Document:

exv10w2

    Exhibit 10.2

 

    

    

 

    Cardica,
    Inc.

    

 

    2005
    Equity Incentive Plan

 

    Adopted
    by the Board of Directors: October 13, 2005

    Approved by the Stockholders: December 27, 2005

    As Amended by the Board of Directors: September 29, 2006

    Approved by the Stockholders: November 8, 2006

    As Amended by the Board of Directors: October 10, 2007

    Approved by the Stockholders: November 14, 2007

    As Amended by the Board of Directors: August 13, 2008

    Approved by the
    Stockholders: November 19, 2008

    Termination Date: October 12, 2015

 

		
	
    1.  
	
    General.

 

    (a) Eligible Stock Award Recipients.  The
    persons eligible to receive Stock Awards are Employees,
    Directors and Consultants.

 

    (b) Available Stock Awards.  The Plan
    provides for the grant of the following Stock Awards:
    (i) Incentive Stock Options, (ii) Nonstatutory Stock
    Options, (iii) Stock Purchase Awards, (iv) Stock Bonus
    Awards, (v) Stock Appreciation Rights, (vi) Stock Unit
    Awards, and (vii) Other Stock Awards.

 

    (c) Purpose.  The Company, by means of the
    Plan, seeks to secure and retain the services of the group of
    persons eligible to receive Stock Awards as set forth in
    Section 1(a), to provide incentives for such persons to
    exert maximum efforts for the success of the Company and any
    Affiliate and to provide a means by which such eligible
    recipients may be given an opportunity to benefit from increases
    in value of the Common Stock through the granting of Stock
    Awards.

 

		
	
    2.  
	
    Definitions.

 

    As used in the Plan, the following definitions shall apply to
    the capitalized terms indicated below:

 

    (a) “Affiliate” means (i) any
    corporation (other than the Company) in an unbroken chain of
    corporations ending with the Company, provided each corporation
    in the unbroken chain (other than the Company) owns, at the time
    of the determination, stock possessing fifty percent (50%) or
    more of the total combined voting power of all classes of stock
    in one of the other corporations in such chain, and
    (ii) any corporation (other than the Company) in an
    unbroken chain of corporations beginning with the Company,
    provided each corporation (other than the last corporation) in
    the unbroken chain owns, at the time of the determination, stock
    possessing fifty percent (50%) or more of the total combined
    voting power of all classes of stock in one of the other
    corporations in such chain. The Board shall have the authority
    to determine (i) the time or times at which the ownership
    tests are applied, and (ii) whether “Affiliate”
    includes entities other than corporations within the foregoing
    definition.

 

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

 

    (c) “Capitalization Adjustment” has the
    meaning ascribed to that term in Section 10(a).

 

    (d) “Cause” means, with respect to a
    Participant, the occurrence of any of the following:
    (i) such Participant’s commission of any felony or any
    crime involving fraud, dishonesty or moral turpitude under the
    laws of the United States or any state thereof; (ii) such
    Participant’s attempted commission of, or participation in,
    a fraud or act of dishonesty against the Company;
    (iii) such Participant’s intentional, material
    violation of any material contract or agreement between the
    Participant and the Company or any statutory duty owed to the
    Company; (iv) such Participant’s unauthorized use or
    disclosure of the Company’s confidential information or

    

    1

 

    trade secrets; or (v) such Participant’s gross
    misconduct. The determination that a termination is for Cause
    shall be made by the Company in its sole discretion. Any
    determination by the Company that the Continuous Service of a
    Participant was terminated with or without Cause for the
    purposes of outstanding Stock Awards held by such Participant
    shall have no effect upon any determination of the rights or
    obligations of the Company or such Participant for any other
    purpose.

 

    (e) “Change in Control” means the
    occurrence, in a single transaction or in a series of related
    transactions, of any one or more of the following events:

 

    (i) any Exchange Act Person becomes the Owner, directly or
    indirectly, of securities of the Company representing more than
    fifty percent (50%) of the combined voting power of the
    Company’s then outstanding securities other than by virtue
    of a merger, consolidation or similar transaction.
    Notwithstanding the foregoing, a Change in Control shall not be
    deemed to occur (A) on account of the acquisition of
    securities of the Company by an investor, any affiliate thereof
    or any other Exchange Act Person from the Company in a
    transaction or series of related transactions the primary
    purpose of which is to obtain financing for the Company through
    the issuance of equity securities or (B) solely because the
    level of Ownership held by any Exchange Act Person (the
    “Subject Person”) exceeds the designated
    percentage threshold of the outstanding voting securities as a
    result of a repurchase or other acquisition of voting securities
    by the Company reducing the number of shares outstanding,
    provided that if a Change in Control would occur (but for the
    operation of this sentence) as a result of the acquisition of
    voting securities by the Company, and after such share
    acquisition, the Subject Person becomes the Owner of any
    additional voting securities that, assuming the repurchase or
    other acquisition had not occurred, increases the percentage of
    the then outstanding voting securities Owned by the Subject
    Person over the designated percentage threshold, then a Change
    in Control shall be deemed to occur;

 

    (ii) there is consummated a merger, consolidation or
    similar transaction involving (directly or indirectly) the
    Company and, immediately after the consummation of such merger,
    consolidation or similar transaction, the stockholders of the
    Company immediately prior thereto do not Own, directly or
    indirectly, either (A) outstanding voting securities
    representing more than fifty percent (50%) of the combined
    outstanding voting power of the surviving Entity in such merger,
    consolidation or similar transaction or (B) more than fifty
    percent (50%) of the combined outstanding voting power of the
    parent of the surviving Entity in such merger, consolidation or
    similar transaction, in each case in substantially the same
    proportions as their Ownership of the outstanding voting
    securities of the Company immediately prior to such transaction;

 

    (iii) the stockholders of the Company approve or the Board
    approves a plan of complete dissolution or liquidation of the
    Company, or a complete dissolution or liquidation of the Company
    shall otherwise occur;

 

    (iv) there is consummated a sale, lease, exclusive license
    or other disposition of all or substantially all of the
    consolidated assets of the Company and its Subsidiaries, other
    than a sale, lease, license or other disposition of all or
    substantially all of the consolidated assets of the Company and
    its Subsidiaries to an Entity, more than fifty percent (50%) of
    the combined voting power of the voting securities of which are
    Owned by stockholders of the Company in substantially the same
    proportions as their Ownership of the outstanding voting
    securities of the Company immediately prior to such sale, lease,
    license or other disposition; or

 

    (v) individuals who, on the date this Plan is adopted by
    the Board, are members of the Board (the “Incumbent
    Board”) cease for any reason to constitute at least
    a majority of the members of the Board; provided, however,
    that if the appointment or election (or nomination for
    election) of any new Board member was approved or recommended by
    a majority vote of the members of the Incumbent Board then still
    in office, such new member shall, for purposes of this Plan, be
    considered as a member of the Incumbent Board.

 

    The term Change in Control shall not include a sale of assets,
    merger or other transaction effected exclusively for the purpose
    of changing the domicile of the Company.

    

    2

 

    Notwithstanding the foregoing or any other provision of this
    Plan, the definition of Change in Control (or any analogous
    term) in an individual written agreement between the Company or
    any Affiliate and the Participant shall supersede the foregoing
    definition with respect to Stock Awards subject to such
    agreement; provided, however, that if no definition of
    Change in Control or any analogous term is set forth in such an
    individual written agreement, the foregoing definition shall
    apply.

 

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

 

    (g) “Committee” means a committee of one
    (1) or more members of the Board to whom authority has been
    delegated by the Board in accordance with Section 3(c).

 

    (h) “Common Stock” means the common stock
    of the Company.

 

    (i) “Company” means Cardica, Inc., a
    Delaware corporation.

 

    (j) “Consultant” means any person,
    including an advisor, who is (i) engaged by the Company or
    an Affiliate to render consulting or advisory services and is
    compensated for such services, or (ii) serving as a member
    of the Board of Directors of an Affiliate and is compensated for
    such services. However, service solely as a Director, or payment
    of a fee for such service, shall not cause a Director to be
    considered a “Consultant” for purposes of the Plan.

 

    (k) “Continuous Service” means that the
    Participant’s service with the Company or an Affiliate,
    whether as an Employee, Director or Consultant, is not
    interrupted or terminated. A change in the capacity in which the
    Participant renders service to the Company or an Affiliate as an
    Employee, Consultant or Director or a change in the entity for
    which the Participant renders such service, provided that there
    is no interruption or termination of the Participant’s
    service with the Company or an Affiliate, shall not terminate a
    Participant’s Continuous Service; provided, however,
    if the corporation for which a Participant is rendering service
    ceases to qualify as an Affiliate, as determined by the Board in
    its sole discretion, such Participant’s Continuous Service
    shall be considered to have terminated on the date such
    corporation ceases to qualify as an Affiliate. For example, a
    change in status from an employee of the Company to a consultant
    of an Affiliate or to a Director shall not constitute an
    interruption of Continuous Service. To the extent permitted by
    law, the Board or the chief executive officer of the Company, in
    that party’s sole discretion, may determine whether
    Continuous Service shall be considered interrupted in the case
    of any leave of absence approved by that party, including sick
    leave, military leave or any other personal leave.
    Notwithstanding the foregoing, a leave of absence shall be
    treated as Continuous Service for purposes of vesting in a Stock
    Award only to such extent as may be provided in the
    Company’s leave of absence policy or in the written terms
    of the Participant’s leave of absence.

 

    (l) “Corporate Transaction” means the
    occurrence, in a single transaction or in a series of related
    transactions, of any one or more of the following events:

 

    (i) a sale or other disposition of all or substantially
    all, as determined by the Board in its sole discretion, of the
    consolidated assets of the Company and its Subsidiaries;

 

    (ii) a sale or other disposition of at least ninety percent
    (90%) of the outstanding securities of the Company;

 

    (iii) the consummation of a merger, consolidation or
    similar transaction following which the Company is not the
    surviving corporation; or

 

    (iv) the consummation of a merger, consolidation or similar
    transaction following which the Company is the surviving
    corporation but the shares of Common Stock outstanding
    immediately preceding the merger, consolidation or similar
    transaction are converted or exchanged by virtue of the merger,
    consolidation or similar transaction into other property,
    whether in the form of securities, cash or otherwise.

 

    (m) “Covered Employee” means the chief
    executive officer and the four (4) other highest
    compensated officers of the Company for whom total compensation
    is required to be reported to stockholders under the Exchange
    Act, as determined for purposes of Section 162(m) of the
    Code.

    

    3

 

    (n) “Director” means a member of the Board.

 

    (o) “Disability” means the permanent and
    total disability of a person within the meaning of
    Section 22(e)(3) of the Code.

 

    (p) “Employee” means any person employed
    by the Company or an Affiliate. However, service solely as a
    Director, or payment of a fee for such services, shall not cause
    a Director to be considered an “Employee” for purposes
    of the Plan.

 

    (q) “Entity” means a corporation,
    partnership or other entity.

 

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

 

    (s) “Exchange Act Person” means any
    natural person, Entity or “group” (within the meaning
    of Section 13(d) or 14(d) of the Exchange Act), except that
    “Exchange Act Person” shall not include (i) the
    Company or any Subsidiary of the Company, (ii) any employee
    benefit plan of the Company or any Subsidiary of the Company or
    any trustee or other fiduciary holding securities under an
    employee benefit plan of the Company or any Subsidiary of the
    Company, (iii) an underwriter temporarily holding
    securities pursuant to an offering of such securities,
    (iv) an Entity Owned, directly or indirectly, by the
    stockholders of the Company in substantially the same
    proportions as their Ownership of stock of the Company; or
    (v) any natural person, Entity or “group” (within
    the meaning of Section 13(d) or 14(d) of the Exchange Act)
    that, as of the effective date of the Plan as set forth in
    Section 13, is the Owner, directly or indirectly, of
    securities of the Company representing more than fifty percent
    (50%) of the combined voting power of the Company’s then
    outstanding securities.

 

    (t) “Fair Market Value” means, as of any
    date, the value of the Common Stock determined as follows:

 

    (i) If the Common Stock is listed on any established stock
    exchange or traded on the Nasdaq Global Market (formerly the
    Nasdaq National Market) or the Nasdaq Capital Market (formerly
    the Nasdaq SmallCap Market), the Fair Market Value of a share of
    Common Stock shall be the closing sales price for such stock (or
    the closing bid, if no sales were reported) as quoted on such
    exchange or market (or the exchange or market with the greatest
    volume of trading in the Common Stock) on the date in question,
    as reported in The Wall Street Journal or such other
    source as the Board deems reliable. Unless otherwise provided by
    the Board, if there is no closing sales price (or closing bid if
    no sales were reported) for the Common Stock on the date in
    question, then the Fair Market Value shall be the closing sales
    price (or closing bid if no sales were reported) on the last
    preceding date for which such quotation exists.

