Document:

exv10w34

 

EXHIBIT 10.34

May 16, 2006

Laura A. Brege

Dear Laura:

     On behalf of Onyx Pharmaceuticals, it is a great pleasure to offer you the position of
Executive Vice President and Chief Business Officer, reporting to me. In this position you will
serve as a member of the Executive Team and will have responsibility for the Finance & Accounting,
Corporate Development, Investor Relations, Legal and Human Resources functions. In making this
offer, we are expressing our enthusiastic support for the skills and commitment you will bring to
Onyx at this exciting time. We are pleased to offer you the following:

Salary: Your annual salary will be $375,000 paid semi-monthly, less required deductions
and withholdings.

Bonus: You are eligible to receive annual bonus amounts of up to 35% of your base salary
if Onyx achieves its corporate objectives and you achieve the performance objectives set for you.
For 2006, you will receive a sign-on bonus of $50,000, and be eligible to receive a bonus amount of
up to $81,250, for a total bonus of $131,000 (35% of base) for 2006 if target bonus objectives are
achieved. Bonus payments will be subject to required deductions and withholdings. The Company
shall have the sole discretion to determine whether you have earned any bonus set forth in this
paragraph and, if so, the amount of any such bonus. If your employment ceases within one year of
hire, except as defined in the Executive Change in Control Severance Benefits Agreement, you will
be required to repay the $50,000 sign on bonus to the Company.

Relocation: If within the first 12 months of your employment you relocate closer to Onyx’s
offices in Emeryville, Onyx will give you a one-time payment of $150,000, less required deductions
and withholdings, to defray costs associated with the move.

Stock: Subject to approval by our Board of Directors, you will be granted an option to
purchase 275,000 Onyx shares at the market price on your start date. The options will be issued
pursuant to the Company’s standard Option Agreement and will be subject to the terms of the
governing stock option plan. These options will be exercisable in installments based upon your
continued employment as follows: 25% after the first twelve months, 1/48 per month thereafter, for
a total of a four-year vesting period. In addition to these options, Onyx employees are eligible
for annual option grants based on individual performance.

Benefits: You will be eligible to participate in the Company’s group insurance and
benefits plans pursuant to the terms of these plans, which currently include:

	          	1.	 	Medical coverage provided by Blue Shield; dental and orthodontic coverage
provided by Delta Dental;

	          	2.	 	Life insurance equal to two times your annual salary;

	          	3.	 	Short-Term and Long-Term Disability;

	          	4.	 	Vision Plan;

	          	5.	 	Flex-125 Cafeteria Plan including premiums, and medical expense and dependent
care reimbursement;

	          	6.	 	Employee Stock Purchase Plan;

	          	7.	 	The Onyx 401(k) Plan through Great-West Life;

	          	8.	 	The tuition reimbursement program; and

	          	9.	 	Membership in the Patelco Credit Union.

You may also choose to have additional Voluntary Term Life for you and your eligible dependents
deducted directly from your paycheck. You will accrue four weeks (160 hours) of vacation per year.
Up to ten paid sick days (eighty hours) may be taken per year in the event of injury or illness,
and there will be ten (10) Company-designated, paid holidays per calendar year.

You will be eligible to enter into the Onyx Executive Change In Control Severance Benefits
Agreement, in the form enclosed with this letter, once you begin your employment. This agreement
will set forth the terms of the change of control benefits that you will be entitled to.

This offer is contingent upon your signing our Proprietary Information Agreement. We ask that you
return one signed copy of the enclosed Proprietary Information Agreement with your offer letter and
keep the other copy for your records.

Onyx agrees that during your employment you may continue your Board obligations from Red Rock
Ventures. As those are satisfied,

 

 

Onyx agrees that you may serve as a member of the board of directors of two other companies
provided that the Company approves of the identity of these companies in advance.

Onyx is an “at will” employer. This means that either you or Onyx may terminate your employment at
any time, with or without cause, and with or without advance notice. In addition, the employment
terms of this letter supersede any other agreements or promises made to you by anyone, whether oral
or written. No employee or representative of the Company, other than its president, has the
authority to make any express or implied agreement contrary to the foregoing. This offer letter
may only be changed in a written document signed by you and me.

Please indicate your acceptance of the terms of this employment offer by signing and dating one
copy and returning it, along with the signed Proprietary Information Agreement to me as soon as
possible, but no later than Wednesday, May 25, 2006, the offer expiration date.

We enthusiastically anticipate your joining our team. Should you have any questions regarding the
provisions of employment, please do not hesitate to contact me.

Sincerely,

/s/ Hollings C. Renton

Hollings C. Renton

Chairman, President and Chief Executive Officer

 

I accept Onyx Pharmaceuticals’ offer of employment in the terms stated.
 

	 	 	 	 
	/s/ Laura A. Brege	 	5/19/2006 
	Laura A. Brege	 	Date 

Start Date      6/12/2006           (if unsure, please estimate)EX-10.1

 

EXHIBIT 10.1

METRETEK TECHNOLOGIES, INC.

1998 STOCK INCENTIVE PLAN

Amended and Restated as of June 12, 2006

Section 1. Purposes.

          The purposes of the Metretek Technologies, Inc. 1998 Stock Incentive Plan (the “Plan”) are to
promote the long-term interests of Metretek Technologies, Inc. and its Subsidiaries by (i)
attracting, retaining and rewarding high-quality executives and other key employees and directors
of, and advisors and consultants to, the Company and its Subsidiaries, (ii) motivating such persons
by enabling them to acquire or increase a proprietary interest in the Company in order to align the
interests of such persons with the Company’s stockholders, and (iii) providing such persons with
incentives to pursue and participate in the long-term growth, profitability and financial success
of the Company.

Section 2. Definitions.

          In addition to the terms defined elsewhere in the Plan, the following terms as used in the
Plan shall have the meanings set forth below:

          (a) “Award” means any Option, SAR (including Limited SAR), Restricted Stock, Deferred Stock,
Performance Award, Dividend Equivalent or Other Stock-Based Award, together with any other right or
interest granted to a Participant under the Plan.

          (b) “Award Agreement” means any written agreement, contract or other instrument or document
evidencing any Award which may, but need not, be executed or acknowledged by a Participant.

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

          (d) “Change in Control” has the meaning given to such term in Section 9(b)(i) of the Plan.

          (e) “Change in Control Price” has the meaning given to such term in Section 9(b)(ii) of the
Plan.

          (f) “Code” means the Internal Revenue Code of 1986, as amended from time to time, together
with the rules, regulations and interpretations promulgated thereunder, and any successor
provisions, rules, regulations and interpretations.

          (g) “Committee” means a committee of directors designated by the Board, in its discretion, to
administer the Plan; provided, however, that, unless otherwise determined by the Board, the
Committee shall consist of two or more directors, each of whom shall be (i) a “non-employee
director” within the meaning of Rule 16b-3 under the Exchange Act, unless administration of the
Plan by “non-employee directors” is not then required in order for exemptions under Rule 16b-3 to
apply to transactions under the Plan, and (ii) an “outside director” as defined under Section
162(m) of the Code, unless administration of the Plan by “outside directors” is not then required
in order to qualify for tax deductibility under Section 162(m) of the Code.

