Document:

exv10w41

 

EXHIBIT 10.41

INFORMATION TECHNOLOGY SERVICES AGREEMENT

     This Information Technology Services Agreement (“Agreement”), dated as of January 1,
2007 (the “Effective Date”), is between Perot Systems Corporation, a Delaware corporation (“Perot
Systems”), and Hillwood Enterprises, L.P., a Texas limited partnership (“Client”).

RECITALS

     WHEREAS, Client and Perot Systems have entered into a Master Agreement for Information
Services dated April 1, 2001 (including the Schedules and the Appendices thereto, (the “Prior
Agreement”) pursuant to which Perot Systems provides certain information technology services to
Client; and

     WHEREAS, Client and Perot Systems desire to restate the terms and conditions of the Prior
Agreement and to amend the terms and conditions of their business relationship in this Agreement as
of the date hereof;

NOW, THEREFORE, for and in consideration of the agreements set forth below, Perot Systems
and Client agree as follows:

Article 1

Agreement and Term

	1.1	 	Agreement. Perot Systems will provide to Client the information technology services
described in Schedule A and any additional services mutually agree to by the parties.
	 
	1.2	 	Term. The term of this Agreement will begin on the Effective Date and will end on
the tenth anniversary of the Effective Date (the “Initial Term”) unless earlier
terminated in accordance with the terms of this Agreement. The Agreement will automatically
extend at the end of the Initial Term for consecutive one-year renewal terms (“Renewal
Terms”) unless either party provides to the other party at least six months prior written
notice that the Agreement will not be extended. The Initial Term and the Renewal Terms are
collectively referred to herein as the “Term.”

Article 2

Account Management and Personnel

	2.1	 	Client Executive. Perot Systems will designate a representative (“Client
Executive”) who will be directly responsible for coordinating and managing the delivery of
the Services and will have full authority to act on Perot Systems’ behalf with respect to all
matters relating to this Agreement. The Client Executive will work with the Client
Representative to address Client’s information technology issues and strategies and the
parties’ relationship under this Agreement. Before designating or replacing its Client
Executive, Perot Systems will consult with and obtain the approval of Client, which shall not
be unreasonably delayed or withheld.
	 
	2.2	 	Client Representative. Client will designate a representative (“Client
Representative”) who will be directly responsible for supervising the delivery of the
Services and have full authority to act on

 

 

	 	 	Client’s behalf with respect to all matters relating to this Agreement. The Client
Representative will work with the Client Executive to address Client’s information
technology issues and strategies and the parties’ relationship under this Agreement.
	 
	2.3	 	Subcontractors. Without limiting Perot Systems’ obligations under this Agreement,
the parties acknowledge and agree that Perot Systems may, upon prior agreement of Client, use
subcontractors or affiliates to perform certain of its obligations under this Agreement.
Unless otherwise agreed, Perot Systems shall be responsible for the performance of any
affiliate or subcontractor personnel providing Services to the same extent as if such
personnel were Perot Systems employees. Notwithstanding the foregoing, Perot Systems may
subcontract to a subsidiary of Perot Systems, or any corporation or entity in which the Perot
Systems has at least a fifty percent (50%) ownership interest.
	 
	2.4	 	Assignment, Qualifications, Retention and Replacement of Perot Systems
Personnel

	 	(a)	 	Before assigning a dedicated individual to Client’s account, Perot Systems will
notify Client of the proposed assignment, introduce the individual to appropriate
Client representatives (and, upon request, provide those representatives with the
opportunity to interview the individual) and provide Client with a résumé and any other
information about the individual that Client reasonably requests. If Client objects to
the proposed assignment such individual will not be assigned to Client’s account.
	 
	 	(b)	 	The personnel Perot Systems assigns to support Client’s account will be
properly educated, trained and qualified for the services they are to perform.
	 
	 	(c)	 	During the first 2 years of assignment Perot Systems will not replace or
reassign any dedicated individual assigned to Client’s account unless Client consents
to such reassignment or replacement, or such person voluntarily resigns from Perot
Systems, is dismissed by Perot Systems for cause, fails to perform his or her duties
and responsibilities pursuant to this Agreement, or dies or is unable to work due to
his or her disability. Such reassignment or replacement shall occur only after a
suitable replacement has been approved by Client. Perot Systems will replace such
individual with an individual who has equivalent qualifications in Client’s Software
applications to perform the applicable services.
	 
	 	(d)	 	Prior to incurring training costs for a dedicated individual assigned to
Client’s account related to Client specific applications or systems, Perot Systems will
share with Client the individual development plan of the applicable individual
including any possible future reassignments. The parties agree that if the individual
is transferred by Perot Systems without Client’s consent during the first 2 years of
assignment, then Client will not be responsible for the replacement individual’s
training costs related to Client specific applications or systems.
	 
	 	(e)	 	If Client determines in good faith that the continued assignment of any of the
Perot Systems Personnel to Client’s account is not in Client’s best interests, then
Client will give Perot Systems notice to that effect. After receiving that notice,
Perot Systems will have a reasonable period of time in which to investigate the matters
stated in that notice, discuss its findings with Client, and resolve any problems with
such person.
	 
	 	(f)	 	Any Perot Systems’ employee assigned to Client’s account shall execute a
confidentiality agreement in the form of the attached Schedule C.

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Article 3

Services

	3.1	 	Base Services. During the Term, Perot Systems will provide to Client the services,
software, equipment and other resources described in Schedule A (the “Base
Services”) and other related services that are mutually agreed to by the parties and that
are within the IS Annual Budget for the Base Services (as set forth in Appendix B-2
of Schedule B).
	 
	3.2	 	Additional Services. Client may from time to time during the Term request that Perot
Systems provide additional services, functions and responsibilities not within the Perot
Systems IS Annual Budget for the scope of the Base Services (“Additional Services”).
Any such Additional Services will be provided under Task Order.

Article 4

Client Responsibilities

	4.1	 	Cooperation. Client shall reasonably cooperate with Perot Systems by, among other
things, making available, as reasonably requested by Perot Systems, management decisions,
information, approvals or disapprovals, and acceptances or rejections in a reasonably timely
manner so that Perot Systems may fulfill its obligations under this Agreement.
	 
	4.2	 	Software. Client will provide Perot Systems with access to, and the necessary rights
to operate, modify, and enhance, (a) the Client proprietary software described in Schedule
A and such other proprietary software as is necessary for Perot Systems to perform its
obligations under the Agreement (“Client Proprietary Software”) and (b) the third
party software described in Schedule A and such other vendor software as is necessary
for Perot Systems to perform its obligations under the Agreement (“Client Vendor
Software”). Client Proprietary Software and Client Vendor Software are collectively
referred to herein as “Client Software.” Client will pay all license, maintenance and
other fees associated with the Client Software and any access or other fees associated with
obtaining such rights to the Client Software.
	 
	4.3	 	Access to Client Facilities. Client shall provide Perot Systems access to its
facilities and will provide at such facilities such office furnishings, janitorial service,
telephone service, utilities (including air conditioning) and office-related equipment,
supplies, and duplicating services as Perot Systems may reasonably require in connection with
the activities contemplated hereunder. Client will provide such access 24 hours a day, seven
days a week. Perot Systems shall obey all generally applicable rules and procedures at any
Client facility of which Client has notified Perot Systems.
	 
	4.4	 	Other Technology. Client will provide Perot Systems with access to the hardware,
equipment, and technology related items and services listed in Schedule A and such
other hardware, equipment and technology related items and services as otherwise reasonably
necessary for Perot Systems to perform its obligations under the Agreement (the “Client
Technology”). Client will pay all license, maintenance and other fees associated with the
Client Technology and any access or other fees associated with obtaining such rights to the
Client Technology.

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Article 5

Payments to Perot Systems

	5.1	 	Base Charges. During the Term, Client will pay Perot Systems each month for the
Base Services the amounts set forth in Schedule B (“Base Charges”).
	 
	5.2	 	Additional Services Charges. During the Term, Client will pay Perot Systems each
month for the Additional Services the amounts set forth in the applicable Task Order.
	 
	5.3	 	Reimbursable Expenses. Client will pay or reimburse Perot Systems for its reasonable
out-of-pocket travel and travel related expenses incurred in connection with its performance
of the Services, which have received Client’s prior approval. Perot Systems will provide
documentation to Client in support of Perot Systems’ reimbursable expenses.
	 
	5.4	 	Taxes. There will be added to any charges under this Agreement, and Client will pay
or reimburse to Perot Systems, amounts equal to any taxes, however designated or levied based
upon such charges, the Services, or this Agreement, including state and local taxes, and any
taxes or amounts in lieu thereof paid or payable by Perot Systems in respect of the foregoing,
excluding franchise taxes and taxes based on the net income or net margin of Perot Systems.
Each party will cooperate with the other in minimizing any applicable tax and, in connection
therewith, Client will provide Perot Systems any resale certificates, information regarding
out-of-state use of materials, services or sales, or other exemption certificates or
information reasonably requested by Perot Systems.
	 
	5.5	 	Invoicing and Payment Terms.

	 	(a)	 	Invoicing. Perot Systems will invoice Client monthly in arrears for
all charges due. Perot Systems will compute periodic charges on a calendar month basis
and prorate those charges for any partial month of the Term.
	 
