EXHIBIT 10.2

 

CERIDIAN CORPORATION
NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM

 

1.                                       Purpose.

 

The purpose of the Ceridian Corporation Non-employee Director Compensation
Program (the “Program”) is to advance the interest of the Company, and its
stockholders by enabling the Company to attract and retain the services of
experienced and knowledgeable non-employee directors, to increase the
proprietary interests of such non-employee directors in the Company’s long-term
success and their identification with the interests of the Company’s
stockholders. All Awards that are part of the compensation paid or deferred
pursuant to this Program are awarded pursuant to the terms of the applicable
Stock Plan and any applicable Award Agreement. The Program is designed and
intended to comply with Rule 16b-3 of the Exchange Act. The Program is also
intended to comply in form and operation with Section 409A of the Code.

 

2.                                       Definitions.

 

The following terms will have the meanings set forth below, unless the context
clearly otherwise requires:

 

2.1                                 “Affiliate” means all persons with whom the
Company would be considered a single employer under Section 414(b) or 414(c) of
the Code.

 

2.2                                 “Annual Retainer” means the annual Board
retainer payable to an Eligible Director for services as a member of the Board
during the calendar year, excluding any Committee Chair Retainer paid to an
Eligible Director for serving as the chair of a committee during the calendar
year. The amount of the Annual Retainer is set forth on Exhibit A hereto, and
may be amended from time to time by the Board or the Committee.

 

2.3                                 “Annual Retainer Election” means the
election made or deemed to have been made by an Eligible Director relating to
the Eligible Director’s Annual Retainer and Committee Chair Retainer, as
provided in Section 7.1 hereof.

 

2.4                                 The “Average Market Price” of a share of
Common Stock means the average of the closing sale prices of a share of Common
Stock, at the end of the regular trading session, which as of the Effective Date
is 4:00 p.m., New York City time, as reported on the New York Stock Exchange
Composite Tape for the ten trading days immediately prior to the date as of
which the Average Market Price is being determined.

 

2.5                                 “Award” means an Option, Restricted Stock
Award, or Retainer Share Award granted to an Eligible Director pursuant to the
Program and the Stock Plan.

 

2.6                                 “Award Agreement” shall mean any written
agreement, contract or other instrument or document evidencing an award granted
under the Stock Plan. Each Award Agreement shall be subject to the applicable
terms and conditions of the Stock Plan under

 

--------------------------------------------------------------------------------

 

which such Award Agreement was granted and any other terms and conditions (not
inconsistent with such Stock Plan) determined by the Committee.

 

2.7                                 “Board” means the Board of Directors of the
Company.

 

2.8                                 “Change of Control” shall mean the first of
the following events to occur:

 

(a)                                  there is consummated a merger or
consolidation to which the Company or any direct or indirect subsidiary of the
Company is a party if the merger or consolidation would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) less than 60% of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation; or

 

(b)                                 the direct or indirect beneficial ownership
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934) in the
aggregate of securities of the Company representing 20% or more of the total
combined voting power of the Company’s then issued and outstanding securities is
acquired by any person or entity or group of associated persons or entities
acting in concert; provided, however, that for purposes hereof, the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by
the Company or any of its subsidiaries, (ii) any acquisition directly from the
Company or any of its subsidiaries, (iii) any acquisition by any employee
benefit plan (or related trust or fiduciary) sponsored or maintained by the
Company or any corporation controlled by the Company, (iv) any acquisition by an
underwriter temporarily holding securities pursuant to an offering of such
securities, (v) any acquisition by a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company (vi) any acquisition in connection with
which, pursuant to Rule 13d-1 promulgated pursuant to the Exchange Act, the
individual, entity or group is permitted to, and actually does, report its
beneficial ownership on Schedule 13-G (or any successor Schedule); provided
that, if any such individual, entity or group subsequently becomes required to
or does report its beneficial ownership on Schedule 13D (or any successor
Schedule), then, for purposes of this paragraph, such individual, entity or
group shall be deemed to have first acquired, on the first date on which such
individual, entity or group becomes required to or does so report, beneficial
ownership of all of the voting securities of the Company beneficially owned by
it on such date, and (vii) any acquisition in connection with a merger or
consolidation which, pursuant to paragraph (a) above, does not constitute a
Change of Control; or

