EXHIBIT 10.2

 

K-V PHARMACEUTICAL COMPANY
2013 INCENTIVE COMPENSATION PLAN

 

1.    Establishment; Effective Date; Purposes; and Duration.

 

(a)     Establishment of the Plan; Effective Date. K-V Pharmaceutical Company, a
Delaware corporation (the “Company”), hereby establishes this incentive
compensation plan to be known as the “K-V Pharmaceutical Company 2013 Incentive
Compensation Plan,” as set forth in this document (the “Plan”). The Plan permits
the grant of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based
Awards, Dividend Equivalents and Cash-Based Awards. The Plan shall become
effective on the effective date of the Third Amended Joint Chapter 11 Plan of
Reorganization for K-V Discovery Solutions, Inc. and its Affiliated Debtors
(“Plan of Reorganization”), dated as of July 17, 2013, as the same may be
amended or modified (“Effective Date”). The Plan shall remain in effect as
provided in Section 1(c).

 

(b)     Purposes of the Plan. The purposes of the Plan are: (i) to enhance the
Company’s and the Affiliates’ ability to attract highly qualified personnel;
(ii) to strengthen their retention capabilities; (iii) to enhance the long-term
performance and competitiveness of the Company and the Affiliates; and (iv) to
align the interests of Participants with those of the Company’s shareholders. To
accomplish such purposes, the Plan provides that the Company may grant
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Other Stock-Based Awards, Dividend
Equivalents and Cash-Based Awards.

 

(c)     Duration of the Plan. The Plan shall commence on the Effective Date and
shall remain in effect, subject to the right of the Board of Directors to amend
or terminate the Plan at any time pursuant to Section 15, until all Shares
subject to it shall have been delivered, and any restrictions on such Shares
have lapsed, pursuant to the Plan’s provisions. However, in no event may an
Award be granted under the Plan on or after ten years from the Effective Date.

 

2.    Definitions.

 

Certain terms used herein have the definitions given to them in the first
instance in which they are used. In addition, for purposes of the Plan, the
following terms are defined as set forth below:

 

(a)     “Affiliate” means (i) any Subsidiary; (ii) any Person that directly or
indirectly controls, is controlled by or is under common control with the
Company; and/or (iii) to the extent provided by the Committee, any Person in
which the Company has a significant interest. The term “control” (including,
with correlative meaning, the terms “controlled by” and “under common control
with”), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting or other securities, by
contract or otherwise.

 

 
 

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(b)     “Applicable Exchange” means such securities exchange or inter-dealer
quotation system as may at the applicable time be the principal market for the
Common Stock.

 

(c)     “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Restricted Stock Units, Other Stock-Based Awards,
Dividend Equivalents and Cash-Based Awards.

 

(d)     “Award Agreement” means either: (a) a written agreement entered into by
the Company and a Participant setting forth the terms and provisions applicable
to an Award granted under the Plan, or (b) a written or electronic statement
issued by the Company to a Participant describing the terms and provisions of
such Award, including any amendment or modification thereof. The Committee may
provide for the use of electronic, internet or other non-paper Award Agreements,
and the use of electronic, internet or other non-paper means for the acceptance
thereof and actions thereunder by a Participant. For the avoidance of doubt, the
term “Award Agreement” includes any Individual Agreement setting forth the terms
and provisions applicable to an Award.

 

(e)     “Board” or “Board of Directors” means the Board of Directors of
the Company.

 

(f)     “Cash-Based Award” means an Award, whose value is determined by the
Committee, granted to a Participant, as described in Section 11.

 

(g)     “Cause” means (i) “Cause” as defined in any Individual Agreement to
which the applicable Participant is a party, or (ii) if there is no such
Individual Agreement or if it does not define Cause: (A) commission of (1) a
felony (or its equivalent in a non-United States jurisdiction) or (2) other
conduct of a criminal nature that has or is likely to have a material adverse
effect on the reputation or standing in the community of the Company or an
Affiliate or that legally prohibits the Participant from working for the Company
or any Affiliate; (B) breach by the Participant of a regulatory rule that
adversely affects the Participant’s ability to perform the Participant’s duties
to the Company and the Subsidiaries and Affiliates; (C) dishonesty in the course
of fulfilling the Participant’s employment duties or performing the
Participant’s services for the Company or an Affiliate; (D) any material breach
by the Participant of any provision of any agreement or understanding between
the Company or an Affiliate and the Participant regarding the terms of the
Participant’s service as an Employee, Non-Employee Director or Consultant to the
Company or an Affiliate, including the willful and continued failure or refusal
of the Participant to perform the material duties required of such Participant
as an Employee, Non-Employee Director or Consultant of the Company or an
Affiliate, other than as a result of having a Disability, or a breach of any
applicable invention assignment, confidentiality or other restrictive covenant
agreement or similar agreement between the Company or an Affiliate and the
Participant; (E) any other misconduct by the Participant that is materially
injurious to the financial condition or business reputation of, or is otherwise
materially injurious to, the Company or an Affiliate; or (F) before a Change of
Control, such other events as shall be determined by the Committee and set forth
in a Participant’s Award Agreement.

 

(h)     “Change of Control” means the occurrence of any of the following:

 

 
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(1)     an acquisition by any individual, entity or group (within the meaning of
Section 13d-3 or 14d-1 of the Exchange Act) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than 50% of the combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of directors to the
Board (the “Outstanding Company Voting Securities”); provided, however, that
“Change of Control” shall not include: (i) the acquisition by any corporation
pursuant to a reorganization, merger, consolidation or similar corporate
transaction (in each case, a “Corporate Transaction”) if, pursuant to such
Corporate Transaction, the beneficial owners of the outstanding Shares and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50.1% of
the outstanding shares of common stock of the corporation resulting from such
Corporate Transaction and the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors, respectively, in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the outstanding
Shares and Outstanding Company Voting Securities, as the case may be, and (ii)
for the avoidance of doubt, any acquisition after the date hereof by any Person
who beneficially owned 50% or more of the combined voting power of the
Outstanding Company Voting Securities prior to the date hereof; or

 

(2)     the consummation of a Corporate Transaction; excluding, however, such a
Corporate Transaction pursuant to which the beneficial owners of the outstanding
Shares and Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or indirectly, more than
50.1% of the outstanding shares of common stock of the corporation resulting
from such Corporate Transaction and the combined voting power of the outstanding
voting securities of such corporation entitled to vote generally in the election
of directors, respectively, in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the outstanding
Shares and Outstanding Company Voting Securities, as the case may be; or

 

(3)     the consummation of (i) a complete liquidation or dissolution of the
Company or (ii) the sale or other disposition of all or substantially all the
assets of the Company; excluding, however, such a sale or other disposition to a
corporation with respect to which, following such sale or other disposition,
more than 50.1% of the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors, respectively, will be then beneficially owned, directly or
indirectly, by the individuals and entities who were the beneficial owners,
respectively, of the outstanding Shares and Outstanding Company Voting
Securities immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale or other
disposition, of the outstanding Shares and Outstanding Company Voting
Securities, as the case may be.

 

 
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(i)       “Change of Control Price” means the highest price per share paid or
offered in respect of the Common Stock in any transaction related to a Change of
Control at any time during the 60-day period preceding the date of the Change of
Control (as determined by the Board or the Committee as constituted before the
Change of Control, if any part of the paid or offered price is payable other
than in cash) or, in the case of a Change of Control occurring solely by reason
of a change in the composition of the Board, the highest price per share paid in
any transaction reported on the Applicable Exchange at any time during such
60-day period (or if the Common Stock is not listed on a national securities
exchange during the relevant 60-day period, the Fair Market Value on the date
preceding the date of the Change of Control), except that “Change of Control
Price” with respect to Stock Options and Stock Appreciation Rights means the
Fair Market Value of a Share for the date on which such an Award is cashed out.

 

(j)       “Code” means the Internal Revenue Code of 1986, as it may be amended
from time to time, including rules and regulations promulgated thereunder and
successor provisions and rules and regulations thereto.

 

(k)      “Committee” means the compensation committee of the Board of Directors
or a subcommittee thereof, or such other committee designated by the Board to
administer the Plan; provided that if no Committee is established, all
references herein to the Committee shall be deemed to refer to the Board of
Directors.

 

(l)       “Common Stock” means common stock, par value $0.01 per share, of the
Company. In the event of any adjustment pursuant to Section 4(c), the stock or
security resulting from such adjustment shall be deemed to be Common Stock
within the meaning of the Plan.

 

(m)     “Consultant” means a consultant, advisor or other independent contractor
who is a natural person and performs services for the Company or an Affiliate in
a capacity other than as an Employee or Non-Employee Director.

 

(n)      “Director” means any individual who is a member of the Board of
Directors of the Company.

 

(o)      “Disability” means (i) “Disability” as defined in the applicable Award
Agreement, or any Individual Agreement, to which the Participant is a party, or
(ii) if clause (i) does not apply, (A) permanent and total disability as
determined under the Company’s, or an Affiliate’s, long-term disability plan
applicable to the Participant, or (B) if there is no such plan applicable to the
Participant, “disability” as determined by the Committee (in each case, to the
extent applicable to any Award, as determined consistent with Section 22(e)(3)
or 409A(a)(2)(C) of the Code).

 

(p)      “Disaffiliation” means an Affiliate’s ceasing to be an Affiliate for
any reason (including as a result of a public offering, or a spin-off or sale by
the Company, of the stock of the Affiliate) or a sale of a division of the
Company or an Affiliate.

 

(q)      “Dividend Equivalent” means a right to receive the equivalent value (in
cash or Shares) of dividends that would otherwise be paid on the Shares subject
to an Award but that have not been issued or delivered, awarded under Section
10.

 

(r)       “Effective Date” shall have the meaning ascribed to such term in
Section 1(a).

 

 
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(s)      “Eligible Individual” means any Employee, Non-Employee Director or
Consultant, and any prospective Employee and Consultant who has accepted an
offer of employment or consultancy from the Company or any Affiliate.

 

(t)       “Employee” means any person designated as an employee of the Company
and/or an Affiliate on the payroll records thereof. An Employee shall not
include any individual during any period he or she is classified or treated by
the Company or an Affiliate as an independent contractor, a consultant, or any
employee of an employment, consulting, or temporary agency or any other entity
other than the Company and/or an Affiliate without regard to whether such
individual is subsequently determined to have been, or is subsequently
retroactively reclassified as a common-law employee of the Company and/or an
Affiliate during such period. For the avoidance of doubt, a Director who would
otherwise be an “Employee” within the meaning of this Section 2(t) shall be
considered an Employee for purposes of the Plan.

 

(u)      “Exchange Act” means the Securities Exchange Act of 1934, as it may be
amended from time to time, including the rules and regulations promulgated
thereunder and successor provisions and rules and regulations thereto.

 

(v)      “Fair Market Value” means (i) “Fair Market Value” as defined in any
Individual Agreement to which the applicable Participant is a party, or (ii) if
there is no such Individual Agreement or if it does not define Fair Market
Value: (A) if the Common Stock is listed on a national securities exchange, as
of any given date, the closing price for the Common Stock on such date on the
Applicable Exchange, or if Shares were not traded on the Applicable Exchange on
such measurement date, then on the next preceding date on which Shares are
traded, all as reported by such source as the Committee may select, or (B) if
the Common Stock is not listed on a national securities exchange, Fair Market
Value shall be determined by the Committee in good faith in a manner that
complies with Sections 409A and 422 of the Code, to the extent applicable.

 

(w)     “Freestanding SAR” means an SAR that is granted independently of any
Options, as described in Section 7.

 

(x)      “Grant Date” means the later of: (i) the date on which the Committee
(or its designee) by resolution, written consent or other appropriate action
selects an Eligible Individual to receive a grant of an Award, determines the
number of Shares or other amount to be subject to such Award and, if applicable,
determines the Option Price or Grant Price of such Award, provided that as soon
reasonably practical thereafter the Committee (or its designee) both notifies
the Eligible Individual of the Award and enters into an Award Agreement with the
Eligible Individual, or (ii) the date designated as the “grant date” in an Award
Agreement.