	 	(b)	 	Payment Terms. All charges shall be paid within one month after the
date of the applicable Perot Systems invoice.
	 
	 	(c)	 	Late Payments. Any amount not paid when due will thereafter bear
interest at the lesser of (i) 1.5% per month or (ii) the highest rate allowed by law.
Client will be responsible for any and all costs of collection, including reasonable
attorney’s fees, for any breach of Client’s obligations to pay amounts owed under this
Agreement.

	5.6	 	Financial Audit. Perot Systems will retain records supporting its charges under this
Agreement for three years following its expiration or termination. Client and its auditors
(including internal audit staff and external public accounting firm auditors) may audit the
relevant financial records of Perot Systems on reasonable prior notice, provided that any
external auditor executes a non-disclosure agreement with Perot Systems.

Article 6

Confidentiality, Proprietary Rights and Audit Rights

	6.1	 	Client Data. All data and information provided by or on behalf of Client to Perot
Systems in connection with the Services will remain the property of Client. Perot Systems
will use such data or

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	 	 	information solely in connection with the activities contemplated by this Agreement. Upon
any termination of this Agreement, Perot Systems shall provide to Client all copies of such
data and information in its possession, and shall also provide to Client copies of other
documentation used exclusively in support of Client.

	6.2	 	Confidential Information.

	 	(a)	 	Confidential Information. All Confidential Information relating to
Client or Perot Systems will be held in confidence by the other party to the same
extent and in at least the same manner as such party protects its own confidential or
proprietary information. Neither Perot Systems nor Client may disclose, publish,
release, transfer or otherwise make available Confidential Information of the other
party to, or for the use or benefit of, any third party without the other party’s
written consent. The term “Confidential Information” is defined to mean, with
respect to Client and Perot Systems, all confidential or proprietary information,
documentation, data, material or know-how concerning or in any way relating to Client
or Perot Systems, respectively, or to Perot Systems’ or Client’s respective business,
customers or suppliers that is proprietary or is not, on the date such information is
disclosed, publicly available, including, without limitation (i) with respect to
Client, the information relating to Client or its customers that is contained in the
data files of Client and the Client Proprietary Software, (ii) with respect to Perot
Systems, all costing and pricing information of Perot Systems, the Perot Systems
Software and the Perot Systems Tools, and (iii) with respect to each party, the terms
of this Agreement.
	 
	 	(b)	 	Certain Permitted Disclosures. Each of Perot Systems and Client will,
however, be permitted to disclose relevant aspects of the other party’s Confidential
Information to its respective officers, agents, subcontractors and employees to the
extent that such disclosure is reasonably necessary for the performance of its duties
and obligations under this Agreement; provided, however, that such party will take
reasonable measures to prevent, and shall remain responsible for, the disclosure of
Confidential Information of the other party in contravention of the provisions of this
Agreement by such officers, agents, subcontractors (except as otherwise specifically
provided in this Agreement) and employees.
	 
	 	(c)	 	Disclosures Required by Law. Perot Systems or Client, as the case may
be, may disclose Confidential Information of the other party if required pursuant to an
order or requirement of a court, administrative agency or other governmental body,
provided that (i) Perot Systems or Client, as the case may be, will give the other
party written notice of such order or requirement as soon as practicable after it has
knowledge thereof and in any event prior to disclosure of the Confidential Information,
and (ii) Perot Systems or Client, as the case may be, will disclose no more
Confidential Information than is required by such order or requirement.
	 
	 	(d)	 	Exclusions. The provisions of this Section 6.2 will not apply with
respect to information which (i) is developed by the other party without violating the
disclosing party’s proprietary rights, (ii) is or becomes publicly known (other than
through unauthorized disclosure), (iii) is disclosed by the owner of such information
to a third party free of any obligation of confidentiality, (iv) is already known by
such party, as determined by dated documentation, without an obligation of
confidentiality other than pursuant to this Agreement, or (v) is rightfully received by
a party free of any obligation of confidentiality.

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	 	(e)	 	Obligations upon Termination or Expiration. Upon the termination or
expiration of this Agreement, except as provided in Section 6.5 with respect to the
Developed Software, Perot Systems or Client, as the case may be, will return to the
other party or destroy any Confidential Information of the other party then held by
Client or by Perot Systems, as the case may be.

	6.3	 	Client Proprietary Software. Client Proprietary Software, including any
modifications to any Client Proprietary Software, will be and remain the property of Client,
and Perot Systems will have no rights or interests therein except as required to perform the
Services.
	 
	6.4	 	Perot Systems Software and Perot Systems Tools. Any software that is proprietary to
Perot Systems that Perot Systems uses or to which Perot Systems provides Client access
(“Perot Systems Software”) and any tools or methodologies which are proprietary to
Perot Systems and used in connection with the activities contemplated by this Agreement
(“Perot Systems Tools”), including any modifications to any Perot Systems Software and
the Perot Systems Tools, will be and remain the property of Perot Systems, and Client will
have no rights or interests therein. Upon termination or expiration of this Agreement, Client
may request that Perot Systems grant to Client a license to any of the Perot Systems Software
and the Perot Systems Tools then being used on the Client account for itself on such
commercially reasonable terms as the parties agree. Perot Systems agrees that it will not
refuse to grant such license.
	 
	6.5	 	Rights in Developed Software.

	 	(a)	 	Copyright. Perot Systems and Client agree that Client will own the
copyright to software developed by Perot Systems hereunder and that is delivered to
Client by Perot Systems but excluding modifications that are not a derivative of Client
Software and any Perot Systems Software and any Embedded Software (“Developed
Software”). Perot Systems may from time to time request that Client grant to Perot
Systems a license to the Developed Software for itself and for its customers on such
terms as the parties agree. Client agrees that it will not unreasonably refuse to
grant such license, unless such grant would materially impair a competitive advantage
to Client or grant a material competitive advantage to a competitor of Client. For
purposes of this Section 6.5(a) a competitor of Client is any company that competes (or
whose affiliates compete) directly with the (i) then current businesses or (ii) planned
businesses.
	 
	 	(b)	 	Embedded Software. The term “Embedded Software” is defined to
mean pre-existing software that is owned by Perot Systems or licensed by Client or
Perot Systems from a third party that is embedded in the Developed Software. Perot
Systems will retain its rights to any Embedded Software that is owned by Perot Systems,
provided, however, that Perot Systems grants to Client a perpetual, transferable,
non-exclusive, paid up, royalty-free license to use, modify, and enhance the Embedded
Software that is owned by Perot Systems as part of the Developed Software. If any
Embedded Software is owned by a third party, then the terms of the applicable license
will define each party’s rights to such Embedded Software.

	6.6	 	Residual Knowledge. Client acknowledges that Perot Systems is in the business of
providing information technology services. Without limiting Perot Systems’ obligations under
Section 6.2, nothing in this Agreement will limit Perot Systems’ right to provide services or
resources to Perot Systems’ other customers or other third parties that are similar to the
activities performed or resources provided by Perot Systems hereunder, and Perot Systems will
be free to use residual information

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	 	 	retained by Perot Systems in a nontangible form; provided, however, that any such residual
knowledge shall not include Client’s Confidential Information.

	6.7	 	Audit of Client’s Business. Perot Systems shall provide reasonable support to Client
in connection with an audit of Client’s business. Perot Systems shall not be obligated by
this Agreement to disclose to Client or any other person or entity any information which is
not reasonably necessary to conduct an audit of Client’s business, nor shall Perot Systems be
obligated to divulge any Confidential Information of Perot Systems or any third party. In no
event shall Perot Systems be obligated to disclose any Confidential Information to any
competitor, or affiliate of a competitor, of Perot Systems. Client may utilize third parties
to conduct such audit subject to such third party or parties entering into a confidentially
agreement reasonably satisfactory to Client and Perot Systems.

Article 7

Performance Review and Termination

	7.1	 	Performance Review. The Client Executive and Client Representative will meet as
often as reasonably requested by either party to review the performance of the parties under
this Agreement. Each party will bear its own costs and expenses incurred in connection with
such review.
	 
	7.2	 	Dispute Resolution. If any continuing dispute between the parties is not resolved
after reasonable attempts to resolve such dispute are made by either party, then, upon the
written request of either party, each party will appoint an officer who does not spend most of
his or her time on activities relating to this Agreement, to meet with the other party’s
officer for the purpose of resolving the dispute. The officers will negotiate in good faith
to resolve the dispute without the necessity of any formal proceeding. During the course of
such negotiations, all reasonable requests made by one party to the other for information will
be honored. Both parties agree to continue performing their respective obligations under this
Agreement while the dispute is being resolved, except to the extent that such obligations are
in dispute, unless and until this Agreement expires or is terminated in accordance with its
terms. If any such dispute is not resolved by negotiations within 30 days of the commencement
of negotiations, unless a party makes a good faith determination that litigation is necessary
to avoid the expiration of an applicable limitations period or to preserve a superior position
with respect to other creditors, the dispute shall be resolved by binding arbitration, in
accordance with the Commercial Arbitration Rules of the American Arbitration Association
provided that a single neutral arbitrator agreed to by the parties or selected in accordance
with those Commercial Arbitration Rules will conduct the arbitration. Such arbitration shall
be held in the jurisdiction of the responding party, and the testimony of the parties and all
pleadings or other materials submitted in connection with the proceedings shall be considered
Confidential Information of the parties. The prevailing party in any such dispute shall be
awarded reasonable costs and expenses, including attorneys’ fees.
	 