 

(c)                                  there is consummated a transaction
contemplated by an agreement for the sale or disposition by the Company of all
or substantially all of the Company ‘s assets, other than a sale or disposition
by the Company of all or substantially all of the Company ‘s assets to an
entity, at least 60% of the combined voting power of the voting securities of
which are owned by stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to such sale; or

 

2

--------------------------------------------------------------------------------

 

(d)                                 the stockholders of the Company approve any
plan or proposal for the liquidation of the Company; or

 

(e)                                  a change in the composition of the Board
such that the “Continuity Directors” cease for any reason to constitute at least
a majority of the Board. For purposes of this clause, “Continuity Directors”
means those members of the Board who either (i) were directors on January 1,
2006 or (ii) were elected by, or on the nomination or recommendation of, at
least a two-thirds (2/3) majority of the then-existing Board (other than a
director whose initial assumption of office was in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company); or

 

(f)                                    such other event or transaction as the
Board shall determine constitutes a Change of Control.

 

2.9                                 “Code” means the Internal Revenue Code of
1986, as amended (including, when the context requires, all regulations,
interpretations and rulings issued thereunder).

 

2.10                           “Committee” means the Nominating and Corporate
Governance Committee of the Board, or any successor committee thereto.

 

2.11                           “Committee Chair Retainer” means the annual cash
retainer payable to Eligible Directors for service as the chair of committees of
the Board during the calendar year. The amount of the Committee Chair Retainer
is set forth on Exhibit A hereto, and may be amended from time to time by the
Board or the Committee.

 

2.12                           “Common Stock” means the common stock of the
Company, par value $0.01 per share.

 

2.13                           “Company” means Ceridian Corporation, a Delaware
corporation.

 

2.14                           “Deferred Shares” shall have the meaning set
forth in Section 7.3(a) hereof.

 

2.15                           “Deferred Stock Account” means a book keeping
account established and maintained by the Committee to evidence amounts credited
with respect to an Eligible Director’s election to receive a portion of his or
her Annual Retainer and, if applicable, Committee Chair Retainer in the form of
Retainer Deferred Share Awards.

 

2.16                           “Effective Date” means January 1, 2006.

 

2.17                           “Eligible Director” means a director of the
Company who is not an employee of the Company or any subsidiary of the Company.

 

2.18                           “Exchange Act” means the Securities Exchange Act
of 1934, as amended.

 

2.19                           “Fair Market Value” means, with respect to the
Common Stock, as of any date (or, if no shares were traded or quoted on such
date, as of the next preceding date on

 

3

--------------------------------------------------------------------------------

 

which there was such a trade or quote), the closing sale price of a share of the
Common Stock, at the end of the regular trading session, which as of the
Effective Date is 4:00 p.m., New York City time, as reported on the New York
Stock Exchange Composite Tape on that date.

 

2.20                           “Issuance Year” means the calendar year in which
the Award was made to an Eligible Director.

 

2.21                           “Option” means a right to purchase shares of
Common Stock granted to an Eligible Director pursuant to Section 6 of the
Program that does not qualify as an “incentive stock option” within the meaning
of Section 422 of the Code. The amount of shares underlying an Option is set
forth on Exhibit A hereto, and may be amended from time to time by the Board or
the Committee.

 

2.22                           “Program” means this Ceridian Corporation
Non-Employee Director Compensation Program, as from time to time amended or
restated.

 

2.23                           “Restricted Shares” means shares of Common Stock
that are the subject of (a) a Restricted Stock Award, and therefore subject to
the restrictions on transferability and the risk of forfeiture imposed by the
provisions of Section 5 of the Program; or (b) a Retainer Restricted Share
Award, and therefore subject to the restrictions on transferability and risk of
forfeiture imposed by the provisions of Section 7.2 of the Program, as
applicable.

