Exhibit 10.6
SAFEGUARD SCIENTIFICS, INC.
2004 EQUITY COMPENSATION PLAN
As Amended and Restated Effective October 21, 2008
     1. Purpose
          The purpose of the Safeguard Scientifics, Inc. 2004 Equity
Compensation Plan is to provide (i) designated Company employees,
(ii) individuals to whom an offer of employment has been extended, (iii) certain
advisors who perform services for the Company, and (iv) nonemployee members of
the Company’s Board of Directors with the opportunity to receive grants of
incentive stock options, nonqualified stock options, stock units, stock
appreciation rights, performance units, stock awards, dividend equivalents and
other stock-based awards. The Company believes that the Plan will encourage the
participants to contribute materially to the Company’s growth, thereby
benefiting the Company’s stockholders, and will align the economic interests of
the participants with those of the stockholders. The Plan was originally
established by the Company’s Board of Directors effective April 6, 2004 and
approved by the stockholders on June 11, 2004. The Plan is hereby amended and
restated to reflect the applicable requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (“Code”) and to make certain other clarifying
changes and is effective October 21, 2008.
     2. Definitions
          Whenever used in this Plan, the following terms will have the
respective meanings set forth below:
          (a) “Board” means the Company’s Board of Directors as constituted from
time to time.
          (b) “Change of Control” means the first to occur of any of the
following events:
               (i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (1) the then outstanding shares of Common
Stock of the Company (“Common Stock”) or (2) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”) (a
“Control Purchase”); excluding, however, the following: (1) any acquisition
directly from the Company, other than an acquisition by virtue of the exercise
of a conversion privilege unless the security being so converted was itself
acquired directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, (4) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (1), (2) and (3) of subsection (iii) of this definition, or
(5) provided, however, that notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because any Person acquires beneficial
ownership of more than 20% of the Common Stock or the

 

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Outstanding Company Voting Securities as a result of the acquisition of Common
Stock or Outstanding Company Voting Securities by the Company which reduces the
amount of Common Stock or Outstanding Company Voting Securities; provided, that
if after such acquisition by the Company such Person becomes the beneficial
owner of additional Common Stock or Outstanding Company Voting Securities that
increases the percentage of Common Stock or Outstanding Company Voting
Securities beneficially owned by such Person, a Change in Control shall then
occur; or
               (ii) A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the Board
(such Board shall be hereinafter referred to as the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board; provided, however,
for purposes of this subsection (ii), that any individual who becomes a member
of the Board subsequent to the effective date of the Plan, whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or whose membership on the Board was
so approved by a board which itself consisted of a majority of directors elected
by the Incumbent Board) shall be considered as though such individual were a
member of the Incumbent Board; but, provided further, that any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated 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 shall not be so considered as a member of the Incumbent Board (a “Board
Change”); or
               (iii) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company (“Corporate Transaction”); excluding, however, such a Corporate
Transaction pursuant to which (1) all or substantially all of the individuals
and entities who are the beneficial owners, respectively, of the Common Stock
and Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Common Stock and Outstanding Company Voting
Securities, as the case may be, (2) no Person (other than the Company, any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Corporate Transaction) will beneficially own, directly or
indirectly, 20% or more of, respectively, the outstanding shares of common stock
of the corporation resulting from such Corporate Transaction or the combined
voting power of the outstanding voting securities of such corporation entitled
to vote generally in the election of directors except to the extent that such
ownership existed prior to the Corporate Transaction, and (3) individuals who
were members of the Incumbent Board will constitute at least a majority of the
members of the board of directors of the corporation resulting from such
Corporate Transaction; or

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               (iv) The approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
               (v) Notwithstanding the foregoing, the Committee may modify the
definition of Change of Control for a particular Grant as the Committee deems
appropriate to comply with Code Section 409A.
          (c) “Code” means the Internal Revenue Code of 1986, as amended and the
regulations promulgated thereunder.
          (d) “Committee” means (i) with respect to Grants to Employees, the
Compensation Committee of the Board or its delegate or successor, or such other
committee appointed by the Board to administer the Plan or its delegate or its
successor, (ii) with respect to Grants made to Nonemployee Directors, the Board
or its delegate, and (iii) with respect to Grants designated as “qualified
performance based compensation” under Code Section 162(m), a committee that
consists of two or more persons appointed by the Board, all of whom shall be
“outside directors” as defined under Code Section 162(m).
          (e) “Company” means Safeguard Scientifics, Inc., any successor
corporation, each corporation which is a member of a controlled group of
corporations (within the meaning of Code Section 414(b)) of which the Company is
a component member, any subsidiary at least 50% directly or indirectly owned by
Safeguard Scientifics, Inc. (or any successor thereto)and any affiliate entity
which, with the approval of the Committee, is deemed to constitute an entity
controlled by Safeguard Scientifics, Inc.
          (f) “Date of Grant” means the effective date of a Grant; provided,
however, that no retroactive Grants will be made.
          (g) “Dividend Equivalent” means an amount determined by multiplying
the number of shares of Stock or Stock Units subject to a Grant by the per-share
cash dividend, or the per-share fair market value (as determined by the
Committee) of any dividend in consideration other than cash, paid by the Company
on its Stock on a dividend payment date.
          (h) “Effective Date” means October 21, 2008.
          (i) “Employee” means, unless otherwise determined by the Committee, an
employee of the Company (including an officer or director who is also an
employee) other than an individual (a) employed in a casual or temporary
capacity (i.e., those hired for a specific job of limited duration), (b) whose
terms of employment are governed by a collective bargaining agreement that does
not provide for participation in this Plan, (c) characterized as a “leased
employee” within the meaning of Code Section 414(d) who is a non-resident alien,
or (d) classified by the Company as a “contractor” or “consultant,” no matter
how characterized by the Internal Revenue Service, other governmental agency or
a court; provided, however, that the Committee shall have the discretion to
determine on a case by case basis whether and to what extent an employee of an
affiliate shall be deemed an Employee. Any change of characterization of an
individual by any court or government agency shall have no effect upon the
classification

