Document:

Exhibit
10.1

 

AMENDED
AND RESTATED

CONVIO,
INC.

2009
STOCK INCENTIVE PLAN

 

1.             Establishment, Purpose and Types of Awards

 

CONVIO, INC., a Delaware
corporation (the “Company”), maintains the Convio
Inc. 2009 Stock Incentive Plan, which is amended and restated herein and which
shall hereafter be known as the Amended and Restated Convio Inc. 2009 Stock
Incentive Plan (the “Plan”).  The purpose
of the Plan is to promote the long-term growth and profitability of the Company
by (i) providing key people with incentives to improve stockholder value
and to contribute to the growth and financial success of the Company through
their future services, and (ii) enabling the Company to attract, retain
and reward the best-available persons.

 

The Plan permits the
granting of stock options (including incentive stock options qualifying under
Code section 422 and nonstatutory stock options), stock appreciation rights,
restricted or unrestricted stock awards, phantom stock, performance awards,
other stock-based awards, or any combination of the foregoing.

 

2.             Definitions

 

Under this Plan, except
where the context otherwise indicates, the following definitions apply:

 

(a)           “Administrator”
means the Board or the committee(s) or officer(s) appointed by the
Board that have authority to administer the Plan as provided in Section 3
hereof.

 

(b)           “Affiliate”
means any entity, whether now or hereafter existing, which controls, is
controlled by, or is under common control with, the Company (including, but not
limited to, joint ventures, limited liability companies, and
partnerships).  For this purpose, “control” shall mean ownership of 50% or more of the total
combined voting power or value of all classes of stock or interests of the
entity, or the power to direct the management and policies of the entity, by
contract or otherwise.

 

(c)           “Award” means
any stock option, stock appreciation right, stock award, phantom stock award,
performance award, or other stock-based award.

 

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

 

(e)           “Change in Control” means:  (i) the acquisition (other than from the
Company) by any Person, as defined in this Section 2(e), of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of 50% or more of (A) the
then outstanding shares of the securities of the Company, or (B) the
combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the “Company Voting Stock”); (ii) the closing of a sale or
other conveyance of all or substantially all of the assets of the Company; or (iii) the
effective time of any merger, share exchange, consolidation, or other business
combination involving the Company if immediately after such transaction persons
who hold a majority of the outstanding voting securities entitled to vote
generally in the election of directors of the surviving entity (or the entity
owning 100% of such surviving entity) are not persons who, immediately prior to
such transaction, held the Company Voting Stock; provided, however,
that a Change in Control shall not include a public offering of capital stock
of the Company and provided, further, that for purposes of
any Award or subplan that constitutes a “nonqualified deferred compensation
plan,” within the meaning of Code section 409A, the Administrator, in its
discretion, may specify a different definition of Change in Control in order to
comply with the provisions of Code section 409A.  For purposes
of this Section 2(e), a “Person” means
any individual, entity or group within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended, other than:
employee benefit plans sponsored or maintained by the Company and by entities
controlled by the Company or an underwriter of the Common Stock in a registered
public offering.

 

(f)            “Code” means
the Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder.

 

 

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

 

(h)           “Fair Market Value” means,
with respect to a share of the Company’s Common Stock for any purpose on a
particular date, the value determined by the Administrator in good faith.  However, if the Common Stock is registered
under Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended, and listed for trading on a national exchange or market, “Fair Market Value” means, as applicable, (i) either
the closing price or the average of the high and low sale price on the relevant
date, as determined in the Administrator’s discretion, quoted on the New York
Stock Exchange, the American Stock Exchange, the Nasdaq Global Select Market,
or the Nasdaq Global Market; (ii) the last sale price on the relevant date
quoted on the Nasdaq Capital Market; (iii) the average of the high bid and
low asked prices on the relevant date quoted on the Nasdaq OTC Bulletin Board
Service or by the National Quotation Bureau, Inc. or a comparable service
as determined in the Administrator’s discretion; or (iv) if the Common
Stock is not quoted by any of the above, the average of the closing bid and
asked prices on the relevant date furnished by a professional market maker for
the Common Stock, or by such other source, selected by the Administrator.  If no public trading of the Common Stock
occurs on the relevant date but the shares are so listed, then Fair Market
Value shall be determined as of the last date before the relevant date on which
trading of the Common Stock did occur. 
For all purposes under this Plan, the term “relevant
date” as used in this Section 2(h) means either the date
as of which Fair Market Value is to be determined or the next preceding date on
which public trading of the Common Stock occurs, as determined in the
Administrator’s discretion.

