant or provide for such acceleration in the Option Agreement.

 

                (c)           Transferability.  The Administrator may, in its sole
discretion, permit the Participant to transfer any or all nonqualified stock
options to any member of the Participant’s “immediate family” as such term is
defined in Rule 16a-1(e) promulgated under the Securities Exchange
Act of 1934, or any successor provision, or to one or more trusts whose
beneficiaries are members of such Participant’s “immediate family” or
partnerships in which such family members are the only partners; provided,
however, that the Participant cannot receive any consideration for the transfer
and such transferred nonqualified stock option shall continue to be subject to
the same terms and conditions as were applicable to such nonqualified stock
option immediately prior to its transfer.

 

                (d)           No
Rights as Shareholder.  A Participant
(or the Participant’s successor or successors) shall have no rights as a
shareholder with respect to any shares covered by a nonqualified stock option
until the date of the issuance of a stock certificate evidencing such
shares.  No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is actually issued (except as otherwise
provided in Section 13 of the Plan).

 

                (e)           Repricing
Prohibited.  Subject to the
anti-dilution adjustment provisions contained in Section 13 hereof,
without the prior approval of the Company’s shareholders, evidenced by a
majority of votes cast, the Administrator shall not cause the cancellation,
substitution or amendment of a Stock Option that would have the effect of
reducing the exercise price of such a Stock Option previously granted under the
Plan, or otherwise approve any modification to such a Stock Option that would
be treated as a “repricing” under the then applicable rules, regulations or
listing requirements adopted by the New York Stock Exchange.

 

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                (f)            Other
Provisions.  The Option Agreement
authorized under this Section 9 shall contain such other provisions as the
Administrator shall deem advisable.

 

SECTION 10.

RESTRICTED
STOCK AND RESTRICTED STOCK UNIT AWARDS

 

                Each Restricted Stock Award or Restricted Stock Unit
Award granted pursuant to the Plan shall be evidenced by a written restricted
stock or restricted stock unit agreement (the “Restricted Stock Agreement” or “Restricted
Stock Unit Agreement,” as the case may be). 
The Restricted Stock Agreement or Restricted Stock Unit Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each
Participant and each Restricted Stock Agreement or Restricted Stock Unit
Agreement shall comply with and be subject to the following terms and
conditions:

 

(a)           Number of Shares.  The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall state the total number of shares of Stock covered by
the Restricted Stock Award or Restricted Stock Unit Award.

 

(b)           Risks of Forfeiture.  The Restricted Stock Agreement or Restricted
Stock Unit Agreement shall set forth the risks of forfeiture, if any, including
risks of forfeiture based on Performance Objectives, which shall apply to the
shares of Stock covered by the Restricted Stock Award or Restricted Stock Unit
Award, and shall specify the manner in which such risks of forfeiture shall
lapse.  The Administrator may, in its
sole discretion, modify the manner in which such risks of forfeiture shall
lapse but only with respect to those shares of Stock which are restricted as of
the effective date of the modification. 
The Administrator may accelerate the lapse of the risks of forfeiture in
the event of the death or disability of the Participant or provide for such
acceleration in the Restricted Stock Agreement or the Restricted Stock Unit
Agreement.

 

(c)                                  Issuance of Shares; Rights as Shareholder.

 

                                (i)            With respect to a Restricted Stock
Award, the Company shall cause to be issued a stock certificate representing
such shares of Stock in the Participant’s name, and shall hold such certificate
as custodian for the Participant until the risks of forfeiture applicable to
the certificate have lapsed, at which time the Company shall deliver the
certificate to the Participant.  The
Company shall place a legend on such certificate describing the risks of
forfeiture and other transfer restrictions set forth in the Participant’s
Restricted Stock Agreement and providing for the cancellation of such
certificate if the shares of Stock subject to the Restricted Stock Award are
forfeited.  Until the risks of forfeiture
have lapsed or the shares subject to such Restricted Stock Award have been
forfeited, the Participant shall be entitled to vote the shares of Stock
represented by such stock certificates and shall receive all dividends attributable
to such shares, but the Participant shall not have any other rights as a
shareholder with respect to such shares.

 

(ii)           With respect to a Restricted Stock
Unit Award, as the risks of forfeiture on the restricted stock units lapse, the
Participant shall be entitled to payment of the restricted stock units.  The Administrator may, in its sole
discretion, pay restricted stock units in cash, shares of Stock or any
combination thereof.  If payment is made
in shares of Stock, the Administrator shall cause to be issued one or more
stock certificates in the Participant’s name and shall deliver such
certificates to the Participant in satisfaction of such restricted stock
units.  Until the risks of forfeiture on
the restricted stock units have lapsed, the Participant shall not be entitled
to vote any shares of stock which may be acquired through the restricted stock
units, shall not receive any dividends attributable to such shares, and shall
not have any other rights as a shareholder with respect to such shares.

 

(d)           Nontransferability.  No Restricted Stock Award or Restricted Stock
Unit Award shall be transferable, in whole or in part, by the Participant,
other than by will or by the laws of descent and distribution, prior to the
date the risks of forfeiture described in the Restricted Stock Agreement or
Restricted Stock Unit Agreement have lapsed. 
If the Participant shall attempt any transfer of any Restricted Stock
Award or Restricted Stock Unit Award granted under the Plan prior to such date,
such transfer shall be void and the Restricted Stock Award or Restricted Stock
Unit Award shall terminate.

 

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                (e)           Other
Provisions.  The Restricted Stock
Agreement or Restricted Stock Unit Agreement authorized under this Section 10
shall contain such other provisions as the Administrator shall deem advisable.

 

SECTION 11.

PERFORMANCE
AWARDS

 

                Each Performance Award granted pursuant to this Section 11
shall be evidenced by a written performance award agreement (the “Performance
Award Agreement”).  The Performance Award
Agreement shall be in such form as may be approved from time to time by the
Administrator and may vary from Participant to Participant; provided, however,
that each Participant and each Performance Award Agreement shall comply with
and be subject to the following terms and conditions:

 

                (a)           Awards.  Performance Awards in the form of Performance
Units or Performance Shares may be granted to any Participant in the Plan.
Performance Units shall consist of monetary awards which may be earned or
become vested in whole or in part if the Company or the Participant achieves
certain Performance Objectives established by the Administrator over a
specified Performance Period.  Performance
Shares shall consist of shares of Stock or other Awards denominated in shares
of Stock that may be earned or become vested in whole or in part if the Company
or the Participant achieves certain Performance Objectives established by the
Administrator over a specified Performance Period.  The Administrator may accelerate the earning
or vesting of the shares or monetary award subject to a Performance Award in
the event of the death or disability of the Participant or provide for such
acceleration in the Performance Award Agreement.

 

                (b)           Performance
Objectives, Performance Period and Payment. 
The Performance Award Agreement shall set forth:

 

                                (i)            the
number of Performance Units or Performance Shares subject to the Performance
Award, and the dollar value of each Performance Unit;

 

                                (ii)           one
or more Performance Objectives established by the Administrator;

 

                                (iii)          the
Performance Period over which Performance Units or Performance Shares may be
earned or may become vested;

 

                                (iv)          the
extent to which partial achievement of the Performance Objectives may result in
a payment or vesting of the Performance Award, as determined by the
Administrator; and

 

                                (v)           the
date upon which payment of Performance Units will be made or Performance Shares
will be issued, as the case may be, and the extent to which such payment or the
receipt of such Performance Shares may be deferred.

 

                (c)           Nontransferability.  No Performance Award shall be transferable,
in whole or in part, by the Participant, other than by will or by the laws of
descent and distribution.  If the
Participant shall attempt any transfer of any Performance Award granted under
the Plan, such transfer shall be void and the Performance Award shall
terminate.

 

                (d)           No
Rights as Shareholder.  A Participant
(or the Participant’s successor or successors) shall have no rights as a
shareholder with respect to any shares covered by a Performance Award until the
date of the issuance of a stock certificate evidencing such shares.  No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such stock
certificate is actually issued (except as otherwise provided in Section 13
of the Plan).

 

                (e)           Other
Provisions.  The Performance Award
Agreement authorized under this Section 11 shall contain such other
provisions as the Administrator shall deem advisable.

 

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SECTION 12.

