Exhibit 10.43

 

UNITED STATIONERS INC.

 

2004 LONG-TERM INCENTIVE PLAN

 

(As amended and restated January 1, 2009)

 

SECTION 1

 

GENERAL

 

1.1. Purpose. The United Stationers Inc. 2004 Long-Term Incentive Plan (the
“Plan”) has been established by United Stationers Inc. (the “Company”) to
promote the long-term growth and financial success of the Company and the
interests of its stockholders by: (i) attracting and retaining individuals with
excellent managerial talent upon whom, in large measure, the sustained progress,
growth and profitability of the Company depend; (ii) motivating those selected
as participants, by means of appropriate performance-based incentives, to
achieve long-term performance goals; (iii) further aligning the interests of
selected employee and Director participants with those of the Company’s other
stockholders and providing them with an effective means to acquire and maintain
equity interests in the Company; and (iv) providing incentive compensation
opportunities that are competitive with those of other similar companies.

 

1.2. Participation. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Individuals, those persons who will be granted one or more Awards, and
thereby become “Participants” in the Plan.

 

1.3. Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Awards made under the Plan, shall be
subject to the provisions of Section 5 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
Section 9.

 

SECTION 2

 

OPTIONS AND SARS

 

2.1. Options. The grant of an “Option” entitles the Participant to purchase
shares of Stock at an Exercise Price established by the Committee. Any Option
granted under this Section 2 may be either a non-qualified option (an “NQO”) or
an incentive stock option (an “ISO”), as determined in the discretion of the
Committee.

 

(a) An “NQO” is an Option that is not intended to be an “incentive stock option”
as that term is described in section 422(b) of the Code.

 

(b) An “ISO” is an Option that is intended to satisfy the requirements
applicable to an “incentive stock option” described in section 422(b) of the
Code and shall be subject to the following conditions, limitations and
restrictions:

 

(i)   ISOs may be granted only to employees of the Company or a Subsidiary that
is a subsidiary or parent corporation of the Company, within the meaning of
section 424 of the Code.

 

(ii)  ISOs shall not be granted under the Plan after the 10-year anniversary of
the date on which the Plan is adopted by the Board or, if earlier, the date on
which the Plan is approved by the Company’s stockholders.

 

(iii) To the extent required by applicable law, if the Committee permits an ISO
to be exercised by a Participant more than three months after the Participant
has ceased being an employee of the Company or a subsidiary as that term is
defined in Code section 424(f), or more than 12 months if the Participant is
permanently and totally disabled, within the meaning of section 22(e) of the
Code, the ISO shall thereafter be treated as an NQO.

 

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(iv) To the extent required by applicable law, the Committee shall not permit an
ISO to be transferred by an employee other than by will or the laws of descent
and distribution, and any ISO granted under this Plan shall be exercisable only
by the employee during the employee’s lifetime.

 

2.2. Stock Appreciation Rights. A stock appreciation right (an “SAR”) entitles
the Participant to receive, in cash or Stock (as determined in accordance with
Subsection 5.7), value equal to (or otherwise based on) the excess of: (a) the
Fair Market Value of a specified number of shares of Stock at the time of
exercise; over (b) an Exercise Price established by the Committee.

 

2.3. Exercise Price. The “Exercise Price” of each Option and SAR granted under
this Section 2 shall be established by the Committee or shall be determined by a
method established by the Committee at the time the Option or SAR is granted;
provided, that the Exercise Price shall not be less than 100% of the Fair Market
Value of a share of Stock on the date of grant (or, if greater, the par value of
a share of Stock).

 

2.4. Exercise. An Option and an SAR shall be exercisable in accordance with such
terms and conditions and during such periods as may be established by the
Committee. In no event, however, shall an Option or SAR expire later than ten
years after the date of its grant.

 

2.5. Payment of Option Exercise Price. The payment of the Exercise Price of an
Option granted under this Section 2 shall be subject to the following:

 

(a)   Subject to the following provisions of this Subsection 2.5, the full
Exercise Price for shares of Stock purchased upon the exercise of any Option
shall be paid at the time of such exercise (except that, in the case of an
exercise arrangement approved by the Committee and described in Paragraph
2.5(c), payment may be made as soon as practicable after the exercise).

 

(b)   The Exercise Price shall be payable in cash, or by tendering, by either
actual delivery of shares or by attestation, shares of Stock acceptable to the
Committee, and valued at the then current value as of the day of exercise, or in
any combination thereof, all as determined by the Committee. The Committee may
limit payments made with shares of Stock pursuant to this Paragraph 2.5(b) to
shares held by the Participant for not less than six months prior to the payment
date.

 

(c)   The Committee may permit a Participant to elect to pay the Exercise Price
upon the exercise of an Option by irrevocably authorizing a third party to sell
shares of Stock (or a sufficient portion of the shares) acquired upon exercise
of the Option and remit to the Company a sufficient portion of the sale proceeds
to pay the entire Exercise Price and any tax withholding resulting from such
exercise.

 

(d)   The Committee, in its sole discretion, may permit the Participant to elect
to pay the Exercise Price by any other method.

 

2.6. Repricing. Except for either adjustments pursuant to Paragraph
5.2(f) (relating to the adjustment of shares), or reductions in the Exercise
Price approved by the Company’s stockholders, (i) the Exercise Price for any
outstanding Option or SAR previously granted under the Plan may not be decreased
after the date of grant nor may an outstanding Option or SAR previously granted
under the Plan be surrendered to the Company as consideration for the grant of a
replacement Option or SAR with a lower exercise price, and (ii) any other action
with respect to Awards that is treated as a repricing under accounting
principles generally accepted in the United States is prohibited. 
Notwithstanding anything in this Subsection 2.6 to the contrary, in no event
shall the Exercise Price of any Option, as reduced or otherwise adjusted,  be
less than the Fair Market Value of a share of Stock on the date of grant of such
Option.

 

2.7. Grants of Options and SARs. An Option may, but need not be, in tandem with
an SAR, and an SAR may, but need not be, in tandem with an Option. Except as
otherwise provided by the Committee, if an Option is in tandem with an SAR, the
exercise price of both the Option and SAR shall be the same, and the exercise of
the Option or SAR with respect to a share of Stock shall cancel the
corresponding tandem SAR or Option right with respect to such share. If an SAR
is in tandem with an Option but is granted after the grant of the Option, or if
an Option is in tandem with an SAR but is granted after the grant of the SAR,
the later granted tandem Award shall have the same exercise price as the earlier
granted Award; provided, however, that the exercise price for the later granted
Award shall not be less than the Fair Market Value of the Stock at the time of
such grant.

