Document:

EXHIBIT
10.1

 

BUCKEYE
PARTNERS, L.P.

 

2009
LONG-TERM INCENTIVE PLAN

 

Effective
January 1, 2009

(as
amended on April 30, 2009)

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Purpose and Design

  	
   

  	
  1

  
	
  2.

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  3.

  	
   

  	
  Grants and Maximum Number of Units Available for
  Grants

  	
   

  	
  5

  
	
  4.

  	
   

  	
  Duration of the Plan

  	
   

  	
  5

  
	
  5.

  	
   

  	
  Administration

  	
   

  	
  5

  
	
  6.

  	
   

  	
  Eligibility

  	
   

  	
  6

  
	
  7.

  	
   

  	
  Phantom Units and Performance Units

  	
   

  	
  6

  
	
  8.

  	
   

  	
  Distribution Equivalent Rights

  	
   

  	
  8

  
	
  9.

  	
   

  	
  Requirements for Performance Goals and Performance
  Periods

  	
   

  	
  9

  
	
  10.

  	
   

  	
  Non-transferability and Compliance with
  Rule 16b-3

  	
   

  	
  9

  
	
  11.

  	
   

  	
  Consequences of a Change of Control

  	
   

  	
  10

  
	
  12.

  	
   

  	
  Adjustment of Number and Price of Units, Etc

  	
   

  	
  10

  
	
  13.

  	
   

  	
  Limitation of Rights

  	
   

  	
  10

  
	
  14.

  	
   

  	
  Amendment or Termination of Plan

  	
   

  	
  10

  
	
  15.

  	
   

  	
  Tax Withholding and Code Section 409A

  	
   

  	
  11

  
	
  16.

  	
   

  	
  Governmental Approval

  	
   

  	
  11

  
	
  17.

  	
   

  	
  Effective Date of Plan

  	
   

  	
  11

  
	
  18.

  	
   

  	
  Successors

  	
   

  	
  11

  
	
  19.

  	
   

  	
  Headings and Captions

  	
   

  	
  12

  
	
  20.

  	
   

  	
  Governing Law

  	
   

  	
  12

  

 

i

 

BUCKEYE
PARTNERS, L.P.

 

2009
LONG-TERM INCENTIVE PLAN

 

1.                                      Purpose and Design

 

The purpose of this Plan is to assist Buckeye Partners, L.P., Buckeye GP
LLC, the Partnership’s general partner, and Affiliates in attracting and
retaining employees of outstanding competence and to enable selected officers
and key employees of the Partnership, the Company and Affiliates to acquire or
increase ownership interests in the Partnership on a basis that will encourage
them to perform at increasing levels of effectiveness and to use their best
efforts to promote the growth and profitability of the Partnership.  The Plan is designed to align directly
long-term executive compensation with tangible, direct and identifiable
benefits realized by Buckeye Partners, L.P. Unit holders.

 

2.                                      Definitions

 

Whenever used in this Plan,
the following terms will have the respective meanings set forth below:

 

2.1                                 “Account” means a bookkeeping account established
on the records of the Company to record a Participant’s interests under the
Plan.

 

2.2                                 “Affiliate” will have the meaning ascribed to such
term in Rule 12b-2 of the General Rules under the Exchange Act.  Notwithstanding the foregoing, Buckeye Pipe
Line Services Company shall be considered an Affiliate of the Company and any
reference to an Affiliate in this Plan shall include an Affiliate of the
Company or the Partnership, as applicable.

 

2.3                                 “Board” means the Company’s Board of Directors as
constituted from time to time.

 

2.4                                 “Cause” shall mean, except to the extent
specified otherwise by the Committee, a finding by the Committee that the
Participant (i) has materially breached his or her employment, severance
or service contract with the Company, Partnership or Affiliate, (ii) has
engaged in disloyalty to the Company, Partnership or Affiliate, including,
without limitation, fraud, embezzlement, theft, commission of a felony or
proven dishonesty, (iii) has disclosed trade secrets or confidential
information of the Company, Partnership or Affiliate to persons not entitled to
receive such information, or (iv) has breached any written non-competition,
non-solicitation, invention assignment or confidentiality agreement between the
Participant and the Company, Partnership or Affiliate.

 

2.5                                 “Change of Control” shall mean the occurrence of one or more
of the following transactions:

 

(a)                                  the sale or disposal by the Partnership
of all or substantially all of its assets; or

 

1

 

(b)                                 the merger or consolidation of the
Partnership with or into another partnership, corporation, or other entity, other
than a merger or consolidation in which the Unit holders immediately prior to
such transaction retain at least a fifty percent (50%) equity interest in the
surviving entity; or

 

(c)                                  the occurrence of one or more of the
following events:

 

(i)                                     the Company ceases to be the sole general
partner of the Partnership;

 

(ii)                                  Buckeye GP
Holdings L.P. ceases
to own and control, directly or indirectly, 100% of the outstanding equity
interests of the Company;

 

(iii)                               MainLine Management LLC ceases to be the sole general
partner of Buckeye GP Holdings L.P.; or

 

(iv)                              BGH GP Holdings, LLC ceases to own and
control, directly or indirectly, 100% of the outstanding equity interests of
MainLine Management LLC;

 

provided, however, that none of the events described in
this clause (c) shall constitute a Change of Control if, following such
event, either ArcLight Capital Partners, LLC and its affiliates (“ArcLight”) or
Kelso & Company and its affiliates (“Kelso”) possess, or both ArcLight
and Kelso collectively possess, directly or indirectly, the power to direct or
cause the direction of the management and policies of the Partnership, whether
through the ownership of voting securities, by contract, or otherwise; or

 

(d)                                 the failure of ArcLight and Kelso
collectively to possess, directly or indirectly, the power to direct or cause
the direction of the management and policies of the Partnership, whether
through the ownership of voting securities, by contract, or otherwise.

 

2.6                                 “Change of Control Period” shall mean the period commencing on the
date of a Change of Control and ending eighteen (18) calendar months following
a Change of Control.

 

2.7                                 “Code” means the
Internal Revenue Code of 1986, as amended and the regulations promulgated
thereunder.

 

2.8                                 “Committee” means the Compensation Committee of the
Board or its successor.

 

2.9                                 “Company” means Buckeye GP LLC, a Delaware limited
liability company, and any successor thereto.

 

2.10                           “Comparison Group” means the group selected by the
Committee and consisting of the Partnership and such other entities deemed by
the Committee (in its sole discretion) to be reasonably comparable to the
Partnership.

 

2.11                           “Date of Grant” means the effective date on which a
Grant is made to a Participant as set forth in the applicable Grant Letter.

 

2

 

2.12                           “Disability” or “Disabled”
means a Participant becoming disabled within the meaning of section 22(e)(3) of
the Code, a long-term disability as determined under the long-term disability
plan of the Company, the Partnership or an Affiliate, which is applicable to
the Participant, or as otherwise determined by the Committee.  Notwithstanding the foregoing, no payment
shall be made to a Participant on account of Disability unless a Participant
becomes disabled within the meaning of such term under section 409A(a)(2)(C) of
the Code.

 

2.13                           “Distribution Equivalent Rights” means an amount determined by
multiplying the number of Units granted to a Participant, subject to any
adjustment under Section 12, by the per-Unit cash distribution, or the
per-Unit fair market value (as determined by the Committee) of any distribution
in consideration other than cash, paid by the Partnership on its Units.

 

2.14                           “Employee” means a regular full-time salaried
employee of the Company or an Affiliate who performs services directly or
indirectly for the benefit of the Partnership.

 

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

 

2.16                           “Fair Market Value” of a Unit means the average, rounded to
one cent ($0.01), of the highest and lowest sales prices thereof on the New
York Stock Exchange on the day on which Fair Market Value is being determined,
as reported on the Composite Tape for transactions on the New York Stock
Exchange. In the event that there are no Unit transactions on the New York
Stock Exchange on such day, the Fair Market Value will be determined as of the
immediately preceding day on which there were Unit transactions on that
exchange.  If a Unit is not publicly traded
or, if publicly traded, is not subject to reported transactions as set forth
above, the Fair Market Value per share shall be as determined by the Committee
through any reasonable valuation method.