 

(i)            “Grant Agreement”
means a written document, including an electronic writing acceptable to the
Administrator, memorializing the terms and conditions of an Award granted
pursuant to the Plan and which shall incorporate the terms of the Plan.

 

(j)            “Performance Measures” mean criteria established by the
Administrator relating to any of the following, as it may apply to an
individual, one or more business units, divisions or subsidiaries, or on a
Company-wide basis, and in either absolute terms or relative to the performance
of one or more comparable companies or an index covering multiple companies:
revenue; earnings before interest, taxes, depreciation and amortization
(EBITDA); operating income; pre- or after-tax income; cash flow; cash flow per
share; net earnings; earnings per share; price-to-earnings ratio; return on
equity; return on invested capital; return on assets; growth in assets; share
price performance; economic value added; total shareholder return; improvement
in or attainment of expense levels; improvement in or attainment of working
capital levels; relative performance to a group of companies comparable to the
Company, and strategic business criteria consisting of one or more objectives
based on the Company’s meeting specified goals relating to revenue, market
penetration, business expansion, costs or acquisitions or divestitures.

 

(k)                                  “Service” means
the provision of services to the Company (or any Affiliate) by a person in the
capacity of an employee or other service relationship with the Company, except
to the extent otherwise specifically provided.

 

3.             Administration

 

(a)           Administration of the
Plan.  The Plan shall be
administered by the Board or by such committee or committees as may be
appointed by the Board from time to time. 
To the extent allowed by applicable state law, the Board by resolution
may authorize an officer or officers to grant Awards (other than stock Awards)
to other officers and employees of the Company and its Affiliates, and, to the
extent of such authorization, such officer or officers shall be the
Administrator.

 

(b)           Powers of the
Administrator.  The
Administrator shall have all the powers vested in it by the terms of the Plan,
such powers to include authority, in its sole and absolute discretion, to grant
Awards under the Plan, prescribe Grant Agreements evidencing such Awards and
establish programs for granting Awards.

 

 

The Administrator
shall have full power and authority to take all other actions necessary to
carry out the purpose and intent of the Plan, including, but not limited to,
the authority to:  (i) determine the
eligible persons to whom, and the time or times at which Awards shall be
granted; (ii) determine the types of Awards to be granted; (iii) determine
the number of shares to be covered by or used for reference purposes for each
Award; (iv) impose such terms, limitations, restrictions and conditions
upon any such Award as the Administrator shall deem appropriate; (v) modify,
amend, extend or renew outstanding Awards, or accept the surrender of
outstanding Awards and substitute new Awards, including without additional
approval by the stockholders of the Company, to approve a program  providing for either (a) the
cancellation of an Award of outstanding options or SARs (as define herein) and
the grant in substitution thereof of new options or SARs covering the same or a
different number of shares but with an exercise price per share equal to the
Fair Market Value per share on the new grant date or payments in cash, or (b) the
amendment of an outstanding Award of an option or SAR to adjust the exercise
price thereof to equal the Fair Market Value per share as of the date of
adjustment, provided, however, that, except as provided in Section 6
or 7(d) of the Plan, any modification that would materially adversely
affect any outstanding Award shall not be made without the consent of the
holder, (vi) accelerate or otherwise change the time in which an Award may
be exercised or becomes payable and to waive or accelerate the lapse, in whole
or in part, of any restriction or condition with respect to such Award,
including, but not limited to, any restriction or condition with respect to the
vesting or exercisability of an Award following termination of any grantee’s
employment or other relationship with the Company; provided, however,
that no such waiver or acceleration of lapse restrictions shall be made
with respect to a performance-based stock award granted to an executive officer
of the Company if such waiver or acceleration is inconsistent with Code section
162(m); (vii) establish objectives and conditions, if any, for earning
Awards and determining whether Awards will be paid with respect to a
performance period; and (viii) for any purpose, including but not limited
to, qualifying for preferred tax treatment under foreign tax laws or otherwise
complying with the regulatory requirements of local or foreign jurisdictions,
to establish, amend, modify, administer or terminate sub-plans, and prescribe,
amend and rescind rules and regulations relating to such sub-plans.

 

The Administrator
shall have full power and authority, in its sole and absolute discretion, to
administer, construe and interpret the Plan, Grant Agreements and all other
documents relevant to the Plan and Awards issued thereunder, to establish,
amend, rescind and interpret such rules, regulations, agreements, guidelines
and instruments for the administration of the Plan and for the conduct of its
business as the Administrator deems necessary or advisable, and to correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in
any Award in the manner and to the extent the Administrator shall deem it
desirable to carry it into effect.