 

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SECTION 3

 

FULL VALUE AWARDS

 

3.1. Full Value Awards. A “Full Value Award” is a grant of one or more shares of
Stock or a right to receive one or more shares of Stock in the future, with such
grant subject to one or more of the following, as determined by the Committee:

 

(a)   The grant shall be in return for the Participant’s previously performed
services, or in return for the Participant surrendering other compensation that
may be due. Awards under this Paragraph (a) may include, without limitation,
bonus stock. Generally, “bonus stock” is the grant of stock in return for
previously performed services or the surrender of other compensation that may be
due.

 

(b)   The grant shall be contingent on the achievement of performance or other
objectives during a specified period. Awards under this Paragraph (b) may
include, without limitation, performance shares and performance units.
Generally, “performance shares” are grants of actual shares of stock whose
payment is contingent on performance as measured against predetermined
objectives over a one-year or multi-year period of time. Generally, “performance
units” are grants of stock units whose payment is contingent on performance as
measured against predetermined objectives over a one-year or multi-year period
of time and whose value fluctuates with stock price changes and performance
against objectives.

 

(c) The grant shall be subject to a risk of forfeiture or other restrictions
that will lapse upon the achievement of one or more goals relating to completion
of service by the Participant or achievement of performance or other objectives.
Awards under this Paragraph (c) may include, without limitation, restricted
stock and restricted stock units. Generally, “restricted stock” and “restricted
stock units” are grants of actual shares of stock or stock units subject to
restrictions and risk of forfeiture until vested by continued employment and/or
attainment of specified performance objectives.

 

The grant of Full Value Awards may also be subject to such other conditions,
restrictions and contingencies as determined by the Committee.

 

3.2. Performance-Based Compensation. The Committee may designate a Full Value
Award being granted to a Participant as intended to be “performance-based
compensation” as that term is used in section 162(m) of the Code. Any such Award
designated as intended to be “performance-based compensation” shall be
conditioned on the achievement of one or more Performance Measures, to the
extent required by Code section 162(m). For Awards under this Section 3 intended
to be “performance-based compensation,” the grant of the Awards and the
establishment of the Performance Measures shall be made during the period
required under Code section 162(m).

 

3.3. Restrictions on Awards. If the right to become vested in a Full Value Award
granted under this Section 3 is conditioned on the completion of a specified
period of service with the Company or the Subsidiaries, without achievement of
Performance Measures or other performance objectives being required as a
condition of vesting, and without it being granted in lieu of other
compensation, then the required period of service for full vesting shall be not
less than three years (subject to acceleration of vesting, to the extent
provided by the Committee, in the event of the Participant’s death, disability,
retirement, Change of Control or termination of employment).

 

SECTION 4

 

CASH INCENTIVE AWARD

 

A “Cash Incentive Award” is the grant of a right to receive a payment of cash
(or in the discretion of the Committee, Stock having value equivalent to the
cash otherwise payable) that is contingent on achievement of performance
objectives over a specified period established by the Committee. The grant of
Cash Incentive Awards may also be subject to such other conditions, restrictions
and contingencies, as determined by the Committee. The Committee may designate a
Cash Incentive Award granted to any Participant as “performance-based
compensation” as that term is used in section 162(m) of the Code. To the extent
required by Code section 162(m), any such Award so designated shall be
conditioned on the achievement of one or more performance objectives. The
performance objectives shall be based on Performance Measures as selected by the
Committee. For Awards under this Section 4 intended to be “performance-based
compensation,” the grant of the Awards and the establishment of the performance
objectives shall be made during the period required under Code section 162(m).
Except as otherwise provided in the applicable plan, arrangement or agreement,
distribution of any Cash Incentive Awards by the Company or its Subsidiaries
(whether granted this Plan or otherwise), for a performance period ending in a
calendar year, shall be made to the Participant not later than March 15 of the
following calendar year; provided, however, that for purposes of determining
compliance with Code section 409A, a payment will be considered to satisfy the
requirement of this sentence if distribution is made no later than the end of
the calendar year following the end of the applicable performance period.

 

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SECTION 5

 

OPERATION AND ADMINISTRATION

 

5.1. Effective Date. Subject to the approval of the stockholders of the Company
at the Company’s 2004 annual meeting of its stockholders, the Plan shall be
effective as of May 1, 2004 (the “Effective Date”). No Awards may be granted
under the Plan prior to its approval by stockholders. In the event of Plan
termination, the Plan shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Awards may be granted under the Plan
after the ten-year anniversary of the Effective Date.

 

5.2. Shares Subject to Plan. The shares of Stock for which Awards may be granted
under the Plan shall be subject to the following:

 

(a) The shares of Stock with respect to which Awards may be made under the Plan
shall be shares currently authorized but unissued or currently held or to the
extent permitted by applicable law, subsequently acquired by the Company as
treasury shares, including shares purchased in the open market or in private
transactions.

 

(b) Subject to the following provisions of this Subsection 5.2, the maximum
number of shares of Stock that may be delivered to Participants and their
beneficiaries under the Plan shall be equal to the sum of Paragraphs (i) and
(ii) below:

 

(i) 4,625,000 shares of Stock; provided, however, that for purposes of applying
the limitations of this Paragraph (b), each share of Stock delivered pursuant to
Section 3 (relating to Full Value Awards), shall be counted as covering 1.85
shares of Stock, and shall reduce the number of shares of Stock available for
delivery under this Paragraph (b) by 1.85 shares.

 

(ii) Any shares of Stock that are represented by awards granted under the 2000
Management Equity Plan and the 1992 Management Equity Plan of the Company (the
“Prior Equity Plans”) that are forfeited, expire or are canceled after the
Effective Date without delivery of shares of Stock or which result in the
forfeiture of the shares of Stock back to the Company to the extent that such
shares would have been added back to the reserve under the terms of the
applicable Prior Equity Plan.

 

(c) To the extent provided by the Committee pursuant to Subsection 5.7, any
Award may be settled in cash rather than Stock.

 

(d) Any shares of Stock subject to an Award which for any reason expires or
terminates unexercised or is not earned in full may again be made subject to an
Award under the Plan. The following shares of Stock may not again be made
available for issuance as Awards under the Plan: (i) shares of Stock not issued
or delivered as a result of the net settlement of an outstanding SAR,
(ii) shares of Stock used to pay the exercise price or withholding taxes related
to an outstanding Award, or (iii) shares of Stock repurchased on the open market
with the proceeds of the option exercise price.

 

(e) Subject to Paragraph 5.2(f), the following additional maximums are imposed
under the Plan:

 

(i) The maximum number of shares that may be covered by Awards granted to any
one Participant pursuant to Section 2 (relating to Options and SARs) shall be
500,000 shares during any one-calendar-year period. If an Option is in tandem
with an SAR, such that the exercise of the Option or SAR with respect to a share
of Stock cancels the tandem SAR or Option right, respectively, with respect to
such share, the tandem Option and SAR rights with respect to each share of Stock
shall be counted as covering but one share of Stock for purposes of applying the
limitations of this Paragraph (i).

