Document:

The Andersons     EX-10.20

 

Exhibit 10.20

Form of Performance Share Award Agreement

	 	 	 	 	 
	To:

	 	 	 	Date: April 1, 2006
	 
	 	 	 	 
	Subject:

	 	          The Andersons, Inc.	 	 
	 	 	2006 Performance Share Unit Award Letter of Agreement

You have been selected to receive a Performance Share Unit (the “PSUs”) award subject to the terms
and conditions of the Long Term Performance Compensation Plan (the “Plan”) and this Letter of
Agreement (the “Agreement”). This Agreement will document the key provisions relating to the PSUs
awarded to you as of April 1, 2006.

Before executing this Agreement by signing the attached Acknowledgment of Receipt (the
“Acknowledgment”), please read the information provided below regarding the specific provisions of
your 2006 PSUs. A copy of the Plan is available upon request from the Human Resources Department.
By signing the Acknowledgment, you declare having read this Agreement and agree to be bound by all
the terms and conditions contained herein. When you are satisfied that you understand the terms and
conditions of the PSU award, please sign the attached Acknowledgment and, return to                     
in the Personnel Department by Friday, April 14, 2006. Remember to keep a copy for your files.

	 	1.	 	Grant of Performance Share Units: Subject to the terms and conditions of the Plan
and this Agreement, The Andersons, Inc. (the “Company”) hereby awards to you                     
PSUs. Each PSU shall be equivalent to one Common Share of the Company.
	 
	 	2.	 	Performance Period: The Performance Period for the PSUs awarded shall be the three
year period beginning January 1, 2006 and ending December 31, 2008.
	 
	 	3.	 	Performance Schedule and Vesting of PSUs: Awards shall vest as of the last day of
the Performance Period in accordance with the following Performance Schedule based on the
Company’s three-year cumulative fully diluted earnings per share (“EPS”) computed under
Generally Accepted Accounting Principles (GAAP) during the Performance Period. The
Compensation Committee of the Board of Directors reserves the right to adjust the EPS
presented in the annual report for extraordinary transactions which impact EPS to ensure
the pay for performance relationship. No PSUs will be considered vested and earned for
payment if the Company’s three-year cumulative EPS during the Performance Period is less
than $9.55.

33

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Annual EPS	 	 	 	 	 	 	 	 	 	 	 	 	 	Cumulative	 	% Units
	Growth Rate	 	Year 1	 	Year 2	 	Year 3	 	EPS Growth	 	Vested *
	 
	 
	 	 	14	%	 	$	3.42	 	 	$	3.90	 	 	$	4.44	 	 	$	11.76	 	 	 	100	%
	 
	 	 	13	%	 	$	3.39	 	 	$	3.83	 	 	$	4.33	 	 	$	11.55	 	 	 	93	%
	 
	 	 	12	%	 	$	3.36	 	 	$	3.76	 	 	$	4.21	 	 	$	11.34	 	 	 	86	%
	 
	 	 	11	%	 	$	3.33	 	 	$	3.70	 	 	$	4.10	 	 	$	11.13	 	 	 	79	%
	 
	 	 	10	%	 	$	3.30	 	 	$	3.63	 	 	$	3.99	 	 	$	10.92	 	 	 	71	%
	 
	 	 	9	%	 	$	3.27	 	 	$	3.56	 	 	$	3.89	 	 	$	10.72	 	 	 	64	%
	 
	 	 	8	%	 	$	3.24	 	 	$	3.50	 	 	$	3.78	 	 	$	10.52	 	 	 	57	%
	 
	 	 	7	%	 	$	3.21	 	 	$	3.43	 	 	$	3.68	 	 	$	10.32	 	 	 	50	%
	 
	 	 	6	%	 	$	3.18	 	 	$	3.37	 	 	$	3.57	 	 	$	10.12	 	 	 	40	%
	 
	 	 	5	%	 	$	3.15	 	 	$	3.31	 	 	$	3.47	 	 	$	9.93	 	 	 	30	%
	 
	 	 	4	%	 	$	3.12	 	 	$	3.24	 	 	$	3.37	 	 	$	9.74	 	 	 	20	%
	 
	 	 	3	%	 	$	3.09	 	 	$	3.18	 	 	$	3.28	 	 	$	9.55	 	 	 	10	%
	 
	 
	 	 	0	%	 	$	3.00	 	 	$	3.00	 	 	$	3.00	 	 	$	9.00	 	 	 	0	%

 

			
	*	 	The target annual EPS growth rate is 7%. At a 7% cumulative EPS
growth rate 100% of competitive target long-term compensation is achieved,
which is equal to 50% of the PSUs granted to you under this agreement. The “%
Units Vested” at a 14% cumulative EPS growth rate achieves 200% of competitive
target long-term compensation, which is equal to 100% of the PSUs granted to
you under this agreement.

