FBR CAPITAL MARKETS CORPORATION
 
2006 LONG-TERM INCENTIVE PLAN
 
(As Amended and Restated Effective June 3, 2010)
 
FBR Capital Markets Corporation, a corporation existing under the laws of the
Commonwealth of Virginia (the “Company”), hereby establishes and adopts the
following 2006 Long-Term Incentive Plan (the “Plan”), as amended and restated
effective June 3, 2010.
 
1.
PURPOSE OF THE PLAN

 
 
1.1.
Purpose. The purpose of the Plan is to assist the Company and its Affiliates in
attracting and retaining selected individuals to serve as directors, employees,
consultants and/or advisors of the Company who are expected to contribute to the
Company’s success and to achieve long-term objectives which will inure to the
benefit of all shareholders of the Company through the additional incentives
inherent in the Awards hereunder.

 
2.
DEFINITIONS

 
 
2.1.
“Accounting Firm” shall have the meaning set forth in Section 11.4.

 
 
2.2.
“Affiliate” shall mean (i) any person or entity that directly, or through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Company (including any Subsidiary) or (ii) any entity in which the
Company has a significant equity interest, as determined by the Committee.

 
 
2.3.
“Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Award, Dividend Equivalent, Interest Equivalent, or Other
Stock-Based Award granted pursuant to the provisions of the Plan.

 
 
2.4.
“Award Agreement” shall mean any written agreement, contract or other instrument
or document evidencing any Award granted by the Committee hereunder.

 
 
2.5.
“Board” shall mean the board of directors of the Company.

 
 
2.6.
“Change in Control” shall have the meaning set forth in Section 11.1.

 
 
2.7.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.

 
 
2.8.
“Committee” shall mean the Compensation Committee of the Board, or, if such
committee of the Board has not been appointed, the Board.

 
 
2.9.
“Covered Employee” shall mean a “covered employee” within the meaning of
Section 162(m)(3) of the Code, or any successor provision thereto.

 
 
2.10.
“Director” shall mean a non-employee member of the Board.

 
 
2.11.
“Dividend Equivalents” shall have the meaning set forth in Section 12.5.

 
 
2.12.
“Employee” shall mean any employee of the Company or any Affiliate. Solely for
purposes of the Plan, an Employee shall also mean any consultant or advisor who
provides services to the Company or any Affiliate, so long as such person
(i) renders bona fide services that are not in connection with the offer and
sale of the Company’s securities in a capital-raising transaction and (ii) does
not directly or indirectly promote or maintain a market for the Company’s
securities.

 
 
2.13.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 
 
2.14.
“Fair Market Value” shall mean, with respect to any property other than Shares,
the market value of such property determined by such methods or procedures as
shall be established from time to time by the Committee. If the Shares are not
listed on a stock exchange, the Fair Market Value of the Shares on any date
shall be their fair market value as determined by the Committee using any
reasonable method and in good faith. If the Shares are listed on a stock
exchange, the Fair Market Value of Shares as of any date shall be the per Share
closing price of the Shares as reported on such stock exchange (or the exchange
selected by the Committee if the Shares are listed on more than one stock
exchange), on the date prior to such date (or if there was no reported closing
price on such date, on the last preceding date on which the closing price was
reported).

 
 
2.15.
“Freestanding Stock Appreciation Right” shall have the meaning set forth in
Section 6.1.

 
 
2.16
“Interest Equivalent” shall have the meaning set forth in Section 12.5

 
 
2.17.
“Limitations” shall have the meaning set forth in Section 10.5.

 
 
2.18.
“Option” shall mean any right granted to a Participant under the Plan allowing
such Participant to purchase Shares at such price or prices and during such
period or periods as the Committee shall determine.

 
 
2.19.
“Option Proceeds” shall mean the cash actually received by the Company for the
option price in connection with the exercise of Options that are exercised after
the effective date of the Plan, plus the maximum tax benefit that could be
realized by the Company as a result of the exercise of such Options, which tax
benefit shall be determined by multiplying (a) the amount that is deductible for
Federal income tax purposes as a result of any such option exercise (currently,
equal to the amount upon which the Participant’s withholding tax obligation is
calculated), times (b) the maximum federal corporate income tax rate for the
year of exercise. To the extent that a Participant pays the option price and/or
withholding taxes with Shares, Option Proceeds shall not be calculated with
respect to the amounts so paid in Shares.

 
 
2.20.
“Other Stock-Based Award” shall have the meaning set forth in Section 8.1.

 
 
2.21.
“Participant” shall mean an Employee or Director who is selected by the
Committee to receive an Award under the Plan.

 
 
2.22.
“Payee” shall have the meaning set forth in Section 13.1.

 
 
2.23.
“Performance Award” shall mean any Award of Performance Shares or Performance
Units granted pursuant to Section 9.

 
 
2.24.
“Performance Period” shall mean that period established by the Committee at the
time any Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are to
be measured.

 
 
2.25.
“Performance Share” shall mean any grant pursuant to Section 9 of a unit valued
by reference to a designated number of Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including cash, Shares, other property, or any combination thereof, upon
achievement of such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or thereafter.

 
 
2.26.
“Performance Unit” shall mean any grant pursuant to Section 9 of a unit valued
by reference to a designated amount of property (including cash) other than
Shares, which value may be paid to the Participant by delivery of such property
as the Committee shall determine, including cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant or
thereafter.

 
 
2.27.
“Permitted Assignee” shall have the meaning set forth in Section 12.3.

 
 
2.28.
“Purchase/Placement Agreement” shall mean that certain agreement by and between
the Company and Friedman, Billings, Ramsey & Co., Inc., as initial
purchaser/placement agent, dated July 14, 2006.

 
 
2.29.
“Restricted Stock” shall mean any Share issued with the restriction that the
holder may not sell, transfer, pledge or assign such Share and with such other
restrictions as the Committee, in its sole discretion, may impose (including any
restriction on the right to vote such Share and the right to receive any
dividends), which restrictions may lapse separately or in combination at such
time or times, in installments or otherwise, as the Committee may deem
appropriate.

 
 
2.30.
“Restricted Stock Award” shall have the meaning set forth in Section 7.1.

 
 
2.31.
“Restriction Period” shall have the meaning set forth in Section 7.1.

