Exhibit 10.38

 

THIRD AMENDED AND RESTATED 2004 STOCK OPTION PLAN

FOR KEY EMPLOYEES OF

VISANT HOLDING CORP. AND ITS SUBSIDIARIES

 

1.             PURPOSE OF PLAN

 

The Third Amended and Restated 2004 Stock Option Plan for Key Employees of
Visant Holding Corp. and Its Subsidiaries (the “Plan”) is designed:

 

(A)           TO PROMOTE THE LONG TERM FINANCIAL INTERESTS AND GROWTH OF VISANT
HOLDING CORP. (THE “COMPANY”) AND ITS SUBSIDIARIES BY ATTRACTING AND RETAINING
MANAGEMENT AND OTHER PERSONNEL WITH THE TRAINING, EXPERIENCE AND ABILITY TO
ENABLE THEM TO MAKE A SUBSTANTIAL CONTRIBUTION TO THE SUCCESS OF THE COMPANY’S
BUSINESS;

 

(B)           TO MOTIVATE MANAGEMENT PERSONNEL BY MEANS OF GROWTH-RELATED
INCENTIVES TO ACHIEVE LONG RANGE GOALS; AND

 

(C)           TO FURTHER THE ALIGNMENT OF INTERESTS OF PARTICIPANTS WITH THOSE
OF THE STOCKHOLDERS OF THE COMPANY THROUGH OPPORTUNITIES FOR INCREASED STOCK, OR
STOCK-BASED OWNERSHIP IN THE COMPANY.

 

2.             DEFINITIONS

 

As used in the Plan, the following words shall have the following meanings:

 

(A)           “AFFILIATE” MEANS WITH RESPECT TO ANY PERSON, ANY ENTITY DIRECTLY
OR INDIRECTLY CONTROLLING, CONTROLLED BY OR UNDER COMMON CONTROL WITH SUCH
PERSON.

 

(B)           “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

 

(C)           “CHANGE IN CONTROL” MEANS (I) THE SALE (IN ONE TRANSACTION OR A
SERIES OF TRANSACTIONS) OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY
TO AN UNAFFILIATED PERSON; (II) A SALE (IN ONE TRANSACTION OR A SERIES OF
TRANSACTIONS) RESULTING IN MORE THAN 50% OF THE VOTING STOCK OF THE COMPANY
BEING HELD BY AN UNAFFILIATED PERSON; (III) A MERGER, CONSOLIDATION,
RECAPITALIZATION OR REORGANIZATION OF THE COMPANY WITH OR INTO AN UNAFFILIATED
PERSON; IF AND ONLY IF ANY SUCH EVENT LISTED IN CLAUSES (I) THROUGH (III) ABOVE
RESULTS IN THE INABILITY OF THE INVESTORS, OR ANY MEMBER OR MEMBERS OF THE
INVESTORS, TO DESIGNATE OR ELECT A MAJORITY OF THE BOARD (OR THE BOARD OF
DIRECTORS OF THE RESULTING ENTITY OR ITS PARENT COMPANY). FOR PURPOSES OF THIS
DEFINITION, THE TERM “UNAFFILIATED PERSON” MEANS ANY PERSON OR GROUP WHO IS NOT
(X) AN INVESTOR OR ANY MEMBER OF THE INVESTORS, (Y) A RULE 405 AFFILIATE OF ANY
INVESTOR OR ANY MEMBER OF ANY INVESTOR, OR (Z) AN ENTITY IN WHICH ANY INVESTOR,
OR ANY MEMBER OF ANY INVESTOR HOLDS, DIRECTLY OR INDIRECTLY, A MAJORITY OF THE
ECONOMIC INTERESTS IN SUCH ENTITY.

 

(D)           “COMMITTEE” MEANS THE COMPENSATION COMMITTEE OF THE BOARD.

 

(E)           “COMMON STOCK” OR “SHARE” MEANS THE CLASS A COMMON STOCK, PAR
VALUE $0.01 PER SHARE, OF THE COMPANY, WHICH MAY BE AUTHORIZED BUT UNISSUED, OR
ISSUED AND REACQUIRED.