 

(y)     “Grant Price” means the price established as of the Grant Date of an SAR
pursuant to Section 7 used to determine whether there is any payment due upon
exercise of the SAR.

 

(z)      “Incentive Stock Option” or “ISO” means a right to purchase Shares
under the Plan in accordance with the terms and conditions set forth in Section
6 and which is designated as an Incentive Stock Option and which is intended to
meet the requirements of Section 422 of the Code.

 

 
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(aa)     “Individual Agreement” means an employment, change of control,
consulting or similar services agreement between a Participant and the Company
or an Affiliate that is in effect as of the Grant Date of an Award hereunder.

 

(bb)     “New Employer” means, after a Change of Control, a Participant’s
employer, or any direct or indirect parent or any direct or indirect
majority-owned subsidiary of such employer.

 

(cc)     “Non-Employee Director” means a Director who is not an Employee.

 

(dd)     “Nonqualified Stock Option” or “NQSO” means a right to purchase Shares
under the Plan in accordance with the terms and conditions set forth in Section
6 and which is not intended to meet the requirements of Section 422 of the Code
or otherwise does not meet such requirements.

 

(ee)     “Notice” means notice provided by a Participant to the Company in a
manner prescribed by the Committee.

 

(ff)     “Option” or “Stock Option” means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Section 6.

 

(gg)     “Option Price” means the price at which a Share may be purchased by a
Participant pursuant to an Option.

 

(hh)     “Other Stock-Based Award” means an equity-based or equity-related
Award, other than an Option, SAR, Restricted Stock, Restricted Stock Unit or
Dividend Equivalent, granted in accordance with the terms and conditions set
forth in Section 9.

 

(ii)     “Participant” means any eligible individual as set forth in Section 5
who holds one or more outstanding Awards.

 

(jj)     “Period of Restriction” means the period of time during which Shares of
Restricted Stock or Restricted Stock Units are subject to a substantial risk of
forfeiture and/or other restrictions, or, as applicable, the period of time
within which performance is measured for purposes of determining whether such an
Award has been earned, and, in the case of Restricted Stock, the transfer of
Shares of Restricted Stock is limited in some way, in each case in accordance
with Section 8.

 

(kk)     “Restricted Stock” means an Award of Shares granted to a Participant,
subject to the applicable Period of Restriction, pursuant to Section 8.

 

(ll)     “Restricted Stock Unit” means an unfunded and unsecured promise to
deliver Shares or cash, subject to the applicable Period of Restriction, granted
pursuant to Section 8.

 

 
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(mm)     “Rule 16b-3” means Rule 16b-3 under the Exchange Act, or any successor
rule, as the same may be amended from time to time.

 

(nn)     “SEC” means the Securities and Exchange Commission.

 

(oo)     “Securities Act” means the Securities Act of 1933, as it may be amended
from time to time, including the rules and regulations promulgated thereunder
and successor provisions and rules and regulations thereto.

 

(pp)     “Share” means a share of Common Stock (including any new, additional or
different stock or securities resulting from any change in corporate
capitalization as listed in Section 4(c)).

 

(qq)     “Stock Appreciation Right” or “SAR” means an Award, granted alone (a
“Freestanding SAR”) or in connection with a related Option (a “Tandem SAR”),
designated as an SAR, pursuant to the terms of Section 7.

 

(rr)     “Stockholders’ Agreement” means the Stockholders’ Agreement, dated as
of the Effective Date, by and among the Company and each of the stockholders of
the Company that is a party thereto, as amended from time to time.

 

(ss)     “Subsidiary” means any present or future corporation which is or would
be a “subsidiary corporation” of the Company as the term is defined in Section
424(f) of the Code.

 

(tt)     “Substitute Awards” means Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, options or other
awards previously granted, or the right or obligation to grant future options or
other awards, by a company acquired by the Company and/or an Affiliate or with
which the Company and/or an Affiliate combines, or otherwise in connection with
any merger, consolidation, acquisition of property or stock, or reorganization
involving the Company or an Affiliate, including a transaction described in Code
Section 424(a).

 

(uu)     “Termination of Service” means the termination of the applicable
Participant’s employment with, or performance of services for, the Company or
any Affiliate under any circumstances. Unless otherwise determined by the
Committee (and subject to the limitations applicable to ISOs under the Code), a
Termination of Service shall not be considered to have occurred in the case of:
(i) sick leave; (ii) military leave; (iii) any other leave of absence approved
by the Committee, provided that such leave is for a period of not more than 90
days, unless reemployment upon the expiration of such leave is guaranteed by
contract or statute, or unless provided otherwise pursuant to an applicable
Company or Affiliate policy adopted from time to time; (iv) changes in status
from Director to advisory director or emeritus status; or (v) transfers between
locations of the Company or between or among the Company and/or an Affiliate or
Affiliates. The Committee may determine, in its sole discretion, that changes in
status between service as an Employee, Non-Employee Director, and a Consultant
will not constitute a Termination of Service if the individual continues to
perform bona fide services for the Company or an Affiliate (subject to the
limitations applicable to ISOs under the Code). A Participant employed by, or
performing services for, an Affiliate or a division of the Company or of an
Affiliate shall be deemed to incur a Termination of Service if, as a result of a
Disaffiliation, such Affiliate or division ceases to be an Affiliate or such a
division, as the case may be, and the Participant does not immediately
thereafter become an employee of, or service provider for, the Company or
another Affiliate. The Committee shall have the discretion to determine whether
and to what extent the vesting of any Awards shall be tolled during any paid or
unpaid leave of absence; provided, however, that, in the absence of such
determination, vesting for all Awards shall be tolled during any such unpaid
leave (but not for a paid leave).

 

 
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3.   Administration.

 

(a)     General. The Committee shall have exclusive authority to operate, manage
and administer the Plan in accordance with its terms and conditions.
Notwithstanding the foregoing, in its absolute discretion, the Board may at any
time and from time to time exercise any and all rights, duties and
responsibilities of the Committee under the Plan, including establishing
procedures to be followed by the Committee, but excluding matters which under
any applicable law, regulation or rule, including any exemptive rule under
Section 16 of the Exchange Act (including Rule 16b-3), are required to be
determined in the sole discretion of the Committee. If and to the extent that
the Committee does not exist or cannot function, the Board may take any action
under the Plan that would otherwise be the responsibility of the Committee,
subject to the limitations set forth in the immediately preceding sentence.

 

(b)     Committee. The members of the Committee shall be appointed from time to
time by, and shall serve at the discretion of, the Board of Directors. The
Committee shall consist of not less than two (2) non-employee members of the
Board, each of whom satisfies such criteria of independence as the Board may
establish and such additional regulatory or listing requirements as the Board
may determine to be applicable or appropriate. Appointment of Committee members
shall be effective upon their acceptance of such appointment. Committee members
may be removed by the Board at any time either with or without cause, and such
members may resign at any time by delivering notice thereof to the Board. Any
vacancy on the Committee, whether due to action of the Board or any other
reason, shall be filled by the Board. The Committee shall keep minutes of its
meetings. A majority of the Committee shall constitute a quorum and a majority
of a quorum may authorize any action. Any decision reduced to writing and signed
by a majority of the members of the Committee shall be fully effective as if it
has been made at a meeting duly held.

 

(c)     Authority of the Committee. The Committee shall have full discretionary
authority to grant, pursuant to the terms of the Plan, Awards to those
individuals who are eligible to receive Awards under the Plan. Except as limited
by law or by the Certificate of Incorporation or By-Laws of the Company, and
subject to the provisions herein, the Committee shall have full power, in
accordance with the other terms and provisions of the Plan, to:

 

(i)      select Eligible Individuals who may receive Awards under the Plan and
become Participants;

 

(ii)     determine eligibility for participation in the Plan and decide all
questions concerning eligibility for, and the amount of, Awards under the Plan;

 

(iii)    determine the sizes and types of Awards;

 

 
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(iv)    determine the terms and conditions of Awards, including the Option
Prices of Options and the Grant Prices of SARs;

 

(v)     grant Awards as an alternative to, or as the form of payment for grants
or rights earned or payable under, other bonus or compensation plans,
arrangements or policies of the Company or an Affiliate, subject to the terms of
any Award Agreement;

 

(vi)    grant Substitute Awards on such terms and conditions as the Committee
may prescribe, subject to compliance with the ISO rules under Code Section 422
and the nonqualified deferred compensation rules under Code Section 409A, where
applicable;

 

(vii)   make all determinations under the Plan concerning Termination of Service
of any Participant’s employment or service with the Company or an Affiliate,
including whether such Termination of Service occurs by reason of Cause,
Disability, retirement or in connection with a Change of Control, and whether a
leave constitutes a Termination of Service;

 

(viii)  determine whether a Change of Control shall have occurred;

 

(ix)     construe and interpret the Plan and any agreement or instrument entered
into under the Plan, including any Award Agreement;

 

(x)      establish and administer any terms, conditions, restrictions,
limitations, forfeiture, vesting or exercise schedule, and other provisions of
or relating to any Award;

 

(xi)     establish and administer any performance goals in connection with any
Awards, including related performance criteria and applicable performance
periods, determine the extent to which any performance goals and/or other terms
and conditions of an Award are attained or are not attained;

 

(xii)    construe any ambiguous provisions, correct any defects, supply any
omissions and reconcile any inconsistencies in the Plan and/or any Award
Agreement or any other instrument relating to any Awards;

 

(xiii)   establish, adopt, amend, waive and/or rescind rules, regulations,
procedures, guidelines, forms and/or instruments for the Plan’s operation or
administration;

 

(xiv)   make all valuation determinations relating to Awards and the payment or
settlement thereof;

 

(xv)    grant waivers of terms, conditions, restrictions and limitations under
the Plan or applicable to any Award, or accelerate the vesting or exercisability
of any Award, except as otherwise provided in an Award Agreement;

 

(xvi)   amend or adjust the terms and conditions of any outstanding Award and/or
adjust the number and/or class of shares of stock subject to any outstanding
Award; provided, that no such amendment or adjustment (unless expressly
permitted by the Plan or an Award Agreement) shall impair a Participant’s rights
under any Award unless the Participant consents in writing;

 

 
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(xvii)  at any time and from time to time after the granting of an Award,
specify such additional terms, conditions and restrictions with respect to such
Award as may be deemed necessary or appropriate to ensure compliance with any
and all applicable laws or rules, including terms, restrictions and conditions
for compliance with applicable securities laws or listing rules, methods of
withholding or providing for the payment of required taxes and restrictions
regarding a Participant’s ability to exercise Options through a cashless
(broker-assisted) exercise; provided, that no such action (unless expressly
permitted by the Plan or an Award Agreement) shall impair a Participant’s rights
under any Award unless the Participant consents in writing;

 

(xviii) establish any “blackout” period that the Committee in its sole
discretion deems necessary or advisable; and

 

(xix)    exercise all such other authorities, take all such other actions and
make all such other determinations as it deems necessary or advisable for the
proper operation and/or administration of the Plan; provided, that no such
action or determination (unless expressly permitted by the Plan or an Award
Agreement) shall impair a Participant’s rights under any Award unless the
Participant consents in writing.

 

(d)     Award Agreements. The Committee shall, subject to applicable laws and
rules, determine the date an Award is granted. Each Award shall be evidenced by
an Award Agreement; however, two or more Awards granted to a single Participant
may be combined in a single Award Agreement. An Award Agreement shall not be a
precondition to the granting of an Award; provided, however, that (i) the
Committee may, but need not, require as a condition to any Award Agreement’s
effectiveness, that such Award Agreement be executed on behalf of the Company
and/or by the Participant to whom the Award evidenced thereby shall have been
granted (including by electronic signature or other electronic indication of
acceptance), and such executed Award Agreement be delivered to the Company, and
(ii) no person shall have any rights under any Award unless and until the
Participant to whom such Award shall have been granted has complied with the
applicable terms and conditions of the Award. The Committee shall prescribe the
form of all Award Agreements, and, subject to the terms and conditions of the
Plan, shall determine the content of all Award Agreements. Subject to the other
provisions of the Plan, any Award Agreement may be supplemented or amended in
writing from time to time as approved by the Committee; provided that the terms
and conditions of any such Award Agreement as supplemented or amended are not
inconsistent with the provisions of the Plan. In the event of any dispute or
discrepancy concerning the terms of an Award, the records of the Committee or
its designee shall be determinative.

