Document:

exhibit101.htm

    Exhibit
10.1

     

     

    CENTENE
CORPORATION

    

    Amended
and Restated

    2003
Stock Incentive Plan

    (as of April 22,
2008)

    
       

    

    

    1.      Purpose

     

    The
purpose of this Amended and Restated 2003 Stock Incentive Plan (the “Plan”) of
Centene Corporation, a Delaware corporation (the “Company”), is to advance the
interests of the Company’s stockholders by enhancing the Company’s ability to
attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company’s stockholders.
Except where the context otherwise requires, the term “Company” shall include
any of the Company’s present or future parent or subsidiary corporations as
defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”) and any other
business venture (including joint venture or limited liability company) in which
the Company has a controlling interest, as determined by the Board of Directors
of the Company (the “Board”).

     

    2.      Eligibility

     

    All of
the Company’s employees, officers, directors, consultants and advisors are
eligible to be granted options, restricted stock, restricted stock units and
stock appreciation rights (each, an “Award”) under the Plan. Each person who has
been granted an Award under the Plan shall be deemed a
“Participant.”

     

    3.      Administration
and Delegation

     

    
      	
              (a)

            	
              Administration by Board of
      Directors. The Plan will be administered by the Board. The Board
      shall have authority to grant Awards and to adopt, amend and repeal such
      administrative rules, guidelines and practices relating to the Plan as it
      shall deem advisable, provided that awards to
      a director may only be recommended by a committee comprised solely of
      independent directors and approved only by all independent directors of
      the board. The Board may correct any defect, supply any omission or
      reconcile any inconsistency in the Plan or any Award in the manner and to
      the extent it shall deem expedient to carry the Plan into effect and it
      shall be the sole and final judge of such expediency. All decisions by the
      Board shall be made in the Board’s sole discretion and shall be final and
      binding on all persons having or claiming any interest in the Plan or in
      any Award. No director or person acting pursuant to the authority
      delegated by the Board shall be liable for any action or determination
      relating to or under the Plan made in good
  faith.

            

    

     

    
      	
              (b)

            	
              Appointment of
      Committees. To the extent permitted by applicable law, the Board
      may delegate any or all of its powers under the Plan to one or more
      committees or subcommittees of the Board (a “Committee”). All references
      in the Plan to the “Board” shall mean the Board or a Committee of the
      Board or the executive officers referred to in Section 3(c) to the extent
      that the Board’s powers or authority under the Plan have been delegated to
      such Committee or executive
officers.

            

    

     

    
      	
              (c)

            	
              Delegation to Executive
      Officers. To the extent permitted by applicable law, the Board may
      delegate to one or more executive officers of the Company the power to
      grant Awards to employees or officers of the Company or any of its present
      or future subsidiary corporations and to exercise such other powers under
      the Plan as the Board may determine, provided that the Board
      shall fix the terms of the Awards to be granted by such executive officers
      (including the exercise price of such Awards, which may include a formula
      by which the exercise price will be determined) and the maximum number of
      shares subject to Awards that the executive officers may grant; provided further,
      however, that no executive officer shall be authorized to grant
      Awards to any “executive officer” of the Company, as
  

            

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                defined by Rule 3b-7 under the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”), or to
      any “officer” of the Company (as defined by Rule 16a-1 under the Exchange
      Act).

              

      

    

     

    4.      Stock
Available for Awards

     

    
      	
              (a)

            	
              Number of Shares.
      Subject to adjustment under Section 7, Awards may be made under the Plan
      for up to 6,900,000 shares of common stock, $.001 par value per share, of
      the Company (“Common Stock”). For purposes of counting the number of
      shares available for the grant of Awards under the
  Plan,

            

    

     

    
      	
               
      

            	
              (1)

            	
              shares
      of Common Stock covered by independent SARs (as hereinafter defined) shall
      be counted against the number of shares available for the grant of Awards
      under the Plan; provided that independent SARs that may be settled in cash
      only shall not be so counted;

            

    

     

    
      	
               
      

            	
              (2)

            	
              if
      any Award (A) expires or is terminated, surrendered or canceled without
      having been fully exercised or is forfeited in whole or in part (including
      as the result of shares of Common Stock subject to such Award being
      repurchased by the Company at the original issuance price pursuant to a
      contractual repurchase right) or (B) results in any Common Stock not being
      issued (including as a result of an independent SAR that was settleable
      either in cash or in stock actually being settled in cash), the unused
      Common Stock covered by such Award shall again be available for the grant
      of Awards under the Plan; provided, however, in the case of Incentive
      Stock Options (as hereinafter defined), the foregoing shall be subject to
      any limitations under the Code; and

            

    

     

    
      	
               
      

            	
              (3)

            	
              shares
      of Common Stock tendered to the Company by a Participant to (A) purchase
      shares of Common Stock upon the exercise of an Award or (B) satisfy tax
      withholding obligations (including shares retained from the Award creating
      the tax obligation) shall not be added back to the number of shares
      available for the future grant of Awards under the Plan. Shares issued
      under the Plan may consist in whole or in part of authorized but unissued
      shares or treasury shares.

            

    

     

    
      	
              (b)

            	
              Sub-limits. Subject to
      adjustment under Section 8, the following sub-limits on the number of
      shares subject to Awards shall
apply:

            

    

     

    
      	
               
      

            	
              (1)

            	
              Per-Participant Limit.
      The maximum number of shares of Common Stock with respect to which Awards
      may be granted to any Participant under the Plan shall be 1,500,000 per
      calendar year. For purposes of the foregoing limit, the combination of an
      Option in tandem with a SAR shall be treated as a single Award. The
      per-Participant limit described in this Section 4(b)(1) shall be construed
      and applied consistently with Section 162(m) of the Code or any successor
      provision thereto (“Section
162(m)”).