 

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(F)            “EMPLOYEE” MEANS A PERSON, INCLUDING AN OFFICER, IN THE REGULAR
EMPLOYMENT OF THE COMPANY OR ONE OF ITS SUBSIDIARIES WHO, IN THE OPINION OF THE
COMMITTEE, IS, OR IS EXPECTED TO HAVE INVOLVEMENT IN THE MANAGEMENT, GROWTH OR
PROTECTION OF SOME PART OR ALL OF THE BUSINESS OF THE COMPANY.

 

(G)           “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(H)           “FAIR MARKET VALUE” MEANS THE PRICE PER SHARE EQUAL TO (I) THE
AVERAGE OF THE LAST SALE PRICE OF THE COMMON STOCK ON THE APPLICABLE DATE ON
EACH STOCK EXCHANGE ON WHICH THE COMMON STOCK MAY AT THE TIME BE LISTED OR,
(II) IF THERE SHALL HAVE BEEN NO SALES ON ANY SUCH EXCHANGES ON THE APPLICABLE
DATE ON ANY GIVEN DAY, THE AVERAGE OF THE CLOSING BID AND ASKED PRICES OF THE
COMMON STOCK ON EACH SUCH EXCHANGE ON THE APPLICABLE DATE OR, (III) IF THERE IS
NO SUCH BID AND ASKED PRICE ON THE APPLICABLE DATE, THE AVERAGE OF THE CLOSING
BID AND ASKED PRICES OF THE COMMON STOCK ON THE NEXT PRECEDING DATE WHEN SUCH
BID AND ASKED PRICE OCCURRED OR, (IV) IF THE COMMON STOCK SHALL NOT BE SO
LISTED, THE CLOSING SALES PRICE OF THE COMMON STOCK AS REPORTED BY NASDAQ ON THE
APPLICABLE DATE IN THE OVER-THE-COUNTER MARKET, OR, (V) IF THERE HAS BEEN NO
PUBLIC OFFERING, THE FAIR MARKET VALUE OF THE COMMON STOCK AS DETERMINED (X) IN
THE GOOD FAITH DISCRETION OF THE BOARD AFTER CONSULTATION WITH MANAGEMENT OF THE
COMPANY AND (Y) WITHOUT ANY PREMIUMS FOR CONTROL OR DISCOUNTS FOR MINORITY
INTERESTS OR RESTRICTIONS ON TRANSFER.

 

(I)            “GRANT” MEANS AN AWARD MADE TO A PARTICIPANT PURSUANT TO THE PLAN
AND DESCRIBED IN SECTION 5, INCLUDING, WITHOUT LIMITATION, AN AWARD OF A STOCK
OPTION, PURCHASE STOCK, RESTRICTED STOCK, STOCK APPRECIATION RIGHT OR DIVIDEND
EQUIVALENT RIGHT (AS SUCH TERMS ARE DEFINED IN SECTION 5), OR ANY COMBINATION OF
THE FOREGOING.

 

(J)            “GRANT AGREEMENT” MEANS AN AGREEMENT BETWEEN THE COMPANY AND A
PARTICIPANT THAT SETS FORTH THE TERMS, CONDITIONS AND LIMITATIONS APPLICABLE TO
A GRANT.

 

(K)           “GROUP” MEANS “GROUP,” AS SUCH TERM IS USED FOR PURPOSES OF
SECTION 13(D) OR 14(D) OF THE EXCHANGE ACT.

 

(L)            “INVESTORS” MEANS FUSION ACQUISITION LLC, A DELAWARE LIMITED
LIABILITY COMPANY, AND DLJ MERCHANT BANKING PARTNERS III, L.P., DLJ OFFSHORE
PARTNERS III-1, C.V., DLJ OFFSHORE PARTNERS III-2, C.V., DLJ OFFSHORE PARTNERS
III, C.V., DLJ MB PARTNERS III GMBH & CO. KG, MILLENNIUM PARTNERS II, L.P. AND
MBP III PLAN INVESTORS, L.P.

