T-3 ENERGY SERVICES 2002 STOCK INCENTIVE PLAN (As Amended and Restated Effective June 4, 2009)

Exhibit 10.1

T-3 ENERGY SERVICES

2002 STOCK INCENTIVE PLAN

(As Amended and Restated Effective June 4, 2009)

TABLE OF CONTENTS

T-3 ENERGY SERVICES
2002 STOCK INCENTIVE PLAN

SECTION 1
GENERAL PROVISIONS RELATING TO
PLAN GOVERNANCE, COVERAGE AND BENEFITS

1.1 Background and Purpose

     T-3 Energy Services, Inc., a Delaware corporation (“ T-3 ”), entered into an Agreement and Plan of Merger, dated as of May 7, 2001, and as subsequently amended, by and among T-3, Industrial Holdings, Inc., a Texas corporation (“ IHI ”), and First Reserve Fund VIII, Limited Partnership, a Delaware limited partnership (the “ Merger Agreement ”).

     Pursuant to the Merger Agreement, the parties entered into a business combination effected by a merger of T-3 into IHI, as a result of which the separate existence of T-3 ceased and IHI was the surviving corporation (the “ Merger ”). Immediately after the consummation of the Merger, IHI merged into a Delaware corporation which was a wholly owned subsidiary of IHI, and the subsidiary survived and its name was changed to T-3 Energy Services, Inc., a Delaware corporation (the “ Company ”). Pursuant to the Merger Agreement, the outstanding options to purchase T-3 Common Stock (collectively, the “ T-3 Options ”) were converted into stock options to purchase shares of the Company’s Common Stock pursuant to an exchange formula set forth in the Merger Agreement.

     T-3 had previously adopted the “T-3 Energy Services, Inc. 2000 Stock Option Plan” (the “ T-3 Plan ”). IHI had previously adopted the “Industrial Holdings, Inc. 1998 Incentive Plan” (the “ IHI 1998 Plan ”) and the “Industrial Holdings, Inc. 1994 Amended and Restated Incentive Stock Plan” (the “ IHI 1994 Plan ”).

     The outstanding T-3 Options at the time of the Merger were assumed under the IHI 1998 Plan at such time. Coincident with the assumption of the outstanding T-3 Options under the IHI 1998 Plan, the T-3 Plan was merged into the IHI 1998 Plan but only to the extent necessary for the purpose of construing the applicable terms and conditions of the individual stock option agreements for the outstanding T-3 Options to the extent that specific terms of such agreements incorporate particular provisions of the T-3 Plan by reference.

     The Company amended and restated the IHI Plan under the form of the plan document entitled “T-3 Energy Services 2002 Stock Incentive Plan” (the “ Plan ”), effective as of January 1, 2002 (the “ Original Effective Date ”), to reflect the reorganization of the plan sponsor and to incorporate various other amendments for the benefit of the Company and the participants in the Plan.

     Effective as of the Original Effective Date, the outstanding stock options under the IHI 1994 Plan (the “ IHI 1994 Options ”) were assumed under the Plan. Coincident with the assumption of the outstanding IHI 1994 Options under the Plan, the IHI 1994 Plan was merged into the Plan but only to the extent necessary for the purpose of construing the applicable terms and conditions of the individual stock option agreements for the outstanding IHI 1994 Options to

the extent that specific terms of such agreements incorporate particular provisions of the IHI 1994 Plan by reference.

     As of the Original Effective Date, all outstanding stock options that were previously granted by T-3 and IHI and assumed and continued under the Plan, as amended and restated, were made subject to the applicable terms and conditions of the Plan, as it may further be amended, and the individual stock option agreements for each such option grant.

     The Company again amended and restated the Plan under the form of the plan document entitled “T-3 Energy Services 2002 Stock Incentive Plan”, as amended and restated effective July 30, 2002, primarily to incorporate changes made by the Sarbanes-Oxley Act of 2002 which was effective July 30, 2002.

