Document:

Exhibit 10.15

 

ZUMIEZ INC.

 

2005 EQUITY INCENTIVE PLAN

 

(Effective January 24, 2005, as amended and restated
effective May 27, 2009)

 

1.             PURPOSES.

 

(a)           General Purpose.  The
Company, by means of the Plan, seeks to retain the services of Eligible
Recipients, to secure and retain the services of new members of this group and
to provide incentives for such persons to exert maximum efforts for the success
of the Company and, if applicable, any of the Company’s parents and
subsidiaries.

 

(b)           Available Stock Awards.  The
purpose of the Plan is to provide a means by which Eligible Recipients may be
given an opportunity to benefit from increases in value of the Common Stock
through the granting of the following Stock Awards:  (i) Incentive Stock Options, (ii) Nonstatutory
Stock Options, (iii) stock bonuses, (iv) Restricted Stock grants, (v) Restricted
Stock Unit grants and (vi) Stock Appreciation Rights.

 

2.             DEFINITIONS.

 

“Affiliate”
means any Parent or Subsidiary of the Company, whether now or hereafter
existing.

 

“Annual Increase” has the meaning set forth in Section 4(a) of the Plan.

 

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

 

“Change in Control” means (i) the consummation of a merger
or consolidation of the Company with or into another entity or any other
corporate reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity’s securities outstanding immediately after such
merger, consolidation or other reorganization is owned by persons who were not
shareholders of the Company immediately prior to such merger, consolidation or
other reorganization; or (ii) the sale, transfer or other disposition of
all or substantially all of the Company’s assets.  A transaction shall not constitute a Change
in Control if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction.

 

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

 

“Committee”
means a committee of one or more members of the Board appointed by the Board in
accordance with Section 3(c) of the Plan.

 

“Common Stock” means the common stock of the Company.

 

“Company”
means Zumiez Inc., a Washington corporation.

 

 

“Consultant”
means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for
such services, including members of any advisory board constituted by the
Company, or (ii) who is a member of the Board of Directors of an
Affiliate.  However, the term “Consultant”
shall not include either Directors who are not compensated by the Company for
their services as Directors or Directors who are merely paid a director’s fee
by the Company for their services as Directors.

 

“Continuous Service” means, with respect to Employees, service with the Company or an
Affiliate that is not interrupted or terminated.  With respect to Directors or Consultants,
Continuous Service means service with the Company, or a Parent or Subsidiary of
the Company, whether as a Director or Consultant, that is not interrupted or
terminated.  The Board or the chief
executive officer of the Company, in that party’s sole discretion, may
determine whether Continuous Service shall be considered interrupted in the
case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave.

 

“Covered Employee” means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to
be reported to shareholders under the Exchange Act, as determined for purposes
of Section 162(m) of the Code and the regulations promulgated
thereunder.

 

“Director”
means a member of the Board of Directors of the Company.

 

“Disability”
means the permanent and total disability of a person within the meaning of Section 22(e)(3) of
the Code.

 

“Eligible Recipient”  means any Employee,
Director or Consultant of the Company or any Employee, Director or Consultant
of a Parent or Subsidiary of the Company.

 

“Employee”
means any person employed by the Company or an Affiliate.  Mere service as a Director or payment of a
director’s fee by the Company or an Affiliate shall not be sufficient to
constitute “employment” by the Company or an Affiliate.

 

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

 

“Executive Officer”  means an executive officer within the meaning of NASD Rule 4350(c),
or any successor rule, as in effect from time to time.

 

“Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:

 

(i)            If the Common Stock is listed on any
established stock exchange or traded on the Nasdaq National Market or the Nasdaq
SmallCap Market, the Fair Market Value of a share of Common Stock shall be the
closing sale price for such stock (or the closing bid, if no sale was reported)
as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the day of determination, as
reported in The Wall Street Journal  or
such other source as the Board deems reliable.

 

(ii)           In the absence of such markets for the Common
Stock, the Fair Market Value shall be determined in good faith by the Board
using a reasonable valuation method.

 

 

“FAS 123”
shall mean Statement of Financial Accounting Standard 123, “Accounting for
Stock-based Compensation,” as promulgated by the Financial Accounting Standards
Board.

 

“Former Plans” shall mean collectively the Zumiez Inc. 1993 Stock Option Plan and the
Zumiez Inc. 2004 Stock Option Plan.

 

“Former Plan Shares” has the meaning set forth in Section 4(b) of the Plan.

 

“Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

 

“Independent Director”  means an independent director as defined in
NASD Rule 4200(a)(15), or any successor rule, as in effect from time to time.

 

“Non-Employee Director”  means a Director
who either (i) is not a current Employee or Officer of the Company or its
parent or a subsidiary, does not receive compensation (directly or indirectly)
from the Company or its parent or a subsidiary for services rendered as a
consultant or in any capacity other than as a Director (except for an amount as
to which disclosure would not be required under Item 404(a) of Regulation
S-K), does not possess an interest in any other transaction as to which
disclosure would be required under Item 404(a) of Regulation S-K and is
not engaged in a business relationship as to which disclosure would be required
under Item 404(b) of Regulation S-K, or (ii) is otherwise
considered a “non-employee director” for purposes of Rule 16b-3.

 

“Nonstatutory Stock Option” means an Option not intended to qualify as
an Incentive Stock Option.

 

“Officer”
means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder.

 

“Option”
means a stock option granted pursuant to Section 6 of the Plan.

