Document:

exv10w4

Exhibit 10.4

TERMINATION OF INVESTOR RIGHTS AGREEMENT

This Termination of Investor Rights Agreement (this “Agreement”) is made as of August 12, 2010, by
and among Trubion Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the
undersigned stockholders of the Company (the “Stockholders,” together with the Company, the
“Parties”).

RECITALS

WHEREAS, the Company proposes to enter into an Agreement and Plan of Merger dated August 12, 2010
(the “Merger Agreement”), by and among the Company, Emergent BioSolutions Inc., 35406 LLC and 30333
Inc., pursuant to which the Company will become a wholly owned subsidiary of Emergent BioSolutions
Inc (the “Merger”).

WHERAS, the Parties entered into that certain Investor Rights Agreement, dated as of July 13, 2004,
as amended on December 19, 2005 (the “IRA”) which provides for certain registration rights with
respect to the shares of the Company’s securities held by the Stockholders and other stockholders
party to the IRA;

WHEREAS, the termination of the IRA, effective as of and contingent upon the Effective Time of the
Merger (as defined in the Merger Agreement) (the “Effective Date”), is a condition to the execution
of the Merger Agreement;

WHEREAS, Section 6.5 of the IRA provides that the IRA may be terminated by written agreement among
the Company and the stockholders of the Company that are party to the IRA and hold at least
two-thirds of the Registrable Securities (as defined in the IRA);

WHEREAS, the Parties desire to terminate the IRA, effective as of and contingent upon the Effective
Time of the Merger.

AGREEMENT

NOW THEREFORE, the parties hereto agree as follows:

     1. By their respective signatures, the Stockholders hereby agree and acknowledge that,
effective as of and contingent upon the Effective Time of the Merger, the IRA is hereby terminated
in accordance with Section 6.5 thereof and, from and after such time, shall have no further force
or effect.

     2. In the event of any termination of the Merger Agreement prior to the occurrence of the
Effective Time pursuant to Article 7.1 thereof, this Agreement shall also terminate and shall be of
no further force or effect.

     3. Effective upon the Effective Date, each Party on behalf of, himself, itself and each of
their respective owners, directors, officers, shareholders, employees, principals, affiliates,
representatives, agents and attorneys, and their respective parent and subsidiary companies, and
any affiliated and associated companies, and predecessors or successors in interest and assigns,
hereby

 

 

fully, irrevocably and unconditionally release, acquit and forever discharge each other from
any and all claims, liabilities, obligations, demands, causes of action, damages, costs, losses,
debts and expenses, including without limitation any claims for court costs or attorneys’ fees, of
whatever kind or nature, in law or in equity, in contract or tort, whether known or unknown,
asserted and/or raised, suspected or claimed, or which could have been asserted and/or raised in
any action arising from or related to the IRA.

     4. This Agreement constitutes the entire agreement between the parties hereto pertaining to
the subject matter hereof and all other written or oral agreements existing between the parties
hereto concerning such subject matter are expressly canceled.

     5. This Agreement shall be construed, interpreted, and applied in accordance with, and shall
be governed by, the laws applicable in the State of Washington.

     6. This Agreement may be executed in counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.

[signature page follows]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to terminate the IRA as of
the date first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	“Company”
	 	 	 	 	 	 	 	“Stockholder”
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trubion Pharmaceuticals, Inc.	 	 	 	ARCH Venture Fund V, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ STEVEN GILLIS	 	 	 	By:	 	ARCH Venture Partners V, L.P.	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Steven Gillis, Ph.D.
	 	 	 	 	 	Its:
	 	General Partner	 	 
	 	 	Its:	 	Executive Chairman and Acting President	 	 	 	By:	 	ARCH Venture Partners V, L.L.C.	 	 
	 

	 	 	 	 	 	 	 	 	 	Its:
	 	General Partner	 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                                                                                    /s/ ROBERT NELSON
 	 
	 	 	Name:  	Robert Nelson 	 
	 	 	Its: Managing Director 	 
	 
	 	ARCH V Entrepreneurs Fund V, L.P.

 	 
	 	By:  	ARCH Venture Partners V, L.P.
 	 
	 	 	Its: General Partner 	 
	 	By:  	                                                                                                    ARCH Venture Partners V, L.L.C.
 	 
	 	 	Its: General Partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                                                                    /s/ ROBERT NELSON
 	 
	 	 	Name:  	Robert Nelson 	 
	 	 	Its: Managing Director 	 
	 
	 	Healthcare Focus Fund, L.P.

 	 
	 	By:  	ARCH Venture Partners V, L.P.
 	 
	 	 	Its: General Partner 	 
	 	By:  	                                                                                                    ARCH Venture Partners V, L.L.C.
 	 
	 	 	Its: General Partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                                                                    /s/ ROBERT NELSON
 	 
	 	 	Name:  	Robert Nelson 	 
	 	 	Its: Managing Director 	 

[SIGNATURE PAGE TO TERMINATION OF IRA]

 

 

	 	 	 	 	 
	 	

Frazier Healthcare IV, L.P.

 	 
	 	By:  	FHM IV, LP
 	 
	 	 	Its general partner 	 
	 	By:  	                                                                                                    FHM IV, LLC
 	 
	 	 	Its general partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                                                                    /s/ THOMAS S. HODGE
 	 
	 	 	Name:  	Tom Hodge 	 
	 	 	Its: COO 	 
	 
	 	Frazier Affiliates IV, L.P.

 	 
	 	By:  	FHM IV, LP
 	 
	 	 	Its general partner 	 
	 	By:  	                                                                                                    FHM IV, LLC
 	 
	 	 	Its general partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                                                                    /s/ THOMAS S. HODGE
 	 
	 	 	Name:  	Tom Hodge 	 
	 	 	Its: COO 	 
	 
	 	Frazier Healthcare III, L.P.