 

 
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(e)     Discretionary Authority; Decisions Binding. The Committee shall have
full discretionary authority in all matters related to the discharge of its
responsibilities and the exercise of its authority under the Plan. All
determinations, decisions, actions and interpretations by the Committee with
respect to the Plan and any Award Agreement, and all related orders and
resolutions of the Committee shall be final, conclusive and binding on all
Participants, the Company and its stockholders, any Affiliate and all persons
having or claiming to have any right or interest in or under the Plan and/or any
Award Agreement. The Committee shall consider such factors as it deems relevant
to making or taking such decisions, determinations, actions and interpretations,
including the recommendations or advice of any Director or officer or employee
of the Company, any director, officer or employee of an Affiliate and such
attorneys, consultants and accountants as the Committee may select. A
Participant or other holder of an Award may contest a decision or action by the
Committee with respect to such person or Award only on the grounds that such
decision or action was arbitrary or capricious or was unlawful, and any review
of such decision or action shall be limited to determining whether the
Committee’s decision or action was arbitrary or capricious or was unlawful.
Notwithstanding anything herein to the contrary, in the event that an Award
Agreement sets forth an alternative mechanism for resolving disputes or standard
of review, the mechanisms and/or standard of review set forth in the Award
Agreement shall control.

 

(f)     Attorneys; Consultants. The Committee may consult with counsel who may
be counsel to the Company. The Committee may, with the approval of the Board,
employ such other attorneys and/or consultants, accountants, appraisers,
brokers, agents and other persons, any of whom may be an Eligible Individual, as
the Committee deems necessary or appropriate. The Committee, the Company and its
officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. The Committee shall not incur any liability for
any action taken in good faith in reliance upon the advice of such counsel or
other persons.

 

(g)     Delegation of Administration. Except to the extent prohibited by
applicable law, or any applicable rules of a stock exchange, the Committee may,
in its discretion, allocate all or any portion of its responsibilities and
powers under this Section 3 to any one or more of its members and/or delegate
all or any part of its responsibilities and powers under this Section 3 to any
person or persons selected by it; provided, however, that the Committee may not
(i) delegate to any executive officer of the Company or an Affiliate, or a
committee that includes any such executive officer, the Committee’s authority to
grant Awards, or the Committee’s authority otherwise concerning Awards, awarded
to executive officers of the Company or an Affiliate; (ii) delegate the
Committee’s authority to grant Awards to consultants unless any such Award is
subject to approval by the Committee; or (iii) delegate its authority to correct
defects, omissions or inconsistencies in the Plan. Any such authority delegated
or allocated by the Committee under this Section 3(g) shall be exercised in
accordance with the terms and conditions of the Plan and any rules, regulations
or administrative guidelines that may from time to time be established by the
Committee, and any such allocation or delegation may be revoked by the Committee
at any time.

 

4.  Shares Subject To The Plan.

 

(a)     Number of Shares Available for Issuance. The shares of stock subject to
Awards granted under the Plan shall be Shares. Such Shares subject to the Plan
may be authorized and unissued shares (which will not be subject to preemptive
rights), Shares held in treasury by the Company, Shares purchased on the open
market or by private purchase or any combination of the foregoing. Subject to
adjustment as provided in Section 4(c), the total number of Shares that may be
issued pursuant to Awards under the Plan shall be 1,736,111 Shares.

 

 
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(b)     Rules for Calculating Shares Issued.

 

(i)      Shares underlying Awards that are (x) forfeited (including any Shares
subject to an Award that are repurchased by the Company due to failure to meet
any applicable condition), cancelled, terminated or expire unexercised, or (y)
settled in cash in lieu of issuance of Shares shall be available for issuance
pursuant to future Awards, to the extent that such Shares are forfeited,
repurchased or not issued under any such Award.

 

(ii)     Any Shares tendered to pay the Option Price of an Option or other
purchase price of an Award, or withholding tax obligations with respect to an
Award, shall not be available for issuance pursuant to future Awards.

 

(iii)    If any Shares subject to an Award are not delivered to a Participant
because (A) such Shares are withheld to pay the Option Price or other purchase
price of such Award, or withholding tax obligations with respect to such Award
or (B) a payment upon exercise of a Stock Appreciation Right is made in Shares,
the number of Shares subject to the exercised or purchased portion of any such
Award that are not delivered to the Participant shall not be available for
issuance pursuant to future Awards.

 

(iv)    Any Shares delivered under the Plan upon exercise or satisfaction of
Substitute Awards shall not reduce the Shares available for issuance under the
Plan; provided, however, that the total number of Shares that may be issued
pursuant to Incentive Stock Options granted under the Plan shall be 1,736,111
Shares, as adjusted pursuant to paragraphs (i), (ii) and (iii) of this Section
4(b) and Section 4(c).

 

(c)     Adjustment Provisions. Notwithstanding any other provisions of the Plan
to the contrary, in the event of (i) any dividend (excluding any ordinary
dividend) or other extraordinary distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, split-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to acquire Shares or other
securities of the Company, or other similar corporate transaction or event
(including a Change of Control) that affects the shares of Common Stock, or
(ii) any unusual or nonrecurring events (including a Change of Control)
affecting the Company, any Affiliate, or the financial statements of the Company
or any Affiliate, or changes in applicable rules, rulings, regulations or other
requirements of any governmental body or securities exchange or inter-dealer
quotation system, accounting principles or law, such that in either case an
adjustment is determined by the Committee in its sole discretion to be necessary
or appropriate to avoid dilution or enlargement of the rights intended to be
granted to, or available for, Participants in the Plan, then the Committee shall
make any such adjustments in such manner as it deems equitable to avoid dilution
or enlargement of the rights intended to be granted to, or available for,
Participants in the Plan, including any or all of the following:

 

(i)      adjusting any or all of (A) the number of Shares or other securities of
the Company (or number and kind of other securities or other property) that may
be delivered in respect of Awards or with respect to which Awards may be granted
under the Plan and (B) the terms of any outstanding Award, including (1) the
number of Shares or other securities of the Company (or number and kind of other
securities or other property) subject to outstanding Awards or to which
outstanding Awards relate, (2) the Option Price or Grant Price with respect to
any Award or (3) any applicable performance measures;

 

 
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(ii)     providing for a substitution or assumption of Awards, accelerating the
exercisability of, lapse of restrictions (including any Period of Restriction)
on, or termination of, Awards or providing for a period of time for exercise
prior to the occurrence of such event; and

 

(iii)    cancelling any one or more outstanding Awards and causing to be paid to
the holders thereof, in cash, Shares, other securities or other property, or any
combination thereof, the Fair Market Value of such Awards, including, in the
case of an outstanding Option or SAR, a cash payment in an amount equal to the
excess, if any, of the Fair Market Value (as of a date specified by the
Committee) of the Shares subject to such Option or SAR over the aggregate Option
Price or Grant Price of such Option or SAR, respectively (it being understood
that, in such event, any Option or SAR having a per share Option Price or Grant
Price equal to, or in excess of, the Fair Market Value of a Share may be
canceled and terminated without any payment or consideration therefor);

 

provided, however, that in the case of any “equity restructuring” (within the
meaning of Financial Accounting Standards Board Accounting Standards
Codification Topic 718, Compensation — Stock Compensation (or any successor
pronouncement)), the Committee shall make an equitable or proportionate
adjustment to outstanding Awards to reflect such equity restructuring. The
Committee shall determine any adjustment pursuant to this Section 4(c):
(i) after taking into account, among other things, to the extent applicable, the
provisions of the Code applicable to Incentive Stock Options and (ii) subject to
Section 16(g)(vi). Any adjustments under this Section 4(c) shall be made in a
manner that does not adversely affect the exemption provided pursuant to Rule
16b-3 under the Exchange Act, to the extent applicable. Any actions or
determinations of the Committee under this Section 4(c) need not be uniform as
to all outstanding Awards, nor treat all Participants identically.

 

(d)     No Limitation on Corporate Actions. The existence of the Plan and any
Awards granted hereunder shall not affect in any way the right or power of the
Company or any Affiliate to make or authorize any adjustment, recapitalization,
reorganization or other change in its capital structure or business structure,
any merger or consolidation, any issuance of debt, preferred or prior preference
stock ahead of or affecting the Shares, additional shares of capital stock or
other securities or subscription rights thereto, any dissolution or liquidation,
any sale or transfer of all or part of its assets or business or any other
corporate act or proceeding.

 

5. Eligibility and Participation.

 

(a)     Eligibility. Eligible Individuals shall be eligible to become
Participants and receive Awards in accordance with the terms and conditions of
the Plan, subject to the limitations on the granting of ISOs set forth in
Section 6(i)(i).

 

 
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(b)     Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select Participants from all Eligible
Individuals and shall determine the nature and amount of each Award.

 

6. Stock Options.

 

(a)     Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Participants in such number (subject to Section 4),
and upon such terms, and at any time and from time to time as shall be
determined by the Committee. The Committee may grant an Option or provide for
the grant of an Option, either from time to time in the discretion of the
Committee or automatically upon the occurrence of specified events, including
the achievement of performance goals, the satisfaction of an event or condition
within the control of the recipient of the Option or within the control of
others, in any event, as determined by the Committee.

 

(b)     Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the maximum duration of the
Option, the number of Shares to which the Option pertains, the conditions upon
which the Option shall become exercisable and such other provisions as the
Committee shall determine, which are not inconsistent with the terms of the
Plan. The Award Agreement also shall specify whether the Option is intended to
be an ISO or an NQSO. To the extent that any Option does not qualify as an ISO
(whether because of its provisions or the time or manner of its exercise or
otherwise), such Option, or the portion thereof which does not so qualify, shall
constitute a separate NQSO.

 

(c)     Option Price. The Option Price for each Option shall be determined by
the Committee and set forth in the Award Agreement; provided that, subject to
Section 6(i)(iii), the Option Price of an Option shall be not less than one
hundred percent (100%) of the Fair Market Value of a Share on the Grant Date of
such Option; provided further, that Substitute Awards or Awards granted in
connection with an adjustment provided for in Section 4(c), in the form of stock
options, shall have an Option Price per Share that is intended to maintain the
economic value of the Award that was replaced or adjusted, as determined by the
Committee.

 

(d)     Duration of Options. Each Option granted to a Participant shall expire
at such time as the Committee shall determine as of the Grant Date and set forth
in the Award Agreement; provided, however, that no Incentive Stock Option shall
be exercisable later than the tenth (10th) anniversary of its Grant Date.

 

 
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(e)     Exercise of Options. Options shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance determine and set forth in the Award Agreement, which need not be the
same for each grant or for each Option or Participant. The Committee, in its
sole discretion, may allow a Participant to exercise an Option that has not
otherwise become exercisable pursuant to the applicable Award Agreement, in
which case the Shares then issued shall be Shares of Restricted Stock having a
Period of Restriction analogous to the exercisability provisions of the Option.
In the event that any portion of an exercisable Option is scheduled to expire or
terminate pursuant to the Plan or the applicable Award Agreement (other than due
to Termination of Service for Cause) and both (x) the date on which such portion
of the Option is scheduled to expire or terminate falls during a Company
blackout trading period applicable to the Participant (whether such period is
imposed at the election of the Company or is required by applicable law to be
imposed) and (y) the Option Price per Share of such portion of the Option is
less than the Fair Market Value of a Share, then on the date that such portion
of the Option is scheduled to expire or terminate, such portion of the Option
(to the extent not previously exercised by the Participant) shall be
automatically exercised on behalf of the Participant through a “net exercise”
(as described in Section 6(f)(iii)) and minimum withholding taxes due (if any)
upon such automatic exercise shall be satisfied by withholding of Shares (as
described in Section 16(b)(i)). The period of time over which a Nonqualified
Stock Option may be exercised shall be automatically extended if on the
scheduled expiration date or termination date (other than due to Termination of
Service for Cause) of such Option the Participant’s exercise of such Option
would violate an applicable law (except under circumstances described in the
preceding sentence); provided, however, that during such extended exercise
period the Option may only be exercised to the extent the Option was exercisable
in accordance with its terms immediately prior to such scheduled expiration date
or termination date; provided further, however, that such extended exercise
period shall end not later than thirty (30) days after the exercise of such
Option first would no longer violate such law.