 

“Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant.  Each Option Agreement shall be subject to the
terms and conditions of the Plan.

 

“Optionholder” means a person to whom an Option is granted pursuant to the Plan or,
if applicable, such other person who holds an outstanding Option.

 

“Outside Director” means a Director who either (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury
Regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an “affiliated corporation” receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an “affiliated corporation”
at any time and is not currently receiving direct or indirect remuneration from
the Company or an “affiliated corporation” for services in any capacity other
than as a Director, or (ii) is otherwise considered an “outside director”
for purposes of Section 162(m) of the Code.

 

“Parent” means a “parent corporation,” whether
now or hereafter existing, as defined in Section 424(e) of the Code.

 

 

“Participant” means a person to whom a Stock Award is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Stock Award.

 

“Performance Criteria” shall have the meaning set forth in Section 7(b)(iii) of the
Plan.

 

“Plan”
means this 2005 Equity Incentive Plan, as amended from time to time.

 

“Regulation S-K” means Regulation S-K promulgated pursuant to
the Securities Act, as in effect from time to time.

 

“Re-Load Option”  has the meaning set forth in Section 6(m) of
the Plan.

 

“Repurchase Blackout
Period”
means six (6) months from the date the Common Stock relating to a Stock
Award is issued to the Participant or, in the case of a Stock Award with
vesting restrictions, six (6) months from the vesting date or, in any
case, such longer or shorter period of time as required to avoid a variable
charge to earnings for financial accounting purposes.

 

“Restricted Stock” shall mean a grant of shares of Common Stock pursuant to Section 7(b) of
the Plan.

 

“Restricted Stock Units” shall mean a grant of the right to receive shares of Common Stock in
the future or their cash equivalent (or both) pursuant to Section 7(b) of
the Plan.

 

“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
to Rule 16b-3, as in effect from time to time.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Stand-Alone Stock Appreciation Right” has the meaning set forth in Section 7(c) of
the Plan.

 

“Stock Appreciation Right” means the right to receive appreciation in
the Common Stock pursuant to the provisions of Section 7(c) of the
Plan.

 

“Stock Award” means any right granted under the Plan, including an Option, a stock
bonus, a Stock Appreciation Right, a Restricted Stock grant and a Restricted
Stock Unit grant.

 

“Stock Award Agreement” means a written agreement between the Company and a holder of a Stock
Award evidencing the terms and conditions of an individual Stock Award
grant.  Each Stock Award Agreement shall
be subject to the terms and conditions of the Plan.

 

“Subsidiary” means (1) in the case of an Incentive Stock Option, a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code, and (2) in the case of any other Stock Award, in addition to a
subsidiary corporation as defined in clause (1), (A) a limited liability
company, partnership or other entity in which the Company controls fifty
percent (50%) or more of the voting power or equity interests, or (B) an
entity with respect to which the Company possesses the power, directly or
indirectly, to direct or cause the direction of the management and policies,
whether through the Company’s ownership of voting securities, by contract or
otherwise.

 

 

“Tandem Stock Appreciation Right” has the meaning set forth in Section 7(c) of
the Plan.

 

“Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of
the Code) stock comprising more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its
Affiliates.

 

3.             ADMINISTRATION.

 

(a)           Administration by Board.  The
Board shall administer the Plan unless and until the Board delegates
administration to a Committee, as provided in Section 3(c).  Whether or not the Board has delegated
administration, the Board shall have the final power to determine all questions
of policy and expediency that may arise in the administration of the Plan.

 

(b)           Powers of Board.  The
Board (or the Committee) shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

 

(i)            To determine from time to time which of the
persons eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; what type or combination of types of Stock
Award shall be granted; the provisions of each Stock Award granted (which need
not be identical), including the time or times when a person shall be permitted
to receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.

 

(ii)           To construe and interpret the Plan and Stock
Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration.  The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Stock Award Agreement, in a manner and to
the extent it shall deem necessary or expedient to make the Plan fully
effective.

 

(iii)         To amend the Plan or a Stock Award as
provided in Section 13.

 

(iv)          Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company that are not in conflict with the provisions of the
Plan.

 

 

(c)           Delegation to Committee. The Board may delegate administration of the
Plan to a Committee of two (2) or more members of the Board, each of whom
must qualify as a Non-Employee Director, Outside Director, and Independent
Director.  If administration is delegated
to such a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be deemed to be to the Committee or subcommittee, as
appropriate), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.  Notwithstanding the foregoing, only a
Committee may grant Stock Awards to (i) senior executives of the Company
who are subject to Section 16 of the Exchange Act, (ii) Covered
Employees, or (iii) the chief executive officer or any other Executive
Officer.  The Board may abolish the
Committee, or any subcommittee, at any time and revest in the Board the
administration of the Plan.

 

(d)           Effect of
Board’s Decision. All determinations, interpretations and constructions made by the Board
in good faith shall not be subject to review by any person and shall be final,
binding and conclusive on all persons.

