Exhibit 10.6
KAYDON CORPORATION

1999 LONG TERM STOCK INCENTIVE PLAN
(Amended and Restated Effective October 23, 2008)
Section 1. Purposes. The purposes of the 1999 Long Term Stock Incentive Plan
(the “Plan”) are to encourage selected employees of, and Consultants to, Kaydon
Corporation (the “Company”) and its Subsidiaries to acquire a proprietary
interest in the Company in order to create an increased incentive to contribute
to the Company’s future success and prosperity, and enhance the ability of the
Company and its Subsidiaries to attract and retain highly qualified individuals
upon whom the sustained progress, growth and profitability of the Company
depend, thus enhancing the value of the Company for the benefit of its
stockholders.
Section 2. Definitions. As used in the Plan, the following terms shall have the
meanings set forth below:
(a) “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Award, Dividend Equivalent or Other
Stock-Based Award granted under the Plan.
(b) “Award Agreement” shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.
(c) “Board” means the Board of Directors of the Company.
(d) “Change in Control” means the occurrence of any of the following events:
(i) 50% Stock. The acquisition, by a person or Persons Acting as a Group, of
stock of the Company that together with stock held by such person or group
constitutes more than 50% of the total fair market value or total voting power
of the stock of Company;
(ii) 35% Stock. The acquisition, by a person or Persons Acting as a Group, of
ownership of stock of the Company that constitutes 35% or more of the total
voting power of Company’s stock in a single transaction or within a twelve month
period ending with the most recent acquisition;
(iii) Directors. The majority of members of the Board being replaced during any
twelve month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board prior to the date of appointment or
election;
(iv) Assets. The acquisition, by a person or Persons Acting as a Group, of the
Company’s assets that have a total gross fair market value equal to or exceeding
forty percent (40%) of the total gross fair market value of Company’s assets in
a single transaction or within a twelve month period ending with the most recent
acquisition. For the purpose of this section, gross fair market value means the
value of the assets of the corporation, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets; or

 

 

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(v) Merger. A reorganization, merger or consolidation of the Company, the
substantive effect of which is a Change in Control under any of subsections (i),
(ii), (iii) or (iv) above, unless with or into a Permitted Successor.
(e) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.
(f) “Committee” shall mean the Compensation Committee of the Company, each of
the members of which is a “non-employee director” within the meaning of
Rule 16b-3.
(g) “Consultant” shall mean any individual performing bona fide services for the
Company (other than services in connection with the offer or sale of securities
in a capital-raising transaction) including former and prospective employees of
the Company and any other individuals designated as such by the Committee.
(h) “Continuing Directors” are the individuals constituting the Board as of the
date this Amended and Restated Plan was adopted by the Board and any subsequent
directors whose election or nomination for election by the Company’s
stockholders was approved by a vote of two-thirds of the individuals who are
then Continuing Directors, but specifically excluding any individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as the term is used in Rule 14a-11 of
Regulation 14A issued under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board.
(i) “Disability” means the Participant: (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months; or (ii) is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than 3 months under an accident and health plan covering employees
of the Company. To the extent required hereunder, the determination of
Disability shall be made by a medical board certified physician selected by the
Company and acceptable to the Participant (or the Participant’s legal
representative, if one has been appointed), provided such agreement as to
acceptability shall not be unreasonably withheld.
(j) “Dividend Equivalent” shall mean any right granted under Section 6(e) of the
Plan.

 

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(k) “Employee Benefit Plan” means any plan or program established by the Company
or a Subsidiary for the compensation or benefit of employees of the Company or
any of its Subsidiaries.
(l) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(m) “Excluded Holder” means any Person who at the time this Amended and Restated
Plan was adopted by the Board was the beneficial owner of 20% or more of the
outstanding common stock of the Company; or the Company, a Subsidiary or any
Employee Benefit Plan of the Company or a Subsidiary or any trust holding such
common stock or other securities pursuant to the terms of an Employee Benefit
Plan.
(n) “Fair Market Value” means, as of any date, if there is then a public market
for the Shares, the closing price of the Shares as reported on the New York
Stock Exchange (“NYSE”) or such other national or regional securities exchange
or market system constituting the primary market for the Shares. If the relevant
date does not fall on a day on which the Shares are trading on NYSE or other
national or regional securities exchange or market system, the date on which the
Fair Market Value shall be established shall be the last day on which the Shares
were so traded prior to the relevant date. If there is then no public market for
the Shares, the Fair Market Value on any relevant date shall be as determined by
the Committee without regard to any restriction other than a restriction which,
by its terms, will never lapse.
(o) “Incentive Stock Option” shall mean an Option granted under Section 6(a) of
the Plan that is intended to meet the requirements of Section 422 of the Code,
or any successor provision thereto.
(p) “Non-Qualified Stock Option” shall mean an Option granted under Section 6(a)
of the Plan that is not intended to be an Incentive Stock Option.
(q) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
(r) “Other Stock-Based Award” shall mean any right granted under Section 6(f) of
the Plan.
(s) “Participant” shall mean an employee of, or Consultant to, the Company or
any Subsidiary designated to be granted an Award under the Plan.
(t) “Performance Award” shall mean any right granted under Section 6(d) of the
Plan.