STOCK APPRECIATION RIGHTS

 

                Each Stock Appreciation Right granted pursuant to
this Section 12 shall be evidenced by a written stock appreciation right
agreement (the “Stock Appreciation Right Agreement”).  The Stock Appreciation Right Agreement shall
be in such form as may be approved from time to time by the Administrator and
may vary from Participant to Participant; provided, however, that each
Participant and each Stock Appreciation Right Agreement shall comply with and
be subject to the following terms and conditions:

 

                (a)           Awards.  A Stock Appreciation Right shall entitle the
Participant to receive, upon exercise, cash, shares of Stock, or any
combination thereof, having a value equal to the excess of (i) the Fair
Market Value of a specified number of shares of Stock on the date of such
exercise, over (ii) a specified exercise price.  The specified exercise price shall not be
less than 100% of the Fair Market Value of such shares of Stock on the date of
grant of the Stock Appreciation Right.  A
Stock Appreciation Right may be granted independent of or in tandem with a previously
or contemporaneously granted Option.

 

                (b)           Term
and Exercisability.  The term during
which any Stock Appreciation Right granted under the Plan may be exercised
shall be established in each case by the Administrator.  The Stock Appreciation Right Agreement shall
state when the Stock Appreciation Right becomes exercisable and shall also
state the maximum term during which such Stock Appreciation Right may be
exercised.  The manner of exercise of
such Stock Appreciation Right shall be specified in the Stock Appreciation
Right Agreement.  If a Stock Appreciation
Right is granted in tandem with an Option, the Stock Appreciation Right
Agreement shall set forth the extent to which the exercise of all or a portion
of the Stock Appreciation Right shall cancel a corresponding portion of the
Option, and the extent to which the exercise of all or a portion of the Option
shall cancel a corresponding portion of the Stock Appreciation Right.  The Administrator may accelerate the
exercisability of any Stock Appreciation Right granted hereunder in the event
of the death or disability of the Participant or provide for such acceleration
in the Stock Appreciation Right Agreement.

 

                (c)           Nontransferability.  No Stock Appreciation Right shall be
transferable, in whole or in part, by the Participant, other than by will or by
the laws of descent and distribution.  If
the Participant shall attempt any transfer of any Stock Appreciation Right
granted under the Plan, such transfer shall be void and the Stock Appreciation
Right shall terminate.

 

                (d)           No
Rights as Shareholder.  A Participant
(or the Participant’s successor or successors) shall have no rights as a
shareholder with respect to any shares covered by a Stock Appreciation Right
until the date of the issuance of a stock certificate evidencing such
shares.  No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the date such stock certificate is actually issued (except as otherwise
provided in Section 13 of the Plan).

 

                (e)           Repricing
Prohibited.  Subject to the
anti-dilution adjustment provisions contained in Section 13 hereof,
without the prior approval of the Company’s shareholders, evidenced by a
majority of votes cast, the Administrator shall not cause the cancellation,
substitution or amendment of a Stock Appreciation Right that would have the
effect of reducing the exercise price of such a Stock Appreciation Right
previously granted under the Plan, or otherwise approve any modification to
such a Stock Appreciation Right that would be treated as a “repricing” under
the then applicable rules, regulations or listing requirements adopted by the
New York Stock Exchange.

 

                (f)            Other
Provisions.  The Stock Appreciation
Right Agreement authorized under this Section 12 shall contain such other
provisions as the Administrator shall deem advisable, including but not limited
to any restrictions on the exercise of the Stock Appreciation Right which may
be necessary to comply with Rule 16b-3 of the Securities Exchange Act of
1934, as amended.

 

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SECTION 13.

RECAPITALIZATION, SALE, MERGER, EXCHANGE

OR LIQUIDATION

 

                In the event of an increase or decrease in the number
of shares of Common Stock resulting from a stock dividend, stock split, reverse
split, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company, the number of shares of Stock
reserved under Section 6 hereof, the number of shares of Stock covered by
each outstanding Award and Option and the price per share thereof shall be
appropriately adjusted to reflect such change. 
Additional shares which may become covered by the Award or Option
pursuant to such adjustment shall be subject to the same restrictions as are
applicable to the shares with respect to which the adjustment relates.

 

                Unless otherwise provided in the agreement evidencing
an Award, in the event of a Change of Control, the Board may provide for one or
more of the following:

 

(a)           the equitable acceleration of the
exercisability of any outstanding Options or Stock Appreciation Rights, the
vesting and payment of any Performance Awards, or the lapsing of the risks of
forfeiture on any Restricted Stock Awards or Restricted Stock Unit Awards;

 

(b)           the complete termination of this
Plan, the cancellation of outstanding Options or Stock Appreciation Rights not
exercised prior to a date specified by the Board (which date shall give
Participants a reasonable period of time in which to exercise such Option or
Stock Appreciation Right prior to the effectiveness of such transaction), the
cancellation of any Performance Award and the cancellation of any Restricted
Stock Awards or Restricted Stock Unit Awards for which the risks of forfeiture
have not lapsed;

 

(c)           that Participants holding outstanding
Options and Stock Appreciation Rights receive, with respect to each share of Stock
subject to such Option or Stock Appreciation Right, as of the effective date of
any such transaction, shares of Common Stock of the Company or shares of stock
of any corporation succeeding the Company by reason of such transaction with a
value equal to the excess of the Fair Market Value of the Stock subject to such
Option or Stock Appreciation Right on the date immediately preceding the
effective date of such transaction over the price per share of such Options or
Stock Appreciation Rights;

 

(d)           that Participants holding outstanding
Restricted Stock Awards, Restricted Stock Unit Awards and Performance Share
Awards receive, with respect to each share of Stock subject to such Awards, as
of the effective date of any such transaction, shares of Common Stock of the
Company or shares of stock of any corporation succeeding the Company by reason
of such transaction with a value equal to the Fair Market Value of the Stock
subject to such Awards on the date immediately preceding the effective date of
such transaction;

 

(e)           the continuance of the Plan with
respect to the exercise of Options or Stock Appreciation Rights which were
outstanding as of the date of adoption by the Board of such plan for such
transaction and the right to exercise such Options and Stock Appreciation
Rights as to an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction; and

 

                (f)            the
continuance of the Plan with respect to Restricted Stock Awards or Restricted
Stock Unit Awards for which the risks of forfeiture have not lapsed as of the
date of adoption by the Board of such plan for such transaction and the right
to receive an equivalent number of shares of stock of the corporation
succeeding the Company by reason of such transaction.

 

                (g)           the
continuance of the Plan with respect to Performance Awards and, to the extent
applicable, the right to receive an equivalent number of shares of stock of the
corporation succeeding the Company by reason for such transaction.

 

                The Board may condition any acceleration of
exercisability or other right to which Participant is not entitled upon any
additional agreements from Participant, including, without limitation, a
Participant agreeing to additional restrictive covenants (e.g.,
confidentiality, noncompetition, non-solicitation, non-circumvention, etc.) and

 

9

 

Participant agreeing to
continue to perform services for the Company, a successor or purchaser of all
or any portion of the Company’s business or related assets for substantially
the same base salary for a period of up to six months.

 

                The Board may restrict the rights of or the
applicability of this Section 13 to the extent necessary to comply with Section 16(b) of
the Securities Exchange Act of 1934, the Internal Revenue Code or any other
applicable law or regulation.  The grant
of an Award pursuant to the Plan shall not limit in any way the right or power
of the Company to make adjustments, reclassifications, reorganizations or
changes of its capital or business structure or to merge, exchange or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

 

SECTION 14.

INVESTMENT PURPOSE

 

                No shares of Stock shall be issued pursuant to the
Plan unless and until there has been compliance, in the opinion of Company’s
counsel, with all applicable legal requirements, including without limitation,
those relating to securities laws and stock exchange listing requirements.  As a condition to the issuance of Stock to
Participant, the Administrator may require Participant to (a) represent
that the shares of Stock are being acquired for investment and not resale and
to make such other representations as the Administrator shall deem necessary or
appropriate to qualify the issuance of the shares as exempt from the Securities
Act of 1933 and any other applicable securities laws, and (b) represent
that Participant shall not dispose of the shares of Stock in violation of the
Securities Act of 1933 or any other applicable securities laws.

 

                As a further condition to the grant of any Option or
the issuance of Stock to Participant, Participant agrees to the following:

 

                (a)           In
the event the Company advises Participant that it plans an underwritten public
offering of its Common Stock in compliance with the Securities Act of 1933, as
amended, and the underwriter(s) seek to impose restrictions under which
certain shareholders may not sell or contract to sell or grant any option to
buy or otherwise dispose of part or all of their stock purchase rights of the
Common Stock underlying Awards, Participant will not, for a period not to
exceed 180 days from the prospectus, sell or contract to sell or grant an
option to buy or otherwise dispose of any Option granted to Participant
pursuant to the Plan or any of the underlying shares of Common Stock without
the prior written consent of the underwriter(s) or its representative(s).

