Document:

exv10w3

 

Exhibit 10.3

No. 16 — 18-4-2007 — Official Gazette of the Macau Special Administrative Region

II Series

(English Translation)

Order of the Secretary for Transports and Public Works no. 27/2007

Using the powers vested upon me by article 64 of the Basic Law of the Macau Special Administrative
Region and in accordance with article 107 of the Law no. 6/80/M, of July 5, 1980, the Secretary for
Transports and Public Works Chief Executive order:

	 	1.	 	The detachment of the public domain and the incorporation in the Macau SAR private
domain of the parcel of land with an area of 29,724 sq mts, considered as an unoccupied
parcel of land, which presently is a part of the Avenida de COTAI (VU3.3) and of the COTAI
Roundabout. The abovementioned parcel of land, is identified with the letters “C1a” and
“C1b” in the cadastre plan no. 6 124/2003, issued by the Macao Cartography and Cadastre
Bureau (MCCB), on November 7, 2006, which is part of this order;
	 
	 	2.	 	The concession by lease, and without a public tender, in favor of the Venetian Cotai
Limited, in the terms and conditions of the attached contract which is part of this order,
of a parcel of land with an area of 405,658 sq mts, not registered in the Macau Land and
Buildings Registry, divided in 3 (three) plots identified as plot “I”, “II” and “III”,
respectively with an area of 292,315 sq mts, 52,864 sq mts and 60,479 sq mts, located in
the reclaimed area between Taipa Island and Coloane Island (COTAI), West of Estrada do
Istmo and South of Estrada da Baía de Nossa Senhora da Esperança, to be used for the
construction of a Complex of casinos, hotels, apartments hotels, conventions and
exhibitions centres and congresses, in an horizontal property regime.
	 
	 	3.	 	Within 30 (thirty) days from the registration of the horizontal property, the Venetian
Cotai Limited shall transfer, in favor of the Venetian Macau Limited, through a notary
deed, the unit corresponding to the “Casino”, to be built in plot “I”.
	 
	 	4.	 	This order becomes immediately effective.

April 10, 2007.

The Secretary for Transports and Public Works, Lau Si Io.

Published Version — April 18, 2007

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No. 16 — 18-4-2007 — Official Gazette of the Macau Special Administrative Region

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(English Translation)

ANNEX

File no. 6 412.01 of the Land, Public Works and Transport Bureau and

File no. 3/2007 of the Land Committee

Contract agreed between:

Macau Special Administrative Region, the First Party;

Venetian Cotai Limited, the Second Party; and

Venetian Macau Limited, the Third Party.

Considering that:

	1.	 	As per a letter addressed to the Chief Executive, submitted on November 15, 2002, the
company designated Galaxy Casino, S.A., holder of one of the concessions for the operation of
games of fortune and chance or other games in casino in the Macau SAR, which concession was
managed by the company Venetian Macau Management Limited as per clause 24, paragraph 1 of the
first version of the respective concession contract, Galaxy Casino, S.A. requested the
concession, by lease, and without public tender, of a land located in the reclaimed area
between Taipa Island and Coloane Island (COTAI), West of the Istmo Taipa-Coloane, with an area
of 985 080 sq mts.
	 
	2.	 	The purpose of the land for which the concession was requested is to built two themed
entertainment complexes, with similar surface, comprising casinos, restaurants, commercial
areas, entertainment and leisure areas, parking areas and hotels, regarding the accomplishment
of the contractual obligations arising from the concession contract for the operation of games
of fortune and chance or other games in casino in the Macau SAR, executed by a deed, on June
26, 2002, recorded in folio
12 to 91v of the Book no. 338 of the Finance Services Bureau, published in the Official Gazette
no. 27/2002, II Series, supplemental number, on July 3, 2002.

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	3.	 	According to the applicant, the two themed areas would be developed separately, being the
East side of the land reserved for the construction of a Resort-Hotel-Casino with the Venetian
theme and a Convention Centre, according to the development plan of the land attached to the
request.
	 
	4.	 	Considering the characteristics and size of the complex, as well as its conformity to the
uses and purposes provided for in the COTAI Plan, the Infrastructures Development Department
(GDI), in view of the application, considered the requested land appropriated for the
development of the project, pointing out the fact that the COTAI area it is one of the few
areas in the Macau SAR with sufficient land for the development of such a complex.
	 
	5.	 	Furthermore, such project is considered a strategic project, inspiring the changes aspired
and outlined by the Government of the Macau SAR for the development of the gaming and
entertainment activities, as for its differentiated capability of developing a new tourism
segment — business and convention tourism — and for the high standards
of quality and its capacity to promote the development of additional activities, namely in the
transport, trade, food and beverage areas and to increase employment as well as to improve
human resources background.
	 
	6.	 	Concerning the importance of the project for economic and social development strategy of the
Macau SAR, which explains the reason why a public tender is not necessary, as well as the need
to ensure its completion until the end of the period set forth in the Investment Plan attached
to the Subconcession Contract for the operation of games of chance or other games in casino in
the Macau Special Administrative Region, executed between the applicant and the Macau SAR
Government, it was exceptionally successively authorized by the former Secretary for
Transports and Public Works the execution of canvass, land reclaim, foundation and structure
works.
	 
	7.	 	Furthermore, the concession process was slower since it was necessary to solve some previous
matters related with it, namely those regarding the identification of the future
concessionary, the incorporation of public green areas, the urban infrastructure networks, the
road network and the accounting of all the costs arising from the land

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	 	 	reclaim, as well as the
electrical power substation installation and its connection to the high voltage network,
within the limits of the land to be conceded.

	8.	 	As a matter of fact, regarding the holding of the concession, it shall be noted that, on
December 17, 2002, “Venetian Macau Management Limited “ decided to change its designation to
“Venetian Macau Limited”, which was duly authorized by the Government, ceasing to be the
gaming operator’s management company for “Galaxy Casino S.A.”, as, pursuant to a subconcession
contract, dated December 19, 2002, previously approved and authorized by Macau SAR Government
as grantor, “Venetian Macau Limited” was granted with a subconcession license for the
operation of casino games.
	 
	9.	 	Pursuant to the above mentioned Subconcession Contract, the concessionaire “Galaxy Casino,
S.A.” and the Subconcessionaire “Venetian Macau Limited” started developing autonomous
investment plans and the Subconcessionaire assumed the obligation to develop the Complex
Resort-Hotel-Casino with The Venetian theme and the convention centre.
	 
	10.	 	The Land, Public Works and Transport Bureau was informed of these changes by a letter dated
August 26, 2003, in which Venetian Macau Limited suggested to carry on the development of a
land located near Istmo between Taipa Island and Coloane Island, with an area of approximately
49,25 hectares, to be detached of the total area initially required by the Company Galaxy
Casino, S.A.
	 
	11.	 	Nevertheless, according to a Chief Executive Order, dated February 25, 2005, it was
authorized that the projects referred to in items 1 and 2 of the Investment Plan attached to
the Subconcession Contract, which should be developed by Venetian Macau Limited, would be
executed by Venetian Cotai Limited, which share capital is held by Venetian Macau Limited
(99,99%) and two other subsidiaries of the Las Vegas
Sands Corp. Venetian Macau Limited, as Subconcessionaire, assumed the obligation to own the
casino unit to be built in Resort-Hotel-Casino (COTAI).

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	 	 	It was also authorized that the above mentioned investments, to be executed indirectly by the
Subconcessionaire, be accounted for the investment amount to be accomplished under the
contractual terms.
	 
	12.	 	Therefore, the company Venetian Macau Limited, with head office in Macau, at 25, Avenida
Doutor Mário Soares, Montepio Building, Ap. 25, 2nd floor, registered at Commercial
and Movable Assets Registry under no. 15702 (SO) and the company Venetian Cotai Limited with
head office in Macau, at Avenida Xian Xing Hai, Zhu Kuan Building, 11th floor, registered in
the above mentioned Companies Registry under number 19845(SO), by a letter dated September 29,
2006, addressed to the Chief of Executive, requested the concession of the land located at
West of Estrada do Istmo and South of Estrada da Baía de Nossa Senhora da Esperança, with an
area of 431,900 sq mts to be granted in the name of the second applicant. The land would be
developed in three stages, in accordance with the development plan, the construction projects
for stage 1 and 2 and the preliminary study for stage 3, all submitted in due time to the
Land, Public Works and Transport Bureau.
	 
	13.	 	Regarding this circumstances and after a long period of negotiations, during which all the
above mentioned issues were analyzed and all the concession terms and conditions were agreed,
namely the premium to be paid for the concession, the Land, Public Works and Transport Bureau
prepared a draft of the concession contract, terms of which were accepted by the applicant,
through a statement submitted on January 25, 2007.
	 
	14.	 	The Land to be leased, with a total area of 405 658 sq mts, not registered in the Macau Land
and Buildings Registry, is divided in three plots which are identified as Plot I, II and III,
respectively with an area of 292,315 sq mts, 52,864 sq mts and 60,479 sq mts.
	 
	15.	 	Plot I is identified with the letters “A1a, “A2a” and “C1a” in the cadastre plan no.
6.124/2003, issued by the Macao Cartography and Cadastre Bureau (MCCB), on November 7, 2006.
	 
	 	 	Plot II is identified with the letters “A1b”, “A2c” and “C1b” in the above mentioned plan and
Plot III is identified with the letter “A2b” in the said plan.
	 
