Document:

Exhibit 10.10

 

LINCOLN
EDUCATIONAL SERVICES CORPORATION

2005 LONG-TERM
INCENTIVE PLAN

 

1.             Purposes of the Plan

 

The purpose of the Plan is to provide an incentive to
certain officers, employees and consultants of the Company and its Subsidiaries
to increase their interest in the Company’s success by offering them an
opportunity to obtain a proprietary interest in the Company through the grant
of equity-based awards.

 

2.             Definitions and Rules of Construction

 

(a)           Definitions.  For purposes of the Plan, the following
capitalized words shall have the meanings set forth below:

 

“Award”
means an Option, Restricted Share Unit, Performance Share Unit, Stock
Appreciation Right or Other Award granted by the Committee pursuant to the
terms of the Plan.

 

“Award
Document” means an
agreement, certificate or other type or form of document or documentation
approved by the Committee which sets forth the terms and conditions of an
Award.  An Award Document may be in
written, electronic or other media, may be limited to a notation on the books
and records of the Company and, unless the Committee requires otherwise, need
not be signed by a representative of the Company or a Participant.

 

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

 

“CEO”
means the Chief Executive Officer of the Company.

 

“Change in Control” occurs upon the occurrence
of any of the following:

 

(i)            when a “person” (as defined in Section 3(a)(9) of
the Exchange Act), including a “group” (as defined in Section 13(d) and
14(d) of the Exchange Act), either directly or indirectly becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act) of 20% or
more of either (1) the then outstanding Common Stock or (2) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors; provided, however, that the following
acquisitions shall not constitute a Change in Control:  (1) any acquisition directly from the
Company; (2) any acquisition by the Company; or (3) any acquisition by
an employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company;

 

(ii)           when, during any period of 24
consecutive months during the existence of the Plan, the individuals who, at
the beginning of such period, constitute the Board (the “Company Incumbent Directors”)
cease for any reason other than death to constitute at

 

 

least a majority
thereof;  provided, however,
that a director who was not a director at the beginning of such 24-month
period shall be deemed to be a Company Incumbent Director if such director was
elected by, or on the recommendation of or with the approval of at least
two-thirds of the directors of the Company, who then qualified as Company
Incumbent Directors;

 

(iii)          when the stockholders of the Company
approve a reorganization, merger or consolidation of the Company without the
consent or approval of a majority of the Company Incumbent Directors;

 

(iv)          consummation of a merger, amalgamation
or consolidation of the Company with any other corporation, the issuance of
voting securities of the Company in connection with a merger, amalgamation or
consolidation of the Company or sale or other disposition of all or
substantially all of the assets of the Company or the acquisition of assets of
another corporation (each, a “Business Combination”),
unless, in each case of a Business Combination, immediately following such
Business Combination, all or substantially all of the individuals and entities
who were the beneficial owners of the Common Stock outstanding immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the then outstanding shares of common stock and 50% of the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Common Stock; or

 

(v)           a
complete liquidation or dissolution of the Company or the sale or other
disposition of all or substantially all of the assets of the Company;

 

provided, however,
that in no event shall a Change in Control be deemed to have occurred so long
as Stonington Partners, Inc., together with Five Mile River Capital, LLC
and any of their respective affiliates, remain the person or group with the
largest single beneficial ownership stake in the outstanding Common Stock and
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of the Company’s directors; provided, further,
that under no circumstances shall an initial public offering of the Company or
its affiliates constitute a Change in Control.

 

Notwithstanding the foregoing, with respect to an
Award that is subject to Section 409A of the Code, no event will
constitute a Change in Control for purposes of the Plan or any Award Document unless such event also
constitutes a “Change in Control Event” as defined under Section 409A of
the Code and the regulations and guidance promulgated thereunder.

 

2

 

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

 

“Committee”
means the Compensation Committee of the Board or such other committee appointed
by the Board to administer the Plan.

 

“Common
Stock” means the Common Stock of the Company, no par value per
share, or such other class of shares or other securities as may be applicable
under Section 13(b) of the Plan.

 

“Company”
means Lincoln Educational Services Corporation or any successor to
substantially all of its business.

 

“Effective
Date” means the date on which the Plan is approved by the
stockholders of the Company.

 

“Eligible
Individual” means an individual described in Section 4(a) of
the Plan.

 

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

 

“Fair Market Value”
means (i) if the Common Stock is listed on a securities exchange or is
traded over the Nasdaq National Market, the closing sales price on such
exchange or over such system on such date or, in the absence of reported sales
on such date, the closing sales price on the immediately preceding date on
which sales were reported, or (ii) if the Common Stock is not listed on a
securities exchange or traded over the Nasdaq National Market, the mean between
the bid and offered prices as quoted by Nasdaq for such date, provided that if
it is determined that the fair market value is not properly reflected by such
Nasdaq quotations, Fair Market Value shall be determined by such other method
as the Committee determines in good faith to be reasonable.

 

“Incentive
Stock Option” means an Option that is intended to comply with
the requirements of Section 422 of the Code or any successor provision
thereto.

 

“Nonqualified
Stock Option” means an Option that is not intended to comply
with the requirements of Section 422 of the Code or any successor
provision thereto.

 

“Option”
means an Incentive Stock Option or Nonqualified Stock Option granted pursuant
to Section 7 of the Plan.

 

“Other Award” means any form of Award other than an
Option, Restricted Share Unit, Performance Share Unit or Stock Appreciation
Right granted pursuant to Section 11 of the Plan.

 

“Participant”
means an Eligible Individual who has been granted an Award under the Plan.

 

3

 

“Performance
Period” means the period established by the Committee and set
forth in the applicable Award Document over which Performance Targets are
measured.

 

“Performance Share Unit” means a
right to receive a Target Number of shares of Common Stock (or cash, if
applicable) payable at the end of a Performance Period, subject to the
Participant’s continued employment and the achievement of the applicable
Performance Targets, granted pursuant to Section 9 of the Plan.

 

“Performance
Target” means the targets established by the Committee and set
forth in the applicable Award Document.

 

“Plan”
means the Lincoln Educational Services Corporation 2005 Long-Term Incentive
Plan as described herein.

 

“Prior
Plan” means the Lincoln Technical Institute Management Stock
Option Plan, which plan shall be terminated (except with respect to awards then
outstanding) as soon as practicable following the Effective Date of the Plan.

