EXHIBIT 10.7
LIBERTY GLOBAL, INC.
2005 NONEMPLOYEE DIRECTOR INCENTIVE PLAN
(As Amended and Restated Effective November 1, 2006)
ARTICLE I
PURPOSE OF PLAN
     1.1 Purpose. The purpose of the Plan is to provide a method whereby
eligible Nonemployee Directors of the Company may be awarded additional
remuneration for services rendered and encouraged to invest in capital stock of
the Company, thereby increasing their proprietary interest in the Company's
businesses and increasing their personal interest in the continued success and
progress of the Company. The Plan is also intended to aid in attracting Persons
of exceptional ability to become Nonemployee Directors of the Company.
     1.2 Effective Date. The Plan was originally effective May 11, 2004 (the
"Effective Date"), was amended and restated effective as of April 1, 2005 with
respect to Awards made after that date, and was further amended and restated
effective as of August 4, 2005 and March 8, 2006. The Plan is hereby further
amended and restated effective as of November 1, 2006.
ARTICLE II
DEFINITIONS
     2.1 Certain Defined Terms. Capitalized terms not defined elsewhere in the
Plan shall have the following meanings (whether used in the singular or plural):
     "Affiliate" of the Company means any corporation, partnership or other
business association that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
Company.
     "Agreement" means a stock option agreement, stock appreciation rights
agreement, restricted shares agreement, stock units agreement or an agreement
evidencing more than one type of Award, specified in Section 10.5, as any such
Agreement may be supplemented or amended from time to time.
     "Approved Transaction" means any transaction in which the Board (or, if
approval of the Board is not required as a matter of law, the stockholders of
the Company) shall approve (i) any consolidation or merger of the Company, or
binding share exchange, pursuant to which shares of Common Stock of the Company
would be changed or converted into or exchanged for cash, securities or other
property, other than any such transaction in which the common stockholders of
the Company immediately
 
 

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prior to such transaction have the same proportionate ownership of the Common
Stock of, and voting power with respect to, the surviving corporation
immediately after such transaction, (ii) any merger, consolidation or binding
share exchange to which the Company is a party as a result of which the Persons
who are common stockholders of the Company immediately prior thereto have less
than a majority of the combined voting power of the outstanding capital stock of
the Company ordinarily (and apart from the rights accruing under special
circumstances) having the right to vote in the election of directors immediately
following such merger, consolidation or binding share exchange, (iii) the
adoption of any plan or proposal for the liquidation or dissolution of the
Company, or (iv) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company.
     "Award" means a grant of Options, SARs, Restricted Shares, Stock Units
and/or cash under the Plan (other than cash payable under Article XI with
respect to Director Compensation, including cash in lieu of fractional shares).
     "Board" means the Board of Directors of the Company.
     "Board Change" means, during any period of two consecutive years,
individuals who at the beginning of such period constituted the entire Board
cease for any reason to constitute a majority thereof unless the election, or
the nomination for election, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of the period.
     "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute or statutes thereto. Reference to any specific
Code section shall include any successor section.
     "Common Stock" means each or any (as the context may require) series of the
Company's common stock.
     "Company" means Liberty Global, Inc., a Delaware corporation.
     "Control Purchase" means any transaction (or series of related
transactions) in which (i) any person (as such term is defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity
(other than the Company, any Subsidiary of the Company or any employee benefit
plan sponsored by the Company or any Subsidiary of the Company) shall purchase
any Common Stock of the Company (or securities convertible into Common Stock of
the Company) for cash, securities or any other consideration pursuant to a
tender offer or exchange offer, without the prior consent of the Board, or
(ii) any person (as such term is so defined), corporation or other entity (other
than the Company, any Subsidiary of the Company, any employee benefit plan
sponsored by the Company or any Subsidiary of the Company or any Exempt Person
(as defined below)) shall become the "beneficial owner" (as such term is defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of the then
outstanding
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securities of the Company ordinarily (and apart from the rights accruing under
special circumstances) having the right to vote in the election of directors
(calculated as provided in Rule 13d-3(d) under the Exchange Act in the case of
rights to acquire the Company's securities), other than in a transaction (or
series of related transactions) approved by the Board. For purposes of this
definition, "Exempt Person" means each of (a) the Chairman of the Board, the
President and each of the directors of the Company as of June 15, 2005, and
(b) the respective family members, estates, and heirs of each of the Persons
referred to in clause (a) above and any trust or other investment vehicle for
the primary benefit of any of such Persons or their respective family members or
heirs. As used with respect to any Person, the term "family member" means the
spouse, siblings and lineal descendants of such Person.
     "Director Compensation" means the fees prescribed to be paid by the Company
to Nonemployee Directors under the heading "Annual Fees" of the Liberty Global,
Inc. Compensation Policy for Nonemployee Directors (As Amended and Restated
Effective June 7, 2006), as the same may be amended from time to time.
     "Disability" means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months.
     "Dividend Equivalents" means, with respect to Restricted Shares to be
issued at the end of the Restriction Period, to the extent specified by the
Board only, an amount equal to all dividends and other distributions (or the
economic equivalent thereof) which are payable to stockholders of record during
the Restriction Period on a like number and kind of shares of Common Stock.
     "Domestic Relations Order" means a domestic relations order as defined by
the Code or Title I of the Employee Retirement Income Security Act, or the rules
thereunder.
     "Effective Date" has the meaning ascribed thereto in Section 1.2.
     "Election Deadline" means, with respect to a particular calendar quarter,
the last day of the immediately preceding calendar quarter.
     "Election Notice" means a written notice provided by a Nonemployee Director
to the Company informing the Company of the Nonemployee Director's decision to
exercise such Nonemployee Director's Stock Election Right.
     "Equity Security" shall have the meaning ascribed to such term in
Section 3(a)(11) of the Exchange Act, and an equity security of an issuer shall
have the meaning ascribed thereto in Rule 16a-1 promulgated under the Exchange
Act, or any successor Rule.
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     "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute or statutes thereto. Reference to any
specific Exchange Act section shall include any successor section.