	16.	 	The concession of the parcels identified with the letters “C1a” and “C1b”, which presently
are part of the Avenida de COTAI (VU3.3) and of the COTAI Roundabout, is

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	 	 	previously detached
of the public domain and incorporated in the Macau SAR private domain, as an unoccupied parcel
of land.
	 
	17.	 	The process followed the regular steps in the proceedings and was submitted to the Land
Commission which, in a meeting held on February 1, 2007, issued a favorable opinion regarding
the approval of the application.
	 
	18.	 	The opinion of the Land Commission was approved by an Order of the Chief Executive, dated
February 13, 2007.
	 
	19.	 	In accordance with article 125 of the Law no. 6/80/M, July 5, 1980, the conditions of the
concession contract, which is part of this order, were notified to the applicants and accepted
by the same, through statements submitted on February 22, 2007, signed by Joaquim Jorge
Perestrelo Neto Valente, also known as Jorge Neto Valente, widower and domiciled in Macau, at
25, Avenida Doutor Mário Soares, Montepio Building, Room 25, 2nd floor, acting as Managing
Director, on behalf of Venetian Cotai Limited and Venetian Macau Limited, sufficient capacity
and powers to perform the act which were verified by the Private Notary, Rui Sousa, according
with the notarization of the said statements.
	 
	20.	 	All the premium payment installments provided for in clause ten, paragraph 1), subparagraph
(3), paragraph 2), subparagraph (2) and paragraph 3), subparagraph (2) of the land concession
contract which is part of this order, were already paid on February 22, 2007, at the treasury
office of the Macau Finance Department (income receipt no. 18550), through the income tax
payment form no. 11/2007, issued by the Land Commission on February 22, 2007, which duplicate
is filed on the correspondent process.

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 CLAUSE FIRST — OBJECT

	1.	 	The object of this agreement is:

	 	1)	 	The detachment of the public domain and the incorporation in the Macau SAR
private domain, of the parcel of land with an area of 29,724 sq mts (Twenty Nine
Thousand, Seven Hundred and Twenty Four square meters), which presently is a part of the
Avenida de COTAI (VU3.3), considered as an unoccupied parcel of land and of the COTAI
Roundabout. The abovementioned parcel of land, which is not registered in the Land and
Buildings Registry Department, is identified with the letters “C1a” and “C1b” in the
cadastre plan no. 6.124/2003, issued by the Macao Cartography and Cadastre Bureau
(MCCB), on November 7, 2006, which is part of this agreement;
	 
	 	2)	 	The concession by lease, by the first party in favor of the Second Party, without
a public tender, of a parcel of land to be reclaimed, with an area of 405,658 sq mts
(Four Hundred and Five Thousand, Six Hundred and Fifty Eight square meters), not
registered in the Macau Land and Buildings Registry, located in the reclaimed area
between Taipa Island and Coloane Island (COTAI), West of Estrada do Istmo and South of
Estrada da Baía de Nossa Senhora da Esperança, valued at $2.592.568.647,00 (Two Thousand
Five Hundred and Ninety Two Million, Five Hundred and Sixty Eight Thousand, Six Hundred
and Forty Seven Eight Patacas), which is identified with the letters “A1a”, “A1b”,
“A2a”, “A2b”, “A2c”, “C1a” and “C1b” in the aforementioned cadastre plan; and
	 
	 	3)	 	The division of the Land referred to in paragraph 2 above into 3 (three) separate
plots, as follows:

	 	(1)	 	Plot I, with an area of 292,315 sq mts (Two Hundred and Ninety Two
Thousand, Three Hundred and Fifteen square meters), valued at $1.458.574.919,00 (One
Thousand, Four Hundred and Fifty Eight Million, Five Hundred and Seventy Four
Thousand and Nine Hundred and Nineteen Patacas), identified with the letters “A1a,
“A2a” and “C1a” of the said plan;
	 
	 	(2)	 	Plot II, with an area of 52,864 sq mts (Fifty Two Thousand, Eight Hundred
and Sixty Four square meters), valued at $539,619,679 (Five Hundred and Thirty Nine
Million Six Hundred and Nineteen Thousand, Six Hundred and

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	 	 	 	Seventy Nine Patacas), identified with the letters “A1b”, “A2c” and “C1b” of the
said plan;
	 
	 	(3)	 	Plot III, with an area of 60,479 sq mts (Sixty Thousand Four Hundred and
Seventy Nine square meters), valued at $594,374,049 (Five Hundred and Ninety Four
Million, Three Hundred and Seventy Four Thousand and Forty Nine Patacas), identified
with the letter “A2b” of the said plan.

	2.	 	The concession of the land with the global area of 405,658 sq mts (Four Hundred and Five
Thousand, Six Hundred and Fifty Eight square meters), divided in 3 (three) plots as identified
in the abovementioned plan of MCCB, hereinafter referred as Land, will be ruled by the clauses
of this agreement.

CLAUSE SECOND — LEASE TERM

	1.	 	The lease is valid for a period of 25 (twenty five) years, from the publishing date of the
dispatch authorizing the present agreement in the Official Gazette.

	2.	 	The aforementioned lease term may be successively renewed, in accordance with the applicable
laws.

CLAUSE THIRD — LAND DEVELOPMENT AND PURPOSE

	1.	 	The development of the Land comprises the construction of a complex of casinos, hotels,
apartments hotels, exhibitions, conventions and conferences centers, in the horizontal
property regime, with the following gross construction areas and for the purposes ascribed to
their side:

	 	1)	 	Plot I, with an area of 292,315 sq mts (Two Hundred and Ninety Two Thousand Three
Hundred and Fifteen square meters):

	 	 	 	 	 
	(1)
	 	Casino
	 	2,600 sq mts
	(2)
	 	5 Star Hotel including gaming, entertainment, leisure, commercial,
restaurants areas and other support areas
	 	760,158 sq mts
	(3)
	 	Exhibitions, conventions and conferences center
	 	112,960 sq mts
	(4)
	 	Parking (Five Star Hotel)
	 	100,975 sq mts
	(5)
	 	Free area
	 	131,994 sq mts

	 	2)	 	Plot II, with an area of 52,864 sq mts (Fifty Two Thousand, Eight Hundred and
Sixty Four square meters):

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	(1)
	 	Five Star Hotel including gaming, entertainment, leisure, commercial,	 	 	 	 
	 
	 	restaurants areas and other support areas	 	148,051 sq mts
	(2)
	 	Parking (Five Star Hotel)	 	10,041 sq mts
	(3)
	 	Free area (Five Star Hotel)	 	32,195 sq mts
	(4)
	 	Five Star Apartment Hotel	 	98,644 sq mts
	(5)
	 	Parking (Five Star Apartment Hotel)	 	20,595 sq mts

	 	3)	 	Plot III, with an area of 60,479 sq mts (Sixty Thousand, Four Hundred and Seventy
Nine square meters):

	 	 	 	 	 	 	 
	(1)
	 	Three Star Hotel including gaming, entertainment, leisure, commercial,	 	 	 	 
	 
	 	restaurants areas and other support areas	 	330.763 sq mts
	(2)
	 	Parking (Three Star Hotel)	 	22,837 sq mts
	(3)
	 	Free area (Three Star Hotel) 	 	21,206 sq mts
	(4)
	 	Three Star Apartment Hotel	 	37,899 sq mts
	(5)
	 	Parking (Three Star Apartment Hotel)	 	7,050 sq mts

	2.	 	The second party must submit the projects in accordance with clause 35, paragraph 2, item 4)
of the sub concession agreement for the operation of games of chance or other games in casino
in the Macau Special Administrative Region, executed on December 19, 2002, complying with any
other obligation set out in that clause, in respect of any projects or construction works.

CLAUSE FOURTH — TERM FOR DEVELOPMENT

	1.	 	The development of the Land must be completed within 48 (Forty-Eight) months, from the
publishing date of the dispatch authorizing the present Agreement in the Official Gazette.

	2.	 	The term set out above includes the terms required for the presentation of the projects by
the second party and their respective approval by the first party.

CLAUSE FIFTH — FINES

	1.	 	As penalty for the non compliance with the development period set out in the previous clause,
the second party is subject to a fine up to $5,000 (Five Thousand Patacas) per day of delay,
up to 60 (sixty) days; beyond this period, and up to the maximum of 120 (one hundred and
twenty) days, the second party is subject to an

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	 	 	aggravated fine of up to twice the amount referred above, except in the case of special
circumstances duly justified and accepted by the first party.

	2.	 	The second party shall not be liable under the preceding paragraph in the case of force
majeure events or if any other relevant event, which can be evidenced as being beyond the
control of the second party, occurs.

	3.	 	An event shall only be considered a force majeure if it results from unpredictable and
overpowering events.

	4.	 	For the purposes of paragraph two above, the second party shall notify the first party, in
writing, as soon as possible, the occurrence of any such events.

CLAUSE SIXTH — TRANSFER OF THE UNIT

	1.	 	Within 30 (thirty) days from the registration of the horizontal property, the second party
shall transfer, in favor of the third party, through a notary deed, the unit corresponding to
the “Casino”, to be built in plot I.

	2.	 	The second party undertakes to submit documentary evidence of the aforementioned transfer to
the first party.

CLAUSE SEVENTH — RENT

	1.	 	During the term of the Land development, the second party shall pay an annual rent in the
amount of $30 (Thirty Patacas) per square meter of the leased Land, in the total amount of
$12,169,740 (Twelve Million, One Hundred and Sixty Nine Thousand, Seven Hundred and Forty
Patacas).