	7.3	 	Termination for Cause. If either party breaches its material obligations under this
Agreement (excluding Client’s obligation to pay Perot Systems) and fails to cure such breach
within 30 days (or such longer period if such breach can not be reasonably cured within such
30 day period) after receipt of written notice from the other party identifying such breach,
then the nonbreaching party may terminate this Agreement by providing the breaching party with
prior written notice of termination.
	 
	7.4	 	Termination for Non-Payment. If Client fails to pay Perot Systems any amounts due
hereunder and fails to cure such nonpayment within 10 days after receipt of written notice
from Perot Systems

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	 	 	identifying such nonpayment, then Perot Systems party may, at its option, suspend some or
all of the Services and/ or terminate this Agreement by providing Client with prior written
notice of the same.
	 
	7.5	 	Termination for Insolvency. ANY LICENSE CONTEMPLATED BY THIS AGREEMENT, SHALL BE
DEEMED AN EXECUTORY CONTRACT UNDER SECTION 365(n) OF TITLE 11 TO THE U.S. BANKRUPTCY CODE AND
SHALL REMAIN IN FULL AND FORCE AND EFFECT UPON THE LICENSEE’S ELECTION AND THE LICENSEE’S
SUBSTANTIAL PERFORMANCE HEREUNDER, NOTWITHSTANDING ANY BANKRUPTCY OR INSOLVENCY OF THE
LICENSOR. If either party is declared insolvent or bankrupt, is the subject of any
proceedings relating to its liquidation, insolvency or for the appointment of a receiver or
similar officer for it, makes an assignment for the benefit of all or substantially all of its
creditors, or enters into an agreement for the composition, extension or readjustment of all
or substantially all of its obligations, then the other party may, by giving prior written
notice thereof to such party, terminate this Agreement as of a date specified in such notice
of termination.
	 
	7.6	 	Termination for Convenience. Client may terminate this Agreement for its convenience
at any time upon 6 months prior written notice to Perot Systems.
	 
	7.7	 	Termination Obligations.

	 	(a)	 	Termination Assistance. During the Termination Assistance Period
(hereinafter defined), Perot Systems will provide to Client the termination assistance
described below as reasonably requested by Client (“Termination Assistance”).
The term “Termination Assistance Period” is defined as (i) if this Agreement
expires under Section 1.2, the six month period prior to the expiration date, or (ii)
if this Agreement is terminated under Section 7.3, 7.4, 7.5, or 7.6, the period
beginning on the date on which a notice of termination is delivered by either party
through the termination date or, upon Client’s written request prior to the termination
date, through the date six months after the termination date. The Termination
Assistance to be provided to Client by Perot Systems will consist of the following:

	 	(i)	 	Continuing to perform any or all of the Services then being
performed by Perot Systems.
	 
	 	(ii)	 	Working with Client to develop a plan for the transition of
services from Perot Systems to Client.
	 
	 	(iii)	 	Providing training for personnel of Client in the performance
of the Services then being transitioned to Client or other service provider.
	 
	 	(iv)	 	With respect to any equipment owned by Perot Systems and used
solely to perform the Services, Client may purchase any such equipment at Perot
Systems’ then-current book value on an “as is — where is” basis. With respect
to any equipment leased by Perot Systems and used solely to perform the
Services, subject to the terms of any applicable lease, Perot Systems will
assign to Client Perot Systems’ rights and obligations with respect to any such
equipment leased by Perot Systems; provided, however, that the lessor under the
lease agrees to release Perot Systems from all liability under the lease as of
the date of assignment.

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	 	(v)	 	With respect to any third party services acquired by Perot
Systems and used solely to perform the Services, subject to the terms of any
applicable third party services agreement, Perot Systems will assign to Client
Perot Systems’ rights and obligations with respect to any such third party
services used by Perot Systems; provided, however, that such third party
service provider under the third party service agreement agrees to release
Perot Systems from all liability under the third party service agreement as of
the date of assignment.

	 	(b)	 	Payment for Termination Assistance. Client will pay Perot Systems for
such Termination Assistance on a cost plus basis in accordance with the existing IS
Annual Budget and terms of this Agreement or on any other mutually acceptable basis.
Notwithstanding Section 5.6, Client shall pay Perot Systems for any Termination
Assistance in advance on the first day of each month of the Termination Assistance
Period an amount equal to Perot Systems’ reasonable estimate of the total amount
payable to Perot Systems for such Termination Assistance for that month adjusted, as
necessary, to reflect the reconciliation based on the actual charges for Termination
Assistance provided during the prior month. Perot Systems will provide Client with an
invoice each month evidencing the estimate of the total amount payable to Perot Systems
for Termination Assistance for the next month and a reconciliation with the actual
charges for the Termination Assistance provided to Client during the prior month.
Perot Systems’ obligations to provide termination assistance are conditional on
Client’s being and remaining current with its payment obligations under this Agreement.

Article 8

Indemnities and Liability

	8.1	 	Cross Indemnity. Each party will indemnify, defend and hold harmless the other and
the other’s affiliates, and their officers, directors, employees, agents, successors, and
assigns, from any and all losses, liabilities, damages and claims, and all related costs and
expenses including reasonable legal fees and disbursements and costs of investigation,
litigation, settlement, judgment, interest and penalties (“Losses”) and threatened Losses,
arising out of third party claims alleging (i) the death or bodily injury of any agent,
employee, customer, business invitee or business visitor of the indemnitor, provided such
claims do not arise out of any act or omission of indemnitee, (ii) the damage, loss or
destruction of any tangible personal property caused by the indemnitor, provided such damage,
loss or destruction does not arise out of any act or omission of indemnitee, (iii) any claim,
demand, charge, action, cause of action or other proceeding asserted against the indemnitee by
a person that results from an act or omission of the indemnitor in its capacity as an employer
of the person, provided such claim, demand, charge, action, cause of action or other
proceeding does not arise out of any act or omission of indemnitee
	 
	8.2	 	Intellectual Property Indemnity.

	 	(a)	 	By Perot Systems. Perot Systems will indemnify, defend and hold
harmless Client and its Affiliates, and their officers, directors, employees, agents,
successors, and assigns, from any and all Losses and threatened Losses arising from
third party claims alleging:

	 	(i)	 	Perot Systems’ failure to perform any obligations to be
performed on or after the Effective Date by Perot Systems under any contracts,
including third party

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	 	 	 	software licenses and third party service contracts where Perot Systems has
expressly agreed under this Agreement to perform those obligations; and
	 
	 	(ii)	 	Any claims of infringement of any United States patent, trade
secret, copyright or other proprietary rights enforceable in the United States
or other proprietary rights, alleged to have occurred because of (i) software
or other resources selected by Perot Systems and provided by Perot Systems to
Client, or (ii) Perot Systems’ activities under this Agreement (other than
claims based on Perot Systems’ use of software or resources provided by
Client).

	 	(b)	 	By Client. Client will indemnify, defend and hold harmless Perot
Systems and its Affiliates and their respective officers, directors, employees, agents,
successors, and assigns, from any and all losses and threatened Losses arising from
third party claims alleging:

	 	(i)	 	Client’s failure to observe or perform any obligations to be
performed by Client under any contracts, including third party software
licenses and third party service contracts, excluding those obligations under
any of those contracts where Perot Systems has expressly agreed under this
Agreement to perform those duties or obligations; and
	 
	 	(ii)	 	Any claims of infringement of any patent, trade secret,
copyright or other proprietary rights, alleged to have occurred because of (i)
software or other resources selected by customer or provided by Client to Perot
Systems, or (ii) Client’s activities under this Agreement (other than claims
based on Client’s use of software or resources provided by Perot Systems).

	 	(c)	 	Infringement. If either party is obligated to indemnify the other
party under Section 8.2(a) or (b), then such party (the “Indemnifying Party”) will, in
addition to indemnifying the other party as provided in this Article 8 and to the other
rights the other party may have under this Agreement, promptly at the Indemnifying
Party’s expense use all commercially reasonable efforts to secure the right to continue
using the item or to replace or modify the item to make it non-infringing, provided
that any replacement or modification will not degrade the performance or quality of the
affected component of the Services. If the Indemnifying Party can accomplish neither
of those actions, and only in that event, then the Indemnifying Party will cease using
the infringing item, and the parties will work in good faith to equitably adjust the
Services, and Perot Systems’ charges under this Agreement.
	 
	 	(d)	 	Indemnification Procedures. With respect to any third party claims
for which either party is entitled to indemnification under this Article 8 (an
“Indemnifiable Claim”), the following procedures will apply:

	 	(i)	 	Notice. After any entity entitled to indemnification
under this Article 8 receives notice of the commencement or threatened
commencement of any civil, criminal, administrative, or investigative action or
proceeding involving an Indemnifiable Claim for which the indemnitee will seek
indemnification under this Article, the indemnitee will promptly notify the
indemnitor of that claim in writing. However, failing to notify an indemnitor
of a claim will not relieve the

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	 	 	 	indemnitor of its obligations under this Agreement except to the extent
the indemnitor is prejudiced thereby. As soon as reasonably practicable
after receiving written notice of the claim, the indemnitor will notify the
indemnitee in writing as to whether the indemnitor elects to assume control
of the defense and settlement of that claim (a “Notice of Election”).
	 
