Exhibit 10.1

 

 

 

1-800-FLOWERS.COM, INC.
2003 LONG TERM INCENTIVE AND SHARE AWARD PLAN

(as amended and restated as of October 22, 2009, as amended
as of October 28, 2011 and September 14, 2016)

 

1.     Purposes.

 

The purposes of the 2003 Long Term Incentive and Share Award Plan are to advance
the interests of 1-800-Flowers.com, Inc. and its shareholders by providing a
means to attract, retain, and motivate employees, consultants and directors of
the Company upon whose judgment, initiative and efforts the continued success,
growth and development of the Company is dependent.

 

2.     Definitions.

 

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

 

(a)     “Affiliate” means any entity other than the Company and its Subsidiaries
that is designated by the Board or the Committee as a participating employer
under the Plan; provided, however, that the Company directly or indirectly owns
at least 20% of the combined voting power of all classes of stock of such entity
or at least 20% of the ownership interests in such entity.

 

(b)     “Award” means any Option, SAR, Restricted Share, Restricted Share Unit,
Performance Share, Performance Unit, Dividend Equivalent, or Other Share-Based
Award granted to an Eligible Person under the Plan.

 

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

 

(d)     “Beneficiary” means the person, persons, trust or trusts which have been
designated by an Eligible Person in his or her most recent written beneficiary
designation filed with the Company to receive the benefits specified under this
Plan upon the death of the Eligible Person, or, if there is no designated
Beneficiary or surviving designated Beneficiary, then the person, persons, trust
or trusts entitled by will or the laws of descent and distribution to receive
such benefits.

 

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

 

(f)     “Code” means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

 

 

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

 

 

(g)     “Committee” means the Compensation Committee of the Board, or such other
Board committee (which may include the entire Board) as may be designated by the
Board to administer the Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist of two or more directors of
the Company, each of whom is a “non-employee director” within the meaning of
Rule 16b-3 under the Exchange Act, to the extent applicable, and each of whom is
an “outside director” within the meaning of Section 162(m) of the Code, to the
extent applicable; provided, further, that the mere fact that the Committee
shall fail to qualify under either of the foregoing requirements shall not
invalidate any Award made by the Committee which Award is otherwise validly made
under the Plan.

 

(h)     “Company” means 1-800-Flowers.com, Inc., a corporation organized under
the laws of Delaware, or any successor corporation.

 

(i)     “Director” means a member of the Board who is not an employee of the
Company, a subsidiary or an Affiliate.

 

(j)     “Dividend Equivalent” means a right, granted under Section 5(g), to
receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded on
a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.

 

(k)     “Eligible Person” means (i) an employee or consultant of the Company, a
Subsidiary or an Affiliate, including any director who is an employee, or (ii) a
Director. Notwithstanding any provisions of this Plan to the contrary, an Award
may be granted to an employee or consultant in connection with his or her hiring
or retention prior to the date the employee or consultant first performs
services for the Company, a Subsidiary or an Affiliate; provided, however, that
any such Award shall not become vested prior to the date the employee or
consultant first performs such services.

 

(l)     “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.

 

(m)     “Fair Market Value” means, with respect to Shares or other property, the
fair market value of such Shares or other property determined by such methods or
procedures as shall be established from time to time by the Committee. If the
Shares are listed on any established stock exchange or a national market system,
unless otherwise determined by the Committee in good faith, the Fair Market
Value of Shares shall mean the closing price per Share on the date in question
(or, if the Shares were not traded on that day, the next preceding day that the
Shares were traded) on the principal exchange or market system on which the
Shares are traded, as such prices are officially quoted on such exchange.

 

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

 

(o)     “NQSO” means any Option that is not an ISO.

 

2

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

 

 

(p)     “Option” means a right, granted under Section 5(b), to purchase Shares.

 

(q)     “Other Share-Based Award” means a right, granted under Section 5(h),
that relates to or is valued by reference to Shares.

 

(r)     “Participant” means an Eligible Person who has been granted an Award
under the Plan.

 

(s)     “Performance Share” means a performance share granted under Section
5(f).

