Document:

Exhibit 10.1

 

Advanstar
Holdings Corp.

2000
Management Incentive Plan

(as amended by Amendments No.1,
No.2, No.3, No.4 and No.5)

 

SECTION 1.  Purpose. 
The purpose of the Advanstar Holdings Corp. 2000
Management Incentive Plan (the “Plan”) is to
promote the interests of Advanstar Holdings Corp. (formerly known as Jetman
Acquisition Corp.), a Delaware corporation (the “Company”),
and its stockholders by (i) attracting and retaining exceptional key
employees of the Company, its Subsidiaries and its Affiliates (as defined
below) and others; (ii) motivating such individuals by means of
performance-related incentives to achieve longer-range performance goals; and (iii) enabling
such individuals to participate in the long-term growth and financial success
of the Company.

 

SECTION 2.  Definitions. 
As used in the Plan, the following terms shall have
the meanings set forth below:

 

“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such Person; provided that no stockholder of the Company shall be deemed
an Affiliate of any other stockholder of the Company solely by reason of any
investment in the Company.  For purposes
of this definition, the term “control”
(including with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”), when used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.

 

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

 

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

 

“Cause” means,
with respect to any Participant, “cause” as defined in such Participant’s
Employment Agreement or Award Agreement, or if not so defined:

 

(i)                  such Participant’s
willful failure to perform his or her material duties (other than as a result
of total or partial incapacity due to physical or mental illness) which such
Participant shall not have cured within 30 days of receiving notice of such
failure;

 

 

(ii)               such Participant’s
conviction of a felony arising from, or any act of, fraud, embezzlement or
willful dishonesty by such Participant in relation to the business or affairs
of the Company and any Subsidiary or Affiliate thereof, or any other felonious
conduct on the part of such Participant that is detrimental to the best
interests of the Company or any Subsidiary or Affiliate thereof;

 

(iii)            such Participant’s
being repeatedly under the influence of illegal drugs or alcohol while
performing his duties; or

 

(iv)           any other willful
misconduct or gross negligence of such Participant which is demonstrably
injurious to the financial condition or business reputation of the Company or
any Subsidiary or Affiliate thereof, including such Participant’s breach of the
provisions of any noncompetition, nonsolicitation or confidentiality covenant
(whether or not contained in this Agreement) in favor of the Company or any
Subsidiary or Affiliate thereof binding upon such Participant.

 

“Change of Control”
means:

 

(i)                  any “person” (as
such term is used in Section 3(a)(9) and 13(d)(3) of the
Exchange Act) other than (A) the DLJ Funds and/or their respective
Permitted Transferees (as defined in the Shareholders’ Agreement) or (B) any
“group” (within the meaning of such Section 13(d)(3)) of which any of the
DLJ Funds is a part, acquires, directly or indirectly, by virtue of the
consummation of any purchase, merger or other combination, securities of the
Company (or its successor) representing more than 51% of the combined voting
power of the Company’s (or its successor’s) then outstanding voting securities
with respect to matters submitted to a vote of the stockholders generally; or

 

(ii)               a sale or transfer
by the Company or any of its Subsidiaries of substantially all of the stock or
consolidated assets of the Company and its Subsidiaries to an entity which is
not an Affiliate of the Company prior to such sale or transfer.

 

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

 

“Compensation Committee”
means a committee of the Board designated by the Board to administer the Plan.

 

“Contribution”
shall mean revenue less direct expenses (including, without limitation, staff
costs), as generally calculated by the Company in its internal management
reporting.

 

 

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“Credit Agreement”
means the Credit Agreement dated as of October 11, 2000 among Advanstar
Communications, Inc., Various Financial Institutions, Fleet National Bank
and DLJ Capital Funding, Inc. as Syndication Agent and Documentation Agent
for the Lenders.

 

“Disability”
means, with respect to any Participant, “disability” as defined in such
Participant’s Employment Agreement or Award Agreement, or if not so defined:

 

(i)                  any permanent
physical or mental incapacity or disability rendering such Participant unable
or unfit to perform effectively the duties and obligations of his employment or
to participate effectively and actively in the management of the Company (or,
if applicable, any Subsidiary or Affiliate thereof); or

 

(ii)               any illness,
accident, injury, physical or mental incapacity or other disability, where such
condition has rendered such Participant unable or unfit to perform effectively
the duties and obligations of his or her employment or to participate
effectively and actively in the management of the Company (or, if applicable,
any Subsidiary or Affiliate thereof) for a period of at least 6 consecutive
months or 12 months in any 24-month period (in either case, as determined
in the good faith judgment of the Compensation Committee).

 

“DLJ Funds”
shall have the meaning assigned to it in the Shareholders’ Agreement.

 

“Employee” means
an employee of the Company or any Subsidiary or Affiliate thereof.

 

“Employment Agreement”
means an employment, severance, consulting or similar agreement between the
Company or any Subsidiary or Affiliate thereof and a Participant.