 

                (b)           In
the event the Company makes any public offering of its securities and
determines in its sole discretion that it is necessary to reduce the number of
issued but unexercised stock purchase rights so as to comply with any state’s
securities or Blue Sky law limitations with respect thereto, the Board of
Directors of the Company shall have the right (i) to accelerate the
exercisability of any Option or Stock Appreciation Right and the date on which
such Option or Stock Appreciation Right must be exercised, provided that the
Company gives Participant prior written notice of such acceleration, and (ii) to
cancel any Options, Stock Appreciation Rights or portions thereof which
Participant does not exercise prior to or contemporaneously with such public
offering.

 

                (c)           In
the event of a transaction (as defined in Section 13 of the Plan),
Participant will comply with Rule 145 of the Securities Act of 1933 and
any other restrictions imposed under other applicable legal or accounting
principles if Participant is an “affiliate” (as defined in such applicable
legal and accounting principles) at the time of the transaction, and Participant
will execute any documents necessary to ensure compliance with such rules.

 

                The Company reserves the right to place a legend on
any stock certificate issued in connection with an Award pursuant to the Plan
to assure compliance with this Section 14.

 

SECTION 15.

AMENDMENT OF THE PLAN

 

                The Board may from time to time, insofar as permitted
by law, suspend or discontinue the Plan or revise or amend it in any respect;
provided, however, that no such revision or amendment, except as is authorized
in Section 13, shall impair the terms and conditions of any Award which is
outstanding on the date of such revision or 

 

10

 

amendment to the material
detriment of the Participant without the consent of the Participant.  Notwithstanding the foregoing, no such
revision or amendment shall (i) increase the number of shares subject to
the Plan except as provided in Section 13 hereof, (ii) change the
designation of the class of Participants eligible to receive Awards, (iii) decrease
the price at which Options may be granted, or (iv) materially increase the
benefits accruing to Participants under the Plan without the approval of the
shareholders of the Company if such approval is required for compliance with
the requirements of any applicable law or regulation.  Furthermore, the Plan may not, without the
approval of the shareholders, be amended in any manner that will cause
incentive stock options to fail to meet the requirements of Section 422 of
the Internal Revenue Code.

 

SECTION 16.

NO
OBLIGATION TO EXERCISE OPTION

 

                The granting of an Option or Stock Appreciation Right
shall impose no obligation upon the Participant to exercise such Option or
Stock Appreciation Right.  Further, the
granting of an Award hereunder shall not impose upon the Company or any
Affiliate any obligation to retain the Participant in its employ for any
period.

 

11Exhibit 10.2

 

AMENDED AND RESTATED

CHRISTOPHER & BANKS CORPORATION

2005 STOCK INCENTIVE PLAN

 

1.             Purpose.  The purpose of the Amended
and Restated Christopher & Banks Corporation 2005 Stock Incentive Plan
is to further align the interests of employees, officers and consultants with
those of the stockholders by providing incentive compensation opportunities
tied to the performance of the Common Stock and by promoting increased
ownership of the Common Stock by such individuals. The Plan is also intended to
advance the interests of the Company and its stockholders by attracting,
retaining and motivating key personnel upon whose judgment, initiative and
effort the successful conduct of the Company’s business is largely dependent.

 

2.             Definitions.  Wherever the following
capitalized terms are used in the Plan, they shall have the meanings specified
below:

 

“Affiliate” means (i) any
entity that would be treated as an “affiliate” of the Company for purposes of Rule 12b-2
under the Exchange Act and (ii) any joint venture or other entity in which
the Company has a direct or indirect beneficial ownership interest representing
at least one-third (1/3) of the aggregate voting power of the equity interests
of such entity or one-third (1/3) of the aggregate fair market value of the
equity interests of such entity, as determined by the Committee.

 

“Award” means an
award of a Stock Option, Stock Appreciation Right, Restricted Stock Award or
Restricted Stock Unit Award granted under the Plan.

 

“Award Agreement”
means a written or electronic agreement entered into between the Company and a
Participant setting forth the terms and conditions of an Award granted to a
Participant.

 

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

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Common
Stock” means the Company’s common stock, par value $0.01 per share.

 

“Committee” means
the Compensation Committee of the Board, or such other committee of the Board
appointed by the Board to administer the Plan.

 

“Company”
means Christopher & Banks Corporation, a Delaware corporation.

 

“Date of Grant”
means the date on which an Award under the Plan is made by the Committee, or
such later date as the Committee may specify to be the effective date of an
Award.

 

“Disability” means
a Participant being considered “disabled” within the meaning of Section 409A(a)(2)(C) of
the Code, unless otherwise provided in an Award Agreement.

 

“Eligible Person”
means any person who is an employee, officer or consultant of the Company or
any Affiliate, or any person to whom an offer of employment with the Company or
any Affiliate is extended, as determined by the Committee, but excluding any
person who is a Non-Employee Director.

 

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

 

“Fair Market Value”
of a share of Common Stock as of a given date shall be the closing sale price
of a share of Common Stock as reported on the New York Stock Exchange on such
date or, if the shares are not traded on the New York Stock Exchange on such
date, on the most recent preceding date when the shares were so traded. If
Common Stock is not listed on the New York Stock Exchange on the date as of
which Fair Market Value is to be 

 

1

 

determined, the Committee
shall determine in good faith the Fair Market Value in whatever manner it
considers appropriate.

 

“Incentive Stock
Option” means a Stock Option granted under Section 6 hereof that is
intended to meet the requirements of Section 422 of the Code and the
regulations thereunder.

 

“Non-Employee
Director” means any member of the Board who is not an employee of the
Company.

 

“Nonqualified Stock
Option” means a Stock Option granted under Section 6 hereof that is
not an Incentive Stock Option.

 

“Participant”
means any Eligible Person who holds an outstanding Award under the Plan.

 

“Performance Award”
means a Restricted Stock Award or Restricted Stock Unit Award that is intended
to qualify as “performance-based compensation” under Section 162(m) of
the Code and described in Section 9 hereof.

 

“Performance Goal”
means one or more of the following performance goals, either individually,
alternatively or in any combination, applied on a corporate, subsidiary or
business unit basis:  revenue, cash flow, gross profit, earnings before
interest and taxes, earnings before interest, taxes, depreciation and
amortization and net earnings, earnings per share, margins (including one or
more of gross, operating and net income margins), returns (including one or
more of return on assets, equity, investment, capital and revenue and total
stockholder return), stock price, economic value added, working capital, market
share, cost reductions, workforce satisfaction and diversity goals, employee
retention, customer satisfaction, completion of key projects and strategic plan
development and implementation.  Such goals may reflect absolute entity or
business unit performance or a relative comparison to the performance of a peer
group of entities or other external measure of the selected performance
criteria

 

“Plan” means
Amended and Restated Christopher & Banks Corporation 2005 Stock
Incentive Plan as set forth herein, as amended from time to time.

 

“Restricted Stock
Award” means a grant of shares of Common Stock to an Eligible Person under Section 8
hereof that are issued, subject to such vesting and transfer restrictions as
the Committee shall determine and set forth in an Award Agreement.

 

“Restricted Stock Unit
Award” means a grant of units to an Eligible Person under Section 8
hereof evidencing the right to receive shares of Common Stock (or a cash
payment equal to the Fair Market Value of a share of Common Stock) at some
future date, subject to such vesting restrictions as the Committee shall
determine and set forth in an Award Agreement.

 

“Service” means a
Participant’s employment with the Company or any Affiliate or a Participant’s
service as a consultant to the Company or any Affiliate, as applicable.

 

“Stock Appreciation
Right” means a contractual right granted to an Eligible Person under Section 7
hereof entitling such Eligible Person to receive a payment, representing the
difference between the base price per share of the right and the Fair Market
Value of a share of Common Stock, at such time, and subject to such conditions,
as are set forth in the Plan and the applicable Award Agreement.

 

“Stock Option”
means a contractual right granted to an Eligible Person under Section 6
hereof to purchase shares of Common Stock at such time and price, and subject
to such conditions, as are set forth in the Plan and the applicable Award
Agreement.

 

“Substantial Risk of
Forfeiture” has the meaning ascribed to that term in Section 409A of
the Code and Department of Treasury guidance issued thereunder.