 

(t)     “Performance Unit” means a performance unit granted under Section 5(f).

 

(u)     “Plan” means this 2003 Long Term Incentive and Share Award Plan.

 

(v)     “Restricted Shares” means an Award of Shares under Section 5(d) that may
be subject to certain restrictions and to a risk of forfeiture.

 

(w)     “Restricted Share Unit” means a right, granted under Section 5(e), to
receive Shares or cash at the end of a specified deferral period.

 

(x)     “Rule 16b-3” means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

 

(y)     “SAR” or “Share Appreciation Right” means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.

 

(z)     “Shares” means common stock, $.01 par value per share, of the Company.

 

(aa)     “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns shares
possessing 50 percent or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.

 

3.     Administration.

 

(a)     Authority of the Committee. The Plan shall be administered by the
committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:

 

(i)     to select Eligible Persons to whom Awards may be granted;

 

(ii)     to designate Affiliates;

 

(iii)     to determine the type or types of Awards to be granted to each
Eligible Person;

 

3

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

 

 

(iv)     to determine the type and number of Awards to be granted, the number of
Shares to which an Award may relate, the terms and conditions of any Award
granted under the Plan (including, but not limited to, any exercise price, grant
price, or purchase price, any restriction or condition, any schedule for lapse
of restrictions or conditions relating to transferability or forfeiture,
exercisability, or settlement of an Award, and waiver or accelerations thereof,
and waivers of performance conditions relating to an Award, based in each case
on such considerations as the Committee shall determine), and all other matters
to be determined in connection with an Award;

 

(v)     to determine whether, to what extent, and under what circumstances an
Award may be settled, or the exercise price of an Award may be paid, in cash,
Shares, other Awards, or other property, or an Award may be canceled, forfeited,
exchanged, or surrendered;

 

(vi)     to determine whether, to what extent, and under what circumstances
cash, Shares, other Awards, or other property payable with respect to an Award
will be deferred either automatically, at the election of the Committee, or at
the election of the Eligible Person, provided that such deferral shall be
intended to be in compliance with Section 409A of the Code;

 

(vii)     to prescribe the form of each Award Agreement, which need not be
identical for each Eligible Person;

 

(viii)     to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;

 

(ix)     to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
rules and regulations, Award Agreement, or other instrument hereunder;

 

(x)     to accelerate the exercisability or vesting of all or any portion of any
Award or to extend the period during which an Award is exercisable;

 

(xi)     to determine whether uncertificated Shares may be used in satisfying
Awards and otherwise in connection with the Plan; and

 

(xii)     to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or advisable
for the administration of the Plan.

 

(b)     Manner of Exercise of Committee Authority. The Committee shall have sole
discretion in exercising its authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, Subsidiaries, Affiliates, Eligible Persons,
any person claiming any rights under the Plan from or through any Eligible
Person, and shareholders. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting any power or authority of the Committee. The Committee may delegate
to other members of the Board or officers or managers of the Company or any
Subsidiary or Affiliate the authority, subject to such terms as the Committee
shall determine, to perform administrative functions. Notwithstanding any
provision of the Plan to the contrary, the Committee may designate an officer of
the Company (the “Designated Officer”) who shall have the power and authority,
subject to the terms and conditions of the Plan, to make awards under the Plan
to employees or consultants who are not officers or directors of the Company for
purposes of Section 16(b) of the Exchange Act; provided, however, that the
authority of the Designated Officer to make such awards shall be subject to
limitations as may be imposed from time to time by the Committee; provided
further, however, that the resolution so authorizing the Designated Officer to
make the awards shall specify the total number of rights or options that the
Designated Officer may so award.

 

4

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

 

 

(c)     Limitation of Liability. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished to
him or her by any officer or other employee of the Company or any Subsidiary or
Affiliate, the Company’s independent certified public accountants, or other
professional retained by the Company to assist in the administration of the
Plan. No member of the Committee, and no officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.