 

(f)     Payment. Options shall be exercised by the delivery of a written notice
of exercise to the Company, in a form specified or accepted by the Committee, or
by complying with any alternative exercise procedures that may be authorized by
the Committee, setting forth the number of Shares with respect to which the
Option is to be exercised, accompanied by full payment for such Shares, which
shall include applicable taxes, if any, in accordance with Section 16. The
Option Price upon exercise of any Option shall be payable to the Company in full
by cash, check or such cash equivalent as the Committee may accept. If approved
by the Committee, and subject to any such terms, conditions and limitations as
the Committee may prescribe and to the extent permitted by applicable law,
payment of the Option Price, in full or in part, may also be made as follows:

 

(i)      Payment may be made in the form of unrestricted and unencumbered Shares
(by actual delivery of such Shares or by attestation) already owned by the
Participant exercising such Option, or by such Participant and his or her spouse
jointly (based on the Fair Market Value of the Common Stock on the date the
Option is exercised); provided, however, that, in the case of an Incentive Stock
Option, the right to make a payment in the form of such already owned Shares may
be authorized only as of the Grant Date of such Incentive Stock Option and
provided further that such already owned Shares must meet any such requirements
as the Committee may determine are necessary in order to avoid an accounting
earnings charge on account of the use of such Shares to pay the Option Price).

 

(ii)     Payment may be made by means of a broker-assisted “cashless exercise”
pursuant to which a Participant may elect to deliver a properly executed
exercise notice to the Company, together with a copy of irrevocable instructions
to a broker to deliver promptly to the Company the amount of Share sale or loan
proceeds necessary to pay the Option Price, and, if requested, the amount of any
federal, state, local or non-United States withholding taxes.

 

 
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(iii)     Payment may be made by a “net exercise” pursuant to which the
Participant instructs the Company to withhold a number of Shares otherwise
deliverable to the Participant upon such exercise of the Option having an
aggregate Fair Market Value on the date of exercise equal to the product of: (i)
the Option Price multiplied by (ii) the number of Shares in respect of which the
Option shall have been exercised, increased by the amount of any applicable
withholding taxes.

 

(iv)     Payment may be made by any other method approved or accepted by the
Committee in its discretion.

 

Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment in accordance
with the preceding provisions of this Section 6(f) and satisfaction of tax
obligations in accordance with Section 16, the Company shall deliver to the
Participant exercising an Option, in the Participant’s name, evidence of book
entry Shares, or, upon the Participant’s request, Share certificates, in an
appropriate amount based upon the number of Shares purchased under the Option,
subject to Section 20(i). Unless otherwise determined by the Committee, all
payments under all of the methods described above shall be paid in United States
dollars.

 

(g)     Rights and Obligations as a Stockholder. No Participant or other person
shall become the beneficial owner of any Shares subject to an Option, nor have
any rights to dividends or other rights of a stockholder with respect to any
such Shares, until the Participant has actually received such Shares following
exercise of his or her Option in accordance with the provisions of the Plan and
the applicable Award Agreement.

 

(h)     Termination of Service. Except as otherwise provided by Section 6(e) or
in the applicable Award Agreement, an Option may be exercised only to the extent
that it is then exercisable, and if at all times during the period beginning
with the date of granting of such Option and ending on the date of exercise of
such Option the Participant is an Employee, Non-Employee Director or Consultant,
and shall terminate immediately upon a Termination of Service of the
Participant. An Option shall cease to become exercisable upon a Termination of
Service of the holder thereof. Notwithstanding the foregoing provisions of this
Section 6(h) to the contrary, the Committee may determine in its discretion that
an Option may be exercised following any such Termination of Service, whether or
not exercisable at the time of such Termination of Service; provided, however,
that in no event may an Option be exercised after the expiration date of such
Option specified in the applicable Award Agreement, except as provided in
Section 6(e).

 

(i)     Limitations on Incentive Stock Options.

 

(i)      General. No ISO shall be granted to any Eligible Individual who is not
an Employee of the Company or a Subsidiary on the Grant Date of such Option. Any
ISO granted under the Plan shall contain such terms and conditions, consistent
with the Plan, as the Committee may determine to be necessary to qualify such
Option as an “incentive stock option” under Section 422 of the Code. Any ISO
granted under the Plan may be modified by the Committee to disqualify such
Option from treatment as an “incentive stock option” under Section 422 of the
Code.

 

 
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(ii)     $100,000 Per Year Limitation. Notwithstanding any intent to grant ISOs,
an Option granted under the Plan will not be considered an ISO to the extent
that it, together with any other “incentive stock options” (within the meaning
of Section 422 of the Code, but without regard to subsection (d) of such
Section) under the Plan and any other “incentive stock option” plans of the
Company, any Subsidiary and any “parent corporation” of the Company within the
meaning of Section 424(e) of the Code, are exercisable for the first time by any
Participant during any calendar year with respect to Shares having an aggregate
Fair Market Value in excess of $100,000 (or such other limit as may be required
by the Code) as of the Grant Date of the Option with respect to such Shares. The
rule set forth in the preceding sentence shall be applied by taking Options into
account in the order in which they were granted.

 

(iii)    Options Granted to Certain Stockholders. No ISO shall be granted to an
individual otherwise eligible to participate in the Plan who owns (within the
meaning of Section 424(d) of the Code), at the Grant Date of such Option, more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or a Subsidiary or any “parent corporation” of the Company
within the meaning of Section 424(e) of the Code. This restriction does not
apply if at the Grant Date of such ISO the Option Price of the ISO is at least
one hundred and ten percent (110)% of the Fair Market Value of a Share on the
Grant Date of such ISO, and the ISO by its terms is not exercisable after the
expiration of five years from such Grant Date.

 

7.   Stock Appreciation Rights.

 

(a)     Grant of SARs. Subject to the terms and conditions of the Plan, SARs may
be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant an SAR (i) in connection
with, and at the Grant Date of, a related Option (a “Tandem SAR”), or (ii)
independent of, and unrelated to, an Option (a “Freestanding SAR”). The
Committee shall have complete discretion in determining the number of Shares to
which a SAR pertains (subject to Section 4) and, consistent with the provisions
of the Plan, in determining the terms and conditions pertaining to any SAR.

 

(b)     Grant Price. The Grant Price for each SAR shall be determined by the
Committee and set forth in the Award Agreement, subject to the limitations of
this Section 7(b). The Grant Price for each Freestanding SAR shall be not less
than one hundred percent (100%) of the Fair Market Value of a Share on the Grant
Date of such Freestanding SAR, except in the case of Substitute Awards or Awards
granted in connection with an adjustment provided for in Section 4(c). The Grant
Price of a Tandem SAR shall be equal to the Option Price of the related Option.

 

(c)     Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR shall be
exercisable only when and to the extent the related Option is exercisable and
may be exercised only with respect to the Shares for which the related Option is
then exercisable. A Tandem SAR shall entitle a Participant to elect, in the
manner set forth in the Plan and the applicable Award Agreement, in lieu of
exercising his or her unexercised related Option for all or a portion of the
Shares for which such Option is then exercisable pursuant to its terms, to
surrender such Option to the Company with respect to any or all of such Shares
and to receive from the Company in exchange therefor a payment described in
Section 7(g). An Option with respect to which a Participant has elected to
exercise a Tandem SAR shall, to the extent of the Shares covered by such
exercise, be canceled automatically and surrendered to the Company. Such Option
shall thereafter remain exercisable according to its terms only with respect to
the number of Shares as to which it would otherwise be exercisable, less the
number of Shares with respect to which such Tandem SAR has been so exercised.
Notwithstanding any other provision of the Plan to the contrary, with respect to
a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR will expire
no later than the expiration of the related ISO; (ii) the value of the payment
with respect to the Tandem SAR may not exceed the difference between the Fair
Market Value of the Shares subject to the related ISO at the time the Tandem SAR
is exercised and the Option Price of the related ISO; and (iii) the Tandem SAR
may be exercised only when the Fair Market Value of the Shares subject to the
ISO exceeds the Option Price of the ISO.

 

 
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(d)     Exercise of Freestanding SARs. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, in
accordance with the Plan, determines and sets forth in the Award Agreement. In
the event that any portion of an exercisable Freestanding SAR is scheduled to
expire or terminate pursuant to the Plan or the applicable Award Agreement
(other than due to Termination of Service for Cause) and both (x) the date on
which such portion of the SAR is scheduled to expire or terminate falls during a
Company blackout trading period applicable to the Participant (whether such
period is imposed at the election of the Company or is required by applicable
law to be imposed) that would otherwise prohibit exercise of such portion of the
SAR and (y) the Grant Price per Share of such portion of the SAR is less than
the Fair Market Value of a Share, then on the date that such portion of the SAR
is scheduled to expire or terminate, such portion of the SAR (to the extent not
previously exercised by the Participant) shall be automatically exercised on
behalf of the Participant and minimum withholding taxes due (if any) upon such
automatic exercise shall be satisfied by withholding of Shares (as described in
Section 16(b)(i)). The period of time over which a Freestanding SAR may be
exercised shall be automatically extended if on the scheduled expiration date or
termination date (other than due to Termination of Service for Cause) of such
SAR the Participant’s exercise of such SAR would violate an applicable law
(except under circumstances described in the preceding sentence); provided,
however, that during such extended exercise period the SAR may only be exercised
to the extent the SAR was exercisable in accordance with its terms immediately
prior to such scheduled expiration date or termination date; provided further,
however, that such extended exercise period shall end not later than thirty (30)
days after the exercise of such SAR first would no longer violate such law.

 

(e)     Award Agreement. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the number of Shares to which the SAR pertains, the Grant
Price, the term of the SAR, and such other terms and conditions as the Committee
shall determine in accordance with the Plan.

 

(f)     Term of SARs. The term of a SAR granted under the Plan shall be
determined by the Committee, in its sole discretion, and set forth in the Award
Agreement; provided, however, that the term of any Tandem SAR shall be the same
as the related Option.

 

 
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(g)     Payment of SAR Amount. An election to exercise SARs shall be deemed to
have been made on the date of Notice of such election to the Company. As soon as
practicable following such Notice, the Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying:

 

(i)      The excess of the Fair Market Value of a Share on the date of exercise
over the Grant Price of the SAR; by

 

(ii)     The number of Shares with respect to which the SAR is exercised,

 

after deduction of any tax withholding in accordance with Section 16.

 

Notwithstanding the foregoing provisions of this Section 7(g) to the contrary,
the Committee may establish and set forth in the applicable Award Agreement a
maximum amount per Share that will be payable upon the exercise of a SAR. At the
discretion of the Committee, such payment upon exercise of a SAR shall be in
cash, in Shares of equivalent Fair Market Value as of the date of such exercise,
or in some combination thereof.

 

(h)     Rights and Obligations as a Stockholder. A Participant receiving a SAR
shall have the rights of a stockholder only as to Shares, if any, actually
issued to such Participant upon satisfaction or achievement of the terms and
conditions of the Award, and in accordance with the provisions of the Plan and
the applicable Award Agreement, and not with respect to Shares to which such
Award relates but which are not actually issued to such Participant.