     "Fair Market Value" of a share of any series of Common Stock on any day
means the last sale price (or, if no last sale price is reported, the average of
the high bid and low asked prices) for a share of such series of Common Stock on
such day (or, if such day is not a trading day, on the next preceding trading
day) as reported on the consolidated transaction reporting system for the
principal national securities exchange on which shares of such series of Common
Stock are listed on such day or if such shares are not then listed on a national
securities exchange, then as reported on Nasdaq. If for any day the Fair Market
Value of a share of the applicable series of Common Stock is not determinable by
any of the foregoing means, then the Fair Market Value for such day shall be
determined in good faith by the Board on the basis of such quotations and other
considerations as the Board deems appropriate.
     "Free Standing SAR" has the meaning ascribed thereto in Section 7.1.
     "Holder" means a Person who has received an Award under the Plan or who has
exercised his Stock Election Right with respect to a particular calendar quarter
and has not yet received the shares issuable as a result of such exercise.
     "Nasdaq" means The Nasdaq Stock Market.
     "Nonemployee Director" means an individual who is a member of the Board and
who is not an employee of the Company or any Subsidiary.
     "Nonqualified Stock Option" means a stock option granted under Article VI.
     "Option" means a Nonqualified Stock Option.
     "Person" means an individual, corporation, limited liability company,
partnership, trust, incorporated or unincorporated association, joint venture or
other entity of any kind.
     "Plan" means this Liberty Global, Inc. 2005 Nonemployee Director Incentive
Plan (As Amended and Restated Effective November 1, 2006).
     "Purchase Restriction" means any restriction under applicable law
(including, without limitation, a blackout period under the Sarbanes-Oxley Act
of 2002) or the rules of The Nasdaq Stock Market or any other principal national
securities exchange on which shares of the applicable series of Common Stock are
traded that would prohibit a Nonemployee Director from purchasing Common Stock.
     "Rescission Notice" means a written notice provided by a Nonemployee
Director to the Company informing the Company of the Nonemployee Director's
decision to
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rescind the future application of a previously delivered Election Notice in
accordance with Section 11.3.
     "Restricted Shares" means shares of any series of Common Stock or the right
to receive shares of any specified series of Common Stock, as the case may be,
awarded pursuant to Article VIII.
     "Restriction Period" means a period of time beginning on the date of each
Award of Restricted Shares and ending on the Vesting Date with respect to such
Award.
     "Retained Distribution" has the meaning ascribed thereto in Section 8.3.
     "SARs" means stock appreciation rights, awarded pursuant to Article VII,
with respect to shares of any specified series of Common Stock.
     "Stock Election Right" means the right of a Nonemployee Director to elect
to receive shares of one or more series of Common Stock, as prescribed by the
Board, in payment of the Director Compensation payable to such Nonemployee
Director with respect to a particular calendar quarter.
     "Stock Unit Awards" has the meaning ascribed thereto in Section 9.1.
     "Subsidiary" of a Person means any present or future subsidiary (as defined
in Section 424(f) of the Code) of such Person or any business entity in which
such Person owns, directly or indirectly, 50% or more of the voting, capital or
profits interests. An entity shall be deemed a subsidiary of a Person for
purposes of this definition only for such periods as the requisite ownership or
control relationship is maintained.
     "Tandem SARs" has the meaning ascribed thereto in Section 7.1.
     "Vesting Date," with respect to any Restricted Shares awarded hereunder,
means the date on which such Restricted Shares cease to be subject to a risk of
forfeiture, as designated in or determined in accordance with the Agreement with
respect to such Award of Restricted Shares pursuant to Article VIII. If more
than one Vesting Date is designated for an Award of Restricted Shares, reference
in the Plan to a Vesting Date in respect of such Award shall be deemed to refer
to each part of such Award and the Vesting Date for such part.
ARTICLE III
ADMINISTRATION
     3.1 Administration. The Plan shall be administered by the Board, provided
that it may delegate to employees of the Company certain administrative or
ministerial duties in carrying out the purposes of the Plan.
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     3.2 Powers. The Board shall have full power and authority to grant to
eligible Persons Options under Article VI of the Plan, SARs under Article VII of
the Plan, Restricted Shares under Article VIII of the Plan and/or Stock Units
under Article IX of the Plan, to determine the terms and conditions (which need
not be identical) of all Awards so granted, to interpret the provisions of the
Plan and any Agreements relating to Awards granted under the Plan and to
supervise the administration of the Plan. The Board in making an Award may
provide for the granting or issuance of additional, replacement or alternative
Awards upon the occurrence of specified events, including the exercise of the
original Award. The Board shall have sole authority in the selection of Persons
to whom Awards may be granted under the Plan and in the determination of the
timing, pricing, and amount of any such Award, subject only to the express
provisions of the Plan. In making determinations hereunder, the Board may take
into account such factors as the Board in its discretion deems relevant.
     3.3 Interpretation. The Board is authorized, subject to the provisions of
the Plan, to establish, amend and rescind such rules and regulations as it deems
necessary or advisable for the proper administration of the Plan and to take
such other action in connection with or in relation to the Plan as it deems
necessary or advisable. Each action and determination made or taken pursuant to
the Plan by the Board, including any interpretation or construction of the Plan,
shall be final and conclusive for all purposes and upon all Persons. No member
of the Board shall be liable for any action or determination made or taken by
him or the Board in good faith with respect to the Plan.
ARTICLE IV
SHARES SUBJECT TO THE PLAN
     4.1 Number of Shares. Subject to the provisions of this Article IV, the
maximum number of shares of Common Stock (i) with respect to which Awards may be
granted during the term of the Plan, and (ii) which may be issued in payment of
Director Compensation pursuant to Article XI shall be 10 million shares;
provided, however, that the maximum number of shares of the Company's Series B
common stock, $.01 par value per share, with respect to which Awards may be so
granted or that may be so issued during the term of the Plan shall be 5 million
shares. The shares of Common Stock subject to (a) any Award granted under the
Plan that shall expire, terminate or be annulled for any reason without having
been exercised (or considered to have been exercised as provided in Section
7.2), (b) any Award of any SARs granted under the Plan that shall be exercised
for cash, and (c) any Award of Restricted Shares or Stock Units that shall be
forfeited prior to becoming vested (provided that the Holder received no
benefits of ownership of such Restricted Shares or Stock Units other than voting
rights and the accumulation of Retained Distributions and unpaid Dividend
Equivalents that are likewise forfeited) shall again be available for purposes
of the Plan.
