Exhibit 10.2

AVIS BUDGET GROUP, INC.

2007 EQUITY AND INCENTIVE PLAN

 

          Page    Section    1.    Purpose; Types of Awards; Construction    2
2.    Definitions    2 3.    Administration   

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4.    Eligibility   

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5.    Stock Subject to the Plan   

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6.    Specific Terms of Awards   

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7.    Change in Control Provisions   

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8.    General Provisions   

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AVIS BUDGET GROUP, INC.

2007 EQUITY AND INCENTIVE PLAN

 

1. Purpose; Types of Awards; Construction.

The purpose of the AVIS BUDGET GROUP, INC. 2007 Equity and Incentive Plan (the
“Plan”) is to promote the interests of the Company and its Subsidiaries and the
stockholders of the Company by providing officers, employees, consultants and
independent contractors (including non-employee directors) of the Company and
its Subsidiaries with appropriate incentives and rewards to encourage them to
enter into and continue in the employ or service of the Company or its
Subsidiaries, to acquire a proprietary interest in the long-term success of the
Company and to reward the performance of individuals in fulfilling their
personal responsibilities for long-range and annual achievements. The Plan
provides for the grant, in the sole discretion of the Committee, of options
(including “incentive stock options” and “nonqualified stock options”), stock
appreciation rights, restricted stock, restricted stock units and other stock-
or cash-based awards. The Plan is designed so that Awards granted hereunder
intended to comply with the requirements for “performance-based compensation”
under Section 162(m) of the Code may comply with such requirements, and the Plan
and Awards shall be interpreted in a manner consistent with such requirements.
Notwithstanding any provision of the Plan, to the extent that any Award would be
subject to Section 409A of the Code, no such Award may be granted if it would
fail to comply with the requirements set forth in Section 409A of the Code and
any regulations or guidance promulgated thereunder.

 

2. Definitions.

For purposes of the Plan, the following terms shall be defined as set forth
below:

(a) “Award” means any Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit or Other Stock-Based Award or Other Cash-Based Award
granted under the Plan.

(b) “Award Agreement” means any written agreement, contract, or other instrument
or document evidencing an Award.

(c) “Board” means the Board of Directors of the Company.

(d) A “Change in Control” shall be deemed to have occurred if the event set
forth in any one of the following paragraphs shall have occurred:

(1) any Person is or becomes the “Beneficial Owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
(not including in the securities Beneficially Owned by such Person any
securities acquired directly from the Company) representing 50% or more of the
Company’s then outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in clause (i) of
paragraph (3) below; or

(2) the following individuals cease for any reason to constitute a majority of
the number of directors then serving: individuals who, on the Effective Date,
constitute the Board of Directors and any new director (other than a director
whose initial assumption of office is 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) whose appointment or election by
the Board of Directors or nomination for election by the Company’s stockholders
was approved or recommended by a vote of at least a majority of the directors
then still in office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously so approved or
recommended; or

(3) there is consummated a merger or consolidation of the Company with any other
corporation other than (i) a merger or consolidation which 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

 

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being converted into voting securities of the surviving entity or any parent
thereof) at least 50% of the combined voting power of the voting securities of
the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities Beneficially Owned by such Person any securities acquired directly
from the Company) representing 50% or more of the combined voting power of the
Company’s then outstanding securities; or

(4) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated 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 75% of the combined voting power of
the voting securities of which are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the holders of the common
stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

(e) “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

(f) “Committee” shall mean the Board, or a committee designated by the Board to
administer the Plan. With respect to Awards granted to Covered Employees, such
committee shall consist of two or more persons, each of whom, unless otherwise
determined by the Board, is an “outside director” within the meaning of
Section 162(m) of the Code and a “nonemployee director” within the meaning of
Rule 16b-3.

(g) “Company” means Avis Budget Group, Inc., a corporation organized under the
laws of the State of Delaware, or any successor corporation.

(h) “Covered Employee” shall have the meaning set forth in Section 162(m)(3) of
the Code.

(i) “Effective Date” shall have the meaning set forth in Section 8(d) of the
Plan.

(j) “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and as now or hereafter construed, interpreted and applied by
regulations, rulings and cases.