 

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

 

“Fair Market Value”
means:

 

(i)                  with respect to
a Share:

 

(A)           as
of the date of the closing of the transactions contemplated by the Merger
Agreement (the “Closing Date”), $10.00.

 

(B)             on any date after the Closing Date, if the
Shares are traded on an exchange or market, as of any given date, the average

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reported closing price of
a Share on such exchange or market as is the principal trading market for such
Shares for the three trading days immediately preceding such date; or

 

(C)             on any date after the Closing Date, if the
Shares are not traded on an exchange or market on the applicable date, as
determined by the Compensation Committee in good faith taking into account as
appropriate recent sales of the Shares, recent valuations of the Shares and
such other factors as the Compensation Committee shall in its discretion deem
relevant or appropriate (excluding a minority discount but taking into account
an Initial Public Offering Discount).

 

(ii)               with respect to an
Option, for each Share underlying such Option, the Fair Market Value per Share
as determined under clause (i) less the exercise price per Share.

 

“Good Reason”  means, with respect to any Participant, “good
reason” as defined in such Participant’s Award Agreement or Employment
Agreement, or if not so defined:

 

(i)                  any failure by
the Company to comply with any of the provisions of this Plan or such
Participant’s Award Agreement or Employment Agreement, other than an
insubstantial or inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by such
Participant; or

 

(ii)               the material
diminution of such Participant’s duties as in effect during the effectiveness
of such Participant’s Award Agreement, excluding an insubstantial or
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by such Participant.

 

“Initial Public Offering
Discount” means a discount to Fair Market Value, as otherwise
determined, of the magnitude that would be necessary, in accordance with usual
and customary underwriting market practice, to effect a successful Initial
Public Offering (as defined in the Shareholders’ Agreement).

 

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“Loans” shall
have the meaning ascribed to it in the Advanstar Holding Corp. Direct
Investment Program.

 

“Merger Agreement”
means the Agreement and Plan of Merger dated as of August 14, 2000, among
the Company, Junior Jetman Corp., Advanstar Inc. and AHI Advanstar LLC.

 

“Option” means a
right to purchase Shares from the Company that is granted under Section 6 of the Plan.

 

“Participant”
means any Employee, non-employee director of the Company of any Subsidiary or
Affiliate thereof or consultant to the Company or any Subsidiary or Affiliate
thereof selected by the Compensation Committee to receive an Option under the
Plan (and, to the extent applicable, any heirs or legal representatives
thereof).

 

“Permitted Transferee”
shall have the meaning assigned to it in the Shareholders’ Agreement.

 

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

 

“Rule 16b-3”
means Rule 16b-3 as promulgated and interpreted by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect
from time to time.

 

“SEC” means the
Securities and Exchange Commission or any successor thereto.

 

“Section 162(m)”
means Section 162(m) of the Code, or any successor section thereto as
in effect from time to time.

 

“Shareholders’ Agreement”
means the Shareholders’ Agreement dated as of October 11, 2000 among the
Company, DLJ Merchant Banking Partners III, L.P. and other DLJ Funds party
thereto, the Existing Shareholders party thereto and the Management
Shareholders party thereto.

 

“Shares” means (i) shares
of common stock, par value $0.01 per share, of the Company and any stock into
which its common stock may thereafter be converted or changed and/or (ii) such
other securities as may be designated by the Compensation Committee from time
to time.

 

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“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which:

 

(i)                  if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the Subsidiaries of that Person or a
combination thereof; or

 

(ii)               if a limited
liability company, partnership, association or other business entity, a
majority of the partnership or other similar ownership interests thereof is at
the time owned or controlled, directly or indirectly, by that Person or one or
more Subsidiaries of that Person or a combination thereof.

 

“Substitute Options”
means Options granted in assumption of, or in substitution for, outstanding
options previously granted by a company acquired by the Company or with which
the Company combines.

 

“Super Performance Vesting
Options” means Options granted pursuant to the form of Award
Agreement set forth in Appendix A hereto.

 

SECTION 3.  Administration.

 

(a)          Authority of Compensation
Committee. The Plan shall be administered by the Compensation
Committee or by the Board as a whole, if no Compensation Committee has been
constituted.  All references to the
powers and responsibilities of the Compensation Committee set forth in this
Plan shall be deemed to be references to the Board if no Compensation Committee
has been constituted.  Subject to the
terms of the Plan, applicable law and contractual restrictions (including, to
the extent applicable, any Award Agreements and Employment Agreements)
affecting the Company, and in addition to other express  powers and authorizations conferred on the
Compensation Committee by the Plan, the Compensation Committee shall have full
power and authority to:

 

(i)                  designate Participants;

 

(ii)               determine the type
or types of Options to be granted to a Participant;

 

(iii)            determine the number
of Shares to be covered by, or with respect to which payments, rights or other
matters are to be calculated in connection with, Options;