 

(d)     Limitation on Committee’s Discretion. Anything in this Plan to the
contrary notwithstanding, in the case of any Award which is intended to qualify
as “performance-based compensation” within the meaning of Section 162(m)(4)(C)
of the Code, the Committee shall have no discretion to increase the amount of
compensation payable under the Award to the extent such an increase would cause
the Award to lose its qualification as such performance-based compensation.

 

(e)     No Option or SAR Repricing Without Shareholder Approval. Except as
provided in the first sentence of Section 4(c) hereof relating to certain
antidilution adjustments, unless the approval of shareholders of the Company is
obtained, Options and SARs issued under the Plan shall not be amended to lower
their exercise price and Options and SARs issued under the Plan will not be
exchanged for other Options or SARs with lower exercise prices.

 

4.     Shares Subject to the Plan.

 

(a)     Subject to adjustment as provided in Section 4(c) hereof, the total
number of Shares reserved for issuance in connection with Awards under the Plan
shall be (i) 10,750,000 plus (ii) the number of Shares subject to awards granted
prior to the Effective Date of this Plan under the Company’s 1999 Stock
Incentive Plan which awards have been or are forfeited, canceled, terminated,
surrendered or otherwise terminated without a distribution of Shares to the
holder of the award; provided, however, that, subject to adjustment as provided
in Section 4(c) hereof, no more than 7,500,000 Shares may be issued as ISOs
under this Plan. No Award may be granted if the number of Shares to which such
Award relates, when added to the number of Shares previously issued under the
Plan and the number of Shares subject to Awards outstanding under the Plan,
exceeds the number of Shares reserved under the applicable provisions of the
preceding sentence. If any Awards are forfeited, canceled, terminated, exchanged
or surrendered or such Award is settled in cash or otherwise terminates without
a distribution of Shares to the Participant, any Shares counted against the
number of Shares reserved and available under the Plan with respect to such
Award shall, to the extent of any such forfeiture, settlement, termination,
cancellation, exchange or surrender, again be available for Awards under the
Plan. If the Share reserve under the Plan has been fully utilized, Options may
be granted under the Plan subject to shareholder approval of a sufficient
increase in the reserve at the next meeting of shareholders of the Company,
provided the Options may not be exercisable prior to such shareholder approval
and they shall terminate if such shareholder approval is not obtained. Upon the
exercise of any Award granted in tandem with any other Awards, such related
Awards shall be canceled to the extent of the number of Shares as to which the
Award is exercised.

 

5

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

 

 

(b)     Subject to adjustment as provided in Section 4(c) hereof, the maximum
number of Shares (i) with respect to which Options or SARs may be granted during
a calendar year to any Eligible Person under this Plan shall be 1,000,000
Shares, and (ii) with respect to Performance Shares, Performance Units,
Restricted Shares or Restricted Share Units intended to qualify as
performance-based compensation within the meaning of Section 162(m)(4)(C) of the
Code shall be the equivalent of 500,000 Shares during a calendar year to any
Eligible Person under this Plan.

 

(c)     In the event that the Committee shall determine that any dividend in
Shares, recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, extraordinary
distribution or other similar corporate transaction or event, affects the Shares
such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Eligible Persons under the Plan, then the Committee
shall make such equitable changes or adjustments as it deems appropriate and, in
such manner as it may deem equitable, (i) adjust any or all of (x) the number
and kind of shares which may thereafter be issued under the Plan, (y) the number
and kind of shares, other securities or other consideration issued or issuable
in respect of outstanding Awards, and (z) the exercise price, grant price, or
purchase price relating to any Award, or (ii) provide for a distribution of cash
or property in respect of any Award; provided, however, in each case that, with
respect to ISOs, such adjustment shall be made in accordance with Section 424(a)
of the Code, unless the Committee determines otherwise; provided further,
however, that no adjustment shall be made pursuant to this Section 4(c) that
causes any Award that is not otherwise deferred compensation subject to Section
409A of the Code to be treated as deferred compensation pursuant to Section 409A
of the Code. In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria and performance objectives, if any,
included in, Awards in recognition of unusual or non-recurring events
(including, without limitation, events described in the preceding sentence)
affecting the Company or any Subsidiary or Affiliate or the financial statements
of the Company or any Subsidiary or Affiliate, or in response to changes in
applicable laws, regulations, or accounting principles; provided, however, that
the Committee shall not have discretion to increase the amount of compensation
payable under any Award intended to qualify as performance-based compensation
for purposes of Section 162(m)(4)(C) of the Code to the extent such an increase
would cause the Award to lose its qualification as performance-based
compensation for purposes of Section 162(m)(4)(C) of the Code and the
regulations thereunder.