 

2.17                           “Good Reason” shall mean the occurrence, without the
Participant’s express written consent, of any of the following events during
the Change in Control Period:

 

(a)                                  a substantial adverse change in the
Participant’s duties or responsibilities from those in effect on the date
immediately preceding the first day of the Change of Control Period;

 

(b)                                 a material reduction in Participant’s
annual rate of base salary or annual bonus opportunity as in effect immediately
prior to commencement of a Change of Control Period; or

 

(c)                                  requiring Participant to be based at a
location more than 100 miles from the Participant’s primary work location as it
existed on the date immediately preceding the first day of the Change of
Control Period, except for required travel substantially consistent with the
Participant’s present business obligations.

 

Notwithstanding the foregoing, Participant shall not
have Good Reason for termination unless (A) Participant gives written
notice of termination for Good Reason within 30 days after the event giving
rise to Good Reason occurs, (B) the Company does not cure the action or
failure to act that constitutes the grounds for Good Reason, as set forth in
Participant’s notice of

 

3

 

termination,
within 30 days after the date on which Participant gives written notice of
termination and (C) Participant actually resigns within 60 days following
the expiration of the Company’s 30-day cure period.

 

2.18                           “Grant” means a grant of one or more Performance
Units or Phantom Units pursuant to the Plan and any tandem Distribution
Equivalent Rights awarded with respect to such Grant.

 

2.19                           “Grant Letter” means
the written instrument that sets forth the terms and conditions of a Grant,
including all amendments thereto.

 

2.20                           “Participant” means an Employee or an independent
director (as set forth in Section 6 below) designated by the Committee to
participate in the Plan.

 

2.21                           “Partnership” means Buckeye Partners, L.P., a Delaware
limited partnership or any successor thereto.

 

2.22                           “Performance Goal” means the goal or goals and other
objectives established by the Committee for a Performance Period, for the
purpose of determining when a Grant subject to such objectives is earned.  All Performance Goals must meet the
requirements of Section 9.

 

2.23                           “Performance Period” means the period of one or more calendar
years during which performance will be measured for Performance Units or tandem
Distribution Equivalent Rights, as specified by the Committee.  Performance Periods must meet the
requirements of Section 9.

 

2.24                           “Performance Unit” means a notional Unit that is subject to
the attainment of one or more Performance Goals established by the Committee
and described in Section 9 and which upon vesting entitles a Participant
to receive a Unit (or a fraction or a multiple thereof as determined based on
the Performance Goal) or, if provided by the Committee in the Grant Letter, an
amount in cash equal to the Fair Market Value of a Unit (or a fraction or a
multiple thereof as determined based on the Performance Goal).

 

2.25                           “Phantom Unit” means a notional Unit granted under the
Plan that is subject to service-based restrictions or other conditions
established by the Committee in its discretion and which upon vesting entitles
a Participant to receive a Unit or, if provided by the Committee in the Grant
Letter, an amount in cash equal to the Fair Market Value of a Unit.

 

2.26                           “Plan” means the Buckeye Partners, L.P. 2009
Long-Term Incentive Plan as stated herein, including any amendments or
modifications thereto.

 

2.27                           “Restriction Period” means the period of one or more calendar
years during which Phantom Units or tandem Distribution Equivalent Rights, if
applicable, shall be subject to restrictions or conditions, including any other
period specified in the Grant Letter.

 

2.28                           “Retirement” means separation from employment other
than for Cause (i) at or after age 65, or (ii) before age 65 provided
the Participant has at the time of such termination 

 

4

 

satisfied the age and vesting requirements for normal or early retirement
pursuant to the terms of any “defined benefit plan” (as such term is defined in
Section 3(35) of the Employee Retirement Income Security Act of 1974, as
amended, or any successor provision) maintained by the Partnership, the Company
or any Affiliate in which the Participant participates, or (iii) if the
Participant does not participate at the time of such termination in such a “defined
benefit plan,” at or after age 55 and before age 65 provided the Participant
has been employed by the Partnership, the Company or any Affiliate for at least
five full years.

 

2.29                           “Unit” means a unit representing a limited
partnership interest in the Partnership.

 

3.                                      Grants and Maximum Number of
Units Available for Grants

 

(a)                                  Grants under the Plan may consist of
Phantom Units, Performance Units and/or tandem Distribution Equivalent
Rights.  All Grants shall be subject to
the terms and conditions set forth herein and to such other terms and
conditions consistent with this Plan as the Committee deems appropriate and as
are specified in writing by the Committee to the individual in the Grant
Letter.  All Grants shall be made
conditional upon the Participant’s acknowledgement, in writing or by acceptance
of the Grant, that all decisions and determinations of the Committee shall be
final and binding on the Participant, his or her beneficiaries and any other
person having or claiming an interest under such Grant.  Grants under a particular Section of the
Plan need not be uniform as among the Participants.

 

(b)                                 The number of Units that may be granted
under this Plan may not exceed 1,500,000 in the aggregate, subject, however, to
the adjustment provisions of Section 12 below. With regard to grants to
any one individual in a calendar year, the number of Units that may be issued
will not exceed 100,000.  If Units are
forfeited, terminated or otherwise not paid in full, the Units subject to such
Grant shall again be available for purposes of the Plan. Units may be (i) previously
issued and outstanding Units, (ii) newly issued Units, or (iii) a
combination of each.

 

4.                                      Duration of the Plan

 

The Plan will remain in effect until all Units subject to the Plan have
been issued and transferred to Participants.

 

5.                                      Administration

 

(a)                                  The Plan will be administered by the
Committee. The Committee may delegate authority to one or more subcommittees,
as it deems appropriate.  Subject to the
express provisions of the Plan, the Committee will have authority, in its
complete discretion, to determine the Employees to whom, and the time or times
at which grants will be made.  In making
such determinations, the Committee may take into account the nature of the
services rendered by an Employee, the present and potential contributions of
the Employee to the Partnership’s success and such other factors as the
Committee in its discretion deems relevant. All powers of the Committee shall
be executed in its sole discretion, in the best interest of the Partnership,
not as a fiduciary, and in keeping with the objectives of the Plan and need not
be uniform as to similarly situated individuals.  No member of the Committee shall be liable
for any 

 

5

 

action, determination or omission taken or made in
good faith with respect to the Plan or any grant hereunder.

 

(b)                                 Subject to the express provisions of the
Plan, the Committee will also have authority, in its complete discretion, to (i) construe
and interpret the Plan, (ii) to prescribe, amend and rescind rules and
regulations relating to the Plan, (iii) to determine the terms and
provisions of the restrictions relating to Grants (none of which need be
identical), and (iv) to make all other determinations (including factual
determinations) necessary or advisable for the orderly administration of the
Plan.  The Grant Letter shall set forth
the terms of each Grant.  Each
Participant’s receipt of a Grant Letter shall constitute that Participant’s
acknowledgement and acceptance of the terms of the Plan and the Grant and the
Committee’s authority and discretion.

 

6.                                      Eligibility

 

Grants hereunder may be made to Employees who, in the sole judgment of
the Committee, are individuals who are in a position to significantly
participate in the development and implementation of the Company’s strategic
plans for the Partnership and thereby contribute materially to the continued
growth and development of the Partnership and to its future financial
success.  Grants hereunder may also be
made to independent members of the board of directors of the Company or
Mainline Management LLC as determined by the Committee in its sole
discretion.  For purposes of this section
independent directors shall be those members of the applicable board of
directors who are “independent,” as defined in the Corporate Governance
Guidelines of the Partnership or of Buckeye GP Holdings, L.P., the Company’s
parent company, as applicable..

