Exhibit 10.1

 

INVESTMENT TECHNOLOGY GROUP, INC.

 

2007 OMNIBUS EQUITY COMPENSATION PLAN

 

Amended and Restated Effective January 23, 2017

 

1.                                      Purpose

 

The purpose of the Investment Technology Group, Inc. 2007 Omnibus Equity
Compensation Plan (the “Plan”) is to provide (i) designated employees of
Investment Technology Group, Inc. (the “Company”) and its subsidiaries, and
(ii) non-employee members of the board of directors of the Company with the
opportunity to receive grants of stock options, stock units, stock awards,
dividend equivalents and other stock-based awards.  The Company believes that
the Plan will encourage the participants to contribute materially to the growth
of the Company, thereby benefiting the Company’s stockholders, and will align
the economic interests of the participants with those of the stockholders.  The
Plan was originally effective on May 8, 2007 upon approval by the stockholders
of the Company, and previously amended and restated on May 12, 2009 upon
approval by the stockholders of the Company, August 18, 2009, May 11, 2010 upon
approval by the stockholders of the Company, June 11, 2013 upon approval by the
stockholders of the Company, February 5, 2014 and June 11, 2015 upon approval by
the stockholders of the Company.  This amendment and restatement is effective
January 23, 2017 upon approval of the Board of Directors.  This amendment and
restatement applies to Grants made or after January 23, 2017.   Grants made
prior to January 23, 2017 shall continue to be governed by the applicable award
Grant Agreements and the terms of the Plan without giving effect to changes made
pursuant to this amendment and restatement, and the Committee shall administer
such Grants in accordance with the Plan without giving effect to changes made
pursuant to this amendment and restatement.

 

The Investment Technology Group, Inc. Non-Employee Directors Stock Option Plan
(the “Director Plan”), the Investment Technology Group, Inc. Amended and
Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”), the
Amended and Restated Investment Technology Group, Inc. Stock Unit Award Program
Subplan (the “SUA Subplan”), the Amended and Restated Investment Technology
Group, Inc. Directors’ Retainer Fee Subplan (the “Directors’ Retainer Fee
Subplan”), and the Amended and Restated Investment Technology Group, Inc.
Directors’ Equity Subplan (the “Directors’ Equity Subplan”, and together with
the Directors’ Retainer Fee Subplan, the “Subplans”) were merged with and into
this Plan as of May 8, 2007.  No additional grants were made thereafter under
the Director Plan and the 1994 Plan.  Outstanding grants under the Director
Plan, the 1994 Plan, the SUA Subplan and the Subplans as of May 8, 2007
continued in effect according to their terms as in effect on May 8, 2007, and
the shares with respect to such outstanding grants were issued or transferred
under this Plan.  After May 8, 2007, the Subplans, and the SUA Subplan until it
was frozen effective on January 1, 2009, continued in effect as subplans of the
Plan and grants and/or deferrals may continue to be

 

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made under the Subplans with shares associated with such grants and/or deferrals
being issued under this Plan.  Effective as of January 1, 2009, the Variable
Compensation Stock Unit Award Program Subplan (formerly known as the Equity
Deferral Award Program Subplan) (the “VCSUA Subplan”) was added as a subplan
under the Plan.

 

2.                                      Definitions

 

Whenever used in this Plan, the following terms will have the respective
meanings set forth below:

 

(a)           “Average Bonus” means the average of the annual bonuses paid to
the Participant for the three years immediately preceding the year in which the
Participant’s termination of employment occurs (or such shorter period during
which the Participant has been employed by the Employing Entity and eligible to
receive annual bonuses, or if the Participant was not employed by the Employing
Entity or eligible to receive annual bonuses in any prior year, the annual bonus
that is required to be paid in accordance with any contractual arrangement
between the Participant and the Employing Entity, or if none, then the annual
bonus that would otherwise have been paid to the Participant for the year in
which the Participant’s termination of employment occurs based upon the actual
achievement of applicable performance objectives). For the avoidance of doubt,
annual bonuses shall include any bonus amounts paid in the form of Basic Units
awarded under the VCSUA Subplan (or any successor thereto).

 

(b)           “Board” means the Company’s Board of Directors.

 

(c)           “Cause” shall have the meaning ascribed to such term in the
applicable Grant Agreement, Subplan or VCSUA Subplan.