 	 
	 	By:  	FHM III, LLC
 	 
	 	 	Its general partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                                                                    /s/ THOMAS S. HODGE
 	 
	 	 	Name:  	Tom Hodge 	 
	 	 	Its: COO 	 
	 
	 	Frazier Affiliates III, L.P.

 	 
	 	By:  	FHM III, LLC
 	 
	 	 	Its general partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                                                                    /s/ THOMAS S. HODGE
 	 
	 	 	Name:  	Tom Hodge 	 
	 	 	Its: COO 	 

 [SIGNATURE PAGE TO TERMINATION OF IRA]

 

 

	 	 	 	 	 
	 	Venrock Partners, L.P.

 	 
	 	By:  	Venrock Partners Management LLC,
 	 
	 	 	Its: General Partner 	 
	 	 	 	 
	 
	 	Venrock Associates IV, L.P.

 	 
	 	By:  	Venrock Management IV, LLC,
 	 
	 	 	Its: General Partner 	 
	 	 	 	 
	 
	 	Venrock Entrepreneurs Fund IV, L.P.

 	 
	 	By:  	VEF Management IV, LLC,
 	 
	 	 	Its: General Partner 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	                                                                                                    /s/ DAVID L. STEPP
 	 
	 	 	Name:  	David L. Stepp 	 
	 	 	Its: Authorized Signatory 	 

 [SIGNATURE PAGE TO TERMINATION OF IRA]

 

 

	 	 	 	 	 
	 	Prospect Venture Partners II, L.P.

 	 
	 	By:  	Prospect Management Co. II, LLC
General Partner
 	 
	 	 	 	 
	 	By:  	                                                                                                    /s/ DAVID MARKLAND
 	 
	 	 	Name:  	David Markland 	 
	 	 	Its: Attorney-In-Fact 	 
	 
	 	Prospect Associates II, L.P.

 	 
	 	By:  	Prospect Management Co. II, LLC
General Partner
 	 
	 	 	 
	 	By:  	                                                                                                    /s/ DAVID MARKLAND
 	 
	 	 	Name:  	David Markland 	 
	 	 	Its: Attorney-In-Fact 	 
	 

  [SIGNATURE PAGE TO TERMINATION OF IRA]Exhibit 10.1

EXHIBIT 10.1

APPENDIX A

GEORGIA-CAROLINA BANCSHARES, INC.

2004 INCENTIVE PLAN

The purposes of the 2004 Incentive Plan are to encourage Eligible Individuals to increase
their efforts to make Georgia-Carolina Bancshares, Inc. and each of its Subsidiaries more
successful, to provide an additional inducement for such Eligible Individuals to continue to
provide services to the Corporation or a Subsidiary as an employee, consultant, non-employee
director, or independent contractor, to reward such Eligible Individuals by providing an
opportunity to acquire incentive awards on favorable terms and to provide a means through which the
Corporation may attract able persons to enter the employment of or engagement with the Corporation
or one of its Subsidiaries. Such incentive awards may, in the discretion of the Board, consist of
Stock (subject to such restrictions as the Board may determine or as provided herein), Performance
Units, Stock Appreciation Rights, Incentive Stock Options, Non-Qualified Stock Options, Phantom
Stock, or any combination of the foregoing, all as the Board, in each case, may determine.

DEFINITIONS

“Award” means an Incentive Stock Option, a Non-Qualified Stock Option, Restricted Stock Award,
Stock Appreciation Rights, Performance Units, or Phantom Stock granted hereunder.

“Award Agreement” means an agreement entered into between the Corporation and the applicable
Participant, setting forth the terms and provisions applicable to the Award then being granted
under this Plan, as further described in Section 2.5 of the Plan.

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

“Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of
the Code shall include reference to any successor provision of the Code.

“Committee” means the Stock Option Committee, if any, appointed by the Board. If no Committee
is appointed by the Board, the Board shall function in place of the Committee.

“Corporation” means Georgia-Carolina Bancshares, Inc.

“Disabled Participant” means a Participant becoming disabled within the meaning of Section
422(c)(6) of the Code.

“Eligible Employee” means any employee of the Corporation or one of its Subsidiaries.

“Eligible Individual” means any Eligible Employee and any consultant, non-employee director,
or independent contractor of the Corporation or one of its Subsidiaries.

“Fair Market Value” shall mean, as applicable, (i) the average closing price of the
Corporation’s Stock quoted on the Over-the-Counter Bulletin Board (or other national quotation
service) for the ten business days prior to the date of Board approval and grant. If the
Corporation’s shares of Common Stock are not traded on the Over-the-Counter Bulletin Board or
through any other nationally recognized quotation service, the fair market value of the
Corporation’s Stock as determined by the Board, acting in good faith, under any method consistent
with the Code, or Treasury Regulations thereunder, as the Board shall in its discretion select and
apply at the time of the grant of the Award concerned. Subject to the
foregoing, the Board, in fixing the Fair Market Value, shall have full authority and
discretion and be fully protected in doing so.

 

 

 

“Incentive Stock Option” means an option that is intended to qualify as an “Incentive Stock
Option” within the meaning of section 422 of the Code. Any Option which does not qualify under
section 422 of the Code shall be treated as a Non-Qualified Stock Option.

“Non-Qualified Stock Option” means an option that is not an Incentive Stock Option.

“Option” means an option to purchase Stock, including Restricted Stock, if the Board so
determines, subject to the applicable provisions of Article 3, awarded in accordance with the terms
of the Plan and which may be an Incentive Stock Option or a Non-Qualified Stock Option.

“Participant” means an Eligible Individual who has been selected by the Board upon the
recommendation of the Committee to participate in the Plan in accordance with Section 2.2 of the
Plan.