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of an individual as an Employee for purposes of this Plan, unless the Committee
determines otherwise.
          (j) “Employed by, or providing service to, the Company” shall mean
employment or service as an Employee of the Company, Key Advisor, or member of
the Board (so that, for purposes of exercising Options and SARs and satisfying
conditions with respect to Restricted Stock, Performance Units and Other
Stock-Based Grants, a Participant shall not be considered to have terminated
employment or service until the Participant ceases to be an Employee of the
Company, Key Advisor, and member of the Board), unless the Committee determines
otherwise. The Committee’s determination as to a Participant’s employment or
other provision of services, termination of employment or cessation of the
provision of services, leave of absence, or reemployment shall be conclusive on
all persons unless determined to be incorrect.
          (k) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
          (l) “Fair Market Value” means the average of the highest and lowest
sales prices of a share of Stock on the New York Stock Exchange on the day on
which Fair Market Value is being determined, as reported on the composite tape
for transactions on the New York Stock Exchange. In the event that there are no
Stock transactions on the New York Stock Exchange on such day, the Fair Market
Value will be determined as of the immediately preceding day on which there were
Stock transactions on that exchange. Notwithstanding the foregoing, in the case
of a cashless exercise pursuant to Section 8(g), the Fair Market Value will be
the actual sale price of the shares issued upon exercise of the Option.
          (m) “Grant” means an Option, Stock Unit, Performance Unit, Stock
Award, Dividend Equivalent, Stock Appreciation Right or Other Stock-Based Award
granted under the Plan.
          (n) “Grant Instrument” means the written agreement that sets forth the
terms and conditions of a Grant, including all amendments thereto.
          (o) “Incentive Stock Option” means a stock option that is intended to
meet the requirements of Code Section 422, as described in Section 8.
          (p) “Nonemployee Director” means a member of the Board who is not an
employee of the Company.
          (q) “Nonqualified Stock Option” means a stock option that is not
intended to meet the requirements of Code Section 422, as described in
Section 8.
          (r) “Option” means an Incentive Stock Option or Nonqualified Stock
Option to purchase Stock at the Option Price for a specified period of time.
          (s) “Option Price” means an amount per share of Stock purchasable
under an Option, as designated by the Committee.

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          (t) “Other Stock-Based Award” means any Grant based on, measured by or
payable in Stock (other than Grants described in Sections 7, 8, 9, 10, 11 and 12
of the Plan) as described in Section 13.
          (u) “Participant” means an Employee, Nonemployee Director or Key
Advisor designated by the Committee to participate in the Plan.
          (v) “Performance Units” means phantom units, as described in
Section 10.
          (w) “Plan” means this 2004 Equity Compensation Plan, as in effect from
time to time.
          (x) “Stock” means the common stock of Safeguard Scientifics, Inc. or
such other securities of Safeguard Scientifics, Inc. as may be substituted for
Stock pursuant to Section 5(c) or Section 18.
          (y) “Stock Award” means an award of Stock, as described in Section 11.
          (z) “Stock Unit” means an award of a phantom unit, representing one or
more shares of Stock, as described in Section 9.
     3. Administration
          (a) Committee. The Plan shall be administered and interpreted by the
Committee or its successor; ministerial functions may be performed by an
administrative committee comprised of Company employees appointed by the
Committee.
          (b) Committee Authority. The Committee shall have the sole authority
to (i) determine the individuals to whom Grants shall be made under the Plan,
(ii) determine the type, size and terms of the Grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, and
(iv) amend the terms of any previously issued Grant, subject to the provisions
of Section 21 below, and (v) deal with any other matters arising under the Plan.
          (c) Committee Determinations. The Committee shall have full power and
express discretionary authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations, agreements
and instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any awards granted hereunder.
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.

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     4. Grants
          Grants under the Plan may consist of grants of Stock Appreciation
Rights as described in Section 7, Incentive Stock Options and Nonqualified Stock
Options as described in Section 8, Stock Units as described in Section 9,
Performance Units as described in Section 10, Stock Awards as described in
Section 11, Dividend Equivalents as described in Section 12 and Other
Stock-Based Awards as described in Section 13. All Grants shall be made
conditional upon the Participant’s acknowledgement, in writing or by acceptance
of the Grant, that all decisions and determinations of the Committee shall be
final and binding on the Participant, his or her beneficiaries and any other
person having or claiming an interest under such Grant. Grants under a
particular Section of the Plan need not be uniform as among the Participants.
     5. Shares Subject to the Plan
          (a) Shares Authorized. Subject to adjustment as described below, the
total aggregate number of shares of Stock that may be issued or transferred
under the Plan is 6,000,000 shares. The shares may be authorized but unissued
shares of Stock or reacquired shares of Stock, including shares purchased by the
Company on the open market for purposes of the Plan. If and to the extent
Options granted under the Plan terminate, expire, or are canceled, forfeited,
exchanged or surrendered without having been exercised or if any Stock
Appreciation Rights, Stock Awards, Stock Units, Performance Units, Dividend
Equivalents or Other Stock-Based Awards are forfeited or terminated, the shares
subject to such Grants shall again be available for purposes of the Plan. Shares
of Stock surrendered in payment of the Option Price of an Option or any
withholding taxes, shall again be available for issuance or transfer under the
Plan. To the extent that any Grants are paid in cash, and not in shares of
Stock, any shares previously reserved for issuance or transfer under the Plan
with respect to such Grants shall again be available for issuance or transfer
under the Plan.
          (b) Individual Limits. Grants under the Plan may be expressed in cash,
in shares of Stock or in a combination of the two, as the Committee determines.
The maximum aggregate number of shares of Stock that shall be subject to Grants
made under the Plan to any individual during any calendar year shall be
1,500,000 shares, subject to adjustment as described below. A Participant may
not accrue Dividend Equivalents during any calendar year in excess of $500,000.
To the extent that Grants made under the Plan are expressed in dollar amounts,
the maximum amount payable to any individual during any calendar year shall be
$1,000,000.
          (c) Adjustments. If there is any change in the number or kind of
shares of Stock outstanding (i) by reason of a stock dividend, spinoff,
recapitalization, stock split or combination or exchange of shares, (ii) by
reason of a merger, reorganization or consolidation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Stock as a class
without the Company’s receipt of consideration, or if the value of outstanding
shares of Stock is substantially reduced as a result of a spinoff or the
Company’s payment of an extraordinary dividend or distribution, the maximum
number of shares of Stock available for issuance under the Plan, the maximum
number of shares of Stock with respect to which any individual may receive
Grants in any year, the kind and number of shares covered by outstanding Grants,
the kind and number of shares issued and to be issued under the Plan, and the
price per share or the applicable market value of