 

(i)     Termination of Service. Except as otherwise provided by Section 7(d) or
in the applicable Award Agreement, a SAR may be exercised only to the extent
that it is then exercisable, and if at all times during the period beginning
with the date of granting of such SAR and ending on the date of exercise of such
SAR the Participant is an Employee, Non-Employee Director or Consultant, and
shall terminate immediately upon a Termination of Service of the Participant. A
SAR shall cease to become exercisable upon a Termination of Service of the
holder thereof. Notwithstanding the foregoing provisions of this Section 7(i) to
the contrary, the Committee may determine in its discretion that a SAR may be
exercised following any such Termination of Service, whether or not exercisable
at the time of such Termination of Service; provided, however, that in no event
may a SAR be exercised after the expiration date of such SAR specified in the
applicable Award Agreement, except as provided in Section 6(e) (in the case of
Tandem SARs) or in Section 7(d) (in the case of Freestanding SARs).

 

8.   Restricted Stock and Restricted Stock Units.

 

(a)     Awards of Restricted Stock and Restricted Stock Units. Subject to the
terms and provisions of the Plan, the Committee, at any time and from time to
time, may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such amounts as the Committee shall determine. Awards of
Restricted Stock may be made with or without the requirement of a cash payment
from the Participant to whom such Award is made in exchange for, or as a
condition precedent to, the completion of such Award and the issuance of Shares
of Restricted Stock, and any such required cash payment shall be set forth in
the applicable Award Agreement. Subject to the terms and conditions of this
Section 8 and the Award Agreement, upon delivery of Shares of Restricted Stock
to a Participant, or creation of a book entry evidencing a Participant’s
ownership of Shares of Restricted Stock, pursuant to Section 8(f), the
Participant shall have all of the rights of a stockholder with respect to such
Shares, subject to the terms and restrictions set forth in this Section 8 or the
applicable Award Agreement or as determined by the Committee.

 

 
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(b)     Award Agreement. Each Restricted Stock and/or Restricted Stock Unit
Award shall be evidenced by an Award Agreement that shall specify the Period of
Restriction, the number of Shares of Restricted Stock or the number of
Restricted Stock Units granted, and such other provisions as the Committee shall
determine in accordance with the Plan.

 

(c)     Nontransferability of Restricted Stock. Except as provided in this
Section 8, Shares of Restricted Stock may not be sold, transferred, pledged,
assigned, encumbered, alienated, hypothecated or otherwise disposed of until the
end of the applicable Period of Restriction established by the Committee and
specified in the Restricted Stock Award Agreement.

 

(d)     Period of Restriction and Other Restrictions. The Period of Restriction
applicable to an Award of Restricted Stock or Restricted Stock Units shall lapse
based on a Participant’s continuing service or employment with the Company or an
Affiliate, the achievement of performance goals, the satisfaction of other
conditions or restrictions or upon the occurrence of other events, in each case,
as determined by the Committee, at its discretion, and stated in the Award
Agreement.

 

(e)     Delivery of Shares and Settlement of Restricted Stock Units. Upon the
expiration of the Period of Restriction with respect to any Shares of Restricted
Stock, the restrictions set forth in the applicable Award Agreement shall be of
no further force or effect with respect to such Shares, except as set forth in
such Award Agreement. If applicable stock certificates are held by the Secretary
of the Company or an escrow holder, upon such expiration, the Company shall
deliver to the Participant, or his beneficiary, without charge, the stock
certificate evidencing the Shares of Restricted Stock that have not then been
forfeited and with respect to which the Period of Restriction has expired.
Unless otherwise provided by the Committee in an Award Agreement, upon the
expiration of the Period of Restriction with respect to any outstanding
Restricted Stock Units, the Company shall deliver to the Participant, or his
beneficiary, without charge, one Share for each such outstanding Restricted
Stock Unit; provided, however, that the Committee may, in its discretion, elect
to (i) pay cash or part cash and part Shares in lieu of delivering only Shares
in respect of such Restricted Stock Units, or (ii) in an Award Agreement, defer
the delivery of Shares beyond the expiration of the Period of Restriction. If a
cash payment is made in lieu of delivering Shares, the amount of such payment
shall be equal to the Fair Market Value of such Shares as of the date on which
the Period of Restriction lapsed (or, if the payment is deferred in accordance
with clause (ii) of the previous sentence, on the date such Shares would have
otherwise been delivered) with respect to such Restricted Stock Units, less
applicable tax withholdings in accordance with Section 16.

 

 
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(f)     Forms of Restricted Stock Awards. Each Participant who receives an Award
of Shares of Restricted Stock shall be issued a stock certificate or
certificates evidencing the Shares covered by such Award registered in the name
of such Participant, which certificate or certificates shall bear an appropriate
legend, and, if the Committee determines that the Shares of Restricted Stock
shall be held by the Company or in escrow rather than delivered to the
Participant pending expiration of the Period of Restriction, the Committee may
require the Participant to additionally execute and deliver to the Company: (i)
an escrow agreement satisfactory to the Committee, if applicable, and (ii) an
appropriate stock power (endorsed in blank) with respect to such Shares of
Restricted Stock. The Committee may require a Participant who receives a
certificate or certificates evidencing a Restricted Stock Award to immediately
deposit such certificate or certificates, together with a stock power or other
appropriate instrument of transfer, endorsed in blank by the Participant, with
signatures guaranteed in accordance with the Exchange Act if required by the
Committee, with the Secretary of the Company or an escrow holder as provided in
the immediately following sentence. The Secretary of the Company or such escrow
holder as the Committee may appoint shall retain physical custody of each
certificate representing a Restricted Stock Award until the Period of
Restriction and any other restrictions imposed by the Committee or under the
Award Agreement with respect to the Shares evidenced by such certificate expire
or shall have been removed. The foregoing to the contrary notwithstanding, the
Committee may, in its discretion, provide that a Participant’s ownership of
Shares of Restricted Stock prior to the lapse of the Period of Restriction or
any other applicable restrictions shall, in lieu of such certificates, be
evidenced by a “book entry” (i.e., a computerized or manual entry) in the
records of the Company or its designated agent in the name of the Participant
who has received such Award. Such records of the Company or such agent shall,
absent manifest error, be binding on all Participants who receive Restricted
Stock Awards evidenced in such manner. The holding of Shares of Restricted Stock
by the Company or such an escrow holder, or the use of book entries to evidence
the ownership of Shares of Restricted Stock, in accordance with this Section
8(f), shall not affect the rights of Participants as owners of the Shares of
Restricted Stock awarded to them, nor affect the restrictions applicable to such
shares under the Award Agreement or the Plan, including the Period of
Restriction.

 

(g)     Rights and Obligations as a Stockholder.

 

(i)      Restricted Stock. Unless otherwise determined by the Committee and set
forth in a Participant’s Award Agreement, to the extent permitted or required by
law, as determined by the Committee, Participants holding Shares of Restricted
Stock shall have the right to exercise full voting rights with respect to those
Shares during the Period of Restriction. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be credited with any cash
dividends paid with respect to such Shares while they are so held, unless
determined otherwise by the Committee and set forth in the Award Agreement. In
the Committee’s discretion, the Period of Restriction that is applicable to the
Restricted Stock may also apply to any such dividends if the Award Agreement so
provides. Except as set forth in the Award Agreement, in the event of (A) any
adjustment as provided in Section 4(c), or (B) any shares or securities are
received as a dividend, or an extraordinary dividend is paid in cash, on Shares
of Restricted Stock, any new or additional Shares or securities or any
extraordinary dividends paid in cash received by a recipient of Restricted Stock
shall be subject to the same terms and conditions, including the Period of
Restriction, as relate to the original Shares of Restricted Stock.

 

 
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(ii)     Restricted Stock Units. A Participant receiving Restricted Stock Units
shall have the rights of a stockholder only as to Shares, if any, actually
issued to such Participant upon expiration of the Period of Restriction and
satisfaction or achievement of the terms and conditions of the Award, and in
accordance with the provisions of the Plan and the applicable Award Agreement,
and not with respect to Shares to which such Award relates but which are not
actually issued to such Participant.

 

(h)     Termination of Employment or Service. Except as otherwise provided in
this Section 8(h), during the Period of Restriction, any Restricted Stock Units
and/or Shares of Restricted Stock held by a Participant shall be forfeited and
revert to the Company (or, if Shares of Restricted Sock were sold to the
Participant, the Participant shall be required to resell such Shares to the
Company at cost) upon the Participant’s Termination of Service or the failure to
meet or satisfy any applicable performance goals or other terms, conditions and
restrictions to the extent set forth in the applicable Award Agreement. Each
applicable Award Agreement shall set forth the extent to which, if any, the
Participant shall have the right to retain Restricted Stock Units and/or Shares
of Restricted Stock, then subject to the Period of Restriction, following such
Participant’s Termination of Service. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the applicable Award
Agreement, need not be uniform among all such Awards issued pursuant to the
Plan, and may reflect distinctions based on the reasons for, or circumstances
of, such Termination of Service.

 

9.   Other Stock-Based Awards.

 

(a)     Other Stock-Based Awards. The Committee may grant types of equity-based
or equity-related Awards not otherwise described by the terms of the Plan
(including the grant or offer for sale of unrestricted Shares), in such amounts
and subject to such terms and conditions, as the Committee shall determine. Such
Other Stock-Based Awards may involve the transfer of actual Shares to
Participants, or payment in cash or otherwise of amounts based on the value of
Shares. The terms and conditions of such Awards shall be consistent with the
Plan and set forth in the Award Agreement and need not be uniform among all such
Awards or all Participants receiving such Awards.

 

(b)     Value of Other Stock-Based Awards. Each Other Stock-Based Award shall be
expressed in terms of Shares or units based on Shares, as determined by the
Committee. The Committee may establish performance goals in its discretion, and
any such performance goals shall be set forth in the applicable Award Agreement.
If the Committee exercises its discretion to establish performance goals, the
number and/or value of Other Stock-Based Awards that will be paid out to the
Participant will depend on the extent to which such performance goals are met.

 

(c)     Payment of Other Stock-Based Awards. Payment, if any, with respect to an
Other Stock-Based Award shall be made in accordance with the terms of the Award,
as set forth in the Award Agreement, in cash, Shares or a combination of cash
and Shares, as the Committee determines.

 

(d)     Rights and Obligations as a Stockholder. A Participant receiving an
Other Stock-Based Award shall have the rights of a stockholder only as to
Shares, if any, actually issued to such Participant upon satisfaction or
achievement of the terms and conditions of the Award, and in accordance with the
provisions of the Plan and the applicable Award Agreement, and not with respect
to Shares to which such Award relates but which are not actually issued to such
Participant.

 

 
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(e)     Termination of Service. The Committee shall determine the extent to
which the Participant shall have the right, if any, to receive payments with
respect to an Other Stock-Based Award following the Participant’s Termination of
Service. Such provisions shall be determined in the sole discretion of the
Committee, such provisions may be included in the applicable Award Agreement,
but need not be uniform among all Other Stock-Based Awards issued pursuant to
the Plan, and may reflect distinctions based on the reasons for Termination of
Service.

 

10. Dividend Equivalents. Unless otherwise provided by the Committee, no
adjustment shall be made in the Shares issuable or taken into account under
Awards on account of cash dividends that may be paid or other rights that may be
issued to the holders of Shares prior to issuance of such Shares under such
Award. The Committee may grant Dividend Equivalents based on the dividends
declared on Shares that are subject to any Award, including any Award the
payment or settlement of which is deferred pursuant to Section 20(d). Any Award
of Dividend Equivalents may be credited as of the dividend payment dates, during
the period between the Grant Date of the Award and the date the Award becomes
payable or terminates or expires, as determined by the Committee. Dividend
Equivalents may be subject to any limitations and/or restrictions determined by
the Committee. Dividend Equivalents shall be converted to cash or additional
Shares by such formula and at such time, and shall be paid at such times, as may
be determined by the Committee.

 

11. Cash-Based Awards.

 

(a)     Grant of Cash-Based Awards. Subject to the terms of the Plan, Cash-Based
Awards may be granted to Participants in such amounts and upon such terms, and
at any time and from time to time, as shall be determined by the Committee, in
accordance with the Plan. A Cash-Based Award entitles the Participant who
receives such Award to receive a payment in cash upon the attainment of
applicable performance goals for the applicable performance period, and/or
satisfaction of other terms and conditions, in each case determined by the
Committee, and which shall be set forth in the Award Agreement. The terms and
conditions of such Awards shall be consistent with the Plan and set forth in the
Award Agreement and need not be uniform among all such Awards or all
Participants receiving such Awards.