 

“Restricted Share Unit” means
a right to receive a share of Common Stock (or cash, if applicable) in the
future, subject to time vesting and the Participant’s continued employment with
the Company, granted pursuant to Section 8 of the Plan.

 

“Stock
Appreciation Right” means a right to receive all or some portion
of the appreciation on shares of Common Stock granted pursuant to Section 10
of the Plan.

 

“Subsidiary” means any
(i) corporation if fifty percent (50%) or more of the total combined
voting power of all classes of stock is owned, either directly or indirectly,
by the Company or another Subsidiary or (ii) limited liability company if
fifty percent (50%) or more of the membership interests is owned, either
directly or indirectly, by the Company or another Subsidiary.

 

“Target Number” means the target number of shares of
Common Stock established by the Committee and set forth in the applicable Award
Document.

 

(b)                                 Rules
of Construction.  The masculine
pronoun shall be deemed to include the feminine pronoun and the singular form
of a word shall be deemed to include the plural form, unless the context
requires otherwise.  Unless the text
indicates otherwise, references to sections are to sections of the Plan.

 

3.             Administration

 

(a)           Committee.  The Plan shall be administered by the
Committee, which shall have full power and authority, subject to the express
provisions hereof, to:

 

(i)            select
the Participants from the Eligible Individuals;

 

(ii)           grant
Awards in accordance with the Plan;

 

4

 

(iii)          determine
the number of shares of Common Stock subject to each Award or the cash amount
payable in connection with an Award;

 

(iv)          determine
the terms and conditions of each Award, including, without limitation, those
related to term, vesting, forfeiture, payment, settlement, exercisability,
Performance Periods, Performance Targets, Target Numbers, and the effect, if
any, of a Participant’s termination of employment with the Company or any of
its Subsidiaries or a Change in Control of the Company, and including the
authority, subject to Section 16, to amend the terms and conditions of an
Award after the granting thereof to a Participant in a manner that is not, without
the consent of the Participant, prejudicial to the rights of such Participant
in such Award;

 

(v)           specify
and approve the provisions of the Award Documents delivered to Participants in
connection with their Awards;

 

(vi)          construe
and interpret any Award Document delivered under the Plan;

 

(vii)         prescribe,
amend and rescind rules and procedures relating to the Plan;

 

(viii)        employ
such legal counsel, independent auditors and consultants as it deems desirable
for the administration of the Plan and to rely upon any opinion or computation
received therefrom;

 

(ix)           vary
the terms of Awards to take account of tax, securities law and other regulatory
requirements of foreign jurisdictions or to procure favorable tax treatment for
Participants; and

 

(x)            make
all other determinations and take any other action desirable or necessary to
interpret, construe or implement properly the provisions of the Plan or
any Award Document.

 

(b)           Plan Construction and Interpretation. 
The Committee shall have full power and authority, subject to the
express provisions hereof, to construe and interpret the Plan.

 

(c)           Determinations of Committee Final and Binding.  All determinations by the Committee in
carrying out and administering the Plan and in construing and interpreting the
Plan shall be final, binding and conclusive for all purposes and upon all
persons interested herein.

 

(d)           Delegation
of Authority.  The Committee may
designate one or more of its members or persons other than its members to carry
out its responsibilities under such conditions or limitations as it may set,
except that the Committee may not delegate its authority with regard to Awards
(including decisions concerning the timing, pricing and amount of shares of
Common Stock subject to an Award) granted to Eligible Individuals (i) who
are officers or directors for purposes of Section 16(b) of the
Exchange Act or (ii) whose compensation for such fiscal year may be
subject to the limit on deductible compensation pursuant to Section 162(m)
of the Code.

 

5

 

(e)           Liability
of Committee.  No member of the Board
or Committee, the CEO, or any officer or employee of the Company to whom any
duties or responsibilities are delegated hereunder shall be liable for any
action or determination made in connection with the operation, administration
or interpretation of the Plan and the Company shall indemnify, defend and hold
harmless each such person from any liability arising from or in connection with
the Plan, except where such liability results directly from such person’s
fraud, willful misconduct or failure to act in good faith.  In the performance of its responsibilities
with respect to the Plan, the Committee shall be entitled to rely upon
information and advice furnished by the Company’s officers, the Company’s
accountants, the Company’s counsel and any other party the Committee deems
necessary, and no member of the Committee shall be liable for any action taken
or not taken in reliance upon any such advice.

 

(f)            Action by the Board.  Anything in the Plan to the contrary
notwithstanding, any authority or responsibility that, under the terms of the
Plan, may be exercised by the Committee may alternatively be exercised by the
Board.

 

4.             Eligibility

 

(a)           Eligible
Individuals.  Awards may be granted
to officers, employees and consultants of the Company or any of its
Subsidiaries.  The Committee shall have
the authority to select the persons to whom Awards may be granted and to
determine the number and terms of Awards to be granted to each such
Participant.  Under this Plan, references
to “employment,” “employed,” etc. include Participants who are consultants of
the Company or its Subsidiaries.

 

(b)           Grants
to Participants.  The Committee shall
have no obligation to grant any Eligible Individual an Award or to designate an
Eligible Individual as a Participant solely by reason of such Eligible
Individual having received a prior Award or having been previously designated
as a Participant.  The Committee may
grant more than one Award to a Participant and may designate an Eligible
Individual as a Participant for overlapping periods of time.

 

5.             Common Stock Subject to the Plan

 

(a)           Plan
Limit.  Subject to Section 13(b),
the maximum number of shares of Common Stock that may be awarded for all purposes
under the Plan shall be the aggregate of 1 million shares of Common Stock,
plus any shares of Common Stock that are available for issuance under the Prior
Plan.  Shares of Common Stock issued
pursuant to Awards under the Plan may be either authorized and unissued shares
of Common Stock or shares of Common Stock held by the Company in its treasury.

 

(b)           Rules Applicable
to Determining Shares Available for Issuance.  For purposes of determining the number
of  shares of Common Stock that remain
available for issuance under the Plan, the number of shares of Common Stock
corresponding to Awards under the Plan or the Prior Plan that are forfeited or
expire for any reason without having been exercised or settled, the number of
shares of Common Stock tendered or withheld to pay the exercise price of an
Award and the number of shares of Common Stock withheld from any Award to
satisfy a Participant’s tax withholding obligations shall be added back to the
Plan Limit and again be available for the grant of Awards.