 

3.             Administration.

 

2

 

3.1           Committee Members.  The
Plan shall be administered by a Committee comprised of no fewer than two
members of the Board. Each Committee member shall satisfy the requirements for (i) an
“independent director” under rules adopted by the New York Stock Exchange,
(ii) a “nonemployee director” for purposes of such Rule 16b-3 under
the Exchange Act and (iii) an “outside director” under Section 162(m) of
the Code. No member of the Committee shall be liable for any action or
determination made in good faith by the Committee with respect to the Plan or
any Award thereunder.

 

3.2           Committee Authority.  The
Committee shall have such powers and authority as may be necessary or
appropriate for the Committee to carry out its functions as described in the Plan.
Subject to the express limitations of the Plan, the Committee shall have
authority in its discretion to determine the Eligible Persons to whom, and the
time or times at which, Awards may be granted, the number of shares, units or
other rights subject to each Award, the exercise, base or purchase price of an
Award (if any), the time or times at which an Award will become vested,
exercisable or payable, the performance goals and other conditions of an Award,
the duration of the Award, and all other terms of the Award. Subject to the
terms of the Plan, the Committee shall have the authority to amend the terms of
an Award in any manner that is not inconsistent with the Plan, provided that no
such action shall adversely affect the rights of a Participant with respect to
an outstanding Award without the Participant’s consent. The Committee shall
also have discretionary authority to interpret the Plan, to make factual
determinations under the Plan, and to make all other determinations necessary
or advisable for Plan administration, including, without limitation, to correct
any defect, to supply any omission or to reconcile any inconsistency in the
Plan or any Award Agreement hereunder. The Committee may prescribe, amend, and
rescind rules and regulations relating to the Plan. The Committee’s
determinations under the Plan need not be uniform and may be made by the
Committee selectively among Participants and Eligible Persons, whether or not
such persons are similarly situated. The Committee shall, in its discretion,
consider such factors as it deems relevant in making its interpretations,
determinations and actions under the Plan including, without limitation, the
recommendations or advice of any officer or employee of the Company or such
attorneys, consultants, accountants or other advisors as it may select. All
interpretations, determinations and actions by the Committee shall be final,
conclusive, and binding upon all parties.

 

3.3           Delegation of Authority.  The
Committee shall have the right, from time to time, to delegate to one or more
officers of the Company the authority of the Committee to grant and determine
the terms and conditions of Awards granted under the Plan, subject to the
requirements of Section 157(c) of the Delaware General Corporation
Law (or any successor provision) and such other limitations as the Committee
shall determine. In no event shall any such delegation of authority be
permitted with respect to Awards to any members of the Board or to any Eligible
Person who is subject to Rule 16b-3 under the Exchange Act or Section 162(m) of
the Code. The Committee shall also be permitted to delegate, to any appropriate
officer or employee of the Company, responsibility for performing certain
ministerial functions under the Plan. In the event that the Committee’s
authority is delegated to officers or employees in accordance with the
foregoing, all provisions of the Plan relating to the Committee shall be
interpreted in a manner consistent with the foregoing by treating any such
reference as a reference to such officer or employee for such purpose. Any
action undertaken in accordance with the Committee’s delegation of authority
hereunder shall have the same force and effect as if such action were
undertaken directly by the Committee and shall be deemed for all purposes of
the Plan to have been taken by the Committee.

 

4.             Shares Subject to the Plan.

 

4.1           Maximum Share Limitations.  Subject
to adjustment pursuant to Section 4.3 hereof, the maximum aggregate number
of shares of Common Stock that may be issued and sold under all Awards granted
under the Plan shall be 2,975,000 shares. 
Of such aggregate Plan limit, the maximum number of shares of Common
Stock that may be issued as Incentive Stock Options under the Plan shall be
limited to 2,975,000 shares.  Each of the
foregoing numerical limitations stated in this Section 4.1 shall be
subject to adjustment in accordance with the provisions of Section 4.3.  Shares of Common Stock issued and sold under
the Plan may be either authorized but unissued shares or shares held in the
Company’s treasury.  To the extent that
any Award involving the issuance of shares of Common Stock is forfeited,
cancelled, returned to the Company for failure to satisfy vesting requirements
or other conditions of the Award, or otherwise terminates without an issuance
of shares of Common Stock being made thereunder, the shares of Common Stock
covered thereby will no longer be counted against the foregoing maximum share
limitations and may again be made subject to Awards under the Plan pursuant to
such limitations.  Any Awards or portions
thereof that are settled in cash and not in shares of Common Stock shall not be
counted against the foregoing maximum share limitations.

 

3

 

4.2           Individual Participant
Limitations (Code § 162(m)).  The maximum number of shares of Common Stock with
respect to which Stock Options and Stock Appreciation Rights in the aggregate
may be granted to any one Participant during any calendar year shall be 250,000
shares.  The maximum number of shares of
Common Stock with respect to which Awards of Restricted Stock and Restricted
Stock Units in the aggregate may be granted to any one Participant during any
calendar year shall be 250,000 shares.

 

4.3           Adjustments.  In the
event of an increase or decrease in the number of shares of Common Stock
resulting from a stock dividend, stock split, reverse split, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company, the number of shares of Stock reserved under Section 4.1
hereof, the number of shares of Stock covered by each outstanding Award and
Option and the price per share thereof shall be appropriately adjusted to
reflect such change.  Additional shares
which may become covered by the Award or Option pursuant to such adjustment
shall be subject to the same restrictions as are applicable to the shares with
respect to which the adjustment relates.

 

5.             Participation and Awards.

 

5.1           Designations of Participants.  All
Eligible Persons are eligible to be designated by the Committee to receive
Awards and become Participants under the Plan. The Committee has the authority,
in its discretion, to determine and designate from time to time those Eligible
Persons who are to be granted Awards, the types of Awards to be granted and the
number of shares of Common Stock or units subject to Awards granted under the
Plan. In selecting Eligible Persons to be Participants and in determining the
type and amount of Awards to be granted under the Plan, the Committee shall
consider any and all factors that it deems relevant or appropriate.

 

5.2           Determination of Awards.  The
Committee shall determine the terms and conditions of all Awards granted to
Participants in accordance with its authority under Section 3.2 hereof. An
Award may consist of one type of right or benefit hereunder or of two or more
such rights or benefits granted in tandem or in the alternative. In the case of
any fractional share or unit resulting from the grant, vesting, payment or
crediting of dividends or dividend equivalents under an Award, the Committee
shall have the discretionary authority to (i) disregard such fractional
share or unit, (ii) round such fractional share or unit to the nearest
lower or higher whole share or unit, or (iii) convert such fractional
share or unit into a right to receive a cash payment. To the extent deemed
necessary by the Committee, an Award shall be evidenced by an Award Agreement
as described in Section 12.1 hereof.

 

6.             Stock Options.

 

6.1           Grant of Stock Options.  A
Stock Option may be granted to any Eligible Person selected by the Committee.
Subject to the provisions of Section 6.8 hereof and Section 422 of
the Code, each Stock Option shall be designated, in the discretion of the
Committee, as an Incentive Stock Option or as a Nonqualified Stock Option.

 

6.2           Exercise Price.  The
exercise price per share of a Stock Option shall not be less than one hundred
percent (100%) of the Fair Market Value of the shares of Common Stock on the
Date of Grant, provided that the Committee may in its discretion specify for
any Stock Option an exercise price per share that is higher than the Fair
Market Value on the Date of Grant.

 

6.3           Vesting of Stock Options.  The
Committee shall in its discretion prescribe the time or times at which, or the
conditions upon which, a Stock Option or portion thereof shall become vested
and/or exercisable, and may accelerate the vesting or exercisability of any Stock
Option at any time. The requirements for vesting and exercisability of a Stock
Option may be based on the continued Service of the Participant with the
Company or its Affiliates for a specified time period (or periods) or on the
attainment of specified performance goals established by the Committee in its
discretion.

 

6.4           Term of Stock Options.  The
Committee shall in its discretion prescribe in an Award Agreement the period
during which a vested Stock Option may be exercised, provided that the maximum
term of a Stock Option shall be ten (10) years from the Date of Grant.
Except as otherwise provided in this Section 6 or as otherwise 

 

4

 

may be provided by the
Committee, no Stock Option may be exercised at any time during the term thereof
unless the Participant is then in the Service of the Company or one of its
Affiliates.