	 	 	 	You must be actively employed by the Company as of the end of the Performance Period to be
eligible to vest in and receive any payment of your PSUs except as noted in paragraph 7
below. Actual vested percentage rates will be interpolated from the above Performance
Schedule using the actual three-year cumulative fully diluted cumulative EPS achieved at
the end of the Performance Period.
	 
	 	4.	 	Rights as a Shareholder: You shall have no rights as a shareholder with respect to
the Common Shares subject to the PSUs awarded to you during the Performance Period
including the right to receive dividends or to vote the Common Shares subject to the PSUs.
	 
	 	5.	 	Equivalent Dividends: If any dividends are paid with respect to Commons Shares of
the Company during the Performance Period, additional PSUs will be awarded to you as of
the last day of the Performance Period. The amount of additional PSUs will be computed
based on the cumulative per share dividend rate actually paid on Common Shares during the
Performance Period and the share price on the last day of the Performance Period.
Additional PSUs awarded to you, if any, shall be subject to the terms and conditions of
the Plan and this Agreement and will vest in accordance with the Performance Schedule
defined in this Agreement.
	 
	 	6.	 	Payment of Earned PSUs: Vested PSUs rounded up to the nearest whole unit shall be
delivered to you in the form of Common Shares no later than 75 days following the
conclusion of the Performance Period. PSUs which do not vest as

34

 

	 	 	 	of the last day of the Performance Period will be forfeited. In that regard, you agree
that you will comply with (or provide adequate assurance as to future compliance with) all
applicable securities laws. In addition, the Company must receive from you payment or a
written request for arrangement of terms for payment, including share withholding, of all
federal, state or local taxes of any kind required to be withheld with respect to the
vesting of Shares as condition precedent to the delivery of the Shares. Shares are subject
to tax withholding based on the market value of the Shares on the date of vesting (i.e.,
closing price on the business day prior to the date of vesting) at required withholding tax
rates. Withholding taxes due, if not satisfied in shares, must be paid in full within
thirty days of the vesting date.
	 
	 	7.	 	Termination and Forfeiture of PSUs: Your right to receive unvested PSUs shall
terminate in whole and forfeit upon your termination of employment with the Company or its
subsidiaries for any reason, except in the event of your death, Permanent Disability,
Retirement, or Termination without Cause as a result of a Sale of your Business Unit. If
your termination with the Company meets one of the listed exceptions, then your unvested
PSUs will remain subject to the Performance Schedule during the Performance Period
provided in this Agreement and the number of your PSUs subject to vesting at the end of
the Performance Period will be reduced proportionate to the number of months rounded to
the nearest whole month you were actively employed during the Performance Period.
	 
	 	8.	 	Other Acknowledgments: You acknowledge that the Compensation Committee may adopt
and/or change from time to time such rules and regulations as it deems proper to
administer the Plan.
	 
	 	9.	 	Binding Effect: This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors and
assigns.

If you have any questions related to the tax consequences of your stock award, please contact
                     at                      in Corporate Accounting. General information is available by
contacting                      at                      in Human Resources.

	 	 	 	 	 
	 

	 	 	 	Thank You,
	 
	 	 	 	 
	 

	 	 	 	/s/ Charles E. Gallagher
	 

	 	 	 	Charles E. Gallagher

Vice President, Human Resources

The Andersons, Inc.

35Exhibit 4.1

 

Exhibit 4.1

REGENT COMMUNICATIONS, INC.

2006 DIRECTORS EQUITY COMPENSATION PLAN

(As adopted January 25, 2006, subject to stockholder approval)

Article 1. Establishment, Purpose, and Duration

     1.1 Establishment of the Plan. On January 25, 2006, the Board of Directors of Regent
Communications, Inc. (the “Company”) adopted, subject to the approval of stockholders, this equity
compensation plan known as the “Regent Communications, Inc. 2006 Directors Equity Compensation
Plan” (hereinafter referred to as the “Plan”), which permits the grant of various types of stock
awards.

     1.2 Purpose of the Plan. The purpose of the Plan is to promote the success of the Company and
its Subsidiaries by linking the personal financial interests of the Company’s Directors to the
financial success of the Company and its Subsidiaries and to growth in shareholder value. The Plan
is designed to provide flexibility to the Company and its Subsidiaries in their ability to attract
and retain the services of Directors upon whose judgment, interest, and special effort the success
of the Company is largely dependent.

