Document:

Exhibit 10.5

 

 THE BOARD OF DIRECTORS

 

OF

 

SEEDO CORP.

 

The following is a true copy of the resolution duly adopted by the Board of Directors of this Corporation at a special meeting, notice to this meeting having been waived, held on this 21st day of February, 2019

 

The Board of Directors which was present for this meeting & took active part therein was:

 

Zohar Levy 

Micha Maman 

Jendayi Frazer

 

WHEREAS there has been presented to and considered by this meeting a Motion to enter into a certain Share Purchase Agreement and Convertible Debenture with YAII PN, LTD.

 

NOW THEREFORE BE IT RESOLVED that the corporation having considered this matter, has opened the floor to all those who voice a preference in the issue, has decided unanimously and RESOLVED:

 

That the Company shall Execute said obligatory documents with YAII PN LTD. for funding purposes, and deems such action in the best interest of the Company.

 

Said Motion is hereby passed and the corporate books, records and the Secretary shall file this Resolution in the corporate records

 

DATED: 21st February, 2019

 

Zohar Levy, Director, CEOa1012019ltipplan

                                                                INDEPENDENCE CONTRACT DRILLING, INC.        2019 OMNIBUS INCENTIVE PLAN                                    (Effective February 27, 2019)                 

 

                     INDEPENDENCE CONTRACT DRILLING, INC.                          2019 OMNIBUS INCENTIVE PLAN   ARTICLE I ESTABLISHMENT, PURPOSE AND DURATION ................................................ 1    1.1  Establishment .................................................................................................................... 1    1.2  Purpose of the Plan ............................................................................................................ 1    1.3  Duration of Plan ................................................................................................................ 1  ARTICLE II DEFINITIONS .......................................................................................................... 1  ARTICLE III ELIGIBILITY .......................................................................................................... 6  ARTICLE IV GENERAL PROVISIONS RELATING TO AWARDS ......................................... 6    4.1  Authority to Grant Awards ................................................................................................ 6    4.2  Shares That Count Against Limit ...................................................................................... 7    4.3  Non-Transferability ........................................................................................................... 7    4.4  Requirements of Law ........................................................................................................ 7    4.5  Changes in the Company’s Capital Structure .................................................................... 8    4.6  Election Under Section 83(b) of the Code ...................................................................... 10     4.7  Forfeiture for Cause ......................................................................................................... 10     4.8  Forfeiture Events ............................................................................................................. 11     4.9  Recoupment in Restatement Situations ........................................................................... 11     4.10  Award Agreements .......................................................................................................... 11     4.11  Amendments of Award Agreements ............................................................................... 11     4.12  Rights as Stockholder ...................................................................................................... 12     4.13  Issuance of Shares of Stock ............................................................................................. 12     4.14  Restrictions on Stock Received ....................................................................................... 12     4.15  Section 409A ................................................................................................................... 12     4.16  Date of Grant ................................................................................................................... 12     4.17  Source of Shares Deliverable Under Awards .................................................................. 12     4.18  Minimum Vesting Requirements .................................................................................... 13   ARTICLE V OPTIONS ................................................................................................................ 13     5.1  Authority to Grant Options .............................................................................................. 13     5.2  Type of Options Available .............................................................................................. 13     5.3  Option Agreement ........................................................................................................... 13     5.4  Option Price ..................................................................................................................... 13     5.5  Duration of Option .......................................................................................................... 14     5.6  Amount Exercisable ........................................................................................................ 14                                           -i-  Error! Unknown document property name.   

 

   5.7  Exercise of Option ........................................................................................................... 14     5.8  Transferability-Incentive Stock Options ......................................................................... 15     5.9  No Rights as Stockholder ................................................................................................ 15     5.10  $100,000 Limitation on ISOs .......................................................................................... 15     5.11  Separation from Service .................................................................................................. 16   ARTICLE VI STOCK APPRECIATION RIGHTS ..................................................................... 16     6.1  Authority to Grant SAR Awards ..................................................................................... 16     6.2  Type of Stock Appreciation Rights Available ................................................................ 16     6.3  General Terms ................................................................................................................. 16     6.4  SAR Agreement .............................................................................................................. 16     6.5  Term of SAR ................................................................................................................... 17     6.6  Exercise of Freestanding SARs ....................................................................................... 17     6.7  Exercise of Tandem SARs .............................................................................................. 17     6.8  Payment of SAR Amount ................................................................................................ 17     6.9  Separation from Service .................................................................................................. 18     6.10  No Rights as Stockholder ................................................................................................ 18     6.11  Restrictions on Stock Received ....................................................................................... 18   ARTICLE VII RESTRICTED STOCK AWARDS ..................................................................... 18     7.1  Restricted Stock Awards ................................................................................................. 18     7.2  Restricted Stock Award Agreement ................................................................................ 18     7.3  Holder’s Rights as Stockholder ....................................................................................... 18   ARTICLE VIII RESTRICTED STOCK UNIT AWARDS.......................................................... 19    8.1  Authority to Grant RSU Awards ..................................................................................... 19     8.2  RSU Award ..................................................................................................................... 19     8.3  RSU Award Agreement ................................................................................................... 19     8.4  Dividend Equivalents ...................................................................................................... 19     8.5  Form of Payment Under RSU Award ............................................................................. 19     8.6  Time of Payment Under RSU Award .............................................................................. 19     8.7  Holder’s Rights as Stockholder ....................................................................................... 20   ARTICLE  IX  PERFORMANCE  STOCK  AWARDS  AND  PERFORMANCE  UNIT         AWARDS ........................................................................................................................ 20     9.1  Authority to Grant Performance Stock Awards and Performance Unit Awards ............ 20     9.2  Performance Goals .......................................................................................................... 20     9.3  Written Agreement .......................................................................................................... 21     9.4  Form of Payment Under Performance Unit Award ......................................................... 21                                           ii  

 

   9.5  Time of Payment Under Performance Unit Award ......................................................... 21     9.6  Holder’s Rights as Stockholder With Respect to a Performance Stock Award .............. 21     9.7  Holder’s Rights as Stockholder With Respect to a Performance Unit Award ................ 21     9.8  Dividend Equivalents ...................................................................................................... 21   ARTICLE X ANNUAL CASH INCENTIVE AWARDS ........................................................... 21     10.1  Authority to Grant Annual Cash Incentive Awards ........................................................ 21     10.2  Written Agreement .......................................................................................................... 22     10.3  Form of Payment Under Annual Cash Incentive Award ................................................ 22     10.4  Time of Payment Under Annual Cash Incentive Award ................................................. 22  ARTICLE XI OTHER STOCK-BASED AWARDS ................................................................... 22     11.1  Authority to Grant Other Stock-Based Awards .............................................................. 22     11.2  Value of Other Stock-Based Award ................................................................................ 22     11.3  Written Agreement .......................................................................................................... 22     11.4  Payment of Other Stock-Based Award ........................................................................... 22     11.5  Separation from Service .................................................................................................. 23     11.6  Time of Payment of Other Stock-Based Award .............................................................. 23   ARTICLE XII CASH-BASED AWARDS ................................................................................... 23     12.1  Authority to Grant Cash-Based Awards .......................................................................... 23     12.2  Value of Cash-Based Award ........................................................................................... 23     12.3  Written Agreement .......................................................................................................... 23     12.4  Payment of Cash-Based Award ....................................................................................... 23     12.5  Time of Payment of Cash-Based Award ......................................................................... 23     12.6  Separation from Service .................................................................................................. 23   ARTICLE XIII SUBSTITUTE AWARDS .................................................................................. 24   ARTICLE XIV ADMINISTRATION .......................................................................................... 24     14.1  Awards ............................................................................................................................. 24     14.2  Authority of the Committee ............................................................................................ 24     14.3  Decisions Binding ........................................................................................................... 26     14.4  No Liability ..................................................................................................................... 26   ARTICLE XV AMENDMENT OR TERMINATION OF PLAN ............................................... 26     15.1  Amendment, Modification, Suspension, and Termination .............................................. 26    15.2  Awards Previously Granted ............................................................................................. 26   ARTICLE XVI MISCELLANEOUS ........................................................................................... 27     16.1  Unfunded Plan/No Establishment of a Trust Fund ......................................................... 27                                            iii  

 

16.2  No Employment Obligation ............................................................................................ 27   16.3  Tax Withholding .............................................................................................................. 27   16.4  No Rights to Awards ....................................................................................................... 28   16.5  No Guarantee of Tax Consequences ............................................................................... 28   16.6  Gender and Number ........................................................................................................ 28   16.7  Severability ...................................................................................................................... 28   16.8  Headings .......................................................................................................................... 29   16.9  Other Compensation Plans .............................................................................................. 29   16.10  Retirement and Welfare Plans ......................................................................................... 29   16.11  Other Awards .................................................................................................................. 29   16.12  Law Limitations/Governmental Approvals ..................................................................... 29   16.13  Delivery of Title .............................................................................................................. 29   16.14  Inability to Obtain Authority ........................................................................................... 29   16.15  Investment Representations ............................................................................................. 29   16.16  Persons Residing Outside of the United States ............................................................... 29   16.17  Arbitration of Disputes .................................................................................................... 30   16.18  No Fractional Shares ....................................................................................................... 30   16.19  Governing Law ................................................................................................................ 30                                                                       iv  

 

                     INDEPENDENCE CONTRACT DRILLING, INC.                          2019 OMNIBUS INCENTIVE PLAN                              (Effective February 27, 2019)                                     ARTICLE I                                                             ESTABLISHMENT, PURPOSE AND DURATION             1.1      Establishment .   The  Company  hereby  establishes  an  incentive      compensation plan, to be known as the “ Independence Contract Drilling, Inc. 2019 Omnibus      Incentive Plan ”, as set forth in this document.  The Plan permits the grant of Incentive Stock      Options,  Nonqualified  Stock  Options,  SARs,  Restricted  Stock,  RSUs,  Performance  Stock      Awards,  Performance  Unit  Awards,  Annual  Cash  Incentive  Awards,  Other  Stock-Based      Awards  and  Cash-Based  Awards.   The  Plan  is  effective  as  of  February  27,  2019  (the      “Effective Date ”), provided  that the Company’s stockholders approve the adoption of the Plan      within 12 months after the date of adoption of the Plan by the Board.             1.2      Purpose of the Plan .  The Plan is intended to advance the interests of the      Company, its Affiliates and its stockholders by providing those persons who have substantial      responsibility  for  the  management  and  growth  of  the  Company  and  its  Affiliates  with      additional performance incentives and an opportunity to obtain or increase their proprietary      interest  in  the  Company,  thereby  encouraging  them  to  continue  in  their  employment  or      affiliation with the Company or its Affiliates.             1.3     Duration of Plan .  The Plan shall continue indefinitely until it is terminated      pursuant to Section 16.1.  No Award may be granted under the Plan on or after the tenth      anniversary of the Effective Date.  The applicable provisions of the Plan will continue in effect      with  respect  to  an  Award  granted  under  the  Plan  for  as  long  as  such  Award  remains      outstanding.  Notwithstanding the foregoing, no Incentive Stock Option may be granted under      the Plan on or after the date that is ten years from the earlier of (a) adoption of the Plan by the      Board and (b) the Effective Date.                                     ARTICLE II                                                                            DEFINITIONS         Each  word  and  phrase  defined  in  this  Article  shall have  the  meaning  set  out  below  throughout  the  Plan,  unless  the  context  in  which  any  such  word  or  phrase  appears  reasonably  requires a broader, narrower or different meaning.         “Affiliate ” means any corporation, partnership, limited liability company or association,  trust or other entity or organization which, directly or indirectly, controls, is controlled by, or is  under common control with, the Company.  For purposes of the preceding sentence, “control”  (including,  with  correlative  meanings,  the  terms  “controlled  by”  and  “under  common  control  with”), as used with respect to any entity or organization, shall mean the possession, directly or  indirectly, of the power (a) to vote more than fifty percent (50%) of the securities having ordinary  voting power for the election of directors or comparable individuals of the controlled entity or    Error! Unknown document property name.   

