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EXHIBIT 10.1

THE CORPORATE EXECUTIVE BOARD COMPANY

2004 STOCK INCENTIVE PLAN

1. Purpose

     The purpose of The Corporate Executive Board Company 2004 Stock Incentive
Plan (the “Plan”) is to advance the interests of The Corporate Executive Board
Company (the “Company”) by stimulating the efforts of employees, officers and,
to the extent provided by Section 5(d), other service providers, in each case
who are selected to be participants, by heightening the desire of such persons
to continue in working toward and contributing to the success and progress of
the Company. The Plan supercedes the Company’s 1999 Stock Option Plan, 2001
Stock Option Plan and 2002 Non-Executive Stock Incentive Plan with respect to
future awards, and provides for the grant of Incentive and Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units
and Deferred Stock Units, any of which may be performance-based, and for
Incentive Bonuses, which may be paid in cash or stock or a combination thereof,
as determined by the Administrator.

2. Definitions

     As used in the Plan, the following terms shall have the meanings set forth
below:

	(a)	 	“Administrator” means the Administrator of the Plan in
accordance with Section 18.

	(b)	 	“Award” means an Incentive Stock Option, Non-Qualified Stock
Option, Stock Appreciation Right, Restricted Stock, Restricted Stock
Unit, Deferred Stock Unit or Incentive Bonus granted to a
Participant pursuant to the provisions of the Plan, any of which the
Administrator may structure to qualify in whole or in part as a
Performance Award.

	(c)	 	“Award Agreement” means a written agreement or other
instrument as may be approved from time to time by the Administrator
implementing the grant of each Award. An Agreement may be in the
form of an agreement to be executed by both the Participant and the
Company (or an authorized representative of the Company) or
certificates, notices or similar instruments as approved by the
Administrator.

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

	(e)	 	“Code” means the Internal Revenue Code of 1986, as amended
from time to time, and the rulings and regulations issues
thereunder.

	(f)	 	“Common Stock” means the Company’s common stock, par value
$.01, subject to adjustment as provided in Section 12.

 

 

	(g)	 	“Company” means The Corporate Executive Board Company, a
Delaware corporation.

	(h)	 	“Deferred Stock Unit” or “DSU” means an Award granted
pursuant to Section 9 representing the unfunded and unsecured right
to receive Common Stock or cash or a combination thereof, as
determined by the Administrator, at the end of a specified deferral
period.

	(i)	 	“Incentive Bonus” means a bonus opportunity awarded under
Section 10 pursuant to which a Participant may become entitled to
receive an amount based on satisfaction of such performance criteria
as are specified in the Award Agreement.

	(j)	 	“Incentive Stock Option” or “ISO” means a stock option that
is intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code.

	(k)	 	“Option” means an ISO and/or a NQSO granted pursuant to
Section 6 of the Plan.

	(l)	 	“Participant” means any individual described in Section 3 to
whom Awards have been granted from time to time by the Administrator
and any authorized transferee of such individual.

	(m)	 	“Performance Award” means an Award, the grant, issuance,
retention, vesting or settlement of which is subject to satisfaction
of one or more Qualifying Performance Criteria established pursuant
to Section 13.

	(n)	 	“Plan” means The Corporate Executive Board Company 2004 Stock
Incentive Plan as set forth herein and as amended from time to time.

	(o)	 	“Prior Plans” mean The Corporate Executive Board Company 1999
Stock Option Plan, The Corporate Executive Board Company 2001 Stock
Option Plan and The Corporate Executive Board Company 2002
Non-Executive Stock Incentive Plan.

	(p)	 	“Qualifying Performance Criteria” has the meaning set forth
in Section 13(b).

	(q)	 	“Restricted Stock” means shares of Common Stock granted
pursuant to Section 8 of the Plan.

	(r)	 	“Restricted Stock Unit” means an Award granted to a
Participant pursuant to Section 8 pursuant to which shares of Common
Stock may be issued in the future.

	(s)	 	“Retirement” has the meaning specified by the Administrator
in the terms of an Award Agreement or, in the absence of any such
term, shall mean retirement from active employment with the Company
and its Subsidiaries (i) at or after age 55 and with the approval of
the Administrator or (ii) at or after age 65. The determination of
the Administrator as to an individual’s Retirement shall be
conclusive on all parties.

 

 

	(t)	 	“Stock Appreciation Right” means a right granted pursuant to
Section 7 of the Plan that entitles the Participant to receive, in
cash or shares of Common Stock or a combination thereof, as
determined by the Administrator, value equal to or otherwise based
on the excess of (i) the market price of a specified number of shares of Common Stock at the time of exercise over (ii) the
exercise price of the right, as established by the Administrator on
the date of grant.

	(u)	 	“Subsidiary” means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company
where each of the corporations in the unbroken chain other than the
last corporation owns stock possessing at least 50 percent or more
of the total combined voting power of all classes of stock in one of
the other corporations in the chain, and if specifically determined
by the Administrator in the context other than with respect to
Incentive Stock Options, may include an entity in which the Company
has a significant ownership interest or that is directly or
indirectly controlled by the Company.

	(v)	 	“Termination of employment” means ceasing to serve as a
full-time employee of the Company and its Subsidiaries or, with
respect to a service provider, ceasing to serve as such for the
Company, except that (i) subject to Section 6(c), an approved leave
of absence or approved employment on a less than full-time basis may
constitute employment as determined by the Administrator, (ii) the
Administrator may determine that a transition of employment to
service with a partnership, joint venture or corporation not meeting
the requirements of a Subsidiary in which the Company or a
Subsidiary is a party is not considered a “termination of
employment” and (iii) service as a member of the Board of Directors
shall constitute continued employment with respect to Awards granted
to a Participant while he or she served as an employee. The
Administrator shall determine whether any corporate transaction,
such as a sale or spin-off of a division or subsidiary that employs
a Participant, shall be deemed to result in a termination of
employment with the Company and its Subsidiaries for purposes of any
affected Participant’s Options, and the Administrator’s decision
shall be final and binding.

	(w)	 	“Total and Permanent Disablement” has the meaning specified
by the Administrator in the terms of an Award Agreement or, in the
absence of any such term or in the case of an Option intending to
qualify as an ISO, the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not
less than 12 months. The determination of the Administrator as to an
individual’s Total and Permanent Disablement shall be conclusive on
all parties.

3. Eligibility

     Any person who is a current or prospective officer or employee (including
any director who is also an employee, in his or her capacity as such) of the
Company or of any Subsidiary shall be eligible for selection by the
Administrator for the grant of Awards hereunder. In addition, to the extent
provided by Section 5(d), any service provider who has been retained to provide
consulting, advisory or other services to the Company or to any Subsidiary
shall be

 

 

eligible for selection by the Administrator for the grant of Awards
hereunder. Options intending to qualify as ISOs may only be granted to
employees of the Company or any Subsidiary within the meaning of the Code, as
selected by the Administrator. For purposes of this Plan, the Chairman of the
Board’s status as an employee shall be determined by the Administrator.

4. Effective Date and Termination of Plan

     This Plan was adopted by the Board of Directors of the Company as of June
11, 2004, and it will become effective (the “Effective Date”) when it is
approved by the Company’s stockholders. The Plan shall remain available for the
grant of Awards until the tenth (10th) anniversary of the Effective Date.
Notwithstanding the foregoing, the Plan may be terminated at such earlier time
as the Board of Directors may determine. Termination of the Plan will not
affect the rights and obligations of the Participants and the Company arising
under Awards theretofore granted and then in effect.

5. Shares Subject to the Plan and to Awards

	(a)	 	Aggregate Limits. The aggregate number of shares of Common
Stock issuable pursuant to all Awards shall not exceed 4,000,000,
plus any shares subject to outstanding awards under the Prior Plans
as of June 11, 2004 that on or after such date cease for any reason
to be subject to such awards (other than by reason of exercise or
settlement of the awards to the extent they are exercised for or
settled in vested and nonforfeitable shares), up to an aggregate
maximum of 9,400,000 shares. Any shares of Common Stock granted as
Options or Stock Appreciation Rights shall be counted against this
limit as one (1) share for every one (1) share granted. Any shares
of Common Stock granted as Awards other than Options or Stock
Appreciation Rights shall be counted against this limit as two and
one-half (2.5) shares for every one (1) share granted. The aggregate
number of shares of Common Stock available for grant under this Plan
and the number of shares of Common Stock subject to outstanding
Awards shall be subject to adjustment as provided in Section 12.
The shares of Common Stock issued pursuant to Awards granted under this
Plan may be shares that are authorized and unissued or shares that
were reacquired by the Company, including shares purchased in the
open market.

	(b)	 	Issuance of Shares. For purposes of Section 5(a), the
aggregate number of shares of Common Stock issued under this Plan at
any time shall equal only the number of shares actually issued upon
exercise or settlement of an Award and shall not include shares
subject to Awards that have been canceled, expired or forfeited or shares subject to Awards that have been delivered to the Company in
payment or satisfaction of the purchase price, exercise price or tax
withholding obligation of an Award.