“Performance Unit” means a performance unit subject to the requirements of Article 4 and
awarded in accordance with the terms of the Plan.

“Phantom Stock” means a deferred compensation award subject to the requirements of Article 6.

“Plan” means the Georgia-Carolina Bancshares, Inc. 2004 Incentive Plan, and as the same may be
amended, administered or interpreted from time to time.

“Qualifying Performance Adjustments” shall mean those adjustments to reported financial
results required to optimally account for: a) the impact of intangible assets and related
amortization expense, b) the effect of changes in tax law, accounting principles or other such laws
or provisions affecting reported results, c) special charges in connection with mergers and
acquisitions, d) losses from discontinued operations, e) any extraordinary non-recurring items as
described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and
analysis of financial condition and results of operation appearing or incorporated by reference in
the Company’s Annual Report on Form 10-KSB filed with the SEC for the applicable year. Such
adjustments will be at the Board’s sole discretion in a manner that is equitable, consistent with
generally accepted accounting principles, and in accordance with the Company’s accounting practices
and conventions as applied in the past.

“Qualifying Performance Goals” shall mean any one or more of the following performance
criteria: net income, earnings per share, return on equity, return on assets, operating income
and/or total shareholder return. Such criteria may be absolute in their terms, measured against
prior year(s) results, or measured against or in relationship to other companies. In all cases,
such measures will be on a reported basis, adjusted at the Board’s sole discretion, as permitted by
the terms of this Plan.

“Restricted Stock” means Stock delivered under the Plan subject to the requirements of Article
5 and such other restrictions as the Board deems appropriate or desirable.

“Stock” means the common stock of the Corporation.

“Stock Appreciation Right” means a right granted under Article 3 either on a stand-alone basis
or in conjunction with the grant of an Option that entitles the holder to receive a cash payment or
an award of Stock, to be determined in the discretion of the Board at the time the applicable Stock
Appreciation Right is granted, in an amount equal to the excess of the Fair Market Value of one
share of Stock on such date of exercise over, (i) in the case of a Stock Appreciation Right granted
on a stand-alone basis, the Fair Market Value of one share of Stock as of the date of grant (as
set forth in the applicable Award Agreement), or (ii) in the case of a Stock Appreciation Right
granted in conjunction with the grant of an Option, the Option Price per share multiplied by the
number of shares covered by the right.

 

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“Subsidiary” means any corporation in an unbroken chain of corporations beginning with the
Corporation, if each of the corporations (other than the last corporation in the unbroken chain)
owns stock possessing more than fifty percent (50%) of the total combined voting power of all
classes of stock in one of the other corporations in the chain.

“Termination” means the termination of employment with the Corporation or any of its
Subsidiaries or the cessation of the provision of services to the Corporation or any of its
Subsidiaries by a non-employee director, consultant or independent contractor.

GENERAL PROVISIONS

Administration. The Plan shall be administered by the Committee; provided, however,
that the Committee shall recommend to the Board for its approval the selection of Eligible
Individuals to receive Awards under the Plan, the form and terms of Awards and the number of shares
or other consideration subject to Awards under the Plan. The Committee shall interpret the Plan
and prescribe such rules, regulations and procedures in connection with the operation of the Plan
as it shall deem to be necessary and advisable for the administration of the Plan consistent with
the purposes of the Plan. Without limiting the foregoing, the Committee shall have the authority
to:

(1) Prescribe, amend and rescind rules and regulations relating to the Plan;

(2) Recommend to the Board the Eligible Individuals to receive Awards under the
Plan as provided in Section 2.2 of the Plan;

(3) Recommend to the Board the form and terms of Awards;

(4) Recommend to the Board the number of shares or other consideration subject
to Awards under the Plan as provided in Articles 3, 4, 5 and 6 of the Plan;

(5) Recommend to the Board whether Awards will be granted singly, in
combination or in tandem with, in replacement of, or as alternatives to, other
Awards under the Plan or grants or awards under any other incentive or compensation
plan of the Corporation;

(6) Construe and interpret the Plan, any Award Agreement in connection with an
Award and any other agreement or document executed pursuant to the Plan;

(7) Correct any defect or omission, or reconcile any inconsistency in the Plan,
any Award or any Award Agreement;

(8) Determine whether a Participant is a Disabled Participant;

(9) Accelerate or, with the consent of the Participant, defer the vesting of
any Award and/or the exercise date of any Award;

(10) Determine whether a Participant’s Termination from the Corporation or its
Subsidiaries is voluntary and with the written consent of the Corporation or its
Subsidiaries;

(11) Authorize any person to execute on behalf of the Corporation any
instrument required to effectuate the grant of an Award;

 

3

 

(12) With the consent of the Participant and approval of the Board, adjust the
terms of an Award previously granted to the Participant;

(13) Determine when a Participant’s period of employment is deemed to be
continued during an approved leave of absence, or whether a Participant has engaged
in the operation or management of a business that is in competition with the
Corporation or any of its Subsidiaries;

(14) Recommend to the Board, upon review of relevant information, the Fair
Market Value of the Stock; and

(15) Make all other determinations deemed necessary or advisable for the
administration of the Plan subject to the approval of the Board as set forth above.

The Committee may delegate to officers of the Corporation or any Subsidiary the authority to
perform administrative functions under the Plan subject to any legal requirements that the
Committee as a whole take action with respect to such function.

The Committee shall keep records of action taken at its meetings. A majority of the Committee
shall constitute a quorum at any meeting, and the acts of a majority of the members present at any
meeting at which a quorum is present, or acts approved in writing by a majority of the Committee,
shall be the acts of the Committee.