	2.	 	After the completion of the development of the Land, the second party shall pay, for each of
the three plots the following annual rents:

	 	1)	 	$14,900,660 (Fourteen Million, Nine Hundred Thousand, Six Hundred and Sixty
Patacas) for plot I;
	 
	 	2)	 	$4,328,735 (Four Million, Three Hundred and Twenty Eight Thousand, Seven Hundred
and Thirty Five Patacas) for plot II;
	 
	 	3)	 	$4,069,818 (Four Million, Sixty Nine Thousand, Eight Hundred and Eighteen
Patacas) for plot III;

     computed according to the following construction gross areas as per its purpose and the
individual rent amounts:

Plot I

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	(1)

	 	Casino: 2,600 sq mts x $15/sq mts
	 	$	39,000	 
	(2)

	 	Five Star Hotel: 760,158 sq mts x $15/sq mts
	 	$	11,402,370	 
	(3)

	 	Exhibitions, conventions and conferences center:	 	 	 	 
	 

	 	112,960 sq mts x $10/sq mts
	 	$	1,129,600	 
	(4)

	 	Parking (Five Star Hotel): 100.975 sq mts x $10/sq mts
	 	$	1,009,750	 
	(5)

	 	Free area (Five Star Hotel)131,994 sq mts x $10/sq mts
	 	$	1,319,940	 
	Plot II
	 	 	 	 	 	 
	(1)

	 	Five Star Hotel: 148,051 sq mts x $15/sq mts
	 	$	2.220.765	 
	(2)

	 	Five Star Apartment Hotel: 98,644 sq mts x $15/sq mts
	 	$	1.479.660	 
	(3)

	 	Parking (Five Star Hotel): 10,041 sq mts x $10/sq mts
	 	$	100.410	 
	(4)

	 	Parking (Five Star Apartment Hotel): 20,595 sq mts x $10/sq mts
	 	$	205.950	 
	(5)

	 	Free area (Five Star Hotel): 32,195 sq mts x $10/sq mts
	 	$	321.950	 
	Plot III
	 	 	 	 	 	 
	(1)

	 	Three Star Hotel: 330,763 sq mts x $10/sq mts
	 	$	3,307,630	 
	(2)

	 	Three Star Apartment Hotel: 37,899 sq mts x $10/sq mts
	 	$	378,990	 
	(3)

	 	Parking (Three Star Hotel): 22,837 sq mts x $7.50/sq mts
	 	$	171,278	 
	(4)

	 	Parking (Three Star Apartment Hotel): 7,050 sq mts x $7,50/sq mts
	 	$	52,875	 
	(5)

	 	Free area (Three Star Hotel): 21,206 sq mts x $7,50/sq mts
	 	$	159,045	 

	3.	 	Without prejudice of the immediate application of the new rent amounts which might be
published during the validity of this agreement, the rents will be reviewed every five years,
commencing from the publishing date of the dispatch authorizing the present agreement in the
Official Gazette.

CLAUSE EIGHTH — GUARANTEE

	1.	 	In accordance with article 126 of Law no. 6/80/M, of July 5, 1980, the second party shall
provide a guarantee securing the amount of $12,169,740 (Twelve Million, One

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	 	 	Hundred and Sixty Nine Thousand, Seven Hundred and Forty Patacas) by way of bank guarantee or
a bank deposit accepted by the first party.

	2.	 	The amount of the aforementioned guarantee shall at all times correspond to the price of the
annual rent.

	3.	 	The guarantee referred in paragraph 1 of this clause will be returned by the Finance
Department to the second party, at request of the later after the usage permits, issued by the
Public Works and Construction Department, are submitted.

CLAUSE NINTH — SPECIAL OBLIGATIONS

1. The following special obligations shall be exclusively borne by the second party:

	 	1)	 	The reclamation works and infrastructures of the leased Land;
	 
	 	2)	 	The construction and installation of the electrical substation 66/11 Kv owned by
the Macau Electricity Company Limited in the leased land;
	 
	 	3)	 	The rerouting and/or removal of all existing infrastructures in the leased Land
and adjacent areas, namely sewage network, water supply, electrical grid and
telecommunications networks;
	 
	 	4)	 	The paving of sidewalks and streets in the leased Land’s adjacent areas.
	 
	 	5)	 	The landscaping of the leased Land’s adjacent areas, including those surrounding
the portion of the artificial lake which is incorporated in the MSAR public domain,
identified with the letters “B1”, “B2” and “C2” of the plan no. 6.124/2003, issued by
the MCCB, on November 7, 2006;

	2.	 	The second party undertakes to draft all construction projects in respect of the works
referred to in the above paragraph, and to submit the said project’s to the first party’s
approval.

	3.	 	The second party warrants the due performance and the quality of the materials and equipment
to be used in the works referred to under items 3 and 4, in paragraph one of this clause for a
period of two years, starting from the provisional receipt of such works, being under the
obligation to repair and correct each and any defect thereunder for the duration of the lease.

	4.	 	The second party will assure the maintenance, preservation and reparation of the materials
and equipments used in the construction works referred in item 5 of paragraph 1 of this clause
during the term of the land lease.

CLAUSE TENTH — PREMIUM

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	1.	 	The second party shall pay to the first party, as consideration for the Land concession, a
premium in the total amount of $2.592.568.647 (Two Thousand, Five Hundred and Ninety Two
Million, Five Hundred and Sixty Eight Thousand, Six Hundred and Forty Seven Patacas), as
follows:

	 	1)	 	Plot I — $1.458.574.919 (One Thousand Four Hundred and Fifty Eight Million, Five
Hundred and Seventy Four Thousand and Nine Hundred and Nineteen Patacas), to be paid in
the following manner:

	 	(1)	 	$70,293,744 (Seventy Million, Two Hundred and Ninety Three Thousand,
Seven Hundred and Forty Four Patacas) paid already and corresponding to the
commitment undertaken by the second party (cost of the executed reclamation works in
Plot I, deducted of the cost of the portion of the route VU3.3 and infrastructures
built by the first party and to be deactivated by interest of the second party);
	 
	 	(2)	 	95.791.000 (Ninety Five Million Seven Hundred and Ninety One Thousand
Patacas) corresponding to the installation cost of the Electrical Substation 66/11
Kv of the Macau Electricity Company Limited and respective connection to the High
Voltage Net;
	 
	 	(3)	 	$487,000,000 (Four Hundred and Eighty Seven Million Patacas) upon the
delivery of the declaration accepting the conditions of this agreement, according to
article 125 of the Law 6/80/M, dated July 5, 1980;
	 
	 	(4)	 	The remaining, in the amount of $805.490.175 (Eight Hundred and Five
Million, Four Hundred and Ninety Thousand One Hundred and Seventy Five Patacas), to
which shall accrue interest at the annual rate of 5%, shall be paid in 7 (seven)
half-yearly installments, of equal value in capital and in interest, in the amount
of $126.861.021 (One Hundred and Twenty Six Million, Eight Hundred and Sixty One
Thousand and Twenty One Patacas), each, the first installment being due 6 (six)
months from the publishing date of the dispatch authorizing the present agreement in
the Official Gazette.

	 	2)	 	Plot II — $539,619,679 (Five Hundred and Thirty Nine Million, Six Hundred and
Nineteen Thousand, Six Hundred and Seventy Nine Patacas), to be paid in the following
manner:

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II Series

(English Translation)

	 	(1)	 	$12,691,926 (Twelve Million, Six Hundred and Ninety One Thousand Nine
Hundred and Twenty Six Patacas) paid already, corresponding to the commitment
undertaken by the second party (cost of the executed reclamation works in Plot II,
deducted of the cost of the portion of the route VU3.3 and infrastructures built by
the first party and to be deactivated by interest of the second party);
	 
	 	(2)	 	$178,000,000 (One Hundred and Seventy Eight Million Patacas) upon the
delivery of the declaration accepting the conditions of this agreement, according to
article 125 of the Law 6/80/M, dated July 5, 1980;
	 
	 	(3)	 	The remaining, in the amount of $348,927,753 (Three Hundred and Forty
Eight Million Nine Hundred and Twenty Seven Thousand Seven Hundred and Fifty Three
Patacas), to which shall accrue interest at the annual rate of 5%, shall be paid in
7 (seven) half-yearly installments, of equal value in capital and in interest, in
the amount of $54,954,526 (Fifty Four Million Nine Hundred and Fifty Four Thousand
Five Hundred and Twenty Six Patacas) each, the first installment being due 6 (six)
months from the publishing date of the dispatch authorizing the present Agreement in
the Official Gazette.

	 	3)	 	Plot III — $594,374,049 (Five Hundred and Ninety Four Million, Three Hundred and
Seventy Four Thousand and Forty Nine Patacas) to be paid in the following manner:

	 	(1)	 	$14,644,530 (Fourteen Million, Six Hundred and Forty Four Thousand, Five
Hundred and Thirty Patacas) paid already, corresponding to the commitment undertaken
by the second party (cost of the executed reclamation works in Plot III, deducted of
the cost of the portion of the route VU3.3 and infrastructures constructed by the
first party and to be deactivated by interest of the second party);
	 
	 	(2)	 	$188,000,000 (One Hundred and Eighty Eight Million Patacas) upon the
delivery of the declaration accepting the conditions of this agreement, according to
article 125 of the Law 6/80/M, dated July 5, 1980.
	 