 
 
2.32.
“Securities Act” shall mean the Securities Act of 1933, as amended.

 
 
2.33.
“Shares” shall mean the shares of common stock of the Company, par value $0.001
per share.

 
 
2.34.
“Stock Appreciation Right” shall mean the right granted to a Participant
pursuant to Section 6.

 
 
2.35.
“Subsidiary” shall mean any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if, at the time of the granting
of the Award, each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.

 
 
2.36.
“Substitute Awards” shall mean Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted, or
the right or obligation to make future awards, by a company acquired by the
Company or any Subsidiary or with which the Company or any Subsidiary combines.

 
 
2.37.
“Tandem Stock Appreciation Right” shall have the meaning set forth in
Section 6.1.

 
In addition, certain other terms used in the Plan have definitions provided to
them in the first place in which they are used herein.
 

 
 
3.        SHARES SUBJECT TO THE PLAN

 
 
3.1
Number of Shares. (a) Subject to adjustment as provided in Section 12.2, a total
of 22,069,985 Shares shall be authorized for grant under the Plan.

 
 
(b)
If any Shares subject to an Award are forfeited, expire or otherwise terminate
without issuance of such Shares, or any Award is settled for cash or otherwise
does not result in the issuance of all or a portion of the Shares subject to
such Award, the Shares shall, to the extent of such forfeiture, expiration,
termination, cash settlement or non-issuance, again be available for Awards
under the Plan.

 
 
(c)
In the event that (i) any Option or other Award granted hereunder is exercised
through the tendering of Shares (either actually or by attestation) or by the
withholding of Shares by the Company, or (ii) withholding tax liabilities
arising from such Option or other Award are satisfied by the tendering of Shares
(either actually or by attestation) or by the withholding of Shares by the
Company, then only the number of Shares issued net of the Shares tendered or
withheld shall be counted for purposes of determining the maximum number of
Shares available for grant under the Plan.

 

 
(d)
Shares reacquired by the Company on the open market using Option Proceeds shall
be available for Awards under the Plan. The increase in Shares available
pursuant to the repurchase of Shares with Option Proceeds shall not be greater
than the amount of such proceeds divided by the Fair Market Value of a Share on
the date of exercise of the Option giving rise to such Option Proceeds.

 
 
(e)
Substitute Awards shall not reduce the Shares authorized for grant under the
Plan or authorized for grant to a Participant in any calendar year.
Additionally, in the event that a company acquired by the Company or any
Subsidiary or with which the Company or any Subsidiary combines has shares
available under a pre-existing plan approved by shareholders and not adopted in
contemplation of such acquisition or combination, the shares available for grant
pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration
payable to the holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not reduce the
Shares otherwise authorized for grant under the Plan; provided that Awards using
such available shares shall not be made after the last date awards or grants
could have been made under the terms of the pre-existing plan, absent the
acquisition or combination, and shall only be made to individuals who were not
Employees or Directors or any Affiliate prior to such acquisition or
combination.

 
 
(f)
Grants of Awards as a material inducement to a person becoming an employee of
the Company or any Subsidiary, including new employees in connection with a
merger or acquisition, or a former employee being rehired as an employee
following a bona fide period of interruption of employment, shall not reduce the
Shares authorized for grant under the Plan if the Committee so determines.

 
 
(g)
Subject to adjustment as provided in Section 12.2, the aggregate number of
Shares that may be issued under the Plan upon the exercise of Options is
22,069,985 shares.

 
 
3.2.
Character of Shares. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued shares, treasury shares or shares purchased in
the open market or otherwise.

 

 
4.
ELIGIBILITY AND ADMINISTRATION

 
 
4.1.
Eligibility. Any Employee or Director shall be eligible to be selected as a
Participant.

 
 
4.2.
Administration. (a) The Plan shall be administered by the Committee. The
Directors may remove from, add members to, or fill vacancies on, the Committee.

 
 
(b)
The Committee shall have full power and authority, subject to the provisions of
the Plan and subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:
(i) select the Employees and Directors to whom Awards may from time to time be
granted hereunder; (ii) determine the type or types of Awards, not inconsistent
with the provisions of the Plan, to be granted to each Participant hereunder;
(iii) determine the number of Shares to be covered by each Award granted
hereunder; (iv) determine the terms and conditions, not inconsistent with the
provisions of the Plan, of any Award granted hereunder; (v) determine whether,
to what extent and under what circumstances Awards may be settled in cash,
Shares or other property, subject to Section 8.1; (vi) determine whether, to
what extent, and under what circumstances cash, Shares, other property and other
amounts payable with respect to an Award made under the Plan shall be deferred
either automatically or at the election of the Participant; (vii) determine
whether, to what extent and under what circumstances any Award shall be canceled
or suspended; (viii) interpret and administer the Plan and any instrument or
agreement entered into under or in connection with the Plan, including any Award
Agreement; (ix) correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent that the
Committee shall deem desirable to carry it into effect; (x) establish such rules
and regulations and appoint such agents as it shall deem appropriate for the
proper administration of the Plan; (xi) determine whether any Award will have
Dividend Equivalents or Interest Equivalents; and (xii) make any other
determination and take any other action that the Committee deems necessary or
desirable for administration of the Plan.

 
 

                        (c)
Decisions of the Committee shall be final, conclusive and binding on all persons
or entities, including the Company, any Participant, any shareholder and any
Employee or any Affiliate. A majority of the members of the Committee may
determine its actions and fix the time and place of its meetings.
  
  

 
 
(d)
The Committee may delegate to a committee of one or more directors of the
Company or, to the extent permitted by law, to one or more officers or a
committee of officers the right to grant Awards to Employees who are not
Directors or officers of the Company and to cancel or suspend Awards to
Employees who are not Directors or officers of the Company.

 
5.
OPTIONS

 
 
5.1.
Grant of Options. Options may be granted hereunder to Participants either alone
or in addition to other Awards granted under the Plan. Any Option shall be
subject to the terms and conditions of this Section 5 and to such additional
terms and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall deem desirable.

 
 
5.2.
Award Agreements. All Options granted pursuant to this Section 5 shall be
evidenced by a written Award Agreement in such form and containing such terms
and conditions as the Committee shall determine which are not inconsistent with
the provisions of the Plan. Granting of an Option pursuant to the Plan shall
impose no obligation on the recipient to exercise such Option. Any individual
who is granted an Option pursuant to this Section 5 may hold more than one
Option granted pursuant to the Plan at the same time.