     1.3 Duration of the Plan. The Plan was approved by the Board on January 25, 2006, shall become
effective on the date it is approved by the Company’s stockholders (the “Effective Date”), and
shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any
time pursuant to Article 13 herein, until all Shares subject to it shall have been purchased or
acquired according to the provisions herein. However, in no event may an Award be granted under
the Plan on or after the tenth (10th) anniversary of the Effective Date of the Plan.

Article 2. Definitions and Construction

     2.1 Definitions. Whenever used in the Plan, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter of the word is capitalized:

          (a) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights or Restricted Stock.

          (b) “Award Agreement” means the agreement or other writing (which may be framed as a
plan or program) that sets forth the terms and conditions of each Award under the Plan, including
any amendment or modification thereof.

          (c) “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of
the General Rules and Regulations under the Exchange Act.

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

10

 

          (e) “Change in Control” shall mean the purchase or other acquisition by any person,
entity or group of persons, within the meaning of section 13(d) or 14(d) of the Securities Exchange
Act of 1934 (“Act”), or any comparable successor provisions, of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Act) of 30 percent or more of either the outstanding
shares of common stock or the combined voting power of Regent Communications, Inc.’s then
outstanding voting securities entitled to vote generally, or the approval by the stockholders of
Regent Communications, Inc. of a reorganization, merger, or consolidation, in each case, with
respect to which persons who were stockholders of Regent Communications, Inc. immediately prior to
such reorganization, merger or consolidation do not, immediately thereafter, own more than 50
percent of the combined voting power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated Regent Communications, Inc.’s then outstanding securities, or a
liquidation or dissolution of Regent Communications, Inc. or of the sale of all or substantially
all of Regent Communications, Inc.’s assets.

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

          (g) “Committee” means the Regent Communications, Inc. Compensation Committee, or
such other committee designated by the Board of Directors to administer this Plan. The Committee
shall be appointed by the Board, shall consist of two or more outside, independent members of the
Board, and in the judgment of the Board, shall be qualified to administer the Plan as contemplated
by (i) Rule 16b-3 of the Securities Exchange Act of 1934 (or any successor rule), and (ii) any
rules and regulations of the Nasdaq Stock Market (or such other stock exchange on which the Stock
is traded). Any member of the Committee who does not satisfy the qualifications set out in the
preceding sentence may recuse himself or herself from any vote or other action taken by the
Committee. The Board may, at any time and in its complete discretion, remove any member of the
Committee and may fill any vacancy in the Committee.

          (h) “Company” means Regent Communications, Inc., a Delaware corporation, or any
successor thereto as provided in Article 15 herein.

          (i) “Director” means a director of the Company or a Subsidiary.

          (j) “Disability” means totally and permanently disabled as from time to time defined
under the long-term disability plan of the Company or a Subsidiary applicable to Employee, or in
the case where there is no applicable plan, permanent and total disability as defined in Section
22(e)(3) of the Code (or any successor Section).

          (k) “Effective Date” means the date this Plan is approved by the Company’s
stockholders.

          (l) “Employee” means an employee of the Company or any of its Subsidiaries,
including an employee who is an officer or a Director.

          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.

11

 

          (n) “Existing Plan(s)” means the Regent Communications, Inc. 1998 Management Stock
Option Plan, as from time to time amended, the Regent Communications, Inc. 2001 Directors’ Stock
Option Plan, as from time to time amended, and the Regent Communications, Inc. 2005 Incentive
Compensation Plan, as from time to time amended, as the context so indicates.

          (o) As used in this Plan (unless a different method of calculation is required by
applicable law) “Fair Market Value” on or as of any date shall mean (i) the closing price of the
Stock as reported by the Nasdaq Stock Market (or, if the Stock is not listed for trading on the
Nasdaq Stock Market, then on such other national exchange upon which the Stock is then listed) for
such date, or if there are no sales on such date, on the next following business day on which there
were sales, or (ii) in the event that the Stock is no longer listed for trading on a national
exchange, an amount determined in accordance with standards adopted by the Committee.

          (p) “Nonqualified Stock Option” or “NQSO” or “Option” means an option to purchase
Stock, granted under Article 8 herein, none of which shall be an incentive stock option pursuant to
Section 422 of the Code (or any successor section).

          (q) “Participant” means a Director who has been granted an Award under the Plan.

          (r) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock is restricted, during which the Participant is subject to a substantial risk of
forfeiture, pursuant to Article 7 herein.