 

(b)     Earning and Payment of Cash-Based Awards. Cash-Based Awards shall become
earned, in whole or in part, based upon the attainment of performance goals
specified by the Committee and/or the occurrence of any event or events and/or
satisfaction of such terms and conditions, including a Change of Control, as the
Committee shall determine, either at or after the Grant Date. The Committee
shall determine the extent to which any applicable performance goals and/or
other terms and conditions of a Cash-Based Award are attained or not attained
following conclusion of the applicable performance period. The Committee may, in
its discretion, waive any such performance goals and/or other terms and
conditions relating to any such Award, subject to Section 12, if applicable.
Payment of earned Cash-Based Awards shall be as determined by the Committee and
set forth in the Award Agreement.

 

 
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(c)     Termination of Employment or Service. Each Award Agreement shall set
forth the extent to which the Participant shall have the right, if any, to
retain Cash-Based Award following such Participant’s Termination of Service.
Such provisions shall be determined in the sole discretion of the Committee,
shall be included in the applicable Award Agreement, need not be uniform among
all such Awards issued pursuant to the Plan, and may reflect distinctions based
on the reasons for Termination of Service.

 

12.   Transferability Of Awards; Beneficiary Designation.

 

(a)     Transferability of Incentive Stock Options. No ISO or Tandem SAR granted
in connection with an ISO may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution or in accordance with Section 12(c). Further, all ISOs
and Tandem SARs granted in connection with ISOs granted to a Participant shall
be exercisable during his or her lifetime only by such Participant.

 

(b)     All Other Awards. Except as otherwise provided in Section 8(e) or
Section 12(c) or a Participant’s Award Agreement or otherwise determined at any
time by the Committee, no Award granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution; provided that the Committee may permit
further transferability, on a general or a specific basis, and may impose
conditions and limitations on any permitted transferability, subject to Section
12(a) and any applicable Period of Restriction; provided further, however, that
no Award may be transferred for value or other consideration without first
obtaining approval thereof by the Board. Further, except as otherwise provided
in a Participant’s Award Agreement or otherwise determined at any time by the
Committee, or unless the Committee decides to permit further transferability,
subject to Section 12(a) and any applicable Period of Restriction, all Awards
granted to a Participant under the Plan, and all rights with respect to such
Awards, shall be exercisable or available during his or her lifetime only by or
to such Participant. With respect to those Awards, if any, that are permitted to
be transferred to another individual, references in the Plan to exercise or
payment related to such Awards by or to the Participant shall be deemed to
include, as determined by the Committee, the Participant’s permitted transferee.
In the event any Award is exercised by or otherwise paid to the executors,
administrators, heirs or distributees of the estate of a deceased Participant,
or such a Participant’s beneficiary, or the transferee of an Award, in any such
case, pursuant to the terms and conditions of the Plan and the applicable
Agreement and in accordance with such terms and conditions as may be specified
from time to time by the Committee, the Company shall be under no obligation to
issue Shares thereunder unless and until the Company is reasonably satisfied
that the person or persons exercising such Award, or to receive such payment,
are the duly appointed legal representative of the deceased Participant’s estate
or the proper legatees or distributees thereof or the named beneficiary of such
Participant, or the valid transferee of such Award, as applicable. Any purported
assignment, transfer or encumbrance of an Award that does not comply with this
Section 12(b) shall be void and unenforceable against the Company.

 

(c)     Beneficiary Designation. Each Participant may, from time to time, name
any beneficiary or beneficiaries who shall be permitted to exercise his or her
Option or SAR or to whom any benefit under the Plan is to be paid in case of the
Participant’s death before he or she fully exercises his or her Option or SAR or
receives any or all of such benefit. Each such designation shall 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. In the absence of any such
beneficiary designation, a Participant’s unexercised Option or SAR, or amounts
due but remaining unpaid to such Participant, at the Participant’s death, shall
be exercised or paid as designated by the Participant by will or by the laws of
descent and distribution.

 

 
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13. Rights of Participants.

 

(a)     Rights or Claims. No person shall have any rights or claims under the
Plan except in accordance with the provisions of the Plan and any applicable
Award Agreement. The liability of the Company and any Affiliate under the Plan
is limited to the obligations expressly set forth in the Plan or an Award
Agreement, and no term or provision of the Plan or an Award Agreement may be
construed to impose any further or additional duties, obligations, or costs on
the Company or any Affiliate thereof or the Board or the Committee not expressly
set forth in the Plan or an Award Agreement. The grant of an Award under the
Plan shall not confer any rights upon the Participant holding such Award other
than such terms, and subject to such conditions, as are specified in the Plan as
being applicable to such type of Award, or to all Awards, or as are expressly
set forth in the Award Agreement evidencing such Award. Without limiting the
generality of the foregoing, neither the existence of the Plan nor anything
contained in the Plan or in any Award Agreement (except if such Award Agreement
is an Individual Agreement and as explicitly sets forth therein) shall be deemed
to:

 

(i)      Give any Eligible Individual the right to be retained in the employment
or service of the Company and/or an Affiliate, whether in any particular
position, at any particular rate of compensation, for any particular period of
time or otherwise;

 

(ii)     Restrict in any way the right of the Company and/or an Affiliate to
terminate, change or modify any Eligible Individual’s employment or service at
any time with or without Cause;

 

(iii)    Confer on any Eligible Individual any right of continued relationship
with the Company and/or an Affiliate, or alter any relationship between them,
including any right of the Company or an Affiliate to terminate, change or
modify its relationship with an Eligible Individual;

 

(iv)    Constitute a contract of employment or service between the Company or
any Affiliate and any Eligible Individual, nor shall it constitute a right to
remain in the employ or service of the Company or any Affiliate;

 

(v)     Give any Eligible Individual the right to receive any bonus, whether
payable in cash or in Shares, or in any combination thereof, from the Company
and/or an Affiliate, nor be construed as limiting in any way the right of the
Company and/or an Affiliate to determine, in its sole discretion, whether or not
it shall pay any Eligible Individual bonuses, and, if so paid, the amount
thereof and the manner of such payment; or

 

 
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(vi)    Give any Participant any rights whatsoever with respect to an Award
except as specifically provided in the Plan and the Award Agreement or in an
applicable Individual Agreement.

 

(b)     Adoption of the Plan. The adoption of the Plan shall not be deemed to
give any Eligible Individual or any other individual any right to be selected as
a Participant or to be granted an Award (except as contemplated in the Plan of
Reorganization or ancillary documents related thereto), or, having been so
selected, to be selected to receive a future Award.

 

(c)     Vesting. Notwithstanding any other provision of the Plan, a
Participant’s right or entitlement to exercise or otherwise vest in any Award
not exercisable or vested at the Grant Date thereof shall only result from
continued services as a Non-Employee Director or Consultant or continued
employment, as the case may be, with the Company or any Affiliate, or
satisfaction of any other performance goals or other conditions or restrictions
applicable, by its terms, to such Award, except, in each such case, as the
Committee may, in its discretion, expressly determine otherwise (in an Award
Agreement or otherwise).

 

(d)     No Effects on Benefits; No Damages. Payments and other compensation
received by a Participant under an Award are not part of such Participant’s
normal or expected compensation or salary for any purpose, including calculating
termination, indemnity, severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments under any laws, plans, contracts, policies, programs,
arrangements or otherwise. Except as set forth in an Award Agreement or
Individual Agreement, a Participant shall, by participating in the Plan, waive
any and all rights to compensation or damages in consequence of Termination of
Service of such Participant for any reason whatsoever, whether lawfully or
otherwise, insofar as those rights arise or may arise from such Participant
ceasing to have rights under the Plan as a result of such Termination of
Service, or from the loss or diminution in value of such rights or entitlements,
including by reason of the operation of the terms of the Plan or the provisions
of any statute or law relating to taxation. No claim or entitlement to
compensation or damages arises from the termination of the Plan or diminution in
value of any Award or Shares purchased or otherwise received under the Plan, in
all cases, provided that the Company has complied with the terms of the Plan and
the applicable Award Agreement.

 

(e)     One or More Types of Awards. A particular type of Award may be granted
to a Participant either alone or in addition to other Awards under the Plan.

 

14.   Change of Control.

 

(a)     Alternative Awards. Notwithstanding any other provisions of the Plan to
the contrary, the occurrence of a Change of Control will not itself result in
the cancellation, acceleration of exercisability or vesting, lapse of any Period
of Restriction or settlement or other payment with respect to any outstanding
Award to the extent that the Board or the Committee determines in its
discretion, prior to such Change of Control, that such outstanding Award shall
be honored or assumed, or new rights substituted therefor (such honored, assumed
or substituted Award being hereinafter referred to as an “Alternative Award”) by
the New Employer, provided that any Alternative Award must:

 

 
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(i)      if the Shares are traded on an Applicable Exchange immediately prior to
the Change of Control, be based on securities that are traded on an established
United States securities market, or which will be so traded within sixty (60)
days following the Change of Control;

 

(ii)     provide the Participant (or each Participant in a class of
Participants) with rights and entitlements substantially equivalent to or better
than the rights, terms and conditions applicable under such Award, including an
identical or better exercise or vesting schedule and identical or better timing
and methods of payment;

 

(iii)    have substantially equivalent economic value to such Award immediately
prior to the Change of Control (as determined by the Board or the Committee (as
constituted prior to the Change of Control), in its discretion);

 

(iv)    have terms and conditions which provide that if the Participant incurs a
Termination of Service by the New Employer under any circumstances other than
involuntary Termination of Service for Cause within one (1) year following the
Change of Control, (1) any conditions on a Participant’s rights under, or any
restrictions on transfer or exercisability applicable to, such Alternative Award
shall be waived or shall lapse in full, and such Alternative Award shall become
fully vested and exercisable, as the case may be, and (2) to the extent
applicable, each such Alternative Award outstanding as of the date of such
Termination of Service may thereafter be exercised until the later of (A) the
last date on which such Award would have been exercisable in the absence of this
Section 14(a), and (B) the earlier of (I) the third anniversary of such Change
of Control and (II) expiration of the term of such Award; and

 

(v)     not subject the Participant to the assessment of additional taxes under
Section 409A of the Code;

 

provided, that, notwithstanding anything in this Section 14(a) to the contrary,
in the event that an Award Agreement specifies the treatment of an Award upon
the occurrence of a Change of Control, such treatment shall control.

 

(b)     Accelerated Vesting and Payment.

 

(i)     Notwithstanding any other provisions of the Plan to the contrary, in the
event Section 14(a) does not apply, upon a Change of Control, (1) all
outstanding Awards shall become fully vested, nonforfeitable and, to the extent
applicable, exercisable immediately prior to the Change of Control; (2) the
Board or the Committee (as constituted prior the Change of Control) shall
provide that in connection with the Change of Control (A) each outstanding
Option and Stock Appreciation Right shall be cancelled in exchange for an amount
(payable in accordance with Section 14(b)(ii)) equal to the excess, if any, of
the Fair Market Value of the Common Stock on the date of the Change of Control
over the Option Price or Grant Price applicable to such Option or Stock
Appreciation Right, (B) each Share of Restricted Stock, each Restricted Stock
Unit and each other Award denominated in Shares shall be cancelled in exchange
for an amount (payable in accordance with Section 14(b)(ii)) equal to the Change
of Control Price multiplied by the number of Shares covered by such Award, (C)
each Award not denominated in Shares shall be cancelled in exchange for the full
amount of such Award (payable in accordance with Section 14(b)), and (D) any
Award the payment or settlement of which was deferred under Section 20(d) or
otherwise shall be cancelled in exchange for the full amount of such deferred
Award (payable in accordance with Section 14(b)(ii)); (3) the target Performance
Goals or other performance goals applicable to any outstanding Awards shall be
deemed to have been attained in full (unless actual performance exceeds the
target, in which case actual performance shall be used) for the entire
applicable performance period then outstanding; and (4) the Board or the
Committee (as constituted prior the Change of Control) may, in addition to the
consequences otherwise set forth in this Section 14(b)(i), make adjustments and
/ or settlements of outstanding Awards as it deems appropriate and consistent
with the Plan’s purposes.