 

 organization, or (b) to direct or cause the direction of the management and policies of the controlled  entity  or  organization,  whether  through  the  ownership  of  voting  securities  or  by  contract  or  otherwise; provided, however, that with respect to Incentive Stock Options, the term “Affiliate”  means only a Parent Corporation of the Company or a Subsidiary Corporation of the Company or  of any such parent corporation (as such terms are defined in Sections 424(e) and (f) of the Code  and  determined  in  accordance  with  Section  421  of  the  Code);  and  provided  further,  that  with  respect to grants of Nonqualified Options or SARs, the term “Affiliate” means only a corporation  or  other  entity  in  a  chain  of  corporations  and/or  other  entities  in  which  the  Company  has  a  “controlling interest” within the meaning of Treasury Regulation Section 1.414(c)-2(b)(2)(i), but  using the threshold of 50% ownership wherever 80% appears.          “Annual Cash Incentive Award ” means an Award granted pursuant to Article X to an  individual who is then an Employee.         “Authorized Shares ” shall have the meaning ascribed to that term in Section 4.1(a).         “Award ” means, individually or collectively, a grant under the Plan of an Incentive Stock  Option,  a  Nonqualified  Stock  Option,  a  SAR,  Restricted  Stock,  a  RSU,  a  Performance  Stock  Award,  a  Performance  Unit  Award,  an  Annual  Cash  Incentive  Award,  an  Other  Stock-Based  Award or a Cash-Based Award, in each case subject to the terms and provisions of the Plan.         “Award Agreement ” means a written or electronic agreement that sets forth the terms and  conditions applicable to an Award granted under the Plan.         “Beneficial Owner ” shall have the meaning ascribed to such term in Rule 13d-3 of the  General Rules and Regulations under the Exchange Act.         “Board ” means the board of directors of the Company.         “Cash-Based Award ” means an Award granted pursuant to Article XII.         “Code ” means the United States Internal Revenue Code of 1986, as amended, and the rules,  regulations and administrative guidance promulgated thereunder.“Committee ” means (a) in the  case of an Award granted to an Outside Director, the Board, and (b) in the case of any other Award  granted under the Plan, the Compensation Committee of the Board, or a subcommittee thereof, or  such other committee designated by the Board, in each case, consisting of two or more members  of the Board, each of whom is intended to be (i) a “Non-Employee Director” within the meaning  of Rule 16b-3 under the Exchange Act for Awards that are intended to be exempt under Rule 16b- 3 under the Exchange Act and (ii) “independent” within the meaning of the rules of the New York  Stock Exchange or, if the Stock is not listed on the New York Stock Exchange, within the meaning  of the rules of the principal stock exchange on which the Stock is then traded.         “Company  ” means Independence Contract Drilling, Inc., a Delaware corporation, or any  successor (by reincorporation, merger or otherwise).         “Corporate Change ” shall have the meaning ascribed to that term in Section 4.5(b).                                           2  

 

       “Dividend Equivalent ” means a payment equivalent in amount to dividends paid with   respect to the Stock to the Company’s stockholders.          “Effective Date ” shall have the meaning ascribed to that term in Section 1.1.         “Employee” means (a) a person employed by the Company or any Affiliate as a common  law  employee  and  (b)  a  person  who  has  agreed  to  become  a  common  law  employee  of  the  Company or any Affiliate and is expected to become such within six (6) months after the date of  grant of the Award.         “Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any successor  act.         “Fair Market Value ” of the Stock as of any particular date means,          (a)   if the Stock is traded on a stock exchange,                (i)   and if the Stock is traded on that date, the closing sale price of the Stock on                    that date; or               (ii)  and if the Stock is not traded on that date, the closing sale price of the Stock                    on the last trading date immediately preceding that date;         as reported on the principal securities exchange on which the Stock is traded; or         (b)   if the Stock is traded in the over-the-counter market,               (i)   and if the Stock is traded on that date, the average between the high bid and                    low asked price on that date; or               (ii)  and if the Stock is not traded on that date, the average between the high bid                    and low asked price on the last trading date immediately preceding that date;         as reported in such over-the-counter market; provided , however, that if the Stock is not so  traded, the Committee may provide for another method or means for determining such fair market  value,  which  method  or  means  shall  comply  with  the requirements  of  a  reasonable  valuation  method as described under Section 409A.         “Fiscal Year ” means the calendar year.         “Freestanding  SAR ”  means  a  SAR  that  is  granted  independently  of  any Options,  as  described in Article VI.         “Government Agencies ” shall have the meaning ascribed to that term in Section 4.7.         “Holder ” means a person who has been granted an Award or any person who is entitled to  receive shares of Stock or cash under an Award.                                           3  

 

       “Incentive Stock Option ” or “ ISO ” means an option to purchase Stock granted pursuant   to Article V that is designated as an incentive stock option and that satisfies the requirements of   section 422 of the Code.          “Nonqualified  Stock  Option ”  or  “ NQSO ”  means  a  “nonqualified  stock  option”  to   purchase Stock granted pursuant to Article V that is not an Incentive Stock Option.          “Option ” means an Incentive Stock Option or a Nonqualified Stock Option.          “Option Price ” shall have the meaning ascribed to that term in Section 5.4.          “Other  Stock-Based  Award ”  means  an  equity-based  or  equity-related  Award  not  otherwise described by the terms and provisions of the Plan that is granted pursuant to Article XI.         “Outside Director ” means a director of the Company who is not an Employee.         “Parent Corporation ” means any corporation (other than the Company) in an unbroken  chain of corporations ending with the Company if, at the time of the action or transaction, each of  the corporations other than the Company owns stock possessing 50 percent or more of the total  combined voting power of all classes of stock in one of the other corporations in the chain.         “Performance Goals ” means one or more of the criteria described in Section 9.2 on which  the performance goals applicable to an Award may be based.         “Performance Period ” means any period designated by the Committee during which (a)  the Performance Goals applicable to an Award shall be measured and (b) the conditions to vesting  applicable to an Award shall remain in effect.         “Performance Stock Award ” means an Award designated as a performance stock award  granted to a Holder pursuant to Article IX.         “Performance Unit Award ” means an Award designated as a performance unit award  granted to a Holder pursuant to Article IX.         “Period of Restriction ” means any period designated by the Committee during which (a)  the Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged,  hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Award  Agreement relating to such award, or (b) the conditions to vesting applicable to any other Award  shall remain in effect.         “Permissible under Section 409A ” means with respect to a particular action (such as, the  grant, payment, vesting, settlement or deferral of an amount or award under the Plan) that such  action is intended to avoid the compensation at issue from being subject to the additional tax or  interest applicable under Section 409A and related penalties.         “Plan ” means the Independence Contract Drilling, Inc. 2019 Omnibus Incentive Plan, as   set forth in this document as it may be amended from time to time.                                           4  

 

      “Prior Plan ” means the Independence Contract Drilling, Inc. Amended and Restated 2014  Omnibus  Incentive  Plan  and  each  other  equity  plan  maintained  by  the  Company  under  which  awards are outstanding as of the effective date of this Plan.         “Restricted  Stock ”  means  shares  of  restricted  Stock  issued  or  granted  under  the  Plan  pursuant to Article VII.         “Restricted Stock Award ” means an authorization by the Committee to issue or transfer  Restricted Stock to a Holder.         “RSU ” means a restricted stock unit credited to a Holder’s ledger account maintained by  the Company pursuant to Article VIII.         “RSU Award ” means an Award granted pursuant to Article VIII.         “SAR ” means a stock appreciation right granted under the Plan pursuant to Article VI.         “Section 409A ” means section 409A of the Code or any successor statute.         “Separation from Service ” means, except as otherwise provided in the case of an ISO in  the  following  sentence  of  this  Section  0,  (a)  if  the  Award  Agreement  is  not  exempt  from  the  application  of  the  requirements  of  Section  409A,  the  termination  of  the  Award  recipient’s  employment or service relationship with the Company and all Affiliates in a manner that satisfies  Section 409A as determined by the Committee and (b) if the Award Agreement is exempt from  the  application  of  the  requirements  of  Section  409A,  the  termination  of  the  Award  recipient’s  employment  or  service  relationship  with  the  Company  and  all  Affiliates  as  determined  by  the  Committee.   “ Separation  from  Service ”  means,  in  the  case  of  an  ISO,  the  termination  of the  Employee’s  employment  relationship  with  all  of  the Company,  any  Parent  Corporation,  any  Subsidiary Corporation and any parent or subsidiary corporation (within the meaning of section  422(a)(2) of the Code) of any such corporation that issues or assumes an ISO in a transaction to  which section 424(a) of the Code applies.         “Stock ” means the common stock of the Company, $0.01 par value per share (or such other  par value as may be designated by act of the Company’s stockholders).         “Subsidiary  Corporation ”  means  any  corporation  (other  than  the  Company)  in  an  unbroken  chain  of  corporations  beginning  with  the  Company  if,  at  the  time  of  the  action  or  transaction, each of the corporations other than the last corporation in an unbroken chain owns  stock possessing 50 percent or more of the total combined voting power of all classes of stock in  one of the other corporations in the chain.         “Substantial Risk of Forfeiture ” shall have the meaning ascribed to that term in Section  409A.         “Substitute Award ” means an Award granted under this Plan upon the assumption of, or  in substitution for, outstanding equity awards previously granted by a company or other entity in  connection  with  a  corporate  transaction,  including a  merger,  combination,  consolidation  or  acquisition of property or stock; provided, however, that in no event shall the term “Substitute                                         5  

 

 Award” be construed to refer to an Award made in connection with the cancellation and repricing   of an Option or SAR.          “Tandem SAR ” means a SAR that is granted in connection with a related Option pursuant  to Article VI herein, the exercise of which shall require forfeiture of the right to purchase a share  of Stock under the related Option (and when a share of Stock is purchased under the Option, the  Tandem SAR shall similarly be canceled).         “Ten Percent Stockholder ” means an individual, who, at the time the applicable Option  is granted, owns stock possessing more than ten percent (10%) of the total combined voting power  of all classes of stock of the Company or any Parent Corporation or Subsidiary Corporation.  An  individual shall be considered as owning the stock owned, directly or indirectly, by or for his or  her  brothers  and  sisters  (whether  by  the  whole  or  half-blood),  spouse,  ancestors,  and  lineal  descendants; and stock owned, directly or indirectly, by or for a corporation, partnership, estate,  or trust, shall be considered as being owned proportionately by or for its stockholders, partners, or  beneficiaries.                                     ARTICLE III                                                                            ELIGIBILITY          Except as otherwise specified in this Article III, the persons who are eligible to receive  Awards under the Plan are Employees and Outside Directors provided , however, that (a) only those  persons who are, on the dates of grant, Employees of the Company or any Parent Corporation or  Subsidiary Corporation are eligible for grants of Incentive Stock Options under the Plan, (b) the  only  persons  who  are  eligible  to  receive  Annual  Cash  Incentive  Awards  under  the  Plan  are  Employees and (c) Outside Directors and Third Party Service Providers are only eligible to receive  NQSOs,  SARs,  Restricted  Stock,  RSUs,  Performance  Stock  Awards  and  Performance  Unit  Awards.  Awards other than ISOs may also be granted to a person who is expected to become an  Employee within six months as specified in Section 14.2(b) of the Plan.                                     ARTICLE IV                                                           GENERAL PROVISIONS RELATING TO AWARDS             4.1     Authority to Grant Awards   The Committee may grant Awards to those      Employees and Outside Directors as the Committee shall from time to time determine, under      the terms and conditions of the Plan.  Subject only to any applicable limitations set out in the      Plan, the number of shares of Stock or other value to be covered by any Award to be granted      under the Plan shall be as determined by the Committee in its sole discretion.                (a)   Subject to adjustment as provided in 4.5, the aggregate number of shares of        Stock  with  respect  to  which  Awards  may  be  granted  under  the  Plan  is  5,500,000  (the        “Authorized Shares ”).  At the time this Plan becomes effective, none of the shares of Stock        available for future grant under the Prior Plans shall be available for grant under such Prior        Plans.                                           6  