          (s) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in
Section 13(d) thereof.

          (t) “Plan” means this Regent Communications, Inc. 2006 Directors Equity Compensation
Plan, as herein described and as hereafter from time to time amended.

          (u) “Previously-Acquired Shares” means shares of Stock acquired by the Participant
or any beneficiary of a Participant, which Shares have been held for a period of not less than six
months, or such longer or shorter period as the Committee may require or permit.

          (v) “Restricted Stock” means an Award of Stock granted to a Participant pursuant to
Article 7 herein.

          (w) “Stock” or “Shares” means the common stock, $.01 par value, of the Company.

          (x) “Stock Appreciation Right” or “SAR” means an Award, granted to a Participant
pursuant to Article 6 herein.

          (y) “Subsidiary” shall mean any corporation which is a subsidiary corporation of the
Company, as that term is defined in Section 424(f) of the Code.

12

 

          (z) “Voting Stock” shall mean securities of any class or classes of stock of a
corporation, the holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors.

     2.2. Gender and Number. Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the singular, and the
singular shall include the plural.

     2.3. Severability. In the event any provision of the Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the
Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

Article 3. Administration

     3.1. Authority of the Committee. The Plan shall be administered by the Committee.
Subject to the provisions of the Plan, the Committee shall have all powers vested in it by the term
of the Plan, such powers to include the authority to:

               (i) Select the Directors to be granted Awards under the Plan;

               (ii) Determine the terms, conditions, form and amount of Awards to be made to
each person selected;

               (iii) Determine the time when Awards are to be made and any conditions which
must be satisfied before an Award is made;

               (iv) Establish objectives and conditions for earning Awards;

               (v) Determine the terms of each Award Agreement and any amendments or
modifications thereof (which shall not be inconsistent with the Plan); and

               (vi) Determine the guidelines and/or procedures for the payment or exercise
of Awards.

     Notwithstanding the foregoing, no action of the Committee (other than pursuant to Section 4.2
hereof) may, without the consent of the person or persons entitled to exercise any outstanding
Option or Stock Appreciation Right, adversely affect the rights of such person or persons with
respect to such Awards.

     3.2. Decisions Binding. The Committee shall have full power and authority to administer and
interpret the Plan and to adopt or establish such rules, regulations, agreements, guidelines,
procedures and instruments, which are not contrary to the terms of the Plan and which, in its
opinion, may be necessary or advisable for the administration and operation of the Plan. All
determinations and decisions made by the Committee pursuant to the provisions of the Plan and all
related orders or resolutions of the Board of Directors shall be final, conclusive and binding on
all persons, including the Company and its Subsidiaries, its stockholders, employees, and
Participants and their estates and beneficiaries, and such determinations and decisions shall not
be reviewable.

13

 

     3.3 Delegation of Certain Responsibilities. The Committee may, subject to the terms of the
Plan and applicable law, appoint such agents as it deems necessary or advisable for the proper
administration of the Plan under this Article 3. Notwithstanding the foregoing, however, the
Committee may not delegate its authority to grant Awards under the Plan, or to correct errors,
omissions or inconsistencies in the Plan. All authority delegated by the Committee under this
Section 3.3 shall be exercised in accordance with the provisions of the Plan and any guidelines for
the exercise of such authority that may from time to time be established by the Committee.

     3.4. Procedures of the Committee. Except as may otherwise be provided in the charter or similar
governing document applicable to the Committee, (a) all determinations of the Committee shall be
made by not less than a majority of its members present at the meeting (in person or otherwise) at
which a quorum is present; (b) a majority of the entire Committee shall constitute a quorum for the
transaction of business; and (c) any action required or permitted to be taken at a meeting of the
Committee may be taken without a meeting if a unanimous written consent, which sets forth the
action, is signed by each member of the Committee and filed with the minutes for proceedings of the
Committee. Service on the Committee shall constitute service as a director of the Company so that
members of the Committee shall be entitled to indemnification, limitation of liability and
reimbursement of expenses with respect to their services as members of the Committee to the same
extent that they are entitled under the Company’s Certificate of Incorporation, as amended from
time to time, and Delaware law for their services as directors of the Company.

     3.5. Award Agreements. Each Award under the Plan shall be evidenced by an Award Agreement which
shall be signed by an authorized officer of the Company and, if required, by the Participant, and
shall contain such terms and conditions as may be authorized or approved by the Committee. Such
terms and conditions need not be the same in all cases.