 

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(iv)           determine the terms and
conditions of any Option and Award Agreement;

 

(v)              determine whether,
to what extent and under what circumstances Options may be settled or exercised
in cash, Shares, other securities, other Options or other property, or
canceled, forfeited, or suspended and the method or methods by which Options
may be settled, exercised, canceled, forfeited or suspended;

 

(vi)           determine whether, to
what extent and under what circumstances cash, Shares, other securities, other
Options, other property and other amounts payable with respect to an Option
shall be deferred either automatically or at the election of the holder thereof
or of the Compensation Committee;

 

(vii)        determine whether, to what
extent and under what circumstances cash, Shares, other securities, other
Options, other property and other amounts issued or payable with respect to an
Option shall be subject to restrictions on transfer, assignment, pledge or
other disposition or alienation, and the nature of such restrictions;

 

(viii)     interpret and administer the
Plan and any instrument or agreement relating to, or Option made under, the
Plan;

 

(ix)             establish, amend,
suspend or waive such rules and regulations and appoint such agents as it
shall deem appropriate for the proper administration of the Plan; and

 

(x)                make any other
determination and take any other action that the Compensation Committee deems
necessary or desirable for the administration of the Plan.

 

(b)         Compensation Committee
Discretion Binding. Unless otherwise expressly provided in the
Plan or any applicable Award Agreements, all designations, determinations,
interpretations and other decisions under or with respect to the Plan or any
Option shall be within the sole discretion of the Compensation Committee, may
be made at any time and shall be final, conclusive and binding upon all Persons
(including the Company or  any Subsidiary
or Affiliate thereof, any Participant, any holder or beneficiary of any Option,
any stockholder and any Employee).

 

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SECTION 4.  Shares
Available for Options.

 

(a)          Shares Available.
Subject to adjustment as provided in Section 4(b),  the number of Shares with respect to which
Options may be granted under the Plan shall be the sum of (i) 4,047,789,
plus (ii) the amount by which 39,363 exceeds the total number of Shares
purchased with Loans during the period after the closing of the transactions
contemplated by the Merger Agreement through December 31, 2000.  Super Performance Vesting Options may not be
granted to purchase Shares in excess of the number set forth in clause (ii) of
the preceding sentence, and Options other than Super Performance Vesting
Options may not be granted to purchase Shares in excess of the number set forth
in clause (i) of the preceding sentence. 
If, after the effective date of the Plan, any Shares covered by an
Option granted under the Plan (other than a Substitute Option) or to which such
an Option relates are forfeited, or if such an Option otherwise terminates or
is canceled without the delivery of Shares, then the Shares covered by such
Option, or to which such Option relates, or the number of Shares otherwise
counted against the aggregate number of Shares with respect to which Options
may be granted, to the extent of any such settlement, forfeiture, termination
or cancellation, shall again become Shares with respect to which Options may be
granted under clause (i) or (ii) above, depending on whether the
forfeited, terminated or canceled Option was a Super Performance Vesting
Option.  Notwithstanding the foregoing
and subject to adjustment as provided in Section 4(b),
no Participant may receive Options in any calendar year that relate to more
than 900,000 Shares (subject to adjustment as provided in Section 4(b)).

 

(b)         Adjustments.
In the event that the Compensation Committee determines that any dividend or
other distribution (whether in the form of cash, Shares, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, reclassification, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Compensation
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
then the Compensation Committee shall, in such manner as it may deem equitable,
adjust any or all of:

 

(i)                  the number of
Shares of the Company (or number and kind of other securities or property) with
respect to which Options may thereafter be granted;

 

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(ii)               the number of
Shares or other securities of the Company (or number and kind of other
securities or property) subject to outstanding Options; and

 

(iii)            the grant or exercise
price with respect to any Option, or, if deemed appropriate, make provision for
a cash payment to the holder of an outstanding Option.

 

(c)          Substitute Options.  Any Shares underlying Substitute Options
shall not be counted against the Shares available for Options under the Plan.

 

(d)         Sources of Shares
Deliverable Under Options. Any Shares delivered pursuant to an
Option may consist, in whole or in part, of authorized and unissued Shares or
of treasury Shares.

 

SECTION 5.  Eligibility. 
Any Employee, non-employee director of the Company or
any Subsidiary or Affiliate thereof or consultant to the Company or any
Subsidiary or Affiliate thereof shall be eligible to be designated a
Participant.  Holders of options granted
by a company that is acquired by the Company or with which the Company combines
are eligible for grants of Substitute Options hereunder in connection with such
acquisition or combination transaction.

 

SECTION 6.  Stock
Options.

 

(a)          Grant.
Subject to the provisions of the Plan and contractual restrictions (including,
to the extent applicable, any Award Agreements or Employment Agreements)
affecting the Company, the Compensation Committee shall have sole and complete
authority to determine the Participants to whom Options shall be granted, the
number of Shares to be covered by each Option, the exercise price therefor and
the conditions and limitations applicable to the exercise of the Option.