 

(ii) To the extent required by applicable law, the aggregate Fair Market Value
(as of the date of grant) of the shares of Stock with respect to which the ISOs
granted to any employee first become exercisable during any calendar year may
not exceed $100,000. For purposes of this $100,000 limit, the employee’s ISOs
under this Plan and all other plans maintained by the Company and its
Subsidiaries will be aggregated. To the extent any ISOs would exceed the
$100,000 limit, the ISO shall thereafter be treated as an NQO.

 

(iii) For Full Value Awards that are intended to be “performance-based
compensation” (as that term is used for purposes of Code section 162(m)), no
more than 300,000 shares of Stock may be delivered pursuant to such Awards
granted to any one Participant during any one-calendar-year period (regardless
of whether settlement of the Award is to occur prior to, at the time of, or
after the time of vesting); provided that Awards described in this Paragraph
(iii) shall be subject to the following:

 

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(A)    If the Awards are denominated in Stock but an equivalent amount of cash
is delivered in lieu of delivery of shares of Stock, the foregoing limit shall
be applied based on the methodology used by the Committee to convert the number
of shares of Stock into cash.

 

(B)    If delivery of Stock or cash is deferred until after shares of Stock have
been earned, any adjustment in the amount delivered to reflect actual or deemed
investment experience after the date the shares are earned shall be disregarded.

 

(iv) For Cash Incentive Awards that are intended to be “performance-based
compensation” (as that term is used for purposes of Code section 162(m)), no
more than $2,000,000 may be paid to any one Participant for performance periods
beginning in any one calendar year, regardless of whether the applicable
performance period during which the Award is earned ends in the same year in
which it begins or in a later calendar year; provided that Awards described in
this Paragraph (iv) shall be subject to the following:

 

(A)  If the Awards are denominated in cash but an equivalent amount of Stock is
delivered in lieu of delivery of cash, the foregoing limit shall be applied to
the cash based on the methodology used by the Committee to convert the cash into
shares of Stock.

 

(B)   If delivery of Stock or cash is deferred until after cash has been earned,
any adjustment in the amount delivered to reflect actual or deemed investment
experience after the date the cash is earned shall be disregarded.

 

(f)    In the event of a corporate transaction involving the Company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination or exchange of shares), the Committee shall proportionally
adjust outstanding Awards to preserve the benefits or potential benefits of the
Awards. Action by the Committee may include: (i) adjustment of the number and
kind of shares (or other securities) which may be delivered under the Plan;
(ii) adjustment of the number and kind of shares (or other securities) subject
to outstanding Awards; (iii) adjustment of the Exercise Price of outstanding
Options and SARs; and (iv) any other adjustments to outstanding Awards that the
Committee determines to be equitable, which may include, without limitation,
(I) replacement of Awards with other Awards which the Committee determines have
comparable value and which are based on stock of a company resulting from or
involved in the transaction, (II) cancellation of the Award in return for cash
payment of the current value of the Award, determined as though the Award is
fully vested at the time of payment, provided that in the case of an Option, the
amount of such payment may be the excess of value of the Stock subject to the
Option at the time of the transaction over the exercise price; and
(III) replacement with other types of Awards.  In no event shall this Paragraph
5.2(f) be construed to permit an adjustment (including a replacement) of an
Option, SAR or other Award if such modification either: (x) would result in
accelerated recognition of income or imposition of additional tax under Code
section 409A; or (y) would cause the Option, SAR or other Award subject to the
adjustment (or cause a replacement Option, SAR or other award) to be subject to
Code section 409A, provided that the restriction of this clause (y) shall not
apply to any Option, SAR or other Award that, at the time it is granted or
otherwise, is designated as being deferred compensation subject to Code section
409A.

 

(g)   The maximum number of shares of Stock that may be delivered to
Participants and their beneficiaries with respect to ISOs granted under the Plan
shall be 4,625,000 shares; provided, however, that to the extent that shares not
delivered must be counted against this limit as a condition of satisfying the
rules applicable to ISOs, such rules shall apply to the limit on ISOs granted
under the Plan.

 

5.3. General Restrictions. Delivery of shares of Stock or other amounts under
the Plan shall be subject to the following:

 

(a)   Notwithstanding any other provision of the Plan, the Company shall have no
obligation to deliver any shares of Stock or make any other distribution of
benefits under the Plan unless such delivery or distribution would comply with
all applicable laws (including, without limitation, the requirements of the
Securities Act of 1933), and the applicable requirements of any securities
exchange or similar entity.

 

(b)   To the extent that the Plan provides for issuance of stock certificates to
reflect the issuance of shares of Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.

 

5.4. Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations.

 

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Except as otherwise provided by the Committee, such withholding obligations may
be satisfied (i) through cash payment by the Participant, (ii) through the
surrender of shares of Stock which the Participant already owns (provided,
however, that to the extent shares described in this clause (ii) are used to
satisfy more than the minimum statutory withholding obligation, as described
below, then, except as otherwise provided by the Committee, payments made with
shares of Stock in accordance with this clause (ii) shall be limited to shares
held by the Participant for not less than six months prior to the payment date),
or (iii) through the surrender of shares of Stock to which the Participant is
otherwise entitled under the Plan; provided, however, that such shares under
this clause (iii) may be used to satisfy not more than the Company’s minimum
statutory withholding obligation (based on minimum statutory withholding rates
for Federal, state and local tax purposes, including payroll taxes, that are
applicable to such supplemental taxable income).

 

5.5. Grant and Use of Awards. In the discretion of the Committee, a Participant
may be granted any Award permitted under the provisions of the Plan, and more
than one Award may be granted to a Participant. Subject to Subsection 2.6
(relating to repricing), Awards may be granted as alternatives to or replacement
of awards granted or outstanding under the Plan or any other plan or arrangement
of the Company or a Subsidiary (including a plan or arrangement of a business or
entity, all or a portion of which is acquired by the Company or a Subsidiary).
Subject to the overall limitation on the number of shares of Stock that may be
delivered under the Plan, the Committee may use available shares of Stock as the
form of payment for compensation, grants or rights earned or due under any other
compensation plans or arrangements of the Company or a Subsidiary, including the
plans and arrangements of the Company or a Subsidiary assumed in business
combinations. Notwithstanding the provisions of Subsection 2.3, Options and SARs
granted under the Plan in replacement for awards under plans and arrangements of
the Company or a Subsidiary assumed in business combinations may be adjusted by
the Committee to preserve the benefit of the award.  The provisions of this
Subsection 5.5 shall be subject to the provisions of Subsection 5.18.