 

4.             SHARES SUBJECT TO THE PLAN.

 

(a)           Share Reserve. Subject to the provisions of Section 12
relating to adjustments upon changes in Common Stock, the Common Stock that may
be issued pursuant to Stock Awards shall not exceed in the aggregate 5,850,000
shares of Common Stock plus (i) the number of Former Plan Shares (as
defined below) and (ii) such number of additional shares determined in accordance
with the next sentence.  There shall be
an annual increase to the number of shares available for Stock Awards effective
on the first business day of each fiscal year of the Company, commencing on January 30,
2006, such that the total number of shares available for issuance hereunder
shall equal fifteen percent (15%) of the total number of shares of Common Stock
outstanding on such business day (the “Annual Increase”);
provided, however, that in no event will the aggregate number of shares
available for award hereunder exceed 8,775,000. 
Notwithstanding the foregoing, the Board may designate, in any fiscal
year, that the Annual Increase be less than the maximum number of shares
available for such increase or that there be no Annual Increase during such
fiscal year.  The shares that may be
issuable under Incentive Stock Options shall be limited to the above maximum
number of shares reserved under the Plan.

 

(b)           Reversion of Shares and
Availability of Shares to the Share Reserve.  If any Stock Award granted
under the Plan or under the Former Plans shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in
full, or if any shares of Common Stock issued to a Participant pursuant to a
Stock Award granted under the Plan or under the Former Plans are forfeited back
to or repurchased by the Company, including, but not limited to, any repurchase
or forfeiture caused by the failure to meet a contingency or condition required
for the vesting or exercise of such shares, then the shares of Common Stock not
acquired under such Stock Award (the “Former Plan Shares”),
shall become available for issuance under the Plan.  Former Plan Shares shall include reserved
shares of Common Stock that are not subject to a grant under the Former
Plans.  Former Plan Shares shall not
include reserved shares of Common Stock that are subject to Options granted
under the Plan that are cancelled and exchanged for new Options pursuant to a
one-time option exchange offer as provided for in Section 6(o).  The number of shares of Common Stock
underlying a Stock Award not issued as a result of any of the following actions
shall again be available for issuance under the Plan:  (i) a payout of a Stand-Alone Stock
Appreciation Right, or a performance-based award of Restricted Stock or
Restricted Stock Units in the form of cash; (ii) a cancellation,
termination, expiration, forfeiture, or lapse for 

 

 

any
reason (with the exception of the termination of a Tandem Stock Appreciation
Right upon exercise of the related Options, or the termination of a related
Option upon exercise of the corresponding Tandem Stock Appreciation Right) of
any Stock Award; or (iii) payment of the Option exercise price and/or
payment of any taxes arising upon exercise of the Option by withholding shares
of Common Stock which otherwise would be acquired on exercise or issued upon
such payout.

 

(c)           Source of Shares.  The
shares of Common Stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

 

5.             ELIGIBILITY.

 

(a)           Eligibility for Specific Stock
Awards.  Incentive Stock Options may be granted only
to Employees.  Stock Awards other than
Incentive Stock Options may be granted to Eligible Recipients.

 

(b)           Ten Percent Shareholders.  A Ten
Percent Shareholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the
Fair Market Value of the Common Stock at the date of grant and the Option is
not exercisable after the expiration of five (5) years from the date of
grant.

 

(c)           Consultants.  A
Consultant shall not be eligible for the grant of a Stock Award if, at the time
of grant, a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to register either the
offer or the sale of the Company’s securities to such Consultant because of the
nature of the services that the Consultant is providing to the Company, or
because the Consultant is not a natural person, or as otherwise provided by the
rules governing the use of Form S-8, unless the Company determines
both (i) that such grant (A) shall be registered in another manner
under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does
not require registration under the Securities Act in order to comply with the
requirements of the Securities Act, if applicable, and (ii) that such
grant complies with the securities laws of all other relevant
jurisdictions.  Form S-8 generally
is available to consultants and advisors only if (i) they are natural
persons, (ii) they provide bona fide services to the issuer, its parents,
its majority-owned subsidiaries or majority-owned subsidiaries of the issuer’s
parent, and (iii) the services are not in connection with the offer or
sale of securities in a capital-raising transaction, and do not directly or
indirectly promote or maintain a market for the issuer’s securities.

 

(d)           Foreign Participants. 
Notwithstanding any provision of the Plan to the contrary, in order to
comply with the laws in other countries in which the Company and its
subsidiaries operate or have Employees, Directors or Consultants, the Board, in
its sole discretion, shall have the power and authority to: (i) determine
which subsidiaries shall be covered by the Plan; (ii) determine which
Employees, Directors or Consultants outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any
Stock Award granted to Employees, Directors or Consultants outside the United
States to comply with applicable foreign laws; (iv) establish subplans and
modify exercise procedures and other terms and procedures, to the extent such
actions may be necessary or advisable (any such subplans and/or modifications
shall be attached to this subplan as appendices); provided, however, that no such subplans and/or modifications
shall increase the number of shares reserved for the Plan as set forth in Section 4
of the Plan; and (v) take any action, before or after a Stock Award is
made, that it deems advisable to obtain approval or comply with any applicable
foreign laws.

 

 

6.             OPTION PROVISIONS.

 

Each Option shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate.  All Options shall be
separately designated Incentive Stock Options or Nonstatutory Stock Options at
the time of grant, and, if certificates are issued, a separate certificate or
certificates will be issued for shares of Common Stock purchased on exercise of
each type of Option.  The provisions of
separate Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option Agreement or
otherwise) the substance of each of the following provisions:

 

(a)           Term. 
Subject to the provisions of Section 5(b) regarding Ten
Percent Shareholders, no Option shall be exercisable after the expiration of
ten (10) years from the date it was granted.