 

(c)           Non-Uniform Determinations.  The Administrator’s determinations under the
Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the Grant Agreements evidencing such Awards) need not be
uniform and may be made by the Administrator selectively among persons who
receive, or are eligible to receive, Awards under the Plan, whether or not such
persons are similarly situated.

 

(d)           Limited Liability.  To the maximum extent permitted by
law, no member of the Administrator shall be liable for any action taken or
decision made in good faith relating to the Plan or any Award thereunder.

 

(e)           Indemnification.  To the maximum extent permitted by law and by
the Company’s charter and by-laws, the members of the Administrator shall be indemnified
by the Company in respect of all their activities under the Plan.

 

(f)            Effect of Administrator’s
Decision.  All actions taken
and decisions and determinations made by the Administrator on all matters
relating to the Plan pursuant to the powers vested in it hereunder shall be in
the Administrator’s sole and absolute discretion and shall be conclusive and
binding on all parties concerned, including the Company, its stockholders, any
participants in the Plan and any other employee, consultant, or director of the
Company, and their respective successors in interest.

 

 

4.             Shares Available for the Plan; Maximum Awards

 

Subject to adjustments as
provided in Section 7(d) of the Plan, upon the effective date of the
Plan, the total number of shares of Common Stock reserved and available for
grant and issuance pursuant to this Plan will be equal to 1,648,000
shares.  In addition, subject to
adjustments in Section 7(d) of the Plan and this Section, the maximum
aggregate number of shares of Common Stock that may be issued under the Plan
shall cumulatively
increase on January 1st of each year commencing in 2011 and ending on (and
including) January 1, 2019, in an amount equal to the lesser of (i) four
percent (4%) of the total number of shares of Common Stock outstanding on December 31
of the preceding calendar year or (ii) an amount
determined by the Board (the “Annual Increase”).  Notwithstanding the foregoing, subject to
adjustments as provided in Section 7(d), not more than 1,648,000 shares
shall be available for issuance pursuant to incentive options intended to
qualify under Code section 422 (“ISO Limit”); provided however, that the
ISO Limit shall cumulatively increase on January 1, 2011 and on each January 1
through and including January 1, 2019, by a number of shares equal to the
lesser of (a) 1,886,911 shares or (b) the Annual Increase.  Common Stock may be issued in connection with a merger
or acquisition as permitted by NASDAQ Rule 5635(c)(3) or, if
applicable, NYSE Listed Company Manual Section 303A.08, or AMEX Company
Guide Section 711 or other applicable rule of the principal exchange
or market on which the Common Stock is listed for trade and such issuance shall
not reduce the number of shares of Common Stock available for issuance under
the Plan.

 

The Company shall reserve
such number of shares for Awards under the Plan, subject to adjustments as
provided in  Section 7(d) of the
Plan.  If any Award, or portion of an
Award, under the Plan expires or terminates unexercised, becomes unexercisable,
is settled in cash without delivery of shares of Common Stock, or is forfeited
or otherwise terminated, surrendered or canceled as to any shares, or if any
shares of Common Stock are repurchased by or surrendered to the Company in
connection with any Award (whether or not such surrendered shares were acquired
pursuant to any Award), or if any shares are withheld by the Company, the
shares subject to such Award and the repurchased, surrendered and withheld
shares shall thereafter be available for further Awards under the Plan;
provided, however, that any such shares that are surrendered to or repurchased
or withheld by the Company in connection with any Award or that are otherwise
forfeited after issuance shall not be available for purchase pursuant to
incentive stock options intended to qualify under Code section 422.  The stock issuable under the Plan shall be
shares of authorized but unissued or reacquired Common Stock or treasury
shares, including shares repurchased by the Company on the open market.  The Company shall at all times during the
term of the Plan and while any Awards are outstanding retain as authorized and
unissued Common Stock, or as treasury Common Stock, at least the number of
shares of Common Stock required to fulfill the Company’s obligations under such
Awards, or otherwise assure itself of its ability to perform its obligations
thereunder.

 

5.             Participation

 

Participation in the Plan
shall be open to all employees, officers, and directors of, and other
individuals providing bona fide services to or for, the Company, or of any
Affiliate of the Company, as may be selected by the Administrator from time to
time. The Administrator may also grant Awards to individuals in connection with
hiring, retention or otherwise, prior to the date the individual first performs
services for the Company or an Affiliate, provided that such Awards shall not
become vested or exercisable, and no shares shall be issued to such individual,
prior to the date the individual first commences performance of such services.