 

5.6. Dividends and Dividend Equivalents. An Award (including without limitation
an Option or SAR Award) may provide the Participant with the right to receive
dividend payments or dividend equivalent payments with respect to Stock subject
to the Award, provided that, except as otherwise provided by the Committee,
payment of any dividend or dividend equivalent shall be subject to the same
conditions, restrictions and contingencies (including vesting) as the underlying
shares of Stock, and further provided that such dividend and dividend equivalent
payments shall be subject to adjustment by the Committee pursuant to Paragraph
5.2(f) (relating to the adjustment of shares).  The provisions of this
Subsection 5.6 shall be subject to the provisions of Subsection 5.18.

 

5.7. Settlement of Awards. The settlement of Awards under the Plan shall be
subject to the following:

 

(a)   The obligation to make payments and distributions with respect to Awards
may be satisfied through cash payments, the delivery of shares of Stock, the
granting of replacement Awards, or combination thereof as the Committee shall
determine. Satisfaction of any such obligations under an Award, which is
sometimes referred to as “settlement” of the Award, may be subject to such
conditions, restrictions and contingencies as the Committee shall determine. The
Committee may permit or require the deferral of any Award payment, subject to
such rules and procedures as it may establish, which may include provisions for
the payment or crediting of interest or dividend equivalents, and may include
converting such credits into deferred Stock equivalents.

 

(b)   Each Subsidiary shall be liable for payment of cash due under the Plan
with respect to any Participant to the extent that such benefits are
attributable to the services rendered for that Subsidiary by the Participant.
Any disputes relating to liability of a Subsidiary for cash payments shall be
resolved by the Committee; provided, however, that no such dispute shall result
in a delay in payment to a Participant beyond the latest date by which such
payment is due under the terms of the applicable Award.

 

(c)   Except for Options and SARs designated at the time of grant or otherwise
as intended to be subject to Code section 409A, this Subsection 5.7 shall not be
construed to permit the deferred settlement of Options or SARs, if such
settlement would result in deferral of compensation under Treas. Reg.
§1.409A-1(b)(5)(i)(A)(3) (except as permitted in paragraphs (i) and (ii) of that
section).

 

(d)   The provisions of this Subsection 5.7 shall be subject to the provisions
of Subsection 5.18.

 

5.8. Transferability. Except as otherwise provided by the Committee (subject to
Paragraph 2.1(b)(iv)), Awards under the Plan are not transferable except as
designated by the Participant by will or by the laws of descent and
distribution.

 

5.9. Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the Committee at such times,
in such form, and subject to such restrictions and limitations, not inconsistent
with the terms of the Plan, as the Committee shall require.

 

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5.10. Agreement With Company. An Award under the Plan shall be subject to such
terms and conditions, not inconsistent with the Plan, as the Committee shall, in
its sole discretion, prescribe. The terms and conditions of any Award to any
Participant shall be reflected in such form of written document as is determined
by the Committee. A copy of such document shall be provided to the Participant,
and the Committee may, but need not require that the Participant sign a copy of
such document. Such document is referred to in the Plan as an “Award Agreement”
regardless of whether any Participant signature is required.  Except for Awards
designated at the time of grant or otherwise as intended to be deferred
compensation subject to Code section 409A, this Subsection 5.10 shall not be
construed to permit the grant of an Award if such action would cause the Award
being granted to be subject to Code section 409A.

 

5.11. Action by Company or Subsidiary. Any action required or permitted to be
taken by the Company or any Subsidiary shall be by resolution of its board of
directors, or by action of one or more members of its board of directors
(including a committee of the board) who are duly authorized to act for the
board, or (except to the extent prohibited by applicable law or applicable
rules of any stock exchange) by a duly authorized officer of the Company or
Subsidiary.

 

5.12. Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

 

5.13. Limitation of Implied Rights.

 

(a)   Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any assets, funds or
property of the Company or any Subsidiary whatsoever, including, without
limitation, any specific funds, assets, or other property which the Company or
any Subsidiary, in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual right to
the Stock or amounts, if any, payable under the Plan, unsecured by any assets of
the Company or any Subsidiary, and nothing contained in the Plan shall
constitute a guarantee that the assets of the Company or any Subsidiary shall be
sufficient to pay any benefits to any person.

 

(b)   The Plan does not constitute a contract of employment, and selection as a
Participant will not give any participating employee or other individual the
right to be retained in the employ of the Company or any Subsidiary or the right
to continue to provide services to the Company or any Subsidiary, nor any right
or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan. Except as otherwise expressly
provided in an Award Agreement or the Plan, no Award under the Plan shall confer
upon the holder thereof any rights as a stockholder of the Company prior to the
date on which the individual fulfills all conditions for receipt of such rights
or any rights to receive any additional Awards under the Plan or any other Plan
or arrangement of the Company or any Subsidiary.

 

5.14. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

 

5.15. Section 83(b) Election. For an Award of Stock that is subject to a
substantial risk of forfeiture, the Committee may: (a) permit the Participant to
make an election to accelerate the recognition of income from the Award to the
date of grant by properly filing an election under section 83(b) of the Code;
(ii) not permit the Participant from making such an election; or (iii) require
the Participant to make such an election as a condition of receiving such Award.
In the absence of a provision in the Award Agreement to the contrary, such an
Award of Stock shall be deemed to permit the Participant to make such election.

 

5.16. Registration. If the Committee determines that registration of Awards
under the Plan is necessary or appropriate, it may use a Form S-8 or, in the
event that such a form is unavailable because the Awards are granted to
employees of companies which are not at least 50% owned by the Company or for
any other reason, the Committee may direct the Company to use such other
registration procedures as it deems appropriate.

 

5.17. Governing Law. The Plan and the rights and obligations hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to principles of conflicts of law of Delaware or any other
jurisdiction.

 

5.18         Limitations under Code Section 409A.  The provisions of the Plan
shall be subject to the following:

 

(a)           No provision of the Plan shall be construed to permit the grant of
an Option or SAR if such action would cause the Option or SAR being granted or
the option or stock appreciation right being replaced to be subject to Code
section 409A,

 

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provided that this paragraph (a) shall not apply to any Option or SAR (or option
or stock appreciation right granted under another plan) being replaced that, at
the time it is granted or otherwise, is designated as being deferred
compensation subject to Code section 409A.

 

(b)           Except with respect to an Option or SAR that, at the time it is
granted or otherwise, is designated as being deferred compensation subject to
Code section 409A, no Option or SAR shall condition the receipt of dividends
with respect to an Option or SAR on the exercise of such Award, or otherwise
provide for payment of such dividends in a manner that would cause the payment
to be treated as an offset to or reduction of the exercise price of the Option
or SAR pursuant Treas. Reg. §1.409A-1(b)(5)(i)(E).