          (h) “Company” means Metretek Technologies, Inc., a Delaware corporation, together with any
successor thereto.

          (i) “Covered Employee” means any individual who is or, in the determination of the Board, is
likely to be a “covered employee” within the meaning of Section 162(m) of the Code.

          (j) “Deferred Stock” means a right, granted to a Participant under Section 6(e) hereof, to
receive cash, Shares, other Awards or other property at the end of a specified deferral period.

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          (k) “Director” means any individual who is a member of the Board.

          (l) “Dividend Equivalent” means a right granted to a Participant under Section 6(g) hereof to
receive cash, Shares, other Awards or other property equal in value to dividends paid with respect
to a specific number of Shares, or other periodic payments.

          (m) “Effective Date” means June 12, 1998, the date the Plan originally became effective. The
Effective Date of the Plan, as amended and restated, means June 12, 2006.

          (n) “Eligible Person” means an officer, employee or director of, or an advisor or consultant
to, the Company or a Subsidiary.

          (o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
together with the rules, regulations and interpretations promulgated thereunder, and any successor
provisions, rules, regulations and interpretations.

          (p) “Fair Market Value” means the fair market value of the property or other item being
valued, as determined by the Board in its sole discretion or by procedures established by the
Board; provided, however, that the fair market value of Shares as of any date means the closing
sale price of the Shares on such date or, if there are no sales on such date, then the closing sale
price of the Shares on the most recent date prior to such date on which there was a sale of Shares,
as reported on the American Stock Exchange, any other national securities exchange, the Nasdaq
Stock Market, or any other quotation system approved by the National Association of Securities
Dealers, Inc., on which Shares are then listed or quoted and that constitutes the primary trading
market for the Shares.

          (q) “Incentive Stock Option” or “ISO” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto and is expressly
designated as an Incentive Stock Option.

          (r) “Limited SAR” means a right granted to a Participant under Section 6(c) hereof.

          (s) “Non-Employee Director” means a Director who is not an officer or employee of the Company
or any of its Subsidiaries on the applicable date.

          (t) “Non-Qualified Stock Option” or “NQSO” means an Option that is not intended to be an
Incentive Stock Option.

          (u) “Option” means a right granted under Section 6(b) hereof to purchase Shares or other
Awards at a specific price during a specific time.

          (v) “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(h)
hereof.

          (w) “Participant” means any Eligible Person who has been granted an Award under the Plan which
remains outstanding, including a person who is no longer an Eligible Person.

          (x) “Performance Award” means a right granted under Section 8 hereof to receive Awards based
upon performance criteria specified by the Board.

          (y) “Person” means any individual, corporation, partnership, limited liability company,
association, joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

          (z) “Plan” means the Metretek Technologies, Inc. 1998 Stock Incentive Plan, as amended from
time to time in accordance with the provisions hereof.

          (aa) “Restricted Stock” means any Shares granted under Section 6(d) hereof.

          (bb) “Related Party” has the meaning given to such term in Section 9(b)(iii) hereof.

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          (cc) “Rule 16b-3” means Rule 16b-3 as from time to time in effect and applicable to the Plan
and the Participants, as promulgated and interpreted by the SEC under Section 16 of the Exchange
Act, including any successor rule thereto.

          (dd) “SEC” means the Securities and Exchange Commission or any successor thereto and shall
include the staff thereof.

          (ee) “Section 409A” means Section 409A of the Code, as from time to time in effect and
applicable to the Plan and the Participants, including any proposed and final regulations and other
guidance thereunder or related thereto issued by the Department of the Treasury or the Internal
Revenue Service.

          (ff) “Shares” means shares of common stock, par value $.01 per share, of the Company, or such
other securities of the Company as may be designated by the Board from time to time.

          (gg) “Stock Appreciation Right” or “SAR” means a right granted to a Participant under Section
6(c) hereof, to be paid an amount measured by the appreciation in the Fair Market Value of shares
from the date of grant to the date of exercise.

          (hh) “Subsidiary” means any corporation (whether now or hereafter existing) which, on the date
of determination, qualifies as a subsidiary corporation of the Company under Section 425(f) of the
Code, and any successor thereto.

          (ii) “Voting Securities” has the meaning given to such term in Section 9(b)(iv) hereof.

Section 3. Administration.

          (a) Authority of the Board. The Plan shall be administered by the Board. Subject to the
terms of the Plan and applicable law, and in addition to other express powers and authorizations
conferred on the Board by the Plan, the Board shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted to an Eligible
Person; (iii) determine the number of Awards to be granted, the number of Shares or amount of cash
or other property to which an Award will relate, the terms and conditions of any Award (including,
but not limited to, any exercise price, grant price or purchase price, any exercise or vesting
periods, any limitation or restriction, any schedule for lapse of limitations, forfeiture
restrictions or restrictions on exercisability or transferability, and any accelerations or waivers
thereof, based in each case on such considerations as the Board shall determine), and all other
matters to be determined in connection with an Award; (iv) determine whether, to what extent and
under what circumstances Awards may be settled or exercised in cash, Shares, other securities,
other Awards or other property, or Awards may be accumulated, vested, exchanged, surrendered,
canceled, forfeited or suspended; (v) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Awards, other property and other amounts
payable with respect to an Award shall be deferred either automatically or at the election of the
Participant or of the Committee; (vi) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (vii) prescribe the form of each Award
Agreement, which need not be identical for each Participant; (viii) adopt, amend, suspend, waive or
rescind such rules and regulations and appoint such agents as it shall deem necessary or desirable
for the administration of the Plan; (ix) correct any defect or supply any omission or reconcile any
inconsistency, and to construe and interpret the Plan, the rules and regulations, any Award
Agreement or other instrument entered into or Award made under the Plan; and (x) make any other
determinations and decisions and take any other action that the Board deems necessary or desirable
for the administration of the Plan.

          (b) Exercise of Authority. Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the Plan or any Award
shall be within the sole discretion of the Board, may be made at any time and shall be final,
conclusive and binding upon all Persons, including the Company, its Subsidiaries, Eligible Persons,
Participants, holders or beneficiaries of Awards, and stockholders. The express grant of any
specific power to the Board, and the taking of any action by the Board, shall not be construed as
limiting any power or authority of the Board. The Board may delegate to officers or managers of
the Company or any Subsidiary, or committees thereof, the authority, subject to such terms as the
Board shall determine, to perform such functions, including administrative functions, as the Board
may determine, to the extent that such delegation will not result in the loss of an exemption under
Rule 16b-3 for Awards granted to Participants subject to Section 16 of the Exchange Act in respect
of the Company and will not cause Awards intended to qualify as “performance-based compensation”
under Section 162(m) of the Code of the Code to fail to so qualify. The Board may appoint agents
to assist it in administering the Plan.