     4.2 Adjustments. If the Company subdivides its outstanding shares of any
series of Common Stock into a greater number of shares of such series of Common
Stock (by stock dividend, stock split, reclassification, or otherwise) or
combines its outstanding shares of any series of Common Stock into a smaller
number of shares of such series of Common Stock (by reverse stock split,
reclassification, or otherwise) or if the Board determines that any stock
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dividend, extraordinary cash dividend, reclassification, recapitalization,
reorganization, split-up, spin-off, combination, exchange of shares, warrants or
rights offering to purchase such series of Common Stock or other similar
corporate event (including mergers or consolidations other than those which
constitute Approved Transactions, adjustments with respect to which shall be
governed by Section 10.1(b)) affects any series of Common Stock so that an
adjustment is required to preserve the benefits or potential benefits intended
to be made available under the Plan, then the Board, in its sole discretion and
in such manner as the Board may deem equitable and appropriate, may make such
adjustments to any or all of (a) the number and kind of shares of stock which
thereafter may be awarded, optioned, or otherwise made subject to the benefits
contemplated by the Plan, (b) the number and kind of shares of stock subject to
outstanding Awards, and (c) the purchase or exercise price and the relevant
appreciation base with respect to any of the foregoing, provided, however, that
the number of shares subject to any Award shall always be a whole number.
Notwithstanding the foregoing, if all shares of any series of Common Stock are
redeemed, then each outstanding Award shall be adjusted to substitute for the
shares of such series of Common Stock subject thereto the kind and amount of
cash, securities or other assets issued or paid in the redemption of the
equivalent number of shares of such series of Common Stock and otherwise the
terms of such Award, including, in the case of Options or similar rights, the
aggregate exercise price, and, in the case of Free Standing SARs, the aggregate
base price, shall remain constant before and after the substitution (unless
otherwise determined by the Board and provided in the applicable Agreement). The
Board may, if deemed appropriate, provide for a cash payment to any Holder of an
Award in connection with any adjustment made pursuant to this Section 4.2.
ARTICLE V
ELIGIBILITY
     5.1 General. The Persons who shall be eligible to participate in the Plan
and to receive Awards under the Plan shall, subject to Section 5.2, be such
Persons who are Nonemployee Directors as the Board shall select. Awards may be
made to Nonemployee Directors who hold or have held Awards under the Plan or any
similar or other awards under any other plan of the Company or any of its
Affiliates.
     5.2 Ineligibility. No Person who is not a Nonemployee Director shall be
eligible to receive an Award.
ARTICLE VI
STOCK OPTIONS
     6.1 Grant of Options. Subject to the limitations of the Plan, the Board
shall designate from time to time those eligible Persons to be granted Options,
the time when each Option shall be granted to such eligible Persons, the series
and number of shares of Common Stock subject to such Option, and, subject to
Section 6.2, the purchase price of the shares of Common Stock subject to such
Option.
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     6.2 Option Price. The price at which shares may be purchased upon exercise
of an Option shall be fixed by the Board and may be no less than the Fair Market
Value of the shares of the applicable series of Common Stock subject to the
Option as of the date the Option is granted.
     6.3 Term of Options. Subject to the provisions of the Plan with respect to
death, retirement and termination of service, the term of each Option shall be
for such period as the Board shall determine as set forth in the applicable
Agreement.
     6.4 Exercise of Options. An Option granted under the Plan shall become (and
remain) exercisable during the term of the Option to the extent provided in the
applicable Agreement and the Plan and, unless the Agreement otherwise provides,
may be exercised to the extent exercisable, in whole or in part, at any time and
from time to time during such term; provided, however, that subsequent to the
grant of an Option, the Board, at any time before complete termination of such
Option, may accelerate the time or times at which such Option may be exercised
in whole or in part (without reducing the term of such Option).
     6.5 Manner of Exercise.
     (a) Form of Payment. An Option shall be exercised by written notice to the
Company upon such terms and conditions as the Agreement may provide and in
accordance with such other procedures for the exercise of Options as the Board
may establish from time to time. The method or methods of payment of the
purchase price for the shares to be purchased upon exercise of an Option and of
any amounts required by Section 10.9 shall be determined by the Board and may
consist of (i) cash, (ii) check, (iii) whole shares of any series of Common
Stock, (iv) the withholding of shares of the applicable series of Common Stock
issuable upon such exercise of the Option, (v) the delivery, together with a
properly executed exercise notice, of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds required to
pay the purchase price, or (vi) any combination of the foregoing methods of
payment, or such other consideration and method of payment as may be permitted
for the issuance of shares under the Delaware General Corporation Law. The
permitted method or methods of payment of the amounts payable upon exercise of
an Option, if other than in cash, shall be set forth in the applicable Agreement
and may be subject to such conditions as the Board deems appropriate.
     (b) Value of Shares. Unless otherwise determined by the Board and provided
in the applicable Agreement, shares of any series of Common Stock delivered in
payment of all or any part of the amounts payable in connection with the
exercise of an Option, and shares of any series of Common Stock withheld for
such payment, shall be valued for such purpose at their Fair Market Value as of
the exercise date.
     (c) Issuance of Shares. The Company shall effect the transfer of the shares
of Common Stock purchased under the Option as soon as practicable after the
exercise thereof and payment in full of the purchase price therefor and of any
amounts required by Section 10.9, and within a reasonable time thereafter, such
transfer shall be evidenced on
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the books of the Company. Unless otherwise determined by the Board and provided
in the applicable Agreement, (i) no Holder or other Person exercising an Option
shall have any of the rights of a stockholder of the Company with respect to
shares of Common Stock subject to an Option granted under the Plan until due
exercise and full payment has been made, and (ii) no adjustment shall be made
for cash dividends or other rights for which the record date is prior to the
date of such due exercise and full payment.