 
 
5.3.
Option Price. Other than in connection with Substitute Awards, the option price
per each Share purchasable under any Option granted pursuant to this Section 5
shall not be less than 100% of the Fair Market Value of such Share on the date
of grant of such Option. Other than pursuant to Section 12.2, the Committee
shall not be permitted to (a) lower the option price per Share of an Option
after it is granted, (b) cancel an Option when the option price per Share
exceeds the Fair Market Value of the underlying Shares in exchange for another
Award (other than in connection with Substitute Awards), and (c) take any other
action with respect to an Option that may be treated as a repricing under the
rules and regulations of a stock exchange on which the Shares are listed,
without shareholder approval.

 
 
    
Notwithstanding any other provision of the Plan to the contrary, upon approval
of the inclusion of this paragraph in the Plan by the Company’s shareholders,
the Committee may provide for, and the Company may implement, a one-time-only
Option exchange program for employee Option holders (other than the named
executive officers of the Company identified in the Company’s definitive proxy
statement for the 2010 annual meeting of shareholders), pursuant to which
certain outstanding Options granted at an exercise price of $15.00 per Share in
August 2006 could, at the election of the person holding such Options, be
tendered to the Company for cancellation in exchange for the issuance of a
lesser amount of Options with a lower exercise price per Share (but not less
than 100% of the Fair Market Value per Share on the date of grant of such new
Option), provided that such one-time-only option exchange program is commenced
prior to June 3, 20113.

 
5.4.
Option Period. The term of each Option shall be fixed by the Committee in its
sole discretion; provided that no Option shall be exercisable after the
expiration of ten years from the date the Option is granted, except in the event
of death or disability as provided in Section 12.4(a).

 
 
5.5.
Exercise of Options. Vested Options granted under the Plan shall be exercised by
the Participant or by a Permitted Assignee thereof (or by the Participant’s
executors, administrators, guardian or legal representative, as may be provided
in an Award Agreement) as to all or part of the Shares covered thereby, by the
giving of written notice of exercise to the Company or its designated agent,
specifying the number of Shares to be purchased, accompanied by payment of the
full purchase price for the Shares being purchased. Unless otherwise provided in
an Award Agreement, full payment of such purchase price shall be made at the
time of exercise and shall be made (a) in cash or cash equivalents (including by
certified check or bank check or wire transfer of immediately available funds),
(b) by tendering previously acquired Shares (either actually or by attestation,
valued at their then Fair Market Value), (c) with the consent of the Committee,
by delivery of other consideration (including, where permitted by law and the
Committee, other Awards) having a Fair Market Value on the exercise date equal
to the total purchase price, (d) with the consent of the Committee, by
withholding Shares otherwise issuable in connection with the exercise of the
Option, (e) through any other method specified in an Award Agreement, or (f) any
combination of any of the foregoing. The notice of exercise, accompanied by such
payment, shall be delivered to the Company at its principal business office or
such other office as the Committee may from time to time direct, and shall be in
such form, containing such further provisions consistent with the provisions of
the Plan, as the Committee may from time to time prescribe. In no event may any
Option granted hereunder be exercised for a fraction of a Share. No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date of such issuance. Except under certain circumstances
contemplated by Section 11 or as may be set forth in an Award Agreement with
respect to death or disability of a Participant, Options will not be exercisable
before the expiration of one year from the date the Option is granted.

 
 
5.6.
Form of Settlement. In its sole discretion, the Committee may provide, at the
time of grant, that the Shares to be issued upon an Option’s exercise shall be
in the form of Restricted Stock or other similar securities, or may reserve the
right so to provide after the time of grant.

 

 
6.
STOCK APPRECIATION RIGHTS

 
 
6.1.
Grant and Exercise. The Committee may provide Stock Appreciation Rights (a) in
conjunction with all or part of any Option granted under the Plan or at any
subsequent time during the term of such Option (“Tandem Stock Appreciation
Right”), (b) in conjunction with all or part of any Award (other than an Option)
granted under the Plan or at any subsequent time during the term of such Award,
or (c) without regard to any Option or other Award (a “Freestanding Stock
Appreciation Right”), in each case upon such terms and conditions as the
Committee may establish in its sole discretion.

 
 
6.2.
Terms and Conditions. Stock Appreciation Rights shall be subject to such terms
and conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee, including the following:

 
 
(a)
Upon the exercise of a Stock Appreciation Right, the holder shall have the right
to receive the excess of (i) the Fair Market Value of one Share on the date of
exercise or such other lesser amount as the Committee shall so determine at any
time during a specified period before the date of exercise over (ii) the grant
price of the right on the date of grant which, except in the case of Substitute
Awards or in connection with an adjustment provided in Section 12.2, shall not
be less than the Fair Market Value of one Share on such date of grant of the
right.

 
 
(b)
Upon the exercise of a Stock Appreciation Right, the Committee shall determine
in its sole discretion whether payment shall be made in cash, in whole Shares or
other property, or any combination thereof.

 
 
(c)
Any Tandem Stock Appreciation Right may be granted at the same time as the
related Option is granted or at any time thereafter before exercise or
expiration of such Option.

 
 
(d)
Any Tandem Stock Appreciation Right related to an Option may be exercised only
when the related Option would be exercisable and the Fair Market Value of the
Shares subject to the related Option exceeds the option price at which Shares
can be acquired pursuant to the Option. Any Option related to a Tandem Stock
Appreciation Right shall no longer be exercisable to the extent the Tandem Stock
Appreciation Right has been exercised and any Tandem Stock Appreciation Right
shall no longer be exercisable to the extent the related Option has been
exercised; provided, however, that if a Tandem Stock Appreciation Right exists
with respect to less than the full number of Shares covered by a related Option,
then an exercise or termination of such Option shall not reduce the number of
Shares to which the Tandem Stock Appreciation Right applies until the number of
Shares then exercisable under such Option equals the number of Shares to which
the Tandem Stock Appreciation Right applies,.

 
 
(e)
The provisions of Stock Appreciation Rights need not be the same with respect to
each recipient.

