Exhibit 10.27
 
HEALTH BENEFITS DIRECT CORPORATION
 
2010 EQUITY COMPENSATION PLAN
 
The purpose of the Health Benefits Direct Corporation 2010 Equity Compensation
Plan (the “Plan”) is to provide (i) employees of Health Benefits Direct
Corporation (the “Company”) and its subsidiaries, (ii) certain consultants and
advisors who perform services for the Company or its subsidiaries and (iii)
non-employee members of the Board (as defined below) with the opportunity to
receive grants of incentive stock options, nonqualified stock options, stock
appreciation rights, stock awards, stock units and other stock-based
awards.  The Company believes that the Plan will encourage the participants to
contribute materially to the growth of the Company, thereby benefiting the
Company’s stockholders, and will align the economic interests of the
participants with those of the stockholders.  The Plan is effective on the
Effective Date, subject to stockholder approval of the Plan on such
date.  Outstanding grants made under the Plan prior to stockholder approval
shall continue in effect according to their terms, provided that the
stockholders approve the Plan within 12 months of the Effective Date.
 
Effective as of the Effective Date, the Health Benefits Direct Corporation 2008
Equity Compensation Plan (the “2008 Plan”) will be merged with and into this
Plan, and no additional grants will be made thereafter under the 2008
Plan.  Outstanding grants under the 2008 Plan will continue in effect according
to their terms as in effect before the Plan merger (subject to such amendments
as the Committee (as defined below) determines, consistent with the 2008 Plan,
as applicable), and the shares with respect to outstanding grants under the 2008
Plan will be issued or transferred under this Plan.
 
1.           Definitions
 
The following terms shall have the meanings set forth below for purposes of the
Plan:
 
(a)           “Board” shall mean the Board of Directors of the Company.
 
(b)           “Cause” shall mean, except to the extent specified otherwise by
the Committee, a finding by the Committee that the Grantee (i) has breached his
or her employment or service contract with the Employer, (ii) has engaged in
disloyalty to the Employer, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty, (iii) has disclosed trade
secrets or confidential information of the Employer to persons not entitled to
receive such information, (iv) has breached any written non-competition,
non-solicitation or confidentiality agreement between the Grantee and the
Employer or (v) has engaged in such other behavior detrimental to the interests
of the Employer as the Committee determines.
 
(c)           Unless otherwise set forth in a Grant Instrument, “Change of
Control” shall be deemed to have occurred if:
 
(i)           Any “person” (as such term is used in sections 13(d) and 14(d) of
the Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the voting power of the then outstanding
securities of the Company; provided that a Change of Control shall not be deemed
to occur as a result of a transaction in which the Company becomes a subsidiary
of another corporation and in which the stockholders of the Company, immediately
prior to the transaction, will beneficially own, immediately after the
transaction, shares entitling such stockholders to more than 50% of all votes to
which all stockholders of the parent corporation would be entitled in the
election of directors.
 
(ii)           The consummation of (A) a merger or consolidation of the Company
with another corporation where the stockholders of the Company, immediately
prior to the merger or consolidation, will not beneficially own in substantially
the same proportion as ownership immediately prior to the merger or
consolidation, immediately after the merger or consolidation, shares entitling
such stockholders to more than 50% of all votes to which all stockholders of the
surviving corporation would be entitled in the election of directors, or where
the members of the Board, immediately prior to the merger or consolidation,
would not, immediately after the merger or consolidation, constitute a majority
of the board of directors of the surviving corporation, (B) a sale or other
disposition of all or substantially all of the assets of the Company, or (C) a
liquidation or dissolution of the Company.
 
 
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The Committee may modify the definition of Change of Control for a particular
Grant as the Committee deems appropriate to comply with section 409A of the Code
or otherwise.
 
(d)           “Code” shall mean the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
 
(e)           “Committee” shall mean the committee, consisting of members of the
Board, designated by the Board to administer the Plan.
 
(f)           “Company” shall mean Health Benefits Direct Corporation and shall
include its successors.
 
(g)           “Company Stock” shall mean common stock of the Company.
 
(h)           “Disability” or “Disabled” shall mean a Grantee’s becoming
disabled within the meaning of section 22(e)(3) of the Code, within the meaning
of the Employer’s long-term disability plan applicable to the Grantee or as
otherwise determined by the Committee.
 
(i)           “Dividend Equivalent” shall mean an amount determined by
multiplying the number of shares of Company Stock subject to a Grant by the
per-share cash dividend paid by the Company on its outstanding Company Stock, or
the per-share fair market value (as determined by the Committee) of any dividend
paid on its outstanding Company Stock in consideration other than cash.
 
(j)           “Effective Date” shall mean the November 18, 2010, subject to
stockholder approval.
 
(k)           “Employee” shall mean an employee of the Employer (including an
officer or director who is also an employee), but excluding any person who is
classified by the Employer as a “contractor” or “consultant,” no matter how
characterized by the Internal Revenue Service, other governmental agency or a
court.  Any change of characterization of an individual by the Internal Revenue
Service or any court or government agency shall have no effect upon the
classification of an individual as an Employee for purposes of this Plan, unless
the Committee determines otherwise.
 
(l)           “Employed by, or providing service to, the Employer” shall mean
employment or service as an Employee, Key Advisor or member of the Board (so
that, for purposes of exercising Options and SARs and satisfying conditions with
respect to Stock Awards, Stock Units and Other Stock-Based Awards, a Grantee
shall not be considered to have terminated employment or service until the
Grantee ceases to be an Employee, Key Advisor and member of the Board).
 
(m)           “Employer” shall mean the Company and each of its subsidiaries.
 