     3.6. Rule 16b-3 Requirements. Notwithstanding any other provision of the Plan, the Board or the
Committee may impose such conditions on any Award (including, without limitation, the right of the
Board or the Committee to limit the time of exercise to specified periods) as may be required to
satisfy the requirements of Rule 16b-3 (or any successor rule), under the Exchange Act (“Rule
16b-3”).

Article 4. Stock Subject to the Plan

     4.1. Number of Shares.

          (a) Subject to adjustment as provided in Section 4.2 herein, the aggregate number of
Shares that may be delivered under this Plan at any time shall not exceed Two Hundred Fifty
Thousand (250,000) Shares. Stock delivered under this Plan may consist, in whole or in part, of
authorized and unissued Shares or treasury Shares. To the extent that Shares subject to an
outstanding Award under this Plan are not issued by reason of the forfeiture, termination,
surrender, cancellation or expiration while unexercised of such award, by reason of the tendering
or withholding of Shares (by either actual delivery or by attestation) to pay all or a portion of
the purchase price or to satisfy all or a portion of the tax withholding obligations relating to an
Award, by reason of being settled in cash in lieu of Stock or settled in a manner such that some or
all of the Shares covered by the Award are not issued to a Participant, or being exchanged for a
grant under this Plan that does not involve Stock, then such shares shall immediately again be
available for issuance under this Plan. The Committee may from time to

14

 

time adopt and observe such procedures concerning the counting of Shares against the Plan
maximum as it may deem appropriate.

          (b) Shares of Stock issued in connection with the Existing Plans and/or awards that
are assumed, converted or substituted pursuant to a merger, acquisition or similar transaction
entered into by the Company or any of its Subsidiaries shall not reduce the number of Shares
available for issuance under this Plan.

     4.2. Adjustments in Authorized Shares. In the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, Stock dividend, split-up, share
combination, or other change in the corporate structure of the Company affecting the Stock, such
adjustment shall be made in the number and class of shares which may be delivered under the Plan,
and in the number and class of and/or price of shares subject to outstanding Awards granted under
the Plan, as may be determined to be appropriate and equitable by the Committee, in its sole
discretion, to prevent dilution or enlargement of rights; and provided that the number of shares
subject to any Award shall always be a whole number.

Article 5. Eligibility and Participation

     5.1. Eligibility. Persons eligible to participate in the Plan include all Directors, other than
Directors who are also Employees.

     5.2. Actual Participation. Subject to the provisions of the Plan, the Committee may from time
to time select those Directors to whom Awards shall be granted and determine the nature and amount
of each Award. No Director shall have any right to be granted a subsequent Award under the Plan if
previously granted an Award.

Article 6. Stock Appreciation Rights

     6.1. Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, Stock
Appreciation Rights may be granted to Directors at any time and from time to time, at the
discretion of the Committee. Subject to the immediately preceding sentence, the Committee shall
have the sole discretion, subject to the requirements of the Plan, to determine the actual number
of Shares subject to SARs granted to any Participant.

     6.2. Exercise of SARs. SARs may be exercised upon whatever terms and conditions the Committee,
in its sole discretion, imposes upon the SARs, which may include, but are not limited to, a
corresponding proportional reduction in Options or other Awards granted in tandem with such SARs.

     6.3. Payment of SAR Amount. Upon exercise of the SAR, the holder shall be entitled to receive
payment of an amount determined by multiplying:

          (a) The difference between the Fair Market Value of a Share on the date of exercise
over the price fixed by the Committee at the date of grant (which price shall not be less than 100%
of the Fair Market Value of a Share on the date of grant); by

          (b) The number of Shares with respect to which the SAR is exercised.

     6.4. Form of Payment. Payment to a Participant of the amount due upon SAR exercise will be made
in Shares having a Fair Market Value as of the date of exercise equal to

15

 

the amount
determined under Section 6.3 above, except as the Committee may otherwise provide for the payment
in cash in the applicable Award Agreement or any amendment or modification thereof.

     6.5. Duration of SAR. Each SAR shall expire at such time as the Committee shall determine in
the Award Agreement, however, no SAR shall be exercisable later than the tenth (10th)
anniversary of the date of its grant.

     6.6. Termination of Service. The disposition of SARs held by a Participant at the time of
termination of service as a Director shall be determined in accordance with Article 9 below.

     6.7. Nontransferability of SARs. Except as the Committee may permit, no SAR granted under the
Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise
than by will or by the laws of descent and distribution. Further, all SARs granted to a
Participant under the Plan shall be exercisable during his lifetime only by such Participant.