 

6.5           Termination of Service.  Subject
to Section 6.8 hereof with respect to Incentive Stock Options, the Stock
Option of any Participant whose Service with the Company or one of its
Affiliates is terminated for any reason shall terminate on the earlier of (A) the
date that the Stock Option expires in accordance with its terms or (B) unless
otherwise provided in an Award Agreement, and except for termination for cause
(as described in Section 11.2 hereof), the expiration of the applicable
time period following termination of Service, in accordance with the following:
(i) twelve (12) months if Service ceased due to Disability, (ii) twelve
(12) months if the Participant died while in the Service of the Company or any
of its Affiliates, or (iii) three (3) months if Service ceased for
any other reason. During the foregoing applicable period, except as otherwise
specified in the Award Agreement or in the event Service was terminated by the
death of the Participant, the Stock Option may be exercised by such Participant
in respect of the same number of shares of Common Stock, in the same manner,
and to the same extent as if he or she had remained in the continued Service of
the Company or any Affiliate during the first three (3) months of such
period; provided that no additional rights shall vest after such three (3) months.
The Committee shall have authority to determine in each case whether an authorized
leave of absence shall be deemed a termination of Service for purposes hereof,
as well as the effect of a leave of absence on the vesting and exercisability
of a Stock Option. Unless otherwise provided by the Committee, if an entity
ceases to be an Affiliate of the Company or otherwise ceases to be qualified
under the Plan or if all or substantially all of the assets of an Affiliate of
the Company are conveyed (other than by encumbrance), such cessation or action,
as the case may be, shall be deemed for purposes hereof to be a termination of
the Service.

 

6.6           Stock Option Exercise; Tax
Withholding.  Subject to such terms and conditions as shall be
specified in an Award Agreement, a Stock Option may be exercised in whole or in
part at any time during the term thereof by notice in the form required by the
Company, together with payment of the aggregate exercise price therefor and
applicable withholding tax. Payment of the exercise price shall be made in the
manner set forth in the Award Agreement, unless otherwise provided by the
Committee: (i) in cash or by cash equivalent acceptable to the Committee, (ii) by
payment in shares of Common Stock that have been held by the Participant for at
least six (6) months (or such period as the Committee may deem appropriate,
for accounting purposes or otherwise) valued at the Fair Market Value of such
shares on the date of exercise, (iii) through an open-market,
broker-assisted sales transaction pursuant to which the Company is promptly
delivered the amount of proceeds necessary to satisfy the exercise price, (iv) by
a combination of the methods described above or (v) by such other method
as may be approved by the Committee and set forth in the Award Agreement.  In addition to and at the time of payment of
the exercise price, the Participant shall pay to the Company the full amount of
any and all applicable income tax, employment tax and other amounts required to
be withheld in connection with such exercise, payable under such of the methods
described above for the payment of the exercise price as may be approved by the
Committee and set forth in the Award Agreement.

 

6.7           Limited Transferability of
Nonqualified Stock Options.  All Stock Options shall be
nontransferable except (i) upon the Participant’s death, in accordance
with Section 12.2 hereof or (ii) in the case of Nonqualified Stock
Options only, for the transfer of all or part of the Stock Option to a
Participant’s “family member” (as defined for purposes of the Form S-8
registration statement under the Securities Act of 1933), as may be approved by
the Committee in its discretion at the time of proposed transfer. The transfer
of a Nonqualified Stock Option may be subject to such terms and conditions as
the Committee may in its discretion impose from time to time. Subsequent
transfers of a Nonqualified Stock Option shall be prohibited other than in
accordance with Section 12.2 hereof.

 

6.8           Additional Rules for
Incentive Stock Options.

 

(a)           Eligibility.  An
Incentive Stock Option may only be granted to an Eligible Person who is
considered an employee for purposes of Treasury Regulation §1.421-7(h) with
respect to the Company or any Affiliate that qualifies as a “subsidiary
corporation” with respect to the Company for purposes of Section 424(f) of
the Code.

 

(b)           Annual Limits.  No
Incentive Stock Option shall be granted to a Participant as a result of which
the aggregate Fair Market Value (determined as of the Date of Grant) of the
stock with respect to 

 

5

 

which incentive stock
options under Section 422 of the Code are exercisable for the first time
in any calendar year under the Plan and any other stock option plans of the
Company or any subsidiary or parent corporation, would exceed $100,000,
determined in accordance with Section 422(d) of the Code. This
limitation shall be applied by taking stock options into account in the order
in which granted.

 

(c)           Termination of Employment.  An
Award of an Incentive Stock Option may provide that such Stock Option may be
exercised not later than three (3) months following termination of
employment of the Participant with the Company and all Subsidiaries, or not
later than one (1) year following a permanent and total disability within
the meaning of Section 22(e)(3) of the Code, as and to the extent
determined by the Committee to comply with the requirements of Section 422
of the Code.

 

(d)           Other Terms and Conditions;
Nontransferability.  Any Incentive Stock Option granted hereunder
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as are deemed necessary or desirable by the Committee, which
terms, together with the terms of the Plan, shall be intended and interpreted
to cause such Incentive Stock Option to qualify as an “incentive stock option”
under Section 422 of the Code. An Award Agreement for an Incentive Stock
Option may provide that such Stock Option shall be treated as a Nonqualified
Stock Option to the extent that certain requirements applicable to “incentive
stock options” under the Code shall not be satisfied. An Incentive Stock Option
shall by its terms be nontransferable other than by will or by the laws of
descent and distribution, and shall be exercisable during the lifetime of a
Participant only by such Participant.

 

(e)           Disqualifying Dispositions.  If
shares of Common Stock acquired by exercise of an Incentive Stock Option are
disposed of within two (2) years following the Date of Grant or one (1) year
following the transfer of such shares to the Participant upon exercise, the
Participant shall, promptly following such disposition, notify the Company in
writing of the date and terms of such disposition and provide such other
information regarding the disposition as the Company may reasonably require.

 

(f)            Repricing Prohibited.  Subject
to the anti-dilution adjustment provisions contained in Section 4.3
hereof, without the prior approval of the Company’s stockholders, evidenced by
a majority of votes cast, neither the Committee nor the Board shall cause the
cancellation, substitution or amendment of a Stock Option that would have the
effect of reducing the exercise price of such a Stock Option previously granted
under the Plan, or otherwise approve any modification to such a Stock Option
that would be treated as a “repricing” under the then applicable rules,
regulations or listing requirements adopted by the New York Stock Exchange.

 

7.             Stock Appreciation Rights.

 

7.1           Grant of Stock Appreciation Rights.  A
Stock Appreciation Right may be granted to any Eligible Person selected by the
Committee. Stock Appreciation Rights may be granted on a basis that allows for
the exercise of the right by the Participant or that provides for the automatic
payment of the right upon a specified date or event. Stock Appreciation Rights
shall be exercisable or payable at such time or times and upon conditions as
may be approved by the Committee, provided that the Committee may accelerate
the exercisability or payment of a Stock Appreciation Right at any time.

 

7.2           Freestanding Stock Appreciation
Rights.  A Stock Appreciation Right may be granted without any
related Stock Option and may be subject to such vesting and exercisability
requirements as specified by the Committee in an Award Agreement. Such vesting
and exercisability requirements may be based on the continued Service of the
Participant with the Company or its Affiliates for a specified time period (or
periods) or on the attainment of specified performance goals established by the
Committee in its discretion. A Stock Appreciation Right will be exercisable or
payable at such time or times as determined by the Committee, provided that the
maximum term of a Stock Appreciation Right shall be ten (10) years from
the Date of Grant. The base price of a Stock Appreciation Right granted without
any related Stock Option shall be determined by the Committee in its sole
discretion; provided, however, that the base price per share of any such
freestanding Stock Appreciation Right shall not be less than one hundred
percent (100%) of the Fair Market Value of the shares of Common Stock on the
Date of Grant.

 

6

 

7.3           Tandem Stock Option/Stock
Appreciation Rights.  A Stock Appreciation Right may be granted
in tandem with a Stock Option, either at the time of grant or at any time
thereafter during the term of the Stock Option. A tandem Stock Option/Stock
Appreciation Right will entitle the holder to elect, as to all or any portion
of the number of shares subject to such Stock Option/Stock Appreciation Right,
to exercise either the Stock Option or the Stock Appreciation Right, resulting
in the reduction of the corresponding number of shares subject to the right so
exercised as well as the tandem right not so exercised. A Stock Appreciation
Right granted in tandem with a Stock Option hereunder shall have a base price
per share equal to the per share exercise price of the Stock Option, will be
vested and exercisable at the same time or times that a related Stock Option is
vested and exercisable, and will expire no later than the time at which the
related Stock Option expires.