 
 
(f)
The Committee may impose such other conditions or restrictions on the terms of
exercise and the exercise price of any Stock Appreciation Right, as it shall
deem appropriate. In connection with the foregoing, the Committee shall consider
the applicability and effect of Section 162(m) of the Code. Notwithstanding the
foregoing provisions of this Section 6.2(f), but subject to Section 12.2 and
Section 12.4(a), a Freestanding Stock Appreciation Right shall not have a term
of greater than ten years. Except under certain circumstances contemplated by
Section 11 or as may be set forth in an Award Agreement with respect to death or
disability of a Participant, Freestanding Stock Appreciation Rights will not be
exercisable before the expiration of one year from the date the right is
granted. In addition to the foregoing, but subject to Section 12.2, the base
amount of any Stock Appreciation Right shall not be reduced after the date of
grant, without shareholder approval.

 
 
(g)
The Committee may impose such terms and conditions on Stock Appreciation Rights
granted in conjunction with any Award (other than an Option) as the Committee
shall determine in its sole discretion.

 

 
7.
RESTRICTED STOCK AWARDS

 
 
7.1.
Grants. Awards of Restricted Stock may be issued hereunder to Participants
either alone or in addition to other Awards granted under the Plan (a
“Restricted Stock Award”). A Restricted Stock Award shall be subject to
restrictions imposed by the Committee covering a period of time specified by the
Committee (the “Restriction Period”). The provisions of Restricted Stock Awards
need not be the same with respect to each recipient. The Committee has absolute
discretion to determine whether any consideration (other than services) is to be
received by the Company or any Affiliate as a condition precedent to the
issuance of Restricted Stock

 
 
7.2.
Award Agreements. The terms of any Restricted Stock Award granted under the Plan
shall be set forth in a written Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan.

 
 
7.3.
Rights of Holders of Restricted Stock. Beginning on the date of grant of the
Restricted Stock Award and subject to execution of the Award Agreement, the
Participant shall become a shareholder of the Company with respect to all Shares
subject to the Award Agreement and shall have all of the rights of a
shareholder, including the right to vote such Shares and the right to receive
distributions made with respect to such Shares; provided, however, that any
Shares or any other property (other than cash) distributed as a dividend or
otherwise with respect to any Restricted Stock as to which the restrictions have
not yet lapsed shall be subject to the same restrictions as such Restricted
Stock.

 
 
7.4.
Minimum Vesting Period. Except for certain limited situations (including the
death, disability or retirement of the Participant or a Change in Control
referred to in Section 11), Restricted Stock Awards subject solely to continued
employment restrictions shall have a Restriction Period of not less than three
years from date of grant (but permitting pro-rata vesting over such time);
provided, that the provisions of this Section 7.4 shall not be applicable to any
Substitute Awards or grants of Restricted Stock in payment of Performance Awards
pursuant to Section 9. Subject to the foregoing three-year or one-year minimum
vesting requirement, as applicable, the Committee may, in its sole discretion
and subject to the limitations imposed under Section 162(m) of the Code and the
Treasury Regulations thereunder in the case of a Restricted Stock Award intended
to comply with the performance-based compensation exception under Code
Section 162(m), waive the forfeiture period and any other conditions set forth
in any Award Agreement subject to such terms and conditions as the Committee
shall deem appropriate.

 
8.
OTHER STOCK–BASED AWARDS

 
 
8.1.
Stock and Administration. Other Awards of Shares and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, Shares or
securities convertible into Shares (“Other Stock-Based Awards”) may be granted
hereunder to Participants, either alone or in addition to other Awards granted
under the Plan, and such Other Stock-Based Awards shall also be available as a
form of payment in the settlement of other Awards granted under the Plan. Other
Stock-Based Awards shall be paid in Shares, cash or a combination, as determined
by the Committee. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees and Directors to
whom and the time or times at which such Other Stock-Based Awards shall be made,
the number of Shares to be granted pursuant to such Awards, and all other
conditions of the Awards. The provisions of Other Stock-Based Awards need not be
the same with respect to each recipient. Other Stock-Based Awards may be
immediately vested, immediately transferable or both immediately vested and
transferable. Except for certain limited situations (including the death,
disability or retirement of the Participant or a Change in Control referred to
in Section 11), Other Stock-Based Awards subject solely to continued employment
restrictions shall be subject to restrictions imposed by the Committee for a
period of not less than three years from date of grant (but permitting pro-rata
vesting over such time); provided, that such restrictions shall not be
applicable to any Substitute Awards, grants of Other Stock-Based Awards in
payment of Performance Awards pursuant to Section 9, or grants of Other
Stock-Based Awards on a deferred basis. In addition, the Committee may award
unrestricted Shares to Participants in lieu of certain cash payments awarded
under other compensation plans or programs of the Company.

 
 
8.2.
Terms and Conditions. Shares (including securities convertible into Shares)
subject to Awards granted under this Section 8 may be issued for no
consideration or for such minimum consideration as may be required by applicable
law. Shares (including securities convertible into Shares) purchased pursuant to
a purchase right awarded under this Section 8 shall be purchased for such
consideration as the Committee shall determine in its sole discretion.

 

 
9.
PERFORMANCE AWARDS

 
 
9.1.
Terms of Performance Awards. Performance Awards may be issued hereunder to
Participants, for no consideration or for such minimum consideration as may be
required by applicable law, either alone or in addition to other Awards granted
under the Plan. The performance criteria to be achieved during any Performance
Period and the length of the Performance Period shall be determined by the
Committee upon the grant of each Performance Award; provided, however, that a
Performance Period shall not be shorter than 12 months nor longer than five
years. Except as provided in Section 11 or as may be provided in an Award
Agreement, Performance Awards will be distributed only after the end of the
relevant Performance Period. Performance Awards may be paid in cash, Shares,
other property, or any combination thereof, in the sole discretion of the
Committee at the time of payment. The performance goals to be achieved for each
Performance Period shall be conclusively determined by the Committee and may be
based upon the criteria set forth in Section 10.1. The amount of the Award to be
distributed shall be conclusively determined by the Committee. Performance
Awards may be paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by the
Committee, on a deferred basis.

