TOWER INTERNATIONAL, INC.

2010 EQUITY INCENTIVE PLAN

 

(As Amended and Restated effective as of March 6, 2014)

 

1.             Establishment and Purpose.

 

The purpose of the Plan is to provide a means whereby eligible employees,
officers, non-employee directors and other individual service providers develop
a sense of proprietorship and personal involvement in the development and
financial success of the Company and to encourage them to devote their best
efforts to the business of the Company, thereby advancing the interests of the
Company and its stockholders. The Company, by means of the Plan, seeks to retain
the services of such eligible persons and to provide incentives for such persons
to exert maximum efforts for the success of the Company and its Subsidiaries.
The Plan is as amended and restated effective as of March

6, 2014 (the “Restatement Date”), subject to the approval of the Plan by the
stockholders of the Company within twelve (12) months of the Restatement Date in
accordance with Section 422 of the Code.

 

The Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Incentive Bonus Awards, Other Cash-Based
Awards and Other Stock-Based Awards.

 

2.             Definitions.

 

Wherever the following capitalized terms are used in the Plan, they shall have
the meanings specified below:

 

2.1           “Affiliate” means, with respect to a Person, a Person that
directly or indirectly Controls, or is Controlled by, or is under common Control
with, such Person.

 

2.2           “Applicable Law” means the requirements relating to the
administration of equity-based awards or equity compensation plans under U.S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or quoted
and the applicable laws of any foreign country or jurisdiction where Awards are,
or will be, granted under the Plan.

 

2.3           “Award” means an award of a Stock Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance
Unit, Incentive Bonus Award, Other Cash-Based Award and Other Stock-Based Award
granted under the Plan.

 

 

 

 

2.4           “Award Agreement” means either (i) a written or electronic
agreement entered into between the Company and a Participant setting forth the
terms and conditions of an Award including any amendment or modification
therefore, or (ii) a written or electronic statement issued by the Company to a
Participant describing the terms and provisions of such Award, including any
amendment or modification thereof. The Committee may provide for the use of
electronic, internet or other non-paper Award Agreements, and the use of
electronic, internet or other non-paper means for the acceptance thereof and
actions thereunder by a Participant. Each Award Agreement shall be subject to
the terms and conditions of the Plan and need not be identical.

 

2.5           “Board” means the Board of Directors of the Company.

 

2.6           “Change in Control” means the occurrence of any one of the
following events:

 

(i)           any Person, other than a “Permitted Investor” as defined below,
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 50%
of the total voting power of the Company’s then outstanding securities generally
eligible to vote for the election of directors (the “Company Voting
Securities”); provided, however, that a Non-Qualifying Transaction (as defined
in paragraph (ii) below) shall not be a Change in Control. A “Permitted
Investor” means (a) Cerberus Capital Management, L.P. or any of its Affiliates
or affiliate funds, (b) any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Subsidiary, or (c) an underwriter
temporarily holding securities pursuant to an offering of such securities;

 

(ii)           the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or any
of its Subsidiaries (a “Business Combination”), unless immediately following
such Business Combination:

 

(a) more than 50% of the total voting power of (1) the corporation resulting
from such Business Combination (the “Surviving Corporation”), or (2) if
applicable, the ultimate parent corporation that directly or indirectly has
beneficial ownership of a majority of the voting securities eligible to elect
directors of the Surviving Corporation (the “Parent Corporation”), is
represented by Company Voting Securities that were outstanding immediately prior
to such Business Combination (or, if applicable, is represented by shares into
which such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination,

 

(b) no Person, other than a Permitted Investor or any employee benefit plan (or
related trust) sponsored or maintained by the Surviving Corporation or the
Parent Corporation, is or becomes the beneficial owner, directly or indirectly,
of securities of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) representing (1) 50% of the total voting power of the
securities then outstanding generally eligible to vote for the election of
directors of the Parent Corporation (or the Surviving Corporation) (the “Parent
Voting Securities”), and (2) a greater percentage of the then outstanding Parent
Voting Securities that are then held by all the Permitted Investors in the
aggregate, and

 

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(c) at least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
following the consummation of the Business Combination were incumbent directors
at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination;

 

Any Business Combination which satisfies all of the criteria specified in (a),
(b) and (c) above shall be deemed to be a “Non-Qualifying Transaction”;

 

(iii)          the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company; or

 

(iv)          the consummation of a sale of all or substantially all of the
Company’s assets to an entity that is not an Affiliate of the Company (other
than pursuant to a Non- Qualifying Transaction).

 

Notwithstanding the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any Person acquires beneficial ownership of more
than 50% of Company Voting Securities as a result of the acquisition of Company
Voting Securities by the Company which reduces the number of Company Voting
Securities outstanding; provided, that if after such acquisition by the Company
such Person becomes the beneficial owner of additional Company Voting Securities
that increases the percentage of outstanding Company Voting Securities
beneficially owned by such Person, a Change in Control of the Company may then
occur.

 

2.7           “Code” means the Internal Revenue Code of 1986, as amended. For
purposes of the Plan, references to sections of the Code shall be deemed to
include references to any applicable regulations thereunder and any successor or
similar provision.

 

2.8           “Committee” means the committee of the Board delegated with the
authority to administer the Plan, or the full Board, as provided in Section 3 of
the Plan. With respect to any decision involving an Award intended to satisfy
the requirements of Section162(m) of the Code, the Committee shall consist of
two or more directors of the Company who are “outside directors” within the
meaning of Section 162(m) of the Code. With respect to any decision relating to
a Reporting Person, the Committee shall consist solely of two or more directors
who are “non-employee directors” within the meaning of Rule16b-3 promulgated
under the Exchange Act, as amended from time to time, or any successor
provision. The fact that a Committee member shall fail to qualify under any of
these requirements shall not invalidate an Award if the Award is otherwise
validly made under the Plan. The Board may at any time appoint additional
members to the Committee, remove and replace members of the Committee with or
without cause, and fill vacancies on the Committee however caused.

 

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2.9           “Common Stock” means the Company’s Common Stock, par value $.01
per share.

 

2.10          “Company” means Tower International, Inc., a Delaware corporation,
and any successor thereto as provided in Section 16.8.

 

2.11          “Control” means, as to any Person, the power to direct or cause
the direction of the management and policies of such Person, or the power to
appoint directors of the Company, whether through the ownership of voting
securities, by contract or otherwise (the terms “Controlled by” and “under
common Control with” shall have correlative meanings).

 

2.12          “Date of Grant” means the date on which an Award under the Plan is
granted by the Committee, or such later date as the Committee may specify to be
the effective date of an Award.

 

2.13          “Disability” means a Participant being considered “disabled”
within the meaning of Section 409A of the Code.

 

2.14          “Eligible Person” means any person who is an employee, officer,
director, consultant, advisor or other individual service provider of the
Company or any Subsidiary, or any person who is determined by the Committee to
be a prospective employee, officer, director, consultant, advisor or other
individual service provider of the Company or any Subsidiary.

 

2.15          “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

2.16          “Fair Market Value” means, as applied to a specific date, the
opening, closing, actual, high, low or average selling price of a share of
Common Stock reported on any established stock exchange or national market
system on the applicable date, the preceding trading day, the next succeeding
trading day, or an average of trading days, as determined by the Committee
consistent with Applicable Law (including Section 409A of the Code). Unless the
Committee determines otherwise or unless otherwise specified in an Award
Agreement, Fair Market Value, as applied to a specific date, shall be deemed to
be the closing price of a share of Common Stock on the most recent date on which
shares of Common Stock were publicly traded. Notwithstanding the foregoing, if
the shares of Common Stock are not traded on any established stock exchange or
national market system, Fair Market Value means the price of a share of Common
Stock as determined by the Committee in its discretion in a manner consistent
with Applicable Law (including Section 409A of the Code).

 

2.17          “Incentive Bonus Award” means an Award granted under Section 12 of
the Plan.

 

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2.18          “Incentive Stock Option” means a Stock Option granted under
Section 6 hereof that is designated as an Incentive Stock Option and is intended
to meet the requirements of Section 422 of the Code.