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          (c) Delegation to a Committee. Notwithstanding anything to the contrary contained herein, the
Board may at any time, or from time to time, appoint a Committee and delegate to such Committee the
authority of the Board to administer the Plan, including to the extend provided by the Board, the
power to further delegate such authority. Upon such appointment and delegation, any such Committee
shall have all the powers, privileges and duties of the Board in the administration of the Plan to
the extent provided in such delegation, except for the power to appoint members of the Committee
and to terminate, modify or amend the Plan. The Board may from time to time appoint members of any
such Committee in substitution for or in addition to members previously appointed, may fill
vacancies in such Committee and may discharge such Committee. Any such Committee shall hold its
meetings at such times and places as it shall deem advisable. A majority of members shall
constitute a quorum and all determinations shall be made by a majority of such quorum. Any
determination reduced to writing and signed by all of the members shall be fully as effective as if
it had been made by a majority vote at a meeting duly called and held.

          (d) Limitation of Liability. The Board, the Committee, if any, and each member of each shall
be entitled to, in good faith, rely or act upon any report or other information furnished to him or
her by any executive officer, other officer or employee of the Company or a Subsidiary, the
Company’s independent auditors, legal counsel, other consultants or any other agents assisting in
the administration of the Plan. Members of the Board and of the Committee, if any, and any officer
or employee of the Company or a Subsidiary acting at the direction or on behalf of the Board and of
the Committee, if any, shall not be personally liable for any action or determination taken or made
in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action or determination.

Section 4. Shares Available for Awards.

          (a) Shares Available. Subject to adjustment as provided in Section 4(b) hereof, the total
number of Shares with respect to which Awards may be granted under the Plan shall be 3,750,000. If
any Shares covered by an Award granted under the Plan, or to which such an Award relates, are
forfeited, or if an Award otherwise terminates or is canceled without the delivery of Shares, or if
payment is made to the Participant in the form of cash or other property other than Shares, then
the Shares covered by such Award, or to which such Award relates, or the number of Shares otherwise
counted against the aggregate number of Shares with respect to which Awards may be granted, to the
extent of any such settlement, forfeiture, termination or cancellation, shall again be, or shall
become, Shares with respect to which Awards may be granted, to the extent permissible under Rule
16b-3. In the event that any Option or other Award granted hereunder is exercised through the
delivery of Shares, the number of Shares available for Awards under the Plan shall be increased by
the number of Shares surrendered, to the extent permissible under Rule 16b-3. For purposes of this
Section 4(a), the number of Shares to which an Award relates shall be counted against the number of
Shares reserved and available under the Plan at the time of grant of the Award, unless such number
of Shares cannot be determined at that time, in which case the number of Shares actually
distributed pursuant to the Award shall be counted against the number of Shares reserved and
available under the Plan at the time of distribution; provided, however, that Awards related to or
retroactively added to, or granted in tandem with, substituted for or converted into, other Awards
shall be counted or not counted against the number of Shares reserved and available under the Plan
in accordance with procedures adopted by the Committee so as to ensure appropriate counting but
avoid double counting; and provided, further, that the number of Shares deemed to be issued under
the Plan upon exercise of an Option or an Other Stock-Based Award in the nature of a stock purchase
right shall be reduced by the number of Shares surrendered by the Participant in payment of the
exercise or purchase price of the Award.

          (b) Adjustments. In the event that any dividend or other distribution (whether in the form of
cash, Shares, other securities or other property), recapitalization, forward or reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
liquidation, dissolution, exchange of Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that an adjustment is necessary or
determined by the Board to be appropriate in order to prevent dilution or enlargement of the
Participants’ rights under the Plan, then the Board shall proportionately adjust any or all of (i)
the number and kind of Shares or other securities of the Company (or number and kind of other
securities or property) which may thereafter be issued in connection with Awards; (ii) the number
and kind of Shares or other securities of the Company (or number and kind of other securities or
property) issued or issuable with respect to outstanding Awards; and (iii) the grant, exercise or
purchase price with respect to any Award; provided, in each case, that with respect to Awards of
Incentive Stock Options, no such adjustment shall be authorized to the extent that such authority
would cause the Plan to violate Section 422(b)(1) of the Code, as from time to time amended.

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          (c) Sources of Shares. Any Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or of treasury Shares, including Shares repurchased by the
Company for purposes of the Plan.

Section 5. Eligibility.

          Awards may be granted under the Plan only to Eligible Persons, except that only Eligible
Persons who are employees of the Company or a Subsidiary shall be eligible for the grant of
Incentive Stock Options.

Section 6. Specific Terms of Awards.

          (a) General. Subject to the provisions of the Plan and any applicable Award Agreement, Awards
may be granted as set forth in this Section 6. In addition, the Board may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to the terms of Section 10
hereof), such additional terms and conditions, not inconsistent with the provisions of the Plan, as
the Board shall determine, including terms requiring forfeiture of Awards in the event of
termination of employment by the Participant and terms permitting a Participant to make elections
pertaining to his Award. Subject to the provisions of the Plan, the Board shall have the right to
accelerate the vesting or exercising of any Award granted under the Plan. Except as provided in
Section 7(a) hereof, or as required by applicable law, Awards shall be granted for no consideration
other than prior and future services.

          (b) Options. Subject to the provisions of the Plan, the Board is authorized to grant Options
to Eligible Persons on the following terms and conditions:

                    (i) Exercise Price. The exercise price per Share of an Option shall be determined by the
Board; provided, however, that, except as provided in Section 7(a), such exercise price shall not
be less than the Fair Market Value of a Share on the date of grant of such Option.

                    (ii) Option Term. The term of each Option shall be determined by the Board.

                    (iii) Methods of Exercise. The Board shall determine the time or times at which or the
circumstances under which an Option may be exercised in whole or in part (including based on
achievement of performance goals and/or service requirements), the methods by which such exercise
price may be paid or deemed to be paid, and the form of such payment, including, without
limitation, cash, Shares, other outstanding Awards or other property (including notes or other
contractual obligations of Participants to make payment on a deferred bases, to the extent
permitted by law) or any combination thereof, having a Fair Market Value equal to the exercise
price.

                    (iv) Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan
shall comply in all material respects with the provisions of Section 422 of the Code or any
successor provision thereto. Incentive Stock Options may only be issued to employees of the
Company or a Subsidiary. Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify
either the Plan or any ISO under Section 422, unless the Participant has first requested the change
that will result in such disqualification.

                    (v) Director Options. Options or other Awards may be granted to Non-Employee Directors in the
discretion of the Board or the Committee of such kinds, in such amounts and at such times as the
Board or the Committee shall decide in its sole discretion.

          (c) Stock Appreciation Rights. The Board is authorized to grant Stock Appreciation Rights to
Eligible Persons on the following terms and conditions:

                    (i) Right to Payment. A Stock Appreciation Right shall confer on the Participant to whom it
is granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of a
Share on the date of exercise (or, in the case of a Limited SAR, the Fair Market Value determined
by reference to the Change in Control Price), or, if the Board shall so determine in the case of
any such right other than one related to any Incentive Stock Option, at any time during a specified
period before or after the date of exercise, over (B) the grant price of the Stock Appreciation
Right as

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determined by the Board as of the date of grant of the Stock Appreciation Right, which, except
as provided in Section 7(a) hereof, shall not be less than the Fair Market Value of a Share on the
date of grant.