 

(d)           “Change in Control” means and shall be deemed to have occurred:

 

(i)            if any person (within the meaning of the Exchange Act), other
than the Company or a Related Party, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Voting
Securities representing 35 percent or more of the total voting power of all the
then-outstanding Voting Securities; or

 

(ii)           if the individuals who, as of the date hereof, constitute the
Board, together with those who first become directors subsequent to such date
and whose recommendation, election or nomination for election to the Board was
approved by a vote of at least a majority of the directors then still in office
who either were directors as of the date hereof or whose recommendation,
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the members of the Board; or

 

(iii)          upon consummation of a merger, consolidation, recapitalization or
reorganization of the Company, reverse split of any class of Voting Securities,
or an acquisition of securities or assets by the Company other than (A) any such
transaction in which the holders of outstanding Voting Securities immediately
prior to the transaction receive (or retain), with respect to such Voting
Securities, voting securities of the surviving or transferee entity representing
more than 50 percent of the total voting power outstanding immediately after
such

 

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transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction, or
(B) any such transaction which would result in a Related Party beneficially
owning more than 50 percent of the voting securities of the surviving or
transferee entity outstanding immediately after such transaction; or

 

(iv)          upon consummation of the sale or disposition by the Company of all
or substantially all of the Company’s assets, other than any such transaction
which would result in a Related Party owning or acquiring more than 50 percent
of the assets owned by the Company immediately prior to the transaction; or

 

(v)           if the stockholders of the Company approve a plan of complete
liquidation of the Company.

 

Notwithstanding the foregoing, the Committee may provide for a different
definition of “Change in Control” in a Grant Agreement if it determines that
such different definition is necessary or appropriate, including without
limitation, to comply with the requirements of Section 409A of the Code.

 

(e)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(f)            “Committee” means (i) with respect to Grants to Employees, the
Compensation Committee of the Board or another committee appointed by the Board
to administer the Plan, (ii) with respect to Grants made to Non-Employee
Directors, the Board, and (iii) with respects to Grants that are intended to be
“qualified performance-based compensation” under section 162(m) of the Code, a
committee that consists of two or more persons appointed by the Board, all of
whom shall be “outside directors” as defined under section 162(m) of the Code
and related Treasury regulations.

 

(g)           “Company” means Investment Technology Group, Inc. and any
successor corporation.

 

(h)           “Company Stock” means the common stock of the Company.

 

(i)            “Disability” means a Participant’s becoming disabled within the
meaning of Section 22(e)(3) of the Code, within the meaning of the Employer’s
long-term disability plan applicable to the Participant or as otherwise
determined by the Committee; provided that if the Committee fails to designate a
definition of Disability in the applicable Grant Agreement, the applicable
Subplan or the VCSUA Subplan, Disability shall mean a Participant’s becoming
disabled within the meaning of Section 22(e)(3) of the Code.

 

(j)            “Dividend Equivalent” means an amount determined by multiplying
the number of shares of Company Stock subject to a Grant by the per-share cash
dividend, or the per-share fair market value (as determined by the Committee) of
any dividend in consideration other than cash, paid by the Company on its
Company Stock.

 

(k)           “Employee” means a person classified as an employee of the
Employing Entity (including an officer or director who is also an employee) for
payroll purposes, as determined in

 

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the sole discretion of the Employing Entity.  Notwithstanding the foregoing, if
a person is engaged in a non-employee status (including, but not limited to, as
an independent contractor, an individual being paid through an employee leasing
company or other third party agency) and is subsequently reclassified by the
Employer, the Internal Revenue Service, or a court as an employee for payroll
purposes, such person, for purposes of this Plan, shall be deemed an Employee
from the actual (and not the effective) date of such reclassification, unless
expressly provided otherwise by the Employer.

 

(l)            “Employer” means the Company and its Subsidiaries.

 

(m)          “Employing Entity” means with respect to an Employee, the Company
or the Company’s Subsidiary that employs the Participant, or with respect to a
Non-Employee Director, the Company.

 

(n)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

(o)           “Exercise Price” means the per share price at which shares of
Company Stock may be purchased under an Option, as designated by the Committee.

 

(p)           “Fair Market Value,” unless otherwise required by an applicable
provision of the Code, as of any date, means the closing sales price of the
Company Stock as reported on the New York Stock Exchange on the date of grant
during regular trading hours; provided, however, that at any time that the
Company Stock is not quoted on the New York Stock Exchange on such trading days,
Fair Market Value shall be determined by the Committee in its discretion.

 

(q)           “Good Reason” means “Good Reason” as defined in a Participant’s
Change in Control Agreement or other applicable agreement with the Employing
Entity, or if no such agreement exists or the definition of “Good Reason” is
specifically limited to such applicable agreement, “Good Reason” means without
the Participant’s express written consent, the occurrence on or after a Change
in Control of any one or more of the following:

 

(i)            a material reduction of the Participant’s primary functional
authorities, duties, or responsibilities or the assignment of duties to the
Participant inconsistent with those of the Participant’s position with the
Employing Entity, other than an insubstantial and inadvertent reduction or
assignment that is remedied by the Employing Entity promptly after receipt of
notice thereof given by the Participant; provided, however, that any reduction
in authorities, duties or responsibilities resulting merely from the acquisition
of the Company and its existence as a Subsidiary or division of another entity
shall not be sufficient to constitute Good Reason;

 

(ii)           the Employing Entity’s requiring the Participant to be based at a
location in excess of 35 miles from the location of the Participant’s principal
job location or office immediately prior to the relocation;

 

(iii)          a material reduction by the Employing Entity of the Participant’s
base salary, unless such reduction applies on substantially the same percentage
basis to all employees of the Employing Entity generally;

 

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(iv)          a material reduction in the Participant’s participation in any of
the Employer’s annual incentive compensation plans in which the Participant
participates, unless such failure applies to all plan participants generally;
and

 

(v)           a material reduction by the Employing Entity of the Participant’s
Total Annual Compensation, which for this purpose means a reduction of the
Participant’s Total Annual Compensation by more than 33 percent.

