Exhibit 10.1
CBIZ, INC. 2002 AMENDED AND RESTATED STOCK INCENTIVE PLAN
(Amended and Restated as of May 12, 2011)
Introduction
     The purpose of the Plan is to give the Company a competitive advantage in
attracting, retaining and motivating officers, employees, and/or directors and
to provide the Company and its Subsidiaries and Affiliates with a stock plan
providing incentives directly linked to the profitability of the Company’s
businesses and increases in Company shareholder value. This Plan is an amendment
and restatement, effective as of the Effective Date, of the CBIZ, Inc. Amended
and Restated 1996 Employee Stock Option Plan (the “Prior Plan”). All grants or
awards that were made under the Prior Plan prior to the Effective Date shall
continue to be governed by the terms of the Prior Plan, except to the extent
specific provisions of this Plan shall be expressly made applicable.
SECTION 1. Definitions
     For purposes of the Plan, the following terms are defined as set forth
below:
          “Affiliate” means a corporation or other entity controlled by,
controlling or under common control with the Company.
          “Award” means a Stock Option, Stock Appreciation Right, Performance
Award, or other stock-based award granted under the Plan.
          “Award Cycle” means the one or more periods of time, as the Committee
may select, over which the attainment of one or more Performance Goals will be
measured for purposes of determining an awardee’s right, and the payment of, a
Performance Award.
          “Board” means the Board of Directors of the Company.
          “Cause” means, unless otherwise provided by the Committee, (1) “Cause”
as defined in any Individual Agreement to which the awardee is a party, or
(2) if there is no such Individual Agreement or if it does not define Cause:
(A) conviction of the awardee for committing a felony under federal law or the
law of the state in which such action occurred, (B) dishonesty in the course of
fulfilling the awardee’s employment duties, (C) willful and deliberate failure
on the part of the awardee to perform his or her employment duties in any
material respect, or (D) prior to a Change in Control, such other events as
shall be determined by the Committee. The Committee shall, unless otherwise
provided in an Individual Agreement with the awardee, have the sole discretion
to determine whether “Cause” exists, and its determination shall be final.
          “Change in Control” and “Change in Control Price” have the meanings
set forth in Sections 10(b) and (c), respectively.
          “Code” means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto. Reference in the Plan to the Code shall be
deemed to include any regulations or other interpretive guidance under such
section, and any amendments or successor provisions to such section, regulations
or guidance.
          “Commission” means the Securities and Exchange Commission or any
successor agency.
          “Committee” means the Committee referred to in Section 2.
          “Common Stock” means common stock, par value $0.01 per share, of the
Company.
          “Company” means CBIZ, Inc., a Delaware corporation, and any successor
thereto.
          “Covered Employee” means an awardee designated prior to the grant of a
Performance Award by the Committee who is or may be a “covered employee” within
the meaning of Section 162(m)(3) of the Code in the year in which the
Performance Award is expected to be taxable to such awardee.

 

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          “Date of Grant” means the date on which the Committee adopts a
resolution, or takes other appropriate action, expressly granting an Award to a
Participant that specifies the key terms and conditions of the Award or, if a
later date is set forth in such resolution, then such date as is set forth in
such resolution.
          “Disability” means, unless otherwise provided by the Committee,
“permanent and total disability” within the meaning of Code Section 22(e)(3).
          “Early Retirement” means retirement from active employment with the
Company, a Subsidiary or Affiliate pursuant to the early retirement provisions
of the applicable pension plan of such employer.
          “EBITDA” means earnings before interest expense, income taxes,
depreciation and amortization and gain or loss on sale of operations.
          “Effective Date” means May 17, 2002.
          “Eligible Awardees” means officers, employees, directors (whether or
not officers or employees), independent contractors and consultants of the
Company or any of its Subsidiaries or Affiliates, and prospective employees
(subject to applicable rules relating to grants of Incentive Stock Options) who
have accepted offers of employment from the Company or its Subsidiaries or
Affiliates, who are or will be responsible for or contribute to the management,
growth or profitability of the business of the Company, or its Subsidiaries or
Affiliates. Eligible independent contractors or consultants described above may
be individuals or entities, including without limitation partnerships or
corporations.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
          “Fair Market Value” means, except as otherwise provided by the
Committee, as of any given date, the closing price on any national exchange
listing the Company’s Common Stock on the Date of Grant , or if the shares were
not traded on such national exchange on such Date of Grant, then on the next
preceding date on which such shares of Common Stock were traded, all as reported
by such source as the Committee may select.
          “Incentive Stock Option” means any Stock Option that is designated by
the Committee as an “incentive stock option” within the meaning of Section 422
of the Code and otherwise meets the requirements set forth in the Plan.
          “Individual Agreement” means an employment or similar agreement
between an awardee and the Company or one of its Subsidiaries or Affiliates.
          “Nonqualified Stock Option” means any Stock Option that is not an
Incentive Stock Option.
          “Normal Retirement” means retirement from active employment with the
Company, a Subsidiary or Affiliate at or after age 65.
          “Qualified Performance-Based Award” means a Performance Award
designated as such by the Committee at the time of award, based upon a
determination that (i) the awardee is or may be a Covered Employee in the year
in which the Company would expect to be able to claim a federal income tax
deduction with respect to such Performance Award and (ii) the Committee intends
that such Award qualify for the Section 162(m) Exemption.
          “Performance Criteria” means the criterion or criteria that the
Committee shall select for purposes of establishing the Performance Goal(s) for
an Award Cycle with respect to any Performance Award under the Plan and shall
consist of one or more of the following measures: net earnings or net income
(before or after taxes); basic or diluted earnings per share (before or after
taxes, from continuing operations or otherwise); net revenue or net revenue
growth; gross profit or gross profit growth; operating profit (before or after
taxes); return measures (including, but not limited to, return on assets,
capital, invested capital, equity or sales); cash flow (including, but not
limited to, operating cash flow, free cash flow and cash flow return on
capital); earnings before or after taxes, interest, depreciation, and
amortization; gross or operating margins; productivity ratios; share price
(including, but not limited to, growth measures and total stockholder return);
expense targets; margins; operating efficiency; objective measures of customer
satisfaction; working capital targets; measures of economic value added;
inventory control; enterprise value; sales; debt levels and net debt; combined
ratio; timely launch of new facilities; client retention; employee retention;
performance relative to budget; unit volume, safety performance targets;
objective measures of personal targets, goals or completion of projects; any of
the foregoing on a non-GAAP adjusted basis; or any combination of the foregoing.
Any one or more of the Performance Criteria may be used on an absolute or
relative basis to measure the performance of the Company and/or one or more
Affiliates as a whole or any business unit(s) of the Company and/or one or more
Affiliates or any combination thereof, as the Committee may deem appropriate.

