Exhibit 10.2

 

3CI EMPLOYEE RETENTION PROGRAM

 

1.             ESTABLISHMENT OF PROGRAM.  THE COMPANY ESTABLISHES THE 3CI
EMPLOYEE RETENTION PROGRAM, AS SET FORTH HEREIN AND AS IT MAY AMENDED FROM TIME
TO TIME (THE “PROGRAM”), EFFECTIVE AS OF DECEMBER 31, 2005.   BONUSES GRANTED
UNDER THIS PROGRAM SHALL BE SUBJECT TO (A) THE TERMS AND CONDITIONS OF THIS
PROGRAM AND THE RESPECTIVE RETENTION AWARD AGREEMENT (DEFINED BELOW) EXECUTED BY
EACH EMPLOYEE OF THE COMPANY WHO IS GRANTED A BONUS UNDER THE PROGRAM, AS SUCH
DOCUMENTS MAY BE AMENDED FROM TIME TO TIME, (B) COURT APPROVAL (DEFINED BELOW),
AND (C) DISTRIBUTION OF THE SETTLEMENT PROCEEDS (DEFINED BELOW).

 

2.             PURPOSE.  THE COMPANY IS A PARTY TO A SETTLEMENT AGREEMENT
PURSUANT TO WHICH STERICYCLE, INC., A DELAWARE CORPORATION AND THE COMPANY’S
MAJORITY STOCKHOLDER (“STERICYCLE”), HAS AGREED TO PAY THE SETTLEMENT PROCEEDS
TO SETTLE THE LOUISIANA SUIT (DEFINED BELOW).  SUBJECT TO COURT APPROVAL, THE
SETTLEMENT PROCEEDS ARE TO BE DISTRIBUTED ON THE EFFECTIVE TIME OF SETTLEMENT
(DEFINED BELOW).  PRIOR TO THE EFFECTIVE TIME OF SETTLEMENT, THE COMPANY WILL
CONTINUE ITS BUSINESS OPERATIONS.  THE PURPOSE OF THIS PROGRAM IS TO ASSIST THE
COMPANY IN MAINTAINING THOSE OPERATIONS BY PROVIDING INCENTIVE TO THE COMPANY’S
EMPLOYEES TO REMAIN EMPLOYED AND TO CONTINUE WORKING FOR THE COMPANY THROUGH THE
EFFECTIVE TIME OF SETTLEMENT.

 

3.             DEFINITIONS.  AS USED HEREIN, UNLESS THE CONTEXT REQUIRES
OTHERWISE, THE FOLLOWING TERMS SHALL HAVE THE MEANINGS INDICATED BELOW:

 

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

 

(B)           “BONUS” MEANS THE RIGHT GRANTED TO AN EMPLOYEE UNDER THE PROGRAM
AND HIS RESPECTIVE RETENTION AWARD AGREEMENT TO RECEIVE A CASH BONUS IN THE
AMOUNT AND UNDER THE TERMS, CONDITIONS AND LIMITATIONS THAT THE SPECIAL
COMMITTEE ESTABLISHES.

 

(C)           “CAUSE” MEANS (A) EMPLOYEE’S GROSS NEGLIGENCE IN THE PERFORMANCE
OF HIS DUTIES AS AN EMPLOYEE OF THE COMPANY, OR THE INTENTIONAL NONPERFORMANCE
OR INTENTIONAL MIS-PERFORMANCE OF SUCH DUTIES; (B) EMPLOYEE’S FAILURE TO ABIDE
BY OR COMPLY WITH THE COMPANY’S WRITTEN POLICIES AND PROCEDURES AS OF
DECEMBER 31, 2005; (C) EMPLOYEE’S DISHONESTY, FRAUD OR WILLFUL MISCONDUCT WITH
RESPECT TO THE BUSINESS OR AFFAIRS OF THE COMPANY; (D) EMPLOYEE’S CONVICTION OF
A FELONY OR OTHER CRIME INVOLVING MORAL TURPITUDE; OR (E) EMPLOYEE’S ABUSE OF
ALCOHOL OR DRUGS (LEGAL OR ILLEGAL) THAT, IN THE SPECIAL COMMITTEE’S SOLE
JUDGMENT, IMPAIRS THE EMPLOYEE’S ABILITY TO PERFORM HIS DUTIES AS AN EMPLOYEE OF
THE COMPANY.