 

(c)           The Plan shall not be construed to permit a modification of an
Award, or to permit the payment of a dividend or dividend equivalent, if such
actions would result in accelerated recognition of taxable income or imposition
of additional tax under Code section 409A.

 

SECTION 6

 

CHANGE OF CONTROL

 

6.1. Effect of Change of Control. Notwithstanding any provision in the Plan
(including, without limitation, Paragraph 5.2(f)) and unless otherwise indicated
in the Award Agreement, upon the occurrence of a Change of Control:

 

(a)   If (i) a Participant’s Date of Termination does not occur between the date
of grant of an Option or SAR and the date of a Change of Control; and (ii) as of
the Change of Control, the Participant is not vested in all of such Option or
SAR, then, as of the date of the Change of Control, the Participant shall become
vested in the Affected Portion of such Option or SAR.

 

(b)   If (i) a Participant’s Date of Termination does not occur between the date
of grant of a Full Value Award and the date of a Change of Control (regardless
of whether settlement of the Award is to occur prior to, at the time of, or
after vesting); and (ii) as of the Change of Control, the Participant is not
vested in all of such Award, then, as of the date of the Change of Control, the
Participant shall become vested in the Affected Portion of such Award. If (i) a
Participant’s Date of Termination does not occur between the date of grant of a
Cash Incentive Award and the date of a Change of Control (regardless of whether
settlement of the Award is to occur at the time of or after vesting); and
(ii) as of the Change of Control, the Participant is not vested in all of such
Award, then, as of the date of the Change of Control, the Participant shall
become vested in the Affected Portion of such Award.

 

(c)  For purposes of this Subsection 6.1, the “Affected Portion” of any Option
or SAR or other Award (excluding a Cash Incentive Award) shall be 50% of the
shares covered by the Award as to which the Award is not vested immediately
prior to the Change of Control; provided that if the vesting of the Award is
contingent on the achievement of performance objectives (that is, objectives
other than the completion of service, and referred to as “Performance-Contingent
Vesting”), the Affected Portion of the Award shall be the number of shares that
would be delivered to the Participant if the target level of performance
objectives were achieved for the applicable performance period multiplied by a
fraction, the numerator of which is the number of days during the period
beginning on the first day of the performance period and ending on the date of
the Change of Control and the denominator of which is the number of days in the
total performance period. For purposes of this Subsection 6.1, the “Affected
Portion” of a Cash Incentive Award shall be 50% of the amount covered by the
Award which is not vested immediately prior to the Change of Control; provided
that if the vesting of the Cash Incentive Award is Performance-Contingent
Vesting, the “Affected Portion” of such Cash Incentive Award shall be the amount
that would be earned by the Participant if the target level of performance
objectives were achieved for the applicable performance period multiplied by a
fraction, the numerator of which is the number of days during the period
beginning on the first day of the performance period and ending on the date of
the Change of Control (but not less than 365 days or, if the performance period
is less than 365 days, the number of days in the total performance period) and
the denominator of which is the number of days in the total performance period.

 

(d) If different portions of any Award that are not vested on the date of a
Change of Control are scheduled to vest on different dates, then the provisions
of this Subsection 6.1 shall be applied to each such portion as though it were a
separate Award.

 

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(e)  Subject to Paragraph (f) below, the vesting of the portion of any Award
that is not the Affected Portion of the Award shall vest without regard to the
acceleration effected by reason of this Subsection 6.1.

 

(f)  Except as otherwise provided by the Committee, if the
Performance-Contingent Vesting of any Award is accelerated by reason of this
Subsection 6.1, then at the end of the applicable performance period for such
Award, the Participant shall become vested in the number of shares or cash
amount in which the Participant would have become vested in accordance with the
terms of the Award, if any (without regard to the acceleration under this
Subsection 6.1) reduced by the number of shares or cash amount vested under the
Award by reason of the acceleration under this Subsection 6.1.

 

(g) If (i) during the two-year period following the date of the Change of
Control, a Participant’s Date of Termination occurs by the Company or its
Subsidiaries without Cause or by the Participant for Good Reason, and (ii) at
the Date of Termination, any Award granted before the Change of Control is not
fully vested, then any and all such Awards granted before the Change of Control
held by the Participant shall become fully vested (and, in the case of Options
or SARs, exercisable) on the Date of Termination.

 

(h) If (i) a Participant’s Date of Termination occurs during an Anticipated
Change of Control by the Company or its Subsidiaries without Cause or by the
Participant for Good Reason, and (ii) within two years following the Date of
Termination, a Change of Control occurs, then the Participant’s Awards
(including Awards that otherwise may have expired on or after the Date of
Termination and prior to the Change of Control date unless inclusion of such
expired Awards would result in the imposition of additional tax under Code
section 409A) shall become vested and, in the case of Options or SARs,
exercisable by the Participant (or, in the event of the Participant’s death
after the Date of Termination, the Participant’s beneficiary) on the date of the
Change of Control, and, in the case of Options or SARs, shall remain exercisable
for the exercise period that would have applied if the Date of Termination (by
the Company or its Subsidiaries without Cause or by the Participant for Good
Reason) occurred on the Change of Control date, provided that such exercise
period shall expire in no event later than the date on which the Option or SAR
would have expired if the Participant had remained employed by the Company or
its Subsidiaries or, if later, 30 days after the Change of Control (provided
that in no event shall an ISO be exercisable more than ten years after the date
of grant).

 

6.2. Definition of Change of Control. For purposes of the Plan, the term “Change
of Control” shall mean:

 

(a) Any “Person” (having the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
“group” within the meaning of Section 13(d)(3)) has or acquires “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of 30% or
more of the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors (“Voting
Securities”); provided, however, that the acquisition or holding of Voting
Securities by (i) the Company or any of its subsidiaries, or (ii) an employee
benefit plan (or a trust forming a part thereof) maintained by the Company or
any of its subsidiaries shall not constitute a change of control; and provided
further that the acquisition or holding of Voting Securities by any Person in
which a Participant has a substantial equity interest shall not constitute a
Change of Control with respect to such Participant. Notwithstanding the
foregoing, a Change of Control shall not be deemed to occur solely because any
Person acquired Beneficial Ownership of more than the permitted amount of Voting
Securities as a result of the issuance of Voting Securities by the Company in
exchange for assets (including equity interests) or funds with a fair value
equal to the fair value of the Voting Securities so issued; provided that if a
Change of Control would occur (but for the operation of this sentence) as a
result of the issuance of Voting Securities by the Company, and after such
issuance of Voting Securities by the Company, such Person becomes the Beneficial
Owner of any additional Voting Securities which increases the percentage of the
Voting Securities Beneficially Owned by such Person to more than 50% of the
Voting Securities of the Company, then a Change of Control shall occur.