 

6

 

(c)           Special
Limits.  Anything to the contrary in Section 5(a) above
notwithstanding, but subject to Section 13(b), the following special
limits shall apply to shares of Common Stock available for Awards under the
Plan:

 

(i)            the
maximum number of shares of Common Stock that may be subject to Options granted
to any Eligible Individual in any calendar year shall equal 150,000 shares;

 

(ii)           the
maximum number of shares of Common Stock that may be subject to Incentive Stock
Options under the Plan shall equal 500,000 shares and;

 

(iii)          the
maximum number of shares of Common Stock that may be subject to Restricted
Share Units, Performance Share Units, Stock Appreciation Rights or Other Awards
granted to any Eligible Individual in any calendar year shall equal 150,000 to
the number of shares of Common Stock.

 

6.             Awards in General

 

(a)           Types of Awards.  Awards under the Plan may consist of
Options, Restricted Share Units, Performance Share Units, Stock Appreciation Rights
and Other Awards.  Any Award described in
Sections 7 through 11 of the Plan may be granted singly or in combination or
tandem with any other Awards, as the Committee may determine.  Awards under the Plan may be made in
combination with, in replacement of, or as alternatives to awards or rights
under any other compensation or benefit plan of the Company, including the plan
of any acquired entity.

 

(b)           Terms Set Forth in Award Document.  The terms and conditions of each Award
shall be set forth in an Award Document in a form approved by the Committee for
such Award, which shall contain terms and conditions not inconsistent with the
Plan.  Notwithstanding the foregoing but
subject to Section 6(c) below, the Committee may, in its sole
discretion, accelerate (i) the vesting or payment of any Award, (ii) the
lapse of restrictions on any Award or (iii) the date on which any Award
first becomes exercisable.  The terms of
Awards may vary among Participants and the Plan does not impose upon the
Committee any requirement to make Awards subject to uniform terms.  Accordingly, the terms of individual Award
Documents may vary.

 

(c)           Termination
of Employment and Change in Control. 
(i)  In connection with a Participant’s termination of employment
with the Company or any of its Subsidiaries, the Committee shall have full
authority and discretion to accelerate the vesting, exercisability or
settlement of, eliminate the restrictions and conditions applicable to, or
extend the post-termination exercise period of an outstanding Award, which
provisions may be specified in the applicable Award Document or determined at a
subsequent time; provided, however, that if a Participant’s
termination of employment with the Company or any of its Subsidiaries is for “cause”
(as such term is defined in the Award Document) or if the Committee fails to
take any action to the contrary, any unexercised Stock Options, whether vested
or not, and any unvested Restricted Share Units, Performance Share Units, Stock
Appreciation Rights or Other Awards granted to such Participant under this Plan
shall lapse and become void as of the date of such

 

7

 

termination.  The employment of a
Participant shall not be deemed to have terminated if such Participant is
transferred among the Company and any of its Subsidiaries.

 

(ii)           In
connection with a Change in Control of the Company, the Committee shall have
full authority and discretion to determine the effect, if any, of such Change
in Control on the vesting, exercisability, settlement, payment or lapse of
restrictions applicable to an Award, which effect may be specified in the
applicable Award Document or determined at a subsequent time.

 

(d)           Dividends and Dividend Equivalents.  The Committee may provide Participants with
the right to receive dividends or payments equivalent to dividends or interest
with respect to an outstanding Award, which payments can either be paid
currently or deemed to have been reinvested in shares of Common Stock, and can
be made in shares of Common Stock, cash or a combination thereof, as the
Committee shall determine.

 

(e)           Rights
of a Shareholder.  A Participant
shall have no rights as a shareholder with respect to shares of Common Stock
covered by an Award until the date the Participant or his nominee becomes the
holder of record of such shares.  No
adjustment shall be made for dividends or other rights for which the record
date is prior to such date, except as provided in Section 13(b).

 

(f)            Performance-Based
Awards.  The Committee may determine
whether any Award under the Plan is intended to be “performance-based
compensation” as that term is used in Section 162(m) of the Code.  Any such Awards designated to be “performance-based
compensation” shall be conditioned on the achievement of one or more
Performance Targets, to the extent required by Section 162(m) of the
Code.  The Performance Targets that may
be used by the Committee for such Awards shall be based on measurable and
attainable financial goals for the Company, one or more of its operating
divisions or Subsidiaries or any combination of the above such as net income,
net revenue, cash flow, operating margin, operating revenue, pre-tax income,
pre-tax operating income, operating income growth, return on assets, total
shareholder return, share price, return on equity, diluted earnings per share
or earnings per share growth, or a combination thereof as selected by the
Committee, and quantifiable non-financial goals.  Each Participant is assigned a Target Number
payable if Performance Targets are achieved. 
If a Participant’s performance exceeds such Participant’s Performance
Targets, Awards may be greater than the Target Number, but may not exceed 200%
of such Participant’s Target Number.  The
Committee retains the right to reduce any Award if it believes that individual
performance does not warrant the Award calculated by reference to the
result.  In the event that all members of
the Committee are not “outside directors” as that term is defined in Section 162(m)
of the Code, the grant and terms of Awards intended to qualify as “performance-based
compensation” shall be made by a subcommittee of the Committee consisting of
two or more “outside directors” for purposes of Section 162(m) of the
Code.

 

7.             Terms and Conditions of Options

 

(a)           General.  The Committee, in its discretion, may grant
Options to eligible Participants and shall determine whether such Options shall
be Incentive Stock Options or Nonqualified Stock Options.  Each Option shall be evidenced by an Award
Document that shall

 

8

 

expressly identify the Option as an Incentive Stock Option or
Nonqualified Stock Option, and be in such form and contain such provisions as
the Committee shall from time to time deem appropriate.

 

(b)           Exercise
Price.  The exercise price of an
Option shall be fixed by the Committee at the time of grant or shall be
determined by a method specified by the Committee at the time of grant, but in
no event shall the exercise price of an Option be less than 100% of the Fair
Market Value of a share of Common Stock on the date of grant.  Payment of the exercise price of an Option
shall be made in any form approved by the Committee at the time of grant.

