Exhibit 10.2
AMENDED AND RESTATED
WRIGHT EXPRESS CORPORATION
2005 EQUITY AND INCENTIVE PLAN
Initially adopted on February 16, 2005
Amended and Restated on May 16, 2008

 

--------------------------------------------------------------------------------

 

AMENDED AND RESTATED
WRIGHT EXPRESS CORPORATION
2005 EQUITY AND INCENTIVE PLAN

          Section   Page  
1. Purpose; Types of Awards; Construction
    1  
 
       
2. Definitions
    1  
 
       
3. Administration
    5  
 
       
4. Eligibility
    6  
 
       
5. Stock Subject to the Plan
    6  
 
       
6. Specific Terms of Awards
    7  
 
       
7. Change in Control Provisions
    13  
 
       
8. General Provisions
    13  

 

--------------------------------------------------------------------------------

 

AMENDED AND RESTATED
WRIGHT EXPRESS CORPORATION
2005 EQUITY AND INCENTIVE PLAN
     1. Purpose; Types of Awards; Construction.
      The purposes of the Amended and Restated Wright Express Corporation 2005
Equity and Incentive Plan (the “Plan”) are to afford an incentive to
non-employee directors, selected officers and other employees, advisors and
consultants of Wright Express Corporation (the “Company”), or any Parent or
Subsidiary of the Company that now exists or hereafter is organized or acquired,
to continue as non-employee directors, officers, employees, advisors or
consultants, as the case may be, to increase their efforts on behalf of the
Company and its Subsidiaries and to promote the success of the Company’s
business. The Plan provides for the grant of Options (including “incentive stock
options” and “nonqualified stock options”), stock appreciation rights,
restricted stock, restricted stock units and other stock- or cash-based awards.
The Plan is designed so that Awards granted hereunder intended to comply with
the requirements for “performance-based compensation” under Section 162(m) of
the Code may comply with such requirements, and the Plan and Awards shall be
interpreted in a manner consistent with such requirements.
     2. Definitions.
     For purposes of the Plan, the following terms shall be defined as set forth
below:
     (a) “Annual Incentive Program” means the program described in Section 6(c)
hereof.
     (b) “Award” means any Option, SAR, Restricted Stock, Restricted Stock Unit
or Other Stock-Based Award or Other Cash-Based Award granted under the Plan.
     (c) “Award Agreement” means any written agreement, contract, or other
instrument or document evidencing an Award.
     (d) “Board” means the Board of Directors of the Company.
     (e) “Cendant” means Cendant Corporation, a Delaware corporation.
     (f) “Cendant Award” shall have the meaning set forth in Section 6(b)(v).
          (g) “Change in Control” means a change in control of the Company,
which will be deemed to have occurred if:
          (i) any “person,” as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than (A) the Company, (B) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, and (C) any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of Stock), is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),

1

--------------------------------------------------------------------------------

 

directly or indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company’s then outstanding voting securities
(excluding any person who becomes such a beneficial owner in connection with a
transaction immediately following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of the Board, the board
of the entity surviving such transaction or, if the Company or the entity
surviving the transaction is then a subsidiary, the board of the ultimate parent
thereof);
          (ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
Effective Date, constitute the Board and any new director (other than a director
whose initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company’s stockholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the Effective Date or whose
appointment, election or nomination for election was previously so approved or
recommended;
          (iii) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation,
other than a merger or consolidation immediately following which the individuals
who comprise the Board immediately prior thereto constitute at least a majority
of the Board, the board of the entity surviving such merger or consolidation or,
if the Company or the entity surviving such merger is then a subsidiary, the
board of the ultimate parent thereof; or
          (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets
(or any transaction having a similar effect), other than a sale or disposition
by the Company of all or substantially all of the Company’s assets to an entity,
immediately following which the individuals who comprise the Board immediately
prior thereto constitute at least a majority of the board of directors of the
entity to which such assets are sold or disposed of or, if such entity is a
subsidiary, the board of the ultimate parent thereof.
Notwithstanding the foregoing, a Change in Control shall not be deemed to have
occurred by virtue of (x) a Public Offering or (y) the consummation of any
transaction or series of integrated transactions immediately following which the
holders of the Stock immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
          (h) “Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder.
          (i) “Committee” means the committee established by the Board to
administer the Plan, the composition of which shall at all times satisfy the
provisions of Rule 16b-3 and Section 162(m) of the Code.