(k) “Fair Market Value” means, with respect to Stock or other property, the fair
market value of such Stock or other property determined by such methods or
procedures as shall be established from time to time by the Committee. Unless
otherwise determined by the Committee in good faith, the per share Fair Market
Value of Stock as of a particular date shall mean (i) the closing price per
share of Stock on the national securities exchange on which the Stock is
principally traded, for the last preceding date on which there was a sale of
such Stock on such exchange, or (ii) if the shares of Stock are then traded in
an over-the-counter market, the average of the closing bid and asked prices for
the shares of Stock in such over-the-counter market for the last preceding date
on which there was a sale of such Stock in such market, or (iii) if the shares
of Stock are not then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Committee, in its sole discretion,
shall determine.

(l) “Grantee” means an employee, consultants, or independent contractor
(including non-employee director) of the Company or any Subsidiary of the
Company or such other individual that performs services for or provides services
to the Company or any Subsidiary of the Company that has been granted an Award
under the Plan.

 

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(m) “ISO” means any Option intended to be and designated as an incentive stock
option within the meaning of Section 422 of the Code.

(n) “NQSO” means any Option that is not designated as an ISO.

(o) “Option” means a right, granted to a Grantee under Section 6(b)(i), to
purchase shares of Stock. An Option may be either an ISO or an NQSO.

(p) “Other Cash-Based Award” means cash awarded under Section 6(b)(v) of the
Plan, including cash awarded as a bonus or upon the attainment of Performance
Goals or otherwise as permitted under the Plan.

(q) “Other Stock-Based Award” means a right or other interest granted to a
Grantee under Section 6(b)(v) of the Plan that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, Stock, including but not limited to (i) unrestricted Stock awarded as a
bonus or upon the attainment of Performance Goals or otherwise as permitted
under the Plan, and (ii) a right granted to a Grantee to acquire Stock from the
Company containing terms and conditions prescribed by the Committee.

(r) “Performance Goals” means performance goals based on the attainment by the
Company or any Subsidiary of the Company (or any division or business unit of
such entity) of performance goals pre-established by the Committee in its sole
discretion, based on one or more of the following criteria (as determined in
accordance with generally accepted accounting principles): (1) return on total
stockholder equity; (2) earnings per share of Company Stock; (3) net income
(before or after taxes); (4) earnings before any or all of interest, taxes,
minority interest, depreciation and amortization; (5) sales or revenues;
(6) return on assets, capital or investment; (7) market share; (8) cost
reduction goals; (9) implementation or completion of critical projects or
processes; (10) cash flow; (11) gross or net profit margin; and (12) any
combination of, or a specified increase in, any of the foregoing. The
performance goals may be based upon the attainment of specified levels of
performance under one or more of the measures described above relative to the
performance of other entities. To the extent permitted under Section 162(m) of
the Code (including, without limitation, compliance with any requirements for
stockholder approval) or to the extent that an Award is not intended to qualify
as performance-based compensation under Section 162(m) of the Code, the
Committee in its sole discretion may designate additional business criteria on
which the performance goals may be based or adjust, modify or amend the
aforementioned business criteria. Performance Goals may include a threshold
level of performance below which no Award will be earned, a level of performance
at which the target amount of an Award will be earned and a level of performance
at which the maximum amount of the Award will be earned. The Committee in its
sole discretion shall have the authority to make equitable adjustments to the
Performance Goals in recognition of unusual or non-recurring events affecting
the Company or any Subsidiary of the Company or the financial statements of the
Company or any Subsidiary of the Company, in response to changes in applicable
laws or regulations, including changes in generally accepted accounting
principles or practices, or to account for items of gain, loss or expense
determined to be extraordinary or unusual in nature or infrequent in occurrence
or related to the disposal of a segment of a business or related to a change in
accounting principles, as applicable.

(s) “Person” shall have the meaning set forth in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (1) the Company or any Subsidiary Corporation, (2) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any Subsidiary Corporation, (3) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (4) 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.

(t) “Plan” means this Avis Budget Group, Inc. 2007 Equity and Incentive Plan, as
amended from time to time.

(u) “Restricted Stock” means an Award of shares of Stock to a Grantee under
Section 6(b)(iii) that may be subject to certain restrictions and to a risk of
forfeiture.

 

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(v) “Restricted Stock Unit” means a right granted to a Grantee under
Section 6(b)(iv) to receive Stock or cash at the end of a specified deferral
period, which right may be conditioned on the satisfaction of specified
performance or other criteria.