 
10.
CODE SECTION 162(m) PROVISIONS

 
 
10.1.
Performance Criteria. If any Award is intended to satisfy the performance-based
compensation exception under Code Section 162(m), then the lapsing of
restrictions on such an Award and the distribution of cash, Shares or other
property pursuant thereto, as applicable, may be subject to the achievement of
one or more objective performance goals established by the Committee, which
shall be based on the attainment of specified levels of one or any combination
of the following: revenues, revenue growth; asset growth; combined net worth;
debt to equity ratio; debt to capitalization ratio; earnings before interest,
taxes, depreciation and amortization; operating income; operating cash flow;
pre- or after-tax net income; cash flow or free cash flow; cash flow or free
cash flow per share; net earnings; earnings per share; return on equity; return
on investment; return on total capital; return on capital employed; return on
assets; return on revenue; economic value added (or an equivalent metric); share
price performance; total shareholder return; improvement in or attainment of
expense levels; improvement in or attainment of working capital levels of the
Company or any Affiliate, division or business unit of the Company for or within
which the Participant is primarily employed. Such performance goals also may be
based solely by reference to the Company’s performance or the performance of an
Affiliate, division or business unit of the Company, or based upon the relative
performance of other companies or upon comparisons of any of the indicators of
performance relative to other companies. The Committee may also exclude the
impact of an event or occurrence which the Committee determines should
appropriately be excluded, including (a) restructurings, discontinued
operations, extraordinary items, and other unusual or non-recurring charges,
(b) an event either not directly related to the operations of the Company or not
within the reasonable control of the Company’s management, or (c) a change in
accounting standards required by generally accepted accounting principles. Such
performance goals shall be set by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of,
Section 162(m) of the Code, or any successor provision thereto, and the
regulations thereunder.

 
 
10.2.
Adjustments. Notwithstanding any provision of the Plan (other than Section 11),
with respect to any Restricted Stock, Performance Award or Other Stock-Based
Award that is subject to this Section 10, the Committee may adjust downwards,
but not upwards, the amount payable pursuant to such Award, and the Committee
may not waive the achievement of the applicable performance goals, except in the
case of the death or disability of the Participant.

 
 
10.3.
Restrictions. The Committee shall have the power to impose such other
restrictions on Awards subject to this Section 10 as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
“performance-based compensation” within the meaning of Section 162(m)(4)(C) of
the Code, or any successor provision thereto.

 
 
10.4.
Limitations on Grants to Individual Participant. Subject to adjustment as
provided in Section 12.2, no Participant may be granted Options or Stock
Appreciation Rights during any calendar year with respect to more than 1,000,000
Shares. Subject to adjustment as provided in Section 12.2, no Participant may be
granted in any calendar year Restricted Stock, Performance Awards and/or Other
Stock-Based Awards that are intended to satisfy the performance-based
compensation exception under Code Section 162(m) and that are denominated in
Shares with respect to more than 750,000 Shares (the “Limitations”). In addition
to the foregoing, the maximum dollar value payable to any Participant in any
calendar year with respect to Performance Awards and/or Other Stock-Based Awards
that are intended to satisfy the performance-based compensation exception under
Code Section 162(m) and that are valued with reference to property other than
Shares is $25,000,000. If an Award is cancelled, the cancelled Award shall
continue to be counted toward the applicable Limitations.

 

 
 11.
 
CHANGE IN CONTROL PROVISIONS

 
 
11.1.
Definition of Change in Control. For purposes of the Plan, a “Change in Control”
shall mean the happening of any of the following events:

 
 
(a)
acquisition by any individual, entity or group (with the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either
(A) the then outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this subsection (a), the following acquisitions shall not
constitute a Change in Control: (1) any acquisition directly from the Company,
(2) any acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (c) of this Section 11.1; or

 
 
(b)
Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s shareholders, was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or

 
 
(c)
Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of assets or stock of another corporation (a “Business
Combination”), in each case, unless, following such Business Combination,
(A) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination or the Founders or Founder Affiliates)
beneficially owns, directly or indirectly, 50% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

 
 
(d)
Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 
 
(e)
In no event shall a Change in Control be deemed to have occurred under this
Section 11.1 upon an initial public offering or a subsequent public offering of
the common stock under the Securities Act.

 

 
 
11.2.
Impact of Change in Control. Unless the Committee determines otherwise in an
Award Agreement, upon a Change in Control, (a) Options and Stock Appreciation
Rights outstanding as of the date of the Change in Control immediately vest and
become fully exercisable, (b) restrictions and deferral limitations on
Restricted Stock lapse and the Restricted Stock become free of all restrictions
and limitations and become fully vested, (c) all Performance Awards shall be
considered to be earned and payable (either in full or pro-rata based on the
portion of Performance Period completed as of the date of the Change in
Control), and any deferral or other restriction shall lapse and such Performance
Awards shall be immediately settled or distributed, (d) the restrictions and
deferral limitations and other conditions applicable to any Other Stock-Based
Awards or any other Awards shall lapse, and such Other Stock-Based Awards or
such other Awards shall become free of all restrictions, limitations or
conditions and become fully vested and transferable to the full extent of the
original grant, and (e) such other additional benefits as the Committee deems
appropriate shall apply, subject in each case to any terms and conditions
contained in the Award Agreement evidencing such Award. Notwithstanding any
other provision of the Plan, the Committee, in its discretion, may determine
that, upon the occurrence of a Change in Control of the Company, each Option and
Stock Appreciation Right outstanding shall terminate within a specified number
of days after notice to the Participant, and such Participant shall receive,
with respect to each Share subject to such Option or Stock Appreciation Right,
an amount equal to the excess of the Fair Market Value of such Share immediately
prior to the occurrence of such Change in Control over the exercise price per
share of such Option and/or Stock Appreciation Right; such amount to be payable
in cash, in one or more kinds of stock or property (including the stock or
property, if any, payable in the transaction) or in a combination thereof, as
the Committee, in its discretion, shall determine.