 

(M)          “PARTICIPANT” MEANS AN EMPLOYEE, NON-EMPLOYEE MEMBER OF THE BOARD,
CONSULTANT OR OTHER PERSON HAVING A RELATIONSHIP WITH THE COMPANY OR ONE OF ITS
SUBSIDIARIES, TO WHOM ONE OR MORE GRANTS HAVE BEEN MADE AND REMAIN OUTSTANDING.

 

(N)           “PERSON” MEANS “PERSON,” AS SUCH TERM IS USED FOR PURPOSES OF
SECTION 13(D) OR 14(D) OF THE EXCHANGE ACT.

 

(O)           “PUBLIC OFFERING” MEANS THE SALE OF SHARES OF COMMON STOCK TO THE
PUBLIC SUBSEQUENT TO THE DATE HEREOF PURSUANT TO A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, WHICH HAS BEEN DECLARED EFFECTIVE BY THE
SECURITIES AND EXCHANGE COMMISSION (OTHER THAN A REGISTRATION STATEMENT ON
FORM S-4, S-8 OR ANY OTHER SIMILAR FORM).

 

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(P)           “SUBSIDIARY” MEANS ANY CORPORATION IN AN UNBROKEN CHAIN OF
CORPORATIONS BEGINNING WITH THE COMPANY IF EACH OF THE CORPORATIONS, OR GROUP OF
COMMONLY CONTROLLED CORPORATIONS, OTHER THAN THE LAST CORPORATION IN THE
UNBROKEN CHAIN THEN OWNS STOCK POSSESSING 50% OR MORE OF THE TOTAL COMBINED
VOTING POWER OF ALL CLASSES OF STOCK IN ONE OF THE OTHER CORPORATIONS IN SUCH
CHAIN.

 

3.             ADMINISTRATION OF PLAN

 

(A)           THE PLAN SHALL BE ADMINISTERED BY THE COMMITTEE. THE COMMITTEE MAY
ADOPT ITS OWN RULES OF PROCEDURE, AND ACTION OF A MAJORITY OF THE MEMBERS OF THE
COMMITTEE TAKEN AT A MEETING, OR ACTION TAKEN WITHOUT A MEETING BY UNANIMOUS
WRITTEN CONSENT, SHALL CONSTITUTE ACTION BY THE COMMITTEE. THE COMMITTEE SHALL
HAVE THE POWER AND AUTHORITY TO ADMINISTER, CONSTRUE AND INTERPRET THE PLAN, TO
MAKE RULES FOR CARRYING IT OUT AND TO MAKE CHANGES IN SUCH RULES. ANY SUCH
INTERPRETATIONS, RULES, AND ADMINISTRATION SHALL BE CONSISTENT WITH THE BASIC
PURPOSES OF THE PLAN.

 

(B)           THE COMMITTEE MAY DELEGATE TO THE CHIEF EXECUTIVE OFFICER AND TO
OTHER SENIOR OFFICERS OF THE COMPANY ITS DUTIES UNDER THE PLAN SUBJECT TO SUCH
CONDITIONS AND LIMITATIONS AS THE COMMITTEE SHALL PRESCRIBE EXCEPT THAT ONLY THE
COMMITTEE MAY DESIGNATE AND MAKE GRANTS TO PARTICIPANTS WHO ARE SUBJECT TO
SECTION 16 OF THE EXCHANGE ACT.

 

(C)           THE COMMITTEE MAY EMPLOY COUNSEL, CONSULTANTS, ACCOUNTANTS,
APPRAISERS, BROKERS OR OTHER PERSONS. THE COMMITTEE, THE COMPANY, AND THE
OFFICERS AND DIRECTORS OF THE COMPANY SHALL BE ENTITLED TO RELY UPON THE ADVICE,
OPINIONS OR VALUATIONS OF ANY SUCH PERSONS. ALL ACTIONS TAKEN AND ALL
INTERPRETATIONS AND DETERMINATIONS MADE BY THE COMMITTEE IN GOOD FAITH SHALL BE
FINAL AND BINDING UPON ALL PARTICIPANTS, THE COMPANY AND ALL OTHER INTERESTED
PERSONS. NO MEMBER OF THE COMMITTEE SHALL BE PERSONALLY LIABLE FOR ANY ACTION,
DETERMINATION OR INTERPRETATION MADE IN GOOD FAITH WITH RESPECT TO THE PLAN OR
THE GRANTS, AND ALL MEMBERS OF THE COMMITTEE SHALL BE FULLY PROTECTED BY THE
COMPANY WITH RESPECT TO ANY SUCH ACTION, DETERMINATION OR INTERPRETATION.