 

7.4           Payment of Stock Appreciation
Rights.  A Stock Appreciation Right will entitle the holder, upon
exercise or other payment of the Stock Appreciation Right, as applicable, to
receive an amount determined by multiplying: (i) the excess of the Fair
Market Value of a share of Common Stock on the date of exercise or payment of
the Stock Appreciation Right over the base price of such Stock Appreciation
Right, by (ii) the number of shares as to which such Stock Appreciation
Right is exercised or paid. Subject to the requirements of Section 409A of
the Code, payment of the amount determined under the foregoing shall be made
solely in shares of Common Stock valued at their Fair Market Value on the date
of exercise or payment, subject to applicable tax withholding requirements.

 

7.5           Repricing Prohibited.  Subject
to the anti-dilution adjustment provisions contained in Section 4.3
hereof, without the prior approval of the Company’s stockholders, evidenced by
a majority of votes cast, neither the Committee nor the Board shall cause the
cancellation, substitution or amendment of a Stock Appreciation Right that
would have the effect of reducing the base price of such a Stock Appreciation
Right previously granted under the Plan, or otherwise approve any modification
to such a Stock Appreciation Right that would be treated as a “repricing” under
the then applicable rules, regulations or listing requirements adopted by the
New York Stock Exchange.

 

8.             Restricted Stock Awards and
Restricted Stock Unit Awards.

 

8.1           Grant of Restricted Stock Awards
and Restricted Stock Unit Awards.  Restricted Stock Awards and
Restricted Stock Unit Awards may be granted to any Eligible Person selected by
the Committee. The Committee may require the payment by the Participant of a
specified purchase price in connection with any Restricted Stock Award or
Restricted Stock Unit Award.

 

8.2           Vesting Requirements.  The
restrictions imposed on shares granted under a Restricted Stock Award or a
Restricted Stock Unit Award shall lapse in accordance with the vesting
requirements specified by the Committee in the Award Agreement, provided that
the Committee may accelerate the vesting of a Restricted Stock Award or
Restricted Stock Unit Award at any time. Such vesting requirements may be based
on the continued Service of the Participant with the Company or its Affiliates
for a specified time period (or periods) or on the attainment of specified
performance goals established by the Committee in its discretion which
constitute a Substantial Risk of Forfeiture. If the vesting requirements of a
Restricted Stock Award shall not be satisfied, the Award shall be forfeited and
the shares of Common Stock subject to the Award shall be returned to the
Company. If the vesting requirements of a Restricted Stock Unit Award shall not
be satisfied, the Award shall be forfeited and the shares of Common Stock
underlying such units subject to the Award shall be returned to the Company.

 

8.3           Issuance and Delivery of Shares.  Any shares issued under a Restricted Stock
Award granted under the Plan shall be issued at the time such Awards are
granted and may be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of a stock certificate
or certificates registered in the name of the Participant. The Committee may
require in an Award Agreement that certificates representing the shares granted
under a Restricted Stock Award bear a legend making appropriate reference to
the restrictions imposed, and that certificates representing the shares granted
or sold under a Restricted Stock Award will remain in the physical custody of
an escrow holder until all restrictions are removed or have expired. Shares
granted under any Restricted Stock Award may not be transferred, assigned or
subject to any encumbrance, pledge, or charge until all applicable restrictions
are removed or have expired, unless otherwise allowed by the Committee. Failure
to satisfy any applicable restrictions shall result in the subject shares of
the Restricted Stock Award being 

 

7

 

forfeited and returned to
the Company. Shares representing a Restricted Stock Award that is no longer
subject to restrictions shall be delivered to the Participant promptly after
the applicable restrictions lapse or are waived.

 

In the case of Restricted
Stock Unit Awards, no shares of Common Stock shall be issued at the time such
Awards are granted. Upon the lapse or waiver of restrictions relating to Restricted
Stock Unit Awards evidencing the right to receive shares of Common Stock, such
shares shall be issued and delivered to the holder of the Restricted Stock Unit
Award.

 

8.4           Restrictions.  Shares
granted under Restricted Stock Awards and Restricted Stock Units shall be
subject to such restrictions as the Committee may impose (including, without
limitation, any limitation on the right to vote shares of Common Stock granted
to the Participant under a Restricted Stock Award or Restricted Stock Unit Award
or the right to receive any dividend or other right or property with respect
thereto), which restrictions may lapse separately or in combination at such
time or times, in such installments or otherwise, as the Committee may deem
appropriate. Notwithstanding the foregoing, the Committee may permit
acceleration of vesting of such Awards in the event of the Participant’s death,
disability or retirement or a change in control of the Company.

 

8.5           Section 83(b) Election.  If
a Participant makes an election pursuant to Section 83(b) of the Code
with respect to a Restricted Stock Award, the Participant shall file, within
thirty (30) days following the Date of Grant, a copy of such election with the
Company and with the Internal Revenue Service, in accordance with the
regulations under Section 83 of the Code. The Committee may provide in an
Award Agreement that the Restricted Stock Award is conditioned upon the
Participant’s making or refraining from making an election with respect to the
Award under Section 83(b) of the Code.

 

8.6           Compliance With Code Section 409A. 
Restricted Stock Awards and Restricted Stock Unit Awards shall be designed and
operated in such a manner that they are either exempt from the application of,
or comply with, the requirements of Section 409A of the Code.

 

9.             Section 162(m) Performance-Based
Awards.

 

9.1           Establishment of Performance Goals.  For purposes of Restricted Stock Awards and
Restricted Stock Unit Awards granted under the Plan that are intended to
qualify as “performance-based compensation” under Section 162(m) of
the Code  (a “Performance Award”), such Performance Awards shall, to the
extent required by Section 162(m) of the Code, be conditioned solely
on the achievement of one or more objective Performance Goals.  Subject to
the terms of the Plan and any applicable Award Agreement, the Performance Goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award granted, the amount of any payment
or transfer to be made pursuant to any Performance Award and any other terms
and conditions of any Performance Award shall be determined by the Committee.
The applicable Performance Goals and specific targets thereunder must be
established and approved by the Committee during the first ninety (90) days of
the performance period (and, in the case of performance periods of less than
one year, in no event after twenty-five percent (25%) or more of the
performance period has elapsed) and while performance relating to such target(s) remains
substantially uncertain within the meaning of Section 162(m) of the
Code.  Performance Goal targets shall be adjusted to mitigate the
unbudgeted impact of material, unusual or nonrecurring gains and losses,
accounting changes or other extraordinary events not foreseen at the time the
targets were set unless the Committee provides otherwise at the time of
establishing the targets.

 

9.2           Committee Certification.  Before any Performance Award under this Section 9
vests, the Committee must certify in writing that the Performance Goal target(s) and
any other material terms of the Performance Award were in fact timely
satisfied.

 

9.3           Expiration of Grant Authority.  As required pursuant to Section 162(m) of
the Code and the regulations promulgated thereunder, the Committee’s authority
to grant new Performance Awards shall terminate upon the first meeting of the
Company’s stockholders that occurs in the fifth (5th) year following the year
in which the Company’s stockholders approve this Plan.

 

10.           Change in Control.

 

8

 

10.1         Effect of Change in Control.  Except
to the extent an Award Agreement provides for a different result (in which case
the Award Agreement will govern and this Section 10 of the Plan shall not
be applicable), notwithstanding anything elsewhere in the Plan or any rules adopted
by the Committee pursuant to the Plan to the contrary, if a Triggering Event
shall occur within the twelve (12) month period beginning with a Change in
Control of the Company, then, effective immediately prior to such Triggering
Event, (i) each outstanding Stock Option and Stock Appreciation Right, to
the extent that it shall not otherwise have become vested and exercisable,
shall automatically become fully and immediately vested and exercisable,
without regard to any otherwise applicable vesting requirement, and (ii) each
Restricted Stock Award and Restricted Stock Unit Award shall become fully and
immediately vested and all forfeiture and transfer restrictions thereon shall
lapse.