 
 
11.3.
Assumption Upon Change in Control. Notwithstanding the foregoing, if in the
event of a Change in Control the successor company assumes or substitutes for an
Option, Stock Appreciation Right, Share of Restricted Stock or Other Stock-Based
Award, then each outstanding Option, Stock Appreciation Right, Share of
Restricted Stock or Other Stock-Based Award shall not be accelerated as
described in Sections 11.2(a), (b) and (d). For the purposes of this
Section 11.3, an Option, Stock Appreciation Right, Share of Restricted Stock or
Other Stock-Based Award shall be considered assumed or substituted for if
following the Change in Control the award confers the right to purchase or
receive, for each Share subject to the Option, Stock Appreciation Right,
Restricted Stock Award or Other Stock-Based Award immediately prior to the
Change in Control, the consideration (whether stock, cash or other securities or
property) received in the transaction constituting a Change in Control by
holders of Shares for each Share held on the effective date of such transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares);
provided, however, that if such consideration received in the transaction
constituting a Change in Control is not solely common stock of the successor
company, the Committee may, with the consent of the successor company, provide
that the consideration to be received upon the exercise or vesting of an Option,
Stock Appreciation Right, Restricted Stock Award or Other Stock-Based Award, for
each Share subject thereto, will be solely common stock of the successor company
substantially equal in fair market value to the per share consideration received
by holders of Shares in the transaction constituting a Change in Control. The
determination of such substantial equality of value of consideration shall be
made by the Committee in its sole discretion and its determination shall be
conclusive and binding. Notwithstanding the foregoing, on such terms and
conditions as may be set forth in an Award Agreement, in the event of an
involuntary termination without cause or a voluntary termination for good reason
of a Participant’s employment in such successor company within a 24-month period
following such Change in Control, each Award held by such Participant at the
time of the Change in Control shall be accelerated as described in Sections
11.2(a), (b) and (d) above.

 
 
11.4.
Limitations on Benefits.

 
 
(a)
Subject to Section 11.4(e), but despite any other provision of this Plan, if it
is determined that receipt of benefits or payments under this Plan, taking into
account other benefits or payments provided under other plans, agreements or
arrangements, would subject a Participant to tax under Code Section 4999, it
must determine whether some amount of the benefits or payments would meet the
definition of a “Reduced Amount.” If it is determined that there is a Reduced
Amount, the total benefits and payments must be reduced to such Reduced Amount,
but not below zero.

 
 
(b)
If it is determined that the total benefits and payments should be reduced to
the Reduced Amount, the Company must promptly notify the Participant of that
determination, including a copy of the detailed calculations by the independent
accounting firm engaged to audit the Company’s financial statements immediately
before the Change in Control (the “Accounting Firm”). All determinations made by
the Accounting Firm under this section are binding upon the Company and the
Participant.

 
 
(c)
It is the intention of the Company and the Participant to reduce the total
benefits and payments under this Plan and any other plan, agreement or
arrangement only if the aggregate Net After Tax Receipts to the Participant
would thereby be increased. As a result of the uncertainty in the application of
Code section 4999 at the time of the initial determination by the Company’s
accounting firm under this section, however, it is possible that amounts will
have been paid or distributed under the Plan to or for the benefit of a
Participant which should not have been so paid or distributed (“Overpayment”) or
that additional amounts which will not have been paid or distributed under the
Plan to or for the benefit of a Participant could have been so paid or
distributed (“Underpayment”), in each case, consistent with the calculation of
the Reduced Amount. If the Accounting Firm, based either upon the assertion of a
deficiency by the Internal Revenue Service against the Company or the
Participant which the accounting firm believes has a high probability of success
or controlling precedent or other substantial authority, determines that an
Overpayment has been made, any such Overpayment must be treated (if permitted by
applicable law) for all purposes as a loan ab initio for which the Participant
must repay the Company together with interest at the applicable federal rate
under Code section 7872(f)(2); provided, however, that no such loan may be
deemed to have been made and no amount shall be payable by Participant to the
Company if and to the extent such deemed loan and payment would not either
reduce the amount on which Participant is subject to tax under Code section 1 or
4999 or generate a refund of such taxes. If the Accounting Firm, based upon
controlling precedent or other substantial authority, determines that an
Underpayment has occurred, the accounting firm must promptly notify the
Administrator of the amount of the Underpayment and such amount, together with
interest at the applicable federal rate under Code section 7872(f)(2), must be
paid to the Participant.

 
 
(d)
For purposes of this section, (i) “Net After Tax Receipt” means the Present
Value of a payment or benefit under this Plan and all other plans, agreements
and arrangements net of all taxes imposed on Participant with respect thereto
under Code sections 1 and 4999, determined by applying the highest marginal rate
under Code section 1 which applied to the Participant’s taxable income for the
immediately preceding taxable year; (ii) “Present Value” means the value
determined in accordance with Code section 280G(d)(4); and (iii) “Reduced
Amount” means the smallest aggregate amount of all payments or benefit under
this Plan which (a) is less than the sum of all payments or benefit under this
Plan and (b) results in aggregate Net After Tax Receipts which are equal to or
greater than the Net After Tax Receipts which would result if the aggregate
payments or benefit under this Plan and all other plans, agreements and
arrangements were any other amount less than the sum of all payments or benefit
under this Plan and all other plans, agreements and arrangements.

 
 
(e)
This section shall not apply to awards made to any Participant if an Award
Agreement or other agreement between the Participant and the Company provides
that the Company shall indemnify the Participant against any liability that the
Participant may incur under Section 4999 of the Code.

 
12.
GENERALLY APPLICABLE PROVISIONS

 
 
12.1.
Amendment and Modification of the Plan. The Board may, from time to time, alter,
amend, suspend or terminate the Plan as it shall deem advisable, subject to any
requirement for shareholder approval imposed by applicable law, including the
rules and regulations of any stock exchange or quotation system on which Shares
are listed or quoted; provided that the Board may not amend the Plan in any
manner that would result in noncompliance with Rule 16b-3 of the Exchange Act;
and further provided that the Board may not, without the approval of the
Company’s shareholders, amend the Plan to (a) increase the number of Shares that
may be the subject of Awards under the Plan (except for adjustments pursuant to
Section 12.2), (b) expand the types of awards available under the Plan,
(c) materially expand the class of persons eligible to participate in the Plan,
(d) amend any provision of Section 5.3, (e) increase the maximum permissible
term of any Option specified by Section 5.4, or (f) amend any provision of
Section 10.5. In addition, no amendments to, or termination of, the Plan shall
in any way impair the rights of a Participant under any Award previously granted
without such Participant’s consent.

