EXHIBIT 10
THE PERFORMANCE
INCENTIVE COMPENSATION PROGRAM
(Amended and Restated — November 2000)
     The following is the text of the Performance Incentive Compensation Program
(the “Program”):
     Section 1. Purpose. The purpose of this Program is to provide The Liberty
Corporation (the “Company”) and its subsidiaries with an effective means of
attracting, retaining and motivating officers, other key employees and directors
(whether or not they are employees) and to encourage and enable them to acquire
common stock of the Company (“Common Stock”), thereby increasing their
proprietary interest in the Company’s success. Subject to the limitations set
forth below, the Program provides for the granting of incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), nonstatutory stock options, performance units, restricted
share awards, unrestricted share awards, phantom stock units, and all or any
combination of the foregoing (“Awards”), to eligible employees.
     Section 2. Administration. The Compensation Committee of the Board of
Directors or such other committee of the Board as the Board may subsequently
designate (hereinafter referred to as the “Committee”) shall have full
discretionary power and authority, subject to such orders or resolutions not
inconsistent with the provisions of the Program as may from time to time be
issued or adopted by the Board, to interpret the provisions and supervise the
administration of the Program. All determinations by the Committee shall be made
by the affirmative vote of a majority of its members, but any determination
reduced to writing and signed by all of the members shall be fully as effective
as if it has been made by a majority vote at a meeting duly called and held. All
decisions made by the Committee pursuant to the provisions of the Program or
resolutions of the Board shall be conclusive and binding on all persons,
including the Company, its shareholders and employees, and participants in the
Program.
     Section 3. Shares Subject to the Program.
     (A) Shares of Common Stock are the only shares that may be delivered under
the Program. The shares of Common Stock to be delivered under the Program shall
be made available from the authorized but unissued shares or from shares
reacquired by the Company, including shares purchased in the open market.
     (B) Subject, in each case, to adjustments made pursuant to the provisions
of Sections 3(C) and 3(D):
     (i) The aggregate number of shares that may be subject to Awards under the
Program from its initial inception in 1983 shall not exceed 5,000,000 shares.

20

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

 

     (ii) Effective May 6, 1997, with respect to stock options granted on or
after that date (and any stock options granted prior to such date if their grant
was conditioned upon approval of amendments to the Program by the shareholders
at their annual meeting on May 6, 1997), the number of shares of Common Stock
with respect to which such stock options may be granted to any one participant
within any calendar year shall not exceed 400,000 shares.
     (iii) Effective May 6, 1997, with respect to Awards granted on or after
that date (and any Awards granted prior to such date if their grant was
conditioned upon approval of amendments to the Program by the shareholders at
their annual meeting on May 6, 1997), the number of shares of Common Stock with
respect to which any such Awards that are measured based on a number of actual
or phantom shares (except for stock options governed by paragraph (ii) above)
may be granted to any one participant within any calendar year shall not exceed
100,000 shares.
     (iv) Effective May 6, 1997, with respect to Awards granted on or after that
date (and any Awards granted prior to such date if their grant was conditioned
upon approval of amendments to the Program by the shareholders at their annual
meeting on May 6, 1997), the maximum amount of compensation that can be paid to
any one participant during any calendar year on account of any such Awards that
are not measured based on a number of actual or phantom shares of Common Stock
shall not exceed $2,000,000.
     (v) Effective May 6, 1997, with respect to Awards granted on and after that
date (and any Awards granted prior to such date if their grant was conditioned
upon approval of amendments to the Program by the shareholders at their annual
meeting on May 6, 1997), under all such Awards (other than stock options)
granted under the Program, in any one calendar year: (x) no one participant may
be paid cash in excess of $5,000,000 and (y) no one participant may receive more
than 1,000,000 shares of Common Stock. For purposes of this paragraph, the
amount paid or received in any calendar year under an Award described in this
paragraph shall be deemed to be the value or number of shares earned under such
Award based on the attainment of performance objectives, if any, and based on
any downward adjustments, as determined by the Committee, as of the date of the
determination. Except in the case of any prior Awards granted subject to
approval by the shareholders of amendments to the Program at their May 6, 1997
annual meeting, amounts paid pursuant to Awards granted under the Program prior
to May 6, 1997, shall not be counted toward and shall not be subject to the
limits contained in this paragraph (v).
     (C) The following rules shall apply in determining the amount of shares or
cash that has been used for purposes of the limits in Section 3(B)(i), (ii),
(iii), (iv) and (v):
     (i) Any shares affected by the expiration or termination (without exercise)
of any option (or portion thereof) prior to May 6, 1997 or by the forfeiture of
all or any portion of an Award of restricted shares or phantom stock units prior
to May 6, 1997, shall be restored to the total shares available for use under
the Program for Awards to the same participant or other participants.
     (ii) Effective May 6, 1997, if: (a) any shares of Common Stock subject to
an Award are forfeited or cancelled; or (b) if any Award otherwise relating to
shares of Common Stock terminates by expiration, forfeiture, cancellation or
otherwise without the issuance of such shares or is settled in cash in lieu of
Common Stock; or (c) if any shares of Common Stock subject to an Award, or any
Awards otherwise relating to shares of Common Stock, are, with the Committee’s
permission, exchanged for or otherwise surrendered and cancelled in connection
with the grant of other Awards, the shares of Common Stock so affected (directly
or as a measurement of the Award, to the extent so affected) shall be restored
to the total shares available for use under the Program for Awards generally,
but shall be counted against the limitations contained in Section 3(B)(ii),
(iii) and (v) with respect to the participant involved. Although shares subject
to or