     6.6 Nontransferability. Unless otherwise determined by the Board and
provided in the applicable Agreement, Options shall not be transferable other
than by will or the laws of descent and distribution or pursuant to a Domestic
Relations Order, and, except as otherwise required pursuant to a Domestic
Relations Order, Options may be exercised during the lifetime of the Holder
thereof only by such Holder (or his or her court-appointed legal
representative).
ARTICLE VII
SARS
     7.1 Grant of SARs. Subject to the limitations of the Plan, SARs may be
granted by the Board to such eligible Persons in such numbers, with respect to
any specified series of Common Stock, and at such times during the term of the
Plan as the Board shall determine. A SAR may be granted to a Holder of an Option
(hereinafter called a "related Option") with respect to all or a portion of the
shares of Common Stock subject to the related Option (a "Tandem SAR") or may be
granted separately to an eligible Nonemployee Director (a "Free Standing SAR").
Subject to the limitations of the Plan, SARs shall be exercisable in whole or in
part upon notice to the Company upon such terms and conditions as are provided
in the Agreement.
     7.2 Tandem SARs. A Tandem SAR may be granted either concurrently with the
grant of the related Option or at any time thereafter prior to the complete
exercise, termination, expiration or cancellation of such related Option. Tandem
SARs shall be exercisable only at the time and to the extent that the related
Option is exercisable (and may be subject to such additional limitations on
exercisability as the Agreement may provide) and in no event after the complete
termination or full exercise of the related Option. Upon the exercise or
termination of the related Option, the Tandem SARs with respect thereto shall be
canceled automatically to the extent of the number of shares of Common Stock
with respect to which the related Option was so exercised or terminated. Subject
to the limitations of the Plan, upon the exercise of a Tandem SAR and unless
otherwise determined by the Board and provided in the applicable Agreement,
(a) the Holder thereof shall be entitled to receive from the Company, for each
share of the applicable series of Common Stock with respect to which the Tandem
SAR is being exercised, consideration (in the form determined as provided in
Section 7.4) equal in value to the excess of the Fair Market Value of a share of
the applicable series of Common Stock with respect to which the Tandem SAR was
granted on the date of exercise over the related Option purchase price per
share, and (b) the related Option with respect thereto shall be canceled
automatically to the extent of the number of shares of Common Stock with respect
to which the Tandem SAR was so exercised.
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     7.3 Free Standing SARs. Free Standing SARs shall be exercisable at the
time, to the extent and upon the terms and conditions set forth in the
applicable Agreement. The base price of a Free Standing SAR may be no less than
the Fair Market Value of the applicable series of Common Stock with respect to
which the Free Standing SAR was granted as of the date the Free Standing SAR is
granted. Subject to the limitations of the Plan, upon the exercise of a Free
Standing SAR and unless otherwise determined by the Board and provided in the
applicable Agreement, the Holder thereof shall be entitled to receive from the
Company, for each share of the applicable series of Common Stock with respect to
which the Free Standing SAR is being exercised, consideration (in the form
determined as provided in Section 7.4) equal in value to the excess of the Fair
Market Value of a share of the applicable series of Common Stock with respect to
which the Free Standing SAR was granted on the date of exercise over the base
price per share of such Free Standing SAR.
     7.4 Consideration. The consideration to be received upon the exercise of a
SAR by the Holder shall be paid in the applicable series of Common Stock with
respect to which the SAR was granted (valued at Fair Market Value on the date of
exercise of such SAR); provided, however, that the Board may permit the Holder
of a SAR who is not subject to United States Federal Income Tax to be paid
consideration in the form of cash, or a combination of cash and the applicable
series of Common Stock with respect to which the SAR was granted. No fractional
shares of Common Stock shall be issuable upon exercise of a SAR, and unless
otherwise provided in the applicable Agreement, the Holder will receive cash in
lieu of fractional shares. Unless the Board shall otherwise determine, to the
extent a Free Standing SAR is exercisable, it will be exercised automatically on
its expiration date.
     7.5 Limitations. The applicable Agreement may provide for a limit on the
amount payable to a Holder upon exercise of SARs at any time or in the
aggregate, for a limit on the time periods during which a Holder may exercise
SARs, and for such other limits on the rights of the Holder and such other terms
and conditions of the SAR, including a condition that the SAR may be exercised
only in accordance with rules and regulations adopted from time to time, as the
Board may determine. Unless otherwise so provided in the applicable Agreement,
any such limit relating to a Tandem SAR shall not restrict the exercisability of
the related Option. Such rules and regulations may govern the right to exercise
SARs granted prior to the adoption or amendment of such rules and regulations as
well as SARs granted thereafter.
     7.6 Exercise. For purposes of this Article VII, the date of exercise of a
SAR shall mean the date on which the Company shall have received notice from the
Holder of the SAR of the exercise of such SAR (unless otherwise determined by
the Board and provided in the applicable Agreement).
     7.7 Nontransferability. Unless otherwise determined by the Board and
provided in the applicable Agreement, (a) SARs shall not be transferable other
than by will or the laws of descent and distribution or pursuant to a Domestic
Relations Order, and (b) except as otherwise required pursuant to a Domestic
Relations Order, SARs may be exercised during the lifetime of the Holder thereof
only by such Holder (or his or her court-appointed legal representative).
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ARTICLE VIII
RESTRICTED SHARES
     8.1 Grant. Subject to the limitations of the Plan, the Board shall
designate those eligible Persons to be granted Awards of Restricted Shares,
shall determine the time when each such Award shall be granted, shall determine
whether shares of Common Stock covered by Awards of Restricted Shares will be
issued at the beginning or the end of the Restriction Period and whether
Dividend Equivalents will be paid during the Restriction Period in the event
shares of the applicable series of Common Stock are to be issued at the end of
the Restriction Period, and shall designate (or set forth the basis for
determining) the Vesting Date or Vesting Dates for each Award of Restricted
Shares, and may prescribe other restrictions, terms and conditions applicable to
the vesting of such Restricted Shares in addition to those provided in the Plan.
