Document:

Exhibit
10.12.1

 

AMENDMENT NO.1 TO

ACA CAPITAL HOLDINGS, INC.

AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN

The
ACA Capital Holdings, Inc. Amended and Restated 2004 Stock Incentive Plan
(the “Plan”) is hereby amended as set forth below, effective as of the date of
adoption (the “Adoption Date”) of this amendment (the “Amendment”) by the Board
of Directors of ACA Capital Holdings, Inc. (the “Corporation”), subject to
approval of this Amendment by the stockholders of the Corporation, as provided
below:

1.              The first sentence of Section 4 is
hereby amended and restated in its entirety to read as follows:

“4. STOCK SUBJECT TO THE
PLAN

“Subject
to adjustment as provided in Section 17
hereof, the number of shares of Stock available for issuance under the Plan shall
be seven hundred and six thousand nine hundred twenty-three (706,923);
provided, however, that the aggregate number of shares of Stock available for
issuance pursuant to Options granted after September 30, 2004 shall not exceed
515,000 shares of Stock (for the avoidance of doubt, such 515,000 shares of
Stock shall not include the 329,974 shares of Stock subject to Options that
were outstanding on September 30, 2004).”

2.              The Plan shall be unchanged in all
other respects.

3.              This Amendment is adopted subject
to approval within one year of the adoption date by the stockholders of the
Corporation. If the stockholders fail to approve this Amendment within one year
of the adoption date, no awards may be granted under the Plan covering shares
of stock in excess of the number permitted under the Plan as in effect before
the adoption date.

*    *    *

The
foregoing Amendment to the Plan was duly adopted and approved by the Board of
Directors of the Corporation on October 4, 2004, subject to approval of the
Amendment by stockholders of the Corporation. The foregoing Amendment to the
Plan was approved by the stockholders of the Corporation on October 4, 2004.Exhibit 10.13

 

 

OMNIBUS INCENTIVE
COMPENSATION PLAN

AMERICAN CAPITAL ACCESS
HOLDINGS,

INCORPORATED

Effective March 1, 2001

 

 

 

CONTENTS

 

 

	
   

  

Article 1. Establishment,
Objectives, and Duration

Article 2. Definitions

Article 3. Administration

Article 4. Shares Subject to
the Plan and Maximum Awards

Article 5. Eligibility and
Participation

Article 6. Stock Options

Article 7. Stock Appreciation
Rights

Article 8. Restricted Stock

Article
9. Performance Units, Performance Shares, and Cash-Based Awards

Article 10. Performance
Measures

Article 11. Beneficiary
Designation

Article 12. Deferrals

Article 13. Rights of
Employees/Directors

Article 14. Change in Control

Article 15. Amendment,
Modification, and Termination

Article 16. Withholding

Article
17. Indemnification

Article
18. Successors

Article
19. General Provisions

 

AMERICAN CAPITAL ACCESS
HOLDINGS, INCORPORATED

OMNIBUS INCENTIVE COMPENSATION PLAN

ARTICLE 1.   ESTABLISHMENT,
OBJECTIVES, AND DURATION

1.1
ESTABLISHMENT OF THE PLAN. American Capital Access Holdings, Incorporated, a
Wyoming corporation (hereinafter referred to as the “Company”) hereby
establishes an incentive compensation plan to be known as the “American Capital
Access Holdings, Incorporated Omnibus Incentive Compensation Plan” (hereinafter
referred to as the “Plan”), as set forth in this document. The Plan permits the
grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares, Performance Units,
and Cash-Based Awards.

Subject
to approval by the Company’s stockholders, the Plan shall become effective as
of March 1, 2001 (the “Effective Date”) and shall remain in effect as provided
in Section 1.3 hereof.

1.2
OBJECTIVES OF THE PLAN. The objectives of the Plan are to optimize the
profitability and growth of the Company through annual and long-term incentive
that are consistent with the Company’s goals and that link the personal
interests of Participants to those of the Company’s stockholders; to provide
Participants with an incentive for excellence in individual performance; and to
promote teamwork among Participants.

The
Plan is further intended to provide flexibility to the Company, its Affiliates,
and Subsidiaries, in their ability to motivate, attract, and retain the
services of Participants who make significant contributions to the Company
success and to allow Participants to share in such success.

1.3
DURATION OF THE PLAN. The Plan shall commence on the Effective Date, described
in Section 1.1 hereof, and shall remain in effect, subject to the right of the
Board of Directors to amend or terminate the Plan at any time pursuant to
Article 15 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Plan’s provisions. However, in no event may an Award
be granted under the Plan on or after the tenth (10th) anniversary of the
Effective Date.

ARTICLE 2.   DEFINITIONS

Whenever
used in the Plan, the following terms shall have the meanings set forth below,
and when the meaning is intended, the initial letter of the word shall be
capitalized:

2.1                                 “AFFILIATE”
shall have the meaning ascribed to such term in Rule 12b of the General Rules
and Regulations of the Exchange Act.

2.2                                 “AWARD” means,
individually or collectively, a grant under this Plan of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares, Performance Units, or Cash-Based Awards.

 

 

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2.3                                 “AWARD AGREEMENT”
means an agreement entered into by the Company and  each Participant setting forth the terms and provisions applicable to
Awards granted under this Plan.

2.4                                 “BENEFICIAL
OWNER” or “BENEFICIAL OWNERSHIP” shall have the meaning ascribed to such term
in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

2.5                                 “BOARD” or “BOARD
OF DIRECTORS” means the Board of Directors of the Company.

