Document:

Exhibit 4.1

GE 0020

GREEN EARTH TECHNOLOGIES, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

This Certifies that

SEE REVERSE FOR
CERTAIN DEFINITIONS

CUSIP 39303R 10  2

is the holder of

FULLY-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $0.001 PAR VALUE, OF

GREEN EARTH TECHNOLOGIES, INC 

transferable on the books of the Corporation by the holder hereof, in person
or by duly authorized attorney, upon surrender of this certificate properly endorsed. This certificate is not valid until countersigned
and registered by the Transfer Agent and Registrar.
      Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.

      Dated:

SECRETARY

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

          The following abbreviations, when used in
the inscription on the face of this certificate, shall be construed as though
they were written out in full according to applicable laws or regulations:  

	
 

 	
 

 	
 

 	
 

 
	
TEN COM  

 	
– as tenants in common 

 	
UNIF GIFT MIN ACT–  

 	
___________ Custodian ___________  

 
	
TEN ENT  

 	
– as tenants by the entireties 

 	
   

 	
     (Cust)                               (Minor)  

 
	
JT TEN 

 	
– as joint tenants with right
   of survivorship and not as
   tenants in common  

 	
  

 	

under Uniform Gifts to Minors  

 
	
   

 	
  

 	
   

 	
Act_______________  

 
	
   

 	
   

 	
   

 	
              (State)  

 

Additional
abbreviations may also be used though not in the above list.  

For value received,_______________________ hereby
sell, assign and transfer unto  

	
 

 	
 

 
	
PLEASE INSERT SOCIAL SECURITY OR
OTHER

IDENTIFYING NUMBER OF ASSIGNEE  

 	
   

 
	
   

 	
   

 
	
   

 	
   

 
	
   

 
	
   

 	
   

 
	
PLEASE
PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE  

 
	
   

 	
   

 
	
   

 
	
   

 	
   

 

	
 

 
	
____________________________________________________________________________________________________________ Shares  

 
	
of the
common stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint______________________________  

 
	
   

 
	
   

 
	
Attorney to transfer the said stock on the books of the
within-named Corporation with full power of substitution in the premises.  

 

	
 

 	
 

 	
 

 	
 

 
	
Dated, ________________________  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 NOTICE:  

 	
 THE
 SlGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE
 FACE OF THE CERTIFICATE, IN
 EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

 
	
  

 	
  

 	
  

 	
  

 
	
 SIGNATURE(S) GUARANTEED:

 	
  

 	
  

 	
  

 
	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 THE
 SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
 STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
 IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO SEC RULE
 17Ac-15.Exhibit 10.1

GREEN EARTH TECHNOLOGIES, INC.

2008 STOCK AWARD AND INCENTIVE PLAN,

AS AMENDED 

GREEN EARTH TECHNOLOGIES, INC.

2008 STOCK AWARD AND INCENTIVE
PLAN, AS AMENDED

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 1.

 	
  

 	
 Purpose

 	
  

 	
   1

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
  

 	
 Definitions

 	
  

 	
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 3.

 	
  

 	
 Administration

 	
  

 	
   3

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 4.

 	
  

 	
 Stock Subject to
 Plan

 	
  

 	
   4

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
  

 	
 Eligibility;
 Per-Person Award Limitations

 	
  

 	
   5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 6.

 	
  

 	
 Specific Terms of
 Awards

 	
  

 	
   5

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 7.

 	
  

 	
 Performance
 Awards, Including Annual Incentive Awards

 	
  

 	
   9

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 8.

 	
  

 	
 Certain Provisions
 Applicable to Awards

 	
  

 	
 12

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 9.

 	
  

 	
 Change in Control

 	
  

 	
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 10.

 	
  

 	
 Additional Award
 Forfeiture Provisions

 	
  

 	
 13

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 11.

 	
  

 	
 General Provisions

 	
  

 	
 15

 

GREEN EARTH TECHNOLOGIES, INC.

2008 STOCK AWARD AND INCENTIVE PLAN

          1.       Purpose. The purpose of this 2008 Stock
Award and Incentive Plan (the “Plan”) is to aid GREEN EARTH TECHNOLOGIES, Inc.,
a Delaware corporation (together with its successors and assigns, the
“Company”), in attracting, retaining, motivating and rewarding employees and
non-employee directors of the Company or its subsidiaries or affiliates, to
provide for equitable and competitive compensation opportunities, to recognize
individual contributions and reward achievement of Company goals, and promote
the creation of long-term value for stockholders by closely aligning the
interests of Participants with those of stockholders. The Plan authorizes
stock-based and cash-based incentives for Participants. 

          2.       Definitions. In addition to the terms
defined in Section 1 above and elsewhere in the Plan, the following capitalized
terms used in the Plan have the respective meanings set forth in this Section: 

          (a)      “Annual
Incentive Award” means a type of Performance Award granted to a Participant
under Section 7(c) representing a conditional right to receive cash, Stock or
other Awards or payments, as determined by the Committee, based on performance
in a performance period of one fiscal year or a portion thereof. 

          (b)      “Annual
Limit” shall have the meaning specified in Section 5(b). 

          (c)      “Award”
means any Option, SAR, Restricted Stock, Restricted Stock Unit, Stock granted
as a bonus or in lieu of another award, Dividend Equivalent, Other Stock-Based
Award, Performance Award or Annual Incentive Award, together with any related
right or interest, granted to a Participant under the Plan. 

          (d)      “Beneficiary”
means the legal representatives of the Participant’s estate entitled by will or
the laws of descent and distribution to receive the benefits under a
Participant’s Award upon a Participant’s death, provided that, if and to the
extent authorized by the Committee, a Participant may be permitted to designate
a Beneficiary, in which case the “Beneficiary” instead will be the person,
persons, trust or trusts (if any are then surviving) which have been designated
by the Participant in his or her most recent written and duly filed beneficiary
designation to receive the benefits specified under the Participant’s Award
upon such Participant’s death. Unless otherwise determined by the Committee,
any designation of a Beneficiary other than a Participant’s spouse shall be
subject to the written consent of such spouse. 

          (e)      “Board”
means the Company’s Board of Directors. 

          (f)       “Cause”
shall have the meaning defined in any employment agreement or severance
agreement between the Participant and the Company or a subsidiary or affiliate
then in effect or, if no such agreement is then in effect or no definition of
“Cause” is contained therein, “Cause” shall mean (i) the Participant’s willful
and continued failure substantially to perform the duties of his or her
position after notice and opportunity to cure; (ii) any willful act or omission
by the Participant constituting dishonesty, fraud or other malfeasance, which
in any such case is demonstrably injurious to the financial condition or
business reputation of the Company or any of its subsidiaries or affiliates;
(iii) an act that constitutes misconduct resulting in a restatement of the
Company’s financial statements due to material non-compliance with any
financial reporting requirement within the meaning of Section 304 of The
Sarbanes-Oxley Act of 2002; or (iv) a felony conviction in a court of law under
the laws of the United States or any state thereof or any other jurisdiction in
which the Company or a subsidiary or affiliate conducts business which
materially impairs the value of the Participant’s service to the Company or any
of its subsidiaries or affiliates; provided, however, that for purposes of this
definition, no act or failure to act shall be

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deemed “willful” unless effected by the
Participant not in good faith and without a reasonable belief that such action
or failure to act was in or not opposed to the Company’s best interests, and no
act or failure to act shall be deemed “willful” if it results from any
incapacity of the Participant due to physical or mental illness. 

          (g)      “Change
in Control” and related terms have the meanings specified in Section 9. 

          (h)      “Code”
means the Internal Revenue Code of 1986, as amended. References to any
provision of the Code or regulation thereunder shall include any successor
provisions and regulations, and reference to regulations includes any
applicable guidance or pronouncement of the Department of the Treasury and
Internal Revenue Service. 

          (i)       “Committee”
means the Compensation Committee of the Board, the composition and governance
of which is established in the Committee’s Charter as approved from time to
time by the Board and subject to Security and Exchange Commission listing
requirements, and other corporate governance documents of the Company. No
action of the Committee shall be void or deemed to be without authority due to
the failure of any member, at the time the action was taken, to meet any
qualification standard set forth in the Committee Charter or this Plan. The
full Board may perform any function of the Committee hereunder except to the
extent limited under SEC regulations, in which case the term “Committee” shall
refer to the Board. 