 

(c)           Term.  An Option shall be effective for such term as
shall be determined by the Committee and as set forth in the Award Document
relating to such Option, and the Committee may extend the term of an Option
after the time of grant; provided, however, that the term of an Option may in no event extend
beyond the tenth anniversary of the date of grant of such Option.

 

(d)           Incentive
Stock Options.  The exercise price
per share of an Incentive Stock Option may not be less than 100% of the Fair
Market Value per share of Common Stock on the date of grant (or, if the
exercise price is not fixed on the date of grant, on such date as the exercise
price is fixed).  No Incentive Stock
Option may be issued pursuant to the Plan to any individual who, at the time
the Incentive Stock Option is granted, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or any
of its Subsidiaries, unless (i) the exercise price determined as of the
date of grant is at least 110% of the Fair Market Value on the date of grant of
the shares of Common Shares subject to such Incentive Stock Option and (ii) the
Incentive Stock Option is not exercisable more than five years from the date of
grant thereof.  No Participant shall be
granted any Incentive Stock Option which would result in such Participant receiving
a grant of Incentive Stock Options that would have an aggregate Fair Market
Value in excess of $100,000, determined as of the time of grant, that would be
exercisable for the first time by such Participant during any calendar year.  The 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.

 

8.             Terms and Conditions of Restricted Share Units

 

The
Committee is authorized to grant Restricted Share Units to Eligible
Individuals.  A Restricted Share Unit shall
entitle a Participant to receive, subject to the terms, conditions and
restrictions set forth in the Plan and applicable Award Document, one or more
shares of Common Stock in consideration of the Participant’s employment with
the Company or any of its Subsidiaries. 
If and when the forfeiture provisions lapse, the Restricted Share Units
shall become shares of Common Stock owned by the corresponding Participant or,
at the sole discretion of the Committee, cash, or a combination of cash and
shares of Common Stock, with a value equal to the Fair Market Value of the
shares at the time of payment.

 

9

 

9.             Terms and Conditions of
Performance Share Units

 

The
Committee is authorized to grant Performance Share Units to Eligible
Individuals.  A Performance Share Unit
shall entitle a Participant to receive,
subject to the terms, conditions and restrictions set forth in the Plan and
applicable Award Document, a
Target Number of shares of Common Stock based upon the achievement of
Performance Targets over the applicable Performance Period.  At
the sole discretion of the Committee, Performance Share Units shall be settled through the
delivery of shares of Common Stock or cash, or a combination of cash
and shares of Common Stock, with a value equal to the Fair Market Value of the shares
of Common Stock as of the last day of the applicable Performance Period.

 

10.          Stock Appreciation Rights

 

(a)           General.  The Committee is authorized to grant Stock
Appreciation Rights to Eligible Individuals. 
A Stock Appreciation Right shall entitle a Participant to receive, upon
satisfaction of the conditions to payment specified in the applicable Award
Document, an amount equal to the excess, if any, of the Fair Market Value on
the exercise date of the number of shares of Common Stock for which the Stock
Appreciation Right is exercised, over the exercise price for such Stock Appreciation
Right specified in the applicable Award Document.  The exercise price per share of Common Stock
covered by a Stock Appreciation Right shall be fixed by the Committee at the
time of grant or, alternatively, shall be determined by a method specified by
the Committee at the time of grant.  At
the sole discretion of the Committee, payments to a Participant upon exercise
of a Stock Appreciation Right may be made in cash or shares of Common Stock, or
in a combination of cash and shares of Common Stock, having an aggregate Fair
Market Value as of the date of exercise equal to such cash amount.

 

(b)           Methods
of Exercise.  In accordance with the rules and
procedures established by the Committee for this purpose, and subject to the
provisions of the applicable Award Document, the Committee shall determine the
permissible methods of exercise for a Stock Appreciation Right.

 

(c)           Stock Appreciation Rights in Tandem with Options.  A Stock Appreciation Right granted in
tandem with an Option may be granted either at the same time as such Option or
subsequent thereto.  If granted in tandem
with an Option, a Stock Appreciation Right shall cover the same number of
shares of Common Stock as covered by the Option (or such lesser number of
shares as the Committee may determine) and shall be exercisable only at such
time or times and to the extent the related Option shall be exercisable, and
shall have the same term and exercise price as the related Option (which, in
the case of a Stock Appreciation Right granted after the grant of the related
Option, may be less than the Fair Market Value per share on the date of grant
of the tandem Stock Appreciation Right). 
Upon exercise of a Stock Appreciation Right granted in tandem with an
Option, the related Option shall be canceled automatically to the extent of the
number of shares covered by such exercise; conversely, if the related Option is
exercised as to some or all of the shares covered by the tandem grant, the
tandem Stock Appreciation Right shall be canceled automatically to the extent
of the number of shares covered by the Option exercise.

 

10

 

11.          Other Awards

 

The Committee shall have the authority to specify the
terms and provisions of other forms of equity-based or equity-related Awards
not described above that the Committee determines to be consistent with the
purpose of the Plan and the interests of the Company, which Awards may provide
for cash payments based in whole or in part on the value or future value of
shares of Common Stock, for the acquisition or future acquisition of shares of
Common Stock, or any combination thereof.

 

12.          Certain Restrictions

 

(a)           Transfers.  Unless the Committee determines otherwise on
or after the date of grant, no Award shall be transferable other than by shall
or by the laws of descent and distribution.

 

(b)           Award
Exercisable Only by Participant. 
During the lifetime of a Participant, an Award shall be exercisable only
by the Participant.  The grant of an
Award shall impose no obligation on a Participant to exercise or settle the
Award.