 

6.             Awards

 

The Administrator, in its
sole discretion, establishes the terms of all Awards granted under the
Plan.  Awards may be granted individually
or in tandem with other types of Awards, concurrently with or with respect to
outstanding Awards.  All Awards are
subject to the terms and conditions provided in the Grant Agreement.

 

(a)           Stock Options.  The Administrator may from time to time grant
to eligible participants Awards of incentive stock options as that term is
defined in Code section 422 or nonstatutory stock options; provided,
however, that Awards of incentive stock options shall be limited to
employees of the

 

 

Company or of any current
or hereafter existing “parent corporation”
or “subsidiary corporation,” as defined in
Code sections 424(e) and (f), respectively, of the Company and any other
individuals who are eligible to receive incentive stock options under the
provisions of Code section 422. 
Options must have an exercise price at least equal to Fair Market Value
as of the date of grant and may not have a term in exess of ten years’
duration.  No stock option shall be an
incentive stock option unless so designated by the Administrator at the time of
grant or in the Grant Agreement evidencing such stock option.

 

(b)           Stock Appreciation
Rights.  The Administrator may
from time to time grant to eligible participants Awards of Stock Appreciation
Rights (“SAR”). 
An SAR entitles the grantee to receive, subject to the provisions of the
Plan and the Grant Agreement, a payment having an aggregate value equal to the
product of (i) the excess of (A) the Fair Market Value on the
exercise date of one share of Common Stock over (B) the base price per
share specified in the Grant Agreement, times (ii) the number of shares
specified by the SAR, or portion thereof, which is exercised.  The base price per share specified in the
Grant Agreement shall not be less than the lower of the Fair Market Value on
the grant date or the exercise price of any tandem stock option Award to which
the SAR is related.  No SAR shall have
term longer than ten years’ duration 
Payment by the Company of the amount receivable upon any exercise of a
SAR may be made by the delivery of Common Stock or cash, or any combination of
Common Stock and cash, as determined in the sole discretion of the
Administrator.  If upon settlement of the
exercise of a SAR a grantee is to receive a portion of such payment in shares
of Common Stock, the number of shares shall be determined by dividing such
portion by the Fair Market Value of a share of Common Stock on the exercise
date.  No fractional shares shall be used
for such payment and the Administrator shall determine whether cash shall be
given in lieu of such fractional shares or whether such fractional shares shall
be eliminated.

 

(c)           Stock Awards.  The Administrator may from time to
time grant restricted or unrestricted stock Awards to eligible participants in
such amounts, on such terms and conditions, and for such consideration,
including no consideration or such minimum consideration as may be required by
law, as it shall determine.  A stock
Award may be paid in Common Stock, in cash, or in a combination of Common Stock
and cash, as determined in the sole discretion of the Administrator.

 

(d)           Phantom Stock.  The Administrator may from time to time grant
Awards to eligible participants denominated in stock-equivalent units (“phantom stock”) in such amounts and on such terms and
conditions as it shall determine. 
Phantom stock units granted to a participant shall be credited to a
bookkeeping reserve account solely for accounting purposes and shall not
require a segregation of any of the Company’s assets.  An Award of phantom stock may be settled in
Common Stock, in cash, or in a combination of Common Stock and cash, as
determined in the sole discretion of the Administrator.  Except as otherwise provided in the
applicable Grant Agreement, the grantee shall not have the rights of a
stockholder with respect to any shares of Common Stock represented by a phantom
stock unit solely as a result of the grant of a phantom stock unit to the
grantee.

 

(e)           Performance Awards.  The Administrator may, in its discretion,
grant performance awards which become payable on account of attainment of one
or more performance goals established by the Administrator.  Performance awards may be paid by the
delivery of Common Stock or cash, or any combination of Common Stock and cash,
as determined in the sole discretion of the Administrator.  Performance goals established by the
Administrator may be based on the Company’s or an Affiliate’s operating income
or one or more other business criteria selected by the Administrator that apply
to an individual or group of individuals, a business unit, or the Company or an
Affiliate as a whole, over such performance period as the Administrator may
designate.  The
Administrator may grant stock awards in a manner constituting “qualified
performance-based compensation” within the meaning of Code section 162(m).  The grant of, or lapse of restrictions with
respect to, such performance-based stock awards shall be based upon one or more
Performance Measures and objective performance targets to be attained relative
to those Performance Measures, all as determined by the Administrator.  Performance targets may include minimum,
maximum, intermediate and target levels of performance, with the size of the
performance-based stock award or the lapse of restrictions with respect thereto
based on the level attained.  A
performance target may be stated as an absolute value or as a value determined
relative to prior performance, one or more indices, budget, one or more peer
group companies, any other standard selected by the Administrator, or any
combination thereof.  The Administrator
shall be authorized to make adjustments in the method of calculating attainment
of Performance Measures and performance