 

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          “Performance Formula” means, for an Award Cycle, the one or more
objective formulae applied against the relevant Performance Goal to determine,
with regard to the Performance Award of a particular awardee, whether all, some
portion but less than all, or none of the Performance Award has been earned for
the Award Cycle.
          “Performance Goals” means the performance goals established by the
Committee in connection with the grant of a Performance Award under Section 7 or
other stock-based Awards under Section 9. In the case of Qualified
Performance-Based Awards, (i) such goals shall be based on the attainment of
specified levels of one or more of the Performance Criteria, and (ii) such
Performance Goals shall be set by the Committee within the time period
prescribed by Section 162(m) of the Code and related regulations.
          “Performance Award” means an Award granted under Section 7.
          “Plan” means the CBIZ, Inc. 2002 Amended and Restated Stock Incentive
Plan, as set forth herein and as amended from time to time.
          “Prior Plan” means the CBIZ, Inc. Amended and Restated 1996 Employee
Stock Option Plan, as in effect immediately prior to the Effective Date.
          “Retirement” means Normal or Early Retirement.
          “Rule 16b-3” means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
          “Section 162(m) Exemption” means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in
Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder.
          “Stock Appreciation Right” means an Award granted under Section 6.
          “Stock Option” means an Award that is granted under Section 5 and that
consists of the right to purchase shares of Common Stock.
          “Subsidiary” means any corporation, partnership, joint venture or
other entity during any period in which at least a 50% voting or profits
interest is owned, directly or indirectly, by the Company or any successor to
the Company.
          “Termination of Employment” means the termination of the awardee’s
employment with, or performance of services for, the Company and any of its
Subsidiaries or Affiliates. An awardee employed by, or performing services for,
a Subsidiary or an Affiliate shall also be deemed to incur a Termination of
Employment if the Subsidiary or Affiliate ceases to be such a Subsidiary or an
Affiliate, as the case may be, and the awardee does not immediately thereafter
become an employee of, or service provider for, the Company or another
Subsidiary or Affiliate. Temporary absences from employment because of illness,
vacation or leave of absence and transfers among the Company and its
Subsidiaries and Affiliates shall not be considered Terminations of Employment.
     In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
SECTION 2. Administration
     The Plan shall be administered by the Compensation Committee or such other
committee of the Board as the Board may from time to time designate (the
“Committee”), which shall be composed of not less than three directors, and
shall be appointed by and serve at the pleasure of the Board. All members of the
Committee shall qualify as “outside directors” for purposes of the Section
162(m) Exemption and as “Non-Employee Directors,” for purposes of Rule 16b-3.
     The Committee shall have plenary authority to grant Awards pursuant to the
terms of the Plan to Eligible Awardees.
     Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
     (a) To select the Eligible Awardees to whom Awards may from time to time be
granted;
     (b) To determine whether and to what extent Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights, and Performance Awards or
any combination thereof are to be granted hereunder;
     (c) To determine the number of shares of Common Stock to be covered by an
Award granted hereunder;
     (d) To determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the exercise price (subject to Section 5(a)),
any vesting condition, restriction or limitation (which may be related to the
performance of the awardee, the Company or any Subsidiary or Affiliate) and any
vesting acceleration regarding any Award and the shares of Common Stock relating
thereto, based on such factors as the Committee shall determine;

 