 

(b)           Exercise Price of an Incentive
Stock Option.  Subject to the provisions of Section 5(b) regarding
Ten Percent Shareholders, the exercise price of each Incentive Stock Option
shall be not less than one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Incentive
Stock Option may be granted with an exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

 

(c)           Exercise Price of a
Nonstatutory Stock Option.  The exercise price of Nonstatutory Stock
Options shall be determined by the Board. 
However, the exercise price of each Nonstatutory Stock Option that is
intended to qualify as performance-based compensation within the meaning of the
Treasury Regulations promulgated under Section 162(m) of the Code
shall be not less than one hundred percent (100%) of the Fair Market Value of
the Common Stock subject to the Option on the date the Option is granted.

 

(d)           Consideration.  The
purchase price of Common Stock acquired pursuant to an Option shall be paid, to
the extent permitted by applicable statutes and regulations, either (i) in
cash at the time the Option is exercised, or (ii) at the discretion of the
Board at the time of the grant of the Option (or subsequently in the case of a
Nonstatutory Stock Option) (A) by delivery to the Company of other Common
Stock, (B) according to a deferred payment or other similar arrangement
with the Optionholder, (C) pursuant to a cashless exercise program
implemented by the Company in connection with the Plan, or (D) in any
other form of legal consideration that may be acceptable to the Board.  Unless otherwise specifically provided in the
Option Agreement, the purchase price of Common Stock acquired pursuant to an
Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the
Common Stock of the Company that have been held for more than six (6) months
(or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes).

 

In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement.

 

(e)           Transferability of an Incentive
Stock Option.  An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and
shall be 

 

 

exercisable
during the lifetime of the Optionholder only by the Optionholder.  Notwithstanding the foregoing, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

 

(f)            Transferability of a Nonstatutory
Stock Option.  A Nonstatutory Stock Option shall be
transferable only to the extent provided in the Option Agreement (subject to
applicable securities laws). 
Notwithstanding the foregoing, the Optionholder may, by delivering
written notice to the Company, in a form satisfactory to the Company, designate
a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.

 

(g)           Vesting Generally.  The
total number of shares of Common Stock subject to an Option may, but need not,
vest and therefore become exercisable in periodic installments that may, but
need not, be equal.  The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board
may deem appropriate.  The vesting
provisions of individual Options may vary. 
The provisions of this Section 6(g) are subject to any Option
provisions governing the minimum number of shares of Common Stock as to which
an Option may be exercised.

 

(h)           Termination of Continuous
Service.  In the event an Optionholder’s Continuous
Service terminates (other than upon the Optionholder’s death or Disability),
the Optionholder may exercise his or her Option (to the extent that the
Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i) the
date three (3) months following the termination of the Optionholder’s
Continuous Service (or, except with respect to Incentive Stock Options, such
longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement.  If, after termination, the Optionholder does
not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate.

 

(i)            Extension of Termination Date. 
Except with respect to Incentive Stock Options, an Optionholder’s Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder’s Continuous Service (other than upon the
Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in Section 6(a),
or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder’s Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

 

(j)            Disability of Optionholder.  In
the event that an Optionholder’s Continuous Service terminates as a result of
the Optionholder’s Disability, the Optionholder may exercise his or her Option
(to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination), but only within such period of time ending on the
earlier of (i) the date twelve (12) months following such termination (or,
except with respect to Incentive Stock Options, such longer or shorter period
specified in the Option Agreement) or (ii) the expiration of the term of
the Option as set forth in the Option Agreement.  If, after termination, the Optionholder does
not exercise his or her Option within the time specified herein, the Option
shall terminate.

 

(k)           Death of Optionholder.  In
the event (i) an Optionholder’s Continuous Service terminates as a result
of the Optionholder’s death or (ii) the Optionholder dies within the
period 

 

 

(if
any) specified in the Option Agreement after the termination of the
Optionholder’s Continuous Service for a reason other than death, then the
Option may be exercised (to the extent the Optionholder was entitled to
exercise such Option as of the date of death) by the Optionholder’s estate, by
a person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the option upon the
Optionholder’s death pursuant to Section 6(e) or 6(f), but only
within the period ending on the earlier of (A) the date eighteen (18)
months following the date of death (or, except with respect to Incentive Stock
Options, such longer or shorter period specified in the Option Agreement) or (B) the
expiration of the term of such Option as set forth in the Option
Agreement.  If, after death, the Option
is not exercised within the time specified herein, the Option shall terminate.

 

(l)            Early Exercise.  The
Option may, but need not, include a provision whereby the Optionholder may
elect at any time before the Optionholder’s Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject
to the Option prior to the full vesting of the Option.  The early purchase of any unvested shares of
Common Stock will be pursuant to an early exercise provision in the Option
Agreement which may provide for a repurchase option in favor of the Company and
other restrictions the Board determines to be appropriate.  Any repurchase option so provided for will be
subject to the repurchase provisions set forth in Section 11(h) herein.

 

(m)          Substitution of Stock
Appreciation Rights for Options.  If the Company is required to or elects to
expense the cost of Options pursuant to FAS 123 (or a successor or other
standard), the Board shall have the sole discretion to substitute without
receiving Participants’ permission, Stock Appreciation Rights paid only in
stock for outstanding Options; provided, the terms of the substituted Stock
Appreciation Rights are substantially the same as the terms of the Options, the
number of shares underlying the number of Stock Appreciation Rights equals the
number of shares underlying the Options and the difference between the Fair
Market Value of the underlying shares of Common Stock and the grant price of
the Stock Appreciation Rights is equivalent to the difference between the Fair
Market Value of the underlying shares of Common Stock and the exercise price of
the Options.