 

7.                                      Phantom Units and Performance
Units

 

7.1                                 Grant of Units. Subject to the provisions of Section 3,
Phantom Units or Performance Units may be granted to Participants at any time
and from time to time as may be determined by the Committee.  The Committee may, in its sole and absolute
discretion, establish a program pursuant to which Phantom Units or Performance
Units may be awarded, subject to terms and conditions established by the Committee,
at the election of a Participant in lieu of cash compensation.  Phantom Units or Performance Units may be
granted with or without Distribution Equivalent Rights as determined by the
Committee.  Units issued or transferred
pursuant to awards of Phantom Units or Performance Units may be issued or
transferred for consideration or for no consideration, and will be subject to
all requirements set forth in the Grant Letter.

 

7.2                                 Restrictions on Phantom Units. 
Unless a different vesting schedule is established by the Committee in
the Grant Letter, Phantom Units shall vest according to the following schedule
based on the years of service of a Participant after the Date of Grant.

 

	
  Restriction Period

  	
   

  	
  Percentage of Phantom Units That Vest

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than Three
  Years from Date of Grant

  	
   

  	
  0

  	
  %

  
	
  Three Years or
  More from Date of Grant

  	
   

  	
  100

  	
  %

  

 

6

 

The Committee may also provide for vesting of Phantom Units based on
the acceptance of employment or commencement of employment with the
Partnership, the Company or Affiliates, as determined by the Committee in its sole
discretion.

 

7.3                                 Restrictions on Performance
Units.  Unless a different vesting schedule is set
forth in the Grant Letter, Performance Units shall vest based on the
achievement of Performance Goals over a three-year Performance Period.  At the end of a Performance Period, each
Performance Unit shall be settled based upon the attainment of the
pre-established Performance Goals as certified by the Committee in writing in
accordance with Section 9 and the Units or amount payable in respect of
each Performance Unit shall be determined by multiplying each Performance Unit
granted by a payout performance multiplier of between 0%-200%, which shall be
determined based upon actual performance compared to the pre-established
Performance Goal.

 

7.4                                 Requirement of Employment. 
After the restrictions on a Participant’s Phantom Units or Performance
Units vest according to the schedule in Section 7.2 and 7.3, the Phantom
Units or Performance Units shall be payable after the end of the Restriction
Period or Performance Period, according to the terms set forth in the Grant
Letter, but no later than the later of the end of the calendar year or the 15th
day of the third month following the end of the Restriction Period or
Performance Period, as applicable.  If
the Participant ceases to be an Employee before the end of the Restriction
Period or Performance Period, the Participant’s Phantom Units or Performance
Units will terminate as to all Units covered by the Grant as to which the
restrictions have not vested, except as provided below.

 

7.5                                 Termination for
Cause; Voluntary Termination.  In the event a Participant’s ceases to be
employed by, or provide service to the Company, Partnership or Affiliate either (i) for
termination for Cause or (ii) voluntarily on the part of the Participant,
any and all Phantom Units or Performance Units not then vested shall be
forfeited as of the date the Participant ceases to be employed by, or provide
service to the Company,
Partnership or Affiliate.

 

7.6                                 Retirement or Termination without
Cause, Death or Disability.  Unless
otherwise provided by the Committee in the Grant Letter, if a Participant
holding Phantom Units or Performance Units ceases to be an Employee by reason
of (i) Retirement or termination without Cause, (ii) Disability, or (iii) death,
the Phantom Units or Performance Units held by such Participant will vest
pursuant to the following:

 

(i)                                     Retirement or Termination without
Cause.  If a Participant terminates employment on
account of Retirement, or the Participant’s employment is terminated by the
Company, Partnership or Affiliate without Cause, such Participant’s Phantom
Units will vest on a prorated basis, based on the portion of the Restriction
Period during which the Participant was employed by the Company, Partnership or
Affiliate and be paid as soon as practicable thereafter, and Performance Units
will vest on a prorated portion based on the actual performance results for the
Performance Period, prorated for the portion of the Performance Period during
which the Participant was employed by the Company, Partnership or Affiliate,
and be paid as soon as practicable thereafter. 
The Committee may, however, provide for complete or 

 

7

 

partial
exceptions to this requirement as it deems appropriate in the case of a Participant
who terminates employment on account of Retirement.

 

(ii)                                  Disability. 
If a Participant is determined to be Disabled, such Participant’s
Phantom Units will immediately vest and be paid as soon as practicable
thereafter and Performance Units will vest and be paid immediately based on a
payout performance multiplier of 100%.

 

(iii)                               Death.  In the event
of the death of a Participant while employed by the Company, Partnership or
Affiliate, such Participant’s Phantom Units will immediately vest and be paid
as soon as practicable thereafter and Performance Units will vest and be paid
immediately based on a payout performance multiplier of 100%.

 

7.7                                 Form of Payment for Units. Phantom Units and Performance Units
will be settled by the delivery of Units, provided that, the Committee will
have the discretion to provide in a Grant Letter that payment in settlement of
Phantom Units or Performance Units for a Participant will be paid in cash based
on the Fair Market Value of the Units otherwise deliverable, or partly in Units
and partly in cash.

 

8.                                      Distribution Equivalent Rights

 

8.1                                 Amount of Distribution
Equivalents Credited.
If the Committee so specifies when granting Phantom Units or Performance Units,
from the Date of Grant of Phantom Units or Performance Units to a Participant
until the date on which the Phantom Units or Performance Units are paid, the
Company will maintain an Account for such Participant and will credit on each
payment date for the payment of a distribution made by the Partnership on its
Units an amount equal to the Distribution Equivalent Rights associated with
such Phantom Units or Performance Units.

 

8.2                                 Payment of Credited Distribution
Equivalent Rights.  Distribution Equivalent Rights will be paid
upon such terms as the Committee determines, including, without limitation the
Performance Goals prescribed in accordance with Section 9.

 

8.3                                 Timing of Payment of Distribution
Equivalent Rights.  Except as otherwise determined by the
Committee or set forth in the Grant Letter, Distribution Equivalent Rights
shall be paid on Phantom Units or Performance Units as follows:

 

(a)                                  Phantom Units. 
Distribution Equivalent Rights shall be paid on Phantom Units, whether
vested or not vested, as soon as practicable following the payment of a
distribution made by the Partnership on its Units in accordance with this
Section.  A Participant will receive the
aggregate amount of the Participant’s Distribution Equivalent Rights in cash,
or in Units as determined by the Committee in its discretion.

 

(b)                                 Performance Units. Distribution Equivalent Rights shall be
paid at the same time and under the same conditions as the underlying
Performance Units are paid.  No payments
of Distribution Equivalent Rights will be made (A) prior to the end of the
Performance Period set forth in the Grant Letter or (B) to any Participant
whose employment by the Company 

 

8

 

terminates prior to the end of the Performance Period
for any reason other than Retirement, death, Disability or involuntary
termination without Cause.  A Participant
will receive the aggregate amount of the Participant’s Distribution Equivalent
Rights in cash, or in Units as determined by the Committee in its discretion,
as soon as practicable after the end of the applicable Performance Period.

 

9.                                      Requirements for Performance
Goals and Performance Periods

 

9.1                                 Requirements for Performance
Goals.  When Performance Units or tandem
Distributions Equivalent Rights are granted, the Committee will establish in
writing Performance Goals either before the beginning of the Performance Period
or during a period ending no later than the earlier of (i) 90 days after
the beginning of the Performance Period or (ii) the date on which 25% of
the Performance Period has elapsed.  The
Performance Goals must specify (A) the Performance Goal(s) that must
be met in order for restrictions on the Performance Units to vest or the
Distribution Equivalent Rights to be paid, (B) the Performance Period
during which performance will be measured, (C) the maximum amounts that
may be paid if the Performance Goals are met, and (D) any other conditions
that the Committee deems appropriate and consistent with the Plan, including
the time of payment and other requirements.

 

9.2                                 Criteria Used for Performance Goals. 
The Committee will use objectively determinable business criteria for
the Performance Goals including, but not limited to, one or more of the
following financial or operational criteria: 
EBITDA, Unit price, earnings per Unit, net earnings, operating earnings,
total capital spending, maintenance capital spending, return on assets, total
Unit holder return, return on equity, growth in assets, cash flow, market
share, distribution growth, distributable cash flow, relative performance to a
Comparison Group, or strategic business criteria, including, but not limited
to, meeting specified revenue goals, business expansion goals, cost targets or
goals relating to acquisitions or divestitures. 
The Performance Goals may relate to the Participant’s business unit or
the performance of the Partnership as a whole, or any combination of the
foregoing.  Performance Goals need not be
uniform as among Participants.