	(c)	 	Tax Code Limits. The aggregate number of shares of Common
Stock subject to Options and Stock Appreciation Rights granted under
this Plan during any calendar year to any one Participant shall not
exceed 500,000, and the aggregate number of shares of Common Stock
issued or issuable under all Awards granted under this Plan other
than Options or Stock Appreciation Rights during any

 

 

	 	 	calendar year
to any one Participant shall not exceed 200,000, which numbers shall
be calculated and adjusted pursuant to Section 12 only to the extent
that such calculation or adjustment will not affect the status of
any Award intended to qualify as “performance based compensation”
under Code Section 162(m). The aggregate number of shares of Common
Stock that may be issued pursuant to the exercise of ISOs granted
under this Plan shall not exceed 4,000,000, which number shall be
calculated and adjusted pursuant to Section 12 only to the extent
that such calculation or adjustment will not affect the status of
any option intended to qualify as an ISO under Code Section 422. The
maximum amount payable pursuant to that portion of an Incentive
Bonus granted under this Plan for any calendar year to any
Participant that is intended to satisfy the requirements for
“performance based compensation” under Code Section 162(m) shall not
exceed four million dollars ($4,000,000).

	(d)	 	Awards to Service Providers. The aggregate number of shares
of Common Stock issued under this Plan pursuant to all Awards
granted to service providers shall not exceed 100,000.

6. Options

	(a)	 	Option Awards. Options may be granted at any time and from
time to time prior to the termination of the Plan, to Participants
selected by the Administrator. No Participant shall have any rights
as a stockholder with respect to any shares of stock subject to
Option hereunder until said shares have been issued. Each Option
shall be evidenced by an Award Agreement. Options granted pursuant
to the Plan need not be identical but each Option must contain and
be subject to the terms and conditions set forth below.

	(b)	 	Price. The purchase price under each Option shall be
established by the Administrator, provided that in no event will the
purchase price be less than the market price of the Common Stock on
the date of grant, except for Options that the Participant pays for
or as to which the Participant foregoes other compensation equal in
value to the amount of such discount. The purchase price of any
Option may be paid in Common Stock, cash or a combination thereof,
as determined by the Administrator, including an irrevocable
commitment by a broker to pay over such amount from a sale of the shares issuable under an Option, the delivery of previously owned
Common Stock and withholding of Common Stock deliverable upon
exercise.

	(c)	 	No Repricing. Other than in connection with a change in the
Company’s capitalization (as described in Section 12) the exercise
price of an Option may not be reduced without stockholder approval
(including canceling previously awarded Options and regranting them
with a lower exercise price).

	(d)	 	Duration and Exercise or Termination of Option. The
Administrator shall have the right to make the timing of the ability
to exercise any Option subject to continued employment, the passage
of time and/or such performance requirements as deemed appropriate
by the Administrator, provided that in no

 

 

	 	 	event shall any Option
become exercisable sooner than one (1) year after the date of grant
except in the event of the Participant’s death or Total and
Permanent Disablement or a change of control (as defined in the
applicable Award Agreement). Unless the Administrator provides
otherwise Options shall become exercisable 25 percent per year
beginning one (1) year after the date of the grant. Unless provided
otherwise in the applicable Award Agreement, the vesting period
and/or exercisability of an Option shall be adjusted by the
Administrator during or to reflect the effects of any period during
which the Participant is on an approved leave of absence or is
employed on a less than full-time basis. Each Option shall expire
within a period of not more than seven (7) years from the date of
grant.

	(e)	 	Termination of Employment: Unless an Option earlier expires
upon the expiration date established pursuant to Section 6(d), upon
the termination of the Participant’s employment, his or her rights
to exercise an Option then held shall be only as follows, unless the
Administrator specifies otherwise:

	(1)	 	Death. Upon the death of a Participant while
in the employ of the Company or any Subsidiary, all of the
Participant’s Options then held shall be exercisable by his
or her estate, heir or beneficiary at any time during the
twelve (12) months next succeeding the date of death. Any
and all of the deceased Participant’s Options that are not
exercised during the twelve (12) months next succeeding the
date of death shall terminate as of the end of such twelve
(12) month period.

	 	 	If a Participant should die within thirty (30) days of his or
her termination of employment with the Company and its
Subsidiaries, an Option shall be exercisable by his or her
estate, heir or beneficiary at any time during the twelve
(12) months succeeding the date of termination, but only to
the extent of the number of shares as to which such Option
was exercisable as of the date of such termination. Any and
all of the deceased Participant’s Options that are not
exercised during the twelve (12) months succeeding the date
of termination shall terminate as of the end of such twelve
(12) month period. A Participant’s estate shall mean his or
her legal representative or other person who so acquires the
right to exercise the Option by bequest or inheritance or by
reason of the death of the Participant.

	(2)	 	Total and Permanent Disablement. Upon
termination of employment as a result of the Total and
Permanent Disablement of any Participant, all of the
Participant’s Options then held shall be exercisable for a
period of twelve (12) months after termination. Any and all
Options that are not exercised during the twelve (12) months
succeeding the date of termination shall terminate as of the
end of such twelve (12) month period.

	(3)	 	Retirement. Upon Retirement of a Participant,
the Participant’s Options then held shall be exercisable for
a period of twelve (12) months after Retirement. The number
of shares with respect to which the Options shall be
exercisable shall equal the total number of shares that were
exercisable

 

 

	 	 	under the Participant’s Option on the date of
his or her Retirement. Any and all Options that are
unexercised during the twelve (12) months succeeding the
date of termination shall terminate as of the end of such
twelve (12) month period.

	(4)	 	Other Reasons. Upon the date of a termination
of a Participant’s employment for any reason other than
those stated above in Sections 6(e)(1), (e)(2) and (e)(3) or
as described in Section 15, (A) any Option that is
unexercisable as of such termination date shall remain
unexercisable and shall terminate as of such date, and (B)
any Option that is exercisable as of such termination date
shall expire the earlier of (i) ninety (90) days following
such date or (ii) the expiration date of such Option.

	(f)	 	Incentive Stock Options. Notwithstanding anything to the
contrary in this Section 6, in the case of the grant of an Option
intending to qualify as an ISO: (i) if the Participant owns stock
possessing more than 10 percent of the combined voting power of all
classes of stock of the Company (a “10% Shareholder”), the purchase
price of such Option must be at least 110 percent of the fair market
value of the Common Stock on the date of grant and the Option must
expire within a period of not more than five (5) years from the date
of grant, (ii) termination of employment will occur when the person
to whom an Award was granted ceases to be an employee (as determined
in accordance with Section 3401(c) of the Code and the regulations
promulgated thereunder) of the Company and its Subsidiaries.
Notwithstanding anything in this Section 6 to the contrary, options
designated as ISOs shall not be eligible for treatment under the
Code as ISOs to the extent that either (iii) the aggregate fair
market value of shares of Common Stock (determined as of the time of
grant) with respect to which such Options are exercisable for the
first time by the Participant during any calendar year (under all
plans of the Company and any Subsidiary) exceeds $100,000, taking
Options into account in the order in which they were granted, and
(iv) such Options otherwise remain exercisable but are not exercised
within three (3) months of Termination of employment (or such other
period of time provided in Section 422 of the Code).

	(g)	 	Other Terms and Conditions: Options may also contain such
other provisions, which shall not be inconsistent with any of the
terms of this Plan, as the Administrator shall deem appropriate.

7. Stock Appreciation Rights

     Stock Appreciation Rights may be granted to Participants from time to time
either in tandem with or as a component of other Awards granted under the Plan
(“tandem SARs”) or not in conjunction with other Awards (“freestanding SARs”)
and may, but need not, relate to a specific Option granted under Section 6. The
provisions of Stock Appreciation Rights need not be the same with respect to
each grant or each recipient. Any Stock Appreciation Right granted in tandem
with an Option may be granted at the same time such Option is granted or at any
time thereafter before exercise or expiration of such Option. All Stock
Appreciation Rights under the Plan shall be granted subject to the same terms
and conditions applicable to Options as set forth

 

 

in Section 6; provided,
however, that Stock Appreciation Rights granted in tandem with a previously
granted Option shall have the terms and conditions of such Option. Subject to
the provisions of Section 6, the Administrator may impose such other conditions
or restrictions on any Stock Appreciation Right as it shall deem appropriate.
Stock Appreciation Rights may be settled in shares of Common Stock, cash or
combination thereof, as determined by the Administrator. Other than in
connection with a change in the Company’s capitalization (as described in
Section 12) the exercise price of a Stock Appreciation Right may not be reduced
without stockholder approval (including canceling previously awarded Stock
Appreciation Rights and regranting them with a lower exercise price).