          (j)       “Covered
Employee” means an Eligible Person who is a Covered Employee as specified in
Section 11(j). 

          (k)       “Dividend
Equivalent” means a right, granted under this Plan, to receive cash, Stock,
other Awards or other property equal in value to all or a specified portion of
the dividends paid with respect to a specified number of shares of Stock. 

          (l)       “Effective
Date” means the effective date specified in Section 11(q). 

          (m)     “Eligible
Person” has the meaning specified in Section 5. 

          (n)      “Exchange
Act” means the Securities Exchange Act of 1934, as amended. References to any
provision of the Exchange Act or rule (including a proposed rule) thereunder
shall include any successor provisions and rules. 

          (o)      “Fair
Market Value” means the fair market value of Stock, Awards or other property as
determined in good faith by the Committee or under procedures established by
the Committee. Unless otherwise determined by the Committee, the Fair Market
Value of Stock shall be the closing sale price per share of Stock reported on a
consolidated basis for securities listed on the principal stock exchange or
market on which Stock is traded on the day as of which such value is being
determined or, if there is no sale on that day, then on the last previous day
on which a sale was reported. Fair Market Value relating to the exercise price
or base price of any Non-409A Option or SAR shall conform to requirements under
Code Section 409A. 

          (p)      “409A
Awards” means Awards that constitute a deferral of compensation under Code
Section 409A and regulations thereunder. “Non-409A Awards” means Awards other
than 409A Awards. Although the Committee retains authority under the Plan to
grant Options, SARs and Restricted Stock on terms that will qualify those
Awards as 409A Awards, Options, SARs exercisable for Stock, and Restricted
Stock are intended to be Non-409A Awards unless otherwise expressly specified
by the Committee. 

          (q)      “Incentive
Stock Option” or “ISO” means any Option designated as an incentive stock option
within the meaning of Code Section 422 and qualifying thereunder. 

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          (r)       “Option”
means a right, granted under this Plan, to purchase Stock. 

          (s)       “Other
Stock-Based Awards” means Awards granted to a Participant under Section 6(h). 

          (t)       “Participant”
means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible Person. 

          (u)      “Performance
Award” means a conditional right, granted to a Participant under Sections 6(i)
and 7, to receive cash, Stock or other Awards or payments. 

          (v)      “Restricted
Stock” means Stock granted under this Plan which is subject to certain
restrictions and to a risk of forfeiture. 

          (w)      “Restricted
Stock Unit” or “RSU” means a right, granted under this Plan, to receive Stock
or other Awards or a combination thereof at the end of a specified deferral
period. 

          (x)      “Rule
16b-3” means Rule 16b-3, as from time to time in effect and applicable to
Participants, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act. 

          (y)      “Stock”
means the Company’s Common Stock, par value $.001 per share, and any other
equity securities of the Company that may be substituted or resubstituted for Stock
pursuant to Section 11(c). 

          (z)      “Stock
Appreciation Rights” or “SAR” means a right granted to a Participant under
Section 6(c). 

          3.       Administration. 

          (a)      Authority of the Committee.
The Plan shall be administered by the Committee, which shall have full and
final authority, in each case subject to and consistent with the provisions of
the Plan, to select Eligible Persons to become Participants; to grant Awards;
to determine the type and number of Awards, the dates on which Awards may be
exercised and on which the risk of forfeiture or deferral period relating to
Awards shall lapse or terminate, the acceleration of any such dates, the
expiration date of any Award, whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price of an Award may be
paid, in cash, Stock, other Awards, or other property, and other terms and
conditions of, and all other matters relating to, Awards; to prescribe
documents evidencing or setting terms of Awards (such Award documents need not
be identical for each Participant), amendments thereto, and rules and
regulations for the administration of the Plan and amendments thereto; to
construe and interpret the Plan and Award documents and correct defects, supply
omissions or reconcile inconsistencies therein; and to make all other decisions
and determinations as the Committee may deem necessary or advisable for the
administration of the Plan. Decisions of the Committee with respect to the
administration and interpretation of the Plan shall be final, conclusive, and
binding upon all persons interested in the Plan, including Participants,
Beneficiaries, transferees under Section 11(b) and other persons claiming
rights from or through a Participant, and stockholders. 

          (b)      Manner of Exercise of Committee
Authority. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee
may act through subcommittees, including for purposes of perfecting exemptions
under Rule 16b-3 or qualifying Awards under Code Section 162(m) as
performance-based compensation, in which case the

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subcommittee shall be subject to and have
authority under the charter applicable to the Committee, and the acts of the
subcommittee shall be deemed to be acts of the Committee hereunder. The
Committee may delegate to officers or managers of the Company or any subsidiary
or affiliate, or committees thereof, the authority, subject to such terms as
the Committee shall determine, to perform such functions, including
administrative functions, as the Committee may determine, to the extent (i)
that such delegation will not result in the loss of an exemption under Rule
16b-3(d) for Awards granted to Participants subject to Section 16 of the Exchange
Act in respect of the Company and will not cause Awards intended to qualify as
“performance-based compensation” under Code Section 162(m) to fail to so
qualify, and (ii) permitted under Section 157 and other applicable provisions
of the Delaware General Corporation Law. 

          (c)      Limitation of Liability.
The Committee and each member thereof, and any person acting pursuant to
authority delegated by the Committee, shall be entitled, in good faith, to rely
or act upon any report or other information furnished by any executive officer,
other officer or employee of the Company or a subsidiary or affiliate, the
Company’s independent auditors, consultants or any other agents assisting in
the administration of the Plan. Members of the Committee, any person acting pursuant
to authority delegated by the Committee, and any officer or employee of the
Company or a subsidiary or affiliate acting at the direction or on behalf of
the Committee or a delegee shall not be personally liable for any action or
determination taken or made in good faith with respect to the Plan, and shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action or determination. 

          4.       Stock Subject To Plan. 

          (a)      Overall Number of Shares Available
for Delivery. The total number of shares of Stock reserved and
available for delivery in connection with Awards under the Plan shall be (i) 20,000,000
million shares, plus (ii) the number of shares subject to awards under any
Preexisting Plans which become available in accordance with Section 4(b) after
the Effective Date; provided, however, that the total number of shares with
respect to which ISOs may be granted shall not exceed the number specified
under clause (i) above. The total number of shares available is
subject to adjustment as provided in Section 11(c). Any shares of Stock
delivered under the Plan shall consist of authorized and unissued shares or
treasury shares. 

          (b)      Share Counting Rules.
The Committee may adopt reasonable counting procedures to ensure appropriate
counting, avoid double counting (as, for example, in the case of tandem or
substitute awards) and make adjustments in accordance with this Section 4(b).
For purposes of the Plan, shares shall be counted against those reserved to the
extent such shares have been delivered and are no longer subject to a risk of
forfeiture. Accordingly, (i) to the extent that an award under the Plan or a
Preexisting Plan is canceled, expired, forfeited, settled in cash, settled by
issuance of fewer shares than the number underlying the award, or otherwise
terminated without delivery of shares to the Participant, the shares retained
by or returned to the Company will be available under the Plan; and (ii) shares
that are withheld from such an award or separately surrendered by the
Participant in payment of the exercise price or taxes relating to such an award
shall be deemed to constitute shares not delivered to the Participant and will
be available under the Plan. The Committee may determine that Awards may be
outstanding that relate to more shares than the aggregate remaining available
under the Plan so long as such Awards will not in fact result in delivery and
vesting of shares in excess of the number then available under the Plan. In
addition, in the case of any Award granted in assumption of or in substitution
for an award of a company or business acquired by the Company or a subsidiary
or affiliate or with which the Company or a subsidiary or affiliate combines,
shares issued or issuable in connection with such substitute Award shall not be
counted against the number of shares reserved under the Plan.

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          5.       Eligibility; Per-Person Award Limitations. 