 

    (ii) In the absence of such markets for the Common Stock,
    the Fair Market Value shall be determined by the Board in good
    faith.

 

    (u) “Incentive Stock Option” means an
    Option intended to qualify as an incentive stock option within
    the meaning of Section 422 of the Code and the regulations
    promulgated thereunder.

 

    (v) “IPO Date” means the date of the
    underwriting agreement between the Company and the
    underwriter(s) managing the initial public offering of the
    Common Stock, pursuant to which the Common Stock is priced for
    the initial public offering.

 

    (w) “Non-Employee Director” means a
    Director who either (i) is not a current employee or
    officer of the Company or an Affiliate, does not receive
    compensation, either directly or indirectly, from the Company or
    an Affiliate for services rendered as a consultant or in any
    capacity other than as a Director (except for an amount as to
    which disclosure would not be required under Item 404(a) of
    Regulation S-K
    promulgated pursuant to the Securities Act
    (“Regulation S-K”)),
    does not possess an interest in any other transaction for which
    disclosure would be required under Item 404(a) of
    Regulation S-K,
    and is not engaged in a business relationship for which
    disclosure would be required pursuant to Item 404(b) of
    Regulation S-K;
    or (ii) is otherwise considered a “non-employee
    director” for purposes of
    Rule 16b-3.

 

    (x) “Nonstatutory Stock Option” means an
    Option not intended to qualify as an Incentive Stock Option.

    

    4

 

    (y) “Officer” means a person who is an
    officer of the Company within the meaning of Section 16 of
    the Exchange Act and the rules and regulations promulgated
    thereunder.

 

    (z) “Option” means an Incentive Stock
    Option or a Nonstatutory Stock Option to purchase shares of
    Common Stock granted pursuant to the Plan.

 

    (aa) “Option Agreement” means a written
    agreement between the Company and an Optionholder evidencing the
    terms and conditions of an Option grant. Each Option Agreement
    shall be subject to the terms and conditions of the Plan.

 

    (bb) “Optionholder” means a person to whom
    an Option is granted pursuant to the Plan or, if applicable,
    such other person who holds an outstanding Option.

 

    (cc) “Other Stock Award” means an award
    based in whole or in part by reference to the Common Stock which
    is granted pursuant to the terms and conditions of
    Section 7(f).

 

    (dd) “Other Stock Award Agreement” means a
    written agreement between the Company and a holder of an Other
    Stock Award evidencing the terms and conditions of an Other
    Stock Award grant. Each Other Stock Award Agreement shall be
    subject to the terms and conditions of the Plan.

 

    (ee) “Outside Director” means a Director
    who either (i) is not a current employee of the Company or
    an “affiliated corporation” (within the meaning of
    Treasury Regulations promulgated under Section 162(m) of
    the Code), is not a former employee of the Company or an
    “affiliated corporation” who receives compensation for
    prior services (other than benefits under a tax-qualified
    retirement plan) during the taxable year, has not been an
    officer of the Company or an “affiliated corporation,”
    and does not receive remuneration from the Company or an
    “affiliated corporation,” either directly or
    indirectly, in any capacity other than as a Director, or
    (ii) is otherwise considered an “outside
    director” for purposes of Section 162(m) of the Code.

 

    (ff) “Own,” “Owned,”
    “Owner,” “Ownership” A person or Entity
    shall be deemed to “Own,” to have “Owned,”
    to be the “Owner” of, or to have acquired
    “Ownership” of securities if such person or Entity,
    directly or indirectly, through any contract, arrangement,
    understanding, relationship or otherwise, has or shares voting
    power, which includes the power to vote or to direct the voting,
    with respect to such securities.

 

    (gg) “Participant” means a person to whom
    a Stock Award is granted pursuant to the Plan or, if applicable,
    such other person who holds an outstanding Stock Award.

 

    (hh) “Performance Criteria” means the one
    or more criteria that the Board shall select for purposes of
    establishing the Performance Goals for a Performance Period. The
    Performance Criteria that shall be used to establish such
    Performance Goals may be based on any one of, or combination of,
    the following: (i) earnings per share; (ii) earnings
    before interest, taxes and depreciation; (iii) earnings
    before interest, taxes, depreciation and amortization (EBITDA);
    (iv) net earnings; (v) return on equity;
    (vi) return on assets, investment, or capital employed;
    (vii) operating margin; (viii) gross margin;
    (ix) operating income; (x) net income (before or after
    taxes); (xi) net operating income; (xii) net operating
    income after tax; (xiii) pre- and after-tax income;
    (xiv) pre-tax profit; (xv) operating cash flow;
    (xvi) sales or revenue targets; (xvii) increases in
    revenue or product revenue; (xviii) expenses and cost
    reduction goals; (xix) improvement in or attainment of
    expense levels; (xx) improvement in or attainment of
    working capital levels; (xxi) economic value added;
    (xxii) market share; (xxiii) cash flow;
    (xxiv) cash flow per share; (xxv) share price
    performance; (xxvi) debt reduction;
    (xxvii) implementation or completion of projects or
    processes; (xxviii) customer satisfaction;
    (xxix) total stockholder return;
    (xxx) stockholders’ equity; and (xxxi) other
    measures of performance selected by the Board. Partial
    achievement of the specified criteria may result in the payment
    or vesting corresponding to the degree of achievement as
    specified in the Stock Award Agreement. The Board shall, in its
    sole discretion, define the manner of calculating the
    Performance Criteria it selects to use for such Performance
    Period.

 

    (ii) “Performance Goals” means, for a
    Performance Period, the one or more goals established by the
    Board for the Performance Period based upon the Performance
    Criteria. Performance Goals may be based on a Company-wide
    basis, with respect to one or more business units, divisions,
    Affiliates, or business segments, and in either absolute terms
    or relative to the performance of one or more comparable
    companies or a relevant index. The Board is authorized to make
    adjustments in the method of calculating the attainment of

    

    5

 

    Performance Goals for a Performance Period as follows:
    (i) to exclude restructuring
    and/or other
    nonrecurring charges; (ii) to exclude exchange rate
    effects, as applicable, for
    non-U.S. dollar
    denominated net sales and operating earnings; (iii) to
    exclude the effects of changes to generally accepted accounting
    standards required by the Financial Accounting Standards Board;
    (iv) to exclude the effects of any statutory adjustments to
    corporate tax rates; and (v) to exclude the effects of any
    “extraordinary items” as determined under generally
    accepted accounting principles. The Board also retains the
    discretion to reduce or eliminate the compensation or economic
    benefit due upon attainment of Performance Goals.

 

    (jj) “Performance Period” means the one or
    more periods of time, which may be of varying and overlapping
    durations, as the Committee may select, over which the
    attainment of one or more Performance Goals will be measured for
    the purpose of determining a Participant’s right to and the
    payment of a Stock Award.

 

    (kk) “Performance Stock Award” means an
    award of shares of Common Stock which is granted pursuant to the
    terms and conditions of Section 7(e).

 

    (ll) “Plan” means this Cardica, Inc. 2005
    Equity Incentive Plan.

 

    (mm) “Prior Plan” means the Company’s
    1997 Equity Incentive Plan in effect immediately prior to the
    effective date of the Plan as set forth in Section 13.

 

    (nn) “Rule 16b-3”
    means
    Rule 16b-3
    promulgated under the Exchange Act or any successor to
    Rule 16b-3,
    as in effect from time to time.

 

    (oo) “Securities Act” means the Securities
    Act of 1933, as amended.

 

    (pp) “Stock Appreciation Right” means a
    right to receive the appreciation on Common Stock that is
    granted pursuant to the terms and conditions of
    Section 7(d).

 

    (qq) “Stock Appreciation Right Agreement”
    means a written agreement between the Company and a holder
    of a Stock Appreciation Right evidencing the terms and
    conditions of a Stock Appreciation Right grant. Each Stock
    Appreciation Right Agreement shall be subject to the terms and
    conditions of the Plan.

 

    (rr) “Stock Award” means any right granted
    under the Plan, including an Option, a Stock Purchase Award,
    Stock Bonus Award, a Stock Appreciation Right, a Stock Unit
    Award, Performance Stock Award, or any Other Stock Award.

 

    (ss) “Stock Award Agreement” means a
    written agreement between the Company and a Participant
    evidencing the terms and conditions of a Stock Award grant. Each
    Stock Award Agreement shall be subject to the terms and
    conditions of the Plan.

 

    (tt) “Stock Bonus Award” means an award of
    shares of Common Stock which is granted pursuant to the terms
    and conditions of Section 7(b).

 

    (uu) “Stock Bonus Award Agreement” means a
    written agreement between the Company and a holder of a Stock
    Bonus Award evidencing the terms and conditions of a Stock Bonus
    Award grant. Each Stock Bonus Award Agreement shall be subject
    to the terms and conditions of the Plan.

 

    (vv) “Stock Purchase Award” means an award
    of shares of Common Stock which is granted pursuant to the terms
    and conditions of Section 7(a).

 

    (ww) “Stock Purchase Award Agreement”
    means a written agreement between the Company and a holder
    of a Stock Purchase Award evidencing the terms and conditions of
    a Stock Purchase Award grant. Each Stock Purchase Award
    Agreement shall be subject to the terms and conditions of the
    Plan.

 

    (xx) “Stock Unit Award” means a right to
    receive shares of Common Stock which is granted pursuant to the
    terms and conditions of Section 7(c).

 

    (yy) “Stock Unit Award Agreement” means a
    written agreement between the Company and a holder of a Stock
    Unit Award evidencing the terms and conditions of a Stock Unit
    Award grant. Each Stock Unit Award Agreement shall be subject to
    the terms and conditions of the Plan.

    

    6

 

    (zz) “Subsidiary” means, with respect to the
    Company, (i) any corporation of which more than fifty
    percent (50%) of the outstanding capital stock having ordinary
    voting power to elect a majority of the board of directors of
    such corporation (irrespective of whether, at the time, stock of
    any other class or classes of such corporation shall have or
    might have voting power by reason of the happening of any
    contingency) is at the time, directly or indirectly, Owned by
    the Company, and (ii) any partnership in which the Company
    has a direct or indirect interest (whether in the form of voting
    or participation in profits or capital contribution) of more
    than fifty percent (50%).

 

    (aaa) “Ten Percent Stockholder” means a
    person who Owns (or is deemed to Own pursuant to
    Section 424(d) of the Code) stock possessing more than ten
    percent (10%) of the total combined voting power of all classes
    of stock of the Company or any Affiliate.

 

		
	
    3.  
	
    Administration.

 

    (a) Administration by Board.  The Board
    shall administer the Plan unless and until the Board delegates
    administration of the Plan to a Committee, as provided in
    Section 3(c).

 

    (b) Powers of Board.  The Board shall have
    the power, subject to, and within the limitations of, the
    express provisions of the Plan:

 

    (i) To construe and interpret the Plan and Stock Awards
    granted under it, and to establish, amend and revoke rules and
    regulations for its administration. The Board, in the exercise
    of this power, may correct any defect, omission or inconsistency
    in the Plan or in any Stock Award Agreement, in a manner and to
    the extent it shall deem necessary or expedient to make the Plan
    fully effective.

 

    (ii) To determine from time to time (1) which of the
    persons eligible under the Plan shall be granted Stock Awards;
    (2) when and how each Stock Award shall be granted;
    (3) what type or combination of types of Stock Award shall
    be granted; (4) the provisions of each Stock Award granted
    (which need not be identical), including the time or times when
    a person shall be permitted to receive cash or Common Stock
    pursuant to a Stock Award; and (5) the number of shares of
    Common Stock with respect to which a Stock Award shall be
    granted to each such person.

 

    (iii) To accelerate the time at which a Stock Award may
    first be exercised or the time during which a Stock Award or any
    part thereof will vest in accordance with the Plan,
    notwithstanding the provisions in the Stock Award stating the
    time at which it may first be exercised or the time during which
    it will vest.

 

    (iv) To amend the Plan or a Stock Award as provided in
    Section 11.

 

    (v) To terminate or suspend the Plan as provided in
    Section 12.

 

    (vi) Generally, to exercise such powers and to perform such
    acts as the Board deems necessary or expedient to promote the
    best interests of the Company which are not in conflict with the
    provisions of the Plan.