 

9.3                                 Forfeitures. 
If and to the extent that all requirements of the Performance Goals and
Grant Letter are not met, grants of Performance Units and Distribution
Equivalent Rights will be forfeited, except as otherwise provided by the
Committee with respect to a Participant who is not a covered employee as
defined and set forth under Code section 162(m).

 

10.                                Non-transferability and
Compliance with Rule 16b-3

 

                                                Only
the Participant may exercise rights under a Grant during the Participant’s
lifetime.  A Participant may not transfer
those rights except (i) by will or by the laws of descent and distribution
or (ii) pursuant to a domestic relations order.  The Committee may impose such conditions on
Grants as may be necessary to satisfy the requirements of Rule 16b-3 under
the Exchange Act.

 

9

 

11.                                Consequences of a Change of
Control

 

In the event a Change of Control occurs while the
Participant is employed by, or providing services to the Company, Partnership
or Affiliate, and (i) the Participant is terminated without Cause during
the Change of Control Period or (ii) the Participant resigns for Good
Reason, such Participant’s Phantom Units (and any unpaid Distribution
Equivalent Rights) will immediately vest and be paid within the 30-day period
following such termination of employment and Performance Units (and any associated
Distribution Equivalent Rights) will vest and be paid based on a payout
performance multiplier of 100% within the 30-day period following such
termination of employment.

 

12.                                Adjustment of Number and Price of
Units, Etc.

 

If there is any change in the number or kind of Units
outstanding (i) by reason of a Unit distribution, spinoff,
recapitalization, Unit split, or combination or exchange of Units, (ii) by
reason of a merger, reorganization, consolidation or reclassification, or (iii) by
reason of any other extraordinary or unusual event affecting the outstanding
Units as a class without the Company’s receipt of consideration, or if the
value of outstanding Units is substantially reduced as result of a spinoff or
the Company’s payment of any extraordinary distribution, the maximum number of
Units available for issuance under the Plan, the maximum number of Units for
which any individual may receive Grants in any year, the kind and number of
Units covered by outstanding Grants, the kind and number of Units to be issued
or issuable under the Plan, and the applicable market value of outstanding
Grants shall be required to be equitably adjusted by the Committee to reflect
any increase or decrease in the number of, or change in the kind or value of,
issued Units to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under the Plan and such outstanding Grants;
provided, however, than any fractional Units resulting from such adjustment
shall be eliminated.  Any adjustments determined
by the Committee shall be final, binding and conclusive.

 

13.                                Limitation of Rights

 

Nothing contained in this
Plan will be construed to give an Employee or independent director any right to
a Grant hereunder except as may be authorized in the discretion of the
Committee.  A Grant under this Plan will
not constitute or be evidence of any agreement or understanding, expressed or
implied, that the Company, Partnership or any Affiliate will employ a
Participant for any specified period of time, in any specific position or at
any particular rate of remuneration.

 

14.                                Amendment or Termination of Plan

 

The
Committee shall have complete and exclusive power and authority to terminate or
amend the Plan and the Committee may amend outstanding awards issued under the
Plan in any or all aspects whatsoever not inconsistent with the terms of the
Plan; provided, however, that no such termination or amendment shall adversely
affect the rights of a Participant with respect to awards at the time
outstanding under the Plan unless the Participant consents to such amendment;
and provided, further, that the Committee shall not, without the approval of
the Unit holders, amend the Plan to (i) materially increase the maximum
number of Units which may be issued under the Plan, except for permissible
adjustments under Section 12, (ii) materially 

 

10

 

increase
the benefits accruing to individuals who participate in the Plan, or (iii) materially
modify the eligibility requirements for the grant of Units under the Plan.

 

15.                                Tax Withholding and Code Section 409A

 

Upon the vesting of restrictions on Phantom Units or
Performance Units, the Company will require the recipient to remit to the
Company an amount sufficient to satisfy federal, state and local withholding
tax requirements.  However, to the extent
authorized by rules and regulations of the Committee, the Company may
withhold Units and make cash payments in respect thereof in satisfaction of a recipient’s tax
obligations in an amount that does not exceed the recipient’s minimum
applicable withholding tax obligations. 
Notwithstanding any provision to the contrary, all provisions of this
Plan shall be construed and interpreted to comply with Code section 409A and
applicable regulations thereunder and if necessary, any provision shall be held
null and void to the extent such provision (or part thereof) fails to comply
with Code section 409A or regulations thereunder.  For purposes of the limitations on
nonqualified deferred compensation under Code section 409A, each payment of
compensation under this Plan shall be treated as a separate payment of
compensation for purposes of applying the deferral election rules and the
exclusion for certain short-term deferral amounts under Code section 409A.  To the extent that deferred compensation
subject to the requirements of Code section 409A becomes payable under this
Plan to a “specified employee” (within the meaning of Code section 409A) on
account of separation from service, any such payments shall be delayed by six
months to the extent necessary to comply with the requirements of Code section
409A, but not beyond the death of the Participant.

 

16.                                Governmental Approval

 

Each grant of Units will
be subject to the requirement that if at any time the listing, registration or
qualification of the Units covered thereby upon any securities exchange, or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of or in connection
with the awarding of such grant of Units, then no such grant may be paid in
whole or in part unless and until such listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions not
acceptable to the Board.

 

17.                                Effective Date of Plan

 

This Plan will become effective as of January 1, 2009, subject to
approval by the Partnership’s Unit holders. 
The Plan shall remain in effect until the earlier of (a) the
termination of the Plan by action of the Board or the Committee, or (b) the
10th anniversary of the effective date.

 

18.                                Successors

 

This Plan will be binding upon and inure to the benefit of the
Partnership, the Company, and their successors and assigns and the Participant
and his heirs, executors, administrators and legal representatives.

 

11

 

19.                                Headings and Captions

 

The headings and captions
herein are provided for reference and convenience only, shall not be considered
part of the Plan, and shall not be employed in the construction of the Plan.

 

20.                                Governing Law

 

The validity,
construction, interpretation and effect of the Plan will be governed
exclusively by and determined in accordance with the law of the State of
Delaware.

 

12Exhibit 10.1

 

ENTERPRISE
BANCORP, INC.

 

2009
STOCK INCENTIVE PLAN

 

SECTION 1.                                GENERAL PURPOSE OF THE PLAN; DEFINITIONS

 

The name of this plan is the Enterprise
Bancorp, Inc. 2009 Stock Incentive Plan (the “Plan”).  The purpose of the Plan is to encourage and
enable the officers, employees, Non-Employee Directors and other key persons
(including consultants and prospective employees) of Enterprise Bancorp, Inc.
(the “Company”) and its Subsidiaries upon whose judgment, initiative and
efforts the Company largely depends for the successful conduct of its business
to acquire a proprietary interest in the Company.  It is anticipated that providing such persons
with a direct stake in the Company’s welfare will assure a closer
identification of their interests with those of the Company and its
stockholders, thereby stimulating their efforts on the Company’s behalf and
strengthening their desire to remain with the Company.

 

The following terms shall be defined as set
forth below:

 

“Act” means the
Securities Act of 1933, as amended, and the rules and regulations
thereunder.

 

“Administrator”
means the compensation committee of the Board, which is comprised of not less
than three Non-Employee Directors, each of whom qualifies as an “outside
director” within the meaning of Section 162(m) of the Code and a “non-employee
director” within the meaning of Rule 16b-3 of the Exchange Act; provided,
however, that if and to the extent that the Board at any time assumes the
powers and responsibilities of the Administrator under the Plan, then all
references to the “Administrator” in the Plan shall refer to the Board under
such circumstances.

 

“Award” or “Awards” means, except where referring to a particular category of grant
under the Plan, any and all of the following: 
Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards, RSUs and SARs.