Eligibility. Those Eligible Individuals who share the responsibility for the
management, growth or protection of the business of the Corporation or any Subsidiary or who, in
the opinion of the Committee, provide services yielding significant benefits to the Corporation or
any Subsidiary shall be eligible to receive Awards as described herein.

Subject to the provisions of the Plan, the Board shall have full and final authority, in its
discretion, to grant Awards as described herein and to determine the Eligible Individuals to whom
Awards shall be granted. In determining the eligibility of any Eligible Individual, as well as in
determining the Award, the Board shall consider the position and the responsibilities of the
Eligible Individual being considered, the nature and value to the Corporation or a Subsidiary of
his or her services, his or her present and/or potential contribution to the success of the
Corporation or a Subsidiary and such other factors as the Board may deem relevant.

Shares Available under the Plan. Subject to adjustment as set forth in Section 2.6,
the maximum number of shares of Stock that may be issued or delivered and as to which Awards may be
granted under the Plan shall be 264,100. Subject to adjustment as set forth in Section 2.6, the
maximum number of shares of Stock (and in the case of Performance Units, the maximum dollar value)
with respect to which Awards may be granted in any calendar year (or in the case of Performance
Units, in any Performance Period) to any Participant under the Plan shall be as follows: Options:
50,000 shares; Stock Appreciation Rights: 50,000 shares; Restricted Stock: 50,000 shares; Phantom
Stock: 50,000 shares; and Performance Units: 20,000 shares or $500,000.

If any Award, other than Performance Units, granted under the Plan is canceled by mutual
consent or terminates or expires for any reason without having been exercised in full, or, if and
to the extent that an award of Phantom Stock is paid in cash rather than the issuance of shares of
Stock, the number of shares subject to such Award (or in the case of Phantom Stock the number of
shares of Stock for which payment was made in cash) shall again be available for purposes of the
Plan, except that, to the extent that Stock Appreciation Rights granted in conjunction with an
Option under the Plan are exercised and the related Option surrendered, the number of shares
available for purposes of the Plan shall be reduced by the number of shares, if any, of Stock
issued or delivered upon exercise of such Stock Appreciation Rights. If the Option Price of any
Option granted under the Plan is satisfied by tendering shares of Stock to the Corporation (by
either actual delivery or by attestation) or if shares of Stock are
tendered or are withheld upon the exercise of the Option to satisfy any applicable tax
withholding, only the number of shares of Stock issued net of the shares of Stock tendered or
withheld shall be deemed delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan.

 

4

 

The shares that may be issued or delivered under the Plan may be either authorized but
unissued shares or repurchased shares or partly each.

Corporation’s Obligation to Deliver Stock. The obligation of the Corporation to
issue or deliver shares of Stock under the Plan shall be subject to (i) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, with respect to such shares,
if deemed necessary or appropriate by counsel for the Corporation; (ii) the condition that the
shares shall have been listed (or authorized for listing upon official notice of issuance) upon
each stock exchange on which such shares may then be listed; and (iii) all other applicable laws,
regulations, rules and orders which may then be in effect.

Award Agreement. Each Award granted under the Plan shall be evidenced by a written
Award Agreement, in a form approved by the Committee. Such Award Agreement shall be subject to and
incorporate the express terms and conditions, if any, required under the Plan or as required by the
Committee for the form of Award granted and such other terms and conditions as the Committee may
specify and shall be executed by the Chief Executive Officer, the President (if other than the
Chief Executive Officer) or any Vice President on behalf of the Corporation and by the Participant
to whom such Award is granted. With the consent of the Participant to whom such Award is granted,
the Board may at any time and from time to time amend an outstanding Award Agreement in a manner
consistent with the Plan. Without consent of the Participant, the Board of Directors may at any
time and from time to time modify or amend Award Agreements with respect to Options intended as of
the date of grant to be Incentive Stock Options in such respects as it deems necessary in order
that Incentive Stock Options granted under the Plan shall comply with the appropriate provisions of
the Code and regulations thereunder which are in effect from time to time with respect to Incentive
Stock Options.

Adjustment and Substitution of Shares. If a dividend or other distribution shall be
declared upon the Stock payable in shares of Stock, the number of shares of Stock then subject to
any outstanding Option or by reference to which the amount of any other Award is determined and the
number of shares which may be issued or delivered under the Plan shall be adjusted by adding
thereto the number of shares which would have been distributable thereon if such shares had been
outstanding on the date fixed for determining the stockholders entitled to receive such stock
dividend or distribution.

If the outstanding shares of Stock shall be changed into or exchangeable for a different
number or kind of shares of Stock or other securities of the Corporation or another corporation,
whether through reorganization, reclassification, recapitalization, stock split-up, spin-off,
combination of shares, merger or consolidation, then there shall be substituted for each share of
Stock subject to any then outstanding Award and for each share of Stock, which may be issued or
delivered under the Plan but is not then subject to an outstanding Award, the number and kind of
shares of Stock or other securities into which each outstanding share of Stock shall be so changed
or for which each such share shall be exchangeable.

In the case of any adjustment or substitution as provided for in this Section 2.6, the
aggregate Option Price for all shares subject to each then outstanding Option prior to such
adjustment or substitution shall be the aggregate option price for all shares of Stock or other
securities (including any fraction) to which such shares shall have been adjusted or which shall
have been substituted for such shares. Any new option price per share shall be carried to at least
three decimal places with the last decimal place rounded upwards to the nearest whole number.

No adjustment or substitution provided for in this Section 2.6 shall require the Corporation
to issue or sell a fraction of a share or other security. Accordingly, all fractional shares or
other securities that result from any such adjustment or substitution shall be eliminated and not
carried forward to any subsequent adjustment or substitution.