     The Company again amended and restated the Plan under the form of the plan document entitled “T-3 Energy Services 2002 Stock Incentive Plan”, as amended and restated effective January 1, 2005, primarily to increase the number of shares of the Company’s Common Stock that are reserved for issuance under the Plan from 1,000,000 to 2,000,000 shares effective April 10, 2006, and to incorporate changes required by Section 409A of the Code which was effective January 1, 2005.

     The Company hereby again amends and restates the Plan under the form of this plan document entitled “T-3 Energy Services 2002 Stock Incentive Plan”, as amended and restated effective June 4, 2009 (hereafter the term “ Plan ” shall refer to this Plan document), to increase the number of shares of the Company’s Common Stock that are reserved for issuance under the Plan from 2,000,000 to 2,623,000 shares effective as of June 4, 2009.

     The purpose of the Plan is to foster and promote the long-term financial success of T-3 Energy Services, Inc. (the “ Company ”) and to increase stockholder value by: (a) encouraging the commitment of selected key Employees, Consultants and Outside Directors, (b) motivating superior performance of key Employees, Consultants and Outside Directors by means of long-term performance related incentives, (c) encouraging and providing key Employees, Consultants and Outside Directors with a program for obtaining ownership interests in the Company which link and align their personal interests to those of the Company’s stockholders, (d) attracting and retaining key Employees, Consultants and Outside Directors by providing competitive compensation opportunities, and (e) enabling key Employees, Consultants and Outside Directors to share in the long-term growth and success of the Company.

     The Plan provides for payment of various forms of compensation. It is not intended to be a plan that is subject to the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”). The Plan will be interpreted, construed and administered consistent with its status as a plan that is not subject to ERISA.

     The Plan will remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to Section 7.7 , until all Shares subject to the Plan have been purchased or acquired according to its provisions. However, in no event may an Incentive Stock Option be granted under the Plan after the expiration of ten (10) years from the Original Effective Date to the extent required by Code Section 422(b)(2).

1.2 Definitions

     The following terms shall have the meanings set forth below:

      (a) Authorized Officer . The Chairman of the Board, the CEO or any other senior officer of the Company to whom either of them delegate the authority to execute any Incentive Agreement for and on behalf of the Company. No officer or director shall be an Authorized Officer with respect to any Incentive Agreement for himself.

      (b) Board . The Board of Directors of the Company.

      (c) Cause . When used in connection with the termination of a Grantee’s Employment, shall mean the termination of the Grantee’s Employment by the Company or any Subsidiary by reason of (i) the conviction of the Grantee by a court of competent jurisdiction as to which no further appeal can be taken of a crime involving moral turpitude or a felony; (ii) the proven commission by the Grantee of a material act of fraud upon the Company or any Subsidiary, or any customer or supplier thereof; (iii) the misappropriation of any funds or property of the Company or any Subsidiary, or any customer or supplier thereof; (iv) the willful and continued failure by the Grantee to perform the material duties assigned to him that is not cured to the reasonable satisfaction of the Company within 30 days after written notice of such failure is provided to Grantee by the Board or CEO (or by another officer of the Company or a Subsidiary who has been designated by the Board or CEO for such purpose); (v) the knowing engagement by the Grantee in any direct and material conflict of interest with the Company or any Subsidiary without compliance with the Company’s or Subsidiary’s conflict of interest policy, if any, then in effect; or (vi) the knowing engagement by the Grantee, without the written approval of the Board or CEO, in any material activity which competes with the business of the Company or any Subsidiary or which would result in a material injury to the business, reputation or goodwill of the Company or any Subsidiary.

      (d) CEO . The Chief Executive Officer of the Company.

      (e) Change of Control . Any of the events described in and subject to Section 6.8 .

      (f) Code . The Internal Revenue Code of 1986, as amended, and the regulations and other authority promulgated thereunder by the appropriate governmental authority. References herein to any provision of the Code shall refer to any successor provision thereto.

      (g) Committee . A committee appointed by the Board to administer the Plan. While the Company is a Publicly Held Corporation, the Plan shall be administered by the Committee appointed by the Board consisting of not less than two directors who fulfill the “nonemployee director” requirements of Rule 16b-3 under the Exchange Act and the “outside director” requirements of Code Section 162(m). In either case, the Committee may be the Compensation Committee of the Board, or any subcommittee of the Compensation Committee, provided that the members of the Committee satisfy the requirements of the previous provisions of this paragraph.