 

         (b)   Subject to adjustment as provided in 4.5, the aggregate number of shares of     Stock with respect to which ISOs may be granted under the Plan is equal to the Authorized     Shares.            (c)   The aggregate value of the cash compensation and the grant date fair value    of shares of Stock that may be awarded or granted under this Plan during any fiscal year of    the Company to any Outside Director shall not exceed $350,000; provided, in connection    with  an  appointment  of  an  Outside  Director  to  the  Board,  when  accounting  for  initial    awards under this Plan issuable to such Outside Director, such annual aggregate value shall    not exceed $450,000 rather than the foregoing limit.         4.2     Shares  That  Count  Against  Limit .   To  the  extent  that  shares  of  Stock  subject to an outstanding Award granted under the Plan, other than Substitute Awards, are not  issued or delivered by reason of (a) the expiration, termination, cancellation or forfeiture of  such Award (excluding shares subject to an option cancelled upon settlement in shares of a  related Tandem SAR or shares subject to a Tandem SAR cancelled upon exercise of a related  option) or (b) the settlement of such Award in cash, then such shares of Stock shall again be  available  under  this  Plan.  Notwithstanding  anything  herein  to  the  contrary,  (i)  shares  repurchased by the Company on the open market with the proceeds of an Option exercise and  (ii)  shares  delivered  to  or  withheld  by  the  Company  to  pay  the  purchase  price  or  the  withholding taxes related to an outstanding award shall not again be available under this Plan.   The maximum number of shares of Stock available for issuance under the Plan shall not be  reduced to reflect any dividends or Dividend Equivalents that are reinvested into additional  shares  of  Stock  or  credited  as  additional  Restricted  Stock,  Restricted  Stock  Units,  Performance Shares, or other Stock-Based Awards.         4.3      Non-Transferability .   Except  as  specified  in  the  applicable  Award  Agreements or in domestic relations court orders, an Award shall not be transferable by the  Holder  other  than  by  will  or  under  the  laws  of  descent  and  distribution,  and  shall  be  exercisable, during the Holder’s lifetime, only by him or her.  Any attempted assignment of  an  Award  in  violation  of  this  Section  shall  be  null  and  void.   In  the  discretion  of  the  Committee, any attempt to transfer an Award other than under the terms of the Plan and the  applicable Award Agreement may terminate the Award.         4.4      Requirements of Law .  The Company shall not be required to sell or issue  any shares of Stock under any Award if issuing those shares of Stock would constitute or  result in a violation by the Holder or the Company of any provision of any law, statute or  regulation of any governmental authority.  Specifically, in connection with any applicable  statute or regulation relating to the registration of securities, upon exercise of any Option or  pursuant to any other Award, the Company shall not be required to issue any shares of Stock  unless the Committee has received evidence satisfactory to it to the effect that the Holder will  not transfer the shares of Stock except in accordance with applicable law, including receipt of  an opinion of counsel satisfactory to the Company to the effect that any proposed transfer  complies with applicable law.  The determination by the Committee on this matter shall be  final,  binding  and  conclusive.   The  Company  may,  but  shall  in  no  event  be  obligated  to,  register any shares of Stock covered by the Plan pursuant to applicable securities laws of any  country or any political subdivision.  In the event the shares of Stock issuable on exercise of                                      7  

 

an Option or pursuant to any other Award are not registered, the Company may imprint on  the  certificate  evidencing  the  shares  of  Stock  any legend  that  counsel  for  the  Company  considers necessary or advisable to comply with applicable law, or, should the shares of Stock  be represented by book or electronic entry rather than a certificate, the Company may take  such steps to restrict transfer of the shares of Stock as counsel for the Company considers  necessary or advisable to comply with applicable law.  The Company shall not be obligated  to take any other affirmative action in order to cause or enable the exercise of an Option or  any other Award, or the issuance of shares of Stock pursuant thereto, to comply with any law  or regulation of any governmental authority.         4.5     Changes in the Company’s Capital Structure .           (a)   The existence of outstanding Awards shall not affect in any way the right     or power of the Company or its stockholders to make or authorize any or all adjustments,     recapitalizations, reorganizations or other changes in the Company’s capital structure or its     business, any merger or consolidation of the Company, any issue of bonds, debentures,     preferred or prior preference shares ahead of or affecting the Stock or Stock rights, the     dissolution or liquidation of the Company, any sale or transfer of all or any part of its assets     or business or  any other corporate act or proceeding, whether of a similar character or     otherwise.            (b)   In the event of any equity restructuring (within the meaning of Financial     Accounting  Standards  Board  Accounting  Standards  Codification  Topic  718,     Compensation—Stock  Compensation  or  any  successor  or  replacement  accounting     standard) that causes the per share value of shares of Stock to change, such as a stock     dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary     cash dividend, the number and class of securities available under this Plan, the terms of     each outstanding Option and SAR (including the number and class of securities subject to     each outstanding option or SAR and the purchase price or base price per share) and the     terms of each other Award (including the number and class of securities subject thereto),     shall be appropriately adjusted by the Committee, such adjustments to be made in the case     of outstanding Options and SARs in accordance with Section 409A of the Code.  In the     event of any other change in corporate capitalization, including a merger, consolidation,     reorganization,  or  partial  or  complete  liquidation of  the  Company,  such  equitable     adjustments  described  in  the  foregoing  sentence  may  be  made  as  determined  to  be     appropriate and equitable by the Committee to prevent dilution or enlargement of rights of     participants. In either case, the decision of the Committee regarding any such adjustment     shall be final, binding and conclusive.            (c)   If  while  unexercised  Awards  remain  outstanding  under  the  Plan  (i)  the     Company  shall  not  be  the  surviving  entity  in  any  merger,  consolidation  or  other     reorganization (or survives only as a subsidiary of an entity other than an entity that was     wholly-owned by the Company immediately prior to such merger, consolidation or other     reorganization),  (ii)  the  Company  sells,  leases  or exchanges  or  agrees  to  sell,  lease  or     exchange all or substantially all of its assets to any other person or entity (other than an     entity wholly-owned by the Company), (iii) the Company is to be dissolved and liquidated,     (iv) any person or entity, including a “group” as contemplated by section 13(d)(3) of the                                      8  

 

 Exchange Act, acquires or gains ownership or control (including, without limitation, the   power to vote) of more than 50% of the outstanding shares of the Company’s voting stock   (based upon voting power entitled to vote generally in the election of Directors), or (v) as   a result of or in  connection with a contested election of directors of the Company, the   persons who were directors of the Company before such election shall cease to constitute   a majority of the Board (each such event is referred to herein as a “ Corporate Change ”),   then, except as otherwise provided in an Award Agreement or another agreement between   the Holder and the Company ( provided  that such exceptions shall not apply in the case of   a reincorporation merger), or as a result of the Committee’s effectuation of one or more of   the alternatives described below, there shall be no acceleration of the time at which any   Award  then  outstanding  may  be  exercised,  and  (x) no  sooner  than  effective  as  of  the   consummation  by  the  Company  of  such  merger,  consolidation,  combination,   reorganization, sale, lease, or  exchange of assets or dissolution and liquidation or such   election of directors and (y) no later than thirty (30) days after a Corporate Change of the   type  described  in  clause  (iv),  the  Committee,  acting  in  its  sole  and  absolute  discretion   without  the  consent  or  approval  of  any  Holder,  shall  act  to  effect  one  or  more  of  the   following alternatives, which may vary among individual Holders and which may vary   among  Awards  held  by  any  individual  Holder  ( provided   that,  with  respect  to  a  reincorporation merger in which Holders of the Company’s ordinary shares will receive  one ordinary share of the successor corporation for each ordinary share of the Company,  none of such alternatives shall apply and, without Committee action, each Award shall  automatically convert into a similar award of the successor corporation exercisable for the  same number of ordinary shares of the successor as the Award was exercisable for ordinary  shares of Stock of the Company):               (i)   require  that  (A)  some  or  all  outstanding  Options  and  SARs  shall         become  exercisable  in  full  or  in  part,  either  immediately  or  upon  a  subsequent         termination of employment, (B) the Period of Restriction applicable to some or all         outstanding  Awards  shall  lapse  in  full  or  in  part, either  immediately  or  upon  a         subsequent termination of employment, (C) the Performance Period applicable to         some or all outstanding awards shall lapse in full or in part, and (D) the Performance         Goals applicable to some or all outstanding Awards shall be deemed to be satisfied         at the target, maximum or any other level;                (ii)  require that shares of capital stock of the corporation resulting from         or succeeding to the business of the Company pursuant to such Corporate Change,         or a parent corporation thereof, be substituted for some or all of the shares of Stock         subject to an outstanding Award, with an appropriate and equitable adjustment to         such award as determined by the Board in accordance with Section 4.5(b); and/or                (iii)  require outstanding Awards, in whole or in part, to be surrendered         to the Company by the Holder, and to be immediately cancelled by the Company,         and to provide for the holder to receive (A) a cash payment in an amount equal to         (x) in the case of an Option or an SAR, the aggregate number of shares of Stock         then  subject  to  the  portion  of  such  Option  or  SAR  surrendered,  whether  or  not         vested or exercisable, multiplied by the excess, if any, of the Fair Market Value of         a share of Stock as of the date of the Corporate Change, over the purchase price or                                    9  