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such Grants shall be equitably adjusted by the Committee, as the Committee deems
appropriate, to reflect any increase or decrease in the number of, or change in
the kind or value of, issued shares of Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under such
Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated by rounding any portion of a share equal to .5 or
greater up, and any portion of a share equal to less than .5 down, in each case
to the nearest whole number. In addition, the Committee shall have discretion to
make the foregoing equitable adjustments in any circumstances in which an
adjustment is not mandated by this subsection (c) or applicable law, including
in the event of a Change of Control. Any adjustments to outstanding Grants shall
be consistent with Code Sections 409A or 422, to the extent applicable. Any
adjustments determined by the Committee shall be final, binding and conclusive.
     6. Eligibility for Participation
          (a) Eligible Persons. All Employees, including Employees who are
officers or members of the Board, and all Nonemployee Directors shall be
eligible to participate in the Plan. Advisors who perform services at the
Company’s request (“Key Advisors”) shall be eligible to participate in the Plan.
          (b) Selection of Participants. The Committee shall select the eligible
parties to receive Grants and shall determine the number of shares of Stock
subject to each Grant.
     7. Stock Appreciation Rights
          (a) General Requirements. The Committee may grant Stock Appreciation
Rights (“SARs”) to a Participant separately or in tandem with any Option (for
all or a portion of the applicable Option). Tandem SARs may be granted either at
the time the Option is granted or at any time thereafter while the Option
remains outstanding; provided, however, that, in the case of an Incentive Stock
Option, SARs may be granted only at the time of the Grant of the Incentive Stock
Option. The Committee shall establish the base amount of the SAR at the time the
SAR is granted. Unless the Committee determines otherwise, the base amount of
each SAR shall be equal to the per share Exercise Price of the related Option
or, if there is no related Option, the Fair Market Value of a share of Stock as
of the Date of Grant of the SAR. In no event shall the Base Amount of the SAR be
less than the Fair Market Value of a share of Stock as of the Date of Grant of
the SAR.
          (b) Tandem SARs. In the case of tandem SARs, the number of SARs
granted to a Participant that shall be exercisable during a specified period
shall not exceed the number of shares of Stock that the Participant may purchase
upon the exercise of the related Option during such period. Upon the exercise of
an Option, the SARs relating to the Stock purchased pursuant to such Option
shall terminate. Upon the exercise of SARs, the related Option shall terminate
to the extent of an equal number of shares of Stock.
          (c) Exercisability. A SAR shall be exercisable during the period
specified by the Committee in the Grant Instrument and shall be subject to such
vesting and other restrictions as may be specified in the Grant Instrument. The
Committee may accelerate the exercisability of any or all outstanding SARs at
any time for any reason. SARs may only be exercised while the

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Participant is employed by, or providing service to, the Company or during the
applicable period after termination of employment. A tandem SAR shall be
exercisable only during the period when the Option to which it is related is
also exercisable. No SAR may be exercised for cash by an officer or director of
the Company or any of its subsidiaries who is subject to Section 16 of the
Exchange Act, except in accordance with Rule 16b-3 under the Exchange Act.
          (d) Value of SARs. When a Participant exercises SARs, the Participant
shall receive in settlement of such SARs an amount equal to the value of the
stock appreciation for the number of SARs exercised, payable in cash, Stock or a
combination thereof, as determined by the Committee. The stock appreciation for
a SAR is the amount by which the Fair Market Value of the underlying Stock on
the date of exercise of the SAR exceeds the base amount of the SAR as described
in Subsection (a).
          (e) Form of Payment. The Committee shall determine whether the
appreciation in a SAR shall be paid in the form of cash, shares of Stock, or a
combination of the two, in such proportion as the Committee deems appropriate.
For purposes of calculating the number of shares of Stock to be received, shares
of Stock shall be valued at their Fair Market Value on the date of exercise of
the SAR. If shares of Stock are to be received upon exercise of a SAR, cash
shall be delivered in lieu of any fractional share.
     8. Options
          (a) General Requirements. The Committee may grant Options to an
Employee or Nonemployee Director or Key Advisor upon such terms and conditions
as the Committee deems appropriate under this Section 8. The Committee may grant
Dividend Equivalents with respect to Options.
          (b) Number of Shares. The Committee shall determine the number of
shares of Stock that will be subject to each Grant of Options.
          (c) Type of Option and Price.
               (i) The Committee may grant Incentive Stock Options or
Nonqualified Stock Options, or any combination of Incentive Stock Options and
Nonqualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or its parents or subsidiaries, as defined in Code
Section 424. Nonqualified Stock Options may be granted to Employees, Nonemployee
Directors and Key Advisors. If an Option is not specifically designated as an
Incentive Stock Option, then the Option shall be a Nonqualified Stock Option.
               (ii) The Option Price shall be determined by the Committee and
may be equal to or greater than the Fair Market Value on the Date of Grant;
provided, however, that an Incentive Stock Option may not be granted to an
Employee who, at the Date of Grant, owns stock possessing more than 10 percent
of the total combined voting power of all classes of stock of the Company or any
parent or subsidiary of the Company, as defined in Code Section 424, unless the
Option Price per share is not less than 110% of the Fair Market Value on the
Date of Grant.