	 	(ii)	 	Procedure Following Notice of Election. If the
indemnitor delivers a Notice of Election relating to any Indemnifiable Claim at
least 10 days before the date on which any response to a complaint or summons
is due, the indemnitor is entitled to have sole control over the defense and
settlement of that claim. However, the indemnitee may participate in defending
that claim and may employ counsel at its own expense to assist in defending the
claim. The indemnitor will obtain the prior written approval of the indemnitee
before entering into any settlement of the claim or ceasing to defend against
the claim.
	 
	 	(iii)	 	Procedure Where No Notice of Election Is Delivered.
If the indemnitor does not deliver a Notice of Election electing to assume the
defense of an Indemnifiable Claim at least 10 days before the date on which any
response to a complaint or summons is due, the indemnitee may defend the claim
in any manner as it may deem appropriate, at the cost and expense of the
indemnitor. The indemnitor will promptly reimburse the indemnitee for all those
costs and expenses.
	 
	 	(iv)	 	Subrogation. If an indemnitor is obligated to
indemnify an indemnitee under this Article 8, then upon paying that indemnity
in full, the indemnitor will be subrogated to all rights of the indemnitee
concerning the claims to which the indemnification relates.

	 	8.4	 	Limitation of Liability. Except with respect to (i) Client’s obligations to
make payments to Perot Systems and under this Agreement (including without limitation any
obligation to make payments in the future under this Agreement), and (ii) the indemnification
obligations of each party under this Agreement, and (iii) damages caused by willful tortuous
misconduct or Gross Negligence of a party, with respect to all claims arising out of, under or in
connection with this Agreement, each party’s liability will not exceed, in the aggregate, an amount
equal to the charges actually paid by Client to Perot Systems during the first twelve months after
the Effective Date (excluding amounts paid as reimbursement of expenses and taxes). For purposes
of this Section 8.4 “Gross Negligence” is defined as an act or omission: (a) which when viewed
objectively from the standpoint of the actor at the time of its occurrence involves an extreme
degree of risk, considering the probability and magnitude of the potential harm to others; and (B)
of which the actor has actual, subjective awareness of the risk involved, but nevertheless proceeds
with conscious indifference to the rights, safety, or welfare of others.
	 
	 	8.5	 	Limitation on Type of Damages. Except with respect to Client’s obligations to make
payments to Perot Systems under this Agreement (including without limitation any obligation to
make payments in the future under this Agreement), with respect to all claims arising out of,
under or in connection with this Agreement, the measure of damages payable by Perot Systems or
Client will not include, and neither Perot Systems nor Client will be liable for, any amounts
for indirect, incidental, reliance, special, consequential (including without limitation lost
profits, income or revenue) or punitive damages of Perot Systems or Client, as applicable, or
any third parties, whether in tort or contract, and whether or not such damages are foreseen.
Notwithstanding the forgoing, any final judgments awarded to any third party against an
indemnified party by a court of competent jurisdiction and any settlement amounts to
which an indemnifying party agrees in writing, in each case in 

11

 

	 	 	 	connection with a claim
covered by an indemnity provision in this Article 8, shall be considered direct
damages.
	 
	 	8.6	 	Disclaimer of Warranty. IF PEROT SYSTEMS ACQUIRES ANY THIRD-PARTY SOFTWARE, HARDWARE
OR SERVICES FOR CLIENT UNDER THIS AGREEMENT, PEROT SYSTEMS WILL PROVIDE SUCH THIRD-PARTY
SOFTWARE, HARDWARE OR SERVICES ON AN “AS IS” BASIS, BUT PEROT SYSTEMS WILL USE REASONABLE
COMMERCIAL EFFORTS TO ASSIST CLIENT IN ENFORCING ANY THIRD-PARTY WARRANTY. EXCEPT AS MAY BE
SPECIFICALLY PROVIDED IN THIS AGREEMENT, PEROT SYSTEMS DOES NOT MAKE, AND HEREBY DISCLAIMS,
ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF THE MERCHANTABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR RESULTS TO
BE DERIVED FROM THE USE OF ANY RESOURCES, SERVICES OR MATERIALS PROVIDED PURSUANT TO THIS
AGREEMENT.
	 
	 	8.7	 	Force Majeure. Each party will be excused from the performance of its obligations
under this Agreement (other than Client’s obligation to make payments to Perot Systems
hereunder) for any period and to the extent that such performance is prevented, in whole or in
part, as a result of delays caused by the other party or any act of God, civil disturbance,
court order, labor dispute, third party nonperformance or other cause beyond its reasonable
control, and such nonperformance will not be a default hereunder or grounds for termination
hereof.

Article 9

Miscellaneous

	 	9.1	 	Notices. All consents, notices, requests, demands, and other communications to be
given or delivered under or by reason of the provisions of this Agreement will be in writing
and will be deemed given when delivered personally against receipt, on the next business day
when sent by overnight courier, and on the fifth business day after being mailed by certified
mail, return receipt requested, to each party at the following address (or to such other
address as that party may have specified by notice given to the other pursuant to this
provision):

If to Perot Systems:

Perot Systems Corporation

2300 West Plano Parkway

Plano, Texas 75075

Attn: President

With a copy to:

Perot Systems Corporation

2300 West Plano Parkway

Plano, Texas 75075

Attn: General Counsel

If to Client:

12

 

Hillwood Enterprises, L.P.

3 Lincoln Center

5430 LBJ Freeway

Suite 800

Dallas, Texas 75248

Attn: CFO

With a copy to:

Hillwood Enterprises, L.P.

3 Lincoln Center

5430 LBJ Freeway

Suite 800

Dallas, Texas 75248

Attn: General Counsel

	 	9.2	 	Assignment. This Agreement and all of the provisions hereof will be binding upon and
inure to the benefit of each party and its respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests or obligations hereunder will be
assigned by either party without the prior written consent of the other.
	 
	 	9.3	 	Severability. Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable law, such
provision will be deemed restated to reflect the original intentions of the parties as nearly
as possible in accordance with applicable law, and, if capable of substantial performance, the
remaining provisions of this Agreement will be enforced as if this Agreement was entered into
without the invalid provision.
	 
	 	9.4	 	Captions. The captions used in this Agreement are for convenience of reference only
and do not constitute a part of this Agreement and will not be deemed to limit, characterize
or in any way affect any provision of this Agreement, and all provisions of this Agreement
will be enforced and construed as if no caption had been used in this Agreement.
	 
	 	9.5	 	Counterparts. This Agreement may be executed in one or more counterparts all of
which taken together will constitute one and the same instrument.
	 
	 	9.6	 	Relationship of Parties. Perot Systems, in furnishing services to Client hereunder,
is acting only as an independent contractor. Perot Systems does not undertake by this
Agreement or otherwise to perform any obligation of Client, whether regulatory or contractual,
or to assume any responsibility for Client’s business or operations, and Perot Systems has the
sole right and obligation to supervise, manage, contract, direct, procure, perform or cause to
be performed, all work to be performed by Perot Systems hereunder unless otherwise provided
herein.
	 
	 	9.7	 	Approvals and Similar Actions. Where agreement, approval, acceptance, consent or
similar action by either party is required by any provision of this Agreement, such action
will not be unreasonably delayed or withheld unless otherwise expressly provided.
	 
	 	9.8	 	Modification; Waiver. This Agreement may be modified only by a written instrument
duly executed by or on behalf of each party. No delay or omission by either party to exercise
any right or power 

13

 

	 	 	 	hereunder will impair such right or power or be construed to be a waiver
thereof. A waiver by either party of any of the obligations to be performed by the other or
any breach thereof will not be construed to be a waiver of any succeeding breach thereof or of
any other obligation herein contained.
	 
	 	9.9	 	No Third-Party Beneficiaries. The parties agree that this Agreement is for the
benefit of the parties hereto and is not intended to confer any rights or benefits on any
third-party, including any employee of either party, and that there are no third-party
beneficiaries to this Agreement or any part or specific provision of this Agreement.
	 
	 	9.10	 	Governing Law; Jury Trial Waiver. The laws of the State of Texas, other than its
rules on conflicts of laws, shall govern the interpretation and construction of this
Agreement. The parties waive their rights to a jury trial of any claim or issue arising out
of or related to this Agreement.
	 
	 	9.11	 	Entire Agreement. This Agreement, including any Schedules referred to herein and
attached hereto (and any Appendices referred to therein and attached thereto), each of which
is incorporated herein for all purposes, constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements, whether written
or oral, with respect to the subject matter contained in this Agreement. No change, waiver,
or discharge hereof shall be valid unless in writing and signed by an authorized
representative of the Party against which such change, waiver or discharge is sought to be
enforced. The Prior Agreement is hereby terminated.
	 
	 	9.12	 	Media Releases. All media releases, public announcements and public disclosures by
Client or Perot Systems relating to this Agreement, including without limitation, promotional
or marketing material (but not including any announcement intended solely for internal
distribution within Client or Perot Systems, as the case may be, or any disclosure required by
legal, accounting or regulatory requirements beyond the reasonable control of Client or Perot
Systems, as the case may be) will be coordinated with and approved by the other prior to the
release thereof.