(w) “Rule 16b-3” means Rule 16b-3, as from time to time in effect promulgated by
the Securities and Exchange Commission under Section 16 of the Exchange Act,
including any successor to such Rule.

(x) “Stock” means shares of the common stock, par value $0.01 per share, of the
Company.

(y) “Stock Appreciation Right” or “SAR” means the right, granted to a Grantee
under Section 6(b)(ii), to be paid an amount measured by the appreciation in the
Fair Market Value of Stock from the date of grant to the date of exercise of the
right.

(z) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code.

(aa) “Substitute Awards” means Awards granted or shares of Stock issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted by a company acquired by the Company or any Subsidiary or with which the
Company or any Subsidiary combines.

(bb) “Total Authorized Shares” shall have the meaning set forth in Section 5 of
the Plan.

 

3. Administration.

The Plan shall be administered by the Committee. The Committee shall have the
authority in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to whom and
the time or times at which Awards shall be granted; to determine the type and
number of Awards to be granted, the number of shares of Stock to which an Award
may relate and the terms, conditions, restrictions and performance criteria
relating to any Award; to determine Performance Goals no later than such time as
required to ensure that an underlying Award which is intended to comply with the
requirements of Section 162(m) of the Code so complies; and to determine
whether, to what extent, and under what circumstances an Award may be settled,
cancelled, forfeited, exchanged, or surrendered; to make adjustments in the
terms and conditions of, and the Performance Goals (if any) included in, Awards;
to construe and interpret the Plan and any Award; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and
provisions of the Award Agreements (which need not be identical for each
Grantee); and to make all other determinations deemed necessary or advisable for
the administration of the Plan. Notwithstanding the foregoing, neither the
Board, the Committee nor their respective delegates shall have the authority to
reprice (or cancel and regrant) any Option or, if applicable, other Award at a
lower exercise, base or purchase price without first obtaining the approval of
the Company’s stockholders.

All determinations of the Committee shall be made by a majority of its members
either present in person or participating by conference telephone at a meeting
or by written consent. The Committee may delegate to one or more of its members
or to one or more agents such administrative duties as it may deem advisable,
and the Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all persons, including but not limited to the Company, any Subsidiary of the
Company, or Grantee (or any person claiming any rights under the Plan from or
through any Grantee) and any stockholder.

No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Award granted
hereunder.

 

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4. Eligibility.

Awards may be granted to executive officers and other key employees, consultants
and independent contractors (including non-employee directors) of the Company or
its Subsidiaries, including officers and directors who are employees, to key
consultants to the Company or its Subsidiaries, and to other individuals who
perform services for or provide services to the Company or its Subsidiaries. In
determining the persons to whom Awards shall be granted and the number of shares
to be covered by each Award, the Committee shall take into account the duties of
the respective persons, their present and potential contributions to the success
of the Company or its Subsidiaries and such other factors as the Committee shall
deem relevant in connection with accomplishing the purposes of the Plan.

 

5. Stock Subject to the Plan.

The maximum number of shares of Stock reserved for the grant of Awards under the
Plan shall be 8,000,000 shares of Stock (all of which such shares of Stock may
be granted as ISOs), subject to adjustment as provided herein (“Total Authorized
Shares”). Subject to adjustment as provided herein, no more than (1) 4,000,000
shares of Stock may be awarded under the Plan in the aggregate in respect of
Awards other than Options and SARs, and (2) 1,000,000 shares of Stock may be
made subject to Awards granted to an individual in a single calendar year.
Determinations made in respect of the limitations set forth in the immediately
preceding sentence shall be made in a manner consistent with Section 162(m) of
the Code. Such shares of Stock may, in whole or in part, be authorized but
unissued shares or shares of Stock that shall have been or may be reacquired by
the Company in the open market, in private transactions or otherwise. If any
shares of Stock subject to an Award are forfeited, or cancelled or if an Award
terminates or expires without a distribution of shares to the Grantee, the
shares of Stock with respect to such Award shall, to the extent of any such
forfeiture, cancellation, termination or expiration, again be available for
Awards under the Plan. Upon the exercise of any Award granted in tandem with any
Awards such related Awards shall be cancelled to the extent of the number of
shares of Stock as to which the Award is exercised and, notwithstanding the
foregoing, such number of shares shall no longer be available for Awards under
the Plan. In addition, shares of Stock surrendered or withheld as payment of
either the exercise price of an Award (including shares of Stock otherwise
underlying an Award of a SAR that are retained by the Company to account for the
grant price of such SAR) and/or withholding taxes in respect of an Award shall
no longer be available for Awards under the Plan.