 

(b)         Exercise Price.
The Compensation Committee shall, in its sole discretion, establish the exercise
price at the time each Option is granted.

 

(c)          Exercise.
Each Option shall be exercisable at such times and subject to such terms and
conditions as the Compensation Committee may, in its sole discretion, specify
in the applicable Award Agreement or thereafter. The Compensation Committee may
impose such conditions with respect to the exercise of Options, including
without limitation, any relating to the application of federal or state
securities laws, as it may deem necessary or advisable.

 

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(d)         Payment. No
Shares shall be delivered pursuant to any exercise of an Option until payment
in full of the exercise price, or adequate provision therefor, is received by
the Company.  Such payment may be made: (i) in
cash; (ii) in Shares owned by the Participant (the value of such Shares
shall be their Fair Market Value on the date of exercise); (iii) by a
combination of cash and Shares; (iv) if approved by the Compensation
Committee, in accordance with a cashless exercise program; or (v) in such
other manner as permitted by the Compensation Committee at the time of grant or
thereafter.

 

SECTION 7.  Vesting;
Termination of Employment.  Each Award Agreement shall
contain such terms as the Compensation Committee may in its sole discretion
determine concerning vesting, forfeiture, the Company’s rights of repurchase of
Shares acquired upon exercise of an Option, and/or the effects of termination
or suspension of a Participant’s employment upon the exercisability of any
Option granted thereunder.

 

SECTION 8.  Accelerated
Vesting.  The Compensation Committee
may, in its sole discretion, provide in an Award Agreement or at any other time
for the accelerated vesting of an Option.

 

SECTION 9.  Amendment
and Termination.

 

(a)          Amendments to the Plan.
The Board may amend, alter, suspend, discontinue, or terminate the Plan or any
portion thereof at any time; provided that
no such amendment, alteration, suspension, discontinuation or termination shall
be made without stockholder approval if such approval is necessary to qualify
for or comply with any tax or regulatory status or requirement (including any
approval requirement which is a prerequisite for exemptive relief from Section 16(b) of
the Exchange Act or Section 162(m) of the Code) for which or with which
the Board deems it necessary or desirable to qualify or comply; provided further, that any such amendment, alteration,
suspension, discontinuance or termination that would adversely affect the
rights of the Participant or any holder or beneficiary of any Option
theretofore granted shall not to the extent be effective without the consent of
such affected Participant, holder or beneficiary. Notwithstanding anything to
the contrary herein, the Compensation Committee may amend the Plan in such
manner as may be necessary so as to have the Plan conform with local rules and
regulations in any jurisdiction outside the United States.

 

(b)         Amendments to Options.
Subject to the terms of the Plan, the applicable Award Agreement and applicable
law, the Compensation Committee may waive any conditions or rights under, amend
any terms of, or alter, suspend, discontinue, cancel or terminate, any Option
theretofore granted, prospectively or

 

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retroactively; provided that any such waiver, amendment, alteration,
suspension, discontinuance, cancellation or termination that would adversely
affect the rights of a Participant or any holder or beneficiary of any Option
theretofore granted shall not to that extent be effective without the consent
of such affected Participant, holder or beneficiary.

 

(c)          Cancellation.
Any provision of this Plan or any Award Agreement to the contrary
notwithstanding, in the event of a Change of Control or an offer to Participants
generally relating to the acquisition of Shares, including through purchase,
merger or otherwise, the Compensation Committee may cause any Option granted
hereunder to be canceled and, in consideration of such canceled option, pay the
holder (i) a cash payment equal to the difference between the aggregate
value of the Shares (based upon the Change of Control or other acquisition
offer) subject to the Option and the aggregate exercise price of such Option
(the “Intrinsic Value”) or (ii) a
substitute option (preserving the Intrinsic Value of the canceled Option).

 

SECTION 10.  Treatment
of Ungranted Options Upon Occurrence of a 
Liquidity Event.  Immediately prior to the
occurrence of a Liquidity Event (as defined in Annex A hereto), the Board shall
award Options, at an exercise price of $10.00 per Share (as adjusted to reflect
any of the events contemplated by Section 4(b)), to purchase that portion
of the Shares on which Options are authorized to be granted under Section 4(a)(i) of
the Plan as to which Options have not, as of such date, previously been
granted.  For the avoidance of doubt,
Options which have been granted and subsequently canceled, forfeited,
terminated or repurchased shall be treated as having been previously granted,
pursuant to the preceding sentence.  The
Options granted under this Section 10 shall be allocated among persons
eligible for an award under Section 5 hereof, in the sole discretion of
the Board.

 

SECTION 11.  General
Provisions.

 

(a)          Dividend Equivalents.
In the sole and complete discretion of the Compensation Committee, an Option
may provide the Participant with dividends or dividend equivalents, payable in
cash, Shares, other securities or other property on a current or deferred
basis.