 

 

targets in recognition
of:  (A) extraordinary or
non-recurring items; (B) changes in tax laws; (C) changes in
generally accepted accounting principles or changes in accounting policies; (D) charges
related to restructured or discontinued operations; (E) restatement of
prior period financial results; and (F) any other unusual, non-recurring
gain or loss that is separately identified and quantified in the Company’s
financial statements; provided that the Administrator’s decision as to whether
such adjustments will be made with respect to any Covered Employee, within the
meaning of Code section 162(m), is determined when the performance targets are
established for the applicable performance period.  Notwithstanding the foregoing, the
Administrator may, at its sole discretion, modify the performance results upon
which Awards are based under the Plan to offset any unintended results arising
from events not anticipated when the Performance Measures and performance targets
were established; provided, that such modifications may be made with respect to
an Award granted to any Covered Employee, within the meaning of Code section
162(m), only to the extent permitted by Code section 162(m) if the Award
was intended to constitute “qualified performance-based compensation” within
the meaning of Code section 162(m). 
Notwithstanding anything in the Plan to the contrary, the Administrator
is not authorized to waive or accelerate the lapse of restrictions on a
performance-based stock award granted to any Covered Employee, within the
meaning of Code section 162(m) except upon death, disability or a change
of ownership or control of the Company.

 

(f)            Other Stock-Based Awards.  The Administrator may from time to time grant
other stock-based awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration or
such minimum consideration as may be required by law, as it shall
determine.  Other stock-based awards may
be denominated in cash, in Common Stock or other securities, in
stock-equivalent units, in stock appreciation units, in securities or
debentures convertible into Common Stock, or in any combination of the
foregoing and may be paid in Common Stock or other securities, in cash, or in a
combination of Common Stock or other securities and cash, all as determined in
the sole discretion of the Administrator.

 

7.             Miscellaneous

 

(a)           Withholding of Taxes.  Grantees and holders of Awards shall pay to
the Company or its Affiliate, or make provision satisfactory to the
Administrator for payment of, any taxes required to be withheld in respect of
Awards under the Plan no later than the date of the event creating the tax
liability.  The Company or its Affiliate
may, to the extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the grantee or holder of an Award.  In the event that payment to the Company or
its Affiliate of such tax obligations is made in shares of Common Stock, such shares
shall be valued at Fair Market Value on the applicable date for such purposes
and shall not exceed in amount the minimum statutory tax withholding
obligation.

 

(b)           Loans.  To the extent otherwise permitted by law, the
Company or its Affiliate may make or guarantee loans to grantees to assist
grantees in exercising Awards and satisfying any withholding tax obligations.

 

(c)           Transferability.  Except as otherwise determined by the
Administrator, and in any event in the case of an incentive stock option or a
stock appreciation right granted with respect to an incentive stock option, no
Award granted under the Plan shall be transferable by a grantee otherwise than
by will or the laws of descent and distribution.  Unless otherwise determined by the Administrator
in accord with the provisions of the immediately preceding sentence, an Award
may be exercised during the lifetime of the grantee, only by the grantee or,
during the period the grantee is under a legal disability, by the grantee’s
guardian or legal representative.

 

(d)           Adjustments for Corporate
Transactions and Other Events.

 

(i)                                     Stock Dividend, Stock Split and
Reverse Stock Split.  In the event of a stock dividend of, or
stock split or reverse stock split affecting, the Common Stock, (A) the
maximum number of shares of such Common Stock as to which Awards may be granted
under this Plan and the maximum number of shares with respect to which Awards
may be granted during any one fiscal year of the Company to any individual, as
provided in Section 4 of the Plan, and (B) the

 

 

number of shares covered by and the exercise price and other terms of
outstanding Awards, shall, without further action of the Board, be adjusted to
reflect such event.  The Administrator
may make adjustments, in its discretion, to address the treatment of fractional
shares and fractional cents that arise with respect to outstanding Awards as a
result of the stock dividend, stock split or reverse stock split.

 

(ii)                                  Non-Change in Control
Transactions.  Except with respect to the transactions
set forth in Section 7(d)(i), in the event of any change affecting the
Common Stock, the Company or its capitalization, by reason of a spin-off,
split-up, dividend, recapitalization, merger, consolidation or share exchange,
other than any such change that is part of a transaction resulting in a Change
in Control of the Company, the Administrator, in its discretion and without the
consent of the holders of the Awards, may make (A) appropriate adjustments
to the maximum number and kind of shares reserved for issuance or with respect
to which Awards may be granted under the Plan, in the aggregate and with
respect to any individual during any one fiscal year of the Company, as
provided in Section 4 of the Plan; and (B) any adjustments in
outstanding Awards, including but not limited to modifying the number, kind and
price of securities subject to Awards.