            

    

     

    5.      Stock
Options

     

    
      	
              (a)

            	
              General. The Board may
      grant options to purchase Common Stock (each, an “Option”) and determine
      the number of shares of Common Stock to be covered by each Option, the
      exercise price of each Option and the conditions and limitations
      applicable to the exercise of each Option, including conditions relating
      to applicable federal or state securities laws, as it considers necessary
      or advisable. An Option that is not intended to be an Incentive Stock
      Option (as hereinafter defined) shall be designated a “Nonstatutory Stock
      Option.”

            

    

     

    
      	
              (b)

            	
              Incentive Stock
      Options. An Option that the Board intends to be an “incentive stock
      option” as defined in Section 422 of the Code (an “Incentive Stock
      Option”) shall only be granted to employees of Centene Corporation, any of
      Centene Corporation’s present or future parent or subsidiary corporations
      as defined in Sections 424(e) or (f) of the Code, and any other entities
      the employees of which are eligible to receive Incentive Stock Options
      under the Code, and shall be subject to and shall be construed
      consistently with the requirements of Section 422 of the Code. The Company
      shall have no liability to a Participant, or any other party, if an Option
      (or any part thereof) that is intended to be an Incentive Stock Option is
      not an Incentive Stock Option.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)

            	
              Exercise Price. The
      Board shall establish the exercise price at the time each Option is
      granted and specify it in the applicable option agreement, provided, however, that
      the exercise price shall be not less than 100% of the fair market value of
      the Common Stock, as determined by the Board, at the time the Option is
      granted.

            

    

     

    
      	
              (d)

            	
              Duration of Options.
      Each Option shall be exercisable at such times and subject to such terms
      and conditions as the Board may specify in the applicable option
      agreement, provided,
      however, that no Option will be granted for a term in excess of 10
      years.

            

    

     

    
      	
              (e)

            	
              Exercise of Option.
      Options may be exercised by delivery to the Company of a written notice of
      exercise signed by the proper person or by any other form of notice
      (including electronic notice) approved by the Board together with payment
      in full as specified in Section 5(f) for the number of shares for which
      the Option is exercised.

            

    

     

    
      	
              (f)

            	
              Payment Upon Exercise.
      Common Stock purchased upon the exercise of an Option granted under the
      Plan shall be paid for as follows:

            

    

     

    
      	
               
      

            	
              (1)

            	
              in
      cash or by check, payable to the order of the
  Company;

            

    

     

    
      	
               
      

            	
              (2)

            	
              except
      as the Board may, in its sole discretion, otherwise provide in an option
      agreement, by (i) delivery of an irrevocable and unconditional undertaking
      by a creditworthy broker to deliver promptly to the Company sufficient
      funds to pay the exercise price and any required tax withholding or (ii)
      delivery by the Participant to the Company of a copy of irrevocable and
      unconditional instructions to a creditworthy broker to deliver promptly to
      the Company cash or a check sufficient to pay the exercise price and any
      required tax withholding;

            

    

     

    
      	
               
      

            	
              (3)

            	
              when
      the Common Stock is registered under the Exchange Act, by delivery of
      shares of Common Stock owned by the Participant valued at their fair
      market value as determined by (or in a manner approved by) the Board in
      good faith (“Fair Market Value”), provided (i) such method of payment is
      then permitted under applicable law and (ii) such Common Stock, if
      acquired directly from the Company was owned by the Participant at least
      six months prior to such delivery;

            

    

     

    
      	
               
      

            	
              (4)

            	
              such
      other lawful consideration as the Board may determine in its sole
      discretion, provided that (i) at least an amount equal to the par value of
      the Common Stock being purchased shall be paid in cash and (ii) no such
      consideration shall consist in whole or in part of a promissory note or
      other evidence of indebtedness; or

            

    

     

    
      	
               
      

            	
              (5)

            	
              by
      any combination of the above permitted forms of
  payment.

            

    

     

    
      	
              (g)

            	
              Substitute Options. In
      connection with a merger or consolidation of an entity with the Company or
      the acquisition by the Company of property or stock of an entity, the
      Board may grant Options in substitution for any options or other stock or
      stock-based Awards granted by such entity or an affiliate thereof.
      Substitute Options may be granted on such terms as the Board deems
      appropriate in the circumstances, notwithstanding any limitations on
      Options contained in the other sections of this Section 5 or in Section
      2.

            

    

     

    6.      Restricted
Stock; Restricted Stock Units

     

    
      	
              (a)

            	
              Grants. The Board may
      grant Awards entitling recipients to acquire shares of Common Stock
      (“Restricted Stock”), subject to the right of the Company to repurchase
      all or part of such shares at their issue price or other stated or formula
      price (or to require forfeiture of such shares if issued at no cost) from
      the recipient in the event that conditions specified by the Board in the
      applicable Award are not satisfied prior to the end of the applicable
      restriction period or periods established by the Board for such Award.
      Instead of granting Awards for Restricted Stock, the Board may grant
      Awards entitling the recipient to receive shares of Common Stock to be
      delivered in the future (“Restricted Stock Units”) subject to such terms
      and conditions on the delivery of the shares of Common Stock as the Board
      shall determine (each Award for Restricted Stock or Restricted Stock
      Units, a “Restricted Stock Award”). The Board may also permit an exchange
      of unvested shares of Common Stock that

            

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 

              	
                have already been delivered to
      a Participant for an instrument evidencing the right to future delivery of
      Common Stock at such time or times, and on such conditions, as the Board
      shall specify.