     The Board shall have the power to fill vacancies on the Committee arising by resignation, death, removal or otherwise. The Board, in its sole discretion, may bifurcate the powers and

duties of the Committee among one or more separate committees, or retain all powers and duties of the Committee in a single Committee. The members of the Committee shall serve at the discretion of the Board.

     Notwithstanding the preceding paragraphs of this Section 1.2(g) , the term “Committee” as used in the Plan with respect to any Incentive Award for an Outside Director shall refer to the entire Board. In the case of an Incentive Award for an Outside Director, the Board shall have all the powers and responsibilities of the Committee hereunder as to such Incentive Award, and any actions as to such Incentive Award may be acted upon only by the Board (unless it otherwise designates in its discretion). When the Board exercises its authority to act in the capacity as the Committee hereunder with respect to an Incentive Award for an Outside Director, it shall so designate with respect to any action that it undertakes in its capacity as the Committee.

      (h) Common Stock . The common stock of the Company, $.001 par value per share, and any class of common stock into which such common shares may hereafter be converted, reclassified or recapitalized.

      (i) Company . T-3 Energy Services, Inc., a corporation organized under the laws of the State of Delaware, and any successor in interest thereto.

      (j) Consultant . An independent agent, consultant, attorney, an individual who has agreed to become an Employee within the next six months, or any other individual who is not an Outside Director or employee of the Company (or any Parent or Subsidiary) and who, in the opinion of the Committee, is in a position to contribute to the growth or financial success of the Company (or any Parent or Subsidiary), (ii) is a natural person and (iii) provides bona fide services to the Company (or any Parent or Subsidiary), which services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities.

      (k) Covered Employee . To the extent that the Company is a Publicly Held Corporation, a named executive officer who is, or is determined by the Committee to likely be, a “covered employee,” as defined in Code Section 162(m) and Treasury Regulation § 1.162-27(c) (or its successor).

      (l) Disability . As determined by the Committee in its discretion exercised in good faith, a physical or mental condition of the Grantee that would entitle him to payment of disability income payments under the Company’s long term disability insurance policy or plan for employees, as then effective, if any; or in the event that the Grantee is not covered, for whatever reason, under the Company’s long-term disability insurance policy or plan, “Disability” means a permanent and total disability as defined in Code Section 22(e)(3). A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, the Grantee shall submit to any reasonable examination(s) required in the opinion of such physician.

      (m) Employee . Any employee of the Company (or any Parent or Subsidiary) within the meaning of Code Section 3401(c) who, in the opinion of the Committee, is in a position to

contribute to the growth, development or financial success of the Company (or any Parent or Subsidiary), including, without limitation, officers who are members of the Board.

      (n) Employment . Employment means that the individual is employed as an Employee, or engaged as a Consultant or Outside Director, by the Company (or any Parent or Subsidiary), or by any corporation issuing or assuming an Incentive Award in any transaction described in Code Section 424(a), or by a parent corporation or a subsidiary corporation of such corporation issuing or assuming such Incentive Award, as the parent-subsidiary relationship shall be determined at the time of the corporate action described in Code Section 424(a) (as such relationships are defined in Code Sections 424(e) and (f)). In this regard, neither the transfer of a Grantee from Employment by the Company to Employment by any Parent or Subsidiary, nor the transfer of a Grantee from Employment by any Parent or Subsidiary to Employment by the Company, shall be deemed to be a termination of Employment of the Grantee. Moreover, the Employment of a Grantee shall not be deemed to have been terminated because of an approved leave of absence from active Employment on account of temporary illness, authorized vacation or granted for reasons of professional advancement, education, or health, or during any period required to be treated as a leave of absence by virtue of any applicable statute, Company personnel policy or written agreement.

     The term “Employment” for all purposes of the Plan shall include (i) active performance of agreed services by a Consultant for the Company (or any Parent or Subsidiary) and (ii) current membership on the Board by an Outside Director.