 

5

 

If any such adjustment or substitution provided for in this Section 2.6 requires the approval
of stockholders in order to enable the Corporation to grant Incentive Stock Options, then no such
adjustment or substitution shall be made without prior stockholder approval. Notwithstanding the
foregoing, in the case of Incentive Stock Options, if the effect of any such adjustment or
substitution would be to cause the Option to fail to continue to qualify as an Incentive Stock
Option or to cause a modification, extension or renewal of such Option within the meaning of
Section 424 of the Code, the Committee may elect that such adjustment or substitution not be made
but rather shall use reasonable efforts to effect such other adjustment of each then outstanding
Option as the Committee in its sole discretion shall deem equitable and which will not result in
any disqualification, modification, extension or renewal (within the meaning of Section 424 of the
Code) of such Incentive Stock Option.

OPTIONS AND STOCK APPRECIATION RIGHTS

Grant of Stock Options and Stock Appreciation Rights. The Board shall have authority,
in its discretion, to grant Incentive Stock Options, Non-Qualified Stock Options or to grant both
types of Options (but not in tandem). Notwithstanding the above, Incentive Stock Options may only
be granted to employees of the Corporation or any of its Subsidiaries. The Board also shall have
the authority, in its discretion, to grant Stock Appreciation Rights either on a stand-alone basis
or in conjunction with Incentive Stock Options or Non-Qualified Stock Options with the effect
provided in Section 3.2(D). Stock Appreciation Rights granted in conjunction with an Incentive
Stock Option may only be granted at the time such Incentive Stock Option is granted. Stock
Appreciation Rights granted in conjunction with a Non-Qualified Stock Option may be granted either
at the time such Non-Qualified Stock Option is granted or at any time thereafter during the term of
such Non-Qualified Stock Option.

Terms and Conditions of Stock Options and Stock Appreciation Rights. Options and
Stock Appreciation Rights granted under the Plan shall be subject to the following terms and
conditions:

(A) The purchase price at which each Option may be exercised (the “Option Price”) shall
be such price as the Committee, in its discretion, shall determine except that, in the case
of an Incentive Stock Option, the Option Price shall not be less than one hundred percent
(100%) of the Fair Market Value per share of Stock covered by the Option on the date of
grant (or in the case of an Incentive Stock Option granted to an Eligible Employee who,
immediately prior to such grant, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation or any Subsidiary (a
“Ten Percent Employee”), shall not be less than 110% of such Fair Market Value on the date
of grant). For purposes of this Section 3.2(A), a Participant (i) shall be considered as
owning not only shares of the Stock owned individually, but also all shares that are at the
time owned, directly or indirectly, by or for the spouse, ancestors, lineal descendants and
brothers and sisters (whether by the whole or half blood) of such individual and (ii) shall
be considered as owning proportionately any shares of Stock owned, directly or indirectly,
by or for any corporation, partnership, estate or trust in which such individual shall be a
stockholder, partner or beneficiary.

(B) The Option Price shall be payable in full in any one or more of the following ways,
as shall be determined by the Board to be applicable to, and as set forth in, any such
Award:

(16) in cash; or

(17) by tendering, either by actual delivery or by attestation, shares of Stock
(which have been owned by the Participant for more than six months, which are free
and clear of all liens and other encumbrances and which are not subject to the
restrictions set forth in Article 5) having an aggregate Fair Market Value on the
date of exercise of the Option equal to the Option Price for the shares being
purchased; or

 

6

 

(18) by requesting that the Corporation withhold such number of shares of Stock
then issuable upon exercise of the Option as shall have an aggregate Fair Market
Value equal to the Option Price for the shares being acquired upon exercise of the
Option; or

(19) by waiver of compensation due or accrued to the Participant for services
rendered; or

(20) provided that a public market for the Corporation’s stock exists:

(a) Through a “same day sale” commitment from the Participant and a
broker-dealer that is a member of the National Association of Securities Dealers (an
“NASD Dealer”) whereby the Participant irrevocably elects to exercise the Option and
to sell a portion of the shares so purchased to pay the purchase price (or a larger
number of the shares so purchased), and whereby the NASD Dealer irrevocably commits
upon receipt of such shares to forward the purchase price directly to the
Corporation (and any excess to the Participant); or

(b) Through a “margin” commitment from the Participant and an NASD Dealer
whereby the Participant irrevocably elects to exercise the Option and to pledge the
shares so purchased to the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the purchase price, and whereby the NASD
Dealer irrevocably commits upon receipt of such shares to forward the purchase price
directly to the Corporation; or

(21) by any combination of the foregoing; or

(22) by such other method as may be determined by the Board and set forth in
the applicable Award Agreement.

If the Option Price is paid in whole or in part in shares of Stock, any portion of the
Option Price representing a fraction of a share shall be paid in cash. The date of exercise
of an Option shall be determined under procedures established by the Board, and the Option
Price shall be payable at such time or times as the Board, in its discretion, shall
determine. No shares shall be issued or delivered upon exercise of an Option until full
payment of the Option Price has been made. When full payment of the Option Price has been
made and subject to the restrictions set forth in Article 5, the Participant shall be
considered for all purposes to be the owner of the shares with respect to which payment has
been made.

(C) An Option may be exercised at such time as the Option vests or at any time
thereafter prior to the time the Option expires in accordance with its terms or otherwise
ceases to be outstanding. No Incentive Stock Option shall be exercisable after the
expiration of ten years (five years in the case of a Ten Percent Employee) from the date of
grant. No Non-Qualified Stock Option shall be exercisable after the expiration of ten years
and six months from the date of grant. Subject to this Section 3.2(C), and 2.5, Options may
be exercised at such times, in such amounts and subject to such restrictions as shall be
determined by the Board, in its discretion.