 

(iii)                               Change in Control
Transactions.  In the event of any transaction resulting
in a Change in Control of the Company, outstanding stock options and other
Awards that are payable in or convertible into Common Stock under this Plan
will terminate upon the effective time of such Change in Control unless
provision is made in connection with the transaction for the continuation or
assumption of such Awards by, or for the substitution of the equivalent awards,
as determined in the sole discretion of the Administrator, of, the surviving or
successor entity or a parent thereof. 
Fifty precent (50%) of the outstanding stock options and other
Awards that will terminate upon the effective time of the Change in Control
pursuant to the foregoing provision shall become fully exercisable immediately
before the effective time of the Change in Control, except that a
participant who has completed less than one (1) year of Service with the
Company prior to the Change in Control will only vest in that number of
outstanding stock options and other Awards he would have vested had he
completed one (1) year of Service. 
The Administrator shall also have the authority to fully vest an Award
should the participant’s Service terminate without cause or for good reason (as
set forth and defined in the applicable Award agreement) within a designated
period (not to exceed eighteen (18) months) following the effective date of a
Change in Control in which the Award is assumed; provided, however,
that no such acceleration shall be made with respect to a
performance-based stock award granted to an executive officer of the Company if
such acceleration is inconsistent with Code section 162(m).  The holders of stock options and other Awards
under the Plan will be permitted, immediately before the Change in Control, to
exercise or convert all portions of such stock options or other Awards under
the Plan that are then exercisable or convertible or which become exercisable
or convertible upon or prior to the effective time of the Change in
Control.  If, immediately before the
Change in Control, no stock of the Company is readily tradeable on an
established securities market or otherwise, and the vesting of an Award or
Awards pursuant to this Section 7(d)(iii) would be treated as a “parachute
payment” (as defined in section 280G of the Code), then such Award or
Awards shall not vest unless the requirements of the shareholder approval
exemption of section 280G(b)(5) of the Code have been satisfied with
respect to such Award or Awards.

 

(iv)          Unusual or Nonrecurring
Events.  The Administrator is
authorized to make, in its discretion and without the consent of holders of
Awards, adjustments in the terms and conditions of, and the criteria included
in,

 

 

Awards in recognition of unusual or nonrecurring events affecting the
Company, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan.

 

(e)           Substitution of Awards in
Mergers and Acquisitions.  Awards
may be granted under the Plan from time to time in substitution for awards held
by employees, officers, consultants or directors of entities who become or are
about to become employees, officers, consultants or directors of the Company or
an Affiliate as the result of a merger or consolidation of the employing entity
with the Company or an Affiliate, or the acquisition by the Company or an
Affiliate of the assets or stock of the employing entity.  The terms and conditions of any substitute
Awards so granted may vary from the terms and conditions set forth herein to
the extent that the Administrator deems appropriate at the time of grant to
conform the substitute Awards to the provisions of the awards for which they
are substituted.

 

(f)           Other Agreements.  As a condition precedent to the grant of any
Award under the Plan, the exercise pursuant to such an Award, or to the
delivery of certificates for shares issued pursuant to any Award, the
Administrator may require the grantee or the grantee’s successor or permitted
transferee, as the case may be, to become a party to a stock restriction
agreement, shareholders’ agreement, voting trust agreement or other agreements
regarding the Common Stock of the Company in such form(s) as the
Administrator may determine from time to time.

 

(g)           Termination, Amendment and
Modification of the Plan.  The
Board may terminate, amend or modify the Plan or any portion thereof at any
time.  Except as otherwise determined by
the Board, termination of the Plan shall not affect the Administrator’s ability
to exercise the powers granted to it hereunder with respect to Awards granted
under the Plan prior to the date of such termination.

 

(h)           Non-Guarantee of
Employment or Service. 
Nothing in the Plan or in any Grant Agreement thereunder shall confer
any right on an individual to continue in the service of the Company or shall
interfere in any way with the right of the Company to terminate such service at
any time with or without cause or notice and whether or not such termination
results in (i) the failure of any Award to vest; (ii) the forfeiture
of any unvested or vested portion of any Award; and/or (iii) any other
adverse effect on the individual’s interests under the Plan.