     All determinations regarding Employment, and the termination of Employment hereunder, shall be made by the Committee in its discretion.

      (o) Exchange Act . The Securities Exchange Act of 1934, as amended.

      (p) Fair Market Value . While the Company is a Publicly Held Corporation, the Fair Market Value of one share of Common Stock on the date in question is deemed to be (i) the closing sales price on such business day of a share of Common Stock as reported on the New York Stock Exchange, Nasdaq Stock Market or other principal securities exchange on which Shares are then listed or admitted to trading, or (ii) if not quoted on a principal securities exchange, the average of the closing bid and asked prices for a Share as quoted by the National Quotation Bureau’s “Pink Sheets” or the National Association of Securities Dealers’ OTC Bulletin Board System. If there was no public trade of Common Stock on the date in question, Fair Market Value shall be determined by reference to the last preceding date on which such a trade was so reported.

     If the Company is not a Publicly Held Corporation at the time a determination of the Fair Market Value of the Common Stock is required to be made hereunder, the determination of Fair Market Value for purposes of the Plan shall be made by the Committee in its sole and absolute discretion. In this respect, the Committee may rely on such financial data, appraisals, valuations, experts, and other sources as, in its sole and absolute discretion, it deems advisable under the circumstances.

     With respect to Stock Options and SARs, Fair Market Value shall be determined consistent with the requirements under Code Section 409A in order to satisfy the exception thereto for stock rights, but only to the extent inconsistent with the methods for determining Fair Market Value above.

      (q) Grantee . Any Employee, Consultant or Outside Director who is granted an Incentive Award under the Plan.

      (r) Immediate Family . With respect to a Grantee, the Grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships.

      (s) Incentive Agreement . The written agreement entered into between the Company and the Grantee setting forth the terms and conditions pursuant to which an Incentive Award is granted under the Plan, as such agreement is further defined in Section 6.1 .

      (t) Incentive Award . A grant of an award under the Plan to a Grantee, including any Nonstatutory Stock Option, Incentive Stock Option (ISO), Stock Appreciation Right (SAR), Restricted Stock Award, Restricted Stock Unit or Other Stock-Based Award.

      (u) Incentive Stock Option or ISO . A Stock Option granted by the Committee to an Employee under Section 2 which is designated by the Committee as an Incentive Stock Option and intended to qualify as an Incentive Stock Option under Code Section 422.

      (v) Insider . If the Company is a Publicly Held Corporation, 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.

      (w) Nonstatutory Stock Option . A Stock Option granted by the Committee to a Grantee under Section 2 that is not designated by the Committee as an Incentive Stock Option.

      (x) Option Price . The exercise price at which a Share may be purchased by the Grantee of a Stock Option.

      (y) Other Stock-Based Award . An award granted by the Committee to a Grantee under Section 4.1 that is valued in whole or in part by reference to, or is otherwise based upon, Common Stock.

      (z) Outside Director . A member of the Board who is not, at the time of grant of an Incentive Award, an employee of the Company or any Parent or Subsidiary.

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

      (bb) Performance-Based Award . A grant of an Incentive Award under the Plan pursuant to Section 5 that is intended to satisfy the Performance-Based Exception.

      (cc) Performance-Based Exception . The performance-based exception from the tax deductibility limitations of Code Section 162(m), as prescribed in Code Section 162(m) and Treasury Regulation Section 1.162-27(e) (or its successor), which is applicable during such period that the Company is a Publicly Held Corporation.

      (dd) Performance Criteria . The business criteria that are specified by the Committee pursuant to Section 5 for an Incentive Award that is intended to qualify for the Performance-Based Exception; the satisfaction of such business criteria during the Performance Period being required for the grant and/or vesting of the particular Incentive Award to occur, as specified in the particular Incentive Agreement.

      (ee) Performance Period . A period of time determined by the Committee over which performance is measured for the purpose of determining a Grantee’s right to, and the payment value of, any Incentive Award that is intended to qualify for the Performance-Based Exception.