(n)           “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
 
(o)           “Exercise Price” shall mean the per share price at which shares of
Company Stock may be purchased under an Option, as designated by the Committee,
but shall not be less than the Fair Market Value of a share of Company Stock on
the date of grant.
 
(p)           “Fair Market Value” shall mean:
 
(i)           If the Company Stock is publicly traded, then the Fair Market
Value per share shall be determined as follows: (A) if the principal trading
market for the Company Stock is a national securities exchange, the closing
price during regular trading hours on the relevant date or (if there were no
trades on that date) the latest preceding date upon which a sale was reported,
or (B) if the Company Stock is not principally traded on any such exchange, the
last reported sale price of a share of Company Stock during regular trading
hours on the relevant date, as reported by the OTC Bulletin Board or, if shares
are not reported on the OTC Bulletin Board, as determined by the Committee
through any reasonable valuation method authorized under the Code.
 
 
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(ii)           If the Company Stock is not publicly traded or, if publicly
traded, is not subject to reported transactions as set forth above, the Fair
Market Value per share shall be as determined by the Committee through any
reasonable valuation method authorized under the Code.
 
(q)           “Grant” shall mean an Option, SAR, Stock Award, Stock Unit or
Other Stock-Based Award under the Plan.
 
(r)           “Grant Instrument” shall mean the written agreement that sets
forth the terms and conditions of a Grant, including any amendments thereto.
 
(s)           “Grantee” shall mean an Employee, Key Advisor or Non-Employee
Director who receives a Grant under the Plan.
 
(t)           “Incentive Stock Option” shall mean an option to purchase Company
Stock that is intended to meet the requirements of an incentive stock option
under section 422 of the Code.
 
(u)           “Key Advisor” shall mean a consultant or advisor of an Employer.
 
(v)           “Non-Employee Director” shall mean a member of the Board who is
not an Employee.
 
(w)           “Nonqualified Stock Option” shall mean an option to purchase
Company Stock that is not intended to meet the requirements of section 422 of
the Code.
 
(x)           “Option” shall mean an Incentive Stock Option or a Nonqualified
Stock Option granted under the Plan.
 
(y)           “Other Stock-Based Award” shall mean any Grant based on, measured
by or payable in Company Stock, as described in Section 10.
 
(z)           “SAR” shall mean a stock appreciation right with respect to a
share of Company Stock.
 
(aa)           “Stock Award” shall mean an award of Company Stock, with or
without restrictions.
 
(bb)           “Stock Unit” shall mean a unit that represents a hypothetical
share of Company Stock.
 
2.           Administration
 
(a)           Committee.  The Plan shall be administered and interpreted by the
Board or by a Committee appointed by the Board.  The Committee, if applicable,
should consist of two or more persons who are “outside directors” as defined
under section 162(m) of the Code, and related Treasury regulations, and
“non-employee directors” as defined under Rule 16b-3 under the Exchange
Act.  The Board shall approve and administer all grants made to Non-Employee
Directors.  The Committee may delegate authority to one or more subcommittees,
as it deems appropriate.  To the extent that the Board or a subcommittee
administers the Plan, references in the Plan to the “Committee” shall be deemed
to refer to the Board or such subcommittee.  In the absence of a specific
designation by the Board to the contrary, the Plan shall be administered by the
Committee of the Board or any successor Board committee performing substantially
the same functions.
 
(b)           Committee Authority.  The Committee shall have the sole authority
to (i) determine the individuals to whom Grants shall be made under the Plan,
(ii) determine the type, size and terms of the Grants to be made to each such
individual, (iii) determine the time when the Grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued Grant, subject to the provisions of Section
18 below, and (v) deal with any other matters arising under the Plan.
 
 
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(c)           Committee Determinations.  The Committee shall have full power and
express discretionary authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations, agreements
and instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion.  The Committee’s
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any awards granted
hereunder.  All powers of the Committee shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly
situated individuals.
 
3.           Grants
 
Grants under the Plan may consist of Options as described in Section 6, Stock
Awards as described in Section 7, Stock Units as described in Section 8, SARs as
described in Section 9 and Other Stock-Based Awards as described in Section
10.  All Grants shall be subject to the terms and conditions set forth herein
and to such other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the Committee to
the individual in the Grant Instrument.  All Grants shall be made conditional
upon the Grantee’s acknowledgement, in writing or by acceptance of the Grant,
that all decisions and determinations of the Committee shall be final and
binding on the Grantee, his or her beneficiaries and any other person having or
claiming an interest under such Grant.  Grants under a particular Section of the
Plan need not be uniform as among the Grantees.
 
4.           Shares Subject to the Plan
 
(a)           Shares Authorized.  Subject to adjustment as described below, the
aggregate number of shares of Company Stock that may be issued or transferred
under the Plan shall be equal to 30,000,000, which number shall include (i) the
number of shares of Company Stock subject to outstanding grants under the 2008
Plan as of the Effective Date, (ii) the number of shares of Company Stock
remaining available for issuance under the 2008 Plan but not subject to
previously exercised, vested or paid grants as of the Effective Date, and (iii)
a number of additional shares of Company Stock, such that the aggregate number
of shares of Company Stock available under the Plan as of the Effective Date is
30,000,000 shares.
 