 

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(u) “Permitted Successor” means a corporation which, immediately following the
consummation of a transaction specified in the definition of “Change in Control”
above, satisfies each of the following criteria:
(i) Stock. Sixty percent or more of the outstanding common stock of the
corporation and the combined voting power of the outstanding securities of the
corporation entitled to vote generally in the election of directors (in each
case determined immediately following the consummation of the applicable
transaction) is beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were the beneficial owners of Company’s
outstanding common stock and outstanding securities entitled to vote generally
in the election of directors (respectively) immediately prior to the applicable
transaction;
(ii) Limitation. No Person other than an Excluded Holder beneficially owns,
directly or indirectly, 20% or more of the outstanding common stock of the
corporation or the combined voting power of the outstanding securities of the
corporation entitled to vote generally in the election of directors (for these
purposes the term Excluded Holder shall include the corporation, any subsidiary
of the corporation and any Employee Benefit Plan of the corporation or any such
subsidiary or any trust holding common stock or other securities of the
corporation pursuant to the terms of any such Employee Benefit Plan); and
(iii) Board. At least a majority of the board of directors is comprised of
Continuing Directors.
(v) “Person” has the same meaning as set forth in Sections 13(d) and 14(d)(2) of
the Exchange Act.
(w) “Persons Acting as a Group” means owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of stock (or assets), or similar
business transaction with the Company. If a person, including an entity, owns
stock in both corporations that enter into a merger, consolidation, purchase or
acquisition of stock (or assets), or similar transaction, such shareholder is
considered to be acting as a group with other shareholders in a corporation
prior to the transaction giving rise to the change and not with respect to the
ownership interest in the other corporation. Persons will not be considered to
be acting as a group solely because they purchase or own stock of the same
corporation at the same time or as a result of the same public offering, or
purchase assets of the same corporation at the same time.
(x) “Restricted Period” shall mean the period of time during which Awards of
Restricted Stock or Restricted Stock Units are subject to restrictions.
(y) “Restricted Stock” shall mean any Share granted under Section 6(c) of the
Plan.
(z) “Restricted Stock Unit” shall mean any right granted under Section 6(c) of
the Plan that is denominated in Shares.
(aa) “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, or any successor rule or regulation.

 

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(bb) “Section 16” shall mean Section 16 of the Exchange Act, the rules and
regulations promulgated by the Securities and Exchange Commission thereunder, or
any successor provision, rule or regulation.
(cc) “Shares” shall mean the Company’s common stock, par value $.10 per share,
and such other securities or property as may become the subject of Awards, or
become subject to Awards, pursuant to an adjustment made under Section 4(e) of
the Plan.
(dd) “Stock Appreciation Right” shall mean any right granted under Section 6(b)
of the Plan.
(ee) “Subsidiary” means any corporation or other entity of which 50% or more of
the outstanding voting stock or voting ownership interest is directly or
indirectly owned or controlled by the Company or by one or more Subsidiaries of
the Company.
Section 3. Administration. The Committee shall administer the Plan, and subject
to the terms of the Plan and applicable law, the Committee’s authority shall
include without limitation the power to:
(a) designate Participants;
(b) determine the types of Awards to be granted;
(c) determine the number of Shares to be covered by Awards and any payments,
rights or other matters to be calculated in connection therewith;
(d) determine the terms and conditions of Awards and amend the terms and
conditions of outstanding Awards;
(e) determine how, whether, to what extent, and under what circumstances Awards
may be settled or exercised in cash, Shares, other securities, other Awards or
other property, or canceled, forfeited or suspended; provided, however, that the
Committee shall not accept the tender of Shares that have been held by the
Participant for less than six months;
(f) determine subject to compliance with any restrictions under Code
Section 409A (and as specifically provided in any Award Agreement hereunder),
how, whether, to what extent, and under what circumstances cash, Shares, other
securities, other Awards, other property and other amounts payable with respect
to an Award shall be deferred either automatically or at the election of the
holder thereof or of the Committee;
(g) determine the methods or procedures for establishing the fair market value
of any property (including, without limitation, any Shares or other securities)
transferred, exchanged, given or received with respect to the Plan or any Award;
(h) prescribe and amend the forms of Award Agreements and other instruments
required under or advisable with respect to the Plan;

 