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     (e) To modify, amend or adjust the terms and conditions of any Award, at
any time or from time to time, including but not limited to Performance Goals;
provided, however, that the Committee may not adjust upwards the amount payable
with respect to a Qualified Performance-Based Award or waive or alter the
Performance Goals associated therewith or otherwise exercise discretion that is
inconsistent with the requirements of the Section 162(m) Exemption in the case
of Awards that are intended to rely on such exemption; provided further,
however, that, notwithstanding any other provisions of the Plan, stockholder
approval shall be required for any action by the Committee (other than action
taken pursuant to Section 3(c)) to (i) reduce the exercise price of an
outstanding Stock Option or Stock Appreciation Right; (ii) cancel an outstanding
Stock Option or Stock Appreciation Right in exchange for cash or any other
Award; (iii) grant a new Stock Option or Stock Appreciation Right in connection
with the cancellation or termination (other than through exercise or expiration
of its term) of a prior granted Stock Option or Stock Appreciation Right, where
the exercise price of such newly granted Stock Option or Stock Appreciation
Right is less than the exercise price of such prior granted Stock Option or
Stock Appreciation Right; or (iv) take any action that is considered a
“repricing” for purposes of the stockholder approval rules of the applicable
securities exchange or inter-dealer quotation system on which the Common Stock
is listed or quoted.
     (f) To determine to what extent and under what circumstances the issuance
of Common Stock and the payment of other amounts payable with respect to an
Award shall be deferred; and
     (g) To determine under what circumstances an Award may be settled in cash
or Common Stock under Sections 5(l) and 6(b)(ii).
     The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret, administer, reconcile any
inconsistency, correct any defect or supply any omission in the Plan and any
instrument or agreement relating to an Award under the Plan and to otherwise
supervise the administration of the Plan.
     The Committee may act only by a majority of its members then in office.
Except to the extent prohibited by applicable law or the applicable rules of a
stock exchange, the Committee may delegate administrative responsibilities with
respect to the Plan. Any determination made by the Committee with respect to any
Award shall be made in the sole discretion of the Committee at the time of the
grant of the Award or, unless in contravention of any express term of the Plan,
at any time thereafter. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and Plan awardees.
     Any authority granted to the Committee may also be exercised by the full
Board, except to the extent that the grant or exercise of such authority would
cause any Award or transaction to become subject to (or lose an exemption under)
the short-swing profit recovery provisions of Section 16 of the Exchange Act or
cause an Award designated as a Qualified Performance-Based Award not to qualify
for, or to cease to qualify for, the Section 162(m) Exemption. To the extent
that any permitted action taken by the Board conflicts with action taken by the
Committee, the Board action shall control.
SECTION 3. Common Stock Subject to Plan
     (a) Maximum Number of Shares. The maximum number of shares of Common Stock
that may be issued to awardees and their beneficiaries under the Plan shall be
15,000,000, which number shall include those shares that are available for
grants under the Prior Plan. No Eligible Awardee may be granted in any fiscal
year of the Company Stock Options, Stock Appreciation Rights or any stock-based
Awards under Section 9 hereof (excluding dividend equivalents), or any
combination of such Awards, covering in excess of 1,000,000 shares of Common
Stock. Shares subject to an Award under the Plan may be authorized and unissued
shares or may be treasury shares. After May 12, 2011, no more than 3,200,000
shares can be granted in connection with Awards under the plan other than Stock
Options and Stock Appreciation Rights.
     (b) Certain Counting Rules. If any Award is forfeited, or if it terminates,
expires, lapses without being exercised or is cashed out pursuant to Section
5(l) hereof or otherwise, or an Award is exercised for, or is settled with,
cash, any shares of Common Stock subject to such Awards shall again be available
for issuance in connection with Awards under the Plan. Shares of Common Stock
used to pay the exercise price or tax obligations, or shares not issued in
connection with settlement of a Stock Option or Stock Appreciation Right or that
are used or withheld to satisfy tax obligations of an awardee shall,
notwithstanding anything herein to the contrary, not be available again for
Awards under the Plan.
     (c) Changes in Capitalization. In the event of any change in corporate
capitalization (including, but not limited to, a change in the number of shares
of Common Stock outstanding), such as a stock split or a corporate transaction,
any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Section 368
of the Code) or any partial or complete liquidation of the Company, the
Committee or Board shall make such equitable substitution or adjustments in the
aggregate number and kind of shares reserved for issuance under the Plan, and
the maximum limitation

 

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upon Stock Options and Stock Appreciation Rights to be granted to any awardee,
in the number, kind and exercise price of shares subject to outstanding Stock
Options and Stock Appreciation Rights, in the number and kind of shares subject
to other outstanding Awards granted under the Plan and such other equitable
substitution or adjustments as it may determine to be appropriate; provided,
however, that the number of shares subject to any Award shall always be a whole
number. Such adjusted exercise price shall also be used to determine the amount
payable by the Company upon the exercise of any Stock Appreciation Right
associated with any Stock Option. Unless otherwise determined by the Committee
or Board, any adjustments to Incentive Stock Options shall be made only to the
extent not constituting a “modification” within the meaning of Section 424(h)(3)
of the Code and any adjustments to Stock Options shall be made in a manner which
does not result in a violation of Section 409A of the Code.
     (d) Substitute Awards. Awards may, in the sole discretion of the Committee,
be granted under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by an entity acquired by the Company or with which the
Company combines (“Substitute Awards”). The number of shares of Common Stock
underlying any Substitute Awards shall be counted against the aggregate number
of shares of Common Stock available for Awards under the Plan.
SECTION 4. Eligibility
     Subject to any other restrictions set forth herein, Awards may be granted
or awarded under the Plan only to Eligible Awardees who have entered into Award
agreements or who have received written notification from the Committee or from
a person designated by the Committee, that they have been selected to
participate in the Plan.
SECTION 5. Stock Options
     Stock Options may be granted alone or in addition to other Awards granted
under the Plan and may be of two types: Incentive Stock Options and Nonqualified
Stock Options. Any Stock Option granted under the Plan shall be in such form as
the Committee may from time to time approve.
     The Committee shall have the authority to grant any optionee Incentive
Stock Options, Nonqualified Stock Options or both types of Stock Options (in
each case with or without Stock Appreciation Rights); provided, however, that
grants hereunder are subject to the aggregate limit on grants to Eligible
Awardees set forth in Section 3. Incentive Stock Options may be granted only to
officers or other employees of the Company and its parent or subsidiary
corporations (within the meaning of Section 424(e) and (f) of the Code). In the
case of an Incentive Stock Option, the terms and conditions of such grant shall
be subject to and comply with such rules as may be prescribed by Section 422 of
the Code. If for any reason a Stock Option intended to be an Incentive Stock
Option (or any portion thereof) shall not qualify as an Incentive Stock Option,
then, to the extent of such nonqualification, such Stock Option or portion
thereof shall be regarded as a Nonqualified Stock Option appropriately granted
under the Plan.
     Stock Options shall be evidenced by option agreements (whether in paper or
electronic medium (including email or the posting on a web site maintained by
the Company or a third party under contract with the Company)), the terms and
provisions of which may differ. An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
Nonqualified Stock Option. The Company shall notify an Eligible Awardee of any
grant of a Stock Option, and an option agreement or agreements shall be duly
executed and delivered by the Company to such optionee. Such agreement or
agreements shall become effective as of the Date of Grant upon execution by the
Company and the optionee.
     Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Committee shall deem desirable:
     (a) Exercise price. The exercise price per share of Common Stock shall not
be less than the greater of the par value or the Fair Market Value of a share of
the Common Stock on the Date of Grant; provided, however, that in the event the
optionee of an Incentive Stock Option owns (or is deemed to own pursuant to
Section 424(d) of the Code), at the time such Stock Option is awarded or
granted, more than ten percent (10%) of the voting power of all classes of stock
of the Company or of any parent or subsidiary corporation of the Company (within
the meaning of Section 424(e) and (f) of the Code), the exercise price shall not
be less than 110% of such Fair Market Value.
     (b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than six (6) years
after the date the Stock Option is granted, and no more than five (5) years
after such date in the case of an Incentive Stock Option granted to an Employee
who is a more than ten percent (10%) shareholder as described in Section 5(a)
above on the date of award or grant.
     (c) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option vests or becomes exercisable only in installments, the
Committee may at any time waive such installment exercise