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          (d) Option Term. The Committee shall determine the term of each
Option. The term of an Option shall not exceed ten years from the Date of Grant.
However, an Incentive Stock Option that is granted to an Employee who, at the
Date of Grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
of the Company, as defined in Code Section 424, may not have a term that exceeds
five years from the Date of Grant.
          (e) Exercisability of Options. Options shall become exercisable in
accordance with such terms and conditions, as may be determined by the Committee
and specified in the Grant Instrument. The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.
With the consent of the Committee, an Option may be exercised at a time prior to
the time at which the Option would otherwise be fully exercisable, in which
event the Participant shall receive shares of restricted stock (or be granted
interests in restricted shares in a book entry system) on such terms and
conditions as shall be determined by the Committee.
          (f) Termination of Employment or Service. Except as provided in the
Grant Instrument, or as otherwise may be determined by the Committee in its
discretion, an Option may only be exercised while the Participant is employed
by, or providing service to, the Company. The Committee shall specify in the
Grant Instrument under what circumstances and during what time periods a
Participant may exercise an Option.
          (g) Exercise of Options. A Participant may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company or its designated agent. The Participant shall pay the Option Price
and any withholding taxes for the Option:
               (i) in cash,
               (ii) with the approval of the Committee, by delivering shares of
Stock owned by the Participant (including Stock acquired in connection with the
exercise of an Option, subject to such restrictions as the Committee deems
appropriate) and having a Fair Market Value on the date of exercise equal to the
Option Price, or by attestation (on a form prescribed by the Committee) to
ownership of shares of Stock having a Fair Market Value on the date of exercise
equal to the Option Price,
               (iii) in cash, provided the payment is made in accordance with
procedures permitted by Regulation T of the Federal Reserve Board and such
procedures do not violate applicable law, as determined by the Committee in its
sole discretion, or
               (iv) by such other method as the Committee may approve.
          Shares of Stock used to exercise an Option shall have been held by the
Participant for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option. Payment for the shares
pursuant to the Option, and any required withholding taxes, must be received by
the time specified by the Committee depending on the type of payment being made.

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          (h) Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that if the aggregate Fair Market Value on the Date of Grant with
respect to which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year, under the Plan or any other stock option
plan of the Company or a parent or subsidiary, exceeds $100,000, then the
Option, as to the excess, shall be treated as a Nonqualified Stock Option. An
Incentive Stock Option shall not be granted to any person who is not an employee
of the Company or a parent or subsidiary, as defined in Code Section 424.
     9. Stock Units
          (a) General Requirements. The Committee may grant Stock Units to an
Employee, Nonemployee Director or Key Advisor, upon such terms and conditions as
the Committee deems appropriate under this Section 9. Each Stock Unit shall
represent the right of the Participant to receive a share of Stock or an amount
based on the value of a share of Stock. All Stock Units shall be credited to
accounts on the Company’s records for purposes of the Plan.
          (b) Terms of Stock Units. The Committee may grant Stock Units that are
payable if specified performance goals or other conditions are met, or under
other circumstances. Stock Units may be paid at the end of a specified period,
or payment may be deferred to a date authorized by the Committee. The Committee
shall determine the number of Stock Units to be granted, the requirements
applicable to such Stock Units, and to the extent required by Code Section 409A,
the specified payment events on which the Stock Units will be payable. Pursuant
to the requirements of Section 12, the Committee may grant Dividend Equivalents
with respect to Stock Units.
          (c) Payment With Respect to Stock Units. Payment with respect to Stock
Units shall be made in cash, in Stock, or in a combination of the two, as
determined by the Committee.
          (d) Requirement of Employment, Service or Other Action. If a
Participant ceases to be employed by, or providing service to the Company, or if
other conditions established by the Committee are not met, the Participant’s
unvested or contingent Stock Units shall be forfeited. The Committee may grant
Stock Units contingent upon the Participant’s taking certain specified actions
as the Committee sees fit, including, but not limited to, deferral of
compensation by the Participant. The Committee may provide for complete or
partial exceptions to this requirement as it deems appropriate.
     10. Performance Units
          (a) General Requirements. The Committee may grant Performance Units to
an Employee or Nonemployee Director, upon such terms and conditions as the
Committee deems appropriate under this Section 10. Each Performance Unit shall
represent the right of the Participant to receive a share of Stock or an amount
based on the value of a share of Stock, if specified performance goals are met.
All Performance Units shall be credited to accounts on the Company’s records for
purposes of the Plan.