(b)           Source of Shares; Share Counting.  Shares issued or transferred
under the Plan may be authorized but unissued shares of Company Stock or
reacquired shares of Company Stock, including shares purchased by the Company on
the open market for purposes of the Plan.  If and to the extent Options or SARs
granted under the Plan (including options granted under the 2008 Plan)
terminate, expire or are canceled, forfeited, exchanged or surrendered without
having been exercised, or if any Stock Awards, Stock Units or Other Stock-Based
Awards (including Stock Awards granted under the 2008 Plan) are forfeited,
terminated or otherwise not paid in full, the shares subject to such Grants
shall again be available for purposes of the Plan.  Shares of Company Stock
otherwise issuable under the Plan that are withheld or surrendered in payment of
the Exercise Price of an Option, and shares withheld or surrendered for payment
of taxes, shall not be available for re-issuance under the Plan.  Upon the
exercise of any SAR under the Plan, the number of shares of Company Stock
available for issuance under the Plan shall be reduced by the gross number of
shares as to which such right is exercised, and not by the net number of shares
actually issued by the Company upon such exercise.  To the extent any Grants are
paid in cash, and not in shares of Company Stock, any shares previously subject
to such Grants shall again be available for issuance or transfer under the Plan.
 
(c)           Individual Limits.  All Grants under the Plan shall be expressed
in shares of Company Stock.  The maximum aggregate number of shares of Company
Stock that shall be subject to Grants made under the Plan to any individual
during any calendar year shall be 5,000,000 shares, subject to adjustment as
described below.
 
(d)           Adjustments.  If there is any change in the number or kind of
shares of Company Stock outstanding by reason of (i) a stock dividend, spinoff,
recapitalization, stock split, or combination or exchange of shares, (ii) a
merger, reorganization or consolidation, (iii) a reclassification or change in
par value, or (iv) any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company’s payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for issuance under the Plan, the maximum number of shares of
Company Stock for which any individual may receive Grants in any year, the kind
and number of shares covered by outstanding Grants, the kind and number of
shares issued and to be issued under the Plan, and the price per share or the
applicable market value of such Grants shall be equitably adjusted by the
Committee, in such manner as the Committee deems appropriate, to reflect any
increase or decrease in the number of, or change in the kind or value of, the
issued shares of Company Stock to preclude, to the extent practicable, the
enlargement or dilution of rights and benefits under the Plan and such
outstanding Grants; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated.  In the event of a Change of Control of the
Company, the provisions of Section 16 of the Plan shall apply.  Any adjustments
to outstanding Grants shall be consistent with section 409A or 424 of the Code,
to the extent applicable.  Any adjustments determined by the Committee shall be
final, binding and conclusive.
 
 
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5.           Eligibility for Participation
 
(a)           Eligible Persons.  All Employees (including, for all purposes of
the Plan, an Employee who is a member of the Board) and Non-Employee Directors
shall be eligible to participate in the Plan.  Key Advisors shall be eligible to
participate in the Plan if the Key Advisors render bona fide services to the
Employer, the services are not in connection with the offer and sale of
securities in a capital-raising transaction and the Key Advisors do not directly
or indirectly promote or maintain a market for the Company’s securities.
 
(b)           Selection of Grantees.  The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Grants and shall determine
the number of shares of Company Stock subject to a particular Grant in such
manner as the Committee determines.
 
6.           Options
 
The Committee may grant Options to an Employee, Non-Employee Director or Key
Advisor, upon such terms as the Committee deems appropriate.  The following
provisions are applicable to Options:
 
(a)           Number of Shares.  The Committee shall determine the number of
shares of Company Stock that will be subject to each Grant of Options to
Employees, Non-Employee Directors and Key Advisors.
 
(b)           Type of Option and Exercise Price.
 
(i)           The Committee may grant Incentive Stock Options or Nonqualified
Stock Options or any combination of the two, all in accordance with the terms
and conditions set forth herein.  Incentive Stock Options may be granted only to
employees of the Company or its parent or subsidiary corporations, as defined in
section 424 of the Code.  Nonqualified Stock Options may be granted to
Employees, Key Advisors and Non-Employee Directors.
 
(ii)           The Exercise Price of Company Stock subject to an Option shall be
determined by the Committee and shall be equal to or greater than the Fair
Market Value of a share of Company Stock on the date the Option is granted;
provided, however, that an Incentive Stock Option may not be granted to an
Employee who, at the time of grant, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company, or any
parent or subsidiary corporation of the Company, as defined in section 424 of
the Code, unless the Exercise Price per share is not less than 110% of the Fair
Market Value of a share of Company Stock on the date of grant.
 
(c)           Option Term.  The Committee shall determine the term of each
Option.  The term of any Option shall not exceed ten years from the date of
grant.  However, an Incentive Stock Option that is granted to an Employee who,
at the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
corporation of the Company, as defined in section 424 of the Code, may not have
a term that exceeds five years from the date of grant.
 
(d)           Exercisability of Options.  Options shall become exercisable in
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Grant Instrument.  The
Committee may accelerate the exercisability of any or all outstanding Options at
any time for any reason.
 
(e)           Grants to Non-Exempt Employees.  Notwithstanding the foregoing,
Options granted to persons who are non-exempt employees under the Fair Labor
Standards Act of 1938, as amended, may not be exercisable for at least six
months after the date of grant (except that such Options may become exercisable,
as determined by the Committee, upon the Grantee’s death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by
applicable regulations).
 
 
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(f)           Termination of Employment, Disability or Death.
 
(i)           Except as provided below, an Option may only be exercised while
the Grantee is employed by, or providing service to, the Employer as an
Employee, Key Advisor or member of the Board.
 
(ii)           In the event that a Grantee ceases to be employed by, or provide
service to, the Employer for any reason other than Disability, death or
termination for Cause, any Option which is otherwise exercisable by the Grantee
shall terminate unless exercised within 90 days after the date on which the
Grantee ceases to be employed by, or provide service to, the Employer (or within
such other period of time as may be specified by the Committee), but in any
event no later than the date of expiration of the Option term.  Except as
otherwise provided by the Committee, any of the Grantee’s Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide service to, the Employer shall terminate as of such date.
 