 

10.2         Definitions.

 

(a)           Cause.  For purposes
of this Section 10, the term “Cause” shall mean a determination by the
Committee that a Participant (i) has been convicted of, or entered a plea
of nolo contendere to, a crime that constitutes a felony under Federal or state
law, (ii) has engaged in willful gross misconduct in the performance of
the Participant’s duties to the Company or an Affiliate or (iii) has
committed a material breach of any written agreement with the Company or any
Affiliate with respect to confidentiality, noncompetition, nonsolicitation or
similar restrictive covenant. Subject to the first sentence of Section 10.1
hereof, in the event that a Participant is a party to an employment agreement
with the Company or any Affiliate that defines a termination on account of “Cause”
(or a term having similar meaning), such definition shall apply as the
definition of a termination on account of “Cause” for purposes hereof, but only
to the extent that such definition provides the Participant with greater
rights. A termination on account of Cause shall be communicated by written
notice to the Participant, and shall be deemed to occur on the date such notice
is delivered to the Participant.

 

(b)           Change in Control.  For
purposes of this Section 10, a “Change in Control” shall be deemed to have
occurred upon:

 

(i)            the occurrence of (A) an
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
percentage of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Company Voting Securities”) (but excluding (1) any
acquisition directly from the Company (other than an acquisition by virtue of
the exercise of a conversion privilege of a security that was not acquired
directly from the Company), (2) any acquisition by the Company or an
Affiliate and (3) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate) (an “Acquisition”)
that is thirty percent (30%) or more of the Company Voting Securities; and (B) the
termination of employment, within six (6) months following the
Acquisition, of the individual who is the Chief Executive Officer of the
Company immediately prior to the Acquisition, for any reason other than death,
Disability, Cause, or voluntary resignation (but excluding any termination that
constitutes a Constructive Termination or any resignation that was requested by
the Board or any such Person (or its employees or representatives) that
completes an Acquisition);

 

(ii)           at any time during a period of two (2) consecutive
years or less, individuals who at the beginning of such period constitute the
Board (and any new directors whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was so approved) cease for any reason (except for death, Disability or
voluntary retirement) to constitute a majority thereof;

 

(iii)          an Acquisition that is fifty percent
(50%) or more of the Company Voting Securities;

 

9

 

(iv)          the consummation of a merger,
consolidation, reorganization or similar corporate transaction, whether or not
the Company is the surviving company in such transaction, other than a merger,
consolidation, or reorganization that would result in the Persons who are
beneficial owners of the Company Voting Securities outstanding immediately
prior thereto continuing to beneficially own, directly or indirectly, in
substantially the same proportions, at least fifty percent (50%) of the
combined voting power of the Company Voting Securities (or the voting
securities of the surviving entity) outstanding immediately after such merger, consolidation
or reorganization;

 

(v)           the sale or other disposition of all
or substantially all of the assets of the Company;

 

(vi)          the approval by the stockholders of
the Company of a complete liquidation or dissolution of the Company; or

 

(vii)         the occurrence of any transaction or
event, or series of transactions or events, designated by the Board in a duly
adopted resolution as representing a change in the effective control of the
business and affairs of the Company, effective as of the date specified in any
such resolution.

 

(c)           Constructive Termination.  For
purposes of this Section 10, a “Constructive Termination” shall mean a
termination of employment by a Participant within sixty (60) days following the
occurrence of any one or more of the following events without the Participant’s
written consent (i) any reduction in position, title (for Vice Presidents
or above), overall responsibilities, level of authority, level of reporting
(for Vice Presidents or above), base compensation, annual incentive compensation
opportunity, aggregate employee benefits or (ii) a request that the
Participant’s location of employment be relocated by more than fifty (50)
miles. Subject to the first sentence of Section 10.1 hereof, in the event
that a Participant is a party to an employment agreement with the Company or
any Affiliate (or a successor entity) that defines a termination on account of “Constructive
Termination,” “Good Reason” or “Breach of Agreement” (or a term having a
similar meaning), such definition shall apply as the definition of “Constructive
Termination” for purposes hereof in lieu of the foregoing, but only to the
extent that such definition provides the Participant with greater rights. A
Constructive Termination shall be communicated by written notice to the
Committee, and shall be deemed to occur on the date such notice is delivered to
the Committee, unless the circumstances giving rise to the Constructive
Termination are cured within five (5) days of such notice.

 

(d)           Triggering Event.  For
purposes of this Section 10, a “Triggering Event” shall mean (i) the
termination of Service of a Participant by the Company or an Affiliate (or any
successor thereof) other than on account of death, Disability or Cause, (ii) the
occurrence of a Constructive Termination or (iii) any failure by the
Company (or a successor entity) to assume, replace, convert or otherwise
continue any Award in connection with the Change in Control (or another
corporate transaction or other change effecting the Common Stock) on the same
terms and conditions as applied immediately prior to such transaction, except
for equitable adjustments to reflect changes in the Common Stock pursuant to Section 4.3
hereof.

 

10.3         Excise Tax Limit.  In
the event that the vesting of Awards together with all other payments and the
value of any benefit received or to be received by a Participant would result
in all or a portion of such payment being subject to the excise tax under Section 4999
of the Code, then the Participant’s payment shall be either (i) the full payment
or (ii) such lesser amount that would result in no portion of the payment
being subject to excise tax under Section 4999 of the Code (the “Excise
Tax”), whichever of the foregoing amounts, taking into account the applicable
Federal, state, and local employment taxes, income taxes, and the Excise Tax,
results in the receipt by the Participant, on an after-tax basis, of the
greatest amount of the payment notwithstanding that all or some portion of the
payment may be taxable under Section 4999 of the Code. All determinations
required to be made under this Section 10 shall be made by a nationally
recognized accounting firm (the “Accounting Firm”). The Company shall cause the
Accounting Firm to provide detailed supporting calculations of its
determinations to the Company and the Participant. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. The Accounting Firm’s
determinations must be made with substantial authority (within the meaning of Section 6662
of the Code). 

 

10

 

For the purposes of all
calculations under Section 280G of the Code and the application of this Section 10.3,
all determinations as to present value shall be made using one hundred twenty percent
(120%) of the applicable Federal rate (determined under Section 1274(d) of
the Code) compounded semiannually.

 

11.           Forfeiture Events.

 

11.1         General.  The
Committee may specify in an Award Agreement at the time of the Award that the
Participant’s rights, payments and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events shall include, but
shall not be limited to, termination of Service for cause, violation of
material Company policies, breach of noncompetition, confidentiality or other
restrictive covenants that may apply to the Participant, or other conduct by
the Participant that is detrimental to the business or reputation of the
Company.

 

11.2         Termination for Cause.  Unless
otherwise provided by the Committee and set forth in an Award Agreement, if a
Participant’s employment with the Company or any Affiliate shall be terminated
for cause, the Company may, in its sole discretion, immediately terminate such
Participant’s right to any further payments, vesting or exercisability with
respect to any Award in its entirety. In the event a Participant is party to an
employment (or similar) agreement with the Company or any Affiliate that
defines the term “cause,” such definition shall apply for purposes of this Section 11.
The Company shall have the power to determine whether the Participant has been
terminated for cause and the date upon which such termination for cause occurs.
Any such determination shall be final, conclusive and binding upon the
Participant. In addition, if the Company shall reasonably determine that a
Participant has committed or may have committed any act which could constitute
the basis for a termination of such Participant’s employment for cause, the
Company may suspend the Participant’s rights to exercise any option, receive
any payment or vest in any right with respect to any Award pending a
determination by the Company of whether an act has been committed which could
constitute the basis for a termination for “cause” as provided in this Section 11.2.

 

12.           General Provisions.

 

12.1         Award Agreement.  To
the extent deemed necessary by the Committee, an Award under the Plan shall be
evidenced by an Award Agreement in a written or electronic form approved by the
Committee setting forth the number of shares of Common Stock or units subject
to the Award, the exercise price, base price, or purchase price of the Award, the
time or times at which an Award will become vested, exercisable or payable and
the term of the Award. The Award Agreement may also set forth the effect on an
Award of termination of Service under certain circumstances. The Award
Agreement shall be subject to and incorporate, by reference or otherwise, all
of the applicable terms and conditions of the Plan, and may also set forth
other terms and conditions applicable to the Award as determined by the
Committee consistent with the limitations of the Plan. Award Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section 422 of the
Code. The grant of an Award under the Plan shall not confer any rights upon the
Participant holding such Award other than such terms, and subject to such
conditions, as are specified in the Plan as being applicable to such type of
Award (or to all Awards) or as are expressly set forth in the Award Agreement.
In the event that any provision of an Award Agreement conflicts with or is
inconsistent in any respect with the terms of the Plan as set forth herein or
subsequently amended, the terms of the Plan shall control.  The Committee
need not require the execution of an Award Agreement by a Participant, in which
case, acceptance of the Award by the Participant shall constitute agreement by
the Participant to the terms, conditions, restrictions and limitations set
forth in the Plan and the Award Agreement as well as the administrative
guidelines of the Company in effect from time to time.