 

“Award Agreement”
means a written or electronic agreement setting forth the terms and provisions
applicable to an Award granted under the Plan. 
Each Award Agreement is subject to the terms and conditions of the Plan.

 

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

 

“Change in Control” means
the occurrence of either (i) a change in control of the Company that the
Company would be required to report in response to Item 5.01 of a Current
Report on Form 8-K as filed by the Company with the Securities and
Exchange Commission pursuant to the requirements of Section 13 or Section 15(d) of
the Exchange Act or, if such reporting obligation is no longer in effect, any
regulations promulgated by the Securities and Exchange Commission or any
successor agency pursuant to the Exchange Act or any successor statute that are
intended to serve similar purposes, or (ii) a person (as such term is used
in Sections 13(d) and 14(d)(2) of the Exchange Act) becoming a
beneficial owner (as that term is 

 

 

defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Company representing twenty-five
percent or more of the total number of votes that may be cast for the election
of directors of the Company, and in either such case the Board has not
consented to the occurrence of such event by a two-thirds vote of all of its
members (unless there is an Interested Stockholder, as that term is defined in
the Company’s articles of organization, as amended, in which case the
affirmative vote of two-thirds of the Continuing Directors, as that term is
defined in the Company’s articles of organization, as amended, shall also be
required).  In addition to the foregoing,
a Change in Control shall be deemed to have occurred if as the result of, or in
connection with, any tender or exchange offer, merger or other business
combination, sale or other disposition of assets or any contested election of
directors of the Company or any combination of the foregoing transactions, the
persons who were directors of the Company before such transaction or related
series of transactions shall cease to constitute a majority of the Board or of
the board of directors of any successor entity.

 

“Code” means the
Internal Revenue Code of 1986, as amended, and any successor statute, and
related rules, regulations and interpretations.

 

“Covered Employee”
means an employee who is a “Covered Employee” within the meaning of Section 162(m) of
the Code.

 

“Disability” means a
condition of total incapacity, mental or physical, for further performance of
duty with the Company and/or any Subsidiary, which the Administrator shall have
determined, on the basis of competent medical evidence, is likely to be permanent.

 

“Effective Date”
means the date on which the Plan is approved by the Board as set forth in Section 15.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.

 

“Fair Market Value”
of the Stock on any given date means the closing price of the Stock as reported
on the Nasdaq Global Market or another national securities exchange.  If there is no trading in the Stock on such
date, the determination shall be made by reference to the closing price of the
Stock on the last date preceding such date on which the Stock was traded.

 

“Incentive Stock Option”
means any Stock Option designated and qualified as an “incentive stock option”
as defined in Section 422 of the Code.

 

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

 

“Non-Qualified Stock Option”
means any Stock Option that is not an Incentive Stock Option.

 

“Option” or “Stock Option” means any option to purchase
shares of Stock granted pursuant to Section 5.

 

2

 

“Restricted Stock Award”
means an Award entitling the recipient to acquire, at such purchase price
(which may be zero) as determined by the Administrator, shares of Stock, subject
to such restrictions and conditions as the Administrator may determine at the
time of grant.

 

“RSU” means a
restricted stock unit granted pursuant to Section 7.

 

“SAR” means a stock
appreciation right granted pursuant to Section 7.

 

 “Section 409A”
means Section 409A of the Code and the regulations and other guidance
promulgated thereunder.

 

“Stock” means the
common stock, par value $0.01 per share, of the Company, subject to adjustments
pursuant to Section 3.

 

“Subsidiary” means
any corporation or other entity (other than the Company) in which the Company
has at least a 50 percent interest, either directly or indirectly.

 

“Ten Percent Owner”
means an employee who owns or is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10 percent of the combined
voting power of all classes of stock of the Company or any parent corporation
or Subsidiary.

 

SECTION 2.                            ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO
SELECT GRANTEES AND DETERMINE AWARDS

 

(a)                                  Administration of Plan.  The Plan shall be administered by
the Administrator.

 

(b)                                 Powers of Administrator.  Subject to the penultimate sentence of this subsection (b), the
Administrator shall have the power and authority to grant Awards consistent
with the terms of the Plan, including the power and authority:

 

(i)  to select the individuals to whom Awards may from time to
time be granted;

 

(ii)  to determine the time or times of grant, and the extent, if
any, of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards, RSUs and SARs, or any combination of the foregoing, granted to any one
or more grantees;

 

(iii)  to determine the number of shares of Stock to be covered by
any Award;

 

(iv)  to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the
Plan, of any Award, which terms and conditions may differ among individual
Awards and grantees, and to approve the form of written instruments evidencing
the Awards;

 

(v)  subject to the terms of the Plan, to accelerate at any time
the exercisability or vesting of all or any portion of any Award;

 

3

 

(vi)  subject to the provisions of Section 5(c), to extend at
any time the period in which Stock Options may be exercised; and

 

(vii)  at any time to adopt, alter or repeal such rules,
guidelines and practices for administration of the Plan and for its own acts
and proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written instruments);
to make all determinations it deems advisable for the administration of the
Plan; to decide all disputes arising in connection with the Plan; and to
otherwise supervise the administration of the Plan.

 

Notwithstanding any other provision contained
in the Plan to the contrary, the terms and conditions of each and every Award
granted to the Company’s chairman, president, and chief executive officer, to
all other executive officers of the Company or any Subsidiary, which shall
include all officers who are subject to the provisions of Section 16 of
the Exchange Act and any other additional officers as may be determined by the
Board, and to any director of the Company, shall be approved by the Board.  All decisions and interpretations of the
Administrator shall be binding on all persons, including the Company and Plan
grantees.

 

(c)                                  Delegation of Authority to Grant Awards.  Subject to applicable law, the
Administrator, in its discretion, may delegate to the chief executive officer
of the Company all or part of the Administrator’s authority and duties with
respect to the granting of Awards to persons other than the chairman, the
president, and the chief executive officer of the Company, any other executive
officer of the Company or any Subsidiary (as determined pursuant to the
penultimate sentence of Section 2(b) above), and any director of the
Company.  Any such delegation by the
Administrator shall include a limitation as to the amount or value of Awards that
may be granted during the period of the delegation and shall contain guidelines
as to the determination of any applicable exercise price and the vesting
criteria.  The Administrator may revoke
or amend the terms of a delegation at any time, but such action shall not
invalidate any prior actions of the Administrator’s delegate or delegates that
were consistent with the terms of the Plan.

 

(d)                                 Award Agreement. 
Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award, which may
include, without limitation, the term of an Award, the provisions applicable in
the event employment or service terminates, and the Company’s authority to
unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.

 

(e)                                  Indemnification. 
Neither the Board nor the Administrator, nor any member of
either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and the Administrator (and any
delegate thereof) shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including, without limitation, reasonable attorneys’ fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under the
Company’s articles of organization or bylaws, each as amended, or any directors’
and officers’ liability insurance coverage which may be in effect from time to
time and/or any indemnification agreement between such individual and the
Company.

 

4

 

SECTION 3.                            STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

 

(a)                                  Stock Issuable. 
The maximum number of shares of Stock reserved and available
for issuance under the Plan, subject to adjustment as provided in Section 3(c),
shall be 400,000 shares.  For purposes of
this limitation, the shares of Stock underlying any Awards that are forfeited,
canceled, held back upon exercise of an Option or settlement of an Award to
cover the exercise price or tax withholding, reacquired by the Company prior to
vesting, satisfied without the issuance of Stock or otherwise terminated (other
than by exercise) shall be added back to the shares of Stock available for
issuance under the Plan.  The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company.

 

(b)                                 Limitations on Size of Grants.  The total number of shares of Stock with respect to which Options and
Restricted Stock Awards and any RSUs and/or SARs that may by their terms be
settled in whole or in part in shares of Stock may be granted under the Plan to
any single person, whether an employee of the Company or otherwise, shall not
exceed in the aggregate 120,000 (subject to adjustment pursuant to Section 3(c) below).