	 	(3)	 	The remaining, in the amount of $391,729,519 (Three Hundred and Ninety
One Million Seven Hundred and Twenty Nine Thousand, Five Hundred and

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No. 16 — 18-4-2007 — Official Gazette of the Macau Special Administrative Region

II Series

(English Translation)

	 	 	 	Nineteen Patacas), to which shall accrue interest at the annual rate of 5%, shall be
paid in 7 (seven) half-yearly installments, of equal value in capital and in
interest, in the amount of $61,695,609 (Sixty One Million Six Hundred and Ninety
Five Thousand, Six Hundred and Nine Patacas), each, the first installment being due
6 (six) months from the publishing date of the dispatch authorizing the present
Agreement in the Official Gazette.

CLAUSE ELEVENTH — EXCESS MATERIALS

	1.	 	The second party is expressly prohibited from withdrawing from the leased Land, without the
prior written consent of the first party, any materials, such as soil, rock, gravel and sand
resulting from foundation excavation works or ground leveling.

	2.	 	The first party shall only consent to the removal of any such materials which can neither be
used on the leased Land nor are suitable for any other use.

	3.	 	The materials removed with the first party’s consent shall be deposited in a location to be
determined by the first party.

	4.	 	Failure to comply with this clause shall, without prejudice to the payment of an indemnity to
be determined by experts from the Land, Public Works and Transport Bureau according to the
materials effectively removed, attract the following penalties:

	 	1)	 	Upon the first infraction: a fine between $20,000 and $50,000;
	 
	 	2)	 	Upon the second infraction: a fine between $51,000 and $100,000;
	 
	 	3)	 	Upon the third infraction: a fine between $101,000 and $200,000 and
	 
	 	4)	 	Upon the fourth infraction, the first party shall have the right to terminate
this agreement.

CLAUSE TWELFTH — USAGE PERMIT

If the development of each of the three lots is completed before the end of the period set out in
clause four, the respective usage permit shall be issued only after the presentation of the voucher
confirming the payment of all premium installments provided for such lot under clause ten and after
the obligations set forth in clause nine, paragraph 1, items 3), 4) and 5) have been performed.

CLAUSE THIRTEENTH — TRANSFER

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No. 16 — 18-4-2007 — Official Gazette of the Macau Special Administrative Region

II Series

(English Translation)

	1.	 	The transfer of any rights or benefits resulting from this concession are, given their
nature, conditional upon the prior authorization of the first party having been obtained and
shall subject the transferee to a revision of the terms and conditions hereof.

	2.	 	Considering the particular characteristics of the overall project where the leased Land is
incorporated, the first party hereby authorizes, without alteration of the terms and
conditions hereof, the transfer of the rights resulting from the concession by lease of plots
II and III, prior to their full development, provided that the respective transfer application
is a first transfer request, that all premium installments of the respective plot have been
fully paid pursuant clause tenth and that all the obligations set forth in clause nine,
paragraph 1, items 3), 4) and 5) have been performed.

	3.	 	As security for financing the necessary construction works, the second party may mortgage the
rights resulting from the concession by lease hereunder in favor of credit institutions, in
accordance with article 2 of Decree-Law 51/83/M, of December 26, 1983.

CLAUSE FOURTEENTH — SUPERVISION 

During the development period of the leased land, the second party must grant full access to the
Land and to the construction works to any government representatives supervising the works, and
provide all assistance and means necessary to ensure the proper discharge of their duties.

CLAUSE FIFTEENTH — FORFEITURE

1. This agreement shall be forfeited in the following situations:

	 	1)	 	After the term of the aggravated fine as per paragraph 1 of clause five;
	 
	 	2)	 	Unauthorized change of the purpose of the lease, prior to the completion of the
development of the Land;
	 
	 	3)	 	Interruption of the development of the land for a period exceeding 90 (ninety)
days, except if due to special conditions duly justified and accepted by the first
party;

	2.	 	The forfeiture of this agreement shall be declared by decision of the Chief Executive, to be
published in the Official Gazette.

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No. 16 — 18-4-2007 — Official Gazette of the Macau Special Administrative Region

II Series

(English Translation)

	3.	 	The forfeiture of this agreement shall determine the reversion, in whole or in part, of the
possession of the Land to the first party, with all improvements and betterments thereon,
without compensation to the second party.

CLAUSE SIXTEENTH — RESCISSION

1. This agreement may be rescinded upon the occurrence of any of the following events:

	 	1)	 	Failure to pay the rent in due time;
	 
	 	2)	 	Unauthorized change in the usage of the Land and/or the purpose of the lease, if
the development has been completed;
	 
	 	3)	 	Non performance of the obligations contained in clauses nine and tenth;
	 
	 	4)	 	Repeated non performance, after the forth infraction, of the obligations
contained in clause eleventh;
	 
	 	5)	 	Transfer of interests in resulting from the concession in contravention to clause
thirteenth.

	2.	 	The rescission shall be declared by decision of the Chief Executive, to be published in the
Official Gazette.

CLAUSE SEVENTEENTH — REVERSION OF THE CASINO

The termination of the sub concession for the operation of games of chance or other games in
casino, granted to the third party through a sub concession agreement of December 19, 2002, whether
by lapse of time or as otherwise therein set forth, shall result in the automatic and free
reversion to the first party of the casino unit, free and clear of encumbrances, charges or liens,
and of all gaming equipment and materials, irrespective of being located within the said casino
unit or not.

CLAUSE EIGHTEENTH — COMPETENT JURISDICTION 

Any dispute resulting from this agreement shall be brought before the Court of First Instance of
the Macau SAR.

CLAUSE NINETEENTH — APPLICABLE LAW

Matters not provided for in this agreement shall be governed by Law 6/80/M, of July 5, 1980 and all
other applicable legislation.

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II Series

(English Translation)

INDEX1

	 	 	 	 	 
	CLAUSE FIRST — OBJECT

	 	 	3	 
	CLAUSE SECOND — LEASE TERM

	 	 	4	 
	CLAUSE THIRD — LAND DEVELOPMENT AND PURPOSE

	 	 	4	 
	CLAUSE FOURTH — TERM FOR DEVELOPMENT

	 	 	5	 
	CLAUSE FIFTH — FINES

	 	 	6	 
	CLAUSE SIXTH — TRANSFERENCE OF THE UNIT

	 	 	6	 
	CLAUSE SEVENTH — RENT

	 	 	6	 
	CLAUSE EIGHTH — GUARANTEE

	 	 	8	 
	CLAUSE NINTH — SPECIAL OBLIGATIONS

	 	 	8	 
	CLAUSE TENTH — PREMIUM

	 	 	9	 
	CLAUSE ELEVENTH — EXCESS LAND MATERIALS

	 	 	11	 
	CLAUSE TWELFTH — USAGE PERMIT

	 	 	12	 
	CLAUSE THIRTEENTH — TRANSFER

	 	 	12	 
	CLAUSE FOURTEENTH — SUPERVISION

	 	 	12	 
	CLAUSE FIFTEENTH — FORFEITURE

	 	 	12	 
	CLAUSE SIXTEENTH — RESCISSION

	 	 	13	 
	CLAUSE SEVENTEENTH — REVERSION OF THE CASINO

	 	 	13	 
	CLAUSE EIGHTEENTH — COMPETENT JURISDICTION

	 	 	14	 
	CLAUSE NINETEENTH — APPLICABLE LAW

	 	 	14	 

 

			
	1	 	The Index is just for reference and it is not
part of the published version.

-18-exv10w1

 

Exhibit
10.1

Universal Technical Institute, Inc.

2003 Incentive Compensation Plan

ARTICLE 1

PURPOSE

1.1 GENERAL. The purpose of the Universal Technical Institute, Inc. 2003 Incentive
Compensation Plan (the “Plan”) is to promote the success and enhance the value of Universal
Technical Institute, Inc. (the “Company”) by linking the personal interests of its Board
members, employees, officers, and executives of, and consultants and advisors to, the Company to
those of Company shareholders and by providing such individuals with an incentive for outstanding
performance to generate superior returns to shareholders of the Company. The Plan is also intended
to provide flexibility to the Company in its ability to motivate, attract, and retain the services
of Board members, employees, officers, and executives of, and consultants and advisors to, the
Company upon whose judgment, interest, and special effort the successful conduct of the Company’s
operation is largely dependent.

ARTICLE 2

EFFECTIVE DATE

2.1 EFFECTIVE DATE. The Plan is effective as of the date the Plan is approved by the Board
(the “Effective Date”). The Plan must be approved by the Company’s shareholders within 12
months after the Effective Date. The Plan will be considered approved by the Company’s shareholders
if it receives the affirmative vote of the holders of a majority of the shares of Company’s stock
present or represented and entitled to vote at a meeting duly held in accordance with the Company’s
Bylaws or by written consent of a majority of the Company’s shareholders in lieu of a meeting. Any
Awards granted under the Plan prior to shareholder approval are effective when made (unless the
Committee specifies otherwise at the time of grant), but no Award may be exercised or settled and
no restrictions relating to any Award may lapse before the Plan is approved by the Company’s
shareholders. If the Company’s shareholders do not approve the Plan within 12 months after the
Effective Date, any Award previously made is automatically canceled without any further act.

ARTICLE 3

DEFINITIONS

3.1 DEFINITIONS. When a word or phrase appears in this Plan with the initial letter
capitalized, and the word or phrase does not begin a sentence, the word or phrase will be given the
meaning in this Section or in Sections 1.1 or 2.1 unless otherwise indicated. The following words
and phrases will have the following meanings:

          (a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Share Award, Performance-Based Award, or IPO Award granted to a Participant under the
Plan.