 

(D)           “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND
ANY SUCCESSOR STATUTE.  REFERENCE IN THE PROGRAM TO ANY SECTION OF THE CODE
SHALL BE DEEMED TO INCLUDE ANY AMENDMENTS OR SUCCESSOR PROVISIONS TO SUCH
SECTION AND ANY TREASURY REGULATIONS PROMULGATED UNDER SUCH SECTION.

 

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

 

(E)           “COMMITTEE” MEANS THE SPECIAL COMMITTEE OF THE BOARD, THE MEMBERS
OF WHICH ARE STEPHEN B. KOENIGSBERG AND KEVIN J. MCMANUS.

 

(F)            “COMPANY” MEANS 3CI COMPLETE COMPLIANCE CORPORATION, DBA AMERICAN
3CI, A DELAWARE CORPORATION.

 

(G)           “COURT” MEANS THE FIRST JUDICIAL DISTRICT COURT, CADDO PARISH,
LOUISIANA, HONORABLE JUDGE ROY L. BRUN PRESIDING.

 

(H)           “COURT APPROVAL” MEANS WHEN THE ORDER AND JUDGMENT OF THE COURT IN
THE LOUISIANA SUIT, INCLUDING, BUT NOT LIMITED TO, APPROVAL OF THE PAYMENT OF
THE BONUSES GRANTED PURSUANT TO THIS PROGRAM, BECOME FINAL AND NO LONGER SUBJECT
TO REVIEW BY APPEAL.

 

(I)            “DIRECTOR” MEANS A MEMBER OF THE BOARD.

 

(J)            “DISABILITY” MEANS THE “DISABILITY” OF A PERSON AS DEFINED IN A
THEN EFFECTIVE LONG-TERM DISABILITY PLAN MAINTAINED BY THE COMPANY THAT COVERS
SUCH PERSON, OR IF SUCH A PLAN DOES NOT EXIST AT ANY RELEVANT TIME, “DISABILITY”
MEANS THE PERMANENT AND TOTAL DISABILITY OF A PERSON WITHIN THE MEANING OF
SECTION 22(E)(3) OF THE CODE.  SECTION 22(E)(3) OF THE CODE PROVIDES THAT AN
INDIVIDUAL IS TOTALLY AND PERMANENTLY DISABLED IF HE IS UNABLE TO ENGAGE IN ANY
SUBSTANTIAL GAINFUL ACTIVITY BY REASON OF ANY MEDICALLY DETERMINABLE PHYSICAL OR
MENTAL IMPAIRMENT THAT CAN BE EXPECTED TO RESULT IN DEATH OR THAT HAS LASTED OR
CAN BE EXPECTED TO LAST FOR A CONTINUOUS PERIOD OF NOT LESS THAN TWELVE (12)
MONTHS.

 

(K)           “EFFECTIVE TIME OF SETTLEMENT” MEANS 9 A.M. CENTRAL TIME ON THE
LATER OF (A) THE DAY FOLLOWING THE DATE ON WHICH THE FINAL ORDER AND JUDGMENT IS
NO LONGER SUBJECT TO REVIEW BY APPEAL, OR (B) THE DAY FOLLOWING THE DATE ON
WHICH ANY APPEAL FROM THE FINAL ORDER AND JUDGMENT IS FINALLY RESOLVED, EITHER
BECAUSE A PETITION FOR CERTIORARI IS DENIED OR BY REASON OF AFFIRMANCE BY A
COURT OF LAST RESORT OR BY LAPSE OF TIME FOLLOWING AFFIRMANCE OR DISMISSAL OF
THE APPEAL BY AN INTERMEDIATE APPELLATE COURT OR OTHERWISE, PROVIDED THAT THE
FINAL ORDER AND JUDGMENT IS NOT REVERSED OR MATERIALLY MODIFIED BY THE COURT OR
ANY REVIEWING COURT.