The Board shall determine the price, if any, to be paid by the Holder for the
Restricted Shares; provided, however, that the issuance of Restricted Shares
shall be made for at least the minimum consideration necessary to permit such
Restricted Shares to be deemed fully paid and nonassessable. All determinations
made by the Board pursuant to this Section 8.1 shall be specified in the
Agreement.
     8.2 Issuance of Restricted Shares at Beginning of the Restriction Period.
If shares of the applicable series of Common Stock are issued at the beginning
of the Restriction Period, the stock certificate or certificates representing
such Restricted Shares shall be registered in the name of the Holder to whom
such Restricted Shares shall have been awarded. During the Restriction Period,
certificates representing the Restricted Shares and any securities constituting
Retained Distributions shall bear a restrictive legend to the effect that
ownership of the Restricted Shares (and such Retained Distributions), and the
enjoyment of all rights appurtenant thereto, are subject to the restrictions,
terms and conditions provided in the Plan and the applicable Agreement. Such
certificates shall remain in the custody of the Company or its designee, and the
Holder shall deposit with the custodian stock powers or other instruments of
assignment, each endorsed in blank, so as to permit retransfer to the Company of
all or any portion of the Restricted Shares and any securities constituting
Retained Distributions that shall be forfeited or otherwise not become vested in
accordance with the Plan and the applicable Agreement.
     8.3 Restrictions. Restricted Shares issued at the beginning of the
Restriction Period shall constitute issued and outstanding shares of the
applicable series of Common Stock for all corporate purposes. The Holder will
have the right to vote such Restricted Shares, to receive and retain such
dividends and distributions, as the Board may designate, paid or distributed on
such Restricted Shares, and to exercise all other rights, powers and privileges
of a Holder of shares of the applicable series of Common Stock with respect to
such Restricted Shares; except, that, unless otherwise determined by the Board
and provided in the applicable Agreement, (a) the Holder will not be entitled to
delivery of the stock certificate or certificates representing such Restricted
Shares until the Restriction Period shall have expired and unless all other
vesting requirements with respect thereto shall have been fulfilled or waived;
(b) the Company or its designee will retain custody of the stock certificate or
certificates representing the Restricted Shares during the Restriction Period as
provided in Section 8.2; (c) other than such dividends and
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distributions as the Board may designate, the Company or its designee will
retain custody of all distributions ("Retained Distributions") made or declared
with respect to the Restricted Shares (and such Retained Distributions will be
subject to the same restrictions, terms and vesting, and other conditions as are
applicable to the Restricted Shares) until such time, if ever, as the Restricted
Shares with respect to which such Retained Distributions shall have been made,
paid or declared shall have become vested, and such Retained Distributions shall
not bear interest or be segregated in a separate account; (d) the Holder may not
sell, assign, transfer, pledge, exchange, encumber or dispose of the Restricted
Shares or any Retained Distributions or his interest in any of them during the
Restriction Period; and (e) a breach of any restrictions, terms or conditions
provided in the Plan or established by the Board with respect to any Restricted
Shares or Retained Distributions will cause a forfeiture of such Restricted
Shares and any Retained Distributions with respect thereto.
     8.4 Issuance of Stock at End of the Restriction Period. Restricted Shares
issued at the end of the Restriction Period shall not constitute issued and
outstanding shares of the applicable series of Common Stock, and the Holder
shall not have any of the rights of a stockholder with respect to the shares of
Common Stock covered by such an Award of Restricted Shares, in each case until
such shares shall have been transferred to the Holder at the end of the
Restriction Period. If and to the extent that shares of Common Stock are to be
issued at the end of the Restriction Period, the Holder shall be entitled to
receive Dividend Equivalents with respect to the shares of Common Stock covered
thereby either (a) during the Restriction Period or (b) in accordance with the
rules applicable to Retained Distributions, as the Board may specify in the
Agreement.
     8.5 Cash Payments. In connection with any Award of Restricted Shares, an
Agreement may provide for the payment of a cash amount to the Holder of such
Restricted Shares after such Restricted Shares shall have become vested. Such
cash amounts shall be payable in accordance with such additional restrictions,
terms and conditions as shall be prescribed by the Board in the Agreement and
shall be in addition to any other compensation payments which such Holder shall
be otherwise entitled or eligible to receive from the Company.
     8.6 Completion of Restriction Period. On the Vesting Date with respect to
each Award of Restricted Shares and the satisfaction of any other applicable
restrictions, terms and conditions, (a) all or the applicable portion of such
Restricted Shares shall become vested, (b) any Retained Distributions and any
unpaid Dividend Equivalents with respect to such Restricted Shares shall become
vested to the extent that the Restricted Shares related thereto shall have
become vested, and (c) any cash amount to be received by the Holder with respect
to such Restricted Shares shall become payable, all in accordance with the terms
of the applicable Agreement. Any such Restricted Shares, Retained Distributions
and any unpaid Dividend Equivalents that shall not become vested shall be
forfeited to the Company, and the Holder shall not thereafter have any rights
(including dividend and voting rights) with respect to such Restricted Shares,
Retained Distributions and any unpaid Dividend Equivalents that shall have been
so forfeited. The Board may, in its discretion, provide that the delivery of any
Restricted Shares, Retained Distributions and unpaid Dividend Equivalents that
shall have become vested, and payment of any cash amounts that shall have become
payable, shall be deferred until such date or dates as the recipient may elect.
Any election of a recipient pursuant to the preceding
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sentence shall be filed in writing with the Board in accordance with such rules
and regulations, including any deadline for the making of such an election, as
the Board may provide, and shall be made in compliance with Section 409A of the
Code.
ARTICLE IX
STOCK UNITS
     9.1 Grant. In addition to granting Awards of Options, SARs and Restricted
Shares, the Board shall, subject to the limitations of the Plan, have authority
to grant to eligible Persons Awards of Stock Units which may be in the form of
shares of any specified series of Common Stock or units, the value of which is
based, in whole or in part, on the Fair Market Value of the shares of any
specified series of Common Stock. Subject to the provisions of the Plan,
including any rules established pursuant to Section 9.2, Awards of Stock Units
shall be subject to such terms, restrictions, conditions, vesting requirements
and payment rules as the Board may determine in its discretion, which need not
be identical for each Award. The determinations made by the Board pursuant to
this Section 9.1 shall be specified in the applicable Agreement.