 

For any of the foregoing to constitute Good Reason, the Participant must provide
written notification of his or her intention to resign within 30 days after the
Participant knows or has reason to know of the occurrence of any such event, and
the Employing Entity shall have 30 business days from the date of receipt of
such notice to effect a cure of the condition constituting Good Reason, and,
upon cure thereof by the Employing Entity, such event shall no longer constitute
Good Reason.  If the Employing Entity does not cure the condition constituting
Good Reason within 30 business days following the date of receipt of the notice
from the Participant, the Good Reason termination shall be effective on the
31st business day following such date of receipt.  A termination of employment
by the Participant shall be for Good Reason if one of the occurrences specified
above shall have occurred, notwithstanding that the Participant may have other
reasons for terminating employment, including employment by another employer
which the Participant desires to accept.

 

(r)            “Grant” means an Option, Stock Unit, Stock Award, SAR, Dividend
Equivalent or Other Stock-Based Award granted under the Plan.

 

(s)            “Grant Agreement” means the written instrument that sets forth
the terms and conditions of a Grant, including all amendments thereto.

 

(t)            “Incentive Stock Option” means an Option that is intended to meet
the requirements of an incentive stock option under section 422 of the Code.

 

(u)           “Non-Employee Director” means a member of the Board who is not an
employee of the Employer.

 

(v)           “Nonqualified Stock Option” means an Option that is not intended
to be taxed as an incentive stock option under section 422 of the Code.

 

(w)          “Option” means an option to purchase shares of Company Stock, as
described in Section 7 of the Plan.

 

(x)           “Other Stock-Based Award” means any Grant based on, measured by or
payable in, Company Stock (other than a Grant described in Sections 7, 8, 9 or
10(a) of the Plan), as described in Section 10(b) of the Plan.

 

(y)           “Participant” means an Employee or Non-Employee Director
designated by the Committee to participate in the Plan.

 

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(z)           “Person” means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, an estate, a
trust, a joint venture, an unincorporated organization or a governmental entity
or any department, agency or political subdivision thereof.

 

(aa)         “Plan” means this Investment Technology Group, Inc. 2007 Omnibus
Equity Compensation Plan, as in effect from time to time.

 

(bb)           “Related Party” means (i) a Subsidiary of the Company; (ii) an
employee or group of employees of the Company or any Subsidiary of the Company;
(iii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any majority-owned Subsidiary of the Company; or (iv) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of Voting Securities.

 

(cc)         “SAR” means a stock appreciation right as described in
Section 10(a) of the Plan.

 

(dd)         “Stock Award” means an award of Company Stock as described in
Section 9 of the Plan.

 

(ee)         “Stock Unit” means an award of a phantom unit representing a share
of Company Stock, as described in Section 8 of the Plan.

 

(ff)          “Subsidiary” or “Subsidiaries” means, with respect to any Person,
any corporation, partnership, limited liability company, association or other
business entity of which (i) if a corporation, 50 percent or more of the total
voting power of shares of stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or combination
thereof; or (ii) if a partnership, limited liability company, association or
other business entity, 50 percent or more of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof.  For purposes of this definition, a Person or Persons will
be deemed to have a 50 percent or more ownership interest in a partnership,
limited liability company, association or other business entity if such Person
or Persons are allocated 50 percent or more of partnership, limited liability
company, association or other business entity gains or losses or control the
managing director or member or general partner of such partnership, limited
liability company, association or other business entity.

 

(gg)         “Total Annual Compensation” means the sum of the Participant’s base
salary and Average Bonus.

 

(hh)         “Voting Securities or Security” means any securities of the Company
which carry the right to vote generally in the election of directors.

 

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3.                                      Administration

 

(a)           Committee.  The Plan shall be administered and interpreted by the
Compensation Committee of the Board or another committee appointed by the Board
to administer the Plan with respect to grants to Employees.  The Plan shall be
administered and interpreted by the Board with respect to grants to Non-Employee
Directors.  The Board or committee, as applicable, that has authority with
respect to a specific Grant shall be referred to as the “Committee” with respect
to that Grant.  Ministerial functions may be performed by an administrative
committee comprised of Company employees appointed by the Committee.

 

(b)           Committee Authority.  The Committee shall have the sole authority
to (i) determine the Participants to whom Grants shall be made under the Plan,
(ii) determine the type, size and terms and conditions of the Grants to be made
to each such Participant, (iii) determine the time when the grants will be made
and, subject to the restriction in Section 4(c), the duration of any applicable
exercise or restriction period, including the criteria for exercisability and
the acceleration of exercisability, (iv) amend the terms and conditions of any
previously issued Grant, subject to the provisions of Section 18 below, and
(v) deal with any other matters arising under the Plan.