21

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

 

relating to an Award exchanged for or otherwise surrendered and cancelled in
connection with the grant of a new Award shall be restored to the total shares
available for use under the Program, the shares subject to or relating to the
resulting new Award shall be counted for all purposes under the Program. The
maximum number of shares available for issuance under the Program shall not be
reduced to reflect any distributions that may be reinvested in additional shares
of Common Stock.
     (D) In the event of a merger, reorganization, consolidation,
recapitalization, stock dividend, spin-off, stock split or any other change in
corporate structure or other distribution of stock or property (except for
ordinary cash dividends) affecting the Company’s Common Stock, such adjustments
shall be made in the aggregate number of shares subject to the Program, the
maximum number of shares which may be acquired by, or subject to an Award
granted or paid to, any participant under the Program, the number and option
price of shares subject to then outstanding options granted under the Program,
the number of restricted shares then subject to restrictions under the Program
and the number of shares used to determine the value of then outstanding phantom
stock units as may be determined to be appropriate by the Committee. In no event
shall any “Qualifying Award” (as described in Section 10) that is then held by a
“Covered Employee” as defined in Section 162(m) of the Code be adjusted pursuant
to Section 3(D) to the extent it would cause such Award to fail to qualify as
“Performance-Based Compensation” under Section 162(m) of the Code.
     Section 4. Eligibility for Participation. The individuals eligible to
participate in the Program shall consist of officers, other key employees and
directors of the Company and its subsidiaries, whether or not such directors are
also employees of the Company or its subsidiaries, as determined by the
Committee. Subject to the limitations of the Program, the Committee shall, after
consultation with and consideration of the recommendations of management, select
the officers, employees and directors to so participate and determine whether an
officer, employee or director is to receive Awards hereunder; provided, however,
that no incentive stock option may be granted to any director who is not an
employee of the Company (or any of its subsidiaries). The Committee, in its
discretion, may impose any conditions that it deems desirable on the grant of
any new Award, including without limitation a condition requiring the applicable
participant to surrender for cancellation an outstanding Award in order to
obtain a new Award that the Committee desires to grant in substitution of any
such outstanding Award.
     Section 5. Stock Options.
     (A) Stock options shall be granted to participants by the Committee from
time to time at its discretion. Each option shall be evidenced by a written
option agreement which shall contain such terms and conditions as may be
approved by the Committee and shall be signed by an officer of the Company and
the participant. Incentive stock options and nonstatutory stock options shall be
evidenced by separate and distinct option agreements.
     (B) A participant shall not be granted any incentive stock option if the
receipt of that option would result in the participant owning incentive stock
options (under the Program and any other plan maintained by the Company or any
subsidiary) that become exercisable for the first time in any one calendar year
into stock of the Company or any of its subsidiaries with a fair market value in
excess of $100,000. For purposes of the preceding sentence, the fair market
value of the stock of the Company or any of its subsidiaries will be determined
by the Committee as of the grant of the incentive stock options without regard
to any restriction other than a restriction which by its terms will never lapse.
     (C) The price at which shares may be purchased upon exercise of a
particular option shall be not less than 100% of the fair market value of such
shares on the date such option is granted, as determined by the Committee
without regard to any restriction other than a restriction which by its terms
will never lapse. In the case of an individual who, at the time an option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company (or any of its subsidiaries) (a “10%
Shareholder”), the exercise price of any incentive stock option shall be not
less than 110% of the fair market value of the shares subject to the option on
the date such option is granted, as determined by the Committee without regard
to any restriction other than a restriction which by its terms will never lapse.

22

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

 