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          (b) Terms of Performance Units. The Committee shall establish the
performance goals and other conditions for payment of Performance Units.
Performance Units may be paid at the end of a specified performance or other
period, or payment may be deferred to a date authorized by the Committee. The
Committee shall determine the number of Performance Units to be granted, the
requirement applicable to such Performance Units, and to the extent required by
Code Section 409A, the specified payment events on which the Performance Units
will be paid. Pursuant to Section 12, the Committee may grant Dividend
Equivalents with respect to Performance Units.
          (c) Payment with respect to Performance Units. At the end of each
Performance Period, the Committee shall determine to what extent the Performance
Goals and other conditions of the Performance Units have been met and the
amount, if any, to be paid with respect to the Performance Units. Payments with
respect to Performance Units shall be made in cash, in Stock, or in a
combination of the two, as determined by the Committee. Payment of Performance
Units shall be made as set forth in the Grant Instrument, and, if applicable,
shall be structured to comply with Code Section 409A.
          (d) Requirement of Employment or Service. If a Participant ceases to
be employed by, or providing service to the Company, or if other conditions
established by the Committee are not met, the Participant’s Performance Units
shall be forfeited. The Committee may provide for complete or partial exceptions
to this requirement as it deems appropriate.
     11. Stock Awards
          (a) General Requirements. The Committee may issue or transfer shares
of Stock to an Employee or Nonemployee Director under a Stock Award, upon such
terms and conditions as the Committee deems appropriate under this Section 11.
Shares of Stock issued or transferred pursuant to Stock Awards may be issued or
transferred for consideration or for no consideration (except as required by
applicable law), and subject to restrictions or no restrictions, as determined
by the Committee. The Committee may establish conditions under which
restrictions on Stock Awards shall lapse over a period of time or according to
such other criteria as the Committee deems appropriate, including restrictions
based upon the achievement of specific performance goals. The period of time
during which the Stock Award will remain subject to restrictions, if any, will
be designated in the Grant Instrument as the “Restriction Period.”
          (b) Number of Shares. The Committee shall determine the number of
shares of Stock to be issued or transferred pursuant to a Stock Award and any
restrictions applicable to such shares.
          (c) Requirement of Employment or Service. If the Participant ceases to
be employed by, or providing service to, the Company, or if other specified
conditions are not met, the Stock Award shall terminate as to all shares covered
by the Grant as to which the restrictions have not lapsed, and those shares of
stock must be immediately returned to the Company. The Committee may provide for
complete or partial exceptions to this requirement as it deems appropriate.

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          (d) Restrictions on Transfer. During the Restriction Period, a
Participant may not sell, assign, transfer, pledge or otherwise dispose of the
shares of a Stock Award except under death as described in Section 17. Each
certificate for a share of a Stock Award shall contain a legend giving
appropriate notice of the restrictions in the Grant. The Participant shall be
entitled to have the legend removed from the stock certificate covering any
shares as to which restrictions have lapsed. The Committee may determine that
the Company will not issue certificates for Stock Awards until all restrictions
on such shares have lapsed, or that the Company will retain possession of
certificates for shares of Stock Awards until all restrictions on such shares
have lapsed. Alternatively, the Participant’s rights in the Stock Award shall be
appropriately reflected in a book entry system maintained by the Company, and a
stock certificate shall be issuable at the end of the Restriction Period.
          (e) Right to Vote and to Receive Dividends. The Committee shall
determine to what extent, and under what conditions, the Participant shall have
the right to vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares, during the Restriction Period. The Committee
may determine that a Participant’s entitlement to dividends or other
distributions with respect to a Stock Award shall be subject to achievement of
performance goals or other conditions.
     12. Dividend Equivalents
          The Committee may grant Dividend Equivalents in connection with Grants
under the Plan, under such terms and conditions as the Committee deems
appropriate under this Section 12. All Dividend Equivalents may be paid to
Participants currently or may be deferred as determined by the Committee and set
forth in the Grant Instrument. All Dividend Equivalents that are not paid
currently shall be credited to accounts on the Company’s records for purposes of
the Plan. Dividend Equivalents may be accrued as a cash obligation, or may be
converted to Stock Units for the Participant. The Committee shall determine
whether any deferred Dividend Equivalents will accrue interest. The Committee
may provide that Dividend Equivalents shall be payable based on the achievement
of specific performance goals. Dividend Equivalents may be payable in cash or
shares of Stock or in a combination of two, as determined by the Committee.
     13. Other Stock-Based Grants
          The Committee may grant other awards that are based on, measured by or
payable in Stock to Employees or Nonemployee Directors, on such terms and
conditions as the Committee deems appropriate under this Section 13. Other
Stock-Based Awards may be granted subject to achievement of performance goals or
other conditions and may be payable in Stock or cash, or in a combination of the
two, as determined by the Committee. The Committee may grant Dividend
Equivalents with respect to Other Stock-Based Awards.
     14. Qualified Performance-Based Compensation
          (a) Designation as Qualified Performance-Based Compensation. The
Committee may determine that Stock Units, Performance Units, Stock Awards, Stock
Appreciation Rights, Dividend Equivalents or Other Stock-Based Awards granted to
an Employee shall be considered “qualified performance-based compensation” under
Code Section