 

(c)           Committee Determinations.  The Committee shall have full power and
express discretionary authority to administer and interpret the Plan, to make
factual determinations and to adopt or amend such rules, regulations, agreements
and instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion.  The Committee’s
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any awards granted hereunder. 
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
Participants.

 

4.                                      Grants

 

(a)           Grants under the Plan may consist of Options as described in
Section 7, Stock Units as described in Section 8, Stock Awards as described in
Section 9, and SARs or Other Stock-Based Awards as described in Section 10.  All
Grants shall be subject to such terms and conditions as the Committee deems
appropriate and as are specified in writing by the Committee to the Participant
in the Grant Agreement.

 

(b)           All Grants shall be made conditional upon the Participant’s
acknowledgement, in writing or by acceptance of the Grant, that all decisions
and determinations of the Committee shall be final and binding on the
Participant, his or her beneficiaries and any other person having or claiming an
interest under such Grant.  Grants under a particular Section of the Plan need
not be uniform as among the Participants.

 

(c)           Grants shall fully vest over a period that is not less than one
year from the date of grant.  A Grant Agreement may provide for accelerated
vesting without regard to the minimum vesting period in connection with a
Participant’s death or Disability, or in the event of (i) a

 

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Change in Control or (ii) a corporate event described in Section 5(d).  In
addition, up to five percent of the shares of Company Stock subject to the
aggregate share reserve set forth in Section 5(a), which may include, without
limitation, Grants to Non-Employee Directors, may be subject to Grants that are
not subject to the foregoing vesting restriction.

 

5.                                      Shares Subject to the Plan

 

(a)           Shares Authorized.  The total aggregate number of shares of
Company Stock that may be issued under the Plan is the sum of the following
(i) 2,600,000 new shares of Company Stock plus (ii) that number of shares of
Company Stock subject to outstanding grants under the Plan as of June 11, 2015
plus (iii) that number of shares remaining available for issuance under the Plan
but not subject to previously exercised, vested or paid grants as of June 11,
2015; subject to the limitation that of the 1,300,000 shares added to the number
of shares of Company Stock authorized for issuance under the Plan on May 12,
2009, 50,000 shares have or shall be used solely to grant Options.  The total
aggregate number of shares of Company Stock that may be issued under the Plan
may be subject to Incentive Stock Options.

 

(b)           Source of Shares; Share Counting.  Shares issued under the Plan
may be authorized but unissued shares of Company Stock or reacquired shares of
Company Stock, including shares purchased by the Company on the open market for
purposes of the Plan.  If and to the extent Options or SARs granted under the
Plan (including options granted under the Subplans) terminate, expire, or are
canceled, forfeited, exchanged or surrendered without having been exercised, and
if and to the extent that any Stock Awards, Stock Units, or Other Stock-Based
Awards (including any stock awards, stock units or other-stock based awards
granted under the SUA Subplan and the Subplans) are forfeited or terminated, or
otherwise are not paid in full, the shares reserved for such Grants shall again
be available for purposes of the Plan.  Shares of Company Stock surrendered in
payment of the Exercise Price of an Option, and shares withheld or surrendered
for payment of taxes, shall not be available for re-issuance under the Plan.  If
SARs are exercised and settled in Company Stock, the full number of shares
subject to the SARs shall be considered issued under the Plan, without regard to
the number of shares issued upon settlement of the SARs.  To the extent any
Grants are paid in cash, and not in shares of Company Stock, any shares
previously subject to such Grants shall not count against the share limits in
this Section 5(b).  The preceding provisions of this Section 5(b) shall apply
only for purposes of determining the aggregate number of shares of Company Stock
that may be issued under the Plan, but shall not apply for purposes of
determining the maximum number of shares of Company Stock with respect to which
Grants may be granted to any Participant under the Plan.

 

(c)           Individual Limits.  All Grants under the Plan shall be expressed
in shares of Company Stock.  The maximum aggregate number of shares of Company
Stock with respect to which all Grants may be made under the Plan to any
Employee during any calendar year shall be 1,000,000 shares, subject to
adjustment as described in subsection (d) below.  A Participant may not accrue
cash dividends or Dividend Equivalents during any calendar year in excess of
$1,000,000.  The individual limits of this subsection (c) shall apply without
regard to whether the Grants are to be paid in Company Stock or cash.  All cash
payments (other than with respect to Dividend Equivalents) shall equal the Fair
Market Value of the shares of Company Stock to

 

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which the cash payments relate.  In addition, the maximum number of shares of
Company Stock which may be granted to any Non-Employee Director during any
calendar year under the Plan shall not exceed 100,000 shares, subject to
adjustment as described in subsection (d) below.