     (D) Options may be granted for any period of time as established by the
Committee, except that:
     (i) The term of any incentive stock option shall not be longer than ten
years (or five years if granted to a 10% Shareholder) from the date the option
is granted.
     (ii) No option granted prior to 1997 may be exercised before the expiration
of a one year period of continued employment by the optionee with the Company or
a subsidiary thereof commencing on the date the option is granted, except as
provided in Section 5(E)(iv) below or except as provided in any amendment to the
applicable option agreement approved and authorized through specific action by
the Committee in a manner consistent with terms permitted hereunder for options
granted after 1996.
     (E) Subject to the limitations in this Section 5 and the terms and
conditions of the option agreement, each option shall be exercisable at such
time or times and in such amount or amounts as the Committee may prescribe and
specify in the applicable option agreement.
     (i) No incentive stock option granted after 1996 under this Program may be
exercised more than three months (or one year in the case of a disabled employee
or a deceased employee who died within three months of terminating employment or
during a disability that terminated employment) after the participant holding
such option ceased being an employee of the Company or a subsidiary thereof,
unless: (x) a longer period applies under Section 5(E)(iv) below for the
beneficiary or legal representative of a deceased employee whose death
terminated employment, or (y) the Company and such participant (or a deceased
participant’s beneficiary or legal representative) mutually agree in writing
that such option will be amended to treat it as a nonstatutory stock option.
     (ii) Unless the option agreement specifies a longer or shorter time for
exercise, a nonstatutory stock option granted after 1996 must be exercised no
later than one year after the participant holding such option ceases to be an
employee (or ceases to be a non-employee director) of the Company or a
subsidiary thereof, unless a longer period applies under Section 5(E)(iv) below.
     (iii) In the case of options granted prior to 1997 (both incentive stock
options and nonstatutory stock options), unless the option agreement is amended
by specific action by the Committee (with the consent of the holder if required)
in a manner consistent with terms permitted hereunder for options granted after
1996, each such option may be exercised only during the continuance of the
optionee’s employment with the Company or one of its subsidiaries, except as
provided in Section 5(E)(iv) below.
     (iv) Except as otherwise provided in Section 5(E)(i) with respect to the
disability or retirement of the holder of incentive stock options granted after
1996, in the event of termination of employment (or service as a non-employee
director) by an optionee by reason of death, disability or retirement at normal
retirement age under the Company’s Retirement Plan or any applicable Retirement
Plan of any of the Company’s subsidiaries (or any applicable retirement policy
for non-employee directors), the written Award agreement may provide that the
options then held by the optionee shall become fully exercisable and/or that any
options then exercisable by such optionee shall remain exercisable by the
optionee or, if applicable, a beneficiary or legal representative, for up to
three years from the date of such termination of employment (or service as a
non-employee director) as specified in the option agreement or until the
expiration of the option, whichever occurs first.
     (F) No shares shall be delivered pursuant to the exercise of any option, in
whole or in part,

23

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

 

until qualified for delivery under such laws and regulations as may be deemed by
the Committee to be applicable thereto and until payment in full of the option
price therefor is received by the Company. Payment of the purchase price shall
be made in cash, cash equivalent or, at the discretion of the Committee, in
Common Stock of the Company valued at its fair market value on the date of
exercise or, at the discretion of the Committee, in a combination of the
foregoing.
     (G) An option granted under the Program may not be transferred except by
will or the laws of descent and distribution and, during the lifetime of the
participant to whom granted, may be exercised only by such participant or his or
her personal representative.
     Section 6. Performance Units.
     (A) Performance units may be awarded by the Committee to participants from
time to time at its discretion. Such units shall have defined terms and
conditions as to their value and the basis on which such values will be
determined.
     (B) Performance units may be awarded in lieu of, or in combination with,
any other Awards, as the Committee may determine. Performance standards shall be
established by the Committee each time performance units are granted and, except
as provided in Section 6(D) below, these standards must be met during the
continuance of the participant’s employment with (or service as a non-employee
director of) the Company or one of its subsidiaries and prior to the making of
any payment with respect to such units.
     (C) Performance units shall be assigned a value by the Committee upon the
award of such units.
     (D) The value of performance units as established pursuant to Section 6(C)
above shall be paid in cash promptly after the performance standards established
pursuant to Section 6(B) above shall have been met and, for Qualifying Awards,
the Committee certification required under Section 10 shall have occurred. In
the event of termination of employment (or service as a non-employee director)
by reason of death, disability or retirement at normal retirement age under the
Company’s Retirement Plan or any applicable Retirement Plan of any of the
Company’s subsidiaries (or any applicable retirement policy for non-employee
directors), the Committee shall have complete discretion to waive all or a part
of the continued employment or service requirements and performance standard
requirements for payment in respect of one or more performance units that are
not Qualifying Awards (as defined below).
     (E) Performance units awarded under the Program may not be transferred
except by will or the laws of descent and distribution and, during the lifetime
of the participant to whom awarded, payment may be made with respect to such
performance units only to the participant or such participant’s personal
representative.
     Section 7. Restricted Shares.
     (A) Awards of restricted shares of Common Stock of the Company shall be
granted to participants by the Committee from time to time in its discretion.
Upon the grant of such an Award to a participant, the Committee shall notify the
participant in writing of the terms of such Award, as described below. Each
Award of restricted shares shall be evidenced by an agreement which shall
contain such terms and conditions as may be approved by the Committee and which
are consistent with the applicable provisions of the Program and shall be signed
by an officer of the Company and the participant.
     (B) No consideration will be paid by a participant pursuant to an Award of
restricted shares under the Program.
     (C) Except as provided for in Section 7(D) and Section 7(F) below,
restricted shares awarded to a participant under the Program shall vest in the
participant during a period commencing on the date