 

2.19          “Nonqualified Stock Option” means a Stock Option granted under
Section 6 hereof that is not an Incentive Stock Option.

 

2.20          “Other Cash-Based Award” means a contractual right granted to an
Eligible Person under Section 13 hereof entitling such Eligible Person to
receive a cash payment at such times, and subject to such conditions, as are set
forth in the Plan and the applicable Award Agreement.

 

2.21          “Other Stock-Based Award” means a contractual right granted to an
Eligible Person under Section 13 representing a notional unit interest equal in
value to a share of Common Stock to be paid and distributed at such times, and
subject to such conditions as are set forth in the Plan and the applicable Award
Agreement.

 

2.22          “Participant” means any Eligible Person who holds an outstanding
Award under the Plan.

 

2.23          “Person” shall mean any individual, partnership, firm, trust,
corporation, limited liability company or other similar entity. When two or more
Persons act as a partnership, limited partnership, syndicate or other group for
the purpose of acquiring, holding or disposing of Common Stock, such
partnership, limited partnership, syndicate or group shall be deemed a “Person”

 

2.24          “Performance Measures” mean the measures of performance of the
Company and its Subsidiaries as defined in Section 14 of the Plan.

 

2.25           “Performance Shares ” means a contractual right granted to an
Eligible Person under Section 10 hereof representing a notional unit interest
equal in value to a share of Common Stock to be paid and distributed at such
times, and subject to such conditions, as are set forth in the Plan and the
applicable Award Agreement.

 

2.26          “Performance Unit” means a contractual right granted to an
Eligible Person under Section 11 hereof representing a notional dollar interest
as determined by the Committee to be paid and distributed at such times, and
subject to such conditions, as are set forth in the Plan and the applicable
Award Agreement.

 

2.27          “Plan” means this Tower International, Inc. 2010 Equity Incentive
Plan, as set forth in this instrument and as hereafter amended from time to
time.

 

2.28           “Reporting Person” means an officer, director or greater than 10%
stockholder of the Company within the meaning of Rule 16a-2 under the Exchange
Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange
Act.

 

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2.29          “Restatement Date” means the date set forth in Section 1 hereof.

 

2.30          “Restricted Stock” means shares of Common Stock granted to an
Eligible Person under Section 8 hereof that are subject to such vesting and
transfer restrictions and such other conditions as are set forth in the Plan and
the applicable Award Agreement.

 

2.31          “Restricted Stock Unit” means a contractual right granted to an
Eligible Person under Section 9 hereof representing notional unit interests
equal in value to a share of Common Stock to be paid and distributed at such
times, and subject to such conditions, as are set forth in the Plan and the
applicable Award Agreement.

 

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

 

2.33          “Service” means a Participant’s employment or other service
relationship with the Company or any Subsidiary.

 

2.34          “Stock Appreciation Right” means a contractual right granted to an
Eligible Person under Section 7 hereof entitling such Eligible Person to receive
a payment, upon the exercise of such right, in such amount and at such time, and
subject to such conditions, as are set forth in the Plan and the applicable
Award Agreement.

 

2.35          “Stock Option” means a contractual right granted to an Eligible
Person under Section 6 hereof to purchase shares of Common Stock at such time
and price, and subject to such conditions, as are set forth in the Plan and the
applicable Award Agreement.

 

2.36          “Subsidiary” means an entity (whether or not a corporation) that
is wholly or majority owned or controlled, directly or indirectly, by the
Company; provided, however, that with respect to Incentive Stock Options, the
term “Subsidiary” shall include only an entity that qualifies under Section
424(f) of the Code as a “subsidiary corporation” with respect to the Company.

 

3.              Administration.

 

Section 3.1 Committee Members. The Plan shall be administered by the Committee;
provided that the entire Board may act in lieu of the Committee on any matter;
except to the extent that, with respect to Section 162(m) Awards and Stock
Options and Stock Appreciation Rights, such action is required to be taken by
the Committee in order to satisfy the requirements of Section 162(m) of the
Code. If and to the extent permitted by Applicable Law, the Committee may
authorize one or more Reporting Persons (or other officers) to make Awards to
Eligible Persons who are not Reporting Persons (or other officers whom the
Committee has specifically authorized to make Awards). Subject to Applicable Law
and the restrictions set forth in the Plan, the Committee may delegate
administrative functions to individuals who are Reporting Persons, officers, or
employees of the Company or its Subsidiaries.

 

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Section 3.2     Committee Authority. The Committee shall have such powers and
authority as may be necessary or appropriate for the Committee to carry out its
functions as described in the Plan. Subject to the express limitations of the
Plan, the Committee shall have authority in its discretion to determine the
Eligible Persons to whom, and the time or times at which, Awards may be granted,
the number of shares, units or other rights subject to each Award, the exercise,
base or purchase price of an Award (if any), the time or times at which an Award
will become vested, exercisable or payable, the performance criteria,
performance goals and other conditions of an Award, the duration of the Award,
and all other terms of the Award. Subject to the terms of the Plan, the
Committee shall have the authority to amend the terms of an Award in any manner
that is not inconsistent with the Plan (including to extend the post-termination
exercisability period of Stock Options and Stock Appreciation Rights), provided
that no such action shall adversely affect the rights of a Participant with
respect to an outstanding Award without the Participant’s consent. The Committee
shall also have discretionary authority to interpret the Plan, to make all
factual determinations under the Plan, and to make all other determinations
necessary or advisable for Plan administration, including, without limitation,
to correct any defect, to supply any omission or to reconcile any inconsistency
in the Plan or any Award Agreement hereunder. The Committee may prescribe,
amend, and rescind rules and regulations relating to the Plan. The Committee’s
determinations under the Plan need not be uniform and may be made by the
Committee selectively among Participants and Eligible Persons, whether or not
such persons are similarly situated. The Committee shall, in its discretion,
consider such factors as it deems relevant in making its interpretations,
determinations and actions under the Plan including, without limitation, the
recommendations or advice of any officer or employee of the Company or such
attorneys, consultants, accountants or other advisors as it may select. All
interpretations, determinations, and actions by the Committee shall be final,
conclusive, and binding upon all parties.

 

Section 3.3          No Liability; Indemnification.          Neither the Board
nor any Committee member, nor any Person acting at the direction of the Board or
the Committee, shall be liable for any act, omission, interpretation,
construction or determination made in good faith with respect to the Plan, any
Award or any Award Agreement. The Company and its Subsidiaries shall pay or
reimburse any member of the Committee, as well as any other Person who takes
action on behalf of the Plan, for all reasonable expenses incurred with respect
to the Plan, and to the full extent allowable under Applicable Law shall
indemnify each and every one of them for any claims, liabilities, and costs
(including reasonable attorney’s fees) arising out of their good faith
performance of duties on behalf of the Company with respect to the Plan. The
Company and its Subsidiaries may, but shall not be required to, obtain liability
insurance for this purpose.

 

4.           Shares Subject to the Plan.

 

Section 4.1 Share Limitation.

 

(a)           Prior to the Restatement Date, subject to adjustment pursuant to
Section

 

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4.2 hereof, the maximum aggregate number of shares of Common Stock available for
issuance under the Plan was 4,600,000 shares (of which 1,166,275 shares of
Common Stock were available for issuance pursuant to new Awards immediately
prior to the Restatement Date). From and after of the Restatement Date, subject
to adjustment pursuant to Section 4.2 hereof, the maximum aggregate number of
shares of Common Stock which may be issued under the Plan pursuant to Awards
granted on or after the Restatement Date shall be 850,000 shares, all of which
may, but need not, be issued in respect of Incentive Stock Options. Shares of
Common Stock issued under the Plan may be either authorized but unissued shares
or shares held in the Company’s treasury. Any shares of Common Stock subject to
Awards that are settled in Common Stock shall be counted against the maximum
share limitations of this Section 4.1 as one share of Common Stock for every
share of Common Stock subject thereto, regardless of the number of shares of
Common Stock actually issued to settle the Award, subject to the provisions of
paragraph (b) below.