2

--------------------------------------------------------------------------------

 

          (j) “Company” means Wright Express Corporation, a corporation
organized under the laws of the State of Delaware, or any successor corporation.
          (k) “Conversion Option” means an NQSO granted under Section 6(b)(v).
          (l) “Conversion Stock” means an Award of Stock granted under
Section 6(b)(v).
          (m) “Covered Employee” shall have the meaning set forth in
Section 162(m)(3) of the Code.
          (n) “Effective Date” means February 16, 2005, the date that the Plan
was originally adopted by the Board.
          (o) “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder.
          (p) “Fair Market Value” means, with respect to Stock or other
property, the fair market value of such Stock or other property determined by
such methods or procedures as shall be established from time to time by the
Committee. Unless otherwise determined by the Committee in good faith, the per
share Fair Market Value of Stock as of a particular date shall mean (i) the mean
between the highest and lowest reported sales price per share of Stock on the
national securities exchange on which the Stock is principally traded, for the
last preceding date on which there was a sale of such Stock on such exchange, or
(ii) if the shares of Stock are then traded in an over-the-counter market, the
average of the closing bid and asked prices for the shares of Stock in such
over-the-counter market for the last preceding date on which there was a sale of
such Stock in such market, or (iii) if the shares of Stock are not then listed
on a national securities exchange or traded in an over-the-counter market, such
value as the Committee, in its sole discretion, shall determine.
          (q) “Grantee” means a person who, as a Non-Employee Director, officer
or other employee of, or as a person providing services to, the Company or a
Parent or Subsidiary of the Company, has been granted an Award under the Plan.
          (r) “ISO” means any Option intended to be and designated as an
incentive stock option within the meaning of Section 422 of the Code.
          (s) “Long Term Incentive Program” means the program described in
Section 6(b) hereof.
          (t) “Non-Employee Director” means any director of the Company who is
not also employed by the Company or any of its Subsidiaries.
          (u) “NQSO” means any Option that is not designated as an ISO.
          (v) “Option” means a right, granted to a Grantee under Section 6(b)(i)
or 6(b)(v), to purchase shares of Stock. An Option may be either an ISO or an
NQSO, provided that ISOs may be granted only to employees of the Company or a
Parent or Subsidiary of the Company.

3

--------------------------------------------------------------------------------

 

          (w) “Other Cash-Based Award” means cash awarded under the Annual
Incentive Program or the Long Term Incentive Program, including cash awarded as
a bonus or upon the attainment of Performance Goals or otherwise as permitted
under the Plan.
          (x) “Other Stock-Based Award” means a right or other interest granted
to a Grantee under the Annual Incentive Program or the Long Term Incentive
Program that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Stock, including but not
limited to (i) unrestricted Stock awarded as a bonus or upon the attainment of
Performance Goals or otherwise as permitted under the Plan, and (ii) a right
granted to a Grantee to acquire Stock from the Company containing terms and
conditions prescribed by the Committee.
          (y) “Parent” means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
          (z) “Performance Goals” means performance goals based on one or more
of the following criteria, determined in accordance with generally accepted
accounting principles where applicable: (i) pre-tax income or after-tax income;
(ii) income or earnings including operating income, earnings before or after
taxes, earnings before or after interest, depreciation, amortization, or
extraordinary or special items; (iii) net income excluding amortization of
intangible assets, depreciation and impairment of goodwill and intangible assets
and/or excluding charges attributable to the adoption of new accounting
pronouncements; (iv) earnings or book value per share (basic or diluted);
(v) return on assets (gross or net), return on investment, return on capital, or
return on equity; (vi) return on revenues; (vii) cash flow, free cash flow, cash
flow return on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital; (viii) economic value
created; (ix) operating margin or profit margin; (x) stock price or total
stockholder return; (xi) income or earnings from continuing operations;
(xii) cost targets, reductions and savings, expense management, productivity and
efficiencies; and (xiii) strategic business criteria, consisting of one or more
objectives based on meeting specified market penetration or market share,
geographic business expansion, customer satisfaction, employee satisfaction,
human resources management, supervision of litigation, information technology,
and goals relating to divestitures, joint ventures and similar transactions.
Where applicable, the Performance Goals may be expressed in terms of attaining a
specified level of the particular criterion or the attainment of a percentage
increase or decrease in the particular criterion, and may be applied to one or
more of the Company or a Parent or Subsidiary of the Company, or a division or
strategic business unit of the Company, all as determined by the Committee. The
Performance Goals may include a threshold level of performance below which no
payment will be made (or no vesting will occur), levels of performance at which
specified payments will be paid (or specified vesting will occur), and a maximum
level of performance above which no additional payment will be made (or at which
full vesting will occur). Each of the foregoing Performance Goals shall be
evaluated in accordance with generally accepted accounting principles, where
applicable, and shall be subject to certification by the Committee. The
Committee shall have the authority to make equitable adjustments to the
Performance Goals in recognition of unusual or non-recurring events affecting
the Company or any Parent or Subsidiary of the Company or the financial
statements of the Company or any Parent or Subsidiary of the Company, in
response to changes in applicable laws or regulations, or to account for items
of gain, loss or expense determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the disposal of a segment of a business
or related to a change in accounting principles.