              

      

    

     

     

    
      	
              (b)

            	
              Terms and
      Conditions.

            

    

     

    
      	
               
      

            	
              (1)

            	
              The
      Board shall determine the terms and conditions of any such Restricted
      Stock Award, including the conditions for repurchase (or forfeiture) and
      the issue price, if any.

            

    

     

    
      	
               
      

            	
              (2)

            	
              If
      the Board determines to grant any Restricted Stock Awards designed to
      satisfy the requirements of Section 162(m)(4)(C) of the Code with respect
      to remuneration payable to a covered employee as defined in Section
      162(m)(3) of the Code (“Covered Employee”) solely on account of one or
      more performance goals (“Performance Goals”) to be achieved during a
      performance period (“Performance Period”), the following requirements
      shall apply:

            

    

     

    
      	
               
      

            	
              (A)

            	
              A
      Committee consisting of two or more outside
  directors:

            

    

     

    
      	
               
      

            	
              (i)

            	
              who
      are not current employees of the Company or any subsidiary or affiliate of
      the Company,

            

    

     

    
      	
               
      

            	
              (ii)

            	
              who
      are not former employees of the Company or any subsidiary or affiliate of
      the Company who receive compensation for prior services (other than
      benefits under a tax-qualified retirement plan) from the Company or any
      subsidiary or affiliate of the Company during the taxable
      year,

            

    

     

    
      	
               
      

            	
              (iii)

            	
              who
      have not been officers of the Company or a subsidiary or affiliate of the
      Company, and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              who
      do not receive direct or indirect compensation from the Company or any
      subsidiary or affiliate of the Company in any capacity other than as a
      director,

            

    

     

    
      	
               
      

            	
              shall
      determine and administer the grants provided for under this Section
      6(b)(2).

            

    

     

    
      	
               
      

            	
              (B)

            	
              (i)

            	
              The
      Performance Goals upon which the payment or vesting of an Award to a
      Covered Employee pursuant to this Section 6(b)(2) shall be limited to the
      following performance measures (“Performance
  Measures”):

            

    

     

    
      	
               
      

            	
              (a)

            	
              net
      earnings or net income (before or after
taxes),

            

    

     

    
      	
               
      

            	
              (b)

            	
              earnings
      per share,

            

    

     

    
      	
               
      

            	
              (c)

            	
              net
      sales or revenue growth,

            

    

     

    
      	
               
      

            	
              (d)

            	
              net
      operating profit,

            

    

     

    
      	
               
      

            	
              (e)

            	
              return
      measures (including, but not limited to, return on assets, capital,
      invested capital, equity, sales, or
revenue),

            

    

     

    
      	
               
      

            	
              (f)

            	
              cash
      flow (including, but not limited to, operating cash flow, free cash flow,
      cash flow return on equity, and cash flow return on
      investment),

            

    

     

    
      	
               
      

            	
              (g)

            	
              earnings
      before or after taxes, interest, depreciation, and/or
      amortization,

            

    

     

    
      	
               
      

            	
              (h)

            	
              gross
      or operating margins,

            

    

     

    
      	
               
      

            	
              (i)

            	
              productivity
      ratios,

            

    

     

    
      	
               
      

            	
              (j)

            	
              share
      price (including, but not limited to, growth measures and total
      shareholder return),

            

    

     

    
      	
               
      

            	
              (k)

            	
              expense
      targets,

            

    

     

    
      	
               
      

            	
              (l)

            	
              margins,

            

    

     

    
      	
               
      

            	
              (m)

            	
              operating
      efficiency,

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (n)

            	
              market
      share,

            

    

     

    
      	
               
      

            	
              (o)

            	
              customer
      satisfaction,

            

    

     

    
      	
               
      

            	
              (p)

            	
              working
      capital targets, and

            

    

     

    
      	
               
      

            	
              (q)

            	
              economic
      value added or EVA® (net operating profit after tax minus the sum of
      capital multiplied by the cost of
capital).

            

    

     

    
      	
               
      

            	
              (ii)

            	
              As
      the Committee may deem appropriate:

            

    

     

    
      	
               
      

            	
              (a)

            	
              any
      of the foregoing Performance Measure(s) may be used to measure the
      performance of the Company, a subsidiary, and/or affiliate of the Company
      as a whole or any business unit of the Company, subsidiary, and/or
      affiliate or any combination thereof during the Performance
      Period;

            

    

     

    
      	
               
      

            	
              (b)

            	
              any
      of the foregoing Performance Measures may be used to compare the
      performance of the Company, a subsidiary and/or affiliate of the Company
      as a whole or any business unit of the Company, subsidiary and/or
      affiliate to the performance of a group of comparator companies, or
      published or special index that the Committee, in its sole discretion,
      deems appropriate;

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Committee may select Performance Measure (j) above as compared to various
      stock market indices; and

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      Committee shall have authority to provide for accelerated vesting of any
      Award based on the achievement of
      Performance Goals pursuant to the foregoing Performance
      Measures.