 

7

 

(D) Stock Appreciation Rights granted on a stand-alone basis shall be exercisable as
and to the extent set forth in the applicable Award Agreement. Stock Appreciation Rights
granted in conjunction with an Option shall be exercisable to the extent that the related
Option is exercisable and only by the same person or persons who are entitled to exercise
the related Option. Stock Appreciation Rights granted on a stand-alone basis shall entitle
the Participant to
receive from the Corporation on exercise that number of shares of Stock having an
aggregate Fair Market Value equal to the excess of the Fair Market Value of one share of
Stock on such date of exercise over the Fair Market Value of one share of Stock on the date
of grant (as set forth in the applicable Award Agreement) multiplied by the number of shares
of Stock covered by the Stock Appreciation Right exercised. Stock Appreciation Rights
granted in conjunction with an Option shall entitle the Participant to surrender the related
Option, or any portion thereof, and to receive from the Corporation in exchange therefor
that number of shares of Stock having an aggregate Fair Market Value equal to the excess of
the Fair Market Value of one share of Stock on such date of exercise over the Option Price
per share, multiplied by the number of shares covered by the Option, or portion thereof,
which is surrendered. Cash shall be paid in lieu of any fractional shares. The Board shall
have the authority, in its discretion, to determine at the time the applicable Stock
Appreciation Right is granted that the obligation of the Corporation shall be paid in cash,
in shares of Stock, or part in cash and part in shares of Stock, and the Award Agreement for
such Stock Appreciation Right shall set forth the payment medium determined by the Board.
The date of exercise of Stock Appreciation Rights shall be determined under procedures
established by the Board, and payment under this Section 3.2(D) shall be made by the
Corporation as soon as practicable after the date of exercise. To the extent that an Option
as to which Stock Appreciation Rights have been granted in conjunction therewith is
exercised, the Stock Appreciation Rights shall be canceled.

(E) No Option or Stock Appreciation Rights shall be transferable by a Participant other
than by will, or if a Participant dies intestate, by the laws of descent and distribution of
the state of domicile of the Participant at the time of death, and all Options and Stock
Appreciation Rights shall be exercisable during the lifetime of a Participant only by the
Participant.

(F) Unless otherwise determined by the Board and set forth in the Award Agreement
referred to in Section 2.5 or an amendment thereto, following the Termination of a
Participant for any reason, such Participant must exercise any outstanding Option within one
year from the date of Termination.

PERFORMANCE UNITS

Performance Period and Objectives. The Board shall determine a performance period
(the “Performance Period”) of one or more years and shall determine the Qualifying Performance
Goals to be applicable to grants of Performance Units. The applicable Qualifying Performance Goals
may vary from Participant to Participant. Performance Periods may overlap and Participants may
participate simultaneously with respect to Performance Units for which different Performance
Periods are prescribed.

Eligibility. At the beginning of a Performance Period, the Board shall determine for
each Participant or group of Participants eligible for Performance Units with respect to that
Performance Period the range of dollar values, if any, which may be fixed or may vary in accordance
with the Qualifying Performance Goals specified by the Board, which shall be paid to a Participant
as an Award if the relevant Qualifying Performance Goal for the Performance Period is met.

Significant Event. If during the course of a Performance Period the Board determines,
in its discretion, that (i) a significant event (or events) has occurred (such as, but not limited
to, a reorganization of the Corporation) which the Board expects to have a substantial effect on a
Qualifying Performance Goal applicable to a Performance Unit during such period (a “Significant
Event”) or (ii) circumstances make it appropriate that Qualifying Performance Adjustments be made,
the Board may revise such Qualifying Performance Goals and make such Qualifying Performance
Adjustments as appropriate; provided that the Board shall not be required to determine that a
reorganization involving the Corporation constitutes a Significant Event.

 

8

 

Termination. If an Eligible Individual terminates service with the Corporation or any
of its Subsidiaries during a Performance Period because of death, Participant Disability,
retirement on or after
age 62, or at an earlier age with the consent of the Corporation, or a Significant Event, as
determined by the Board, that Eligible Individual shall be entitled to payment in settlement of
each Performance Unit for which the Performance Period was prescribed (i) based upon the Qualifying
Performance Goals satisfied at the end of such period; and (ii) prorated for the portion of the
Performance Period during which the Eligible Individual was employed or retained by the Corporation
or any of its Subsidiaries; provided, however, the Board may provide for an earlier
payment in settlement of such Performance Unit in such amount or amounts and under such terms and
conditions as the Board deems appropriate or desirable with the consent of the Eligible Individual.
If an Eligible Individual terminates service with the Corporation or any of its Subsidiaries
during a Performance Period for any other reason, such Eligible Individual shall not be entitled to
any payment with respect to that Performance Period unless the Board shall otherwise determine.

Award. The Board shall have the authority, in its discretion, to determine at the
time the applicable Performance Unit is granted that the obligation of the Corporation shall be
paid in cash, in shares of Stock, or part in cash and part in shares of Stock, and the Award
Agreement for such Performance Unit shall set forth the payment medium determined by the Board.
Each Performance Unit shall be paid either as a lump sum payment or in annual installments, as the
Board shall determine, at the time of grant of the Performance Unit or otherwise, commencing as
soon as practicable after the end of the relevant Performance Period.

RESTRICTED STOCK

Award. Restricted Stock may be received by an Eligible Individual as an Award.
Restricted Stock may but need not be subject to a restriction period (after which restrictions
shall lapse) which shall mean a period commencing on the date the Award is granted and ending on
such date or upon the achievement of such Qualifying Performance Goals or other criteria as the
Board shall determine (the “Restriction Period”). The Board may provide for the lapse of
restrictions in installments where deemed appropriate.