2.6                                 “CASH-BASED
AWARD” means an Award granted to a Participant as described in Article 9
herein.

2.7                               “CHANGE IN
CONTROL” of the Company shall be deemed to have occurred of the first day that
any one or more of the following conditions shall have been satisfied:

(a)                                Any Person
(other than those Persons in control of the Company of the Effective Date, or
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or indirectly by
the stockholder of the Company in substantially the same proportions as their
ownerships of stock of the Company) becomes the Beneficial Owner directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company’s then outstanding securities;
or

(b)                               During any
period of two (2) consecutive years (not including a period prior to the
Effective Date), individuals who at the beginning of such period constitute the
Board (and any new Director, whose election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the Director then still in
office who either were Directors at the beginning of the period or whose
election or nomination for election was approved), cease for any reason to
constitute a majority thereof; or

(c)                                Any Person is or
becomes able to elect a majority of the member of the Board; or

(d)                               The stockholders
of the Company approve: (i) a plan of complete liquidation of the Company;
(ii) an agreement for the sale or disposition of all or substantially all
the Company’s assets; or (iii) a merger, consolidation, or reorganization
of the Company with or involving any other corporation, other than a merger,
consolidation, or reorganization that would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) at least fifty percent (50%) of the combined voting
power of the voting securities of the Company (or such surviving entity)
outstanding immediately after such merger, consolidation, or reorganization.

However, in no event shall a “Change
in Control” be deemed to have occurred, with respect to a Participant, if the
Participant is part of a purchasing group that consummates 

 

 

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the Change-in-Control
transaction. A Participant shall be deemed “part of a purchasing group” for
purposes of the preceding sentence if the Participant is an equity participant in
the purchasing company or group (except for: (i) passive ownership of less
than three percent (3%) of the stock of the purchasing company; or (ii) ownership
of an equity interest in the purchasing company or group that is otherwise not
significant, as determined prior to the Change in Control by a majority of the
nonemployee continuing Directors).

2.8                               “CODE” means the
Internal Revenue Code of 1986, as amended from time to time.

2.9                               “COMMITTEE”
means any committee appointed by the Board to administer Awards to Employees,
as specified in Article 3 herein.

2.10                           “COMPANY” means
American Capital Access Holdings, Incorporated, a Wyoming corporation, and any
successor thereto as provided in Article 18 herein.

2.11                           “COVERED
EMPLOYEE” means a Participant who, as of the date of vesting and/or payout of
an Award, as applicable, is one of the group of “covered employees,” as defined
in the regulations promulgated under Code Section 162(m), or any successor
statute.

2.12                           “DIRECTOR” means
any individual who is a member of the Board of Directors of the Company;
provided, however, that any Director who is employed by the Company shall be
considered an Employee under the Plan.

2.13                         “DISABILITY”
shall have the meaning ascribed to such term in the long-term disability plan
of the Company, its Subsidiary or Affiliates employing the Employee or if no
such plan exists, at the discretion of the Board, except as otherwise provided
in any agreement with a Participant.

2.14                         “EFFECTIVE DATE”
shall have the meaning ascribed to such term in Section 1.1 hereof.

2.15                         “EMPLOYEE” means
any employee of the Company or its Subsidiaries or Affiliates.

2.16                         “EXCHANGE ACT”
means the Securities Exchange Act of 1934, as amended from time to time, or any
successor act thereto.

2.17                         “FAIR MARKET
VALUE” “Fair Market Value” shall be determined as follows, except as otherwise
provided in an Award Agreement:

(a)                                  At all times
during which the Company’s Shares are not traded on a public securities
exchange, “Fair Market Value” shall be determined by the Board in its sole
discretion.

(b)                                 At all times
following an initial public offering of Shares concurrent with listing on a
public securities exchange or a national automated quotation system, Fair
Market Value shall meet the closing price for Shares on the relevant date, or
(if there were no sales on such date) the closing price on the nearest day
before and 

 

 

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                                                the nearest day
after the relevant date, as reported in The Wall Street Journal or a similar publication
selected by the Board.

2.18                         “FREESTANDING
SAR” means an SAR that is granted independently of any Options, as described in
Article 7 herein.

2.19                         “INCENTIVE STOCK
OPTION” or “ISO” means an option to purchase Shares granted under Article 6
herein and that is designated as an Incentive Stock Option and that is intended
to meet the requirements of Code Section 422.

2.20                         “INSIDER” shall
mean an individual who is, on the relevant date, an officer, director or ten
percent (10%) beneficial owner of any class of the Company’s equity securities
that is registered pursuant to Section 12 of the Exchange Act, all as
defined under Section 16 of the Exchange Act.

2.21                         “NONQUALIFIED
STOCK OPTION” or “NQSO” means an option to purchase Shares granted under Article 6
herein and that is not intended to meet the requirements of Code Section 422,
or that otherwise does not meet such requirements.

2.22                         “OPTION” means
an Incentive Stock Option or a Nonqualified Stock Option, as described in
Article 6 herein.

2.23                         “OPTION PRICE”
means the price at which a Share may be purchased by a Participant pursuant to
an Option.

2.24                         “PARTICIPANT”
means an Employee or Director who has been selected to receive an Award or who
has outstanding an Award granted under the Plan.

2.25                         “PERFORMANCE-BASED
EXCEPTION” means the performance-based exception from the tax deductibility
limitations of Code Section 162(m).

2.26                         “PERFORMANCE
SHARE” means an Award granted to a Participant, as described in Article 9
herein.