 

(b)           At any time during a period of two consecutive years, the
individuals who at the beginning of such period constituted the Board (the
“Incumbent Board”) cease for any reason to constitute more than 50% of the
Board; provided, however, that if the election, or nomination for election by
the Company’s stockholders, of any new director was approved by a vote of more
than 50% of the directors then comprising the Incumbent Board, such new director
shall, for purposes of this Paragraph (b), be considered as though such person
were a member of the Incumbent Board; provided, further, however, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of (i) either an actual
“Election Contest” (as described in Rule 14a-1 1 promulgated under the Exchange
Act) or other actual solicitation of proxies or contest by or on behalf of a
Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by reason of
an agreement intended to avoid or settle any actual or threatened Election
Contest or Proxy Contest.

 

(c) Consummation of a merger, consolidation or reorganization or approval by the
Company’s stockholders of a liquidation or dissolution of the Company or the
occurrence of a liquidation or dissolution of the Company (“Business
Combination”), unless, following such Business Combination:

 

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(i)  the Persons with Beneficial Ownership of the Company, immediately before
such Business Combination, have Beneficial Ownership of more than 50% of the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors of the corporation (or in the election of
a comparable governing body of any other type of entity) resulting from such
Business Combination (including, without limitation, an entity which as a result
of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (the
“Surviving Company”) in substantially the same proportions as their Beneficial
Ownership of the Voting Securities immediately before such Business Combination;

 

(ii)  the individuals who were members of the Incumbent Board immediately prior
to the execution of the initial agreement providing for such Business
Combination constitute more than 50% of the members of the board of directors
(or comparable governing body of a noncorporate entity) of the Surviving
Company; and

 

(iii) no Person (other than the Company, any of its subsidiaries or any employee
benefit plan (or any trust forming a part thereof) maintained by the Company,
the Surviving Company or any Person who immediately prior to such Business
Combination had Beneficial Ownership of 30% or more of the then Voting
Securities) has Beneficial Ownership of 30% or more of the then combined voting
power of the Surviving Company’s then outstanding voting securities; provided,
that notwithstanding this clause (iii), a Change of Control shall not be deemed
to occur solely because any Person acquired Beneficial Ownership of more than
30% of Voting Securities as a result of the issuance of Voting Securities by the
Company in exchange for assets (including equity interests) or funds with a fair
value equal to the fair value of the Voting Securities so issued; provided,
however that a Business Combination with a Person in which a Participant has a
substantial equity interest shall not constitute a Change of Control with
respect to such Participant.

 

(d) Approval by the Company’s stockholders of an agreement for the assignment,
sale, conveyance, transfer, lease or other disposition of all or substantially
all of the assets of the Company to any Person (other than a Person in which a
Participant has a substantial equity interest (in which case there shall not be
a Change of Control with respect to such Participant) and other than a
subsidiary of the Company or other entity, the Persons with Beneficial Ownership
of which are the same Persons with Beneficial Ownership of the Company and such
Beneficial Ownership is in substantially the same proportions), or the
occurrence of the same. Notwithstanding the foregoing, a Change of Control shall
not be deemed to occur solely because any Person acquired Beneficial Ownership
of more than the permitted amount of Voting Securities as a result of the
acquisition of Voting Securities by the Company which, by reducing the number of
Voting Securities outstanding, increases the proportional number of shares
Beneficially Owned by such Person; provided that if a Change of Control would
occur (but for the operation of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such acquisition of Voting
Securities by the Company, such Person becomes the Beneficial Owner of any
additional Voting Securities which increases the percentage of the Voting
Securities Beneficially Owned by such Person, then a Change of Control shall
occur.

 

Notwithstanding this Subsection 6.2 or Subsection 6.3 below, if any Award under
the Plan constitutes Deferred Compensation (as defined in Paragraph
9(m)(vi) below) and becomes payable upon a Change of Control, a change of
control event that otherwise is a Change of Control under the Plan shall be a
Change of Control for purposes of the Plan only if such event also satisfies the
requirements of Treas. Reg. §1.409A-3(i)(5).

 

6.3. Definition of Anticipated Change of Control. An “Anticipated Change of
Control” shall exist during any period in which the circumstances described in
Paragraphs (a) or (b), below, exist (provided, however, that an Anticipated
Change of Control shall cease to exist not later than the occurrence of a Change
of Control):

 

(a)   The Company enters into an agreement, the consummation of which would
result in the occurrence of a Change of Control, provided that an Anticipated
Change of Control described in this Paragraph (a) shall cease to exist upon the
expiration or other termination of all such agreements.

 

(b)   Any person (including, without limitation, the Company) publicly announces
an intention to take or to consider taking actions the consummation of which
would constitute a Change of Control; provided that an Anticipated Change of
Control described in this Paragraph (b) shall cease to exist upon the withdrawal
of such intention, or upon a reasonable determination by the Committee that
there is no reasonable chance that such actions would be consummated.

 

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SECTION 7

 

COMMITTEE

 

7.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the “Committee”) in
accordance with this Section 7. The Committee shall be selected by the Board,
and shall consist solely of two or more members of the Board who are outside
directors within the meaning of section 162(m)(4)(C)(i) of the Code and the
applicable regulations and nonemployee directors within the meaning of
Rule 16b-3 under the Exchange Act. The Human Resources Committee shall
administer the Plan unless otherwise determined by the Board. The Board may
delegate the authority to grant and administer non-employee director
compensation to the Governance Committee. If the Committee does not exist, or
for any other reason determined by the Board, the Board may take any action
under the Plan that would otherwise be the responsibility of the Committee.

 

7.2. Powers of Committee. The Committee’s administration of the Plan shall be
subject to the following:

 

(a) Subject to the provisions of the Plan, the Committee will have the authority
and discretion to select from among the Eligible Individuals those persons who
shall receive Awards, to determine the time or times of receipt, to determine
the types of Awards and the number of shares covered by the Awards, to establish
the terms, conditions, performance criteria, restrictions, and other provisions
of such Awards, and (subject to the restrictions imposed by Section 8) to amend,
cancel or suspend Awards.

 

(b) To the extent that the Committee determines that the restrictions imposed by
the Plan preclude the achievement of the material purposes of the Awards in
jurisdictions outside the United States, the Committee will have the authority
and discretion to modify those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.

 

(c) The Committee will have the authority and discretion to interpret the Plan,
to establish, amend, and rescind any rules and regulations relating to the Plan,
to determine the terms and provisions of any Award Agreement made pursuant to
the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.