 
 
12.2.
Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other
property, but without regard to the payment of any cash dividends by the Company
in the ordinary course), stock split, reverse stock split, spin-off or similar
transaction or other change in corporate structure affecting the Shares or the
value thereof, the terms of the Plan and Awards shall be adjusted and such
adjustments shall be as the Committee, in its sole discretion, deems equitable
or appropriate, including such adjustments in the aggregate number, class and
kind of securities that may be delivered under the Plan and, in the aggregate or
to any one Participant, in the number, class, kind and option or exercise price
of securities subject to outstanding Awards granted under the Plan (including,
if the Committee deems appropriate, the substitution of similar options to
purchase the shares of, or other awards denominated in the shares of, another
company) as the Committee may determine to be appropriate in its sole
discretion; provided, however, that the number of Shares subject to any Award
shall always be a whole number.

 
 
12.3.
Transferability of Awards. Except as provided below, and except as otherwise
authorized by the Committee in an Award Agreement, no Award and no Shares
subject to Awards described in Section 8 that have not been issued or as to
which any applicable restriction, performance or deferral period has not lapsed,
may be sold, assigned, transferred, pledged or otherwise encumbered, other than
by will or the laws of descent and distribution, or pursuant to a qualified
domestic relations order, and such Award may be exercised during the life of the
Participant only by the Participant or the Participant’s guardian or legal
representative. Notwithstanding the foregoing, a Participant may assign or
transfer an Award with the consent of the Committee (each transferee thereof, a
“Permitted Assignee”); provided that such Permitted Assignee shall be bound by
and subject to all of the terms and conditions of the Plan and the Award
Agreement relating to the transferred Award and shall execute an agreement
satisfactory to the Company evidencing such obligations; and provided further
that such Participant shall remain bound by the terms and conditions of the
Plan. The Company shall cooperate with any Permitted Assignee and the Company’s
transfer agent in effectuating any transfer permitted under this Section 12.3.

 
 
12.4.
Termination of Employment. Unless the Committee shall determine otherwise at or
after the date of grant, the following termination provisions shall apply:

 
 
(a)
Death or Disability. Upon a Participant’s termination due to death or
disability, as those terms may be defined in the Award Agreement, (i) Options
and Stock Appreciation Rights outstanding as of the date of termination shall
immediately vest and become fully exercisable, and remain exercisable for one
year, even if one year exceeds the original option term (except for Options that
are incentive stock options under Code section 422 and related Tandem Stock
Appreciation Rights that shall not be exercisable after the original term), and
even if death occurs during a post-termination exercise period; (ii) Performance
Awards shall be considered to be earned and payable (either in full or pro-rata
based on the portion of Performance Period completed as of the date of
termination and performance to such date), and any deferral or other restriction
shall lapse and such Performance Awards shall be immediately settled or
distributed; (iii) restrictions and deferral limitations on Restricted Stock,
Other Stock-Based Awards, and any other Awards shall lapse and the Restricted
Stock shall become free of all restrictions, limitations, or conditions and
become fully vested and transferable to the full extent of the original grant;
and (iv) such other additional benefits as the Committee deems appropriate shall
apply, subject in each case to any terms and conditions contained in the Award
Agreement evidencing such Award.

 
 
(b)
Retirement. Upon a Participant’s retirement, as that term may be defined in the
Award Agreement, and conditioned upon the Participant entering into non-compete,
non-solicitation, non-disclosure, and non-disparagement agreements, (i) Options
and Stock Appreciation Rights outstanding as of the date of termination and that
are not vested shall continue to vest and, once vested, shall remain exercisable
for the lesser of three (3) years from vesting date or their original terms;
(ii) Options and Stock Appreciation Rights outstanding as of the date of
termination and that are vested shall remain exercisable for the lesser of three
(3) years from the date of termination or their original terms,
(iii) Performance Awards shall continue to vest and shall be payable upon
completion of the applicable Performance Period to the extent the associated
performance goals are achieved; (iv) Restricted Stock, Other Stock-Based Awards,
or any other Awards shall continue to vest, as applicable; and (v) such other
additional benefits as the Committee deems appropriate shall apply, subject in
each case to any terms and conditions contained in the Award Agreement
evidencing such Award.

 
 
(c)
Involuntary Termination Without Cause due to a Reduction in Force. Upon a
Participant’s involuntary termination without cause due to a reduction in force,
as that term may be defined in the Award Agreement, and conditioned upon the
Participant entering into non-solicitation, non-disclosure, and
non-disparagement agreements, (i) vested Options and Stock Appreciation Rights
outstanding as of the date of termination shall remain exercisable for 90 days,
and unvested Options and Stock Appreciation Rights shall be forfeited;
(ii) Performance Awards shall be payable at the end of the applicable
Performance Period, to the extent the associated performance goals are achieved,
pro-rata based on the number of months of the Performance Period that have been
completed as of the date of termination divided by the total number of months in
the Performance Period; (iii) Restricted Stock, Other Stock-Based Awards or any
other Awards subject to a cliff vesting or annual pro rata vesting provision
shall vest pro-rata based on the number of months of the vesting period
completed as of the date of termination divided by the total number of months in
the vesting period, and unvested Restricted Stock, unvested Other Stock-Based
Awards or any other unvested Awards shall be forfeited; and (iv) such other
additional benefits as the Committee deems appropriate shall apply, subject in
each case to any terms and conditions contained in the Award Agreement
evidencing such Award.

 
 
(d)
Termination for Cause. Upon a Participant’s termination for cause, as that term
may be defined in the Award Agreement, (i) all Options and Stock Appreciation
Rights outstanding as of the date of termination, whether vested or not vested,
shall be immediately canceled, and (ii) any unvested awards of Restricted Stock,
Performance Awards, Other Stock-Based Awards or other Awards shall be
immediately forfeited.

 
 
(e)
Other Termination. Upon a Participant’s termination for any other reason,
including voluntary resignation and involuntary termination without cause not
due to a reduction in force, as those terms may be defined in the Award
Agreement, (i) vested Options and Stock Appreciation Rights outstanding on the
date of termination shall remain exercisable for 90 days, and unvested Options
and Stock Appreciation Rights shall be forfeited, and (ii) unvested Restricted
Stock, Performance Awards, Other Stock-Based Awards or other Awards shall be
immediately forfeited.