     9.2 Rules. The Board may, in its discretion, establish any or all of the
following rules for application to an Award of Stock Units:
     (a) Any shares of Common Stock which are part of an Award of Stock Units
may not be assigned, sold, transferred, pledged or otherwise encumbered prior to
the date on which the shares are issued or, if later, the date provided by the
Board at the time of the Award.
     (b) Such Awards may provide for the payment of cash consideration by the
Person to whom such Award is granted or provide that the Award, and any shares
of Common Stock to be issued in connection therewith, if applicable, shall be
delivered without the payment of cash consideration; provided, however, that the
issuance of any shares of Common Stock in connection with an Award of Stock
Units shall be for at least the minimum consideration necessary to permit such
shares to be deemed fully paid and nonassessable.
     (c) Awards of Stock Units may relate in whole or in part to performance or
other criteria established by the Board at the time of grant.
     (d) Awards of Stock Units may provide for deferred payment schedules,
vesting over a specified period of service, the payment (on a current or
deferred basis) of dividend equivalent amounts with respect to the number of
shares of Common Stock covered by the Award, and elections by the Holder to
defer payment of the Award or the lifting of restrictions on the Award, if any,
provided that any such deferrals shall comply with the requirements of
Section 409A of the Code.
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     (e) In such circumstances as the Board may deem advisable, the Board may
waive or otherwise remove, in whole or in part, any restrictions or limitations
to which a Stock Unit Award was made subject at the time of grant.
ARTICLE X
GENERAL PROVISIONS
     10.1 Acceleration of Awards.
     (a) Death or Disability. If a Holder's service shall terminate by reason of
death or Disability, notwithstanding any contrary waiting period, installment
period, vesting schedule or Restriction Period in any Agreement or in the Plan,
unless the applicable Agreement provides otherwise: (i) in the case of an Option
or SAR, each outstanding Option or SAR granted under the Plan shall immediately
become exercisable in full in respect of the aggregate number of shares covered
thereby; (ii) in the case of Restricted Shares, the Restriction Period
applicable to each such Award of Restricted Shares shall be deemed to have
expired and all such Restricted Shares, any related Retained Distributions and
any unpaid Dividend Equivalents shall become vested and any related cash amounts
payable pursuant to the applicable Agreement shall be adjusted in such manner as
may be provided in the Agreement; and (iii) in the case of Stock Units, each
such Award of Stock Units shall become vested in full.
     (b) Approved Transactions; Board Change; Control Purchase. In the event of
any Approved Transaction, Board Change or Control Purchase, notwithstanding any
contrary waiting period, installment period, vesting schedule or Restriction
Period in any Agreement or in the Plan, unless the applicable Agreement provides
otherwise: (i) in the case of an Option or SAR, each such outstanding Option or
SAR granted under the Plan shall become exercisable in full in respect of the
aggregate number of shares covered thereby; (ii) in the case of Restricted
Shares, the Restriction Period applicable to each such Award of Restricted
Shares shall be deemed to have expired and all such Restricted Shares, any
related Retained Distributions and any unpaid Dividend Equivalents shall become
vested and any related cash amounts payable pursuant to the applicable Agreement
shall be adjusted in such manner as may be provided in the Agreement; and
(iii) in the case of Stock Units, each such Award of Stock Units shall become
vested in full, in each case effective upon the Board Change or Control Purchase
or immediately prior to consummation of the Approved Transaction.
Notwithstanding the foregoing, unless otherwise provided in the applicable
Agreement, the Board may, in its discretion, determine that any or all
outstanding Awards of any or all types granted pursuant to the Plan will not
vest or become exercisable on an accelerated basis in connection with an
Approved Transaction if effective provision has been made for the taking of such
action which, in the opinion of the Board, is equitable and appropriate to
substitute a new Award for such Award or to assume such Award and to make such
new or assumed Award, as nearly as may be practicable, equivalent to the old
Award (before giving effect to any acceleration of the vesting or exercisability
thereof), taking into account, to the extent applicable, the kind and amount of
securities, cash or other assets into or for which
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     the applicable series of Common Stock may be changed, converted or
exchanged in connection with the Approved Transaction.
     10.2 Termination of Service.
     (a) General. If a Holder's service shall terminate prior to an Option or
SAR becoming exercisable or being exercised (or deemed exercised, as provided in
Section 7.2) in full, or during the Restriction Period with respect to any
Restricted Shares or prior to the vesting or complete exercise of any Stock
Units, then such Option or SAR shall thereafter become or be exercisable, such
Stock Units to the extent vested shall thereafter be exercisable, and the
Holder's rights to any unvested Restricted Shares, Retained Distributions,
unpaid Dividend Equivalents and related cash amounts, and any such unvested
Stock Units shall thereafter vest, in each case solely to the extent provided in
the applicable Agreement; provided, however, that, unless otherwise determined
by the Board and provided in the applicable Agreement, (i) no Option or SAR may
be exercised after the scheduled expiration date thereof; (ii) if the Holder's
service terminates by reason of death or Disability, the Option or SAR shall
remain exercisable for a period of at least one year following such termination
(but not later than the scheduled expiration of such Option or SAR); and (iii)
any termination of the Holder's service for cause will be treated in accordance
with the provisions of Section 10.2(b).
     (b) Termination for Cause. If a Holder's service on the Board shall be
terminated by the Company for "cause" during the Restriction Period with respect
to any Restricted Shares, or prior to any Option or SAR becoming exercisable or
being exercised in full or prior to the vesting or complete exercise of any
Stock Unit (for these purposes, "cause" shall include dishonesty, incompetence,
moral turpitude, other misconduct of any kind and the refusal to perform his
duties and responsibilities for any reason other than illness or incapacity;
provided, however, that if such termination occurs within 12 months after an
Approved Transaction or Control Purchase or Board Change, termination for
"cause" shall mean only a felony conviction for fraud, misappropriation or
embezzlement), then, unless otherwise determined by the Board and provided in
the applicable Agreement, (i) all Options and SARs and all unvested or
unexercised Stock Units held by such Holder shall immediately terminate, and
(ii) such Holder's rights to all Restricted Shares, Retained Distributions, any
unpaid Dividend Equivalents and any related cash amounts shall be forfeited
immediately.