24

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

 

such shares are awarded to a participant and ending on a date to be specified by
the Committee, in accordance with a vesting schedule to be determined by the
Committee in its discretion and specified in the Award. Subject to the
immediately preceding sentence, the Committee may condition the vesting of any
restricted shares awarded after November 7, 1995 on any additional terms and
conditions (including performance achievement goals applicable to all or any
portion of the overall vesting period) for such period or periods as shall be
determined by the Committee. If the Award document relating to any Award of
restricted shares granted prior to November 7, 1995 fails to contain any vesting
schedule, then such shares shall vest in equal annual installments (of 20% on
each anniversary of the Award date) over the five year period commencing on the
date such shares are awarded.
     (i) To the extent that the shares remain non-vested under the vesting
schedule and any additional vesting terms and conditions set by the Committee,
such shares shall be deemed to be subject to a Restriction Period. The
Restriction Period for restricted shares shall terminate when and to the extent
that such shares vest in the participant in accordance with their stated vesting
terms or in accordance with the accelerated vesting provided in Section 7(D),
Section 7(F) or the terms of any Award implementing the provisions of Section 12
below, subject, in each case, to the need for Qualifying Awards to comply with
Section 10, and except to the extent such shares have been forfeited as provided
in Section 7(E) or 7(G) below.
     (ii) Restricted shares under the Program which are subject to a Restriction
Period may not be assigned, transferred, pledged or otherwise encumbered or
disposed of, except by forfeiture to the Company as provided in Section 7(E) or
7(G) below.
     (iii) During the applicable Restriction Period: (x) the Company shall
retain possession of the certificates for restricted shares awarded under the
Program, (y) the participant shall execute and deliver to the Company a stock
power in blank with respect to such shares and (z) the participant shall be
entitled to full dividend and voting rights in respect of such shares. After the
end of the applicable Restriction Period, the restrictions imposed under the
Program shall cease to apply to the shares previously subject to such
Restriction Period and the certificates for such shares shall be delivered to
the participant.
     (D) In the event of termination of employment (or service as a non-employee
director) by reason of death, disability or retirement at normal retirement age
under the Company’s Retirement Plan or any applicable Retirement Plan of any of
the Company’s subsidiaries (or any applicable retirement policy for non-employee
directors), the written Award agreement may provide that the restrictions
imposed under the Program in respect of any Awards then subject to a Restriction
Period, except Qualifying Awards, shall terminate as of the date of such
termination of employment (or service as a non-employee director).
     (E) In the event of termination of employment (or service as a non-employee
director) for any reason other than as provided in Section 7(D) above, a
participant shall forfeit all rights in respect of any shares then subject to a
Restriction Period as of the date of such termination of employment (or service
as a non-employee director), absent a contrary determination by the Committee
pursuant to the terms of any Award implementing the provisions of Section 12 in
connection with a Change in Control Event.
     (F) With respect to restricted share Awards granted prior to 1997, in the
event of a merger, consolidation, sale of all or substantially all of the
Company’s assets, or other corporate reorganization in which the Company is not
the surviving corporation, the restrictions imposed under the Program in respect
of any shares then subject to a Restriction Period shall terminate as of the
date of such event or as of such earlier date as determined by the Committee.
With respect to restricted share Awards granted after 1996, the terms of the
particular Awards will govern the extent (if any) to which the restrictions on
such restricted shares may terminate as a result of any transaction described in
the immediately preceding sentence, and in such regard may refer to the
provisions of Section 12.
     (G) To the extent all or a portion of a restricted share Award is subject
to additional vesting

25

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

 