 

(b)         Non-Transferability of
Options. Except to the extent otherwise provided in a
Participant’s Award Agreement, no Option shall be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by such Participant,
except by will or the laws of descent and distribution.

 

(c)          No Rights to Options.
No Employee, Participant or other Person shall have any claim to be granted any
Option, and there is no obligation for uniformity of treatment of Employees,
Participants or holders or beneficiaries of 

 

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Options. The terms and
conditions of Options need not be the same with respect to each recipient.

 

(d)         Stock Certificates.
Certificates, if any, issued in respect of Shares shall, unless the
Compensation Committee otherwise determines, be registered in the name of the
Participant or his or her Permitted Transferees and, so long as a Participant
continues to be governed by any forfeiture provisions relating to the Shares,
shall be deposited by such Participant or Permitted Transferee, together with a
stock power endorsed in blank, with the Company.  When such forfeiture conditions lapse, the
Company shall deliver such certificates to the Participant upon request.  Such stock certificate shall carry such
appropriate legends, and such written instructions shall be given to the
Company’s transfer agent, as may be deemed necessary or advisable by counsel to
the Company in order to comply with the requirements of (i) the Securities
Act of 1933, as amended, any state securities laws or any other applicable laws
and (ii) the Shareholders’ Agreement. 
Subject to the provisions of the Shareholders’ Agreement, all
certificates for Shares or other securities of the Company or any Subsidiary
delivered under the Plan pursuant to any Option or the exercise thereof shall
be subject to such stop transfer orders and other restrictions as the
Compensation Committee may deem advisable under the Plan or the rules,
regulations and other requirements of the SEC or any exchange or market upon
which such Shares or other securities of the Company are then listed and any
applicable laws or rules or regulations, and the Compensation Committee
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.

 

(e)          Withholding.
A Participant may be required to pay to the Company or any Subsidiary, and the
Company or any Subsidiary shall have the right and is hereby authorized to
withhold from any Option, from any payment due or transfer made under any
Option or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Shares, other securities, other Options or
other property) of any applicable withholding taxes in respect of an Option,
its exercise or any payment or transfer under an Option or under the Plan, and
to take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for the payment of such taxes. The Compensation
Committee may provide for additional cash payments to holders of Options to
defray or offset any tax arising from any such grant, lapse, vesting or
exercise of any Option.

 

(f)            Award Agreements.
Each Option hereunder shall be evidenced by an Award Agreement which shall be
delivered to the Participant and shall specify the terms and conditions of the
Option and any rules applicable thereto.

 

(g)         No Limit on Other
Compensation Arrangements. This Plan is not intended to be the
exclusive authority for the grant of options, stock or stock-based awards, and
nothing contained in this Plan shall prevent the Company or 

 

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any Subsidiary or
Affiliate thereof from adopting or continuing in effect other compensation
arrangements, which may, but need not, provide for the grant of options, restricted
stock, Shares and other types of awards provided for hereunder (subject to
stockholder approval if such approval is required by applicable law).  Any such arrangements may be either generally
applicable or applicable only in specific cases.

 

(h)         No Right to Employment.
The grant of an Option shall not be construed as giving a Participant the right
to be retained in the employment or service of the Company or any Subsidiary or
Affiliate thereof.  Further, the Company
or any Subsidiary may at any time dismiss a Participant from employment or
service, free from any liability or any claim under the Plan, unless otherwise
expressly provided in the Plan or in any Award Agreement.

 

(i)             Rights as a Stockholder.
Subject to the provisions of the applicable Option, no Participant or holder or
beneficiary of any Option shall have any rights as a stockholder with respect
to any Shares to be issued under the Plan until he or she has become the holder
of such Shares.

 

(j)             Governing Law.
The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan and any Award Agreement shall be determined in
accordance with the laws of the State of Delaware.

 

(k)          Severability.
If any provision of the Plan or any Option is or becomes or is deemed to be
invalid, illegal, or unenforceable in any jurisdiction or as to any Person or
Option, or would disqualify the Plan or any Option under any law deemed
applicable by the Compensation Committee, such provision shall be construed or
deemed amended to conform to the applicable laws, or if it cannot be construed
or deemed amended without, in the determination of the Compensation Committee,
materially altering the intent of the Plan or the Option, such provision shall
be stricken as to such jurisdiction, Person or Option, and the remainder of the
Plan and any such Option shall remain in full force and effect.

 

(l)             Other Laws.
The Compensation Committee may refuse to issue or transfer any Shares or other
consideration under an Option if, acting in its sole discretion, it determines
that the issuance or transfer of such Shares or such other consideration might
violate any applicable law or regulation or entitle the Company to recover the
same under Section 16(b) of the Exchange Act, and any payment tendered
to the Company by a Participant in connection therewith shall be promptly
refunded to the relevant Participant, holder or beneficiary. Without limiting
the generality of the foregoing, no Option granted hereunder shall be construed
as an offer to sell securities of the Company, and no such offer shall be
outstanding, unless and until the Compensation Committee in its sole discretion
has determined that any such offer, if made, would be in compliance with all

 

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applicable requirements
of the federal and state securities laws and any other laws to which such
offer, if made, would be subject.