     10.3 Nonalienation of Benefits. Except as set forth herein, no right or
benefit under the Plan shall be subject to anticipation, alienation, sale,
assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge,
and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void. No right or
benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities or torts of the Person entitled to such benefits.
     10.4 Written Agreement. Each Award of Options shall be evidenced by a stock
option agreement; each Award of SARs shall be evidenced by a stock appreciation
rights agreement; each Award of Restricted Shares shall be evidenced by a
restricted shares agreement; and each
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Award of Stock Units shall be evidenced by a stock units agreement, each in such
form and containing such terms and provisions not inconsistent with the
provisions of the Plan as the Board from time to time shall approve; provided,
however, that if more than one type of Award is made to the same Holder, such
Awards may be evidenced by a single Agreement with such Holder. Each grantee of
an Option, SAR, Restricted Shares or Stock Units shall be notified promptly of
such grant, and a written Agreement shall be promptly executed and delivered by
the Company. Any such Agreement may be supplemented or amended from time to time
as approved by the Board as contemplated by Section 10.6(b).
     10.5 Designation of Beneficiaries. Each Person who shall be granted an
Award under the Plan may designate a beneficiary or beneficiaries and may change
such designation from time to time by filing a written designation of
beneficiary or beneficiaries with the Board on a form to be prescribed by it,
provided that no such designation shall be effective unless so filed prior to
the death of such Person.
     10.6 Termination and Amendment.
     (a) General. Unless the Plan shall theretofore have been terminated as
hereinafter provided, no Awards or stock payments under Article XI may be made
under the Plan on or after the tenth anniversary of the Effective Date. The Plan
may be terminated at any time prior to the tenth anniversary of the Effective
Date and may, from time to time, be suspended or discontinued or modified or
amended if such action is deemed advisable by the Board.
     (b) Modification. No termination, modification or amendment of the Plan
may, without the consent of the Person to whom any Award shall theretofore have
been granted, adversely affect the rights of such Person with respect to such
Award. No modification, extension, renewal or other change in any Award granted
under the Plan shall be made after the grant of such Award, unless the same is
consistent with the provisions of the Plan. With the consent of the Holder and
subject to the terms and conditions of the Plan (including Section 10.6(a)), the
Board may amend outstanding Agreements with any Holder, including any amendment
which would (i) accelerate the time or times at which the Award may be exercised
and/or (ii) extend the scheduled expiration date of the Award. Without limiting
the generality of the foregoing, the Board may, but solely with the Holder's
consent unless otherwise provided in the Agreement, agree to cancel any Award
under the Plan and grant a new Award in substitution therefor, provided that the
Award so substituted shall satisfy all of the requirements of the Plan as of the
date such new Award is made. Nothing contained in the foregoing provisions of
this Section 10.6(b) shall be construed to prevent the Board from providing in
any Agreement that the rights of the Holder with respect to the Award evidenced
thereby shall be subject to such rules and regulations as the Board may, subject
to the express provisions of the Plan, adopt from time to time or impair the
enforceability of any such provision.
     10.7 Government and Other Regulations. The obligation of the Company with
respect to Awards and to stock payments under Article XI shall be subject to all
applicable laws, rules
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and regulations and such approvals by any governmental agencies as may be
required, including the effectiveness of any registration statement required
under the Securities Act of 1933, and the rules and regulations of any
securities exchange or association on which the Common Stock may be listed or
quoted. For so long as any series of Common Stock are registered under the
Exchange Act, the Company shall use its reasonable efforts to comply with any
legal requirements (a) to maintain a registration statement in effect under the
Securities Act of 1933 with respect to all shares of the applicable series of
Common Stock that may be issued to Holders under the Plan and (b) to file in a
timely manner all reports required to be filed by it under the Exchange Act.
     10.8 Withholding. The Company's obligation to deliver shares of Common
Stock or pay cash under the Plan shall be subject to applicable federal, state
and local tax withholding requirements. Federal, state and local withholding tax
due at the time of an Award, upon the exercise of any Option or SAR, upon the
vesting of, or expiration of restrictions with respect to, Restricted Shares or
Stock Units, or upon payment of Director Compensation in stock under Article XI,
as appropriate, may, in the discretion of the Board, be paid in shares of the
applicable series of Common Stock already owned by the Holder or through the
withholding of shares otherwise issuable to such Holder, upon such terms and
conditions (including the conditions referenced in Section 6.5) as the Board
shall determine. If the Holder shall fail to pay, or make arrangements
satisfactory to the Board for the payment to the Company of, all such federal,
state and local taxes required to be withheld by the Company, then the Company
shall, to the extent permitted by law, have the right to deduct from any payment
of any kind otherwise due to such Holder an amount equal to any federal, state
or local taxes of any kind required to be withheld by the Company with respect
to such Award or payment.
     10.9 Nonexclusivity of the Plan. The adoption of the Plan by the Board
shall not be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
     10.10 Exclusion from Other Plans. By acceptance of an Award, unless
otherwise provided in the applicable Agreement, each Holder shall be deemed to
have agreed that such Award is special incentive compensation that will not be
taken into account, in any manner, as compensation or bonus in determining the
amount of any payment under any pension, retirement or other benefit plan,
program or policy of the Company or any Subsidiary of the Company. In addition,
each beneficiary of a deceased Holder shall be deemed to have agreed that such
Award will not affect the amount of any life insurance coverage, if any,
provided by the Company on the life of the Holder which is payable to such
beneficiary under any life insurance plan of the Company or any Subsidiary of
the Company.