      (ff) Plan . T-3 Energy Services 2002 Stock Incentive Plan, as amended and restated effective June 4, 2009, which is set forth herein and as it may be amended from time to time.

      (gg) Plan Year . The calendar year.

      (hh) Publicly Held Corporation . A corporation issuing any class of common equity securities required to be registered under Section 12 of the Exchange Act.

      (ii) Restricted Stock . Common Stock that is issued or transferred to a Grantee pursuant to Section 3 .

      (jj) Restricted Stock Award . An authorization by the Committee to issue or transfer Restricted Stock to a Grantee pursuant to Section 3 .

      (kk) Restricted Stock Unit . A unit granted to a Grantee pursuant to Section 4.1 which entitles him to receive a Share or cash on the vesting date, as specified in the Incentive Agreement.

      (ll) Restriction Period . The period of time determined by the Committee and set forth in the Incentive Agreement during which the transfer of Restricted Stock by the Grantee is restricted.

      (mm) Retirement . The voluntary termination of Employment from the Company or any Parent or Subsidiary constituting retirement for age on any date after the Employee attains the normal retirement age of 65 years, or such other age as may be designated by the Committee in the Employee’s Incentive Agreement.

      (nn) Share . A share of the Common Stock of the Company.

      (oo) Share Pool . The number of shares authorized for issuance under Section 1.4 , as adjusted for awards and payouts under Section 1.5 and as adjusted for changes described in Section 6.6 .

      (pp) Spread . The difference between the grant price per Share specified in any SAR grant and the Fair Market Value of a Share on the date of exercise of the SAR.

      (qq) Stock Appreciation Right or SAR . A Stock Appreciation Right as described in Section 2.4 .

      (rr) Stock Option or Option . Pursuant to Section 2 , (i) an Incentive Stock Option granted to an Employee, or (ii) a Nonstatutory Stock Option granted to an Employee, Consultant or Outside Director, whereunder such option the Grantee has the right to purchase Shares. In accordance with Code Section 422, only an Employee may be granted an Incentive Stock Option.

      (ss) Subsidiary . Any company (whether a corporation, partnership, joint venture or other form of entity) in which the Company or a corporation in which the Company owns a majority of the shares of capital stock, directly or indirectly, owns a greater than 50% equity interest except that, with respect to the issuance of Incentive Stock Options, the term “Subsidiary” shall have the same meaning as the term “subsidiary corporation” as defined in Code Section 424(f) as required by Code Section 422.

1.3 Plan Administration

      (a) Authority of the Committee . Except as may be limited by law and subject to the provisions herein, the Committee shall have full power to (i) select Grantees who shall participate in the Plan; (ii) determine the sizes, duration and types of Incentive Awards; (iii) determine the terms and conditions of Incentive Awards and Incentive Agreements; (iv) determine whether any Shares subject to Incentive Awards will be subject to any restrictions on transfer; (v) construe and interpret the Plan and any Incentive Agreement or other agreement entered into under the Plan; and (vi) establish, amend, or waive rules for the Plan’s administration. Further, the Committee shall make all other determinations which may be necessary or advisable for the administration of the Plan.

      (b) Meetings . The Committee shall designate a chairman from among its members who shall preside at its meetings, and shall designate a secretary, without regard to whether that person is a member of the Committee, who shall keep the minutes of the proceedings and all records, documents, and data pertaining to its administration of the Plan. Meetings shall be held at such times and places as shall be determined by the Committee and the Committee may hold telephonic meetings. The Committee may take any action otherwise proper under the Plan by the affirmative vote, taken with or without a meeting, of a majority of its members. The Committee may authorize any one or more of its members or any officer of the Company to execute and deliver documents on behalf of the Committee.

      (c) Decisions Binding . All determinations and decisions of the Committee shall be made in its discretion pursuant to the provisions of the Plan, and shall be final, conclusive and binding on all persons including the Company, its shareholders, Employees, Grantees, and their estates and beneficiaries. The Committee’s decisions and determinations with respect to any Incentive Award need not be uniform and may be made selectively among Incentive Awards and

Grantees, whether or not such Incentive Awards are similar or such Grantees are similarly situated.