 

(L)            “EMPLOYEE” MEANS ANY PERSON, INCLUDING AN OFFICER BUT NOT A
DIRECTOR, WHO IS EMPLOYED BY THE COMPANY.

 

(M)          “FINAL ORDER AND JUDGMENT” MEANS THE FINAL ORDER AND JUDGMENT OF
THE COURT DISMISSING THE LOUISIANA SUIT WITH PREJUDICE AND WITHOUT FURTHER
COSTS, INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR INTEREST, PENALTIES, COSTS AND
ATTORNEYS’ FEES, THAT THE PLAINTIFFS OR DEFENDANTS HAVE ALLEGED OR MAY HAVE
ALLEGED IN CONNECTION WITH THE LOUISIANA SUIT OR THAT ARE COVERED BY THE
RELEASES EXECUTED IN CONJUNCTION WITH THE DISMISSAL OF THE LOUISIANA SUIT.

 

(N)           “LOUISIANA SUIT” MEANS CAUSE NO. 467704-A, ROBB ET AL. V.
STERICYCLE, INC. ET AL., IN THE COURT.

 

(O)           “RETENTION AWARD AGREEMENT” MEANS THE WRITTEN AGREEMENT EVIDENCING
THE AWARD OF A BONUS PURSUANT TO THIS PROGRAM EXECUTED BY THE COMPANY AND AN
EMPLOYEE, INCLUDING ANY AMENDMENTS THERETO.

 

American 3CI

Employee Retention Program

 

2

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

 

(P)           “SECTION” MEANS A SECTION OF THIS PROGRAM UNLESS OTHERWISE STATED
OR THE CONTEXT OTHERWISE REQUIRES.

 

(Q)           “SETTLEMENT AGREEMENT” MEANS THAT CERTAIN SETTLEMENT AGREEMENT,
DATED AS OF NOVEMBER 11, 2005, AS IT MAY BE AMENDED OR MODIFIED FROM TIME TO
TIME, PURSUANT TO WHICH THE PARTIES TO THE LOUISIANA SUIT HAVE AGREED TO SETTLE
ALL CLAIMS IN THE LOUISIANA SUIT.

 

(R)            “SETTLEMENT PROCEEDS” MEANS THE $32,500,000 IN CASH THAT
STERICYCLE HAS PAID TO SETTLE THE ALLEGATIONS AGAINST IT AND ITS AFFILIATES IN
THE LOUISIANA SUIT.

 

4.             BONUSES UNDER THE PROGRAM. SUBJECT TO COURT APPROVAL, THE MAXIMUM
AGGREGATE AMOUNT OF THE SETTLEMENT PROCEEDS WITH RESPECT TO WHICH BONUSES MAY BE
GRANTED UNDER THIS PROGRAM SHALL BE $1,000,000 IN CASH (THE “BONUS POOL”).  ANY
AMOUNT OF THE BONUS POOL GRANTED PURSUANT TO THIS PROGRAM OR A RETENTION AWARD
AGREEMENT THAT IS FORFEITED OR CANCELED SHALL BE DEEMED NOT TO HAVE BEEN GRANTED
FOR PURPOSES OF DETERMINING THE MAXIMUM AGGREGATE AMOUNT THAT MAY BE PAID UNDER
THE PROGRAM AND SHALL AGAIN BE AVAILABLE FOR BONUS GRANTS UNDER THE PROGRAM. 
NOTWITHSTANDING ANY PROVISION OF THIS PROGRAM OR ANY RETENTION AWARD AGREEMENT
TO THE CONTRARY, NO BONUS OR ANY OTHER AMOUNT SHALL BE PAID TO ANY EMPLOYEE
UNDER THE PROGRAM OR ANY RETENTION AWARD AGREEMENT UNLESS AND UNTIL THE
EFFECTIVE TIME OF SETTLEMENT AND DISTRIBUTION OF THE SETTLEMENT PROCEEDS.