                    (ii) Other Terms. The term, methods of exercise, methods of settlement and any other terms
and conditions of any Stock Appreciation Right shall be determined by the Board. Limited SARs
that may only be exercised in connection with a Change in Control or other event as specified by
the Board may be granted on such terms, not inconsistent with this Section 6(c), as the Board may
determine. SARs and Limited SARs may be awarded either on a free-standing basis or in tandem with
other Awards.

          (d) Restricted Stock. The Board is authorized to grant Restricted Stock to Eligible Persons
on the following terms and conditions:

                    (i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions as the Board may impose (including,
without limitation, limitations on the right to vote Restricted Stock or the right to receive
dividends thereon), which restrictions may lapse separately or in combination at such times, under
such circumstances (including based on the achievement of performance goals and/or future service
requirements), in such installments, or otherwise, as the Board shall determine at the time of
grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award
Agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have all
of the rights of a stockholder, including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by
the Board). During the restricted period applicable to the Restricted Stock, subject to Section 11
hereof, the Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or
otherwise encumbered by the Participant.

                    (ii) Forfeiture. Except as otherwise determined by the Board at the time of grant or
thereafter, upon termination of employment or service on the Board (as determined under criteria
established by the Board) during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions shall be forfeited and reacquired by the Company; provided,
however, that restrictions on Restricted Stock shall be waived in whole or in part in the event of
terminations resulting from specified causes, and the Board may in other cases waive in whole or in
part restrictions on or the forfeiture of Restricted Stock.

                    (iii) Certificates for Shares. Restricted Stock granted under the Plan may be evidenced in
such manner as the Board shall determine, including, without limitation, issuance of certificates
representing Shares. Certificates representing Shares of Restricted Stock shall be registered in
the name of the Participant and shall bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Restricted Stock, and the Board may require that the Company
retain physical possession of the Certificates, and that the Participant deliver a stock power to
the Company, endorsed in blank, relating to the Restricted Stock.

                    (iv) Dividends and Splits. As a condition to the grant of an Award of Restricted Stock, the
Board may require that any cash dividends paid on a share of Restricted Stock be automatically
reinvested in additional shares of Restricted Stock or applied to the purchase of additional Awards
under the Plan. Unless otherwise determined by the Board, Shares distributed in connection with a
stock split or stock dividend, and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to
which such Shares or other property has been distributed.

          (e) Deferred Stock. The Board is authorized to grant Deferred Stock to Eligible Persons on
the following terms and conditions:

                    (i) Issuance and Limitations. Delivery of Shares shall occur upon expiration of the deferral
period specified for the Award of Deferred Stock by the Board. In addition, an Award of Deferred
Stock shall be subject to such limitations (including a risk of forfeiture) as the Committee may
impose (if any), which limitations may lapse at the expiration of the deferral period or at other
specified times (including based on achievement of performance goals and/or future service
requirements, separately or in combination, in installments or otherwise, as the Committee shall
determine at the time of grant or thereafter. A Participant awarded Deferred Stock shall have no
voting rights and shall have no rights to receive dividends in respect of Deferred Stock, unless
and only to the extent that the Committee shall award Dividend Equivalents in respect of such
Deferred Stock.

                    (ii) Forfeiture. Except as otherwise determined by the Board upon termination of employment
with or service to the Company (as determined under criteria established by the Board) during the
applicable deferral period or

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portion thereof to which forfeiture conditions apply, Deferred Stock that is at that time
subject to deferral (other than a deferral at the election of the Participant) shall be forfeited;
provided, however, that the Board may provide, by rule or regulation or in any Award Agreement or
may determine in any individual case, that restriction or forfeiture conditions relating to
Deferred Stock shall be waived in whole or in part in the event of terminations resulting from
specified causes, and the Board may in other cases waive in whole or in part the forfeiture of
Deferred Stock.

                    (iii) Section 409A. Notwithstanding the foregoing, the terms and conditions of any Award of
Deferred Stock under the Plan shall satisfy the requirements for exemption under Section 409A or
shall satisfy the requirements of Section 409A determined by the Board prior to such deferral.

          (f) Bonus Shares and Awards in Lieu of Obligations. The Board is authorized to grant Shares
or other Awards as a bonus to Eligible Persons or in lieu of obligations to pay cash or deliver
other property under the Plan or under other plans or compensatory arrangements (including salary
requirements), provided that, in the case of Participants subject to Section 16 of the Exchange
Act, the amount of such grants remains within the discretion of the Board to the extent necessary
to ensure that acquisitions of Shares or other Awards are exempt from liability under Section 16(b)
of the Exchange Act. Shares or Awards granted hereunder shall be subject to such other terms as
shall be determined by the Board.

          (g) Dividend Equivalents. The Board is authorized to grant Dividend Equivalents to a
Participant. Dividend Equivalents shall confer upon the Participant rights to receive, currently
or on a deferred basis, cash, Shares, other Awards or other property equal in value to dividends
paid with respect to a specified number of Shares, or otherwise, as determined by the Board. The
Board may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Shares or Awards or other investment vehicles, and
subject to such restrictions or transferability and risk of forfeiture, as the Board may specify.
Dividend Equivalents may be awarded on a free-standing basis or with another Award. Notwithstanding
the foregoing, the terms and conditions of any Award of Dividend Equivalents under the Plan shall
comply with any applicable requirements under Section 409A.

          (h) Other Stock-Based Awards. The Board is authorized, subject to limitations under
applicable law, to grant to Participants such other Awards that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed
by the Board to be consistent with the purposes of the Plan, including, without limitation,
purchase rights for Shares, Shares awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debt securities or other rights convertible or exchangeable into
Shares, Awards with value and payment contingent upon performance of the Company or any other
factors designated by the Board, and Awards valued by reference to the book value of Shares or the
value of securities of or the performance of specified Subsidiaries as the Board determines. The
Board shall determine the terms and conditions of such awards. Except as provided in Section 7(a)
hereof, Shares or securities delivered pursuant to an Award in the nature of a purchase right
granted under this Section 6(h) shall be purchased for such consideration, paid for at such times,
by such methods and in such forms, including, without limitation, cash, Shares, other outstanding
Awards or other property or any combination thereof, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under the Plan, may also be granted
pursuant to this Section 6(h).

          (i) Exchange Provisions. The Board may at any time offer to exchange or buy out any
previously granted Award for a payment in cash, Shares, another Award or other property, based on
such terms and conditions as the Board shall determine and communicate to the Participant at the
time that such offer is made, provided such terms and conditions comply with any applicable
requirements of Section 409A.

Section 7. General Terms of Awards.