 

(b)          To the extent that any Award under the Plan (including Awards
granted prior to the Restatement Date) payable in shares of Common Stock is
forfeited, cancelled, returned to the Company for failure to satisfy vesting
requirements or upon the occurrence of other forfeiture events, are settled in
cash in lieu of Shares or otherwise terminates without payment being made
thereunder, the shares of Common Stock covered thereby will no longer be counted
against the maximum share limitations set forth in paragraph (a) above and may
again be made subject to Awards under the Plan pursuant to such limitations. To
the extent any shares of Common Stock are tendered (by either actual delivery or
attestation) or withheld (i) to pay the exercise price of a Stock Option granted
under this Plan (including Stock Options granted prior to the Restatement Date)
or (ii) to satisfy tax withholding obligations associated with an Award granted
under the Plan (including Awards granted prior to the Restatement Date), the
shares of Common Stock covered thereby will no longer be counted against the
maximum share limitations set forth in paragraph (a) above and may again be made
subject to Awards under the Plan pursuant to such limitations. To the extent any
shares of Common Stock that were subject to a Stock Appreciation Right granted
under the Plan (including Stock Appreciation Rights granted prior to the
Restatement Date) were not issued upon the exercise of such Stock Appreciation
Right, the shares of Common Stock covered thereby will no longer be counted
against the maximum share limitations set forth in paragraph (a) above and may
again be made subject to Awards under the Plan pursuant to such limitations.

 

Section 4.2 Adjustments. If there shall occur any change with respect to the
outstanding shares of Common Stock by reason of any recapitalization,
reclassification, stock dividend, extraordinary dividend, stock split, reverse
stock split, or other distribution with respect to the shares of Common Stock,
or any merger, reorganization, consolidation, combination, spin-off or other
similar corporate change, or any other change affecting the Common Stock, the
Committee shall, in the manner and to the extent that it deems appropriate and
equitable to the Participants and consistent with the terms of the Plan, cause
an adjustment to be made in (i) the maximum numbers and kind of shares provided
in Section 4.1 hereof and Section 14.4 hereof, (ii) the numbers and kind of
shares of Common Stock, units, or other rights subject to then outstanding
Awards, (iii) the price for each share or unit or other right subject to then
outstanding Awards, (iv) the performance measures or goals relating to the
vesting of an Award and (v) any other terms of an Award that are affected by the
event to prevent dilution or enlargement of a Participant’s rights under an
Award. Notwithstanding the foregoing, in the case of Incentive Stock Options,
any such adjustments shall, to the extent practicable, be made in a manner
consistent with the requirements of Section 424(a) of the Code.

 

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Section 4.3 No Repricing. Except as provided in Section 4.2 or Section 15, the
terms of an outstanding Award may not be amended, without prior stockholder
approval, to: (i) reduce the exercise price of an outstanding Stock Option or
the base price of an outstanding Stock Appreciation Right; (ii) cancel an
outstanding Stock Option or Stock Appreciation Right in exchange for a Stock
Option or Stock Appreciation Right with an exercise price or base price, as
applicable, that is less than the exercise price of such cancelled Stock Option
or the base price of such cancelled Stock Appreciation Right; or (iii) cancel an
outstanding Stock Option or Stock Appreciation Right with an exercise price or
base price, as applicable, that is greater than the Fair Market Value of a share
of Common Stock on the date of cancellation in exchange for cash or another
Award.

 

5.             Participation and Awards.

 

Section 5.1           Designation of Participants. All Eligible Persons are
eligible to be designated by the Committee to receive Awards and become
Participants under the Plan. The Committee has the authority, in its discretion,
to determine and designate from time to time those Eligible Persons who are to
be granted Awards, the types of Awards to be granted and the number of shares of
Common Stock or units subject to Awards granted under the Plan. In selecting
Eligible Persons to be Participants and in determining the type and amount of
Awards to be granted under the Plan, the Committee shall consider any and all
factors that it deems relevant or appropriate.

 

Section 5.2           Determination of Awards. The Committee shall determine the
terms and conditions of all Awards granted to Participants in accordance with
its authority under Section 3.2 hereof. An Award may consist of one type of
right or benefit hereunder or of two or more such rights or benefits granted in
tandem or in the alternative. To the extent deemed appropriate by the Committee,
an Award shall be evidenced by an Award Agreement as described in Section 16.1
hereof.

 

6.           Stock Options.

 

Section 6.1           Grant. A Stock Option may be granted to any Eligible
Person selected by the Committee. Subject to the provisions of Section 6.6
hereof and Section 422 of the Code, each Stock Option shall be designated, in
the discretion of the Committee, as an Incentive Stock Option or as a
Nonqualified Stock Option.

 

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Section 6.2           Exercise Price. The exercise price per share of a Stock
Option shall not be less than 100% of the Fair Market Value of a share of Common
Stock on the Date of Grant, subject to adjustments as provided for under Section
4.2, provided that the Committee may in its discretion specify for any Stock
Option an exercise price per share that is higher than the Fair Market Value on
the Date of Grant. The exercise price per share of any Stock Option granted upon
the effectiveness of an initial public offering of the Common Stock shall be the
price per share of the Common Stock paid by the public in connection with such
initial public offering.

 

Section 6.3           Vesting. The Committee shall in its discretion prescribe
the time or times at which, or the conditions upon which, a Stock Option or
portion thereof shall become vested and/or exercisable. The requirements for
vesting and exercisability of a Stock Option may be based on the continued
Service of the Participant with the Company or a Subsidiary for a specified time
period (or periods) or on the attainment of a specified performance goal (or
goals) established by the Committee in its discretion. The Committee may, in its
discretion, accelerate the vesting or exercisability of any Stock Option at any
time. The Committee in its sole discretion may allow a Participant to exercise
unvested Nonqualified Stock Options, in which case the shares of Common Stock
then issued shall be Restricted Stock having analogous vesting restrictions to
the unvested Nonqualified Stock Options.

 

Section 6.4           Term. The Committee shall in its discretion prescribe in
an Award Agreement the period during which a vested Stock Option may be
exercised, provided that the maximum term of a Stock Option shall be ten (10)
years from the Date of Grant. A Stock Option may be earlier terminated as
specified by the Committee and set forth in an Award Agreement upon or following
the termination of a Participant’s Service with the Company or any Subsidiary,
including by reason of voluntary resignation, death, Disability, termination for
cause or any other reason. Except as otherwise provided in this Section 6 or in
an Award Agreement as such agreement may be amended from time to time upon
authorization of the Committee, no Stock Option may be exercised at any time
during the term thereof unless the Participant is then in the Service of the
Company or one of its Subsidiaries.

 

Section 6.5           Exercise. Subject to such terms and conditions as shall be
specified in an Award Agreement, a Stock Option may be exercised in whole or in
part at any time during the term thereof by notice in the form required by the
Company, and payment of the aggregate exercise price by certified or bank check,
or such other means as the Committee may accept. As set forth in an Award
Agreement or otherwise determined by the Committee, in its sole discretion, at
or after grant, payment in full or in part of the exercise price of an Option
may be made: (i) in the form of shares of Common Stock that have been held by
the Participant for such period as the Committee may deem appropriate for
accounting purposes or otherwise, valued at the Fair Market Value of such shares
on the date of exercise; (ii) by surrendering to the Company shares of Common
Stock otherwise receivable on exercise of the Option; (iii) by a cashless
exercise program implemented by the Committee in connection with the Plan;
and/or (iv) by such other method as may be approved by the Committee and set
forth in an Award Agreement. Subject to any governing rules or regulations, as
soon as practicable after receipt of written notification of exercise and full
payment of the exercise price and satisfaction of any applicable tax withholding
pursuant to Section 17.5, the Company shall deliver to the Participant evidence
of book entry shares of Common Stock, or upon the Participant’s request, Common
Stock certificates in an appropriate amount based upon the number of shares of
Common Stock purchased under the Option. Unless otherwise determined by the
Committee, all payments under all of the methods indicated above shall be paid
in United States dollars or shares of Common Stock, as applicable.

