AMENDMENT TO
TOM BROWN, INC.
1999 LONG TERM INCENTIVE PLAN
WHEREAS, TOM BROWN, INC. (the "Company") has heretofore adopted the TOM
BROWN, INC. 1999 LONG TERM INCENTIVE PLAN (the "Plan") on behalf of itself and
its affiliates; and
WHEREAS, the Company, through the action of its Board of Directors
pursuant to Paragraph XII of the Plan, desires to amend the Plan in certain
respects;
NOW, THEREFORE, the Plan shall be amended as follows, effective as of
May 10, 2001:
1. The second sentence of Subparagraph XI(c) of the Plan shall be
deleted and the following shall be substituted therefor:
"Notwithstanding any provision in an Option Agreement or the Plan to
the contrary, upon the occurrence of a Change in Control (as defined in
clause (i), (ii), (iii) or (iv) below) each Option then outstanding
that is held by an individual who is an Employee, Consultant or
Director immediately prior to such Change in Control shall become fully
vested and exercisable in full immediately prior to such Change in
Control (or at such earlier time as may be specified by the Committee),
and each Restricted Stock Award then outstanding that is held by an
individual who is an Employee, Consultant or Director immediately prior
to such Change in Control shall become fully vested immediately prior
to such Change in Control (or at such earlier time as may be specified
by the Committee). Moreover, effective as of a date (selected by the
Committee) within ten days after the approval by the stockholders of
the Company of a Change in Control (as defined in clause (ii), (iii) or
(iv) below), or thirty days of a Change in Control (as defined in
clause (i) below), the Committee, acting in its sole discretion without
the consent or approval of any Holder, may effect one or more of the
following alternatives with respect to the then outstanding Options
held by Employees, Consultants or Directors which may vary among
individual Holders and which may vary among Options held by any
individual Holder:
(1) accelerate the time at which such Options may be exercised
or adjust the time period during which such Options may be exercised so
that such Options may be exercised for a period of time on or before a
specified date (before or after such Change in Control) fixed by the
Committee, after which specified date all unexercised Options and all
rights of Holders thereunder shall terminate,
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(2) require the mandatory surrender to the Company by Holders
of some or all of such Options (irrespective of whether such Options
are then exercisable under the provisions of the Plan) as of a date,
before or after such Change in Control, specified by the Committee, in
which event the Committee shall thereupon cancel such Options and pay
(or cause to be paid) to each Holder an amount of cash per share equal
to the excess of the amount calculated in Subparagraph (d) below (the
"Change in Control Value") of the shares subject to such Option over
the exercise price(s) under such Options for such shares,
(3) make such adjustments to such Options as the Committee
deems appropriate to reflect such Change in Control (provided, however,
that the Committee may determine in its sole discretion that no
adjustment is necessary to such Options) or
(4) provide that, upon any exercise of an Option theretofore
granted, the Holder shall be entitled to purchase under such Option, in
lieu of the number of shares of Common Stock as to which such Option
shall then be exercisable, the number and class of shares of stock or
other securities or property (including, without limitation, cash) to
which the Holder would have been entitled pursuant to the terms of the
agreement effecting such Change in Control if, immediately prior to
such Change in Control the Holder had been the holder of record of the
number of shares of Common Stock as to which such Option is then
exercisable.