 

(c)                                  Changes in Capital Stock.  If, as a result of any reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar change in the Company’s capital stock, the outstanding shares of Stock
are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or additional shares or new or
different shares or other securities of the Company are distributed with
respect to such shares of Stock, the Administrator shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, including the limitation set forth in Section 3(b) above),
(ii) the number and kind of shares or other securities subject to any then
outstanding Awards under the Plan, (iii) the repurchase price, if any, per
share subject to each outstanding Restricted Stock Award, and (iv) the
exercise price for each share subject to any then outstanding Stock Options
under the Plan, without changing the aggregate exercise price (i.e., the
exercise price multiplied by the number of shares subject to such outstanding
Stock Options) as to which such Stock Options remain exercisable; provided,
however, that no adjustment shall be made hereunder with respect to any
Incentive Stock Option that would constitute a modification as defined under Section 424
of the Code.  Any adjustment by the
Administrator hereunder shall be final, binding and conclusive.  No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Administrator in its
discretion may make a cash payment in lieu of fractional shares.

 

(d)                                 Change in Control or Liquidation.  Except as the Administrator may
otherwise specify with respect to particular Awards in the relevant Award
documentation, in the case of and subject to the consummation of a Change in
Control or a liquidation of the Company, all Options that are not exercisable
immediately prior to the effective time of the Change in Control or liquidation
shall become fully exercisable as of such effective time and all Restricted
Stock Awards, RSUs and SARs shall become fully vested and nonforfeitable as of
such effective time.  Upon the effective
time of a Change in Control or liquidation of the Company, the Plan and all
outstanding Options granted hereunder shall terminate, unless, in the case of a
Change in Control, provision is made in connection with the Change in Control
in the sole discretion of the parties thereto for the assumption or
continuation of all Options theretofore granted by the successor entity, or the
substitution of such Options with new stock options of the successor entity or
parent thereof, with appropriate adjustment as to the number and kind of shares
and, if 

 

5

 

appropriate, the per share exercise prices, as such parties shall agree
(after taking into account any acceleration hereunder).  In the event of such prospective termination
of outstanding Options, the Company shall have the option in its sole
discretion to either (i) make or provide for a cash payment to the holders
of such Options, in exchange for the cancellation thereof, in an amount equal
to the difference between (A) the value on a per share basis as determined
by the Administrator of the consideration payable or otherwise to be received
by the Company’s shareholders in such Change in Control or liquidation
multiplied by the number of shares of Stock subject to such Options (to the
extent then exercisable (after taking into account any acceleration hereunder)
at prices not in excess of such value) and (B) the aggregate exercise price
of all such Options or (ii) permit the holders of such Options, within a
specified period of time prior to the consummation of the Change in Control or
liquidation as determined by the Administrator, to exercise the Options.

 

(e)                                  Substitute Awards. 
The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or
other key persons of another corporation in connection with the merger or
consolidation of the employing corporation with the Company or a Subsidiary or
the acquisition by the Company or a Subsidiary of property or stock of the
employing corporation.  The Administrator
may direct that the substitute Awards be granted on such terms and conditions
as the Administrator considers appropriate in the circumstances. Any substitute
Awards granted under the Plan shall not count against the share limitation set
forth in Sections 3(a) and 3(b).

 

(f)                                    Interpretation.  Except
as expressly provided to the contrary in this Section 3, the issuance by
the Company of shares of capital stock of any class for cash or property or for
services, either upon direct sale or upon the exercise of rights or warrants,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect the number, class or price of
shares of Stock then subject to outstanding Options or Restricted Stock Awards.

 

SECTION 4.                            ELIGIBILITY

 

Grantees under the Plan will be such full or
part-time officers and other employees and Non-Employee Directors of the
Company and its Subsidiaries, as well as other key persons (including
consultants and prospective employees), as are selected from time to time by
the Administrator in its sole discretion.

 

SECTION 5.                            STOCK OPTIONS

 

(a)                                  Stock Option Grants.  Any Stock Option granted under the
Plan shall be in such form as the Administrator may from time to time
approve.  Stock Options granted under the
Plan may be either Incentive Stock Options or Non-Qualified Stock Options.  Incentive Stock Options may be granted only
to employees of the Company or any Subsidiary that is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code.  To the extent that any Option does not
qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified Stock
Option. Stock Options granted pursuant to this Section 5(a) shall be
subject to the following terms and conditions contained in this Section 5
and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Administrator shall deem desirable.

 

6

 

(b)                                 Exercise Price. 
The exercise price per share for the Stock covered by a Stock
Option granted pursuant to Section 5(a) shall be determined by the
Administrator at the time of grant, but shall not be less than 100 percent of
the Fair Market Value on the date of grant. 
In the case of an Incentive Stock Option that is granted to a Ten
Percent Owner, the option price of such Incentive Stock Option shall be not
less than 110 percent of the Fair Market Value on the grant date.

 

(c)                                  Option Term.  The
term of each Stock Option shall be fixed by the Administrator, but no Stock
Option shall be exercisable more than ten years after the date the Stock Option
is granted.  In the case of an Incentive
Stock Option that is granted to a Ten Percent Owner, the term of such Stock
Option shall be no more than five years from the date of grant.

 

(d)                                 Exercisability; Rights of a Stockholder.  Stock Options shall become exercisable
at such time or times, whether or not in installments, as shall be determined
by the Administrator at the time of grant and set forth in the applicable
Option Award Agreement.  The
Administrator may not accelerate the exercisability of all or any portion of
any Stock Option, except in the case of a Change in Control or liquidation of
the Company or upon the death or Disability of the grantee.  A grantee of a Stock Option shall have the
rights of a stockholder only as to shares acquired upon the exercise of the
Stock Option and not as to any unexercised portion of the Stock Option.

 

(e)                                  Method of Exercise.  Stock Options may be exercised in
whole or in part by giving written notice of exercise to the Company or to such
third-party service provider as may be designated by the Company for such
purpose, specifying the number of shares to be purchased.  Payment of the purchase price may be made by
one or more of the following methods to the extent provided in the Option Award
Agreement:

 

(i)  In cash, by certified or bank check or other instrument
acceptable to the Administrator;

 

(ii)  Through the delivery (or attestation to the ownership) of
shares of Stock that have been purchased by the optionee on the open market or
that are beneficially owned by the optionee and are not then subject to
restrictions under any Company plan. 
Such surrendered shares shall be valued at Fair Market Value on the
exercise date.  To the extent required to
avoid variable accounting treatment under FAS 123R or other applicable accounting
rules, such surrendered shares shall have been owned by the optionee for at
least six months; or

 

(iii)  By the optionee delivering to the Company or its
third-party designee a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company cash or
a check payable and acceptable to the Company for the purchase price; provided
that in the event the optionee chooses to pay the purchase price as so
provided, the optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment procedure.

 

7

 

Payment instruments will be received subject
to collection.  The transfer to the
optionee on the records of the Company or of the Company’s transfer agent of
the shares of Stock to be purchased pursuant to the exercise of a Stock Option
will be contingent upon receipt from the optionee (or a purchaser acting in his
or her stead in accordance with the provisions of the Stock Option) by the
Company of the full purchase price for such shares and the fulfillment of any
other requirements contained in the Option Award Agreement or applicable
provisions of laws (including the satisfaction of any withholding taxes that
the Company is obligated to withhold with respect to the optionee).  In the event an optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation
method, the number of shares of Stock transferred to the optionee upon the
exercise of the Stock Option shall be net of the number of attested
shares.  In the event that the Company
establishes, for itself or using the services of a third party, an automated
system for the exercise of Stock Options, such as a system using an internet
website or interactive voice response, then the paperless exercise of Stock
Options may be permitted through the use of such an automated system.

 

(f)                                    Annual Limit on Incentive Stock Options.  To the extent required for “incentive
stock option” treatment under Section 422 of the Code, the aggregate Fair
Market Value (determined as of the time of grant) of the shares of Stock with
respect to which Incentive Stock Options granted under this Plan and any other
plan of the Company or of its parent corporation or any Subsidiary become
exercisable for the first time by an optionee during any calendar year shall
not exceed $100,000.  To the extent that
any Stock Option exceeds this limit, it shall constitute a Non-Qualified Stock
Option.