          (a)      Eligibility. Awards
may be granted under the Plan only to Eligible Persons. For purposes of the Plan,
an “Eligible Person” means an employee of the Company or any subsidiary or
affiliate, including any executive officer or non-employee director of the
Company or a subsidiary or affiliate, and any person who has been offered
employment by the Company or a subsidiary or affiliate, provided that such
prospective employee may not receive any payment or exercise any right relating
to an Award until such person has commenced employment with the Company or a
subsidiary or affiliate or a consultant to the Company. An employee on leave of
absence may be considered as still in the employ of the Company or a subsidiary
or affiliate for purposes of eligibility for participation in the Plan. For
purposes of the Plan, a joint venture in which the Company or a subsidiary has
a substantial direct or indirect equity investment shall be deemed an
affiliate, if so determined by the Committee. Holders of awards granted by a
company or business acquired by the Company or a subsidiary or affiliate, or
with which the Company or a subsidiary or affiliate combines, are eligible for
grants of substitute awards granted in assumption of or in substitution for
such outstanding awards previously granted under the Plan in connection with
such acquisition or combination transaction. 

          (b)      Per-Person Award Limitations.
In each calendar year during any part of which the Plan is in effect, an
Eligible Person may be granted Awards intended to qualify as “performance-based
compensation” under Code Section 162(m) relating to his or her Annual Limit. A
Participant’s Annual Limit, in any year during any part of which the
Participant is then eligible under the Plan, shall equal 5,000,000 shares
plus the amount of the Participant’s unused Annual Limit relating to
Stock-denominated Awards as of the close of the previous year, subject to
adjustment as provided in Section 11(c). In the case of an Award which is not
valued in a way in which the limitation set forth in the preceding sentence
would operate as an effective limitation satisfying applicable law (including
Treasury Regulation 1.162-27(e)(4)), an Eligible Person may not be granted
Awards authorizing the earning during any calendar year of an amount that
exceeds the Eligible Person’s Annual Limit. For this purpose, (i) “earning”
means satisfying performance conditions so that an amount becomes payable,
without regard to whether it is to be paid currently or on a deferred basis or
continues to be subject to any service requirement or other non-performance
condition, and (ii) a Participant’s Annual Limit is used to the extent an
amount or number of shares may be potentially earned or paid under an Award,
regardless of whether such amount or shares are in fact earned or paid.

          6.       Specific Terms Of Awards. 

          (a)      General. Awards may
be granted on the terms and conditions set forth in this Section 6. In
addition, the Committee may impose on any Award or the exercise thereof, at the
date of grant or thereafter (subject to Sections 11(e) and 11(k)), such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine, including terms requiring forfeiture of
Awards in the event of termination of employment or service by the Participant
and terms permitting a Participant to make elections relating to his or her
Award. The Committee shall retain full power and discretion with respect to any
term or condition of an Award that is not mandatory under the Plan, subject to
Section 11(k). The Committee shall require the payment of lawful consideration
for an Award to the extent necessary to satisfy the requirements of the
Delaware General Corporation Law, and may otherwise require payment of
consideration for an Award except as limited by the Plan. 

          (b)      Options. The
Committee is authorized to grant Options to Participants on the following terms
and conditions: 

	
  

 	
  

 	
  

 
	
  

 	
  (i)

 	
 Exercise Price. The exercise price per share of Stock purchasable
 under an Option (including both ISOs and non-qualified Options) shall be
 determined by the Committee, provided that such exercise price shall be not
 less than the Fair Market Value of a share of Stock on the date of grant of
 such Option, subject to Section 8(a). Notwithstanding the foregoing, any
 substitute award granted in assumption of or in substitution for an
 outstanding award granted by a company

 

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 or business acquired by the Company or a subsidiary or affiliate, or
 with which the Company or a subsidiary or affiliate combines may be granted
 with an exercise price per share of Stock other than as required above.

 
	
  

 	
  

 	
  

 
	
  

 	
  (ii)

 	
 Option Term; Time and Method of Exercise. The Committee shall
 determine the term of each Option, provided that in no event shall the term
 of any Option exceed a period of ten (10) years from the date of grant. The
 Committee shall determine the time or times at which or the circumstances
 under which an Option may be exercised in whole or in part (including based
 on achievement of performance goals and/or future service requirements), the
 methods by which such exercise price may be paid or deemed to be paid and the
 form of such payment (subject to Sections 11(k) and 11(l)), including,
 without limitation, cash, Stock (including by withholding Stock deliverable
 upon exercise, if such withholding or withholding feature will not result in
 additional accounting expense to the Company), other Awards or awards granted
 under other plans of the Company or any subsidiary or affiliate, or other
 property (including through broker-assisted “cashless exercise” arrangements,
 to the extent permitted by applicable law), and the methods by or forms in
 which Stock will be delivered or deemed to be delivered in satisfaction of
 Options to Participants (including, in the case of 409A Awards, deferred
 delivery of shares subject to the Option, as mandated by the Committee, with
 such deferred shares subject to any vesting, forfeiture or other terms as the
 Committee may specify). 

 
	
  

 	
  

 	
  

 
	
  

 	
  (iii)

 	
 ISOs. The terms of any ISO granted under the Plan shall comply in all
 respects with the provisions of Code Section 422.

 

          (c)      Stock Appreciation Rights.
The Committee is authorized to grant SARs to Participants on the following
terms and conditions: 

	
  

 	
  

 	
  

 
	
  

 	
  (i)

 	
 Right to Payment. An SAR shall confer on the Participant to whom it
 is granted a right to receive, upon exercise thereof, the excess of (A) the
 Fair Market Value of one share of Stock on the date of exercise (or, in the
 case of a “Limited SAR,” the Fair Market Value determined by reference to the
 Change in Control Price, as defined under Section 9(e) hereof) over (B) the
 grant price of the SAR, which shall be determined by the Committee but which
 in any event shall be not less than the Fair Market Value of a share of Stock
 on the date of grant of the SAR, subject to Section 8(a).

 
	
  

 	
  

 	
  

 
	
  

 	
  (ii)

 	
 Other Terms. The Committee shall determine the term of each SAR,
 provided that in no event shall the term of an SAR exceed a period of ten
 years from the date of grant. The Committee shall determine at the date of
 grant or thereafter, the time or times at which and the circumstances under
 which a SAR may be exercised in whole or in part (including based on
 achievement of performance goals and/or future service requirements), the
 method of exercise, method of settlement, form of consideration payable in
 settlement, method by or forms in which Stock will be delivered or deemed to
 be delivered to Participants, whether or not a SAR shall be free-standing or
 in tandem or combination with any other Award, and whether or not the SAR
 will be a 409A Award or Non-409A Award (cash SARs will in all cases be 409A
 Awards). The Committee may require that an outstanding Option be exchanged
 for an SAR exercisable for Stock having vesting, expiration, and other terms
 substantially the same as the Option, so long as such exchange will not
 result in additional accounting expense to the Company.

 

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  (d)

 	
 Restricted Stock. The Committee is authorized to
 grant Restricted Stock to Participants on the following terms and conditions:
 

 
	
  

 	
  

 	
  

 
	
  

 	
  (i)

 	
 Grant and Restrictions. Restricted Stock shall be subject to such
 restrictions on transferability, risk of forfeiture and other restrictions,
 if any, as the Committee may impose, which restrictions may lapse separately
 or in combination at such times, under such circumstances (including based on
 achievement of performance goals and/or future service requirements), in such
 installments or otherwise and under such other circumstances as the Committee
 may determine at the date of grant or thereafter. Except to the extent
 restricted under the terms of the Plan and any Award document relating to the
 Restricted Stock, a Participant granted Restricted Stock shall have all of
 the rights of a stockholder, including the right to vote the Restricted Stock
 and the right to receive dividends thereon (subject to any mandatory
 reinvestment or other requirement imposed by the Committee). 

 
	
  

 	
  

 	
  

 
	
  

 	
  (ii)

 	
 Forfeiture. Except as otherwise determined by the Committee, upon
 termination of employment or service during the applicable restriction
 period, Restricted Stock that is at that time subject to restrictions shall
 be forfeited and reacquired by the Company; provided that the Committee may
 provide, by rule or regulation or in any Award document, or may determine in
 any individual case, that restrictions or forfeiture conditions relating to
 Restricted Stock will lapse in whole or in part, including in the event of
 terminations resulting from specified causes. 