 

    (vii) To adopt such procedures and sub-plans as are
    necessary or appropriate to permit participation in the Plan by
    Employees who are foreign nationals or employed outside the
    United States.

 

    (c) Delegation to Committee.

 

    (i) General.  The Board may delegate some
    or all of the administration of the Plan to a Committee or
    Committees. If administration is delegated to a Committee, the
    Committee shall have, in connection with the administration of
    the Plan, the powers theretofore possessed by the Board that
    have been delegated to the Committee, including the power to
    delegate to a subcommittee any of the administrative powers the
    Committee is authorized to exercise (and references in this Plan
    to the Board shall thereafter be to the Committee or
    subcommittee), subject, however, to such resolutions, not
    inconsistent with the provisions of the Plan, as may be adopted
    from time to time by the Board. The Board may retain the
    authority to concurrently administer the Plan with the Committee
    and may, at any time, revest in the Board some or all of the
    powers previously delegated.

    

    7

 

    (ii) Section 162(m) and
    Rule 16b-3
    Compliance.  In the sole discretion of the Board,
    the Committee may consist solely of two (2) or more Outside
    Directors, in accordance with Section 162(m) of the Code,
    and/or
    solely of two or more Non-Employee Directors, in accordance with
    Rule 16b-3.
    In addition, the Board or the Committee, in its sole discretion,
    may (1) delegate to a committee of one or more members of
    the Board who need not be Outside Directors the authority to
    grant Stock Awards to eligible persons who are either
    (a) not then Covered Employees and are not expected to be
    Covered Employees at the time of recognition of income resulting
    from such Stock Award, or (b) not persons with respect to
    whom the Company wishes to comply with Section 162(m) of
    the Code,
    and/or
    (2) delegate to a committee of one or more members of the
    Board who need not be Non-Employee Directors the authority to
    grant Stock Awards to eligible persons who are not then subject
    to Section 16 of the Exchange Act.

 

    (d) Delegation to an Officer.  The Board
    may delegate to one or more Officers of the Company the
    authority to do one or both of the following (i) designate
    Officers and Employees of the Company or any of its Subsidiaries
    to be recipients of Stock Awards and the terms thereof, and
    (ii) determine the number of shares of Common Stock to be
    subject to such Stock Awards granted to such Officers and
    Employees; provided, however, that the Board resolutions
    regarding such delegation shall specify the total number of
    shares of Common Stock that may be subject to the Stock Awards
    granted by such Officer and that such Officer may not grant a
    Stock Award to himself or herself. Notwithstanding anything to
    the contrary in this Section 3(d), the Board may not
    delegate to an Officer authority to determine the Fair Market
    Value of the Common Stock pursuant to Section 2(t)(ii)
    above.

 

    (e) Effect of Board’s Decision.  All
    determinations, interpretations and constructions made by the
    Board in good faith shall not be subject to review by any person
    and shall be final, binding and conclusive on all persons.

 

    (f) Cancellation and Re-Grant of Stock
    Awards.  Neither the Board nor any Committee shall
    have the authority to: (i) reprice any outstanding Stock
    Awards under the Plan, or (ii) cancel and re-grant any
    outstanding Stock Awards under the Plan, unless the stockholders
    of the Company have approved such an action within a twelve
    (12) month period preceding or following such an event.

 

		
	
    4.  
	
    Shares
    Subject to the Plan.

 

    (a) Share Reserve.  Subject to the
    provisions of Section 10(a) relating to Capitalization
    Adjustments, the number of shares of Common Stock that may be
    issued pursuant to Stock Awards shall not exceed, in the
    aggregate, 1,658,377 shares of Common Stock. Such share
    reserve consists of the number of shares remaining available for
    future issuance under the Prior Plan as of immediately prior to
    the termination of the Prior Plan, plus an additional
    1,650,000 shares of Common Stock. In addition, the share
    reserve shall be increased from time to time by the number of
    shares of Common Stock that (i) are issuable pursuant to
    stock awards outstanding under the Company’s Prior Plan as
    of the effective date of the Plan (as set forth in
    Section 13), and (ii) but for the termination of the
    Prior Plan as of the effective date of the Plan, would otherwise
    have reverted to the share reserve of the Prior Plan.

 

    (b) Reversion of Shares to the Share
    Reserve.  If any Stock Award shall for any reason
    expire or otherwise terminate, in whole or in part, without
    having been exercised in full, if any shares of Common Stock
    issued to a Participant pursuant to a Stock Award are forfeited
    to or repurchased by the Company, including, but not limited to,
    any repurchase or forfeiture caused by the failure to meet a
    contingency or condition required for the vesting of such
    shares, or if any shares of Common Stock are cancelled in
    accordance with the cancellation and regrant provisions of
    Section 3(f), then the shares of Common Stock not issued
    under such Stock Award, or forfeited to or repurchased by the
    Company, shall revert to and again become available for issuance
    under the Plan. If any shares subject to a Stock Award are not
    delivered to a Participant because such shares are withheld for
    the payment of taxes or the Stock Award is exercised through a
    reduction of shares subject to the Stock Award (i.e.,
    “net exercised”), the number of shares that are not
    delivered to the Participant shall remain available for issuance
    under the Plan. If the exercise price of any Stock Award is
    satisfied by tendering shares of Common Stock held by the
    Participant (either by actual delivery or attestation), then the
    number of shares so tendered shall remain available for issuance
    under the Plan. Notwithstanding anything to the contrary in this
    Section 4(b), subject to the provisions of
    Section 10(a) relating to Capitalization Adjustments the
    aggregate maximum number of shares of Common Stock that may be
    issued pursuant to the exercise of Incentive Stock Options shall
    be 1,658,377 shares of Common Stock plus the amount of any
    increase in the number of shares that may be available for
    issuance pursuant to Stock Awards pursuant to Section 4(a).

    

    8

 

    (c) Source of Shares.  The stock issuable
    under the Plan shall be shares of authorized but unissued or
    reacquired Common Stock, including shares repurchased by the
    Company on the open market.

 

		
	
    5.  
	
    Eligibility.

 

    (a) Eligibility for Specific Stock
    Awards.  Incentive Stock Options may be granted
    only to Employees. Stock Awards other than Incentive Stock
    Options may be granted to Employees, Directors and Consultants.

 

    (b) Ten Percent Stockholders.  A Ten
    Percent Stockholder shall not be granted an Incentive Stock
    Option unless the exercise price of such Option is at least one
    hundred ten percent (110%) of the Fair Market Value of the
    Common Stock on the date of grant and the Option is not
    exercisable after the expiration of five (5) years from the
    date of grant.

 

    (c) Section 162(m) Limitation on Annual
    Grants.  Subject to the provisions of
    Section 10(a) relating to Capitalization Adjustments, at
    such time as the Company may be subject to the applicable
    provisions of Section 162(m) of the Code, no Employee shall
    be eligible to be granted Stock Awards whose value is determined
    by reference to an increase over an exercise or strike price of
    at least one hundred percent (100%) of the Fair Market Value of
    the Common Stock on the date the Stock Award is granted covering
    more than two hundred thousand (200,000) shares of Common Stock
    during any calendar year.

 

    (d) Consultants.  A Consultant shall not
    be eligible for the grant of a Stock Award if, at the time of
    grant, a
    Form S-8
    Registration Statement under the Securities Act
    (“Form S-8”)
    is not available to register either the offer or the sale of the
    Company’s securities to such Consultant because of the
    nature of the services that the Consultant is providing to the
    Company, because the Consultant is not a natural person, or
    because of any other rule governing the use of
    Form S-8.

 

		
	
    6.  
	
    Option
    Provisions.

 

    Each Option shall be in such form and shall contain such terms
    and conditions as the Board shall deem appropriate. All Options
    shall be separately designated Incentive Stock Options or
    Nonstatutory Stock Options at the time of grant, and, if
    certificates are issued, a separate certificate or certificates
    shall be issued for shares of Common Stock purchased on exercise
    of each type of Option. The provisions of separate Options need
    not be identical; provided, however, that each Option
    Agreement shall include (through incorporation of provisions
    hereof by reference in the Option or otherwise) the substance of
    each of the following provisions:

 

    (a) Term.  The Board shall determine the
    term of an Option; provided, however, that subject to the
    provisions of Section 5(b) regarding Ten
    Percent Stockholders, no Incentive Stock Option shall be
    exercisable after the expiration of ten (10) years from the
    date of grant.

 

    (b) Exercise Price of an Incentive Stock
    Option.  Subject to the provisions of
    Section 5(b) regarding Ten Percent Stockholders, the
    exercise price of each Incentive Stock Option shall be not less
    than one hundred percent (100%) of the Fair Market Value of the
    Common Stock subject to the Option on the date the Option is
    granted. Notwithstanding the foregoing, an Incentive Stock
    Option may be granted with an exercise price lower than that set
    forth in the preceding sentence if such Option is granted
    pursuant to an assumption or substitution for another option in
    a manner consistent with the provisions of Section 424(a)
    of the Code.

 

    (c) Exercise Price of a Nonstatutory Stock
    Option.  The exercise price of each Nonstatutory
    Stock Option shall be not less than one hundred percent (100%)
    of the Fair Market Value of the Common Stock subject to the
    Option on the date the Option is granted. Notwithstanding the
    foregoing, a Nonstatutory Stock Option may be granted with an
    exercise price lower than that set forth in the preceding
    sentence if such Option is granted pursuant to an assumption or
    substitution for another option in a manner consistent with the
    provisions of Section 424(a) of the Code.

 

    (d) Consideration.  The purchase price of
    Common Stock acquired pursuant to the exercise of an Option
    shall be paid, to the extent permitted by applicable law and as
    determined by the Board in its sole discretion, by any
    combination of the methods of payment set forth below. The Board
    shall have the authority to grant Options that do not permit all
    of the following methods of payment (or otherwise restrict the
    ability to

    

    9

 

    use certain methods) and to grant Options that require the
    consent of the Company to utilize a particular method of
    payment. The methods of payment permitted by this
    Section 6(d) are:

 

    (i) by cash or check;

 

    (ii) pursuant to a program developed under
    Regulation T as promulgated by the Federal Reserve Board
    that, prior to the issuance of Common Stock, results in either
    the receipt of cash (or check) by the Company or the receipt of
    irrevocable instructions to pay the aggregate exercise price to
    the Company from the sales proceeds; provided, however,
    that such program is not in violation of the prohibition on
    the extension of credit to the Company’s executive officers
    and Directors under Section 402 of the Sarbanes-Oxley Act
    of 2002, in the opinion of counsel acceptable to the Company;

 

    (iii) by delivery to the Company (either by actual delivery
    or attestation) of shares of Common Stock;

 

    (iv) by a “net exercise” arrangement pursuant to
    which the Company will reduce the number of shares of Common
    Stock issued upon exercise by the largest whole number of shares
    with a Fair Market Value that does not exceed the aggregate
    exercise price; provided, however, the Company shall
    accept a cash or other payment from the Participant to the
    extent of any remaining balance of the aggregate exercise price
    not satisfied by such reduction in the number of whole shares to
    be issued; provided, however, shares of Common Stock will
    no longer be outstanding under an Option and will not be
    exercisable thereafter to the extent that (i) shares are
    used to pay the exercise price pursuant to the “net
    exercise,” (ii) shares are delivered to the
    Participant as a result of such exercise, and (iii) shares
    are withheld to satisfy tax withholding obligations; or

 

    (v) according to a deferred payment or similar arrangement
    with the Optionholder; provided, however, that interest
    shall compound at least annually and shall be charged at the
    minimum rate of interest necessary to avoid (i) the
    imputation of interest income to the Company and compensation
    income to the Optionholder under any applicable provisions of
    the Code, and (ii) the classification of the Option as a
    liability for financial accounting purposes.

 

    (e) Transferability of Options.  The Board
    may, in its sole discretion, impose such limitations on the
    transferability of Options as the Board shall determine. In the
    absence of such a determination by the Board to the contrary,
    the following restrictions on the transferability of Options
    shall apply:

 

    (i) Restrictions on Transfer.  An Option
    shall not be transferable except by will or by the laws of
    descent and distribution and shall be exercisable during the
    lifetime of the Optionholder only by the Optionholder.

 

    (ii) Domestic Relations
    Orders.  Notwithstanding the foregoing, an Option
    may be transferred pursuant to a domestic relations order.

 

    (iii) Beneficiary
    Designation.  Notwithstanding the foregoing, the
    Optionholder may, by delivering written notice to the Company,
    in a form provided by or otherwise satisfactory to the Company,
    designate a third party who, in the event of the death of the
    Optionholder, shall thereafter be the beneficiary of an Option
    with the right to exercise the Option and receive the Common
    Stock or other consideration resulting from an Option exercise.

