EXHIBIT 10.19
ADOBE SYSTEMS INCORPORATED
2005 EQUITY INCENTIVE ASSUMPTION PLAN
(as amended as of March 1, 2010)
 
1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.
 
1.1 Establishment.  Adobe Systems Incorporated, a Delaware corporation,
established the Adobe Systems Incorporated 2005 Equity Incentive Assumption Plan
(the “Plan”) effective as of December 3, 2005 (the “Effective Date”) and hereby
amends and restates the Plan effective as of November 16, 2009 (the “Restatement
Date”), as most recently amended as of March 1, 2010.
 
1.2 Background and Purpose.  The Plan was established in connection with the
acquisition by the Company of Macromedia, Inc. and is amended and restated in
connection with the acquisition by the Company of Omniture, Inc. The Plan is
intended to comply with Rule 5635(c)(3) of the Nasdaq Qualitative Listing
Requirements.  The purpose of the Plan is to advance the interests of the
Participating Company Group and its stockholders by providing an incentive to
attract, retain and reward persons performing services for the Participating
Company Group and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group.  The Plan seeks to achieve
this purpose by providing for Awards in the form of Options, Restricted Stock
Units, Stock Appreciation Rights, Stock Purchase Rights, Stock Bonuses,
Performance Shares and Performance Units.  Outstanding Awards shall continue to
be governed by and administered under the terms of the Macromedia Plans or
Omniture Plans pursuant to which they originally were granted.  Awards granted
on or after the Effective Date, other than Outstanding Awards, shall be subject
to the terms of this Plan.
 
1.3 Term of Plan.  The Plan shall continue in effect until the earlier of its
termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Awards
granted under the Plan have lapsed; provided, however, that no Awards may be
made from Reserve A after August 1, 2009, no Awards may be made from Reserve B
after November 10, 2014, no Awards may be made from Reserve C after March 23,
2016, no Awards may be made from Reserve D after June 30, 2015 and no Awards may
be made from Reserve E after July 14, 2014.
 
2. DEFINITIONS AND CONSTRUCTION.
 
2.1 Definitions.  Whenever used herein, the following terms shall have their
respective meanings set forth below:
 
(a) “Affiliate” means (i) an entity, other than a Parent Corporation, that
directly, or indirectly through one or more intermediary entities, controls the
Company or (ii) an entity, other than a Subsidiary Corporation, that is
controlled by the Company directly, or indirectly through one or more
intermediary entities.  For this purpose, the term “control” (including the term
“controlled by”) means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the relevant
entity, whether through the ownership of voting securities, by contract or
otherwise; or shall have such other
 

 
 
 

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meaning assigned such term for the purposes of registration on Form S-8 under
the Securities Act.
 
(b) “Award” means any Option, SAR, Stock Purchase Right, Stock Bonus, Restricted
Stock Unit, Performance Share or Performance Unit granted under the Plan.
 
(c) “Award Agreement” means a written agreement between the Company and a
Participant setting forth the terms, conditions and restrictions of the Award
granted to the Participant.  An Award Agreement may be an “Option Agreement,” a
“SAR Agreement,” a “Stock Purchase Agreement,” a “Stock Bonus Agreement,” a
“Restricted Stock Unit Agreement,”  a “Performance Share Agreement” or a
“Performance Unit Agreement.”
 
(d) “Board” means the Board of Directors of the Company.
 
(e) “Code” means the Internal Revenue Code of 1986, as amended, and any
applicable regulations promulgated thereunder.
 
(f) “Committee” means the Executive Compensation Committee or other committee of
the Board duly appointed to administer the Plan and having such powers as shall
be specified by the Board.  If no committee of the Board has been appointed to
administer the Plan, the Board shall exercise all of the powers of the Committee
granted herein, and, in any event, the Board may in its discretion exercise any
or all of such powers.
 
(g) “Company” means Adobe Systems Incorporated, a Delaware corporation, or any
successor corporation thereto.
 
(h) “Disability” means the permanent and total disability of the Participant,
within the meaning of Section 22(e)(3) of the Code.
 
(i) “Dividend Equivalent” means a credit, made at the discretion of the
Committee or as otherwise provided by the Plan, to the account of a Participant
in an amount equal to the cash dividends paid on one share of Stock for each
share of Stock represented by an Award held by such Participant.
 
(j)  “Employee” means any person treated as an employee in the records of a
Participating Company (including an Officer or a member of the Board who is also
an employee); provided, however, that neither service as a member of the Board
nor payment of a director’s fee shall be sufficient to constitute employment for
purposes of the Plan.
 
(k) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
(l) “Fair Market Value” means, as of any date, the value of a share of Stock or
other property as determined by the Committee, in its discretion, or by the
Company, in its discretion, if such determination is expressly allocated to the
Company herein, subject to the following:
 
 

 
 
 

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(i) If, on such date, the Stock is listed on a national or regional securities
exchange or market system, the Fair Market Value of a share of Stock shall be
the closing price of a share of Stock (or the mean of the closing bid and asked
prices of a share of Stock if the Stock is so quoted instead) as quoted on the
Nasdaq Global Select Market, The Nasdaq SmallCap Market or such other national
or regional securities exchange or market system constituting the primary market
for the Stock, as reported in The Wall Street Journal or such other source as
the Company deems reliable.  If the relevant date does not fall on a day on
which the Stock has traded on such securities exchange or market system, the
date on which the Fair Market Value shall be established shall be the last day
on which the Stock was so traded prior to the relevant date, or such other
appropriate day as shall be determined by the Committee, in its discretion.
 
(ii) If, on such date, the Stock is not listed on a national or regional
securities exchange or market system, the Fair Market Value of a share of Stock
shall be as determined by the Committee in good faith without regard to any
restriction other than a restriction which, by its terms, will never lapse.
 
(m) “Insider” means an Officer, a member of the Board or any other person whose
transactions in Stock are subject to Section 16 of the Exchange Act.
 
(n) “Macromedia Plans” means the equity incentive plans of Macromedia, Inc.
included in Reserve A and Reserve B, as described in Section 4.1 of the Plan.
 
(o) “Nonstatutory Stock Option” means an Option not intended to be (as set forth
in the Award Agreement) an incentive stock option within the meaning of Section
422(b) of the Code.
 
(p) “Officer” means any person designated by the Board as an officer of the
Company.
 
(q) “Omniture Plans” means the equity incentive plans of Omniture, Inc. included
in Reserve C, Reserve D and Reserve E as described in Section 4.1 of the Plan.
 
(r) “Option” means the right to purchase Stock at a stated price for a specified
period of time granted to a participant pursuant to Section 6 of the Plan.  All
Options shall be Nonstatutory Stock Options.
 
(s) “Outstanding Award” means an award outstanding immediately prior to the
Effective Date under the Macromedia Plans or an award outstanding immediately
prior to the Restatement Date under the Omniture Plans.
 
(t) “Parent Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.
 
(u) “Participant” means any eligible person who has been granted one or more
Awards.
 
 

 
 
 

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(v) “Participating Company” means the Company or any Parent Corporation,
Subsidiary Corporation or Affiliate.
 
(w) “Participating Company Group” means, at any point in time, all corporations
collectively which are then Participating Companies.
 
(x) “Performance Award” means an Award of Performance Shares or Performance
Units.
 
(y) “Performance Award Formula” means, for any Performance Award, a formula or
table established by the Committee pursuant to Section 9.3 of the Plan which
provides the basis for computing the value of a Performance Award at one or more
threshold levels of attainment of the applicable Performance Goal(s) measured as
of the end of the applicable Performance Period.
 
(z) “Performance Goal” means a performance goal established by the Committee
pursuant to Section 9.3 of the Plan.
 
(aa) “Performance Period” means a period established by the Committee pursuant
to Section 9.3 of the Plan at the end of which one or more Performance Goals are
to be measured.
 
(bb) “Performance Share” means a bookkeeping entry representing a right granted
to a Participant pursuant to Section 9 of the Plan to receive a payment equal to
the value of a Performance Share based on performance.
 