4

--------------------------------------------------------------------------------

 

          (aa) “Plan” means this Wright Express Corporation 2005 Equity and
Incentive Plan, as amended from time to time.
          (bb) “Plan Year” means a calendar year.
          (cc) “Public Offering” means an offering of securities of the Company
that is registered with the Securities and Exchange Commission.
          (dd) “Restricted Stock” means an Award of shares of Stock to a Grantee
under Section 6(b)(iii) that may be subject to certain restrictions and to a
risk of forfeiture.
          (ee) “Restricted Stock Unit” or “RSU” means a right granted to a
Grantee under Section 6(b)(iv) or 6(b)(v) to receive Stock or cash at the end of
a specified period, which right may be conditioned on the satisfaction of
specified performance or other criteria.
          (ff) “Rule 16b-3” means Rule 16b-3, as from time to time in effect
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act, including any successor to such Rule.
          (gg) “Securities Act” means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder.
          (hh) “Stock” means shares of the common stock, par value $0.01 per
share, of the Company.
          (ii) “Stock Appreciation Right” or “SAR” means the right, granted to a
Grantee under Section 6(b)(ii), to be paid an amount measured by the
appreciation in the Fair Market Value of Stock from the date of grant to the
date of exercise of the right.
          (jj) “Subsidiary” means a “subsidiary corporation,” whether now or
hereafter existing, as defined in Section 424(f) of the Code.
     3. Administration.
     The Plan shall be administered by the Board or by such Committee that the
Board may appoint for this purpose. If a Committee is appointed to administer
the Plan, all references herein to the “Committee” shall be references to such
Committee. If no Committee is appointed by the Board to administer the Plan, all
references herein to the “Committee” shall be references to the Board. The
Committee shall have the authority in its discretion, subject to and not
inconsistent with the express provisions of the Plan, to administer the Plan and
to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Awards; to determine the
persons to whom and the time or times at which Awards shall be granted; to
determine the type and number of Awards to be granted, the number of shares of
Stock to which an Award may relate and the terms, conditions, restrictions and
performance criteria relating to any Award; to determine Performance Goals no
later than such time as required to ensure that an underlying Award which is
intended to comply with the

5

--------------------------------------------------------------------------------

 

requirements of Section 162(m) of the Code so complies; and to determine
whether, to what extent, and under what circumstances an Award may be settled,
cancelled, forfeited, exchanged, or surrendered; to make adjustments in the
terms and conditions of, and the Performance Goals (if any) included in, Awards;
to construe and interpret the Plan and any Award; to prescribe, amend and
rescind rules and regulations relating to the Plan; to determine the terms and
provisions of the Award Agreements (which need not be identical for each
Grantee); and to make all other determinations deemed necessary or advisable for
the administration of the Plan. Notwithstanding the foregoing, neither the
Board, the Committee nor their respective delegates shall have the authority to
reprice (or cancel and regrant) any Option or, if applicable, other Award at a
lower exercise, base or purchase price without first obtaining the approval of
the Company’s stockholders.
     The Committee may appoint a chairperson and a secretary and may make such
rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. All determinations of the
Committee shall be made by a majority of its members either present in person or
participating by conference telephone at a meeting or by written consent. The
Committee may delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable, and the Committee or any
person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Plan. All decisions, determinations and
interpretations of the Committee shall be final and binding on all persons,
including but not limited to the Company, any Parent or Subsidiary of the
Company or any Grantee (or any person claiming any rights under the Plan from or
through any Grantee) and any stockholder.
     No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Award granted
hereunder.
     4. Eligibility.
     Awards may be granted to Non-Employee Directors, officers and other
employees, advisors or consultants of the Company or any Parent or Subsidiary of
the Company, selected in the discretion of the Committee. In determining the
persons to whom Awards shall be granted and the type of any Award (including the
number of shares to be covered by such Award), the Committee shall take into
account such factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan.
     5. Stock Subject to the Plan.
     The maximum number of shares of Stock reserved for the grant of Awards
under the Plan shall be 3,200,000, including all shares to be issued pursuant to
Conversion Options or Conversion Stock, subject to adjustment as provided
herein. No more than 500,000 shares of Stock may be made subject to Options
(other than Conversion Options) or SARs granted to a single individual in a
single Plan Year, subject to adjustment as provided herein, and no more than
500,000 shares of Stock may be made subject to stock-based awards other than
Options or SARs (including Restricted Stock and Restricted Stock Units (but
other than Conversion Stock) or Other Stock-Based Awards denominated in shares
of Stock) granted to a single individual in a single Plan Year, in either case,
subject to adjustment as provided herein. Determinations made in respect of the
limitations set forth in the immediately