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(i) designate Options granted to key employees of the Company or its
Subsidiaries as Incentive Stock Options;
(j) interpret and administer the Plan, Award Agreements, Awards and any
contract, document, instrument or agreement relating thereto;
(k) establish, amend, suspend or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the administration of the Plan;
(l) decide all questions and settle all controversies and disputes which may
arise in connection with the Plan, Award Agreements and Awards;
(m) make any other determination and take any other action that the Committee
deems necessary or desirable for the interpretation, application and
administration of the Plan, Award Agreements and Awards.
All designations, determinations, interpretations and other decisions under or
with respect to the Plan, Award Agreements or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all persons, including the Company, Subsidiaries,
Participants, beneficiaries of Awards and stockholders of the Company.
Section 4. Shares Available for Awards
(a) Shares Available. Subject to adjustment as provided in Section 4(c):
(i) Initial Authorization. There shall be 2,000,000 Shares initially available
for issuance under the Plan.
(ii) Acquired Shares. In addition to the amount set forth above, up to 2,000,000
Shares acquired by the Company subsequent to the effectiveness of the Plan as
full or partial payment for the exercise price for an Option or any other stock
option granted by the Company, or acquired by the Company, in open market
transactions or otherwise, in connection with the Plan or any Award hereunder or
any other employee stock option or restricted stock issued by the Company may
thereafter be included in the Shares available for Awards. If any Shares covered
by an Award or to which an Award relates are forfeited, or if an Award expires,
terminates or is canceled, then the Shares covered by such Award, or to which
such Award relates, or the number of Shares otherwise counted against the
aggregate number of Shares available under the Plan by reason of such Award, to
the extent of any such forfeiture, expiration, termination or cancellation, may
thereafter be available for further granting of Awards and included as acquired
Shares for purposes of the preceding sentence.

 

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(iii) Accounting for Awards. For purposes of this Section 4,
(A) if an Award (other than a Dividend Equivalent) is denominated in Shares, the
number of Shares covered by such Award, or to which such Award relates, shall be
counted on the date of grant of such Award against the aggregate number of
Shares available for granting Awards under the Plan to the extent determinable
on such date and insofar as the number of Shares is not then determinable under
procedures adopted by the Committee consistent with the purposes of the Plan;
and
(B) Dividend Equivalents and Awards not denominated in Shares shall be counted
against the aggregate number of Shares available for granting Awards under the
Plan in such amount and at such time as the Committee shall determine under
procedures adopted by the Committee consistent with the purposes of the Plan;
provided, however, that Awards that operate in tandem with (whether granted
simultaneously with or at a different time from), or that are substituted for,
other Awards or restricted stock awards or stock options granted under any other
plan of the Company may be counted or not counted under procedures adopted by
the Committee in order to avoid double counting. Any Shares that are delivered
by the Company or its Subsidiaries, and any Awards that are granted by, or
become obligations of, the Company, through the assumption by the Company of, or
in substitution for, outstanding restricted stock awards or stock options
previously granted by an acquired company shall not, except in the case of
Awards granted to Participants who are directors or officers of the Company for
purposes of Section 16, be counted against the Shares available for granting
Awards under the Plan.
(iv) Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant
to an Award may consist, in whole or in part, of authorized but unissued Shares
or of Shares reacquired by the Company, including but not limited to Shares
purchased on the open market.
(b) Individual Stock-Based Awards. Subject to adjustment as provided in
Section 4(c), no Participant may receive stock-based Awards under the Plan
during any three consecutive calendar years that relate to more than 500,000
Shares. No provision of this Paragraph 4(b) shall be construed as limiting the
amount of any cash-based Award which may be granted to any Participant.
(c) Adjustments. Subject to compliance with any restrictions under Code
Section 409A, upon the occurrence of any dividend or other distribution (whether
in the form of cash, Shares, other securities or other property), change in the
capital or shares of capital stock, recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company or extraordinary transaction or event which affects the Shares, then the
Committee shall have the authority to make such adjustment, if any, in such
manner as it deems appropriate, in (i) the number and type of Shares (or other
securities or property) which thereafter may be made the subject of Awards,
(ii) outstanding Awards including without limitation the number and type of
Shares (or other securities or property) subject thereto, and (iii) the grant,
purchase or exercise price with respect to outstanding Awards and, if deemed
appropriate, make provision for cash payments to the holders of outstanding
Awards; provided, however, that the number of Shares subject to any Award
denominated in Shares shall always be a whole number.

 

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Section 5. Eligibility. Any employee of, or Consultant to, the Company or any
Subsidiary, including any officer of the Company (who may also be a director,
but excluding a member of the Committee, any person who serves only as a
director of the Company and any Consultant to the Company or a Subsidiary who is
also a director of the Company and who is not rendering services pursuant to a
written agreement with the entity in question), as may be selected from time to
time by the Committee or by the directors to whom authority may be delegated
pursuant to Section 3 hereof in its or their discretion, is eligible to be
designated a Participant.
Section 6. Awards
(a) Options. The Committee is authorized to grant Options to Participants to
purchase Shares of the Company. Notwithstanding the foregoing, the Committee may
only grant Incentive Stock Options to Participants who are employees of the
Company or an Affiliate that is a “parent corporation” or “subsidiary
corporation” within the meaning of Section 424 of the Code, and a Participant
shall not be eligible to receive Options or SARs if they are classified as an
employee solely by an entity that is a “parent corporation” (within the meaning
of Code Section 424) of the Company.
(i) Committee Determinations. Subject to the terms of the Plan, the Committee
shall determine:
(A) the purchase price per Share under each Option; provided, that no Option
will be granted with an exercise price that is below the Fair Market Value of
the Shares on the date such Option is granted;
(B) the term of each Option; and
(C) the time or times at which an Option may be exercised, in whole or in part,
the method or methods by which and the form or forms (including, without
limitation, cash, Shares or other property, or any combination thereof, having a
fair market value on the exercise date equal to the relevant exercise price) in
which payment of the exercise price with respect thereto may be made or deemed
to have been made. The terms of any Incentive Stock Option granted under the
Plan shall comply in all respects with the provisions of Section 422 of the
Code, or any successor provision thereto, and any regulations promulgated
thereunder.
Subject to the terms of the Plan, the Committee may impose such conditions or
restrictions on any Option as it deems appropriate, and as shall be set forth in
the Award Agreement therefor.