(cc) “Performance Unit” means a bookkeeping entry representing a right granted
to a Participant pursuant to Section 9 of the Plan to receive a payment equal to
the value of a Performance Unit based upon performance.
 
(dd) “Reserve A” means the shares of Stock described in Section 4.1 of the Plan
as being allocated to such reserve.
 
(ee) “Reserve B” means the shares of Stock described in Section 4.1 of the Plan
as being allocated to such reserve.
 
(ff) “Reserve C” means the shares of Stock described in Section 4.1 of the Plan
as being allocated to such reserve.
 
(gg) “Reserve D” means the shares of Stock described in Section 4.1 of the Plan
as being allocated to such reserve.
 
(hh) “Reserve E” means the shares of Stock described in Section 4.1 of the Plan
as being allocated to such reserve.
 
(ii) “Restricted Stock Unit” means a bookkeeping entry representing a right
granted to a Participant pursuant to Section 8 of the Plan to receive one share
of Stock, a
 
 

 
 
 

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cash payment equal to the value of one share of Stock, or a combination thereof,
as determined in the sole discretion of the Committee.
 
(jj)  “Restriction Period” means the period established in accordance with
Section 8.5 of the Plan during which shares subject to a Stock Award are subject
to Vesting Conditions.
 
(kk) “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time
to time, or any successor rule or regulation.
 
(ll) “SAR” or “Stock Appreciation Right” means a bookkeeping entry representing,
for each share of Stock subject to such SAR, a right granted to a Participant
pursuant to Section 7 of the Plan to receive payment of an amount equal to the
excess, if any, of the Fair Market Value of a share of Stock on the date of
exercise of the SAR over the exercise price.
 
(mm) “Section 162(m)” means Section 162(m) of the Code.
 
(nn) “Securities Act” means the Securities Act of 1933, as amended.
 
(oo) “Service” means a Participant’s employment with the Participating Company
Group as an Employee.  Unless otherwise determined by the Board, a Participant’s
Service shall be deemed to have terminated if the Participant ceases to render
service to the Participating Company Group as an Employee.  However, a
Participant’s Service shall not be deemed to have terminated merely because of a
change in the Participating Company for which the Participant renders such
Service as an Employee, provided that there is no interruption or termination of
the Participant’s Service.  Furthermore, a Participant’s Service shall not be
deemed to have terminated if the Participant takes any bona fide leave of
absence approved by the Company of ninety (90) days or less.  In the event of a
leave in excess of ninety (90) days, the Participant’s Service shall be deemed
to terminate on the ninety-first (91st) day of the leave unless the
Participant’s right to return to Service is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated by the
Company or required by law, a leave of absence shall not be treated as Service
for purposes of determining vesting under the Participant’s Award Agreement.  A
Participant’s Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Participant
performs Service ceasing to be a Participating Company.  Subject to the
foregoing, the Company, in its discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such termination.
 
(pp) “Stock” means the common stock of the Company, as adjusted from time to
time in accordance with Section 4.2 of the Plan.
 
(qq) “Stock Award” means an Award of a Stock Bonus, a Stock Purchase Right or a
Restricted Stock Unit Award.
 
(rr) “Stock Bonus” means Stock granted to a Participant pursuant to Section 8 of
the Plan.
 
 

 
 
 

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(ss) “Stock Purchase Right” means a right to purchase Stock granted to a
Participant pursuant to Section 8 of the Plan.
 
(tt) “Subsidiary Corporation” means any present or future “subsidiary
corporation” of the Company, as defined in Section 424(f) of the Code.
 
(uu) “Vesting Conditions” mean those conditions established in accordance with
Section 8.5 of the Plan prior to the satisfaction of which shares subject to a
Stock Award remain subject to forfeiture or a repurchase option in favor of the
Company.
 
2.2 Construction.  Captions and titles contained herein are for convenience only
and shall not affect the meaning or interpretation of any provision of the
Plan.  Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular.  Use of the term
“or” is not intended to be exclusive, unless the context clearly requires
otherwise.
 
3. ADMINISTRATION.
 
3.1 Administration by the Committee.  The Plan shall be administered by the
Committee.  All questions of interpretation of the Plan or of any Award shall be
determined by the Committee, and such determinations shall be final and binding
upon all persons having an interest in the Plan or such Award.
 
3.2 Authority of Officers.  Any Officer shall have the authority to act on
behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated
to the Company herein, provided the Officer has apparent authority with respect
to such matter, right, obligation, determination or election.  To the extent
consistent with applicable laws (including but not limited to Delaware General
Corporation Law Section 157(c)), the Board may, in its discretion, delegate to a
committee comprised of one or more Officers (any such committee, an “Officer
Committee”) the authority to designate Employees (other than themselves) to
receive one or more Options or rights to acquire shares of Stock and to
determine the number of shares of Stock subject to such Options and rights,
without further approval of the Board or the Committee. Any such grants will be
subject to the terms of the Board resolutions providing for such delegation of
authority.
 
3.3 Administration with Respect to Insiders.  With respect to participation by
Insiders in the Plan, at any time that any class of equity security of the
Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall
be administered in compliance with the requirements, if any, of Rule 16b-3.
 
3.4 Powers of the Committee.  In addition to any other powers set forth in the
Plan and subject to the provisions of the Plan, the Committee shall have the
full and final power and authority, in its discretion:
 
(a) to determine the persons to whom, and the time or times at which, Awards
shall be granted and the number of shares of Stock or units to be subject to
each Award;
 
(b) to determine the type of Award granted;
 
 

 
 
 

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(c) to determine the Fair Market Value of shares of Stock or other property;
 
(d) to determine the terms, conditions and restrictions applicable to each Award
(which need not be identical) and any shares acquired pursuant thereto,
including, without limitation, (i) the exercise or purchase price of shares
purchased pursuant to any Award, (ii) the method of payment for shares purchased
pursuant to any Award, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with Award, including by the withholding or
delivery of shares of Stock, (iv) the timing, terms and conditions of the
exercisability or vesting of any Award or any shares acquired pursuant thereto,
(v) the Performance Award Formula and Performance Goals applicable to any Award
and the extent to which such Performance Goals have been attained, (vi) the time
of the expiration of any Award, (vii) the effect of the Participant’s
termination of Service on any of the foregoing, and (viii) all other terms,
conditions and restrictions applicable to any Award or shares acquired pursuant
thereto not inconsistent with the terms of the Plan;
 
(e) to determine whether an Award of SARs, Restricted Stock Units, Performance
Shares or Performance Units will be settled in shares of Stock, cash, or in any
combination thereof;
 
(f) to approve one or more forms of Award Agreement;
 
(g) to amend, modify, extend, cancel or renew any Award or to waive any
restrictions or conditions applicable to any Award or any shares acquired
pursuant thereto;
 
(h) to accelerate, continue, extend or defer the exercisability or vesting of
any Award or any shares acquired pursuant thereto, including with respect to the
period following a Participant’s termination of Service;
 
(i) to prescribe, amend or rescind rules, guidelines and policies relating to
the plan, or to adopt sub-plans or supplements to, or alternative versions of,
the Plan, including, without limitation, as the Committee deems necessary or
desirable to comply with the laws of or to accommodate the laws, regulations,
tax or accounting effectiveness, accounting principles or custom of, foreign
jurisdictions whose citizens may be granted Awards; and
 
(j) to correct any defect, supply any omission or reconcile any inconsistency in
the Plan or any Award Agreement and to make all other determinations and take
such other actions with respect to the Plan or any Award as the Committee may
deem advisable to the extent not inconsistent with the provisions of the Plan or
applicable law.
 
3.5 Option Repricing.  Without the affirmative vote of holders of a majority of
the shares of Stock cast in person or by proxy at a meeting of the stockholders
of the Company at which a quorum representing a majority of all outstanding
shares of Stock is present or represented by proxy, the Board shall not approve
a program providing for either (a) the cancellation of outstanding Options and
the grant in substitution therefore of new Options having a lower exercise price
or (b) the amendment of outstanding Options to reduce the exercise price
thereof.  This paragraph shall not be construed to apply to “issuing or assuming
a stock option in a transaction to which section 424(a) applies,” within the
meaning of Section 424 of the Code.
 