terms and conditions (such as performance goals) imposed by the Committee to
supplement the vesting schedule established for such Award, and such additional
terms and conditions are not satisfied during the applicable period established
for satisfying such terms and conditions, the restricted shares subject to such
additional vesting terms and conditions shall be forfeited as of the end of the
period during which such vesting terms and conditions were to be satisfied. This
special forfeiture provision applies only to the number of restricted shares for
which a special vesting term or condition is not satisfied. To the extent a
portion of the restricted shares granted initially as part of the same Award are
not subject to any special vesting terms or conditions (other than the vesting
schedule based on continued employment (or service as a non-employee director)
over the vesting period) or are subject to special terms and conditions that
have been satisfied, or may be satisfied by a later deadline, such restricted
shares shall not be forfeited pursuant to this Section 7(G) unless and until the
later deadline for satisfying any remaining special terms and conditions occurs
without such terms and conditions being satisfied.
     Section 8. Phantom Stock Units. Awards of phantom stock units (“phantom
units”) shall be based on a number of phantom shares of Common Stock determined
by the Committee. The Company shall establish a book account (“Book Account”) on
its records for each participant receiving an Award of phantom stock units and
shall credit to a participant’s Book Account the number of phantom shares of
Common Stock granted to such participant pursuant to the Award. No actual shares
of Common Stock or other certificates shall be issued to a participant when a
phantom unit Award is granted. Phantom unit Awards shall be evidenced by written
agreements in such form as the Committee shall approve from time to time. A
participant shall earn the amount credited to his or her Book Account from time
to time in accordance with a schedule established by the Committee. The schedule
shall provide that a participant’s interest will be earned in one or more
increments over a period of time determined by the Committee and may require
that certain performance goals be achieved. The Committee may establish a
different schedule for each phantom unit Award and each participant.
     (A) From the time a phantom unit Award has been granted until the time it
is settled or forfeited, the participant to whom the phantom units were awarded
shall be entitled to receive, as additional compensation, cash payments
equivalent to the amount of dividends that would be paid with respect to a
number of shares of Common Stock corresponding to the number of phantom units
represented by such Award.
     (B) No Award of phantom units shall confer on the participant any voting
rights unless and until such phantom unit Award is paid to the participant in
the form of actual shares of Common Stock.
     (C) Except as otherwise provided in Section 10 with respect to Qualifying
Awards, if a participant ceases employment with (or service as a non-employee
director of) the Company and its subsidiaries as a result of death, disability
or retirement at normal retirement age under the Company’s Retirement Plan or
any applicable Retirement Plan of any of the Company’s subsidiaries (or any
applicable retirement policy for non-employee directors), the written Award
agreement may provide that such participant (or his or her beneficiary) shall be
entitled to such participant’s full interest in any phantom unit Award (whether
or not earned) on the date of such termination (to the extent not previously
paid). Upon termination of employment with (or service as a non-employee
director of) the Company and its subsidiaries for any other reason, a
participant’s interest in any unearned phantom unit Awards shall be forfeited,
absent a contrary determination by the Committee pursuant to the terms of any
Award implementing the provisions of Section 12 in connection with a Change in
Control Event. Notwithstanding the preceding sentence, whenever a phantom unit
Award is granted in substitution for restricted shares that were subject to an
Award granted prior to 1997 and that are surrendered and cancelled in connection
with the grant of such phantom unit Award, the Committee may provide in such
phantom unit Award that such phantom units will become fully earned under the
same circumstances as the restrictions applicable to the cancelled restricted
shares would have terminated pursuant to Section 7(F).
     (D) When the Committee determines that a phantom unit Award is to be
granted, the Committee shall give the participant an opportunity to elect the
time(s) at which the amount credited to his or her Book Account, once earned, is
to be paid in a form of payment determined under Section 8(E)

26

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

 

below. Thereafter, the participant may make one or more superseding elections to
modify an earlier election in order to further defer (but not accelerate) the
time(s) of payment, provided that any superseding election must be made prior to
the tax year in which the payments affected by the further deferral would have
otherwise been made. All elections under this Section 8(D) shall be made subject
to the provisions of Section 8(E) below and to the following:
     (i) An election may specify that the amount credited to a participant’s
Book Account will be paid to the participant in increments as soon as each
increment becomes earned.
     (ii) Alternatively, an election may specify that the earned amounts
credited to a participant’s Book Account will be paid to the participant in a
lump sum or in increments at a specified time or times after they become earned
even though the participant has not yet retired, or in substantially equal
annual installments commencing as soon as practicable following the
participant’s retirement from employment with (or service as a non-employee
director of) the Company and its subsidiaries. At the time the participant makes
an election, the participant shall designate the period over which the
installment payments will be made. The Committee will have discretion to modify
the form of installment payment designated by the participant, if the Committee
deems such a modification to be appropriate and in the best interests of the
Company. If a participant elects the deferred payment form of payment and dies
after the installment payments begin, the remaining installments will be paid to
the participant’s beneficiary according to the schedule of installments
designated by the participant.
     (iii) The Committee may specify in a phantom unit Award or by rules adopted
and amended from time to time reasonable limits on the minimum amounts and the
frequency of payments that shall be required for a participant to elect multiple
installments and a maximum time period (no sooner than five years following
termination of a participant’s employment (or service as a non-employee
director)) during which all earned amounts shall be paid.
     (E) Subject to any restrictions on the form of payment that may be
specified by the Committee in the terms of any phantom unit Award, the Committee
shall determine whether a payment shall be made: (i) in whole shares of Common
Stock equal to the number of whole phantom shares of Common Stock credited to
the participant’s Book Account, (ii) in cash, or (iii) in a combination of whole
shares of Common Stock and cash, in such proportions as the Committee deems
appropriate. When a payment is made in cash, the phantom shares of Common Stock
then credited to the participant’s Book Account shall be valued, for purposes of
the payment, at the fair market value of a share of Common Stock at the time the
payment is made.
     (F) The Committee shall have the right to defer payment of a participant’s
phantom unit Awards, when earned, to the extent that the sum of (i) the
participant’s phantom unit Awards that have been earned and are scheduled to be
settled plus (ii) all other “compensation” (as defined for purposes of Section
162(m) of the Code) with respect to the participant for the taxable year in
which settlement of the earned phantom unit Awards would otherwise be
deductible, may not be deductible by the Company by reason of Section 162(m) of
the Code, as determined by the Committee in its sole discretion. A phantom unit
Award deferred pursuant to this Section 8(F) shall be settled in subsequent
taxable years of the Company to the extent that the sum of the participant’s
deferred, but earned, phantom unit Awards and all other “compensation” with
respect to the participant would be deductible by the Company under Section
162(a) of the Code. This Section 8(F) shall apply only to the extent that the
Committee determines in its sole discretion that the deferral could allow
settlement of the phantom unit Awards to be deductible in a future year. The
Committee’s determination shall be final and binding.
     Section 9. Unrestricted Shares. Awards of unrestricted shares of Common
Stock of the Company may be granted by the Committee from time to time in its
discretion to participants in consideration of services rendered to the Company
or its subsidiaries; provided that the Committee obtains adequate authorization
(whether in advance or as ratification) from the Board of Directors to the
extent required to comply with Sections 33-6-210(b)