In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, Stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Grantees under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of
(i) the number and kind of shares of Stock or other property (including cash)
that may thereafter be issued in connection with Awards, (ii) the number and
kind of shares of Stock or other property (including cash) issued or issuable in
respect of outstanding Awards, (iii) the exercise price, grant price, or
purchase price relating to any Award; provided, that, with respect to ISOs, such
adjustment shall be made in accordance with Section 424(h) of the Code; and
(iv) the Performance Goals applicable to outstanding Awards.

 

6. Specific Terms of Awards.

(a) General. The term of each Award shall be for such period as may be
determined by the Committee. Subject to the terms of the Plan and any applicable
Award Agreement, payments to be made by the Company or any Subsidiary of the
Company upon the grant, maturation, or exercise of an Award may be made in such
forms as the Committee shall determine at the date of grant or thereafter,
including, without limitation, cash, Stock, or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis. The
Committee may make rules relating to installment or deferred payments with
respect to Awards, including the

 

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rate of interest to be credited with respect to such payments. In addition to
the foregoing, the Committee may impose on any Award or the exercise thereof, at
the date of grant or thereafter, such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine.

(b) Types of Awards. The Committee is authorized to grant the Awards described
in this Section 6(b), under such terms and conditions as deemed by the Committee
to be consistent with the purposes of the Plan. Such Awards may be granted with
value and payment contingent upon Performance Goals. Each Award shall be
evidenced by an Award Agreement containing such terms and conditions applicable
to such Award as the Committee shall determine at the date of grant or
thereafter.

(i) Options. The Committee is authorized to grant Options to Grantees on the
following terms and conditions:

(A) Type of Award. The Award Agreement evidencing the grant of an Option under
the Plan shall designate the Option as an ISO or an NQSO.

(B) Exercise Price. The exercise price per share of Stock purchasable under an
Option shall be determined by the Committee, but in no event shall the exercise
price of any Option be less than the Fair Market Value of a share of Stock on
the date of grant of such Option. The exercise price for Stock subject to an
Option may be paid in cash or by an exchange of Stock previously owned by the
Grantee, through a “broker cashless exercise” procedure approved by the
Committee, a combination of the above, or any other method approved the
Committee, in any case in an amount having a combined value equal to such
exercise price.

(C) Term and Exercisability of Options. The date on which the Committee adopts a
resolution expressly granting an Option shall be considered the day on which
such Option is granted unless the Committee determines that a future date is
advisable. Options shall be exercisable over the exercise period (which shall
not exceed ten years from the date of grant), at such times and upon such
conditions as the Committee may determine, as reflected in the Award Agreement;
provided, that (i) subject to clause (ii) below, no Option granted to an
employee of the Company or a Subsidiary (other than Substitute Awards) shall
vest prior to the first anniversary of the date on which the Option is granted
and (ii) the Committee shall have the authority to accelerate the exercisability
of any outstanding Option at such time and under such circumstances as it, in
its sole discretion, deems appropriate. An Option may be exercised to the extent
of any or all full shares of Stock as to which the Option has become
exercisable, by giving written notice of such exercise to the Committee or its
designated agent.

(D) Other Provisions. Options may be subject to such other conditions including,
but not limited to, restrictions on transferability of the shares of Stock
acquired upon exercise of such Options, as the Committee may prescribe in its
discretion or as may be required by applicable law.

(ii) SARs. The Committee is authorized to grant SARs to Grantees on the
following terms and conditions:

(A) In General. SARs may be granted independently or in tandem with an Option at
the time of grant of the related Option. An SAR granted in tandem with an Option
shall be exercisable only to the extent the underlying Option is exercisable.
Unless otherwise specified in the Award Agreement, payment of an SAR shall be
made in Stock.