            	
            

    

     

    
      	
               
      

            	
              (iii)

            	
              The
      Committee may provide in any such Award that any evaluation of performance
      may include or exclude any of the following events that occurs during a
      Performance Period:

            

    

     

    
      	
               
      

            	
              (a)

            	
              asset
      write-downs,

            

    

     

    
      	
               
      

            	
              (b)

            	
              litigation
      or claim judgments or settlements,

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      effect of changes in tax laws, accounting principles, or other laws or
      provisions affecting reported
results,

            

    

     

    
      	
               
      

            	
              (d)

            	
              any
      reorganization and restructuring
programs,

            

    

     

    
      	
               
      

            	
              (e)

            	
              extraordinary
      nonrecurring items as described in Accounting Principles Board Opinion No.
      30 and/or in management’s discussion and analysis of financial condition
      and results of operations appearing in the Company’s annual report to
      shareholders for the applicable
year,

            

    

     

    
      	
               
      

            	
              (f)

            	
              acquisitions
      or divestitures, and

            

    

     

    
      	
               
      

            	
              (g)

            	
              foreign
      exchange gains and losses.

            

    

     

    
      	
            	
              Such
      inclusions or exclusions shall be prescribed in a form that meets the
      requirements of Code Section 162(m) for deductibility.

            	
               

            

       

    

     

    
      	
               
      

            	
              (C)

            	
              The
      Performance Period for any Award pursuant to this Section 6(b)(2) shall
      not be less than one taxable year of the
  Company.

            

    

     

    
      	
               
      

            	
              (D)

            	
              The
      maximum number of shares the Committee may grant to a Covered Employee
      during a taxable year of the Company pursuant to this Section 6(b)(2)
      shall be 1,000,000 shares.

            

    

     

    
      	
               
      

            	
              (E)

            	
              The
      Performance Goals for any Award pursuant to this Section 6(b)(2) shall be
      memorialized in writing and furnished to affected Covered Employees not
      later than 90 days after the beginning of the Performance Period to which
      they apply.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (F)

            	
              The
      Committee shall certify in writing the accomplishment of the Performance
      Goals related to an Award before the Award can become
      unconditional.

            

    

     

    
      	
               
      

            	
              (G)

            	
              Awards
      that are intended to qualify as Performance-Based Compensation may not be
      adjusted upward. The Committee shall retain the discretion to adjust such
      Awards downward, either on a formula or discretionary basis or any
      combination, as the Committee
determines.

            

    

     

    
      	
               
      

            	
              (H)

            	
              In
      the event that applicable tax and/or securities laws change to permit
      Committee discretion to alter the governing Performance Measures without
      obtaining shareholder approval of such changes, the Committee shall have
      sole discretion to make such changes without obtaining shareholder
      approval, provided the exercise of such discretion does not violate Code
      Section 409A. In addition, in the event that the Committee determines that
      it is advisable to grant Awards that shall not qualify as
      Performance-Based Compensation, the Committee may make such grants without
      satisfying the requirements of Code Section 162(m) and base vesting on
      Performance Measures other than those set forth in this Section
      6(b)(2).

            

    

     

    
      	
               
      

            	
              (I)

            	
              This
      Section 6(b)(2) is designed to comply with the requirements of Section
      162(m)(4)(C) of the Code and regulations issued thereunder and all
      provisions of this Section 6(b)(2) shall be applied consistent
      therewith.

            

    

     

    
      	
              (c)

            	
              Stock Certificates. Any
      stock certificates issued in respect of a Restricted Stock Award, if
      applicable, shall be registered in the name of the Participant and, unless
      otherwise determined by the Board, deposited by the Participant, together
      with a stock power endorsed in blank, with the Company (or its designee).
      At the expiration of the applicable restriction periods, the Company (or
      such designee) shall deliver the certificates no longer subject to such
      restrictions to the Participant or if the Participant has died, to the
      beneficiary designated, in a manner determined by the Board, by a
      Participant to receive amounts due or exercise rights of the Participant
      in the event of the Participant’s death (the “Designated Beneficiary”). In
      the absence of an effective designation by a Participant, Designated
      Beneficiary shall mean the Participant’s
estate.

            

    

     

    7.      Stock
Appreciation Rights

     

    
      	
              (a)

            	
              General. A Stock
      Appreciation Right (“SAR”) is an Award entitling the holder, upon
      exercise, to receive an amount in Common Stock determined by reference to
      appreciation, from and after the date of grant, in the fair market value
      of a share of Common Stock. The date as of which such appreciation or
      other measure is determined shall be the exercise
  date.

            

    

     

    
      	
              (b)

            	
              Grants. SARs may be
      granted in tandem with, or independently of, Options granted under the
      Plan. The Board shall establish the exercise price at the time each SAR is
      granted and specify it in the applicable SAR agreement, provided, however,
      that the exercise price shall be not less than 100% of the fair market
      value of the Common Stock, as determined by the Board, at the time the SAR
      is granted.

            

    

     

    
      	
               
      

            	
              (1)

            	
              Tandem Awards. When
      SARs are expressly granted in tandem with Options, (i) the SAR will be
      exercisable only at such time or times, and to the extent, that the
      related Option is exercisable (except to the extent designated by the
      Board in connection with a Reorganization Event) and will be exercisable
      in accordance with the procedure required for exercise of the related
      Option; (ii) the SAR will terminate and no longer be exercisable upon the
      termination or exercise of the related Option, except to the extent
      designated by the Board in connection with a Reorganization Event and
      except that a SAR granted with respect to less than the full number of
      shares covered by an Option will not be reduced until the number of shares
      as to which the related Option has been exercised or has terminated
      exceeds the number of shares not covered by the SAR; (iii) the Option will
      terminate and no longer be exercisable upon the exercise of the related
      SAR; and (iv) the SAR will be transferable only with the related
      Option.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

            	
              Independent SARs. A SAR
      not expressly granted in tandem with an Option will become exercisable at
      such time or times, and on such conditions, as the Board may specify in
      the SAR Award.