 

        base price per share of Stock subject to such Option or SAR, (y) in the case of an          Award denominated in shares of Stock, the number of shares of Stock then subject          to  the  portion  of  such  award  surrendered  to  the  extent  the  Performance  Goals          applicable to such award have been satisfied or are deemed satisfied pursuant to          Section 4.5(c)(i), whether or not vested, multiplied by the Fair Market Value of a          share of Stock as of the date of the Corporate Change, and (z) in the case of an          Award denominated in cash, the value of the Award then subject to the portion of          such Award surrendered to the extent the Performance Goals applicable to such          award have been satisfied or are deemed satisfied pursuant to Section 4.5(c)(i); (B)          shares  of  capital  stock  of  the  corporation  resulting  from  or  succeeding  to  the          business  of  the  Company  pursuant  to  such  Corporate Change,  or  a  parent          corporation thereof, having a fair market value not less than the amount determined          under clause (A) above; or (C) a combination of the payment of cash pursuant to          clause (A) above and the issuance of shares pursuant to clause (B) above.         4.6     Election Under Section 83(b) of the Code .  No Holder shall exercise the  election permitted under section 83(b) of the Code with respect to any Award without the  prior written approval of the General Counsel or the Chief Financial Officer of the Company.   Any Holder who makes an election under section 83(b) of the Code with respect to any Award  without the prior written approval of the General Counsel or the Chief Financial Officer of  the Company may, in the discretion of the Committee, forfeit any or all Awards granted to  him or her under the Plan.         4.7     Forfeiture for Cause .  Notwithstanding any other provision of the Plan or  an Award Agreement, if the Committee finds by a majority vote that a Holder, before or after  his  Separation  from  Service,  (a)  committed  fraud,  embezzlement,  theft,  felony  or  act  of  dishonesty in the course of his employment by the Company or an Affiliate which conduct  damaged the Company of an Affiliate, (b) disclosed trade trade secrets of the Company or an  Affiliate or (c) violated the terms of any non-competition, non-disclosure or similar agreement  with respect to the Company or any Affiliate to which the Holder is a party, then as of the  date the Committee makes its finding, some or all Awards awarded to the Holder (including  vested Awards that have been exercised, vested Awards that have not been exercised and  Awards that have not yet vested), as determined by the Committee in its sole discretion, and  all net proceeds realized with respect to any such Awards, will be forfeited to the Company  on such terms as determined by the Committee.  The findings and decision of the Committee  with respect to such matter, including those regarding the acts of the Holder and the damage  done to the Company, will be final for all purposes.  No decision of the Committee, however,  will affect the finality of the discharge of the individual by the Company or an Affiliate or  severance  of  the  individual’s  affiliation  with  the Company  and  all  Affiliates.    Nothing  contained in this Section 4.7 or elsewhere in the Plan is intended to limit a Holder’s ability to  (i) report possible violations of law or regulation to, or file a charge or complaint with, the  Securities and Exchange Commission, the Equal Employment Opportunity Commission, the  National  Labor  Relations  Board,  the  Occupational  Safety  and  Health  Administration,  the  Department of Justice, the Congress, any Inspector General, or any other federal, state or local  governmental agency or commission (“ Government Agencies ”), (ii) communicate with any  Government Agencies or otherwise participate in any investigation or proceeding that may be  conducted by any Government Agency, including providing documents or other information,                                     10  

 

without  notice  to  the  Company,  or  (iii)  under  applicable  United  States  federal  law  to  (x)  disclose in confidence trade secrets to federal, state, and local government officials, or to an  attorney, for the sole purpose of reporting or investigating a suspected violation of law or (y)  disclose trade secrets in a document filed in a lawsuit or other proceeding, but only if the filing  is made under seal and protected from public disclosure.                        4.8     Forfeiture Events .  The Committee may specify in an Award Agreement  that the Holder’s rights, payments, and benefits with respect to an Award shall be subject to  reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified  events,  in  addition  to  any  otherwise  applicable  vesting  or  performance  conditions  of  an  Award.  Such events may include, but shall not be limited to, Separation from Service for  cause,  Separation  from  Service  for  any  other  reason,  violation  of  material  policies  of  the  Company  and  its  Affiliates,  breach  of  noncompetition,  confidentiality,  or  other  restrictive  covenants that may apply to the Holder, or other conduct by the Holder that is detrimental to  the business or reputation of the Company and its Affiliates.         4.9     Recoupment  in  Restatement  Situations .   Without  limiting  the  applicability of Section 4.7 or Section 4.8, if the Company is required to prepare an accounting  restatement due to the material noncompliance of the Company with any financial reporting  requirement under applicable securities laws, the current or former Holder who was a current  or former executive officer of the Company or an Affiliate shall forfeit and must repay to the  Company  any  compensation awarded under the  Plan to the  extent specified in any  of the  Company’s recoupment policies established or amended (now or in the future) in compliance  with  the  rules  and  standards  of  the  Securities  and Exchange  Commission  under  or  in  connection  with  Section  10D  of  the  Exchange  Act.   In  addition,  without  limiting  the  applicability of Section 4.7 or Section 4.8, any Award granted pursuant to the Plan, and any  Stock or property issued or cash paid pursuant to such an Award, shall be subject to any  recoupment, forfeiture or clawback policy that may be adopted by the Board of the Company  from time to time and to any requirement of applicable law, regulation or listing standard that  requires the Company to recoup, forfeit or claw back compensation paid pursuant to such an  Award.         4.10    Award  Agreements .   Each  Award  shall  be  embodied  in  an  Award  Agreement  that  shall  be  subject  to  the  terms  and  conditions  of  the  Plan.   The  Award  Agreement shall be signed by an executive officer of the Company, other than the Holder, on  behalf  of  the  Company,  and  may  be  signed  by  the  Holder  to  the  extent  required  by  the  Committee.   The  Award  Agreement  may  specify  the  effect  of  a  change  in  control  of  the  Company or a Separation from Service of the Holder on the Award.  The Award Agreement  may contain any other provisions that the Committee in its discretion shall deem advisable  which are not inconsistent with the terms and provisions of the Plan.         4.11    Amendments  of  Award  Agreements .   The  terms  of  any  outstanding  Award under the Plan may be amended from time to time by the Committee in its discretion  in any manner that it deems appropriate and that is consistent with the terms of the Plan or  necessary to implement the requirements of the Plan.  However, no such amendment shall  adversely affect in a material manner any right of a Holder without his or her written consent.   Except as specified in Section Error! Reference source not found. , the Committee may not                                     11  

 

directly or indirectly lower the exercise price of a previously granted Option or the grant price  of a previously granted SAR.         4.12     Rights as Stockholder .  A Holder shall not have any rights as a stockholder  with respect to Stock covered by an Option, a SAR, an RSU, a Performance Unit, or an Other  Stock-Based  Award  payable  in  Stock  until  the  date, if  any,  such  Stock  is  issued  by  the  Company;  and,  except  as  otherwise  provided  in  Section  4.5  or  an  Award  Agreement,  no  adjustment for dividends, or otherwise, shall be made if the record date therefor is prior to the  date of issuance of such Stock.         4.13    Issuance  of  Shares  of  Stock .   Shares  of  Stock,  when  issued,  may  be  represented by a certificate or by book or electronic entry.         4.14    Restrictions  on  Stock  Received .   The  Committee  may  impose  such  conditions and restrictions on any shares of Stock issued pursuant to an Award as it may deem  advisable  or  desirable.   These  restrictions  may  include,  but  shall  not  be  limited  to,  a  requirement that the Holder hold the shares of Stock for a specified period of time.         4.15    Section 409A .  Awards shall be designed, granted and administered in such  a manner that they are intended to either be exempt from the application of, or comply with,  the requirements of Section 409A.  The Company makes no representations that the Plan, the  administration of the Plan, any Award Agreement or the amounts hereunder comply with, or  are exempt from, Section 409A and the Company undertakes no obligation to ensure such  compliance  or  exemption.   The  Plan  and  each  Award  Agreement  under  the  Plan  that  is  intended to comply the requirements of Section 409A shall be construed and interpreted in  accordance with such intent.  Notwithstanding any other provision of the Plan, if Holder is a  “specified employee” (within the meaning of Section 409A), and the Company determines  that a payment or vesting under an Award is not Permissible under Section 409A, then no  payment shall be made or vesting shall occur under the Award due to a “separation from  service” (within the meaning of Section 409A of the Code) for any reason before the earlier  of the date (i) that is six (6) months after the date on which the Holder incurs such separation  from service or (ii) of the Holder’s death.         4.16    Date of Grant .  The date on which an Option or SAR is granted shall be  the date the Company completes the corporate action constituting an offer of Stock for sale to  a Holder under the terms and conditions of the Option or SAR; provided  that such corporate  action shall not be considered complete until the date on which the maximum  number of shares  that can be purchased under the Option or SAR and the minimum Option Price or grant price  are fixed or determinable.  If the corporate action contemplates an immediate offer of Stock  for sale to a class of individuals, then the date of the granting of an Option or SAR is the time  or date of that corporate action, if the offer is to be made immediately.  If the corporate action  contemplates a particular date on which the offer is to be made, then the date of grant is the  contemplated date of the offer.         4.17    Source  of  Shares  Deliverable  Under  Awards .   Any  shares  of  Stock  delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued  shares of Stock or of treasury shares of Stock.                                     12  

 

         4.18     Minimum Vesting Requirements .  No Award granted under the Plan shall     become exercisable or vested prior to the one-year anniversary of the date of grant; provided,     however, that, such restriction shall not apply to Awards granted under this Plan with respect     to the number of shares of Stock which, in the aggregate, does not exceed five percent (5%)     of the total number of shares initially available for Awards under this Plan.  This Section 4.18     shall not restrict the right of the Committee to provide in an Award Agreement or otherwise     for the acceleration or continuation of the vesting or exercisability of an Award upon or after     a Change in Control, a Separation from Service or otherwise including, without limitation, as     a result of a termination without cause, due to retirement or constructive termination.                                    ARTICLE V                                                                             OPTIONS            5.1      Authority to Grant Options .  Subject to the terms and provisions of the     Plan, the Committee, at any time, and from time to time, may grant Options under the Plan to     eligible persons under Article III in such number and upon such terms as the Committee shall     determine; provided  that ISOs may be granted only to eligible Employees of the Company or     of any Parent Corporation or Subsidiary Corporation (as permitted by section 422 of the Code     and the regulations thereunder).            5.2      Type  of  Options  Available .   Options  granted  under  the  Plan  may  be     NQSOs or ISOs.            5.3      Option Agreement .  Each Option grant under the Plan shall be evidenced     by an Award Agreement that shall specify (a) whether the Option is intended to be an ISO or     an NQSO, (b) the Option Price, (c) the duration of the Option, (d) the number of shares of     Stock  to  which  the  Option  pertains,  (e)  the  exercise  restrictions,  if  any,  applicable  to  the     Option and (f) such other provisions as the Committee shall determine that are not inconsistent     with the terms and provisions of the Plan.  Notwithstanding the designation of an Option as     an ISO in the applicable Award Agreement for such Option, to the extent the limitations of     Section  5.10  of  the  Plan  are  exceeded  with  respect to  the  Option  or  the  Option  does  not     otherwise qualify as an ISO, the portion of the Option in excess of the limitation or which     does not otherwise qualify as an ISO shall be treated as a NQSO.  An Option granted under     the Plan may not be granted with any Dividend Equivalents rights.            5.4      Option Price .  Except with respect to Substitute Awards, the price at which     shares of Stock may be purchased under an Option (the “ Option Price ”) shall not be less than     one hundred percent (100%) of the Fair Market Value of the shares of Stock on the date the     Option  is  granted; provided , however ,  if  the  Option  is  an  ISO  granted  to  a  Ten  Percent     Stockholder, the Option Price must not be less than one hundred ten percent (110%) of the     Fair  Market  Value  of  the  shares  of  Stock  on  the  date  the  ISO  is  granted.   Subject  to  the     limitations  set  forth  in  the  preceding  sentences  of  this  Section  5.4,  the  Committee  shall     determine the Option Price for each grant of an Option under the Plan.         Notwithstanding the foregoing, in the case of an Option that is a Substitute Award, the  purchase price per share of the shares subject to such Option may be less than one hundred percent                                        13  

 