(B) Term and Exercisability of SARs. The date on which the Committee adopts a
resolution expressly granting an SAR shall be considered the day on which such
SAR is granted unless the Committee determines that a future date is advisable.
SARs shall be exercisable over the exercise period (which shall not exceed ten
years from the date of grant), at such times and upon such conditions as the
Committee may determine, as reflected in the Award Agreement; provided,
(i) subject to clause (ii) below, no SAR granted to an employee of the Company
or a Subsidiary (other than Substitute Awards) shall vest prior

 

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to the first anniversary of the date on which the SAR is granted and (ii) that
the Committee shall have the authority to accelerate the exercisability of any
outstanding SAR at such time and under such circumstances as it, in its sole
discretion, deems appropriate.

(C) Payment. An SAR shall confer on the Grantee a right to receive an amount
with respect to each share of Stock subject thereto, upon exercise thereof,
equal to the excess of (1) the Fair Market Value of one share of Stock on the
date of exercise over (2) the grant price of the SAR (which in the case of an
SAR granted in tandem with an Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other SAR shall be such price as
the Committee may determine but in no event shall be less than the Fair Market
Value of a share of Stock on the date of grant of such SAR). A SAR may be
exercised by giving written notice of such exercise to the Committee or its
designated agent.

(iii) Restricted Stock. The Committee is authorized to grant Restricted Stock to
Grantees on the following terms and conditions:

(A) Issuance and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions, if any, as the Committee
may impose at the date of grant or thereafter, which restrictions may lapse
separately or in combination at such times, under such circumstances, in such
installments, or otherwise, as the Committee may determine. The Committee may
place restrictions on Restricted Stock that shall lapse, in whole or in part,
only upon the attainment of Performance Goals. Notwithstanding the above,
(i) subject to clause (ii) below, no award of Restricted Stock granted to an
employee of the Company or a Subsidiary (other than Substitute Awards) shall
vest prior to the first anniversary of the date on which such award is granted,
and (ii) the Committee shall have the authority to accelerate the exercisability
of any outstanding award of Restricted Stock at such time and under such
circumstances as it, in its sole discretion, deems appropriate. Except to the
extent restricted under the Award Agreement relating to the Restricted Stock, a
Grantee granted Restricted Stock shall have all of the rights of a stockholder
including, without limitation, the right to vote Restricted Stock and the right
to receive dividends thereon.

(B) Certificates for Stock. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Grantee, such
certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, and the
Company shall retain physical possession of the certificate.

(C) Dividends. Except to the extent restricted under the applicable Award
Agreement, dividends paid on Restricted Stock shall be either paid at the
dividend payment date in cash or in shares of unrestricted Stock having a Fair
Market Value equal to the amount of such dividends. Stock distributed in
connection with a stock split or stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the
same extent as the Restricted Stock with respect to which such Stock or other
property has been distributed.

(iv) Restricted Stock Units. The Committee is authorized to grant Restricted
Stock Units to Grantees, subject to the following terms and conditions:

(A) Conditions to Vesting. At the time of the grant of Restricted Stock Units,
the Committee may impose such restrictions or conditions to the vesting of such
Awards as it, in its discretion, deems appropriate, including, but not limited
to, achievement of Performance Goals. Notwithstanding the above, (i) subject to
clause (ii) below, no award of Restricted Stock Units granted to an employee of
the Company or a Subsidiary (other than Substitute Awards) shall vest prior to
the first anniversary of the date on which such award is granted, and (ii) the
Committee shall have the authority to accelerate the exercisability of any
outstanding award of Restricted Stock Units at such time and under such
circumstances as it, in its sole discretion, deems appropriate.

 

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(B) Benefit Upon Vesting. Unless otherwise provided in an Award Agreement, upon
the vesting of a Restricted Stock Unit, there shall be delivered to the Grantee,
within 30 days of the date on which such Award (or any portion thereof) vests,
the number of shares of Stock equal to the number of shares of Stock equal to
the number of Restricted Stock Units becoming so vested.

(C) Dividend Equivalents. Subject to the requirements of Section 409A of the
Code, an Award of Restricted Stock Units may provide the Grantee with the right
to receive dividend equivalent payments with respect to Stock subject to the
Award (both before and after the Stock subject to the Award is earned, vested,
or acquired), which payments may be either made currently or credited to an
account for the Participant, and may be settled in cash or Stock, as determined
by the Committee. Any such settlements and any such crediting of dividend
equivalents may be subject to such conditions, restrictions and contingencies as
the Committee shall establish, including the reinvestment of such credited
amounts in Stock equivalents.