 

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(ii) Other Terms. Unless otherwise determined by the Committee:
(A) A Participant electing to exercise an Option shall give written notice to
the Company, as may be specified by the Committee, of exercise of the Option and
the number of Shares elected for exercise, such notice to be accompanied by such
instruments or documents as may be required by the Committee, and shall tender
the purchase price of the Shares elected for exercise.
(B) At the time of exercise of an Option payment in full in cash shall be made
for all Shares then being purchased. At the discretion of the Committee, as set
forth in a Participant’s Award Agreement, any Option granted under the Plan may
be deemed exercised by delivery to the Company of a properly executed exercise
notice, acceptable to the Committee, together with irrevocable instructions to
the Participant’s broker to deliver to the Company sufficient cash to pay the
exercise price and any applicable income and employment withholding taxes, in
accordance with a written agreement between the Company and the brokerage firm.
(C) The Company shall not be obligated to issue any Shares unless and until:
(1) if the class of Shares at the time is listed upon any stock exchange, the
Shares to be issued have been listed, or authorized to be added to the list upon
official notice of issuance, upon such exchange, and
(2) in the opinion of the Company’s counsel there has been compliance with
applicable law in connection with the issuance and delivery of Shares and such
issuance shall have been approved by the Company’s counsel.
Without limiting the generality of the foregoing, the Company may require from
the Participant such investment representation or such agreement, if any, as the
Company’s counsel may consider necessary in order to comply with the Securities
Act of 1933 as then in effect, and may require that the Participant agree that
any sale of the Shares will be made only in such manner as shall be in
accordance with law and that the Participant will notify the Company of any
intent to make any disposition of the Shares whether by sale, gift or otherwise.
The Participant shall take any action reasonably requested by the Company in
such connection. A Participant shall have the rights of a stockholder only as
and when Shares have been actually issued to the Participant pursuant to the
Plan.

 

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(D) If the employment of, or consulting arrangement with, a Participant
terminates for any reason (including termination by reason of the fact that an
entity is no longer a Subsidiary) other than the Participant’s death, the
Participant may thereafter exercise the Option as provided below, except that
the Committee may terminate the unexercised portion of the Option concurrently
with or at any time following termination of the employment or consulting
arrangement (including termination of employment upon a change of status from
employee to Consultant) if it shall determine that reason to terminate the
Participant for cause exists at the time of termination or existed at such time.
For purposes of the foregoing, “cause” shall be defined as set forth in any
employment or other agreement between the Participant and the Company, or if no
such agreement exists, cause shall exist if, in connection with the
Participant’s duties as an employee of the Company, or any of its subsidiaries
or affiliates, Participant committed a fraud or any felony, engaged in
deliberate, willful or gross misconduct, or committed any other act which causes
or may reasonably be expected to cause substantial injury to the Company, a
subsidiary, or any of its affiliates. If such termination is voluntary on the
part of the Participant, the option may be exercised only within ten days after
the date of termination. If such termination is involuntary on the part of the
Participant, if an employee retires, or if the employment or consulting
relationship is terminated by reason of Disability, the Option may be exercised
within three months after the date of termination or retirement; provided,
however, that at the Committee’s discretion, Options held by a retiree of the
Company may continue to vest in accordance with the Option vesting schedule in
effect prior to such Participant’s retirement (however any Incentive Stock
Option would automatically convert to a Non-Qualified Option after the
three-month period after retirement). For purposes of this Paragraph (D), a
Participant’s employment or consulting arrangement shall not be considered
terminated (i) in the case of approved sick leave or other bona fide leave of
absence (not to exceed one year), (ii) in the case of a transfer of employment
or the consulting arrangement among the Company and Subsidiaries, or (iii) by
virtue of a change of status from employee to Consultant or from Consultant to
employee, except as provided above.
(E) If a Participant dies at a time when entitled to exercise an Option, then at
any time or times within one year after death such Option may be exercised, as
to all or any of the Shares which the Participant was entitled to purchase
immediately prior to death. The Company may decline to deliver Shares to a
designated beneficiary until it receives indemnity against claims of third
parties satisfactory to the Company. Except as so exercised such Option shall
expire at the end of such period.
(F) An Option may be exercised only if and to the extent such Option was
exercisable at the date of termination of employment or the consulting
arrangement, and an Option may not be exercised at a time when the Option would
not have been exercisable had the employment or consulting arrangement
continued.