 

 
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(ii)     Payments. Payment of any amounts in accordance with this Section 14(b)
shall be made in cash or, if determined by the Board or the Committee (as
constituted prior to the Change of Control), in securities of the New Employer,
provided that, if the Shares are traded on an Applicable Exchange immediately
prior to the Change of Control, such securities of the New Employer are traded
on an established United States securities market, or which will be so traded
within sixty (60) days following the Change of Control, having an aggregate fair
market value (as determined by such Board or Committee) equal to such amount or
in a combination of such securities and cash. All amounts payable hereunder
shall be payable in full, as soon as reasonably practicable, but in no event
later than ten (10) business days, following the Change of Control.

 

(c)     Certain Terminations of Service Prior to Change of Control. The
Committee may determine, in its sole discretion, that any Participant who incurs
a Termination of Service under any circumstances other than involuntary
Termination of Service for Cause or resignation on or after the date on which
the Company entered into an agreement in principle the consummation of which
would constitute a Change of Control, but prior to such consummation, and such
Change of Control actually occurs, shall be treated, solely for purposes of the
Plan (including this Section 14), as continuing in the Company’s, or the
applicable Affiliate’s, employment or service until the occurrence of such
Change of Control and to have been Terminated under such circumstances
immediately thereafter.

 

(d)     Termination, Amendment, and Modifications of Change of Control
Provisions. Notwithstanding any other provision of the Plan or any Award
Agreement provision, the provisions of this Section 14 may not be terminated,
amended, or modified on or after the date of a Change of Control to materially
impair any Participant’s Award theretofore granted and then outstanding under
the Plan without the prior written consent of such Participant.

 

(e)     No Implied Rights; Other Limitations. No Participant shall have any
right to prevent the consummation of any of the acts described in Section 4(c)
or this Section 14 affecting the number of Shares available to, or other
entitlement of, such Participant under the Plan or such Participant’s Award. Any
actions or determinations of the Committee under this Section 14 need not be
uniform as to all outstanding Awards, nor treat all Participants identically.
Notwithstanding the foregoing provisions of this Section 14, the Committee shall
determine the adjustments provided in this Section 14: (i) subject to Section
16(g)(vi), and (ii) after taking into account, among other things, to the extent
applicable, the provisions of the Code applicable to Incentive Stock Options,
and in no event may any ISO be exercised after ten (10) years from the Grant
Date thereof.

 

 
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15.   Amendment and Termination.

 

(a)     Amendment and Termination of the Plan. The Board may, at any time and
with or without prior notice, amend, alter, suspend or terminate the Plan,
retroactively or otherwise, but no such amendment, alteration, suspension or
termination of the Plan shall be made which would adversely affect the rights of
any Participant with respect to a previously granted Award without such
Participant’s written consent, except any such amendment made to comply with
applicable law, tax rules, stock exchange rules or accounting rules. In
addition, no such amendment shall be made without the approval of the Company’s
stockholders to the extent such approval is required by any applicable law, tax
rules, stock exchange rules or accounting rules (including as necessary to
comply with any rules or requirements of any securities exchange or inter-dealer
quotation system on which the Shares may be listed or quoted).

 

(b)     Amendment of Awards. Subject to the immediately following sentence, the
Committee may unilaterally amend or alter the terms of any Award theretofore
granted, including any Award Agreement, retroactively or otherwise, but no such
amendment shall be inconsistent with the terms and conditions of the Plan or
adversely affect the rights of the Participant to whom such Award was granted
with respect to such Award without his or her written consent, except such an
amendment made to cause the Plan or such Award to comply with applicable law,
tax rules, stock exchange rules or accounting rules.

 

(c)     Individual Agreements. The provisions of any Individual Agreement that
make express reference to the Plan or any Awards, or otherwise to equity or
equity-based awards made by the Company or an Affiliate, shall prevail over the
provisions of the Plan and the applicable Award Agreement in the case of a
conflict between such provisions and the provisions of the Plan and the
applicable Award Agreement; provided that an Award Agreement may specifically
provide that the all or a portion of the provisions of the Individual Agreement
will not prevail, in which case, to that extent, the Plan and Award Agreement
will apply in accordance with their terms.

 

16.  Tax Withholding and Other Tax Matters.

 

(a)     Tax Withholding. The Company and/or any Affiliate are authorized to
withhold from any Award granted or payment due under the Plan the amount of all
Federal, state, local and non-United States taxes due in respect of such Award
or payment and take any such other action as may be necessary or appropriate, as
determined by the Committee, to satisfy all obligations for the payment of such
taxes. No later than the date as of which an amount first becomes includible in
the gross income or wages of a Participant for federal, state, local, or
non-U.S. tax purposes with respect to any Award, such Participant shall pay to
the Company, or make arrangements satisfactory to the Committee regarding the
payment of, any federal, state, local or non-U.S. taxes or social security (or
similar) contributions of any kind required by law to be withheld with respect
to such amount. The obligations of the Company under the Plan shall be
conditional on such payment or satisfactory arrangements (as determined by the
Committee in its discretion), and the Company and the Subsidiaries and
Affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to such Participant, whether or not
under the Plan.

 

 
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(b)     Withholding or Tendering Shares. Without limiting the generality of
Section 16(a), subject to any applicable laws, a Participant may (unless
disallowed by the Committee to the extent not provided in an Award Agreement)
elect to satisfy or arrange to satisfy, in whole or in part, the tax obligations
incident to an Award by: (i) electing to have the Company withhold Shares or
other property otherwise deliverable to such Participant pursuant to his or her
Award (provided, however, that the amount of any Shares so withheld shall not
exceed the amount necessary to satisfy required Federal, state, local and
non-United States withholding obligations using the minimum statutory
withholding rates for Federal, state, local and/or non-U.S. tax purposes,
including payroll taxes, that are applicable to supplemental taxable income)
and/or (ii) tendering to the Company Shares already owned by such Participant
(or by such Participant and his or her spouse jointly) and which meet any such
requirements as the Committee may determine are necessary in order to avoid an
accounting earnings charge on account of the use of such Shares to satisfy such
tax obligations), based, in each case, on the Fair Market Value of the Common
Stock on the payment date as determined by the Committee. All such elections
shall be irrevocable, made in writing, signed by the Participant, and shall be
subject to any restrictions or limitations that the Committee, in its sole
discretion, deems appropriate (to the extent not explicitly permitted by an
Award Agreement). The Committee may establish such procedures as it deems
appropriate, including making irrevocable elections, for settlement of
withholding obligations with Common Stock.

 

(c)     Restrictions. The satisfaction of tax obligations pursuant to this
Section 16 shall be subject to such restrictions as the Committee may impose,
including any restrictions required by applicable law or the rules and
regulations of the SEC, and shall be construed consistent with an intent to
comply with any such applicable laws, rule and regulations.

 

(d)     Special ISO Obligations. The Committee may require a Participant to give
prompt written notice to the Company concerning any disposition of Shares
received upon the exercise of an ISO within: (i) two (2) years from the Grant
Date such ISO to such Participant or (ii) one (1) year from the transfer of such
Shares to such Participant or (iii) such other period as the Committee may from
time to time determine. The Committee may direct that a Participant with respect
to an ISO undertake in the applicable Award Agreement to give such written
notice described in the preceding sentence, at such time and containing such
information as the Committee may prescribe, and/or that the certificates
evidencing Shares acquired by exercise of an ISO refer to such requirement to
give such notice.

 

(e)     Section 83(b) Election. If a Participant makes an election under Section
83(b) of the Code to be taxed with respect to an Award as of the date of
transfer of Shares rather than as of the date or dates upon which the
Participant would otherwise be taxable under Section 83(a) of the Code, such
Participant shall deliver a copy of such election to the Company upon or prior
to the filing such election with the Internal Revenue Service. Neither the
Company nor any Affiliate shall have any liability or responsibility relating to
or arising out of the filing or not filing of any such election or any defects
in its construction.

 

 
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(f)     No Guarantee of Favorable Tax Treatment. Although the Company intends to
administer the Plan so that Awards will be exempt from, or will comply with, the
requirements of Code Section 409A, the Company does not warrant that any Award
under the Plan will qualify for favorable tax treatment under Code Section 409A
or any other provision of federal, state, local, or non-United States law. The
Company shall not be liable to any Participant or any other person or entity for
any tax, interest, or penalties the Participant might owe as a result of the
grant, holding, vesting, exercise, or payment of any Award under the Plan.

 

(g)     Nonqualified Deferred Compensation.

 

(i)      It is the intention of the Company that no Award shall be deferred
compensation subject to Code Section 409A unless and to the extent that the
Committee specifically determines otherwise as provided in paragraph (ii) of
this Section 16(g), and the Plan and the terms and conditions of all Awards
shall be interpreted and administered accordingly.

 

(ii)     The terms and conditions governing any Awards that the Committee
determines will be subject to Section 409A of the Code, including any rules for
payment or elective or mandatory deferral of the payment or delivery of Shares
or cash pursuant thereto, and any rules regarding treatment of such Awards in
the event of a Change of Control, shall be set forth in the applicable Award
Agreement and shall be intended to comply in all respects with Section 409A of
the Code, and the Plan and the terms and conditions of such Awards shall be
interpreted and administered accordingly.

 

(iii)    The Committee shall not extend the period to exercise an Option or
Stock Appreciation Right to the extent that such extension would cause the
Option or Stock Appreciation Right to become subject to Code Section 409A.

 

(iv)    No Dividend Equivalents shall relate to Shares underlying an Option or
SAR unless such Dividend Equivalent rights are explicitly set forth as a
separate arrangement and do not cause any such Option or SAR to be subject to
Code Section 409A.

 

(v)     If for any reason, such as imprecision in drafting, any provision of the
Plan and/or any Award Agreement does not accurately reflect its intended
establishment of an exemption from (or compliance with) Code Section 409A, as
demonstrated by consistent interpretations or other evidence of intent, such
provision shall be considered ambiguous as to its exemption from (or compliance
with) Code Section 409A and shall be interpreted by the Company in a manner
consistent with such intent, as determined in the discretion of the Company. If,
notwithstanding the foregoing provisions of this Section 16(g)(v), any provision
of the Plan or any Award Agreement would cause a Participant to incur any
additional tax or interest under Code Section 409A, the Company shall reform
such provision in a manner intended to avoid the incurrence by such Participant
of any such additional tax or interest; provided that the Company shall
maintain, to the extent reasonably practicable, the original intent and economic
benefit to the Participant of the applicable provision without violating the
provisions of Code Section 409A.

 

 
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(vi)    Notwithstanding the provisions of Section 4(c) to the contrary, (1) any
adjustments made pursuant to Section 4(c) to Awards that are considered
“deferred compensation” subject to Section 409A of the Code shall be made in
compliance with the requirements of Section 409A of the Code; (2) any
adjustments made pursuant to Section 4(c) to Awards that are not considered
“deferred compensation” subject to Section 409A of the Code shall be made in
such a manner as to ensure that after such adjustment, the Awards either (A)
continue not to be subject to Section 409A of the Code or (B) comply with the
requirements of Section 409A of the Code; and (3) in any event, neither the
Committee nor the Board shall have any authority to make any adjustments,
substitutions or changes pursuant to Section 4(c) to the extent the existence of
such authority would cause an Award that is not intended to be subject to
Section 409A of the Code at the Grant Date thereof to be subject to Section 409A
of the Code.

 

(vii)   If any Award is subject to Section 409A of the Code, the provisions of
Section 14 shall be applicable to such Award only to the extent specifically
provided in the Award Agreement and permitted pursuant to paragraph (ii) of this
Section 16(g).