 
 
12.5.
Deferral; Dividend Equivalents and Interest Equivalents. The Committee shall be
authorized to establish procedures pursuant to which the payment of any Award
may be deferred. Subject to the provisions of the Plan and any Award Agreement,
the recipient of an Award (including any deferred Award) may, if so determined
by the Committee, be entitled to receive, currently or on a deferred basis,
cash, stock or other property dividends, or cash payments in amounts equivalent
to cash, stock or other property dividends on Shares (“Dividend Equivalents”)
with respect to the number of Shares covered by the Award, as determined by the
Committee, in its sole discretion, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional Shares or
otherwise reinvested. Any cash-based Award, including deferred Awards or
accumulated cash Dividend Equivalents, may be credited with interest (“Interest
Equivalents”) on the same basis as provided above.

 
13.
MISCELLANEOUS

 
 
13.1.
Tax Withholding. The Company shall have the right to make all payments or
distributions pursuant to the Plan to a Participant (or a Permitted Assignee
thereof) (any such person, a “Payee”) net of any applicable Federal, State and
local taxes required to be paid or withheld as a result of (a) the grant of any
Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the
delivery of Shares or cash, (d) the lapse of any restrictions in connection with
any Award or (e) any other event occurring pursuant to the Plan. The Company or
any Affiliate shall have the right to withhold from wages or other amounts
otherwise payable to such Payee such withholding taxes as may be required by
law, or to otherwise require the Payee to pay such withholding taxes. If the
Payee shall fail to make such tax payments as are required, the Company or its
Affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to such Payee or to take
such other action as may be necessary to satisfy such withholding obligations.
The Committee shall be authorized to establish procedures for election by
Participants to satisfy such obligation for the payment of such taxes by
tendering previously acquired Shares (either actually or by attestation, valued
at their then Fair Market Value) that have been owned for a period of at least
six months (or such other period to avoid accounting charges against the
Company’s earnings), or by directing the Company to retain Shares (up to the
employee’s minimum required tax withholding rate) otherwise deliverable in
connection with the Award.

 
 
13.2.
Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor the grant
of an Award hereunder shall confer upon any Employee or Director the right to
continue in the employment or service of the Company or any Affiliate or affect
any right that the Company or any Affiliate may have to terminate the employment
or service of (or to demote or to exclude from future Awards under the Plan) any
such Employee or Director at any time for any reason. Except as specifically
provided by the Committee, the Company shall not be liable for the loss of
existing or potential profit from an Award granted in the event of termination
of an employment or other relationship. No Employee or Participant shall have
any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Employees or Participants under the Plan.

 
 
13.3.
Prospective Recipient. The prospective recipient of any Award under the Plan
shall not, with respect to such Award, be deemed to have become a Participant,
or to have any rights with respect to such Award, until and unless such
recipient shall have executed an agreement or other instrument evidencing the
Award and delivered a copy thereof to the Company, and otherwise complied with
the then applicable terms and conditions.

 
 
13.4.
Cancellation of Award. Notwithstanding anything to the contrary contained
herein, all outstanding Awards granted to any Participant shall be canceled if
the Participant, without the consent of the Company, while employed by the
Company or any Affiliate or after termination of such employment or service,
establishes a relationship with a competitor of the Company or any Affiliate or
engages in activity that is in conflict with or adverse to the interest of the
Company or any Affiliate, as determined by the Committee in its sole discretion.

 
 
13.5.
Stop Transfer Orders. All certificates for Shares delivered under the Plan
pursuant to any Award shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.

 
 
13.6.
Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services performed or to be performed for the Company or any Affiliate, division
or business unit of the Company. Any income or gain realized pursuant to Awards
under the Plan and any Stock Appreciation Rights constitute a special incentive
payment to the Participant and shall not be taken into account, to the extent
permissible under applicable law, as compensation for purposes of any of the
employee benefit plans of the Company or any Affiliate except as may be
determined by the Committee or by the Board or board of directors of the
applicable Affiliate.

 
 
13.7.
Other Plans. Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to shareholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.

 
 
13.8.
Severability. If any provision of the Plan shall be held unlawful or otherwise
invalid or unenforceable in whole or in part by a court of competent
jurisdiction, such provision shall (a) be deemed limited to the extent that such
court of competent jurisdiction deems it lawful, valid and/or enforceable and as
so limited shall remain in full force and effect, and (b) not affect any other
provision of the Plan or part thereof, each of which shall remain in full force
and effect. If the making of any payment or the provision of any other benefit
required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.

 
 
13.9.
Construction. All references in the Plan to “Section or Sections” are intended
to refer to the Section or Sections, as the case may be, of the Plan. As used in
the Plan, the words “include” and “including,” and variations thereof, shall not
be deemed to be terms of limitation, but rather shall be deemed to be followed
by the words “without limitation.”

 
 
13.10.
Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant by the Company, nothing contained herein shall give
any such Participant any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver the Shares or payments in lieu of or with respect to Awards
hereunder; provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.

 
 
13.11.
Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Virginia and
construed accordingly.

 
 
13.12.
Effective Date of Plan; Termination of Plan. The Plan, as amended and restated
herein, shall be effective on the date of the approval of the Plan by the
holders of a majority of the shares entitled to vote at a duly constituted
meeting of the shareholders of the Company. The Plan, as amended and restated
herein, shall be null and void and of no effect if the foregoing condition is
not fulfilled. Awards may be granted under the Plan, as amended and restated
herein, at any time and from time to time on or prior to April 20, 2019. Awards
outstanding on such date shall remain in effect until they have been exercised
or terminated, or have expired.

 
 
13.13.
Foreign Employees. Awards may be granted to Participants who are foreign
nationals or employed outside the United States, or both, on such terms and
conditions different from those applicable to Awards to Employees employed in
the United States as may, in the judgment of the Committee, be necessary or
desirable in order to recognize differences in local law or tax policy. The
Committee also may impose conditions on the exercise or vesting of Awards in
order to minimize the Company’s obligation with respect to tax equalization for
Employees on assignments outside their home country.

 
 
13.14.
Captions. The captions in the Plan are for convenience of reference only, and
are not intended to narrow, limit or affect the substance or interpretation of
the provisions contained herein.