 

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Section 6.6           Additional Rules for Incentive Stock Options.

 

(a)           An Incentive Stock Option may only be granted to an Eligible
Person who is considered an employee under Treasury Regulation §1.421-7(h) of
the Company or any Subsidiary.

 

(b)           No Incentive Stock Option shall be granted to an Eligible Person
as a result of which the aggregate Fair Market Value (determined as of the Date
of Grant) of the stock with respect to which Incentive Stock Options are
exercisable for the first time in any calendar year under the Plan and any other
stock option plans of the Company or any Subsidiary would exceed $100,000,
determined in accordance with Section 422(d) of the Code. This limitation shall
be applied by taking Incentive Stock Options into account in the order in which
granted.

 

(c)           If a Stock Option granted under the Plan is intended to be an
Incentive Stock Option, and if the Participant, at the time of grant, owns stock
possessing 10% or more of the total combined voting power of all classes of
Common Stock of the Company or any Subsidiary, then (A) the Stock Option
exercise price per share shall in no event be less than 110% of the Fair Market
Value of the Common Stock on the date of such grant and (B) such Stock Option
shall not be exercisable after the expiration of five (5) years following the
date such Stock Option is granted.

 

(d)           An Award of an Incentive Stock Option shall provide that such
Stock Option may be exercised not later than three (3) months following
termination of employment of the Participant with the Company and all
Subsidiaries, or not later than one (1) year following death or a permanent and
total disability within the meaning of Section 22(e)(3) of the Code, as and to
the extent determined by the Committee to comply with the requirements of
Section 422 of the Code.

 

(e)           If shares of Common Stock acquired by exercise of an Incentive
Stock Option are disposed of within two (2) years following the Date of Grant or
one (1) year following the transfer of such shares to the Participant upon
exercise, the Participant shall, promptly following such disposition, notify the
Company in writing of the date and terms of such disposition and provide such
other information regarding the disposition as the Company may reasonably
require.

 

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7.           Stock Appreciation Rights.

 

Section 7.1           Grant.           A Stock Appreciation Right may be granted
to any Eligible Person selected by the Committee. Stock Appreciation Rights may
be granted on a basis that allows for the exercise of the right by the
Participant or that provides for the automatic payment of the right upon a
specified date or event.

 

Section 7.2           Base Price. The base price of a Stock Appreciation Right
shall be determined by the Committee in its sole discretion; provided, however,
that the base price for any grant of a Stock Appreciation Right shall not be
less than 100% of the Fair Market Value of a share of Common Stock on the Date
of Grant, subject to adjustments as provided for under Section 4.2.

 

Section 7.3           Vesting. The Committee shall in its discretion prescribe
the time or times at which, or the conditions upon which, a Stock Appreciation
Right or portion thereof shall become vested and/or exercisable. The
requirements for vesting and exercisability of a Stock Appreciation Right may be
based on the continued Service of a Participant with the Company or a Subsidiary
for a specified time period (or periods) or on the attainment of a specified
performance goal (or goals) established by the Committee in its discretion. The
Committee may, in its discretion, accelerate the vesting or exercisability of
any Stock Appreciation Right at any time.

 

Section 7.4           Term. The Committee shall in its discretion prescribe in
an Award Agreement the period during which a vested Stock Appreciation Right may
be exercised, provided that the maximum term of a Stock Appreciation Right shall
be ten (10) years from the Date of Grant. A Stock Appreciation Right may be
earlier terminated as specified by the Committee and set forth in an Award
Agreement upon or following the termination of a Participant’s Service with the
Company or any Subsidiary, including by reason of voluntary resignation, death,
Disability, termination for cause or any other reason. Except as otherwise
provided in this Section 7 or in an Award Agreement as such agreement may be
amended from time to time upon authorization of the Committee, no Stock
Appreciation Right may be exercised at any time during the term thereof unless
the Participant is then in the Service of the Company or one of its
Subsidiaries.

 

Section 7.5           Payment. Subject to such terms and conditions as shall be
specified in an Award Agreement, a vested Stock Appreciation Right may be
exercised in whole or in part at any time during the term thereof by notice in
the form required by the Company and payment of any exercise price. Upon the
exercise of a Stock Appreciation Right and payment of any applicable exercise
price, a Participant shall be entitled to receive an amount determined by
multiplying: (i) the excess of the Fair Market Value of a share of Common Stock
on the date of exercise of the Stock Appreciation Right over the base price of
such Stock Appreciation Right, by (ii) the number of shares as to which such
Stock Appreciation Right is exercised. Payment of the amount determined under
the immediately preceding sentence may be made, as approved by the Committee and
set forth in the Award Agreement, in shares of Common Stock valued at their Fair
Market Value on the date of exercise, in cash, or in a combination of shares of
Common Stock and cash, subject to applicable tax withholding requirements set
forth in Section 17.5. If Stock Appreciation Rights are settled in shares of
Common Stock, then as soon as practicable following the date of settlement the
Company shall deliver to the Participant evidence of book entry shares of Common
Stock, or upon the Participant’s request, Common Stock certificates in an
appropriate amount.

 

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8.           Restricted Stock.

 

Section 8.1           Grant. Restricted Stock may be granted to any Eligible
Person selected by the Committee. The Committee may require the payment by the
Participant of a specified purchase price in connection with any shares of
Restricted Stock. The Committee may provide in an Award Agreement for the
payment of dividends and distributions to the Participant at such times as paid
to stockholders generally or at the times of vesting of the corresponding shares
of Restricted Stock. If any dividends or distributions are paid in shares of
Common Stock while shares of Restricted Stock are subject to restrictions under
Section 8.3 of the Plan, the dividends or other distributions shares shall be
subject to the same restrictions on transferability as the shares of Common
Stock to which they were paid. The Committee may also subject the grant of any
shares of Restricted Stock to the execution of a voting agreement with the
Company or with any Affiliate of the Company.

 

Section 8.2           Vesting. The restrictions imposed on shares of Restricted
Stock shall lapse in accordance with the vesting requirements specified by the
Committee in the Award Agreement. The requirements for vesting of a shares of
Restricted Stock may be based on the continued Service of the Participant with
the Company or its Subsidiaries for a specified time period (or periods) or on
the attainment of a specified performance goal (or goals) established by the
Committee in its discretion. The Committee may, in its discretion, accelerate
the vesting of shares of Restricted Stock at any time. If the vesting
requirements applicable to shares of Restricted Stock are not satisfied, the
Award shall be forfeited and the shares of Common Stock subject to the Award
shall be returned to the Company. In the event that the Participant paid any
purchase price with respect to such forfeited shares, unless otherwise provided
by the Committee in an Award Agreement, the Company will refund to the
Participant the lesser of (i) such purchase price and (ii) the Fair Market Value
of such shares on the date of forfeiture.

 

Section 8.3           Restrictions. Shares of Restricted Stock may not be
transferred, assigned or subject to any encumbrance, pledge, or charge until all
applicable restrictions are removed or have expired, unless otherwise allowed by
the Committee. The Committee may require in an Award Agreement that certificates
representing shares of Restricted Stock bear a legend making appropriate
reference to the restrictions imposed, and that certificates representing the
shares remain in the physical custody of an escrow holder until all restrictions
are removed or have expired.

 

Section 8.4           Rights as Stockholder. Subject to the foregoing provisions
of this Section 8 and the applicable Award Agreement, the Participant shall have
all rights of a stockholder with respect to shares of Restricted Stock granted
to the Participant, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto, unless the
Committee determines otherwise at the time the Restricted Stock is granted.

 

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Section 8.5           Section 83(b) Election. If a Participant makes an election
pursuant to Section 83(b) of the Code with respect to shares of Restricted
Stock, the Participant shall file, within 30 days following the Date of Grant, a
copy of such election with the Company (directed to the Secretary thereof) and
with the Internal Revenue Service, in accordance with the regulations under
Section 83 of the Code. The Committee may provide in an Award Agreement that
shares of Restricted Stock are conditioned upon the Participant’s making or
refraining from making an election with respect to the shares under Section
83(b) of the Code.