 

 
 
 

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3.6 Indemnification.  In addition to such other rights of indemnification as
they may have as members of the Board or the Committee or as officers or
employees of the Participating Company Group, members of the Board or the
Committee and any officers or employees of the Participating Company Group to
whom authority to act for the Board, the Committee or the Company is delegated
shall be indemnified by the Company against all reasonable expenses, including
attorneys’ fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Company, in writing, the opportunity
at its own expense to handle and defend the same.
 
4. SHARES SUBJECT TO PLAN.
 
4.1 Maximum Number of Shares Issuable.  The Plan shall have five separate share
reserves (“Reserve A,” “Reserve B,” “Reserve C,” “Reserve D” and “Reserve E”).
Reserve A and Reserve B reflect the unused share reserves and potential
reversions to such reserves, as of the Effective Date, with respect to the
following equity incentive plans that were maintained by Macromedia, Inc. prior
to the Effective Date:
 
 
Reserve A:
Andromedia, Inc. 1999 Stock Plan

 
 
Reserve B:
Macromedia, Inc. 2002 Equity Incentive Plan

 
Accordingly, as of the Effective Date, Reserve A consists of 190,678 shares of
Stock, of which there are Outstanding Awards covering 186,279 shares of Stock
and 4,399 shares of Stock remaining available for Awards; and Reserve B consists
of 6,163,117 shares of Stock, of which there are Outstanding Awards covering
5,897,011 shares of Stock and 266,106 shares of Stock remaining available for
Awards. Reserve C, Reserve D and Reserve E reflect the unused share reserves and
potential reversions to such reserves, as of the Restatement Date, with respect
to the following equity incentive plans that were maintained by Omniture, Inc.
prior to the Restatement Date:
 
 
Reserve C:
Omniture, Inc. 2006 Equity Incentive Plan

 
 
Reserve D:
Omniture, Inc. 2007 Equity Incentive Plan

 
 
Reserve E:
Omniture, Inc. 2008 Equity Incentive Plan

 
As of the Restatement Date, Reserve C consists of 6,688,321 shares of Stock, of
which there are Outstanding Awards covering 4,960,628 shares of Stock and
1,727,693 shares of Stock remaining available for Awards, Reserve D consists of
54,002 shares of Stock, of which there are Outstanding Awards covering 39,558
shares of Stock and 14,444 shares of Stock remaining

 

 
 
 

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available for Awards and Reserve E consists of 1,177,269 shares of Stock, of
which there are Outstanding Awards covering 764,455 shares of Stock and 412,814
shares of Stock remaining available for Awards.  Outstanding Awards shall
continue to be governed by and administered under the terms of the Macromedia
Plan or Omniture Plan pursuant to which they originally were granted, but in the
event of their forfeiture or expiration unexercised, the shares of Stock
associated with such forfeited or expired Outstanding Awards shall become
available for award pursuant to the terms of this Plan from Reserve A, Reserve
B, Reserve C, Reserve D or Reserve E, as applicable.  Reserve A, Reserve B,
Reserve C, Reserve D and Reserve E shall each be subject to adjustment as
provided in Section 4.2 of the Plan.  For each Award granted under Reserve A or
Reserve B of the Plan, Reserve A or Reserve B, as the case may be, shall be
reduced by one share of Stock for each share of Stock subject to such
Award.  For each Award granted under Reserve C, Reserve D or Reserve E of the
Plan, Reserve C, Reserve D or Reserve E, as the case may be, shall be reduced
(a) by one share of Stock for each share of Stock subject to such an Option or
Stock Appreciation Right, and (b) by one and seventy seven-hundredths (1.77)
shares of Stock for each share of Stock subject to such an Award that is not an
Option or Stock Appreciation Right.  Such shares shall consist of authorized but
unissued or reacquired shares of Stock or any combination thereof.  If an Award
for any reason expires or is terminated or canceled without having been
exercised or settled in full, or if shares of Stock acquired pursuant to an
Award subject to forfeiture or repurchase are forfeited or repurchased by the
Company at the Participant’s purchase price to effect a forfeiture of unvested
shares upon termination of Service, the shares of Stock allocable to the
terminated portion of such Award or such forfeited or repurchased shares of
Stock shall be added back to Reserve A, Reserve B, Reserve C, Reserve D or
Reserve E in an amount corresponding to the reduction in such Reserve A, Reserve
B, Reserve C, Reserve D or Reserve E previously made in accordance with the
rules described above in this Section 4.1 and again be available for issuance
under the Plan from Reserve A, Reserve B, Reserve C, Reserve D or Reserve E, as
applicable.  Shares of Stock shall not be deemed to have been issued pursuant to
the Plan with respect to any portion of an Award (other than an SAR that may be
settled in shares of Stock or cash) that is settled in cash.  Shares withheld in
satisfaction of tax withholding obligations pursuant to Section 13.2 shall not
again become available for issuance under the Plan.  Upon payment in shares of
Stock pursuant to the exercise of an SAR, the number of shares available for
issuance under the Plan shall be reduced by the gross number of shares for which
the SAR is exercised.  If the exercise price of an Option is paid by tender to
the Company, or attestation to the ownership, of shares of Stock owned by the
Participant, the number of shares available for issuance under the Plan shall be
reduced by the gross number of shares for which the Option is exercised.

4.2 Adjustments for Changes in Capital Structure.  In the event of any change in
the Stock through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares
or similar change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the stockholders of the Company in a
form other than Stock (excepting normal cash dividends) that has a material
effect on the Fair Market Value of shares of Stock, appropriate adjustments
shall be made in the number and class of shares subject to the Plan, in the
Award limits set forth in Section 5.3 and in the number of shares of Stock
subject to, and the exercise or purchase price per share under, any Award then
outstanding under this Plan.  Notwithstanding the foregoing, any fractional
share
 
 

 
 
 

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resulting from an adjustment pursuant to this Section 4.2 shall be rounded down
to the nearest whole number, and in no event may the exercise or purchase price
under any Award be decreased to an amount less than the par value, if any, of
the stock subject to such Award.  The adjustments determined by the Committee
pursuant to this Section 4.2 shall be final, binding and conclusive.
 
5. ELIGIBILITY AND AWARD LIMITATIONS.
 
5.1 Persons Eligible for Awards.  Awards from Reserve A and Reserve B may be
granted only to Employees who were not employed by or providing service to any
Participating Company (other than Macromedia, Inc. and its Affiliates and
Subsidiaries) prior to the Effective Date. Awards from Reserve C, Reserve D and
Reserve E may be granted only to Employees who were not employed by or providing
service to any Participating Company (other than Omniture, Inc. and its
affiliates and subsidiaries) prior to the Restatement Date.  For purposes of
this Section 5.1, “Employees” shall include prospective Employees to whom Awards
are granted in connection with written offers of an employment with the
Participating Company Group; provided, however, that no Stock subject to any
such Award shall vest, become exercisable or be issued prior to the date on
which such person commences Service.
 
5.2 Participation.  Except as otherwise provided in Section 3.2 above, Awards
are granted solely at the discretion of the Committee.  Eligible persons may be
granted more than one (1) Award.  However, eligibility in accordance with this
Section shall not entitle any person to be granted an Award, or, having been
granted an Award, to be granted an additional Award.
 
5.3 Award Limits.  Subject to adjustment as provided in Section 4.2, in no event
shall more than one hundred thousand (100,000) shares of Stock in the aggregate
be issued under Reserve A and Reserve B of the Plan pursuant to the exercise or
settlement of Stock Awards and Performance Awards.
 