     10.11 Unfunded Plan. Neither the Company nor any Subsidiary of the Company
shall be required to segregate any cash or any shares of Common Stock which may
at any time be represented by Awards or deliverable in payment of Director
Compensation under Article XI, and the Plan shall constitute an "unfunded" plan
of the Company. Except as provided in Article VIII with respect to Awards of
Restricted Shares and except as expressly set forth in an
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Agreement, no Holder shall have voting or other rights with respect to the
shares of Common Stock covered by an Award or deliverable in payment of Director
Compensation under Article XI prior to the delivery of such shares. Neither the
Company nor any Subsidiary of the Company shall, by any provisions of the Plan,
be deemed to be a trustee of any shares of Common Stock or any other property,
and the liabilities of the Company to any Holder pursuant to the Plan shall be
those of a debtor pursuant to such contract obligations as are created by or
pursuant to the Plan, and the rights of any Holder under the Plan shall be
limited to those of a general creditor of the Company. In its sole discretion,
the Board may authorize the creation of trusts or other arrangements to meet the
obligations of the Company under the Plan, provided, however, that the existence
of such trusts or other arrangements is consistent with the unfunded status of
the Plan.
     10.12 Governing Law. The Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
     10.13 Accounts. The delivery of any shares of Common Stock and the payment
of any amount under the Plan shall be for the account of the Company or the
applicable Subsidiary of the Company, as the case may be, and any such delivery
or payment shall not be made until the recipient shall have paid or made
satisfactory arrangements for the payment of any applicable withholding taxes as
provided in Section 10.8.
     10.14 Legends. Each certificate evidencing shares of Common Stock issued
under the Plan shall bear such legends as the Board deems necessary or
appropriate to reflect or refer to any terms, conditions or restrictions
applicable to such shares, including any to the effect that the shares
represented thereby may not be disposed of unless the Company has received an
opinion of counsel, acceptable to the Company, that such disposition will not
violate any federal or state securities laws.
     10.15 Company's Rights. Neither the grant of Awards pursuant to the Plan
nor the availability or exercise of the Stock Election Right shall affect in any
way the right or power of the Company to make reclassifications, reorganizations
or other changes of or to its capital or business structure or to merge,
consolidate, liquidate, sell or otherwise dispose of all or any part of its
business or assets.
     10.16 Interpretation. The words "include," "includes," "included" and
"including" to the extent used in the Plan shall be deemed in each case to be
followed by the words "without limitation."
     10.17 Section 409A. Notwithstanding anything in this Plan to the contrary,
if any Plan provision or Award under the Plan would result in the imposition of
an additional tax under Code Section 409A and related regulations and United
States Department of the Treasury pronouncements ("Section 409A"), that Plan
provision or Award will be reformed to avoid imposition of the applicable tax
and no action taken to comply with Section 409A shall be deemed to adversely
affect the Holder's rights to an Award.
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ARTICLE XI
STOCK IN LIEU OF CASH DIRECTOR COMPENSATION
     11.1 General. Subject to the provisions of this Article XI, each
Nonemployee Director shall have a Stock Election Right with respect to Director
Compensation payable for the calendar quarter ended December 31, 2005 and each
calendar quarter thereafter. Subject to any applicable Purchase Restrictions, to
the extent a Nonemployee Director has exercised the Stock Election Right in
accordance with this Article XI, such Nonemployee Director will receive shares
of the applicable series of Common Stock in payment of the Director Compensation
payable to such Nonemployee Director with respect to the applicable calendar
quarter on the last day of such calendar quarter (or as soon as practicable
thereafter). The number of shares of the applicable series of Common Stock
issuable to a Nonemployee Director in payment of such Nonemployee Director's
Director Compensation for a particular calendar quarter shall equal the quotient
obtained by dividing (x) the aggregate amount of such Director Compensation by
(y) the Fair Market Value of a share of the applicable series of Common Stock as
of the last day of such calendar quarter. No fractional shares will be issued.
In lieu of issuing any fractional shares resulting from such calculation, an
amount in cash will be paid equal to such fraction multiplied by the Fair Market
Value of a share of the applicable series of Common Stock on the last day of
such calendar quarter. All shares of Common Stock issued in payment of Director
Compensation under this Article XI shall be issued free of all restrictions,
except as required by law.
     11.2 Timing of Election. Subject to the deemed election provisions of
Section 11.3, a Nonemployee Director who wishes to exercise the Stock Election
Right with respect to a particular calendar quarter must provide an Election
Notice by the Election Deadline applicable to such calendar quarter. Once the
Election Deadline applicable to a particular calendar quarter has passed, no
changes may be made to the form of consideration to be delivered in payment of
the Director Compensation payable to any Nonemployee Director with respect to
such calendar quarter, unless the Board determines, in its sole discretion, that
such change is occasioned by an extraordinary or unanticipated event.
     11.3 Deemed Election. If a Nonemployee Director has never delivered a
timely Election Notice, the Nonemployee Director shall receive cash for the
Director Compensation payable to such Nonemployee Director for all calendar
quarters until an Election Notice is timely delivered. Once an Election Notice
is timely delivered by a Nonemployee Director, it shall apply to the calendar
quarter with respect to which it was delivered and, if such Nonemployee Director
subsequently fails to timely provide Election Notices with respect to the
succeeding calendar quarters, it shall be deemed to apply to all succeeding
calendar quarters until a Rescission Notice is timely delivered to the Company
with respect to any succeeding calendar quarter. For a Rescission Notice to be
timely with respect to a particular calendar quarter, it must be delivered to
the Company by the Election Deadline applicable to such calendar quarter. A
Nonemployee Director who has delivered a Rescission Notice may exercise a Stock
Election Right for subsequent calendar quarters by the timely delivery of an
Election Notice.
     11.4 Election Void During Restricted Period. If, on the date a Nonemployee
Director is to receive shares of Common Stock pursuant to this Article XI, a
Purchase Restriction is in
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place, such Nonemployee Director shall instead receive cash in payment of the
Director Compensation then payable to such Nonemployee Director.
     11.5 Conditions. Nothing contained herein shall preclude the Board, in its
sole discretion, from imposing additional conditions as it may determine, in its
sole discretion, on any issuance of shares of Common Stock in payment of
Director Compensation pursuant to this Article XI.
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