2.27                         “PERFORMANCE
UNIT” means an Award granted to a Participant, as described in Article 9
herein.

2.28                         “PERIOD OF
RESTRICTION” means the period during which the transfer of Shares of Restricted
Stock is limited in some way (based on the passage of time, the achievement of
performance goals, or upon the occurrence of other events as determined by the
Committee, at its discretion), and the Shares are subject to a substantial risk
of forfeiture, as provided in Article 8 herein.

2.29                         “PERSON” shall
have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act and used in Sections 13(d) and 14(d) thereof, including a “group”
as defined in Section 13(d) thereof.

 

 

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2.30                         “RESTRICTED
STOCK” means an Award granted to a Participant pursuant to Article 8
herein.

2.31                         “RETIREMENT”
means the Participant’s termination of employment after such Participant
reaches age sixty-five (65) or age fifty-five (55) with the accrual of ten (10)
years of service.

2.32                         “SHARES” means
common stock, par value $.01 of the Company.

2.33                         “STOCK
APPRECIATION RIGHT” or “SAR” means an Award, granted alone or in connection
with a related Option, designated as an SAR, pursuant to the terms of
Article 7 herein.

2.34                         “SUBSIDIARY”
means any corporation, partnership, joint venture, or other entity in which the
Company has a majority voting interest.

2.35                         “TANDEM SAR”
means an SAR that is granted in connection with a related Option pursuant to
Article 7 herein, the exercise of which shall require forfeiture of the right
to purchase a Share under the related Option (and when a Share is purchased
under the Option, the Tandem Sar shall similarly be canceled).

ARTICLE
3.   ADMINISTRATION

3.1   GENERAL.   Subject
to the terms and conditions of the Plan, the Plan shall be administered by the
Board, or by the Committee. The members of the Committee shall be appointed
from time to time by, and shall serve at the discretion of, the Board of
Directors. The Board may delegate to the Committee any or all of the administration
of the Plan; provided, however, that the administration of the Plan with
respect to Awards granted to Directors may not be so delegated. To the extent
that the Board has delegated to the Committee an authority and responsibility
under the Plan, all applicable references to the Board in the Plan shall be to
the Committee. The Committee shall have the authority to delegate
administrative duties to officers of the Company.

3.2   AUTHORITY
OF THE BOARD.   Except as limited by law or by the Certificate of Incorporation
or Bylaws of the Company, and subject to the provisions herein the Board shall
have full power to select Employees and Directors who shall participate in the
Plan; determine the sizes and types of Awards; determine the terms and
conditions of Awards in a manner consistent with the Plan; construe and
interpret the Plan and any agreement or instrument entered into under the Plan;
establish, amend, or waive rules and regulations for the Plan’s administration;
and amend the terms and conditions of any outstanding Award as provided in the
Plan. Further, the Board shall make all other determinations that may be
necessary or advisable for the administration of the Plan. As permitted by law
and the terms of the Plan, the Board may delegate its authority as identified
herein.

3.3   DECISIONS
BINDING.   Except as specifically provided in an Award Agreement, all
determinations and decisions made by the Board pursuant to the provisions of
the Plan and all related orders and resolutions of the Board shall be final,
conclusive, and binding on all persons, including the Company, its
stockholders, Directors, Employees, Participants, and their estates and
beneficiaries.

 

 

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ARTICLE
4.   SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

4.1   NUMBER
OF SHARES AVAILABLE FOR GRANTS.   Subject to adjustment as provided in
Section 4.2 herein, the number of Shares hereby reserved for issuance to
Participants under the Plan shall be 364,764.1, some or all of which may be
granted in the form of Shares of Restricted Shares. The Board shall determine
the appropriate methodology for calculating the number of shares issued
pursuant to the Plan.

4.2   ADJUSTMENTS
IN AUTHORIZED SHARES.   In the event of any change in corporate
capitalization, such as a stock split, or a corporate transaction, such as any
merger, consolidation, separation, including a spin-off, or other distribution
of stock or property of the Company, any reorganization (whether or not such
reorganization comes within the definition of such term in Code Section 368) or
any partial or complete liquidation of the Company, such adjustment shall be
made in the number and class of Shares that may be delivered under Section 4.1,
in the number and class of and/or price of Shares subject to outstanding Awards
granted under the Plan, and in the Award limits set forth in subsections 4.1(a)
and 4.1(b), as may be determined to be appropriate and equitable by the Board,
in its sole discretion, to prevent dilution or enlargement of rights; provided,
however, that the number of Shares subject to any Award shall always be a whole
number.

ARTICLE
5.   ELIGIBILITY AND PARTICIPATION

5.1    ELIGIBILITY.   Persons eligible to
participate in this Plan include all Employees and Directors.

5.2    ACTUAL PARTICIPATION.   Subject to
the provisions of the Plan, the Board may, from time to time, select from all
eligible Employees and Directors, those to whom Awards shall be granted and
shall determine the nature and amount of each Award.

ARTICLE
6.   STOCK OPTIONS

6.1    GRANT OF OPTIONS.   Subject to the
terms and provisions of the Plan, Options may be granted to Participants in
such number, and upon such terms, and at any time and from time to time as
shall be determined by the Board.

6.2    AWARD AGREEMENT.   Each Option grant
shall be evidenced by an Award Agreement that shall specify the Option Price,
the duration of the Option, the number of Shares to which the Option pertains,
and such other provisions as the Board shall determine which are not
inconsistent with the terms of the Plan. The Award Agreement also shall specify
whether the Option is intended to be an ISO within the meaning of Code Section
422, or an NQSO whose grant is intended not to fall under the provisions of
Code Section 422.