 

(m)       No Trust or Fund Created.
Neither the Plan nor any Option shall create or be construed to create a trust
or separate fund of any kind or a fiduciary relationship between the Company or
any Subsidiary and a Participant or any other Person. To the extent that any
Person acquires a right to receive payments from the Company or any Subsidiary
or Affiliate thereof pursuant to an Option, such right shall be no greater than
the right of such unsecured general creditor of the Company or such Subsidiary
or Affiliate thereof.

 

(n)         No Fractional Shares.
No fractional Shares shall be issued or delivered pursuant to the Plan or any
Option, and the Compensation Committee shall determine whether cash or other
securities or other property shall be paid or transferred in lieu of any
fractional Shares or whether such fractional Shares or any rights thereto shall
be canceled, terminated or otherwise eliminated.

 

(o)         Shareholders’ Agreement
Transfer Restrictions.  A
Participant shall, as a condition precedent to the exercise or settlement of an
Option, execute an instrument agreeing to be bound by the terms of the
Shareholders’ Agreement or, at the election of the Company, a counterpart of
the Shareholders’ Agreement.  In any
event, any Shares acquired upon exercise or settlement shall be subject to the
provisions in the Shareholders’ Agreement regarding restrictions on transfer
and the Company’s rights to compel sales and repurchase Shares.

 

(p)         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.

 

SECTION 12.  Term
of the Plan.

 

(a)          Effective Date.
The Plan shall be effective as of October 11, 2000 subject to approval by
the stockholders of the Company. Options may be granted hereunder prior to such
stockholder approval, subject in all cases, however, to such approval.

 

(b)         Expiration Date.  Unless otherwise expressly provided in the
Plan or in an applicable Award Agreement, any Option granted hereunder may, and
the authority of the Board or the Compensation Committee to amend, alter,
adjust, suspend, discontinue or terminate any such Option or to waive any
conditions or rights under any such Option shall, continue after the authority
for grant of new Options hereunder has been exhausted.

 

14

 

As Amended effective April 19, 2005

ANNEX A

 

I.                                         VESTING
OF PERFORMANCE VESTING OPTIONS.

 

1.                                       To
the extent that the Performance Vesting Options are not previously vested as of
April 19, 2005 (the “Unvested PVO”), 25% of the Unvested PVO shall become
fully vested and exercisable on each of the following dates: (a) May 31,
2005; (b) December 31, 2005; (c) December 31, 2006; and (d) December 31,
2007 (each such date, a “Performance Vesting Date”); provided
that the Optionee is on such Performance Vesting Date, and at all times since
the date of grant set forth in such Optionee’s Award Agreement (the “Date of
Grant”) has been, in the employment of (or, in the case of a non-employee
director of the Company or any Subsidiary or Affiliate thereof or a consultant
to the Company or any Subsidiary or Affiliate thereof, in the service of) the
Company or a Subsidiary or Affiliate thereof.

 

2.                                       It
is acknowledged and affirmed that by action of the Board on March 7, 2002,
25% of the Shares subject to the Performance Vesting Option were vested on March 31,
2002 (the “2002 Vesting Date”).  For
Performance Vesting Options having a Date of Grant prior to the 2002 Vesting
Date, the provisions of paragraph I.1 above shall be applicable to the 75% of
such Performance Vesting Options which remained unvested as of April 19,
2005.  For Performance Vesting Options
having a Date of Grant after the 2002 Vesting Date, the provisions of paragraph
I.1 above shall be applicable to all of such Performance Vesting Options.

 

15EXHIBIT 10.1

 

FIRST AMENDMENT TO RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO RESTATED CREDIT AGREEMENT
(this “Amendment”) dated as of the 20th day of April, 2005, by and among PLAINS
MARKETING, L.P. (“Borrower”), BANK OF AMERICA, N.A., as Administrative Agent,
and the Lenders party hereto.

 

W I T N E S S E T H:

 

WHEREAS, Borrower, Administrative Agent and Lenders
named therein entered into that certain Restated Credit Agreement dated as of
November 19, 2004 (as heretofore amended, the “Original Agreement”) for the
purposes and consideration therein expressed; and

 

WHEREAS, Borrower, Administrative Agent and Lenders
desire to amend the Original Agreement for the purposes described herein;

 

NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements contained herein and in the Original
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree as follows:

 

ARTICLE I. — Definitions and References

 

§ 1.1.       Terms
Defined in the Original Agreement. 
Unless the context otherwise requires or unless otherwise expressly
defined herein, the terms defined in the Original Agreement shall have the same
meanings whenever used in this Amendment.