 

    (f) Vesting Generally.  The total number
    of shares of Common Stock subject to an Option may vest and
    therefore become exercisable in periodic installments that may
    or may not be equal. The Option may be subject to such other
    terms and conditions on the time or times when it may or may not
    be exercised (which may be based on performance or other
    criteria) as the Board may deem appropriate. The vesting
    provisions of individual Options may vary. The provisions of
    this Section 6(f) are subject to any Option provisions
    governing the minimum number of shares of Common Stock as to
    which an Option may be exercised.

 

    (g) Termination of Continuous Service.  In
    the event that an Optionholder’s Continuous Service
    terminates (other than for Cause or upon the Optionholder’s
    death or Disability), the Optionholder may exercise his or her
    Option (to the extent that the Optionholder was entitled to
    exercise such Option as of the

    

    10

 

    date of termination of Continuous Service) but only within such
    period of time ending on the earlier of (i) the date three
    (3) months following the termination of the
    Optionholder’s Continuous Service (or such longer or
    shorter period specified in the Option Agreement), or
    (ii) the expiration of the term of the Option as set forth
    in the Option Agreement. If, after termination of Continuous
    Service, the Optionholder does not exercise his or her Option
    within the time specified herein or in the Option Agreement (as
    applicable), the Option shall terminate.

 

    (h) Extension of Termination Date.  An
    Optionholder’s Option Agreement may provide that if the
    exercise of the Option following the termination of the
    Optionholder’s Continuous Service (other than upon the
    Optionholder’s death or Disability) would be prohibited at
    any time solely because the issuance of shares of Common Stock
    would violate the registration requirements under the Securities
    Act, then the Option shall terminate on the earlier of
    (i) the expiration of a period of three (3) months
    after the termination of the Optionholder’s Continuous
    Service during which the exercise of the Option would not be in
    violation of such registration requirements, or (ii) the
    expiration of the term of the Option as set forth in the Option
    Agreement.

 

    (i) Disability of Optionholder.  In the
    event that an Optionholder’s Continuous Service terminates
    as a result of the Optionholder’s Disability, the
    Optionholder may exercise his or her Option (to the extent that
    the Optionholder was entitled to exercise such Option as of the
    date of termination of Continuous Service), but only within such
    period of time ending on the earlier of (i) the date twelve
    (12) months following such termination of Continuous
    Service (or such longer or shorter period specified in the
    Option Agreement), or (ii) the expiration of the term of
    the Option as set forth in the Option Agreement. If, after
    termination of Continuous Service, the Optionholder does not
    exercise his or her Option within the time specified herein or
    in the Option Agreement (as applicable), the Option shall
    terminate.

 

    (j) Death of Optionholder.  In the event
    that (i) an Optionholder’s Continuous Service
    terminates as a result of the Optionholder’s death, or
    (ii) the Optionholder dies within the period (if any)
    specified in the Option Agreement after the termination of the
    Optionholder’s Continuous Service for a reason other than
    death, then the Option may be exercised (to the extent the
    Optionholder was entitled to exercise such Option as of the date
    of death) by the Optionholder’s estate, by a person who
    acquired the right to exercise the Option by bequest or
    inheritance or by a person designated as the beneficiary of the
    Option upon the Optionholder’s death, but only within the
    period ending on the earlier of (i) the date eighteen
    (18) months following the date of death (or such longer or
    shorter period specified in the Option Agreement), or
    (ii) the expiration of the term of such Option as set forth
    in the Option Agreement. If, after the Optionholder’s
    death, the Option is not exercised within the time specified
    herein or in the Option Agreement (as applicable), the Option
    shall terminate. If the Optionholder designates a third party
    beneficiary of the Option in accordance with
    Section 6(e)(iii), then upon the death of the Optionholder
    such designated beneficiary shall have the sole right to
    exercise the Option and receive the Common Stock or other
    consideration resulting from the Option exercise.

 

    (k) Termination for Cause.  In the event
    that an Optionholder’s Continuous Service is terminated for
    Cause, the Option shall terminate immediately and cease to
    remain outstanding.

 

		
	
    7.  
	
    Provisions
    of Stock Awards other than Options.

 

    (a) Stock Purchase Awards.  Each Stock
    Purchase Award Agreement shall be in such form and shall contain
    such terms and conditions as the Board shall deem appropriate.
    At the Board’s election, shares of Common Stock may be
    (i) held in book entry form subject to the Company’s
    instructions until any restrictions relating to the Stock
    Purchase Award lapse; or (ii) evidenced by a certificate,
    which certificate shall be held in such form and manner as
    determined by the Board. The terms and conditions of Stock
    Purchase Award Agreements may change from time to time, and the
    terms and conditions of separate Stock Purchase Award Agreements
    need not be identical; provided, however, that each Stock
    Purchase Award Agreement shall include (through incorporation of
    the provisions hereof by reference in the agreement or
    otherwise) the substance of each of the following provisions:

 

    (i) Purchase Price.  At the time of the
    grant of a Stock Purchase Award, the Board will determine the
    price to be paid by the Participant for each share subject to
    the Stock Purchase Award. To the extent required by applicable
    law, the price to be paid by the Participant for each share of
    the Stock Purchase Award will not be less than the par value of
    a share of Common Stock.

    

    11

 

    (ii) Consideration.  At the time of the
    grant of a Stock Purchase Award, the Board will determine the
    consideration permissible for the payment of the purchase price
    of the Stock Purchase Award. The purchase price of Common Stock
    acquired pursuant to the Stock Purchase Award shall be paid
    either: (i) in cash or by check at the time of purchase,
    (ii) at the discretion of the Board, according to a
    deferred payment or other similar arrangement with the
    Participant, (iii) by past or future services rendered to
    the Company or an Affiliate, or (iv) in any other form of
    legal consideration that may be acceptable to the Board in its
    sole discretion and permissible under applicable law.

 

    (iii) Vesting.  Shares of Common Stock
    acquired under a Stock Purchase Award may be subject to a share
    repurchase right or option in favor of the Company in accordance
    with a vesting schedule to be determined by the Board.

 

    (iv) Termination of Participant’s Continuous
    Service.  In the event that a Participant’s
    Continuous Service terminates, the Company shall have the right,
    but not the obligation, to repurchase or otherwise reacquire,
    any or all of the shares of Common Stock held by the Participant
    that have not vested as of the date of termination under the
    terms of the Stock Purchase Award Agreement. At the Board’s
    election, the price paid for all shares of Common Stock so
    repurchased or reacquired by the Company may be at the lesser
    of: (i) the Fair Market Value on the relevant date, or
    (ii) the Participant’s original cost for such shares.
    The Company shall not be required to exercise its repurchase or
    reacquisition option until at least six (6) months (or such
    longer or shorter period of time necessary to avoid
    classification of the Option as a liability for financial
    accounting purposes) have elapsed following the
    Participant’s purchase of the shares of stock acquired
    pursuant to the Stock Purchase Award unless otherwise determined
    by the Board or provided in the Stock Purchase Award Agreement.

 

    (v) Transferability.  Rights to purchase
    or receive shares of Common Stock granted under a Stock Purchase
    Award shall be transferable by the Participant only upon such
    terms and conditions as are set forth in the Stock Purchase
    Award Agreement, as the Board shall determine in its sole
    discretion, and so long as Common Stock awarded under the Stock
    Purchase Award remains subject to the terms of the Stock
    Purchase Award Agreement.

 

    (b) Stock Bonus Awards.  Each Stock Bonus
    Award Agreement shall be in such form and shall contain such
    terms and conditions as the Board shall deem appropriate. At the
    Board’s election, shares of Common Stock may be
    (i) held in book entry form subject to the Company’s
    instructions until any restrictions relating to the Stock Bonus
    Award lapse; or (ii) evidenced by a certificate, which
    certificate shall be held in such form and manner as determined
    by the Board. The terms and conditions of Stock Bonus Award
    Agreements may change from time to time, and the terms and
    conditions of separate Stock Bonus Award Agreements need not be
    identical, provided, however, that each Stock Bonus Award
    Agreement shall include (through incorporation of provisions
    hereof by reference in the agreement or otherwise) the substance
    of each of the following provisions:

 

    (i) Consideration.  A Stock Bonus Award
    may be awarded in consideration for (i) past or future
    services rendered to the Company or an Affiliate, or
    (ii) any other form of legal consideration that may be
    acceptable to the Board in its sole discretion and permissible
    under applicable law.

 

    (ii) Vesting.  Shares of Common Stock
    awarded under the Stock Bonus Award Agreement may be subject to
    forfeiture to the Company in accordance with a vesting schedule
    to be determined by the Board.

 

    (iii) Termination of Participant’s Continuous
    Service.  In the event a Participant’s
    Continuous Service terminates, the Company may receive via a
    forfeiture condition, any or all of the shares of Common Stock
    held by the Participant which have not vested as of the date of
    termination of Continuous Service under the terms of the Stock
    Bonus Award Agreement.

 

    (iv) Transferability.  Rights to acquire
    shares of Common Stock under the Stock Bonus Award Agreement
    shall be transferable by the Participant only upon such terms
    and conditions as are set forth in the Stock Bonus Award
    Agreement, as the Board shall determine in its sole discretion,
    so long as Common Stock awarded under the Stock Bonus Award
    Agreement remains subject to the terms of the Stock Bonus Award
    Agreement.

    

    12

 

    (c) Stock Unit Awards.  Each Stock Unit
    Award Agreement shall be in such form and shall contain such
    terms and conditions as the Board shall deem appropriate. The
    terms and conditions of Stock Unit Award Agreements may change
    from time to time, and the terms and conditions of separate
    Stock Unit Award Agreements need not be identical, provided,
    however, that each Stock Unit Award Agreement shall include
    (through incorporation of the provisions hereof by reference in
    the agreement or otherwise) the substance of each of the
    following provisions:

 

    (i) Consideration.  At the time of grant
    of a Stock Unit Award, the Board will determine the
    consideration, if any, to be paid by the Participant upon
    delivery of each share of Common Stock subject to the Stock Unit
    Award. The consideration to be paid (if any) by the Participant
    for each share of Common Stock subject to a Stock Unit Award may
    be paid in any form of legal consideration that may be
    acceptable to the Board in its sole discretion and permissible
    under applicable law.

 

    (ii) Vesting.  At the time of the grant of
    a Stock Unit Award, the Board may impose such restrictions or
    conditions to the vesting of the Stock Unit Award as it, in its
    sole discretion, deems appropriate.

 

    (iii) Payment.  A Stock Unit Award may be
    settled by the delivery of shares of Common Stock, their cash
    equivalent, any combination thereof or in any other form of
    consideration, as determined by the Board and contained in the
    Stock Unit Award Agreement.

 

    (iv) Additional Restrictions.  At the time
    of the grant of a Stock Unit Award, the Board, as it deems
    appropriate, may impose such restrictions or conditions that
    delay the delivery of the shares of Common Stock (or their cash
    equivalent) subject to a Stock Unit Award after the vesting of
    such Stock Unit Award.

 

    (v) Dividend Equivalents.  Dividend
    equivalents may be credited in respect of shares of Common Stock
    covered by a Stock Unit Award, as determined by the Board and
    contained in the Stock Unit Award Agreement. At the sole
    discretion of the Board, such dividend equivalents may be
    converted into additional shares of Common Stock covered by the
    Stock Unit Award in such manner as determined by the Board. Any
    additional shares covered by the Stock Unit Award credited by
    reason of such dividend equivalents will be subject to all the
    terms and conditions of the underlying Stock Unit Award
    Agreement to which they relate.

 

    (vi) Termination of Participant’s Continuous
    Service.  Except as otherwise provided in the
    applicable Stock Unit Award Agreement, such portion of the Stock
    Unit Award that has not vested will be forfeited upon the
    Participant’s termination of Continuous Service.