 

5.             ELIGIBILITY.  BONUSES MAY ONLY BE GRANTED TO EMPLOYEES OF THE
COMPANY. THE SPECIAL COMMITTEE IN ITS SOLE DISCRETION SHALL SELECT THE
RECIPIENTS OF BONUSES.  AN EMPLOYEE MAY BE GRANTED MORE THAN ONE BONUS UNDER THE
PROGRAM, AND BONUSES MAY BE GRANTED AT ANY TIME OR TIMES DURING THE TERM OF THE
PROGRAM.  THE GRANT OF A BONUS TO AN EMPLOYEE SHALL NOT BE DEEMED EITHER TO
ENTITLE THAT INDIVIDUAL TO, OR TO DISQUALIFY THAT INDIVIDUAL FROM, PARTICIPATION
IN ANY OTHER GRANT OF BONUSES UNDER THE PROGRAM OR ANY OTHER EMPLOYEE BENEFIT
GIVEN BY THE COMPANY.

 

6.             TERMS AND CONDITIONS OF BONUSES.  THE SPECIAL COMMITTEE SHALL
DETERMINE FROM TIME TO TIME AND IN ITS SOLE DISCRETION THE PROVISIONS, TERMS AND
CONDITIONS OF EACH BONUS, INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF EACH
BONUS, EMPLOYMENT REQUIREMENTS, TERMINATION OF EMPLOYMENT PROVISIONS, AND ALL
OTHER TERMS AND CONDITIONS, SUBJECT TO THE FOLLOWING:

 

(A)           FORM OF RETENTION AWARD AGREEMENT.  EACH BONUS GRANTED UNDER THIS
PROGRAM SHALL BE EVIDENCED BY A WRITTEN RETENTION AWARD AGREEMENT IN SUCH FORM
(WHICH NEED NOT BE THE SAME FOR EACH EMPLOYEE) AS THE SPECIAL COMMITTEE
APPROVES, BUT WHICH IS CONSISTENT WITH THIS PROGRAM.

 

(B)           DATE OF BONUS.  THE INITIAL DATE OF GRANT OF ALL BONUSES UNDER
THIS PROGRAM WILL BE AS OF DECEMBER 31, 2005.  THEREAFTER, THE DATE OF ANY GRANT
OF A BONUS UNDER THIS PROGRAM WILL BE THE DATE ON WHICH THE SPECIAL COMMITTEE
MAKES THE DETERMINATION TO GRANT SUCH BONUS, UNLESS OTHERWISE SPECIFIED BY THE
SPECIAL COMMITTEE.  A RETENTION AWARD AGREEMENT EVIDENCING THE BONUS WILL BE
DELIVERED TO THE EMPLOYEE FOR HIS EXECUTION WITHIN A REASONABLE TIME AFTER THE
DATE OF GRANT OF A BONUS.

 

3

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

 

(C)           PAYMENT.  ALL BONUSES GRANTED UNDER THE PROGRAM ARE PART OF THE
SETTLEMENT PROCEEDS TO BE OBTAINED BY THE COMPANY PURSUANT TO THE SETTLEMENT
AGREEMENT.  NO BONUSES WILL BE PAID UNLESS THE SETTLEMENT AGREEMENT OBTAINS
COURT APPROVAL AND UNTIL THE EFFECTIVE TIME OF SETTLEMENT AND DISTRIBUTION OF
THE SETTLEMENT PROCEEDS.

 