 

(d) Any interpretation of the Plan by the Committee and any decision made by it
under the Plan is final and binding on all persons.

 

(e) In controlling and managing the operation and administration of the Plan,
the Committee shall take action in a manner that conforms to the articles and
by-laws of the Company, and applicable state corporate law.

 

7.3. Delegation by Committee. Except to the extent prohibited by applicable law
or the applicable rules of a stock exchange or automated quotation system on
which the Stock is listed, the Committee may allocate all or any portion of its
responsibilities and powers to any one or more of its members and may delegate
all or any part of its responsibilities and powers to any person or persons
selected by it. Any such allocation or delegation may be revoked by the
Committee at any time.

 

7.4. Information to be Furnished to Committee. The Company and Subsidiaries
shall furnish the Committee with such data and information as it determines may
be required for it to discharge its duties. The records of the Company and
Subsidiaries as to an employee’s or Participant’s employment (or other provision
of services), termination of employment (or cessation of the provision of
services), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms
of the Plan.

 

SECTION 8

 

AMENDMENT AND TERMINATION

 

The Board may, at any time, amend or terminate the Plan, and the Board or the
Committee may amend any Award Agreement, provided that no amendment or
termination may, in the absence of written consent to the change by the affected
Participant (or, if the Participant is not then living, the affected
beneficiary), adversely affect the rights of any Participant or beneficiary
under any Award granted under the Plan prior to the date such amendment is
adopted by the Board or the Committee (if applicable); and further provided that
adjustments pursuant to Paragraph 5.2(f) shall not be subject to the foregoing
limitations of this Section 8; and further provided that the provisions of
Subsection 2.7 (relating to repricing) cannot be amended unless the amendment is
approved by the Company’s stockholders.  No amendment or termination of the Plan
shall be adopted or effective if it would result in accelerated recognition of
income or imposition of additional tax under Code section 409A or, except as
otherwise provided in the amendment, would cause amounts that were not otherwise
subject to Code section 409A to become subject to Code section 409A.

 

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SECTION 9

 

DEFINED TERMS

 

In addition to the other definitions contained herein, the following definitions
shall apply:

 

(a) Affected Portion. The term “Affected Portion” shall have the meaning set
forth in Paragraph 6.1(c).

 

(b) Anticipated Change of Control. The term “Anticipated Change of Control”
shall have the meaning set forth in Subsection 6.3.

 

(c) Award. The term “Award” means any award or benefit granted under the Plan,
including, without limitation, the grant of Options, SARs, Full Value Awards and
Cash Incentive Awards.

 

(d) Award Agreement. The term “Award Agreement” shall have the meaning set forth
in Subsection 5.10.

 

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

 

(f)  Bonus Stock. The term “bonus stock” shall have the meaning set forth in
Paragraph 3.1(a).

 

(g)    Cash Incentive Award. The term “Cash Incentive Award” shall have the
meaning set forth in Section 4.

 

(h)   Cause. Except as otherwise provided by the Committee, and subject to the
last sentence of this definition, “Cause” shall mean: (i) the Participant’s
continued failure to perform substantially the duties of the Participant with
the Company and its Subsidiaries (other than any such failure resulting from
incapacity due to physical or mental illness or death), after a written demand
for improvement and substantial performance is delivered to the Participant (by
the Board for the chief executive officer of the Company, by the chief executive
officer of the Company for officers other than the chief executive officer, and
by an officer of the Company for Participants other than officers) which
specifically identifies the failure which, when judged by objective standards,
is clearly and significantly detrimental to the Company and its Subsidiaries;
(ii) the Participant’s engaging in an intentional, fraudulent act in the conduct
of the business of the Company or its Subsidiaries which is demonstrably
injurious to the Company or its Subsidiaries; or (iii) the Participant’s
conviction of, or plea of guilty or nolo contendere to, any criminal violation
(other than a traffic-related violation) involving dishonesty, fraud, breach of
trust or sexual offense or any criminal felony violation (other than a
traffic-related violation). If a non-employee director ceases to be a member of
the Board, he or she shall be treated as having been terminated by a Company
without Cause on the date of such cessation unless the director is removed from
the Board for cause (as that term is defined in Article Sixth, Section 5 of the
Company’s Restated Certificate of Incorporation as in effect on the Effective
Date).

 

(i) Change of Control. The term “Change of Control” shall have the meaning set
forth in Subsection 6.2.

 

(j) Code. The term “Code” means the Internal Revenue Code of 1986, as amended. A
reference to any provision of the Code shall include reference to any successor
provision of the Code.

 

(k) Committee. The term “Committee” shall have the meaning set forth in
Subsection 7.1.

 

(l) Company. The term “Company” shall have the meaning set forth in Subsection
1.1.

 

(m) Date of Termination. The term “Date of Termination” with respect to an Award
granted to any Participant shall mean the first day occurring on or after the
grant date of the Award on which the Participant is not employed by the Company
or any Subsidiary, regardless of the reason for the termination of employment;
provided that a termination of employment shall not be deemed to occur by reason
of a transfer of the Participant between the Company and a Subsidiary or between
two Subsidiaries; and further provided that the Participant’s employment shall
not be considered terminated while the Participant is on a leave of absence from
the Company or a Subsidiary approved by the Participant’s employer. If, as a
result of a sale or other transaction, the Participant’s employer ceases to be a
Subsidiary (and the Participant’s employer is or becomes an entity that is
separate from the Company), and the Participant is not, at the end of the 30-day
period following the transaction, employed by the Company or an entity that is
then a Subsidiary, then the occurrence of such transaction shall be treated as
the Date of Termination caused by the Participant being discharged by the
employer. For purposes of applying the foregoing definition of Date of
Termination, a Participant shall be deemed to be employed by the Company or
Subsidiary during any period in which he or she is a member of the Board of
Directors of the Company or a Subsidiary.  With respect to Awards that
constitute Deferred Compensation, references to the Participant’s termination of
employment (including references to the Participant’s employment termination,
and to the Participant terminating employment, a Participant’s separation from
service, and other similar reference) and references to a Participant’s
termination as a

 

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director (including separation from service and other similar references) shall
mean, respectively, the Participant ceasing to be employed by, or ceasing to
perform director services for, the Company and the Affiliates, subject to the
following:

 

(i)    The employment relationship or director relationship will be deemed to
have ended at the time the Participant and the applicable company reasonably
anticipate that a level of bona fide services the Participant would perform for
the Company and the Affiliates after such date would permanently decrease to no
more than 20% of the average level of bona fide services performed over the
immediately preceding 36 month period (or the full period of service to the
Company and the Affiliates if the Participant has performed services for the
Company and the Affiliates for less than 36 months).  In the absence of an
expectation that the Participant will perform at the above-described level, the
date of termination of employment or termination as a director will not be
delayed solely by reason of the Participant continuing to be on the Company’s
and the Affiliates’ payroll after such date.