 

(d)           Adjustments.  If there is any change in the number or kind of
shares of Company Stock outstanding by reason of a stock dividend, spinoff,
stock split or reverse stock split, or by reason of a combination,
reorganization, recapitalization or reclassification affecting the outstanding
Company Stock as a class without the Company’s receipt of consideration, the
maximum number of shares of Company Stock available for Grants, the maximum
number of shares of Company Stock that any individual participating in the Plan
may be granted in any year, the number of shares covered by outstanding Grants,
the kind of shares issued under the Plan and outstanding Grants, and the price
per share of outstanding Grants shall be equitably adjusted by the Committee, as
the Committee deems appropriate, to reflect any increase or decrease in the
number of, or change in the kind or value of, issued shares of Company Stock to
preclude, to the extent practicable, the enlargement or dilution of rights and
benefits under Grants; provided, however, that any fractional shares resulting
from such adjustment shall be eliminated.  In addition, the Committee shall have
discretion to make the foregoing equitable adjustments in any circumstances in
which an adjustment is not mandated by this subsection (d) or applicable law,
including in the event of a Change in Control.  Any adjustments to outstanding
Grants shall be consistent with section 409A or 422 of the Code, to the extent
applicable.  Any adjustments determined by the Committee shall be final, binding
and conclusive.

 

6.                                      Eligibility for Participation

 

(a)           Eligible Persons.  All Employees, including Employees who are
officers or members of the Board, and all Non-Employee Directors shall be
eligible to participate in the Plan.

 

(b)           Selection of Participants.  The Committee shall select the
Employees and Non-Employee Directors to receive Grants and shall determine the
number of shares of Company Stock subject to each Grant.

 

7.                                      Options

 

(a)           General Requirements. The Committee may grant Options to an
Employee or Non-Employee Director upon such terms and conditions as the
Committee deems appropriate under this Section 7.  The Committee shall determine
the number of shares of Company Stock that will be subject to each Grant of
Options to Employees and Non-Employee Directors. No dividends will be paid on
the shares of Company Stock subject to Options.

 

(b)           Type of Option, Price and Term.

 

(i)            The Committee may grant Incentive Stock Options or Nonqualified
Stock Options or any combination of the two, all in accordance with the terms
and conditions set forth herein.  Incentive Stock Options may be granted only to
Employees of the Company or its parents or subsidiaries, as defined in section
424 of the Code.  Nonqualified Stock Options may be granted to Employees or
Non-Employee Directors.

 

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(ii)           The Exercise Price of Company Stock subject to an Option shall be
determined by the Committee and may be equal to or greater than the Fair Market
Value of a share of Company Stock on the date the Option is granted.  However,
an Incentive Stock Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10 percent of the total combined voting
power of all classes of stock of the Company or any parent or subsidiary, as
defined in section 424 of the Code, unless the Exercise Price per share is not
less than 110 percent of the Fair Market Value of the Company Stock on the date
of grant.

 

(iii)          The Committee shall determine the term of each Option, which
shall not exceed ten years from the date of grant.  However, an Incentive Stock
Option that is granted to an Employee who, at the time of grant, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary, as defined in
section 424 of the Code, may not have a term that exceeds five years from the
date of grant.

 

(c)           Exercisability of Options.

 

(i)            Subject to the limitation in Section 4(c) above, Options shall
become exercisable in accordance with such terms and conditions as may be
determined by the Committee and specified in the Grant Agreement.  The Committee
may accelerate the exercisability of any or all outstanding Options at any time
for any reason.

 

(ii)           The Committee may provide in a Grant Agreement that the
Participant may elect to exercise part or all of an Option before it otherwise
has become exercisable.  Any shares so purchased shall be restricted shares and
shall be subject to a repurchase right in favor of the Company during a
specified restriction period, with the repurchase price equal to the lesser of
(A) the Exercise Price or (B) the Fair Market Value of such shares at the time
of repurchase, or such other restrictions as the Committee deems appropriate.

 

(iii)          Options granted to persons who are non-exempt employees under the
Fair Labor Standards Act of 1938, as amended, may not be exercisable for at
least six months after the date of grant (except that such Options may become
exercisable, as determined by the Committee, upon the Participant’s death,
Disability or retirement, or upon a Change in Control or other circumstances
permitted by applicable regulations and subject to the restriction in
Section 4(c) above).

 

(d)           Termination of Employment or Service.  Except as provided in the
Grant Agreement, an Option may only be exercised while the Participant is
employed by the Employer, or providing service as a Non-Employee Director.  The
Committee shall determine in the Grant Agreement under what circumstances and
during what time periods a Participant may exercise an Option after termination
of employment or service.