 

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provisions, in whole or in part, based on such factors as the Committee may
determine. In addition, the Committee may at any time accelerate the
exercisability of any Stock Option.
     (d) Method of Exercise. Subject to the provisions of this Section 5, Stock
Options may be exercised, in whole or in part, at any time during the option
term by giving written notice of exercise to the Company specifying the number
of shares of Common Stock subject to the Stock Option to be purchased. Such
notice shall be accompanied by payment in full of the exercise price by
certified or bank check or such other instrument as the Company may accept. If
approved by the Committee, payment, in full or in part, may also be made in the
form of unrestricted Common Stock (by delivery of such shares or by attestation)
already owned by the optionee of the same class as the Common Stock subject to
the Stock Option (based on the Fair Market Value of the Common Stock on the date
the Stock Option is exercised); provided, however, that, in the case of an
Incentive Stock Option, the right to make a payment in the form of already owned
shares of Common Stock of the same class as the Common Stock subject to the
Stock Option may be authorized only at the time the Stock Option is granted and
provided, further, that such already owned shares shall have been held by the
optionee for at least six (6) months (or such shorter or longer period required
to avoid a charge to earnings for financial accounting purposes) at the time of
exercise or shall have been purchased on the open market.
     If approved by the Committee, payment in full or in part may also be made
by delivering a properly executed exercise notice to the Company, together with
a copy of irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale proceeds necessary to pay the exercise price, and, if
requested, by the amount of any federal, state, local or foreign withholding
taxes. To facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
     In addition, if approved by the Committee, payment in full or in part may
also be made by instructing the Committee to withhold a number of such shares
having a Fair Market Value on the date of exercise equal to the aggregate
exercise price of such Stock Option.
     No shares of Common Stock shall be issued until full payment therefor has
been made. An optionee shall have all of the rights of a stockholder of the
Company holding the class and/or series of Common Stock that is subject to such
Stock Option (including, if applicable, the right to vote the shares and the
right to receive dividends), only at such time as the optionee has given written
notice of exercise, has paid in full for such shares and, if requested, has
given the representation described in Section 13(a).
     (e) Notification Upon Disqualifying Disposition of an Incentive Stock
Option. Each awardee of an Incentive Stock Option under the Plan shall notify
the Company in writing immediately after the date he or she makes a
disqualifying disposition of any shares of Common Stock acquired pursuant to the
exercise of such Incentive Stock Option. A disqualifying disposition is any
disposition (including, without limitation, any sale) of such shares of Common
Stock before the later of (A) two years after the Date of Grant of the Incentive
Stock Option or (B) one year after the date of exercise of the Incentive Stock
Option. The Company may, if determined by the Committee and in accordance with
procedures established by the Committee, retain possession of any shares of
Common Stock acquired pursuant to the exercise of an Incentive Stock Option as
agent for the applicable awardee until the end of the period described in the
preceding sentence.
     (f) Compliance With Laws, etc. Notwithstanding the foregoing, in no event
shall an awardee be permitted to exercise a Stock Option in a manner that the
Committee determines would violate the Sarbanes-Oxley Act of 2002, or any other
applicable law or the applicable rules and regulations of the Securities and
Exchange Commission or the applicable rules and regulations of any securities
exchange or inter-dealer quotation system on which the securities of the Company
are listed or traded.
     (g) Nontransferability of Stock Options. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of descent
and distribution; or (ii) in the case of a Nonqualified Stock Option, as
otherwise expressly permitted by the Committee including, if so permitted,
pursuant to a transfer to a family member or members of the optionee, whether
directly or indirectly or by means of a trust or partnership or otherwise. For
purposes of this Plan, unless otherwise determined by the Committee, “family
member” shall have the meaning given to such term in General Instructions
A.1(a)(5) to Form S-8 under the Securities Act of 1933 as amended, and any
successor thereto. All Stock Options shall be exercisable, subject to the terms
of this Plan, only by the optionee, the guardian or legal representative of the
optionee, or any person to whom such option is transferred pursuant to this
paragraph, it being understood that the term “holder” and “optionee” include
such guardian, legal representative and other transferee.
     (h) Termination by Death. Unless otherwise determined by the Committee, if
an optionee incurs a Termination of Employment by reason of death, any Stock
Option held by such optionee may thereafter be exercised, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, for a
period of one (1) year (or such other period as the Committee may specify in the
option agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.