 

(d)     Any Shares distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares or treasury Shares including Shares
acquired by purchase in the open market or in private transactions.

 

6

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

 

 

5.     Specific Terms of Awards.

 

(a)     General. Awards may be granted on the terms and conditions set forth in
this Section 5. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 8(d)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms regarding forfeiture
of Awards or continued exercisability of Awards in the event of termination of
service by the Eligible Person.

 

(b)     Options. The Committee is authorized to grant Options, which may be
NQSOs or ISOs, to Eligible Persons on the following terms and conditions:

 

(i)     Exercise Price. The exercise price per Share purchasable under an Option
shall be determined by the Committee; provided, however, that the exercise price
per Share of an Option shall not be less than the Fair Market Value of a Share
on the date of grant of the Option. The Committee may, without limitation, set
an exercise price that is based upon achievement of performance criteria if
deemed appropriate by the Committee.

 

(ii)     Option Term. The term of each Option shall be determined by the
Committee; provided, however, that such term shall not be longer than ten years
from the date of grant of the Option.

 

(iii)     Time and Method of Exercise. The Committee shall determine at the date
of grant or thereafter the time or times at which an Option may be exercised in
whole or in part (including, without limitation, upon achievement of performance
criteria if deemed appropriate by the Committee), the methods by which such
exercise price may be paid or deemed to be paid (including, without limitation,
broker-assisted exercise arrangements), the form of such payment (including,
without limitation, cash, Shares or other property), and the methods by which
Shares will be delivered or deemed to be delivered to Eligible Persons;
provided, however, that in no event may any portion of the exercise price be
paid with Shares acquired either under an Award granted pursuant to this Plan,
upon exercise of a stock option granted under another Company plan or as a stock
bonus or other stock award granted under another Company plan unless, in any
such case, the Shares were acquired and vested more than six months in advance
of the date of exercise.

 

(iv)     ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, including but not,
limited to the requirement that the ISO shall be granted within ten years from
the earlier of the date of adoption or shareholder approval of the Plan. ISOs
may only be granted to employees of the Company or a Subsidiary or to employees
of an entity that is treated as the Company or a Subsidiary under the Code.

 

(c)     SARs. The Committee is authorized to grant SARs (Share Appreciation
Rights) to Eligible Persons on the following terms and conditions:

 

(i)     Right to Payment. A SAR shall confer on the Eligible Person to whom it
is granted a right to receive with respect to each Share subject thereto, upon
exercise thereof, the excess of (1) the Fair Market Value of one Share on the
date of exercise, over (2) the exercise price per Share of the SAR as determined
by the Committee as of the date of grant of the SAR (which shall not be less
than the Fair Market Value per Share on the date of grant of the SAR and, in the
case of a SAR granted in tandem with an Option, shall be equal to the exercise
price of the underlying option).

 

7

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

 

 

(ii)     Other Terms. The Committee shall determine, at the time of grant or
thereafter, the time or times at which a SAR may be exercised in whole or in
part (which shall not be more than ten years after the date of grant of the
SAR), the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or deemed to be
delivered to Eligible Persons, whether or not a SAR shall be in tandem with any
other Award, and any other terms and conditions of any SAR. Unless the Committee
determines otherwise, a SAR (1) granted in tandem with an NQSO may be granted at
the time of grant of the related NQSO or at any time thereafter and (2) granted
in tandem with an ISO may only be granted at the time of grant of the related
ISO.