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162(m). The provisions of this Section 14 shall apply to any such Grants that
are to be considered “qualified performance-based compensation” under Code
Section 162(m). To the extent that Grants under this Plan designated as
“qualified performance-based compensation under Code Section 162(m) are made, no
such Grant may be made as an alternative to another Grant that is not designated
as qualified performance based compensation but instead must be separate and
apart from all other Grants made.
          (b) Performance Goals. When Grants that are to be considered
“qualified performance-based compensation” are granted, the Committee shall
establish in writing
               (i) the objective performance goals that must be met,
               (ii) the period during which performance will be measured,
               (iii) the maximum amounts that may be paid if the performance
goals are met, and
               (iv) any other conditions that the Committee deems appropriate
and consistent with the Plan and the requirements of Code Section 162 for
“qualified performance-based compensation.” The performance goals shall satisfy
the requirements for “qualified performance-based compensation,” including the
requirement that the achievement of the goals be substantially uncertain at the
time they are established and that the performance goals be established in such
a way that a third party with knowledge of the relevant facts could determine
whether and to what extent the performance goals have been met. The Committee
shall not have discretion to increase the amount of compensation that is payable
upon achievement of the designated performance goals, but the Committee may
reduce the amount of compensation that is payable upon achievement of the
designated performance goals.
          (c) Criteria Used for Objective Performance Goals. In setting the
performance goals for Grants designated as “qualified performance-based
compensation” pursuant to this Section 14, the Committee shall use objectively
determinable performance goals based on one or more of the following objective
criteria, either in absolute terms or in comparison to publicly available
industry standards or indices: earnings, revenue, operating margins and
statistics, operating or net cash flows, financial return and leverage ratios,
total stockholder returns, market share, or strategic business criteria
consisting of one or more penetration goals, geographic business expansion
goals, cost targets, customer satisfaction goals, product development goals,
goals relating to acquisitions or divestitures, or any other objective measure
derived from any of the foregoing criteria. In addition, in setting the
performance goals for Grants not designated as “qualified performance-based
compensation” for purposes of Code Section 162(m), the Committee may use such
other goals as are developed in the Company’s operating plan for the Performance
Period. The performance goals may relate to the Participant’s business unit or
the performance of the Company as a whole, or any combination of the foregoing.
Performance goals need not be uniform as among Participants.
          (d) Timing of Establishment of Goals. The Committee shall establish
the performance goals in writing either before the beginning of the performance
period or during a period ending no later than the earlier of (i) 90 days after
the beginning of the performance

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period or (ii) the date on which 25% of the performance period has been
completed, or such other date as may be required or permitted under applicable
regulations under Code Section 162(m).
          (e) Announcement of Results. The Committee shall certify and announce
the results for the performance period to all Participants after the Company
announces the Company’s financial results for the performance period. If and to
the extent that the Committee does not certify that the performance goals have
been met, the applicable Grants for the performance period shall be forfeited or
shall not be paid as applicable.
          (f) Death, Disability or Other Circumstances. The Committee may
provide that Grants shall be payable or restrictions shall lapse, in whole or in
part, in the event of the Participant’s death or disability during the
Performance Period, a Change of Control or under other circumstances consistent
with the Treasury regulations and rulings under Code Section 162(m).
     15. Deferrals
          The Committee may permit or require a Participant to defer receipt of
the payment of cash or the delivery of shares that would otherwise be due to the
Participant in connection with any Grant. If any such deferral election is
permitted or required, the Committee shall establish rules and procedures for
such deferrals as it shall determine in its sole discretion, consistent with the
applicable requirements of Code Section 409A.
     16. Withholding of Taxes
          (a) Required Withholding. All Grants under the Plan shall be subject
to applicable federal (including FICA), state and local tax withholding
requirements. The Company may require that the Participant or other person
receiving or exercising Grants pay to the Company the amount of any federal,
state or local taxes that the Company is required to withhold with respect to
such Grants, or the Company may deduct from other wages paid by the Company the
amount of any withholding taxes due with respect to such Grants.
          (b) Share Withholding. At the Company’s election, or if the Committee
so permits, with respect to a Participant, the Company’s tax withholding
obligation with respect to Grants paid in Stock may be satisfied by having
shares withheld, at the time such Grants become taxable, up to an amount that
does not exceed the minimum applicable withholding tax rate for federal
(including FICA), state and local tax liabilities, provided, however, that at
the Company’s sole discretion, a Participant may be permitted to tender other
shares of Stock to the Company to supplement such withholding, but only if such
action is not in violation of applicable law and does not result in materially
disadvantageous tax, accounting or financial results to the Company. If the
Committee permits a Participant to elect share withholding, the Participant’s
election must be in a form and manner prescribed by the Committee and may be
subject to the prior approval of the Committee.

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     17. Transferability of Options
          The transferability of options granted under the Plan shall be
governed by the following provisions:
          (a) Incentive Stock Options. Unless otherwise specifically determined
by the Committee, during the lifetime of the Participant, Incentive Stock
Options shall be exercisable only by the Participant and shall not be assignable
or transferable other than by will or the laws of inheritance following the
Participant’s death.
          (b) Nonqualified Stock Options — Limited Transferability. Except for
the specially transferable Nonqualified Stock Options described in subparagraph
(c) below, or except as otherwise specifically determined by the Committee,
Nonqualified Stock Options shall be subject to the same limitation on transfer
as Incentive Stock Options, except that the Committee may structure one or more
Nonqualified Stock Options so that the option may be assigned in whole or in
part during the Participant’s lifetime to one or more family members of the
Participant or to a trust established exclusively for one or more such family
members, to the extent such assignment is in connection with the Participant’s
estate plan or pursuant to a domestic relations order. The assigned portion may
only be exercised by the person or persons who acquire a proprietary interest in
the option pursuant to the assignment. The terms applicable to the assigned
portion shall be the same as those in effect for the option immediately prior to
such assignment and shall be set forth in such documents issued to the assignee
as the Committee may deem appropriate.
          (c) Specially Transferable Nonqualified Stock Options. The Committee
may, in its sole discretion, structure one or more Nonqualified Stock Options,
either at the time of the initial grant or through subsequent amendment, so that
those options will be transferable to a third party for consideration payable in
cash, securities or other property, subject to the following limitations:
(i) each such option may be transferred only to the extent that option is at the
time exercisable for vested shares, (ii) such option may only be transferred to
a third party approved by the Committee, (iii) the period during which the
option may in fact be transferable may be limited to one or more periods
designated by the Committee, (iv) the Committee may structure the option so that
restrictions upon subsequent transferability may become applicable following the
initial transfer of that option to a third party, (v) the term of such option
may be limited to a fixed period, whether or not the Participant continues in
service, where such period varies in duration than the maximum term in effect
for the option in the absence of such transfer, and (vi) the share reserve under
the Plan shall be reduced immediately upon the transfer, whether or not the
transferred option is in fact exercised. The Committee shall have complete
discretion (subject to the express limitations of the Plan) to establish the
remaining terms and provisions of each such specially transferable option,
including appropriate anti-dilution provisions and
reorganization/recapitalization adjustments, so as to facilitate the
marketability of the option and conform such option to the typical terms and
provisions in effect for similar securities traded in the open market.
          (d) Notwithstanding the foregoing, the Participant may designate one
or more persons as the beneficiary or beneficiaries of his or her outstanding
options, and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or