[SIGNATURE PAGE FOLLOWS]

14

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and delivered by their
duly authorized representative as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 
	HILLWOOD ENTERPRISES, L.P.,	 	 	 	PEROT SYSTEMS CORPORATION	 	 
	a Texas limited partnership	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	AHB, LLC,	 	 	 	 	 	 	 	 
	a Texas limited liability company,	 	 	 	 	 	 	 	 
	its general partner	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/James C. Swain
	 	 	 	By:
	 	/s/ Steven R. Curts	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	James C. Swain
	 	 	 	Name:
	 	Steven R. Curts	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	EVP/CFO
	 	 	 	Title:
	 	Vice President	 	 
	 	 	 	 	 	 	 	 	 

15

 

SCHEDULE B

CHARGES

1. GENERAL PROVISIONS

1.1 General 

The Base Charges described in Section 5.1 of the Agreement shall consist of the Baseline
Service Charge described in Section 2.1.

1.2 Definitions

	 	 	 
	“Monthly Resource 

Cost:

	 	shall mean the sum of (1) compensation (salary, including salary
increases based on Perot Systems’ standard compensation policies, overtime pay), (2) fringe allocation
(3) standard and reasonable bonus allocation (Perot Systems’ Global Variable Pay Program), (4) training
allocation and (5) contractor and intracompany allocation for each resource providing Base Services to
Client during the calendar month.
	 
	 	 
	“Monthly Computer 

Services Related Cost”

	 	shall mean the sum of (1) IS rates based costs (PSC Data Center), and (2) other computer costs
(software, equipment, communications, offsite storage) related to the Base Services provided to Client
during the calendar month.
	 
	 	 
	“Office Related Cost”

	 	shall mean the sum of (1) employee related, (2) facilities (Client approved, voice communications,
communication depreciation, communication equipment, mobile phone and pagers), (3) Client approved
travel and (4) other administrative costs (postage, freight and delivery, outside reproduction, business
gifts) related to the Base Services provided to Client during the calendar month.
	 
	 	 
	“Multiplier”

	 	shall mean 1.23.

2. BASE CHARGES

2.1 Charges for Base Services

Client will pay Perot Systems as consideration for providing the Base Services the amounts
specified below.

	 	(a)	 	The aggregate Monthly Resource Cost times the Multiplier.
	 
	 	(b)	 	The aggregate Monthly Computer Services Related Cost times the Multiplier.
	 
	 	(c)	 	The aggregate Monthly Office Related Cost times the Multiplier.

1

 

2.2 Base Charges Reporting

Perot Systems shall provide to Client a monthly report of its costs related to the
Base Services in the categories listed below. The Monthly Base Charges Report shall
be substantially in the form of Appendix B-1.

	 	(a)	 	Compensation (salary, overtime pay)
	 
	 	(b)	 	Fringe Allocation
	 
	 	(c)	 	Global Variable Pay Allocation (Bonus)
	 
	 	(d)	 	Training Allocation
	 
	 	(e)	 	Contractors/Inter-company
	 
	 	(f)	 	IS Rates Based Charges (PSC Data Center)
	 
	 	(g)	 	Other Computer Costs (software, equipment, communications)
	 
	 	(h)	 	Employee Related Facilities
	 
	 	(i)	 	Allocation
	 
	 	(j)	 	Travel
	 
	 	(k)	 	Other Administrative
	 
	 	(l)	 	Headcount — Perot Systems
	 
	 	(m)	 	Headcount — Subcontractor

2.3 Non-Allowable Costs

In no event will Client be responsible for Perot Systems’ employee search fees or
any other expenses relating to hiring Perot Systems employees without the prior
written consent of Client.

3. CHARGES FOR ADDITIONAL SERVICES

As described in Section 3.2 of the Agreement, certain Services will be
performed as Additional Services. Perot Systems will provide up to $37,500 of
Additional Services at no charge to Client. Thereafter, such Additional Services
will be performed on a cost plus or other mutually acceptable basis depending on
the nature of the Additional Services, in each case as specified in the applicable
Task Order.

4. BUDGET PROCESS

	 	(a)	 	During each year this Agreement is in force, the Client
Executive will develop and submit to the Client Representative a Services Plan
that describes in reasonable detail, among other things, (A) Client’s
requirements for Services for Client’s next fiscal year, including but not
limited to Client’s requirements for Services staffing, project staffing,

2

 

	 	 	 	and equipment, (B) the relative priority of the items included in the
Services Plan, (C) proposed changes to Client’s existing information
technology systems, including changes that will require development
projects not included within the scope of the Services, (D) an Annual IS
Budget for the following year which will identify Perot Systems’ forecasted
expenditures to the same detail level set forth in Appendix B-2.
The Annual IS Budget for Perot Systems related costs shall be substantially
in the form of the IS Annual Budget for the first contract year that is
attached as Appendix B-2.
	 
	 	(b)	 	After the Client Executive submits the proposed Annual IS
Budget and during the period Client develops its annual business plan and the
supporting operations budgets, the parties will work together to review and,
to the extent necessary, revise the Services Plan, and related costs to
complete the definitive Annual IS Budget. Client in its sole discretion will
determine the amount of the Annual IS Budget and Perot Systems in its sole
discretion will determine the Services to be provided in accordance with such
Annual IS Budget.

3exv10w1

 

Exhibit 10.1

WHITING PETROLEUM CORPORATION

2003 EQUITY INCENTIVE
PLAN

(as amended through February 23, 2007)

Section 1. Purpose

          The purpose of the Whiting Petroleum Corporation 2003 Equity Incentive Plan (the “Plan”) is to
promote the best interests of Whiting Petroleum Corporation (together with any successor thereto,
the “Company”) and its stockholders by providing key employees and non-employee directors of the
Company and its Affiliates (as defined below) with an opportunity to acquire a proprietary interest
in the Company. It is intended that the Plan will promote continuity of management and increased
incentive and personal interest in the welfare of the Company by those key employees who are
primarily responsible for shaping and carrying out the long-range plans of the Company and securing
the Company’s continued growth and financial success. In addition, by encouraging stock ownership
by directors who are not employees of the Company or its Affiliates, the Company seeks to attract
and retain on its Board of Directors persons of exceptional competence and to provide a further
incentive to serve as a director of the Company.

Section 2. Definitions

          As used in the Plan, the following terms shall have the respective meanings set forth below:

          (a) “Affiliate” shall mean any entity that, directly or through one or more intermediaries, is
controlled by, controls, or is under common control with, the Company.

          (b) “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock, Restricted
Stock Unit, Performance Share or Performance Unit granted under the Plan.

          (c) “Award Agreement” shall mean any written agreement, contract, or other instrument or
document evidencing any Award granted under the Plan.

          (d) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. Any
reference to a specific provision of the Code shall also be deemed a reference to any successor
provision thereto.

          (e) “Commission” shall mean the United States Securities and Exchange Commission or any
successor agency.

          (f) “Committee” shall mean a committee of the Board of Directors of the Company or a
subcommittee thereof designated by such Board to administer the Plan and comprised solely of not
less than two directors, each of whom will be a “non-employee director” within the meaning of Rule
16b-3 and, to the extent deemed appropriate by the Committee, each of whom will be an “outside
director” within the meaning of Section 162(m)(4)(C) of the Code; provided that the mere fact that
the Committee shall fail to qualify under the foregoing requirements shall not invalidate any Award
made by the Committee that is otherwise validly made under the Plan, unless the Committee is aware
at the time of the Award’s grant of the Committee’s failure to so qualify.

 

 

          (g) “Dividend Equivalent” shall mean a right, granted to a Participating Key Employee or a
Non-Employee Director under the Plan, to receive cash equal to the cash dividends paid with respect
to a specified number of Shares. Dividend Equivalents shall not be deemed to be Awards under the
Plan.

          (h) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

          (i) “Excluded Items” shall mean any items which the Committee determines shall be excluded in
fixing Performance Goals, including, without limitation, any gains or losses from discontinued
operations, any extraordinary gains or losses and the effects of accounting changes.

          (j) “Fair Market Value” shall mean, with respect to any property (including, without
limitation, any Shares or other securities), the fair market value of such property determined by
such methods or procedures as shall be established from time to time by the Committee.

          (k) “Incentive Stock Option” shall mean an option granted under Section 6(a) of the Plan that
is intended to meet the requirements of Section 422 of the Code.

          (l) “Key Employee” shall mean any officer or other key employee of the Company or of any
Affiliate who is responsible for or contributes to the management, growth or profitability of the
business of the Company or any Affiliate as determined by the Committee.

          (m) “Non-Employee Director” shall mean a director of the Company or any Affiliate who is not
an employee of the Company or any Affiliate.

          (n) “Non-Qualified Stock Option” shall mean an option granted under Section 6(a) of the Plan
that is not intended to be an Incentive Stock Option.

          (o) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock Option.

          (p) “Participating Key Employee” shall mean a Key Employee designated to be granted an Award
under the Plan.