6. TERMS AND CONDITIONS OF OPTIONS.
 
Options shall be evidenced by Award Agreements specifying the number of shares
of Stock covered thereby, in such form as the Committee shall from time to time
establish.  No Option or purported Option shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Award
Agreement.  Award Agreements evidencing Options may incorporate all or any of
the terms of the Plan by reference and shall comply with and be subject to the
following terms and conditions:
 
6.1 Exercise Price.  The exercise price for each Option shall be established in
the discretion of the Committee; provided, however, that the exercise price per
share shall be not less than the Fair Market Value of a share of Stock on the
effective date of grant of the Option.  Notwithstanding the foregoing, an Option
may be granted with an exercise price lower than the minimum exercise price set
forth above if such Option is granted pursuant to an assumption or substitution
for another option in a manner qualifying under the provisions of Section 409A
and 424(a) of the Code.
 
 

 
 
 

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6.2 Exercisability and Term of Options.  Options shall be exercisable at such
time or times, or upon such event or events, and subject to such terms,
conditions, performance criteria and restrictions as shall be determined by the
Committee and set forth in the Award Agreement evidencing such Option; provided,
however, that (a) no Option shall be exercisable after the expiration of seven
(7) years after the effective date of grant of such Option, and (b) no Option
granted to a prospective Employee may become exercisable prior to the date on
which such person commences Service.  Subject to the foregoing, unless otherwise
specified by the Committee in the grant of an Option, any Option granted
hereunder shall terminate seven (7) years after the effective date of grant of
the Option, unless earlier terminated in accordance with its provisions.
 
6.3 Payment of Exercise Price.
 
(a) Forms of Consideration Authorized.  Except as otherwise provided below,
payment of the exercise price for the number of shares of Stock being purchased
pursuant to any Option shall be made (i) in cash, by check or cash equivalent,
(ii) by tender to the Company, or attestation to the ownership, of shares of
Stock owned by the Participant having a Fair Market Value not less than the
exercise price, (iii) by delivery of a properly executed notice of exercise
together with irrevocable instructions to a broker providing for the assignment
to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System) (a “Cashless Exercise”), (iv) by such other consideration (including,
without limitation, a net exercise) as may be approved by the Committee from
time to time to the extent permitted by applicable law, or (v) by any
combination thereof.  The Committee may at any time or from time to time grant
Options which do not permit all of the foregoing forms of consideration to be
used in payment of the exercise price or which otherwise restrict one or more
forms of consideration.
 
(b) Limitations on Forms of Consideration.
 
(i) Tender of Stock.  Notwithstanding the foregoing, an Option may not be
exercised by tender to the Company, or attestation to the ownership, of shares
of Stock to the extent such tender or attestation would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the Company’s stock.  Unless otherwise provided by the Committee, an Option
may not be exercised by tender to the Company, or attestation to the ownership,
of shares of Stock unless such shares either have been owned by the Participant
for more than six (6) months (and not used for another Option exercise by
attestation during such period) or were not acquired, directly or indirectly,
from the Company.
 
(ii) Cashless Exercise.  The Company reserves, at any and all times, the right,
in the Company’s sole and absolute discretion, to establish, decline to approve
or terminate any program or procedures for the exercise of Options by means of a
Cashless Exercise.
 
 

 
 
 

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6.4 Effect of Termination of Service.  An Option shall be exercisable after a
Participant’s termination of Service to such extent and during such period as
determined by the Committee, in its discretion, and set forth in the Award
Agreement evidencing such Option.
 
6.5 Transferability of Options.  During the lifetime of the Participant, an
Option shall be exercisable only by the Participant or the Participant’s
guardian or legal representative.  No Option shall be assignable or transferable
by the Participant, except by will or by the laws of descent and
distribution.  Notwithstanding the foregoing, to the extent permitted by the
Committee, in its discretion, and set forth in the Award Agreement evidencing
such Option, an Option shall be assignable or transferable subject to the
applicable limitations, if any, described in the General Instructions to Form
S-8 Registration Statement under the Securities Act.
 
7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
 
SARs shall be evidenced by Award Agreements specifying the number of shares of
Stock subject to the Award, in such form as the Committee shall from time to
time establish.  No SAR or purported SAR shall be a valid and binding obligation
of the Company unless evidenced by a fully executed Award Agreement.  Award
Agreements evidencing SARs may incorporate all or any of the terms of the Plan
by reference and shall comply with and be subject to the following terms and
conditions:
 
7.1 Types of SARs Authorized.  SARs may be granted in tandem with all or any
portion of a related Option (a “Tandem SAR”) or may be granted independently of
any Option (a “Freestanding SAR”).  A Tandem SAR may be granted either
concurrently with the grant of the related Option or at any time thereafter
prior to the complete exercise, termination, expiration or cancellation of such
related Option.
 
7.2 Exercise Price.  The exercise price for each SAR shall be established in the
discretion of the Committee; provided, however, that (a) the exercise price per
share subject to a Tandem SAR shall be the exercise price per share under the
related Option and (b) the exercise price per share subject to a Freestanding
SAR shall be not less than the Fair Market Value of a share of Stock on the
effective date of grant of the SAR.
 
7.3 Exercisability and Term of SARs.
 
(a) Tandem SARs.  Tandem SARs shall be exercisable only at the time and to the
extent, and only to the extent, that the related Option is exercisable, subject
to such provisions as the Committee may specify where the Tandem SAR is granted
with respect to less than the full number of shares of Stock subject to the
related Option.  The Committee may, in its discretion, provide in any Award
Agreement evidencing a Tandem SAR that such SAR may not be exercised without the
advance approval of the Company and, if such approval is not given, then the
Option shall nevertheless remain exercisable in accordance with its terms.  A
Tandem SAR shall terminate and cease to be exercisable no later than the date on
which the related Option expires or is terminated or canceled.  Upon the
exercise of a Tandem SAR with respect to some or all of the shares subject to
such SAR, the related Option shall be canceled automatically as to the number of
shares with respect to which the Tandem SAR was exercised.
 
 

 
 
 

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Upon the exercise of an Option related to a Tandem SAR as to some or all of the
shares subject to such Option, the related Tandem SAR shall be canceled
automatically as to the number of shares with respect to which the related
Option was exercised.
 
(b) Freestanding SARs.  Freestanding SARs shall be exercisable at such time or
times, or upon such event or events, and subject to such terms, conditions,
performance criteria and restrictions as shall be determined by the Committee
and set forth in the Award Agreement evidencing such SAR; provided, however,
that no Freestanding SAR shall be exercisable after the expiration of seven (7)
years after the effective date of grant of such SAR.
 
7.4 Exercise of SARs.  Upon the exercise (or deemed exercise pursuant to Section
7.5) of an SAR, the Participant (or the Participant’s legal representative or
other person who acquired the right to exercise the SAR by reason of the
Participant’s death) shall be entitled to receive payment of an amount for each
share with respect to which the SAR is exercised equal to the excess, if any, of
the Fair Market Value of a share of Stock on the date of exercise of the SAR
over the exercise price.  Payment of such amount shall be made in cash, shares
of Stock, or any combination thereof as determined by the Committee.  Unless
otherwise provided in the Award Agreement evidencing such SAR, payment shall be
made in a lump sum as soon as practicable following the date of exercise of the
SAR.  The Award Agreement evidencing any SAR may provide for deferred payment in
a lump sum or in installments.  When payment is to be made in shares of Stock,
the number of shares to be issued shall be determined on the basis of the Fair
Market Value of a share of Stock on the date of exercise of the SAR.  For
purposes of Section 7, an SAR shall be deemed exercised on the date on which the
Company receives notice of exercise from the Participant.
 
7.5 Deemed Exercise of SARs.  If, on the date on which an SAR would otherwise
terminate or expire, the SAR by its terms remains exercisable immediately prior
to such termination or expiration and, if so exercised, would result in a
payment to the holder of such SAR, then any portion of such SAR which has not
previously been exercised shall automatically be deemed to be exercised as of
such date with respect to such portion.
 