(v) Other Stock- or Cash-Based Awards. The Committee is authorized to grant
Awards to Grantees in the form of Other Stock-Based Awards or Other Cash-Based
Awards, as deemed by the Committee to be consistent with the purposes of the
Plan. Awards granted pursuant to this paragraph may be granted with value and
payment contingent upon the achievement of Performance Goals, and, if so
granted, such goals shall relate to periods of performance in excess of one
calendar year. The Committee shall determine the terms and conditions of such
Awards at the date of grant or thereafter. The maximum amount that any Grantee
may receive with respect to Other Cash-Based Awards pursuant to this
Section 6(b)(v) in respect of any annual performance period is three times such
Grantee’s annual base salary as of the beginning of the performance period and
for any other performance period in excess of one year, such amount multiplied
by a fraction, the numerator of which is the number of months in the performance
period and the denominator of which is twelve. Payments earned hereunder may be
decreased or, with respect to any Grantee who is not a Covered Employee,
increased in the sole discretion of the Committee based on such factors as it
deems appropriate. No payment shall be made to a Covered Employee prior to the
certification by the Committee that the Performance Goals have been attained.
The Committee may establish such other rules applicable to the Other Stock- or
Cash-Based Awards to the extent not inconsistent with Section 162(m) of the
Code.

(c) Termination of Service. Except as otherwise set forth by in the Award
Agreement, each Award shall terminate immediately upon the Grantee’s termination
of service with the Company or any of its Subsidiaries, except that the Grantee
shall have 90 days following the date of such termination of service to exercise
any portion of an Option or SAR that he could have exercised on the date of such
termination of service; provided, however, that such exercise must be
accomplished prior to the expiration of the Award term. Notwithstanding the
foregoing, except as otherwise set forth by the Committee in the Award
Agreement, if the Grantee ‘s termination of service is due to his total and
permanent disability (as defined in any agreement between the Grantee and the
Company or, if no such agreement is in effect, as determined by the Committee in
its good faith discretion) or death, the Grantee, or the representative of the
estate of the Grantee, as the case may be, may exercise any portion of the
Option or SAR which the Participant could have exercised on the date of such
termination for a period of six months thereafter; provided, however, that such
exercise must be accomplished prior to the expiration of the Award term.
Notwithstanding the foregoing, except as set forth by the Committee in the Award
Agreement, in the event of a termination of the Grantee ‘s service with the
Company or any of its Subsidiaries for Cause, the unexercised portion of the
Option or SAR shall terminate immediately and the Grantee shall have no right
thereafter to exercise any part of the Award.

 

7. Change in Control Provisions.

(a) Unless otherwise determined by the Committee and evidenced in an Award
Agreement, in the event of a Change in Control:

(i) any Award carrying a right to exercise that was not previously vested and
exercisable shall become fully vested and exercisable; and

 

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(ii) the restrictions, payment conditions, and forfeiture conditions applicable
to any other Award granted under the Plan shall lapse and such Awards shall be
deemed fully vested, and any performance conditions imposed with respect to
Awards shall be deemed to be fully achieved.

(b) Notwithstanding any other provision of the Plan, in the event of a Change in
Control in which the consideration paid to the holders of shares of Stock is
solely cash, the Committee may, in its discretion, provide that each Award
shall, upon the occurrence of a Change in Control, be cancelled in exchange for
a payment in an amount equal to (i) the excess of the consideration paid per
share of Stock in the Change in Control over the exercise or purchase price (if
any) per share of Stock subject to the Award multiplied by (ii) the number of
Shares granted under the Award.

 

8. General Provisions.

(a) Nontransferability. Awards shall not be transferable by a Grantee except by
will or the laws of descent and distribution and shall be exercisable during the
lifetime of a Grantee only by such Grantee or his guardian or legal
representative.

(b) No Right to Continued Employment, etc. Nothing in the Plan or in any Award,
any Award Agreement or other agreement entered into pursuant hereto shall confer
upon any Grantee the right to continue in the employ or service of the Company
or Subsidiary of the Company or to be entitled to any remuneration or benefits
not set forth in the Plan or such Award Agreement or other agreement or to
interfere with or limit in any way the right of the Company or any such
Subsidiary to terminate such Grantee’s employment or independent contractor
relationship.