          (a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted under the Plan may,
in the discretion of the Board, be granted either alone or in addition to, in tandem with or in
substitution or exchange for, any other Award granted under the Plan or any award granted under any
other plan of the Company or any Subsidiary (subject to the terms of Section 10 hereof), or any
other right of a Participant to receive payment from the Company or any Subsidiary. Such
additional, tandem, substitute or exchange Awards may be granted at any time. If an Award is
granted in substitution or exchange for another Award or award, the Board shall require the
surrender of such other Award or award in consideration for the grant of the new Award. The
exercise price of any Option, the grant price of any Stock Appreciation Right or the purchase price
of any other Award conferring a right to purchase Share retroactively granted in tandem with an
outstanding Award or award shall be either not less than the Fair Market Value of Shares at the
date of grant of the later Award or equal to the Fair Market Value of Shares at the date of grant
of the earlier Award or award. Notwithstanding the foregoing, the exercise price of any Option,
grant price of any Stock Appreciation Right or purchase price of any other

7

 

Award conferring a right to purchase Shares which is granted in exchange or substitution for
an option, stock appreciation right or other award granted by the Company (other than in connection
with a transaction described in Section 9(a) hereof) shall not be less than the exercise price,
grant price or purchase price of the exchanged or substituted Option, Stock Appreciation Right or
other Award, and outstanding Awards shall not be amended (other than in connection with a
transaction described in Section 4(b) hereof to reduce the exercise price, grant price or purchase
price of any such Award.

          (b) Decisions Required to be Made by the Board. Other provisions of the Plan and any Award
Agreement notwithstanding, if any decision regarding an Award or the exercise of any right by a
Participant, at any time such Participant is subject to Section 16 of the Exchange Act or is a
Covered Employee under Section 162(m) of the Code, is required to be made or approved by the Board
in order that a grant to or transaction by such Participant will be exempt under Rule 16b-3 or
qualify as “qualified performance-based compensation” for purposes of Section 162(m) of the Code
then the Board shall retain full and exclusive power and authority to make such decision or to
approve or disapprove any such decision by the Participant.

          (c) Term of Awards. The term of each Award shall be for such period as may be determined by
the Board; provided, however, that in no event shall the term of any Incentive Stock Option, or a
Stock Appreciation Right granted in tandem therewith, exceed a period of ten years from the date of
its grant; and provided, further, that the terms and conditions of each Award shall comply with any
applicable requirements of Section 409A.

          (d) Form and Timing of Payment of Awards. Subject to the terms of the Plan and any applicable
Award Agreement, payments or substitutions to be made by the Company or a Subsidiary upon the
grant, exercise or settlement of an Award may be made in such forms as the Board shall determine at
the time of grant or thereafter (subject to the terms of Section 10 hereof), including, without
limitation, cash, Shares, other Awards or other property or any combination thereof, and may be
made in a single payment or substitution, in installments or on a deferred basis, in each case in
accordance with rules and procedures established by the Board. Such rules and procedures may
include, without limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend Equivalents in respect of
installment or deferred payments. The settlement of any Award may be accelerated, and cash paid in
lieu of Shares in connection with such settlement, in the discretion of the Board or upon
occurrence of one or more specified events (in addition to a Change in Control), provided such
terms and conditions of any such settlement comply with any applicable requirements of Section
409A.

          (e) Exemptions from Section 16(b) Liability. It is the intent of the Company that the grant
of any Awards to or other transaction by a Participant who is subject to Section 16 of the Exchange
Act shall be exempt under Rule 16b-3 (except for transactions acknowledged in writing to be
non-exempt by such Participant). Accordingly, if any provision of the Plan or any Award Agreement
does not comply with the requirements of Rule 16b-3 as then applicable to any such transaction,
such provision shall be construed or deemed amended to the extent necessary to conform to the
applicable requirements of Rule 16b-3 so that such Participant shall avoid liability under Section
16(b).

          (f) Share Certificates. All certificates for Shares delivered under the terms of the Plan
shall be subject to such stop-transfer orders and other restrictions as the Committee may deem
advisable under federal or state securities laws, rules and regulations thereunder, and the rules
of any national securities exchange, the Nasdaq Stock Market or any other automated quotation
system on which Shares are listed or quoted. The Board may cause a legend or legends to be placed
on any such certificates to make appropriate reference to such restrictions or any other
restrictions or limitations that may be applicable to Shares. In addition, during any period in
which Awards or Shares are subject to restrictions or limitations under the terms of the Plan or
any Award Agreement, or during any period during which delivery or receipt of an Award or Shares
has been deferred by the Board or a Participant, the Board may require any Participant to enter
into an agreement providing that certificates representing Shares issuable or issued pursuant to an
Award shall remain in the physical custody of the Company or such other Person as the Committee may
designate.

Section 8. Performance Awards.

          (a) Performance Conditions. The right of a Participant to exercise or receive a grant or
settlement of any Award, and the timing thereof, may be subject to such performance conditions as
may be specified by the Board. The Board may use such business criteria and other measures of
performance as it may deem appropriate in establishing any performance conditions, and may exercise
its discretion to reduce or increase the amounts payable under any Award subject to performance
conditions, except as limited under Section 8(b) hereof in the case of a Performance Award intended
to qualify under Section 162(m) of the Code.

8

 

          (b) Performance Awards Granted to Designated Covered Employees. If the Board determines that
a Performance Award to be granted to an Eligible Person who is designated by the Board as likely to
be a Covered Employee should qualify as “performance-based compensation” for purposes of Section
162(m) of the Code, the Board shall comply with the pre-established performance goals and other
terms set forth in this Section 8(b).

                    (i) Performance Goals Generally. The performance goals for such Performance Awards shall
consist of one or more business criteria and a targeted level or levels of performance with respect
to each of such criteria, as specified by the Board consistent with this Section 8(b).
Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m) of
the Code, including the requirement that the level or levels of performance targeted by the Board
result in the achievement of performance goals being “substantially uncertain.” The Board may
determine that such achievement of performance be granted, exercised and/or settled upon
achievement of any one performance goal or that two or more of the performance goals must be
achieved as a condition to grant, exercise and/or settlement of such Performance Awards.
Performance goals may differ for Performance Awards granted to anyone Participant or to different
Participants.

                    (ii) Business Criteria. One or more of the following business criteria for the Company, on a
consolidated basis, and/or for specified Subsidiaries or business units of the Company (except with
respect to the total stockholder return and earnings per share criteria), shall be used by the
Board in establishing performance goals for such Performance Awards: (1) earnings per share; (2)
revenues; (3) cash flow; (4) return on investment; (5) return on net assets, assets, capital or
equity; (6) economic value added; (7) operating margin; (8) net income; (9) pretax earnings; (10)
pretax earnings before interest, depreciation and amortization; (11) pretax operating earnings
after interest expense and before extraordinary or special items; (12) operating earnings; (13)
total stockholder return; (14) price of the shares (and changes thereof); and (15) any of the above
goals as compared to the performance of a published or special index deemed applicable by the Board
including, but not limited to, the Standard & Poor’s 500 Stock Index or a group of comparable
companies.