 

    (d) Stock Appreciation Rights.  Each Stock
    Appreciation Right Agreement shall be in such form and shall
    contain such terms and conditions as the Board shall deem
    appropriate. The terms and conditions of Stock Appreciation
    Right Agreements may change from time to time, and the terms and
    conditions of separate Stock Appreciation Right Agreements need
    not be identical; provided, however, that each Stock
    Appreciation Right Agreement shall include (through
    incorporation of the provisions hereof by reference in the
    agreement or otherwise) the substance of each of the following
    provisions:

 

    (i) Strike Price and Calculation of
    Appreciation.  Each Stock Appreciation Right will
    be denominated in shares of Common Stock equivalents. The
    appreciation distribution payable on the exercise of a Stock
    Appreciation Right will be not greater than an amount equal to
    the excess of (i) the aggregate Fair Market Value (on the
    date of the exercise of the Stock Appreciation Right) of a
    number of shares of Common Stock equal to the number of share of
    Common Stock equivalents in which the Participant is vested
    under such Stock Appreciation Right, and with respect to which
    the Participant is exercising the Stock Appreciation Right on
    such date, over (ii) an amount (the strike price) that will
    be determined by the Board at the time of grant of the Stock
    Appreciation Right.

 

    (ii) Vesting.  At the time of the grant of
    a Stock Appreciation Right, the Board may impose such
    restrictions or conditions to the vesting of such Stock
    Appreciation Right as it, in its sole discretion, deems
    appropriate.

 

    (iii) Exercise.  To exercise any
    outstanding Stock Appreciation Right, the Participant must
    provide written notice of exercise to the Company in compliance
    with the provisions of the Stock Appreciation Right Agreement
    evidencing such Stock Appreciation Right.

    

    13

 

    (iv) Payment.  The appreciation
    distribution in respect to a Stock Appreciation Right may be
    paid in Common Stock, in cash, in any combination of the two or
    in any other form of consideration, as determined by the Board
    and contained in the Stock Appreciation Right Agreement
    evidencing such Stock Appreciation Right.

 

    (v) Termination of Continuous Service.  In
    the event that a Participant’s Continuous Service
    terminates, the Participant may exercise his or her Stock
    Appreciation Right (to the extent that the Participant was
    entitled to exercise such Stock Appreciation Right as of the
    date of termination) but only within such period of time ending
    on the earlier of (i) the date three (3) months
    following the termination of the Participant’s Continuous
    Service (or such longer or shorter period specified in the Stock
    Appreciation Right Agreement), or (ii) the expiration of
    the term of the Stock Appreciation Right as set forth in the
    Stock Appreciation Right Agreement. If, after termination, the
    Participant does not exercise his or her Stock Appreciation
    Right within the time specified herein or in the Stock
    Appreciation Right Agreement (as applicable), the Stock
    Appreciation Right shall terminate.

 

    (e) Performance Stock Awards.  A
    Performance Stock Award is any Stock Award that may be granted,
    may vest, or may be exercised based upon service conditions,
    upon the attainment during a Performance Period of certain
    Performance Goals, or both. The length of any Performance
    Period, the Performance Goals to be achieved during the
    Performance Period, and the measure of whether and to what
    degree such Performance Goals have been attained shall be
    conclusively determined by the Board in its sole discretion. The
    maximum benefit to be received by any individual in any calendar
    year attributable to Performance Stock Awards shall not exceed
    the value of two hundred thousand (200,000) shares of Common
    Stock.

 

    (f) Other Stock Awards.  Other forms of
    Stock Awards valued in whole or in part by reference to, or
    otherwise based on, Common Stock may be granted either alone or
    in addition to Stock Awards provided for under Section 6
    and the preceding provisions of this Section 7. Subject to
    the provisions of the Plan, the Board shall have sole and
    complete authority to determine the persons to whom and the time
    or times at which such Other Stock Awards will be granted, the
    number of shares of Common Stock (or the cash equivalent
    thereof) to be granted pursuant to such Other Stock Awards and
    all other terms and conditions of such Other Stock Awards.

 

		
	
    8.  
	
    Covenants
    of the Company.

 

    (a) Availability of Shares.  During the
    terms of the Stock Awards, the Company shall keep available at
    all times the number of shares of Common Stock required to
    satisfy such Stock Awards.

 

    (b) Securities Law Compliance.  The
    Company shall seek to obtain from each regulatory commission or
    agency having jurisdiction over the Plan such authority as may
    be required to grant Stock Awards and to issue and sell shares
    of Common Stock upon exercise of the Stock Awards; provided,
    however, that this undertaking shall not require the Company
    to register under the Securities Act the Plan, any Stock Award
    or any Common Stock issued or issuable pursuant to any such
    Stock Award. If, after reasonable efforts, the Company is unable
    to obtain from any such regulatory commission or agency the
    authority that counsel for the Company deems necessary for the
    lawful issuance and sale of Common Stock under the Plan, the
    Company shall be relieved from any liability for failure to
    issue and sell Common Stock upon exercise of such Stock Awards
    unless and until such authority is obtained.

 

		
	
    9.  
	
    Miscellaneous.

 

    (a) Use of Proceeds.  Proceeds from the
    sale of shares of Common Stock pursuant to Stock Awards shall
    constitute general funds of the Company.

 

    (b) Stockholder Rights.  No Participant
    shall be deemed to be the holder of, or to have any of the
    rights of a holder with respect to, any shares of Common Stock
    subject to such Stock Award unless and until such Participant
    has satisfied all requirements for exercise of the Stock Award
    pursuant to its terms.

 

    (c) No Employment or Other Service
    Rights.  Nothing in the Plan, any Stock Award
    Agreement or other instrument executed thereunder or any Stock
    Award granted pursuant thereto shall confer upon any Participant
    any right to continue to serve the Company or an Affiliate in
    the capacity in effect at the time the Stock Award was granted
    or shall affect the right of the Company or an Affiliate to
    terminate (i) the employment of an Employee with

    

    14

 

    or without notice and with or without cause, (ii) the
    service of a Consultant pursuant to the terms of such
    Consultant’s agreement with the Company or an Affiliate, or
    (iii) the service of a Director pursuant to the Bylaws of
    the Company or an Affiliate, and any applicable provisions of
    the corporate law of the state in which the Company or the
    Affiliate is incorporated, as the case may be.

 

    (d) Incentive Stock Option $100,000
    Limitation.  To the extent that the aggregate Fair
    Market Value (determined at the time of grant) of Common Stock
    with respect to which Incentive Stock Options are exercisable
    for the first time by any Optionholder during any calendar year
    (under all plans of the Company and any Affiliates) exceeds one
    hundred thousand dollars ($100,000), the Options or portions
    thereof that exceed such limit (according to the order in which
    they were granted) shall be treated as Nonstatutory Stock
    Options, notwithstanding any contrary provision of the
    applicable Option Agreement(s).

 

    (e) Investment Assurances.  The Company
    may require a Participant, as a condition of exercising or
    acquiring Common Stock under any Stock Award, (i) to give
    written assurances satisfactory to the Company as to the
    Participant’s knowledge and experience in financial and
    business matters
    and/or to
    employ a purchaser representative reasonably satisfactory to the
    Company who is knowledgeable and experienced in financial and
    business matters and that he or she is capable of evaluating,
    alone or together with the purchaser representative, the merits
    and risks of exercising the Stock Award; and (ii) to give
    written assurances satisfactory to the Company stating that the
    Participant is acquiring Common Stock subject to the Stock Award
    for the Participant’s own account and not with any present
    intention of selling or otherwise distributing the Common Stock.
    The foregoing requirements, and any assurances given pursuant to
    such requirements, shall be inoperative if (i) the issuance
    of the shares upon the exercise or acquisition of Common Stock
    under the Stock Award has been registered under a then currently
    effective registration statement under the Securities Act, or
    (ii) as to any particular requirement, a determination is
    made by counsel for the Company that such requirement need not
    be met in the circumstances under the then applicable securities
    laws. The Company may, upon advice of counsel to the Company,
    place legends on stock certificates issued under the Plan as
    such counsel deems necessary or appropriate in order to comply
    with applicable securities laws, including, but not limited to,
    legends restricting the transfer of the Common Stock.

 

    (f) Withholding Obligations.  To the
    extent provided by the terms of a Stock Award Agreement, the
    Company may, in its sole discretion, satisfy any federal, state
    or local tax withholding obligation relating to a Stock Award by
    any of the following means (in addition to the Company’s
    right to withhold from any compensation paid to the Participant
    by the Company) or by a combination of such means:
    (i) causing the Participant to tender a cash payment;
    (ii) withholding shares of Common Stock from the shares of
    Common Stock issued or otherwise issuable to the Participant in
    connection with the Stock Award; provided, however, that
    no shares of Common Stock are withheld with a value exceeding
    the minimum amount of tax required to be withheld by law (or
    such lower amount as may be necessary to avoid classification of
    the Stock Award as a liability for financial accounting
    purposes); or (iii) by such other method as may be set
    forth in the Stock Award Agreement.

 

    (g) Electronic Delivery.  Any reference
    herein to a “written” agreement or document shall
    include any agreement or document delivered electronically or
    posted on the Company’s intranet.

 

		
	
    10.  
	
    Adjustments
    upon Changes in Common Stock; Corporate Transactions.

 

    (a) Capitalization Adjustments.  If any
    change is made in, or other events occur with respect to, the
    Common Stock subject to the Plan or subject to any Stock Award
    after the effective date of the Plan set forth in
    Section 13 without the receipt of consideration by the
    Company (through merger, consolidation, reorganization,
    recapitalization, reincorporation, stock dividend, dividend in
    property other than cash, stock split, liquidating dividend,
    combination of shares, exchange of shares, change in corporate
    structure or other transaction not involving the receipt of
    consideration by the Company (each a “Capitalization
    Adjustment”)), the Board shall appropriately
    adjust: (i) the class(es) and maximum number of securities
    subject to the Plan pursuant to Section 4(a), (ii) the
    class(es) and number of securities subject to each outstanding
    stock award under the Prior Plan that are added from time to
    time to the share reserve under the Plan pursuant to
    Section 4(a), (iii) the class(es) and maximum number
    of securities that may be issued pursuant to the exercise of
    Incentive Stock Options pursuant to Section 4(b),
    (iv) the class(es) and maximum number of securities that
    may be awarded to any person pursuant to Sections 5(c) and
    7(e), and (v) the class(es) and number of securities and
    price per share of stock subject to outstanding Stock Awards.
    The

    

    15

 

    Board shall make such adjustments, and its determination shall
    be final, binding and conclusive. (Notwithstanding the
    foregoing, the conversion of any convertible securities of the
    Company shall not be treated as a transaction “without
    receipt of consideration” by the Company.)

 

    (b) Dissolution or Liquidation.  In the
    event of a dissolution or liquidation of the Company, all
    outstanding Stock Awards (other than Stock Awards consisting of
    vested and outstanding shares of Common Stock not subject to the
    Company’s right of repurchase) shall terminate immediately
    prior to the completion of such dissolution or liquidation, and
    the shares of Common Stock subject to the Company’s
    repurchase option may be repurchased by the Company
    notwithstanding the fact that the holder of such Stock Award is
    providing Continuous Service, provided, however, that the
    Board may, in its sole discretion, cause some or all Stock
    Awards to become fully vested, exercisable
    and/or no
    longer subject to repurchase or forfeiture (to the extent such
    Stock Awards have not previously expired or terminated) before
    the dissolution or liquidation is completed but contingent on
    its completion.

 

    (c) Corporate Transaction.  The following
    provisions shall apply to Stock Awards in the event of a
    Corporate Transaction unless otherwise provided in a written
    agreement between the Company or any Affiliate and the holder of
    the Stock Award:

 

    (i) Stock Awards May Be Assumed.  In the
    event of a Corporate Transaction, any surviving corporation or
    acquiring corporation (or the surviving or acquiring
    corporation’s parent company) may assume or continue any or
    all Stock Awards outstanding under the Plan or may substitute
    similar stock awards for Stock Awards outstanding under the Plan
    (including but not limited to, awards to acquire the same
    consideration paid to the stockholders of the Company pursuant
    to the Corporate Transaction), and any reacquisition or
    repurchase rights held by the Company in respect of Common Stock
    issued pursuant to Stock Awards may be assigned by the Company
    to the successor of the Company (or the successor’s parent
    company, if any), in connection with such Corporate Transaction.
    A surviving corporation or acquiring corporation may choose to
    assume or continue only a portion of a Stock Award or substitute
    a similar stock award for only a portion of a Stock Award. The
    terms of any assumption, continuation or substitution shall be
    set by the Board in accordance with the provisions of
    Section 3(b).