 

4.             ELIGIBILITY

 

The Committee may from time to time make Grants under the Plan to such
Employees, or other persons having a relationship with Company or any of its
Subsidiaries, and in such form and having such terms, conditions and limitations
as the Committee may determine. The terms, conditions and limitations of each
Grant under the Plan shall be set forth in a Grant Agreement, in a form approved
by the Committee, consistent, however, with the terms of the Plan; provided,
however, that such Grant Agreement shall contain provisions dealing with the
treatment of Grants in the event of the termination of employment, death or
disability of a Participant, and may also include provisions concerning the
treatment of Grants in the event of a Change in Control of the Company.

 

5.             GRANTS

 

From time to time, the Committee will determine the forms and amounts of Grants
for Participants. Such Grants may take the following forms in the Committee’s
sole discretion:

 

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(A)           STOCK OPTIONS - THESE ARE OPTIONS TO PURCHASE COMMON STOCK. AT THE
TIME OF GRANT THE COMMITTEE SHALL DETERMINE, AND SHALL INCLUDE IN THE GRANT
AGREEMENT OR OTHER PLAN RULES, THE OPTION EXERCISE PERIOD, THE OPTION EXERCISE
PRICE, VESTING REQUIREMENTS, AND SUCH OTHER TERMS, CONDITIONS OR RESTRICTIONS ON
THE GRANT OR EXERCISE OF THE OPTION AS THE COMMITTEE DEEMS APPROPRIATE
INCLUDING, WITHOUT LIMITATION, THE RIGHT TO RECEIVE DIVIDEND EQUIVALENT PAYMENTS
ON VESTED AND/OR UNVESTED OPTIONS. IN ADDITION TO OTHER RESTRICTIONS CONTAINED
IN THE PLAN, AN OPTION GRANTED UNDER THIS SECTION 5(A) MAY NOT BE EXERCISED
AFTER THE END OF THE CALENDAR YEAR THAT IS 10 YEARS AFTER THE DATE IT IS
GRANTED. PAYMENT OF THE OPTION EXERCISE PRICE SHALL BE MADE IN CASH OR IN SHARES
OF COMMON STOCK THAT THE PARTICIPANT HAS HELD FOR AT LEAST SIX MONTHS, OR A
COMBINATION THEREOF, IN ACCORDANCE WITH THE TERMS OF THE PLAN, THE GRANT
AGREEMENT AND OF ANY APPLICABLE GUIDELINES OF THE COMMITTEE IN EFFECT AT THE
TIME.

 

(B)           STOCK APPRECIATION RIGHTS - THE COMMITTEE MAY GRANT STOCK
APPRECIATION RIGHTS IN CONNECTION WITH, OR INDEPENDENT OF, THE GRANT OF A STOCK
OPTION. EACH STOCK APPRECIATION RIGHT SHALL BE SUBJECT TO SUCH OTHER TERMS AS
THE COMMITTEE MAY DETERMINE. A STOCK APPRECIATION RIGHT MEANS THE RIGHT TO
TRANSFER AND SURRENDER TO THE COMPANY ALL OR A PORTION OF A STOCK OPTION IN
EXCHANGE FOR A CASH AMOUNT EQUAL TO THE EXCESS OF (I) THE AGGREGATE FAIR MARKET
VALUE, AS OF THE DATE SUCH OPTION OR PORTION THEREOF IS TRANSFERRED OR
SURRENDERED, OF THE COMMON STOCK UNDERLYING BY SUCH OPTION OR PORTION THEREOF,
OVER (II) THE AGGREGATE EXERCISE PRICE OF SUCH OPTION OR PORTION THEREOF,
RELATING TO SUCH COMMON STOCK.