8. Restricted Stock and Restricted Stock Units

	(a)	 	Restricted Stock and Restricted Stock Unit Awards. Restricted
Stock and Restricted Stock Units may be granted at any time and from
time to time prior to the termination of the Plan to Participants
selected by the Administrator. Restricted Stock is an award or
issuance of shares of Common Stock the grant, issuance, retention,
vesting and/or transferability of which is subject during specified
periods of time to such conditions (including continued employment
or performance conditions) and terms as the Administrator deems
appropriate. Restricted Stock Units are Awards denominated in units
of Common Stock under which the issuance of shares of Common Stock
is subject to such conditions (including continued employment or
performance conditions) and terms as the Administrator deems
appropriate. Each grant of Restricted Stock and Restricted Stock
Units shall be evidenced by an Award Agreement. Unless determined
otherwise by the Administrator, each Restricted Stock Unit will be
equal to one share of Common Stock and will entitle a Participant
to either shares of Common Stock or an amount of cash determined
with reference to the value of shares of Common Stock. To the extent
determined by the Administrator, Restricted Stock and Restricted
Stock Units may be satisfied or settled in Common Stock, cash or a
combination thereof. Restricted Stock and Restricted Stock Units
granted pursuant to the Plan need not be identical but each grant of
Restricted Stock and Restricted Stock Units must contain and be
subject to the terms and conditions set forth below.

	(b)	 	Contents of Agreement. Each Award Agreement shall contain
provisions regarding (i) the number of shares of Common Stock or
Restricted Stock Units subject to such Award or a formula for
determining such number, (ii) the purchase price of the shares, if
any, and the means of payment, (iii) the performance criteria, if
any, and level of achievement versus these criteria that shall
determine the number of shares or units granted, issued, retainable
and/or vested, (iv) such terms and conditions on the grant,
issuance, vesting and/or forfeiture of the shares or units as may be
determined from time to time by the Administrator, (v) restrictions
on the transferability of the shares or units and (vi) such further
terms and conditions in each case not inconsistent with this Plan as
may be determined from time to time by the Administrator. Shares of
Common Stock issued under a Restricted Stock Award may be issued in
the name of the Participant and held by

 

 

	 	 	the Participant or held by
the Company, in each case as the Administrator may provide.

	(c)	 	Sales Price. Subject to the requirements of applicable law,
the Administrator shall determine the price, if any, at which Awards
of Restricted Stock or Restricted Stock Units, or shares of Common
Stock issuable under Restricted Stock Unit Awards, shall be sold or
awarded to a Participant, which may vary from time to time and among
Participants and which may be below the market price of such shares
at the date of grant.

	(d)	 	Vesting. The grant, issuance, retention, vesting and/or
settlement of shares of Restricted Stock and Restricted Stock Units
shall occur at such time and in such installments as determined by
the Administrator or under criteria established by the
Administrator. The Administrator shall have the right to make the
timing of the grant and/or the issuance, ability to retain, vesting
and/or settlement of shares of Restricted Stock and under Restricted
Stock Units subject to continued employment, passage of time and/or
such performance criteria as deemed appropriate by the
Administrator; provided that in no event shall the grant, issuance,
retention, vesting and/or settlement of shares under Restricted
Stock or Restricted Stock Unit Awards that is based on performance
criteria and level of achievement versus such criteria be subject to
a performance period of less than one year and no condition that is
based upon continued employment or the passage of time shall provide
for vesting or settlement in full of a Restricted Stock or Stock
Unit Award over a period of less than three years from the date the
Award is made, other than as a result of or upon the death,
disability or retirement of the Participant, in each case as
specified in the agreement evidencing such Award. Notwithstanding
anything to the contrary herein, the performance criteria for any
Restricted Stock or Restricted Stock Unit that is intended to
satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code shall be a measure based on one or more
Qualifying Performance Criteria selected by the Administrator and
specified at the time the Restricted Stock or Restricted Stock Unit
is granted.

	(e)	 	Discretionary Adjustments and Limits. Subject to the limits
imposed under Code Section 162(m) for Awards that are intended to
qualify as “performance based compensation,” notwithstanding the
satisfaction of any performance goals, the number of shares of
Common Stock granted, issued, retainable and/or vested under an
Award of Restricted Stock or Restricted Stock Units on account of
either financial performance or personal performance evaluations may
be reduced by the Administrator on the basis of such further
considerations as the Administrator shall determine.

	(f)	 	Voting Rights. Unless otherwise determined by the
Administrator, Participants holding shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to
those shares during the period of restriction. Participants shall
have no voting rights with respect to shares of Common Stock
underlying Restricted Stock Units unless and until such shares are
reflected as issued and outstanding shares on the Company’s stock
ledger.

 

 

	(g)	 	Dividends and Distributions. Participants in whose name
Restricted Stock is granted shall be entitled to receive all
dividends and other distributions paid with respect to those shares,
unless determined otherwise by the Administrator. Any such dividends
or distributions will be subject to the same restrictions on
transferability as the Restricted Stock with respect to which they
were distributed. Shares underlying Restricted Stock Units shall be
entitled to dividends or dividend equivalents only to the extent
provided by the Administrator.

9. Deferred Stock Units

     The Administrator may establish rules for the deferred delivery of Common
Stock upon exercise of an Option or Stock Appreciation Right and upon
settlement, vesting or other events with respect to Restricted Stock or
Restricted Stock Units, or in payment or satisfaction of an Incentive Bonus or
of any other compensation arrangement maintained by the Company or a
Subsidiary, in each case with the deferral evidenced by use of “Stock Units”
equal in number to the number of shares of Common Stock whose delivery is so
deferred or to the value of the amount being so deferred. A “Stock Unit” is a
bookkeeping entry representing an amount equivalent to the fair market value of
one share of Common Stock. Unless the Administrator specifies otherwise, Stock
Units represent an unfunded and unsecured obligation of the Company. Settlement
of Stock Units upon expiration of the deferral period shall be made in Common
Stock, cash or a combination thereof, as determined by the Administrator. The
amount of Common Stock, or other settlement medium, to be so distributed may be
increased by dividend equivalents. Unless determined otherwise by the
Administrator, during the deferral period a Participant will not have any
rights as a stockholder of the Company, including, without limitation, voting
rights and the right to receive dividends or distributions. Until a Stock Unit
is so settled, the number of shares of Common Stock represented by a Stock Unit
shall be subject to adjustment pursuant to Section 12. Any Stock Units that are
settled after the holder’s death shall be distributed to the holder’s
designated beneficiary(ies) or, if none was designated, the holder’s estate.

10. Incentive Bonuses

	(a)	 	General. Each Incentive Bonus Award will confer upon the
Participant the opportunity to earn a future payment tied to the
level of achievement with respect to one or more performance
criteria established for a performance period of not less than one
year.

	(b)	 	Incentive Bonus Document. Each Award Agreement evidencing an
Incentive Bonus shall contain provisions regarding (i) the target
and maximum amount payable to the Participant as an Incentive Bonus,
(ii) the performance criteria and level of achievement versus these
criteria that shall determine the amount of such payment, (iii) the
term of the performance period as to which performance shall be
measured for determining the amount of any payment, (iv) the timing
of any payment earned by virtue of performance, (v) restrictions on
the alienation or transfer of the Incentive Bonus prior to actual
payment, (vi) forfeiture provisions and (vii) such further terms and
conditions, in each case not inconsistent with this Plan as may be
determined from time to time by the Administrator.

 

 

	(c)	 	Performance Criteria. The Administrator shall establish the
performance criteria and level of achievement versus these criteria
that shall determine the target and maximum amount payable under an
Incentive Bonus, which criteria may be based on financial
performance and/or personal performance evaluations. The
Administrator may specify the percentage of the target Incentive
Bonus that is intended to satisfy the requirements for
“performance-based compensation” under Code Section 162(m).
Notwithstanding anything to the contrary herein, the performance
criteria for any portion of an Incentive Bonus that is intended by
the Administrator to satisfy the requirements for “performance-based
compensation” under Code Section 162(m) shall be a measure based on
one or more Qualifying Performance Criteria (as defined in Section
13(b)) selected by the Administrator and specified at the time the
Incentive Bonus is granted. The Administrator shall certify the
extent to which any Qualifying Performance Criteria has been
satisfied, and the amount payable as a result thereof, prior to
payment of any Incentive Bonus that is intended to satisfy the
requirements for “performance-based compensation” under Code Section
162(m).

	(d)	 	Timing and Form of Payment. The Administrator shall determine
the timing of payment of any Incentive Bonus. Payment of the amount
due under an Incentive Bonus may be made in cash or in shares of
Common Stock, as determined by the Administrator. The Administrator
may provide for or, subject to such terms and conditions as the
Administrator may specify, may permit a Participant to elect for the
payment of any Incentive Bonus to be deferred to a specified date or
event.

	(e)	 	Discretionary Adjustments. Notwithstanding satisfaction of
any performance goals, the amount paid under an Incentive Bonus on
account of either financial performance or personal performance
evaluations may be reduced by the Administrator on the basis of such
further considerations as the Administrator shall determine.