          (b) “Award Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award.

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

          (d) “Cause” means (except as otherwise provided in an Award Agreement) any of the
following: (i) Participant’s conviction of, or plea of guilty or nolo contendere to, a felony or a
crime involving

1

 

embezzlement, conversion of property or moral turpitude; (ii) a finding by a
majority of the Board of Directors of Participant’s fraud, embezzlement or conversion of the
Company’s property; (iii) Participant’s conviction of, or plea of guilty or nolo contendere to, a
crime involving the acquisition, use or expenditure of federal, state or local government funds or
the unlawful use, possession or sale of illegal substances; (iv) an
administrative or judicial determination that Participant committed fraud or any other violation of
law involving federal, state or local government funds; (v) a finding by a majority of the Board of
Directors of Participant’s knowing breach of any of Participant’s fiduciary duties to the Company
or the Company’s stockholders or making of a misrepresentation or omission which breach,
misrepresentation or omission would reasonably be expected to materially adversely affect the
business, properties, assets, condition (financial or other) or prospects of the Company; (vi)
Participant’s alcohol or substance abuse, which materially interferes with Participant’s ability to
discharge the duties, responsibilities and obligations to or for the Company; provided,
that Participant has been given notice and 30 days from such notice fails to cure such abuse; and
(vii) Participant’s personal (as opposed to the Company’s) material and knowing failure, to observe
or comply with applicable laws whether as an officer, stockholder or otherwise, in any material
respect or in any manner which would reasonably be expected to have a material adverse effect in
respect of the Company’s ongoing business, operations, conditions, other business relationship or
properties.

     Any rights the Company or any of its Subsidiaries has to determine the existence of events
giving rise to Cause are in addition to the rights the Company or any of its Subsidiaries may have
under any other agreement with the Participant or at law or in equity. If, after a Participant’s
termination of employment or services, the Company discovers that the Participant’s employment or
services could have been terminated for Cause, the Participant’s employment or services will, in
the Board’s sole discretion, be deemed to have been terminated for Cause retroactively to the date
the events giving rise to Cause occurred.

          (e) “Change of Control” means: (i) any sale, lease, exchange, or other transfer (in
one transaction or series of related transactions) of all or substantially all the Company’s assets
to any person or group of related persons under Section 13(d) of the Exchange Act
(“Group”); (ii) the Company’s shareholders approve and complete any plan or proposal for
the liquidation or dissolution of the Company; (iii) any person or Group becomes the beneficial
owner, directly or indirectly, of shares representing more than 50% of the aggregate voting power
of the issued and outstanding stock entitled to vote in the election of directors of the Company
(“Voting Stock”) and such person or Group has the power and authority to vote such shares;
(iv) any person or Group acquires sufficient shares of Voting Stock to elect a majority of the
members of the Board; or (v) the completion of a merger or consolidation of the Company with
another entity in which holders of the Stock immediately before the completion of the transaction
hold, directly or indirectly, immediately after the transaction, 50% or less of the common equity
interest in the surviving corporation in the transaction. Notwithstanding the foregoing, in no
event will a Change of Control be deemed to have occurred as a result of an initial public offering
of the Stock.

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

          (g) “Committee” means the committee of the Board described in Article 4.

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

          (i) “Disability” means (unless otherwise defined in an employment agreement between
the Company or any of its Subsidiaries and the Participant or in the Participant’s Award Agreement)
any illness or other physical or mental condition of a Participant that renders the Participant
incapable of performing his customary and usual duties for the Company or Subsidiary, or any
medically determinable illness or other physical or mental condition resulting from a bodily
injury, disease or mental disorder, which in the Committee’s sole judgment is permanent and
continuous in nature. The Committee may require such medical or other evidence as it deems
necessary to judge the nature and permanency of the Participant’s condition.

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

          (k) “Fair Market Value” means, as of any given date, the fair market value of Stock on
a particular date determined by such methods or procedures established by the Committee. Unless
otherwise

2

 

determined by the Committee the Fair Market Value of Stock as of any date is the closing
price for the Stock as reported on the New York Stock Exchange (or on any national securities
exchange on which the Stock is then listed) for that date or, if no closing price is reported for
that date, the closing price on the next
preceding date for which a closing price was reported. For purposes of IPO Awards and Awards
effective as of the effective date of the Company’s initial public offering, fair market value of
Stock shall be the price at which the Company’s Stock is offered to the public in its initial
public offering.

          (l) “Good Reason” means when used with reference to a voluntary termination by
Participant of Participant’s employment or service with the Company, shall mean (i) a material
reduction in Participant’s authority, perquisites, position or responsibilities (other than such a
reduction which affects all of the Company’s senior executives on a substantially equal or
proportionate basis), or (ii) a requirement that Participant relocate greater than 50 miles from
Participant’s primary work location.

          (m) “Incentive Stock Option” means an Option that is intended to meet the requirements
of Section 422 of the Code or any successor provision.

          (n) “IPO Award” means the Option granted to each eligible Participant pursuant to
Article 12.

          (o) “Non-Employee Director” means a member of the Board who qualifies as a
“Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor
provision.

          (p) “Non-Qualified Stock Option” means an Option that is not intended to be an
Incentive Stock Option.

          (q) “Option” means a right granted to a Participant under Article 7 or Article 12 of
the Plan to purchase Stock at a specified price during specified time periods. An Option may be
either an Incentive Stock Option or a Non-Qualified Stock Option.

          (r) “Participant” means a person who, as a Board member, employee, officer, or
executive of, or consultant or advisor providing services to, the Company or any Subsidiary, has
been granted an Award under the Plan.

          (s) “Performance-Based Awards” means Awards subject to the terms and conditions of
Article 11. All Performance-Based Awards are intended to qualify as “performance-based
compensation” under Section 162(m) of the Code. To the extent that the Committee desires to have
an Award granted under any provision of the Plan to qualify as “performance-based compensation”
under Section 162(m) of the Code, such Award shall comply with the terms of Article 11.

          (t) “Performance Criteria” means the criteria that the Committee selects for purposes
of establishing the Performance Goal or Performance Goals for a Participant for a Performance
Period. One or more of the following business criteria for the Company, on a consolidated basis,
and/or for Subsidiaries, divisions or for business or geographical units of the Company and/or a
Subsidiary shall be used by the Committee in establishing Performance Goals for Performance-Based
Awards: (1) earnings per share; (2) revenues or gross margins; (3) cash flow; (4) operating margin;
(5) return on net assets, investment, capital, or equity; (6) economic value added; (7) direct
contribution; (8) net income; pretax earnings; earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; earnings after interest expense and before
extraordinary or special items; operating income; income before interest income or expense, unusual
items and income taxes, local, state or federal and excluding budgeted and actual bonuses which
might be paid under any ongoing bonus plans of the Company (as a group, for purposes of this
definition, these are referred to as “Profit Measures”); (9) working capital; (10)
management of fixed costs or variable costs; (11) identification or consummation of investment
opportunities or completion of specified projects in accordance with corporate business plans,
including strategic mergers, acquisitions or divestitures; (12) total stockholder return; (13) debt
reduction; (14) capacity utilization; (15) contract and/or applicant growth; (16) average number of
students; (17) number of students enrolled; (18) Profit Measures per training hour; (19) Profit
Measures per student (20) Retention/persistence of students; (21) Graduation rates; (22)
Course/program length; (23) Reduction on cycle time for funding; (24) Profit Measures per square
foot of facility; (25) Number of students per instructor; (26) Revenue for on-line training; (27)
Revenue for international training; (28) Revenue for new business; (29) Number of seats available
and utilized; (30) Number of training hours provided; (31) Reduction in total salaries per student;
(32) Reduction in semi-

3

 

variable costs; (33) Placement rates; (34) Full time equivalents employed
per student; (35) Full time equivalents per training hour provided; (36) Employee retention; (37)
Student show rates. Any of the above goals may be determined on an absolute or relative basis or,
if applicable, as compared to the performance of
a published or special index deemed relevant by the Committee including, but not limited to, the
Standard & Poor’s 500 Stock Index or a group of companies that are comparable to the Company.

          (u) “Performance Goals” means, for a Performance Period, the written goals established
by the Committee for the Performance Period based upon the Performance Criteria. Performance Goals
shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code and
regulations thereunder including the requirement that the Performance Goals being “substantially
uncertain” at the time such Performance Goals are set. The Committee will, within the time
prescribed by Section 162(m) of the Code, objectively define the Performance Goals it determines to
use for a Performance Period for a Participant. The Committee shall adjust either the Performance
Goals or the actual results to exclude the impact of an event or occurrence which the Committee
determines should appropriately be excluded, including without limitation (i) restructurings,
discontinued operations, extraordinary items, and other unusual or non-recurring charges, (ii) an
event either not directly related to the operations of the Company or not within the reasonable
control of the Company’s management, (iii) a change in accounting standards required by generally
accepted accounting principles or (iv) in response to, or in anticipation of, changes in
applicable laws or regulations affecting the Company or the Performance Goal.

          (v) “Performance Period” means the one or more periods of time, which may be of
varying and overlapping durations, selected by the Committee, over which the attainment of one or
more Performance Goals will be measured for purposes of determining a Participant’s right to, and
the payment of, a Performance-Based Award.