 
	
  

 	
  

 	
  

 
	
  

 	
  (iii)

 	
 Certificates for Stock. Restricted Stock granted under the Plan may
 be evidenced in such manner as the Committee shall determine. If certificates
 representing Restricted Stock are registered in the name of the Participant,
 the Committee may require that such certificates bear an appropriate legend
 referring to the terms, conditions and restrictions applicable to such
 Restricted Stock, that the Company retain physical possession of the
 certificates, and that the Participant deliver a stock power to the Company,
 endorsed in blank, relating to the Restricted Stock. 

 
	
  

 	
  

 	
  

 
	
  

 	
  (iv)

 	
 Dividends and Splits. As a condition to the grant of an Award of
 Restricted Stock, the Committee may require that any dividends paid on a
 share of Restricted Stock shall be either (A) paid with respect to such
 Restricted Stock at the dividend payment date in cash, in kind, or in a
 number of shares of unrestricted Stock having a Fair Market Value equal to
 the amount of such dividends, or (B) automatically reinvested in additional
 Restricted Stock or held in kind, which shall be subject to the same terms as
 applied to the original Restricted Stock to which it relates, or (C) deferred
 as to payment, either as a cash deferral or with the amount or value thereof
 automatically deemed reinvested in RSUs, other Awards or other investment
 vehicles, subject to such terms as the Committee shall determine or permit a
 Participant to elect. Unless otherwise determined by the Committee, Stock
 distributed in connection with a Stock split or Stock dividend, and other
 property distributed as a dividend, shall be subject to restrictions and a
 risk of forfeiture to the same extent as the Restricted Stock with respect to
 which such Stock or other property has been distributed. 

 

          (e)      Restricted Stock Units.
The Committee is authorized to grant RSUs to Participants, subject to the
following terms and conditions: 

	
  

 	
  

 	
  

 
	
  

 	
  (i)

 	
 Award and Restrictions. Issuance of Stock will occur upon expiration
 of the deferral period specified for an Award of RSUs by the Committee (or,
 if permitted by the Committee, as elected by the Participant). In addition,
 RSUs shall be

 

- 7 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 subject to such restrictions on transferability, risk of forfeiture
 and other restrictions, if any, as the Committee may impose, which
 restrictions may lapse at the expiration of the deferral period or at earlier
 specified times (including based on achievement of performance goals and/or
 future service requirements), separately or in combination, in installments
 or otherwise, and under such other circumstances as the Committee may
 determine at the date of grant or thereafter. RSUs may be satisfied by
 delivery of Stock, other Awards, or a combination thereof (subject to Section
 11(l)), as determined by the Committee at the date of grant or thereafter.

 
	
  

 	
  

 	
  

 
	
  

 	
  (ii)

 	
 Forfeiture. Except as otherwise determined by
 the Committee, upon termination of employment or service during the
 applicable deferral period or portion thereof to which forfeiture conditions
 apply (as provided in the Award document evidencing the RSU), all RSUs that
 are at that time subject to such forfeiture conditions shall be forfeited;
 provided that the Committee may provide, by rule or regulation or in any
 Award document, or may determine in any individual case, that restrictions or
 forfeiture conditions relating to RSUs will lapse in whole or in part,
 including in the event of terminations resulting from specified causes.

 
	
  

 	
  

 	
  

 
	
  

 	
  (iii)

 	
 Dividend Equivalents. Unless otherwise determined by the Committee,
 Dividend Equivalents on the specified number of shares of Stock covered by an
 Award of RSUs shall be either (A) paid with respect to such RSUs at the
 dividend payment date in cash or in shares of unrestricted Stock having a
 Fair Market Value equal to the amount of such dividends, or (B) deferred with
 respect to such RSUs, either as a cash deferral or with the amount or value
 thereof automatically deemed reinvested in additional RSUs, other Awards or
 other investment vehicles having a Fair Market Value equal to the amount of
 such dividends, as the Committee shall determine or permit a Participant to
 elect. 

 

          (f)       Bonus Stock and Awards in Lieu of
Obligations. The Committee is authorized to grant Stock as a
bonus, or to grant Stock or other Awards in lieu of obligations of the Company
or a subsidiary or affiliate to pay cash or deliver other property under the
Plan or under other plans or compensatory arrangements, subject to such terms
as shall be determined by the Committee. 

          (g)      Dividend Equivalents.
The Committee is authorized to grant Dividend Equivalents to a Participant,
which may be awarded on a free-standing basis or in connection with another
Award. The Committee may provide that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in
additional Stock, Awards, or other investment vehicles, and subject to
restrictions on transferability, risks of forfeiture and such other terms as
the Committee may specify. 

          (h)      Other Stock-Based Awards.
The Committee is authorized, subject to limitations under applicable law, to
grant to Participants such other Awards that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, Stock or factors that may influence the value of Stock, including, without
limitation, convertible or exchangeable debt securities, other rights
convertible or exchangeable into Stock, purchase rights for Stock, Awards with
value and payment contingent upon performance of the Company or business units
thereof or any other factors designated by the Committee, and Awards valued by
reference to the book value of Stock or the value of securities of or the
performance of specified subsidiaries or affiliates or other business units.
The Committee shall determine the terms and conditions of such Awards. Stock
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(h) shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Stock, other Awards, notes, or other property, as the Committee shall
determine.

- 8 -

Cash awards, as an element of or supplement
to any other Award under the Plan, may also be granted pursuant to this Section
6(h). 

          (i)       Performance Awards.
Performance Awards, denominated in cash or in Stock or other Awards, may be
granted by the Committee in accordance with Section 7. 

          7.       Performance Awards, Including Annual Incentive Awards.

          (a)      Performance Awards Generally.
Performance Awards may be denominated as a cash amount, number of shares of
Stock, or specified number of other Awards (or a combination) which may be
earned upon achievement or satisfaction of performance conditions specified by
the Committee. In addition, the Committee may specify that any other Award
shall constitute a Performance Award by conditioning the right of a Participant
to exercise the Award or have it settled, and the timing thereof, upon
achievement or satisfaction of such performance conditions as may be specified
by the Committee. The Committee may use such business criteria and other
measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce or increase
the amounts payable under any Award subject to performance conditions, except
as limited under Sections 7(b) and 7(c) in the case of a Performance Award
intended to qualify as “performance-based compensation” under Code Section
162(m). 

          (b)      Performance Awards Granted to
Covered Employees. If the Committee determines that a
Performance Award to be granted to an Eligible Person who is designated by the
Committee as likely to be a Covered Employee should qualify as
“performance-based compensation” for purposes of Code Section 162(m), the grant,
exercise and/or settlement of such Performance Award shall be contingent upon
achievement of a preestablished performance goal and other terms set forth in
this Section 7(b). 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Performance Goal Generally. The performance goal for such Performance
 Awards shall consist of one or more business criteria and a targeted level or
 levels of performance with respect to each of such criteria, as specified by
 the Committee consistent with this Section 7(b). The performance goal shall
 be objective and shall otherwise meet the requirements of Code Section 162(m)
 and regulations thereunder, including the requirement that the level or
 levels of performance targeted by the Committee result in the achievement of
 performance goals being “substantially uncertain.” The Committee may
 determine that such Performance Awards shall be granted, exercised and/or
 settled upon achievement of any one performance goal or that two or more of
 the performance goals must be achieved as a condition to grant, exercise
 and/or settlement of such Performance Awards. Performance goals may differ
 for Performance Awards granted to any one Participant or to different
 Participants. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Business Criteria. One or more of the following business criteria may
 be used by the Committee in establishing performance goals for such
 Performance Awards for the Company, including:

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (1)

 	
 sales or sales growth;

 
	
  

 	
  

 	
  

 	
 (2)

 	
 expenses or expense ratios;

 
	
  

 	
  

 	
  

 	
 (3)

 	
 operating income, earnings from operations, earnings before or after
 taxes, earnings before or after interest, depreciation, amortization, stock
 compensation or extraordinary or special items;

 
	
  

 	
  

 	
  

 	
 (4)

 	
 net income or net income per common share (basic or diluted;
 including or excluding extraordinary items);

 
	
  

 	
  

 	
  

 	
 (5)

 	
 return on assets, return on investment, return on capital, or return
 on equity;

 

- 9 -

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (6)

 	
 cash flow, free cash flow, cash flow return on investment, or net
 cash provided by operations;

 
	
  

 	
  

 	
  

 	
 (7)

 	
 economic profit or value created;

 
	
  

 	
  

 	
  

 	
 (8)

 	
 stock price or total stockholder return;

 
	
  

 	
  

 	
  

 	
 (9)

 	
 completion of financing activities; and 

 
	
  

 	
  

 	
  

 	
 (10)

 	
 specific strategic or operational business criteria, including market
 penetration, geographic expansion, new concept development goals, new
 projects, new products, or new ventures; customer satisfaction; staffing,
 training and development, succession planning or employee satisfaction; goals
 relating to mergers and acquisitions, divestitures, affiliates or joint
 ventures. 