Article 7. Restricted Stock

     7.1. Grant of Restricted Stock. Subject to the terms and conditions of the Plan, the Committee,
at any time and from time to time, may grant Restricted Stock under the Plan to such Directors and
in such amounts and on such terms and conditions as it shall determine.

     7.2. Transferability. Except as the Committee may permit, the Shares of Restricted Stock
granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the termination of the applicable Period of Restriction or for such period of
time as shall be established by the Committee and as shall be specified in the Award Agreement, or
upon earlier satisfaction of other conditions (which may include the attainment of performance
goals) as specified by the Committee in its sole discretion and set forth in the Award Agreement,
otherwise than by will or by the laws of descent and distribution. All rights with respect to the
Restricted Stock granted to a Participant under the Plan shall be exercisable during his lifetime
only by such Participant.

     7.3. Other Restrictions. The Committee shall impose such other restrictions on any Shares of
Restricted Stock granted pursuant to the Plan as it may deem advisable and the Committee may legend
certificates representing Restricted Stock or record stop transfer orders with respect to
uncertificated Shares to give appropriate notice of such restrictions.

     7.4. End of Period of Restriction. Except as otherwise provided in this Article, after the last
day of the Period of Restriction, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall become freely transferable by the Participant. Once the Shares are
released from the restrictions, the Participant shall be entitled to have the legend or stop
transfer order removed.

     7.5. Voting Rights. During the Period of Restriction, Participants holding Shares of Restricted
Stock granted hereunder may exercise full voting rights with respect to those Shares, unless
otherwise specified in the applicable Award Agreement.

     7.6. Dividends and Other Distributions. Except as otherwise provided by the Committee, during
the Period of Restriction, Participants holding Shares of Restricted Stock shall be entitled to
receive all dividends and other distributions paid with respect to those Shares while they are so
held. If any such dividends or distributions are paid in Shares, the Shares shall

16

 

be subject to the
same restrictions on transferability as the Shares of Restricted Stock with respect to which they
were paid.

     7.7. Termination of Service. The disposition of Restricted Stock held by a Participant at the
time of termination of service as a Director shall be determined in accordance with Article 9
below.

Article 8. Options

     8.1. Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted
to Directors at any time and from time to time as shall be determined by the Committee. The
Committee shall have the sole discretion, subject to the requirements of the Plan, to determine the
actual number of Shares subject to Options granted to any Participant.

     8.2. Option Award Agreement. Each Option grant shall be evidenced by an Award Agreement that
shall specify the type of Option granted, the Option price, the duration of the Option, the number
of Shares to which the Option pertains, and such other provisions as the Committee shall determine.
All Options shall be Nonqualified Stock Options whose grant is not intended to be subject to the
provisions of Code Section 422.

     8.3. Option Price. The purchase price per share of Stock covered by an Option shall be
determined by the Committee but shall not be less than 100% of the Fair Market Value of such Stock
on the date the Option is granted. Notwithstanding the authority granted to the Committee pursuant
to Section 3.1 of the Plan, once an Option is granted, the Committee shall have no authority to
reduce the Option price, nor may any Option granted under the Plan be surrendered to the Company as
consideration for the grant of a new Option with a lower exercise price without the approval of the
Company’s stockholders, except pursuant to Section 4.2 of the Plan related to an adjustment in the
number of Shares.

     8.4. Duration of Options. Each Option shall expire at such time as the Committee shall
determine in the Award Agreement, however, no Option shall be exercisable later than the tenth
(10th) anniversary date of its grant.

     8.5. Exercise of Options. To the extent exercisable and not expired, forfeited, cancelled or
otherwise terminated, Options granted under the Plan shall be exercisable at such times and be
subject to such restrictions and conditions as provided in the Award Agreement, which need not be
the same for all Participants.

     8.6. Payment. To the extent exercisable and not expired or forfeited, cancelled or otherwise
terminated, Options shall be exercised by the delivery of a written notice to the Company setting
forth the number of Shares with respect to which the Option is to be exercised, accompanied by full
payment for the Shares. The Option price upon exercise of any Option shall be payable to the
Company in full either (a) in cash or its equivalent, including, but not limited to, delivery of a
properly completed exercise notice, together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale proceeds from the sale of the Shares subject to the
Option exercise or to deliver loan proceeds from such broker to pay the exercise price and any
withholding taxes due, (b) by delivery or deemed delivery through attestation of
Previously-Acquired Shares having a Fair Market Value at the time of exercise equal to the total
Option price, (c) by a combination of (a) or (b), or (d) such other methods as the Committee deems
appropriate. The proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes. As soon as

17

 

practicable after receipt
of written notification and payment, the Company shall deliver to the Participant Stock
certificates in an appropriate amount based upon the number of Options exercised, issued in the
Participant’s name.