Restriction Period. Except as otherwise provided in this Article 5, no shares of
Restricted Stock received by an Eligible Individual shall be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of during the Restriction Period; provided,
however, that the Restriction Period for any recipient of Restricted Stock shall expire and
all restrictions on shares of Restricted Stock shall lapse upon death, Disability, retirement on or
after age 62 or an earlier age with the consent of the Corporation, or, if such Restricted Stock
constitutes all or a portion of a Performance Unit with vesting dependent upon the achievement of a
Qualifying Performance Goal, upon the determination by the Board that a Significant Event affecting
such Qualifying Performance Goal has occurred.

Termination. Except as otherwise provided in Section 5.2 above, if an Eligible
Individual terminates employment or service with the Corporation or any of its Subsidiaries for any
reason before the expiration of the Restriction Period, all shares of Restricted Stock still
subject to restriction shall, unless the Board otherwise determines, be forfeited by the recipient
and shall be reacquired by the Corporation. Upon such forfeiture, such forfeited shares of
Restricted Stock shall again become available for award under the Plan.

Restricted Stock Certificates. The Board may require, under such terms and conditions
as it deems appropriate or desirable, that the certificates for Restricted Stock delivered under
the Plan be held in custody by a bank or other institution, or that the Corporation may itself hold
such shares in custody until the Restriction Period expires or until restrictions thereon otherwise
lapse, and may require, as a condition of any receipt of Restricted Stock, that the recipient shall
have delivered a stock power endorsed in blank relating to the Restricted Stock.

 

9

 

Exchange of Shares. Nothing in this Article 5 shall preclude a recipient of
Restricted Stock from exchanging any shares of Restricted Stock subject to the restrictions
contained herein for any other shares of Stock that are similarly restricted.

PHANTOM STOCK

Award. The Board shall have authority, in its discretion, to grant deferred
compensation to an Eligible Individual by the award of Phantom Stock, the value of which is related
to the value of the Stock of the Company.

Value. An Award of Phantom Stock shall entitle the Participant to receive from the
Corporation cash and/or shares of Stock having an aggregate fair market value equal to the Fair
Market Value of a share of Stock on such date, or upon the occurrence of one or more events, as may
be specified in the Award Agreement for any Phantom Stock.

Termination. If the Participant is Terminated for any reason prior to the vesting of
the Phantom Stock Award, the Participant’s rights with respect to the Phantom Stock will terminate
and be forfeited, and neither the Participant nor his or her heirs, personal representatives,
successors or assigns shall have any future rights with respect to any such Phantom Stock.

CERTIFICATES FOR AWARDS OF STOCK

Stock Certificates. Subject to Section 5.4 and except as otherwise provided in this
Section 7.1, each Participant entitled to receive shares of Stock under the Plan shall be issued a
certificate for such shares. Such certificate shall be registered in the name of the Eligible
Individual and shall bear an appropriate legend reciting the terms, conditions and restrictions, if
any, applicable to such shares and shall be subject to appropriate stop-transfer orders. To the
extent that the Plan provides for issuance of stock certificates to reflect the issuance of shares
of Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange. If the issuance of shares under the
Plan is effected on a non-certificated basis, the issuance of shares to a Participant shall be
reflected by crediting (by means of a book entry) the applicable number of shares of Stock to an
account maintained by the Corporation in the name of such Participant, which account may be an
account maintained by the Corporation for such Participant under any dividend reinvestment program
offered by the Corporation.

Compliance with Laws and Regulations. The Corporation shall not be required to issue
or deliver any certificates for shares of Stock, or to effect the issuance of any non-certificated
shares as provided in Section 7.1, prior to (i) the listing of such shares on any stock exchange or
quotation system on which the Stock may then be listed; and (ii) the completion of any registration
or qualification of such shares under any Federal or state law, or any ruling or regulation of any
government body which the Corporation shall, in its sole discretion, determine to be necessary or
advisable.

Restrictions. All certificates for shares of Stock delivered under the Plan (and all
non-certificated shares credited to a Participant’s account as provided in Section 7.1) shall also
be subject to such stop-transfer orders and other restrictions as the Board may deem advisable
under the rules, regulations and other requirements of the Securities and Exchange Commission, any
stock exchange or quotation system upon which the Stock is then listed and any applicable Federal
or state securities laws; and the Board may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. The foregoing provisions of this
Section 7.3 shall not be effective if and to the extent that the shares of Stock delivered under
the Plan are covered by an effective and current registration statement under the Securities Act of
1933, or if and so long as the Board determines that application of such
provisions is no longer required or desirable. In making such determination, the Board may
rely upon an opinion of counsel for the Company.

 

10

 

Rights of Stockholders. Except for the restrictions on Restricted Stock under Article
5, each Participant who receives an award of Stock shall have all of the rights of a stockholder
with respect to such shares, including the right to vote the shares and receive dividends and other
distributions. No Eligible Individual awarded an Option, a Stock Appreciation Right or Phantom
Stock shall have any right as a stockholder with respect to any shares subject to such Award prior
to the date of issuance to him or her of a certificate or certificates for such shares, or if
applicable, the crediting of non-certificated shares to an account maintained by the Corporation in
the name of such Eligible Individual.

CHANGE OF CONTROL

The following acceleration provisions shall apply in the event of a Change of Control as
defined in this Section 8.1:

(a) In the event of a Change of Control as defined in paragraph (b) of this
Section 8.1:

(i) any Stock Appreciation Rights and any Options awarded under the Plan, if
not previously exercisable and vested, shall become fully exercisable and vested;
and

(23) the restrictions and deferral limitations applicable to any Restricted
Stock Award under the Plan shall lapse and such shares and awards shall be deemed
fully vested.