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Business criteria may be measured on a consolidated basis, by
 department, group or business unit, or for specified subsidiaries or
 affiliates of the Company. The targeted level or levels of performance with
 respect to such business criteria may be established at such levels and in
 such terms as the Committee may determine, in its discretion, including in
 absolute terms, as a ratio, as a goal relative to performance in prior
 periods, or as a goal compared to the performance of one or more comparable
 companies or an index covering multiple companies. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 Performance Period; Timing for Establishing Performance Goals.
 Achievement of performance goals in respect of such Performance Awards shall
 be measured over a performance period of up to one year or more than one
 year, as specified by the Committee. A performance goal shall be established
 not later than the earlier of (A) 90 days after the beginning of any
 performance period applicable to such Performance Award or (B) the time 25%
 of such performance period has elapsed. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 Performance Award Pool. The Committee may establish a Performance
 Award pool, which shall be an unfunded pool, for purposes of measuring
 performance of the Company in connection with Performance Awards. The amount
 of such Performance Award pool shall be based upon the achievement of a
 performance goal or goals based on one or more of the business criteria set
 forth in Section 7(b)(ii) during the given performance period, as specified
 by the Committee in accordance with Section 7(b)(iv). The Committee may
 specify the amount of the Performance Award pool as a percentage of any of
 such business criteria, a percentage thereof in excess of a threshold amount,
 or as another amount which need not bear a strictly mathematical relationship
 to such business criteria. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 Settlement of Performance Awards; Other Terms. Settlement of
 Performance Awards shall be in cash, Stock, other Awards or other property,
 in the discretion of the Committee. The Committee may, in its discretion,
 increase or reduce the amount of a settlement otherwise to be made in
 connection with such Performance Awards, but may not exercise discretion to
 increase any such amount payable to a Covered Employee in respect of a
 Performance Award subject to this Section 7(b). Any settlement which changes
 the form of payment from that originally specified shall be implemented in a
 manner such that the Performance Award and other related Awards do not,
 solely for that reason, fail to qualify as “performance-based compensation”
 for purposes of Code Section 162(m). The Committee shall specify the
 circumstances in which such Performance Awards shall be paid or forfeited in
 the event of termination of employment by the Participant or other event
 (including a Change in Control) prior to the end of a performance period or
 settlement of such Performance Awards. 

 

- 10 -

          (c)      Annual Incentive Awards Granted to
Designated Covered Employees. The Committee may grant an Annual
Incentive Award to an Eligible Person who is designated by the Committee as
likely to be a Covered Employee. Such Annual Incentive Award will be intended
to qualify as “performance-based compensation” for purposes of Code Section
162(m), and its grant, exercise and/or settlement shall be contingent upon
achievement of pre-established performance goals and other terms set forth in
this Section 7(c). 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Grant of Annual Incentive Awards. Not later than the earlier of 90
 days after the beginning of any performance period applicable to such Annual
 Incentive Award or the time 25% of such performance period has elapsed, the
 Committee shall determine the Covered Employees who will potentially receive
 Annual Incentive Awards, and the amount(s) potentially payable thereunder,
 for that performance period. The amount(s) potentially payable shall be based
 upon the achievement of a performance goal or goals based on one or more of
 the business criteria set forth in Section 7(b)(ii) in the given performance
 period, as specified by the Committee. The Committee may designate an annual
 incentive award pool as the means by which Annual Incentive Awards will be
 measured, which pool shall conform to the provisions of Section 7(b)(iv). In
 such case, the portion of the Annual Incentive Award pool potentially payable
 to each Covered Employee shall be preestablished by the Committee. In all
 cases, the maximum Annual Incentive Award of any Participant shall be subject
 to the limitation set forth in Section 5. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Payout of Annual Incentive Awards. After the end of each performance
 period, the Committee shall determine the amount, if any, of the Annual
 Incentive Award for that performance period payable to each Participant. The
 Committee may, in its discretion, determine that the amount payable to any
 Participant as a final Annual Incentive Award shall be reduced from the
 amount of his or her potential Annual Incentive Award, including a
 determination to make no final Award whatsoever, but may not exercise
 discretion to increase any such amount. The Committee shall specify the
 circumstances in which an Annual Incentive Award shall be paid or forfeited
 in the event of termination of employment by the Participant or other event
 prior to the end of a performance period or settlement of such Annual
 Incentive Award. 

 

          (d)      Written Determinations.
Determinations by the Committee as to the establishment of performance goals,
the amount potentially payable in respect of Performance Awards and Annual
Incentive Awards, the level of actual achievement of the specified performance
goals relating to Performance Awards and Annual Incentive Awards, and the
amount of any final Performance Award and Annual Incentive Award shall be
recorded in writing in the case of Performance Awards intended to qualify under
Section 162(m). Specifically, the Committee shall certify in writing, in a
manner conforming to applicable regulations under Section 162(m), prior to
settlement of each such Award granted to a Covered Employee, that the
performance objective relating to the Performance Award and other material
terms of the Award upon which settlement of the Award was conditioned have been
satisfied. 

          8.       Certain Provisions Applicable To Awards. 

          (a)      Stand-Alone, Additional, Tandem, and
Substitute Awards. Awards granted under the Plan may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution or exchange for, any other Award or any award
granted under another plan of the Company, any subsidiary or affiliate, or any
business entity to be acquired by the Company or a subsidiary or affiliate, or
any other right of a Participant to receive payment

- 11 -

from the Company or any subsidiary or
affiliate; provided, however, that a 409A Award may not be granted in tandem
with a Non-409A Award. Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards. Subject to Sections 11(k)
and (l), the Committee may determine that, in granting a new Award, the
in-the-money value or fair value of any surrendered Award or award or the value
of any other right to payment surrendered by the Participant may be applied to
reduce the exercise price of any Option, grant price of any SAR, or purchase
price of any other Award. 

          (b)      Term of Awards. The
term of each Award shall be for such period as may be determined by the
Committee, subject to the express limitations set forth in Sections 6(b)(ii),
6(c)(ii) and 8 or elsewhere in the Plan. 

          (c)      Form and Timing of Payment under
Awards; Deferrals. Subject to the terms of the Plan (including
Sections 11(k) and (l)) and any applicable Award document, payments to be made
by the Company or a subsidiary or affiliate upon the exercise of an Option or
other Award or settlement of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Stock, other
Awards or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Award may be
accelerated, and cash paid in lieu of Stock in connection with such settlement,
in the discretion of the Committee or upon occurrence of one or more specified events,
subject to Sections 11(k) and (l). Subject to Section 11(k), installment or
deferred payments may be required by the Committee (subject to Section 11(e))
or permitted at the election of the Participant on terms and conditions
established by the Committee. Payments may include, without limitation,
provisions for the payment or crediting of reasonable interest on installment
or deferred payments or the grant or crediting of Dividend Equivalents or other
amounts in respect of installment or deferred payments denominated in Stock. In
the case of any 409A Award that is vested and no longer subject to a risk of
forfeiture (within the meaning of Code Section 83), such Award will be
distributed to the Participant, upon application of the Participant, if the Participant
has had an unforeseeable emergency within the meaning of Code Sections
409A(a)(2)(A)(vi) and 409A(a)(2)(B)(ii), in accordance with Section
409A(a)(2)(B)(ii).