 

SECTION 6.                            RESTRICTED STOCK AWARDS

 

(a)                                  Nature of Restricted Stock Awards.  The Administrator shall determine
the restrictions and conditions applicable to each Restricted Stock Award at
the time of grant.  Conditions may be
based on continuing employment (or other service relationship) and/or
achievement of pre-established performance goals and objectives.  The grant of a Restricted Stock Award is
contingent on the grantee executing a Restricted Stock Award Agreement.  The terms and conditions of each such
Restricted Stock Award Agreement shall be determined by the Administrator, and
such terms and conditions may differ among individual Awards and grantees.

 

(b)                                 Rights as a Stockholder.  Upon execution of a Restricted
Stock Award Agreement and payment of any applicable purchase price, a grantee
shall have the rights of a stockholder with respect to the voting of the
Restricted Stock, subject to such conditions contained in the Restricted Stock
Award Agreement.  Unless the
Administrator shall otherwise determine, (i) uncertificated Restricted
Stock shall be accompanied by a notation on the records of the Company or the
Company’s transfer agent to the effect that they are subject to forfeiture
until such Restricted Stock are vested as provided in Section 6(d) below,
and (ii) certificated Restricted Stock shall remain in the possession of
the Company until such Restricted Stock is vested as provided in Section 6(d) below,
and the grantee shall be required, as a condition of the grant, to deliver to
the Company such instruments of transfer as the Administrator may prescribe.

 

(c)                                  Restrictions. 
Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the applicable Restricted Stock Award Agreement.  Except in the case of a Change in Control or
liquidation of 

 

8

 

the Company or upon the death or Disability of the grantee, if a
grantee’s employment (or other service relationship) with the Company and its
Subsidiaries terminates for any reason, any Restricted Stock that has not
vested at the time of termination shall automatically and without any
requirement of notice to such grantee from, or other action by or on behalf of,
the Company be deemed to have been reacquired by the Company at its original
purchase price (if any) from such grantee or such grantee’s legal
representative simultaneously with such termination of employment (or other
service relationship), and thereafter shall cease to represent any ownership of
the Company by the grantee or rights of the grantee as a stockholder.  Following such deemed reacquisition of shares
of unvested Restricted Stock that are represented by physical certificates, a
grantee shall surrender such certificates to the Company upon request without
consideration.

 

(d)                                 Vesting of Restricted Stock.  The Administrator at the time of
grant shall specify and include in the applicable Restricted Stock Award
Agreement the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company’s right of repurchase
or forfeiture shall lapse.  Subsequent to
such date or dates and/or the attainment of such pre-established performance
goals, objectives and other conditions, the shares on which all restrictions
have lapsed shall no longer be Restricted Stock and shall be deemed “vested”.  Except in the case of a Change in Control or
liquidation of the Company or upon the death or Disability of the grantee, a
grantee’s rights in any shares of Restricted Stock that have not vested shall
automatically terminate upon the grantee’s termination of employment (or other
service relationship) with the Company and its Subsidiaries and such shares
shall be subject to the provisions of Section 6(c) above.

 

SECTION 7.                            RESTRICTED STOCK UNITS AND STOCK APPRECIATION RIGHTS

 

The Administrator may grant RSUs and SARs in
respect of such number of shares of Stock subject to the Plan as it shall
determine in its sole discretion.  The
terms and conditions of any such RSUs or SARs shall be contained in an RSU
Agreement or SAR Agreement as the case may be.

 

SECTION 8.                            TRANSFERABILITY OF AWARDS

 

(a)                                  Transferability. 
Except as provided in Section 8(b) below, during a
grantee’s lifetime, his or her Awards shall be exercisable only by the grantee,
or by the grantee’s legal representative or guardian in the event of the
grantee’s incapacity.  No Awards shall be
sold, assigned, transferred or otherwise encumbered or disposed of by a grantee
other than by will or by the laws of descent and distribution.  No Awards shall be subject, in whole or in
part, to attachment, execution, or levy of any kind, and any purported transfer
in violation hereof shall be null and void.

 

(b)                                 Administrator Action. 
Notwithstanding Section 8(a), the Administrator, in its
discretion, may provide either in the Award Agreement regarding a given Award
or by subsequent written approval that the grantee may transfer his or her
Awards (other than any Incentive Stock Options) to his or her immediate family
members, to trusts for the benefit of such family members, or to partnerships
or limited liability companies in which such family members are the only
partners or members, provided that the transferee agrees in writing with 

 

9

 

the Company to be bound by all of the terms and conditions of the Plan
and the applicable Award.

 

(c)                                  Family Member. 
For purposes of Section 8(b), “family member” shall mean
a grantee’s child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the grantee’s household (other than
a tenant or employee of the grantee), a trust in which these persons (or the
grantee) have more than 50 percent of the beneficial interest, a foundation in
which these persons (or the grantee) control the management of assets, and any
other entity in which these persons (or the grantee) own more than 50 percent
of the voting interests.

 

(d)                                 Designation of Beneficiary.  Each grantee to whom an Award has
been made under the Plan may designate a beneficiary or beneficiaries to
exercise any Award or receive any payment under any Award payable on or after
the grantee’s death.  Any such designation
shall be on a form provided for that purpose by the Administrator and shall not
be effective until received by the Administrator.  If no beneficiary has been designated by a
deceased grantee, or if the designated beneficiaries have predeceased the grantee,
the beneficiary shall be the grantee’s estate.

 

SECTION 9.                            TAX WITHHOLDING

 

(a)                                  Payment by Grantee. 
Each grantee shall, no later than the date as of which the
value of an Award or of any Stock or other amounts received thereunder first
becomes includable in the gross income of the grantee for federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any federal, state, or local taxes of any
kind required by law to be withheld by the Company with respect to such
income.  The Company and its Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the grantee.  The Company’s obligation to deliver evidence
of book entry (or stock certificates) to any grantee is subject to and
conditioned on tax withholding obligations being satisfied by the grantee.

 

(b)                                 Payment in Stock. 
Subject to approval by the Administrator, a grantee may elect
to have the Company’s minimum required tax withholding obligation (and not more
than such amount) satisfied, in whole or in part, by authorizing the Company to
withhold from shares of Stock to be issued pursuant to any Award a number of
shares with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount due.

 

SECTION 10.                      SECTION 409A
AWARDS

 

To the extent that any Award is determined to
constitute “nonqualified deferred compensation” within the meaning of Section 409A
(a “409A Award”), the Award shall be subject to such additional rules and
requirements as specified by the Administrator from time to time in order to
comply with Section 409A.  In this
regard, if any amount under a 409A Award is payable upon a “separation from
service” (within the meaning of Section 409A) to a grantee who is then
considered a “specified employee” (within the meaning of Section 409A),
then no such 

 

10

 

payment shall be made prior to the date that is the earlier of (i) six
months and one day after the grantee’s separation from service, or (ii) the
grantee’s death, but only to the extent such delay is necessary to prevent such
payment from being subject to interest, penalties and/or additional tax imposed
pursuant to Section 409A.  Further,
the settlement of any such Award may not be accelerated except to the extent
permitted by Section 409A.

 

SECTION 11.                      TRANSFER, LEAVE OF ABSENCE, ETC.

 

For purposes of the Plan, the following
events shall not be deemed a termination of employment:  (i) a transfer to the employment of the
Company from a Subsidiary or from the Company to a Subsidiary, or from one
Subsidiary to another; or (ii) an approved leave of absence for military
service or sickness, or for any other purpose approved by the Company, if the
employee’s right to re-employment is guaranteed either by a statute or by
contract or under the policy pursuant to which the leave of absence was granted
or if the Administrator otherwise so provides in writing.