 

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(iii) Restoration Options. Subject to compliance with any restrictions under
Code Section 409A, the Committee may grant a Participant the right to receive a
restoration Option with respect to an Option or any other option granted by the
Company. Unless the Committee shall otherwise determine, a restoration Option
shall provide that the underlying option must be exercised while the Participant
is an employee of or Consultant to the Company or a Subsidiary and the number of
Shares which are subject to a restoration Option shall not exceed the number of
whole Shares exchanged in payment of the original option.
(b) Stock Appreciation Rights. The Committee is authorized to grant Stock
Appreciation Rights to Participants. Subject to the terms of the Plan, a Stock
Appreciation Right granted under the Plan shall confer on the holder thereof a
right to receive, upon exercise thereof, the excess of (i) the Fair Market Value
of one Share on the date of exercise or, if the Committee shall so determine in
the case of any such right other than one related to any Incentive Stock Option,
at any time during a specified period before or after the date of exercise, over
(ii) the grant price of the right as specified by the Committee; provided, that
no such Stock Appreciation Right will be granted with an exercise price that is
below the Fair Market Value of the Shares on the date such right is granted.
Subject to the terms of the Plan, the Committee shall determine the grant price,
term, methods of exercise and settlement and any other terms and conditions of
any Stock Appreciation Right and may impose such conditions or restrictions on
the exercise of any Stock Appreciation Right as it may deem appropriate, and as
shall be set forth in the Award Agreement therefor.
(c) Restricted Stock and Restricted Stock Units.
(i) Issuance. The Committee is authorized to grant to Participants Awards of
Restricted Stock, which shall consist of Shares, and Restricted Stock Units
which shall give the Participant the right to receive cash, other securities or
other property, in each case subject to the termination of the Restricted Period
determined by the Committee.
(ii) Restrictions. The Restricted Period may differ among Participants and may
have different expiration dates with respect to portions of Shares covered by
the same Award. Subject to the terms of the Plan, Awards of Restricted Stock and
Restricted Stock Units shall have such restrictions as the Committee may impose
(including, without limitation, limitations on the right to vote Restricted
Stock or the right to receive any dividend or other right or property), which
restrictions may lapse separately or in combination at such time or times, in
installments or otherwise. Unless the Committee shall otherwise determine, any
Shares or other securities distributed with respect to Restricted Stock or which
a Participant is otherwise entitled to receive by reason of such Shares shall be
subject to the restrictions contained in the applicable Award Agreement. Subject
to the aforementioned restrictions and the provisions of the Plan, Participants
shall have all of the rights of a stockholder with respect to Shares of
Restricted Stock. In addition, any Award Agreement with respect to an Award of
Restricted Stock Units shall set forth the specific time that payment of such
Award will be made upon the lapsing of any restrictions and the form of payment
thereunder, in compliance with any applicable restrictions under Code
Section 409A; including the requirement that any payment upon a “specified
employee’s” termination of employment be delayed for six months.

 

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(iii) Registration. Restricted Stock granted under the Plan may be evidenced in
such manner as the Committee may deem appropriate, including, without
limitation, book-entry registration or issuance of stock certificates.
(iv) Forfeiture. Except as otherwise determined by the Committee:
(A) If the employment of, or consulting arrangement with, a Participant
terminates for any reason (including termination by reason of the fact that any
entity is no longer a Subsidiary), other than the Participant’s death or
Disability or, in the case of an employee, retirement, all Shares of Restricted
Stock theretofore awarded to the Participant which are still subject to
restrictions shall upon such termination of employment or the consulting
relationship be forfeited and transferred back to the Company. Notwithstanding
the foregoing or Paragraph (C) below, if a Participant continues to hold an
Award of Restricted Stock following termination of the employment or consulting
arrangement (including retirement and termination of employment upon a change of
status from employee to Consultant), the Shares of Restricted Stock which remain
subject to restrictions shall nonetheless be forfeited and transferred back to
the Company if the Committee upon termination or at any time thereafter
determines that reason to terminate the Participant for cause exists or existed
at the time of termination of the employment or the consulting relationship. For
purposes of the foregoing, “cause” shall be defined as set forth in any
employment or other agreement between the Participant and the Company, or if no
such agreement exists, cause shall exist if, in connection with the
Participant’s duties as an employee or consultant of the Company, or any of its
subsidiaries or affiliates, Participant committed a fraud or any felony, engaged
in deliberate, willful or gross misconduct, or committed any other act which
causes or may reasonably be expected to cause substantial injury to the Company,
a subsidiary, or any of its affiliates. For purposes of this Paragraph (A), a
Participant’s employment or consulting arrangement shall not be considered
terminated (i) in the case of approved sick leave or other bona fide leave of
absence (not to exceed one year), (ii) in the case of a transfer of employment
or the consulting arrangement among the Company and Subsidiaries, or (iii) by
virtue of a change of status from employee to Consultant or from Consultant to
employee, except as provided above.
(B) If a Participant ceases to be employed or retained by the Company or a
Subsidiary by reason of death or Disability or if following retirement a
Participant continues to have rights under an Award of Restricted Stock and
thereafter dies, the restrictions contained in the Award shall lapse with
respect to such Restricted Stock.