6

--------------------------------------------------------------------------------

 

preceding sentence shall be made in a manner consistent with Section 162(m) of
the Code. Such shares may, in whole or in part, be authorized but unissued
shares or shares that shall have been or may be reacquired by the Company in the
open market, in private transactions or otherwise. If any shares subject to an
Award are forfeited, cancelled, exchanged or surrendered or if an Award
terminates or expires without a distribution of shares to the Grantee, or if
shares of Stock are surrendered or withheld as payment of either the exercise
price of an Award and/or withholding taxes in respect of an Award, the shares of
Stock with respect to such Award shall, to the extent of any such forfeiture,
cancellation, exchange, surrender, withholding, termination or expiration, again
be available for Awards under the Plan. Upon the exercise of any Award granted
in tandem with any other Award, such related Award shall be cancelled to the
extent of the number of shares of Stock as to which the Award is exercised and,
notwithstanding the foregoing, such number of shares shall no longer be
available for Awards under the Plan.
     In the event that the Committee shall determine that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, Stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Grantees under the Plan, then the Committee shall make such equitable
changes or adjustments as it deems necessary or appropriate to any or all of
(i) the number and kind of shares of Stock or other property (including cash)
that may thereafter be issued in connection with Awards, (ii) the number and
kind of shares of Stock or other property (including cash) issued or issuable in
respect of outstanding Awards, (iii) the exercise price, grant price, or
purchase price relating to any Award; provided, that, with respect to ISOs, such
adjustment shall be made in accordance with Section 424(h) of the Code; and
(iv) the Performance Goals applicable to outstanding Awards.
     6. Specific Terms of Awards.
          (a) General. The term of each Award shall be for such period as may be
determined by the Committee. Subject to the terms of the Plan and any applicable
Award Agreement, payments to be made by the Company or a Parent or Subsidiary of
the Company upon the grant, vesting, maturation, or exercise of an Award may be
made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, Stock, or other property, and
may be made in a single payment or transfer, in installments, or on a deferred
basis. The Committee may make rules relating to installment or deferred payments
with respect to Awards, including the rate of interest to be credited with
respect to such payments. In addition to the foregoing, the Committee may impose
on any Award or the exercise thereof, at the date of grant or thereafter, such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall determine.
          (b) Long Term Incentive Program. Under the Long Term Incentive
Program, the Committee is authorized to grant the Awards described in this
Section 6(b), under such terms and conditions as deemed by the Committee to be
consistent with the purposes of the Plan. Such Awards may be granted with value
and payment contingent upon Performance Goals. Except as otherwise set forth
herein or as may be determined by the Committee, each Award granted under the
Long Term Incentive Program shall be evidenced by an Award Agreement containing
such terms and conditions applicable to such Award as the Committee shall
determine at the date of grant or thereafter.

7

--------------------------------------------------------------------------------

 