(100%)  of the Fair Market Value per share on the date of grant, provided, that the excess of: (a)  the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares  subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the  excess of: (i) the aggregate fair market value (as of the time immediately preceding the transaction  giving rise to the Substitute Award, such fair market value to be determined by the Committee) of  the shares of the predecessor company or other entity that were subject to the grant assumed or  substituted for by the Company, over (ii) the aggregate purchase price of such shares.            5.5      Duration of Option .  An Option shall not be exercisable after the earlier of     (a) the general term of the Option specified in the applicable Award Agreement (which shall     not exceed ten years, and, in the case of a Ten Percent Stockholder, no ISO shall be exercisable     later than the fifth (5th) anniversary of the date of its grant) or (b) the period of time specified     in the applicable Award Agreement that follows the Holder’s Separation from Service.            5.6     Amount Exercisable .  Each Option may be exercised at the time, in the     manner and subject to the conditions the Committee specifies in the Award Agreement in its     sole discretion.            5.7      Exercise of Option .               (a)   General Method of Exercise .  Subject to the terms and provisions of the        Plan and the applicable Award Agreement, Options may be exercised in whole or in part        from  time  to  time  by  the  delivery  of  written  notice  in  the  manner  designated  by  the        Committee stating (i) that the Holder wishes to exercise such Option on the date such notice        is so delivered, (ii) the number of shares of Stock with respect to which the Option is to be        exercised and (iii) the address to which a stock certificate, if any, representing such shares        of  Stock  should  be  mailed  or  delivered,  or  the  account  to  which  the  shares  of  Stock        represented by book or electronic entry should be delivered.  Except in the case of exercise        by a third party broker as provided below, in order for the notice to be effective the notice        must be accompanied by payment of the Option Price (and all applicable federal, state,        local and foreign withholding taxes described in Section 17.3) by any combination of the        following: (v) cash, certified check, or bank draft for an amount equal to the Option Price        under  the  Option,  (w)  by  delivery  (either  actual  delivery  or  by  attestation  procedures        established by the Company) of shares of Stock with a Fair Market Value on the date of        exercise  equal  to  the  Option  Price  under  the  Option  (if  approved  in  advance  by  the        Committee  or  an  executive  officer  of  the  Company), (x)  the  Committee  may  permit  a        Holder to pay such Holder’s Option Price upon the exercise of an Option by having the        Company  reduce  the  number  of  shares  of  Stock  that  will  be  delivered  pursuant  to  the        exercise of the Option, (y) as described further in (c) below, an election to make a cashless        exercise through a registered broker-dealer (if approved in advance by the Committee or        an executive officer of the Company) or (z) except as specified below, any other form of        payment  which  is  acceptable  to  the  Committee.   Whenever  an  Option  is  exercised  by        exchanging shares of Stock owned by the Holder, the Holder shall deliver to the Company        or its delegate certificates registered in the name of the Holder representing a number of        shares of Stock legally and beneficially owned by the Holder, free of all liens, claims, and        encumbrances of every kind, accompanied by stock powers duly endorsed in blank by the        record holder of the shares represented by the certificates, (with signature guaranteed by a                                        14  

 

   commercial  bank  or  trust  company  or  by  a  brokerage firm  having  a  membership  on  a     registered  national  stock  exchange).   The  delivery of  certificates  upon  the  exercise  of     Option  is  subject  to  the  condition  that  the  person exercising  the  Option  provide  the     Company  with  the  information  the  Company  might  reasonably  request  pertaining  to     exercise, sale or other disposition of an Option.            (b)   Issuance of Shares .  Subject to Section 4.3 and Section 5.7(c), as promptly     as practicable after receipt of written notification and payment, in the form required by     Section 5.7(a), of an amount of money necessary to satisfy the aggregate option price and     any withholding tax liability that may  result from the exercise of such Option, the Company     shall deliver to the Holder certificates for the number of shares with respect to which the     Option has been exercised, issued in the Holder’s name.  Delivery of the shares shall be     deemed effected for all purposes when a stock transfer agent of the Company shall have     deposited the certificates in the United States mail, addressed to the Holder, at the address     specified by the Holder or shall have transferred to the account designated by the Holder     to which the shares of Stock represented by book or electronic entry are to be delivered.            (c)   Exercise  Through  Third-Party  Broker .   The  Committee  may  permit  a     Holder to elect to pay the Option Price and any applicable tax withholding resulting from     such exercise by authorizing a third-party broker to sell all or a portion of the shares of     Stock acquired upon exercise of the Option and remit to the Company a sufficient portion     of the sale proceeds to pay the Option Price and any applicable federal, state, local and     foreign tax withholding resulting from such exercise.            (d)   Limitations on Exercise Alternatives .  An Option may not be exercised for     a fraction of a share of Stock.         5.8      Transferability-Incentive  Stock  Options .   Notwithstanding  anything  in  the Plan or an Award Agreement to the contrary, no ISO granted under the Plan may be sold,  transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or  by the laws of descent and distribution, and all ISOs granted to an Employee under this Article  V shall be exercisable during his or her lifetime only by such Employee.         5.9      No Rights as Stockholder .  A Holder of an Option shall not have any rights  as a stockholder with respect to Stock covered by an Option until the date a stock certificate  for such Stock is issued by the Company.  Except as otherwise provided in Section 4.5, no  adjustment for dividends, or otherwise, shall be made if the record date therefor is prior to the  date of issuance of such certificate.         5.10     $100,000 Limitation on ISOs .  To the extent that the aggregate Fair Market  Value of shares of Stock with respect to which ISOs first become exercisable by a Holder in  any calendar year exceeds $100,000, taking into account both shares of Stock subject to ISOs  under the Plan and Stock subject to ISOs under all other plans of the Company, such Options  shall be treated as NQSOs.  For this purpose, the “Fair Market Value” of the shares of Stock  subject to Options shall be determined as of the date the Options were awarded.  In reducing  the number of Options treated as ISOs to meet the $100,000 limit, the most recently granted  Options shall be reduced first.  To the extent a reduction of simultaneously granted Options                                     15  

 

    is necessary to meet the $100,000 limit, the Committee may, in the manner and to the extent      permitted by law, designate which shares of Stock are to be treated as shares acquired pursuant      to the exercise of an ISO.             5.11     Separation from Service .  Each Award Agreement shall set forth the extent      to which the Holder of an Option shall have the right to exercise the Option following the      Holder’s Separation from Service.  Such provisions shall be determined in the sole discretion      of  the  Committee,  need  not  be  uniform  among  all  Options  issued  pursuant  to  the  Award      Agreement or the Plan, and may reflect distinctions based on the reasons for termination or      severance.                                     ARTICLE VI                                                                    STOCK APPRECIATION RIGHTS             6.1      Authority to Grant SAR Awards .  Subject to the terms and provisions of      the Plan, the Committee, at any time, and from time to time, may grant SARs under the Plan      to eligible persons under Article III in such number and upon such terms as the Committee      shall determine.  Subject to the terms and conditions of the Plan, the Committee shall have      complete  discretion  in  determining  the  number  of  SARs  granted  to  each  Holder  and,      consistent with the provisions of the Plan, in determining the terms and conditions pertaining      to such SARs.             6.2      Type of Stock Appreciation Rights Available .  The Committee may grant      Freestanding SARs, Tandem SARs, or any combination of these forms of SARs.             6.3      General Terms .  Subject to the terms and conditions of the Plan, a SAR      granted under the Plan shall confer on the recipient a right to receive, upon exercise thereof,      an amount equal to the excess of (a) the Fair Market Value of one share of the Stock on the      date of exercise over (b) the grant price of the SAR, which shall not be less than one hundred      percent (100%) of the Fair Market Value of one share of the Stock on the date of grant of the      SAR except in the case of Substitute Awards.  The grant price of Tandem SARs shall not be      less than the Option Price of the related Option.  A SAR granted under the Plan may not be      granted with any Dividend Equivalents rights.         Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the grant  price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value  per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as  of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over  (b) the aggregate base price thereof does not exceed the excess of: (i) the aggregate fair market  value (as of the time immediately preceding the transaction giving rise to the Substitute Award,  such  fair  market  value  to  be  determined  by  the  Committee)  of  the  shares  of  the  predecessor  company or other entity that were subject to the grant assumed or substituted for by the Company,  over (ii) the aggregate base price of such shares.             6.4     SAR Agreement  .  Each Award of SARs granted under the Plan shall be      evidenced by an Award Agreement that shall specify (a) the grant price of the SAR, (b) the                                         16  

 

term of the SAR, (c) the vesting and termination provisions of the SAR and (d) such other  provisions  as  the  Committee  shall  determine  that  are  not  inconsistent  with  the  terms  and  provisions of the Plan. The Committee may impose such additional conditions or restrictions  on the exercise of any SAR as it may deem appropriate.         6.5      Term  of  SAR.   The  term  of  a  SAR  granted  under  the  Plan  shall  be  determined by the Committee, in its sole discretion; provided that no SAR shall be exercisable  on or after the tenth anniversary date of its grant.  Notwithstanding any other provision of this  Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO: (a)  the Tandem SAR will expire no later than the expiration of the underlying ISO; (b) the value  of the payout with respect to the Tandem SAR may be for no more than one hundred percent  (100%) of the excess of the Fair Market Value of the shares of Stock subject to the underlying  ISO at the time the Tandem SAR is exercised over the Option Price of the underlying ISO;  and (c) the Tandem SAR may be exercised only when the Fair Market Value of the shares of  Stock subject to the ISO exceeds the Option Price of the ISO.         6.6      Exercise of Freestanding SARs .  Subject to the terms and provisions of  the Plan and the applicable Award Agreement, Freestanding SARs may be exercised in whole  or in part from time to time by the delivery of written notice in the manner designated by the  Committee stating (a) that the Holder wishes to exercise such SAR on the date such notice is  so  delivered,  (b)  the  number  of  shares  of  Stock  with  respect  to  which  the  SAR  is  to  be  exercised and (c) the address to which the payment due under such SAR should be delivered.   In accordance with applicable law, a Freestanding SAR may be exercised subject to whatever  additional terms and conditions the Committee, in its sole discretion, imposes.         6.7      Exercise of Tandem SARs .  Subject to the terms and provisions of the Plan  and the applicable Award Agreement, Tandem SARs may be exercised for all or part of the  shares of Stock subject to the related Option upon the surrender of the right to exercise the  equivalent portion of the related Option and by the delivery of written notice in the manner  designated by the Committee stating (a) that the Holder wishes to exercise such SAR on the  date such notice is so delivered, (b) the number of shares of Stock with respect to which the  SAR is to be exercised and (c) the address to which the payment due under such SAR should  be delivered.  A Tandem SAR may be exercised only with respect to the shares of Stock for  which its related Option is then exercisable.  In accordance with applicable law, a Tandem  SAR may be exercised subject to whatever additional terms and conditions the Committee, in  its sole discretion, imposes.         6.8      Payment of SAR Amount .  Upon the exercise of a SAR, a Holder shall be  entitled to receive payment from the Company in an amount determined by multiplying the  excess of the Fair Market Value of a share of Stock on the date of exercise over the grant price  of the SAR by the number of shares of Stock with respect to which the SAR is exercised.  The  payment  upon  SAR  exercise  may  be  in  cash,  in  Stock of  equivalent  value,  in  some  combination thereof or in any other manner approved by the Committee in its sole discretion.   The Committee’s determination regarding the form of SAR payout shall be set forth in the  Award Agreement pertaining to the grant of the SAR.                                      17  

 