 

(C)           PURCHASE STOCK - PURCHASE STOCK ARE SHARES OFFERED TO A
PARTICIPANT AT SUCH PRICE AS DETERMINED BY THE COMMITTEE, THE ACQUISITION OF
WHICH MAY MAKE THE PARTICIPANT ELIGIBLE TO RECEIVE GRANTS UNDER THE PLAN,
INCLUDING, BUT NOT LIMITED TO, STOCK OPTIONS.

 

(D)           RESTRICTED STOCK – RESTRICTED STOCK ARE SHARES GRANTED BY THE
COMMITTEE TO A PARTICIPANT, WITHOUT CHARGE TO THE PARTICIPANT (OTHER THAN AS MAY
BE REQUIRED BY APPLICABLE LAW). THE RESTRICTED STOCK SHALL BE SUBJECT TO SUCH
OTHER TERMS AS THE COMMITTEE MAY DETERMINE.

 

(E)           DIVIDEND EQUIVALENT RIGHTS – THE COMMITTEE MAY GRANT DIVIDEND
EQUIVALENT RIGHTS EITHER ALONE OR IN CONNECTION WITH THE GRANT OF A STOCK
OPTION. A DIVIDEND EQUIVALENT RIGHT MEANS THE RIGHT TO RECEIVE A PAYMENT IN
RESPECT OF ONE SHARE OF COMMON STOCK (WHETHER OR NOT SUBJECT TO A STOCK OPTION)
EQUAL TO THE AMOUNT OF ANY DIVIDEND PAID IN RESPECT OF ONE SHARE OF COMMON STOCK
HELD BY A SHAREHOLDER IN THE COMPANY. EACH DIVIDEND EQUIVALENT RIGHT SHALL BE
SUBJECT TO SUCH TERMS AS THE COMMITTEE MAY DETERMINE.

 

6.             LIMITATIONS AND CONDITIONS

 

(A)           THE NUMBER OF SHARES AVAILABLE FOR GRANTS UNDER THIS PLAN SHALL BE
510,230 UNLESS RESTRICTED BY APPLICABLE LAW. SHARES RELATED TO GRANTS THAT ARE
FORFEITED, TERMINATED, CANCELED OR EXPIRE UNEXERCISED, SHALL IMMEDIATELY BECOME
AVAILABLE FOR NEW GRANTS.

 

(B)           NO GRANTS SHALL BE MADE UNDER THE PLAN BEYOND TEN YEARS AFTER THE
EFFECTIVE DATE OF THE PLAN, BUT THE TERMS OF GRANTS MADE ON OR BEFORE THE
EXPIRATION OF THE PLAN MAY EXTEND BEYOND SUCH EXPIRATION. AT THE TIME A GRANT IS
MADE OR AMENDED OR THE TERMS OR CONDITIONS OF A GRANT ARE CHANGED IN ACCORDANCE
WITH THE TERMS OF THE PLAN OR THE GRANT AGREEMENT, THE COMMITTEE MAY PROVIDE FOR
LIMITATIONS OR CONDITIONS ON SUCH GRANT.

 

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(C)           NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE COMPANY OR
ANY OF ITS SUBSIDIARIES TO TERMINATE ANY PARTICIPANT’S EMPLOYMENT AT ANY TIME OR
FOR ANY REASON.

 

(D)           OTHER THAN AS SPECIFICALLY PROVIDED IN THE FORM OF AMENDED AND
RESTATED MANAGEMENT STOCKHOLDER’S AGREEMENT ATTACHED HERETO AS EXHIBIT A, NO
BENEFIT UNDER THE PLAN SHALL BE SUBJECT IN ANY MANNER TO ANTICIPATION,
ALIENATION, SALE, TRANSFER, ASSIGNMENT, PLEDGE, ENCUMBRANCE, OR CHARGE, AND ANY
ATTEMPT TO DO SO SHALL BE VOID. NO SUCH BENEFIT SHALL, PRIOR TO RECEIPT THEREOF
BY THE PARTICIPANT, BE IN ANY MANNER LIABLE FOR OR SUBJECT TO THE DEBTS,
CONTRACTS, LIABILITIES, ENGAGEMENTS, OR TORTS OF THE PARTICIPANT.