For purposes of paragraph (a) of this Section 8.1, a “Change of Control” means
the happening of any of the following:

The acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (a) the
then-outstanding shares of Stock of the Corporation (the “Outstanding Corporation Stock”) or
(b) the combined voting power of the then-outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the “Outstanding Corporation Voting
Securities”); provided, however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (x) any acquisition by the
Corporation, (y) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Corporation or any corporation controlled by the Corporation, or, (z)
any acquisition by any corporation pursuant to a transaction which complies with clauses
(a), (b) and (c) of subsection (3) of this Section 8.1; or

 

11

 

The individuals who, as of the date this Plan is approved by the Board, are members of
the Board (the “Incumbent Board”), cease for any reason to constitute at least a majority of
the Board; provided, however, that, if the election, or nomination for election by the
Corporation’s stockholders, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be
considered and defined as a member of the Incumbent Board; and provided further, that no
individual shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened “Election Contest” (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board (a
“Proxy Contest”), including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest; or

Consummation by the Corporation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Corporation or the
acquisition of assets of another corporation (a “Business Combination”), in each case,
unless, following such Business Combination, (a) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding Corporation
Stock and Outstanding Corporation Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 25% of, respectively, the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the Corporation
or all or substantially all of the Corporation’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Corporation Stock and Outstanding
Corporation Voting Securities, as the case may be, (b) no Person (excluding any employee
benefit plan (or related trust) of the Corporation or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then-outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then-outstanding voting
securities of such corporation except to the extent that such ownership existed prior to the
Business Combination, and (c) at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or

Approval by the shareholders of the Corporation of a complete liquidation or
dissolution of the Corporation.

MISCELLANEOUS

Effect of the Plan on the Rights of Employees and Employer. Neither the adoption of
the Plan nor any action of the Board or the Committee pursuant to the Plan shall be deemed to give
any Eligible Individual any right to be granted an Award under the Plan and nothing in the Plan, in
any Award granted under the Plan or in any Award Agreement shall confer any right to any
Participant to continue in the employment of the Corporation or any Subsidiary or to continue to be
retained to provide services to the Corporation or any Subsidiary as a non-employee director,
consultant or independent contractor or interfere in any way with the rights of the Corporation or
any Subsidiary to terminate a Participant at any time.

 

12

 

Amendment. The right to alter and amend the Plan at any time and from time to time
and the right to revoke or terminate the Plan or to suspend the granting of Awards pursuant to the
Plan are hereby specifically reserved to the Board; provided always that no such revocation,
termination, alteration or suspension of any Award shall terminate any outstanding Award
theretofore granted under the Plan, unless there is a liquidation or a dissolution of the
Corporation; and provided further that no such alteration or amendment of the Plan shall, without
prior stockholder approval (i) increase the total number of shares which may be issued or delivered
under the Plan; (ii) make any changes in the class of Eligible Individuals; (iii) extend the period
set forth in the Plan during which Awards may be granted; or (iv) or make any changes that require
shareholder approval under the rules and regulations of any securities exchange or market on which
the Common Stock is traded. No alteration, amendment, revocation or termination of the Plan or
suspension of any Award shall, without the written consent of the holder of an Award theretofore
granted under the Plan, adversely affect the rights of such holder with respect to such Award.

Effective Date and Duration of Plan. The effective date and date of adoption of the
Plan shall be March 23, 2004 (the “Effective Date”), the date of adoption of the Plan by the Board,
provided that such adoption of the Plan by the Board is approved by the affirmative vote of the
holders of at least a majority of the outstanding shares of Stock at a meeting of such holders duly
called, convened and held within one year of the Effective Date. No Award granted under the Plan
prior to such shareholder approval may be exercised until after such approval. No Award may be
granted under the Plan subsequent to March 23, 2014.

Unfunded Status of Plan. The Plan shall be unfunded. The Corporation shall not be
required to establish any special or separate fund nor to make any other segregation of assets to
assume the payment of any benefits under the Plan. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general unsecured creditor of the
Corporation; provided, however, that the Committee may authorize the creation of trusts or make
other arrangements to meet the Corporation’s obligations under the Plan to deliver cash, shares or
other property pursuant to any Award, which trusts or other arrangements shall be consistent with
the “unfunded” status of the Plan unless the Committee otherwise determines.

Employee Status. For purposes of determining questions of termination and exercise of
an Option or Stock Appreciation Right after a Participant’s Termination, a leave of absence for
military or government service, illness, temporary disability or other reasons approved by a duly
authorized officer of the Company shall not be treated as Termination or interruption of employment
or engagement; provided, however, that, with respect to an Incentive Stock Option, if such leave of
absence exceeds 90 days, such Option shall be deemed a Non-Qualified Stock Option unless the
Eligible Individual’s right to reemployment with the Company or a Subsidiary following such leave
of absence is guaranteed by statute or by contract; provided, however, that no Award may be granted
to an employee while he or she is absent on leave.

 

13

 

Tax Withholding. Whenever the Corporation proposes or is required to distribute Stock
under the Plan, the Corporation may require the recipient to remit to the Corporation an amount
sufficient to satisfy any Federal, state and local tax withholding requirements prior to the
delivery of any certificate for such shares or, in the discretion of the Committee, the Corporation
may withhold from the shares to be delivered shares sufficient to satisfy all or a portion of such
tax withholding requirements. Whenever under the Plan payments are to be made in cash, such
payments may be net of an amount sufficient to satisfy any Federal, state and local tax withholding
requirements.

Benefits. Amounts received under the Plan are not to be taken into account for
purposes of computing benefits under other plans unless the Corporation determines to do so.

Successors and Assigns. The terms of the Plan shall be binding upon the Corporation
and its successors and assigns.

Headings. Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provision hereof.

Federal and State Laws, Rules and Regulations. The Plan and the grant of Awards shall
be subject to all applicable federal and state laws, rules and regulations and to such approval by
any government or regulatory agency as may be required.

 

14

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