 

    (ii) Stock Awards Held by Current
    Participants.  In the event of a Corporate
    Transaction in which the surviving corporation or acquiring
    corporation (or its parent company) does not assume or continue
    such outstanding Stock Awards or substitute similar stock awards
    for such outstanding Stock Awards, then with respect to Stock
    Awards that have not been assumed, continued or substituted and
    that are held by Participants whose Continuous Service has not
    terminated prior to the effective time of the Corporate
    Transaction (referred to as the “Current
    Participants”), the vesting of such Stock Awards
    (and, if applicable, the time at which such Stock Awards may be
    exercised) shall (contingent upon the effectiveness of the
    Corporate Transaction) be accelerated in full to a date prior to
    the effective time of such Corporate Transaction as the Board
    shall determine (or, if the Board shall not determine such a
    date, to the date that is five (5) days prior to the
    effective time of the Corporate Transaction), and such Stock
    Awards shall terminate if not exercised (if applicable) at or
    prior to the effective time of the Corporate Transaction, and
    any reacquisition or repurchase rights held by the Company with
    respect to such Stock Awards shall lapse (contingent upon the
    effectiveness of the Corporate Transaction). No vested Stock
    Unit Award shall terminate pursuant to this
    Section 10(c)(ii) without being settled by delivery of
    shares of Common Stock, their cash equivalent, any combination
    thereof, or in any other form of consideration, as determined by
    the Board, prior to the effective time of the Corporate
    Transaction.

 

    (iii) Stock Awards Held by Former
    Participants.  In the event of a Corporate
    Transaction in which the surviving corporation or acquiring
    corporation (or its parent company) does not assume or continue
    such outstanding Stock Awards or substitute similar stock awards
    for such outstanding Stock Awards, then with respect to Stock
    Awards that have not been assumed, continued or substituted and
    that are held by persons other than Current Participants, the
    vesting of such Stock Awards (and, if applicable, the time at
    which such Stock Award may be exercised) shall not be
    accelerated and such Stock Awards (other than a Stock Award
    consisting of vested and outstanding shares of Common Stock not
    subject to the Company’s right of repurchase) shall
    terminate if not exercised (if applicable) prior to the
    effective time of the Corporate Transaction; provided,
    however, that any reacquisition or repurchase rights held by
    the Company with respect to such Stock Awards shall not
    terminate and may continue to be exercised notwithstanding the
    Corporate Transaction. No vested

    

    16

 

    Stock Unit Award shall terminate pursuant to this
    Section 10(c)(iii) without being settled by delivery of
    shares of Common Stock, their cash equivalent, any combination
    thereof, or in any other form of consideration, as determined by
    the Board, prior to the effective time of the Corporate
    Transaction.

 

    (iv) Payment for Stock Awards in Lieu of
    Exercise.  Notwithstanding the foregoing, in the
    event a Stock Award will terminate if not exercised prior to the
    effective time of a Corporate Transaction, the Board may
    provide, in its sole discretion, that the holder of such Stock
    Award may not exercise such Stock Award but will receive a
    payment, in such form as may be determined by the Board, equal
    in value to the excess, if any, of (i) the value of the
    property the holder of the Stock Award would have received upon
    the exercise of the Stock Award, over (ii) any exercise
    price payable by such holder in connection with such exercise.

 

    (d) Change in Control.  A Stock Award may
    be subject to additional acceleration of vesting and
    exercisability upon or after a Change in Control as may be
    provided in the Stock Award Agreement for such Stock Award or as
    may be provided in any other written agreement between the
    Company or any Affiliate and the Participant. A Stock Award may
    vest as to all or any portion of the shares subject to the Stock
    Award (i) immediately upon the occurrence of a Change in
    Control, whether or not such Stock Award is assumed, continued,
    or substituted by a surviving or acquiring entity in the Change
    in Control, or (ii) in the event a Participant’s
    Continuous Service is terminated, actually or constructively,
    within a designated period following the occurrence of a Change
    in Control. In the absence of such provisions, no such
    acceleration shall occur.

 

		
	
    11.  
	
    Amendment
    of the Plan and Stock Awards.

 

    (a) Amendment of Plan.  Subject to the
    limitations, if any, of applicable law, the Board at any time,
    and from time to time, may amend the Plan. However, except as
    provided in Section 10(a) relating to Capitalization
    Adjustments, no amendment shall be effective unless approved by
    the stockholders of the Company to the extent stockholder
    approval is necessary to satisfy applicable law.

 

    (b) Stockholder Approval.  The Board, in
    its sole discretion, may submit any other amendment to the Plan
    for stockholder approval, including, but not limited to,
    amendments to the Plan intended to satisfy the requirements of
    Section 162(m) of the Code and the regulations thereunder
    regarding the exclusion of performance-based compensation from
    the limit on corporate deductibility of compensation paid to
    Covered Employees.

 

    (c) Contemplated Amendments.  It is
    expressly contemplated that the Board may amend the Plan in any
    respect the Board deems necessary or advisable to provide
    eligible Employees with the maximum benefits provided or to be
    provided under the provisions of the Code and the regulations
    promulgated thereunder relating to Incentive Stock Options
    and/or to
    bring the Plan
    and/or
    Incentive Stock Options granted under it into compliance
    therewith.

 

    (d) No Impairment of Rights.  Rights under
    any Stock Award granted before amendment of the Plan shall not
    be impaired by any amendment of the Plan unless (i) the
    Company requests the consent of the affected Participant, and
    (ii) such Participant consents in writing.

 

    (e) Amendment of Stock Awards.  The Board,
    at any time and from time to time, may amend the terms of any
    one or more Stock Awards, including, but not limited to,
    amendments to provide terms more favorable than previously
    provided in the Stock Award Agreement, subject to any specified
    limits in the Plan that are not subject to Board discretion;
    provided, however, that the rights under any Stock Award
    shall not be impaired by any such amendment unless (i) the
    Company requests the consent of the affected Participant, and
    (ii) such Participant consents in writing.

 

		
	
    12.  
	
    Termination
    or Suspension of the Plan.

 

    (a) Plan Term.  The Board may suspend or
    terminate the Plan at any time. Unless sooner terminated, the
    Plan shall terminate on the day before the tenth (10th)
    anniversary of the earlier of (i) the date the Plan is
    adopted by the Board, or (ii) the date the Plan is approved
    by the stockholders of the Company. No Stock Awards may be
    granted under the Plan while the Plan is suspended or after it
    is terminated.

    

    17

 

    (b) No Impairment of Rights.  Suspension
    or termination of the Plan shall not impair rights and
    obligations under any Stock Award granted while the Plan is in
    effect except with the written consent of the affected
    Participant.

 

		
	
    13.  
	
    Effective
    Date of Plan.

 

    The Plan shall become effective on the IPO Date, but no Stock
    Award shall be exercised (or, in the case of a Stock Purchase
    Award, Stock Bonus Award, Stock Unit Award, or Other Stock Award
    shall be granted) unless and until the Plan has been approved by
    the stockholders of the Company, which approval shall be within
    twelve (12) months before or after the date the Plan is
    adopted by the Board.

 

		
	
    14.  
	
    Choice
    of Law.

 

    The law of the State of Delaware shall govern all questions
    concerning the construction, validity and interpretation of this
    Plan, without regard to that state’s conflict of laws rules.

    

    18EX-4.1

Exhibit 4.1

UST
Sequence No. 76

 

WARRANT TO PURCHASE COMMON STOCK

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS
OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED
TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.

WARRANT

to purchase

3,983,308

Shares of Common Stock

of
Associated Banc-Corp

               Issue
Date: November 21, 2008

     1. Definitions. Unless the context otherwise requires, when used herein
the following terms shall have the meanings indicated.

     “Affiliate” has the meaning ascribed to it in the Purchase Agreement.

     “Appraisal Procedure” means a procedure whereby two independent appraisers, one chosen by the
Company and one by the Original Warrantholder, shall mutually agree upon the determinations then
the subject of appraisal. Each party shall deliver a notice to the other appointing its appraiser
within 15 days after the Appraisal Procedure is invoked. If within 30 days after appointment of the
two appraisers they are unable to agree upon the amount in question, a third independent appraiser
shall be chosen within 10 days thereafter by the mutual consent of such first two appraisers. The
decision of the third appraiser so appointed and chosen shall be given within 30 days after the
selection of such third appraiser. If three appraisers shall be appointed and the determination of
one appraiser is disparate from the middle determination by more than twice the amount by which the
other determination is disparate from the middle determination, then the determination of such
appraiser shall be excluded, the remaining two determinations shall be averaged and such average
shall be binding and conclusive upon the

 

 

Company and the Original Warrantholder; otherwise, the average of all three determinations
shall be binding upon the Company and the Original Warrantholder. The costs of conducting any
Appraisal Procedure shall be borne by the Company.

     “Board of Directors” means the board of directors of the Company, including any duly
authorized committee thereof.

     “Business Combination” means a merger, consolidation, statutory share exchange or similar
transaction that requires the approval of the Company’s stockholders.

     “business day” means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other governmental actions
to close.

     “Capital Stock” means (A) with respect to any Person that is a corporation or company, any and
all shares, interests, participations or other equivalents (however designated) of capital or
capital stock of such Person and (B) with respect to any Person that is not a corporation or
company, any and all partnership or other equity interests of such Person.

     “Charter” means, with respect to any Person, its certificate or articles of incorporation,
articles of association, or similar organizational document.

     “Common Stock” has the meaning ascribed to it in the Purchase Agreement.

     “Company” means the Person whose name, corporate or other organizational form and jurisdiction
of organization is set forth in Item 1 of Schedule A hereto.

     “conversion” has the meaning set forth in Section 13(B).

     
“convertible
securities” has the meaning set forth in Section 13(B).

     
“CPP” has the
meaning ascribed to it in the Purchase Agreement.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

     “Exercise
Price” means the amount set forth in Item 2 of
Schedule A hereto.

     
“Expiration Time” has the meaning set forth in Section 3.

     “Fair Market Value” means, with respect to any security or other property, the fair market
value of such security or other property as determined by the Board of Directors, acting in good
faith or, with respect to Section 14, as determined by the Original Warrantholder acting in good
faith. For so long as the Original Warrantholder holds this Warrant or any portion thereof, it may
object in writing to the Board of Director’s calculation of fair market value within 10 days of
receipt of written notice thereof. If the Original Warrantholder and the Company are unable to
agree on fair market value during the 10-day period following the delivery of the Original
Warrantholder’s objection, the Appraisal Procedure may be invoked by either party to

2

 

determine Fair Market Value by delivering written notification thereof not later than the
30th day after delivery of the Original Warrantholder’s objection.

     “Governmental Entities” has the meaning ascribed to it in the Purchase Agreement.

     
“Initial Number” has the meaning set forth in Section 13(B).

     “Issue Date “ means the date set forth in Item 3 of Schedule A hereto.

     “Market Price” means, with respect to a particular security, on any given day, the last
reported sale price regular way or, in case no such reported sale takes place on such day, the
average of the last closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or admitted to trading,
or if not listed or admitted to trading on any national securities exchange, the average of the
closing bid and ask prices as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that purpose. “Market Price” shall be
determined without reference to after hours or extended hours trading. If such security is not
listed and traded in a manner that the quotations referred to above are available for the period
required hereunder, the Market Price per share of Common Stock shall be deemed to be (i) in the
event that any portion of the Warrant is held by the Original Warrantholder, the fair market value
per share of such security as determined in good faith by the Original Warrantholder or (ii) in all
other circumstances, the fair market value per share of such security as determined in good faith
by the Board of Directors in reliance on an opinion of a nationally recognized independent
investment banking corporation retained by the Company for this purpose and certified in a
resolution to the Warrantholder. For the purposes of determining the Market Price of the Common
Stock on the “trading day” preceding, on or following the occurrence of an event, (i) that trading
day shall be deemed to commence immediately after the regular scheduled closing time of trading on
the New York Stock Exchange or, if trading is closed at an earlier time, such earlier time and (ii)
that trading day shall end at the next regular scheduled closing time, or if trading is closed at
an earlier time, such earlier time (for the avoidance of doubt, and as an example, if the Market
Price is to be determined as of the last trading day preceding a specified event and the closing
time of trading on a particular day is 4:00 p.m. and the specified event occurs at 5:00 p.m. on
that day, the Market Price would be determined by reference to such 4:00 p.m. closing price).

     “Ordinary Cash Dividends” means a regular quarterly cash dividend on shares of Common Stock
out of surplus or net profits legally available therefor (determined in accordance with generally
accepted accounting principles in effect from time to time), provided that Ordinary Cash Dividends
shall not include any cash dividends paid subsequent to the Issue Date to the extent the aggregate
per share dividends paid on the outstanding Common Stock in any quarter exceed the amount set forth
in Item 4 of Schedule A hereto, as adjusted for any stock split, stock dividend, reverse stock
split, reclassification or similar transaction.