 

12.2         No Assignment or Transfer;
Beneficiaries.  Except as provided in Section 6.7 hereof,
Awards under the Plan shall not be assignable or transferable by the
Participant, except by will or by the laws of descent and distribution, and
shall not be subject in any manner to assignment, alienation, pledge,
encumbrance or charge. Notwithstanding the foregoing, the Committee may provide
in the terms of an Award Agreement that the Participant shall have the right to
designate a beneficiary or beneficiaries who shall be entitled to any rights,
payments or other benefits specified under an Award following the Participant’s
death. During the lifetime of a Participant, an Award shall be exercised only
by such Participant or such Participant’s guardian or legal representative. In
the event of a 

 

11

 

Participant’s death, an
Award may to the extent permitted by the Award Agreement be exercised by the
Participant’s beneficiary as designated by the Participant in the manner
prescribed by the Committee or, in the absence of an authorized beneficiary
designation, by the legatee of such Award under the Participant’s will or by
the Participant’s estate in accordance with the Participant’s will or the laws
of descent and distribution, in each case in the same manner and to the same
extent that such Award was exercisable by the Participant on the date of the
Participant’s death.

 

12.3         Deferrals of Payment.  The
Committee may in its discretion permit a Participant to defer the receipt of
payment of cash or delivery of shares of Common Stock that would otherwise be
due to the Participant by virtue of the exercise of a right or the satisfaction
of vesting or other conditions with respect to an Award. If any such deferral
is to be permitted by the Committee, the Committee shall establish rules and
procedures relating to such deferral in a manner intended to comply with the
requirements of Section 409A of the Code, including, without limitation,
the time when an election to defer may be made, the time period of the deferral
and the events that would result in payment of the deferred amount, the
interest or other earnings attributable to the deferral and the method of
funding, if any, attributable to the deferred amount.

 

12.4         Rights as Stockholder.  A
Participant shall have no rights as a holder of shares of Common Stock with
respect to any unissued securities covered by an Award until the date the
Participant becomes the holder of record of such securities. Except as provided
in Section 4.3 hereof, no adjustment or other provision shall be made for
dividends or other stockholder rights, except to the extent that the Award
Agreement provides for dividend payments or dividend equivalent rights.

 

12.5         Employment or Service.  Nothing
in the Plan, in the grant of any Award or in any Award Agreement shall confer
upon any Eligible Person any right to continue in the Service of the Company or
any of its Affiliates, or interfere in any way with the right of the Company or
any of its Affiliates to terminate the Participant’s employment or other
service relationship for any reason at any time.

 

12.6         Securities Laws.  No
shares of Common Stock will be issued or transferred pursuant to an Award
unless and until all then applicable requirements imposed by Federal and state
securities and other laws, rules and regulations and by any regulatory
agencies having jurisdiction, and by any exchanges upon which the shares of
Common Stock may be listed, have been fully met. As a condition precedent to
the issuance of shares pursuant to the grant or exercise of an Award, the
Company may require the Participant to take any reasonable action to meet such
requirements. The Committee may impose such conditions on any shares of Common
Stock issuable under the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act of 1933, as amended, under
the requirements of any exchange upon which such shares of the same class are
then listed, and under any blue sky or other securities laws applicable to such
shares. The Committee may also require the Participant to represent and warrant
at the time of issuance or transfer that the shares of Common Stock are being
acquired only for investment purposes and without any current intention to sell
or distribute such shares.

 

12.7         Tax Withholding.  The
Participant shall be responsible for payment of any taxes or similar charges
required by law to be withheld from an Award or an amount paid in satisfaction
of an Award, which shall be paid by the Participant on or prior to the payment
or other event that results in taxable income in respect of an Award. The Award
Agreement may specify the manner in which the withholding obligation shall be
satisfied with respect to the particular type of Award.

 

12.8         Unfunded Plan.  The
adoption of the Plan and any reservation of shares of Common Stock or cash
amounts by the Company to discharge its obligations hereunder shall not be
deemed to create a trust or other funded arrangement. Except upon the issuance
of Common Stock pursuant to an Award, any rights of a Participant under the
Plan shall be those of a general unsecured creditor of the Company, and neither
a Participant nor the Participant’s permitted transferees or estate shall have
any other interest in any assets of the Company by virtue of the Plan.
Notwithstanding the foregoing, the Company shall have the right to implement or
set aside funds in a grantor trust, subject to the claims of the Company’s
creditors or otherwise, to discharge its obligations under the Plan.

 

12.9         Other Compensation and Benefit Plans.  The
adoption of the Plan shall not affect any other share incentive or other
compensation plans in effect for the Company or any Affiliate, nor shall the
Plan preclude the 

 

12

 

Company from establishing
any other forms of share incentive or other compensation or benefit program for
employees of the Company or any Affiliate. The amount of any compensation
deemed to be received by a Participant pursuant to an Award shall not
constitute includable compensation for purposes of determining the amount of
benefits to which a Participant is entitled under any other compensation or
benefit plan or program of the Company or an Affiliate, including, without
limitation, under any pension or severance benefits plan, except to the extent
specifically provided by the terms of any such plan.

 

12.10       Plan Binding on Transferees.  The
Plan shall be binding upon the Company, its transferees and assigns, and the
Participant, the Participant’s executor, administrator and permitted
transferees and beneficiaries.

 

12.11       Severability.  If any
provision of the Plan or any Award Agreement shall be determined to be illegal
or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.

 

12.12       Foreign Jurisdictions.  The
Committee may adopt, amend and terminate such arrangements and grant such
Awards, not inconsistent with the intent of the Plan, as it may deem necessary
or desirable to comply with any tax, securities, regulatory or other laws of
other jurisdictions with respect to Awards that may be subject to such laws.
The terms and conditions of such Awards may vary from the terms and conditions
that would otherwise be required by the Plan solely to the extent the Committee
deems necessary for such purpose. Moreover, the Board may approve such
supplements to or amendments, restatements or alternative versions of the Plan,
not inconsistent with the intent of the Plan, as it may consider necessary or
appropriate for such purposes, without thereby affecting the terms of the Plan
as in effect for any other purpose.

 

12.13       Substitute Awards in Corporate
Transactions.  Nothing contained in the Plan shall be construed
to limit the right of the Committee to grant Awards under the Plan in
connection with the acquisition, whether by purchase, merger, consolidation or
other corporate transaction, of the business or assets of any corporation or
other entity. Without limiting the foregoing, the Committee may grant Awards
under the Plan to an employee or director of another corporation who becomes an
Eligible Person by reason of any such corporate transaction in substitution for
awards previously granted by such corporation or entity to such person. The
terms and conditions of the substitute Awards may vary from the terms and
conditions that would otherwise be required by the Plan solely to the extent
the Committee deems necessary for such purpose.

 

12.14       Governing Law.  The Plan
and all rights hereunder shall be subject to and interpreted in accordance with
the laws of the State of Delaware, without reference to the principles of
conflicts of laws, and to applicable Federal securities laws.

 

13.           Effective Date; Amendment and
Termination.

 

13.1         Effective Date.  The
Plan shall become effective following its adoption by the Board and its
approval by the Company’s stockholders on the date of the 2008 Annual Meeting
of Stockholders. The term of the Plan shall be ten (10) years from the original
date of adoption by the Board, subject to Section 13.3 hereof.

 

13.2         Amendment.  The Board
may at any time and from time to time and in any respect, amend or modify the
Plan. The Board may seek the approval of any amendment or modification by the
Company’s stockholders to the extent it deems necessary or advisable in its
discretion for purposes of compliance with Section 162(m) or Section 422
of the Code, the listing requirements of the New York Stock Exchange or other
exchange or securities market or for any other purpose. No amendment or
modification of the Plan shall adversely affect any Award theretofore granted
without the consent of the Participant or the permitted transferee of the
Award.

 

13.3         Termination.  The Plan
shall terminate on April 7, 2015, which is the tenth (10th) anniversary of
the date of its original adoption by the Board. The Board may, in its
discretion and at any earlier date, terminate the Plan. Notwithstanding the
foregoing, no termination of the Plan shall adversely affect any Award
theretofore granted without the consent of the Participant or the permitted
transferee of the Award.

 

13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]