 

(e)           Exercise of Options.  A Participant may exercise an Option that
has become exercisable, in whole or in part, by delivering a notice of exercise
to the Company.  The Participant shall pay the Exercise Price for the Option
(i) in cash, (ii) if permitted by the Committee, by delivering shares of Company
Stock owned by the Participant and having a Fair Market Value on the date of
exercise equal to the Exercise Price or by attestation to ownership of

 

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shares of Company Stock having an aggregate Fair Market Value on the date of
exercise equal to the Exercise Price, (iii) by payment through a broker in
accordance with procedures permitted by Regulation T of the Federal Reserve
Board, (iv) by surrender of all or any part of the vested shares of Company
Stock for which the Option is exercisable to the Company for an appreciation
distribution payable in shares of Company Stock with a Fair Market Value at the
time of the Option surrender equal to the dollar amount by which the then Fair
Market Value of the shares of Company Stock subject to the surrendered portion
exceeds the aggregate Exercise Price payable for those shares (i.e., “net
exercise”) or (v) by such other method as the Committee may approve.  Shares of
Company Stock used to exercise an Option shall have been held by the Participant
for the requisite period of time to avoid adverse accounting consequences to the
Company with respect to the Option.  Payment for the shares pursuant to the
Option, and any required withholding taxes, must be received by the time
specified by the Committee depending on the type of payment being made, but in
all cases prior to the issuance of the Company Stock.

 

(f)            Limits on Incentive Stock Options.  Each Incentive Stock Option
shall provide that, if the aggregate Fair Market Value of the stock on the date
of the grant with respect to which Incentive Stock Options are exercisable for
the first time by a Participant during any calendar year, under the Plan or any
other stock option plan of the Company or a parent or subsidiary, as defined in
section 424 of the Code, exceeds $100,000, then the Option, as to the excess,
shall be treated as a Nonqualified Stock Option.  An Incentive Stock Option
shall not be granted to any person who is not an Employee of the Company or a
parent or subsidiary, as defined in section 424 of the Code.

 

8.                                      Stock Units

 

(a)           General Requirements.  The Committee may grant Stock Units to an
Employee or Non-Employee Director, upon such terms and conditions as the
Committee deems appropriate under this Section 8.  Each Stock Unit shall
represent the right of the Participant to receive a share of Company Stock or an
amount based on the value of a share of Company Stock.  All Stock Units shall be
credited to bookkeeping accounts for purposes of the Plan.

 

(b)           Terms of Stock Units.  The Committee may grant Stock Units that
are payable on terms and conditions determined by the Committee, which may
include payment based on achievement of performance goals.  Subject to the
restriction in Section 4(c) above, Stock Units may be paid at the end of a
specified vesting or performance period, or payment may be deferred to a date
authorized by the Committee.  The Committee shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock Units.

 

(c)           Payment With Respect to Stock Units.  Payment with respect to
Stock Units shall be made in cash, in Company Stock, or in a combination of the
two, as determined by the Committee.  The Grant Agreement shall specify the
maximum number of shares that can be issued under the Stock Units.

 

(d)           Requirement of Employment or Service.  The Committee shall
determine in the Grant Agreement under what circumstances a Participant may
retain Stock Units after

 

11

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termination of the Participant’s employment or service, and the circumstances
under which Stock Units may be forfeited.

 

9.                                      Stock Awards

 

(a)           General Requirements. The Committee may issue shares of Company
Stock to an Employee or Non-Employee Director under a Stock Award, upon such
terms and conditions as the Committee deems appropriate under this Section 9. 
Shares of Company Stock issued pursuant to Stock Awards may be issued for cash
consideration or for no cash consideration, and subject to restrictions or no
restrictions, as determined by the Committee.  Subject to the restriction in
Section 4(c) above, the Committee may establish conditions under which
restrictions on Stock Awards shall lapse over a period of time or according to
such other criteria as the Committee deems appropriate, including restrictions
based upon the achievement of specific performance goals.  The Committee shall
determine the number of shares of Company Stock to be issued pursuant to a Stock
Award.

 

(b)           Requirement of Employment or Service.  The Committee shall
determine in the Grant Agreement under what circumstances a Participant may
retain Stock Awards after termination of the Participant’s employment or
service, and the circumstances under which Stock Awards may be forfeited.

 

(c)           Restrictions on Transfer.  While Stock Awards are subject to
restrictions, a Participant may not sell, assign, transfer, pledge or otherwise
dispose of the shares of a Stock Award except upon death as described in
Section 15(a) hereof.  If a certificate is issued, each certificate for a share
of a Stock Award shall contain a legend giving appropriate notice of the
restrictions in the Grant.  The Participant shall be entitled to have the legend
removed when all restrictions on such shares have lapsed.  The Company may
retain possession of any certificates for Stock Awards until all restrictions on
such shares have lapsed.

 

(d)           Right to Vote and to Receive Dividends.  The Committee shall
determine to what extent, and under what conditions, the Participant shall have
the right to vote shares of Stock Awards and to receive any dividends or other
distributions paid on such shares during the restriction period; provided that
dividends with respect to Stock Awards that vest based on performance shall vest
and be paid only if and to the extent the underlying Stock Awards vest and are
paid, as determined by the Committee.