 

§ 1.2.       Other
Defined Terms.  Unless the context
otherwise requires, the following terms when used in this Amendment shall have
the meanings assigned to them in this § 1.2.

 

“Amendment” means this First Amendment to
Credit Agreement.

 

“Credit
Agreement” means the Original Agreement as amended hereby.

 

ARTICLE II. — Amendments

 

§ 2.1.       Definitions.  The definition of “Letter of Credit” set
forth in Section 1.1 of the Original Agreement is hereby amended in its
entirety to read as follows:

 

“Letter of
Credit” means any letter of credit issued by LC Issuer hereunder at the
application of Borrower.  For the
avoidance of doubt, Letter of Credit includes a commercial or documentary
letter of credit and a standby letter of credit.

 

§ 2.2.       Letters
of Credit - Applicability of ISP and UCP. 
Section 2.10(h) of the Original Agreement is hereby amended in its
entirety to read as follows:

 

(h)           Applicability of ISP and UCP. Unless otherwise expressly agreed by LC Issuer and Borrower
when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each
standby Letter of Credit, and (ii) the rules of the Uniform Customs and
Practice

 

 

for Documentary
Credits, as most recently published by the International Chamber of Commerce at
the time of issuance shall apply to each commercial or documentary Letter of
Credit.

 

§ 2.3.       Clawback Provision  Section 3.1 of the Original Agreement is
hereby amended by adding a new subsection (b) at the end thereof, to read as
follows:

 

(b)           Unless Administrative Agent shall
have received notice from Borrower prior to the date on which any payment is
due to Administrative Agent, for the account of the Lenders or the LC Issuer,
that Borrower will not make such payment, Administrative Agent may assume that
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the appropriate Lenders or the LC
Issuer, as the case may be, the amount due. 
In such event, if Borrower has not in fact made such payment, then each
of such Lenders or the LC Issuer, as the case may be, severally agrees to repay
to Administrative Agent forthwith on demand the amount so distributed to such
Lender or the LC Issuer, in immediately available funds with interest thereon,
for each day from and including the date such amount is distributed to it to
but excluding the date of payment to Administrative Agent, at the greater of
the Federal Funds Rate and a rate determined by Administrative Agent in
accordance with banking industry rules on interbank compensation.  A notice of Administrative Agent to any Lender
with respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.

 

§ 2.4.       Schedules  Schedule II to the Original Agreement is
hereby amended in its entirety to read as set forth on Schedule II attached
hereto.  Upon the effectiveness hereof,
each Lender a party hereto agrees to a portion of the Maximum Facility Amount
equal to the amount set forth opposite its name on such Schedule II of the
Credit Agreement.

 

§ 2.5.       Confirmation of Prior Approved
Financing Requests  Each Lender a
party hereto hereby confirms that it has previously approved the following
Financing Requests and acknowledges and agrees that such approvals shall apply
with respect to its portion of the Maximum Facility Amount agreed to hereby.

 

1.               Financing
Request-Initial dated March 1, 2005 with respect to a Delivery Month of March,
2005 and an Initial Financing Request of $416,000,000 and related Financing
Request-Final dated April 6, 2005 with Final Financing Request of $457,000,000.

 

2.               Financing
Request-Initial dated April 6, 2005 with respect to a Delivery Month of April,
2005 and an Initial Financing Request of $496,800,000.

 

3.               Special Financing
Request 2004 #8.5 dated March 1, 2005 totaling $17,000,000 and Special
Financing Request 2004 #8.6 dated April 6, 2005 totaling $12,200,000.

 

4.               Special Financing
Request 2005 #2.1 dated March 1, 2005 totaling $5,700,000 and Special Financing
Request 2005 #2.2 dated April 6, 2005 totaling $6,300,000.

 

5.               Special Financing
Request 2005 #3.1 dated March 4, 2005 totaling $4,400,000 and Special Financing
Request 2005 #3.2 dated April 6, 2005 totaling $4,400,000.

 

6.               Special Financing
Request 2005 #4.1 dated April 6, 2005 totaling $20,100,000.

 

2

 

ARTICLE III. — Conditions of Effectiveness

 

§ 3.1.       Effective
Date.  This Amendment shall become
effective as of the date first written above, when and only when

 

(i) 
Administrative Agent shall have received, at Administrative Agent’s
office a counterpart of this Amendment executed and delivered by Borrower and
Lenders;

 

(ii) 
Administrative Agent shall have additionally received all of the
following documents, each document (unless otherwise indicated) being dated the
date of receipt thereof by Administrative Agent, duly authorized, executed and
delivered, and in form and substance satisfactory to Administrative Agent:

 

Supporting
Documents.  Such
supporting documents as Administrative Agent may reasonably request.