 

(n)           Re-Load Options.

 

(i)            Without in any way limiting the authority of
the Board to make or not to make grants of Options hereunder, the Board shall
have the authority (but not an obligation) to include as part of any Option
Agreement a provision entitling the Optionholder to a further Option (a “Re-Load Option”) in the event the Optionholder exercises the
Option evidenced by the Option Agreement, in whole or in part, by surrendering
other shares of Common Stock in accordance with this Plan and the terms and
conditions of the Option Agreement. Unless otherwise specifically provided in
the Option Agreement, the Optionholder shall not surrender shares of Common
Stock acquired, directly or indirectly from the Company, unless such shares
have been held for more than six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes).

 

(ii)           Any such Re-Load Option shall (i) provide
for a number of shares of Common Stock equal to the number of shares of Common
Stock surrendered as part or all of the exercise price of such Option, (ii) have
an expiration date which is the same as the expiration date of the Option the
exercise of which gave rise to such Re-Load Option, and (iii) have an
exercise price which is equal to one hundred percent (100%) of the Fair Market
Value of the Common Stock subject to the Re-Load Option on the date of exercise
of the original Option.

 

 

Notwithstanding
the foregoing, a Re-Load Option shall be subject to the same exercise price and
term provisions heretofore described for Options under the Plan.

 

Any such Re-Load Option may be an Incentive
Stock Option or a Nonstatutory Stock Option, as the Board may designate at the
time of the grant of the original Option; provided, however, that the designation of any Re-Load Option as
an Incentive Stock Option shall be subject to the one hundred thousand dollar
($100,000) annual limitation on the exercisability of Incentive Stock Options
described in Section 11(d) of the Plan and in Section 422(d) of
the Code.  There shall be no Re-Load
Options on a Re-Load Option.  Any such
Re-Load Option shall be subject to the availability of sufficient shares of Common
Stock under Section 4(a) and shall be subject to such other terms and
conditions as the Board may determine that are not inconsistent with the
express provisions of the Plan regarding the terms of Options.

 

(o)           One-Time
Option Exchange Offer. 
Notwithstanding any other provision of the Plan to the contrary, upon
approval of the Company’s shareholders, the Board (or the Committee) may
provide for, and the Company may implement, a one-time-only option exchange
offer, pursuant to which certain outstanding Options could, at the election of
the person holding such Option, be tendered to the Company for cancellation in
exchange for the issuance of a lesser amount of Options with a lower exercise
price, provided that such one-time-only option exchange offer is commenced
within six months of the date of such shareholder approval.

 

7.             PROVISIONS
OF STOCK AWARDS OTHER THAN OPTIONS.

 

(a)           Stock
Bonus Awards.  Grants of
stock bonus awards shall be pursuant to a Stock Award Agreement, which shall be
in such form and shall contain such terms and conditions as the Board shall
deem appropriate.  The terms and
conditions of each grant of a stock bonus award shall include (through
incorporation of provisions hereof by reference in the Stock Award Agreement or
otherwise) the substance of each of the following provisions:

 

(i)            Consideration.  A stock bonus may be awarded in consideration
for past services rendered to the Company or an Affiliate for its benefit.

 

(ii)           Vesting;
Right of Repurchase.  Shares of
Common Stock awarded under the Stock Award Agreement may, but need not, be
subject to a share repurchase option in favor of the Company in accordance with
a vesting schedule to be determined by the Board.  Such repurchase option is subject to the
repurchase provisions set forth in Section 11(h).

 

(iii)         Termination
of Participant’s Continuous Service.  In the event a Participant’s Continuous
Service terminates, the Company may reacquire any or all of the shares of
Common Stock held by the Participant which have not vested as of the date of
termination under the terms of the Stock Award Agreement.  In such event, the Company shall not reaquire
the Common Stock until after the Repurchase Blackout Period.

 

(iv)          Transferability.  Rights to acquire shares of Common Stock
under the Stock Award Agreement shall be transferable by the Participant only
upon such terms and conditions as are set forth in the Stock Award Agreement,
as the Board shall determine in its discretion, so long as Common Stock awarded
under the Stock Award Agreement remains subject to the terms of the Stock Award
Agreement.

 

 

(b)           Restricted
Stock and Restricted Stock Units.

 

(i)            Designation.  Restricted Stock or Restricted Stock Units
may be granted under the Plan. 
Restricted Stock or Restricted Stock Units may include a dividend
equivalent right, as permitted by Section 12(a).  After the Board determines that it will offer
Restricted Stock or Restricted Stock Units, it will advise the Participant in
writing or electronically, by means of a Stock Award Agreement, of the terms,
conditions and restrictions, including vesting, if any, related to the offer,
including the number of shares of Common Stock that the Participant shall be
entitled to receive or purchase, the price to be paid, if any, and, if
applicable, the time within which the Participant must accept the offer.  The offer shall be accepted by execution of a
Stock Award Agreement or as otherwise directed by the Board.  The term of each award of Restricted Stock or
Restricted Stock Units shall be at the discretion of the Board.