11. Conditions and Restrictions Upon Securities Subject to Awards

     The Administrator may provide that the shares of Common Stock issued upon
exercise of an Option or Stock Appreciation Right or otherwise subject to or
issued under an Award shall be subject to such further agreements,
restrictions, conditions or limitations as the Administrator in its discretion
may specify prior to the exercise of such Option or Stock Appreciation Right or
the grant, vesting or settlement of such Award, including without limitation,
conditions on vesting or transferability, forfeiture or repurchase provisions
and method of payment for the shares issued upon exercise, vesting or
settlement of such Award (including the actual or constructive surrender of
Common Stock already owned by the Participant) or payment of taxes arising in
connection with an Award. Without limiting the foregoing, such restrictions may
address the timing and manner of any resales by the Participant or other
subsequent transfers by the Participant of any shares of Common Stock issued
under an Award, including without limitation (i) restrictions under an insider
trading policy or pursuant to applicable law, (ii) restrictions designed to
delay and/or coordinate the timing and manner of sales by Participant and
holders of other Company equity compensation arrangements, and (iii)
restrictions as to the use of a specified brokerage firm for such resales or
other transfers.

 

 

12. Adjustment of and Changes in the Stock

     In the event that the number of shares of Common Stock of the Company
shall be increased or decreased through a reorganization, reclassification,
combination of shares, stock split, reverse stock split, spin-off, dividend
(other than regular, quarterly cash dividends), or otherwise, then each share
of Common Stock of the Company which has been authorized for issuance under the
Plan, whether such share is then currently subject to or may become subject to
an Award under the Plan, as well as the per share limits set forth in Section 5
of this Plan, may be proportionately adjusted by the Administrator to reflect
such increase or decrease, unless the Company provides otherwise under the
terms of such transaction. The terms of any outstanding Award may also be
adjusted by the Administrator as to price, number of shares of Common Stock
subject to such Award and other terms to reflect the foregoing events.

     In the event there shall be any other change in the number or kind of
outstanding shares of Common Stock of the Company, or any stock or other
securities into which such Common Stock shall have been changed, or for which
it shall have been exchanged, whether by reason of a change of control, other
merger, consolidation or otherwise, then the Administrator shall, in its sole
discretion, determine the appropriate adjustment, if any, to be effected. In
addition, in the event of such change described in this paragraph, the
Administrator may accelerate the time or times at which any Award may be
exercised and may provide for cancellation of such accelerated Awards that are
not exercised within a time prescribed by the Administrator in its sole
discretion. Notwithstanding anything to the contrary herein, any adjustment to
Options granted pursuant to this Plan intended to qualify as ISOs shall comply
with the requirements, provisions and restrictions of the Code.

     No right to purchase fractional shares shall result from any adjustment in
Awards pursuant to this Section 12. In case of any such adjustment, the shares
subject to the Award shall be rounded down to the nearest whole share. Notice
of any adjustment shall be given by the Company to each Participant, which
shall have been so adjusted and such adjustment (whether or not notice is
given) shall be effective and binding for all purposes of the Plan.

13. Qualifying Performance-Based Compensation

	(a)	 	General. The Administrator may establish performance criteria
and level of achievement versus such criteria that shall determine
the number of shares of Common Stock to be granted, retained,
vested, issued or issuable under or in settlement of or the amount
payable pursuant to an Award, which criteria may be based on
Qualifying Performance Criteria or other standards of financial
performance and/or personal performance evaluations. In addition,
the Administrator may specify a percentage of an Award that is
intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code, provided that the
performance criteria for any portion of an Award that is intended by
the Administrator to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code shall be a measure
based on one or more Qualifying Performance Criteria selected by the
Administrator and specified at the time the Award is granted. The
Administrator shall certify the extent to which any Qualifying
Performance Criteria has been satisfied, and the amount payable as a
result thereof, prior to payment, settlement or vesting of any

 

 

	 	 	Award
that is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code. Notwithstanding
satisfaction of any performance goals, the number of shares issued
under or the amount paid under an award may, to the extent specified
in the Award Agreement, be reduced by the Administrator on the basis
of such further considerations as the Administrator in its sole
discretion shall determine.

	(b)	 	Qualifying Performance Criteria. For purposes of this Plan,
the term “Qualifying Performance Criteria” shall mean any one or
more of the following performance criteria, either individually,
alternatively or in any combination, applied to either the Company
as a whole or to a business unit or Subsidiary, either individually,
alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years’ results or
to a designated comparison group, in each case as specified by the
Administrator: (i) cash flow (before or after dividends), (ii)
earnings per share (including earnings before interest, taxes,
depreciation and amortization), (iii) stock price, (iv) return on
equity, (v) total stockholder return, (vi) return on capital
(including return on total capital or return on invested capital),
(vii) return on assets or net assets, (viii) market capitalization,
(ix) economic value added, (x) debt leverage (debt to capital), (xi)
revenue, (xii) income or net income, (xiii) operating income, (xiv)
operating profit or net operating profit, (xv) operating margin or
profit margin, (xvi) return on operating revenue, (xvii) cash from
operations, (xviii) operating ratio, (xix) operating revenue, or
(xx) customer service. To the extent consistent with Section 162(m)
of the Code, the Administrator may appropriately adjust any
evaluation of performance under a Qualifying Performance Criteria to
exclude any of the following events that occurs during a performance
period: (i) asset write-downs, (ii) litigation, claims, judgments or
settlements, (iii) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported
results, (iv) accruals for reorganization and restructuring programs
and (v) any extraordinary, unusual or non-recurring items as
described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and
results of operations appearing in the Company’s Forms 10-K or 10-Q
for the applicable year.

14. Transferability

     Unless the Administrator specifies otherwise, each Award may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated by a
Participant other than by will or the laws of descent and distribution, and
each Option or Stock Appreciation Right shall be exercisable only by the
Participant during his or her lifetime.

15. Suspension or Termination of Awards

     Except as otherwise provided by the Administrator, if at any time
(including after a notice of exercise has been delivered or an award has
vested) the Chief Executive Officer or any other person designated by the
Administrator (each such person, an “Authorized Officer”) reasonably believes
that a Participant may have committed an Act of Misconduct as described in

 

 

this
Section 15, the Authorized Officer, Administrator or Board of Directors may
suspend the Participant’s rights to exercise any Option, to vest in an Award,
and/or to receive payment for or receive shares of Common Stock in settlement
of an Award pending a determination of whether an Act of Misconduct has been
committed.

     If the Administrator or an Authorized Officer determines a Participant has
committed an act of embezzlement, fraud, dishonesty, nonpayment of any
obligation owed to the Company or any Subsidiary, breach of fiduciary duty or
deliberate disregard of the Company or Subsidiary rules resulting in loss,
damage or injury to the Company or any Subsidiary, or if a Participant makes an
unauthorized disclosure of any Company or Subsidiary trade secret or
confidential information, engages in any conduct constituting unfair
competition, breaches any non-competition agreement, induces any Company or
Subsidiary customer to breach a contract with the Company or any Subsidiary, or
induces any principal for whom the Company or any Subsidiary acts as agent to
terminate such agency relationship (any of the foregoing acts, an “act of
misconduct”), then except as otherwise provided by the Administrator, (i)
neither the Participant nor his or her estate nor transferee shall be entitled
to exercise any Option whatsoever, vest in or have the restrictions on an Award
lapse, or otherwise receive payment of an Award, (ii) the Participant will
forfeit all outstanding Awards and (iii) the Participant may be required, at
the Administrator’s sole discretion, to return and/or repay to the Company any
then unvested shares of Common Stock previously issued under the Plan. In
making such determination, the Administrator or an Authorized Officer shall
give the Participant an opportunity to appear and present evidence on his or
her behalf at a hearing before the Administrator or an opportunity to submit
written comments, documents, information and arguments to be considered by the
Administrator. Any dispute by a Participant or other person as to the
determination of the Administrator shall be resolved pursuant to Section 23 of
the Plan.

16. Compliance with Laws and Regulations

     This Plan, the grant, issuance, vesting, exercise and settlement of Awards
thereunder, and the obligation of the Company to sell, issue or deliver shares
under such Awards, shall be subject to all applicable foreign, federal, state
and local laws, rules and regulations and to such approvals by any governmental
or regulatory agency as may be required. The Company shall not be required to
register in a Participant’s name or deliver any shares prior to the completion
of any registration or qualification of such shares under any foreign, federal,
state or local law or any ruling or regulation of any government body which the
Administrator shall determine to be necessary or advisable. To the extent the
Company is unable to or the Administrator deems it infeasible to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any shares hereunder, the Company and its Subsidiaries shall be relieved of
any liability with respect to the failure to issue or sell such shares as to
which such requisite authority shall not have been obtained. No Stock Option
shall be exercisable and no shares shall be issued and/or transferable under
any other Award unless a registration statement with respect to the shares
underlying such Stock Option is effective and current or the Company has
determined that such registration is unnecessary.

     In the event an Award is granted to or held by a Participant who is
employed or providing services outside the United States, the Administrator
may, in its sole discretion, modify the provisions of the Plan or of such Award
as they pertain to such individual to comply with

 

 

applicable foreign law or to
recognize differences in local law, currency or tax policy. The Administrator
may also impose conditions on the grant, issuance, exercise, vesting,
settlement or retention of Awards in order to comply with such foreign law
and/or to minimize the Company’s obligations with respect to tax equalization
for Participants employed outside their home country.