            

    

     

    
      	
              (c)

            	
              Exercise. SARs may be
      exercised by delivery to the Company of a written notice of exercise
      signed by the proper person or by any other form of notice (including
      electronic notice) approved by the Board, together with any other
      documents required by the Board.

            

    

     

    8.      Adjustments
for Changes in Common Stock and Certain Other Events

     

    
      	
              (a)

            	
              Changes in
      Capitalization. In the event of any stock split, reverse stock
      split, stock dividend, recapitalization, combination of shares,
      reclassification of shares, spin-off or other similar change in
      capitalization or event, or any distribution to holders of Common Stock
      other than a normal cash dividend, (i) the number and class of securities
      available under the Plan, (ii) the per-Participant limit set forth in
      Section 4(b), (iii) the number and class of securities and exercise price
      per share subject to each outstanding Option, and (iv) the repurchase
      price per share subject to each outstanding Restricted Stock Award shall
      be appropriately adjusted by the Company (or substituted Awards may be
      made, if applicable) to the extent the Board shall determine, in good
      faith, that such an adjustment (or substitution) is necessary and
      appropriate. If this Section 8(a) applies and Section 8(c) also applies to
      any event, Section 8(c) shall be applicable to such event, and this
      Section 8(a) shall not be
applicable.

            

    

     

    
      	
              (b)

            	
              Liquidation or
      Dissolution. In the event of a proposed liquidation or dissolution
      of the Company, the Board shall upon written notice to the Participants
      provide that all then unexercised Options will (i) become exercisable in
      full as of a specified time at least 10 business days prior to the
      effective date of such liquidation or dissolution and (ii) terminate
      effective upon such liquidation or dissolution, except to the extent
      exercised before such effective date. The Board may specify the effect of
      a liquidation or dissolution on any Restricted Stock Award granted under
      the Plan at the time of the grant.

            

    

     

    
      	
              (c)

            	
              Reorganization
      Events.

            

    

     

    
      	
               
      

            	
              (1)

            	
              Definition. A
      “Reorganization Event” shall mean: (a) any merger or consolidation of the
      Company with or into another entity as a result of which all of the Common
      Stock of the Company is converted into or exchanged for the right to
      receive cash, securities or other property or (b) any exchange of all of
      the Common Stock of the Company for cash, securities or other property
      pursuant to a share exchange
transaction.

            

    

     

    
      	
               
      

            	
              (2)

            	
              Consequences of a
      Reorganization Event on Options. Upon the occurrence of a
      Reorganization Event, or the execution by the Company of any agreement
      with respect to a Reorganization Event, the Board shall provide that all
      outstanding Options shall be assumed, or equivalent options shall be
      substituted, by the acquiring or succeeding corporation (or an affiliate
      thereof). For purposes hereof, an Option shall be considered to be assumed
      if, following consummation of the Reorganization Event, the Option confers
      the right to purchase, for each share of Common Stock subject to the
      Option immediately prior to the consummation of the Reorganization Event,
      the consideration (whether cash, securities or other property) received as
      a result of the Reorganization Event by holders of Common Stock for each
      share of Common Stock held immediately prior to the consummation of the
      Reorganization Event (and if holders were offered a choice of
      consideration, the type of consideration chosen by the holders of a
      majority of the outstanding shares of Common Stock); provided, however, that if the
      consideration received as a result of the Reorganization Event is not
      solely common stock of the acquiring or succeeding corporation (or an
      affiliate thereof), the Company may, with the consent of the acquiring or
      succeeding corporation, provide for the consideration to be received upon
      the exercise of Options to consist solely of common stock of the acquiring
      or succeeding corporation (or an affiliate thereof) equivalent in fair
      market value to the per share consideration received by holders of
      outstanding shares of Common Stock as a result of the Reorganization
      Event.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
the foregoing, if the acquiring or succeeding corporation (or an affiliate
thereof) does not agree to assume, or substitute for, such Options, then the
Board shall, upon written notice to the Participants, provide that all then
unexercised Options will become exercisable in full as of a specified time prior
to the Reorganization Event and will terminate immediately prior to the
consummation of such Reorganization Event, except to the extent exercised by the
Participants before the consummation of such Reorganization Event; provided, however, that in
the event of a Reorganization Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share of
Common Stock surrendered pursuant to such Reorganization Event (the “Acquisition
Price”), then the Board may instead provide that all outstanding Options shall
terminate upon consummation of such Reorganization Event and that each
Participant shall receive, in exchange therefore, a cash payment equal to the
amount (if any) by which (A) the Acquisition Price multiplied by the number of
shares of Common Stock subject to such outstanding Options (whether or not then
exercisable), exceeds (B) the aggregate exercise price of such Options. To the
extent all or any portion of an Option becomes exercisable solely as a result of
the first sentence of this paragraph, upon exercise of such Option the
Participant shall receive shares subject to a right of repurchase by the Company
or its successor at the Option exercise price. Such repurchase right (1) shall
lapse at the same rate as the Option would have become exercisable under its
terms and (2) shall not apply to any shares subject to the Option that were
exercisable under its terms without regard to the first sentence of this
paragraph.