(iii)           In the event the Grantee ceases to be employed by, or provide
service to, the Company on account of a termination for Cause by the Employer,
any Option held by the Grantee shall terminate as of the date the Grantee ceases
to be employed by, or provide service to, the Employer.  In addition,
notwithstanding any other provisions of this Section 6, if the Committee
determines that the Grantee has engaged in conduct that constitutes Cause at any
time while the Grantee is employed by, or providing service to, the Employer or
after the Grantee’s termination of employment or service, any Option held by the
Grantee shall immediately terminate and the Grantee shall automatically forfeit
all shares underlying any exercised portion of an Option for which the Company
has not yet delivered the share certificates, upon refund by the Company of the
Exercise Price paid by the Grantee for such shares.  Upon any exercise of an
Option, the Company may withhold delivery of share certificates pending
resolution of an inquiry that could lead to a finding resulting in a forfeiture.
 
(iv)           In the event the Grantee ceases to be employed by, or provide
service to, the Employer because the Grantee is Disabled, any Option which is
otherwise exercisable by the Grantee shall terminate unless exercised within one
year after the date on which the Grantee ceases to be employed by, or provide
service to, the Employer (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term.  Except as otherwise provided by the Committee,
any of the Grantee’s Options which are not otherwise exercisable as of the date
on which the Grantee ceases to be employed by, or provide service to, the
Employer shall terminate as of such date.
 
(v)           If the Grantee dies while employed by, or providing service to,
the Employer or within 90 days after the date on which the Grantee ceases to be
employed or provide service on account of a termination specified in Section
6(e)(ii) above (or within such other period of time as may be specified by the
Committee), any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee
ceases to be employed by, or provide service to, the Employer (or within such
other period of time as may be specified by the Committee), but in any event no
later than the date of expiration of the Option term.  Except as otherwise
provided by the Committee, any of the Grantee’s Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or
provide service to, the Employer shall terminate as of such date.
 
(g)           Exercise of Options.  A Grantee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company.  The Grantee shall pay the Exercise Price for an Option as
specified by the Committee (i) in cash, (ii) unless the Committee determines
otherwise, by delivering shares of Company Stock owned by the Grantee and having
a Fair Market Value on the date of exercise at least equal to the Exercise Price
or by attestation (on a form prescribed by the Committee) to ownership of shares
of Company Stock having a Fair Market Value on the date of exercise at least
equal to the Exercise Price, (iii) by payment through a broker in accordance
with procedures permitted by Regulation T of the Federal Reserve Board, or (iv)
by such other method as the Committee may approve.  In addition, to the extent
an Option is at the time exercisable for vested shares of Company Stock, all or
any part of that vested portion may be surrendered to the Company for an
appreciation distribution payable in shares of Company Stock with a Fair Market
Value at the time of the Option surrender equal to the dollar amount by which
the then Fair Market Value of the shares of Company Stock subject to the
surrendered portion exceeds the aggregate Exercise Price payable for those
shares.  Shares of Company Stock used to exercise an Option shall have been held
by the Grantee for the requisite period of time necessary to avoid adverse
accounting consequences to the Company with respect to the Option.  Payment for
the shares to be issued or transferred pursuant to the Option, and any required
withholding taxes, must be received by the Company by the time specified by the
Committee depending on the type of payment being made, but in all cases prior to
the issuance or transfer of such shares.
 
 
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(h)           Limits on Incentive Stock Options.  Each Incentive Stock Option
shall provide that, if the aggregate Fair Market Value of the Company Stock on
the date of the grant with respect to which Incentive Stock Options are
exercisable for the first time by a Grantee during any calendar year, under the
Plan or any other stock option plan of the Company or a parent or subsidiary,
exceeds $100,000, then the Option, as to the excess, shall be treated as a
Nonqualified Stock Option.  An Incentive Stock Option shall not be granted to
any person who is not an Employee of the Company or a subsidiary corporation
(within the meaning of section 424(f) of the Code) of the Company.
 
7.           Stock Awards
 
The Committee may issue or transfer shares of Company Stock to an Employee, Key
Advisor or Non-Employee Director under a Stock Award, upon such terms as the
Committee deems appropriate.  The following provisions are applicable to Stock
Awards:
 
(a)           General Requirements.  Shares of Company Stock issued or
transferred pursuant to Stock Awards may be issued or transferred for
consideration or for no consideration, and subject to restrictions or no
restrictions, as determined by the Committee.  The Committee may, but shall not
be required to, establish conditions under which restrictions on Stock Awards
shall lapse over a period of time or according to such other criteria as the
Committee deems appropriate, including, without limitation, restrictions based
upon the achievement of specific performance goals.  The period of time during
which the Stock Awards will remain subject to restrictions will be designated in
the Grant Instrument as the “Restriction Period.”
 
(b)           Number of Shares.  The Committee shall determine the number of
shares of Company Stock to be issued or transferred pursuant to a Stock Award
and the restrictions applicable to such shares.
 
(c)           Requirement of Employment or Service.  If the Grantee ceases to be
employed by, or provide service to, the Employer during a period designated in
the Grant Instrument as the Restriction Period, or if other specified conditions
are not met, the Stock Award shall terminate as to all shares covered by the
Grant as to which the restrictions have not lapsed, and those shares of Company
Stock must be immediately returned to the Company.  The Committee may, however,
provide for complete or partial exceptions to this requirement as it deems
appropriate.
 