          (i) Options. The Committee is authorized to grant Options to Grantees
on the following terms and conditions:
          (A) Type of Award. The Award Agreement evidencing the grant of an
Option under the Plan shall designate the Option as an ISO or an NQSO.
          (B) Exercise Price. The exercise price per share of Stock purchasable
under an Option shall be determined by the Committee, but, subject to
Section 6(b)(v), in no event shall the per share exercise price of any Option be
less than the Fair Market Value of a share of Stock on the date of grant of such
Option. The exercise price for Stock subject to an Option may be paid in cash or
by an exchange of Stock previously owned by the Grantee for at least six months
(if acquired from the Company), through a “broker cashless exercise” procedure
approved by the Committee (to the extent permitted by law), or a combination of
the above, in any case in an amount having a combined value equal to such
exercise price. An Award Agreement may provide that a Grantee may pay all or a
portion of the aggregate exercise price by having shares of Stock with a Fair
Market Value on the date of exercise equal to the aggregate exercise price
withheld by the Company.
          (C) Term and Exercisability of Options. The date on which the
Committee adopts a resolution expressly granting an Option shall be considered
the day on which such Option is granted. Options shall be exercisable over the
exercise period (which shall not exceed ten years from the date of grant), at
such times and upon such conditions as the Committee may determine, as reflected
in the Award Agreement; provided, that the Committee shall have the authority to
accelerate the exercisability of any outstanding Option at such time and under
such circumstances as it, in its sole discretion, deems appropriate. An Option
may be exercised to the extent of any or all full shares of Stock as to which
the Option has become exercisable, by giving such written, electronic, or
telephonic notice as the Committee may prescribe of such exercise to the
Committee or its designated agent.
          (D) Termination of Employment. An Option may not be exercised unless
the Grantee is then a director of, in the employ of, or providing services to,
the Company or a Parent or Subsidiary of the Company, and unless the Grantee has
remained continuously so employed, or continuously maintained such relationship,
since the date of grant of the Option; provided, that the Award Agreement may
contain provisions extending the exercisability of Options, in the event of
specified terminations of employment or service, to a date not later than the
expiration date of such Option.
          (E) Other Provisions. Options may be subject to such other conditions
including, but not limited to, restrictions on transferability of the shares
acquired upon exercise of such Options, as the Committee may prescribe in its
discretion or as may be required by applicable law.
     (ii) SARs. The Committee is authorized to grant SARs to Grantees on the
following terms and conditions:

8

--------------------------------------------------------------------------------

 

          (A) In General. Unless the Committee determines otherwise, a SAR
(1) granted in tandem with an NQSO may be granted at the time of grant of the
related NQSO or at any time thereafter or (2) granted in tandem with an ISO may
only be granted at the time of grant of the related ISO. A SAR granted in tandem
with an Option shall be exercisable only to the extent the underlying Option is
exercisable. Payment of a SAR may be made in cash, Stock, or property as
specified in the Award or determined by the Committee.
          (B) Right Conferred. A SAR shall confer on the Grantee a right to
receive an amount with respect to each share subject thereto, upon exercise
thereof, equal to the excess of (1) the Fair Market Value of one share of Stock
on the date of exercise over (2) the grant price of the SAR (which in the case
of an SAR granted in tandem with an Option shall be equal to the exercise price
of the underlying Option, and which in the case of any other SAR shall be such
price as the Committee may determine).
          (C) Term and Exercisability of SARs. The date on which the Committee
adopts a resolution expressly granting a SAR shall be considered the day on
which such SAR is granted. SARs shall be exercisable over the exercise period
(which shall not exceed the lesser of ten years from the date of grant or, in
the case of a tandem SAR, the expiration of its related Award), at such times
and upon such conditions as the Committee may determine, as reflected in the
Award Agreement; provided, that the Committee shall have the authority to
accelerate the exercisability of any outstanding SAR at such time and under such
circumstances as it, in its sole discretion, deems appropriate. A SAR may be
exercised to the extent of any or all full shares of Stock as to which the SAR
(or, in the case of a tandem SAR, its related Award) has become exercisable, by
giving such written, electronic, or telephonic notice as the Committee may
prescribe of such exercise to the Committee or its designated agent.
          (D) Termination of Employment. A SAR may not be exercised unless the
Grantee is then a director of, in the employ of, or providing services to, the
Company or a Parent or Subsidiary of the Company, and unless the Grantee has
remained continuously so employed, or continuously maintained such relationship,
since the date of grant of the SAR; provided, that the Award Agreement may
contain provisions extending the exercisability of the SAR, in the event of
specified terminations of employment or service, to a date not later than the
expiration date of such SAR (or, in the case of a tandem SAR, its related
Award).
          (E) Other Provisions. SARs may be subject to such other conditions
including, but not limited to, restrictions on transferability of the shares
acquired upon exercise of such SARs, as the Committee may prescribe in its
discretion or as may be required by applicable law.
          (iii) Restricted Stock. The Committee is authorized to grant
Restricted Stock to Grantees on the following terms and conditions:
          (A) Issuance and Restrictions. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions, if any, as the
Committee may impose at the date of grant or thereafter, which restrictions may
lapse separately or in combination at such times,