6.3    OPTION PRICE.   The Option Price for
each grant of an Option under this Plan shall be as determined by the Board.

6.4    DURATION OF OPTIONS.   Each Option
granted to a Participant shall expire at such time as the Board shall determine
at the time of grant; provided, however, that no ISO shall be exercisable later
than the tenth (10th) anniversary date of its grant.

 

 

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6.5    EXERCISE OF OPTIONS.   Options
granted under this Article 6 shall be exercisable at such times and be subject
to such restrictions and conditions as the Board shall in each instance
approve, which need not be the same for each grant or for each Participant.

Notwithstanding
the above, Options may, but need not, include a provision whereby the Participant
may elect to exercise the Option as to any part or all of the Shares subject to
the Option prior to the full vesting of the Option. Any unvested Shares so
purchased shall be subject to a repurchase right in favor of the Company, with
the repurchase price to be equal to the lesser of: (a) the original purchase
price; or (b) the Fair Market Value of the Shares on the date of such
repurchase, or to any other restriction the Committee determines to be
appropriate.

6.6    PAYMENT.   Options granted under
this Article 6 shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment for the
Shares.

The
Option Price upon exercise of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; or (b) by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Option Price (provided that the Shares that are tendered, if
acquired from the Company, must have been held by the Participant for at least
six (6) months prior to their tender to satisfy the Option Price) (c) to the
extent authorized in the Award Agreement, a promissory note; or (d) by a combination
of (a), (b) and (c); or (d) any other method approved by the Board in its sole
discretion.

The
Board also may allow cashless exercise as permitted under Federal Reserve Board’s
Regulation T, subject to applicable securities law restriction or by any
other means which the Board determines to be consistent with the Plan’s purpose
and applicable law. Subject to any governing rules or regulations, as soon as
practicable after receipt of a written notification of exercise and full
payment, the Company shall deliver to the Participant, in the Participant’s
name, Share certificates in an appropriate amount based upon the number of
Shares purchased under the Option(s).

Unless
otherwise determined by the Board, all payments under all of the methods indicated
above shall be paid in United States dollars.

6.7    RESTRICTIONS ON SHARE TRANSFERABILITY.   The
Board may impose such restrictions on any Shares acquired pursuant to the
exercise of an Option granted under this Article 6 as it may deem advisable,
including, without limitation, restrictions under applicable federal securities
laws, under the requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, and under any blue sky or state
securities laws applicable to such Shares.

6.8    TERMINATION OF EMPLOYMENT/DIRECTORSHIP.   Each
Participant’s Award Agreement shall set forth the extent to which the
Participant shall have the right to exercise the Option following termination
of the Participant’s employment or directorship with the Company. Such
provisions shall be determined in the sole discretion of the Board, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.

6.9    NONTRANSFERABILITY OF OPTIONS.

 

 

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(a)                                  INCENTIVE STOCK
OPTIONS. No ISO granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, all ISOs granted to a Participant
under the Plan shall be exercisable during his or her lifetime only by such
Participant.

(b)                                 NONQUALIFIED
STOCK OPTIONS. Except as otherwise provided in a Participant’s Award Agreement,
no NQSO granted under this Article 6 may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant’s Award Agreement, all NQSOs granted to a Participant under this
Article 6 shall be exercisable during his or her lifetime only by such
Participant.

ARTICLE
7.   STOCK APPRECIATION RIGHTS

7.1    GRANT OF SARS.   Subject to the terms and
conditions of the Plan, SARs may be granted to Participants at any time and
from time to time as shall be determined by the Board. The Board may grant
Freestanding SARs, Tandem SARs, o any combination of these forms of SAR.

Subject
to the terms and conditions of the Plan, the Board shall have complete
discretion in determining the number of SARs granted to each Participant and,
consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such SARs.

The
grant price of a Freestanding SAR shall equal the Fair Market Value of a Share
on the date of grant of the SAR. The grant price of Tandem SARs shall equal the
Option Price of the related Option.

7.2    SAR AGREEMENT.   Each SAR grant
shall be evidenced by an Award Agreement that shall specify the grant price,
the term of the SAR, and such other provisions as the Board shall determine.

7.3    TERM OF SARS.   The term of an SAR
granted under the Plan shall be determined by the Board, in its sole
discretion.

7.4    EXERCISE OF FREESTANDING SARS.   Freestanding
SARs may be exercised upon whatever terms and conditions the Board, in its sole
discretion, imposes upon them.

7.5    EXERCISE OF TANDEM SARS.   Tandem
SARs may be exercised for all or part of the Shares subject to the related
Option upon the surrender of the right to exercise the equivalent portion of
the related Option. A Tandem SAR may be exercised only with respect to the
Shares for which its related Option is then exercisable.

Notwithstanding
any other provision of this Plan to the contrary, with respect to a Tandem SAR
granted in connection with an ISO: (a) the Tandem SAR will expire no later
than the expiration of the underlying ISO; (b) the value the payout with
respect to the Tandem SAR may be for no more than one hundred percent (100%) of
the difference between the Option Price of the underlying IS and the Fair
Market Value of the Shares subject to the underlying ISO at the time the Tandem
SAR is 

 

 

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exercised; and (c) the
Tandem SAR may be exercised only when the Fair Market Value of the Shares
subject to the ISO exceeds the Option Price of the ISO.