 

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     (i) Termination by Reason of Disability. Unless otherwise determined by the
Committee, if an optionee incurs a Termination of Employment by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised
by the optionee, to the extent it was exercisable at the time of such
Termination of Employment, or on such accelerated basis as the Committee may
determine, for a period of one (1) year (or such other period as the Committee
may specify in the option agreement) from the date of such Termination of
Employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the optionee dies
within such period, any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such period, continue to be exercisable to the
extent to which it was exercisable at the time of death for a period of one
(1) year from the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is the shorter. In the event of
Termination of Employment by reason of Disability, if an Incentive Stock Option
is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Nonqualified Stock Option.
     (j) Termination by Reason of Retirement. Unless otherwise determined by the
Committee, if an optionee incurs a Termination of Employment by reason of
Retirement, any Stock Option held by such optionee may thereafter be exercised
by the optionee, to the extent it was exercisable at the time of such
Retirement, or on such accelerated basis as the Committee may determine, for a
period of two years (or such other period as the Committee may specify in the
option agreement) from the date of such Termination of Employment or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter; provided, however, that if the optionee dies within such period any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of one year from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of Termination of Employment by
reason of Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a Nonqualified Stock
Option.
     (k) Other Terminations. Unless otherwise determined by the Committee:
(A) if an optionee incurs a Termination of Employment for Cause, all Stock
Options held by such optionee shall thereupon terminate upon such termination;
and (B) if an optionee incurs a Termination of Employment for any reason other
than death, Disability, Retirement or for Cause, any Stock Option held by such
optionee, to the extent it was then exercisable at the time of termination, or
on such accelerated basis as the Committee may determine, may be exercised for
the period of the earlier of three (3) months from the date of such Termination
of Employment or the expiration of the stated term of such Stock Option;
provided, however, that if the optionee dies within such three-month period, any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such three-month period, continue to be exercisable to the extent
to which it was exercisable at the time of death for a period of one (1) year
from the date of such death or until the expiration of the stated term of such
Stock Option, whichever period is the shorter. Notwithstanding any other
provision of this Plan to the contrary, in the event an optionee incurs a
Termination of Employment other than for Cause during the 24-month period
following a Change in Control, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination, or on such accelerated basis as the Committee may
determine, for the shorter of (x) the longer of (i) one (1) year from such date
of termination or (ii) such other period as may be provided in the Plan for such
Termination of Employment or as the Committee may provide in the option
agreement, or (y) expiration of the stated term of such Stock Option. If an
Incentive Stock Option is exercised after the expiration of the post-termination
exercise periods that apply for purposes of Section 422 of the Code, such Stock
Option will thereafter be treated as a Nonqualified Stock Option.
     (l) Cashing Out of Stock Option. On receipt of written notice of exercise,
the Committee (but not the optionee) may elect to cash out all or part of the
portion of the shares of Common Stock for which a Stock Option is being
exercised by paying the optionee an amount, in cash or Common Stock, equal to
the excess of the Fair Market Value of the Common Stock over the exercise price
times the number of shares of Common Stock for which the Stock Option is being
exercised on the effective date of such cash-out.
     (m) Change in Control Cash-Out. Notwithstanding any other provision of the
Plan, during the 60-day period from and after a Change in Control (the “Exercise
Period”), if the Committee shall determine at the time of grant or thereafter,
an optionee shall have the right, whether or not the Stock Option is fully
exercisable and in lieu of the payment of the exercise price for the shares of
Common Stock being purchased under the Stock Option and by giving notice to the
Company, to elect (within the Exercise Period) to surrender all or part of the
Stock Option to the Company and to receive cash, within thirty (30) days of such
election, in an amount equal to the amount by which the Change in Control Price
per share of Common Stock on the date of such election shall exceed the exercise
price per share of Common Stock under the Stock Option (the “Spread”) multiplied
by the number of shares of Common Stock granted under the Stock Option as to
which the right granted under this Section 5(m) shall have been exercised.
     (n) [Reserved]

 