 

(E)           PARTICIPANTS SHALL NOT BE, AND SHALL NOT HAVE ANY OF THE RIGHTS OR
PRIVILEGES OF, STOCKHOLDERS OF THE COMPANY IN RESPECT OF ANY SHARES PURCHASABLE
IN CONNECTION WITH ANY GRANT UNLESS AND UNTIL CERTIFICATES REPRESENTING ANY SUCH
SHARES HAVE BEEN ISSUED BY THE COMPANY TO SUCH PARTICIPANTS (OR BOOK ENTRY
REPRESENTING SUCH SHARES HAS BEEN MADE AND SUCH SHARES HAVE BEEN DEPOSITED WITH
THE APPROPRIATE REGISTERED BOOK-ENTRY CUSTODIAN).

 

(F)            NO ELECTION AS TO BENEFITS OR EXERCISE OF ANY GRANT MAY BE MADE
DURING A PARTICIPANT’S LIFETIME BY ANYONE OTHER THAN THE PARTICIPANT EXCEPT BY A
LEGAL REPRESENTATIVE APPOINTED FOR OR BY THE PARTICIPANT.

 

(G)           ABSENT EXPRESS PROVISIONS TO THE CONTRARY, ANY GRANT UNDER THIS
PLAN SHALL NOT BE DEEMED COMPENSATION FOR PURPOSES OF COMPUTING BENEFITS OR
CONTRIBUTIONS UNDER ANY RETIREMENT PLAN OF THE COMPANY OR ITS SUBSIDIARIES AND
SHALL NOT AFFECT ANY BENEFITS UNDER ANY OTHER BENEFIT PLAN OF ANY KIND NOW OR
SUBSEQUENTLY IN EFFECT UNDER WHICH THE AVAILABILITY OR AMOUNT OF BENEFITS IS
RELATED TO LEVEL OF COMPENSATION. THIS PLAN IS NOT A “RETIREMENT PLAN” OR
“WELFARE PLAN” UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED.

 

(H)           UNLESS THE COMMITTEE DETERMINES OTHERWISE, NO BENEFIT OR PROMISE
UNDER THE PLAN SHALL BE SECURED BY ANY SPECIFIC ASSETS OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES, NOR SHALL ANY ASSETS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES
BE DESIGNATED AS ATTRIBUTABLE OR ALLOCATED TO THE SATISFACTION OF THE COMPANY’S
OBLIGATIONS UNDER THE PLAN.

 

7.             TRANSFERS AND LEAVES OF ABSENCE

 

For purposes of the Plan, unless the Committee determines otherwise: (a) a
transfer of a Participant’s employment without an intervening period of
separation among the Company and any Subsidiary (or among any Subsidiaries)
shall not be deemed a termination of employment, and (b) a Participant who is
granted in writing a leave of absence or who is entitled to a statutory leave of
absence shall be deemed to have remained in the employ of the Company (and any
Subsidiary) during such leave of absence.

 

8.             ADJUSTMENTS

 

In the event of any change in the outstanding Common Stock by reason of a stock
split, spin-off, stock combination, reclassification, recapitalization,
liquidation, dissolution, reorganization, merger, Change in Control, or other
event affecting the capital stock of the Company, the Committee may adjust
appropriately (a) the number and kind of shares subject to

 

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the Plan and available for or covered by Grants and (b) share prices related to
outstanding Grants, and make such other revisions to outstanding Grants as it
deems, in good faith, are equitably required (including, without limitation, to
the exercise price of Stock Options).

 

9.             MERGER, CONSOLIDATION, EXCHANGE, ACQUISITION, LIQUIDATION OR
DISSOLUTION

 