7.6    PAYMENT OF SAR AMOUNT.   Upon
exercise of an SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying:

(a)                                  The difference
between the Fair Market Value of a Share on the date of exercise over the grant
price; by

(b)                                 The number of
Shares with respect to which the SAR is exercised

At
the discretion of the Board, the payment upon SAR exercise may be in cash, in
Shares of equivalent value, in some combination thereof, or in any other manner
approved by the Board at its sole discretion. The Board’s determination
regarding the form of SAR payout shall be set forth in the Award Agreement
pertaining to the grant of the SAR.

7.7    TERMINATION OF EMPLOYMENT/DIRECTORSHIP.   Each
Award Agreement shall set forth the extent to which the Participant shall have
the right to exercise the SAR following termination of the Participant’s
employment or directorship with the Company, its Affiliates, and/or its
subsidiaries, as the case may be. Such provisions shall be determined in the
sole discretion of the Board, shall be included in the Award Agreement entered
into with Participants, need not be uniform among all SARs issued pursuant to
the Plan, and may reflect distinction based on the reasons for termination.

7.8    NONTRANSFERABILITY OF SARS.   Except
as otherwise provided in a Participant’s Award Agreement, no SAR granted under
the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant’s Award Agreement, all
SARs granted to a Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant.

ARTICLE
8.   RESTRICTED STOCK

8.1    GRANT OF RESTRICTED STOCK.   Subject
to the terms and provisions of the Plan, the Board, at any time and from time
to time, may grant Shares of Restricted Stock to Participants in such amounts
as the Board shall determine.

8.2    RESTRICTED STOCK AGREEMENT.   Each
Restricted Stock grant shall be evidenced by a Restricted Stock Award Agreement
that shall specify the Period (?? of Restriction, the number of Shares of
Restricted Stock granted, and such other provisions as the Board shall
determine.

8.3    TRANSFERABILITY.   Except as
provided in this Article 8, the Shares of Restricted Stock granted herein
may not be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated until the end of the applicable Period Restriction established by
the Board and specified in the Restricted Stock Award Agreement, or upon
earlier satisfaction of any other conditions, as specified the Board in its
sole discretion and set forth in the Restricted Stock Award Agreement. All
rights with respect to the Restricted Stock granted to a Participant under the
Plan shall be available during his or her lifetime only such Participant.

 

 

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8.4    OTHER RESTRICTIONS.   The Board shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock restrictions based upon the achievement of
specific performance goals, time-based restrictions on vesting following the
attainment of the performance goals, time-based restrictions, and/or
restrictions under applicable federal or state securities laws.

To
the extent deemed appropriate by the Board, the Company may retain the
certificates representing Shares of Restricted Stock in the Company’s possession
until such time as all conditions and/or restrictions applicable to such Share
have been satisfied.

Except
as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.

8.5    DIVIDENDS AND OTHER DISTRIBUTIONS.   During
the Period of Restriction, the Board may apply any restrictions to the
dividends that the Board deems appropriate. Without limiting the generality of
the preceding sentence, if the grant or vesting of Restricted Shares granted to
a Covered Employee is designed to comply with the requirements of the
Performance-Based Exception, the Board may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such
Restricted Shares, such that the dividends and/o the Restricted Shares maintain
eligibility for the Performance-Based Exception.

8.6    TERMINATION OF EMPLOYMENT/DIRECTORSHIP.   Each
Award Agreement shall set forth the extent to which the Participant shall have
the right to receive unvested Restricted Shares following termination of the
Participant’s employment or directorship with the Company. Such provisions
shall be determined in the sole discretion of the Board, shall be included in
the Award Agreement entered into with each Participant, need not be uniform
among all Shares of Restricted Stock issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.

ARTICLE
9.   PERFORMANCE UNITS, PERFORMANCE SHARES, AND CASH-BASED AWARDS

9.1    GRANT OF PERFORMANCE UNITS/SHARES AND
CASH-BASED AWARDS.   Subject to the terms of the Plan, Performance Units,
Performance Shares, and/or Cash-Based Awards may be granted to Participants in such
amounts and upon such terms, and at any time and from time to time, as shall be
determined by the Board.

9.2    VALUE OF PERFORMANCE UNITS/SHARES AND
CASH-BASED AWARDS.   Each Performance Unit shall have an initial value that
is established by the Board the time of grant. Each Performance Share shall
have an initial value equal to the Fair Market Value of a Share on the date of
grant. Each Cash-Based Award shall have a value as may be determined by the
Board. The Board shall set performance goals in its discretion which, depending
on the extent to which they are met, will determine the number and/or value of
Performance Units/Shares and Cash-Based Awards that will be paid out to the
Participant. For purposes of the Article 9, the time period during which
the performance goals must be met shall be called a “Performance Period.”

9.3    EARNING OF PERFORMANCE UNITS/SHARES AND
CASH-BASED AWARDS.   Subject to the terms of this Plan, after the
applicable Performance Period has ended, the holder of Performance 

 

 

10

Units/Shares and Cash-Based
Awards shall be entitled to receive payout on the number and value of
Performance Units/Shares and Cash-Based Awards earned by the Participant over
the Performance Period, to be determined as a function of the extent to which
the corresponding performance goals have been achieved.