      6.9      Separation from Service .  Each Award Agreement shall set forth the extent  to which the Holder of a SAR shall have the right to exercise the SAR following the Holder’s  Separation from Service.  Such provisions shall be determined in the sole discretion of the  Committee, may be included in the Award Agreement entered into with the Holder, need not  be uniform among all SARs issued pursuant to the Plan, and may reflect distinctions based on  the reasons for termination or severance.         6.10     No Rights as Stockholder .  A grantee of a SAR award, as such, shall have  no rights as a stockholder.         6.11     Restrictions  on  Stock  Received .   The  Committee  may  impose  such  conditions and restrictions on any shares of Stock received upon exercise of a SAR granted  pursuant to the Plan as it may deem advisable or desirable.  These restrictions may include,  but shall not be limited to, a requirement that the Holder hold the shares of Stock received  upon exercise of a SAR for a specified period of time.                                ARTICLE VII                                                             RESTRICTED STOCK AWARDS         7.1      Restricted Stock Awards .  Subject to the terms and provisions of the Plan,  the Committee, at any time, and from time to time, may make Awards of Restricted Stock  under the Plan to eligible persons under Article III in such number and upon such terms as the  Committee  shall  determine.   The  amount  of  and  the  vesting,  transferability  and  forfeiture  restrictions applicable to any Restricted Stock Award shall be determined by the Committee  in  its  sole  discretion.   If  the  Committee  imposes  vesting,  transferability  and  forfeiture  restrictions on a Holder’s rights with respect to Restricted Stock, the Committee may issue  such instructions to the Company’s share transfer agent in connection therewith as it deems  appropriate.  The Committee may also cause the certificate for shares of Stock issued pursuant  to a Restricted Stock Award to be imprinted with any legend which counsel for the Company  considers  advisable  with  respect  to  the  restrictions  or,  should  the  shares  of  Stock  be  represented by book or electronic entry rather than a certificate, the Company may take such  steps to restrict transfer of the shares of Stock as counsel for the Company considers necessary  or advisable.         7.2      Restricted Stock Award Agreement .  Each Restricted Stock Award shall  be evidenced by an Award Agreement that contains any vesting, transferability and forfeiture  restrictions and other provisions not inconsistent with the Plan as the Committee may specify.         7.3      Holder’s Rights as Stockholder . Subject to the terms and conditions of the  Plan, each recipient of a Restricted Stock Award shall have all the rights of a stockholder with  respect to the shares of Restricted Stock included in the Restricted Stock Award during the  Period of Restriction established for the Restricted Stock Award.  Dividends paid with respect  to Restricted Stock in cash or property other than shares of Stock or rights to acquire shares  of Stock shall be deposited with the Company and shall be subject to the same restrictions as  the shares of Stock with respect to which such distribution was made.  Dividends paid in  shares of Stock or rights to acquire shares of Stock shall be added to and become a part of the                                     18  

 

Restricted Stock.  During the Period of Restriction, certificates representing the Restricted  Stock shall be registered in the Holder’s name and bear a restrictive legend to the effect that  ownership of such Restricted Stock, and the enjoyment of all rights appurtenant thereto, are  subject to the restrictions, terms, and conditions provided in the Plan and the applicable Award  Agreement.  Such certificates shall be deposited by the recipient with the Secretary of the  Company  or  such  other  officer  or  agent  of  the  Company  as  may  be  designated  by  the  Committee, together with all stock powers or other instruments of assignment, each endorsed  in blank, which will permit transfer to the Company of all or any portion of the Restricted  Stock  which  shall  be  forfeited  in  accordance  with  the  Plan  and  the  applicable  Award  Agreement.                                ARTICLE VIII                                                          RESTRICTED STOCK UNIT AWARDS         8.1      Authority to Grant RSU Awards .  Subject to the terms and provisions of  the Plan, the Committee, at any time, and from time to time, may grant RSU Awards under  the Plan to eligible persons under Article III in such amounts and upon such terms as the  Committee  shall  determine.   The  amount  of  and  the  vesting,  transferability  and  forfeiture  restrictions applicable to any RSU Award shall be determined by the Committee in its sole  discretion.  The Committee shall maintain a bookkeeping ledger account which reflects the  number of RSUs credited under the Plan for the benefit of a Holder.         8.2      RSU Award .  An RSU Award shall be similar in nature to a Restricted  Stock Award except that no shares of Stock are actually transferred to the Holder until a later  date specified in the applicable Award Agreement.  Each RSU shall have a value equal to the  Fair Market Value of a share of Stock.         8.3     RSU  Award  Agreement .   Each  RSU  Award  shall  be  evidenced  by  an  Award Agreement that contains any Substantial Risk of Forfeiture, vesting, transferability  and  forfeiture  restrictions,  form  and  time  of  payment  provisions  and  other  provisions  not  inconsistent with the Plan as the Committee may specify.         8.4     Dividend  Equivalents .   An  Award  Agreement  for  an  RSU  Award  may  specify that the Holder shall be entitled to the payment of Dividend Equivalents under the  Award; provided, however, that any Dividend Equivalents with respect to an RSU Award that  is  subject  to  vesting  conditions  shall  be  subject  to  the  same  vesting  conditions  as  the  underlying Award.           8.5     Form of Payment Under RSU Award  .  Payment under an RSU Award  shall  be  made  in  cash,  shares  of  Stock  or  any  combination  thereof,  as  specified  in  the  applicable Award Agreement.         8.6     Time of Payment Under RSU Award .  A Holder’s payment under an RSU  Award shall be made at such time as is specified in the applicable Award Agreement.  The  Award Agreement shall specify that the payment will be made (a) by a date that is no later  than the date that is two and one-half (2 1/2) months after the end of the calendar year in                                     19  

 

    which the RSU Award payment is no longer subject to a Substantial Risk of Forfeiture or (b)      at a time that is Permissible under Section 409A.             8.7      Holder’s Rights as Stockholder .  Except as set forth in Section 8.4, each      recipient of an RSU Award shall have no rights of a stockholder with respect to the Holder’s      RSUs.  A Holder shall have no voting rights with respect to any RSU Awards.                                     ARTICLE IX                                                PERFORMANCE STOCK AWARDS AND PERFORMANCE UNIT AWARDS             9.1     Authority to Grant Performance Stock Awards and Performance Unit  Awards .  Subject to the terms and provisions of the Plan, the Committee, at any time, and from  time to time, may grant Performance Stock Awards and Performance Unit Awards under the Plan  to eligible persons under Article III in such amounts and upon such terms as the Committee shall  determine.  The amount of and the vesting, transferability and forfeiture restrictions applicable to  any Performance Stock Award or Performance Unit Award shall be based upon the attainment of  such  Performance  Goals  as  the  Committee  may  determine;  provided,  however,  that  the  performance period for any Performance Stock Award or Performance Unit Award shall not be  less than one year.  If the Committee imposes vesting, transferability and forfeiture restrictions on  a  Holder’s  rights  with  respect  to  Performance  Stock  Award  or  Performance  Unit  Awards,  the  Committee  may  issue  such  instructions  to  the  Company’s  share  transfer  agent  in  connection  therewith as it deems appropriate.  The Committee may also cause the certificate for shares of  Stock issued pursuant to a Performance Stock Award or Performance Unit Award to be imprinted  with any legend which counsel for the Company considers advisable with respect to the restrictions  or, should the shares of Stock be represented by book or electronic entry rather than a certificate,  the Company may take such steps to restrict transfer of the shares of Stock as counsel for the  Company considers necessary or advisable.             9.2     Performance  Goals .   Performance  Goals  upon  which  the  payment  or      vesting of an Award under this Plan may be based on one or more of the following business      criteria that apply to the Holder, one or more business units or subsidiaries of the Company,      or the Company as a whole: earnings per share, earnings per share growth, total stockholder      return, economic value added, cash return on capitalization, increased revenue, revenue ratios      (per employee or per customer), net income, stock price, market share, return on equity, return      on assets, return on capital, return on capital compared to cost of capital, return on capital      employed,  return  on  invested  capital,  stockholder  value,  net  cash  flow,  operating  income,      earnings before interest and taxes (“EBIT”), earnings before interest, taxes, depreciation and      amortization (“EBITDA”), cash flow, cash flow from operations, cost reductions, cost ratios      (per  employee  or  per  customer),  proceeds  from  dispositions,  project  completion  time  and      budget goals, net cash flow before financing activities, customer growth, total market value,      successful  closing  of  transactions,  utilization  rates,  safety  and  environmental  performance      measures  (including  total  recordable  incident  rates  (“TRIR”)) , or  such  other  goals  as  the      Committee may determine whether or not listed herein.  Performance Goals may also be based      on  performance  relative  to  a  peer  group  of  companies.   Performance  Goals  may  apply  to      results obtained relative to a specific industry or a specific index.  Unless otherwise stated,      such  a  Performance  Goal  need  not  be  based  upon  an  increase  or  positive  result  under  a                                         20  

 

   particular business criterion and could include, for example, maintaining the status quo or     limiting  economic  losses.   The  terms,  conditions  and  limitations  applicable  to  any     Performance Stock Award or Performance Unit Award made pursuant to the Plan shall be     determined by the Committee.              9.3      Written Agreement .  Each Performance Stock Award or Performance Unit     Award shall be evidenced by an Award Agreement that contains any vesting, transferability     and  forfeiture  restrictions  and  such  other  provisions  not  inconsistent  with  the  Plan  as  the     Committee may specify.            9.4      Form of Payment Under Performance Unit Award .  Payment under a     Performance Unit Award shall be made in cash, shares of Stock or any combination thereof,     as specified in the applicable Award Agreement.            9.5     Time of Payment Under Performance Unit Award .  A Holder’s payment     under a Performance Unit Award shall be made at such time as is specified in the applicable     Award Agreement.  The Award Agreement shall specify that the payment will be made (a)     by a date that is no later than the date that is two and one-half (2 l/2) months after the end of     the calendar year in which the Performance Unit Award payment is no longer subject to a     Substantial Risk of Forfeiture or (b) at a time that is Permissible under Section 409A.            9.6      Holder’s Rights as Stockholder With Respect to a Performance Stock  Award .  Subject to the terms and conditions of the Plan, each Holder of a Performance Stock  Award shall have all the rights of a stockholder with respect to the shares of Stock issued to the  Holder pursuant to the Award during any period in which such issued shares of Stock are subject  to forfeiture and restrictions on transfer, including without limitation, the right to vote such shares  of Stock.  Notwithstanding the foregoing, dividends paid with respect to a Performance Stock  Award shall be deposited with the Company and shall be subject to the same forfeiture and other  restrictions as the shares of Stock with respect to which such distribution was made.            9.7      Holder’s Rights as Stockholder With Respect to a Performance Unit  Award .  Each recipient of a Performance Unit Award shall have no rights of a stockholder with  respect to the Holder’s Performance Unit Award.  A Holder shall have no voting rights with respect  to any Performance Unit Award.            9.8      Dividend  Equivalents .   An  Award  Agreement  for  a  Performance  Unit     Award may specify that the Holder shall be entitled to the payment of Dividend Equivalents     under  the  Award;  provided,  however,  that  any  Dividend  Equivalents  with  respect  to  a     Performance Unit Award that is subject to vesting conditions shall be subject to the same     vesting conditions as the underlying Award.                                      ARTICLE X                                                                ANNUAL CASH INCENTIVE AWARDS            10.1     Authority to Grant Annual Cash Incentive Awards .  Subject to the terms     and provisions of the Plan, the Committee, at any time, and from time to time, may grant     Annual Cash Incentive Awards under the Plan to Employees in such amounts and upon such                                        21  