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beneficiaries upon the Participant’s death while holding those options. Such
beneficiary or beneficiaries shall take the transferred options subject to all
the terms and conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited time period
during which the option may be exercised following the Participant’s death.
     18. Consequences of a Change of Control
          (a) Notice and Acceleration. Upon a Change of Control, unless the
Committee determines otherwise, (i) the Company shall provide each Participant
who holds outstanding Grants with written notice of the Change of Control,
(ii) all outstanding Options shall automatically accelerate and become fully
exercisable, (iii) the restrictions and conditions on all outstanding Stock
Awards shall immediately lapse, (iv) all Stock Units and Performance Units shall
become payable in cash or in stock in an amount not less than the Fair Market
Value of the Stock or the Stock to which the units relate, as determined by the
Committee, and (v) Dividend Equivalents and Other Stock-Based Awards shall
become payable in full in cash or in stock, in amounts determined by the
Committee.
          (b) Assumption of Grants. Upon a Change of Control where the Company
is not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
and SARs that are not exercised shall be assumed by, or replaced with comparable
options by, the surviving corporation (or a parent or subsidiary of the
surviving corporation), and other Grants that remain outstanding shall be
converted to similar grants of the surviving corporation (or a parent or
subsidiary of the surviving corporation).
          (c) Other Alternatives. Notwithstanding the foregoing, subject to
subsection (d) below, in the event of a Change of Control, the Committee may
take any of the following actions with respect to any or all outstanding Grants,
without the consent of any Participant: (i) the Committee may require that
Participants surrender their outstanding Options in exchange for a payment by
the Company, in cash or Stock as determined by the Committee, in an amount equal
to the amount by which the then Fair Market Value subject to the Participant’s
unexercised Options exceeds the Option Price, if any, or (ii) after giving
Participants an opportunity to exercise their outstanding Options, the Committee
may terminate any or all unexercised Options, at such time as the Committee
deems appropriate, and (iii) with respect to Participants holding Stock Units,
Performance Units, Dividend Equivalents or Other Stock-Based Awards, the
Committee may determine that such Participants shall receive a payment in
settlement of such Stock Units, Performance Units, Dividend Equivalents or other
Stock-Based Awards, in such amount and form as may be determined by the
Committee; provided, that the payment amount shall deliver an equivalent value
for such settled Award. Such surrender, termination or settlement shall take
place as of the date of the Change of Control or such other date as the
Committee may specify.
          (d) Committee. The Committee making the determinations under this
Section 18 following a Change of Control must be comprised of the same members
as those members of the Committee immediately before the Change of Control. If
the Committee members do not meet this requirement, the automatic provisions of
subsections (a) and (b) shall apply, and the Committee shall not have discretion
to vary them.

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     19. Other Transactions
          The Committee may provide in a Grant Instrument that a sale or other
transaction involving a Subsidiary or other business unit of the Company shall
be considered a Change of Control for purposes of a Grant or the Committee may
establish other positions that shall be applicable in the event of a specified
transaction.
     20. Requirements for Issuance or Transfer of Shares
          No Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance of
such Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Grant made to any Participant
hereunder on such Participant’s undertaking in writing to comply with such
restrictions on the Participant’s subsequent disposition of such shares of Stock
as the Committee shall deem necessary or advisable, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Stock issued or transferred under the Plan
will be subject to such stop-transfer orders and other restrictions as may be
required by applicable laws, regulations and interpretations, including any
requirement that a legend be placed thereon.
     21. Amendment and Termination of the Plan
          (a) Amendment. The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without approval of
the stockholders of the Company if such approval is required in order to comply
with the Code or applicable laws, or to comply with applicable stock exchange
requirements. No amendment or termination of this Plan shall, without the
consent of the Participant, impair any rights or obligations under any Grant
previously made to the Participant, unless such right has been reserved in the
Plan or the Grant Instrument, or except as provided in Section 23(b) below.
Notwithstanding the preceding, the Board may amend the Plan at any time, without
the consent of the Participant, to comply with applicable legal requirements or
to ensure the various Grants awarded under this Plan maintain the designations
given to them in the Plan, including, but not limited to, changes necessary to
ensure an option continues to be an incentive stock option or to ensure
qualified performance-based compensation continues to “qualified
performance-based compensation” under Code Section 162(m).
          (b) No Repricing Without Stockholder Approval. Notwithstanding
anything in the Plan to the contrary, the Committee may not reprice Options, nor
may the Board amend the Plan to permit repricing of Options, unless the
stockholders of the Company provide prior approval for such repricing. The term
“repricing” shall have the meaning given that term in Section 303A(8) of the New
York Stock Exchange Listed Company Manual, as in effect from time to time, or
any other substantially equivalent successor rule.
          (c) Stockholder Approval for “Qualified Performance-Based
Compensation.” If Grants denominated as “qualified performance-based
compensation” are awarded under Section 14 above, the Plan must be reapproved by
the Company’s stockholders no later than the first stockholders’ meeting that
occurs in the fifth year following the year in which the