(D)           EMPLOYMENT.   NOTHING IN THIS PROGRAM, ANY RETENTION AWARD
AGREEMENT OR ANY BONUS ALTERS THE EMPLOYMENT AT-WILL RELATIONSHIP BETWEEN THE
COMPANY AND ITS EMPLOYEES. THE COMPANY SHALL HAVE THE RIGHT AT ANY TIME TO
TERMINATE THE EMPLOYMENT OF ANY EMPLOYEE.  NOTWITHSTANDING THIS RIGHT OF
TERMINATION, HOWEVER, IF AN EMPLOYEE’S EMPLOYMENT WITH THE COMPANY PRIOR TO THE
EFFECTIVE TIME OF SETTLEMENT IS TERMINATED (A) BY THE COMPANY, FOR ANY REASON
OTHER THAN FOR “CAUSE,” INCLUDING DEATH OR DISABILITY, OR (B) BY AN EMPLOYEE,
BECAUSE THE COMPANY HAS CHANGED ANY OF THE MATERIAL TERMS OF AN EMPLOYEE’S
EMPLOYMENT (E.G. JOB DUTIES, EXISTING REMUNERATION AND BENEFITS, PLACE OF WORK)
AND SUCH CHANGE HAS MADE AN EMPLOYEE’S JOB SUBSTANTIALLY MORE ONEROUS FOR SUCH
EMPLOYEE, THEN, SUCH EMPLOYEE SHALL BE ENTITLED TO, AND THE COMPANY SHALL PAY,
SUCH EMPLOYEE HIS BONUS AT THE TIME AND ON THE TERMS OTHERWISE SPECIFIED IN THE
EMPLOYEE’S RETENTION AWARD AGREEMENT.  SUBJECT TO THE PROVISIONS OF A PARTICULAR
RETENTION AWARD AGREEMENT, ON TERMINATION OF AN EMPLOYEE’S EMPLOYMENT WITH THE
COMPANY, ANY BONUS AWARDED TO SUCH EMPLOYEE SHALL BE FORFEITED BY THE EMPLOYEE. 
UPON ANY FORFEITURE, ALL RIGHTS OF THE EMPLOYEE WITH RESPECT TO HIS BONUS AND
HIS RETENTION AWARD AGREEMENT SHALL CEASE AND TERMINATE WITHOUT ANY FURTHER
OBLIGATION ON THE PART OF THE COMPANY.   THE SPECIAL COMMITTEE WILL HAVE
DISCRETION TO DETERMINE WHETHER THE EMPLOYMENT OF ANY EMPLOYEE HAS TERMINATED
AND THE DATE ON WHICH SUCH EMPLOYMENT TERMINATES OR HAS TERMINATED AND WHETHER
THE EMPLOYEE’S EMPLOYMENT TERMINATED AS A RESULT OF THE DISABILITY OR DEATH OF
THE EMPLOYEE.

 

(E)           NON-ASSIGNABILITY.  NO EMPLOYEE MAY ASSIGN, PLEDGE OR OTHERWISE
DISPOSE OF ANY OF HIS RIGHTS, OBLIGATIONS OR INTERESTS IN A BONUS OR A RETENTION
AWARD AGREEMENT, OTHERWISE THAN BY WILL OR BY THE LAWS OF DESCENT AND
DISTRIBUTION.

 

(F)            WITHHOLDING TAXES.  THE SPECIAL COMMITTEE MAY ESTABLISH SUCH
RULES AND PROCEDURES AS IT CONSIDERS DESIRABLE IN ORDER TO SATISFY ANY
OBLIGATION OF THE COMPANY TO WITHHOLD THE STATUTORY PRESCRIBED MINIMUM AMOUNT OF
FEDERAL OR STATE INCOME TAXES OR OTHER TAXES WITH RESPECT TO ANY BONUS.   PRIOR
TO PAYMENT OF ANY BONUS, THE COMPANY WILL WITHHOLD, OR CAUSE TO BE WITHHELD,
FROM ANY BONUS ALL INCOME, EMPLOYMENT AND OTHER TAXES AND BENEFITS AS THE
COMPANY DEEMS NECESSARY TO SATISFY THE EMPLOYEE’S OBLIGATIONS PURSUANT TO ANY
AND ALL LAWS OR GOVERNMENT REGULATIONS OR RULINGS, OR IF APPLICABLE, EMPLOYEE
BENEFIT PLANS.

 

(G)           NO OFFSET.   THE COMPANY DOES NOT HAVE, AND WILL NOT ATTEMPT TO
EXERCISE, ANY RIGHT OF OFFSET, RECOUPMENT, COUNTERCLAIM OR SIMILAR RIGHT TO
REDUCE OR EXCUSE PAYMENT OF ANY BONUS FOR ANY CLAIM OR PAYMENT, EXCEPT WITH
REGARD TO THE OBLIGATIONS SET FORTH IN SECTION 6(F) ABOVE.