 

2.24                           “Restricted Stock Award” means a grant of
Restricted Shares to an Eligible Director pursuant to Section 5 of the Program.
The dollar value of a Restricted Stock Award is set forth on Exhibit A hereto,
and may be amended from time to time by the Board or the Committee.

 

2.25                           “Retainer Deferred Share Award” means that
portion of the Annual Retainer and, if applicable, Committee Chair Retainer that
an Eligible Director has elected to defer in the form of a credit to the
Eligible Director’s Deferred Stock Account pursuant to Section 7.3 of the
Program.

 

2.26                           “Retainer Restricted Share Award” means that
portion of an Eligible Director’s Annual Retainer and, if applicable, Committee
Chair Retainer that the Eligible Director has elected to receive in the form of
Restricted Shares pursuant to Section 7.2 of the Program.

 

2.27                           “Retainer Share Award” means a Retainer Deferred
Share Award and/or a Retainer Restricted Share Award.

 

2.28                           “Securities Act” means the Securities Act of
1933, as amended.

 

2.29                           “Separation from Service” means a termination of
an Eligible Director’s service with the Company and all Affiliates as a director
and non-employee consultant/advisor, provided such termination constitutes a
“separation from service” within the meaning of Section 409A of the Code, or
such other change in the Eligible

 

4

--------------------------------------------------------------------------------

 

Director’s relationship with the Company and all Affiliates that constitutes a
“separation from service” within the meaning of Section 409A of the Code.

 

2.30                           “Stock Plan” means the then current
shareholder-approved stock incentive plan of the Company pursuant to which stock
based awards shall be granted to Eligible Directors, which as of the Effective
Date is the Ceridian Corporation 2004 Long-Term Stock Incentive Plan.

 

3.                                       Program Administration.

 

The Program will be administered by the Committee. The Committee may retain such
actuarial, accounting, legal, clerical and other services as may reasonably be
required in the administration of the Program, and may pay reasonable
compensation for such services. The Company will pay all costs of administering
the Program. All questions of interpretation of the Program will be determined
by the Committee, each determination, interpretation or other action made or
taken by the Committee pursuant to the provisions of the Program will be
conclusive and binding for all purposes and on all persons, and no member of the
Committee will be liable for any action or determination made in good faith with
respect to the Program or any Award granted under the Program and the Stock
Plan.

 

4.                                       Annual Retainer, Committee Chair
Retainer and Expenses.

 

4.1                                 Annual Retainer. Each Eligible Director is
entitled to receive an Annual Retainer. The portion of the Annual Retainer
payable in cash shall be paid in arrears on a quarterly basis on or about the
15th day of March, June, September and December. In the event an Eligible
Director joins the Board during a calendar year, the Eligible Director will
receive a pro rata portion of the Annual Retainer and such portion will be paid
entirely in cash on a quarterly basis. In addition, a pro rata portion of the
Annual Retainer payable in cash shall be forfeited if an Eligible Director
ceases to be an Eligible Director prior to December 31.

 

4.2                                 Committee Chair Retainer. The chairs of
committees of the Board are each entitled to receive a Committee Chair Retainer.
The portion of any Committee Chair Retainer payable in cash shall be paid in
arrears on a quarterly basis on or about the 15th day of March, June, September
and December. In the event an Eligible Director becomes a chair of a committee
of the Board during a calendar year, the committee chair will receive a pro rata
portion of the Committee Chair Retainer and such portion will be paid entirely
in cash on a quarterly basis. In addition, a pro rata portion of the Committee
Chair Retainer payable in cash shall be forfeited if the Eligible Director
ceases to be a chair of a committee of the Board prior to December 31.

 

4.3                                 Expenses. Each Eligible Director is entitled
to reimbursement for reasonable travel costs of attending Board and committee
meetings and other business purposes related to Board membership. Such
reimbursement shall be payable in cash after receipt of proper documentation by
the Company from such Eligible Director.