     

    
      	
               
      

            	
              (3)

            	
              Consequences
      of a Reorganization Event on Restricted Stock Awards. Upon the occurrence
      of a Reorganization Event, the repurchase and other rights of the Company
      under each outstanding Restricted Stock Award shall inure to the benefit
      of the Company’s successor and shall apply to the cash, securities or
      other property that the Common Stock was converted into or exchanged for
      pursuant to such Reorganization Event in the same manner and to the same
      extent as they applied to the Common Stock subject to such Restricted
      Stock Award.

            

    

     

    9.      General
Provisions Applicable to Awards

     

    
      	
              (a)

            	
              Transferability of
      Awards. Awards shall not be sold, assigned, transferred, pledged or
      otherwise encumbered by the person to whom they are granted, either
      voluntarily or by operation of law, except by will or the laws of descent
      and distribution or, other than in the case of an Incentive Stock Option,
      pursuant to a qualified domestic relations order, and, during the life of
      the Participant, shall be exercisable only by the Participant; provided that the Board
      may permit or provide in an Award for the gratuitous transfer of the Award
      by the Participant to or for the benefit of any immediate family member,
      family trust or family partnership established solely for the benefit of
      the Participant and/or an immediate family member thereof if, with respect
      to such proposed transferee, the Company would be eligible to use a
      registration statement on Form S-8 for the registration of the sale of the
      Common Stock subject to such Award under the Securities Act of 1933, as
      amended and provided
      further that the Company shall not be required to recognize any
      such transfer until such time as the Participant and such permitted
      transferee shall, as a condition to such transfer, deliver to the Company
      a written instrument in form and substance satisfactory to the Company
      confirming that such transferee shall be bound by all of the terms and
      conditions of the Award. References to a Participant, to the extent
      relevant in the context, shall include references to authorized
      transferees.

            

    

     

    
      	
              (b)

            	
              Documentation. Each
      Award shall be evidenced in such form (written, electronic or otherwise)
      as the Board shall determine. Each Award may contain terms and conditions
      in addition to those set forth in the
Plan.

            

    

     

    
      	
              (c)

            	
              Board Discretion.
      Except as otherwise provided by the Plan, each Award may be made alone or
      in addition or in relation to any other Award. The terms of each Award
      need not be identical, and the Board need not treat Participants
      uniformly.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)

            	
              Termination of Status.
      The Board shall determine the effect on an Award of the disability, death,
      retirement, authorized leave of absence or other change in the employment
      or other status of a Participant and the extent to which, and the period
      during which, the Participant, the Participant’s legal representative,
      conservator, guardian or Designated Beneficiary may exercise rights under
      the Award.

            

    

     

    
      	
              (e)

            	
              Withholding. Each
      Participant shall pay to the Company, or make provision satisfactory to
      the Board for payment of, any taxes required by law to be withheld in
      connection with Awards to such Participant no later than the date of the
      event creating the tax liability. Except as the Board may otherwise
      provide in an Award, when the Common Stock is registered under the
      Exchange Act, Participants may satisfy such tax obligations in whole or in
      part by delivery of shares of Common Stock, including shares retained from
      the Award creating the tax obligation, valued at their Fair Market Value;
      provided,
      however, that the total tax withholding where stock is being used
      to satisfy such tax obligations cannot exceed the Company’s minimum
      statutory withholding obligations (based on minimum statutory withholding
      rates for federal and state tax purposes, including payroll taxes, that
      are applicable to such supplemental taxable income). The Company may, to
      the extent permitted by law, deduct any such tax obligations from any
      payment of any kind otherwise due to a
  Participant.

            

    

     

    
      	
              (f)

            	
              Amendment of Award. The
      Board may amend, modify or terminate any outstanding Award, including but
      not limited to, substituting therefore another Award of the same or a
      different type, changing the date of exercise or realization, and
      converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the
      Participant’s consent to such action shall be required unless the Board
      determines that the action, taking into account any related action, would
      not materially and adversely affect the Participant, and would not cause
      adverse tax consequences to the Participant under Section 409A of the
      Code.

            

    

     

    
      	
              (g)

            	
              Conditions on Delivery of
      Stock. The Company will not be obligated to deliver any shares of
      Common Stock pursuant to the Plan or to remove restrictions from shares
      previously delivered under the Plan until (i) all conditions of the Award
      have been met or removed to the satisfaction of the Company, (ii) in the
      opinion of the Company’s counsel, all other legal matters in connection
      with the issuance and delivery of such shares have been satisfied,
      including any applicable securities laws and any applicable stock exchange
      or stock market rules and regulations, and (iii) the Participant has
      executed and delivered to the Company such representations or agreements
      as the Company may consider appropriate to satisfy the requirements of any
      applicable laws, rules or
regulations.

            

    

     

    
      	
              (h)

            	
              Vesting of Awards. No
      Award granted under the Plan after July 19, 2005 to any employee of the
      Company may vest or become exercisable in increments greater than
      one-third of the total Award in any period of twelve consecutive months
      following the date of grant.