 

(H)           MODIFICATION, EXTENSION AND RENEWAL.  THE SPECIAL COMMITTEE SHALL
HAVE THE POWER TO MODIFY, CANCEL, EXTEND OR RENEW ANY AND ALL RETENTION AWARD
AGREEMENTS AND TO AUTHORIZE THE GRANT OF NEW BONUSES AND THE ENTRY OF NEW
RETENTION AWARD AGREEMENTS IN SUBSTITUTION THEREFOR, PROVIDED THAT ANY SUCH
ACTION MAY NOT, WITHOUT THE WRITTEN CONSENT OF THE EFFECTED EMPLOYEE, IMPAIR ANY
RIGHTS UNDER ANY BONUS AND RETENTION AWARD AGREEMENT PREVIOUSLY GRANTED TO SUCH
EMPLOYEE.

 

4

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

 

7.             INTERPRETATION.  SUBJECT TO COURT APPROVAL, THE SPECIAL COMMITTEE
SHALL HAVE FULL AND SOLE POWER AND AUTHORITY TO INTERPRET, CONSTRUE AND
ADMINISTER THE PROGRAM AND ALL RETENTION AWARD AGREEMENTS AND SHALL PRESCRIBE
SUCH RULES AND REGULATIONS IN CONNECTION WITH THE OPERATION OF THE PROGRAM AS IT
DETERMINES TO BE ADVISABLE FOR THE ADMINISTRATION OF THE PROGRAM.  THE SPECIAL
COMMITTEE’S INTERPRETATIONS AND CONSTRUCTION OF THE PROGRAM, ALL RETENTION AWARD
AGREEMENTS AND ALL BONUSES, AND ALL ACTIONS HEREUNDER AND THEREUNDER, INCLUDING,
BUT NOT LIMITED TO THE AMOUNT OF AND THE RECIPIENT OF ANY BONUS, SHALL BE
BINDING AND CONCLUSIVE ON THE COMPANY AND ON ALL OTHER PERSONS AND ENTITIES FOR
ALL PURPOSES.  NONE OF THE INDIVIDUAL MEMBERS OF THE SPECIAL COMMITTEE, THE
SPECIAL COMMITTEE, THE COMPANY OR ANY OFFICER OR DIRECTOR OF THE COMPANY, SHALL
BE LIABLE TO ANY PERSON OR ENTITY, INCLUDING ANY EMPLOYEE AND HIS
REPRESENTATIVES, HEIRS OR AGENTS, FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN,
IN CONNECTION WITH THE INTERPRETATION AND ADMINISTRATION OF THIS AGREEMENT
UNLESS ATTRIBUTABLE TO HIS OR ITS LACK OF GOOD FAITH.

 

8.             EFFECT OF PROGRAM.  NEITHER THE ADOPTION OF THIS PROGRAM NOR ANY
ACTION OF THE SPECIAL COMMITTEE SHALL BE DEEMED TO GIVE ANY EMPLOYEE ANY RIGHT
TO BE GRANTED A BONUS OR ANY OTHER RIGHTS EXCEPT AS MAY BE EVIDENCED BY THE
RETENTION AWARD AGREEMENT, OR ANY AMENDMENT THERETO, DULY AUTHORIZED BY THE
SPECIAL COMMITTEE AND EXECUTED ON BEHALF OF THE COMPANY, AND THEN ONLY TO THE
EXTENT AND ON THE TERMS AND CONDITIONS EXPRESSLY SET FORTH THEREIN.  THE
EXISTENCE OF THE PROGRAM, THE RETENTION AWARD AGREEMENTS, AND THE BONUSES
GRANTED THEREUNDER SHALL NOT AFFECT IN ANY WAY THE RIGHT OF THE SPECIAL
COMMITTEE TO MAKE, AUTHORIZE OR APPROVE ANY CHANGE, AMENDMENT OR MODIFICATION IN
THE SETTLEMENT AGREEMENT OR ANY OTHER CORPORATE ACT OR PROCEEDING BY OR FOR THE
COMPANY THAT THE SPECIAL COMMITTEE IS AUTHORIZED OR EMPOWERED TO TAKE ON BEHALF
OF THE COMPANY.