                    (iii) Performance Period; Timing for Establishing Performance Goals. Achievement of
performance goals in respect of such Performance Awards shall be measured over a performance period
of up to 10 years, a specified by the Board. Performance goals shall be established not later than
90 days after the beginning of any performance period applicable to such Performance Awards or at
such other date as may be required or permitted for “performance-based compensation” under Section
162(m) of the Code.

                    (iv) Performance Award Pool. The Board may establish a Performance Award pool, which shall be
an unfunded pool for purposes of measuring performance of the Company in connection with
Performance Awards. The amount of such Performance Award pool shall be based upon the achievement
of a performance goal or goals based on one or more of the business criteria set forth in Section
8(b)(ii) hereof during the given performance period, as specified by the Board in accordance with
Section 8(b)(iii) hereof. The Board may specify the amount of the Performance Award pool as a
percentage of any such business criteria, a percentage thereof in excess of a threshold amount, or
as another amount which need not bear a strictly mathematical relationship to such business
criteria.

                    (v) Settlement of Performance Awards; Other Terms. Settlement of such Performance Awards
shall be in cash, Stock, other Awards or other property, in the discretion of the Board. The Board
may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with
such Performance Awards, but may not exercise discretion to increase any such amount payable to a
Covered Employee in respect of a Performance Award subject to this Section 8(b). The Board shall
specify the circumstances in which such Performance Awards shall be paid or forfeited in the event
of termination of employment by the Participant prior to the end of a performance period or
settlement of Performance Awards.

          (c) Written Determinations. All determinations by the Board as to the establishment of
performance goals, the amount of any Performance Award pool or potential individual Performance
Awards and as to the achievement of performance goals relating to Performance Awards under Section
8(b) hereof shall be made in writing in the case of any Award intended to qualify under Section
162(m) of the Code. The Board may not delegate any responsibility relating to such Performance
Awards.

          (d) Status of Section 8(b) Awards under Section 162(m) of the Code. It is the intent of the
Company that Performance Awards under Section 8(b) granted to persons who are designated by the
Committee as likely to be Covered Employees within the meaning of Section 162(m) of the Code and
the regulations thereunder shall, if so designated by the Board, constitute “performance-based
compensation” within the meaning of Section 162(m) of the Code of the Code and the regulations
thereunder. The foregoing notwithstanding, because the Board cannot determine with certainty
whether a

9

 

given participant will be a Covered Employee with respect to a fiscal year that has not yet
been completed, the term Covered Employee as used herein shall mean only a person designated by
the Committee, at the time of grant of Performance Awards or an Annual Incentive Award, as likely
to be a Covered Employee with respect to that fiscal year. If any provision of the Plan as in
effect on the date of adoption or any agreements relating to performance Awards or Annual Incentive
Awards that are designated as intended to comply with Section 162(m) of the Code does not comply or
is inconsistent with the requirements of Section 162(m) of the Code, such provision shall be
construed or deemed amended to the extent necessary to conform to such requirements.

Section 9. Change in Control.

          (a) Acceleration of Exercisability and Lapse of Restrictions and Cash-Out of Awards upon
“Change in Control”. In the event of a Change in Control, subject only to the applicable
restrictions set forth in Section 11(a) hereof, the following provisions shall apply unless
otherwise provided in the Award Agreement, and:

                    (i) All outstanding Awards, pursuant to which the Participant may have a right to exercise
which was not previously exercisable and vested, shall become fully exercisable and vested as of
the time of the Change in Control and shall remain exercisable and vested for the balance of the
stated term of such Award without regard to any termination of employment or services by the
Participant.

                    (ii) Unless the right to lapse of restrictions or limitations is waived or deferred by a
Participant prior to such lapse, all restrictions (including risks of forfeiture and deferrals) on
outstanding Awards subject to restrictions or limitations under the Plan shall lapse and such
Awards shall be deemed fully vested as of the time of the Change in Control.

                    (iii) All performance criteria, goals and other conditions to payment of Awards under which
payments of cash, Shares or other property are subject to conditions shall be deemed to be achieved
or fulfilled as of the time of the Change in Control.

                    (iv) For a period of 60 days following a Change in Control, each Participant may elect to
surrender any outstanding Award and to receive, in full satisfaction therefor, a cash payment equal
to the value of such Award calculated on the basis of the Change in Control Price of any Shares or
the Fair Market Value of any property other than Shares relating to such Award; provided, however,
that in the case of an Incentive Stock Option, or a Stock Appreciation Right granted in tandem
therewith, the payment shall be based upon the Fair Market Value of Shares on the date which the
Change in Control occurred; provided further, however, that in the case of a Change in Control
described in Section 9(b)(i)(C) or (D) hereof, the payment described in this sentence shall not
necessarily be made in cash but instead shall be made in the same form (i.e., cash, Shares, other
securities or combination thereof) as holders of Shares receive in exchange for their Shares in the
transaction that results in the Change in Control. In the event that an Award is granted in tandem
with another Award such that the Participant’s right to payment for such Award is an alternative to
payment of another Award, the Participant electing to surrender any such tandem Award shall
surrender all alternative Awards related thereto and receive payment for the Award which produces
the highest payment to the Participant.

          (b) Definition of Certain Terms. For purposes of this Section 9, the following definitions,
in addition to those set forth in Section 2, shall apply:

                    (i) “Change in Control” means and shall be deemed to have occurred if:

                              (A) any Person, other than the Company or a Related Party, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be
the beneficial owner of all Shares that such Person has the right to acquire pursuant to any
agreement or arrangement or upon exercise, conversation rights, warrants, options or otherwise,
without regard to the 60 day period referred to in Rule 13d-3 under the Exchange Act), directly or
indirectly, of Voting Securities representing 25% or more of the total voting power of all the then
outstanding Voting Securities, except that there shall be excluded from the number of Voting
Securities deemed to be beneficially owned by a Person a number of Voting Securities representing
not more than 10 percent of the then outstanding voting power if such Person is (1) eligible to
file a Schedule 13G pursuant to Rule 13-1(b)(1) under the Exchange Act with respect to Voting
Securities or (2) an underwriter who becomes the beneficial owner of more than 20% of the then
outstanding Voting Securities pursuant to a firm commitment underwriting agreement with the
Company; or

                              (B) the individuals who, as of the effective date of the Plan, constitute the members of the
Board together with those directors who are first elected subsequent to such date and whose
election by the Board or

10

 

nomination for election by the Company’s stockholders was approved by a vote of at least a
majority of the members of the Board then still in office who were either directors as of the
effective date of the Plan or whose election or nomination for election was previously so approved
(the “Continuing Directors”), cease for any reason to constitute at least a majority of the members
of the Board; or

                              (C) the consummation of a merger, consolidation, recapitalization or reorganization of the
Company, reverse spilt of any class of Voting Securities, or in an acquisition of securities or
assets by the Company, other than (1) any such transaction which would result in at least 75% of
the total voting power represented by the voting securities of the surviving entity outstanding
immediately after such transaction being beneficially owned by at least 75% of the holders of
outstanding Voting Securities immediately prior to the transaction, with the voting power of each
such continuing holder relative to other such continuing holders not substantially altered in the
transaction, or (2) any such transaction which would result in a Related Party beneficially owning
more than 50% of the voting securities of the surviving entity outstanding immediately after such
transaction; or

                              (D) the stockholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or substantially all of the
Company’s assets other than (1) any such transaction which would result in a Related Party owning
or acquiring more than 50 percent of the assets owned by the Company immediately prior to the
transaction, or (2) a sale or disposition immediately after which such assets will be owned
directly or indirectly by the stockholders of the Company in substantially the same proportions as
their ownership of the common stock of the Company immediately prior to such sale or disposition.