 

terms as the Committee shall determine.  Subject to the following provisions in this Article  X, the amount of any Annual Cash Incentive Awards shall be based on the attainment of such  Performance Goals as the Committee may determine and the term, conditions and limitations  applicable  to  any  Annual  Cash  Incentive  Awards  made  pursuant  to  the  Plan  shall  be  determined by the Committee.         10.2     Written  Agreement .   Each  Annual  Cash  Incentive  Award  shall  be  evidenced by an Award Agreement that contains any vesting, transferability and forfeiture  restrictions and other provisions not inconsistent with the Plan as the Committee may specify.         10.3     Form of Payment Under Annual Cash Incentive Award .  Payment under  an Annual Cash Incentive Award shall be made in cash.         10.4     Time  of  Payment  Under  Annual  Cash  Incentive  Award .   A  Holder’s  payment under an Annual Cash Incentive Award shall be made at such time as is specified in  the applicable Award Agreement.  The Award Agreement shall specify that the payment will  be made (a) by a date that is no later than the date that is two and one-half (2 1/2) months after  the end of the calendar year in which the Annual Cash Incentive Award payment is no longer  subject to a Substantial Risk of Forfeiture or (b) at a time that is Permissible under Section  409A.                                 ARTICLE XI                                                            OTHER STOCK-BASED AWARDS         11.1     Authority to Grant Other Stock-Based Awards .  Subject to the terms and  provisions of the Plan, the Committee, at any time, and from time to time, may grant other  types  of  equity-based  or  equity-related  Awards  not otherwise  described  by  the  terms  and  provisions of the Plan (including the grant or offer for sale of unrestricted shares of Stock)  under the Plan to eligible persons under Article III in such number and upon such terms as the  Committee shall determine.  Such Awards may involve the transfer of actual shares of Stock  to Holders, or payment in cash or otherwise of amounts based on the value of shares of Stock  and may include, without limitation, Awards designed to comply with or take advantage of  the applicable local laws of jurisdictions other than the United States.         11.2     Value  of  Other  Stock-Based  Award .   Each  Other  Stock-Based  Award  shall be expressed in terms of shares of Stock or units based on shares of Stock, as determined  by the Committee.         11.3     Written Agreement .  Each Other Stock-Based Award shall be evidenced  by an Award Agreement that contains any vesting, transferability and forfeiture restrictions  and other provisions not inconsistent with the Plan as the Committee may specify.         11.4     Payment of Other Stock-Based Award .  Payment under an Other-Stock  Based Award shall be made in cash, shares of Stock or any combination thereof, as specified  in the applicable Award Agreement.                                      22  

 

      11.5     Separation from Service .  The Committee shall determine the extent to  which a Holder’s rights with respect to Other Stock-Based Awards shall be affected by the  Holder’s Separation from Service.  Such provisions shall be determined in the sole discretion  of  the  Committee  and  need  not  be  uniform  among  all Other  Stock-Based  Awards  issued  pursuant to the Plan.         11.6    Time of Payment of Other Stock-Based Award .  A Holder’s payment  under an Other Stock-Based Award shall be made at such time as is specified in the applicable  Award Agreement.  If a payment under the Award Agreement is subject to Section 409A, the  Award Agreement shall specify that the payment will be made (a) by a date that is no later  than the date that is two and one-half (2 1/2) months after the end of the calendar year in  which the Other Stock-Based Award payment is no longer subject to a Substantial Risk of  Forfeiture or (b) at a time that is Permissible under Section 409A.                                ARTICLE XII                                                               CASH-BASED AWARDS         12.1    Authority  to  Grant  Cash-Based  Awards .   Subject  to  the  terms  and  provisions of the Plan, the Committee, at any time, and from time to time, may grant Cash- Based Awards under the Plan to eligible persons under Article III in such amounts and upon  such terms as the Committee shall determine.         12.2    Value of Cash-Based Award .  Each Cash-Based Award shall specify a  payment amount or payment range as determined by the Committee.         12.3    Written Agreement .  Each Cash-Based Award shall be evidenced by an  Award  Agreement  that  contains  any  vesting,  transferability  and  forfeiture  restrictions  and  other provisions not inconsistent with the Plan as the Committee may specify.         12.4     Payment of Cash-Based Award .  Payment, if any, with respect to a Cash- Based Award shall be made in accordance with the terms of the Award, in cash.         12.5    Time of Payment of Cash-Based Award .  Payment under a Cash-Based  Award shall be made at such time as is specified in the applicable Award Agreement.  If a  payment under the Award Agreement is subject to Section 409A, the Award Agreement shall  specify that the payment will be made (a) by a date that is no later than the date that is two  and one-half (2 1/2) months after the end of the calendar year in which the Cash-Based Award  payment  is  no  longer  subject  to  a  Substantial  Risk of  Forfeiture  or  (b)  at  a  time  that  is  Permissible under Section 409A.         12.6    Separation from Service .  The Committee shall determine the extent to  which a Holder’s rights with respect to Cash-Based Awards shall be affected by the Holder’s  Separation from Service.  Such provisions shall be determined in the sole discretion of the  Committee and need not be uniform among all Cash-Based Awards issued pursuant to the  Plan.                                      23  

 

                                 ARTICLE XIII                                                                        SUBSTITUTE AWARDS         Substitute Awards may be granted under the Plan from time to time in substitution for stock  options and other awards held by employees of other entities who are about to become Employees,  or whose employer is about to become an Affiliate as the result of a merger or consolidation of the  Company with another corporation, or the  acquisition by the Company of substantially all the  assets of another corporation, or the acquisition by the Company of at least fifty percent (50%) of  the  issued  and  outstanding  stock  of  another  corporation  as  the  result  of  which  such  other  corporation will become a subsidiary of the Company.  The terms and conditions of the Substitute  Awards so granted may vary from the terms and conditions set forth in the Plan to such extent as  the  Board  at  the  time  of  grant  may  deem  appropriate  to  conform,  in  whole  or  in  part,  to  the  provisions of the awards in substitution for which they are granted.  If shares of Stock are issued  under the Plan with respect to a Substitute Award such shares of Stock will not count against the  aggregate number of shares of Stock with respect to which Awards may be granted under the Plan.                                    ARTICLE XIV                                                                         ADMINISTRATION             14.1    Awards .   The  Plan  shall  be  administered  by  the  Committee or,  in  the      absence of the Committee or in the case of awards issued to Outside Directors, the Plan shall      be administered by the Board.  The members of the Committee (that is not itself the Board)      shall serve at the discretion of the Board.  The Committee shall have full and exclusive power      and  authority  to  administer  the  Plan  and  to  take  all  actions  that  the  Plan  expressly      contemplates or are necessary or appropriate in connection with the administration of the Plan      with respect to Awards granted under the Plan.             14.2    Authority of the Committee .               (a)   The Committee shall have full and exclusive power to interpret and apply        the terms and provisions of the Plan and Awards made under the Plan, and to adopt such        rules, regulations and guidelines for implementing the Plan as the Committee may deem        necessary  or  proper,  all  of  which  powers  shall  be  exercised  in  the  best  interests  of  the        Company and in keeping with the objectives of the Plan.  A majority of the members of        the Committee shall constitute a quorum for the transaction of business relating to the Plan        or Awards made under the Plan, and the vote of a majority of those members present at        any  meeting  shall  decide  any  question  brought  before  that  meeting.   Any  decision  or        determination  reduced  to  writing  and  signed  by  a  majority  of  the  members  shall  be  as        effective as if it had been made by a majority vote at a meeting properly called and held.         All questions of interpretation and application of the Plan, or as to Awards granted under        the  Plan,  shall  be  subject  to  the  determination,  which  shall  be  final  and  binding,  of  a        majority  of  the  whole  Committee.  In  carrying  out  its  authority  under  the  Plan,  the        Committee shall have full and final authority and discretion, including but not limited to        the following rights, powers and authorities to (i) determine the persons to whom and the        time or times at which Awards will be made; (ii) determine the type or types of Awards to                                         24  

 

       be granted; (iii) determine the number and exercise price of shares of Stock covered in each         Award subject to the terms and provisions of the Plan; (iv) determine the terms, provisions         and conditions of each Award, which need not be identical and need not match the default         terms  set  forth  in  the  Plan;  (v)  determine  whether,  to  what  extent,  and  under  what         circumstances Awards may be settled or exercised in cash, Stock, other securities, other         Awards or other property, or canceled, forfeited, or suspended and the method or methods         by  which  Awards  may  be  settled,  exercised,  canceled,  forfeited,  or  suspended;  (vi)         prescribe, amend and rescind rules and regulations relating to administration of the Plan;         and  (vii)  make  all  other  determinations  and  take  all  other  actions  deemed  necessary,         appropriate or advisable for the proper administration of the Plan.  [The Committee may,         in its sole discretion and for any reason at any time (including, without limitation, in an         Award Agreement or upon a termination of employment), take action such that (i) any or         all outstanding Options and SARs shall become exercisable in part or in full, (ii) all or a         portion of the Period of Restriction applicable to any outstanding Awards shall lapse, (iii)         all or a portion of the Performance Period applicable to any outstanding Awards shall lapse         and (iv) the Performance Goals (if any)  applicable to any outstanding Awards shall be         deemed to be satisfied at the target, maximum or any other level .] 1                  (b)   The Committee may make an Award to an individual who the Company         expects to become an Employee of the Company or any of its Affiliates within six (6)         months  after  the  date  of  grant  of  the  Award,  with  the  Award  being  subject  to  and         conditioned on the individual actually becoming an Employee within that time period and         subject to other terms and conditions as the Committee may establish.                (c)   The Committee may correct any defect or supply any omission or reconcile         any inconsistency in the Plan or in any Award to a Holder in the manner and to the extent         the Committee deems necessary or desirable to further the Plan’s objectives.  Further, the         Committee shall make all other determinations that may be necessary or advisable for the         administration  of  the  Plan.   The  Committee  may  employ  attorneys,  consultants,         accountants,  agents,  and  other  persons,  any  of  whom  may  be  an  Employee,  and  the         Committee, the Company,  and its officers and  Board shall be entitled to rely upon the         advice, opinions, or valuations of any such person.                (d)   The  Committee  may  delegate  some  or  all  of  its  power  and  authority         hereunder  to  the  Board  (or  any  members  thereof)  or,  subject  to  applicable  law,  to  a         subcommittee of the Board, a member of the Board, the Chief Executive Officer or other         executive officer of the Company as the Committee deems appropriate; provided, however,        that the Committee may not delegate its power and authority to a member of the Board, the        Chief  Executive  Officer  or  other  executive  officer of  the  Company  with  regard  to  the        selection  for  participation  in  this  Plan  of  an  officer,  director  or  other  person  subject  to        Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of        an Award to such an officer, director or other person.                                                        1 ISS EPSC Factor.  Consider design feature in evaluating points under EPSC analysis.                                          25  

 