 

(d)     Restricted Shares. The Committee is authorized to grant Restricted
Shares to Eligible Persons on the following terms and conditions:

 

(i)     Issuance and Restrictions. Restricted Shares 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 (including,
without limitation, upon achievement of performance criteria if deemed
appropriate by the Committee), in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the Award
Agreement relating to the Restricted Shares, an Eligible Person granted
Restricted Shares shall have all of the rights of a shareholder including,
without limitation, the right to vote Restricted Shares and the right to receive
dividends thereon. If the lapse of restrictions is conditioned on the
achievement of performance criteria, the Committee shall select the criterion or
criteria from the list of criteria set forth in Section 5(f)(i). The Committee
must certify in writing prior to the lapse of restrictions conditioned on
achievement of performance criteria that such performance criteria were in fact
satisfied.

 

(ii)     Forfeiture. Except as otherwise determined by the Committee, at the
date of grant or thereafter, upon termination of service during the applicable
restriction period, Restricted Shares and any accrued but unpaid dividends or
Dividend Equivalents that are at that time subject to restrictions shall be
forfeited; provided, however, that the Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any individual case,
that restrictions or forfeiture conditions relating to Restricted Shares will be
waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part the
forfeiture of Restricted Shares.

 

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

 

8

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

 

 

(iv)     Dividends. Dividends paid on Restricted Shares shall be either paid at
the dividend payment date, or deferred for payment to such date as determined by
the Committee, in cash or in restricted or unrestricted Shares having a Fair
Market Value equal to the amount of such dividends. Shares distributed in
connection with a Share split or dividend in Shares, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Shares with respect to which
such Shares or other property has been distributed.

 

(e)     Restricted Share Units. The Committee is authorized to grant Restricted
Share Units to Eligible Persons, subject to the following terms and conditions:

 

(i)     Award and Restrictions. Delivery of Shares or cash, as the case may be,
will occur upon expiration of the deferral period specified for Restricted Share
Units by the Committee (or, if permitted by the Committee, as elected by the
Eligible Person). In addition, Restricted Share Units shall be subject to such
restrictions as the Committee may impose, if any (including, without limitation,
the achievement of performance criteria if deemed appropriate by the Committee),
at the date of grant or thereafter, which restrictions may lapse at the
expiration of the deferral period or at earlier or later specified times,
separately or in combination, in installments or otherwise, as the Committee may
determine. If the lapse of restrictions is conditioned on the achievement of
performance criteria, the Committee shall select the criterion or criteria from
the list of criteria set forth in Section 5(f)(i). The Committee must certify in
writing prior to the lapse of restrictions conditioned on the achievement of
performance criteria that such performance criteria were in fact satisfied.

 

(ii)     Forfeiture. Except as otherwise determined by the Committee at date of
grant or thereafter, upon termination of service (as determined under criteria
established by the Committee) during the applicable deferral period or portion
thereof to which forfeiture conditions apply (as provided in the Award Agreement
evidencing the Restricted Share Units), or upon failure to satisfy any other
conditions precedent to the delivery of Shares or cash to which such Restricted
Share Units relate, all Restricted Share Units that are at that time subject to
deferral or restriction shall be forfeited; provided, however, that the
Committee may provide, by rule or regulation or in any Award Agreement, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Share Units will be waived in whole or in part in the
event of termination resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Restricted Share Units.

 

(f)     Performance Shares and Performance Units. The Committee is authorized to
grant Performance Shares or Performance Units or both to Eligible Persons on the
following terms and conditions:

 

(i)     Performance Period. The Committee shall determine a performance period
(the “Performance Period”) of one or more years or other periods and shall
determine the performance objectives for grants of Performance Shares and
Performance Units. Performance objectives may vary from Eligible Person to
Eligible Person and shall be based upon one or more of the following performance
criteria as the Committee may deem appropriate: appreciation in value of the
Shares; total shareholder return; earnings per share; earnings per share growth;
operating income; net income; pro forma net income; return on equity; return on
designated assets; return on capital; economic value added; earnings; earnings
before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA on a
pre-bonus basis; EBITDA on a pre-bonus basis adjusted for the change in
inventory for the Plan Year (“modified free cash flow”); free cash flow;
revenues; revenue growth; expenses; operating profit margin; operating cash
flow; gross profit margin; net profit margin; or any of the above criteria as
compared to the performance of a published or special index deemed applicable by
the Committee, including, but not limited to, the Standard & Poor’s 500 Stock
Index. The performance objectives may be determined by reference to the
performance of the Company, or of a Subsidiary or Affiliate, or of a division or
unit of any of the foregoing. Performance Periods may overlap and Eligible
Persons may participate simultaneously with respect to Performance Shares and
Performance Units for which different Performance Periods are prescribed.