 

13.          Recapitalization or Reorganization

 

(a)           Authority
of the Company and Stockholders.  The
existence of the Plan, the Award Documents and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or
the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or business, any merger or consolidation of the Company, any issue of
stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to
or affect the shares of Common Stock or the rights thereof or which are
convertible into or exchangeable for shares of Common Stock, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

 

(b)           Change
in Capitalization.  Notwithstanding
any provision of the Plan or any Award Document, the number and kind of shares
authorized for issuance under Section 5, including the maximum number of
shares available under the special limits provided for in Section 5(c),
may be equitably adjusted in the sole discretion of the Committee in the event
of a stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, extraordinary dividend, split-up, spin-off, combination,
exchange of shares, warrants or rights offering to purchase shares of Common
Stock at a price substantially below Fair Market Value or other similar
corporate event affecting the shares of Common Stock in order to preserve, but
not increase, the benefits or potential benefits intended to be made available
under the Plan.  In addition, upon the
occurrence of any of the foregoing events, the number of outstanding Awards and
the number and kind of shares subject to any outstanding Award and the exercise
price per share, if any, under any outstanding Award shall be equitably
adjusted (including by payment of cash to a Participant) as the Committee deems
necessary and advisable in order to preserve the benefits or potential benefits
intended to be made available to Participants granted Awards.  Such adjustments shall be made by the
Committee, in its sole discretion, whose determination as to

 

11

 

what adjustments shall be made, and the extent thereof, shall be
final.  Unless otherwise determined by
the Committee, such adjusted Awards shall be subject to the same restrictions
and vesting or settlement schedule to which the underlying Award is
subject.  Notwithstanding the foregoing,
in the event a stock split is declared upon the Common Stock, the shares of
Common Stock then subject to each Option shall be increased proportionately
without any change in the aggregate purchase price therefore.

 

(c)           No
Repricing.  The Committee may not
reprice any Option or Stock Appreciation Right whether by (i) amending an
Option or Stock Appreciation Right to reduce its exercise price, (ii) canceling
an Option or Stock Appreciation Right and regranting an Option with a lower
exercise price than the original exercise price of the cancelled Option or
Stock Appreciation Right or (iii) taking any other action (whether in the
form of an amendment, cancellation or replacement grant) that has the effect of
repricing an Option or Stock Appreciation Right ; provided
that nothing in this Section 13(c) shall prevent the Committee from
making adjustments pursuant to Section 13(b).

 

14.          Term of the Plan

 

Unless earlier terminated pursuant to Section 16,
the Plan shall terminate on the 10th anniversary of the Effective
Date, except with respect to Awards then outstanding.  No Awards may be granted under the Plan after
the 10th anniversary of the Effective Date.

 

15.          Effective Date

 

The Plan shall become effective on the Effective Date;
provided, however, that, if the Plan is not approved
by the shareholders upon submission to them for approval, the Plan shall be
void ab initio and of no further
force and effect.

 

16.          Amendment and Termination

 

Notwithstanding anything herein to the contrary, the
Board may, at any time, terminate or, from time to time, amend, modify or
suspend the Plan; provided, however,
that no termination, amendment, modification or suspension of the Plan shall
materially and adversely alter or impair the rights of a Participant in any
Award previously made under the Plan without the consent of the holder thereof
and no amendment which increases the Plan Limit shall be effective without
shareholder approval (other than in connection with a transaction or event
described in Section 13(b) of the Plan).  Notwithstanding the foregoing, the Board
shall have broad authority to amend the Plan or any Award under the Plan
without the consent of a Participant to the extent it deems necessary or
desirable to (a) comply with, or take into account changes in applicable
tax laws, securities laws, accounting rules and other applicable laws, rules and
regulations or (b) to ensure that an Award is not subject to interest and
penalties under Section 409A of the Code.

 

17.          Miscellaneous

 

(a)           Tax
Withholding.  The Company or a
Subsidiary, as appropriate, may require any individual entitled to receive a
payment in respect of an Award to remit to the Company, prior to such payment,
an amount sufficient to satisfy any applicable tax withholding

 

12

 

requirements.  In the case of an
Award payable in shares of Common Stock, the Company or a Subsidiary, as
appropriate, may permit such individual to satisfy, in whole or in part, such
obligation to remit taxes by directing the Company to withhold shares that
would otherwise be received by such individual or to repurchase shares that
were issued to such individual to satisfy the minimum statutory withholding
rates for any applicable tax withholding purposes, in accordance with all
applicable laws and pursuant to such rules as the Committee may establish
from time to time.  The Company or a
Subsidiary, as appropriate, shall also have the right to deduct from all cash
payments made to a Participant (whether or not such payment is made in
connection with an Award) any applicable taxes required to be withheld with respect
to such payments.

 

(b)           No
Right to Awards or Employment.  No
person shall have any claim or right to receive Awards under the Plan.  Neither the Plan, the grant of Awards under
the Plan, nor any action taken or omitted to be taken under the Plan shall be
deemed to create or confer on any Eligible Individual any right to be retained
in the employ of the Company or any Subsidiary or other affiliate thereof, or
to interfere with or to limit in any way the right of the Company or any
Subsidiary or other affiliate thereof to terminate the employment of such
Eligible Individual at any time.

 

(c)           Section 16(b) of
the Exchange Act.  The Plan is
intended to comply in all respects with Section 16(b) of the Exchange
Act.  Notwithstanding anything contained
in the Plan or any Award Document under the Plan to the contrary, if the
consummation of any transaction under the Plan, or the taking of any action by
the Committee in connection with a Change in Control of the Company, would
result in the possible imposition of liability on a Participant pursuant to Section 16(b) of
the Exchange Act, the Committee shall have the right, in its sole discretion,
but shall not be obligated, to defer such transaction or the effectiveness of
such action to the extent necessary to avoid such liability, but in no event
for a period longer than 180 days.

 

(d)           Section 162(m)
of the Code.  The Plan is intended to
comply in all respects with Section 162(m) of the Code.

 

(e)           Securities Law Restrictions.  The Committee may require each Participant
purchasing or acquiring shares of Common Stock pursuant to an Award under the
Plan to represent to and agree with the Company in writing that such Eligible
Individual is acquiring the shares of Common Stock for investment purposes and
not with a view to the distribution thereof. 
All certificates for shares of Common Stock delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission, any exchange upon which the shares
of Common Stock are then listed, and any applicable securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

 

(f)            Award
Document.  In the event of any
conflict or inconsistency between the Plan and any Award Document, the Plan
shall govern and the Award Document shall be interpreted to minimize or
eliminate any such conflict or inconsistency.

 

13

 

(g)           Headings.  The headings of sections herein are included
solely for convenience of reference and shall not affect the meaning of any of
the provisions of the Plan.