     8.7. Restrictions on Stock Transferability. The Committee shall impose such restrictions on any
Shares acquired pursuant to the exercise of an Option under the Plan as it may deem advisable,
including, without limitation, restrictions under applicable Federal securities law, under the
requirements of any stock exchange upon which such Shares are then listed and under any blue sky or
state securities laws applicable to such Shares.

     8.8. Termination of Service. The disposition of Options held by a Participant at the time of
termination of service as a Director shall be determined in accordance with Article 9 below.

     8.9. Nontransferability of Options. Except as the Committee may permit, no Option granted under
the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further, all Options granted to
a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
The Committee may impose additional restrictions on transferability, and establish such operational
procedures regarding transferability, as it may deem appropriate, necessary, or advisable.

Article 9. Termination of Service as a Director

     9.1. Termination of Service Other Than Due to Death or Disability. Subject to Section 9.3
below, if the service of a Participant as a Director shall terminate for any reason other than
death or Disability:

          (a) Each SAR shall be immediately cancelled and terminated;

          (b) Any shares of Restricted Stock, still subject to restrictions as of the date of
such termination, shall automatically be forfeited and returned to the Company or cancelled, as
applicable; and

          (c) Each Option shall be cancelled and terminated if not exercised within the 90 day
period immediately following the date of termination of service as a Director.

     9.2. Termination Due to Death or Disability. Subject to Section 9.3 below, in the event the
service of a Participant as a Director is terminated by reason of death or Disability:

          (a) Each SAR and Option held by the Participant (whether or not exercisable prior to
the date of termination) may be exercised on or before the earlier of the expiration date of the
SAR or Option or within the applicable period provided by the Code for termination due to death or
permanent disability; and

          (b) Any remaining Period of Restriction applicable to Restricted Stock Units
pursuant to Section 7.2 herein shall automatically terminate and the Shares of Restricted Stock
shall thereby be free of restrictions and be fully transferable.

     9.3. Effect of Termination of Service. The disposition of each Award held by a Participant in
the event of termination of service as a Director shall be as determined by the

18

 

Committee and set forth in the applicable Award Agreement and any amendment or modification
thereof, which
disposition may differ from the provisions of Sections 9.1 and 9.2 above. To the extent the
applicable Award Agreement or an amendment or modification thereof does not expressly provide for
such disposition, the disposition of the Award shall be determined in accordance with Sections 9.1
and 9.2.

Article 10. Beneficiary Designation

     Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively and who may include a trustee under a will or living
trust) to whom any benefit under the Plan is to be paid in case of his death before he receives any
or all of such benefit. Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Committee, and will be effective only when filed
by the Participant in writing with the Committee during his lifetime. In the absence of any such
designation or if all designated beneficiaries predecease the Participant, benefits remaining
unpaid at the Participant’s death shall be paid to the Participant’s estate.

Article 11. Rights of Participants

     11.1. Service. Nothing in the Plan shall interfere with or limit in any way the right of the
Company, its stockholders or its Board of Directors to remove a Participant as a Director, nor
confer upon any Participant any right to continue to serve as a Director of the Company.

     11.2. Participation. No Director shall have a right to be selected as a Participant, or, having
been so selected, to be selected again as a Participant.

     11.3. No Implied Rights. Neither the establishment of the Plan nor any amendment thereof shall
be construed as giving any Participant, beneficiary, or any other person any legal or equitable
right unless such right shall be specifically provided for in the Plan or conferred by specific
action of the Committee in accordance with the terms and provisions of the Plan. Except as
expressly provided in this Plan, neither the Company nor any of its Subsidiaries shall be required
or be liable to make any payment under the Plan.

     11.4. No Right to Company Assets. Neither the Participant nor any other person shall acquire, by
reason of the Plan, any right in or title to any assets, funds or property of the Company or any of
its Subsidiaries whatsoever including, without limiting the generality of the foregoing, any
specific funds, assets, or other property which the Company or any of its Subsidiaries, in its sole
discretion, may set aside in anticipation of a liability hereunder. Any benefits which become
payable hereunder shall be paid from the general assets of the Company or the applicable
subsidiary. The Participant shall have only a contractual right to the amounts, if any, payable
hereunder unsecured by any asset of the Company or any of its Subsidiaries. Nothing contained in
the Plan constitutes a guarantee by the Company or any of its Subsidiaries that the assets of the
Company or the applicable subsidiary shall be sufficient to pay any benefit to any person.