 

(viii)  Notwithstanding any other provision in the Plan, any Award Agreement or
any other written document establishing the terms and conditions of an Award, if
any Participant is a “specified employee,” within the meaning of Section 409A of
the Code, as of the date of his or her “separation from service” (as defined
under Section 409A of the Code), then, to the extent required by Treasury
Regulation Section 1.409A-3(i)(2) (or any successor provision), any payment made
to such Participant on account of his or her separation from service shall not
be made before a date that is six months after the date of his or her separation
from service. The Committee may elect any of the methods of applying this rule
that are permitted under Treasury Regulation Section 1.409A-3(i)(2)(ii) (or any
successor provision).

 

17. Limits Of Liability; Indemnification.

 

(a)     Limits of Liability. Any liability of the Company or an Affiliate to any
Participant with respect to any Award shall be based solely upon contractual
obligations created by the Plan and the Award Agreement.

 

(i)      None of the Company, any Affiliate, any member of the Board or the
Committee or any other person participating in any determination of any question
under the Plan, or in the interpretation, administration or application of the
Plan, shall have any liability, in the absence of bad faith, to any party for
any action taken or not taken in connection with the Plan, except as may
expressly be provided by statute.

 

(ii)     Each member of the Committee, while serving as such, shall be
considered to be acting in his or her capacity as a director of the Company.
Members of the Board of Directors and members of the Committee acting under the
Plan shall be fully protected in relying in good faith upon the advice of
counsel and shall incur no liability except for gross negligence or willful
misconduct in the performance of their duties.

 

 
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(iii)    The Company shall not be liable to a Participant or any other person as
to: (i) the non-issuance of Shares as to which the Company has been unable to
obtain (after use of commercially reasonable efforts) from any regulatory body
having relevant jurisdiction the authority reasonably deemed by the Committee or
the Company’s counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, (ii) any tax consequence expected, but not realized, by any
Participant or other person due to the receipt, exercise or settlement of any
Option or other Award, or (iii) any tax, interest, or penalties any Participant
or other person might owe as a result of the grant, holding, vesting, exercise,
or payment of any Award under the Plan.

 

(b)     Indemnification. Subject to the requirements of Delaware law, each
individual who is or shall have been a member of the Committee or of the Board,
or an officer of the Company to whom authority was delegated in accordance with
Section 3, shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own
expense, to handle and defend the same before he or she undertakes to handle and
defend it on his or her own behalf, unless such loss, cost, liability, or
expense is a result of the individual’s own willful misconduct or except as
provided by statute. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such individual may be
entitled under the Company’s Certificate of Incorporation or By-Laws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify
or hold harmless such individual.

 

18.   Successors. All obligations of the Company under the Plan with respect to
Awards granted hereunder shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company.

 

19.   Forfeiture / Clawback. The Committee may, in its discretion, specify in an
Award Agreement or a policy that is incorporated into an Award Agreement by
reference, that a Participant’s rights, payments, and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture, rescission or
recoupment upon the occurrence of certain specified events, in addition to any
otherwise applicable vesting, restrictions or performance conditions of an
Award. Such events may include, but shall not be limited to, Termination of
Service with or without cause, breach of noncompetition, confidentiality, or
other restrictive covenants that may apply to the Participant, or restatement of
the Company’s financial statements to reflect adverse results from those
previously released financial statements, as a consequence of errors, omissions,
fraud, or misconduct.

 

20.   Miscellaneous.

 

 
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(a)     Drafting Context; Captions. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural. The
words “Section” and “paragraph” herein shall refer to provisions of the Plan,
unless expressly indicated otherwise. The words “include,” “includes,” and
“including” herein shall be deemed to be followed by “without limitation”
whether or not they are in fact followed by such words or words of similar
import, unless the context otherwise requires. The headings and captions
appearing herein are inserted only as a matter of convenience. They do not
define, limit, construe, or describe the scope or intent of the provisions of
the Plan.

 

(b)     Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

 

(c)     Exercise and Payment of Awards. An Award shall be deemed exercised or
claimed when the Secretary of the Company or any other Company official or other
person designated by the Committee for such purpose receives appropriate Notice
from a Participant, in form acceptable to the Committee, together with payment
of the applicable Option Price, Grant Price or other purchase price, if any, in
compliance with Section 16, in accordance with the Plan and such Participant’s
Award Agreement.

 

(d)     Deferrals. Subject to applicable law, the Committee may from time to
time establish procedures pursuant to which a Participant may defer on an
elective basis receipt of all or a portion of the cash or Shares subject to an
Award on such terms and conditions as the Committee shall determine, including
those of any deferred compensation plan of the Company or any Affiliate
specified by the Committee for such purpose.

 

(e)     No Effect on Other Plans. Neither the adoption of the Plan nor anything
contained herein shall affect any other compensation or incentive plans or
arrangements of the Company or any Affiliate, or prevent or limit the right of
the Company or any Affiliate to establish any other forms of incentives or
compensation for their directors, officers, eligible employees or consultants or
grant or assume options or other rights otherwise than under the Plan.

 

(f)     Requirements of Law; Limitations on Awards; Stockholders Agreement.

 

(i)      The granting of Awards and the issuance of Shares under the Plan shall
be subject to all applicable laws, rules, and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required.

 

(ii)     If at any time the Committee shall determine, in its discretion, that
the listing, registration and/or qualification of Shares upon any securities
exchange or under any state, Federal or non-United States law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the sale or purchase of Shares hereunder,
the Company shall have no obligation to allow the grant, exercise or payment of
any Award, or to issue or deliver evidence of title for Shares issued under the
Plan, in whole or in part, unless and until such listing, registration,
qualification, consent and/or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Committee.

 

 
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(iii)    If at any time counsel to the Company shall be of the opinion that any
sale or delivery of Shares pursuant to an Award is or may be in the
circumstances unlawful or result in the imposition of excise taxes on the
Company or any Affiliate under the statutes, rules or regulations of any
applicable jurisdiction, the Company shall have no obligation to make such sale
or delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act, or otherwise with
respect to Shares or Awards and the right to exercise or payment of any Option
or Award shall be suspended until, in the opinion of such counsel, such sale or
delivery shall be lawful or will not result in the imposition of excise taxes on
the Company or any Affiliate.

 

(iv)    Upon termination of any period of suspension under this Section 20(f),
any Award affected by such suspension which shall not then have expired or
terminated shall be reinstated as to all Shares available before such suspension
and as to the Shares which would otherwise have become available during the
period of such suspension, but no suspension shall extend the term of any Award.

 

(v)     The Committee may require each person receiving Shares in connection
with any Award under the Plan to represent and agree with the Company in writing
that such person is acquiring such Shares for investment without a view to the
distribution thereof, and/or provide such other reasonable representations and
agreements as the Committee may prescribe. The Committee, in its absolute
discretion, may impose such restrictions on the ownership and transferability of
the Shares purchasable or otherwise receivable by any person under any Award as
it deems appropriate. Any such restrictions shall be set forth in the applicable
Award Agreement at the grant date, and the certificates evidencing such shares
may include any legend that the Committee deems appropriate to reflect any such
restrictions.

 

(vi)     An Award and any Shares received upon the exercise or payment of an
Award shall be subject to such other transfer and/or ownership restrictions
and/or legending requirements as the Committee may establish in its discretion
and may be referred to on the certificates evidencing such Shares, including
restrictions under applicable Federal securities laws, under the requirements of
any stock exchange or market upon which such Shares are then listed
and/or traded, and under any blue sky or state securities laws applicable to
such Shares.

 

(vii)     Upon the delivery of any Shares to a Participant under the Plan, such
Participant, to the extent of such Participant’s Shares, shall become subject to
the terms, conditions, rights and obligations of the Stockholders’ Agreement.

 

(g)     Participants Deemed to Accept Plan. By accepting any benefit under the
Plan, each Participant and each person claiming under or through any such
Participant shall be conclusively deemed to have indicated their acceptance and
ratification of, and consent to, all of the terms and conditions of the Plan and
any action taken under the Plan by the Board, the Committee or the Company, in
any case in accordance with the terms and conditions of the Plan.

 

 
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(h)     Governing Law. Except as to matters concerning the issuance of Shares or
other matters of corporate governance, which shall be determined, and related
Plan and Award provisions, which shall be construed, under the laws of the State
of Delaware, the Plan and each Award Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of the Plan to the substantive law of another
jurisdiction. Unless otherwise provided in the Award Agreement, Participants are
deemed to submit to the exclusive jurisdiction and venue of the federal or state
courts of the State of Delaware, to resolve any and all issues that may arise
out of or relate to the Plan or any related Award Agreement.

 

(i)     Plan Unfunded. The Plan shall be an unfunded plan for incentive
compensation. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the issuance
of Shares or the payment of cash upon exercise or payment of any Award. Proceeds
from the sale of Shares pursuant to Options or other Awards granted under the
Plan shall constitute general funds of the Company. With respect to any payments
not yet made to any person pursuant to an Award, nothing contained in the Plan
or any Award Agreement shall give such person any rights that are greater than
those of a general creditor of the Company or any Affiliate, and a Participant’s
rights under the Plan at all times constitute an unsecured claim against the
general assets of the Company for the payment any amounts as they come due under
the Plan. Neither the Participant nor the Participant’s duly-authorized
transferee or beneficiaries shall have any claim against or rights in any
specific assets, Shares, or other funds of the Company or any Affiliate.

 

(j)     Administration Costs. The Company shall bear all costs and expenses
incurred in administering the Plan, including expenses of issuing Shares
pursuant to any Options or other Awards granted hereunder.

 

(k)     Uncertificated Shares. To the extent that the Plan provides for issuance
of certificates to reflect the transfer of Shares, the transfer of such Shares
may nevertheless be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange.

 

(l)     No Fractional Shares. An Option or other Award shall not be exercisable
with respect to a fractional Share or the lesser of fifty (50) shares or the
full number of Shares then subject to the Option or other Award. No fractional
Shares shall be issued upon the exercise or payment of an Option or other Award.

 

(m)     Affiliate Eligible Individuals. In the case of a grant of an Award to
any Eligible Individual of an Affiliate, the Company may, if the Committee so
directs, issue or transfer the Shares, if any, covered by the Award to such
Affiliate, for such lawful consideration as the Committee may specify, upon the
condition or understanding that such Affiliate will transfer such Shares to such
Eligible Individual in accordance with the terms and conditions of such Award
and those of the Plan. The Committee may also adopt procedures regarding
treatment of any Shares so transferred to an Affiliate that are subsequently
forfeited or canceled.

 

 
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(n)     Data Protection. By participating in the Plan, each Participant consents
to the collection, processing, transmission and storage by the Company, in any
form whatsoever, of any data of a professional or personal nature which is
necessary for the purposes of administering the Plan. The Company may share such
information with any Affiliate, any trustee, its registrars, brokers, other
third-party administrator or any person who obtains control of the Company or
any Affiliate or any division respectively thereof.

 

(o)     Right of Offset. To the extent permitted by applicable law, the Company
and the Affiliates shall have the right to offset against the obligations to
make payment or issue any Shares to any Participant under the Plan, any
outstanding amounts (including travel and entertainment advance balances, loans,
tax withholding amounts paid by the employer or amounts repayable to the Company
or any Affiliate pursuant to tax equalization, housing, automobile or other
employee programs) such Participant then owes to the Company or any Affiliate
and any amounts the Committee otherwise reasonably deems appropriate pursuant to
any tax equalization policy or agreement, in each case to the extent permitted
by applicable law and not in violation of Code Section 409A.

 

(p)     Participants Based Outside of the United States. The Committee may grant
awards to Eligible Individuals who are non-United States nationals, or who
reside outside the United States or who are not compensated from a payroll
maintained in the United States or who are otherwise subject to (or could cause
the Company to be subject to) legal or regulatory provisions of countries or
jurisdictions outside the United States, on such terms and conditions different
from those specified in the Plan as may, in the judgment of the Committee, be
necessary or desirable to foster and promote achievement of the purposes of the
Plan and comply with such legal or regulatory provisions, and, in furtherance of
such purposes, the Committee may make or establish such modifications,
amendments, procedures or subplans as may be necessary or advisable to comply
with such legal or regulatory requirements (including to maximize tax
efficiency).

 

*     *     *

 

 

 

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