 

(h)           Section 409A
of the Code.  If any provision of the
Plan or an Award Agreement contravenes any regulations or Treasury guidance
promulgated under Section 409A of the Code or could cause an Award to be
subject to the interest and penalties under Section 409A of the Code, such
provision of the Plan or any Award Agreement shall be modified to maintain, to
the maximum extent practicable, the original intent of the applicable provision
without violating the provisions of Section 409A of the Code.

 

(i)            Application
of Funds.  The proceeds received by
the Company from the sale of shares of Common Stock pursuant to Awards shall be
used for general corporate purposes.

 

(j)            Governing
Law.  The Plan and all agreements
entered into under the Plan shall be construed in accordance with and governed
by the laws of the State of New York.

 

(k)           Unfunded Plan.  The Plan is intended to constitute an unfunded
plan for incentive compensation.  Prior
to the issuance of Shares in connection with an Award, nothing contained herein
shall give any Participant any rights that are greater than those of a general
unsecured creditor of the Company.  In
its sole discretion, the Committee may authorize the creation of trusts or
other arrangements to meet the obligations created under the Plan to deliver
Shares with respect to awards hereunder.

 

14Exhibit 10.11

 

LINCOLN
EDUCATIONAL SERVICES CORPORATION

2005 NON-EMPLOYEE
DIRECTORS RESTRICTED STOCK PLAN

 

1.                                      Purpose of the Plan

 

The Plan is intended to encourage ownership
of Common Stock by Non-Employee Directors of the Company, upon whose judgment
and interest the Company is dependent for its successful operation and growth,
in order to increase their proprietary interest in the Company’s success and to
encourage them to serve as directors of the Company.

 

2.                                      Definitions and Rules of
Construction

 

(a)           Definitions.  For purposes of the Plan, the following
capitalized words shall have the meanings set forth below:

 

“Annual Meeting” means
an annual meeting of the Company’s stockholders.

 

“Award” means an award
of Restricted Stock or Restricted Stock Units made pursuant to the terms of the
Plan.

 

“Award
Document” means an agreement, certificate or other type or form
of document or documentation approved by the Committee which sets forth the
terms and conditions of an Award.  An
Award Document may be in written, electronic or other media, may be limited to
a notation on the books and records of the Company and, unless the Committee
requires otherwise, need not be signed by a representative of the Company or a
Non-Employee Director.

 

“Board”
means the Board of Directors of the Company, including any directors who may be
participants in the Plan.

 

“Change
in Control” means
a “Change in Control” as defined in the Company’s 2005 Long-Term Incentive
Plan.

 

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

 

“Committee” means the Compensation Committee of the
Board or such other committee appointed by the Board to administer the Plan.

 

“Common
Stock” means the common stock of the Company, no par value per
share, or such other class of share or other securities as may be applicable
under Section 9(b) hereof.

 

“Company”
means Lincoln Education Services Corporation, or any successor to substantially
all of its business.

 

 

“Date
of Grant” means the date on which a Non-Employee Director is
granted an Award.

 

“Deferral
Election” means a Non-Employee Director’s irrevocable, written
election to defer his Award of Restricted Stock in accordance with Section 8
hereof.

 

“Deferral
Plan” means the Company’s 2005 Deferred Compensation Plan or any
successor plan thereto.

 

“Effective
Date” means the date on which the Plan is approved by the
stockholders of the Company.

 

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

 

“Fair Market Value”
means (i) if the Common Stock is listed on a securities exchange or is
traded over the Nasdaq National Market, the closing sales price on such
exchange or over such system on such date or, in the absence of reported sales on
such date, the closing sales price on the immediately preceding date on which
sales were reported, or (ii) if the Common Stock is not listed on a
securities exchange or traded over the Nasdaq National Market, the mean between
the bid and offered prices as quoted by Nasdaq for such date, provided that if
it is determined that the fair market value is not properly reflected by such
Nasdaq quotations, Fair Market Value shall be determined by such other method
as the Committee determines in good faith to be reasonable.

 

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

 

“Plan”
means this Lincoln Educational Services Corporation 2005 Non-Employee Directors
Restricted Stock Plan, as described herein.

 

“Plan
Limit” has the meaning assigned to such term in Section 5
hereof.

 

“Restricted
Stock” means restricted shares of Common Stock granted to a
Non-Employee Director pursuant to Section 7 hereof.  One share of Restricted Stock corresponds to
one share of Common Stock.

 

“Restricted
Stock Units” mean a contractual right to receive shares of
Common Stock at a subsequent date upon satisfaction of the conditions to
vesting and settlement pursuant to Section 8 hereof.  One Restricted Stock Unit corresponds to one
share of Common Stock.

 

“Subsidiary”
means (i) a domestic or foreign corporation or other entity with respect
to which the Company, directly or indirectly, has the power, whether through
the ownership of voting securities, by contract or otherwise, to elect at least
a majority of the members of such corporation’s board of directors or analogous
governing body, or (ii) any other domestic or foreign corporation or other
entity in which the Company,

 

2

 

directly
or indirectly, has an equity or similar interest and which the Board designates
as a Subsidiary for purposes of the Plan.

 

“Vesting
Date” has the meaning assigned to such term in Section 8(c) hereof.

 

(b)           Rules of Construction.  The masculine pronoun shall be deemed to
include the feminine pronoun and the singular form of a word shall be deemed to
include the plural form, unless the context requires otherwise.  Unless the text indicates otherwise, references
to sections are to sections of the Plan.

 

3.                                      Administration

 

(a)           Authority.  Subject to the provisions of Section 12
hereof, the Committee shall have authority to interpret the provisions of the
Plan, to establish such rules and procedures as may be necessary or
advisable to administer the Plan and to make all determinations necessary or
advisable for the administration of the Plan, including, without limitation,
factual and legal determinations; provided, however, that no such interpretation or
determination shall change or affect the selection of persons eligible to
receive an Award under the Plan, the number of shares authorized under the Plan
or the terms and conditions thereof.  The
interpretation and construction by the Committee of any provision of the Plan
or of any Award Document shall be final, binding and conclusive on all parties.

 

(b)           Delegation.  The Committee may designate one or more
employees of the Company to carry out the day-to-day aspects of the Committee’s
responsibilities under such conditions as it may set.

 

4.                                      Eligibility

 

Awards under the Plan
shall be granted pursuant to the provisions hereof to persons who are
Non-Employee Directors.