 

9.            Restricted Stock Units.

 

Section 9.1           Grant. Restricted Stock Units may be granted to any
Eligible Person selected by the Committee. The value of each Restricted Stock
Unit is equal to the Fair Market Value of the Common Stock on the applicable
date or time period of determination, as specified by the Committee. Restricted
Stock Units shall be subject to such restrictions and conditions as the
Committee shall determine. Restricted Stock Units may be granted together with a
dividend equivalent right with respect to the shares of Common Stock subject to
the Award, which may be accumulated and may be deemed reinvested in additional
stock units, as determined by the Committee in its discretion.

 

Section 9.2           Vesting. On the Date of Grant, the Committee shall, in its
discretion, determine any vesting requirements with respect to Restricted Stock
Units, which shall be set forth in the Award Agreement. The requirements for
vesting of Restricted Stock Units may be based on the continued Service of the
Participant with the Company or its Subsidiaries for a specified time period (or
periods) or on the attainment of a specified performance goal (or goals)
established by the Committee in its discretion. The Committee may, in its
discretion, accelerate the vesting of Restricted Stock Units Award at any time.
Restricted Stock Units may also be granted on a fully vested basis, with a
deferred payment date as may be determined by the Committee or elected by the
Participant in accordance with Applicable Law and rules established by the
Committee.

 

Section 9.3           Payment. Restricted Stock Units shall become payable to a
Participant at the time or times determined by the Committee and set forth in
the Award Agreement, which may be upon or following the vesting of the Award.
Payment of Restricted Stock Units may be made, at the discretion of the
Committee, in cash or in shares of Common Stock, or in a combination thereof as
set forth in the Award Agreement, subject to applicable tax withholding
requirements set forth in Section 17.5. Any cash payment of Restricted Stock
Units shall be made based upon the Fair Market Value of the Common Stock,
determined on such date or over such time period as determined by the Committee.
If Restricted Stock Units are settled in shares of Common Stock, then on the
date of settlement, the Company shall deliver to the Participant evidence of
book entry shares of Common Stock, or upon the Participant’s request, Common
Stock certificates in an appropriate amount.

 

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10.           Performance Shares.

 

Section 10.1 Grant. Performance Shares may be granted to any Eligible Person
selected by the Committee. A Performance Share Award shall be subject to such
restrictions and condition as the Committee shall specify. A Performance Share
Award may be granted with a dividend equivalent right with respect to the shares
of Common Stock subject to the Award, which may be accumulated and may be deemed
reinvested in additional stock units, as determined by the Committee in its
discretion.

 

Section 10.2 Value. Each Performance Share shall have an initial value equal to
the Fair Market Value of a Share on the Grant Date. The Committee shall set
performance goals in its discretion that, depending on the extent to which they
are met over a specified time period, shall determine the number of Performance
Shares that shall be paid to a Participant.

 

Section 10.3 Earning. After the applicable time period has ended, the number of
Performance Shares earned by the Participant over such time period shall be
determined as a function of the extent to which the applicable corresponding
performance goals have been achieved. This determination shall be made solely by
the Committee. The Committee may, in its discretion, waive any performance or
vesting conditions relating to a Performance Share Award.

 

Section 10.4 Form and Timing of Payment. The Committee shall pay at the close of
the applicable Performance Period, or as soon as practicable thereafter, any
earned Performance Shares in the form of cash or in shares of Common Stock or in
a combination thereof, as specified in a Participant’s Award Agreement, subject
to applicable tax withholding requirements set forth in Section 17.5. Any shares
of Common Stock paid to a Participant under this Section 10.4 may be subject to
any restrictions deemed appropriate by the Committee. If Performance Shares are
settled in shares of Common Stock, then as soon as practicable following the
date of settlement the Company shall deliver to the Participant evidence of book
entry shares of Common Stock, or upon the Participant’s request, Common Stock
certificates in an appropriate amount.

 

11.           Performance Units.

 

Section 11.1 Grant. Performance Units may be granted to any Eligible Person
selected by the Committee. A Performance Unit Award shall be subject to such
restrictions and condition as the Committee shall specify in a Participant’s
Award Agreement.

 

Section 11.2 Value. Each Performance Unit shall have an initial notional value
equal to a dollar amount determined by the Committee, in its sole discretion.
The Committee shall set performance goals in its discretion that, depending on
the extent to which they are met over a specified time period, will determine
the number of Performance Units that shall be settled and paid to the
Participant.

 

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Section 11.3 Earning. After the applicable time period has ended, the number of
Performance Units earned by the Participant, and the amount payable in cash, in
shares or in a combination thereof, over such time period shall be determined as
a function of the extent to which the applicable corresponding performance goals
have been achieved. This determination shall be made solely by the Committee.
The Committee may, in its discretion, waive any performance or vesting
conditions relating to a Performance Unit Award

 

Section 11.4 Form and Timing of Payment. The Committee shall pay at the close of
the applicable Performance Period, or as soon as practicable thereafter, any
earned Performance Units in the form of cash or in shares of Common Stock or in
a combination thereof, as specified in a Participant’s Award Agreement, subject
to applicable tax withholding requirements set forth in Section 17.5. Any shares
of Common Stock paid to a Participant under this Section 11.4 may be subject to
any restrictions deemed appropriate by the Committee. If Performance Units are
settled in shares of Common Stock, then as soon as practicable following the
date of settlement the Company shall deliver to the Participant evidence of book
entry shares of Common Stock, or upon the Participant’s request, Common Stock
certificates in an appropriate amount.

 

12.           Incentive Bonus Awards.

 

Section 12.1    Grant. The Committee, at its discretion, may grant Incentive
Bonus Awards to such Participants as it may designate from time to time on such
terms and conditions as the Committee shall determine.

 

Section 12.2    Performance Criteria.   The determination of Incentive Bonus
Awards for a given year or years may be based upon the attainment of specified
levels of Company or Subsidiary performance as measured by performance criteria
determined at the discretion of the Committee, including any or all of the
Performance Measures set forth in Section 14 of the Plan. The Committee shall
(i) select those Participants who shall be eligible to receive an Incentive
Bonus Award, (ii) determine the performance period, (iii) determine target
levels of performance, and (iv) determine the level of Incentive Bonus Award to
be paid to each selected Participant upon the achievement of each performance
level. The Committee generally shall make the foregoing determinations prior to
the commencement of services to which an Incentive Bonus Award relates (or for
Incentive Bonus Awards that are Section 162(m) Awards, within the permissible
time period established for exemption under Code Section 162(m) of the Code), to
the extent applicable, and while the outcome of the performance goals and
targets is substantially uncertain.

 

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12.3          Payment.

 

(a) Incentive Bonus Awards shall be paid in cash or settled through the issuance
of unrestricted shares of Common Stock, Restricted Stock Awards or Restricted
Stock Units under the Plan, as determined by the Committee in its sole
discretion. Payment or settlement shall be made following a determination by the
Committee that the performance targets were attained.

 

(b) The amount of an Incentive Bonus Award to be paid upon the attainment of
each targeted level of performance shall equal a percentage of a Participant’s
base salary for the fiscal year, a fixed dollar amount, or such other formula,
as determined by the Committee.

 

13.           Other Cash-Based Awards and Other Stock-Based Awards

 

Section 13.1 Grant. The Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of the Plan
(including the grant or offer for sale of unrestricted shares of Common Stock)
in such amounts and subject to such terms and conditions, as the Committee shall
determine. Such Awards may involve the transfer of actual shares of Common Stock
to a Participant, or payment in cash or otherwise of amounts based on the value
of shares of Common Stock. In addition, the Committee, at any time and from time
to time, may grant Cash-Based Awards to a Participant in such amounts and upon
such terms as the Committee shall determine, in its sole discretion.