 

(ii)   The employment or director relationship will be treated as continuing
intact while the Participant is on a bona fide leave of absence (determined in
accordance with Treas. Reg. §409A-1(h)).

 

(iii)  The determination of a Participant’s termination of employment or
termination as a director by reason of a sale of assets, sale of stock,
spin-off, or other similar transaction of the Company or an Affiliate will be
made in accordance with Treas. Reg. §1.409A-1(h).

 

(iv)  If a Participant performs services both as an employee of the Company or
an Affiliate, and a member of the board of directors of the Company or an
Affiliate, the determination of whether termination of employment or termination
of service as a director shall be made in accordance with Treas. Reg.
§1.409A-1(h)(5) (relating to dual status service providers).

 

(v)   For purposes of this Paragraph 9(m), the term “Affiliates” means all
persons with whom the Company is considered to be a single employer under Code
section 414(b) and all persons with whom the Company would be considered a
single employer under Code section 414(c) thereof.

 

(vi)  For purposes of this Paragraph 9(m), the term “Deferred Compensation”
means payments or benefits that would be considered to be provided under a
nonqualified deferred compensation plan as that term is defined in Treas. Reg.
§1.409A-1.

 

(n) Effective Date. The term “Effective Date” shall have the meaning set forth
in Subsection 5.1.

 

(o) Eligible Individual. Subject to the provisions of Paragraph 2.1(b) (relating
to ISOs), the term “Eligible Individual” means any employee of the Company or a
Subsidiary, and any non-employee member of the Board of Directors of the Company
or the Board of Directors of any Subsidiary.

 

(p) Exchange Act. The term “Exchange Act” means the Securities Exchange Act of
1934, as amended.

 

(q) Exercise Price. The term “Exercise Price” shall have the meaning set forth
in Subsection 2.3.

 

(r) Fair Market Value. Except as otherwise provided by the Committee, “Fair
Market Value” for a share of Stock for a day shall be the closing price per
share on such day on the principal exchange on which shares of Stock are listed
or admitted to trading or on the Nasdaq National Market or the Nasdaq SmallCap
Market (or the closing bid if no sales were reported); if shares of Stock are
listed or admitted to trading on an exchange but such day is not a trading day,
Fair Market Value shall be determined as of the last preceding trading day. If
the preceding sentence is not applicable, Fair Market Value shall be determined
in good faith by the Committee in accordance with Treas. Reg.
1.409A-1(b)(5)(iv).

 

(s) Full Value Award. The term “Full Value Award” shall have the meaning set
forth in Subsection 3.1.

 

(t) Good Reason. Except as otherwise provided by the Committee, “Good Reason”
shall exist upon the occurrence of any of the following events: (i) a diminution
in the Participant’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities (including the assignment
to the Participant of any duties inconsistent with the Participant’s position,
authority, duties or responsibilities), excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company or its Subsidiaries promptly after receipt of notice
thereof given by the Participant; (ii) the Company or its Subsidiaries shall
(A) reduce the base salary or bonus or incentive opportunity of the Participant
or (B) 

 

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substantially reduce in the aggregate the Participant’s benefits; or (iii) the
Company shall require the Participant to relocate the Participant’s principal
business office to any location more than 50 miles from its location prior to
the Change of Control or Anticipated Change of Control.

 

(u) ISO. The term “ISO” shall have the meaning set forth in Subsection 2.1.

 

(v) NQO. The term “NQO” shall have the meaning set forth in Subsection 2.1.

 

(w) Option. The term “Option” shall have the meaning set forth in Subsection
2.1.

 

(x) Participant. The term “Participant” shall have the meaning set forth in
Subsection 1.2.

 

(y) Performance-Based Compensation. The term “Performance-Based Compensation”
shall have the meaning ascribed to it under section 162(m) of the Code.

 

(z) Performance-Contingent Vesting. The term “Performance-Contingent Vesting”
shall have the meaning set forth in Paragraph 6.1(c).

 

(aa) Performance Measures. The “Performance Measures” may be based on any one or
more of the following, as selected by the Committee: (a) earnings per share;
(b) net earnings/income; (c) net operating earnings/income; (d) net operating
earnings/income after taxes; (e) net operating earnings/income per share;
(f) EPS from continuing operations; (g) EBIT; (h) stock price appreciation;
(i) total shareholder return; (j) relative total shareholder return (for
example, as compared to peer group performance); (k) sales/revenues, or any
component thereof; (l) sales/revenue growth; (m) unit volume; (n) gross or
operating margins/margin contribution; (o) economic value added or economic
profit; (p) return on assets (net assets or operating assets); (q) return on
equity; (r) return on invested capital or invested capital efficiency;
(s) working capital or working capital efficiency; (t) cash flow/free cash flow;
(u) net cash provided by operating activities; (v) cash return on assets;
(w) waste recovery, cost control and/or operating efficiency targets;
(x) expense targets; and (y) safety goals. Each goal may be expressed on an
absolute and/or relative basis, may be based on or otherwise employ comparisons
based on internal targets, the past performance of the Company and/or the past
or current performance of other companies, and in the case of earnings-based
measures, may use or employ comparisons relating to capital, shareholders equity
and/or shares outstanding, investments or assets or net assets.

 

(bb) Performance Shares. The term “performance shares” shall have the meaning
set forth in Paragraph 3.1(b).

 

(cc) Performance Units. The term “performance units” shall have the meaning set
forth in Paragraph 3.1(b).

 

(dd) Plan. The “Plan” means the United Stationers Inc. 2004 Long-Term Incentive
Plan.

 

(ee) Prior Equity Plans. The term “Prior Equity Plans” shall have the meaning
set forth in Paragraph 5.2(b)(ii).

 

(ff) Restricted Stock. The term “restricted stock” shall have the meaning set
forth in Paragraph 3.1(c).

 

(gg) Restricted Stock Units. The term “restricted stock units” shall have the
meaning set forth in Paragraph 3.1(c).

 

(hh) SAR. The term “SAR” shall have the meaning set forth in Subsection 2.2.

 

(ii) Stock. The term “Stock” means Common Stock of the Company.

 

(jj) Subsidiary. For purposes of the Plan and subject to Subsection
2.1(b) (relating to ISOs), the term “Subsidiary” means any corporation,
partnership, joint venture or other entity during any period in which at least a
fifty percent voting or profits interest is owned, directly or indirectly, by
the Company (or by any entity that is a successor to the Company), and any other
business venture designated by the Committee in which the Company (or any entity
that is a successor to the Company) has a significant interest.

 

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