     “Original Warrantholder” means the United States Department of the Treasury. Any actions
specified to be taken by the Original Warrantholder hereunder may only be taken by such Person and
not by any other Warrantholder.

3

 

     “Permitted Transactions” has the meaning set forth in Section 13(B).

     “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

     “Per Share Fair Market Value” has the meaning set forth in Section 13(C).

     “Preferred Shares” means the perpetual preferred stock issued to the Original
Warrantholder on the Issue Date pursuant to the Purchase Agreement.

     “Pro Rata Repurchases” means any purchase of shares of Common Stock by the Company or any
Affiliate thereof pursuant to (A) any tender offer or exchange offer subject to Section 13(e) or
14(e) of the Exchange Act or Regulation 14E promulgated thereunder or (B) any other offer available
to substantially all holders of Common Stock, in the case of both (A) or (B), whether for cash,
shares of Capital Stock of the Company, other securities of the Company, evidences of indebtedness
of the Company or any other Person or any other property (including, without limitation, shares of
Capital Stock, other securities or evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding. The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the Company under any
tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any
Pro Rata Repurchase that is not a tender or exchange offer.

     “Purchase Agreement” means the Securities Purchase Agreement — Standard Terms incorporated
into the Letter Agreement, dated as of the date set forth in Item 5 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department of the Treasury
(the “Letter Agreement”), including all annexes and schedules thereto.

     “Qualified Equity Offering” has the meaning ascribed to it in the Purchase Agreement.

     “Regulatory Approvals” with respect to the Warrantholder, means, to the extent applicable and
required to permit the Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common Stock without the Warrantholder being in violation of applicable law, rule or
regulation, the receipt of any necessary approvals and authorizations of, filings and registrations
with, notifications to, or expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder.

     “SEC” means the U.S. Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.

     “Shares” has the meaning set forth in Section 2.

     “trading
day ” means (A) if the shares of Common Stock are not traded on any national or
regional securities exchange or association or over-the-counter market, a business day or (B) if
the shares of Common Stock are traded on any national or regional securities exchange or

4

 

association or over-the-counter market, a business day on which such relevant exchange or
quotation system is scheduled to be open for business and on which the shares of Common Stock (i)
are not suspended from trading on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or longer; and (ii)
have traded at least once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the shares of Common Stock.

     “U.S. GAAP” means United States generally accepted accounting principles.

     “Warrantholder” has the meaning set forth in Section 2.

     “Warrant” means this Warrant, issued pursuant to the Purchase Agreement.

     2. Number of Shares; Exercise Price. This certifies that, for value received, the
United States Department of the Treasury or its permitted assigns (the “Warrantholder”) is
entitled, upon the terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory Approvals, if any, up
to an aggregate of the number of fully paid and nonassessable shares of Common Stock set forth in
Item 6 of Schedule A hereto, at a purchase price per share of Common Stock equal to the Exercise
Price. The number of shares of Common Stock (the “Shares”) and the Exercise Price are subject to
adjustment as provided herein, and all references to “Common Stock,” “Shares” and “Exercise Price”
herein shall be deemed to include any such adjustment or series of adjustments.

     3. Exercise of Warrant; Term. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by this Warrant is
exercisable, in whole or in part by the Warrantholder, at any time or from time to time after the
execution and delivery of this Warrant by the Company on the date hereof, but in no event later
than 5:00 p.m., New York City time on the tenth anniversary of the Issue Date (the “Expiration
Time”), by (A) the surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office of the Company
located at the address set forth in Item 7 of Schedule A hereto (or such other office or agency of
the Company in the United States as it may designate by notice in writing to the Warrantholder at
the address of the Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:

          (i) by having the Company withhold, from the shares of Common Stock that would otherwise be
delivered to the Warrantholder upon such exercise, shares of Common stock issuable upon exercise of
the Warrant equal in value to the aggregate Exercise Price as to which this Warrant is so exercised
based on the Market Price of the Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to this Section 3, or

          (ii) with the consent of both the Company and the Warrantholder, by tendering in cash, by
certified or cashier’s check payable to the order of the Company, or by wire transfer of
immediately available funds to an account designated by the Company.

5

 

          If the Warrantholder does not exercise this Warrant in its entirety, the
Warrantholder will be entitled to receive from the Company within a reasonable time, and in any
event not exceeding three business days, a new warrant in substantially identical form for the
purchase of that number of Shares equal to the difference between the number of Shares subject to
this Warrant and the number of Shares as to which this Warrant is so exercised. Notwithstanding
anything in this Warrant to the contrary, the Warrantholder hereby acknowledges and agrees that its
exercise of this Warrant for Shares is subject to the condition that the Warrantholder will have
first received any applicable Regulatory Approvals.

     4. Issuance
of Shares; Authorization; Listing. Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the Warrantholder may designate
and will be delivered to such named Person or Persons within a reasonable time, not to exceed three
business days after the date on which this Warrant has been duly exercised in accordance with the
terms of this Warrant. The Company hereby represents and warrants that any Shares issued upon the
exercise of this Warrant in accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges
(other than liens or charges created by the Warrantholder, income and franchise taxes incurred in
connection with the exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will be deemed to have
been issued to the Warrantholder as of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in accordance with the terms of this
Warrant, notwithstanding that the stock transfer books of the Company may then be closed or
certificates representing such Shares may not be actually delivered on such date. The Company will
at all times reserve and keep available, out of its authorized but unissued Common Stock, solely
for the purpose of providing for the exercise of this Warrant, the aggregate number of shares of
Common Stock then issuable upon exercise of this Warrant at any time. The Company will (A) procure,
at its sole expense, the listing of the Shares issuable upon exercise of this Warrant at any time,
subject to issuance or notice of issuance, on all principal stock exchanges on which the Common
Stock is then listed or traded and (B) maintain such listings of such Shares at all times after
issuance. The Company will use reasonable best efforts to ensure that the Shares may be issued
without violation of any applicable law or regulation or of any requirement of any securities
exchange on which the Shares are listed or traded.

     5. No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the Warrantholder shall be entitled
to receive a cash payment equal to the Market Price of the Common Stock on the last trading day
preceding the date of exercise less the pro-rated Exercise Price for such fractional share.

     6. No
Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the Company prior to the
date of exercise hereof. The Company will at no time close its transfer books against transfer of
this Warrant in any manner which interferes with the timely exercise of this Warrant.

6

 

     7. Charges, Taxes and Expenses. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company.

     8. Transfer/Assignment.

     (A) Subject to compliance with clause (B) of this Section 8, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company by the registered
holder hereof in person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but registered in the name of
one or more transferees, upon surrender of this Warrant, duly endorsed, to the office or agency of
the Company described in Section 3. All expenses (other than stock transfer taxes) and other
charges payable in connection with the preparation, execution and delivery of the new warrants
pursuant to this Section 8 shall be paid by the Company.

     (B) The transfer of the Warrant and the Shares issued upon exercise of the Warrant are subject
to the restrictions set forth in Section 4.4 of the Purchase Agreement. If and for so long as
required by the Purchase Agreement, this Warrant shall contain the legends as set forth in Sections
4.2(a) and 4.2(b) of the Purchase Agreement.

     9. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of like tenor and
representing the right to purchase the same aggregate number of Shares. The Company shall maintain
a registry showing the name and address of the Warrantholder as the registered holder of this
Warrant. This Warrant may be surrendered for exchange or exercise in accordance with its terms, at
the office of the Company, and the Company shall be entitled to rely in all respects, prior to
written notice to the contrary, upon such registry.

     10. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver, in lieu of such
lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such lost, stolen,
destroyed or mutilated Warrant.

     11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a business day,
then such action may be taken or such right may be exercised on the next succeeding day that is a
business day.

     12. Rule 144 Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC thereunder
(or, if the Company is not required to file such reports, it will, upon the request of any

7

 

Warrantholder, make publicly available such information as necessary to permit sales
pursuant to Rule 144 under the Securities Act), and it will use reasonable best efforts to take
such further action as any Warrantholder may reasonably request, in each case to the extent
required from time to time to enable such holder to, if permitted by the terms of this Warrant and
the Purchase Agreement, sell this Warrant without registration under the Securities Act within the
limitation of the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be
amended from time to time, or (B) any successor rule or regulation hereafter adopted by the SEC.
Upon the written request of any Warrantholder, the Company will deliver to such Warrantholder a
written statement that it has complied with such requirements.

     13. Adjustments and Other Rights. The Exercise Price and the number of Shares
issuable upon exercise of this Warrant shall be subject to adjustment from time to time as follows;
provided, that if more than one subsection of this Section 13 is applicable to a single event, the
subsection shall be applied that produces the largest adjustment and no single event shall cause an
adjustment under more than one subsection of this Section 13 so as to result in duplication:

     (A) Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company
shall (i) declare and pay a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into a greater number of
shares, or (iii) combine or reclassify the outstanding shares of Common Stock into a smaller number
of shares, the number of Shares issuable upon exercise of this Warrant at the time of the record
date for such dividend or distribution or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the Warrantholder after such date shall
be entitled to purchase the number of shares of Common Stock which such holder would have owned or
been entitled to receive in respect of the shares of Common Stock subject to this Warrant after
such date had this Warrant been exercised immediately prior to such date. In such event, the
Exercise Price in effect at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the record
or effective date, as the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of Shares issuable upon
exercise of the Warrant determined pursuant to the immediately preceding sentence.

     (B) Certain Issuances of Common Shares or Convertible Securities. Until the earlier of
(i) the date on which the Original Warrantholder no longer holds this Warrant or any portion
thereof and (ii) the third anniversary of the Issue Date, if the Company shall issue shares of
Common Stock (or rights or warrants or other securities exercisable or convertible into or
exchangeable (collectively, a “conversion”) for shares of Common Stock) (collectively, “convertible
securities”) (other than in Permitted Transactions (as defined below) or a transaction to which
subsection (A) of this Section 13 is applicable) without consideration or at a consideration per
share (or having a conversion price per share) that is less than 90% of the Market Price on the
last trading day preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:

8

 

(A) the number of Shares issuable upon the exercise of this Warrant
immediately prior to the date of the agreement on pricing of such shares (or of such
convertible securities) (the “Initial Number”) shall be increased to the number
obtained by multiplying the Initial Number by a fraction (A) the numerator of which
shall be the sum of (x) the number of shares of Common Stock of the Company
outstanding on such date and (y) the number of additional shares of Common Stock
issued (or into which convertible securities may be exercised or convert) and (B)
the denominator of which shall be the sum of (I) the number of shares of Common
Stock outstanding on such date and (II) the number of shares of Common Stock which
the aggregate consideration receivable by the Company for the total number of shares
of Common Stock so issued (or into which convertible securities may be exercised or
convert) would purchase at the Market Price on the last trading day preceding the
date of the agreement on pricing such shares (or such convertible securities); and

(B) the Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such shares (or of such convertible securities) by a
fraction, the numerator of which shall be the number of shares of Common Stock
issuable upon exercise of this Warrant prior to such date and the denominator of
which shall be the number of shares of Common Stock issuable upon exercise of this
Warrant immediately after the adjustment described in clause (A) above.

     For purposes of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible securities shall be
deemed to be equal to the sum of the net offering price (including the Fair Market Value of any
non-cash consideration and after deduction of any related expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any, payable upon exercise or conversion of
any such convertible securities into shares of Common Stock; and “Permitted Transactions” shall
mean issuances (i) as consideration for or to fund the acquisition of businesses and/or related
assets, (ii) in connection with employee benefit plans and compensation related arrangements in the
ordinary course and consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock or convertible
securities for cash conducted by the Company or its affiliates pursuant to registration under the
Securities Act or Rule 144A thereunder on a basis consistent with capital raising transactions by
comparable financial institutions and (iv) in connection with the exercise of preemptive rights on
terms existing as of the Issue Date. Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.