 

ARTICLE IV. — Representations and Warranties

 

§ 4.1.       Representations
and Warranties of Borrower.  In order
to induce Administrative Agent and Lenders to enter into this Amendment,
Borrower represents and warrants to Administrative Agent and each Lender that:

 

(a)           The
representations and warranties contained in Article V of the Original Agreement
are true and correct at and as of the time of the effectiveness hereof, except
to the extent that such representation and warranty was made as of a specific
date or updated, modified or supplemented as of a subsequent date with the
consent of Majority Lenders, then in each case, such other date.

 

(b)           Borrower
is duly authorized to execute and deliver this Amendment, and Borrower is and
will continue to be duly authorized to borrow and perform its obligations under
the Credit Agreement.  Borrower has duly
taken all action necessary to authorize the execution and delivery of this
Amendment and to authorize the performance of its obligations hereunder.

 

(c)           The
execution and delivery by Borrower of this Amendment,  the performance by it of its obligations
hereunder, and the consummation of the transactions contemplated hereby, do not
and will not (i) violate any provision of (1) Law applicable to it, (2) its
organizational documents, or (3) any judgment, order or material license or
permit applicable to or binding upon it, (ii) result in the acceleration of any
Indebtedness owed by it, or (iii) result in or require the creation of any
consensual Lien upon any of its material assets or properties, except as
expressly contemplated in, or permitted by, the Loan Documents.  Except as expressly contemplated in, or
permitted by, the Loan Documents, disclosed in the Disclosure Schedule or
disclosed pursuant to Section 6.4 of the Credit Agreement, no permit, consent,
approval, authorization or order of, and no notice to or filing, registration
or qualification with, any Governmental Authority is required on the part of
Borrower pursuant to the provisions of any material Law applicable to it as a
condition to its execution, delivery or performance of this Amendment, or to
consummate the transactions contemplated hereby.

 

3

 

(d)           When
duly executed and delivered, this Amendment and each of the Loan Documents, as
amended hereby, will be a legal and binding obligation of Borrower, enforceable
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or similar Laws of general application relating to the
enforcement of creditors’ rights and general principles of equity.

 

ARTICLE V. — Miscellaneous

 

§ 5.1.       Ratification
of Agreements.  The Original
Agreement, as hereby amended, is hereby ratified and confirmed in all
respects.  The Loan Documents, as they
may be amended or affected by this Amendment, are hereby ratified and confirmed
in all respects by Borrower.  Any
reference to the Credit Agreement in any Loan Document shall be deemed to refer
to this Amendment also.  The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of
Administrative Agent or any Lender under the Credit Agreement or any other Loan
Document nor constitute a waiver of any provision of the Credit Agreement or
any other Loan Document.

 

§ 5.2.       Ratification
of Security Documents.  Borrower,
Administrative Agent, and Lenders each acknowledge and agree that any and all
indebtedness, liabilities or obligations, arising under or in connection with
the LC Obligations or the Notes, are Obligations and are secured indebtedness
under, and are secured by, each and every Security Document.  Borrower hereby re-pledges, re-grants and
re-assigns a security interest in and lien on every asset of Borrower described
as Collateral in any Security Document.

 

§ 5.3.       Survival
of Agreements.  All representations,
warranties, covenants and agreements of Borrower shall survive the execution
and delivery of this Amendment and the performance hereof, including without
limitation the making or granting of each Loan, and shall further survive until
all of the Obligations under the Credit Agreement are paid in full.  All statements and agreements contained in
any certificate or instrument delivered by Borrower hereunder or under the
Credit Agreement to Administrative Agent or any Lender shall be deemed to
constitute representations and warranties by, or agreements and covenants of,
Borrower under this Amendment and under the Credit Agreement.

 

§ 5.4.       Loan
Documents.  This Amendment is a Loan
Document, and all provisions in the Credit Agreement pertaining to Loan
Documents apply hereto.

 

§ 5.5.      GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA IN ALL RESPECTS, INCLUDING CONSTRUCTION, VALIDITY
AND PERFORMANCE.

 

§ 5.6.       Counterparts.  This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.  Delivery of an executed
signature page by facsimile transmission shall be effective as delivery of a
manual executed counterpart.

 

4

 

IN WITNESS WHEREOF, this Amendment is executed as of
the date first above written.

 

	
  BORROWER:

  	
  PLAINS
  MARKETING, L.P.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    Plains Marketing GP Inc., General
  Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Al Swanson

  	
   

  
	
   

  	
   

  	
    Al Swanson, Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LENDER PARTIES:

  	
  BANK OF AMERICA,
  N.A.,

  	
   

  
	
   

  	
  Administrative
  Agent, LC Issuer and Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BNP PARIBAS,
  Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FORTIS CAPITAL
  CORP., Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SOCIETE
  GENERALE, Lender

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

5

 

	
   

  	
  WACHOVIA BANK,
  NATIONAL

  ASSOCIATION, Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BANK OF
  SCOTLAND, Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  COMERICA BANK,
  Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO
  BANK, N.A., Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

6

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