      (d) Modification of Outstanding Incentive Awards . Subject to the shareholder approval requirements of Section 7.7 if applicable and except as otherwise provided in Section 6.6(f), the Committee may, in its discretion, provide for the extension of the exercisability of an Incentive Award, accelerate the vesting or exercisability of an Incentive Award, eliminate or make less restrictive any restrictions contained in an Incentive Award, waive any restriction or other provisions of an Incentive Award, or otherwise amend or modify an Incentive Award in any manner that (i) is not adverse to the Grantee to whom such Incentive Award was granted, (ii) is consented to by such Grantee, and (iii) does not cause the Incentive Award to provide for the deferral of compensation in a manner that does not comply with Code Section 409A (unless otherwise determined by the Committee). With respect to an Incentive Award that is an ISO, no adjustment thereto shall be made to the extent constituting a “modification” within the meaning of Code Section 424(h)(3) unless otherwise agreed to by the Grantee in writing. Notwithstanding the above provisions of this subsection, no amendment or modification of an Incentive Award shall be made to the extent such modification results in any Stock Option with an exercise price less than 100% of the Fair Market Value per Share on the date of grant (110% for Grantees who are 10% or greater shareholders pursuant to Section 1.7(b) ).

      (e) Delegation of Authority . The Committee may delegate to designated officers or other employees of the Company any of its duties and authority under the Plan pursuant to such conditions or limitations as the Committee may establish from time to time; provided, however, the Committee may not delegate to any person the authority (i) to grant Incentive Awards or (ii) if the Company is a Publicly Held Corporation, to take any action which would contravene the requirements of Rule 16b-3 under the Exchange Act, the Performance-Based Exception under Code Section 162(m), or the Sarbanes-Oxley Act of 2002.

      (f) Expenses of Committee . The Committee may employ legal counsel, including, without limitation, independent legal counsel and counsel regularly employed by the Company, and other agents as the Committee may deem appropriate for the administration of the Plan. The Committee may rely upon any opinion or computation received from any such counsel or agent. All expenses incurred by the Committee in interpreting and administering the Plan, including, without limitation, meeting expenses and professional fees, shall be paid by the Company.

      (g) Surrender of Previous Incentive Awards . The Committee may, in its absolute discretion, grant Incentive Awards to Grantees on the condition that such Grantees surrender to the Committee for cancellation such other Incentive Awards (including, without limitation, Incentive Awards with higher exercise prices) as the Committee directs; provided, however, the Committee may not provide for the repricing or exchange of underwater Stock Options or SARs for cash consideration or other Incentive Awards unless such repricing or exchange receives the approval of a majority of the holders of the Shares. Incentive Awards granted on the condition precedent of surrender of outstanding Incentive Awards shall not count against the limits set forth in Section 1.4 until such time as such previous Incentive Awards are surrendered and cancelled. No surrender of Incentive Awards shall be made under this Section 1.3(g) if such surrender causes any Incentive Award to provide for the deferral of compensation in a manner

that is subject to taxation under Code Section 409A (unless otherwise determined by the Committee).

      (h) Indemnification . Each person who is or was a member of the Committee shall be indemnified by the Company against and from any damage, loss, liability, cost and expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be a party or in which he may be involved by reason of any action taken or failure to act under the Plan, except for any such act or omission constituting willful misconduct or gross negligence. Each such person shall be indemnified by the Company for all amounts paid by him in settlement thereof, with the Company’s approval, or paid by him in satisfaction of any judgment in any such action, suit, or proceeding against him, provided he shall give the Company an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles or Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