     (C) Other Distributions. In case the Company shall fix a record date for the
making of a distribution to all holders of shares of its Common Stock of securities, evidences of
indebtedness, assets, cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its
Common Stock and other dividends or distributions referred to in Section 13 (A)), in each such
case, the Exercise Price in effect prior to such record date shall be reduced immediately
thereafter to the price determined by multiplying the Exercise Price in effect immediately prior to
the reduction by the quotient of (x) the Market Price of the Common Stock on the last trading day
preceding the first date on which the Common Stock trades regular way on the principal

9

 

national securities exchange on which the Common Stock is listed or admitted to trading
without the right to receive such distribution, minus the amount of cash and/or the Fair Market
Value of the securities, evidences of indebtedness, assets, rights or warrants to be so distributed
in respect of one share of Common Stock (such amount and/or Fair Market Value, the “Per Share Fair
Market Value”) divided by (y) such Market Price on such date specified in clause (x); such
adjustment shall be made successively whenever such a record date is fixed. In such event, the
number of Shares issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment, and (2) the Exercise Price in effect immediately prior to the
distribution giving rise to this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence. In the case of adjustment for a cash dividend that is, or
is coincident with, a regular quarterly cash dividend, the Per Share Fair Market Value would be
reduced by the per share amount of the portion of the cash dividend that would constitute an
Ordinary Cash Dividend. In the event that such distribution is not so made, the Exercise Price and
the number of Shares issuable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board of Directors determines not to distribute such shares,
evidences of indebtedness, assets, rights, cash or warrants, as the case may be, to the Exercise
Price that would then be in effect and the number of Shares that would then be issuable upon
exercise of this Warrant if such record date had not been fixed.

     (D) Certain Repurchases of Common Stock. In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the price determined by
multiplying the Exercise Price in effect immediately prior to the Effective Date of such Pro Rata
Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of
shares of Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the Market
Price of a share of Common Stock on the trading day immediately preceding the first public
announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the
denominator shall be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so
repurchased and (ii) the Market Price per share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates of the intent to
effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall be increased to the number obtained by dividing (x) the product
of (1) the number of Shares issuable upon the exercise of this Warrant before such adjustment, and
(2) the Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the immediately preceding
sentence. For the avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Shares issuable upon exercise of this Warrant shall be made pursuant to this Section 13(D).

     (E) Business Combinations. In case of any Business Combination or reclassification of
Common Stock (other than a reclassification of Common Stock referred to in Section 13(A)), the
Warrantholder’s right to receive Shares upon exercise of this Warrant shall be converted into the
right to exercise this Warrant to acquire the number of shares of stock or other securities or
property (including cash) which the Common Stock issuable (at the time of such Business Combination
or reclassification) upon exercise of this Warrant immediately prior to such

10

 

Business Combination or reclassification would have been entitled to receive upon
consummation of such Business Combination or reclassification; and in any such case, if necessary,
the provisions set forth herein with respect to the rights and interests thereafter of the
Warrantholder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably
be, to the Warrantholder’s right to exercise this Warrant in exchange for any shares of stock or
other securities or property pursuant to this paragraph. In determining the kind and amount of
stock, securities or the property receivable upon exercise of this Warrant following the
consummation of such Business Combination, if the holders of Common Stock have the right to elect
the kind or amount of consideration receivable upon consummation of such Business Combination, then
the consideration that the Warrantholder shall be entitled to receive upon exercise shall be deemed
to be the types and amounts of consideration received by the majority of all holders of the shares
of common stock that affirmatively make an election (or of all such holders if none make an
election).

     (F) Rounding of Calculations; Minimum Adjustments. All calculations under this Section
13 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest one- hundredth
(1/100th) of a share, as the case may be. Any provision of this Section 13 to the contrary
notwithstanding, no adjustment in the Exercise Price or the number of Shares into which this
Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01 or
one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or amounts so carried forward,
shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.

     (G) Timing of Issuance of Additional Common Stock Upon Certain Adjustments. In any
case in which the provisions of this Section 13 shall require that an adjustment shall become
effective immediately after a record date for an event, the Company may defer until the occurrence
of such event (i) issuing to the Warrantholder of this Warrant exercised after such record date and
before the occurrence of such event the additional shares of Common Stock issuable upon such
exercise by reason of the adjustment required by such event over and above the shares of Common
Stock issuable upon such exercise before giving effect to such adjustment and (ii) paying to such
Warrantholder any amount of cash in lieu of a fractional share of Common Stock; provided, however,
that the Company upon request shall deliver to such Warrantholder a due bill or other appropriate
instrument evidencing such Warrantholder’s right to receive such additional shares, and such cash,
upon the occurrence of the event requiring such adjustment.

     (H) Completion of Qualified Equity Offering. In the event the Company (or any
successor by Business Combination) completes one or more Qualified Equity Offerings on or prior to
December 31, 2009 that result in the Company (or any such successor) receiving aggregate gross
proceeds of not less than 100% of the aggregate liquidation preference of the Preferred Shares (and
any preferred stock issued by any such successor to the Original Warrantholder under the CPP), the
number of shares of Common Stock underlying the portion of this Warrant then held by the Original
Warrantholder shall be thereafter reduced by a number of shares of Common Stock equal to the
product of (i) 0.5 and (ii) the number of shares underlying

11

 

the Warrant on the Issue Date (adjusted to take into account all other
theretofore made adjustments pursuant to this Section 13).

     (I) Other Events. For so long as the Original Warrantholder holds this Warrant
or any portion thereof, if any event occurs as to which the provisions of this Section 13 are not
strictly applicable or, if strictly applicable, would not, in the good faith judgment of the Board
of Directors of the Company, fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of such provisions, then the Board of Directors
shall make such adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good faith opinion of the
Board of Directors, to protect such purchase rights as aforesaid. The Exercise Price or the number
of Shares into which this Warrant is exercisable shall not be adjusted in the event of a change in
the par value of the Common Stock or a change in the jurisdiction of incorporation of the Company.

     (J) Statement Regarding Adjustments. Whenever the Exercise Price or the number
of Shares into which this Warrant is exercisable shall be adjusted as provided in Section 13, the
Company shall forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price that shall be in
effect and the number of Shares into which this Warrant shall be exercisable after such adjustment,
and the Company shall also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Company’s records.

     (K) Notice of Adjustment Event. In the event that the Company shall propose to
take any action of the type described in this Section 13 (but only if the action of the type
described in this Section 13 would result in an adjustment in the Exercise Price or the number of
Shares into which this Warrant is exercisable or a change in the type of securities or property to
be delivered upon exercise of this Warrant), the Company shall give notice to the Warrantholder, in
the manner set forth in Section 13(J), which notice shall specify the record date, if any, with
respect to any such action and the approximate date on which such action is to take place. Such
notice shall also set forth the facts with respect thereto as shall be reasonably necessary to
indicate the effect on the Exercise Price and the number, kind or class of shares or other
securities or property which shall be deliverable upon exercise of this Warrant. In the case of any
action which would require the fixing of a record date, such notice shall be given at least 10 days
prior to the date so fixed, and in case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of any such action.

     (L) Proceedings Prior to Any Action Requiring Adjustment. As a condition
precedent to the taking of any action which would require an adjustment pursuant to this Section
13, the Company shall take any action which may be necessary, including obtaining regulatory, New
York Stock Exchange, NASDAQ Stock Market or other applicable national securities exchange or
stockholder approvals or exemptions, in order that the Company may thereafter validly and legally
issue as fully paid and nonassessable all shares of Common Stock that the Warrantholder is entitled
to receive upon exercise of this Warrant pursuant to this Section 13.

12

 

     (M) Adjustment Rules. Any adjustments pursuant to this Section 13 shall be
made successively whenever an event referred to herein shall occur. If an adjustment in Exercise
Price made hereunder would reduce the Exercise Price to an amount below par value of the Common
Stock, then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the
par value of the Common Stock.

     14. Exchange. At any time following the date on which the shares of Common Stock of
the Company are no longer listed or admitted to trading on a national securities exchange (other
than in connection with any Business Combination), the Original Warrantholder may cause the Company
to exchange all or a portion of this Warrant for an economic interest (to be determined by the
Original Warrantholder after consultation with the Company) of the Company classified as permanent
equity under U.S. GAAP having a value equal to the Fair Market Value of the portion of the Warrant
so exchanged. The Original Warrantholder shall calculate any Fair Market Value required to be
calculated pursuant to this Section 14, which shall not be subject to the Appraisal Procedure.

     15. No Impairment. The Company will not, by amendment of its Charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking of all such action
as may be necessary or appropriate in order to protect the rights of the Warrantholder.

     16. Governing Law. This Warrant will be governed by and construed in accordance with
the federal law of the United States if and to the extent such law is applicable, and otherwise in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State. Each of the Company and the Warrantholder agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the District of Columbia
for any civil action, suit or proceeding arising out of or relating to this Warrant or the
transactions contemplated hereby, and (b) that notice may be served upon the Company at the address
in Section 20 below and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 9 hereof. To the extent permitted by
applicable law, each of the Company and the Warrantholder hereby unconditionally waives trial by
jury in any civil legal action or proceeding relating to the Warrant or the transactions
contemplated hereby or thereby.

     17. Binding Effect. This Warrant shall be binding upon any successors or assigns of
the Company.

     18. Amendments. This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the Warrantholder.

     19 . Prohibited Actions. The Company agrees that it will not take any action
which would entitle the Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this Warrant, together with

13

 

all shares of Common Stock then outstanding and all shares of Common Stock then issuable
upon the exercise of all outstanding options, warrants, conversion and other rights, would exceed
the total number of shares of Common Stock then authorized by its Charter.

     20. Notices. Any notice, request, instruction or other document to be given hereunder
by any party to the other will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a recognized next day
courier service. All notices hereunder shall be delivered as set forth in Item 8 of Schedule A
hereto, or pursuant to such other instructions as may be designated in writing by the party to
receive such notice.

     21. Entire Agreement. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter Agreement (including all
documents incorporated therein), contain the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior and contemporaneous arrangements or undertakings
with respect thereto.

[Remainder of page intentionally left blank]

14

 

[Form of Notice of Exercise]

Date:                     

TO:     [Company]

RE:     Election to Purchase Common Stock

     The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby agrees
to subscribe for and purchase the number of shares of the Common Stock set forth below covered by
such Warrant. The undersigned, in accordance with Section 3 of the Warrant, hereby agrees to pay
the aggregate Exercise Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such Warrant, but not yet
subscribed for and purchased, if any, should be issued in the name set forth below.

Number of Shares of Common Stock                                                             

Method of Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of the
Warrant or cash exercise pursuant to Section 3(ii) of the Warrant, with consent of the Company
and the Warrantholder)          
                                                                      

Aggregate
Exercise Price:                                                            
                    

	 	 	 	 	 	 	 	 	 
	 

	 	Holder:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 

15

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a duly
authorized officer.

Dated: November 21, 2008

	 	 	 	 	 
	 	COMPANY: Associated Banc-Corp

 	 
	 	By:  	/s/ Paul S. Beideman
 	 
	 	 	Name:  	Paul S. Beideman 	 
	 	 	Title:  	Chairman and Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	Attest:

 	 
	 	By:  	/s/ Brian R. Bodager
 	 
	 	 	Name:  	Brian R. Bodager 	 
	 	 	Title:  	Chief Administrative Officer,
General Counsel and Corporate Secretary 	 
	 

[Signature Page to Warrant]

16

 

SCHEDULE A

	 	 	 
	Item 1 

Name:

Corporate or other organizational form:

Jurisdiction of organization:

	 	Associated Banc-Corp

Corporation

Wisconsin
	 
	 	 
	Item 2 

Exercise Price:

	 	$19.771
	 
	 	 
	Item 3 

Issue Date:

	 	November 21, 2008 
	 
	 	 
	Item 4

Amount of last dividend declared prior
to the Issue Date:

	 	$0.32 per share declared on
October 22, 2008 payable on November 17, 2008 to shareholders
of record on November 7, 2008
	 
	 	 
	Item 5 

Date of Letter Agreement between the Company

and the United States Department of the Treasury:

	 	November 21, 2008 
	 
	 	 
	Item 6

Number of shares of Common Stock: 
	 	 
	 
	 	 
	Item 7

Company’s address:

	 	3,983,308

1200 Hansen Road, Green Bay, Wisconsin 54304
	 
	 	 
	Item 8

Notice information:

	 	Associated Banc-Corp

1200 Hansen Road

Green Bay, Wisconsin 54304

Attention: Brian R. Bodager

Chief Administrative Officer, General Counsel and Corporate

Secretary

Telephone: (920) 431-8815 

Facsimile: (920) 431-8867 

E-mail: Brian.Bodager@associatedbank.com
	 
	 	 
	 

	 	with a copy to:

Katten Muchin Rosenman LLP

525 W. Monroe Street, Suite 1900 

Chicago, Illinois 60661 

Attention: Robert J. Wild, Esq.

Telephone: (312) 902-5567 

Facsimile: (312) 577-8878 

E-mail: Robert.Wild@kattenlaw.com

 

			
	1	 	Initial exercise price to be calculated based on the
average of closing prices of the Common Stock on the 20 trading days ending on
the last trading day prior to the date the Company’s application for
participation in the Capital Purchase Program was approved by the United States
Department of the Treasury.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00150-of-00352.parquet"}]]