9

--------------------------------------------------------------------------------

 

under such circumstances, in such installments, or otherwise, as the Committee
may determine. The Committee may place restrictions on Restricted Stock that
shall lapse, in whole or in part, only upon the attainment of Performance Goals.
Except to the extent restricted under the Award Agreement relating to the
Restricted Stock, a Grantee granted Restricted Stock shall have all of the
rights of a stockholder including, without limitation, the right to vote
Restricted Stock and the right to receive dividends thereon.
          (B) Forfeiture. Upon termination of employment with or service to the
Company, or upon termination of the director or independent contractor
relationship, as the case may be, during the applicable restriction period or
portion thereof to which forfeiture conditions apply, Restricted Stock and any
accrued but unpaid dividends that are then subject to restrictions shall be
forfeited; provided, that the Committee may provide, by rule or regulation or in
any Award Agreement, or may determine in any individual case, that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Restricted Stock.
          (C) Certificates for Stock. Restricted Stock granted under the Plan
may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Grantee, such certificates shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock, and the
Company shall retain physical possession of the certificate.
          (D) Dividends. Dividends paid on Restricted Stock shall be either paid
at the dividend payment date, or deferred for payment to such date as determined
by the Committee, in cash or in shares of unrestricted Stock having a Fair
Market Value equal to the amount of such dividends. Stock distributed in
connection with a stock split or stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the
same extent as the Restricted Stock with respect to which such Stock or other
property has been distributed.
          (iv) Restricted Stock Units. The Committee is authorized to grant
Restricted Stock Units to Grantees, subject to the following terms and
conditions:
          (A) Award and Restrictions. Delivery of Stock or cash, as determined
by the Committee, will occur upon expiration of the deferral period specified
for Restricted Stock Units by the Committee. The Committee may place
restrictions on Restricted Stock Units that shall lapse, in whole or in part,
only upon the attainment of Performance Goals.
          (B) Forfeiture. Upon termination of employment with or service to the
Company, or upon termination of the director or independent contractor
relationship, as the case may be, during the applicable deferral period or
portion thereof to which forfeiture conditions apply, or upon failure to satisfy
any other conditions precedent to the delivery of Stock or cash to which such
Restricted Stock Units relate, all Restricted Stock Units and any accrued but
unpaid dividend equivalents that are then subject to deferral or restriction
shall be forfeited; provided, that the Committee may provide, by rule or
regulation or in any Award

10

--------------------------------------------------------------------------------

 

Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock Units will be waived in whole
or in part in the event of termination resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Restricted Stock Units.
          (C) Director Deferred Compensation Awards. The Company shall issue
RSUs pursuant to this Section 6(b)(iv)(C) for the purpose of fulfilling the
Company’s obligations under its Non-Employee Director Deferred Compensation Plan
(the “Deferred Compensation Plan”); provided, that certain terms and conditions
of the grant and payment of such RSUs set forth in the Deferred Compensation
Plan (and only to the extent set forth in such plan) shall supercede the terms
generally applicable to RSUs granted under the Plan. RSUs granted under this
paragraph need not be evidenced by an Award Agreement unless the Committee
determines that such an Award Agreement is desirable for the furtherance of the
purposes of the Plan and the Deferred Compensation Plan.
          (D) Non-Employee Director Compensatory Awards. The Company shall issue
RSUs payable only in Stock (unless the Committee determines otherwise) pursuant
to this Section 6(b)(iv)(D) for the purpose of fulfilling the Company’s
obligation to compensate each Non-Employee Director, in part, in the form of
RSUs.
          (1) For Plan Years ending on or before December 31, 2006, such RSUs
shall be awarded at such times as the Company shall otherwise pay to
Non-Employee Directors their annual retainer fees, as well as such other fees,
stipends and payments determined by the Committee to be subject to such
Non-Employee Director compensation policy (each such award date, a “Fee Payment
Date”). The Company shall keep a separate book account in the name of each
Non-Employee Director. The number of RSUs to be credited to each Non-Employee
Director’s account as of each Fee Payment Date shall be calculated by dividing
(1) fifty percent (50%) of the total retainer or fee otherwise to be paid to
such Non-Employee Director on such Fee Payment Date by (2) the Fair Market Value
of a share of Stock as of such Fee Payment Date. The Restricted Stock Units so
credited shall be immediately vested and non-forfeitable and shall become
payable on the the date which is two hundred (200) days immediately following
the date upon which such Director’s service as a member of the Board terminates
for any reason.
          (2) For Plan Years beginning on and after January 1, 2007, such RSUs
shall be awarded at the time (“Award Date”) of the annual Stockholders meeting
(unless the Committee determines otherwise). The Company shall keep a separate
book account in the name of each Non-Employee Director and shall credit to each
Non-Employee Director’s account as of each Award Date the number of RSUs awarded
as of such date. The RSUs so credited shall become vested and nonforfeitable and
(unless deferred) shall become payable in accordance with the terms of the Award
Agreement. The RSUs so credited that a Non-Employee Director has deferred, if
any, shall become payable on the date which is 200 days immediately following
the date upon which such Director’s service as a member of the Board terminates
for any reason, but only to the extent such RSUs are vested and nonforfeitable
on the date service on the Board terminates.