(c) Taxes. The Company or any Subsidiary of the Company is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Stock, or any other payment to a Grantee,
amounts of withholding and other taxes due in connection with any transaction
involving an Award, and to take such other action as the Committee may deem
advisable to enable the Company and Grantees to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any Award.
This authority shall include authority to withhold or receive Stock or other
property and to make cash payments in respect thereof in satisfaction of a
Grantee’s tax obligations. The Committee may provide in the Award Agreement that
in the event that a Grantee is required to pay any amount to be withheld in
connection with the issuance of shares of Stock in settlement or exercise of an
Award, such withholding and other taxes shall be satisfied with shares of Stock
to be received upon settlement or exercise of such Award equal to the minimum
amount required to be withheld.

(d) Stockholder Approval; Amendment and Termination.

(i) The Plan shall take effect upon its adoption by the Board (the “Effective
Date”).

(ii) The Board may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part; provided, however, that unless otherwise
determined by the Board, an amendment that requires stockholder approval in
order for the Plan to continue to comply with Section 162(m) or any other law,
regulation or stock exchange requirement shall not be effective unless approved
by the requisite vote of stockholders. Notwithstanding the foregoing, no
amendment to or termination of the Plan shall affect adversely any of the rights
of any Grantee, without such Grantee’s consent, under any Award theretofore
granted under the Plan.

(e) Expiration of Plan. Unless earlier terminated by the Board pursuant to the
provisions of the Plan, the Plan shall expire on the tenth anniversary of the
date of the Plan’s adoption by the Board. No Awards shall be granted under the
Plan after such expiration date. The expiration of the Plan shall not affect
adversely any of the rights of any Grantee, without such Grantee’s consent,
under any Award theretofore granted.

(f) Deferrals. The Committee shall have the authority to establish such
procedures and programs that it deems appropriate to provide Grantees with the
ability to defer receipt of cash, Stock or other property payable

 

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with respect to Awards granted under the Plan; provided, however, to the extent
that such deferral is subject to Section 409A of the Code, the rules and
procedures established by the Committee shall comply with Section 409A of the
Code.

(g) No Rights to Awards; No Stockholder Rights. No Grantee shall have any claim
to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Grantees. Except as provided specifically herein, a
Grantee or a transferee of an Award shall have no rights as a stockholder with
respect to any shares of Stock covered by the Award until the date of the
issuance of a Stock certificate to him for such shares or the issuance of shares
to him in book-entry form.

(h) Unfunded Status of Awards. The Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Grantee pursuant to an Award, nothing contained in the Plan or any
Award shall give any such Grantee any rights that are greater than those of a
general creditor of the Company.

(i) No Fractional Shares. No fractional shares of Stock shall be required to be
issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or paid
in lieu of such fractional shares of Stock or whether such fractional shares or
any rights thereto shall be forfeited or otherwise eliminated.

(j) Regulations and Other Approvals.

(i) The obligation of the Company to sell or deliver Stock with respect to any
Award granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.

(ii) Each Award is subject to the requirement that, if at any time the Committee
determines, in its absolute discretion, that the listing, registration or
qualification of Stock issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Award or the issuance of
Stock, no such Award shall be granted or payment made or Stock issued, in whole
or in part, unless listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions not acceptable to the
Committee.

(iii) In the event that the disposition of Stock acquired pursuant to the Plan
is not covered by a then current registration statement under the Securities Act
and is not otherwise exempt from such registration, such Stock shall be
restricted against transfer to the extent required by the Securities Act or
regulations thereunder, and the Committee may require a Grantee receiving Stock
pursuant to the Plan, as a condition precedent to receipt of such Stock, to
represent to the Company in writing that the Stock acquired by such Grantee is
acquired for investment only and not with a view to distribution.

(iv) The Committee may require a Grantee receiving Stock pursuant to the Plan,
as a condition precedent to receipt of such Stock, to enter into a stockholder
agreement or “lock-up” agreement in such form as the Committee shall determine
is necessary or desirable to further the Company’s interests.

(k) Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Delaware without
giving effect to the conflict of laws principles thereof.

 

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