27

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

 

and 33-8-250(e)(8) of the South Carolina Business Corporation Act of 1988, as it
may be amended from time to time (the “SCBCA”), or any successor provisions, all
as in effect at the time of any such grants. Without limiting the preceding
sentence, but subject to the proviso therein, Awards of unrestricted shares may
be granted by the Committee from time to time to directors of the Company or its
subsidiaries in lieu of or as a supplement to cash fees for services rendered as
directors.
     Section 10. Qualifying Awards. The Committee may, in its sole discretion,
grant an Award (other than unrestricted shares) to any participant with the
intent that such Award as “performance-based compensation” under Section 162(m)
of the Code (a “Qualifying Award”). Qualifying Awards may be issued as stock
options or, if the settlement or vesting of the Award is conditioned upon
achievement of performance goals established pursuant to Section 10(A) below, as
restricted shares, phantom stock units or performance units. Unless otherwise
specified in writing by the Committee, either at the time an Award is granted or
at any time thereafter, all Awards issued under the Program that are either
stock options or Awards as to which the settlement or vesting of the Award is
conditioned upon achievement of performance goals established by the Committee
in accordance with Section 10(A) below, shall be treated as Qualifying Awards.
The provisions of this Section 10, as well as other applicable provisions of the
Plan not inconsistent with this Section 10, shall apply to all Qualifying Awards
issued under the Program.
     (A) For Qualifying Awards, all amounts received upon the settlement or
vesting of restricted shares, phantom stock units and performance units shall be
based upon the attainment of performance goals established by the Committee in
accordance with Section 162(m) of the Code. Such performance goals may vary by
participant and by Award. For Awards granted on or after May 6, 1997 (or granted
prior to such date if their grant was conditioned upon approval of amendments to
the Program by the shareholders at their annual meeting on May 6, 1997), such
performance goals shall be based on any one or more (or any combination) of the
following business criteria: revenues, net income (before or after tax),
earnings, earnings per share, shareholders’ equity, return on equity, assets,
return on assets, capital, return on capital, book value, economic value added,
operating margins, profit margins, cash flow, shareholder return, expenses,
sales or market share, expense management, return on investment, improvements in
capital structure, budget comparisons, profitability of an identifiable business
unit or product, or stock price, or shall be based on any one or more (or any
combination) of the foregoing business criteria: (1) before the effect of
acquisitions, divestitures, accounting changes, restructuring or other special
charges or other extraordinary items or (2) after giving effect to an adjustment
to reflect any such transaction or extraordinary item, to the extent in each
such case the Committee specifies, when granting the Award, that the effect of
any such transactions or extraordinary items shall be disregarded or that a
particular formula or other objective method shall be used to make an
appropriate adjustment to reflect any such transaction or extraordinary item.
     (i) The foregoing business criteria and the performance goals established
by the Committee may be applicable to the Company as a whole, one or more of its
subsidiaries, divisions, business units or business lines, or any combination of
the foregoing. The performance goals also may be based on the attainment of
specified levels of Company performance under one or more of the business
criteria described above relative to the performance of other corporations.
     (ii) The Committee may condition the settlement or vesting of any such
Award on the attainment of other conditions, such as completion of a period of
service, that must be satisfied in addition to the performance goal or goals
specified in the Award and that may apply during the same or a different time
period than the period used for the performance goal or goals.
     (B) The Committee shall have the discretion, by participant and by Award,
to reduce (but not to increase) some or all of the amount that would otherwise
be payable under the Award by reason of the satisfaction of the performance
goals set forth in the Award. In making any such determination, the Committee is
authorized to take into account any such factor or factors it determines are
appropriate, including but not limited to Company, business unit and individual
performance.