 

10.                               Stock Appreciation Rights and Other
Stock-Based Awards

 

(a)           SARs.  The Committee may grant SARs to an Employee or Non-Employee
Director separately or in tandem with an Option.  No dividends will be paid on
the shares of Company Stock subject to SARs.  The following additional
provisions are applicable to SARs:

 

(i)            Base Amount.  The Committee shall establish the base amount of
the SAR at the time the SAR is granted.  The base amount of each SAR shall be
equal to the per share Exercise Price of the related Option or, if there is no
related Option, an amount that is at least equal to the Fair Market Value of a
share of Company Stock as of the date of Grant of the SAR.

 

12

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(ii)           Tandem SARs.  The Committee may grant tandem SARs either at the
time the Option is granted or at any time thereafter while the Option remains
outstanding; provided, however, that, in the case of an Incentive Stock Option,
SARs may be granted only at the date of the grant of the Incentive Stock
Option.  In the case of tandem SARs, the number of SARs granted to a Participant
that shall be exercisable during a specified period shall not exceed the number
of shares of Company Stock that the Participant may purchase upon the exercise
of the related Option during such period.  Upon the exercise of an Option, the
SARs relating to the Company Stock covered by such Option shall terminate.  Upon
the exercise of SARs, the related Option shall terminate to the extent of an
equal number of shares of Company Stock.

 

(iii)          Exercisability.  An SAR shall be exercisable during the period
specified by the Committee in the Grant Agreement and shall be subject to such
vesting and other restrictions as may be specified in the Grant Agreement,
subject to the restriction in Section 4(c) above.  The Committee may grant SARs
the exercise of which is subject to achievement of performance goals or other
conditions.  The Committee may accelerate the exercisability of any or all
outstanding SARs at any time for any reason.  The Committee shall determine in
the Grant Agreement under what circumstances and during what periods a
Participant may exercise an SAR after termination of employment or service.  A
tandem SAR shall be exercisable only while the Option to which it is related is
exercisable.

 

(iv)          Grants to Non-Exempt Employees.  SARs granted to persons who are
non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may
not be exercisable for at least six months after the date of grant (except that
such SARs may become exercisable, as determined by the Committee, upon the
Participant’s death, Disability or retirement, or upon a Change in Control or
other circumstances permitted by applicable regulations and subject to
Section 4(c) above).

 

(v)           Value of SARs.  When a Participant exercises SARs, the Participant
shall receive in settlement of such SARs an amount equal to the value of the
stock appreciation for the number of SARs exercised.  The stock appreciation for
an SAR is the amount by which the Fair Market Value of the underlying Company
Stock on the date of exercise of the SAR exceeds the base amount of the SAR as
described in subsection (i).

 

(vi)          Form of Payment.  The Committee shall determine whether the stock
appreciation for an SAR shall be paid in the form of shares of Company Stock,
cash or a combination of the two.  For purposes of calculating the number of
shares of Company Stock to be received, shares of Company Stock shall be valued
at their Fair Market Value on the date of exercise of the SAR.  If shares of
Company Stock are to be received upon exercise of an SAR, cash shall be
delivered in lieu of any fractional share.

 

(vii)         Term.  The Committee shall determine the term of each SAR, which
shall not exceed ten years from the date of grant.

 

(b)           Other Stock-Based Awards.  The Committee may grant other awards
not specified in Sections 7, 8 or 9 or subsection (a) above that are based on or
measured by Company Stock to Employees and Non-Employee Directors, on such terms
and conditions as the Committee deems

 

13

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appropriate, subject to the restriction in Section 4(c) above.  Other
Stock-Based Awards may be granted subject to achievement of performance goals or
other conditions and may be payable in Company Stock or cash, or in a
combination of the two, as determined by the Committee in the Grant Agreement. 
Dividends and Dividend Equivalents with respect to Other Stock-Based Awards
shall vest and be paid only if and to the extent the underlying Other
Stock-Based Awards vest and are paid, as determined by the Committee.

 

11.          Dividend Equivalents.

 

(a)           General Requirements.  When the Committee makes a Grant under the
Plan, the Committee may grant Dividend Equivalents in connection with the Grant,
under such terms and conditions as the Committee deems appropriate under this
Section 11.  Dividend Equivalents may be paid to Participants currently or may
be deferred, as determined by the Committee.  All Dividend Equivalents that are
not paid currently shall be credited to bookkeeping accounts for purposes of the
Plan.  Dividend Equivalents may be accrued as a cash obligation, or may be
converted to Stock Units for the Participant, and deferred Dividend Equivalents
may accrue interest, all as determined by the Committee.  The Committee may
provide that Dividend Equivalents shall be payable based on the achievement of
specific performance goals.  Dividend Equivalents with respect to Stock Units
shall vest and be paid only if and to the extent the underlying Stock Units vest
and are paid, as determined by the Committee.  In no event may Dividend
Equivalents be granted with respect to Options or SARs.

 

(b)           Payment with Respect to Dividend Equivalents.  Dividend
Equivalents may be payable in cash or shares of Company Stock or in a
combination of the two, as determined by the Committee.