 

Section 13.2 Value. Each Other Stock-Based Award shall be expressed in terms of
shares of Common Stock or units based on shares of Common Stock, as determined
by the Committee, in its sole discretion. Each Other Cash-Based Award shall
specify a payment amount or payment range as determined by the Committee, in its
sole discretion. If the Committee exercises its discretion to establish
performance goals, the value of Other Cash-Based Awards that shall be paid to
the Participant will depend on the extent to which such performance goals are
met.

 

Section 13.3 Payment. Payment, if any, with respect to Other Cash-Based Awards
and Other Stock-Based Award shall be made in accordance with the terms of the
Award, in cash or shares of Common Stock, as the Committee determines.

 

14. Section 162(m) Awards.

 

Section 14.1          Grant. The Committee, at its discretion, may grant
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units,
Incentive Bonus Awards, Other Stock-Based Awards and/or Other Cash-Based Awards
that are intended to be exempt from the deduction limitation under Section
162(m) of the Code by virtue of the exception for “qualified performance-based
compensation” under Section 162(m) of the Code (“Section 162(m) Awards”).
Section 162(m) Awards must comply with the additional requirements set forth in
this Section 14, which shall control over any other provision that pertains to
such Award.

 

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Section 14.2      Performance Measures.

 

(a)           Each Section 162(m) Award shall be contingent on the attainment of
one or more pre-established, objective performance goals based on one or more
Performance Measures (“Performance Goals”). Further, at the discretion of the
Committee, a Section 162(m) Award may be subject to goals and restrictions in
addition to the attainment of Performance Goals.

 

               (b)          “Performance Measures” are one or more measures of
performance based on one or more of the following criteria, or a combination of
any of the following criteria, as determined by the Committee: (i) net earnings
or net income (before or after taxes); (ii) earnings growth; (iii) earnings per
share (including, but not limited to, growth in diluted earnings per share from
continuing operations); (iv) net sales (including, but not limited to, net sales
growth); (v) gross profits or net operating profit; (vi) return measures
(including, but not limited to, return on assets, capital, equity, or sales);
(vii) cash flow (including, but not limited to, operating cash flow, free cash
flow, cash flow return on capital and statutory cash measures); (viii) revenue
growth; (ix) earnings before or after taxes, interest, depreciation, and/or
amortization; (x) productivity ratios; (xi) Common Stock price (including, but
not limited to, growth measures), (xii) total stockholder return; (xiii) expense
targets; (xiv) margins (including, but not limited to, gross or operating
margins and earnings before or after taxes, interest, depreciation, and/or
amortization margins); (xv) operating efficiency; (xvi) customer satisfaction or
increase in the number of customers; (xvii) attainment of budget goals; (xviii)
division working capital turnover; (xix) attainment of strategic or operational
initiatives; (xx) market share; (xxi) cost reductions; (xxii) working capital
targets; (xxiii) sales backlog; (xxiv) net debt; and (xxv) value-added measures.
The foregoing criteria shall have any reasonable definitions that the Committee
may specify, which may include or exclude any or all of the following items, as
the Committee may specify: extraordinary, unusual or non-recurring items; asset
write-downs; effects of changes in tax laws, accounting principles or other laws
or provisions; effects of currency fluctuations; effects of industry volumes,
customer mix or customer tooling payments and receipts; effects of financing
activities (e.g., effect on earnings per share of issuing convertible debt
securities); expenses for reorganizations and restructuring, productivity
initiatives or new business initiatives; non-operating items; acquisition and
divestiture expenses; effects of litigation or claim judgments or settlements
and effects of acquisitions and divestitures. Performance Goals may be (i) used
to measure the performance of the Company and/or any of its Subsidiaries as a
whole, any business unit thereof, or any combination thereof (ii) absolute or
relative (to prior performance of the Company or to the performance of one or
more other entities or external indices) and (iii) expressed in terms of a
progression within a specified range.

 

(c)           For each Section 162(m) Award, the Committee shall (i) select the
Participant who shall be eligible to receive a Section 162(m) Award, (ii)
determine the Performance Goals, (iii) determine the applicable period of
service to which the Performance Goals relate (the “Performance Period”), and
(iv) determine, in terms of an objective formula or standard, the method for
computing the amount of compensation payable to the Participant if the
Performance Goal is obtained. The Committee shall make the foregoing
determinations prior to the commencement of the Performance Period applicable to
an Award (or within the permissible time period established under Section 162(m)
of the Code) and while the outcome of the Performance Goals is substantially
uncertain.

 

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14.3          Certification of Attainment of Performance Goals; Negative
Discretion.

 

(a)           After each Performance Period, but in all cases prior to payment
or settlement of a Section 162(m) Award, the Committee shall certify in writing
(which may include the written minutes for any meeting of the Committee) that
the Performance Goals and all other material terms applicable to a Section
162(m) Award were in fact satisfied. At the time of such certification, the
Committee shall also determine the amount of compensation payable to the
Participant as a result of the attainment of such Performance Goals. The
Committee shall have no discretion to waive all or part of the Performance Goals
applicable to the receipt of full or partial payment of a Section 162(m) Award,
except in the case of a Change in Control or the death or Disability of a
Participant.

 

(b)           Notwithstanding the foregoing, the Committee may, in its
discretion, reduce any Section 162(m) Award based on such factors as may be
determined by the Committee, including, without limitation, a determination by
the Committee that such a reduction is appropriate in light of pay practices of
competitors, or the performance of the Company, a Subsidiary or a Participant
relative to the performance of competitors, or performance with respect to the
Company’s strategic business goals.

 

Section 14.4         Individual Participant Limitations.   Subject to adjustment
as provided in Section 4.2, with respect to Section 162(m) Awards and Stock
Options and Stock Appreciation Rights intended to be exempt from the deduction
limitation under Code Section 162(m), no Participant in any one fiscal year of
the Company may be granted (a) Stock Options or Stock Appreciation Rights with
respect to more than 500,000 shares of Common Stock each; (b) Restricted Stock
or Restricted Stock Units with respect to more than 300,000 shares of Common
Stock each; and (c) Performance Shares, Incentive Bonus Awards and Other Stock
Based Awards that are denominated in shares of Common Stock with respect to more
than 300,000 shares of Common Stock each. The maximum dollar value payable to
any Participant in any one fiscal year of the Company with respect to Restricted
Stock Units, Performance Units or Incentive Bonus Awards or Other Stock-Based
Awards that may be settled in cash or other property (other than Common Stock)
is $6,000,000. If an Award is cancelled, the cancelled Award shall continue to
be counted towards the applicable limitations. The limitations in this Section
14.4 shall be interpreted and applied in a manner consistent with Section 162(m)
of the Code.

 

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15.           Change in Control.

 

Section 15.1    Effect.

 

(a)           The Committee may, at the time of the grant of an Award and as set
forth in an Award Agreement, provide for the effect of a “Change in Control” on
an Award. Such provisions may include any one or more of the following: (i) the
acceleration or extension of time periods for purposes of exercising, vesting
in, or realizing gain from any Award, (ii) the elimination or modification of
performance or other conditions related to the payment or other rights under an
Award, (iii) provision for the cash settlement of an Award for an equivalent
cash value, as determined by the Committee, or (iv) such other modification or
adjustment to an Award as the Committee deems appropriate to maintain and
protect the rights and interests of Participants upon or following a Change in
Control. To the extent necessary for compliance with Section 409A of the Code,
an Award Agreement shall provide that an Award subject to the requirements of
Section 409A that would otherwise become payable upon a Change in Control shall
only become payable to the extent that the requirements for a “change in
control” for purposes of Section 409A have been satisfied.