28

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

 

     (C) Prior to payment of any Qualifying Award, the Committee shall certify
in writing that the performance goals and any other material terms of the Award
were in fact satisfied, all in a manner consistent with the applicable
regulations under Section 162(m) of the Code. Such certification shall not be
required, however, for compensation that is attributable solely to an increase
in the value of the Company’s Common Stock.
     (D) If a participant leaves employment with the Company and its
subsidiaries as a result of death, disability or retirement, the written Award
agreement may provide that any stock options shall become fully exercisable
and/or that any restrictions with respect to any other forms of Qualifying
Awards shall terminate, in each case as of the date of such termination, subject
to the Committee’s authority under Section 10(E) as to the timing or receipt,
payment or settlement of such Qualifying Award.
     (E) Except in the case of a stock option (as to which the holder decides
when to exercise consistent with applicable provisions in the Program and option
agreement), the Committee is authorized to defer or accelerate the actual
receipt, payment or settlement of any Qualifying Award to the extent it is or
becomes vested or owned, and the applicable performance goals have been
satisfied, at or prior to the time of termination of the holder’s employment for
any reason (including Awards that become vested or owned in accordance with this
Section 10 and Section 5 as a result of such termination) or to the extent the
Qualifying Award is or will be vested or owned, and the applicable performance
goals have been satisfied, at the time of receipt, payment or settlement during
employment; provided, however, that if any “payment of compensation” (other than
a “transfer of property”), as such terms are used in the regulations adopted
under Section 162(m), is accelerated, the amount of compensation paid shall be
discounted to reasonably reflect the time value of money, except to the extent
such discounting is not necessary to comply with the regulations under Section
162(m) of the Code when acceleration occurs as a result of termination of
employment due to the death or disability of a holder of an Award.
     Section 11. Withholding. Whenever the Company proposes or is required to
issue or transfer shares of Common Stock or issue a certificate free of
restrictions for vesting shares previously subject to forfeiture under the
Program, the Company shall have the right to require the participant to remit to
the Company an amount sufficient to satisfy any applicable federal, state and
local withholding tax requirements prior to the delivery of any certificate or
certificates for such shares. Whenever under the Program payments are to be made
in cash, such payments shall be net of an amount sufficient to satisfy any
applicable federal, state and local withholding tax requirements. A participant
may elect with respect to any stock option (other than an incentive stock
option), restricted share award, restricted stock unit or performance unit to
surrender or authorize the Company to withhold shares of Common Stock (valued at
current fair market value on the date of surrender or withholding of the shares)
in satisfaction of all such applicable withholding requirements (the “Stock
Surrender Withholding Election”); provided, however, that:
     (A) Any Stock Surrender Withholding Election shall be made by written
notice to the Company and thereafter shall be irrevocable by the participant;
     (B) If a participant is an “officer” of the Company or other person subject
to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or any successor law, any Stock Surrender Withholding Election shall be
subject to any additional rules established from time to time by the Committee;
     (C) Any Stock Surrender Withholding Election must be made prior to the date
on which the participant recognizes taxable income with respect to the receipt
of such shares (the “Tax Date”);
     (D) When the Tax Date falls after the exercise of a stock option and the
participant makes a Stock Surrender Withholding Election, the full number of
shares of Common Stock subject to the stock option being exercised will be
issued, but the participant will be unconditionally obligated to deliver to the
Company on the Tax Date a number of shares of Common Stock having a value on the
Tax Date equal to the participant’s federal, state and local withholding tax
requirements; and

29

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

 

     (E) For purposes of this Section, the Committee shall have the discretion
to provide (by general rule or a provision in a specific Award document) that,
at the election of the participant (and subject to such conditions as the
Committee may impose by general rule or in a provision in a specific Award
document), “federal, state and local withholding tax requirements” shall be
deemed to be any amount designated by the participant which exceeds the amount
required by applicable law and governmental regulations to be withheld but which
does not exceed the participant’s total estimated federal, state and local tax
obligations associated with the transaction, including FICA taxes to the extent
applicable.
     Shares subject to an Award under the Program that are surrendered or
withheld under this Section 11 to satisfy a participant’s federal, state and
local withholding tax obligations shall not thereby become available for use
again under the Program.
     Section 12. Committee Authority To Accelerate Right of Exercise and
Accelerate Vesting in Certain Circumstances. The Committee may determine when
granting any Award (and may specify in the Award document) or may determine at
any time after granting an Award (in circumstances deemed appropriate by the
Committee) that notwithstanding the fact that an outstanding stock option has
not otherwise become exercisable in full in accordance with its terms and
notwithstanding any conditions to the vesting or earning of a participant’s
rights with respect to any Award of restricted shares, phantom stock units or
performance units, such Award shall become fully exercisable (in the case of
stock options) or otherwise shall become fully exercisable and fully vested and
earned upon a “Change in Control Event” described in this Section 12 or upon any
termination of such participant’s employment with (or service as a director of)
the Company or its subsidiary or significant reduction in such participant’s
responsibilities or compensation following any such Change in Control Event.
Such determinations may be different as to different Awards.
     Except as otherwise provided in any Award agreement, a “Change of Control
Event” shall be deemed to have occurred in the event of:
     (i) the sale, lease or exchange of all or substantially all of the assets
of the Company or of the assets of Cosmos Broadcasting Corporation (other than
to a person that directly or indirectly controls, is controlled by or is under
common control with, the Company);
     (ii) the acquisition, directly or indirectly, by any person or related
group of persons (other than the Company, a person that directly or indirectly
controls, is controlled by or is under common control with, the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934 as amended) of securities possessing more than thirty-five
percent (35%) of the total combined voting power of the Company’s outstanding
securities, unless such person or related group of persons acquired such
beneficial ownership as a result of (1) the reduction in the number of shares of
Common Stock outstanding due to the Company’s acquisition of its Common Stock,
(2) a will or the laws or descent and distribution, (3) the transfer of shares
to any member of the transferor’s immediate family or to a trust for the benefit
of a member of the transferor’s immediate family (a “Transferee Trust”), (4) a
divorce decree or settlement, (5) the transfer of shares held on February 4,
1997 by any trust or held at any time by a Transferee Trust to any beneficiary
of such trust, or (6) any acquisition by such person of shares pursuant to any
employee benefit plan of the Company or of any of its subsidiaries;
     (iii) a change in the composition of the Board of Directors that results in
the individuals who, as of November 27, 2000, are members of the Board (the
“Incumbent Board”), ceasing for any reason to constitute at least a majority of
the members of the Board; provided, however, that if the election, or nomination
for election by the Company’s common stockholders, of any new director is
approved by a vote of at least a majority of the Incumbent Board, such new
director shall, for purposes of this Program, be considered as a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office in any of the following manners: (a) as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated under the
Exchange Act); (b) as a result of other