 

5

--------------------------------------------------------------------------------

 

5.                                       New Director Restricted Stock Awards.

 

5.1                                 Grants to New Directors. At such time after
the Effective Date as additional Eligible Directors are first elected or
appointed to the Board to fill new directorships or to fill vacancies, each such
Eligible Director will receive, on a one-time basis on the date of his or her
first election or appointment to the Board, a Restricted Stock Award. The number
of Restricted Shares to be awarded to each such Eligible Director pursuant to
such Restricted Stock Award shall be determined by dividing the dollar value of
the Restricted Stock Award by the Average Market Price calculated on the date of
such Eligible Director’s first election or appointment to the Board, and then
rounding the result to the nearest 100 shares. Such Restricted Stock Award shall
be awarded under the Stock Plan. In addition to the terms and conditions set
forth below, such Restricted Stock Award shall be subject to the terms and
conditions of the Stock Plan and any applicable Award Agreement.

 

5.2                                 Restrictions. Restricted Shares that are
awarded to an Eligible Director pursuant to a Restricted Stock Award may not be
sold, assigned or otherwise transferred, or subjected to any lien, either
voluntarily or involuntarily, by operation of law or otherwise, until such time
and only to the extent that such restrictions on transferability have lapsed as
provided in this Section 5.2 and in the Award Agreement. For purposes of this
Program, the lapsing of such transferability restrictions is referred to as
“vesting,” and Restricted Shares that are no longer subject to such
transferability restrictions are referred to as “vested.” Except as otherwise
provided in the Award Agreement, 20% of the total number of Restricted Shares
subject to a Restricted Stock Award will vest on each of the first five
anniversary dates of the date such Restricted Stock Award was granted.

 

6.                                       Option.

 

6.1                                 Grant. Each Eligible Director will be
granted on an annual basis, at such time as the Eligible Director is elected or
re-elected to the Board by the stockholders of the Company, an Option. Such
Option will be granted only upon such election or re-election of the Eligible
Director, and no Option will be granted if the Eligible Director is not so
elected or re-elected. Such Option shall be awarded under the Stock Plan. In
addition to the terms and conditions set forth below, such Option shall be
subject to the terms and conditions of the Stock Plan and any applicable Award
Agreement.

 

6.2                                 Exercise Price, Exercisability and Duration.
The per share price to be paid by an Eligible Director upon exercise of an
Option will be 100% of the Fair Market Value of one share of Common Stock on the
date of grant. Except as otherwise provided in the Award Agreement, one-third of
each Option will become exercisable on each of the first three anniversaries of
its date of grant and will expire and will no longer be exercisable on the fifth
anniversary of its date of grant.

 

6

--------------------------------------------------------------------------------

 

7.                                       Payment of Portion of Annual Retainer
in Retainer Share Award.

 

7.1                                 Annual Retainer Election.

 

(a)                                  Each year an Eligible Director must elect
to receive at least fifty percent (50%) (or such other greater percentage as the
Committee shall determine) and may elect to receive more of his or her Annual
Retainer in the form of (a) Retainer Restricted Share Awards pursuant to Section
7.2, (b) Retainer Deferred Share Awards pursuant to Section 7.3, or (c) a
combination of Retainer Restricted Share Awards and Retainer Deferred Share
Awards. Each year an Eligible Director, if applicable, may elect to receive a
portion of his or her Committee Chair Retainer in the form of (a) Retainer
Restricted Share Awards pursuant to Section 7.2, (b) Retainer Deferred Share
Awards pursuant to 7.3, or (c) a combination of Retainer Restricted Share Awards
and Retainer Deferred Share Awards. In the event that an Eligible Director fails
to make a valid Annual Retainer Election, such Eligible Director shall be deemed
to have elected to receive (a) fifty percent (50%) (or such other greater
percentage as the Committee shall determine) of his or her Annual Retainer in
the form of Retainer Restricted Share Awards and any balance of his or her
Annual Retainer in cash and (b) if applicable, one hundred percent (100%) of the
Committee Chair Retainer in cash.