(d)           Restrictions on Transfer and Legend on Stock Certificate.  During
the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
otherwise dispose of the shares of a Stock Award except under Section 15(a)
below.  Unless otherwise determined by the Committee, the Company will retain
possession of certificates for shares of Stock Awards until all restrictions on
such shares have lapsed.  Each certificate for a Stock Award, unless held by the
Company, shall contain a legend giving appropriate notice of the restrictions in
the Grant.  The Grantee shall be entitled to have the legend removed from the
stock certificate covering the shares subject to restrictions when all
restrictions on such shares have lapsed.  The Committee may determine that the
Company will not issue certificates for Stock Awards until all restrictions on
such shares have lapsed.
 
(e)           Right to Vote and to Receive Dividends.  Unless the Committee
determines otherwise, during the Restriction Period, the Grantee shall have the
right to vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares, subject to any restrictions deemed
appropriate by the Committee, including, without limitation, the achievement of
specific performance goals.
 
(f)           Lapse of Restrictions.  All restrictions imposed on Stock Awards
shall lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions, if any, imposed by the Committee.  The Committee
may determine, as to any or all Stock Awards, that the restrictions shall lapse
without regard to any Restriction Period.
 
8.           Stock Units
 
The Committee may grant Stock Units, each of which shall represent one
hypothetical share of Company Stock, to an Employee, Key Advisor or Non-Employee
Director, upon such terms and conditions as the Committee deems
appropriate.  The following provisions are applicable to Stock Units:
 
 
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(a)           Crediting of Units.  Each Stock Unit shall represent the right of
the Grantee to receive a share of Company Stock or an amount of cash based on
the value of a share of Company Stock, if and when specified conditions are
met.  All Stock Units shall be credited to bookkeeping accounts established on
the Company’s records for purposes of the Plan.
 
(b)           Terms of Stock Units.  The Committee may grant Stock Units that
are payable if specified performance goals or other conditions are met, or under
other circumstances.  Stock Units may be paid at the end of a specified
performance period or other period, or payment may be deferred to a date
authorized by the Committee.  The Committee shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock Units.
 
(c)           Requirement of Employment or Service.  If the Grantee ceases to be
employed by, or provide service to, the Employer prior to the vesting of Stock
Units, or if other conditions established by the Committee are not met, the
Grantee’s Stock Units shall be forfeited.  The Committee may, however, provide
for complete or partial exceptions to this requirement as it deems appropriate.
 
(d)           Payment With Respect to Stock Units.  Payments with respect to
Stock Units shall be made in cash, Company Stock or any combination of the
foregoing, as the Committee shall determine.
 
9.           Stock Appreciation Rights
 
The Committee may grant SARs to an Employee, Key Advisor or Non-Employee
Director separately or in tandem with any Option.  The following provisions are
applicable to SARs:
 
(a)           General Requirements.  The Committee may grant SARs to an
Employee, Key Advisor or Non-Employee Director separately or in tandem with any
Option (for all or a portion of the applicable Option).  Tandem SARs may be
granted either at the time the Option is granted or at any time thereafter while
the Option remains outstanding; provided, however, that, in the case of an
Incentive Stock Option, SARs may be granted only at the time of the Grant of the
Incentive Stock Option.  The Committee shall establish the base amount of the
SAR at the time the SAR is granted.  The base amount of each SAR shall be equal
to the per share Exercise Price of the related Option or, if there is no related
Option, an amount equal to or greater than the Fair Market Value of a share of
Company Stock as of the date of Grant of the SAR.
 
(b)           Tandem SARs.  In the case of tandem SARs, the number of SARs
granted to a Grantee that shall be exercisable during a specified period shall
not exceed the number of shares of Company Stock that the Grantee may purchase
upon the exercise of the related Option during such period.  Upon the exercise
of an Option, the SARs relating to the Company Stock covered by such Option
shall terminate.  Upon the exercise of SARs, the related Option shall terminate
to the extent of an equal number of shares of Company Stock.
 
(c)           Exercisability.  An SAR shall be exercisable during the period
specified by the Committee in the Grant Instrument and shall be subject to such
vesting and other restrictions as may be specified in the Grant Instrument.  The
Committee may accelerate the exercisability of any or all outstanding SARs at
any time for any reason.  SARs may only be exercised while the Grantee is
employed by, or providing service to, the Employer or during the applicable
period after termination of employment or service as described in Section 6(e)
above.  A tandem SAR shall be exercisable only during the period when the Option
to which it is related is also exercisable.
 
(d)           Grants to Non-Exempt Employees.  Notwithstanding the foregoing,
SARs granted to persons who are non-exempt employees under the Fair Labor
Standards Act of 1938, as amended, may not be exercisable for at least six
months after the date of grant (except that such SARs may become exercisable, as
determined by the Committee, upon the Grantee’s death, Disability or retirement,
or upon a Change of Control or other circumstances permitted by applicable
regulations).
 
(e)           Value of SARs.  When a Grantee exercises SARs, the Grantee shall
receive in settlement of such SARs an amount equal to the value of the stock
appreciation for the number of SARs exercised.  The stock appreciation for an
SAR is the amount by which the Fair Market Value of the underlying Company Stock
on the date of exercise of the SAR exceeds the base amount of the SAR as
described in subsection (a).
 
 
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(f)           Form of Payment.  The appreciation in an SAR shall be paid in
shares of Company Stock, cash or any combination of the foregoing, as the
Committee shall determine.  For purposes of calculating the number of shares of
Company Stock to be received, shares of Company Stock shall be valued at their
Fair Market Value on the date of exercise of the SAR.
 