 

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(C) If an employee ceases to be employed by the Company or a Subsidiary by
reason of retirement, the restrictions contained in the Award of Restricted
Stock shall continue to lapse in the same manner as though employment had not
terminated.
(D) At the expiration of the Restricted Period as to Shares covered by an Award
of Restricted Stock, the Company shall deliver the Shares as to which the
Restricted Period has expired, as follows:
(1) if an assignment to a trust has been made in accordance with
Section 6(g)(iv)(B)(l ), to such trust; or
(2) if the Restricted Period has expired by reason of death and a beneficiary
has been designated in a form approved by the Company, to the beneficiary so
designated; or
(3) in all other cases, to the Participant or the legal representative of the
Participant’s estate.
(d) Performance Awards. The Committee is authorized to grant Performance Awards
to Participants. Subject to the terms of the Plan, a Performance Award granted
under the Plan (i) may be denominated or payable in cash, Shares (including,
without limitation, Restricted Stock), other securities, or other property, and
(ii) shall confer on the holder thereof rights valued as determined by the
Committee and payable to, or exercisable by, the holder of the Performance
Award, in whole or in part, upon the achievement of such performance goals
during such performance periods as the Committee shall establish. Subject to the
terms of the Plan, and as shall be set forth in the Award Agreement therefor,
the performance goals to be achieved during any performance period, the length
of any performance period, the amount of any Performance Award granted, the
amount of any payment or transfer to be made pursuant to any Performance Award
and other terms and conditions shall be determined by the Committee. In
addition, any Award Agreement with respect to a Performance Award shall set
forth the specific time that payment of such Award will be made upon the
satisfaction of any performance goals and/or period and the form of payment
thereunder, in compliance with any applicable restrictions under Code
Section 409A; including the requirement that any payment upon a “specified
employee’s” termination of employment be delayed for six months.
(e) Dividend Equivalents. The Committee is authorized to grant to Participants
Awards under which the holders thereof shall be entitled to receive payments
equivalent to dividends or interest with respect to a number of Shares
determined by the Committee, and the Committee may provide that such amounts (if
any) shall be deemed to have been reinvested in additional Shares or otherwise
reinvested. Subject to the terms of the Plan, and as shall be set forth in the
Award Agreement therefor, such Awards may have such terms and conditions as the
Committee shall determine. In addition, any Award Agreement with respect to a
Dividend Equivalent Award shall set forth the specific time that payment of such
Award will be made and the form of payment thereunder, in compliance with any
applicable restrictions under Code Section 409A; including the requirement that
any payment upon a “specified employee’s” termination of employment be delayed
for six months.

 

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(f) Other Stock-Based Awards. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to or otherwise based on or related to Shares
(including, without limitation, securities convertible into Shares), as are
deemed by the Committee to be consistent with the purposes of the Plan,
provided, however, that such grants to persons who are subject to Section 16
must comply with the provisions of Rule 16b-3. Subject to the terms of the Plan,
and as shall be set forth in the Award Agreement therefor, the Committee shall
determine the terms and conditions of such Awards. Shares or other securities
delivered pursuant to a purchase right granted under this Section 6(f) shall be
purchased for such consideration, which may be paid by such method or methods
and in such form or forms, including, without limitation, cash, Shares, other
securities or other property or any combination thereof, as the Committee shall
determine. In addition, any Award Agreement with respect to any other
stock-based Award shall set forth the specific time that payment of such Award
will be made and the form of payment thereunder, in compliance with any
applicable restrictions under Code Section 409A; including the requirement that
any payment upon a “specified employee’s” termination of employment be delayed
for six months.
(g) General.
(i) No Cash Consideration for Awards. Except for Options and Stock Appreciation
Rights Awards, Awards may be granted hereunder for no cash consideration or for
such minimal cash consideration as may be required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may, in the discretion
of the Committee, and as shall be set forth in the Award Agreement therefor, be
granted either alone or in addition to, in tandem with or in substitution
(subject to compliance with any restrictions under Code Section 409A) for any
other Award or any award granted under any other plan of the Company or any
Subsidiary. Awards granted in addition to or in tandem with other Awards or in
addition to or in tandem with awards granted under another plan of the Company
or any Subsidiary, may be granted either at the same time as or at a different
time from the grant of such other Awards or awards.
(iii) Forms of Payment Under Awards. Subject to the terms of the Plan and as
shall be set forth in any applicable Award Agreement, payments or transfers to
be made by the Company or a Subsidiary upon the grant, exercise, or payment of
an Award may be made in such form or forms as the Committee shall determine,
including, without limitation, cash, Shares, other securities or other property,
or any combination thereof, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case in accordance with rules and
procedures established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents in respect of installment or deferred payments. In
addition, any Award Agreement hereunder, other than for an Award of Options,
Stock Appreciation Rights or Restricted Stock, shall set forth the specific time
that payment of such Award will be made and the form of payment thereunder, in
compliance with any applicable restrictions under Code Section 409A; including
the requirement that any payment upon a “specified employee’s” termination of
employment be delayed for six months.