 

(i) Compliance with Securities Laws; Listing and Registration.  If at any time the Administrator determines
that the delivery of Common Stock under the Plan is or may be unlawful under
the laws of any applicable jurisdiction, or Federal, state or foreign
securities laws, the right to exercise an Award or receive shares of Common
Stock pursuant to an Award shall be suspended until the Administrator
determines that such delivery is lawful. 
The Company shall have no obligation to effect any registration or
qualification of the Common Stock under Federal, state or foreign laws.  If at any time the Administrator determines
that the delivery of Common Stock under the Plan is or may violate the rules of
the national exchange on which the shares are then listed for trade, the right
to exercise an Award or receive shares of Common Stock pursuant to an Award
shall be suspended until the Administrator determines that such delivery would
not violate such rules.

 

If applicable, the
Company may require that a grantee, as a condition to exercise of an Award, and
as a condition to the delivery of any share certificate, make such written
representations (including representations to the effect that such person will
not dispose of the Common Stock so acquired in violation of Federal, state or
foreign securities laws) and furnish such information as may, in the opinion of
counsel for the Company, be appropriate to permit the Company to issue the
Common Stock in compliance with applicable Federal, state or foreign securities
laws.  The stock certificates for any
shares of Common Stock issued pursuant to this Plan may bear a legend
restricting transferability of the shares of Common Stock unless such shares
are registered or an exemption from registration is available under the
Securities Act of 1933, as amended, and applicable state or foreign securities
laws.

 

(j)            No Trust or Fund Created.  Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a

 

 

grantee or any other person.  To the extent that any grantee or other
person acquires a right to receive payments from the Company pursuant to an
Award, such right shall be no greater than the right of any unsecured general
creditor of the Company.

 

(k)           Governing Law.  The validity, construction and effect of the
Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant Agreements, and the rights of any and all persons having
or claiming to have any interest therein or thereunder, shall be determined
exclusively in accordance with applicable federal laws and the laws of the
State of Texas, without regard to its conflict of laws principles.

 

(l)            409A Savings Clause.  The Plan and all Awards granted hereunder are
intended to comply with, or otherwise be exempt from, Code section 409A.  The Plan and all Awards granted under the
Plan shall be administered, interpreted, and construed in a manner consistent
with Code section 409A to the extent necessary to avoid the imposition of
additional taxes under Code section 409A(a)(1)(B).  Should any provision of the Plan, any Award
Agreement, or any other agreement or arrangement contemplated by the Plan be
found not to comply with, or otherwise be exempt from, the provisions of Code
section 409A, such provision shall be modified and given effect (retroactively
if necessary), in the sole discretion of the Administrator, and without the
consent of the holder of the Award, in such manner as the Administrator
determines to be necessary or appropriate to comply with, or to effectuate an
exemption from, Code section 409A. 
Notwithstanding anything in the Plan to the contrary, in no event shall
the Administrator exercise its discretion to accelerate the payment or
settlement of an Award where such payment or settlement constitutes deferred
compensation within the meaning of Code section 409A unless, and solely to the
extent, that such accelerated payment or settlement is permissible under
Treasury Regulation section 1.409A-3(j)(4) or any successor provision.

 

(m)          Effective Date;
Termination Date.  The Plan is
effective as of the date on which the Plan is adopted by the Board, subject to
approval of the stockholders within twelve months before or after such
date.  No Award shall be granted under
the Plan after the close of business on the day immediately preceding the tenth
anniversary of the effective date of the Plan, or if earlier, the tenth anniversary
of the date this Plan is approved by the stockholders.  Subject to other applicable provisions of the
Plan, all Awards made under the Plan prior to such termination of the Plan
shall remain in effect until such Awards have been satisfied or terminated in
accordance with the Plan and the terms of such Awards.

 

 

APPENDIX
A

PROVISIONS
FOR CALIFORNIA RESIDENTS

 

With respect to Awards
granted to California residents prior to a public offering of capital stock of
the Company that is effected pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission under the
Securities Act of 1933, as amended, and only to the extent required by
applicable law, the following provisions shall apply notwithstanding anything
in the Plan or a Grant Agreement to the contrary:

 

1.             With respect to any Award granted in the form of a stock
option pursuant to Section 6(a) of the Plan:

 

(a)           The exercise period shall be no more
than 120 months from the date the option is granted.

 

(b)           The options shall be non-transferable
other than by will, by the laws of descent and distribution, or, if and to the
extent permitted under the Grant Agreement, to a revocable trust or as
permitted by Rule 701 of the Securities Act of 1933, as amended
(17 C.F.R. 230.701).