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SECTION 6. Stock Appreciation Rights
     (a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Nonqualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option.
     A Stock Appreciation Right may be exercised by an optionee in accordance
with Section 6(b) by surrendering the applicable portion of the related Stock
Option in accordance with procedures established by the Committee. Upon such
exercise and surrender, the optionee shall be entitled to receive an amount
determined in the manner prescribed in Section 6(b). Stock Options which have
been so surrendered shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
     (b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including the
following:
     (i) Stock Appreciation Rights shall be exercisable only at such time or
times and to the extent that the Stock Options to which they relate are
exercisable in accordance with the provisions of Section 5 and this Section 6.
     (ii) Upon the exercise of a Stock Appreciation Right, an optionee shall be
entitled to receive an amount in cash, shares of Common Stock or both, in value
equal to the excess of the Fair Market Value of one share of Common Stock over
the exercise price per share specified in the related Stock Option multiplied by
the number of shares in respect of which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to determine the form of
payment.
     (iii) Stock Appreciation Rights shall be transferable only to permitted
transferees of the underlying Stock Option in accordance with Section 5(g).
     (iv) Upon the exercise of a Stock Appreciation Right, the Stock Option or
part thereof to which such Stock Appreciation Right is related shall be deemed
to have been exercised for the purpose of the limitation set forth in Section 3
on the number of shares of Common Stock to be issued under the Plan, but only to
the extent of the number of shares covered by the Stock Appreciation Right at
the time of exercise at such time.
SECTION 7. Performance Awards
     (a) Administration. Performance Awards may be awarded either alone or in
addition to other Awards granted under the Plan. A Performance Award shall
consist of the conditional right to receive shares of Common Stock, cash
(including cash bonuses determined with or without reference to shares of Common
Stock) or a combination of such shares and cash based upon the attainment of
specified goals over the term of an Award Cycle. In the event Performance Awards
consist of a conditional right to receive cash bonuses, such bonuses may be
expressed as percentages of a bonus pool that is established in accordance with
the requirements of the Section 162(m) Exemption.
     (b) Terms and Conditions. Performance Awards shall be subject to the
following terms and conditions:
     (i) The Committee may, prior to or at the time of the grant, designate a
Performance Award as a Qualified Performance-Based Award, in which event it
shall condition the settlement thereof upon the attainment of one or more
Performance Goals and shall otherwise structure the Award so as to qualify for
the Section 162(m) Exemption. In the case of a Qualified Performance-Based
Award, within the first ninety (90) days of an Award Cycle (or, if longer or
shorter, within the maximum period allowed under the Section 162(m) Exemption),
the Committee shall determine the Eligible Awardees to whom and the time or
times at which Performance Awards shall be awarded, the amount of cash or the
number of shares of Common Stock that may be paid or issued pursuant to
Performance Awards awarded to any Eligible Awardee or any group of Eligible
Awardees, the duration of the applicable Award Cycle, the Performance Criteria
that will be used to establish the Performance Goal(s), the kind(s) and/or
level(s) of the Performance Goal(s) that is (are) to apply and the Performance
Formula. If the Committee does not designate a Performance Award as a Qualified
Performance-Based Award, it may nevertheless condition the settlement thereof
upon the attainment of one or more Performance Goals. Regardless of whether
Performance Awards are Qualified Performance-Based Awards, the Committee may
also condition the settlement thereof upon the continued service of the awardee.
The provisions of such Awards (including without limitation any applicable
Performance Goals) need not be the same with respect to each awardee. Subject to
the provisions of the Plan and the Performance Award Agreement referred to in
Section 7(b)(vi), Performance Awards may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Award Cycle. Over any period of five
fiscal years of the Company the sum of any cash paid, and the Fair Market Value,
as of the date of payment or issuance, of any shares of Common Stock paid or
issued, to an awardee pursuant to Qualified Performance-

 

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Based Awards may not exceed ten percent (10%) of the reported EBITDA of the
Company and its Affiliates for such five year period.
     (ii) Except to the extent otherwise provided in the applicable Performance
Award Agreement (or other governing document), upon an awardee’s Termination of
Employment for any reason during the Award Cycle or before any applicable
Performance Goals are satisfied, all rights to receive cash or stock in
settlement of any Performance Awards shall be forfeited by the awardee;
provided, however, that the Committee shall have the discretion to waive, in
whole or in part, any or all remaining payment limitations (other than, in the
case of Performance Awards that are Qualified Performance-Based Awards,
satisfaction of the applicable Performance Goals unless the awardee’s employment
is terminated by reason of death or Disability) with respect to any or all of
such awardee’s Performance Awards.
     (iii) [Reserved]
     (iv) At the expiration of the applicable Award Cycle, the Committee shall
evaluate the Company’s performance in light of any Performance Goals and other
conditions for a Performance Award. In the case of Qualified Performance-Based
Awards, the Committee shall certify in writing whether, and to what extent, the
Performance Goals for the Award Cycle have been achieved and, if so, shall
determine and certify in writing the number of shares of Common Stock or the
amount of cash or both, that has been earned by the awardee. The Company shall
then cause to be delivered to the awardee the earned cash amount or the number
of shares, as appropriate; provided, however, that any Performance Award that
may be settled by the issuance of shares of Common Stock may, in the discretion
of the Committee, be settled by the payment of cash equal to the Fair Market
Value of such number of shares of Common Stock.
     (v) In determining the actual amount of an individual awardee’s Performance
Award for an Award Cycle, the Committee may reduce or eliminate the amount of
the Performance Award earned under the Performance Formula in the Award Cycle
through the use of negative discretion if, in its sole discretion, such
reduction or elimination is appropriate. The Committee shall not have the
discretion, except as otherwise provided in the Plan, to (A) grant or provide
payment in respect of a Performance Award for an Award Cycle if the Performance
Goal(s) for such Award Cycle have not been attained; or (B) increase a
Performance Award above the applicable limitations set forth in
Section 7(b)(vii) of the Plan.
     (vi) Except to the extent otherwise provided in the Performance Award
Agreement (or other governing document), Performance Awards granted for an Award
Cycle shall be paid as soon as administratively practicable following completion
of the Award Cycle and, to the extent applicable, the certification required by
Section 7(iv) and no later than March 15 of the year following the year in which
the Award Cycle ends.
     (vii) Each Award shall, unless otherwise documented by the Committee, be
confirmed by, and be subject to, the terms of a written agreement (a
“Performance Award Agreement”).
     (viii) Notwithstanding any provision contained in this Plan to the
contrary, the maximum Qualified Performance-Based Award payable to any one
awardee under the Plan for an Award Cycle is 1,000,000 shares of Common Stock
or, in the event such Qualified Performance-Based Award is paid in cash with
reference to shares of Common Stock, the equivalent cash value thereof on the
first or last day of the Award Cycle to which such Award relates, as determined
by the Committee. The maximum amount that can be paid in any calendar year to
any awardee pursuant to a cash bonus Award that is determined without reference
to shares of Common Stock shall be $10,000,000. Furthermore, any Qualified
Performance-Based Award that has been deferred shall not (between the date as of
which the Award is deferred and the payment date) increase (A) with respect to a
Qualified Performance-Based Award that is payable in cash, by a measuring factor
for each fiscal year greater than a reasonable rate of interest set by the
Committee; or (B) with respect to a Qualified Performance-Based Award that is
payable in shares of Common Stock, by an amount greater than the appreciation of
a share of Common Stock from the date such Award is deferred to the payment
date.
SECTION 8. [Reserved]
SECTION 9. Other Stock-Based Awards
     Awards not described in Sections 5, 6 or 7 above that constitute grants or
awards of Common Stock or other grants or awards that are valued in whole or in
part by reference to, or are otherwise based upon, Common Stock, including,
without limitation, restricted shares of Common Stock, dividend equivalents and
convertible debentures, may be granted either alone or in conjunction with other
Awards granted under the Plan. The Committee may, in its sole discretion,
prescribe such conditions or restrictions (including the attainment of
Performance Goals and/or other restrictions designed to satisfy the Section
162(m) Exemption) for the vesting or settlement of any such other Awards
described in this Section as it may deem advisable.