7.6 Effect of Termination of Service.  An SAR shall be exercisable after a
Participant’s termination of Service to such extent and during such period as
determined by the Committee, in its discretion, and set forth in the Award
Agreement evidencing such SAR.
 
7.7 Nontransferability of SARs.  SARs may not be assigned or transferred in any
manner except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, shall be exercisable only by the Participant or the
Participant’s guardian or legal representative.
 
8. TERMS AND CONDITIONS OF STOCK AWARDS.
 
Stock Awards shall be evidenced by Award Agreements specifying whether the Award
is a Stock Bonus, a Stock Purchase Right or a Restricted Stock Unit, and the
number of shares of Stock subject to the Award, in such form as the Committee
shall from time to time establish.  No Stock Award or purported Stock Award
shall be a valid and binding obligation of the Company unless evidenced by a
fully executed Award Agreement.  Award Agreements
 
 

 
 
 

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evidencing Stock Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:
 
8.1 Types of Stock Awards Authorized.  Stock Awards may be in the form of a
Stock Bonus, a Stock Purchase Right, or a Restricted Stock Unit.  Stock Awards
may be granted upon such conditions as the Committee shall determine, including,
without limitation, upon the attainment of one or more Performance Goals
described in Section 9.4.  If either the grant of a Stock Award or the lapsing
of the Restriction Period is to be contingent upon the attainment of one or more
Performance Goals, the Committee shall follow procedures substantially
equivalent to those set forth in Sections 9.3 through 9.5(a).
 
8.2 Purchase Price.  The purchase price for shares of Stock issuable under each
Stock Purchase Right shall be established by the Committee in its
discretion.  No monetary payment (other than applicable tax withholding) shall
be required as a condition of receiving shares of Stock pursuant to a Stock
Bonus, the consideration for which shall be services actually rendered to a
Participating Company or for its benefit.  Notwithstanding the foregoing, the
Participant shall furnish consideration in the form of cash or past services
rendered to a Participating Company or for its benefit having a value not less
than the par value of the shares of Stock subject to such Stock Award.
 
8.3 Purchase Period.  A Stock Purchase Right shall be exercisable within a
period established by the Committee, which shall in no event exceed thirty (30)
days from the effective date of the grant of the Stock Purchase Right; provided,
however, that no Stock Purchase Right granted to a prospective Employee may
become exercisable prior to the date on which such person commences Service.
 
8.4 Payment of Purchase Price.  Except as otherwise provided below, payment of
the purchase price for the number of shares of Stock being purchased pursuant to
any Stock Purchase Right or delivered pursuant to a Restricted Stock Unit shall
be made (i) in cash, by check, or cash equivalent, (ii) by such other
consideration as may be approved by the Committee from time to time to the
extent permitted by applicable law, or (iii) by any combination thereof, in each
case consistent with any requirements under applicable law regarding payment in
respect of the “par value” of the Stock.  The Committee may at any time or from
time to time grant Stock Purchase Rights or Restricted Stock Units which do not
permit all of the foregoing forms of consideration to be used in payment of the
purchase price or which otherwise restrict one or more forms of
consideration.  Stock Bonuses shall be issued in consideration for past services
actually rendered to a Participating Company or for its benefit.  At the time of
grant of Restricted Stock Units, the Committee will determine the consideration,
if any, to be paid by the Participant upon delivery of each share of Stock
acquired pursuant to Restricted Stock Units.
 
8.5 Vesting; Restrictions on Transfer; Deferral.  Shares issued pursuant to any
Stock Award may or may not be made subject to vesting conditioned upon the
satisfaction of such Service requirements, conditions, restrictions or
performance criteria, including, without limitation, Performance Goals as
described in Section 9.4 (the “Vesting Conditions”), as shall be established by
the Committee and set forth in the Award Agreement evidencing such
Award.  During any period (the “Restriction Period”) in which shares acquired
pursuant to a Stock
 
 

 
 
 

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Award remain subject to Vesting Conditions, such shares may not be sold,
exchanged, transferred, pledged, assigned or otherwise disposed of other than
pursuant to a Change of Control as provided in Section 11, or as provided in
Section 8.8.  Upon request by the Company, each Participant shall execute any
agreement evidencing such transfer restrictions prior to the receipt of shares
of Stock hereunder and shall promptly present to the Company any and all
certificates representing shares of Stock acquired hereunder for the placement
on such certificates of appropriate legends evidencing any such transfer
restrictions. Restricted Stock Units may be subject to such conditions that may
delay the delivery of the shares of Stock (or their cash equivalent) subject to
Restricted Stock Units after the vesting of such Award.
 
8.6 Voting Rights; Dividends and Distributions.  Except as provided in this
Section, Section 8.5 and any Award Agreement, during the Restriction Period
applicable to shares subject to a Stock Award, the Participant shall have all of
the rights of a stockholder of the Company holding shares of Stock, including
the right to vote such shares and to receive all dividends and other
distributions paid with respect to such shares.  With respect to Restricted
Stock Units, the Committee may, in its sole discretion, provide that dividend
equivalents shall not be paid or provide either for the current payment of
dividend equivalents or for the accumulation and payment of dividend equivalents
to the extent that the Restricted Stock Units become nonforfeitable.  However,
in the event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, then any and all new, substituted or additional
securities or other property (other than normal cash dividends) to which the
Participant is entitled by reason of the Participant’s Stock Award shall be
immediately subject to the same Vesting Conditions and, if applicable, deferral
elections as the shares subject to the Stock Award with respect to which such
dividends or distributions were paid or adjustments were made.
 
8.7 Effect of Termination of Service.  Unless otherwise provided by the
Committee in the grant of a Stock Award and set forth in the Award Agreement, if
a Participant’s Service terminates for any reason, whether voluntary or
involuntary (including the Participant’s death or disability), then (i) the
Company shall have the option to repurchase for the purchase price paid by the
Participant any shares acquired by the Participant pursuant to a Stock Purchase
Right which remain subject to Vesting Conditions as of the date of the
Participant’s termination of Service and (ii) the Participant shall forfeit to
the Company any shares acquired by the Participant pursuant to a Stock Bonus
which remain subject to Vesting Conditions as of the date of the Participant’s
termination of Service and (iii) the Participant shall forfeit all rights in any
portion of a Restricted Stock Unit award that has not vested as of the date of
the Participant’s termination of Service.  The Company shall have the right to
assign at any time any repurchase right it may have, whether or not such right
is then exercisable, to one or more persons as may be selected by the Company.
 
8.8 Nontransferability of Stock Award Rights.  Rights to acquire shares of Stock
pursuant to a Stock Award may not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except by will or the laws of descent and distribution, and, during the lifetime
of the Participant, shall be exercisable only by the Participant or the
Participant’s guardian or legal representative.
 
 

 
 
 

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9. TERMS AND CONDITIONS OF PERFORMANCE AWARDS.
 
Performance Awards shall be evidenced by Award Agreements in such form as the
Committee shall from time to time establish.  No Performance Award or purported
Performance Award shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement.  Award Agreements evidencing
Performance Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:
 
9.1 Types of Performance Awards Authorized.  Performance Awards may be in the
form of either Performance Shares or Performance Units.  Each Award Agreement
evidencing a Performance Award shall specify the number of Performance Shares or
Performance Units subject thereto, the Performance Award Formula, the
Performance Goal (s) and Performance Period applicable to the Award, and the
other terms, conditions and restrictions of the Award.
 
9.2 Initial Value of Performance Shares and Performance Units.  Unless otherwise
provided by the Committee (or, as applicable for awards not granted in a manner
intending to comply with Section 162(m), a duly authorized Officer Committee in
accordance with applicable law) in granting a Performance Award, each
Performance Share shall have an initial value equal to the Fair Market Value of
one (1) share of Stock, subject to adjustment as provided in Section 4.2, on the
effective date of grant of the Performance Share, and each Performance Unit
shall have an initial value of one hundred dollars ($100).  The final value
payable to the Participant in settlement of a Performance Award determined on
the basis of the applicable Performance Award Formula will depend on the extent
to which Performance Goals established by the Committee are attained within the
applicable Performance Period established by the Committee.
 