        (e)   No member of the Board or Committee, and neither the Chief Executive    Officer nor any other executive officer to whom the Committee delegates any of its power    and authority hereunder, shall be liable for any act, omission, interpretation, construction    or determination made in connection with this Plan in good faith, and the members of the    Board and the Committee and the Chief Executive Officer or other executive officer shall    be entitled to indemnification and reimbursement by the Company in respect of any claim,    loss, damage or expense (including attorneys’ fees) arising therefrom to  the full extent    permitted by law (except as otherwise may be provided in the Company’s Amended and    Restated Certificate of Incorporation and/or Amended and Restated By-laws) and under    any directors’ and officers’ liability insurance that may be in effect from time to time.         14.3     Decisions  Binding .   All  determinations  and  decisions  made  by  the  Committee or the Board, as the case may be, pursuant to the provisions of the Plan and all  related orders and resolutions of the Committee or the Board, as the case may be, shall be  final,  conclusive  and  binding  on  all  persons,  including  the  Company,  its  Affiliates,  its  stockholders, Holders and the estates and beneficiaries of Holders.         14.4    No Liability .  Under no circumstances shall the Company, its Affiliates, the  Board or the Committee incur liability for any indirect, incidental, consequential or special  damages  (including  lost  profits)  of  any  form  incurred  by  any  person,  whether  or  not  foreseeable and regardless of the form of the act in which such a claim may be brought, with  respect to the Plan or the Company’s, its Affiliates’, the Committee’s or the Board’s roles in  connection with the Plan.                                ARTICLE XV                                                       AMENDMENT OR TERMINATION OF PLAN         15.1     Amendment,  Modification,  Suspension,  and  Termination .   Subject  to  Section 15.2, the Board may, at any time and from time to time, alter, amend, modify, suspend,  or terminate the Plan and the Committee may, at any time and from time to time, alter, amend,  modify, suspend, or terminate any Award Agreement in whole or in part; provided, however,  that,  without  the  prior  approval  of  the  Company’s  stockholders,  (i)  except  as  provided  in  Section  4.5,  the  Committee  shall  not  directly  or  indirectly  lower  the  Option  Price  of  a  previously granted Option or the grant price of a previously granted SAR, cancel a previously  granted Option or previously  granted SAR for a payment of  cash or other property if the  aggregate fair market value of such Option or SAR is less than the gross Option Price of such  Option or the gross grant price of such SAR, (ii) amend the Plan if stockholder approval is  required with respect to such amendment by applicable law or stock exchange rules, or (iii)  amend the director compensation limits set forth in Section 4.2(c).         15.2    Awards Previously Granted .  Notwithstanding any other provision of the  Plan to the contrary, no termination, amendment, suspension, or modification of the Plan or  an Award Agreement shall adversely affect in any material way any Award previously granted  under the Plan, without the written consent of the Holder holding such Award.                                      26  

 

                             ARTICLE XVI                                                                  MISCELLANEOUS         16.1    Unfunded Plan/No Establishment of a Trust Fund .  Holders shall have  no right, title, or interest whatsoever in or to any investments that the Company or any of its  Affiliates may make to aid in meeting obligations under the Plan.  Nothing contained in the  Plan, and no action taken pursuant to its provisions, shall create or be construed to create a  trust  of  any  kind,  or  a  fiduciary  relationship  between  the  Company  and  any  Holder,  beneficiary, legal representative, or any other person.  To the extent that any person acquires  a right to receive payments from the Company under the Plan, such right shall be no greater  than the right of an unsecured general creditor of the Company.  All payments to be made  hereunder shall be paid from the general funds of the Company and no special or separate  fund shall be established and no segregation of assets shall be made to assure payment of such  amounts, except as expressly set forth in the Plan.  No property shall be set aside nor shall a  trust fund of any kind be established to secure the rights of any Holder under the Plan.  The  Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974,  as amended.         16.2     No  Employment  Obligation .   The  granting  of  any  Award  shall  not  constitute an employment or service contract, express or implied, and shall not impose upon  the Company or any Affiliate any obligation to employ or continue to employ, or to utilize or  continue to utilize the services of, any Holder.  The right of the Company or any Affiliate to  terminate  the  employment  of,  or  the  provision  of  services  by,  any  person  shall  not  be  diminished  or  affected  by  reason  of  the  fact  that  an  Award  has  been  granted  to  him,  and  nothing in the Plan or an Award Agreement shall interfere with or limit in any way the right  of the Company or its Affiliates to terminate any Holder’s employment or service relationship  at any time or for any reason not prohibited by law.         16.3    Tax Withholding .           (a)   The  Company  or  any  Affiliate  shall  be  entitled  to  deduct  from  other    compensation payable to each Holder any sums required by federal, state, local or foreign    tax  law  to  be  withheld  (“ Tax  Withholding  Obligation ”)  with  respect  to  the  vesting  or     exercise of an Award or lapse of restrictions on an Award.  In the alternative, the Company     may require the Holder (or other person validly exercising the Award) to pay such sums     for taxes directly to the Company or any Affiliate in cash or by check within one day after     the date of vesting, exercise or lapse of restrictions.            (b)   The Committee may, in its discretion, permit a Holder to satisfy any Tax     Withholding  Obligation  arising  upon  the  vesting  of or  payment  under  an  Award  by     delivering  to  the  Holder  a  reduced  number  of  shares  of  Stock  in  the  manner  specified     herein.  If permitted by the Committee and acceptable to the Holder, at the time of vesting     of shares under the Award, the Company shall (a) calculate the amount of the Company’s     or an Affiliate’s Tax Withholding Obligation on  the assumption that all such shares of     Stock vested under the Award are made available for delivery, (b) reduce the number of     such shares of Stock made available for delivery so that the Fair Market Value of the shares                                     27  

 

   of Stock withheld on the vesting date approximates the Company’s or an Affiliate’s Tax     Withholding Obligation and (c) in lieu of the withheld shares of Stock, remit cash to the     United  States  Treasury  or  other  applicable  governmental  authorities,  on  behalf  of  the     Holder, in the amount of the Tax Withholding Obligation.  The Company shall withhold     only whole shares of Stock to satisfy its Tax Withholding Obligation.  Where the  Fair     Market  Value  of  the  withheld  shares  of  Stock  does  not  equal  the  amount  of  the  Tax     Withholding Obligation, the Company shall withhold shares of Stock with a Fair Market     Value less than the amount of the Tax Withholding Obligation and the Holder must satisfy     the remaining withholding obligation in some other manner permitted under this Section     16.3.  Shares of Common Stock to be delivered or withheld may not have an aggregate Fair     Market  Value  in  excess  of  the  amount  determined  by applying  the  minimum  statutory     withholding rate (or, if permitted by the Company, such other rate as will not cause adverse     accounting consequences under the accounting rules then in effect, and is permitted under     applicable IRS withholding rules).  The withheld shares of Stock not made available for     delivery by the Company shall be retained as treasury shares or will be cancelled and the     Holder’s right, title and interest in such shares of Stock shall terminate.            (c)   The  Company  shall  have  no  obligation  upon  vesting  or  exercise  of  any     Award or lapse of restrictions on an Award until the Company or an Affiliate has received     payment  sufficient  to  cover  the  Minimum  Statutory  Tax  Withholding  Obligation  with     respect to that vesting, exercise or lapse of  restrictions.  Neither the Company nor  any     Affiliate shall be obligated to advise a Holder of the existence of the tax or the amount     which it will be required to withhold.         16.4     No  Rights  to  Awards.   No  Employee,  Outside  Director,  Third  Party  Service Provider or other person shall have any claim to be granted any Award, and there is  no obligation for uniformity of treatment of among such Persons. The terms and conditions  of Awards need not be the same with respect to each recipient.         16.5     No  Guarantee  of  Tax  Consequences .   The  Company  makes  no  commitment or guarantee to any Employee, Outside Director, Third Party Service Provider  or other person that any federal, state, local or other tax treatment will (or will not) apply or  be available to any person with respect to Awards under this Plan or the granting, holding,  vesting, transfer or settlement of any such Award and assumes no liability whatsoever for the  tax consequences to any Employee, Outside Director, Third Party Service Provider or to any  other person with respect to Awards under this Plan or the granting, holding, vesting, transfer  or settlement of any such Award.         16.6     Gender and Number .  If the context requires, words of one gender when  used in the Plan shall include the other and words used in the singular or plural shall include  the other.         16.7    Severability .  In the event any provision of the Plan shall be held illegal or  invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the  Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had  not been included.                                      28  

 

      16.8     Headings .  Headings of Articles and Sections are included for convenience  of reference only and do not constitute part of the Plan and shall not be used in construing the  terms and provisions of the Plan.         16.9     Other Compensation Plans .  The adoption of the Plan shall not affect any  other option, incentive or other compensation or benefit plans in effect for the Company or  any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of  incentive  compensation  arrangements  for  Employees, Outside  Directors  or  Third  Party  Service Providers.         16.10    Retirement and Welfare Plans .  Neither Awards made under the Plan nor  shares of Stock or cash paid pursuant to such Awards, may be included as “compensation”  for purposes of computing the benefits payable to any person under the Company’s or any  Affiliate’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless  such  other  plan  expressly  provides  that  such  compensation  shall  be  taken  into  account  in  computing a participant’s benefit.         16.11   Other Awards .  The grant of an Award shall not confer upon the Holder  the right to receive any future or other Awards under the Plan, whether or not Awards may be  granted to similarly situated Holders, or the right to receive future Awards upon the same  terms or conditions as previously granted.         16.12   Law Limitations/Governmental Approvals .  The granting of Awards and  the issuance of shares of Stock under the Plan shall be subject to all applicable laws, rules,  and regulations, and to such approvals by any governmental agencies or national securities  exchanges as may be required.         16.13   Delivery of Title .  The Company shall have no obligation to issue or deliver  evidence of title for shares of Stock issued under the Plan prior to (a) obtaining any approvals  from governmental agencies that the Company determines are necessary or advisable; and (b)  completion of any registration or other qualification of the Stock under any applicable national  or  foreign  law  or  ruling  of  any  governmental  body  that  the  Company  determines  to  be  necessary or advisable.         16.14   Inability to Obtain Authority .  The inability of the Company to obtain  authority from any regulatory body having jurisdiction, which authority is deemed by the  Company’s counsel to be necessary to the lawful issuance and sale of any shares of Stock  hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell  such shares of Stock as to which such requisite authority shall not have been obtained.         16.15   Investment  Representations .   The  Committee  may  require  any  person  receiving Stock pursuant to an Award under the Plan to represent and warrant in writing that  the person is acquiring the shares of Stock for investment and without any present intention  to sell or distribute such Stock.         16.16   Persons  Residing  Outside  of  the  United  States .   Notwithstanding  any  provision of the Plan to the contrary, in order to comply with the laws in other countries in  which the Company or any of its Affiliates operates or has employees, the Committee, in its                                     29  

 

sole discretion, shall have the power and authority to (a) determine which Affiliates shall be  covered by the Plan; (b) determine which persons employed outside the United States are  eligible to participate in the Plan; (c) amend or vary the terms and provisions of the Plan and  the  terms  and  conditions  of  any  Award  granted  to  persons  who  reside  outside  the  United  States; (d) establish subplans and modify exercise procedures and other terms and procedures  to the extent such actions may be necessary or advisable (and any subplans and modifications  to Plan terms and procedures established under this Section 16.16 by the Committee shall be  attached to the Plan document as Appendices); and (e) take any action, before or after an  Award  is  made,  that  it  deems  advisable  to  obtain  or  comply  with  any  necessary  local  government regulatory exemptions or approvals. Notwithstanding the above, the Committee  may not take any actions hereunder, and no Awards shall be granted, that would violate the  Code, any securities law or governing statute or any other applicable law.         16.17    Arbitration of Disputes .  Any controversy arising out of or relating to the  Plan or an Award Agreement shall be resolved by arbitration conducted in Houston, Texas  pursuant to the arbitration rules of the American Arbitration Association.  The arbitration shall  be final and binding on the parties.         16.18    No Fractional Shares .  No fractional shares of Stock shall be issued or  delivered pursuant to the Plan or any Award.  The Committee shall determine whether cash,  additional Awards, or other property shall be issued or paid in lieu of fractional shares of  Stock or whether such fractional shares or any rights thereto shall be forfeited or otherwise  eliminated.         16.19    Governing Law .  The provisions of the Plan and the rights of all persons  claiming thereunder shall be construed, administered and governed under the laws of the State  of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise  refer construction or interpretation of the Plan to the substantive law of another jurisdiction.   Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan  are deemed to submit to the sole and exclusive jurisdiction and venue of the federal or state  courts of the State of Texas to resolve any and all issues that may arise out of or relate to the  Plan or any related Award Agreement.                                                      30

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