9.4    FORM AND TIMING OF PAYMENT OF
PERFORMANCE UNITS/SHARES AND CASH-BASED AWARDS.   Payment of earned
Performance Units/Shares and Cash-Based Awards shall be as determined by the
Board and as evidenced in the Award Agreement. Subject to the terms of the
Plan, the Board, in its sole discretion, may pay earned Performance
Units/Shares and Cash-Based Awards in the form of cash or in Shares (or in a
combination thereof) that have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares and Cash-Based Awards at the close
of the applicable Performance Period. Such Shares may be granted subject to any
restrictions deemed appropriate by the Board. The determination of the Board
with respect to the form of payout of such Awards shall be set forth in the
Award Agreement pertaining to the grant of the Award.

At
the discretion of the Board, Participants holding Performance Units/Shares may
be entitled to receive dividend units with respect to dividends declared with
respect to the Shares. Such dividends may be subject to the same accrual,
forfeiture, and payout restrictions as apply to dividends earned with respect
to Shares of Restricted Stock, as set forth in Section 8.6 herein, as
determined by the Board).

9.5    TERMINATION OF EMPLOYMENT/DIRECTORSHIP.   In
the event the employment or directorship terminates for any reason, including
by reason of death, Disability, or Retirement, all Performance Units/Shares and
Cash-Based Awards shall be forfeited by the Participant to the Company unless
determined otherwise by the Board, as set forth in the Participant’s Award
Agreement.

9.6    NONTRANSFERABILITY.   Except as
otherwise provided in a Participant’s Award Agreement, Performance Units/Shares
and Cash-Based Awards may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, except as otherwise provided in a
Participant’s Award Agreement, a Participant’s rights under the Plan shall be
exercisable during the Participant’s lifetime only by the Participant.

ARTICLE
10.   PERFORMANCE MEASURES

Unless
and until the Committee proposes for shareholder vote and shareholders approve
a change in the general performance measures set forth in this Article 10, the
attainment of which may determine the degree of payout and/or vesting with
respect to Awards to Covered Employees that are designed to qualify for the
Performance-Based Exception, the performance measure(s) to be used for purposes
of such grants shall be chosen from among:

(a)                                  Earnings per
share;

(b)                                 Net income
(before or after taxes);

(c)                                  Return measures
(including, but not limited to, return on assets, equity, or sales);

(d)                                 Cash flow
(including, but not limited to, operating cash flow and free cash flow);

 

 

11

(e)                                  Cash flow return
on investments, which equals net cash flows divided owner’s equity;

(f)                                    Earnings before
or after taxes, interest, depreciation and/or   amortization;

(g)                                 Internal rate of
return or increase in net present value;

(h)                                 Dividends paid;

(i)                                     Gross revenues;

(j)                                     Gross margins;
and

(k)                                  Share price
(including, but not limited to, growth measures and total shareholder return).

The
Board in its sole discretion shall have the ability to set such performance
measures at the corporate level or the business unit level.

The
Committee may exclude various items and occurrences from business results
before determining Awards under the Plan. To the extent such exclusion affect
Awards to executives covered by Section 162(m), they will be prescribed in
resolutions that meet the requirements of Section 162(m) for deductibility.

Awards
that are designed to qualify for the Performance-Based Exception, and that are
held by Covered Employees, may not be adjusted upward (the Board shall retain
the discretion to adjust such Awards downward).

In
the event that applicable tax and/or securities laws change to permit the Board
discretion to alter the governing performance measures without obtaining
shareholder approval of such changes, the Board shall have sole discretion to
make such changes without obtaining shareholder approval. In addition, in the
event that the Board determines that it is advisable to grant Awards that shall
not qualify for the Performance-Based Exception, the Board may make such grant
without satisfying the requirements of Code Section 162(m).

ARTICLE
11.   BENEFICIARY DESIGNATION

Each
Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of his or her death before he or
she receives any or all of such benefit. Each such designation shall revoke all
prior designations by the same Participant, shall be in a form prescribed by
the Company, and will be effective only when filed by the Participant in
writing with the Company during the Participant’s lifetime. In the absence of
any such designation, benefits remaining unpaid at the Participant’s death
shall be paid to the Participant’s estate.

ARTICLE
12.   DEFERRALS

The
Board may permit or require a Participant to defer such Participant’s receipt
of the payment of cash or the delivery of Shares that would otherwise due to
such Participant by virtue of the exercise of an Option or SAR, the lap or
waiver of restrictions with respect to Restricted Stock, or the satisfaction of
any requirements or goals with respect to Performance Units/Shares and

 

 

12

Cash-Based Awards. If any
such deferral election is required or permitted, the Board shall, in its sole
discretion, establish rules and procedures for such payment deferrals.

ARTICLE
13.   RIGHTS OF EMPLOYEES/DIRECTORS

13.1     EMPLOYMENT.   Nothing in the Plan
shall interfere with or limit in any way the right of the Company to terminate
any Participant’s employment at any time, nor confer upon any Participant any
right to continue in the employ of the Company.

13.2     PARTICIPATION.   No Employee or
Director shall have the right to be selected to receive an Award under this
Plan, or, having been so selected, to be selected to receive a future Award.

13.3     RIGHTS AS A STOCKHOLDER.   A
Participant shall have none of the rights of a shareholder with respect to
shares of Common Stock covered by any Award until the Participant becomes the
record holder of such shares.