 

(A)           NO EFFECT ON RETIREMENT AND OTHER BENEFIT PROGRAMS.  THIS PROGRAM
IS NOT A “RETIREMENT PLAN” OR “WELFARE PLAN” UNDER THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED.  FOR PURPOSES OF ANY RETIREMENT OR
EMPLOYEE BENEFIT PLANS OF THE COMPANY, INCLUDING ITS 401K PLAN, ANY PAYMENTS
MADE PURSUANT TO THIS PROGRAM OR ANY RETENTION AWARD AGREEMENT SHALL BE SUBJECT
TO THE TERMS AND CONDITIONS, INCLUDING THE METHOD OF COMPUTING COMPENSATION OR
CONTRIBUTIONS, OF ANY RETIREMENT OR EMPLOYEE BENEFIT PLAN OF THE COMPANY AS THEY
EXIST AT THE EFFECTIVE TIME OF SETTLEMENT.

 

9.             AMENDMENT OR TERMINATION OF PROGRAM.  THE SPECIAL COMMITTEE IN
ITS SOLE DISCRETION MAY, AT ANY TIME AND FROM TIME TO TIME AFTER THE DATE OF
ADOPTION OF THIS PROGRAM, TERMINATE OR AMEND THE PROGRAM IN ANY RESPECT,
INCLUDING AMENDMENT OF ANY FORM OF RETENTION AWARD AGREEMENT TO BE EXECUTED
PURSUANT TO THIS PROGRAM.  NO BONUS MAY BE GRANTED AFTER THE EFFECTIVE DATE OF
SETTLEMENT.  ANY AMENDMENT OR TERMINATION OF THE PROGRAM SHALL NOT AFFECT
BONUSES PREVIOUSLY GRANTED AND THE RESPECTIVE RETENTION AWARD AGREEMENT, AND
SUCH BONUSES AND AGREEMENTS SHALL REMAIN IN FULL FORCE AND EFFECT AS IF THE
PROGRAM HAD NOT BEEN AMENDED OR TERMINATED, UNLESS AGREED OTHERWISE IN A WRITING
SIGNED BY THE EFFECTED EMPLOYEE OR HIS REPRESENTATIVE.

 

10.           EFFECTIVE DATE AND TERM OF PROGRAM.  THE PROGRAM AS SET FORTH
HEREIN IS EFFECTIVE AS OF DECEMBER 31, 2005, AND SHALL CONTINUE IN FORCE AND
EFFECT UNTIL BOTH OF THE FOLLOWING EVENTS HAVE OCCURRED: (A) THE EFFECTIVE TIME
OF SETTLEMENT, AND (B) THE DISTRIBUTION

 

5

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

 

OF THE BONUSES TO COMPANY EMPLOYEES PURSUANT TO THE TERMS OF THIS PROGRAM AND
THE RETENTION AWARD AGREEMENTS ENTERED INTO BY THE COMPANY UNDER THIS PROGRAM.

 

11.           GOVERNING LAW.  THE PROGRAM SHALL BE CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO ANY CONFLICTS
OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION).  LITIGATION CONCERNING ANY DISPUTE OVER THE INTERPRETATION OR
ENFORCEMENT OF THIS PROGRAM WILL BE FILED AND RESOLVED IN A FEDERAL OR STATE
COURT IN TARRANT COUNTY, TEXAS.

 

12.           INTERPRETIVE MATTERS.  WHENEVER REQUIRED BY THE CONTEXT, PRONOUNS
AND ANY VARIATION THEREOF SHALL BE DEEMED TO REFER TO THE MASCULINE, FEMININE,
OR NEUTER, AND THE SINGULAR SHALL INCLUDE THE PLURAL, AND VISA VERSA.  THE TERM
“INCLUDE” OR “INCLUDING” DOES NOT DENOTE OR IMPLY ANY LIMITATION.  THE CAPTIONS
AND HEADINGS USED IN THE PROGRAM ARE INSERTED FOR CONVENIENCE AND SHALL NOT BE
DEEMED A PART OF THE PROGRAM FOR CONSTRUCTION OR INTERPRETATION.

 

6

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