 

(b)           Notwithstanding anything to the contrary set forth in the Plan,
unless otherwise provided by an Award Agreement, upon or in anticipation of any
Change in Control, the Committee may, in its sole and absolute discretion and
without the need for the consent of any Participant, take one or more of the
following actions contingent upon the occurrence of that Change in Control: (i)
cause any or all outstanding Stock Options and Stock Appreciation Rights held by
Participants affected by the Change in Control to become vested and immediately
exercisable, in whole or in part; (ii) cause any or all outstanding Restricted
Stock, Restricted Stock Units, Performance Shares, Performance Units, Incentive
Bonus Award and any other Award held by Participants affected by the Change in
Control to become non-forfeitable, in whole or in part; (iii) cancel any Stock
Option or Stock Appreciation Right in exchange for a substitute option in a
manner consistent with the requirements of Treasury Regulation. §1.424-1(a)
(notwithstanding the fact that the original Stock Option may never have been
intended to satisfy the requirements for treatment as an Incentive Stock
Option); (iv) cancel any Restricted Stock, Restricted Stock Units, Performance
Shares or Performance Units held by a Participant in exchange for restricted
stock or performance shares of or stock or performance units in respect of the
capital stock of any successor corporation; (v) redeem any Restricted Stock held
by a Participant affected by the Change in Control for cash and/or other
substitute consideration with a value equal to the Fair Market Value of an
unrestricted share of Common Stock on the date of the Change in Control; (vi)
cancel any Stock Option or Stock Appreciation Right held by a Participant
affected by the Change in Control in exchange for cash and/or other substitute
consideration with a value equal to (A) the number of shares of Common Stock
subject to that Stock Option or Stock Appreciation Right, multiplied by (B) the
difference, if any, between the Fair Market Value per share of Common Stock on
the date of the Change in Control and the exercise price of that Stock Option or
Stock Appreciation Right; provided, that if the Fair Market Value per share of
Common Stock on the date of the Change in Control does not exceed the exercise
price of any such Stock Option or Stock Appreciation Right, the Committee may
cancel that Stock Option or Stock Appreciation Right without any payment of
consideration therefor; (vii) cancel any Restricted Stock Unit or Performance
Unit held by a Participant affected by the Change in Control in exchange for
cash and/or other substitute consideration with a value equal to the Fair Market
Value per share of Common Stock on the date of the Change in Control (provided
that such cancelation and exchange does not violate Section 409A of the Code);
or (ix) make such other modifications, adjustments or amendments to outstanding
Awards or the Plan as the Committee deems necessary or appropriate.

 

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16.           General Provisions.

 

Section 16.1 Award Agreement. To the extent deemed necessary by the Committee,
an Award under the Plan shall be evidenced by an Award Agreement in a written or
electronic form approved by the Committee setting forth the number of shares of
Common Stock or units subject to the Award, the exercise price, base price, or
purchase price of the Award, the time or times at which an Award will become
vested, exercisable or payable and the term of the Award. The Award Agreement
may also set forth the effect on an Award of termination of Service under
certain circumstances. The Award Agreement shall be subject to and incorporate,
by reference or otherwise, all of the applicable terms and conditions of the
Plan, and may also set forth other terms and conditions applicable to the Award
as determined by the Committee consistent with the limitations of the Plan.
Award Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section 422
of the Code. The grant of an Award under the Plan shall not confer any rights
upon the Participant holding such Award other than such terms, and subject to
such conditions, as are specified in the Plan as being applicable to such type
of Award (or to all Awards) or as are expressly set forth in the Award
Agreement.

 

Section 16.2 Forfeiture Events/Representations. The Committee may specify in an
Award Agreement at the time of the Award that the Participant’s rights, payments
and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting or performance
conditions of an Award. Such events shall include, but shall not be limited to,
termination of Service for cause, violation of material Company policies, breach
of noncompetition, confidentiality or other restrictive covenants that may apply
to the Participant, or other conduct by the Participant that is detrimental to
the business or reputation of the Company. The Committee may also specify in an
Award Agreement that the Participant’s rights, payments and benefits with
respect to an Award shall be conditioned upon the Participant making a
representation regarding compliance with noncompetition, confidentiality or
other restrictive covenants that may apply to the Participant and providing that
the Participant’s rights, payments and benefits with respect to an Award shall
be subject to reduction, cancellation, forfeiture or recoupment on account of a
breach of such representation. In addition, (i) Awards and any compensation
directly attributable to Awards may be made subject to forfeiture, recovery by
the Company or other action pursuant to any compensation recovery policy adopted
by the Board or the Committee at any time, including in response to the
requirements of Section 10D of the Exchange Act and any implementing rules and
regulations thereunder, or as otherwise required by law and (ii) any Award
Agreement may be unilaterally amended by the Committee to comply with any such
compensation recovery policy.

 

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Section 16.3 No Assignment or Transfer; Beneficiaries.

 

(a)           Awards under the Plan shall not be assignable or transferable by
the Participant, except by will or by the laws of descent and distribution, and
shall not be subject in any manner to assignment, alienation, pledge,
encumbrance or charge. Notwithstanding the foregoing, the Committee may provide
in an Award Agreement that the Participant shall have the right to designate a
beneficiary or beneficiaries who shall be entitled to any rights, payments or
other benefits specified under an Award following the Participant’s death.
During the lifetime of a Participant, an Award shall be exercised only by such
Participant or such Participant’s guardian or legal representative. In the event
of a Participant’s death, an Award may, to the extent permitted by the Award
Agreement, be exercised by the Participant’s beneficiary as designated by the
Participant in the manner prescribed by the Committee or, in the absence of an
authorized beneficiary designation, by the legatee of such Award under the
Participant’s will or by the Participant’s estate in accordance with the
Participant’s will or the laws of descent and distribution, in each case in the
same manner and to the same extent that such Award was exercisable by the
Participant on the date of the Participant’s death.

 

(b)           Notwithstanding anything else in this Section 16.3 to the
contrary, the Committee may in its discretion provide in an Award Agreement that
an Award in the form of a Nonqualified Stock Option, share-settled Stock
Appreciation Right, Restricted Stock, Performance Share or share-settled Other
Stock-Based Award may be transferred, on such terms and conditions as the
Committee deems appropriate, either (i) by instrument to the Participant’s
“Immediate Family” (as defined below), (ii) by instrument to an inter vivos or
testamentary trust (or other entity) in which the Award is to be passed to the
Participant’s designated beneficiaries, or (iii) by gift to charitable
institutions. Any transferee of the Participant’s rights shall succeed and be
subject to all of the terms of the applicable Award Agreement and the Plan.
“Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
and shall include adoptive relationships.

 

Section 16.4    Rights as Stockholder. A Participant shall have no rights as a
holder of shares of Common Stock with respect to any unissued securities covered
by an Award until the date the Participant becomes the holder of record of such
securities. Except as provided in Section 4.2 hereof, no adjustment or other
provision shall be made for dividends or other stockholder rights, except to the
extent that an Award Agreement (other than an Award Agreement for Stock Options
or Stock Appreciation Rights) provides for dividend payments or dividend
equivalent rights.

 

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Section 16.5 Employment or Service. Nothing in the Plan, in the grant of any
Award or in any Award Agreement shall confer upon any Eligible Person or
Participant any right to continue in the Service of the Company or any of its
Subsidiaries, or interfere in any way with the right of the Company or any of
its Subsidiaries to terminate the employment or other service relationship of an
Eligible Person or Participant for any reason at any time.

 

Section 16.6  Fractional Shares. In the case of any fractional share or unit
resulting from the grant, vesting, payment or crediting of dividends or dividend
equivalents under an Award, the Committee shall have the discretionary authority
to (i) disregard such fractional share or unit, (ii) round such fractional share
or unit to the nearest lower or higher whole share or unit, or (iii) convert
such fractional share or unit into a right to receive a cash payment.

 

Section 16.7 Other Compensation and Benefit Plans. The amount of any
compensation deemed to be received by a Participant pursuant to an Award shall
not constitute includable compensation for purposes of determining the amount of
benefits to which a Participant is entitled under any other compensation or
benefit plan or program of the Company or any Subsidiary, including, without
limitation, under any bonus, pension, profit-sharing, life insurance, salary
continuation or severance benefits plan, except to the extent specifically
provided by the terms of any such plan.