                              (E) any other event occurs which the Board determines, in its discretion, would materially
alter the structure of the Company or its ownership.

                    (ii) “Change in Control Price” means, with respect to a Share, the higher of (A) the highest
Fair Market Value of the Shares at any time during the 60 calendar days preceding and the 60 days
following the Change in Control; or (B) the highest price paid per Share in a transaction which
either (1) results in a Change in Control or (2) would be consummated but for another transaction
which results in a Change in Control and, if it were consummated, would result in a Change in
Control. With respect to clause (B) in the preceding sentence, the “price paid” will be equal to
the sum of (1) the face amount of any portion of the consideration consisting of cash or cash
equivalents and (2) the Fair Market Value of any portion of the consideration consisting or real or
personal property other than cash or cash equivalents, as established by an independent appraiser
selected by the Board.

                    (iii) “Related Party” means (A) a Subsidiary of the Company; or (B) an employee or group of
employees of the Company or any majority-owned Subsidiary of the Company; or (C) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or any majority-owned
Subsidiary of the Company; or (D) an entity owned directly or indirectly by the stockholders of the
Company in substantially the same proportion as their ownership of Voting Securities.

                    (iv) “Voting Securities or Security” means any securities of the Company which carry the right
to vote generally in the election of directors.

Section 10. Amendments to and Termination of the Plan and Awards.

          (a) Generally. The Board may amend, alter, suspend, discontinue or terminate the Plan or the
Committee’s authority to grant Awards under the Plan without the consent of stockholders or
Participants, except that (i) any amendment, alteration, suspension, discontinuation or termination
shall be subject to approval of the Company’s stockholders not later than the annual meeting next
following such Board action if stockholder approval is required by any federal or state law or
regulation or the rules of the Nasdaq Stock Market or on any national securities exchange, stock
market or automated quotation system on which the Shares are then listed, traded or quoted, or if
the Board in its discretion determines that obtaining such stockholder approval is for any reason
advisable; provided, however, that, without the consent of the Participant, no amendment,
alteration, suspension, discontinuation or termination of the Plan may materially and adversely
affect the rights of such Participant under any Award theretofore granted to him; and (ii) the
exercise price of any outstanding Option may not be reduced, directly or indirectly, including
without limitation by canceling any outstanding Option for the purpose of reissuing the Option to
the Participant at a lower exercise price, without the prior approval of the Company’s
stockholders. The Board may waive any conditions or rights under, amend any terms of, or amend,
alter, suspend, discontinue or terminate, any Award theretofore granted, prospectively or
retrospectively; provided, however, that,

11

 

without the consent of the Participant, no amendment, alteration, suspension, discontinuation
or termination of any Award may materially and adversely affect the rights of such Participant
under any Award theretofore granted to him.

          (b) Section 409A. Without limiting the generality of the foregoing, to the extent applicable,
notwithstanding anything herein to the contrary, this Plan and Awards issued hereunder shall be
interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and
other interpretative guidance issued thereunder. Notwithstanding any provision of the Plan to the
contrary, in the event that the Board or the Committee, if any, determines that any amounts payable
hereunder will be taxable to a Participant under Section 409A, the Company may (a) adopt such
amendments to the Plan and Awards and appropriate policies and procedures, including amendments and
policies with retroactive effect, that the Board or the Committee, if any, determines necessary or
appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Awards
hereunder and/or (b) take such other actions as the Board or the Committee, if any, determines
necessary or appropriate to avoid the imposition of an additional tax under Section 409A.

Section 11. General Provisions.

          (a) Compliance with Legal and Other Requirements. The Company may, to the extent deemed
necessary or advisable by the Board, postpone the issuance or delivery of Shares or payment of
other benefits under any Award until completion of such registration or qualification of such
Shares or other required action under any federal or state law, rule or regulation, listing or
other required action with respect to the Nasdaq Stock Market or any national securities exchange,
automated quotation system or any other stock exchange or stock market upon which the Shares or
other securities of the Company are listed or quoted, or compliance with any other obligation of
the Company, as the Board may consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such other conditions as
it may consider appropriate in connection with the issuance or delivery of Shares or payment of
other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or
other obligations. The foregoing notwithstanding, in connection with a Change in Control, the
Company shall take or cause to be taken no action, and shall undertake or permit to arise no legal
or contractual obligation, that results or would result in any postponement of the issuance or
delivery of Stock or payment of benefits under any Award or the imposition of any other conditions
on such issuance, delivery or payment, to the extent that such postponement of other condition
would represent a greater burden on a Participant than existed on the 90th day preceding the Change
in Control.

          (b) Transferability. No Award granted under the Plan, nor any other rights acquired by a
Participant under the Plan, shall be assignable or transferable by a Participant, other than by a
will or the laws of descent and distribution, or pursuant to a qualified domestic relations order
as defined under the Code or Title I of the Board of Retirement Income Security Act of 1974, and
each such Award or right shall be exercisable during the Participant’s lifetime only by the
Participant or, if admissible under applicable law, by the Participant’s guardian or legal
representative or a transferee receiving such Award pursuant to a QDRO; provided, however, that the
Board may, in its sole discretion, authorize all or a portion of an Award to be transferable by the
Participant, but only to (i) any immediate family members of the Participant, (ii) any trust or
trusts for the exclusive benefit of such immediate family members, or (iii) a partnership or
limited liability company in which such immediate family members are the only partners or members,
provided that (A) there may be no consideration for any such transfer, other than an interest in a
transferee’s partnership, limited liability company or other similar entity, (B) the Award
Agreement related to the Award must expressly provide for such transferability in a manner
consistent with this section 11(b), (C) the Board, in granting an Award, may impose additional
restrictions on transfer or prohibit such transfer entirely, (D) following any transfer, any such
Award shall continue to be subject to the same terms and conditions as were applicable immediately
prior to transfer, provided that for purposes of the Plan, any reference to a Participant shall be
deemed to refer to the transferee, (E) in the event of a transferee’s death, an Award may be
exercised by the personal representative of the transferee’s estate or, if no personal
representative has been appointed, by the successor or successors in interest determined under the
transferee’s will or under the applicable laws of descent and distribution. Following any such
transfer, any transferee shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided for purposes of Section 11(b) hereof, the term
“Participant” shall be deemed to refer to the transferee, and any event of termination of
employment of the Participant as set forth in the Award Agreement or in this Plan shall continue to
be applied with respect to the original Participant, following which the Award shall be exercisable
by the transferee only to the extent, and for the period specified by, the Award Agreements.