9.3 Establishment of Performance Period, Performance Goals and Performance Award
Formula.  In granting each Performance Award, the Committee shall establish in
writing the applicable Performance Period, Performance Award Formula and one or
more Performance Goals which, when measured at the end of the Performance
Period, shall determine on the basis of the Performance Award Formula the final
value of the Performance Award to be paid to the Participant.  Although
Performance Awards under the Plan will not qualify as performance-based
compensation for purposes of Section 162(m) because stockholders of the Company
have not approved certain provisions of the Plan as required by Section 162(m),
the Committee shall seek to comply with Section 162(m) with respect to
Performance Awards, except as otherwise provided herein.  Accordingly, unless
otherwise permitted in compliance with the requirements under Section 162(m)
with respect to “performance-based compensation,” the Committee shall establish
the Performance Goal(s) and Performance Award Formula applicable to each
Performance Award no later than the earlier of (a) the date ninety (90) days
after the commencement of the applicable Performance Period or (b) the date on
which 25% of the Performance Period has elapsed, and, in any event, at a time
when the outcome of the Performance Goals remains substantially uncertain.  Once
established, the Performance Goals and Performance Award Formula shall not be
changed during the Performance Period.  The Company shall notify each
Participant granted a Performance Award
 
 

 
 
 

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of the terms of such Award, including the Performance Period, Performance
Goal(s) and Performance Award Formula.
 
9.4 Measurement of Performance Goals.  Performance Goals shall be established by
the Committee on the basis of targets to be attained (“Performance Targets”)
with respect to one or more measures of business or financial performance (each,
a “Performance Measure”), subject to the following:
 
(a) Performance Measures.  Performance Measures shall have the same meanings as
used in the Company’s financial statements, or, if such terms are not used in
the Company’s financial statements, they shall have the meaning applied pursuant
to generally accepted accounting principles, or as used generally in the
Company’s industry.  Performance Measures shall be calculated with respect to
the Company and each Subsidiary Corporation consolidated therewith for financial
reporting purposes or such division or other business unit as may be selected by
the Committee.  For purposes of the Plan, the Performance Measures applicable to
a Performance Award shall be calculated in accordance with generally accepted
accounting principles, but prior to the accrual or payment of any Performance
Award for the same Performance Period and excluding the effect (whether positive
or negative) of any change in accounting standards or any extraordinary, unusual
or nonrecurring item, as determined by the Committee, occurring after the
establishment of the Performance Goals applicable to the Performance
Award.  Performance Measures may be one or more of the following, as determined
by the Committee:
 
(i) growth in revenue;
 
(ii) growth in the market price of the Stock;
 
(iii) operating margin;
 
(iv) gross margin;
 
(v) operating income;
 
(vi) pre-tax profit;
 
(vii) earnings before interest, taxes and depreciation;
 
(viii) net income;
 
(ix) total return on shares of Stock relative to the increase in an appropriate
index as may be selected by the Committee;
 
(x) earnings per share;
 
(xi) return on stockholder equity;
 
(xii) return on net assets;
 
 

 
 
 

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(xiii) expenses;
 
(xiv) return on capital;
 
(xv) economic value added;
 
(xvi) market share; and
 
(xvii) cash flow, as indicated by book earnings before interest, taxes,
depreciation and amortization.
 
(b) Performance Targets.  Performance Targets may include a minimum, maximum,
target level and intermediate levels of performance, with the final value of a
Performance Award determined under the applicable Performance Award Formula by
the level attained during the applicable Performance Period.  A Performance
Target may be stated as an absolute value or as a value determined relative to a
standard selected by the Committee.
 
9.5 Settlement of Performance Awards.
 
(a) Determination of Final Value.  As soon as practicable following the
completion of the Performance Period applicable to a Performance Award, the
Committee shall certify in writing the extent to which the applicable
Performance Goals have been attained and the resulting final value of the Award
earned by the Participant and to be paid upon its settlement in accordance with
the applicable Performance Award Formula.
 
(b) Discretionary Adjustment of Award Formula.  In its discretion, the Committee
may, either at the time it grants a Performance Award or at any time thereafter,
provide for the positive or negative adjustment of the Performance Award Formula
applicable to a Performance Award granted to any Participant who is not a
“covered employee” within the meaning of Section 162(m) (a “Covered Employee”)
to reflect such Participant’s individual performance in his or her position with
the Company or such other factors as the Committee may determine.  If permitted
under a Covered Employee’s Award Agreement, the Committee shall have the
discretion, on the basis of such criteria as may be established by the
Committee, to reduce some or all of the value of the Performance Award that
would otherwise be paid to the Covered Employee upon its settlement
notwithstanding the attainment of any Performance Goal and the resulting value
of the Performance Award determined in accordance with the Performance Award
Formula.  No such reduction may result in an increase in the amount payable upon
settlement of another Participant’s Performance Award.
 
(c) Effect of Leaves of Absence.  Unless otherwise required by law, payment of
the final value, if any, of a Performance Award held by a Participant who has
taken in excess of thirty (30) days of leaves of absence during a Performance
Period shall be prorated on the basis of the number of days of the Participant’s
Service during the Performance Period during which the Participant was not on a
leave of absence.
 
(d) Notice to Participants.  As soon as practicable following the Committee’s
determination and certification in accordance with Sections 9.5(a) and (b), the
Company shall notify each Participant of the determination of the Committee.
 
 

 
 
 

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(e) Payment in Settlement of Performance Awards.  As soon as practicable
following the Committee’s determination and certification in accordance with
Sections 9.5(a) and (b), payment shall be made to each eligible Participant (or
such Participant’s legal representative or other person who acquired the right
to receive such payment by reason of the Participant’s death) of the final value
of the Participant’s Performance Award.  Payment of such amount shall be made in
cash, shares of Stock, or a combination thereof as determined by the
Committee.  Unless otherwise provided in the Award Agreement evidencing a
Performance Award, payment shall be made in a lump sum.  An Award Agreement may
provide for deferred payment in a lump sum or in installments.  If any payment
is to be made on a deferred basis, the Committee may, but shall not be obligated
to, provide for the payment during the deferral period of Dividend Equivalents
or interest.
 
(f) Provisions Applicable to Payment in Shares.  If payment is to be made in
shares of Stock, the number of such shares shall be determined by dividing the
final value of the Performance Award by the value of a share of Stock determined
by the method specified in the Award Agreement.  Such methods may include,
without limitation, the closing market price on a specified date (such as the
settlement date) or an average of market prices over a series of trading
days.  Shares of Stock issued in payment of any Performance Award may be fully
vested and freely transferable shares or may be shares of Stock subject to
Vesting Conditions as provided in Section 8.5.  Any shares subject to Vesting
Conditions shall be evidenced by an appropriate Award Agreement and shall be
subject to the provisions of Sections 8.5 through 8.8 above.
 
9.6 Dividend Equivalents.  In its discretion, the Committee may provide in the
Award Agreement evidencing any Performance Share Award that the Participant
shall be entitled to receive Dividend Equivalents with respect to the payment of
cash dividends on Stock having a record date prior to the date on which the
Performance Shares are settled or forfeited.  Dividend Equivalents may be paid
currently or may be accumulated and paid to the extent that Performance Shares
become nonforfeitable, as determined by the Committee.  Settlement of Dividend
Equivalents may be made in cash, shares of Stock, or a combination thereof as
determined by the Committee, and may be paid on the same basis as settlement of
the related Performance Share as provided in Section 9.5.  Dividend Equivalents
shall not be paid with respect to Performance Units.
 
9.7 Effect of Termination of Service.  The effect of a Participant’s termination
of Service on the Participant’s Performance Award shall be as determined by the
Committee, in its discretion, and set forth in the Award Agreement evidencing
such Performance Award.
 