10.         Other Stock-Based Awards
 
The Committee may grant Other Stock-Based Awards, which are awards (other than
those described in Sections 6, 7, 8 and 9 of the Plan) that are based on or
measured by Company Stock, to any Employee, Key Advisor or Non-Employee
Director, on such terms and conditions as the Committee shall determine.  Other
Stock-Based Awards may be awarded subject to the achievement of performance
goals or other conditions and may be payable in cash, Company Stock or any
combination of the foregoing, as the Committee shall determine.
 
11.         Dividend Equivalents
 
The Committee may grant Dividend Equivalents in connection Stock Units or Other
Stock-Based Awards.  Dividend Equivalents may be paid currently or accrued as
contingent cash obligations and may be payable in cash or shares of Company
Stock, and upon such terms as the Committee may establish, including, without
limitation, the achievement of specific performance goals.
 
12.         Qualified Performance -  Based Compensation
 
The Committee may determine that Stock Awards, Stock Units, Other Stock-Based
Awards and Dividend Equivalents granted to an Employee shall be considered
“qualified performance-based compensation” under section 162(m) of the
Code.  The following provisions shall apply to Grants of Stock Awards, Stock
Units, Other Stock-Based Awards and Dividend Equivalents that are to be
considered “qualified performance-based compensation” under section 162(m) of
the Code:
 
(a)           Performance Goals.
 
(i)           When Stock Awards, Stock Units, Other Stock-Based Awards or
Dividend Equivalents that are to be considered “qualified performance-based
compensation” are granted, the Committee shall establish in writing (A) the
objective performance goals that must be met, (B) the performance period during
which the performance will be measured, (C) the threshold, target and maximum
amounts that may be paid if the performance goals are met, and (D) any other
conditions that the Committee deems appropriate and consistent with the Plan and
section 162(m) of the Code.
 
(ii)           The business criteria may relate to the Grantee’s business unit
or the performance of the Company and its parents and subsidiaries as a whole,
or any combination of the foregoing. The Committee shall use objectively
determinable performance goals based on one or more of the following criteria:
stock price, earnings per share, net earnings, operating earnings, earnings
before income taxes, EBITDA (earnings before income tax expense, interest
expense, and depreciation and amortization expense), return on assets,
stockholder return, return on equity, growth in assets, unit volume, sales or
market share, or strategic business criteria consisting of one or more
objectives based on meeting specified revenue goals, market penetration goals,
geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures.
 
(b)           Establishment of Goals.  The Committee shall establish the
performance goals in writing either before the beginning of the performance
period or during a period ending no later than the earlier of (i) 90 days after
the beginning of the performance period or (ii) the date on which 25% of the
performance period has been completed, or such other date as may be required or
permitted under applicable regulations under section 162(m) of the Code.  The
performance goals shall satisfy the requirements for “qualified
performance-based compensation,” including the requirement that the achievement
of the goals be substantially uncertain at the time they are established and
that the goals be established in such a way that a third party with knowledge of
the relevant facts could determine whether and to what extent the performance
goals have been met.  The Committee shall not have discretion to increase the
amount of compensation that is payable upon achievement of the designated
performance goals.
 
 
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(c)           Certification of Results.  The Committee shall certify and
announce the results for each performance period to all Grantees after the
announcement of the Company’s financial results for the performance period.  If
and to the extent that the Committee does not certify that the performance goals
have been met, the grants of Stock Awards, Stock Units, Other Stock-Based Awards
and Dividend Equivalents for the performance period shall be forfeited or shall
not be made, as applicable.  If Dividend Equivalents are granted as “qualified
performance-based compensation” under section 162(m) of the Code, a Grantee may
not accrue more than $1,000,000 of such Dividend Equivalents during any calendar
year.
 
(d)           Death, Disability or Other Circumstances.  The Committee may
provide that Stock Awards, Stock Units, Other Stock-Based Awards and Dividend
Equivalents shall be payable or restrictions on such Grants shall lapse, in
whole or in part, in the event of the Grantee’s death or Disability during the
performance period, or under other circumstances consistent with the Treasury
regulations and rulings under section 162(m) of the Code.
 
13.         Deferrals
 
The Committee may permit or require a Grantee to defer receipt of the payment of
cash or the delivery of shares that would otherwise be due to such Grantee in
connection with any Stock Units or Other Stock-Based Awards.  If any such
deferral election is permitted or required, the Committee shall establish rules
and procedures for such deferrals and may provide for interest or other earnings
to be paid on such deferrals.  The rules and procedures for any such deferrals
shall be consistent with applicable requirements of section 409A of the Code.
 
14.         Withholding of Taxes
 
(a)           Required Withholding.  All Grants under the Plan shall be subject
to applicable federal (including FICA), state and local tax withholding
requirements.  The Employer may require that the Grantee or other person
receiving or exercising Grants pay to the Employer the amount of any federal,
state or local taxes that the Employer is required to withhold with respect to
such Grants, or the Employer may deduct from other wages and compensation paid
by the Employer the amount of any withholding taxes due with respect to such
Grants.
 
(b)           Election to Withhold Shares.  If the Committee so permits, a
Grantee may elect to satisfy the Employer’s tax withholding obligation with
respect to Grants paid in Company Stock by having shares withheld up to an
amount that does not exceed the Grantee’s minimum applicable withholding tax
rate for federal (including FICA), state and local tax liabilities.  The
election must be in a form and manner prescribed by the Committee and may be
subject to the prior approval of the Committee.
 