 

Section 16.8 Plan Binding on Transferees. The Plan shall be binding upon the
Company, its transferees and assigns, and the Participant, the Participant’s
executor, administrator and permitted transferees and beneficiaries. In
addition, all obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

 

Section 16.9 Foreign Jurisdictions. The Committee may adopt, amend and terminate
such arrangements and grant such Awards, not inconsistent with the intent of the
Plan, as it may deem necessary or desirable to comply with any tax, securities,
regulatory or other laws of other jurisdictions with respect to Awards that may
be subject to such laws. The terms and conditions of such Awards may vary from
the terms and conditions that would otherwise be required by the Plan solely to
the extent the Committee deems necessary for such purpose. Moreover, the Board
may approve such supplements to or amendments, restatements or alternative
versions of the Plan, not inconsistent with the intent of the Plan, as it may
consider necessary or appropriate for such purposes, without thereby affecting
the terms of the Plan as in effect for any other purpose.

 

Section 16.10 Substitute Awards in Corporate Transactions. Nothing contained in
the Plan shall be construed to limit the right of the Committee to grant Awards
under the Plan in connection with the acquisition, whether by purchase, merger,
consolidation or other corporate transaction, of the business or assets of any
corporation or other entity. Without limiting the foregoing, the Committee may
grant Awards under the Plan to an employee or director of another corporation
who becomes an Eligible Person by reason of any such corporate transaction in
substitution for awards previously granted by such corporation or entity to such
person. The terms and conditions of the substitute Awards may vary from the
terms and conditions that would otherwise be required by the Plan solely to the
extent the Committee deems necessary for such purpose. Any shares of Common
Stock subject to these substitute Awards shall not be counted against any of the
maximum share limitations set forth in the Plan.

 

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17.           Legal Compliance.

 

Section 17.1 Securities Laws. No shares of Common Stock will be issued or
transferred pursuant to an Award unless and until all then applicable
requirements imposed by Federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any
exchanges upon which the shares of Common Stock may be listed, have been fully
met. As a condition precedent to the issuance of shares pursuant to the grant or
exercise of an Award, the Company may require the Participant to take any
reasonable action to meet such requirements. The Committee may impose such
conditions on any shares of Common Stock issuable under the Plan as it may deem
advisable, including, without limitation, restrictions under the Securities Act,
as amended, under the requirements of any exchange upon which such shares of the
same class are then listed, and under any blue sky or other securities laws
applicable to such shares. The Committee may also require the Participant to
represent and warrant at the time of issuance or transfer that the shares of
Common Stock are being acquired only for investment purposes and without any
current intention to sell or distribute such shares. Certificates representing
Common Stock acquired pursuant to an Award may bear such legend as the Company
may consider appropriate under the circumstances. If an Award is made to an
Eligible Person who is subject to Chinese jurisdiction, and approval of the
Award by China’s State Administration of Foreign Exchange is needed, the Award
may be converted to cash or other equivalent amount if and to the extent that
such approval is not obtained.

 

Section 17.2 Incentive Arrangement. The Plan is designed to provide an on-
going, pecuniary incentive for Participants to produce their best efforts to
increase the value of the Company. The Plan is not intended to provide
retirement income or to defer the receipt of payments hereunder to the
termination of a Participant’s employment or beyond. The Plan is thus intended
not to be a pension or welfare benefit plan that is subject to Employee
Retirement Income Security Act of 1974 (“ERISA”), and shall be construed
accordingly. All interpretations and determinations hereunder shall be made on a
basis consistent with the Plan’s status as not an employee benefit plan subject
to ERISA.

 

Section 17.3 Unfunded Plan. The adoption of the Plan and any reservation of
shares of Common Stock or cash amounts by the Company to discharge its
obligations hereunder shall not be deemed to create a trust or other funded
arrangement. Except upon the issuance of Common Stock pursuant to an Award, any
rights of a Participant under the Plan shall be those of a general unsecured
creditor of the Company, and neither a Participant nor the Participant’s
permitted transferees or estate shall have any other interest in any assets of
the Company by virtue of the Plan. Notwithstanding the foregoing, the Company
shall have the right to implement or set aside funds in a grantor trust, subject
to the claims of the Company’s creditors or otherwise, to discharge its
obligations under the Plan.

 

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Section 17.4 Section 409A Compliance. To the extent applicable, it is intended
that the Plan and all Awards hereunder comply with the requirements of Section
409A of the Code, and the Plan and all Award Agreements shall be interpreted and
applied by the Committee in a manner consistent with this intent in order to
avoid the imposition of any additional tax under Section 409A of the Code. In
the event that any provision of the Plan or an Award Agreement is determined by
the Committee to not comply with the applicable requirements of Section 409A of
the Code, the Committee shall have the authority to take such actions and to
make such interpretations or changes to the Plan or an Award Agreement as the
Committee deems necessary to comply with such requirements, provided that the
Committee shall act in a manner that is intended to preserve the economic value
of the Award to the Participant. In no event whatsoever shall the Company be
liable for any additional tax, interest or penalties that may be imposed on any
Participant by Section 409A of the Code or any damages for failing to comply
with Section 409A of the Code. Notwithstanding anything in the Plan to the
contrary, all or part of an Award payment to a Participant who is determined to
constitute a Code Section 409A “Specified Employee” at the time of separation
from service, shall be delayed (if then required) under Code Section 409A, and
paid in an aggregated lump on the first business day after six (6) months have
lapsed following the Participant’s separation from service, or the date of the
Participant’s death, if earlier. Any remaining payments shall be paid on their
regularly scheduled payment dates. For purposes of the Plan and any Agreements
issued under the Plan, the phrases “separation from service,” “termination of
employment” and “employment termination” shall be deemed to mean “separation
from service” as defined by Code Section 409A.

 

Section 17.5 Tax Withholding.

 

(a)           The Company shall have the power and the right to deduct or
withhold, or require a participant to remit to the Company, the minimum
statutory amount to satisfy federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of the Plan, but in no event shall such
deduction or withholding or remittance exceed the minimum statutory withholding
requirements.

 

(b)           If permitted under an Award Agreement or authorized by the
Committee, (i) a Participant may, in order to fulfill the minimum statutory
withholding obligation, tender previously-acquired shares of Common Stock or
have shares of stock withheld from the exercise, provided that the shares have
an aggregate Fair Market Value sufficient to satisfy in whole or in part the
applicable minimum withholding taxes, and (ii) the broker-assisted exercise
procedure described in Section 6.5 may also be utilized to satisfy the
withholding requirements related to the exercise of a Stock Option.

 

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(c)           Notwithstanding the foregoing, a Participant may not use shares of
Common Stock to satisfy the withholding requirements to the extent that (i)
there is a substantial likelihood that the use of such form of payment or the
timing of such form of payment would subject the Participant to a substantial
risk of liability under Section 16 of the Exchange Act; or (ii) such withholding
would constitute a violation of the provisions of any law or regulation
(including the Sarbanes-Oxley Act of 2002).

 

Section 17.6 No Guarantee of Tax Consequences. Neither the Company, the Board,
the Committee nor any other Person make any commitment or guarantee that any
federal, state, local or foreign tax treatment will apply or be available to any
Participant or any other person hereunder.

 

Section 17.7 Severability. If any provision of the Plan or any Award Agreement
shall be determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.

 

Section 17.8 Governing Law. The Plan and all rights hereunder shall be subject
to and interpreted in accordance with the laws of the State of Delaware, without
reference to the principles of conflicts of laws, and to applicable Federal
securities laws.

 

18.           Amendment and Termination.

 

The Board may suspend or terminate the Plan (or any portion thereof) at any time
and may amend the Plan at any time and from time to time in such respects as the
Board may deem advisable or in the best interests of the Company or any
Subsidiary. No such amendment, suspension or termination shall materially and
adversely affect the rights of any Participant under any outstanding Awards,
without the consent of such Participant. The Plan will continue in effect until
terminated in accordance with this Section 18; provided, however, that no Award
will be granted hereunder on or after the tenth anniversary of the Restatement
Date; but provided further, that Awards granted prior to such tenth anniversary
may extend beyond that date.

 

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