 

5.                                      Plan Limit

 

Subject to Section 9(b) hereof,
the Company is authorized to issue up to 100,000 shares of Common Stock under
the Plan (the “Plan
Limit”).  Such shares may
be authorized but unissued shares of Common Stock or reacquired shares of
Common Stock held in the treasury of the Company.

 

6.                                      Awards in General

 

(a)           General.  The terms and conditions of each Award shall
be set forth in an Award Document, which shall contain terms and conditions not
inconsistent with the Plan.  Each Award
made to a Non-Employee Director under the Plan shall be granted for no
consideration other than the provision of services (or such minimum payment as
may be required under applicable law) or for such other consideration as the
Committee may determine.

 

(b)           Effect of Termination of Service.  Notwithstanding any provision of the Plan to
the contrary, in the event that a Non-Employee Director’s service on the Board
terminates, the

 

3

 

Committee shall have full authority and discretion to accelerate the
vesting of an Award, which provisions may be specified in the applicable Award
Document or determined at a subsequent time. 
In the absence of any action by the Committee to the contrary, upon such
termination of service, the Non-Employee Director’s Award shall, to the extent
unvested, be immediately forfeited as of such date of termination of
service.  The date of a Non-Employee
Director’s termination of service from the Board for any reason shall be
determined in the sole discretion of the Committee.

 

7.                                      Terms and Conditions of
Restricted Stock Awards

 

The terms of this Section 7
are subject to the terms and provisions set forth above in Section 6.

 

(a)           Initial Grant of Restricted
Stock.  Subject to the provisions of Section 8,
each Non-Employee Director shall receive an Award of shares of Restricted Stock
equal to $60,000 (based on the Fair Market Value of a share of Common Stock on
the Date of Grant) or such other amount as the Committee may determine from
time to time for service as a director of the Company on the first day of the
calendar month following the later of (i) the month in which such Non-Employee
Director becomes a Non-Employee Director and (ii) the date of consummation
of the Company’s initial public offering.

 

(b)           Annual Grants of Restricted
Stock.  Subject to the provisions of Sections 7 and
8, as of the date of each Annual Meeting commencing in 2006, each Non-Employee
Director shall automatically receive an Award of shares of Restricted Stock
equal to $30,000 (based on the Fair Market Value of a share of Common Stock on
the Date of Grant) for service as a director of the Company, provided that such Non-Employee Director
shall continue to serve as a director of the Company immediately after such
Annual Meeting, provided further
that if a person is elected, appointed or otherwise becomes a Non-Employee
Director during a period of 60 days prior to the Annual Meeting in any year,
then such Non-Employee Director shall not receive any Award of Restricted Stock
pursuant to this Section 7(b) for such year.

 

(c)           Vesting.  An Award of Restricted Stock shall vest and
become nonforfeitable at a rate of 33 1/3% on each of the first, second and
third anniversaries of the Date of Grant (subject to early vesting, if so
provided by the Committee in its sole discretion in the applicable Award
Document or at a subsequent time, upon a Change in Control of the Company).

 

(d)           Issuance of Shares.  A certificate representing the whole shares
of Common Stock covered by an Award of Restricted Stock shall be issued in the
Non-Employee Director’s name, subject to the terms and conditions of the Plan
and the applicable Award Document, promptly after the Date of Grant, and such a
Non-Employee Director shall be deemed to own such number of whole shares of
Common Stock, including, without limitation, for purposes of dividends and
voting, as of the Date of Grant.  The
Board may require that the certificate evidencing such shares be held in
custody by the Company until the restrictions thereon shall have lapsed, and
that, as a condition of any Award of Restricted Stock, the Eligible Director
shall have delivered a stock power, endorsed in blank, relating to the Common
Stock covered by such Award of Restricted Stock.

 

4

 

(e)           Restrictions on Transfer of
Restricted Stock.  Unless the Committee determines otherwise,
Restricted Stock shall not be transferable other than by the laws of descent
and distribution until such Restricted Stock has vested pursuant to Section 7(c) but,
in no event, prior to the expiration of a period of six (6) months from
the Date of Grant.

 

8.                                      Deferral Election; Terms and
Conditions of Restricted Stock Unit Awards

 

The terms of this Section 8
are subject to the terms and provisions set forth above in Section 6.

 

(a)           Deferral Election.  Notwithstanding any provision of Section 7,
each Non-Employee Director shall be given the opportunity to irrevocably elect
to defer under the Deferral Plan receipt of all or any portion of an Award of
Restricted Stock otherwise receivable by him under paragraph (a) or (b) of
Section 7 through a Deferral Election. 
Any Deferral Election must be made by a Non-Employee Director within the
requisite time specified by the Committee, but in no event later than December 31
of the taxable year prior to the year in which the applicable Award of
Restricted Stock is granted to such Non-Employee Director.

 

(b)           Grant of Restricted Stock Units.  When a Non-Employee Director makes a Deferral
Election, he shall receive a number of Restricted Stock Units in lieu of, and
equal to, the number of shares of Restricted Stock that is subject to such
Deferral Election.  The Non-Employee
Director shall receive an Award of these Restricted Stock Units on the same
date that the Award of Restricted Stock subject to the Deferral Election
otherwise would have been granted to him under paragraph (a) or (b), as
applicable, of Section 7.  Except as
otherwise provided by the Committee in any Award Document, the terms and
conditions applicable to an Award of Restricted Stock Units are described in
this Section 8.

 

(c)           Vesting.  An Award of Restricted Stock Units shall vest
and become nonforfeitable at a rate of 33 1/3% on each of the first, second and
third anniversaries of the Date of Grant (each, a “Vesting Date”) (subject to early vesting, if so provided by the
Committee in its sole discretion in the applicable Award Document or at a
subsequent time, including, without limitation, upon a Change in Control of the
Company).

 

(d)           No Issuance of Shares; Deferral.  Subject to Section 8(f), upon an Award
of Restricted Stock Units, or a portion thereof, becoming vested, no shares of
Common Stock shall be issued to the Non-Employee Director.  Instead, the Restricted Stock Units shall be
credited, without any further action on the part of the Non-Employee Director,
to the Non-Employee Director’s deferred compensation account under the Deferral
Plan on the applicable Vesting Date.  Any
Restricted Stock Units credited to the Deferral Plan shall be held in the
Deferral Plan as Restricted Stock Units until such time as they are settled
through the delivery of shares of Common Stock in accordance with the terms and
conditions of the Deferral Plan.