          (c) No Rights to Awards; No Stockholder Rights. Nothing in the Plan shall be construed as
giving any Participant, Eligible Person or other Person any right to claim to be granted any Award
under the Plan, or to be treated uniformly with other Participants and Eligible Persons. No Award
shall confer on any Participant any of the rights of a stockholder of the Company unless and until
Shares are in fact issued to such Participant in connection with the terms of such Award.
Notwithstanding the foregoing, in connection with each grant of Restricted Stock hereunder, the
applicable

12

 

Award shall specify if and to what extent the Participant shall not be entitled to the rights
of a stockholder in respect of such Restricted Stock.

          (d) Withholding. The Company or any Subsidiary is authorized to withhold from any Award
granted or any payment due under the Plan, including from a distribution of Shares, amounts of
withholding and other taxes due with respect to an Award, its exercise or any payment thereunder,
and to take such other action as the Committee may deem necessary or advisable to enable the
Company and Participants to satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Awards. This authority shall include authority to withhold or receive
Shares, Awards or other property and to make cash payments in respect thereof in satisfaction of
such tax obligations.

          (e) No Right to Employment. Nothing contained in the Plan or any Award Agreement shall
confer, and no grant of an Award shall be construed as, (i) conferring, upon any Participant or any
Eligible Person, any right to continue in the employ or service of the Company or any Subsidiary or
(ii) interfering in any way with the right of the Company or any Subsidiary to (A) terminate any
Participant’s or Eligible Person’s employment or service at any time or (B) increase or decrease
the compensation of any Participant or Eligible Person from the rate in existence at the time of
granting of an Award, except as may be expressly provided in any Award Agreement or other
compensation arrangement.

          (f) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made
to Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general unsecured creditor of the Company;
provided, however, that the Board may authorize the creation of trusts or make other arrangements
to meet the Company’s obligations under the Plan to deliver cash, Shares or other property pursuant
to any Award, which trusts or other arrangements shall be consistent with the “unfunded” status of
the Plan unless the Board otherwise determines.

          (g) No Limit on Other Compensatory Arrangements Nothing contained in the Plan shall prevent
the Company or any Subsidiary from adopting or continuing in effect other or additional
compensation arrangements (which may include, without limitation, employment agreements with
executives and arrangements which relate to Awards under the Plan), and such arrangements may be
either generally applicable only in specific cases.

          (h) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the
Plan or any Award. The Board shall determine whether cash, other Awards or other property shall be
issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.

          (i) Governing Law. The validity, interpretation, construction and effect of the Plan, any
rules and regulations relating to the Plan and any Award Agreement shall be governed by the laws of
the State of Delaware (without regard to provisions governing conflicts of laws) and applicable
federal law.

          (j) Severability.

                    (i) If any provision of the Plan or any Award is or becomes or is deemed to be invalid,
illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the
Plan or any Award under any law deemed amended to conform to applicable laws or, if it cannot be
construed or deemed amended without, in the determination of the Board, materially altering the
intent of the Plan, it shall be deleted and the remainder of the Plan shall remain in full force
and effect; provided, however, that, unless otherwise determined by the Board, the provision shall
not be construed or deemed amended or deleted with respect to any Participant whose rights and
obligations under the Plan are not subject to the law of such jurisdiction or the law deemed
applicable by the Board.

                    (ii) If any of the terms or provisions of the Plan conflict with the requirements of
applicable law or applicable rules and regulations thereunder, including the requirements of
Section 162(m) of the Code, Rule 16b-3 and/or Section 422A of the Code, then such terms or
provisions shall be deemed inoperative to the extent necessary to avoid the conflict with
applicable law, or applicable rules and regulations, without invalidating the remaining provisions
hereof. With respect to ISOs, if the Plan does not contain any provision required to be included
herein under Section 422A of the Code, such provisions shall be deemed to be incorporated herein
with the same force and effect as if such provision had been set out at length herein; provided,
further, that to the extent any Option which is intended to qualify as an ISO cannot so qualify,
such Option, to that extent, shall be deemed to be a Nonqualified Stock Option for all purposes of
the Plan.

13

 

          (k) Rule 16b-3 Compliance. With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable terms and conditions of Rule
16b-3 and any successor provisions. To the extent that any provision of the Plan or action by the
Board fails to so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Board.

          (l) Headings. Headings are given to the sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.

          (m) Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement which
shall be delivered to the Participant and shall specify the terms and conditions of the Award and
any rules applicable thereto. Such terms may include, but are not limited to, the effect on such
Award of the death, retirement or other termination of employment of a Participant and the effect,
if any, of a change in control of the Company.

          (n) Indemnification. Each person who is or shall have been a member of the Committee, if any,
or of the Board shall be indemnified and held harmless by the Company against and from any loss,
cost, liability or expense that may be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under the Plan and against
and from any and all amounts paid by him in settlement thereof, with the Company’s approval, or
paid by him in satisfaction of any judgment in any such action, suit or proceeding against him,
provided he shall give the Company an opportunity, at its own expense, to handle and defend the
same before he undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive and shall be independent of any other rights of
indemnification to which such persons may be entitled under the Company’s Certificate of
Incorporation or By-laws, by contract, as a matter of law, or otherwise.

          (o) Construction. For purposes of the Plan, the following rules of construction shall apply:
(i) the word “or” is disjunctive but not necessarily exclusive; (ii) words in the singular include
the plural; words in the plural include the singular; and words in the neuter gender include the
masculine and feminine genders; and (iii) words in the masculine or feminine gender include the
other and neuter genders.

Section 12. Effective Date and Termination.

          (a) The Plan originally became effective as of June 12, 1998, the date the Plan was originally
adopted and approved by the stockholders of the Company. The Plan, as amended and restated, shall
become effective June 12, 2006.

          (b) Awards may not be granted under the Plan after June 12, 2008. Unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted hereunder may, and the
authority of the Board to amend, alter, adjust, suspend, discontinue or terminate any such Award or
to waive any conditions or rights under any such Award shall, continue after June 12, 2008.

Section 13. Section 409A.

          The Company intends that any and all Awards under the Plan satisfy the requirements of
Section 409A to avoid the imposition of excise taxes thereunder, and the provisions of this Plan
shall be interpreted in a manner that is consistent with such intention. Notwithstanding other
provisions of the Plan or any Award agreements thereunder, no Award shall be granted, deferred,
accelerated, extended, paid out or modified under this Plan in a manner that would result in the
imposition of an additional tax under Section 409A upon a Participant. In the event that it is
reasonably determined by the Committee that, as a result of Section 409A, payments in respect of
any Award under the Plan may not be made at the time contemplated by the terms of the Plan or the
relevant Award agreement, as the case may be, without causing the Participant holding such Award to
be subject to taxation under Section 409A, the Company will make such payment on the first day that
would not result in the Participant incurring any tax liability under Section 409A.

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