15.         Transferability of Grants
 
(a)           Nontransferability of Grants.  Except as provided below, only the
Grantee may exercise rights under a Grant during the Grantee’s lifetime.  A
Grantee may not transfer those rights except (i) by will or by the laws of
descent and distribution or (ii) with respect to Grants other than Incentive
Stock Options, pursuant to a domestic relations order.  When a Grantee dies, the
personal representative or other person entitled to succeed to the rights of the
Grantee may exercise such rights.  Any such successor must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Grantee’s will or under the applicable laws of descent and distribution.
 
(b)           Transfer of Nonqualified Stock Options. Notwithstanding the
foregoing, the Committee may provide, in a Grant Instrument, that a Grantee may
transfer Nonqualified Stock Options to family members, or one or more trusts or
other entities for the benefit of or owned by family members, consistent with
the applicable securities laws, according to such terms as the Committee may
determine; provided that the Grantee receives no consideration for the transfer
of an Option and the transferred Option shall continue to be subject to the same
terms and conditions as were applicable to the Option immediately before the
transfer.
 
16.         Consequences of a Change of Control
 
(a)           Notice and Acceleration.  Unless the Committee determines
otherwise, effective upon the date of the Change of Control, (i) all outstanding
Options and SARs shall automatically accelerate and become fully exercisable,
(ii) the restrictions and conditions on all outstanding Stock Awards shall
immediately lapse, and (iii) all Stock Units, Other Stock-Based Awards and
Dividend Equivalents shall become fully vested and shall be paid at their target
values, or in such greater amounts as the Committee may determine.
 
 
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(b)           Other Alternatives.  Notwithstanding the foregoing, in the event
of a Change of Control, the Committee may take one or more of the following
actions with respect to any or all outstanding Grants: the Committee may (i)
require that Grantees surrender their outstanding Options and SARs in exchange
for one or more payments by the Company, in cash or Company Stock as determined
by the Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee’s unexercised
Options and SARs exceeds the Exercise Price of the Options or the base amount of
the SARs, as applicable, (ii) after giving Grantees an opportunity to exercise
their outstanding Options and SARs, terminate any or all unexercised Options and
SARs at such time as the Committee deems appropriate, or (iii) determine that
outstanding Options and SARs that are not exercised shall be assumed by, or
replaced with comparable options or rights by, the surviving corporation, (or a
parent or subsidiary of the surviving corporation), and other outstanding Grants
that remain in effect after the Change of Control shall be converted to similar
grants of the surviving corporation (or a parent or subsidiary of the surviving
corporation).  Such surrender or termination shall take place as of the date of
the Change of Control or such other date as the Committee may specify.
 
17.         Requirements for Issuance or Transfer of Shares
 
No Company Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance or
transfer of such Company Stock have been complied with to the satisfaction of
the Committee.  The Committee shall have the right to condition any Grant on the
Grantee’s undertaking in writing to comply with such restrictions on his or her
subsequent disposition of the shares of Company Stock as the Committee shall
deem necessary or advisable, and certificates representing such shares may be
legended to reflect any such restrictions.  Certificates representing shares of
Company Stock issued or transferred under the Plan may be subject to such
stop-transfer orders and other restrictions as the Committee deems appropriate
to comply with applicable laws, regulations and interpretations, including any
requirement that a legend be placed thereon.
 
18.         Amendment and Termination of the Plan
 
(a)           Amendment.  The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without stockholder
approval if such approval is required in order to comply with the Code or other
applicable law, or to comply with applicable stock exchange requirements.
 
(b)           No Repricing Without Stockholder Approval.  Notwithstanding
anything in the Plan to the contrary, the Committee may not reprice Options, nor
may the Board amend the Plan to permit repricing of Options, unless the
stockholders of the Company provide prior approval for such repricing.  An
adjustment to an Option pursuant to Section 4(c) above shall not constitute a
repricing of the Option.
 
(c)           Stockholder Re-Approval Requirement.  If Stock Awards, Stock
Units, Other Stock-Based Awards or Dividend Equivalents are granted as
“qualified performance-based compensation” under Section 12 above, the Plan must
be reapproved by the stockholders no later than the first stockholders meeting
that occurs in the fifth year following the year in which the stockholders
previously approved the provisions of Section 12, if required by section 162(m)
of the Code or the regulations thereunder.
 
(d)           Termination of Plan.  The Plan shall terminate on the day
immediately preceding the tenth anniversary of the Effective Date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the stockholders.
 
(e)           Termination and Amendment of Outstanding Grants.  A termination or
amendment of the Plan that occurs after a Grant is made shall not materially
impair the rights of a Grantee unless the Grantee consents or unless the
Committee acts under Section 19(f) below.  The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Grant.  Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 19(f) below or may be amended by agreement
of the Company and the Grantee consistent with the Plan.
 
 
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19.         Miscellaneous
 
(a)           Grants in Connection with Corporate Transactions and
Otherwise.  Nothing contained in the Plan shall be construed to (i) limit the
right of the Committee to make Grants under the Plan in connection with the
acquisition, by purchase, lease, merger, consolidation or otherwise, of the
business or assets of any corporation, firm or association, including Grants to
employees thereof who become Employees, or (ii) limit the right of the Company
to grant stock options or make other awards outside of the Plan.  The Committee
may make a Grant to an employee of another corporation who becomes an Employee
by reason of a corporate merger, consolidation, acquisition of stock or
property, reorganization or liquidation involving the Company, in substitution
for a stock option or stock awards grant made by such
corporation.  Notwithstanding anything in the Plan to the contrary, the
Committee may establish such terms and conditions of the new Grants as it deems
appropriate, including setting the Exercise Price of Options or the base price
of SARs at a price necessary to retain for the Grantee the same economic value
as the prior options or rights.
 
(b)           Governing Document.  The Plan shall be the controlling
document.  No other statements, representations, explanatory materials or
examples, oral or written, may amend the Plan in any manner.  The Plan shall be
binding upon and enforceable against the Company and its successors and assigns.
 