 

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(iv) Limits on Transfer of Awards.
(A) Except as the Committee may otherwise determine, no Award or right under any
Award may be sold, encumbered, pledged, alienated, attached, assigned or
transferred in any manner and any attempt to do any of the foregoing shall be
void and unenforceable against the Company.
(B) Notwithstanding the provisions of Paragraph (A) above:
(1) Except as set forth in Paragraph (2) below, a Participant may assign or
transfer a Non-Qualified Stock Option or rights under an Award of Restricted
Stock:

  •   to a beneficiary designated by the Participant in writing on a form
approved by the Committee;

  •   by will or the applicable laws of descent and distribution to the personal
representative, executor or administrator of the Participant’s estate; or

  •   to a revocable grantor trust established by the Participant for the sole
benefit of the Participant during the Participant’s life, and under the terms of
which the Participant is and remains the sole trustee until death or Disability.
Such assignment shall be effected by a written instrument in form and content
satisfactory to the Committee, and the Participant shall deliver to the
Committee a true copy of the agreement or other document evidencing such trust.
If in the judgment of the Committee the trust to which a Participant may attempt
to assign rights under such an Award does not meet the criteria of a trust to
which an assignment is permitted by the terms hereof, or if after assignment,
because of amendment, by force of law or any other reason such trust no longer
meets such criteria, such attempted assignment shall be void and may be
disregarded by the Committee and the Company and all rights to any such Awards
shall revert to and remain solely in the Participant. Notwithstanding a
qualified assignment, the Participant, and not the trust to which rights under
such an Award may be assigned, for the purpose of determining compensation
arising by reason of the Award, shall continue to be considered an employee or
Consultant, as the case may be, of the Company or a Subsidiary, but such trust
and the Participant shall be bound by all of the terms and conditions of the
Award Agreement and this Plan. Shares issued in the name of and delivered to
such trust shall be conclusively considered issuance and delivery to the
Participant.

 

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(2) The Committee shall not permit directors or officers of the Company for
purposes of Section 16 to transfer or assign Awards except as permitted under
Rule 16b-3.
(C) The Committee, the Company and its officers, agents and employees may rely
upon any beneficiary designation, assignment or other instrument of transfer,
copies of trust agreements and any other documents delivered to them by or on
behalf of the Participant which they believe genuine and any action taken by
them in reliance thereon shall be conclusive and binding upon the Participant,
the personal representatives of the Participant’s estate and all persons
asserting a claim based on an Award. The delivery by a Participant of a
beneficiary designation, or an assignment of rights under an Award as permitted
hereunder, shall constitute the Participant’s irrevocable undertaking to hold
the Committee, the Company and its officers, agents and employees harmless
against claims, including any cost or expense incurred in defending against
claims, of any person (including the Participant) which may be asserted or
alleged to be based on an Award, subject to a beneficiary designation or an
assignment. In addition, the Company may decline to deliver Shares to a
beneficiary until it receives indemnity against claims of third parties
satisfactory to the Company.
(v) Share Certificates. All certificates for Shares or other securities
delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the Plan or the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which such
Shares or other securities are then listed and any applicable Federal or state
securities laws, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions.
(vi) Change in Control. Notwithstanding any of the provisions of this Plan or
instruments evidencing Awards granted hereunder, upon a Change in Control (as
defined above) the vesting of all rights of Participants under outstanding
Awards shall be accelerated and all restrictions thereon shall terminate in
order that Participants may fully realize the benefits thereunder, in the manner
otherwise provided for as to the time and form of payment in the Participant’s
Award Agreement. Such acceleration shall include, without limitation, the
immediate exercisability in full of all Options and Stock Appreciation Rights
and the termination of restrictions on Restricted Stock and Restricted Stock
Units. Further, in addition to the Committee’s authority set forth in Section
4(c) and subject to compliance with any restrictions under Code Section 409A,
the Committee (as constituted before such Change in Control) is authorized and
has sole discretion, as to any Award of Options, Stock Appreciation Rights or
Restricted Stock, to take any one or more of the following actions: (i) provide
for the purchase of any such Award for an amount of cash equal to the net value
of such Award to the holder thereof (taking into account any exercise price with
respect to such Award and the Fair Market Value of the Shares as of that time)
that could have been attained upon the exercise of such Award or realization of
the Participant’s rights had such Award been currently exercisable or payable;
(ii) make such adjustment to any such Award then outstanding as the Committee
deems appropriate to reflect such Change in Control; and (iii) cause any such
Award then outstanding to be assumed, or new rights substituted therefor, by the
acquiring or surviving corporation after such Change in Control.