          9.       Change in Control. 

          Other
provisions of the Plan notwithstanding but subject to the limitations set forth
in this Section 9, the Committee may provide, in an Award agreement or in such
other manner as the Committee may specify, that in the event of a change in
control or a termination of employment or service following a change in control,
any or all of the following terms will apply:

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 That an outstanding Award will vest in whole or in part, thereby
 becoming non-forfeitable and entitling the Participant to exercise specified
 rights under the Award, and that the Award will remain outstanding for
 specified periods thereafter (but not beyond the maximum term of the Award
 permitted under the Plan);

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 That any period in which settlement of an outstanding Award is to be
 deferred beyond the date of vesting will immediately end, except as limited
 under Code Section 409A;

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 That, with respect to an outstanding Award subject to the achievement
 of performance goals and conditions, such performance goals and conditions
 will be deemed to be met at a specified level (for example, at target level
 or maximum level), or that such level of performance will be determined in
 some other manner; and/or

 

- 12 -

	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 That an outstanding Award will be immediately settled by payment of
 cash, or the Participant will be permitted during a specified period to elect
 such a cash settlement, with the amount of cash payable equal to the
 intrinsic value or fair value of the Award, or a value determined in another
 specified manner, at a specified date or during a specified period, except as
 limited under Code Section 409A. 

 

For purposes of the Plan, the term “change in
control” shall be defined by the Committee, and need not be the same for all
Participants. Any of the terms of Awards relating to a change in control shall
apply to a Non-409A Award only to the extent permitted without causing the
Award to become subject to Code Section 409A, and shall apply to a 409A Award
only to the extent permitted under Code Section 409A. For this purpose, Code
Section 409A may permit some of the terms specified above to apply only if the
change in control constitutes a change in the ownership or effective control of
the Company, or in the ownership of a substantial portion of the assets of the
Company, within the meaning of Code Section 409A(a)(2)(A)(v). 

          10.      Additional Award Forfeiture Provisions. 

          (a)      Forfeiture of Options and Other
Awards and Gains Realized Upon Prior Option Exercises or Award Settlements.
Unless otherwise determined by the Committee, each Award granted hereunder,
other than Awards granted to non-employee directors, shall be subject to the
following additional forfeiture conditions, to which the Participant, by
accepting an Award hereunder, agrees. If any of the events specified in Section
10(b)(i), (ii), or (iii) occurs (a “Forfeiture Event”), all of the following forfeitures
will result: 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 The unexercised portion of the Option, whether or not vested, and any
 other Award not then settled (except for an Award that has not been settled
 solely due to an elective deferral by the Participant and otherwise is not
 forfeitable in the event of any termination of service of the Participant)
 will be immediately forfeited and canceled upon the occurrence of the
 Forfeiture Event; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 The Participant will be obligated to repay to the Company, in cash,
 within five business days after demand is made therefor by the Company (but
 not earlier than termination of employment in the case of an equity award
 accounted for under APB 25), the total amount of Award Gain (as defined
 herein) realized by the Participant upon each exercise of an Option or
 settlement of an Award (regardless of any elective deferral) that occurred on
 or after (A) the date that is six months prior to the occurrence of the
 Forfeiture Event, if the Forfeiture Event occurred while the Participant was
 employed by the Company or a subsidiary or affiliate, or (B) the date that is
 six months prior to the date the Participant’s employment by the Company or a
 subsidiary or affiliate terminated, if the Forfeiture Event occurred after
 the Participant ceased to be so employed. For purposes of this Section, the
 term “Award Gain” shall mean (i), in respect of a given Option exercise, the
 product of (X) the Fair Market Value per share of Stock at the date of such
 exercise (without regard to any subsequent change in the market price of
 shares) minus the exercise price times (Y) the number of shares as to which
 the Option was exercised at that date, and (ii), in respect of any other
 settlement of an Award granted to the Participant, the Fair Market Value of
 the cash or Stock paid or payable to Participant (regardless of any elective
 deferral) less any cash or the Fair Market Value of any Stock or property
 (other than an Award or award which would have itself then been forfeitable
 hereunder and excluding any payment of tax withholding) paid by the
 Participant to the Company as a condition of or in connection such
 settlement. 

 

          (b)      Events Triggering Forfeiture.
The forfeitures specified in Section 10(a) will be triggered upon the
occurrence of any one of the following Forfeiture Events at any time during the

- 13 -

Participant’s employment by the Company or a
subsidiary or affiliate and resulting in his or her termination of employment,
or during the one-year period following termination of such employment: 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 The Participant, acting alone or with others, directly or indirectly,
 (A) engages, either as employee, employer, consultant, advisor, or director,
 or as an owner, investor, partner, or stockholder unless the Participant’s
 interest is insubstantial, in any business in an area or region in which the
 Company conducts business at the date the event occurs, which is directly in
 competition with a business then conducted by the Company or a subsidiary or
 affiliate; (B) induces any customer or supplier of the Company or a subsidiary
 or affiliate, or a telephone company with which the Company or a subsidiary
 or affiliate has a business relationship, to curtail, cancel, not renew, or
 not continue his or her or its business with the Company or any subsidiary or
 affiliate; or (C) induces, or attempts to influence, any employee of or
 service provider to the Company or a subsidiary or affiliate to terminate
 such employment or service. The Committee shall, in its discretion, determine
 which lines of business the Company conducts on any particular date and which
 third parties may reasonably be deemed to be in competition with the Company.
 For purposes of this Section 10(b)(i), a Participant’s interest as a
 stockholder is insubstantial if it represents beneficial ownership of less
 than five percent of the outstanding class of stock, and a Participant’s
 interest as an owner, investor, or partner is insubstantial if it represents
 ownership, as determined by the Committee in its discretion, of less than
 five percent of the outstanding equity of the entity;

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 The Participant discloses, uses, sells, or otherwise transfers,
 except in the course of employment with or other service to the Company or
 any subsidiary or affiliate, any confidential or proprietary information of
 the Company or any subsidiary or affiliate, including but not limited to
 information regarding the Company’s current and potential customers,
 organization, employees, finances, and methods of operations and investments,
 so long as such information has not otherwise been disclosed to the public or
 is not otherwise in the public domain, except as required by law or pursuant
 to legal process, or the Participant makes statements or representations, or
 otherwise communicates, directly or indirectly, in writing, orally, or
 otherwise, or takes any other action which may, directly or indirectly,
 disparage or be damaging to the Company or any of its subsidiaries or
 affiliates or their respective officers, directors, employees, advisors,
 businesses or reputations, except as required by law or pursuant to legal
 process; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 The Participant fails to cooperate with the Company or any subsidiary
 or affiliate in any way, including, without limitation, by making himself or
 herself available to testify on behalf of the Company or such subsidiary or
 affiliate in any action, suit, or proceeding, whether civil, criminal,
 administrative, or investigative, or otherwise fails to assist the Company
 or any subsidiary or affiliate in any way, including, without limitation, in
 connection with any such action, suit, or proceeding by providing information
 and meeting and consulting with members of management of, other
 representatives of, or counsel to, the Company or such subsidiary or
 affiliate, as reasonably requested. 

 

          (c)      Agreement Does Not Prohibit
Competition or Other Participant Activities. Although the
conditions set forth in this Section 10 shall be deemed to be incorporated into
an Award, a Participant is not thereby prohibited from engaging in any
activity, including but not limited to competition with the Company and its
subsidiaries and affiliates. Rather, the non-occurrence of the Forfeiture
Events set forth in Section 10(b) is a condition to the Participant’s right to
realize and retain value from his or her compensatory Options and Awards, and
the consequence under the Plan if the Participant engages in an activity giving
rise to any such

- 14 -

Forfeiture Event are the forfeitures
specified herein. The Company and the Participant shall not be precluded by
this provision or otherwise from entering into other agreements concerning the
subject matter of Sections 10(a) and 10(b). 

          (d)      Committee Discretion.
The Committee may, in its discretion, waive in whole or in part the Company’s
right to forfeiture under this Section, but no such waiver shall be effective
unless evidenced by a writing signed by a duly authorized officer of the
Company. In addition, the Committee may impose additional conditions on Awards,
by inclusion of appropriate provisions in the document evidencing or governing
any such Award. 