17. Withholding

     To the extent required by applicable federal, state, local or foreign law,
a Participant shall be required to satisfy, in a manner satisfactory to the
Company, any withholding tax obligations that arise by reason of an Option
exercise, disposition of shares issued under an ISO, the vesting of or
settlement of deferred units under an Award, an election pursuant to Section
83(b) of the Code or otherwise with respect to an Award. The Company and its
Subsidiaries shall not be required to issue shares of Common Stock, make any
payment or to recognize the transfer or disposition of shares until such
obligations are satisfied. The Administrator may permit these obligations to be
satisfied by having the Company withhold a portion of the shares of Common
Stock that otherwise would be issued to him or her upon exercise of the Option
or the vesting or settlement of an Award, or by tendering shares previously
acquired.

18. Administration of the Plan

	(a)	 	Administrator of the Plan. The Plan shall be administered by
the Administrator who shall be the Compensation Committee of the
Board of Directors or, in the absence of a Compensation Committee,
the Board of Directors itself. Any power of the Administrator may
also be exercised by the Board of Directors, except to the extent
that the grant or exercise of such authority would cause any Award
or transaction to become subject to (or lose an exemption under) the
short-swing profit recovery provisions of Section 16 of the
Securities Exchange Act of 1934 or cause an Award designated as a
Performance Award not to qualify for treatment as performance-based
compensation under Code Section 162(m). To the extent that any
permitted action taken by the Board conflicts with action taken by
the Administrator, the Board action shall control. The Compensation
Committee may by resolution authorize one or more officers of the
Company to perform any or all things that the Administrator is
authorized and empowered to do or perform under the Plan, and for
all purposes under this Plan, such officer or officers shall be
treated as the Administrator; provided, however, that the resolution
so authorizing such officer or officers shall specify the total
number of Awards (if any) such officer or officers may award
pursuant to such delegated authority, and any such Award shall be
subject to the form of Option agreement theretofore approved by the
Compensation Committee. No such officer shall designate himself or
herself as a recipient of any Awards granted under authority
delegated to such officer. In addition, the Compensation Committee
may delegate any or all aspects of the day-to-day administration of
the Plan to one or more officers or employees of the Company or any
Subsidiary, and/or to one or more agents.

	(b)	 	Powers of Administrator. Subject to the express provisions of
this Plan, the Administrator shall be authorized and empowered to do
all things that it determines to be necessary or appropriate in
connection with the administration of

 

 

	 	 	this Plan, including, without
limitation: (i) to prescribe, amend and rescind rules and
regulations relating to this Plan and to define terms not otherwise
defined herein; (ii) to determine which persons are Participants, to
which of such Participants, if any, Awards shall be granted
hereunder and the timing of any such Awards, and to grant Awards;
(iii) to grant Awards to Participants and determine the terms and
conditions thereof, including the number of shares subject to Awards
and the exercise or purchase price of such shares and the
circumstances under which Awards become exercisable or vested or are
forfeited or expire, which terms may but need not be conditioned
upon the passage of time, continued employment, the satisfaction of
performance criteria, the occurrence of certain events (including
events which the Board or the Administrator determine constitute a
Change of Control), or other factors; (iv) to establish and verify
the extent of satisfaction of any performance goals or other
conditions applicable to the grant, issuance, exercisability,
vesting and/or ability to retain any Award; (v) to prescribe and
amend the terms of the agreements or other documents evidencing
Awards made under this Plan (which need not be identical) and the
terms of or form of any document or notice required to be delivered
to the Company by Participants under this Plan; (vi) to determine
whether, and the extent to which, adjustments are required pursuant
to Section 12; (vii) to interpret and construe this Plan, any rules
and regulations under this Plan and the terms and conditions of any
Award granted hereunder, and to make exceptions to any such
provisions in good faith and for the benefit of the Company; and
(viii) to make all other determinations deemed necessary or
advisable for the administration of this Plan.

	(c)	 	Determinations by the Administrator. All decisions,
determinations and interpretations by the Administrator regarding
the Plan, any rules and regulations under the Plan and the terms and
conditions of or operation of any Award granted hereunder, shall be
final and binding on all Participants, beneficiaries, heirs, assigns
or other persons holding or claiming rights under the Plan or any
Award. The Administrator shall consider such factors as it deems
relevant, in its sole and absolute discretion, to making such
decisions, determinations and interpretations including, without
limitation, the recommendations or advice of any officer or other
employee of the Company and such attorneys, consultants and
accountants as it may select.

	(d)	 	Subsidiary Awards. In the case of a grant of an Award to any
Participant employed by a Subsidiary, such grant may, if the
Administrator so directs, be implemented by the Company issuing any
subject shares to the Subsidiary, for such lawful consideration as
the Administrator may determine, upon the condition or understanding
that the Subsidiary will transfer the shares to the Participant in
accordance with the terms of the Award specified by the
Administrator pursuant to the provisions of the Plan.
Notwithstanding any other provision hereof, such Award may be issued
by and in the name of the Subsidiary and shall be deemed granted on
such date as the Administrator shall determine.

19. Amendment of the Plan or Awards

 

 

     The Board may amend, alter or discontinue this Plan and the Administrator
may amend, or alter any agreement or other document evidencing an Award made
under this Plan but, except as provided pursuant to the provisions of Section
12, no such amendment shall, without the approval of the stockholders of the
Company:

	(a)	 	increase the maximum number of shares for which Awards may be
granted under this Plan;

	(b)	 	reduce the price at which Options may be granted below the
price provided for in Section 6(a);

	(c)	 	reduce the exercise price of outstanding Options;

	(d)	 	extend the term of this Plan;

	(e)	 	change the class of persons eligible to be Participants;

	(f)	 	otherwise amend the Plan in any manner requiring stockholder
approval by law or under the NASDAQ National Market listing
requirements; or

	(g)	 	increase the individual maximum limits in Sections 5(c) and
(d).

     No amendment or alteration to the Plan or an Award or Award Agreement
shall be made which would impair the rights of the holder of an Award, without
such holder’s consent, provided that no such consent shall be required if the
Administrator determines in its sole discretion and prior to the date of any
change of control (as defined in the applicable Award Agreement) that such
amendment or alteration either is required or advisable in order for the
Company, the Plan or the Award to satisfy any law or regulation or to meet the
requirements of or avoid adverse financial accounting consequences under any
accounting standard.

20. No Liability of Company

     The Company and any Subsidiary or affiliate which is in existence or
hereafter comes into existence shall not be liable to a Participant or any
other person as to: (i) the non-issuance or sale of shares of Common Stock as
to which the Company has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company’s counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and (ii) any tax
consequence expected, but not realized, by any Participant or other person due
to the receipt, exercise or settlement of any Award granted hereunder.

21. Non-Exclusivity of Plan

     Neither the adoption of this Plan by the Board of Directors nor the
submission of this Plan to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board of Directors
or the Administrator to adopt such other incentive arrangements as either may
deem desirable, including without limitation, the granting of restricted stock
or stock options otherwise than under this Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.

 

 

22. Governing Law

     This Plan and any agreements or other documents hereunder shall be
interpreted and construed in accordance with the laws of the Delaware and
applicable federal law. Any reference in this Plan or in the agreement or other
document evidencing any Awards to a provision of law or to a rule or regulation
shall be deemed to include any successor law, rule or regulation of similar
effect or applicability.

23. Arbitration of Disputes

     In the event a Participant or other holder of an Award or person claiming
a right under an Award or the Plan believes that a decision by the
Administrator with respect to such person or Award was arbitrary or capricious,
the person may request arbitration with respect to such decision. The review by
the arbitrator shall be limited to determining whether the Participant or other
Award holder has proven that the Administrator’s decision was arbitrary or
capricious. This arbitration shall be the sole and exclusive review permitted
of the Administrator’s decision. Participants, Award holders and persons
claiming rights under an Award or the Plan explicitly waive any right to
judicial review.

     Notice of demand for arbitration shall be made in writing to the
Administrator within thirty (30) days after the applicable decision by the
Administrator. The arbitrator shall be selected by those members of the Board
of Directors who are neither members of the Compensation Committee of the Board
of Directors nor employees of the Company or any Subsidiary. If there are no
such members of the Board of Directors, the arbitrator shall be selected by the
Board of Directors. The arbitrator shall be an individual who is an attorney
licensed to practice law in the District of Columbia. Such arbitrator shall be
neutral within the meaning of the Commercial Rules of Dispute Resolution of the
American Arbitration Association; provided, however, that the arbitration shall
not be administered by the American Arbitration Association. Any challenge to
the neutrality of the arbitrator shall be resolved by the arbitrator whose
decision shall be final and conclusive. The arbitration shall be administered
and conducted by the arbitrator pursuant to the Commercial Rules of Dispute
Resolution of the American Arbitration Association. Each side shall bear its
own fees and expenses, including its own attorney’s fees, and each side shall
bear one half of the arbitrator’s fees and expenses. The decision of the
arbitrator on the issue(s) presented for arbitration shall be final and
conclusive and may be enforced in any court of competent jurisdiction.