 

9

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

 

 

(ii)     AwardValue. At the beginning of a Performance Period, the Committee
shall determine for each Eligible Person or group of Eligible Persons with
respect to that Performance Period the range of number of Shares, if any, in the
case of Performance Shares, and the range of dollar values, if any, in the case
of Performance Units, which may be fixed or may vary in accordance with such
performance or other criteria specified by the Committee, which shall be paid to
an Eligible Person as an Award if the relevant measure of Company performance
for the Performance Period is met. The Committee must certify in writing that
the applicable performance criteria were satisfied prior to payment under any
Performance Shares or Performance Units.

 

(iii)     Significant Events. If during the course of a Performance Period there
shall occur significant events as determined by the Committee which the
Committee expects to have a substantial effect on a performance objective during
such period, the Committee may revise such objective; provided, however, that,
in the case of any Award intended to qualify as performance-based compensation
for purposes of Section 162(m)(4)(C) of the Code, the Committee shall not have
any discretion to increase the amount of compensation payable under the Award to
the extent such an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the Code
and the regulations thereunder.

 

(iv)     Forfeiture. Except as otherwise determined by the Committee, at the
date of grant or thereafter, upon termination of service during the applicable
Performance Period, Performance Shares and Performance Units for which the
Performance Period was prescribed shall be forfeited; provided, however, that
the Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in an individual case, that restrictions or forfeiture conditions
relating to Performance Shares and Performance Units will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Performance Shares and Performance Units; provided further, however, that, in
the case of any Award intended to qualify as performance-based compensation for
purposes of Section 162(m)(4)(C) of the Code, any such waiver of restrictions or
forfeiture conditions shall only be made under circumstances that do not cause
the Award to lose its qualification as performance-based compensation for
purposes of Section 162(m)(4)(C) of the Code and the regulations thereunder.

 

10

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

 

 

(v)     Payment. Each Performance Share or Performance Unit may be paid in whole
Shares, or cash, or a combination of Shares and cash either as a lump sum
payment or in installments, all as the Committee shall determine, at the time of
grant of the Performance Share or Performance Unit or otherwise, commencing as
soon as practicable after the end of the relevant Performance Period. The
Committee must certify in writing prior to the payment of any Performance Share
or Performance Unit that the performance objectives and any other material terms
were in fact satisfied.

 

(g)     Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Eligible Persons. The Committee may provide, at the date of grant
or thereafter, that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Shares, or
other investment vehicles as the Committee may specify; provided, however, that
Dividend Equivalents (other than freestanding Dividend Equivalents) shall be
subject to all conditions and restrictions of the underlying Awards to which
they relate.

 

(h)     Other Share-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Persons such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Shares, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
unrestricted shares awarded purely as a “bonus” and not subject to any
restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares
or other property, as the Committee shall determine. Cash awards, as an element
of or supplement to any other Award under the Plan, shall also be authorized
pursuant to this Section 5(h).

 

6.     Certain Provisions Applicable to Awards.

 

(a)     Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted to Eligible
Persons either alone or in addition to, in tandem with, or in exchange or
substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Person to receive payment from the
Company or any Subsidiary or Affiliate. Awards may be granted in addition to or
in tandem with such other Awards or awards, and may be granted either as of the
same time as or a different time from the grant of such other Awards or awards.
Subject to the provisions of Section 3(e) hereof prohibiting Option and SAR
repricing without shareholder approval, the per Share exercise price of any
Option, grant price of any SAR, or purchase price of any other Award conferring
a right to purchase Shares which is granted, in connection with the substitution
of awards granted under any other plan or agreement of the Company or any
Subsidiary or Affiliate or any business entity to be acquired by the Company or
any Subsidiary or Affiliate, shall be determined by the Committee, in its
discretion.