          (q) “Performance Goals” shall mean each of, or a combination of one or more of, the following
(in all cases after excluding the impact of applicable Excluded Items):

	 	(i)	 	Return on equity;
	 
	 	(ii)	 	Return on investment;
	 
	 	(iii)	 	Return on net assets;
	 
	 	(iv)	 	Return on revenues;
	 
	 	(v)	 	Operating income;
	 
	 	(vi)	 	Performance value added (as defined by the
Committee at the time of selection);
	 
	 	(vii)	 	Pre-tax profits;
	 
	 	(viii)	 	Net income;

 

 

	 
	 	(ix)	 	Net earnings per Share;
	 
	 	(x)	 	Working capital as a percent of net revenues;
	 
	 	(xi)	 	Net cash provided by operating activities;
	 
	 	(xii)	 	Market price per Share;
	 
	 	(xiii)	 	Total stockholder return;
	 
	 	(xiv)	 	Cash flow or cash flow per share;
	 
	 	(xv)	 	Reserve value or reserve value per share;
	 
	 	(xvi)	 	Net asset value or net asset value per share;
	 
	 	(xvii)	 	Production volumes;
	 
	 	(xviii)	 	Reserve addition; and
	 
	 	(xix)	 	Finding and development costs.

measured in each case for the Performance Period (aa) for the Company on a consolidated basis, (bb)
for any one or more Affiliates or divisions of the Company, where appropriate, and/or (cc) for any
other business unit or units of the Company or any Affiliate, where appropriate, as defined by the
Committee at the time of selection; provided that it shall only be appropriate to measure net
earnings per Share and market price per Share on a consolidated basis.

          (r) “Performance Period” shall mean, in relation to Performance Shares or Performance Units,
any period for which a Performance Goal or Goals have been established; provided, however, that
such period shall not be less than one year.

          (s) “Performance Share” shall mean any right granted under Section 6(e) of the Plan that will
be paid out in cash, as a Share (which, in specified circumstances, may be a Share of Restricted
Stock) or as a Restricted Stock Unit, which right is contingent on the achievement of one or more
Performance Goals during a specified Performance Period.

          (t) “Performance Unit” shall mean any right granted under Section 6(e) of the Plan to receive
a designated dollar value amount in cash, Shares (which, in specified circumstances, may be a
designated dollar value amount of Shares of Restricted Stock) or Restricted Stock Units, which
right is contingent on the achievement of one or more Performance Goals during a specified
Performance Period.

          (u) “Person” shall mean any individual, corporation, partnership, association, joint-stock
company, trust, unincorporated organization, or government or political subdivision thereof.

          (v) “Released Securities” shall mean Shares of Restricted Stock with respect to which all
applicable restrictions have expired, lapsed, or been waived.

          (w) “Restricted Securities” shall mean Awards of Restricted Stock or other Awards under which
issued and outstanding Shares are held subject to certain restrictions.

 

 

          (x) “Restricted Stock” shall mean any Share granted under Section 6(c) of the Plan or, in
specified circumstances, a Share paid in connection with another Award, with such Share subject to
risk of forfeiture and restrictions on transfer or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service by the Key Employee or
Non-Employee Director or the achievement of performance or other objectives, as determined by the
Committee.

          (y) “Restricted Stock Unit” shall mean any right to receive Shares in the future granted under
Section 6(d) of the Plan or paid in connection with another Award, with such right subject to risk
of forfeiture and restrictions on transfer or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service by the Key Employee or
Non-Employee Director or the achievement of performance or other objectives, as determined by the
Committee.

          (z) “Rule 16b-3” shall mean Rule 16b-3 as promulgated by the Commission under the Exchange
Act, or any successor rule or regulation thereto.

          (aa) “Shares” shall mean shares of common stock of the Company, $.001 par value, and such
other securities or property as may become subject to Awards pursuant to an adjustment made under
Section 4(b) of the Plan.

          (bb) “Stock Appreciation Right” shall mean any right granted under Section 6(b) of the Plan.

Section 3. Administration

          The Plan shall be administered by the Committee; provided, however, that if at any time the
Committee shall not be in existence, the functions of the Committee as specified in the Plan shall
be exercised by a committee consisting of those members of the Board of Directors of the Company
who qualify as “non-employee directors” under Rule 16b-3 and as “outside directors” under Section
162(m)(4)(C) of the Code. To the extent permitted by applicable law, the Committee may delegate to
one or more executive officers of the Company any or all of the authority and responsibility of the
Committee with respect to the Plan, other than with respect to Persons who are subject to Section
16 of the Exchange Act. To the extent the Committee has so delegated to one or more executive
officers the authority and responsibility of the Committee, all references to the Committee herein
shall include such officer or officers.

          Subject to the terms of the Plan and without limitation by reason of enumeration, the
Committee shall have full discretionary power and authority to: (i) designate Participating Key
Employees and select Non-Employee Directors to be participants under the Plan; (ii) determine the
type or types of Awards to be granted to each Participating Key Employee and Non-Employee Director
under the Plan; (iii) determine the number of Shares to be covered by (or with respect to which
payments, rights, or other matters are to be calculated in connection with) Awards granted to
Participating Key Employees or Non-Employee Directors; (iv) determine the terms and conditions of
any Award granted to a Participating Key Employee or Non-Employee Director (provided, however, that
the exercise price of any Option shall not be less than 100% of the Fair Market Value of a Share on
the date of grant of such Option); (v) determine whether, to what extent, and under what
circumstances Awards granted to Participating Key Employees or Non-Employee Directors may be
settled or exercised in cash, Shares, other securities, other Awards, or other property, and the
method or methods by which Awards may be settled, exercised, cancelled, forfeited, or suspended;
(vi) determine whether, to what extent, and under what circumstances cash, Shares, other Awards,
and other amounts payable with respect to an Award granted to Participating Key Employees of
Non-Employee Directors under the Plan shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the Plan and any instrument
or agreement relating to, or Award made under, the Plan (including, without limitation, any Award
Agreement); (viii) establish,

 

 

amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for the administration of the
Plan. Unless otherwise expressly provided in the Plan, all designations, determinations,
interpretations, and other decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time, and shall be final, conclusive, and
binding upon all Persons, including the Company, any Affiliate, any Participating Key Employee, any
Non-Employee Director, any holder or beneficiary of any Award, any stockholder, and any employee of
the Company or of any Affiliate.

Section 4. Shares Available for Award

          (a) Shares Available. Subject to adjustment as provided in 0:

               (i) Number of Shares Available. The number of Shares with respect to which Awards may
be granted under the Plan shall be 2,000,000 Shares. If, after the effective date of the
Plan, any Shares covered by an Award granted under the Plan, or to which any Award relates,
are forfeited or if an Award otherwise terminates, expires or is cancelled prior to the
delivery of all of the Shares or of other consideration issuable or payable pursuant to such
Award, then the number of Shares counted against the number of Shares available under the
Plan in connection with the grant of such Award, to the extent of any such forfeiture,
termination, expiration or cancellation, shall again be available for granting of additional
Awards under the Plan.

               (ii) Limitations on Awards to Individual Participants. No Participating Key Employee
shall be granted, during any calendar year, Options for more than 300,000 Shares, Stock
Appreciation Rights with respect to more than 300,000 Shares, more than 150,000 Shares of
Restricted Stock, more than 150,000 Restricted Stock Units, more than 150,000 Performance
Shares nor more than 150,000 Performance Units under the Plan. In all cases, determinations
under this 0 shall be made in a manner that is consistent with the exemption for
performance-based compensation provided by Section 162(m) of the Code and any regulations
promulgated thereunder.

               (iii) Accounting for Awards. The number of Shares covered by an Award under the Plan,
or to which such Award relates, shall be counted on the date of grant of such Award against
the number of Shares available for granting Awards under the Plan.

               (iv) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an
Award may consist, in whole or in part, of authorized and unissued Shares or of treasury
Shares.

          (b) Adjustments. In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such that an adjustment
is determined by the Committee to be appropriate, then the Committee may, in such manner as it may
deem equitable, adjust any or all of (i) the number and type of Shares subject to the Plan and
which thereafter may be made the subject of Awards under the Plan, (ii) the number and type of
Shares subject to the individual participant limits of Section 4(a)(ii), (iii) the number and type
of Shares subject to outstanding Awards, and (iv) the grant, purchase, or exercise price with
respect to any Award to reflect such transaction or event; or, if deemed appropriate, make
provision for a cash payment to the holder of an outstanding Award in exchange for cancellation of
such Award or in lieu of any or all of the foregoing adjustments; provided, however, in each case,
that with respect to Awards of Incentive Stock Options no

 

 

such adjustment shall be authorized to the extent that such authority would cause the Plan to
violate Section 422(b) of the Code; and provided further that the number of Shares subject to any
Award payable or denominated in Shares shall always be a whole number.

Section 5. Eligibility

          The Committee may designate any Key Employee as a Participating Key Employee. All
Non-Employee Directors shall be eligible to receive, at the discretion of the Committee, Awards of
Non-Qualified Stock Options pursuant to Section 6(a), Restricted Stock pursuant to Section 6(c) and
Restricted Stock Units pursuant to Section 6(d).

Section 6. Awards

          (a) Option Awards. The Committee may grant Options to Key Employees and Non-Employee Directors with the terms and conditions as set forth below and with such additional terms and conditions, in either case not
inconsistent with the provisions of the Plan, as the committee shall
determine.