     24. No Right to Employment, Reelection or Continued Service

     Nothing in this Plan or an Award Agreement shall interfere with or limit
in any way the right of the Company, its Subsidiaries and/or its affiliates to
terminate any Participant’s employment, service on the Board or service for the
Company at any time or for any reason not prohibited by law, nor confer upon
any Participant any right to continue his or her employment or service for any
specified period of time. Neither an Award nor any benefits arising under this
Plan shall constitute an employment contract with the Company, any Subsidiary
and/or its affiliates, accordingly, subject to Sections 4 and 19, this Plan and
the benefits hereunder may be terminated at any time in the sole and exclusive
discretion of the Board of Directors without giving rise to any liability on
the part of the Company, its Subsidiaries and/or its affiliates.exv10w9

 

EXHIBIT 10.9

AMENDED AND RESTATED PORTFOLIO RECOVERY ASSOCIATES

2002 STOCK OPTION PLAN AND 2004 RESTRICTED STOCK PLAN

Section 1. Purpose

     This Amended and Restated Portfolio Recovery Associates 2002 Stock Option
Plan and 2004 Restricted Stock Plan constitutes an amendment and restatement of
the Portfolio Recovery Associates 2002 Stock Option Plan, and incorporates a
Restricted Stock Plan, and shall be referred to hereafter as the “Plan.” The
purposes of the Plan are to encourage selected employees, key consultants and
directors of Portfolio Recovery Associates, Inc., a Delaware corporation
(together with any successor thereto, the “Company”), or any present or future
Subsidiary (as defined below) of the Company to acquire a proprietary interest
in the growth and performance of the Company, to enhance the ability of the
Company to attract, retain and reward qualified individuals upon whom, in large
measure, the sustained progress, growth and profitability of the Company depend
and to motivate such individuals to contribute to the achievement of the
Company’s business objectives and to align the interest of such individuals
with the longer term interests of the Company’s stockholders.

Section 2. Definitions

     As used in the Plan, the following terms shall have the meanings set
forth below:

	(a)	 	“Award” shall mean a grant of Options, Restricted Shares,
and/or Deferred Stock to a Participant.
	 
	(b)	 	“Board” shall mean the Board of Directors of the Company.
	 
	(c)	 	“Code” shall mean the Internal Revenue Code of 1986, as
amended from time to time.
	 
	(d)	 	“Committee” shall mean the Compensation Committee of the Board
of Directors of the Company (the “Board”). The Committee shall
consist of two or more members of the Board, not less than two (2)
of whom shall be both an “outside director” within the meaning of
Section 162(m) of the Code and a “non-employee director” within
the meaning of Rule 16b-3, as from time to time amended (“Rule
16b-3”), promulgated under Section 16 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”).
	 
	(e)	 	“Fair Market Value” shall mean, with respect to Shares or
other securities, the fair market value of the Shares or other
securities determined by such methods or procedures as shall be
established from time to time by the Committee in good faith or in
accordance with applicable law. Unless otherwise determined by the
Committee, the Fair Market Value of Shares shall mean (i) the
closing price per Share of the Shares on the principal exchange on
which the Shares are then trading, if any, on such date, or, if the
Shares were not traded on such date, then on the next preceding
trading day during which a sale occurred; or (ii) if the Shares are
not traded on an exchange but are quoted on the Nasdaq Stock Market
or a

 

 

	 	 	successor quotation system, (1) the last sales price (if the
Shares are then listed as a National Market Issue on the Nasdaq
Stock Market) or (2) the mean between the closing representative
bid and asked prices (in all other cases) for the Shares on such
date as reported by the Nasdaq Stock Market or such successor
quotation system; or (iii) if the Shares are not publicly traded
on an exchange and not quoted on the Nasdaq Stock Market or a
successor quotation system, the mean between the closing bid and
asked prices for the Shares on such date as determined in good
faith by the Committee. Notwithstanding the foregoing, the Fair
Market Value of any Options granted prior to the Company’s initial
public offering shall be deemed to be the initial public offering
price as determined by the Company’s underwriters.
	 
	(f)	 	“Incentive Stock Option” shall mean an option granted under
the Plan that is designated as an incentive stock option within the
meaning of Section 422 of the Code or any successor provision
thereto.
	 
	(g)	 	“Independent Director” shall mean each member of the Board
who meets the test for an “independent” director as promulgated by
the Securities and Exchange Commission and the stock exchange or
quotation system on which the Shares are then listed or quoted.
	 
	(h)	 	“Key Employee” shall mean any officer, director or other
employee who is a regular full-time employee of the Company or its
present and future Subsidiaries.
	 
	(i)	 	“Non-Qualified Stock Option” shall mean an Option granted
under the Plan that is not designated as an Incentive Stock
Option.
	 
	(j)	 	“Non-Employee Restricted Shares” shall mean Restricted Shares
of the Common Stock of the Company which are available under the Plan for
award to any person who on the date of Grant is a member of the
Board of Directors of the Company and is not an employee of the
Company or of any Subsidiary of the Company, as defined in Code
Section 424(f).
	 
	(k)	 	“Option” shall mean an Incentive Stock Option or a
Non-Qualified Stock Option.
	 
	(l)	 	“Option Agreement” or “Restricted Stock
Agreement” shall
mean a written agreement, contract or other instrument or document
evidencing an Option or Restricted Share, respectively, granted
under the Plan, and shall specify the Date of the Grant, the Price
for Grants of Options, vesting provisions and any restrictions with
respect to Grants of Restricted Shares.
	 
	(m)	 	“Participant” shall mean a Key Employee, key consultant (as
determined by the Committee) or non-employee Director who has been
granted Restricted Shares under the Plan.
	 
	(n)	 	“Performance Based Restricted Shares” shall mean Shares
awarded to Participants as an incentive to achieve certain
performance goals.
	 
	(o)	 	“Person” shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization
or government or political subdivision thereof.

2

 

	(p)	 	“Restricted Share” shall mean a share of Common Stock, restricted
as to transferability or sale for such time, and/or under such
conditions, as the Committee shall determine, awarded to a
Participant pursuant to Section 3, and subject to the terms
and restrictions set forth in a Restricted Share Agreement,
upon the award of the Restricted Share to the Participant.
	 
	(q)	 	“Restricted Share Agreement” shall mean a written agreement,
contract or other instrument or document evidencing a Restricted
Share granted under the Plan.
	 
	(r)	 	“Rule 16b-3” shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended, or any successor rule or regulation thereto.
	 
	(s)	 	“Shares” shall mean the common stock of the Company, $0.01
par value, and such other securities or property as may become the
subject of Options or Restricted Shares pursuant to the Plan.
	 
	(t)	 	“Subsidiary” shall have the meaning ascribed thereto in Code
Section 424(f).
	 
	(u)	 	“Ten Percent Stockholder” shall mean a Person, who together
with his or her spouse, children and trusts and custodial accounts
for their benefit, immediately at the time of the grant of an Option
and assuming its immediate exercise, would beneficially own, within
the meaning of Section 424(d) of the Code, Shares possessing more
than ten percent (10%) of the total combined voting power of all of
the outstanding capital stock of the Company or any Subsidiary of
the Company.

Section 3. Administration

	(a)	 	Generally. The Plan shall be administered by the Committee
or its delegates. Unless otherwise expressly provided in the Plan,
all designations, determinations, interpretations and other
decisions under or with respect to the Plan or any Option or
Restricted Share shall be within the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive,
and binding upon all Persons, including the Company, any
Participant, any holder or beneficiary of any Option or Restricted
Share, any stockholder of the Company and any employee of the
Company.
	 
	(b)	 	Powers. Subject to the terms of the Plan and applicable law and
except as provided in Section 7 hereof, the Committee shall have
full power and authority to: (i) designate Participants; (ii)
determine the type or types of Options to be granted to each
Participant under the Plan, (iii) make awards of Restricted
Shares (“Restricted Share Awards”, and sometimes collectively with
the grant of Options, “Grants”); (iv) determine the number of
Shares to be awarded; (v) determine the terms and conditions of
any Grant; (vi) determine whether, to what extent, and under what
circumstances Options may be settled or exercised in cash, Shares,
other Options, or other property, or canceled, forfeited, or
suspended, and the method or methods by which Options may be
settled, exercised, canceled, forfeited, or suspended; (vii)
interpret and administer

3

 

	 	 	the Plan and any instruments or agreements relating to, Grants
made under, the Plan; (viii) establish, amend, suspend, or waive
such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and
(ix) make any other determination and take any other action that
the Committee deems necessary or desirable for the administration
of the Plan. The Committee may delegate to one or more of its
members or to one or more agents or entities such administrative
duties as it may deem advisable, and the Committee or any person
to whom it has delegated duties as aforesaid may employ one or
more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan. The
Committee shall have the authority in its discretion to delegate
powers to specified officers of the Company, consistent with the
terms of this Plan and subject to such restrictions, if any, as
the Committee may specify when making such delegation.