 

11

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

 

 

(b)     Term of Awards. The term of each Award granted to an Eligible Person
shall be for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any Option or SAR exceed a period of
ten years from the date of its grant.

 

(c)     Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Subsidiary
or Affiliate 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, Shares or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis,
provided that any such deferral shall be intended to be in compliance with
Section 409A of the Code. The Committee may make rules relating to installment
or deferred payments with respect to Awards, including the rate of interest to
be credited with respect to such payments, and the Committee may require
deferral of payment under an Award if, in the sole judgment of the Committee, it
may be necessary in order to avoid nondeductibility of the payment under Section
162(m) of the Code.

 

(d)     Nontransferability. Unless otherwise set forth by the Committee in an
Award Agreement, Awards shall not be transferable by an Eligible Person except
by will or the laws of descent and distribution (except pursuant to a
Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Person only by such Eligible Person or his guardian or legal
representative. An Eligible Person’s rights under the Plan may not be pledged,
mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to
claims of the Eligible Person’s creditors.

 

(e)     Noncompetition. The Committee may, by way of the Award Agreements or
otherwise, establish such other terms, conditions, restrictions and/or
limitations, if any, of any Award, provided they are not inconsistent with the
Plan, including, without limitation, the requirement that the Participant not
engage in competition with the Company.

 

7.     Change of Control Provisions.

 

(a)     Acceleration of Exercisability and Lapse of Restrictions. Unless
otherwise provided by the Committee at the time of the Award grant, in the event
of a Change of Control, (i) all outstanding Awards pursuant to which the
Participant may have rights the exercise of which is restricted or limited,
shall become fully exercisable immediately prior to the time of the Change of
Control so that the Shares subject to the Award will be entitled to participate
in the Change of Control transaction, and (ii) unless the right to lapse of
restrictions or limitations is waived or deferred by a Participant prior to such
lapse, all restrictions or limitations (including risks of forfeiture and
deferrals) on outstanding Awards subject to restrictions or limitations under
the Plan shall lapse, and all performance criteria and other conditions to
payment of Awards under which payments of cash, Shares or other property are
subject to conditions shall be deemed to be achieved or fulfilled and shall be
waived by the Company immediately prior to the time of the Change of Control so
that the Shares subject to the Award will be entitled to participate in the
Change of Control transaction.

 

12

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

 

 

(b)     Definition of Change of Control. For purposes of this Section 7, “Change
of Control” shall mean:

 

(i)     a merger, consolidation or reorganization approved by the Company’s
stockholders, unless securities representing more than fifty percent (50%) of
the total combined voting power of the voting securities of the successor
corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Company’s outstanding voting securities immediately prior
to such transaction;

 

(ii)     any stockholder-approved transfer or other disposition of all of
substantially all of the Company’s assets; or

 

(iii)     the acquisition after the Effective Date, directly or indirectly, by
any person or related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of
the Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities.

 

8.     General Provisions.

 

(a)     Compliance with Legal and Trading Requirements. The Plan, the granting
and exercising of Awards thereunder, and the other obligations of the Company
under the Plan and any Award Agreement, shall be subject to all applicable
federal, state and foreign laws, rules and regulations, and to such approvals by
any regulatory or governmental agency as may be required. The Company, in its
discretion, may postpone the issuance or delivery of Shares under any Award
until completion of such stock exchange or market system listing or registration
or qualification of such Shares or other required action under any state or
federal law, rule or regulation as the Company may consider appropriate, and may
require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of Shares in compliance with applicable laws, rules and regulations. No
provisions of the Plan shall be interpreted or construed to obligate the Company
to register any Shares under federal, state or foreign law. The Shares issued
under the Plan may be subject to such other restrictions on transfer as
determined by the Committee.