 

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SECTION 10. Change in Control Provisions
     (a) Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, the Committee may provide in the terms of any grant that in the event
of a Change in Control:
     (i) Any Stock Options and Stock Appreciation Rights outstanding as of the
date such Change in Control is determined to have occurred, and which are not
then exercisable and vested, shall become fully exercisable and vested to the
full extent of the original grant.
     (ii) All Performance Awards shall be considered to be earned and payable in
full, and any deferral or other restriction shall lapse and such Performance
Awards shall be settled in cash as promptly as is practicable.
     (b) Definition of Change in Control. For purposes of the Plan, a “Change in
Control” shall mean the occurrence 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 40% or more of either (1) the then outstanding shares of common stock of the
Company (the “Outstanding 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”); 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 entity controlled by the Company, or (4) any
acquisition pursuant to a transaction which complies with clauses (1), (2) and
(3) of subsection (iii) of this Section 10(b); or
     (ii) A change in the composition of the Board such that the individuals
who, as of the Effective Date, constitute the Board (such Board being
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 Section 10(b), that any individual who becomes a member of the Board
subsequent to the Effective Date, 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 deemed to be such pursuant to this provision) 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; 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 Outstanding Company 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 Outstanding Company
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, 40% 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
     (iv) A complete liquidation or dissolution of the Company.
     (c) Change in Control Price. For purposes of the Plan, “Change in Control
Price” means the higher of (i) the highest reported sales price, regular way, of
a share of Common Stock in any transaction reported on the New York Stock
Exchange Composite Tape or other national exchange on which such shares are
listed or on NYSE during the 60-day period prior to and including the date of a
Change in Control or (ii) if the Change in Control is the result of a tender or
exchange offer or a Corporate Transaction, the highest price per share of Common
Stock paid in such tender or exchange offer or Corporate Transaction; provided,
however, that in the case of Incentive Stock Options and Stock Appreciation

 

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Rights relating to Incentive Stock Options, the Change in Control Price shall be
in all cases the Fair Market Value of the Common Stock on the date such
Incentive Stock Option or Stock Appreciation Right is exercised. To the extent
that the consideration paid in any such transaction described above consists all
or in part of securities or other noncash consideration, the value of such
securities or other noncash consideration shall be determined at the sole
discretion of the Board.
SECTION 11. Term, Amendment and Termination
     The Plan will terminate on the day before the annual meeting of
stockholders to be held in calendar year 2021; provided, however , that no
Incentive Stock Option may be granted under the Plan after the day before the
tenth anniversary of the stockholders’ approval of the amendment and restatement
of the Plan at the annual meeting held on May 12, 2011. Under the Plan, Awards
outstanding as of such date shall not be affected or impaired by the termination
of the Plan.
     The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of an
optionee under a Stock Option or a recipient of a Stock Appreciation Right,
Performance Award or other stock-based Award theretofore granted without the
optionee’s or recipient’s consent, except such an amendment made to comply with
applicable law, stock exchange rules or accounting rules. In addition, no such
amendment shall be made without the requisite approval of the Company’s
stockholders if such amendment has the effect of changing the number of shares
of Common Stock available for issuance under the Plan (other than changes or
adjustments provided for in Section 3) or changing the identity of persons
eligible to receive Awards or to the extent such approval is required by
applicable law or stock exchange rules, including, without limitation, any law
governing the Section 162(m) Exemption or the qualification of Incentive Stock
Options under Section 422 of the Code.
     The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment shall
cause a Qualified Performance-Based Award or any other Award intended to comply
with the Section 162(m) Exemption to cease to qualify for such exemption or
impair the rights of any holder without the holder’s consent except such an
amendment made to cause the Plan or Award to comply with applicable law, stock
exchange rules or accounting rules. Stockholder approval shall be required for
any Committee action that is subject to such approval as described in
Section 2(e).
     Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules as
well as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.
SECTION 12. Unfunded Status of Plan
     It is presently intended that the Plan constitute an “unfunded” plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan.
SECTION 13. General Provisions
     (a) The Committee may require each person purchasing or receiving shares
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to the distribution thereof.
The certificates for such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.
     Notwithstanding any other provision of the Plan or agreements made pursuant
thereto, the Company shall not be required to issue or deliver any certificate
or certificates for shares of Common Stock under the Plan prior to fulfillment
of all of the following conditions:
     (1) Listing or approval for listing upon notice of issuance, of such shares
on the New York Stock Exchange, Inc., or such other securities exchange as may
at the time be the principal market for the Common Stock;
     (2) Any registration or other qualification of such shares of the Company
under any state or federal law or regulation, or the maintaining in effect of
any such registration or other qualification which the Committee shall, in its
absolute discretion upon the advice of counsel, deem necessary or advisable; and
     (3) Obtaining any other consent, approval, or permit from any state or
federal governmental agency which the Committee shall, in its absolute
discretion after receiving the advice of counsel, determine to be necessary or
advisable.
     (b) Nothing contained in the Plan shall prevent the Company or any
Subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.