1.4 Shares of Common Stock Available for Incentive Awards

     Subject to adjustment under Section 6.6 , there shall be available for Incentive Awards that are granted wholly or partly in Common Stock (including rights or Stock Options that may be exercised for or settled in Common Stock) One Million (1,000,000) Shares and, effective as of April 10, 2006, Two Million (2,000,000) Shares and, effective as of June 4, 2009, Two Million Six Hundred Twenty Three Thousand (2,623,000) Shares. Except as otherwise provided in Section 1.5, the number of Shares that are the subject of Incentive Awards under this Plan, which are forfeited or terminated, expire unexercised, are settled in cash in lieu of Common Stock or in a manner such that all or some of the Shares covered by an Incentive Award are not issued to a Grantee or are exchanged for Incentive Awards that do not involve Common Stock, shall again immediately become available for Incentive Awards hereunder. The aggregate number of Shares which may be issued upon exercise of ISOs shall be One Million (1,000,000) of the Shares reserved pursuant to the first sentence of this paragraph. For purposes of counting Shares against the ISO maximum number of reserved Shares, the net number of Shares issued pursuant to the exercise of an ISO shall be counted. The Committee may from time to time adopt and observe such procedures concerning the counting of Shares against the Plan maximum as it may deem appropriate.

     During any period that the Company is a Publicly Held Corporation, then unless and until the Committee determines that a particular Incentive Award granted to a Covered Employee is not intended to comply with the Performance-Based Exception, the following rules shall apply to grants of Incentive Awards to Covered Employees:

     (a) Subject to adjustment as provided in Section 6.6 , the maximum aggregate number of Shares of Common Stock attributable to Incentive Awards paid out in Shares that may be granted (in the case of Stock Options and SARs) or that may vest (in the case of Restricted Stock, Restricted Stock Units or Other Stock-Based Awards), as applicable, in any calendar year

pursuant to any Incentive Award held by any individual Covered Employee shall be One Million (1,000,000) Shares.

     (b) The maximum aggregate cash payout (with respect to any Incentive Awards paid out in cash) in any calendar year which may be made to any Covered Employee shall be Twenty Million Dollars ($20,000,000).

     (c) With respect to any Stock Option or SAR granted to a Covered Employee that is canceled or repriced, the number of Shares subject to such Stock Option or SAR shall continue to count against the maximum number of Shares that may be the subject of Stock Options or SARs granted to such Covered Employee hereunder and, in this regard, such maximum number shall be determined in accordance with Code Section 162(m).

     (d) The limitations of subsections (a), (b) and (c) above shall be construed and administered so as to comply with the Performance-Based Exception.

1.5 Share Pool Adjustments for Awards and Payouts

     (a) The following Incentive Awards and payouts shall reduce, on a one Share for one Share basis, the number of Shares authorized for issuance under the Share Pool:

          (i) Stock Option; and

          (ii) SAR.

     (b) The following Incentive Awards and payouts shall reduce, on a 1.22 Shares for one Share basis, the number of Shares authorized for issuance under the Share Pool:

          (i) Restricted Stock Award; and

          (ii) A payout of a Restricted Stock Unit or Other Stock-Based Award in Shares.

     (c) The following transactions shall restore, on a one Share for one Share basis to the extent the Incentive Award reduced the Shares available under the Share Pool by one Share at the time of grant, and on a 1.22 Share for one Share basis to the extent the Incentive Award reduced the Shares available under the Share Pool by 1.22 Shares at the time of grant, the number of Shares authorized for issuance under the Share Pool:

          (i) A payout of a Restricted Stock Award, Restricted Stock Unit, SAR, or Other Stock-Based Award in the form of cash and not Shares (but not the “cashless” exercise of a Stock Option as provided in Section 2.3(a) ); and

          (ii) A cancellation, termination, expiration, forfeiture, or lapse for any reason of any Shares subject to an Incentive Award.

     Payment of an Option Price or tax withholding for any Incentive Award settled in Shares by withholding Shares which otherwise would be acquired on exercise, vesting or settlement

shall not result in any increase in or restoration to the number of Shares available in the Share Pool.

1.6 Common Stock Available

     The Common Stock available for issuance or transfer under the Plan shall be made available from Shares now or hereafter (a) held in the treasury of the Company, (b) authorized but unissued shares, or (c) Shares to be purchased or acquired by the Company. No fractional shares shall be issued under the Plan; payment for fractional shares shall be made in cash.