          (w) “Performance Share” means a right granted to a Participant under Article 9 and
denominated in shares of Stock, to receive cash, Stock, or other Awards, the payment of which is
contingent on achieving certain Performance Goals established by the Committee.

          (x) “Performance Unit” means a right granted to a Participant under Article 9 and
denominated in cash, to receive cash, Stock, other Awards or other property, the payment of which
is contingent on achieving certain Performance Goals established by the Committee.

          (x) “Plan” means the Universal Technical Institute, Inc. 2003 Incentive Compensation
Plan, as amended.

          (y) “Restricted Stock Award” means Stock granted to a Participant under Article 10
that is subject to certain restrictions and to risk of forfeiture.

          (z) “Stock” means the common stock of the Company and such other securities of the
Company that may be substituted for Stock pursuant to Article 14.

          (aa) “Stock Appreciation Right” or “SAR” means a right granted to a
Participant under Article 8 to receive cash, Stock, or other Awards, all as determined pursuant to
Article 8.

          (bb) “Stock Unit” means a right granted to a Participant under Article 10 to receive
cash, Stock, or other Awards, pursuant to the terms of Article 10.2.

          (cc) “Subsidiary” means any corporation or other entity of which the Company owns,
directly or indirectly, a majority of the outstanding voting stock or voting power.

4

 

ARTICLE 4

ADMINISTRATION

4.1 COMMITTEE. The Plan will be administered by the Board or a Committee appointed by, and
which serves at the discretion of, the Board. If the Board appoints a Committee, the Committee will
consist of at least two individuals, each of whom qualifies as (i) a Non-Employee Director, and
(ii) an “outside director” under Code Section 162(m) and the regulations issued thereunder.
Reference to the Committee in this Plan will refer to the Board if the Board does not appoint a
Committee.

4.2 ACTION BY THE COMMITTEE. A majority of the Committee will constitute a quorum. The acts
of a majority of the members present at any meeting at which a quorum is present, and acts approved
in writing by a majority of the Committee in lieu of a meeting, will be deemed the acts of the
Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report
or other information furnished to that member by any officer or other employee of the Company or
any Subsidiary, the Company’s independent certified public accountants, any executive compensation
consultant or other professional retained by the Company to assist in the Plan’s administration.

4.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in the Plan, the Committee
has the exclusive power, authority and discretion to:

          (a) Designate Participants to receive Awards;

          (b) Determine the type of Awards granted to each Participant;

          (c) Determine the number of Awards granted and the number of shares of Stock to which an Award
will relate;

          (d) Except as otherwise provided in the Plan, determine the terms and conditions of any Award
granted under the Plan including but not limited to, the exercise price, grant price, or purchase
price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture
restrictions or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the Committee in its sole discretion
determines; provided, however, that the Committee will not have the authority to accelerate the
vesting or waive the forfeiture of any Performance-Based Awards;

          (e) Amend, modify, or terminate any outstanding Award, with the Participant’s consent unless
the Committee has the authority to amend, modify, or terminate an Award without the Participant’s
consent under any other provision of the Plan;

          (f) Determine whether, to what extent, and under what circumstances an Award may be settled
in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property,
or an Award may be canceled, forfeited, or surrendered;

          (g) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;

          (h) Decide all other matters that must be determined in connection with an Award;

          (i) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;

          (j) Interpret the terms of, and any matter arising under, the Plan or any Award Agreement; and

          (k) Make all other decisions and determinations that may be required under the Plan or as the
Committee deems necessary or advisable to administer the Plan.

4.4 DECISIONS BINDING. The Committee’s interpretation of the Plan, any Awards granted under
the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to
the Plan are final, binding, and conclusive on all parties.

5

 

ARTICLE 5

SHARES SUBJECT TO THE PLAN

5.1 NUMBER OF SHARES. Subject to adjustment provided in Section 14.1, the aggregate number
of shares of Stock reserved and available for grant under the Plan will be 4,430,972.

5.2 LAPSED AWARDS. To the extent that an Award terminates, expires, or lapses for any
reason, any shares of Stock subject to the Award will again be available to the Committee to grant
Awards under the Plan.

5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or
in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.

5.4 LIMITATION ON NUMBER OF SHARES AND CASH SUBJECT TO AWARDS. Notwithstanding any
provision in the Plan to the contrary, and subject to the adjustment in Section 14.1, the maximum
number of shares of Stock with respect to one or more Awards that may be granted to any one
Participant during any fiscal year of the Company is 1,000,000. For Performance-Based Awards that
are payable in cash, the maximum amount payable to any one Participant for any fiscal year of the
Company equals the product of 1,000,000 and the Fair Market Value of the Stock as of the first day
of the Company’s fiscal year.

ARTICLE 6

ELIGIBILITY AND PARTICIPATION

6.1 ELIGIBILITY.

          (a) GENERAL. Persons eligible to participate in this Plan include all Board members,
employees, officers, and executives of, and consultants and advisors to, the Company or a
Subsidiary, as determined by the Committee.

          (b) FOREIGN PARTICIPANTS. To assure the viability of Awards granted to Participants
employed in foreign countries, the Committee is authorized to provide for any special terms it
considers necessary or appropriate to accommodate differences in local law, tax policy, or custom.
Moreover, the Committee may approve any supplements to, or amendments, restatements, or alternative
versions of the Plan as it considers necessary or appropriate for such purposes without affecting
the terms of the Plan as in effect for any other purpose; provided, however, that no such
supplements, amendments, restatements, or alternative versions may increase the share limitations
contained in Section 5.1 of the Plan.

6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee may, from
time to time, select from among all eligible individuals, those to whom Awards will be granted and
will determine the nature and amount of each Award. No individual will have any right to be granted
an Award under this Plan.

ARTICLE 7

STOCK OPTIONS

7.1 GENERAL. The Committee is authorized to grant Options to Participants on the following
terms and conditions:

          (a) EXERCISE PRICE. The exercise price per share of Stock under an Option will be
determined by the Committee and set forth in the Award Agreement; provided, however, that the
Option’s
exercise price per share of Stock may not be less than the Fair Market Value per share of Stock on
the date of grant.

          (b) TIME AND CONDITIONS OF EXERCISE. The Committee will determine the time or times at
which an Option may be exercised in whole or in part. The Committee will also determine the

6

 

performance or other conditions, if any, that must be satisfied before all or part of an Option may
be exercised. Unless otherwise provided in an Award Agreement, an Option will lapse immediately if
a Participant’s employment or services are terminated for Cause.

          (c) PAYMENT. The Committee will determine the methods by which the exercise price of
an Option may be paid, the form of payment, including, without limitation, cash, promissory note,
shares of Stock (through actual tender or by attestation), or other property (including
broker-assisted “cashless exercise” arrangements), and the methods by which shares of Stock will be
delivered or deemed to be delivered to Participants

          (d) EVIDENCE OF GRANT. All Options will be evidenced by a written Award Agreement,
which Agreement will include such provisions as determined by the Committee.

7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options will be granted only to employees and
the terms of any Incentive Stock Options granted under the Plan must comply with the following
additional rules:

          (a) EXERCISE PRICE. The per share exercise price for any Incentive Stock Option may
not be less than the Fair Market Value as of the date of the grant.

          (b) EXERCISE. No Incentive Stock Option may be exercisable for more than ten years
after the date of its grant.

          (c) LAPSE OF OPTION. An Incentive Stock Option will lapse under the following
circumstances.

               (1) The Incentive Stock Option will lapse ten years from the date it is granted, unless
it
lapses earlier under the Award Agreement.

               (2) Unless otherwise provided in the Award Agreement, an Incentive Stock Option will
lapse
upon a Participant’s termination of employment for Cause or for any other reason (other than the
death or Disability).

               (3) If the Participant terminates employment because of Disability or death before the
Option
lapses pursuant to paragraph (1) or (2) above, the Incentive Stock Option will lapse, unless it is
sooner exercised, on the earlier of (i) the date on which the Option would have lapsed had the
Participant not become Disabled or lived and had remain employed; or (ii) 12 months after the date
of the Participant’s termination of employment because of Disability or death. Upon the
Participant’s Disability or death, any Incentive Stock Option exercisable at the Participant’s
Disability or death may be exercised by the Participant’s legal representative, by the person or
persons entitled to do so under the Participant’s last will and testament, or, if the Participant
fails to make testamentary disposition of such Incentive Stock Option or dies intestate, by the
person or persons entitled to receive the Incentive Stock Option under the applicable laws of
descent and distribution.

          (d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value (determined as of
the grant date) of all shares of Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed $100,000.00 or such other
limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that
Incentive Stock Options are first
exercisable by a Participant in excess of such limitation, the excess will be considered
Non-Qualified Stock Options.

          (e) TEN PERCENT OWNERS. An Incentive Stock Option will be granted to any individual
who, at the date of grant, owns stock possessing more than ten percent of the total combined voting
power of all classes of Stock only if such Option is granted at a price that is not less than 110%
of Fair Market Value on the grant date and the Option is exercisable for no more than five years
from the grant date.

          (f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an Incentive Stock Option may
be made pursuant to this Plan after the tenth anniversary of the Effective Date.

7

 

          (g) RIGHT TO EXERCISE. An Incentive Stock Option may be exercised only by the
Participant during his or her lifetime.