 

(b)                                 The Annual Retainer Election is made by the
Eligible Director by filing, no later than December 31 of each year (or by such
other date as the Committee shall determine), an irrevocable election with the
Company on a form provided for that purpose. The Annual Retainer Election shall
be effective with respect to the Annual Retainer and Committee Chair Retainer
payable with respect to services performed during the next calendar year. The
Annual Retainer Election form shall specify an amount to be received in the form
of Retainer Restricted Share Awards and/or Retainer Deferred Share Awards
expressed as a dollar amount or as a percentage of the Eligible Director’s
Annual Retainer and, if applicable, Committee Chair Retainer. The issuance of
such a Retainer Restricted Share Award or Retainer Deferred Share Award shall be
in lieu of payment of that portion of the Annual Retainer and Committee Chair
Retainer in cash.

 

7.2                                 Retainer Restricted Share Awards.

 

(a)                                  On the first trading day of the calendar
year, an Eligible Director shall be granted a Retainer Restricted Share Award
equal to the number of shares of Common Stock determined by dividing an amount
equal to the amount of the Annual Retainer and, if applicable, the Committee
Chair Retainer that the Eligible Director elected to receive (or is deemed to
have elected to receive) in the form of a Retainer Restricted Share Award by the
Average Market Price calculated on the first trading day of the calendar year,
rounded up to the nearest whole share. Any such Retainer Restricted Share Award
shall be awarded under the Stock Plan. In addition to the terms and conditions
set forth below, such Retainer Restricted Share Award shall be subject to the
terms and conditions of the Stock Plan and any applicable Award Agreement.

 

7

--------------------------------------------------------------------------------

 

(b)                                 Shares subject to a Retainer Restricted
Share Award may not be sold, assigned or otherwise transferred, or subjected to
any lien, either voluntarily or involuntarily, by operation of law or otherwise,
until the Eligible Director’s service with the Company ceases. In the event an
Eligible Director’s service with the Company ceases prior to December 31 of the
Issuance Year (unless such cessation of service occurs following a Change of
Control), a portion of the shares subject to a Retainer Restricted Share Award
will be forfeited in an amount equal to the number of shares subject to such
Retainer Restricted Share Award multiplied by a fraction, the numerator of which
is the number of days remaining in the Issuance Year after the date of such
Eligible Director’s service with the Company ceases and the denominator of which
is 365, rounded down to the nearest whole share.

 

7.3                                 Retainer Deferred Share Awards.

 

(a)                                  On the first trading day of the calendar
year, an Eligible Director shall receive a credit to his or her Deferred Stock
Account equal to the number of shares of Common Stock (“Deferred Shares”)
determined by dividing an amount equal to the amount of the Annual Retainer and,
if applicable, the Committee Chair Retainer that the Eligible Director elected
to receive in the form of a Retainer Deferred Share Award by the Average Market
Price calculated on the first trading day of the calendar year, rounded up to
the nearest whole share. Any such Retainer Deferred Share Award shall be awarded
under the Stock Plan. In addition to the terms and conditions set forth below,
such Retainer Deferred Share Award shall be subject to the terms and conditions
of the Stock Plan; provided, however, that the terms and conditions set forth
below shall be deemed to constitute the Award Agreement with respect to any
Retainer Deferred Share Award and no separate, executed Award Agreement shall be
required under the terms of the Program or the Stock Plan.

 

(b)                                 In the event an Eligible Director incurs a
Separation from Service prior to December 31 of the Issuance Year (unless such
Separation from Service occurs following a Change of Control), a portion of the
Deferred Shares credited to the Eligible Director’s Deferred Stock Account will
be forfeited in an amount equal to the Deferred Shares multiplied by a fraction,
the numerator of which is the number of days remaining in the Issuance Year
after the date of such Eligible Director’s Separation from Service and the
denominator of which is 365, rounded down to the nearest whole share.

 

(c)                                  Each time a cash dividend is paid on the
Common Stock, the Eligible Director shall receive a credit to his or her
Deferred Stock Account equal to that number of shares of Common Stock (rounded
to the nearest whole share) having a Fair Market Value on the dividend payment
date equal to the amount of the cash dividend payable on the number of shares
credited to the Eligible Director’s Deferred Stock Account on the dividend
record date. Each time there is a change in the number or character of the
Common Stock (through any stock dividend or other distribution,
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation split-up, spin-off, combination, repurchase or exchange of shares
or otherwise), the Eligible Director shall receive a credit to his or her
Deferred Stock Account equal to that change in number or character of the Common
Stock.