 

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(vii) Cash Settlement. Notwithstanding any provision of this Plan or of any
Award Agreement to the contrary, any Award of Options, Stock Appreciation Rights
or Restricted Stock outstanding hereunder may at any time be canceled in the
Committee’s sole discretion upon payment of the net value of such Award to the
holder thereof in cash (taking into account any exercise price with respect to
such Award and the Fair Market Value of the Shares as of that time).
Section 7. Amendment and Termination. Except to the extent prohibited by
applicable law and unless otherwise expressly provided in an Award Agreement or
in the Plan:
(a) Amendments to the Plan. The Board may amend the Plan and the Board or the
Committee may amend any outstanding Award; provided, however, that without the
consent of affected Participants, no amendment of the Plan or of any Award may
impair the rights of Participants under outstanding Awards.
(b) Waivers. The Committee may waive any conditions or rights under any Award
theretofore granted, prospectively or retroactively, without the consent of any
Participant.
(c) Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. Subject to compliance with any restrictions under Code Section 409A, the
Committee shall be authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4(c) hereof) affecting the Company, any Subsidiary, or the financial
statements of the Company or any Subsidiary, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits to be made available under the Plan.
(d) Correction of Defects, Omissions, and Inconsistencies. Subject to compliance
with any restrictions under Code Section 409A, the Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem desirable to effectuate the
Plan.

 

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Section 8. General Provisions
(a) No Rights to Awards. No Participant or other person shall have any claim to
be granted any Award under the Plan, and there is no obligation for uniformity
of treatment of Participants or holders or beneficiaries of Awards under the
Plan. The terms and conditions of Awards of the same type and the determination
of the Committee to grant a waiver or modification of any Award and the terms
and conditions thereof need not be the same with respect to each Participant.
(b) Withholding. The Company or any Subsidiary shall be authorized to withhold
from any Award granted or any payment due or transfer made under any Award or
under the Plan the amount (in cash, Shares, other securities, other Awards or
other property) of withholding taxes due in respect of an Award, its exercise or
any payment or transfer under such Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company or Subsidiary to
satisfy all obligations for the payment of such taxes. In no event shall the
Company or any Subsidiary withhold from an Award under the Plan more Shares than
are required to meet the established minimum tax withholding requirements of
federal, state and local obligations.
(c) Income Taxes and Deferred Compensation. Participants are solely responsible
and liable for the satisfaction of any federal, state, province, or local taxes
that may arise in connection with the grant of Awards (including, for
Participants subject to taxation in the United States, any taxes arising under
Section 409A of the Code, except to the extent otherwise specifically provided
in a written agreement with the Company). Neither the Company nor any of its
employees, officers, directors, or service providers shall have any obligation
whatsoever to pay such taxes, to prevent any Participant from incurring such
taxes, or to mitigate or protect any Participant from any such tax liabilities.
Notwithstanding anything in this Plan to the contrary, if any amounts that
become due under this Plan as a result of a Participant’s cessation of
employment with the Company constitute “nonqualified deferred compensation”
within the meaning of Section 409A, payment of such amounts shall not commence
until the Participant incurs a “separation from service” within the meaning of
Treasury Regulation § 1.409A-1(h) (“Separation from Service”). If, at the time
of a Participant’s Separation from Service, the Participant is a “specified
employee” (under Internal Revenue Code Section 409A), any amount that
constitutes “nonqualified deferred compensation” within the meaning of Code
Section 409A that becomes payable to a Participant on account of the
Participant’s Separation from Service (including any amounts payable pursuant to
the preceding sentence) will not be paid until after the end of the sixth
calendar month beginning after the Participant’s Separation from Service (the
“409A Suspension Period”). Within 14 calendar days after the end of the 409A
Suspension Period, the Participant shall be paid a lump sum payment in cash
equal to any payments delayed because of the preceding sentence, without
interest. Thereafter, the Participant shall receive any remaining benefits as if
there had not been an earlier delay.
(d) No Limit on Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or any Subsidiary from adopting or continuing in
effect other or additional compensation arrangements, including the grant of
options and other stock-based awards, and such arrangements may be either
generally applicable or applicable only in specific cases.

 

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(e) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Subsidiary. Further, the Company or a Subsidiary may at any time dismiss a
Participant from employment, free from any liability, or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement
or other written agreement with the Participant.
(f) Governing Law. The validity, construction and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable Federal law.
(g) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any
person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, person or Award, and the remainder of the Plan and any such Award
shall remain in full force and effect.
(h) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary and a Participant or any
other person. To the extent that any person acquires a right to receive payments
from the Company or any Subsidiary pursuant to an Award, such right shall be no
greater than the right of any unsecured general creditor of the Company or any
Subsidiary.
(i) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and subject to compliance with any
restrictions under Code Section 409A, the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares, or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
(j) Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof
Section 9. Effective Date of the Plan. The Plan was originally effective as of
April 30, 1999, the date of its approval by the Company’s stockholders. The Plan
is hereby amended and restated effective October 23, 2008, by Board action, in
compliance with the provisions of Section 7(a) hereof.

 

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