            

    

     

    
      	
              (i)

            	
              

                Repricing of Awards.
      Unless such action is approved by the
      Company’s stockholders and does not cause an Award to become subject to
      Section 409A of the Code: (1) no outstanding Award granted under the Plan
      may be amended to provide for an exercise price per share that is less
      than the then-existing exercise price per share of such outstanding Award
      (other than adjustments pursuant to Section 8), (2) the Board may not
      cancel any outstanding Award (whether or not granted under the Plan) and
      grant in substitution therefore new Awards under the Plan covering the
      same or a different number of shares of Common Stock and having an
      exercise price per share less than the then-existing exercise price per
      share of the cancelled Award, and (3) the Board may not repurchase any
      outstanding Award granted under the Plan at a price greater than the
      current fair market value of the existing
    award.

              

            

    

     

    10.           Miscellaneous

     

    
      	
              (a)

            	
              No Right To Employment or
      Other Status. No person shall have any claim or right to be granted
      an Award, and the grant of an Award shall not be construed as giving a
      Participant the right to continued employment or any other relationship
      with the Company. The Company expressly reserves the right
  

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	
                   

                	
                  at any time to dismiss or
      otherwise terminate its relationship with a Participant free from any
      liability or claim under the Plan, except as expressly provided in the
      applicable
Award.

                

        

      

    

     

    
      	
              (b)

            	
              No Rights As
      Stockholder. Subject to the provisions of the applicable Award, no
      Participant or Designated Beneficiary shall have any rights as a
      stockholder with respect to any shares of Common Stock to be distributed
      with respect to an Award until becoming the record holder of such shares.
      Notwithstanding the foregoing, in the event the Company effects a split of
      the Common Stock by means of a stock dividend and the exercise price of
      and the number of shares subject to such Option are adjusted as of the
      date of the distribution of the dividend (rather than as of the record
      date for such dividend), then an optionee who exercises an Option between
      the record date and the distribution date for such stock dividend shall be
      entitled to receive, on the distribution date, the stock dividend with
      respect to the shares of Common Stock acquired upon such Option exercise,
      notwithstanding the fact that such shares were not outstanding as of the
      close of business on the record date for such stock
    dividend.

            

    

     

    
      	
              (c)

            	
              Effective Date and Term of
      Plan. The Plan shall become effective on the date on which it is
      adopted by the Board, but no Award granted to a Participant that is
      intended to comply with Section 162(m) shall become exercisable, vested or
      realizable, as applicable to such Award, unless and until the Plan has
      been approved by the Company’s stockholders to the extent stockholder
      approval is required by Section 162(m) in the manner required under
      Section 162(m), including the vote required under Section 162(m). No
      Awards shall be granted under the Plan after the completion of ten years
      from the earlier of (i) the date on which the Plan was adopted by the
      Board or (ii) the date the Plan was approved by the Company’s
      stockholders, but Awards previously granted may extend beyond that
      date.

            

    

     

    
      	
              (d)

            	
              Amendment of Plan. The
      Board may amend, suspend or terminate the Plan or any portion thereof at
      any time, provided that (i) any
      “material revision” to the Plan (as defined in the New York Stock Exchange
      Listed Company Manual, as in effect as of July 22, 2005) must be approved
      by the Company’s stockholders prior to such revision becoming effective
      and (ii) to the extent required by Section 162(m), no Award granted to a
      Participant that is intended to comply with Section 162(m) after the date
      of such amendment shall become exercisable, realizable or vested, as
      applicable to such Award, unless and until such amendment shall have been
      approved by the Company’s stockholders if required by Section 162(m),
      including the vote required under Section
  162(m).

            

    

     

    
      	
              (e)

            	
              Governing Law. The
      provisions of the Plan and all Awards made hereunder shall be governed by
      and interpreted in accordance with the laws of the State of Delaware,
      without regard to any applicable conflicts of
  law.EXHIBIT 10.53

    EXHIBIT
10.53

     

    Addendum
5 To Lease

    

    This
Addendum (Addendum 5), dated January 22, 2008, is to that certain lease dated
June 23, 1989, effective January 1, 1993 as subsequently amended (Lease), by and
between Kipp Cattle Co., a partnership and/or Rex Kipp, Jr. as his sole and
separate property and estate (Lessor) and Bowlin Travel Centers Inc, a Nevada
corporation (Lessee), as successor in interest to Bowlin Outdoor Advertising
& Travel Centers Incorporated, a Nevada Corporation, as successor in
interest to Bowlin’s Incorporated., a New Mexico corporation as original
lessee.  This Addendum 5 is made in order to specify and document the
change in Lease term and the following intentions and agreements of the Lessor
and Lessee regarding fuel sales at the Premises:

    

    Term:  The Lease
Term is hereby amended to now expire on December 31, 2022.

    

    First-Right-Of-Refusal:  This
Section shall be added to the Lease:  Lessor
and Lessee agree that Lessee shall have the option to match, on the same terms
and conditions, any bonafide offer that Lessor may receive for the sale of all,
or any portion, of the leased Premises.  If any such offer is received
by Lessor, Lessor shall provide Lessee with written notice and details of the
offer.   Lessee will then have Twenty (20) business days after
having received such notice to provide a written response to Lessor noting
Lessee’s intent to exercise their option to purchase the Premises on the
specified terms and conditions.  If Lessee fails to provide the timely
notice of their intent to exercise this option, Lessor is free to accept the
original offer.  Lessee’s failure to exercise any option available
under this Section pertains only to that specific offer and is not a waiver of
the option for any future offers.  Lessee’s First-Right-Of-Refusal
shall continue for all future offers to purchase the Premises, that may be
received by Lessor or successors to Lessor.