               (i) Type of Option. The Committee shall determine whether an Option granted to a
Participating Key Employee is to be an Incentive Stock Option or Non-Qualified Stock Option;
provided, however, that Incentive Stock Options may be granted only to Key Employees of the
Company, a parent corporation (within the meaning of Code Section 424(e)) or a subsidiary
corporation (within the meaning of Code Section 424(f)). All Options granted to
Non-Employee Directors shall be Non-Qualified Stock Options.

               (ii) Exercise Price. The exercise price per Share of an Option granted pursuant to
this 0 shall be determined by the Committee; provided, however, that such exercise price
shall not be less than 100% of the Fair Market Value of a Share on the date of grant of such
Option.

               (iii) Option Term. The term of each Option shall be fixed by the Committee; provided,
however, that in no event shall the term of any Option exceed a period of ten years from the
date of its grant.

               (iv) Exercisability and Method of Exercise. An Option shall become exercisable in such
manner and within such period or periods and in such installments or otherwise as shall be
determined by the Committee; provided, however, that no Option may vest and become
exercisable within a period that is less than one year from the date of grant of such Option
(subject to acceleration of vesting, to the extent permitted by the Committee, in the event
of the Participating Key Employee’s or Non-Employee Director’s death, disability, retirement
or involuntary termination or in the event of a change in control of the Company (as defined
by the Committee)). The Committee also shall determine the method or methods by which, and
the form or forms, including, without limitation, cash, Shares, other securities, other
Awards, or other property, or any combination thereof, having a Fair Market Value on the
exercise date equal to the relevant exercise price, in which payment of the exercise price
with respect to any Option may be made or deemed to have been made.

               (v) Incentive Stock Options. The terms of any Incentive Stock Option granted to a Key
Employee under the Plan shall comply in all respects with the provisions of Section 422 of
the Code and any regulations promulgated thereunder. Notwithstanding any provision in the
Plan to the contrary, no Incentive Stock Option may be granted hereunder after the tenth
anniversary of the adoption of the Plan by the Board of Directors.

 

 

          (b) Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights to Key
Employees. Non-Employee Directors are not eligible to be granted Stock Appreciation Rights under
the Plan. Subject to the terms of the Plan and any applicable Award Agreement, a Stock
Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive,
upon exercise thereof, the excess of (i) the Fair Market Value of one Share on the date of exercise
over (ii) the grant price of the Stock Appreciation Right as specified by the Committee, which
shall not be less than 100% of the Fair Market Value of one Share on the date of grant of the Stock
Appreciation Right. Subject to the terms of the Plan, the grant price, term, methods of exercise,
methods of settlement (including whether the Participating Key Employee will be paid in cash,
Shares, other securities, other Awards, or other property, or any combination thereof), and any
other terms and conditions of any Stock Appreciation Right shall be determined by the Committee.
The Committee may impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it may deem appropriate.

          (c) Restricted Stock Awards.

               (i) Issuance. The Committee may grant Awards of Restricted Stock to Key Employees and
Non-Employee Directors.

               (ii) Restrictions. Shares of Restricted Stock granted to Participating Key Employees
and Non-Employee Directors shall be subject to such restrictions as the Committee may impose
(including, without limitation, any limitation on the right to vote a Share of Restricted
Stock or the right to receive any dividend or other right or property), which restrictions
may lapse separately or in combination at such time or times, in such installments or
otherwise, as the Committee may deem appropriate.

               (iii) Registration. Any Restricted Stock granted under the Plan to a Participating Key
Employee or Non-Employee Director may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in respect of
Shares of Restricted Stock granted under the Plan to a Participating Key Employee or
Non-Employee Director, such certificate shall be registered in the name of the Participating
Key Employee or Non-Employee Director and shall bear an appropriate legend (as determined by
the Committee) referring to the terms, conditions, and restrictions applicable to such
Restricted Stock.

               (iv) Payment of Restricted Stock. At the end of the applicable restriction period
relating to Restricted Stock granted to a Participating Key Employee or Non-Employee
Director, one or more stock certificates for the appropriate number of Shares, free of
restrictions imposed under the Plan, shall be delivered to the Participating Key Employee or
Non-Employee Director, or, if the Participating Key Employee or Non-Employee Director
received stock certificates representing the Restricted Stock at the time of grant, the
legends placed on such certificates shall be removed.

               (v) Forfeiture. Except as otherwise determined by the Committee, upon termination of
employment of a Participating Key Employee or service as a director of a Non-Employee
Director (as determined under criteria established by the Committee) for any reason during
the applicable restriction period, all Shares of Restricted Stock still subject to
restriction shall be forfeited by the Participating Key Employee or Non-Employee Director;
provided, however, that the Committee may, when it finds that a waiver would be in the best
interests of the Company, waive in whole or in part any or all remaining restrictions with
respect to Shares of Restricted Stock held by a Participating Key Employee or Non-Employee
Director.

 

 

          (d) Restricted Stock Units.

               (i) Issuance. The Committee may grant Awards of Restricted Stock Units to Key
Employees or Non-Employee Directors.

               (ii) Restrictions. Restricted Stock Units granted to Participating Key Employees or
Non-Employee Directors shall be subject to such restrictions as the Committee may impose,
which restrictions may lapse separately or in combination at such time or times, in such
installments or otherwise, as the Committee may deem appropriate.

               (iii) Payment of Shares. At the end of the applicable restriction period relating to
Restricted Stock Units granted to a Participating Key Employee or Non-Employee Director, one
or more stock certificates for the number of Shares equal to the corresponding number of
Restricted Stock Units, free of restrictions imposed under the Plan, shall be delivered to
the Participating Key Employee or Non-Employee Director.

               (iv) Forfeiture. Except as otherwise determined by the Committee, upon termination of
employment of a Participating Key Employee or service as a director of a Non-Employee
Director (as determined under criteria established by the Committee) for any reason during
the applicable restriction period, all unvested Restricted Stock Units shall be forfeited by
the Participating Key Employee or Non-Employee Director; provided, however, that the
Committee may, when it finds that a waiver would be in the best interests of the Company,
waive in whole or in part any or all remaining restrictions with respect to Restricted Stock
Units held by a Participating Key Employee or Non-Employee Director.

          (e) Performance Shares and Performance Units.

               (i) Issuance. The Committee may grant Awards of Performance Shares and/or Performance
Units to Key Employees. Non-Employee Directors are not eligible to be granted Performance
Shares or Performance Units under the Plan.

               (ii) Performance Goals and Other Terms. The Committee shall determine the Performance
Period, the Performance Goal or Goals (and the performance level or levels related thereto)
to be achieved during any Performance Period, the proportion of payments, if any, to be made
for performance between the minimum and full performance levels for any Performance Goal
and, if applicable, the relative percentage weighting given to each of the selected
Performance Goals. The Committee shall also determine the restrictions applicable to Shares
of Restricted Stock or Restricted Stock Units received upon payment of Performance Shares or
Performance Units if Performance Shares or Performance Units are paid in such manner, and
any other terms, conditions and rights relating to a grant of Performance Shares or
Performance Units. The Committee shall have sole discretion to choose among the selected
Performance Goals set forth in 0. Subject to stockholder approval to the extent required to
qualify the Award for the performance-based exemption provided by Section 162(m) of the
Code, the Committee shall have sole discretion to choose Performance Goals in addition to
those set forth in 0. Notwithstanding the foregoing, in the event the Committee determines
it is advisable to grant Performance Shares or Performance Units which do not qualify for
the performance-based exemption under Section 162(m) of the Code, the Committee may make
such grants without satisfying the requirements thereof.

               (iii) No Voting Rights. Participating Key Employees shall have no voting rights with
respect to Performance Shares or Shares underlying Performance Units held by them during the
applicable Performance Period.

 

 

               (iv) Payment. As soon as is reasonably practicable following the end of the applicable
Performance Period, and subject to the Committee certifying in writing as to the
satisfaction of the requisite Performance Goal or Goals if such certification is required in
order to qualify the Award for the performance-based exemption provided by Section 162(m) of
the Code, payment of earned Performance Shares and/or Performance Units shall be made. The
Committee, in its sole discretion, may pay earned Performance Shares and Performance Units
in the form of cash, Shares (which may be Shares of Restricted Stock), Restricted Stock
Units or a combination of cash, Shares (which may be Shares of Restricted Stock) and/or
Restricted Stock Units, which have an aggregate Fair Market Value equal to the value of the
earned Performance Shares and Shares underlying earned Performance Units at the close of the
applicable Performance Period. Any Shares of Restricted Stock payable in connection with
Performance Shares or Performance Units shall, pending the expiration, lapse, or waiver of
the applicable restrictions, be evidenced in the manner as set forth in 0 hereof.

          (f) General.

               (i) No Consideration for Awards. Awards shall be granted to Participating Key
Employees and Non-Employee Directors for no cash consideration unless otherwise determined
by the Committee.

               (ii) Award Agreements. Each Award granted under the Plan shall be evidenced by an
Award Agreement in such form (consistent with the terms of the Plan) as shall have been
approved by the Committee.

               (iii) Awards May Be Granted Separately or Together. Awards to Participating Key
Employees under the Plan may be granted either alone or in addition to, in tandem with, or
in substitution for any other Award or any award granted under any other plan of the Company
or any Affiliate. Awards granted in addition to or in tandem with other Awards, or in
addition to or in tandem with awards granted under any other plan of the Company or any
Affiliate, may be granted either at the same time as or at a different time from the grant
of such other Awards or awards.