1.7 Participation

      (a) Eligibility . The Committee shall from time to time designate those Employees, Consultants and/or Outside Directors, if any, to be granted Incentive Awards under the Plan, the type of Incentive Awards granted, the number of Shares, Stock Options, rights or units, as the case may be, which shall be granted to each such person, and any other terms or conditions relating to the Incentive Awards as it may deem appropriate to the extent consistent with the provisions of the Plan. A Grantee who has been granted an Incentive Award may, if otherwise eligible, be granted additional Incentive Awards at any time.

     No Insider shall be eligible to be granted an Incentive Award that is subject to Rule 16a-3 under the Exchange Act unless and until such Insider has granted a limited power of attorney to those officers of the Company who have been designated by the Committee for purposes of future required filings under the Exchange Act.

      (b) Incentive Stock Option Eligibility . No Consultant or Outside Director shall be eligible for the grant of any Incentive Stock Option. In addition, no Employee shall be eligible for the grant of any Incentive Stock Option who owns or would own immediately before the grant of such Incentive Stock Option, directly or indirectly, stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, or any Parent or Subsidiary. This restriction does not apply if, at the time such Incentive Stock Option is granted, the Incentive Stock Option exercise price is at least one hundred and ten percent (110%) of the Fair Market Value on the date of grant and the Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the date of grant. For the purpose of the immediately preceding sentence, the attribution rules of Code Section 424(d) shall apply for the purpose of determining an Employee’s percentage ownership in the Company or any Parent or Subsidiary. This paragraph shall be construed consistent with the requirements of Code Section 422.

1.8 Types of Incentive Awards

     The types of Incentive Awards under the Plan are Stock Options and Stock Appreciation Rights as described in Section 2 , Restricted Stock Awards as described in Section 3 , Restricted Stock Units and Other Stock-Based Awards as described in Section 4 , or any combination of the foregoing.

SECTION 2
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

2.1 Grant of Stock Options

     The Committee is authorized to grant (a) Nonstatutory Stock Options to Employees, Consultants and/or Outside Directors and (b) Incentive Stock Options to Employees only, in accordance with the terms and conditions of the Plan, and with such additional terms and conditions, not inconsistent with the Plan, as the Committee shall determine in its discretion. Successive grants may be made to the same Grantee regardless whether any Stock Option previously granted to such person remains unexercised.

2.2 Stock Option Terms

      (a) Written Agreement . Each grant of a Stock Option shall be evidenced by a written Incentive Agreement. Among its other provisions, each Incentive Agreement shall set forth the extent to which the Grantee shall have the right to exercise the Stock Option following termination of the Grantee’s Employment. Such provisions shall be determined in the discretion of the Committee, shall be included in the Grantee’s Incentive Agreement, and need not be uniform among all Stock Options issued pursuant to the Plan.

      (b) Number of Shares . Each Stock Option shall specify the number of Shares of Common Stock to which it pertains.

      (c) Exercise Price . The exercise price per Share of Common Stock under each Stock Option shall be determined by the Committee; provided, however, that such exercise price shall not be less than 100% of the Fair Market Value per Share on the date the Stock Option is granted (or 110% for 10% or greater shareholders granted Incentive Stock Options as described in Section 1.7(b) ). Each Stock Option shall specify the method of exercise which shall be consistent with the requirements of Section 2.3(a) .

      (d) Term . In the Incentive Agreement, the Committee shall fix the term of each Stock Option (which shall be not more than ten (10) years from the date of grant for and not more than five (5) years for ISO grants to 10% or greater shareholders pursuant to Section 1.7(b) ). In the event no term is fixed, such term shall be ten (10) years from the date of grant.

      (e) Exercise . The Committee shall determine the time or times at which a Stock Option may be exercised, in whole or in part. Each Stock Option may specify the required period of continuous Employment and/or the Performance Criteria to be achieved before the Stock Option or portion thereof will become exercisable. Each Stock Option, the exercise of which, or the timing of the exercise of which, is dependent, in whole or in part, on the achievement of designated Performance Criteria, may specify a minimum level of achievement in respect of the specified Performance Criteria below which no Stock Options will be exercisable and a method for determining the number of Stock Options that will be exercisable if performance is at or above such minimum but short of full ach