          11.      General Provisions. 

          (a)      Compliance with Legal and Other
Requirements. The Company may, to the extent deemed necessary or
advisable by the Committee and subject to Section 11(k), postpone the issuance
or delivery of Stock or payment of other benefits under any Award until
completion of such registration or qualification of such Stock or other
required action under any federal or state law, rule or regulation, listing or
other required action with respect to any stock exchange or automated quotation
system upon which the Stock or other securities of the Company are listed or
quoted, or compliance with any other obligation of the Company, as the
Committee may consider appropriate, and may require any Participant to make
such representations, furnish such information and comply with or be subject to
such other conditions as it may consider appropriate in connection with the
issuance or delivery of Stock or payment of other benefits in compliance with
applicable laws, rules, and regulations, listing requirements, or other
obligations. The foregoing notwithstanding, in connection with a Change in
Control, the Company shall take or cause to be taken no action, and shall
undertake or permit to arise no legal or contractual obligation, that results
or would result in any postponement of the issuance or delivery of Stock or
payment of benefits under any Award or the imposition of any other conditions
on such issuance, delivery or payment, to the extent that such postponement or
other condition would represent a greater burden on a Participant than existed
on the 90th day preceding the Change in Control. 

          (b)      Limits on Transferability;
Beneficiaries. No Award or other right or interest of a
Participant under the Plan shall be pledged, hypothecated or otherwise
encumbered or subject to any lien, obligation or liability of such Participant
to any party (other than the Company or a subsidiary or affiliate thereof), or
assigned or transferred by such Participant otherwise than by will or the laws
of descent and distribution or to a Beneficiary upon the death of a
Participant, and such Awards or rights that may be exercisable shall be
exercised during the lifetime of the Participant only by the Participant or his
or her guardian or legal representative, except that Awards and other rights
(other than ISOs and SARs in tandem therewith) may be transferred to one or
more transferees during the lifetime of the Participant, and may be exercised
by such transferees in accordance with the terms of such Award, but only if and
to the extent such transfers are permitted by the Committee, subject to any
terms and conditions which the Committee may impose thereon (which may include
limitations the Committee may deem appropriate in order that offers and sales
under the Plan will meet applicable requirements of registration forms under
the Securities Act of 1933 specified by the Securities and Exchange
Commission). A Beneficiary, transferee, or other person claiming any rights
under the Plan from or through any Participant shall be subject to all terms
and conditions of the Plan and any Award document applicable to such
Participant, except as otherwise determined by the Committee, and to any
additional terms and conditions deemed necessary or appropriate by the
Committee. 

          (c)      Adjustments. In the
event that any large, special and non-recurring dividend or other distribution
(whether in the form of cash or property other than Stock), recapitalization,
forward or reverse split, Stock dividend, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, liquidation,
dissolution or other similar corporate transaction or event affects the Stock
such that an adjustment is determined by the Committee to be appropriate and,
in the case of any outstanding Award, necessary in order to prevent dilution or
enlargement of the rights of the Participant,, then the Committee shall, in an
equitable manner

- 15 -

as determined by the Committee, adjust any or
all of (i) the number and kind of shares of Stock which may be delivered in
connection with Awards granted thereafter, (ii) the number and kind of shares
of Stock by which annual per-person Award limitations are measured under
Section 5, (iii) the number and kind of shares of Stock subject to or
deliverable in respect of outstanding Awards and (iv) the exercise price, grant
price or purchase price relating to any Award or, if deemed appropriate, the
Committee may make provision for a payment of cash or property to the holder of
an outstanding Option (subject to Section 11(l)). In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards (including Performance Awards and performance goals and any
hypothetical funding pool relating thereto) in recognition of unusual or
nonrecurring events (including, without limitation, events described in the
preceding sentence, as well as acquisitions and dispositions of businesses and
assets) affecting the Company, any subsidiary or affiliate or other business
unit, or the financial statements of the Company or any subsidiary or
affiliate, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business conditions or in
view of the Committee’s assessment of the business strategy of the Company, any
subsidiary or affiliate or business unit thereof, performance of comparable
organizations, economic and business conditions, personal performance of a
Participant, and any other circumstances deemed relevant; provided that no such
adjustment shall be authorized or made if and to the extent that the existence
of such authority (i) would cause Options, SARs, or Performance Awards granted
under the Plan to Participants designated by the Committee as Covered Employees
and intended to qualify as “performance-based compensation” under Code Section
162(m) and regulations thereunder to otherwise fail to qualify as
“performance-based compensation” under Code Section 162(m) and regulations
thereunder, or (ii) would cause the Committee to be deemed to have authority to
change the targets, within the meaning of Treasury Regulation
1.162-27(e)(4)(vi), under the performance goals relating to Options or SARs
granted to Covered Employees and intended to qualify as “performance-based
compensation” under Code Section 162(m) and regulations thereunder. 

         (d)      Tax Provisions. 

	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Withholding. The Company and any subsidiary or affiliate is
 authorized to withhold from any Award granted, any payment relating to an
 Award under the Plan, including from a distribution of Stock, or any payroll
 or other payment to a Participant, amounts of withholding and other taxes due
 or potentially payable in connection with any transaction involving an Award,
 and to take such other action as the Committee may deem advisable to enable
 the Company and Participants to satisfy obligations for the payment of
 withholding taxes and other tax obligations relating to any Award. This
 authority shall include authority to withhold or receive Stock or other
 property and to make cash payments in respect thereof in satisfaction of a
 Participant’s withholding obligations, either on a mandatory or elective
 basis in the discretion of the Committee, or in satisfaction of other tax
 obligations. Other provisions of the Plan notwithstanding, only the minimum
 amount of Stock deliverable in connection with an Award necessary to satisfy
 statutory withholding requirements will be withheld, unless withholding of
 any additional amount of Stock will not result in additional accounting
 expense to the Company. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 Required Consent to and Notification of Code Section 83(b) Election.
 No election under Section 83(b) of the Code (to include in gross income in
 the year of transfer the amounts specified in Code Section 83(b)) or under a
 similar provision of the laws of a jurisdiction outside the United States may
 be made unless expressly permitted by the terms of the Award document or by
 action of the Committee in writing prior to the making of such election. In
 any case in which a Participant is permitted to make such an election in
 connection with an Award, the Participant shall notify the Company of such
 election within ten days of filing notice of the election with the Internal
 Revenue Service or other

 

- 16 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 governmental authority, in addition to any filing and notification
 required pursuant to regulations issued under Code Section 83(b) or other
 applicable provision.

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 Requirement of Notification Upon Disqualifying Disposition Under Code
 Section 421(b). If any Participant shall make any disposition of shares of
 Stock delivered pursuant to the exercise of an ISO under the circumstances
 described in Code Section 421(b) (i.e., a disqualifying disposition), such
 Participant shall notify the Company of such disposition within ten days
 thereof. 

 

          (e)      Changes to the Plan.
The Board may amend, suspend or terminate the Plan or the Committee’s authority
to grant Awards under the Plan without the consent of stockholders or
Participants; provided, however, that any amendment to the Plan shall be
submitted to the Company’s stockholders for approval not later than the
earliest annual meeting for which the record date is at or after the date of
such Board action if such stockholder approval is required by any federal or
state law or regulation or the rules of the Nasdaq National Market or any other
stock exchange or automated quotation system on which the Stock may then be
listed or quoted, or if such amendment would materially increase the number of
shares reserved for issuance and delivery under the Plan, and the Board may
otherwise, in its discretion, determine to submit other amendments to the Plan
to stockholders for approval; and provided further, that, without the consent
of an affected Participant, no such Board action may materially and adversely
affect the rights of such Participant under any outstanding Award (for this
purpose, actions that alter the timing of federal income taxation of a
Participant will not be deemed material unless such action results in an income
tax penalty on the Participant). With regard to other terms of Awards, the
Committee shall have no authority to waive or modify any such Award term after
the Award has been granted to the extent the waived or modified term would be
mandatory under the Plan for any Award newly granted at the date of the waiver
or modification.