11

--------------------------------------------------------------------------------

 

     (v) Converted Cendant Awards. The Committee is authorized to grant Options
and Stock awards (such Options and Stock awards, “Conversion Options” and
“Conversion Stock,” respectively) in consideration of the cancellation by
Cendant of certain stock options and restricted stock unit awards previously
granted to Participants by Cendant (such Cendant awards, the “Cendant Awards”).
Notwithstanding any other provision of the Plan to the contrary, and in any
event in accordance with a formula for the conversion of Cendant Awards
determined by the Board in its sole discretion, (i) the number of shares to be
subject to a Conversion Option or Conversion Stock shall be determined by the
Committee and (ii) the per share exercise price of a Conversion Option shall be
determined by the Committee and may be less than the Fair Market Value of a
share of Stock on the date of grant.
     (vi) Other Stock- or Cash-Based Awards. The Committee is authorized to
grant Awards to Grantees in the form of Other Stock-Based Awards or Other
Cash-Based Awards, as deemed by the Committee to be consistent with the purposes
of the Plan. Awards granted pursuant to this paragraph may be granted with value
and payment contingent upon Performance Goals, so long as such goals relate to
periods of performance in excess of one calendar year. The Committee shall
determine the terms and conditions of such Awards at the date of grant or
thereafter. Performance periods under this Section 6(b)(vi) may overlap. The
maximum value of the aggregate payment that any Grantee may receive pursuant to
this Section 6(b)(vi) in respect of any Plan Year is $1 million. Payments earned
hereunder may be decreased or, with respect to any Grantee who is not a Covered
Employee, increased in the sole discretion of the Committee based on such
factors as it deems appropriate. No such payment shall be made to a Covered
Employee prior to the certification by the Committee that the Performance Goals
have been attained. The Committee may establish such other rules applicable to
the Other Stock- or Cash-Based Awards to the extent not inconsistent with
Section 162(m) of the Code.
          (c) Annual Incentive Program. The Committee is authorized to grant
Awards to Grantees pursuant to the Annual Incentive Program, under such terms
and conditions as deemed by the Committee to be consistent with the purposes of
the Plan. Grantees will be selected by the Committee with respect to
participation for a Plan Year. The maximum value of the aggregate payment that
any Grantee may receive under the Annual Incentive Program in respect of any
Plan Year is $1 million. Payments earned hereunder may be decreased or, with
respect to any Grantee who is not a Covered Employee, increased in the sole
discretion of the Committee based on such factors as it deems appropriate. No
such payment shall be made to a Covered Employee prior to the certification by
the Committee that the Performance Goals relating to Awards hereunder have been
attained. The Committee may establish such other rules applicable to the Annual
Incentive Program to the extent not inconsistent with Section 162(m) of the
Code.
     7. Change in Control Provisions.
     Unless otherwise determined by the Committee and evidenced in an Award
Agreement, in the event of a Change of Control:

12

--------------------------------------------------------------------------------

 

          (a) any Award carrying a right to exercise that was not previously
vested and exercisable shall become fully vested and exercisable; and
          (b) the restrictions, deferral limitations, payment conditions, and
forfeiture conditions applicable to any other Award granted under the Plan shall
lapse and such Awards shall be deemed fully vested, and any performance
conditions imposed with respect to Awards shall be deemed to be fully achieved.
     8. General Provisions.
          (a) Nontransferability. Unless otherwise provided in an Award
Agreement, Awards shall not be transferable by a Grantee except by will or the
laws of descent and distribution and shall be exercisable during the lifetime of
a Grantee only by such Grantee or his guardian or legal representative.
          (b) No Right to Continued Employment, etc. Nothing in the Plan or in
any Award, any Award Agreement or other agreement entered into pursuant hereto
shall confer upon any Grantee the right to continue in the employ of, or to
continue as a director of, or to continue to provide services to, the Company or
any Parent or Subsidiary of the Company or to be entitled to any remuneration or
benefits not set forth in the Plan or such Award Agreement or other agreement or
to interfere with or limit in any way the right of the Company or any such
Parent or Subsidiary to terminate such Grantee’s employment, or director or
independent contractor relationship.
          (c) Taxes. The Company or any Parent or Subsidiary of the Company is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of Stock, or any other payment to
a Grantee, amounts of withholding and other taxes due in connection with any
transaction involving an Award, and to take such other action as the Committee
may deem advisable to enable the Company and Grantees to satisfy obligations for
the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof in satisfaction of a
Grantee’s tax obligations. The Committee may provide in the Award Agreement that
in the event that a Grantee is required to pay any amount to be withheld in
connection with the issuance of shares of Stock in settlement or exercise of an
Award, the Grantee may satisfy such obligation (in whole or in part) by electing
to have a portion of the shares of Stock to be received upon settlement or
exercise of such Award equal to the minimum amount required to be withheld.
          (d) Stockholder Approval; Amendment and Termination.
          (i) The Plan shall take effect upon its adoption by the Board but the
Plan (and any grants of Awards made prior to the stockholder approval mentioned
herein) shall be subject to the requisite approval of the stockholders of the
Company. In the event that the stockholders of the Company do not ratify the
Plan at a meeting of the stockholders at which such issue is considered and
voted upon, then upon such event the Plan and all rights hereunder shall
immediately terminate and no Grantee (or any permitted transferee thereof) shall
have any remaining rights under the Plan or any Award Agreement entered into in
connection herewith.