30

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

 

actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board (a “Proxy Contest”); and (c) by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest;
     (iv) the merger or consolidation of the Company with or into another
entity, or of Cosmos Broadcasting Corporation with or into another entity (other
than the Company, a person that directly or indirectly controls, is controlled
by or is under common control with, the Company), unless the shareholders of the
Company immediately prior to such merger or consolidation own, directly or
indirectly, more than sixty-five percent (65%) of the total combined voting
power of the surviving entity’s outstanding securities immediately after such
merger or consolidation; or
     (v) the liquidation or dissolution of the Company or Cosmos Broadcasting
Corporation (other than in connection with a transaction excepted under clause
(i), (ii), (iii) or (iv) above).
     Section 13. Regulatory and Other Legal Requirements. All aspects of this
Program shall be subject to applicable laws, rules, regulations and approvals
required by governmental entities and stock exchanges. Without limiting the
foregoing, the issuance of shares of the Company’s Common Stock under the
Program is subject to applicable provisions of the SCBCA (or any successor
laws); without in any way abdicating its decision making authority in connection
with the grant of any Awards hereunder (including, but not limited to, the
Committee’s authority to establish and administer performance goals and certify
as to the attainment of any such performance goals), the Committee may obtain
further parameters from the Board of Directors within which to exercise the
Committee’s authority or may obtain ratification of the Committee’s decisions by
the full Board of Directors or may do both to the extent deemed appropriate to
comply with the SCBCA (including Sections 33-6-210(b) and 33-8-250(e)(8)) or any
successor laws.
     Section 14. Grantor Trusts. The Committee may, in its discretion and in a
manner consistent with Section 13, establish one or more grantor trusts (with
such terms as the Committee may determine) and contribute shares of Common Stock
and such other assets as may be deemed desirable for use in satisfying the
Company’s obligations to one or more participants under one or more Awards
granted hereunder. The creation and funding of any such trust with respect to
one or more Awards shall not create any obligation on the part of the Company or
any rights in participants receiving other Awards to have the same or any
similar trust created or funded with respect to other Awards. If any such trust
is used for purposes of satisfying the Company’s obligations to any participant
under an Award, the Company shall be relieved of its obligation to satisfy any
claim for benefits under such Award to the extent such participant receives a
distribution from the trust of the shares of Common Stock or other assets due in
accordance with the Award, but the Company shall remain liable for any balance
due that is not received from such trust.
     Section 15. Term. This Program initially became effective May 3, 1983 for
ten years and was amended, with shareholder approval, in 1990 to extend its term
to May 1, 2000. Subject to approval of certain amendments by the shareholders of
the Company at their annual meeting to be held on May 6, 1997 or at any
adjournment thereof, this Program has been further amended, effective on the
date of such shareholder approval, to extend its term to May 6, 2007 unless
terminated at an earlier date by the Board. No Awards shall be granted after
termination of the Program, but any then outstanding Awards shall continue in
effect for the remainder of their respective terms, subject to the conditions of
such Awards. No incentive stock options may be granted after February 4, 2007,
which is ten years after the Committee’s adoption of the Program as most
recently extended and restated.
     Section 16. Amendments and Discontinuance. The Committee may amend,
suspend, or discontinue the Program; provided, however, that the Committee may
condition the effectiveness of any amendment on shareholder approval to the
extent the Committee determines that shareholder approval is necessary or
desirable to qualify for: certain tax deductions or other desired treatment
under Section 162(m) or other Sections of the Code and related regulations of
the Internal Revenue Service, all as amended from time to time; certain
exemptions under Section 16 of the Securities Exchange Act of 1934 and related
rules adopted by the Securities and Exchange Commission, all as amended from
time to time; or any other desired exemption or treatment under any applicable
law or regulation. Notwithstanding the foregoing, no such amendment shall
materially and adversely affect the rights of any participant as to any Award
then outstanding without the consent of such participant.

31