          (f)       Right of Setoff. The
Company or any subsidiary or affiliate may, to the extent permitted by
applicable law, deduct from and set off against any amounts the Company or a
subsidiary or affiliate may owe to the Participant from time to time, including
amounts payable in connection with any Award, owed as wages, fringe benefits,
or other compensation owed to the Participant, such amounts as may be owed by
the Participant to the Company, including but not limited to amounts owed under
Section 10(a), although the Participant shall remain liable for any part of the
Participant’s payment obligation not satisfied through such deduction and
setoff. By accepting any Award granted hereunder, the Participant agrees to any
deduction or setoff under this Section 11(f). 

          (g)      Unfunded Status of Awards; Creation
of Trusts. The Plan is intended to constitute an “unfunded” plan
for incentive and deferred compensation. With respect to any payments not yet
made to a Participant or obligation to deliver Stock pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided that the Committee may authorize the creation of trusts and deposit
therein cash, Stock, other Awards or other property, or make other arrangements
to meet the Company’s obligations under the Plan. Such trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant. 

          (h)      Nonexclusivity of the Plan.
Neither the adoption of the Plan by the Board nor its submission to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or a committee thereof to adopt such
other incentive arrangements, apart from the Plan, as it may deem desirable,
including incentive arrangements and awards which do not qualify under Code
Section 162(m), and such other arrangements may be either applicable generally
or only in specific cases. 

- 17 -

          (i)       Payments in the Event of
Forfeitures; Fractional Shares. Unless otherwise determined by
the Committee, in the event of a forfeiture of an Award with respect to which a
Participant paid cash consideration, the Participant shall be repaid the amount
of such cash consideration. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated. 

          (j)       Compliance with Code Section 162(m).
It is the intent of the Company that Options and SARs granted to
Covered Employees and other Awards designated as Awards to Covered Employees
subject to Section 7 shall constitute qualified “performance-based
compensation” within the meaning of Code Section 162(m) and regulations
thereunder, unless otherwise determined by the Committee at the time of
allocation of an Award. Accordingly, the terms of Sections 7(b), (c), and (d),
including the definitions of Covered Employee and other terms used therein,
shall be interpreted in a manner consistent with Code Section 162(m) and
regulations thereunder. The foregoing notwithstanding, because the Committee
cannot determine with certainty whether a given Participant will be a Covered
Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the
Committee as likely to be a Covered Employee with respect to a specified fiscal
year. If any provision of the Plan or any Award document relating to a
Performance Award that is designated as intended to comply with Code Section
162(m) does not comply or is inconsistent with the requirements of Code Section
162(m) or regulations thereunder, such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements, and no
provision shall be deemed to confer upon the Committee or any other person
discretion to increase the amount of compensation otherwise payable in
connection with any such Award upon attainment of the applicable performance
objectives. 

          (k)      Certain Limitations on Awards to
Ensure Compliance with Section 409A. For purposes
of this Plan, references to an Award term or event (including any authority or
right of the Company or a Participant) being “permitted” under Section 409A
mean, for a 409A Award, that the term or event will not cause the Participant
to be liable for payment of interest or a tax penalty under Section 409A and,
for a Non-409A Award, that the term or event will not cause the Award to be
treated as subject to Section 409A. Other provisions of the Plan
notwithstanding, the terms of any 409A Award and any Non-409A Award, including
any authority of the Company and rights of the Participant with respect to the
Award, shall be limited to those terms permitted under Section 409A, and any
terms not permitted under Section 409A shall be automatically modified and
limited to the extent necessary to conform with Section 409A. For this purpose,
other provisions of the Plan notwithstanding, the Company shall have no
authority to accelerate distributions relating to 409A Awards in excess of the
authority permitted under Section 409A, any distribution subject to Section
409A(a)(2)(A)(i) (separation from service) to a “key employee” as defined under
Section 409A(a)(2)(B)(i), shall not occur earlier than the earliest time
permitted under Section 409A(a)(2)(B)(i), and any authorization of payment of
cash to settle a Non-409A Award shall apply only to the extent permitted under
Section 409A for such Award. 

          (l)       Certain Limitations Relating to
Accounting Treatment of Awards. Other provisions of the Plan
notwithstanding, the Committee’s authority under the Plan (including under
Sections 8(c), 11(c) and 11(d)) is limited to the extent necessary to ensure
that any Option or other Award of a type that the Committee has intended to be
subject to fixed accounting with a measurement date at the date of grant or the
date performance conditions are satisfied under APB 25 shall not become subject
to “variable” accounting solely due to the existence of such authority, unless
the Committee specifically determines that the Award shall remain outstanding
despite such “variable” accounting. This provision shall cease to be effective
if and at such time as the Company elects to no longer account for equity compensation
under APB 25. 

          (m)      Governing Law. The
validity, construction, and effect of the Plan, any rules and regulations
relating to the Plan and any Award document shall be determined in accordance
with

- 18 -

the laws of the State of Delaware, without
giving effect to principles of conflicts of laws, and applicable provisions of
federal law. 

          (n)      Awards to Participants Outside the
United States. The Committee may modify the terms of any Award
under the Plan made to or held by a Participant who is then resident or
primarily employed outside of the United States in any manner deemed by the
Committee to be necessary or appropriate in order that such Award shall conform
to laws, regulations, and customs of the country in which the Participant is
then resident or primarily employed, or so that the value and other benefits of
the Award to the Participant, as affected by foreign tax laws and other
restrictions applicable as a result of the Participant’s residence or
employment abroad shall be comparable to the value of such an Award to a
Participant who is resident or primarily employed in the United States. An
Award may be modified under this Section 11(n) in a manner that is inconsistent
with the express terms of the Plan, so long as such modifications will not contravene
any applicable law or regulation or result in actual liability under Section
16(b) for the Participant whose Award is modified. 

          (o)      Limitation on Rights Conferred under
Plan. Neither the Plan nor any action taken hereunder shall be
construed as (i) giving any Eligible Person or Participant the right to
continue as an Eligible Person or Participant or in the employ or service of
the Company or a subsidiary or affiliate, (ii) interfering in any way with the
right of the Company or a subsidiary or affiliate to terminate any Eligible
Person’s or Participant’s employment or service at any time (subject to the
terms and provisions of any separate written agreements), (iii) giving an
Eligible Person or Participant any claim to be granted any Award under the Plan
or to be treated uniformly with other Participants and employees, or (iv)
conferring on a Participant any of the rights of a stockholder of the Company
unless and until the Participant is duly issued or transferred shares of Stock
in accordance with the terms of an Award or an Option is duly exercised. Except
as expressly provided in the Plan and an Award document, neither the Plan nor
any Award document shall confer on any person other than the Company and the
Participant any rights or remedies thereunder. 

          (p)      Severability; Entire Agreement.
If any of the provisions of this Plan or any Award document is finally held to
be invalid, illegal or unenforceable (whether in whole or in part), such
provision shall be deemed modified to the extent, but only to the extent, of
such invalidity, illegality or unenforceability, and the remaining provisions
shall not be affected thereby; provided, that, if any of such provisions is
finally held to be invalid, illegal, or unenforceable because it exceeds the maximum
scope determined to be acceptable to permit such provision to be enforceable,
such provision shall be deemed to be modified to the minimum extent necessary
to modify such scope in order to make such provision enforceable hereunder. The
Plan and any Award documents contain the entire agreement of the parties with
respect to the subject matter thereof and supersede all prior agreements,
promises, covenants, arrangements, communications, representations and
warranties between them, whether written or oral with respect to the subject
matter thereof. 

          (q)      Plan Effective Date and Termination.
The Plan shall become effective if, and at such time as, the Board of Directors
of the Company have approved it by the affirmative vote. Upon such approval of
the Plan by the Directors of the Company, no further awards shall be granted
under any Preexisting Plans, but any outstanding awards under the Preexisting
Plans shall continue in accordance with their terms (this includes authority to
modify any such award to the full extent permitted under the Preexisting Plan).
Unless earlier terminated by action of the Board of Directors, the authority of
the Committee to make grants under the Plan shall terminate on the date that is
ten years and the Plan will remain in effect until such time as no Stock
remains available for delivery under the Plan and the Company has no further
rights or obligations under the Plan with respect to outstanding Awards under
the Plan. 

- 19 -

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