9.8 Nontransferability of Performance Awards.  Prior to settlement in accordance
with the provisions of the Plan, no Performance Award may be subject in any
manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except by will or by the laws of descent and
distribution.  All rights with respect to a Performance Award granted to a
Participant hereunder shall be exercisable during his or her lifetime only by
such Participant or the Participant’s guardian or legal representative.
 
 

 
 
 

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10. STANDARD FORMS OF AWARD AGREEMENT.
 
10.1 Award Agreements.  Each Award shall comply with and be subject to the terms
and conditions set forth in the appropriate form of Award Agreement approved by
the Committee and as amended from time to time.  Any Award Agreement may consist
of an appropriate form of Notice of Grant and a form of Agreement incorporated
therein by reference, or such other form or forms as the Committee may approve
from time to time.
 
10.2 Authority to Vary Terms.  The Committee shall have the authority from time
to time to vary the terms of any standard form of Award Agreement either in
connection with the grant or amendment of an individual Award or in connection
with the authorization of a new standard form or forms; provided, however, that
the terms and conditions of any such new, revised or amended standard form or
forms of Award Agreement are not inconsistent with the terms of the Plan.
 
11. CHANGE OF CONTROL.
 
11.1 Awards Granted Prior to January 24, 2008.  The following provisions shall
control for Awards granted prior to January 24, 2008:
 
(a) Except as otherwise provided in a Participant’s Award Agreement:
 
(i) An “Ownership Change Event” shall be deemed to have occurred if any of the
following occurs with respect to the Company: (i) the direct or indirect sale or
exchange by the stockholders of the Company of all or substantially all of the
voting stock of the Company; (ii) a merger or consolidation in which the Company
is a party; (iii) the sale, exchange, or transfer of all or substantially all of
the assets of the Company (other than a sale, exchange or transfer to one or
more subsidiaries of the Company); or (iv) a liquidation or dissolution of the
Company.
 
(ii) A “Change in Control” shall mean an Ownership Change Event or series of
related Ownership Change Events (collectively, a “Transaction”) in which the
stockholders of the Company immediately before the Transaction do not retain
immediately after the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of an Ownership
Change Event described in Section 11.1(a)(iii), the entity to which the assets
of the Company were transferred.
 
(b) Effect of Change in Control on Options, SARs and Restricted Stock Units.  In
the event of a Change in Control, the surviving, continuing, successor, or
purchasing entity or parent thereof, as the case may be (the “Acquiror”), may,
without the consent of any Participant, either assume the Company’s rights and
obligations under outstanding Options, SARs and Restricted Stock Units or
substitute for outstanding Options, SARs and Restricted Stock Units
substantially equivalent equity awards for the Acquiror’s stock.  In the event
the Acquiror elects not to assume or substitute for outstanding Options, SARs or
Restricted Stock Units in connection with a Change in Control, the Committee
shall provide that any unexercised and/or unvested portions of such outstanding
Awards shall be immediately exercisable and vested in full as of the date thirty
(30) days prior to the date of the Change in
 
 

 
 
 

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Control.  The exercise and/or vesting of any Option, SAR or Restricted Stock
Unit that was permissible solely by reason of this paragraph shall be
conditioned upon the consummation of the Change in Control.  Any Options, SARs
or Restricted Stock Units which are not assumed or replaced by the Acquiror in
connection with the Change in Control nor exercised as of the time of
consummation of the Change in Control shall terminate and cease to be
outstanding effective as of the time of consummation of the Change in Control.
 
(c) Effect of Change in Control on Stock Awards.  The Committee may, in its
discretion, provide in any Award Agreement evidencing a Stock Award that, in the
event of a Change in Control, the lapsing of the Restriction Period applicable
to the shares subject to the Stock Award held by a Participant whose Service has
not terminated prior to such date shall be accelerated effective as of the date
of the Change in Control to such extent as specified in such Award
Agreement.  Any acceleration of the lapsing of the Restriction Period that was
permissible solely by reason of this Section 11.1(c) and the provisions of such
Award Agreement shall be conditioned upon the consummation of the Change in
Control.
 
(d) Effect of Change in Control on Performance Awards.  The Committee may, in
its discretion, provide in any Award Agreement evidencing a Performance Award
that, in the event of a Change in Control, the Performance Award held by a
Participant whose Service has not terminated prior to such date shall become
payable effective as of the date of the Change in Control to such extent as
specified in such Award Agreement.
 
11.2 Awards Granted On or After January 24, 2008.  The following provisions
shall control for Awards granted on or after January 24, 2008:
 
(a) Except as otherwise provided in a Participant’s Award Agreement, “Change of
Control” shall mean a change of control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Exchange Act, whether or not the Company is then
subject to such reporting requirement; provided, however, that anything in this
Plan to the contrary notwithstanding, a Change of Control shall be deemed to
have occurred if:
 
(i) any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity or person, or any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act, is or becomes
the “beneficial owner” (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power of the
Company’s then outstanding securities entitled to vote in the election of
directors of the Company;
 
(ii) during any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Board and any new directors, whose
election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least three-fourths (3/4ths) of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved (the
“Incumbent Directors”), cease for any reason to constitute a majority thereof;
 
 

 
 
 

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(iii) there occurs a reorganization, merger, consolidation or other corporate
transaction involving the Company (a “Transaction”), in each case with respect
to which the stockholders of the Company immediately prior to such Transaction
do not, immediately after the Transaction, own securities representing more than
50% of the combined voting power of the Company, a parent of the Company or
other corporation resulting from such Transaction (counting, for this purpose,
only those securities held by the Company’s stockholders immediately after the
Transaction that were received in exchange for, or represent their continuing
ownership of, securities of the Company held by them immediately prior to the
Transaction);
 
(iv) all or substantially all of the assets of the Company are sold, liquidated
or distributed; or
 
(v) there is a “Change of Control” or a “change in the effective control” of the
Company within the meaning of Section 280G of the Code and the regulations
promulgated thereunder;
 
provided, that if a Change of Control constitutes a payment event with respect
to any Award which provides for the deferral of compensation that is subject to
Section 409A of the Code, the transaction or event described in clauses (i)
through (v) with respect to such Award must also constitute a “change in control
event,” as defined in Treasury Regulation §1.409A-3(i)(5) to the extent required
by Section 409A of the Code.
 
(b) The Committee or the Board may, in its discretion, provide in any Award
Agreement, severance plan or other individual agreement, that, in the event of a
Change of Control of the Company, the Award held by a Participant shall become
vested, exercisable and/or payable to such extent as specified in such document.
 
(c) In the event of a Change of Control, the surviving, continuing, successor,
or purchasing entity or parent thereof, as the case may be (the “Acquiror”),
may, without the consent of any Participant, either assume the Company’s rights
and obligations under outstanding Awards or substitute for outstanding Awards
substantially equivalent equity awards for the Acquiror’s stock.  In the event
the Acquiror elects not to assume or substitute for outstanding Awards in
connection with a Change of Control, any unexercised and/or unvested portions of
such outstanding Awards shall become immediately exercisable and vested in full
as of immediately prior to the effective date of the Change of Control.  The
exercise and/or vesting of any Award that was permissible solely by reason of
this paragraph 11.2 shall be conditioned upon the consummation of the Change of
Control.  Any Awards which are not assumed or replaced by the Acquiror in
connection with the Change of Control nor exercised as of the time of
consummation of the Change of Control shall terminate and cease to be
outstanding effective as of the time of consummation of the Change of Control.
 
12. COMPLIANCE WITH SECURITIES LAW.
 
The grant of Awards and the issuance of shares of Stock pursuant to any Award
shall be subject to compliance with all applicable requirements of federal,
state and foreign law with respect to such securities and the requirements of
any stock exchange or market system
 
 

 
 
 

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upon which the Stock may then be listed.  In addition, no Award may be exercised
or shares issued pursuant to an Award unless (i) a registration statement under
the Securities Act shall at the time of such exercise or issuance be in effect
with respect to the shares issuable pursuant to the Award or (ii) in the opinion
of legal counsel to the Company, the shares issuable pursuant to the Award may
be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act.  The inability of the Company
to obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained.  As a condition to issuance of any
Stock, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect
thereto as may be requested by the Company.
 