 

SECTION 12.                      AMENDMENTS AND TERMINATION

 

The Board may, at any time, amend or
discontinue the Plan and the Administrator may, at any time, amend or cancel
any outstanding Award for the purpose of satisfying changes in law or for any
other lawful purpose, but no such action shall adversely affect rights under
any outstanding Award without the holder’s consent.  To the extent required under the rules of
any securities exchange or market system on which the Stock is listed, to the
extent determined by the Administrator to be required by the Code to ensure
that Incentive Stock Options granted under the Plan are qualified under Section 422
of the Code or to ensure that compensation earned under Awards qualifies as
performance-based compensation under Section 162(m) of the Code, or
to the extent determined by the Administrator to be required to ensure the
availability to the Plan of the protections of Section 16(b) of the
Exchange Act or for any other reason under applicable law, Plan amendments
shall be subject to the approval of the Company’s stockholders entitled to vote
at a meeting of stockholders.  Nothing in
this Section 12 shall limit the Administrator’s authority to take any
action permitted pursuant to Section 3(c) or 3(d).

 

SECTION 13.                      STATUS OF PLAN

 

With respect to the portion of any Award that
has not been exercised and any payments in cash, Stock or other consideration
not received by a grantee, a grantee shall have no rights greater than those of
a general creditor of the Company unless the Administrator shall otherwise
expressly determine in connection with any Award or Awards.  In its sole discretion, the Administrator may
authorize the creation of trusts or other arrangements to meet the Company’s
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

 

SECTION 14.                      GENERAL PROVISIONS

 

(a)                                  No Distribution.  The Administrator may require each
person acquiring Stock pursuant to an Award to represent to and agree with the
Company in writing that such person is acquiring the shares without a view to
distribution thereof.

 

11

 

(b)                                 Delivery of Stock Certificates.  Stock certificates to grantees
under this Plan shall be deemed delivered for all purposes when the Company or
a transfer agent of the Company shall have mailed such certificates in the
United States mail, addressed to the grantee, at the grantee’s last known
address on file with the Company. 
Uncertificated Stock shall be deemed delivered for all purposes when the
Company or a transfer agent of the Company shall have given to the grantee by
electronic mail (with proof of receipt) or by United States mail, addressed to the
grantee, at the grantee’s last known address on file with the Company, notice
of issuance and recorded the issuance in its records (which may include
electronic “book entry” records). 
Notwithstanding anything herein to the contrary, the Company shall not
be required to issue or deliver any certificates evidencing shares of Stock
pursuant to the exercise of any Award, unless and until the Administrator has
determined, with advice of counsel (to the extent the Administrator deems such
advice necessary or advisable), that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange
on which the shares of Stock are listed, quoted or traded.  All stock certificates delivered pursuant to
the Plan shall be subject to any stop-transfer orders and other restrictions as
the Administrator deems necessary or advisable to comply with federal, state or
foreign jurisdiction, securities or other laws, and the rules, regulations and
requirements of any stock exchange on which the Stock is listed or traded.  The Administrator may place legends on any
stock certificate to reference restrictions applicable to the Stock.  In addition to the terms and conditions
provided herein, the Administrator may require that an individual make such
reasonable covenants, agreements, and representations as the Administrator, in
its discretion, deems necessary or advisable in order to comply with any such
laws, rules, regulations or requirements. 
The Administrator shall have the right to require any individual to
comply with any timing or other restrictions with respect to the settlement or
exercise of any Award, including a window-period limitation, as may be imposed
in the discretion of the Administrator.

 

(c)                                  Stockholder Rights. 
Until Stock is deemed delivered in accordance with Section 14(b),
no right to vote or receive dividends or any other rights of a stockholder will
exist with respect to shares of Stock to be issued in connection with an Award,
notwithstanding the exercise of a Stock Option or any other action by the
grantee with respect to an Award.

 

(d)                                 Other Compensation Arrangements; No Employment
Rights.  Nothing contained in
this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be
either generally applicable or applicable only in specific cases.  The adoption of this Plan and the grant of
Awards do not confer upon any employee or other person any right to continued
employment or other service relationship with the Company or any Subsidiary.

 

(e)                                  Insider Trading Policy Restrictions.  Option exercises and other Awards
under the Plan shall be subject to the Company’s insider trading policy and
procedures, as in effect from time to time.

 

(f)                                    Forfeiture of Awards under Sarbanes-Oxley Act.  If the Company is required to
prepare an accounting restatement due to the material noncompliance of the
Company, as a result of misconduct, with any financial reporting requirement
under the federal securities laws, then any grantee of an Award who is included
among the individuals subject to automatic forfeiture 

 

12

 

under Section 304 of the Sarbanes-Oxley Act of 2002 shall
reimburse the Company for the amount of any Award received by such individual
under the Plan during the 12-month period following the first public issuance
or filing with the Securities and Exchange Commission, as the case may be, of
the financial document embodying such financial reporting requirement.

 

(g)                                 Forfeiture of Awards for Dishonesty.  Notwithstanding anything to the
contrary in the Plan or in any Award Agreement, if the Administrator
determines, after full consideration of the facts presented on behalf of both
the Company and a grantee of an Award, that the grantee has been engaged in
fraud, embezzlement, theft, commission of a felony or proven dishonesty in the
course of his or her employment by or performance of services for the Company
or a Subsidiary that has damaged the Company or a Subsidiary in any way, or has
disclosed trade secrets or other proprietary information of the Company or a
Subsidiary or has otherwise violated the terms of his or her employment by, or
any other agreement or understanding with, the Company or any Subsidiary, (i) the
grantee shall forfeit all unexercised Options and/or unvested Restricted Stock,
RSUs and SARs and all exercised Options and vested Restricted Stock, RSUs and
SARs to the extent that the Company has not yet delivered or otherwise released
the shares or other payments in question, (ii) the Company shall have the
right to repurchase all or any part of the shares of Stock acquired by the
grantee upon the earlier exercise of any Option or vesting of Restricted Stock
or vesting of any RSU or SAR, at a price equal to the amount, if any, paid to
the Company by the grantee upon the exercise of such Option, receipt of such
Restricted Stock or vesting of such RSU or SAR,,  and (iii) the Company shall have the
right to recoup the full amount of all cash payments previously paid to the
grantee under any vested RSU or SAR and to recoup the full amount of any profit
realized by the grantee upon the sale of any Restricted Stock that has previously
vested or any shares of Stock acquired upon the grantee’s earlier exercise of
any Option or vesting of any RSU or SAR, which recoupment shall be reduced by
an amount equal to the price, if any, paid to the Company by the grantee upon
the earlier issuance of such Restricted Stock, exercise of such Option or
vesting of such RSU or SAR.  The decision
of the Administrator as to the cause of a grantee’s discharge and the damage
done to the Company or a Subsidiary shall be final, binding and
conclusive.  No decision of the
Administrator, however, shall affect in any manner the finality of the
discharge of a grantee by the Company or a Subsidiary.

 

SECTION 15.                      EFFECTIVE DATE OF PLAN

 

The Plan shall become effective on the date
on which it is adopted by the Board (the “Effective Date”), but no Award
granted under the Plan shall become exercisable unless and until the Plan shall
have been approved by the Company’s shareholders.  If such shareholder approval is not obtained
within twelve months after the Effective Date, the Awards previously granted
under the Plan shall not vest and shall terminate and no Awards shall be
granted under the Plan thereafter. 
Amendments to the Plan not requiring shareholder approval shall become effective
when adopted by the Board; amendments requiring shareholder approval (as
provided in Section 12) shall become effective when adopted by the Board,
but no Award granted after the date of such amendment shall become exercisable
(to the extent that such amendment to the Plan was required to enable the
Company to grant such Award to a particular person) unless and until such
amendment shall have been approved by the Company’s shareholders.  If such shareholder approval is not obtained
within twelve months of the Board’s adoption of such amendment, any Awards
granted on or after the date of such amendment shall terminate to the extent
that such 

 

13

 

amendment was required to enable the Company to grant  such Award to a particular grantee.  Subject to this limitation, Awards may be
granted under the Plan at any time during the period from and including the
Effective Date through and including the day next preceding the tenth
anniversary of the Effective Date.

 

SECTION 16.                      GOVERNING LAW

 

The Plan and all Awards and actions taken
thereunder shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Massachusetts, applied without regard to conflict of law
principles.

 

14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00158-of-00352.parquet"}]]