For purposes of Subparagraphs XI(c) and XI(d), a "Change in
Control" shall mean:
(i) the acquisition, directly or indirectly, by any
individual, entity or group within the meaning of Section 13(d)(3) or
14(d)(2) of the 1934 Act (a "Person"), except for an underwriter or
group of underwriters in connection with a public offering of common
stock, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 50% or more of either (x) the
then-outstanding shares of Common Stock of the Company (the
"Outstanding Common Stock") or (y) the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Voting
Securities"), in each case other than acquisitions of beneficial
ownership by (I) the Company and its subsidiaries, (II) any employee
benefit plan sponsored or maintained by the Company or any Person
organized, established or appointed pursuant to the terms of any such
employee benefit plan or (III) any acquisition by any Person pursuant
to a transaction that complies with items (x), (y) and (z) of clause
(ii) below;
(ii) consummation of a merger of the Company with another
entity, a consolidation involving the Company, a share exchange
involving the Company, or the sale, lease or exchange of all or
substantially all of the assets of the Company (each a "Business
Combination") unless, in any such case, immediately following such
Business Combination, (x) the Persons who were the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding Voting
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Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50%, respectively, of the then
outstanding equity securities and 50% of the combined voting power of
the then outstanding voting securities entitled to vote generally in
the election of directors (or comparable governing body), as the case
may be, of the Resulting Person (as defined below) of such Business
Combination in substantially the same proportions as their beneficial
ownership immediately prior to such Business Combination; provided,
however, that for purposes of this item (x), any shares of equity
securities or voting securities of the Resulting Person received or
otherwise owned by such beneficial owners in such Business Combination
other than as a result of such beneficial ownership of Outstanding
Common Stock or Outstanding Voting Securities immediately prior to such
Business Combination shall not be considered to be owned by such
beneficial owners for the purposes of calculating their percentage of
ownership of the outstanding equity securities and voting power of the
Resulting Person, (y) no Person (excluding any Resulting Person from
such Business Combination or any employee benefit plan sponsored or
maintained by the Company or such Resulting Person or any Person
organized, established or appointed pursuant to the terms of any such
employee benefit plan) beneficially owns, directly or indirectly, 30%
or more, respectively, of the then-outstanding equity securities of the
Resulting Person or the combined voting power of the then-outstanding
voting securities of the Resulting Person unless such ownership existed
immediately prior to the Business Combination and (z) immediately
following such Business Combination at least a majority of the members
of the Board of Directors (or comparable governing body) of the
Resulting Person were members of the Incumbent Board (as defined in
clause (iii) below) at the time of the execution of the initial
agreement or other action by the Board providing for such Business
Combination;
(iii) as a result of or in connection with a contested
election of the Board, individuals who constituted the Board before
such event (the "Incumbent Board") (provided that any individual
becoming a director subsequent to such date whose appointment or whose
nomination for election by the Company's stockholders was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board), shall cease for any reason to
constitute at least a majority of the Board; or
(iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company pursuant to the corporation
laws of its jurisdiction of incorporation.
For purposes of the preceding sentence, "Resulting Person" in the
context of a Business Combination that is a merger or consolidation shall mean
the surviving Person unless the surviving Person is or shall become a subsidiary
of another Person and the holders of Outstanding Common Stock or Outstanding
Voting Securities receive securities of such other Person in such Business
Combination, in which event the Resulting Person shall be such other Person."
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2. Subparagraph XI(d) of the Plan shall be deleted and the following
shall be substituted therefor:
"(d) For the purposes of clause (2) in Subparagraph (c) above,
the "Change in Control Value" shall equal the amount determined in
clause (i), (ii) or (iii), whichever is applicable, as follows: (i) the
per share price offered to stockholders of the Company in any such
Change in Control transaction, (ii) the price per share offered to
stockholders of the Company in any tender offer or exchange offer
whereby a Change in Control takes place, or (iii) if such Change in
Control occurs other than pursuant to a tender or exchange offer, the
fair market value per share of the shares into which such Options being
surrendered are exercisable, as determined by the Committee as of the
date determined by the Committee to be the date of cancellation and
surrender of such Options. In the event that the consideration offered
to stockholders of the Company in any transaction described in this
Subparagraph (d) or Subparagraph (c) above consists of anything other
than cash, the Committee shall determine the fair cash equivalent of
the portion of the consideration offered which is other than cash."
3. As amended hereby, the Plan is specifically ratified and reaffirmed.
IN WITNESS WHEREOF, this Amendment to Tom Brown, inc. Amended and
Restated 1993 Stock Option Plan has been executed to be effective as of May 10,
2001.
ATTEST: TOM BROWN, INC.
By: /s/ BRUCE R. DEBOER By: /s/ JAMES D. LIGHTNER
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Bruce R. DeBoer James D. Lightner
Secretary President and Chief Executive Officer
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