     11.5. Rights as Stockholder; Fractional Shares. Except as otherwise provided under the Plan, a
Participant or Beneficiary shall have no rights as a holder of Shares with respect to Awards
hereunder, unless and until Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company). Fractional Shares shall not
be issued or transferred under an Award, but the Committee may authorize

19

 

payment of cash in lieu of a fraction, or round the fraction down. To the extent the Stock is
uncertificated,
references in this Plan to certificates shall be deemed to include references to any book-entry
evidencing such Shares.

     11.6. Other Restrictions and Limitations. The Committee may impose such restrictions and
limitations on any Awards granted pursuant to the Plan as it may deem advisable, including, without
limitation, restrictions under applicable Federal or state securities laws, Share ownership or
holding period requirements, or requirements to enter into or to comply with confidentiality,
non-competition and/or other restrictive or similar covenants, and may legend the certificates
issued in connection with an Award to give appropriate notice of any such restrictions.

Article 12. Change in Control

Notwithstanding any other provisions of the Plan, and except as otherwise provided in the Award
Agreement, in the event of a Change in Control all Awards granted under this Plan shall immediately
vest 100% in each Participant, including Options, Stock Appreciation Rights and Restricted Stock.

Article 13. Amendment, Modification, and Termination

     13.1.
Amendment, Modification and Termination of Plan. The Board may terminate the Plan or any
portion thereof at any time, and may amend or modify the Plan from time to time in such respects as
the Board may deem advisable in order that any Awards thereunder shall conform to any change in
applicable laws or regulations or in any other respect the Board may deem to be in the best
interests of the Company; provided, however, that no such amendment or modification shall, without
stockholder approval, (i) except as provided in Section 4.2, increase the number of shares of Stock
which may be issued under the Plan, (ii) expand the types of Awards available to Participants under
the Plan, (iii) materially expand the class of persons eligible to participate in the Plan; (iv)
delete or limit the provisions in Section 8.3 prohibiting the repricing of Options or reduce the
price at which Shares may be offered under Options; or (v) extend the termination date for making
Awards under the Plan. In addition, the Plan shall not be amended without approval of such
amendment by the Company’s stockholders if such amendment is required under (1) the rules and
regulations of the Nasdaq Stock Market or an other national exchange on which the Stock is then
listed, or (2) other applicable law, rules or regulations.

     13.2. Amendment or Modification of Awards. The Committee may amend or modify any outstanding
Awards in any manner to the extent that the Committee would have had the authority under the Plan
initially to make such Award as so modified or amended, including without limitation, to change the
date or dates as of which Awards may be exercised, to remove the restrictions on Awards, or to
modify the manner in which Awards are determined and paid.

     13.3. Effect on Outstanding Awards. No such amendment, modification or termination of the Plan
pursuant to Section 13.1 above, or amendment or modification of an Award pursuant to Section 13.2
above, shall materially adversely alter or impair any outstanding Awards without the consent of the
Participant affected thereby.

20

 

Article 14. Withholding

     14.1. Tax Withholding. The Company and any of its Subsidiaries shall have the power and the
right to deduct or withhold, or require a Participant to remit to the Company or any of its
Subsidiaries, an amount sufficient to satisfy Federal, state and local taxes (including the
Participant’s FICA obligation) required by law to be withheld with respect to any grant, exercise,
or payment made under or as a result of this Plan.

     14.2. Stock Delivery or Withholding. With respect to withholding required upon the exercise of
Options or SARs, upon the lapse of restrictions on Restricted Stock, or upon any other taxable
event arising as a result of Awards granted hereunder, Participants may elect to satisfy the
withholding requirement, in whole or in part, by delivering to the Company Shares of Stock
previously owned by the Participant or, if permitted by the Committee, having the Company withhold
Shares of Stock, in each case having a Fair Market Value on the date the tax is to be determined
equal to the minimum (or such greater amount as the Committee may permit) statutory total tax which
would be imposed on the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate. Stock withholding elections made by
Participants who are subject to the short-swing profit restrictions of Section 16 of the Exchange
Act must comply with the additional restrictions of Section 16 and Rule 16b-3 in making their
elections.

Article 15. Successors

     All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall
be binding on any successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all
of the business and/or assets of the Company.

Article 16. Requirements of Law

     16.1. Requirements of Law. The granting of Awards and the issuance of Shares of Stock under this
Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

     16.2. Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance
with and governed by the laws of the State of Delaware.

21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]