(c)           Funding of the Plan.  The Plan shall be unfunded.  The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any Grants under the Plan.
 
(d)           Rights of Grantees.  Nothing in the Plan shall entitle any
Employee, Key Advisor, Non-Employee Director or other person to any claim or
right to be granted a Grant under the Plan.  Neither the Plan nor any action
taken hereunder shall be construed as giving any individual any rights to be
retained by or in the employ of the Employer or any other employment rights.
 
(e)           No Fractional Shares.  No fractional shares of Company Stock shall
be issued or delivered pursuant to the Plan or any Grant.  Except as otherwise
provided under the Plan, 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.
 
(f)           Compliance with Law.
 
(i)           The Plan, the exercise of Options and SARs and the obligations of
the Company to issue or transfer shares of Company Stock under Grants shall be
subject to all applicable laws and regulations, and to approvals by any
governmental or regulatory agency as may be required.  With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act.  In addition,
it is the intent of the Company that Incentive Stock Options comply with the
applicable provisions of section 422 of the Code, that Grants of “qualified
performance - based compensation” comply with the applicable provisions of
section 162(m) of the Code and that, to the extent applicable, Grants comply
with the requirements of section 409A of the Code.  To the extent that any legal
requirement of section 16 of the Exchange Act or section 422, 162(m) or 409A of
the Code as set forth in the Plan ceases to be required under section 16 of the
Exchange Act or section 422, 162(m) or 409A of the Code, that Plan provision
shall cease to apply.  The Committee may revoke any Grant if it is contrary to
law or modify a Grant to bring it into compliance with any valid and mandatory
government regulation.  The Committee may also adopt rules regarding the
withholding of taxes on payments to Grantees.  The Committee may, in its sole
discretion, agree to limit its authority under this Section.
 
(ii)           The Plan is intended to comply with the requirements of section
409A of the Code, to the extent applicable.  Each Grant shall be construed and
administered such that the Grant either (A) qualifies for an exemption from the
requirements of section 409A of the Code or (B) satisfies the requirements of
section 409A of the Code.  If a Grant is subject to section 409A of the Code,
(I) distributions shall only be made in a manner and upon an event permitted
under section 409A of the Code, (II) payments to be made upon a termination of
employment shall only be made upon a “separation from service” under section
409A of the Code, (III) unless the Grant specifies otherwise, each installment
payment shall be treated as a separate payment for purposes of section 409A of
the Code, and (IV) in no event shall a Grantee, directly or indirectly,
designate the calendar year in which a distribution is made except in accordance
with section 409A of the Code.
 
 
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(iii)           Any Grant that is subject to section 409A of the Code and that
is to be distributed to a Key Employee (as defined below) upon separation from
service shall be administered so that any distribution with respect to such
Award shall be postponed for six months following the date of the Grantee’s
separation from service, if required by section 409A of the Code.  If a
distribution is delayed pursuant to section 409A of the Code, the distribution
shall be paid within 15 days after the end of the six-month period.  If the
Grantee dies during such six-month period, any postponed amounts shall be paid
within 90 days of the Grantee’s death.  The determination of Key Employees,
including the number and identity of persons considered Key Employees and the
identification date, shall be made by the Committee or its delegate each year in
accordance with section 416(i) of the Code and the “specified employee”
requirements of section 409A of the Code.
 
(iv)           Notwithstanding anything in the Plan or any Grant agreement to
the contrary, each Grantee shall be solely responsible for the tax consequences
of Grants under the Plan, and in no event shall the Company have any
responsibility or liability if a Grant does not meet any applicable requirements
of section 409A of the Code.  Although the Company intends to administer the
Plan to prevent taxation under section 409A of the Code, the Company does not
represent or warrant that the Plan or any Grant complies with any provision of
federal, state, local or other tax law.
 
(g)           Employees Subject to Taxation outside the United States.  With
respect to Grantees who are believed by the Committee to be subject to taxation
in countries other than the United States, the Committee may make Grants on such
terms and conditions, consistent with the Plan, as the Committee deems
appropriate to comply with the laws of the applicable countries, and the
Committee may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws.
 
(h)           Clawback Rights.  Subject to the requirements of applicable law,
the Committee may provide in any Grant Instrument that, if a Grantee breaches
any restrictive covenant agreement between the Grantee and the Employer or
otherwise engages in activities that constitute Cause either while employed by,
or providing service to, the Employer or within a specified period of time
thereafter, all Grants held by the Grantee shall terminate, and the Company may
rescind any exercise of an Option or SAR and the vesting of any other Grant and
delivery of shares upon such exercise or vesting, as applicable on such terms as
the Committee shall determine, including the right to require that in the event
of any such rescission, (i) the Grantee shall return to the Company the shares
received upon the exercise of any Option or SAR and/or the vesting and payment
of any other Grant or, (ii) if the Grantee no longer owns the shares, the
Grantee shall pay to the Company the amount of any gain realized or payment
received as a result of any sale or other disposition of the shares  (or, in the
event the Grantee transfers the shares by gift or otherwise without
consideration, the Fair Market Value of the shares on the date of the breach),
net of the price originally paid by the Grantee for the shares.  Payment by the
Grantee shall be made in such manner and on such terms and conditions as may be
required by the Committee.  The Employer shall be entitled to set off against
the amount of any such payment any amounts otherwise owed to the Grantee by the
Employer.
 
(i)           Governing Law.  The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall be governed
and construed by and determined in accordance with the laws of the State of
Delaware, without giving effect to the conflict of laws provisions thereof.
 
 
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