Section 4. Shares Available for Options and Restricted Shares

	(a)	 	Shares Available. Subject to adjustment as provided herein:
	 
	(b)	 	Limitation on Number of Shares. The total aggregate number of Options
and Restricted Shares that may be issued under the Plan are limited
such that the maximum aggregate number of Shares which may be issued
pursuant to, or by reason of, Grants of Options or Restricted Shares
is 2,000,000. Further, no Participant shall be granted more than
200,000 Restricted Shares, or granted Options to purchase more than
200,000 Shares, or granted any combination of Options and Restricted
Shares, which taken together would total more than 200,000 in any
one fiscal year; provided, however, that the Committee may adopt
procedures for the counting of Shares relating to any grant of
Options or Restricted Shares to ensure appropriate counting, avoid
double counting, and provide for adjustments in any case in which
the number of Shares actually distributed differs from the number of
Shares previously counted in connection with such Grant. To the
extent that an Option or Restricted Share granted ceases to remain
outstanding by reason of termination of rights granted thereunder,
forfeiture or otherwise, the Restricted Shares or Shares subject to
such Option shall again become available for award under the Plan.
	 
	(c)	 	Sources of Shares Any Shares delivered pursuant to an Option or
Restricted Share award may consist, in whole or in part, of
authorized and unissued Shares or of treasury Shares.
	 
	(c)	 	Adjustments. In the event that the Committee shall determine that any
change in corporate capitalization, such as a dividend or other
distribution of Shares, or a corporate transaction, such as a
merger, consolidation, reorganization or partial or complete
liquidation of the Company or other similar corporate transaction
or event, affects the Shares such that an adjustment is determined
by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits

4

 

	 	 	intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem necessary to prevent dilution
or enlargement of the benefits or potential benefits intended to
be made under the Plan, adjust any or all of (x) the number and
type of Shares which thereafter may be made the subject of Grants
of Restricted Shares or Options, (y) the number and type of Shares
subject to outstanding Options, and (z) the grant, purchase, or
exercise price with respect to any Option or Restricted Share, the
purchase, or exercise price with respect to any Option, or, if
deemed appropriate, make provision for a cash payment to the
holder of any outstanding Option or Restricted Share; provided,
however, in each case, that (i) with respect to Incentive Stock
Options no such adjustment shall be authorized to the extent that
such adjustment would cause the Plan to violate Section 422 of the
Code or any successor provision thereto; (ii) such adjustment
shall be made in such manner as not to adversely affect the status
of any Option or Grant of Restricted Shares as “performance-based
compensation” under Section 162(m) of the Code; and (iii) the
number of Shares subject to any Option denominated in Shares shall
always be a whole number. Any determinations made by the
Committee pursuant to this provision shall be conclusive.

     (d) Limits on Transfers. Subject to Code Section 422, no Options or
Restricted Shares, and no rights thereto, shall be assignable, alienable,
saleable or transferable by a Participant otherwise than by will or by the laws
of descent and distribution, and any such Options, and all rights under any
such Options shall be exercisable during the Participant’s lifetime, only by
the Participant or, if permissible under applicable law (including Code Section
422, in the case of an Incentive Stock Option), by the Participant’s guardian
or legal representative. No Options or Restricted Shares, and no rights under
any such Options or Restricted Shares, may be pledged, alienated, attached, or
otherwise encumbered, and any purported pledge, alienation, attachment, or
encumbrance thereof shall be void and unenforceable against the Company.
Notwithstanding the foregoing, the Committee may, in its discretion, provide
that Non-Qualified Stock Options or Restricted Shares may be transferable,
without consideration, to immediate family members (i.e., children,
grandchildren or spouse), to trusts for the benefit of such immediate family
members and to partnerships in which such family members are the only partners.
The Committee may attach to such transferability feature such terms and
conditions as it deems advisable. Any beneficiary, guardian, legal
representative or other person claiming any rights under the Plan from or
through any Participant shall be subject to all terms and conditions of the
Plan and any Option Agreement or Restricted Share Agreement applicable to such
Participant, except as otherwise determined by the Committee, and to any
additional restrictions deemed necessary or appropriate by the Committee.

     a) Tax Withholding. The Company or any Subsidiary is authorized to withhold from any Option granted or from any Restricted Share Award any payment
relating to an Option or Restricted Share under the Plan, any amounts of
federal, state or local withholding and other taxes due in connection with any
transaction involving the grant of an Option or Restricted Share, and to take
such other action as the Committee may deem advisable to enable the Company and Participants to satisfy
obligations for the

5

 

payment of withholding taxes and other tax obligations
relating to any Option or Restricted Share. This authority shall include
authority to withhold or receive Shares (which shall be valued at the fair
market value on the date of payment) or other property, and to make cash
payments in respect thereof in satisfaction of a Participant’s tax obligations.

     (e) Regulatory Requirements. There is no obligation under the Plan that any
Participant be advised by the Committee of the existence of the tax or the
amount required to be withheld. Notwithstanding any other provision of this
Plan, the Committee may impose conditions on payment of any other obligations
as may be required to satisfy applicable regulatory requirements, including
without limitation, any applicable requirements of the Exchange Act.

Section 5. Eligibility

        In determining the Persons to whom Options or Restricted Shares shall be
granted and the number of Restricted Shares or Options to be granted, the
Committee shall take into account the nature of the Person’s duties, such
Person’s present and potential contributions to the success of the Company and
such other factors as it shall deem relevant in connection with accomplishing
the purposes of the Plan. A Key Employee who has been granted Options or
Restricted Shares under the Plan may be granted additional Options or
Restricted Shares, subject to such limitations as may be imposed by the Code on
the grant of Incentive Stock Options. Notwithstanding anything herein to the
Contrary, no Participant shall have any right or entitlement to continued
employment for any period, or to receive any Options or Restricted Shares.
Incentive Stock Options and Restricted Shares constituting performance based
compensation within the meaning of Section 162(m) of the Code) may be granted
only to Key Employees of the Company or of any Subsidiary of the Company.

Section 6. Options

        The Committee is hereby authorized to grant Options to Participants upon
the following terms and the conditions (except to the extent otherwise provided
in Section 7) and with such additional terms and conditions, in either case not
inconsistent with the provisions of the Plan, as the Committee shall determine:

6

 

        (a) Exercise Price. The exercise price per Share purchasable under
Options shall be determined by the Committee at the time the Option is granted
but generally shall not be less than the Fair Market Value of the Shares
covered thereby at the time the Option is granted.

        (b) Option Term. The term of each Non-Qualified Stock Option shall
be fixed by the Committee but generally shall not exceed ten (10) years from
the date of grant.

        (c) Time and Method of Exercise. The Committee shall determine the
time or times at which the right to exercise an Option may vest, and the method
or methods by which, and the form or forms in which, payment of the option
price with respect to exercises of such Option may be made or deemed to have
been made (including, without limitation, (i) cash, Shares, outstanding Options
or other consideration, or any combination thereof, having a Fair Market Value
on the exercise date equal to the relevant option price and (ii) a
broker-assisted cashless exercise program established by the Committee),
provided in each case that such methods avoid “short-swing” profits to the
Participant under Section 16(b) of the Securities Exchange Act of 1934, as
amended. The payment of the exercise price of an Option may be made in a
single payment or transfer, in installments, or on a deferred basis, in each
case in accordance with rules and procedures established by the Committee.

        (d) Incentive Stock Options. All terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the provisions
of Section 422 of the Code, or any successor provision thereto, and any
regulations promulgated thereunder including that, (i)(A) in the case of a
grant to a Person that is not a Ten Percent Stockholder the purchase price per
Share purchasable under Incentive Stock Options shall not be less than the Fair
Market Value of a Share on the date of grant and (B) in the case of a grant to
a Ten Percent Stockholder the purchase price per Share purchasable under
Incentive Stock Options shall not be less than 110% of the Fair Market Value of
a Share on the date of grant and (ii) the term of each Incentive Stock Option
shall be fixed by the Committee but shall in no event be more than ten (10)
years from the date of grant, or in the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, five (5) years from the date of grant.

Section 7. Restricted Shares

        The Committee is hereby authorized to grant Awards of Performance-Based
Restricted Shares or Non-employee Director Restricted Shares to Participants
upon the following terms and conditions and with such additional terms and
conditions, in either case not inconsistent with the provisions of the Plan, as
the Committee shall determine. Each Restricted Share Award under the Plan
shall be evidenced by a stock certificate of the Company, registered in the
name of the Participant, accompanied by a Restricted Stock Agreement in such
form as the Committee shall prescribe from time to time. The Restricted Share
Awards shall comply with the following terms and conditions and with

7

 

such other terms and conditions not inconsistent with the terms of this Plan as
the Committee, in its discretion, shall establish.