 

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     (c) The Plan shall not constitute a contract of employment, and adoption of
the Plan shall not confer upon any employee any right to continued employment,
nor shall it interfere in any way with the right of the Company or any
Subsidiary or Affiliate to terminate the employment of any employee at any time.
     (d) No later than the date as of which an amount first becomes includible
in the gross income of the recipient of an Award for federal income tax purposes
with respect to any Award under the Plan, the awardee shall pay to the Company,
or make arrangements satisfactory to the Company regarding the payment of, any
federal, state, local or foreign taxes (or other amounts) of any kind required
by law to be withheld with respect to such amount. Unless otherwise determined
by the Company, withholding obligations may be settled with Common Stock,
including Common Stock that is part of the Award that gives rise to the
withholding requirement; provided that not more than the legally required
minimum withholding may be settled with Common Stock. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements, and
the Company and its Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the awardee.
The Committee may establish such procedures as it deems appropriate, including
making irrevocable elections, for the settlement of withholding obligations with
Common Stock.
     (e) The Committee shall establish such procedures as it deems appropriate
for an awardee to designate a beneficiary to whom any amounts payable in the
event of the awardee’s death are to be paid or by whom any rights of the
awardee, after the awardee’s death, may be exercised.
     (f) In the case of a grant of an Award to any employee of a Subsidiary of
the Company, the Company may, if the Committee so directs, issue or transfer the
shares of Common Stock, if any, covered by the Award to the Subsidiary, for such
lawful consideration as the Committee may specify, upon the condition or
understanding that the Subsidiary will transfer the shares of Common Stock to
the employee in accordance with the terms of the Award specified by the
Committee pursuant to the provisions of the Plan. All shares of Common Stock
underlying Awards that are forfeited or canceled shall revert to the Company.
     (g) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws.
     (h) Except as otherwise provided in Section 5(g) or 6(b)(iii) or by the
Committee, Awards under the Plan are not transferable except by will or by laws
of descent and distribution.
     (i) In the event an Award is granted to an Eligible Awardee who is employed
or providing services outside the United States and who is not compensated from
a payroll maintained in the United States, the Committee may, in its sole
discretion, modify the provisions of the Plan as they pertain to such individual
to comply with applicable foreign law.
     (j) The Committee may, in its sole discretion, permit an awardee to elect
to further defer receipt of cash or shares of Common Stock in settlement of a
Performance Award until a specified date or until a specified event described in
Section 409A(a)(2) of the Code, under such terms as the Committee may determine
and in accordance with the requirements of Code Section 409A and the regulations
issued thereunder. No such election in the case of a Qualified Performance-Based
Award may cause the Award to fail to qualify for the Section 162(m) Exemption.
     (k) If so determined by the Committee, the provisions of the Plan regarding
Performance Awards shall be disclosed and reapproved by stockholders no later
than the first stockholder meeting that occurs in the fifth year following the
year in which stockholders previously approved such provisions, in each case in
order for certain Awards granted after such time to qualify for the Section
162(m) Exemption. Nothing in this clause, however, shall affect the validity of
Awards granted after such time if such stockholder approval has not been
obtained.
SECTION 14. Effective Date of Plan
     The Plan shall be effective as of the Effective Date. The foregoing
notwithstanding, no issuance of shares or settlement of any Award or other
payment of compensation under the Plan may occur until shareholder approval of
the Plan.
SECTION 15. Director Equity Grants
     (a) Each director of the Company who is not otherwise an employee of the
Company or any of its Subsidiaries or Affiliates, shall on the first day after
his or her first election as a director of the Company automatically be granted
50,000 Nonqualified Stock Options to purchase Common Stock having an exercise
price of 100% of Fair Market Value of the Common Stock on the Date of Grant of
such Nonqualified Stock Option.
     (b) Annually thereafter each such non-employee director shall be granted
such Award, if any, as provided by the Company’s policy regarding the
compensation of non-employee directors as approved from time to time by the
Compensation Committee and the full Board.

 

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     (c) In the event that the number of shares of Common Stock available for
future grant under the Plan is insufficient to make all automatic grants
required to be made on the date specified in Section 15(a), then all
non-employee directors entitled to a grant on such date shall share ratably in
the number of options on shares available for grant under the Plan.
     (d) Each holder of a Stock Option granted pursuant to this Section 15 shall
also have the rights specified in Section 5(m). Except as expressly provided in
this Section 15, any Stock Option granted hereunder shall be subject to the
terms and conditions of the Plan as if the grant were made pursuant to Section 5
hereof.