ARTICLE 8

STOCK APPRECIATION RIGHTS

8.1 GRANT OF SARs. The Committee is authorized to grant SARs to Participants on the
following terms and conditions:

          (a) RIGHT TO PAYMENT. Upon the exercise of a SAR, the Participant to whom it is
granted has the right to receive the excess, if any, of:

               (1) The Fair Market Value of a share of Stock on the date of exercise; over

               (2) The grant price of the SAR as determined by the Committee, which will not be less
than the
Fair Market Value of a share of Stock on the date of grant.

          (b) OTHER TERMS. All SARs grants will be evidenced by an Award Agreement. The terms,
methods of exercise, methods of settlement, form of consideration payable in settlement, and any
other terms and conditions of any SAR will be determined by the Committee at the time of the grant
of the Award and as set forth in the Award Agreement.

ARTICLE 9

PERFORMANCE AWARDS

9.1 GRANT OF PERFORMANCE SHARES AND UNITS. The Committee is authorized to grant Performance
Shares and Performance Units to Participants on such terms and conditions as determined by the
Committee. The Committee has the discretion to determine the number of Performance Shares and /or
Performance Units granted to each Participant and such other terms and conditions of such grant,
all as set forth in the Award Agreement. A Performance Share Award shall list in the Award
Agreement the maximum number of shares of Stock subject to the Award. A Performance Unit Award
shall list in the Award Agreement the maximum amount of cash subject to the Award and each
Performance Unit shall equal a maximum payment of one U.S. Dollar.

9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the Participant rights, valued as
determined by the Committee, and payable to, or exercisable by, the Participant to whom the
Performance Shares are granted, in whole or in part, as the Committee will establishes at grant or
thereafter. Subject to the terms of the Plan, the Committee will set performance goals and other
terms or conditions to payment of the Performance Shares and Performance Units, in its discretion,
which, depending on the extent to which they are met, will determine the number and value of
Performance Shares and the Performance Units that will be paid to the Participant.

9.3 OTHER TERMS. Performance Shares and Performance Units may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by the Committee and as set
forth in the Award Agreement.

9.4 CASH BONUSES. The Committee is authorized to grant cash bonuses to Participants on
such terms and conditions as determined by the Committee subject to the terms of the Plan. The
purpose of granting cash bonuses under the Plan is to qualify such cash bonuses as
“performance-based compensation” under Section 162(m) of the Code pursuant to Article 11 below.

8

 

ARTICLE 10

STOCK AWARDS

10.1 RESTRICTED STOCK AWARDS

          (a) GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards of
Restricted Stock to Participants in such amounts and subject to such terms and conditions as
determined by the Committee, all as set forth in the Award Agreement.

          (b) ISSUANCE AND RESTRICTIONS. Restricted Stock will be subject to such restrictions
on transferability and other restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on
the Restricted Stock). These restrictions may lapse separately or in combination at such times,
under such circumstances, in such installments, or otherwise, as the Committee determines at the
time of the grant of the Award or thereafter.

          (c) FORFEITURE. Except as otherwise determined by the Committee at the time of the
grant of the Award or thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to restrictions will be
forfeited, provided, however, that the Committee may provide in any Restricted Stock Award
Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in
whole or in part in the event of terminations resulting from specified causes, and the Committee
may in other cases waive in whole or in part restrictions or forfeiture conditions relating to
Restricted Stock.

          (d) CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under the Plan may be
evidenced as determined by the Committee. If certificates representing shares of Restricted Stock
are registered in the name of the Participant, the certificates must bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the
Company may, at its discretion, retain physical possession of the certificate until such time as
all applicable restrictions lapse.

10.2 STOCK UNIT AWARDS

          (a) GRANT OF STOCK UNITS. The Committee is authorized to make Awards of Stock Units to
Participants in such amounts and subject to such terms and conditions as determined by the
Committee, all as set forth in the Award Agreement.

          (b) ISSUANCE AND RESTRICTIONS. Stock Units will be subject to such restrictions on
transferability and other restrictions as the Committee may impose. These restrictions may lapse
separately or in combination, at such times, under such circumstances, in such installments, or
otherwise, as the Committee determines at the time of the grant of the Award or thereafter.

          (c) FORFEITURE. Except as otherwise determined by the Committee at the time of the
grant of the Award or thereafter, upon termination of employment or service during the applicable
restriction period, a Stock Unit that is at that time is unvested or otherwise subject to
restrictions will be forfeited, provided, however, that the Committee may provide in any Award
Agreement that restrictions or forfeiture conditions relating to Stock Units will be waived in
whole or in part in the event of terminations resulting from specified causes, and the Committee
may in any case waive, in whole or in part, restrictions or forfeiture conditions relating to Stock
Units.

          (d) DELIVERY AND PAYMENT. The Committee may determine, in its discretion, the timing
of the delivery of any payment for Stock Units and the form such payment shall take. Delivery may
be promptly after vesting or the restrictions with respect to the Stock Units have lapsed or at
such later time, as determined by the Committee. Payment may be made in cash, Stock, other Awards,
other property or any
combination of the foregoing, as determined by the Committee, either at the time of grant and
memorialized in the Award Agreement or at any time prior to delivery.

9

 

ARTICLE 11

PERFORMANCE-BASED AWARDS

11.1 PURPOSE. The purpose of this Article 11 is to provide the Committee the ability to
qualify Awards granted under the Plan as “performance-based compensation” under Section 162(m) of
the Code. If the Committee, in its discretion, decides to grant a Performance-Based Award, the
provisions of this Article 11 will control notwithstanding any contrary provision in the Plan.

11.2 APPLICABILITY. This Article 11 will apply only to those employees selected by the
Committee to receive Performance-Based Awards who, the Committee believes, are, or are likely to
be, as of the end of the tax year in which the Company would claim a tax deduction in connection
with such Award, Covered Employees. The Committee may, in its discretion, grant Awards to employees
who are or may become Covered Employees that do not satisfy the requirements of this Article 11.
The designation of a Covered Employee or any other employee as a Participant for a Performance
Period does not entitle the Participant to receive an Award for the period. Moreover, the
designation of a Covered Employee or other employee as a Participant for a particular Performance
Period will not require designation of such Covered Employee or other employee as a Participant in
any subsequent Performance Period and designation of one Covered Employee or other employee as a
Participant will not require designation of any other Covered Employees or other employees as
Participants in such period or in any other Performance Period.

11.3 GRANT OF PERFORMANCE-BASED AWARDS. Subject to the requirements of Section 162(m) of
the Code, the Committee is authorized to grant to Participants Awards that also qualify as
Performance-Based Awards in such amounts and subject to such terms and conditions as determined by
the Committee, all as set forth in the applicable Award Agreements. The Award Agreement for each
Performance-Based Award shall state the Performance Goals to be achieved, the length of the
Performance Period and all other material terms necessary to comply with Section 162(m) of the
Code.

11.4 PAYMENT OF PERFORMANCE AWARDS. A Participant will be eligible to receive payment
under a Performance-Based Award for a Performance Period only if the Performance Goals for such
period are achieved. In determining the actual payment of an individual Performance-Based Award,
the Committee may reduce or eliminate the amount of the Performance-Based Award earned for the
Performance Period, if in its sole and absolute discretion, such reduction or elimination is
appropriate.

ARTICLE 12

IPO AWARDS

12.1 IPO AWARDS. IPO Awards will be awarded to Participants selected by the Committee and
will be subject to the following terms and conditions:

          (a) EFFECTIVE DATE OF AWARDS. The effective date of the IPO Awards will be the date of
the Company’s initial public offering of Stock.

          (b) EXERCISE PRICE FOR AWARDS. Notwithstanding anything in the Plan to the contrary,
the exercise price per share of Stock under the IPO Awards will be the price at which the Company’s
Stock is offered to the public in its initial public offering of Stock (“IPO Price”).

          (c) AMOUNT OF THE IPO AWARDS. Each Participant selected to receive an IPO Award and
who became an employee by the Company on or after October 21, 2001, will be entitled to receive an
Option to purchase 50 shares of Stock. Each Participant selected to receive an IPO Award and who
became an employee by the Company before October 21, 2001, will be entitled to receive an Option to
purchase 100 shares of Stock. Such Option will be designated as a Non-Qualified Stock Option.

          (d) TIME AND CONDITIONS OF EXERCISE. The IPO Awards will become fully exercisable on
the first anniversary of the date of grant. Unless otherwise provided in the Award Agreement, the
IPO Award will lapse upon a Participant’s termination of employment or service with the Company or
a Subsidiary for any reason, and will include such other provisions as may be specified by the
Committee.

10

 

          (e) PAYMENT. The Committee will determine the methods by which the exercise price of
the IPO Awards may be paid, the form of payment, including, without limitation, cash, promissory
note, shares of Stock (through actual tender or by attestation), or other property (including
broker-assisted “cashless exercise” arrangements), and the methods by which shares of Stock will be
delivered or deemed to be delivered to Participants.

          (f) EVIDENCE OF GRANT. All IPO Awards will be evidenced by an Award Agreement.

ARTICLE 13

PROVISIONS APPLICABLE TO AWARDS

13.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in the discretion of
the Committee, be granted either alone, in addition to, or in tandem with, any other Award granted
under the Plan. Awards granted in addition to or in tandem with other Awards may be granted either
at the same time as or at a different time from the grant of such other Awards.

13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange or buy out any
previously granted Award for a payment in cash, Stock, or another Award, based on the terms and
conditions the Committee determines and communicates to the Participant at the time the offer is
made.

13.3 TERM OF AWARD. The term of each Award will be for the period as determined by the
Committee, provided that in no event will the term of any Incentive Stock Option or a Stock
Appreciation Right granted in tandem with the Incentive Stock Option exceed a period of ten years
from the date of its grant.