     

    If any
ownership transfer of the Premises becomes eminent because of possible
bankruptcy proceedings or because an entity may exercise it’s collateral rights
to the Premises, Lessor shall, prior to the initiation of any legal actions,
notify Lessee of such potential actions and Lessee shall then have the right to
take ownership of the property, in the case of bankruptcy, by purchasing the
Premises from Lessor at the then fair market price; or in case where an entity
may attempt to exercise collateral rights, by Lessee satisfying the debt owed to
the secured party.

     

    Allowance of Pets: The Lease
terms are hereby clarified to include:  Lessee, at its sole
discretion, may allow, or disallow, its employees, customers or agents to bring
and keep pets and other domesticated animals onto the property so long as those
animals are properly cared for and are controlled as would be customary and
expected for the particular type or species of animal.

    

    Lessee
acknowledges that Lessor owns cattle that may be grazed on Lessor controlled
property adjoining the Premises and Lessee acknowledges that unsupervised pets,
specifically dogs, have the potential to disrupt the peaceful existence of those
cattle.  Lessee therefore agrees that, if Lessee allows pet dogs onto
the Premises under the terms of this Section, Lessee will advise the dog’s
owners of the specific concerns for the safety and wellbeing of Lessor’s cattle
and will also advise the owners of the need for supervision and control of their
animals, as well as the potential consequences of the lack of supervision or
control of their animals.  Lessor and Lessee agree that, if Lessor’s
cattle are threatened, Lessor will be allowed to take, without threat of
retribution by Lessee, any legal action necessary to properly maintain the
security of Lessor’s cattle on the adjoining property.

    

    Gasoline, Diesel and Motor Oil
Products:  All provisions of the Lease, including subsequent
amendments, that reference the purchase and sale of motor fuels and motor oil
products, including, but not limited to, the original lease document Article
XIII titled Purchase Of Gasoline And Oil Products To Be Sold; and those
provisions relating to gasoline sales portions of rent payments and the source
and costs of gasoline products as written in the amendment dated June 8, 1992
and effective January 1, 1992, shall be hereby replaced by the following terms
and conditions:

    

    
      	
            	
              1. 
       

            	
              Lessor
      authorizes Lessee to sell gasoline, diesel and motor oil products (Fuel
      Products) at the Premises and Lessor and Lessee agree that Lessee may
      purchase Fuel Products from any legal source that Lessee , from time to
      time, considers to be most appropriate for Lessee’s
    business.

            

    

    

    
      	
            	
              2. 
       

            	
              Lessee
      will pay Lessor Two Cents ($0.02) per gallon for all gasoline and diesel
      fuels (Fuel Sales) sold at the Premises.  Payment will be
      calculated monthly and submitted to Lessor within 15 days following the
      month in which the sales occurred.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
            	
              3. 
       

            	
              Motor
      oils will be included in general sales activity at the
      business.  Lessee will continue to pay Lessor Three Percent (3%)
      of all non Fuel Sales at the Premises and will continue to make the
      appropriate calculation and payment within 15 days following the end of
      the month during which the sales
occurred.

            

    

    

    
      	
            	
              4. 
       

            	
              Lessor
      hereby authorizes Lessee to, at Lessee’s sole discretion and expense,
      install and maintain any equipment and storage facilities needed for sale
      of Fuel Products.  Lessor and Lessee agree that any such
      equipment or storage facilities will remain the property of Lessee, with
      Lessee having right the remove, replace or modify any such items at any
      time without any further authorization by, or duty to,
    Lessor.

            

    

    

    
      	
            	
              5. 
       

            	
              Lessor
      and Lessee agree that Lessee may, at Lessee’s sole discretion, from time
      to time, determine the brand of fuel to be sold at the Premises,
      including, if Lessee so chooses, no branding at
  all.

            

    

     

    TAXES:  Lessee shall
pay all ad valorem taxes pertinent to the Premises, including those related to
currently existing Lessor’s Items.  Lessor agrees to, immediately
after receipt, provide Lessee with a copy of any assessment and tax notices
pertinent to the Premises, and Lessor hereby grants Lessee, as the responsible
party, the right to protest, on Lessor’s behalf, any unreasonable changes to the
assessed value of any items pertinent to this section.  Lessor will
assist Lessee as necessary with the filing of any documents or forms as may be
required to complete the protest.

    

    All
provisions, terms and conditions of the Lease, as subsequently amended, that are
not specifically modified by this Amendment 5, shall remain in full force and
effect.

     

    Accepted
and agreed to, this 23rd day of January, 2008:

     

     

    
      	Lessor:	 	 	Lessee:	 
	 	 	 	 	 
	
              /s/ 
      Rex Kipp, Jr. 

            	 	 	
              /s/  
      Kit Johnson

            	 
	
              Rex
      Kipp, Jr. 

            	 	 	
              Kit
      Johnson, Director of Operations

            	 
	 	 	 	
              Bowlin Travel Centers Inc.

            	 
	 	 	 	 	 
	Signature
      Date:  1/23/08	 	 	Signature
      Date:  1/23/08	 

    

     

     

      
        	 	 	 	 	 
	
                /s/ 
      Justin
      Kipp

              	 	 	
                 

              	 
	
                
                  Justin
      Kipp, General Partner,

                

              	 	 	
                 

              	 
	
                Kipp
      Cattle Co.

              	 	 	
                 

              	 
	 	 	 	 	 
	Signature
      Date:  1/23/08	 	 	 	 

      

    

     

     

    
      
        
        

      

      
        2

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