 

8

--------------------------------------------------------------------------------

 

(d)                                 At the time of making the Annual Retainer
Election, each Eligible Director shall also complete a deferral payment election
specifying one of the payment options described in Section 7.3(e) below with
respect to the Deferred Shares subject to such Annual Retainer Election.

 

(e)                                  An Eligible Director may elect to receive
payment of his or her Deferred Stock Account in a lump sum on January 10 of the
year (or the first business day thereafter) following the Eligible Director’s
Separation from Service on the Board or in five, ten or fifteen annual
installments beginning on January 10 of the year (or the first business day
thereafter) following the Eligible Director’s Separation from Service. If an
Eligible Director fails to make a deferral payment election, such Eligible
Director shall be deemed to have elected a single lump sum payment. All payments
shall be made in shares of Common Stock plus cash in lieu of any fractional
share. If an Eligible Director elects to receive installment payments from his
or her Deferred Stock Account, the amount of each installment payment shall be
computed as the number of shares credited to the Eligible Director’s Deferred
Stock Account, multiplied by a fraction, the numerator of which is one and the
denominator of which is the total number of installments elected (i.e., five,
ten or fifteen) minus the number of installments previously paid. Amounts paid
prior to the final installment payment shall be rounded to the nearest whole
number of shares; the final installment payment shall be for the whole number of
shares then credited to the Eligible Director’s Deferred Stock Account, together
with cash in lieu of any fractional share.

 

(f)                                    An Eligible Director may elect to change
the form of his or her distribution after making his or her Annual Retainer
Election (other than on account of a Change in Control under Section 7.3(i)),
provided (i) the Eligible Director makes such election in accordance with rules
established by the Committee at least 12 months prior to the date that the
Eligible Director’s first scheduled payment was to begin, (ii) the election may
not take effect until at least 12 months after the date on which a completed
election is filed with the Committee, and (iii) the election defers commencement
of the benefit at least 5 years beyond the date payment otherwise would have
been made or commenced, except with respect to payments on account of death. An
installment distribution shall be treated as a single payment for purposes of
this Section 7(f).

 

(g)                                 If an Eligible Director dies before
receiving all payments to which he or she is entitled under this Section 7.3 of
the Program, payment shall be made in the form elected by the Eligible Director
to the beneficiary designated by the Eligible Director on a form provided for
that purpose and delivered to and accepted by the Committee or, in the absence
of a valid designation or if the designated beneficiary does not survive the
Eligible Director, to such Eligible Director’s estate.

 

(h)                                 No right to receive payments under this
Section 7.3 of the Program nor any shares of Common Stock credited to an
Eligible Director’s Deferred Stock Account shall be assignable or transferable
by an Eligible Director other than by will or the laws of descent and
distribution. The designation of a beneficiary by an Eligible Director pursuant
to Section 7.3(g) does not constitute a transfer.

 

9

--------------------------------------------------------------------------------

 

(i)                                     Notwithstanding anything to the contrary
set forth in the Program, upon the occurrence of a Change of Control of the
Company, then if, and only if, such Change of Control is determined by the
Committee to be a “change of control” within the meaning of Section 409A of the
Code, credits to an Eligible Director’s Deferred Stock Account as of the
business day immediately prior to the effective date of the transaction
constituting the Change of Control shall be paid in full to the Eligible
Director or the Eligible Director’s beneficiary or estate, as the case may be,
in whole shares of Common Stock (together with cash in lieu of a fractional
share) on such date.

 

8.                                       Rights of Eligible Directors.

 

8.1                                 Service as a Director. Nothing in the
Program nor the Stock Plan will interfere with or limit in any way the right of
the stockholders of the Company to remove an Eligible Director, and neither the
Program nor the Stock Plan, nor the granting of an Award nor any other action
taken pursuant to the Program or Stock Plan, will constitute or be evidence of
any agreement or understanding, express or implied, that the stockholders of the
Company will re-elect an Eligible Director for any period of time or at any
particular rate of compensation.