13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any applicable law or
Award Agreement, payments or transfers to be made by the Company or a Subsidiary on the grant or
exercise of an Award may be made in such forms as the Committee determines at or after the time of
grant, including without limitation, cash, promissory note, Stock, other Awards, or other property,
or any combination, and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case determined in accordance with rules adopted by, and at the discretion
of, the Committee.

13.5 LIMITS ON TRANSFER. No right or interest of a Participant in any Award may be pledged,
encumbered, or hypothecated to or in favor of any party other than the Company or a Subsidiary, or
will be subject to any lien, obligation, or liability of such Participant to any other party other
than the Company or a Subsidiary. Except as otherwise provided by the Committee, no Award will be
assignable or transferable by a Participant other than by will or the laws of descent and
distribution.

13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant may, in the manner
determined by the Committee, designate a beneficiary to exercise the rights of the Participant and
to receive any distribution with respect to any Award upon the Participant’s death.

A beneficiary, legal guardian, legal representative, or other person claiming any rights under
the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to
the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Committee. If the Participant is
married, a designation of a person other than the Participant’s spouse as his beneficiary with
respect to more than 50% of the Participant’s interest in the Award will not be effective without
the written consent of the Participant’s spouse. If no beneficiary has been
designated or survives the Participant, payment will be made to the person entitled thereto under
the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a
beneficiary designation may be changed or revoked by a Participant at any time provided the change
or revocation is filed with the Committee.

13.7 STOCK CERTIFICATES. Notwithstanding anything herein to the contrary, the Company will
not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the
exercise of any Awards, unless and until the Board has determined, with advice of counsel, that the
issuance and delivery of such certificates is in compliance with all applicable laws, regulations
of governmental authorities and, if

11

 

applicable, the requirements of any exchange on which the
shares of Stock are listed or traded. All Stock certificates delivered under the Plan are subject
to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to
comply with Federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated quotation system on
which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock
certificate to reference restrictions applicable to the Stock. In addition to the terms and
conditions provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion, deems advisable in
order to comply with any such laws, regulations, or requirements.

13.8 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control occurs and, within one
year after the Change of Control, a Participant’s employment or service with the Company is
terminated without Cause or, a Participant terminates employment or services with the Company for
Good Reason, all outstanding Options, Stock Appreciation Rights, and other Awards will become fully
exercisable and all restrictions on outstanding Awards will lapse. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section
7.2(d), the excess Options will be deemed to be Non-Qualified Stock Options. Upon, or in
anticipation of, such an event, the Committee may cause every Award outstanding hereunder to
terminate at a specific time in the future and will give each Participant the right to exercise
Awards during a period of time as the Committee, in its sole and absolute discretion, will
determine.

ARTICLE 14

CHANGES IN CAPITAL STRUCTURE

14.1 GENERAL.

          (a) SHARES AVAILABLE FOR GRANT AND LIMITS. If there is any change in the number of
shares of Stock outstanding by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or similar corporate change, the maximum aggregate
number of shares of Stock with respect to which the Committee may grant Awards pursuant to Section
5.1 and the maximum number of shares of Stock which may be granted to any one person in a single
calendar year pursuant to Section 5.4 will be appropriately adjusted by the Committee. If there is
any change in the number of shares of Stock outstanding by reason of any other event or
transaction, the Committee may, but need not, make such adjustments in the number and class of
shares of Stock with respect to which Awards may be granted pursuant to Section 5.1 and the maximum
number of shares of Stock which may be granted to any one person in a single calendar year pursuant
to Section 5.4, as the Committee may deem appropriate.

          (b) OUTSTANDING AWARDS — INCREASE OR DECREASE IN ISSUED SHARES WITHOUT CONSIDERATION.
Subject to any required action by the shareholders of the Company, if there is any increase or
decrease in the number of issued shares of Stock resulting from a subdivision or consolidation of
shares of Stock or the payment of a stock dividend (but only on the shares of Stock), or any other
increase or decrease in the number of such shares effected without receipt or payment of
consideration by the Company, the Committee will proportionally adjust the number of shares of
Stock subject to each outstanding Award and the exercise price per share of Stock of each such
Award.

          (c) OUTSTANDING AWARDS — CERTAIN MERGERS. Subject to any required action by the
shareholders of the Company, if the Company is the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the holders of shares of Stock
receive securities of another corporation), each Award outstanding on the date of such merger or
consolidation will pertain to and apply to the securities which a holder of the number of shares of
Stock subject to such Award would have received in such merger or consolidation.

          (d) OUTSTANDING AWARDS — OTHER CHANGES. If any other change in the capitalization of
the Company or corporate change other than those specifically referred to in Article 14, the
Committee may, in its absolute discretion, make such adjustments in the number and class of shares
subject

12

 

to Awards outstanding on the date on which such change occurs and in the per share exercise
price of each Award as the Committee may consider appropriate to prevent dilution or enlargement of
rights.

          (e) NO OTHER RIGHTS. Except as expressly provided in the Plan, no Participant will
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, will affect, and no adjustment
by reason thereof will be made with respect to, the number of shares of Stock subject to an Award
or the exercise price of any Award.

ARTICLE 15

AMENDMENT, MODIFICATION, AND TERMINATION

15.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the Board, at any time
and from time to time, the Committee may terminate, amend or modify the Plan; provided, however,
that to the extent necessary and desirable to comply with any applicable law, regulation, or stock
exchange rule, the Company will obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.

15.2 AWARDS PREVIOUSLY GRANTED. Except as otherwise provided in the Plan, including without
limitation, the provisions of Article 14, no termination, amendment, or modification of the Plan
will adversely affect in any material way any Award previously granted under the Plan, without the
written consent of the Participant.

ARTICLE 16

GENERAL PROVISIONS

16.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person will have any claim to
be granted any Award under the Plan, and neither the Company nor the Committee is obligated to
treat Participants, employees, and other persons uniformly.

16.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of the rights of a
stockholder of the Company unless and until shares of Stock are in fact issued to such person in
connection with such Award.

16.3 WITHHOLDING. The Company or any Subsidiary has the authority and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
Federal, state, and local taxes (including the Participant’s FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of this Plan. With the Committee’s
consent, a Participant may elect to have the Company withhold from those shares of Stock that would
otherwise be received upon the exercise of any Option, a number of shares having a Fair Market
Value equal to the minimum statutory amount necessary to
satisfy the Company’s applicable federal, state, local and foreign income and employment tax
withholding obligations.

16.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any Award Agreement will
interfere with or limit in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment or services at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company or any Subsidiary.

16.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award Agreement will give the Participant any rights that are
greater than those of a general creditor of the Company or any Subsidiary.

13

 

16.6 INDEMNIFICATION. To the extent allowable under applicable law, each member of the
Committee or the Board will be indemnified and held harmless by the Company from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by such member in connection
with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or
in which he or she may be involved by reason of any action or failure to act under the Plan and
against and from any and all amounts paid by him or her in satisfaction of judgment in such action,
suit, or proceeding against him or her provided he or she gives the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to handle and defend it on
his or her own behalf. The foregoing right of indemnification is in addition to any other rights of
indemnification to which such persons may be entitled under the Company’s Articles of Incorporation
or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify
them or hold them harmless.

16.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan will be taken into account
in determining any benefits under any pension, retirement, savings, profit sharing, group
insurance, welfare or other benefit plan of the Company or any Subsidiary.

16.8 EXPENSES. The Company and its Subsidiaries will pay the expenses of administering the
Plan.

16.9 TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for
convenience of reference only, and if there is any conflict, the text of the Plan, rather than such
titles or headings, will control.

16.10 FRACTIONAL SHARES. No fractional shares of stock will be issued and the Committee
will determine, in its discretion, whether cash will be given in lieu of fractional shares or
whether such fractional shares will be eliminated by rounding up or down as appropriate.

16.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on the relevant date,
obligated to file reports under Section 16 of the Exchange Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so
comply, it will be void to the extent permitted by law and voidable as deemed advisable by the
Committee.

16.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to make payment of
awards in Stock or otherwise will be subject to all applicable laws, rules, and regulations, and to
such approvals by government agencies as may be required. The Company will be under no obligation
to register under the Securities Act of 1933, as amended, any of the shares of Stock paid under the
Plan. If the shares paid under the Plan may in certain circumstances be exempt from registration
under the Securities Act of 1933, as amended, the Company may restrict the transfer of such shares
in such manner as it deems advisable to ensure the availability of any such exemption.

16.13 GOVERNING LAW. The Plan and all Award Agreements will be construed in accordance with
and governed by the laws of the State of Arizona.

16.14 NO AUTHORITY TO REPRICE. Other than in connection with a change in the Company’s
capital structure (as described in Article 14 of this Plan), neither the Committee nor the Board
shall have the authority to reprice any outstanding Option or SAR without the prior approval of the
Company’s shareholders. “Repricing” means any of the following or any other action that has the
same effect: (i) lowering the exercise price of an Option or the grant price of a SAR after it is
granted; (ii) any other action that is treated as a repricing under generally accepted accounting
principles; or (iii) canceling an Option at a time when its exercise price exceeds the fair market
value of the underlying stock, in exchange for another Option, a Restricted Stock Award or other
equity, unless the cancellation and exchange occurs in connection with a change in the Company’s
capital structure (as described in Article 14 of this Plan).

14

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