13

--------------------------------------------------------------------------------

 

          (ii) The Board may at any time and from time to time alter, amend,
suspend, or terminate the Plan in whole or in part; provided, however, that
unless otherwise determined by the Board, an amendment that requires stockholder
approval in order for the Plan to continue to comply with Section 162(m) or any
other law, regulation or stock exchange requirement shall not be effective
unless approved by the requisite vote of stockholders. Notwithstanding the
foregoing, no amendment to or termination of the Plan shall affect adversely any
of the rights of any Grantee, without such Grantee’s consent, under any Award
theretofore granted under the Plan.
          (e) Expiration of Plan. Unless earlier terminated by the Board
pursuant to the provisions of the Plan, the Plan shall expire on the tenth
anniversary of the Effective Date. No Awards shall be granted under the Plan
after such expiration date. The expiration of the Plan shall not affect
adversely any of the rights of any Grantee, without such Grantee’s consent,
under any Award theretofore granted.
          (f) Deferrals. The Committee shall have the authority to establish
such procedures and programs that it deems appropriate to provide Grantees with
the ability to defer receipt of cash, Stock or other property payable with
respect to Awards granted under the Plan. Any procedures or programs established
by the Committee under this paragraph shall be designed and administered in
compliance with Section 409A of the Code and Internal Revenue Service guidance
issued thereunder.
          (g) No Rights to Awards; No Stockholder Rights. No Grantee or other
person shall have any claim to be granted any Award under the Plan, and there is
no obligation for uniformity of treatment of Grantees. Except as provided
specifically herein, a Grantee or a transferee of an Award shall have no rights
as a stockholder with respect to any shares covered by the Award until the date
of the issuance of a stock certificate to him for such shares.
          (h) Unfunded Status of Awards. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments not yet made to a Grantee pursuant to an Award, nothing contained in
the Plan or any Award shall give any such Grantee any rights that are greater
than those of a general creditor of the Company.
          (i) No Fractional Shares. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.
          (j) Regulations and Other Approvals.
          (i) The obligation of the Company to sell or deliver Stock with
respect to any Award granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
          (ii) Each Award is subject to the requirement that, if at any time the
Committee determines, in its absolute discretion, that the listing, registration
or qualification of Stock issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition

14

--------------------------------------------------------------------------------

 

of, or in connection with, the grant of an Award or the issuance of Stock, no
such Award shall be granted or payment made or Stock issued, in whole or in
part, unless listing, registration, qualification, consent or approval has been
effected or obtained free of any conditions not acceptable to the Committee.
          (iii) In the event that the disposition of Stock acquired pursuant to
the Plan is not covered by a then-current registration statement under the
Securities Act and is not otherwise exempt from such registration, such Stock
shall be restricted against transfer to the extent required by the Securities
Act or regulations thereunder, and the Committee may require a Grantee receiving
Stock pursuant to the Plan, as a condition precedent to receipt of such Stock,
to represent to the Company in writing that the Stock acquired by such Grantee
is acquired for investment only and not with a view to distribution.
          (iv) The Committee may require a Grantee receiving Stock pursuant to
the Plan, as a condition precedent to receipt of such Stock, to enter into a
stockholder agreement or “lock-up” agreement in such form as the Committee shall
determine is necessary or desirable to further the Company’s interests.
          (k) Governing Law. The Plan and all determinations made and actions
taken pursuant hereto shall be governed by the laws of the State of Delaware
without giving effect to the conflict of laws principles thereof.

15