 

(b)     No Right to Continued Employment or Service. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee, consultant or
director the right to be retained in the employ or service of the Company or any
of its Subsidiaries or Affiliates, nor shall it interfere in any way with the
right of the Company or any of its Subsidiaries or Affiliates to terminate any
employee’s, consultant’s or director’s employment or service at any time.

 

13

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

 

 

(c)     Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to an Eligible Person, 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 Eligible Persons 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 Shares or other property and to make cash payments in
respect thereof in satisfaction of an Eligible Person’s tax obligations;
provided, however, that the amount of tax withholding to be satisfied by
withholding Shares shall be limited to the minimum amount of taxes, including
employment taxes, required to be withheld under applicable Federal, state and
local law.

 

(d)     Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee’s authority to grant Awards
under the Plan without the consent of shareholders of the Company or
Participants, except that (i) any such amendment or alteration as it applies to
ISOs shall be subject to the approval of the Company’s shareholders to the
extent such shareholder approval is required under Section 422 of the Code, and
(ii) any such amendment or alternation shall be subject to the approval of the
Company’s shareholders to the extent such shareholder approval is required under
the rules of any stock exchange or automated quotation system on which the
Shares may then be listed or quoted; provided, however, that, without the
consent of an affected Participant, no amendment, alteration, suspension,
discontinuation, or termination of the Plan may materially and adversely affect
the rights of such Participant under any Award theretofore granted to him or
her. The Committee may waive any conditions or rights under, amend any terms of,
or amend, alter, suspend, discontinue or terminate, any Award theretofore
granted, prospectively or retrospectively; provided, however, that, without the
consent of a Participant, no amendment, alteration, suspension, discontinuation
or termination of any Award may materially and adversely affect the rights of
such Participant under any Award theretofore granted to him or her.

 

(e)     No Rights to Awards; No Shareholder Rights. No Eligible Person or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Eligible Persons and employees.
No Award shall confer on any Eligible Person any of the rights of a shareholder
of the Company unless and until Shares are duly issued or transferred to the
Eligible Person in accordance with the terms of the Award.

 

(f)     Unfunded Status of Awards. The Plan is intended to constitute an
“unfunded” plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award shall give any such Participant any rights that are greater than those of
a general creditor of the Company; provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company’s obligations under the Plan to deliver cash, Shares, other Awards, or
other property pursuant to any Award, which trusts or other arrangements shall
be consistent with the “unfunded” status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.

 

(g)     Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including, without
limitation, the granting of options and other awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.

 

14

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

 

 

(h)     Not Compensation for Benefit Plans. No Award payable under this Plan
shall be deemed salary or compensation for the purpose of computing benefits
under any benefit plan or other arrangement of the Company for the benefit of
its employees, consultants or directors unless the Company shall determine
otherwise.

 

(i)     No Fractional Shares. No fractional Shares shall 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 or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.

 

(j)     Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the laws of New York without giving effect to
principles of conflict of laws thereof.

 

(k)     Effective Date; Plan Termination. The Plan became effective as of
December 3, 2003 (the “Effective Date”). As amended and restated, the Plan was
scheduled to terminate on October 22, 2019. However, so long as the Plan is
approved by shareholders, the Plan shall terminate as to future awards on
September 14, 2026.

 

(l)     Section 409A. Awards under the Plan are intended to comply with, or be
exempt from, the applicable requirements of Section 409A of the Code and shall
be limited, construed and interpreted in accordance with such intent. Although
the Company does not guarantee any particular tax treatment, to the extent that
any Award is subject to Section 409A of the Code, it shall be paid in a manner
that is intended to comply with Section 409A of the Code, including regulations
and any other guidance issued by the Secretary of the Treasury and the Internal
Revenue Service with respect thereto. In no event whatsoever shall the Company
be liable for any additional tax, interest or penalties that may be imposed on
the Participant by Section 409A of the Code or any damages for failing to comply
with Section 409A of the Code.

 

(m)     Titles and Headings. The titles and headings of the sections in the Plan
are for convenience of reference only. In the event of any conflict, the text of
the Plan, rather than such titles or headings, shall control.

 

 

15