ARTICLE
14.   CHANGE IN CONTROL

14.1     TREATMENT OF OUTSTANDING AWARDS.   Upon
the occurrence of a Change in Control, unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges, or unless the Board
shall determine otherwise in the Award Agreement:

(a)                                Subject to the
exceptions set forth in the last sentence of this Section 14.1(a) upon the
occurrence of a Change of Control, either of the following two actions shall be
taken: (A) fifteen days prior to the scheduled consummation of a Change of
Control all Options and SARs outstanding hereunder shall become immediately
exercisable and shall remain exercisable for a period of fifteen days, or (B)
the Board may elect, in its sole discretion, to cancel any outstanding grants
and pay or deliver or cause to be paid or delivered, to the holder thereof an amount
in cash or securities having a value (as determined by the Board acting in good
faith), equal to the product of the number of Shares subject to the Option (the
“Option Shares”) multiplied by the amount, if any, by which (I) the formula or
fixed price per share paid to holders of Shares pursuant to such transaction
exceeds (II) the Option Price applicable to such Option Shares. With respect to
the Company’s establishment of an exercise window, (i) any exercise of an
Option during such fifteen-day period shall be conditioned upon the
consummation of the event and shall be effective only immediately before the
consummation of the event, and (ii) upon consummation of any Change of Control
the Plan, and all outstanding but unexercised Options shall terminate. The
Board shall send written notice of an event that will result in such a
termination to all individuals who hold Options not later than the time at
which the Company gives notice thereof to its shareholders. This Section
14.1(a) shall not apply to any Change of Control to the extent that provision
is made in writing in connection with such Change of Control for the assumption
or continuation of the Options and SARs theretofore granted, or for the substitution
for such Options and SARs for new common stock options and new SARs relating to
the stock of successor entity, or a parent or subsidiary thereof, with
appropriate adjustments as to the number of shares (disregarding any 

 

 

13

                                                consideration
that is not common stock) and option prices, in which event the Plan and
Options and SARs theretofore granted shall continue in the manner and under the
terms so provided.

(b)                               Any restriction
periods and restrictions imposed on Restricted Shares that are not
performance-based shall lapse.

(d)
                              The target
payout opportunities attainable under all outstanding Awards of
performance-based Restricted Stock, Performance Units Performance Shares, and
Cash-Based Awards shall be deemed to have been fully earned for the entire
Performance Period(s) as of the effective date of the Change in Control. The
vesting of all Awards denominated in Shares shall be accelerated as of the
effective date of the Change in Control, and there shall be paid out to
Participants within thirty (30) days following the effective date of the Change
in Control a pro rata number of shares based upon an assumed achievement of all
relevant target performance goals and upon the length of time within the
Performance Period that has elapsed prior to the Change in Control. Awards
denominated in cash shall be paid pro rata to participants in cash within
thirty (30) days following the effective date of the Change in Control, with
the probation determined as a function of the length of time within the
Performance Period that has elapsed prior to the Change in Control, and based
on an assumed achievement of all relevant targeted performance goals.

14.2     TERMINATION, AMENDMENT, AND
MODIFICATIONS OF CHANGE-IN-CONTROL PROVISIONS.   Notwithstanding any other
provision of this Plan (but subject to the limitations of Section 15.3
hereof) or any Award Agreement provision, the provisions of this Article 14
may not be terminated, amended, or modified on or after the date of a Change in
Control to affect adversely any Award thereto for granted under the Plan
without the prior written consent of the Participant with respect to said
Participant’s outstanding Awards; provided, however, the Board may terminate,
amend, or modify this Article 14 at any time and from time to time prior
to the date of a Change in Control.

14.3     POOLING OF INTERESTS ACCOUNTING.   Notwithstanding
any other provision of the Plan to the contrary, in the event that the
consummation of a Change in Control is contingent on using pooling of interests
accounting methodology, the Board may take any action necessary to preserve the
use of pooling of interest accounting.

ARTICLE
15.   AMENDMENT, MODIFICATION, AND TERMINATION

15.1     AMENDMENT, MODIFICATION, AND
TERMINATION.   Subject to the terms of the Plan, the Board may at any time
and from time to time, alter, amend, suspend, and terminate the Plan in whole
or in part.

15.2     ADJUSTMENT OF AWARDS UPON THE
OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING EVENTS.   The Board may make
adjustments in the terms and condition of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without
limitation, the events described in Section 4.3 hereof) affecting the Company
or the financial statements of the Company or of changes in applicable laws,
regulations, or accounting principles whenever the Board 

 

 

14

determines that such
adjustments are appropriate in order to prevent dilution ?? enlargement of the
benefits or potential benefits intended to be made available under the Plan;
provided that, unless the Board determines otherwise at the time such
adjustment is considered, no such adjustment shall be authorized to the extent
that such authority would be inconsistent with the Plan’s or any Award’ meeting
the requirements of Section 162(m) of the Code, as from time to time amended.

15.3     AWARDS PREVIOUSLY GRANTED.   Notwithstanding
any other provision of the Plan to the contrary (but subject to Section 14.3
hereof), no termination, amendment, or modification of the Plan shall adversely
affect in any material way any Award previously granted under the Plan, without
the written consent o the Participant holding such Award.

15.4     COMPLIANCE WITH CODE SECTION 162(M).   At
all times when Code Section 162 (m) is applicable, all Awards granted under
this Plan to Employees who are ?? could reasonably become Covered Employees as
determined by the Board shall comply with the requirements of Code Section
162(m); provided, however, that in the event the Board determines that such
compliance is not desired with respect to any Award or Awards available for grant
under the Plan, then compliance with Code Section 162(m) will not be required.
In addition, in the event that changes are made to Code Section 162(m) to
permit greater flexibility with respect to any Award or Awards available
under the Plan, the Board may, subject to this Article 15, make any adjustments
it deems appropriate.