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stockholders previously approved the provisions of Section 14, if additional
Grants are to be made under Section 14 and if required by Code Section 162(m) or
the regulations thereunder. Any such reapproval shall not affect outstanding
grants made within the five-year period following the year in which the previous
approval was obtained.
          (d) Termination of Plan. The Plan shall terminate on the day
immediately preceding the tenth anniversary of its effective date, unless the
Plan is terminated earlier by the Board or is extended by the Board with the
approval of the stockholders. The termination of the Plan shall not impair the
power and authority of the Committee with respect to an outstanding Grant.
     22. Effective Date of the Plan
          The Plan shall be effective on October 21, 2008.
     23. Miscellaneous
          (a) Grants in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including Grants to employees thereof
who become Employees, or for other proper corporate purposes, or (ii) limit the
right of the Company to grant stock options or make other awards outside of this
Plan. Without limiting the foregoing, the Committee may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company in substitution for a grant made by such
corporation. The terms and conditions of the substitute Grants may vary from the
terms and conditions required by the Plan and from those of the substituted
stock incentives. The Committee shall prescribe the provisions of the substitute
Grants.
          (b) Compliance with Law. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Stock under Grants
shall be subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required. In addition, it is the intent of the
Company that Incentive Stock Options comply with the applicable provisions of
Code Section 422 and that, to the extent applicable, all other Grants comply
with the requirements of Code Section 409A. To the extent that any legal
requirement of Code Sections 422 or 409A as set forth in the Plan ceases to be
required under Code Sections 422 or 409A, that Plan provision shall cease to
apply. With respect to persons subject to Section 16 of the Exchange Act, it is
the intent of the Company that the Plan and all transactions under the Plan
comply with all applicable provisions of Rule 16b-3 or its successors under the
Exchange Act. In addition, it is the intent of the Company that the Plan and
applicable Grants comply with the applicable provisions of Code Section 162(m) .
To the extent that any legal requirement of Section 16 of the Exchange Act or
Code Section 162(m) as set forth in the Plan ceases to be required under
Section 16 of the Exchange Act or Code Section 162(m) , that Plan provision
shall cease to apply. The Committee may revoke any Grant if it is contrary to
law or modify a Grant to bring it into compliance with any valid and mandatory
government regulation.

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The Committee may also adopt rules regarding the withholding of taxes on
payments to Participants. The Committee may, in its sole discretion, agree to
limit its authority under this Section.
          (c) Code Section 409A. The Plan is intended to comply with the
applicable requirements of Code Section 409A and the regulations promulgated
thereunder, to the extent applicable, and shall be administered in accordance
with Code Section 409A to the extent Code Section 409A is applicable to the Plan
or any Grant hereunder. Each Grant shall be subject to such terms as the
Committee determines and shall be construed and administered such that the Grant
either (i) qualifies for an exemption from the requirements of Code
Section 409A, or (ii) satisfies such requirements. Grants of Performance Units,
Stock Units, and other similar stock-based awards shall be structured in a
manner consistent with the requirements of Code Section 409A and distributions
shall only be made in a manner and upon an event permitted under Code
Section 409A and, to the extent required under Code Section 409A, payments to a
Participant who is a “specified employee” (within the meaning of such term under
Code Section 40A) upon his or her separation from service shall be subject to a
six-month delay and shall be paid within 15 days after the end of the six-month
period following separation from service. All payments to be made upon a
termination of employment or service shall only be made upon a “separation from
service” under Code Section 409A. Except as permitted by Code Section 409A, in
no event shall a Participant, directly or indirectly, designate the calendar
year in which the distribution is made.
          (d) Effect of Revisions to Accounting Standards or Applicable Law. In
the event of revisions to accounting standards applicable to the Company or to
applicable law, which revisions are viewed by the Committee as resulting in a
material detriment to the Company, the Committee shall have the discretion to
modify any Grant, Grant Instrument or related right or document issued under
this Plan but only to the extent such modification does not result in a material
detriment to the Participant.
          (e) Enforceability. The Plan shall be binding upon and enforceable
against the Company and its successors and assigns.
          (f) Funding of the Plan; Limitation on Rights. This Plan shall be
unfunded. The Company shall not be required to establish any special or separate
fund or to make any other segregation of assets to assure the payment of any
Grants under this Plant.
          (g) Rights of Participants. Nothing in this Plan shall entitle any
Employee, Nonemployee Director or other person to any claim or right to receive
a Grant under this Plan. Neither this Plan nor any action taken hereunder shall
be construed as giving any individual any rights to be retained by or in the
employment or service of the Company.
          (h) No Fractional Shares. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Grant. The Committee shall
determine whether cash, other awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise limited.

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          (i) Employees Subject to Taxation Outside the United States. With
respect to Participants who are subject to taxation in countries other than the
United States, the Committee may make Grants on such terms and conditions as the
Committee deems appropriate to comply with the laws of the applicable countries,
and the Committee may create such produces addendum and subplans and make such
modifications as may be necessary or advisable to comply with such laws.
          (j) Governing Law. The validity, construction, interpretation and
effect of the Plan and Grant Instruments issued under the Plan shall be governed
and construed by and determined in accordance with the laws of the Commonwealth
of Pennsylvania without giving effect to the conflict of laws provisions
thereof.

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