 

8.2                                 Non-Exclusivity of the Program. Nothing
contained in the Program is intended to create any limitations on the power or
authority of the Board to adopt such additional or other compensation
arrangements for non-employee directors as the Board may deem necessary or
desirable.

 

9.                                       Securities Law and Other Restrictions.

 

Notwithstanding any other provision of the Program or any agreements entered
into pursuant to the Program, the Company will not be required to issue any
shares of Common Stock under this Program, and an Eligible Director may not
sell, assign, transfer or otherwise dispose of shares of Common Stock issued
pursuant to Awards granted under the Program, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable state securities laws or an exemption from such registration under
the Securities Act and applicable state securities laws, and (b) there has been
obtained any other consent, approval or permit from any other regulatory body
which the Committee, in its sole discretion, deems necessary or advisable. The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company in order to comply with such
securities law or other restrictions.

 

10.                                 Program Effective Date, Duration, Amendment,
Modification and Termination.

 

The Program shall be deemed effective as of the Effective Date and shall
continue in full force and effect until suspended or terminated by the Committee
or the Board. The Committee or the Board may suspend or terminate the Program or
any portion thereof at any time, and may amend the Program from time to time in
such respects as the

 

10

--------------------------------------------------------------------------------

 

Committee or the Board may deem advisable in order that Awards under the Program
will conform to any change in applicable laws or regulations or in any other
respect the Committee or the Board may deem to be in the best interests of the
Company; provided, however, that no amendments to the Program will be effective
without approval of the stockholders of the Company if stockholder approval of
the amendment is then required pursuant to the rules of the New York Stock
Exchange or any similar regulatory body. Payments of amounts due under Section
7.3 may not be accelerated on account of a termination of the Program unless and
only to the extent permitted under Section 409A of the Code.

 

11.                                 Stock Plan.

 

Notwithstanding anything stated to the contrary herein, all Awards granted
pursuant to the Program shall be awarded under, and in accordance with, the
terms of the Stock Plan.

 

12.                                 Miscellaneous.

 

12.1                           Governing Law. Notwithstanding conflict of law
provisions, the validity, construction, interpretation, administration and
effect of the Program and any rules, regulations and actions relating to the
Program will be governed by and construed exclusively in accordance with the
laws of the State of Delaware.

 

12.2                           Successors and Assigns. The Program will be
binding upon and inure to the benefit of the successors and permitted assigns of
the Company and the Eligible Directors.

 

12.3                           No Representation or Warranty. The Company makes
no representation or warranty regarding the tax consequences relating to any
Award, and the Company recommends that the Eligible Director consult with his or
her own advisors before making any determination regarding the election to
receive, exercise or the sale of an Award.

 

12.4                           Unfunded Program. The Program shall be unfunded
and shall not create (or be construed to create) a trust or separate fund or
funds. The Program shall not establish any fiduciary relationship between the
Company and any Eligible Director or other person. To the extent any person
holds any rights by virtue of a grant under the Program, such rights shall be no
greater than the rights of an unsecured general creditor of the Company. If the
Company shall, in fact, elect to set aside monies or other assets to meet its
obligations under Section 7.3 of the Program (there being no obligation to do
so), whether in a grantor trust or otherwise, the same shall, nevertheless, be
regarded as a part of the general assets of the Company subject to the claims of
its general creditors, and neither any Eligible Director nor any beneficiary of
any Eligible Director shall have a legal, beneficial, or security interest
therein.

 

11

--------------------------------------------------------------------------------

 

EXHIBIT A

 

Annual Retainer

 

$

65,000

 

 

 

 

 

Committee Chair Retainer (Audit)

 

$

15,000

 

 

 

 

 

Committee Chair Retainer (Other)

 

$

10,000

 

 

 

 

 

Option Award

 

8,000

 shares

 

 

 

 

New Director Restricted Stock Award

 

$

150,000

 value

 

1

--------------------------------------------------------------------------------