13. TAX WITHHOLDING.
 
13.1 Tax Withholding in General.  The Company shall have the right to deduct
from any and all payments made under the Plan, or to require the Participant,
through payroll withholding, cash payment or otherwise, including by means of a
Cashless Exercise of an Option, to make adequate provision for, the federal,
state, local and foreign taxes, if any, required by law to be withheld by the
Participating Company Group with respect to an Award or the shares acquired
pursuant thereto.  The Company shall have no obligation to deliver shares of
Stock, to release shares of Stock from an escrow established pursuant to an
Award Agreement, or to make any payment in cash under the Plan until the
Participating Company Group’s tax withholding obligations have been satisfied by
the Participant.
 
13.2 Withholding in Shares.  The Company shall have the right, but not the
obligation, to deduct from the shares of Stock issuable to a Participant upon
the exercise or settlement of an Award, or to accept from the Participant the
tender of, a number of whole shares of Stock having a Fair Market Value, as
determined by the Company, equal to all or any part of the tax withholding
obligations of the Participating Company Group.  The Fair Market Value of any
shares of Stock withheld or tendered to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.
 
14. TERMINATION OR AMENDMENT OF PLAN.
 
The Committee may terminate or amend the Plan at any time.  However, without the
approval of the Company’s stockholders, there shall be (a) no increase in the
maximum aggregate number of shares of Stock that may be issued under the Plan
(except by operation of the provisions of Section 4), (b) no change in the class
of persons eligible to receive Awards, and (c) no other amendment of the Plan
that would require approval of the Company’s stockholders under any applicable
law, regulation or rule; provided, however, that the maximum aggregate number of
shares of Stock that may be issued under the Plan may be increased without
stockholder approval in accordance with Rule 5635(c)(3) of the Nasdaq
Qualitative Listing Requirements (or any other applicable rule of the securities
exchange on which shares of Stock are then trading) in connection with business
acquisitions by the Company following the Effective Date.  No termination or
amendment of the Plan shall affect any then outstanding
 
 

 
 
 

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Award unless expressly provided by the Committee.  In any event, no termination
or amendment of the Plan may adversely affect any then outstanding Award without
the consent of the Participant, unless such termination or amendment is
necessary to comply with any applicable law, regulation or rule.
 
15. MISCELLANEOUS PROVISIONS.
 
15.1 Repurchase Rights.  Shares issued under the Plan may be subject to one or
more repurchase options, or other conditions and restrictions as determined by
the Committee in its discretion at the time the Award is granted.  The Company
shall have the right to assign at any time any repurchase right it may have,
whether or not such right is then exercisable, to one or more persons as may be
selected by the Company.  Upon request by the Company, each Participant shall
execute any agreement evidencing such transfer restrictions prior to the receipt
of shares of Stock hereunder and shall promptly present to the Company any and
all certificates representing shares of Stock acquired hereunder for the
placement on such certificates of appropriate legends evidencing any such
transfer restrictions.
 
15.2 Provision of Information.  Each Participant shall be given access to
information concerning the Company equivalent to that information generally made
available to the Company’s common stockholders.
 
15.3 Rights as Employee.  No person, even though eligible pursuant to Section 5,
shall have a right to be selected as a Participant, or, having been so selected,
to be selected again as a Participant.  Nothing in the Plan or any Award granted
under the Plan shall confer on any Participant a right to remain an Employee, or
interfere with or limit in any way any right of a Participating Company to
terminate the Participant’s Service at any time.  To the extent that an Employee
of a Participating Company other than the Company receives an Award under the
Plan, that Award can in no event be understood or interpreted to mean that the
Company is the Employee’s employer or that the Employee has an employment
relationship with the Company.
 
15.4 Rights as a Stockholder.  A Participant shall have no rights as a
stockholder with respect to any shares covered by an Award until the date of the
issuance of such shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company).  No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such shares are issued, except as provided
in Section 4.2 or another provision of the Plan.
 
15.5 Fractional Shares.  The Company shall not be required to issue fractional
shares upon the exercise or settlement of any Award.
 
15.6 Beneficiary Designation.  Subject to local laws and procedures, each
Participant may file with the Company a written designation of a beneficiary who
is to receive any benefit under the Plan to which the Participant is entitled in
the event of such Participant’s death before he or she receives any or all of
such benefit.  Each designation will revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be effective
only when filed by the Participant in writing with the Company during the
Participant’s lifetime.  If a married Participant designates a beneficiary other
than the Participant’s spouse, the
 
 

 
 
 

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effectiveness of such designation may be subject to the consent of the
Participant’s spouse.  If a Participant dies without an effective designation of
a beneficiary who is living at the time of the Participant’s death, the Company
will pay any remaining unpaid benefits to the Participant’s legal
representative.
 
15.7 Unfunded Obligation.  Participants shall have the status of general
unsecured creditors of the Company.  Any amounts payable to Participants
pursuant to the Plan shall be unfunded and unsecured obligations for all
purposes, including, without limitation, Title I of the Employee Retirement
Income Security Act of 1974.  No Participating Company shall be required to
segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations.  The Company
shall retain at all times beneficial ownership of any investments, including
trust investments, which the Company may make to fulfill its payment obligations
hereunder.  Any investments or the creation or maintenance of any trust or any
Participant account shall not create or constitute a trust or fiduciary
relationship between the Committee, the Officer Committee or any Participating
Company and a Participant, or otherwise create any vested or beneficial interest
in any Participant or the Participant’s creditors in any assets of any
Participating Company.  The Participants shall have no claim against any
Participating Company for any changes in the value of any assets which may be
invested or reinvested by the Company with respect to the Plan.
 
15.8 Section 409A.  To the extent that the Committee determines that any Award
granted under the Plan is, or may reasonably be, subject to Section 409A of the
Code (together, with any state law of similar effect, “Section 409A”), the Award
Agreement evidencing such Award shall incorporate the terms and conditions
necessary to avoid the consequences described in Section 409A(a)(1) of the Code
(or any similar provision).  To the extent applicable and permitted by law, the
Plan and Award Agreements shall be interpreted in accordance with Section 409A
and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued or amended after the date of grant of any Award hereunder.
 
Notwithstanding any provision of the Plan to the contrary, in the event that the
Committee determines that any Award is, or may reasonably be, subject to Section
409A and related Department of Treasury guidance (including such Department of
Treasury guidance issued from time to time), the Committee may, without the
Participant’s consent, adopt such amendments to the Plan and the applicable
Award Agreement or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
that the Committee determines are necessary or appropriate to (A) exempt the
Award from Section 409A and/or preserve the intended tax treatment of the
benefits provided with respect to the Award, or (B) comply with the requirements
of Section 409A and related Department of Treasury guidance.
 
In addition, and except as otherwise set forth in the applicable Award
Agreement, if the Company determines that any Award granted under this Plan
constitutes, or may reasonably constitute, “deferred compensation” under Section
409A and the Participant is a “specified employee” of the Company at the
relevant date, as such term is defined in Section 409A (a)(2)(B)(i), then any
payment or benefit resulting from such Award will be delayed until the earliest
date following the Participant’s “separation from service” with the
Participating
 
 

 
 
 

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Company Group within the meaning of Section 409A on which the Company can
provide such payment or benefit to the Participant without the Participant’s
incurrence of any additional tax or interest pursuant to Section 409A, with all
payments or benefits due thereafter occurring in accordance with the original
schedule.  In addition, this Plan and the benefits to be provided hereunder are
intended to comply in all respects with the applicable provisions of Section
409A.
 
Notwithstanding anything to the contrary contained herein, neither the Company
nor any of its Affiliates shall be responsible for, or required to reimburse or
otherwise make any Participant whole for, any tax or penalty imposed on, or
losses incurred by, any Participant that arises in connection with the potential
or actual application of Section 409A to any Award granted hereunder.