 

(c)           Unless employment is terminated for “cause”
as defined by applicable law, the terms of the Plan or Grant Agreement, or a
contract of employment, the right to exercise the option in the event of
termination of employment, to the extent that the Award recipient is entitled
to exercise on the date employment terminates, will continue until the earlier
of the option expiration date, or:

 

(1) At least 6
months from the date of termination if termination was caused by death or
disability.

 

(2) At least 30 days
from the date of termination if termination was caused by other than death or
disability.

 

2.             With respect to an Award, granted pursuant to Section 6(c) of
the Plan, that provides the Award recipient the right to purchase stock, the
Award shall be non-transferable other than by will, by the laws of descent and
distribution, or, if and to the extent permitted under the Grant Agreement, to
a revocable trust or as permitted by Rule 701 of the Securities Act of
1933, as amended (17 C.F.R. 230.701).

 

3.             The Plan shall have a termination date of not more than
10 years from the date the Plan is adopted by the Board or the date the Plan is
approved by the security holders, whichever is earlier.

 

4.             Security holders representing a majority of the Company’s
outstanding securities entitled to vote must approve the Plan by the later of (a) 12
months after the date the Plan is adopted or (b) 12 months after the
granting of any Award to a resident of California.  Any option exercised or any securities
purchased before security holder approval is obtained must be rescinded if
security holder approval is not obtained within the period described in the
preceding sentence.  Such securities
shall not be counted in determining whether such approval is obtained.

 

5.             At the discretion of the Administrator, the Company may
reserve to itself and/or its assignee(s) in the Grant Agreement or any
applicable stock restriction agreement a right to repurchase securities held by
an Award recipient upon such Award recipient’s termination of employment at any
time within six months after such Award recipient’s termination date (or in the
case of securities issued upon exercise of an option after the termination
date, within six months after the date of such exercise) for cash or
cancellation of purchase money indebtedness, at:

 

(A) no less than the
Fair Market Value of such securities as of the date of the Award recipient’s
termination of employment, provided, that such right to repurchase
securities terminates when the Company’s securities have become publicly
traded; or

 

(B) the Award
recipient’s original purchase price, provided, that such right to
repurchase securities at the original purchase price lapses at the rate of at
least 20% of the securities per year over 5 years from the date the option is
granted (without respect to the date the option was exercised or became
exercisable).

 

 

The securities held by an
officer, director, manager or consultant of the Company or an affiliate may be
subject to additional or greater restrictions.

 

6.             The Company will provide financial statements to each
Award recipient annually during the period such individual has Awards
outstanding, or as otherwise required under Section 260.140.46 of Title 10
of the California Code of Regulations. 
Notwithstanding the foregoing, the Company will not be required to
provide such financial statements to Award recipients when the Plan complies
with all conditions of Rule 701 of the Securities Act of 1933, as amended
(17 C.F.R. 230.701); provided that for purposes of determining such
compliance, any registered domestic partner shall be considered a “family
member” as that term is defined in Rule 701.

 

7.             The Plan is intended to comply with Section 25102(o) of
the California Corporations Code.  Any
provision of this Plan which is inconsistent with Section 25102(o),
including without limitation any provision of this Plan that is more
restrictive than would be permitted by Section 25102(o) as amended
from time to time, shall, without further act or amendment by the Board, be
reformed to comply with the provisions of Section 25102(o).  If at any time the Administrator determines
that the delivery of Common Stock under the Plan is or may be unlawful under
the laws of any applicable jurisdiction, or federal or state securities laws,
the right to exercise an Award or receive shares of Common Stock pursuant to an
Award shall be suspended until the Administrator determines that such delivery
is lawful.  The Company shall have no
obligation to effect any registration or qualification of the Common Stock
under federal or state laws.QuickLinks
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  Exhibit 10.12    
    

 
 

  DIRECTOR COMPENSATION    
    

            The following compensation arrangements have been established for the Board of Directors of the Company: All outside directors will
receive an annual retainer of $25,000. The chairpersons of the Audit Committee, the Compensation Committee, the Risk Oversight Committee, and the Nominating / Governance Committee will for this
service receive retainers of $10,000, of $7,000, of $5,000, and of $5,000 respectively. Outside directors also receive a meeting fee of $1,000 for each Board and Committee meeting attended. Outside
directors also receive an annual grant of $40,000 of restricted stock, which stock has 3-year cliff vesting. Directors have the option to receive their $25,000 annual retainer in the form
of stock at a 25% premium (i.e., $31,250 of stock) if they agree to hold the stock for at least one year. No separate compensation is paid to directors who are also employees of the Company. 

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Exhibit 10.12

DIRECTOR COMPENSATION

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