In its absolute discretion, acting in good faith, and on such terms and
conditions as it deems appropriate, coincident with or after the grant of any
Grant, the Committee may provide that such Grant cannot be exercised after the
amalgamation, merger or consolidation of the Company with or into another
corporation, the exchange of all or substantially all of the assets of the
Company for the securities of another corporation, the acquisition by another
corporation of 80% or more of the Company’s then outstanding shares of voting
stock or the recapitalization, reorganization, reclassification, liquidation,
dissolution, or other event affecting the capital stock of the Company, and the
Committee shall, on such terms and conditions as it deems appropriate, acting in
good faith, also provide, either by the terms of such Grant or by a resolution
adopted prior to the occurrence of such amalgamation, merger, consolidation,
exchange, acquisition, recapitalization, reorganization, reclassification,
liquidation, dissolution or other event affecting the capital stock of the
Company, that, after written notice to all affected Participants and for a
reasonable period of time prior to such event, such Grant shall be exercisable
as to any Shares subject thereto which is being made unexercisable after any
such event, notwithstanding anything to the contrary herein (but subject to the
provisions of Section 6(b)) and that, upon the occurrence of such event, such
Grant shall terminate and be of no further force or effect; provided, however,
that the Committee may also provide, in its absolute discretion, that even if
the Grant shall remain exercisable after any such event, from and after such
event, any such Grant shall be exercisable only for the kind and amount of
securities and/or other property, or the cash equivalent thereof (as determined
by the Committee in good faith), receivable as a result of such event by the
holder of a number of Shares for which such Grant could have been exercised
immediately prior to such event.

 

10.           AMENDMENT AND TERMINATION

 

(a)           The Committee shall have the authority to make such amendments to
any terms and conditions applicable to outstanding Grants as are consistent with
this Plan provided that no such action shall modify any Grant in a manner
adverse to the Participant without the Participant’s consent except as such
modification is provided for or contemplated in the terms of the Grant or this
Plan (except that any adjustment that is made pursuant to Section 8 or 9 hereof
shall be made by the Committee reasonably and in good faith).

 

(b)           The Board of Directors may amend, suspend or terminate the Plan
except that no such action, other than an action under Section 8 or 9 hereof,
may be taken which would, without stockholder approval, increase the aggregate
number of Shares available for Grants under the Plan, decrease the price of
outstanding Grants, change the requirements relating to the Committee, extend
the term of the Plan or be materially adverse to all Participants with respect
to any outstanding Grants.

 

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11.           GOVERNING LAW; INTERNATIONAL PARTICIPANTS

 

(A)           THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF DELAWARE APPLICABLE THEREIN.

 

(B)           WITH RESPECT TO PARTICIPANTS WHO RESIDE OR WORK OUTSIDE THE UNITED
STATES OF AMERICA AND WHO ARE NOT (AND WHO ARE NOT EXPECTED TO BE) “COVERED
EMPLOYEES” WITHIN THE MEANING OF SECTION 162(M) OF THE CODE, THE COMMITTEE MAY,
IN ITS SOLE DISCRETION, AMEND THE TERMS OF THE PLAN OR AWARDS WITH RESPECT TO
SUCH PARTICIPANTS IN ORDER TO CONFORM SUCH TERMS WITH THE REQUIREMENTS OF LOCAL
LAW OR TO OBTAIN MORE FAVORABLE TAX OR OTHER TREATMENT FOR A PARTICIPANT, THE
COMPANY OR AN AFFILIATE.

 

12.           WITHHOLDING TAXES

 

The Company shall have the right to deduct from any cash payment made under the
Plan any minimum federal, state or local income or other taxes required by law
to be withheld with respect to such payment. It shall be a condition to the
obligation of the Company to deliver Shares upon the exercise of a Stock Option
that the Participant pay to the Company such amount as may be requested by the
Company for the purpose of satisfying any liability for such minimum withholding
taxes.

 

13.           EFFECTIVE DATE AND TERMINATION DATES

 

The Plan shall be effective on and as of the date of its approval by the
stockholders of the Company and shall terminate ten years later, subject to
earlier termination by the Board pursuant to Section 10.

 

ORIGINAL PLAN APPROVED BY STOCKHOLDERS ON OCTOBER 4, 2004.

 

AMENDED AND RESTATED PLAN APPROVED BY STOCKHOLDERS ON JANUARY 6, 2005.

 

SECOND AMENDED AND RESTATED PLAN APPROVED BY STOCKHOLDERS ON MARCH 14, 2005.

 

THIRD AMENDED AND RESTATED PLAN APPROVED BY STOCKHOLDERS ON MARCH 22, 2006.

 

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