               (iv) Forms of Payment Under Awards. Subject to the terms of the Plan and of any
applicable Award Agreement, payments or transfers to be made by the Company or an Affiliate
upon the grant, exercise, or payment of an Award to a Participating Key Employee or
Non-Employee Director may be made in such form or forms as the Committee shall determine,
and may be made in a single payment or transfer, in installments, or on a deferred basis, in
each case in accordance with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the payment or crediting of
interest on installment or deferred payments.

               (v) Limits on Transfer of Awards. Except as otherwise provided by the Committee, no
Award (other than Released Securities), and no right under any such Award, shall be
assignable, alienable, saleable, or transferable by a Participating Key Employee or
Non-Employee Director otherwise than by will or by the laws of descent and distribution (or,
in the case of an Award of Restricted Securities, to the Company); provided, however, that a
Participating Key Employee or Non-Employee Director at the discretion of the Committee may
be entitled, in the manner established by the Committee, to designate a beneficiary or
beneficiaries to exercise his or her rights, and to receive any property distributable, with
respect to any Award upon the death of the Participating Key Employee or Non-Employee
Director, as the case may be. Each Award, and each right under any Award, shall be
exercisable, during the lifetime of the Participating Key Employee or Non-Employee Director,
only by such individual or, if permissible under applicable law, by such

 

 

individual’s guardian or legal representative. Except as otherwise provided by the
Committee, no Award (other than Released Securities), and no right under any such Award, may
be pledged, alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment, or encumbrance thereof shall be void and unenforceable against the
Company or any Affiliate.

               (vi) Term of Awards. Except as otherwise provided in the Plan, the term of each Award
shall be for such period as may be determined by the Committee.

               (vii) Share Certificates; Representation. In addition to the restrictions imposed
pursuant to 0 and 0 hereof, all certificates for Shares delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules, regulations,
and other requirements of the Commission, any stock exchange or other market upon which such
Shares are then listed or traded, and any applicable federal or state securities laws, and
the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions. The Committee may require each Participating
Key Employee, Non-Employee Director or other Person who acquires Shares under the Plan by
means of an Award originally made to a Participating Key Employee or Non-Employee Director
to represent to the Company in writing that such Participating Key Employee, Non-Employee
Director or other Person is acquiring the Shares without a view to the distribution thereof.

          (g) Dividend Equivalents. In addition to Awards granted under the Plan, the Committee may
grant Dividend Equivalents to Participating Key Employees and Non-Employee Directors, entitling the
Participating Key Employees and Non-Employee Directors to receive cash equal to cash dividends paid
with respect to a specified number of Shares. Dividend Equivalents may only be granted in
connection with an Award granted to the Participating Key Employee or Non-Employee Director under
the Plan. The Committee may provide that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in such investment vehicles as determined by the
Committee, subject to such restrictions and risks of forfeiture as the Committee may impose.

          (h) No Repricing of Options. Except adjustments made pursuant to 0 or adjustments made with
prior approval of the Company’s stockholders, the Committee shall not have the authority to effect
(i) the repricing of any outstanding Options under the Plan or (ii) the modification of an Option
or entering into a transaction or series of transactions which modification or transaction(s) would
be deemed to constitute a repricing of an Option pursuant to Financial Accounting Standards Board
Interpretation No. 44, Accounting for Certain Transactions Involving Stock Compensation, March
2000, as amended or supplemented from time to time. The provisions of this 0 cannot be amended
unless the amendment is approved by the Company’s stockholders.

Section 7. Amendment and Termination of the Plan; Correction of Defects and Omissions

          (a) Amendments to and Termination of the Plan. Except as otherwise provided herein, the Board
of Directors of the Company may at any time amend, alter, suspend, discontinue, or terminate the
Plan; provided, however, that stockholder approval of any amendment of the Plan shall also be
obtained (i) if such amendment (A) increases the number of Shares with respect to which Awards may
be granted under the Plan (other than increases related to adjustments made as provided in 0
hereof), (B) expands the class of persons eligible to participate under the Plan or (C) otherwise
increases in any material respect the benefits payable under the Plan; or (ii) if otherwise
required by (A) the Code or any rules promulgated thereunder (in order to allow for Incentive Stock
Options to be granted under the Plan), or (B) the listing requirements of the New York Stock
Exchange or any principal securities exchange or market on which the Shares are then traded (in
order to maintain the listing of the Shares thereon). Termination of the

 

 

Plan shall not affect the rights of Participating Key Employees or Non-Employee Directors with
respect to Awards previously granted to them, and all unexpired Awards shall continue in force and
effect after termination of the Plan except as they may lapse or be terminated by their own terms
and conditions.

          (b) Correction of Defects, Omissions and Inconsistencies. The Committee may correct any
defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Award
Agreement in the manner and to the extent it shall deem desirable to carry the Plan into effect.

Section 8. General Provisions

          (a) No Rights to Awards. No Key Employee, Participating Key Employee, Non-Employee Director
or other Person shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Key Employees, Participating Key Employees, Non-Employee
Directors or holders or beneficiaries of Awards under the Plan. The terms and conditions of Awards
need not be the same with respect to each Participating Key Employee or Non-Employee Director.

          (b) Withholding. No later than the date as of which tax withholding is first required with
respect to any Award under the Plan, the Participating Key Employee shall pay to the Company, or
make arrangements satisfactory to the Company regarding the payment of, any federal, state, local
or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations arising with respect to Awards to
Participating Key Employees under the Plan may be settled with Shares (other than Restricted
Securities), including Shares that are part of, or are received upon exercise of, the Award that
gives rise to the withholding requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and any Affiliate shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment otherwise due to the
Participating Key Employee. The Committee may establish such procedures as it deems appropriate
for the settling of withholding obligations with Shares, including, without limitation, the
establishment of such procedures as may be necessary to satisfy the requirements of Rule 16b-3.

          (c) No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent
the Company or any Affiliate from adopting or continuing in effect other or additional compensation
arrangements, and such arrangements may be either generally applicable or applicable only in
specific cases.

          (d) Rights and Status of Recipients of Awards. The grant of an Award shall not be construed
as giving a Participating Key Employee the right to be retained in the employ of the Company or any
Affiliate. Further, the Company or any Affiliate may at any time dismiss a Participating Key
Employee from employment, free from any liability, or any claim under the Plan, unless otherwise
expressly provided in the Plan or in any Award Agreement. The grant of an Award to a Non-Employee
Director pursuant to Section 6(a) of the Plan shall confer no right on such Non-Employee Director
to continue as a director of the Company or any Affiliate. Except for rights accorded under the
Plan and under any applicable Award Agreement, Participating Key Employees and Non-Employee
Directors shall have no rights as holders of Shares as a result of the granting of Awards
hereunder.

          (e) No Compensation for Benefit Plans. No Award payable under this Plan shall be deemed
salary or compensation for the purpose of computing benefits under any benefit plan or other
arrangement of the Company or any Affiliate for the benefit of its employees or directors unless
the Company or appropriate Affiliate shall determine otherwise.

          (f) Approval of Material Terms of Performance Goals. Notwithstanding anything herein to the
contrary, if so determined by the Board of Directors, the Plan provisions specifying the material

 

 

terms of the Plan’s performance goals (within the meaning of Code Section 162(m)) shall be
submitted to the stockholders of the Company for re-approval no later than the first stockholder
meeting that occurs in the fifth year following the year in which stockholders previously approved
such Plan provisions.

          (g) Unfunded Status of the Plan. Unless otherwise determined by the Committee, the Plan shall
be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds.
The Plan shall not establish any fiduciary relationship between the Company and any Participating
Key Employee, Non-Employee Director or other Person. To the extent any Person holds any right by
virtue of a grant under the Plan, such right (unless otherwise determined by the Committee) shall
be no greater than the right of a general unsecured creditor of the Company.

          (h) Governing Law. The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the internal laws of the
State of Delaware, without reference to conflict of law principles thereof, and applicable federal
law.

          (i) Severability. If any provision of the Plan or any Award Agreement or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as to any
Person or Award, or would disqualify the Plan, any Award Agreement or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed amended to conform
to applicable laws, or if it cannot be so construed or deemed amended without, in the determination
of the Committee, materially altering the intent of the Plan, any Award Agreement or the Award,
such provision shall be stricken as to such jurisdiction, Person, or Award, and the remainder of
the Plan, any such Award Agreement and any such Award shall remain in full force and effect.

          (j) No Fractional Shares. No fractional Shares or other securities shall be issued or
delivered pursuant to the Plan, any Award Agreement or any Award, and the Committee shall determine
(except as otherwise provided in the Plan) whether cash, other securities, or other property shall
be paid or transferred in lieu of any fractional Shares or other securities, or whether such
fractional Shares or other securities or any rights thereto shall be canceled, terminated, or
otherwise eliminated.

          (k) Headings. Headings are given to the Sections and subsections of the Plan solely as a
convenience to facilitate reference. Such headings shall not be deemed in any way material or
relevant to the construction or interpretation of the Plan or any provision thereof.

Section 9. Effective Date of the Plan

          The Plan shall be effective on the day immediately following its approval by the sole
stockholder of the Company provided that such approval is obtained within twelve months following
the date of adoption of the Plan by the Board of Directors of the Company.

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