 

(ii)           Restrictions.  Subject to Section 8(b)(iii), the Board
may impose such conditions or restrictions on the Restricted Stock or
Restricted Stock Units granted pursuant to the Plan as it may determine
advisable, including the achievement of specific performance goals, time based
restrictions on vesting, or others.  If
the Board established performance goals, the Board shall determine whether a
Participant has satisfied the performance goals.

 

(iii)         Performance
Criteria.  Restricted
Stock and Restricted Stock Units granted pursuant to the Plan that are intended
to qualify as “performance based compensation” under Section 162(m) of
the Code shall be subject to the attainment of performance goals relating to
the Performance Criteria selected by the Board and specified at the time such
Restricted Stock and Restricted Stock Units are granted.  For purposes of this Plan, “Performance Criteria” means one or more of the following (as
selected by the Board and as such list to be amended or supplemented from time
to time by the Plan Administrator): (1) cash flow; (2) earnings per
share; (3) earnings before interest, taxes, and amortization; (4) return
on equity; (5) total shareholder return; (6) share price performance;
(7) return on capital; (8) return on assets or net assets; (9) revenue;
(10) revenue growth; (11) earnings growth; (12) operating income; (13)
operating profit; (14) profit margin; (15) return on operating revenue; (16)
return on invested capital; (17) market price; (18) brand recognition; (19)
customer satisfaction; (20) operating efficiency; or (21) productivity.  Any of these Performance Criteria may be used
to measure the performance of the Company as a whole or any business unit or
division of the Company.

 

(iv)          Transferability.  Restricted Stock and Restricted Stock Units
shall be transferable by the Participant only upon such terms and conditions as
are set forth in the Stock Award Agreement, as the Board shall determine in its
discretion.

 

(v)            Vesting.  Unless the Board determines otherwise, the
Stock Award Agreement shall provide for the forfeiture of the non-vested shares
of Common Stock underlying Restricted Stock or the termination of unvested
Restricted Stock Units upon termination of a Participant’s Continuous
Service.  To the extent that the
Participant purchased the shares of Common Stock granted under any such
Restricted Stock award and any such shares of Common Stock remain non-vested at
the time of termination of a Participant’s Continuous Service, the termination
of Participant’s Continuous Service shall cause an immediate sale of such
non-vested shares of Common Stock to the Company at the original price per
share of Common Stock paid by the Participant.

 

(c)           Stock
Appreciation Rights.  Grants of Stock Appreciation Rights shall be
pursuant to a Stock Award Agreement, which shall be in such form and shall
contain such terms and conditions, as the Board shall deem appropriate.  The Board may grant Stock Appreciation 

 

 

Rights in connection with
all or any part of an Option (“Tandem Stock Appreciation
Rights”) to a Participant or in a stand-alone grant (“Stand-Alone Stock Appreciation Rights”). The terms and
conditions of a Stock Appreciation Right shall include (through incorporation
of the provisions hereof by reference in the Stock Award Agreement or
otherwise) the substance of each of the following provisions:

 

(i)            Calculation of Appreciation.  Each Stock Appreciation Right will be
denominated in shares of Common Stock equivalents. The appreciation
distribution payable on the exercise of a Stock Appreciation Right will be not
greater than an amount equal to the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the Stock Appreciation Right) of a
number of shares of Common Stock equal to the number of share of Common Stock
equivalents in which the Participant is vested under such Stock Appreciation
Right and with respect to which the Participant is exercising the Stock
Appreciation Right on such date, over (B) an amount that will be
determined by the Board at the time of grant of the Stock Appreciation Right
(which amount, in the case of Stock Appreciation Rights intended to qualify as
performance-based compensation within the meaning of the Treasury Regulations
under Section 162(m) of the Code, shall be not less than the Fair
Market Value of such shares of Common Stock at the time of grant of the Common
Stock equivalents).

 

(ii)           Vesting.  At the time
of the grant of a Stock Appreciation Right, the Board may impose such
restrictions or conditions to the vesting of such Stock Appreciation Right as
it deems appropriate.

 

(iii)         Exercise.  To exercise
any outstanding Stock Appreciation Right, the Participant must provide written
notice of exercise to the Company in compliance with the provisions of the Stock
Award Agreement evidencing such Stock Appreciation Right.

 

(iv)          Payment. The appreciation distribution in respect of a
Stock Appreciation Right may be paid in Common Stock, in cash, or any
combination of the two, as the Board deems appropriate.

 

(v)            Termination of Continuous Service.  If a Participant’s Continuous Service
terminates for any reason, any unvested Stock Appreciation Rights shall be
forfeited and any vested Stock Appreciation Rights shall be automatically
redeemed.

 

(vi)          Transferability.  Stock Appreciation Rights shall be
transferable by the Participant only upon such terms and conditions as are set
forth in the Stock Award Agreement, as the Board shall determine in its
discretion.

 

(vii)         Tandem
Stock Appreciation Rights.  A Tandem Stock Appreciation Right
shall be exercisable only to the extent that the related Option is exercisable
and a Tandem Stock Appreciation Right shall expire no later than the date on
which the related Option expires.

 

8.             COVENANTS
OF THE COMPANY.

 

(a)           Availability
of Shares.  During the
terms of the Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock required to satisfy such Stock Awards.

 

(b)           Securities
Law Compliance.  The Company
shall seek to obtain from each regulatory commission or agency having
jurisdiction over the Plan such authority as may be 

 

 

required
to grant Stock Awards and to issue and sell shares of Common Stock upon
exercise of the Stock Awards; provided,
however, that this undertaking shall not require the Company to register
under the Securities Act the Plan, any Stock Award or any Common Stock issued
or issuable pursuant to any such Stock Award. 
If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of Common Stock under
the Plan, the Company shall be relieved from any liability for failure to issue
and sell Common Stock upon exercise of such Stock Awards unless and until such
authority is obtained.