 

(e)           Restrictions on Transfer of
Restricted Stock Units.  Unless the Committee determines otherwise,
Restricted Stock Units shall not be transferable other than by the laws of
descent and distribution.

 

5

 

(f)            Dividend Equivalent Payments.  Unless the Committee determines otherwise, if
the Company pays any cash or other dividend or makes any other distribution in
respect of the shares of Common Stock underlying an Award of Restricted Stock
Units, or a portion thereof, before such Restricted Stock Units are credited to
the Deferral Plan in accordance with the terms of Section 8(d), the
Company shall maintain a bookkeeping record to which such amount of the
dividend or distribution in respect of such shares of Common Stock shall be
credited to an account for the Non-Employee Director and distributed in whole
shares of Common Stock at the time the Award, or portion thereof is vested.

 

(g)           No Rights as a Stockholder.  Except as otherwise provided by the Committee
in the applicable Award Document, a Non-Employee Director shall have no rights
as a stockholder with respect to any Awards of Restricted Stock Units or any
value thereof deferred under the Deferral Plan.

 

9.                                      No Restriction on Right of
Company to Effect Corporate Changes

 

(a)           Authority of the Company and
Stockholders.  The existence of the Plan, the Award
Documents and the Awards granted hereunder shall not affect or restrict in any
way the right or power of the Company or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other
change in the Company’s capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior preference
stocks whose rights are superior to or affect the Common Stock or the rights
thereof or which are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

 

(b)           Change in Capitalization.  Notwithstanding any provision of the Plan or
any Award Document, the number and kind of shares authorized for issuance under
Section 5 hereof may be equitably adjusted in the sole discretion of the
Committee in the event of a stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, extraordinary dividend, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Common
Stock at a price substantially below Fair Market Value or other similar
corporate event affecting the Common Stock in order to preserve, but not
increase, the benefits or potential benefits intended to be made available
under the Plan.  In addition, upon the
occurrence of any of the foregoing events, the number and kind of shares
subject to any outstanding Awards may be equitably adjusted (including by
payment of cash to a Non-Employee Director) in the sole discretion of the
Committee in order to preserve the benefits or potential benefits intended to
be made available to Non-Employee Directors granted Awards.  Such adjustments shall be made by the
Committee, in its sole discretion, whose determination as to what adjustments
shall be made, and the extent thereof, shall be final.  Unless otherwise determined by the Committee,
such adjusted Awards shall be subject to the same restrictions to which the
underlying Award is subject.

 

6

 

10.                               Miscellaneous

 

(a)           Tax Withholding.  The Company shall require as a condition to
delivery of shares of Common Stock that the Non-Employee Director remit an
amount sufficient to satisfy all applicable tax withholding requirements (if
any) and any or all indebtedness or other obligation of the Non-Employee
Director to the Company or any of its Subsidiaries.

 

(b)           No Right to Continued
Directorship.  Nothing in the Plan shall confer upon any
Non-Employee Director the right to continue as a director of the Company or
affect any right that the Company or any Non-Employee Director may have to
terminate the service of such Non-Employee Director.

 

(c)           Section 16(b) of the
Exchange Act.  The Plan is intended to comply in all
respects with Section 16(b) of the Exchange Act.  Notwithstanding anything contained in the
Plan or any Award Document under the Plan to the contrary, if the consummation
of any transaction under the Plan, or the taking of any action by the Committee
in connection with a Change in Control of the Company, would result in the
possible imposition of liability on a Non-Employee Director pursuant to Section 16(b) of
the Exchange Act, the Committee shall have the right, in its sole discretion,
but shall not be obligated, to defer such transaction or the effectiveness of
such action to the extent necessary to avoid such liability, but in no event
for a period longer than 180 days.

 

(d)           Securities Law Restrictions.  The Committee may require each Non-Employee
Director purchasing or acquiring shares of Common Stock pursuant to an Award
under the Plan to represent to and agree with the Company in writing that such
Non-Employee Director is acquiring the shares of Common Stock for investment
purposes and not with a view to the distribution thereof.  All certificates for shares of Common Stock
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any exchange upon which the shares of Common Stock are then listed, and any
applicable securities law, and the Committee may cause a legend or legends to
be put on any such certificates to make appropriate reference to such
restrictions.

 

(e)           Governing Law.  The Plan and all agreements entered into
under the Plan shall be construed in accordance with and governed by the laws
of the State of New York.

 

(f)            Unfunded Plan. 
The Plan is intended to constitute an unfunded plan for incentive
compensation.  Prior to the issuance of
Shares in connection with an Award, nothing contained herein shall give any
Participant any rights that are greater than those of a general unsecured
creditor of the Company.  In its sole
discretion, the Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver Shares
with respect to awards hereunder.

 

(g)           Section 409A of the Code.  If any provision of the Plan or an Award
Document contravenes any regulations or Department of Treasury guidance
promulgated under Section 409A of the Code or could cause an Award to be
subject to the interest and penalties under Section 409A of the Code, such
provision of the Plan or any Award Document shall be modified to maintain, to
the maximum extent practicable, the original intent of the applicable provision
without violating the provisions of Section 409A of the Code.

 

7

 

11.                               Term of the Plan

 

Unless earlier terminated
pursuant to Section 12 hereof, the Plan shall terminate on the tenth
anniversary of the Effective Date, except with respect to Awards then
outstanding.

 

12.                               Amendment and Termination

 

The
Plan may be terminated and may be modified or amended by the Board at any time
and from time-to-time; provided, however,
that (i) no modification or amendment shall be effective without
stockholder approval if such approval is required by law or under the rules of
Nasdaq or the stock exchange on which the shares are listed, and (ii) no
such termination, modification, or amendment of the Plan shall adversely alter
or affect the terms of any then outstanding Awards previously granted hereunder
without the consent of the holder thereof. 
Notwithstanding the foregoing, the Board shall have broad authority to
amend the Plan or any Award under the Plan without the consent of a Participant
to the extent it deems necessary or desirable to (a) comply with, or take
into account changes in applicable tax laws, securities laws, accounting rules and
other applicable laws, rules and regulations or (b) to ensure that an
Award is not subject to interest and penalties under Section 409A of the
Code.

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]