     (a). Stock Legends; Prohibition on Disposition. Certificates
for Shares of Restricted Share shall bear an appropriate legend referring to
the restrictions to which they are subject, and any attempt to dispose of any
Shares of Stock in contravention of such restrictions shall be null and void
and without effect. The certificates representing Shares of Restricted Share
shall be held by the Company until the restrictions are satisfied. Upon the
expiration or termination of the Restricted Period and the satisfaction of any
other conditions prescribed by the Committee, the restrictions applicable to
Restricted Shares shall lapse, and, a certificate for such Shares may be
delivered, free of all such restrictions, to the Participant or the
Participant’s beneficiary or estate, as the case may be.

     (b). Termination of Service and Forfeiture. In the case of
Participants who are employees of the Company or any of its Subsidiaries, the
Committee shall determine the extent to which the restrictions on any
Restricted Share Award shall lapse upon the termination of the employee
Participant’s service to the Company and its Subsidiaries, due to death,
disability, retirement or for any other reason. Except as otherwise determined
by the Compensation Committee, upon termination of employment for any reason
whatsoever, during the restriction period, any portion of a Restricted Share
Award which is still subject to restriction shall be forfeited by the
Participant and reacquired by the Company, in which case, the Participant,
shall forthwith deliver to the Secretary of the Company such instruments of
transfer, if any, as may reasonably be requested or required to transfer the
Shares back to the Company.  

     (c). Effect of Attempted Transfer.

     No interest in any Restricted Share Award shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and any such attempted action shall be void. No such interest in any
Restricted Share Award shall be in any manner liable for or subject to debts,
contracts, liabilities, engagements or torts of any Participant or beneficiary.
If any Participant or beneficiary shall attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge any benefit payable under or
interest in any Restricted Share Award, then the Committee, in its discretion,
may hold, or may apply such benefit or interest or any part thereof to or for
the benefit of such Participant, beneficiary, spouse, children, blood relatives
or other dependents, or any of them, in any such manner and such proportions as
the Committee may consider proper.

     (d). Rights as a Stockholder. Unless the Board otherwise
provides, holders of unvested Restricted Shares shall have no rights as
shareholders of the Company. A Participant shall not be entitled to delivery of
a stock certificate until the Shares vest, any applicable restricted period
shall have lapsed, and the Participant has paid the $.01 per Share par value of
the Shares awarded. All distributions, if any, received by a Participant with
respect to Restricted Shares as a result of any stock split, stock
dividend,

8

 

combination of Shares or other similar transaction shall be
subject to the restrictions applicable to the original award.

     (e). Performance-Based Restricted Shares. Awards of
Performance-Based Restricted Shares are intended to qualify as
performance-based for the purposes of Section 162(m) of the Code. The Committee
shall provide that the Restricted Period applicable to such Restricted Shares
shall lapse if certain pre-established objectives are attained within
pre-established time frames. Performance goals may be based on any of the
following, or other criteria: (i) Company earnings or earnings per share, (ii)
revenues, (iii) expenses, (iv) one or more operating ratios, (v) stock price
and/or (vi) similar performance criteria. The Committee shall establish one or
more objective performance goals for each such Award of Restricted Shares on
the date of Grant. The performance goals selected in any case may be particular
to an employee’s function, and the Committee may also consider the
Participant’s contributions, responsibilities, current compensation and current
ownership of Shares of the Company’s Stock or Stock Options. The Committee
shall determine whether the Participant’s performance goals were attained, and
such determination shall be final and conclusive. The Committee may impose
such other restrictions and conditions (in addition to the performance-based
restrictions described above) on any Award of Shares of Performance-Based
Restricted Shares as the Committee may deem appropriate, and may waive any such
restrictions and conditions.

Section 8. Restricted Shares Awarded to Non-Employee Directors

     Each non-employee Director who was not a member of the Board as of the
date of the approval of the Amended Plan by the Company’s stockholders shall be
granted 2,000 Restricted Shares at the time such Independent Director joins the
Board, and shall be entitled to receive 1,000 Restricted Shares annually
thereafter, beginning on the first anniversary date of their appointment. Any
such Grant of Restricted Shares shall be subject to the terms of a Restricted
Stock Agreement, which shall provide that such Shares shall vest over a period
five (5) years, in equal annual installments, beginning on the first
anniversary date of their appointment. Each non-employee Director who was a
member of the Board prior to the approval of the offering shall automatically
be granted 1,000 Shares of Restricted Stock annually, beginning on November 7,
2004, and 1,000 Shares of Restricted Stock each year thereafter, on the
anniversary of their initial appointment. Such Shares shall be subject to the
terms of a Restricted Stock Agreement, which shall provide that such Shares
shall vest in five (5) equal annual installments on the anniversary of the
initial date of such Grants. All such Grants shall be made exclusively to
Directors of the Company who are not employees of the Company or any of its
Subsidiaries. The Committee may impose such additional restrictions and
conditions on any award of Shares of non-employee Director Restricted Stock as
the Committee deems appropriate, and may waive any such additional restrictions
and conditions applicable to such Shares. Grants of Restricted Stock shall have
their restrictions accelerated (a) three (3) months after the date a
non-employee Director ceases to serve as a Director of the Company due to
physical or mental disability, (b) in the event of a non-employee Director’s
death; or (c) in event a non-employee Director

9

 

reaches the age of seventy-five (75), having served on the Board for not less
than five consecutive years. In such event, the Shares related to such Grant
shall be delivered to the Director or, in the event of death, to such
Director’s beneficiary as soon as administratively feasible after such event.

Section 9. Amendment and Termination

        Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Option or Restricted Stock Agreement or in the Plan:

        (a) Amendments to the Plan. The Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board, but no amendment shall be effective without the approval
of the stockholders of the Company if such approval would be required under
Sections 162(m) or 422 of the Code, Rule 16b-3, by any other law or rule of
any governmental authority, the Nasdaq Stock Exchange, or other self-regulatory
organization to which the Company may then be subject. Except as may be
otherwise provided herein, neither the amendment, suspension nor termination of
the Plan shall, without the consent of the holder of such Option or Restricted
Share, alter or impair any rights or obligations theretofore granted.

        (b) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option or grant of Restricted Shares in the
manner and to the extent it shall deem desirable to carry the Plan into effect.

Section 10. General Provisions

        (a) No Rights to Awards. No Key Employee shall have any claim to
be granted any Restricted Shares or Option under the Plan, and there is no
obligation for uniformity of treatment of Key Employees or holders or
beneficiaries of Options or Restricted Shares under the Plan. The terms and
conditions of Options or Restricted Shares need not be the same with respect to
each recipient. If any Shares subject to an Option Grant or Restricted Share
Award are forfeited, canceled, exchanged or surrendered or if a Grant otherwise
terminates or expires without a distribution of Shares to the Participant, the
shares of Common Stock with respect to such Grant shall, to the extent of any
such forfeiture, cancellation, exchange, surrender, termination or expiration,
again be available for Grants under the Plan.

        (b) No Right to Employment. The grant of an Option or of
Restricted Shares shall not be construed as giving a Participant the right to
be retained in the employ of the Company. Further, the Company may at any time
dismiss a Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any
Option Agreement or Restricted Share Agreement. In the event of termination of
employment and termination or loss of rights

10

 

to Shares granted hereunder, by forfeiture or otherwise, any such Shares
shall again become available for award under the Plan.

        (c) Governing Law and Legality. The validity, construction, and
effect of the Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware and applicable
federal law. Any issuance or transfer of Options and Shares pursuant to this
Plan are subject to all applicable federal and state laws, rules and
regulations and to such approvals by any regulatory or government agency which
may be necessary or advisable in connection therewith. Without limiting the
generality of the foregoing, no Grants may be made under this Plan and no
Options or Shares shall be issued by the Company until in any such case all
legal requirements applicable to the issuance have been complied with. In
connection with any Option or Stock issuance or transfer, the person acquiring
the Shares or Option shall, if requested by the Company, give assurance to the
Company with respect to such matters as may be necessary to assure compliance
with all applicable legal requirements.

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

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

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

Section 11. Effective Date of the Plan

        The Plan originally became effective as of November 4, 2002. The Plan as
amended hereby, will become effective upon the adoption thereof by the
affirmative vote of a majority of stockholders of the Company, present in
person or represented by proxy, and entitled to vote thereon at the Company’s
2004 Annual Meeting of Stockholders.

11

 

Section 12. Term of the Plan

        The Plan shall continue until the earlier of (i) the date on which all
Options or Shares issuable hereunder have been issued, (ii) the termination of
the Plan by the Board or (iii) November 4, 2012, which is
the 10th anniversary
of the effective date of the original Plan. However, unless otherwise
expressly provided in the Plan or in an applicable Option Agreement or
Restricted Share Agreement, any Option theretofore granted may extend beyond
such date and the authority of the Committee to amend, alter, adjust, suspend,
discontinue, or terminate any such Option or Restricted Share, or to waive any
conditions or rights under any such Option or Restricted Share Agreement, and
the authority of the Board to amend the Plan, shall extend beyond such date.

12

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