 

9.             USE OF
PROCEEDS FROM STOCK.

 

Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

 

10.          EFFECTIVE DATE OF PLAN.

 

The Plan shall become effective as determined by the Board, but no
Stock Award shall be exercised (or, in the case of a stock bonus, shall be
granted) unless and until the Plan has been approved by the shareholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.

 

11.          MISCELLANEOUS.

 

(a)           Acceleration
of Exercisability and Vesting.  The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which
a Stock Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Stock Award stating the time at which it
may first be exercised or the time during which it will vest.

 

(b)           Shareholder
Rights.  No Participant shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares of Common Stock subject to such Stock Award unless and until such
Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.

 

(c)           No
Employment or other Service Rights.  Nothing in the Plan or any instrument
executed or Stock Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company or an Affiliate in the
capacity in effect at the time the Stock Award was granted or shall affect the
right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant’s agreement
with the Company or an Affiliate, or (iii) the service of a Director
pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the
Affiliate is incorporated, as the case may be.

 

(d)           Incentive
Stock Option $100,000 Limitation.  To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionholder
during any calendar year (under all plans of the Company and its Affiliates)
exceeds one hundred thousand dollars ($100,000), the Options or portions
thereof which exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options.

 

 

(e)           Maximum
Award Amounts.  In no event
shall a Participant receive a Stock Award or Stock Awards during any one (1) calendar
year covering in the aggregate more than 1,000,000  shares of Common Stock.

 

(f)            Investment
Assurances.  The Company
may require a Participant, as a condition of exercising or acquiring Common
Stock under any Stock Award (i) to give written assurances satisfactory to
the Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising
the Stock Award, and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the
Stock Award for the Participant’s own account and not with any present
intention of selling or otherwise distributing the Common Stock.  The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (1) the
issuance of the shares of Common Stock upon the exercise or acquisition of
Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (2) as to
any particular requirement, a determination is made by counsel for the Company
that such requirement need not be met in the circumstances under the then
applicable securities laws.  The Company
may, upon advice of counsel to the Company, place legends on stock certificates
issued under the Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited to,
legends restricting the transfer of the Common Stock.

 

(g)           Withholding
Obligations.  To the
extent provided by the terms of a Stock Award Agreement, the Participant may
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of
such means:  (i) tendering a cash
payment, (ii) authorizing the Company to withhold shares of Common Stock
from the shares of Common Stock otherwise issuable to the Participant as a
result of the exercise or acquisition of Common Stock under the Stock Award, provided, however, that no shares of
Common Stock are withheld with a value exceeding the minimum amount of tax
required to be withheld by law, or (iii) delivering to the Company owned
and unencumbered shares of Common Stock.

 

(h)           Repurchase
Provisions.  The Company
shall exercise any repurchase option specified in the Stock Award by giving the
holder of the Stock Award written notice of intent to exercise the repurchase
option.  Payment may be cash or cancellation
of purchase money indebtedness for the Common Stock.  The terms of any repurchase option shall be
specified in the Stock Award and may be either at Fair Market Value at the time
of repurchase or at not less than the original purchase price.

 

(i)            Golden Parachute Taxes.  In the event that any amounts paid or deemed
paid to a Participant under the Plan are deemed to constitute “excess parachute
payments” as defined in Section 280G of the Code (taking into account any
other payments made under the Plan and any other compensation paid or deemed
paid to a Participant), or if any Participant is deemed to receive an “excess
parachute payment” by reason of his or her vesting of Options pursuant to Section 12(c) herein,
the amount of such payments or deemed payments shall be reduced (or,
alternatively the provisions of Section 12(c) shall not act to vest
options to such Participant), so that no such payments or deemed payments shall
constitute excess parachute payments. 
The determination of whether a payment or deemed payment constitutes an
excess parachute payment shall be in the sole discretion of the Board.

 

 

(j)            Plan
Unfunded.  The Plan shall
be unfunded.  Except for the Board’s
reservation of a sufficient number of authorized shares to the extent required
by law to meet the requirements of the Plan, the Company shall not be required
to establish any special or separate fund or to make any other segregation of
assets to assure payment of any Stock Award under the Plan.

 

12.          ADJUSTMENTS
UPON CHANGES IN STOCK.

 

(a)           Capitalization
Adjustments.  In the event that any dividend or other
distribution (whether in the form of cash, shares of the Common Stock, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, exchange of Common Stock or other securities of the Company, or
other change in the corporate structure of the Company affecting the Common
Stock occurs, the Board, in order to prevent diminution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
may, in its sole discretion, adjust the number and class of Common Stock that
may be delivered under the Plan and/or the number, class, and price of Common
Stock covered by each outstanding Stock Award. 
In lieu of the payment of a dividend the Board in its discretion may
provide holders of Restricted Stock or Restricted Stock Units a dividend
equivalent right, in the form of additional shares of Common Stock or units,
with respect to the unvested shares of Common Stock or unvested units the
Participant shall be entitled to receive or purchase.

 

(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Board will notify each Participant as soon as
practicable prior to the effective date of such proposed transaction.  To the extent it has not been previously
exercised, a Stock Award will terminate immediately prior to the consummation
of such proposed action.