ARTICLE
16.   WITHHOLDING

16.1     TAX WITHHOLDING.   The Company
shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy Federal,
state, and local taxes, domestic or foreign, required by law or regulation to
be withheld with respect to any taxable event arising as a result of this Plan.

16.2     SHARE WITHHOLDING.   With respect
to withholding required upon the exercise of Options or SARs, upon the lapse of
restrictions on Restricted Stock or upon any other taxable event arising as a
result of Awards granted hereunder Participants may elect, subject to the
approval of the Board, to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the minimum statutory total tax that
could be imposed on the transaction. A ?? such elections shall be irrevocable,
made in writing, signed by the Participant and shall be subject to any
restrictions or limitations that the Board, in its sole discretion, deems
appropriate.

ARTICLE
17.   INDEMNIFICATION

Each
person who is or shall have been a member of the Committee, or of the Board,
shall be indemnified and held harmless by the Company against and from any
loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him or her in settlement thereof,
with the Company’s approval, or paid by him or her in satisfaction of any judgment
in any such action, suit, or proceeding against him or her, provided he or she
shall give the Company an opportunity, at its own expense, to handle and defend
the same before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such 

 

 

15

persons may be entitled under
the Company’s Articles of Incorporation or Bylaw as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

ARTICLE
18.   SUCCESSORS

All
obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

ARTICLE
19.   GENERAL PROVISIONS

19.1     GENDER AND NUMBER.   Except where
otherwise indicated by the context, any masculine term used herein also shall
include the feminine; the plural shall include the singular and the singular
shall include the plural.

19.2     SEVERABILITY.   In the event any
provision of the Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of the Plan, and
the Plan shall be construed and enforced if the illegal or invalid provision
had not been included.

19.3     REQUIREMENTS OF LAW.   The granting
of Awards and the issuance of Share under the Plan shall be subject to all
applicable laws, rules, and regulations and to such approvals by any
governmental agencies or national securities exchanges as may be required.

19.4     SECURITIES LAW COMPLIANCE.   With
respect to Insiders, transactions under this Plan are intended to comply with
all applicable conditions of Rule 16b-3 or its successors under the 1934 Act,
unless determined otherwise by the Board. To the extent any provision of the
Plan or action by the Board fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Board.

19.5     LISTING.   The Company may use
reasonable endeavors to register Shares allotted pursuant to the exercise of an
Option with the United States Securities and Exchange Commission or to the
effect compliance with the registration, qualification, and listing
requirements of any national securities laws, stock exchange, or automated
quotation system.

19.6     DELIVERY OF TITLE.   The Company
shall have no obligation to issue or deliver evidence of title for shares of
Shares under the Plan prior to:

(a)                                  Obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and

(b)                                 Completion of
any registration or other qualification of the Shares under any applicable
national or foreign law or ruling of any governmental body that the Company
determines to be necessary or advisable.

19.7     INABILITY TO OBTAIN AUTHORITY.   The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any 

 

 

16

liability in respect of the
failure to issue or sell such Shares as to which such requisite authority shall
not have been obtained.

19.8     INVESTMENT REPRESENTATIONS.   As a
condition to the exercise of an Option, the Company may require the person
exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without
any present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.

19.9     NO ADDITIONAL RIGHTS.   Nothing in
the Plan shall interfere with or limit in any way the right of the Company to
terminate any Participant’s employment at any time, or confer upon any
Participant any right to continue in the employ of the Company.

Neither
the Award nor any benefits arising under this Plan shall constitute part of a
Participant’s employment contract with the Company or any Subsidiary or
Affiliate, and accordingly subject to Section 15.3, this Plan and the benefits
hereunder may be terminated at any time in the sole and exclusive discretion of
the Committee without giving rise to liability on the part of the Company or
any Affiliate for severance payments.

19.10     EMPLOYEES BASED OUTSIDE OF THE UNITED
STATES.   Notwithstanding any provision of the Plan to the contrary, in
order to comply with provisions of laws in other countries in which the
Company, its Affiliates, and its Subsidiaries operate or have Employees, the
Board, in their sole discretion, shall have the power and authority to:

(a)                                  Determine which
Affiliates and Subsidiaries will be covered by the Plan;

(b)                                 Determine which
Employees employed outside the United States are eligible to participate in the
Plan;

(c)                                  Modify the terms
and conditions of any Award granted to Employees who are employed outside the
United States; and

(d)                                 Establish subplans,
modified exercise procedures, and other terms and procedures to the extent such
actions may be necessary or advisable. Any sub plans and modifications to Plan
terms and procedures established under this Section 19.10 by the Board or the
Committee shall be attached to this Plan document as Appendices.

(e)                                  Take any action,
before or after an Award is made, which it deems advisable to obtain or comply
with any necessary local government regulatory exemptions or approvals;
provided that the Board may not take any actions hereunder which would violate
any securities law or governing statute.

19.11     UNCERTIFICATED SHARES.   To the
extent that the Plan provides for issuance of certificates to reflect the
transfer of Shares, the transfer of such Shares may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
rules of any stock exchange.

 

 

17

19.12     GOVERNING LAW.   The Plan and each
Award Agreement shall be governed by the laws of the state of New York,
excluding any conflicts or choice of law rule or principle that might otherwise
refer construction or interpretation of the Plan to the substantive law of
another jurisdiction. Unless otherwise provided in the Award Agreement,
recipients of an Award under the Plan are deemed to submit to the exclusive
jurisdiction and venue of the federal or state courts of New York, county of
New York, to resolve any and all issues that may arise out of or relate to the
Plan or any related Award Agreement.

 

 

18

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