 

(c)           Change
in Control.  In the event of
Change in Control, then, to the extent permitted by applicable law:  (1) any surviving corporation may assume
any Stock Awards outstanding under the Plan or may substitute similar stock
awards (including an award to acquire the same consideration paid to the
shareholders in the transaction described in this Section 12(c)) for those
outstanding under the Plan, or (2) in the event any surviving corporation
does not assume or continue such Stock Awards, or to substitute similar stock
awards for those outstanding under the Plan in accordance with the preceding
clause, then the time during which such Stock Awards may be exercised
automatically will be accelerated and become fully vested and exercisable
immediately prior to the consummation of such transaction, and the Stock Awards
shall automatically terminate upon consummation of such transaction if not
exercised prior to such event.

 

(d)           No Limitations.  The
grant of Stock Awards will in no way affect the Company’s right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

 

13.          AMENDMENT OF THE PLAN AND STOCK
AWARDS.

 

(a)           Amendment
of Plan.  The Board at
any time, and from time to time, may amend the Plan.  However, except as provided in Section 12
relating to adjustments upon changes in Common Stock, no amendment shall be
effective unless approved by the shareholders of the Company to the extent
shareholder approval is necessary to satisfy the applicable requirements of Section 422
or 162(m) of the Code and the Treasury Regulations thereunder, Rule 16b-3
or any Nasdaq or securities exchange listing requirements.  For purposes of clarity, any increase in the 

 

 

number
of shares reserved for issuance hereunder in accordance with the provisions of Section 4(a) hereof
shall not be deemed to be an amendment to the Plan.

 

(b)           Contemplated
Amendments.  It is
expressly contemplated that the Board may amend the Plan in any respect the
Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code
and the regulations promulgated thereunder relating to Incentive Stock Options
and/or to bring the Plan and/or Incentive Stock Options granted under it into
compliance therewith.

 

(c)           No
Impairment of Rights. 
Rights under any Stock Award granted before amendment of the Plan shall
not be impaired by any amendment of the Plan unless (i) the Company
requests the consent of the Participant and (ii) the Participant consents
in writing.

 

(d)           Amendment
of Stock Awards.  The Board at
any time, and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that the rights under any Stock Award shall not be
impaired by any such amendment unless (i) the Company requests the consent
of the Participant and (ii) the Participant consents in writing.

 

14.          TERMINATION OR SUSPENSION OF THE
PLAN.

 

(a)           Plan
Term.  The Board may suspend or
terminate the Plan at any time.  Unless
sooner terminated, the Plan shall terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board or approved by the
shareholders of the Company, whichever is later.  No Stock Awards may be granted under the Plan
while the Plan is suspended or after it is terminated.

 

(b)           No
Impairment of Rights. 
Suspension or termination of the Plan shall not impair rights and
obligations under any Stock Award granted while the Plan is in effect except
with the written consent of the Participant.

 

15.          CHOICE OF LAW.

 

The
law of the State of Washington shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.Exhibit 10.1

 

SECOND
AMENDMENT

TO

HAWAIIAN HOLDINGS, INC.

2005 STOCK INCENTIVE PLAN

 

As adopted
by the board of directors of Hawaiian Holdings, Inc. on November 12,
2008

 

THIS SECOND AMENDMENT TO HAWAIIAN HOLDINGS, INC. 2005 STOCK
INCENTIVE PLAN (the “Amendment”)
is made by Hawaiian Holdings, Inc. to be effective on November 12,
2008.

 

Section 1.                    Amendments.

 

(a)                    Amendment to Section 2.    The
term “Discretionary Director Awards” is hereby inserted, in alphabetical order,
in Section 2 to read in its entirety as follows:

 

“Discretionary
Director Awards” shall have the meaning specified in the Section 6 hereof.”

 

(b)                   Amendment to Section 3.    The
first paragraph of Section 3 is hereby deleted in its entirety and
restated to read as follows:

 

“The
Plan shall be administered by the Compensation Committee of the Board of
Directors of the Company (the “Committee”); provided that Discretionary
Director Awards shall be granted and administered by the Corporate Governance
and Nominating Committee of the Board of Directors of the Company (the “Nominating
Committee”; the term “Committee” as used in this Plan with respect to the
administration of Discretionary Director Awards shall be deemed to mean the “Nominating
Committee”). Any action of the Committee in administering the Plan shall be
final, conclusive and binding on all persons, including the Company, its
Subsidiaries, their employees, Participants, consultants, contractors, persons
claiming rights from or through Participants and stockholders of the Company.”

 

(c)                    Amendment to Section 6(c).    Section 6(c) is
hereby deleted in its entirety and restated to read as follows:

 

“Discretionary Director Awards. The
Nominating Committee is authorized to grant, in its discretion, annual Awards
to each Non-Employee Director (such Awards, the “Discretionary Director Awards”).
The amount, timing and terms of such Discretionary Director Awards shall be
determined in the sole discretion of the Nominating Committee.”

 

(d)                   Amendment to Section 7(d).    Section 7(d) is
hereby amended to delete the parenthetical “(other than a Director Option
granted to a Non-Employee Director who is not an employee of the Company)”
appearing in Section 7(d).

 

Section 2.                    Reaffirmation of the Plan.    The
Plan and all of it provisions are hereby reaffirmed as being in full force and
effect, except as expressly amended by this Amendment.

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