 

12.                               Qualified Performance-Based Compensation

 

(a)           Designation as Qualified Performance-Based Compensation.  The
Committee may determine that Stock Units, Stock Awards, Dividend Equivalents or
Other Stock-Based Awards granted to an Employee shall be considered “qualified
performance-based compensation” under section 162(m) of the Code, in which case
the provisions of this Section 12 shall apply.  The Committee may also grant
Options or SARs under which the exercisability of the Options is subject to
achievement of performance goals as described in this Section 12 or otherwise.

 

(b)           Performance Goals.  When Grants are made under this Section 12,
the Committee shall establish in writing (i) the objective performance goals
that must be met, (ii) the period during which performance will be measured,
(iii) the maximum amounts that may be paid if the performance goals are met, and
(iv) any other conditions that the Committee deems appropriate and consistent
with the requirements of section 162(m) of the Code for “qualified
performance-based compensation.”  The performance goals shall satisfy the
requirements for “qualified performance-based compensation,” including the
requirement that the achievement of the goals be substantially uncertain at the
time they are established and that the performance goals be established in such
a way that a third party with knowledge of the relevant facts could determine
whether and to what extent the performance goals have been met.  The Committee
shall not have

 

14

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discretion to increase the amount of compensation that is payable, but may
reduce the amount of compensation that is payable, pursuant to Grants identified
by the Committee as “qualified performance-based compensation.”

 

(c)           Criteria Used for Objective Performance Goals.  The Committee
shall use objectively determinable performance goals based on one or more of the
following criteria:  stock price, earnings per share, price-earnings multiples,
net earnings, operating earnings, revenue, number of days sales outstanding in
accounts receivable, productivity, margin, EBITDA (earnings before interest,
taxes, depreciation and amortization), net capital employed, return on assets,
shareholder return, return on equity, return on capital employed, growth in
assets, unit volume, sales, cash flow, market share, relative performance to a
comparison group designated by the Committee, or strategic business criteria
consisting of one or more objectives based on meeting specified revenue goals,
market penetration goals, customer growth, geographic business expansion goals,
cost targets or goals relating to acquisitions or divestitures.  The performance
goals may relate to one or more business units or the performance of the Company
as a whole, or any combination of the foregoing.  Performance goals need not be
uniform as among Participants.

 

(d)           Timing of Establishment of Goals. The Committee shall establish
the performance goals in writing either before the beginning of the performance
period or during a period ending no later than the earlier of (i) 90 days after
the beginning of the performance period or (ii) the date on which 25 percent of
the performance period has been completed, or such other date as may be required
or permitted under applicable regulations under section 162(m) of the Code.

 

(e)           Certification of Results.  The Committee shall certify the
performance results for the performance period specified in the Grant Agreement
after the performance period ends.  The Committee shall determine the amount, if
any, to be paid pursuant to each Grant based on the achievement of the
performance goals and the satisfaction of all other terms of the Grant
Agreement.

 

(f)            Death, Disability or Other Circumstances.  The Committee may
provide in the Grant Agreement that Grants under this Section 12 shall be
payable, in whole or in part, in the event of the Participant’s death or
Disability, a Change in Control or under other circumstances consistent with the
Treasury regulations and rulings under section 162(m) of the Code.

 

13.                               Deferrals

 

The Committee may permit or require a Participant to defer receipt of the
payment of cash (including Dividend Equivalents) or the delivery of shares that
would otherwise be due to the Participant in connection with any Grant.  The
Committee shall establish rules and procedures for any such deferrals,
consistent with applicable requirements of section 409A of the Code.

 

15

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14.                               Withholding of Taxes

 

All Grants under the Plan shall be subject to applicable federal (including
FICA), state and local tax withholding requirements.  The Employing Entity may
require that the Participant (or other person receiving or exercising Grants)
pay to the Employing Entity the amount of any federal, state or local taxes that
the Employing Entity is required to withhold with respect to such Grants, or the
Employing Entity may deduct from other wages paid by the Employing Entity the
amount of any withholding taxes due with respect to such Grants.  Unless
otherwise determined by the Committee, the Employing Entity’s tax withholding
obligation with respect to Grants paid in Company Stock shall be satisfied by
having shares of Company Stock withheld, at the time such Grants become taxable.

 

15.                               Transferability of Grants

 

(a)           Restrictions on Transfer.  Except as described in subsection
(b) below, only the Participant may exercise rights under a Grant during the
Participant’s lifetime, and a Participant may not transfer those rights except
by will or by the laws of descent and distribution.  When a Participant dies,
the personal representative or other person entitled to succeed to the rights of
the Participant may exercise such rights.  Any such successor must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Participant’s will or under the applicable laws of descent and distribution.

 

(b)           Transfer of Nonqualified Stock Options to or for Family Members. 
Notwithstanding subsection (a) above, the Committee may provide, in a Grant
Agreement, that a Participant may transfer Nonqualified Stock Options to family
members, or one or more trusts or other entities for the benefit of or owned by
family members, consistent with the applicable securities laws, according to
such terms as the Committee may determine; provided that the Participant
receives no consideration for the transfer of an Option and the transferred
Option shall continue to be subject to the same terms and conditions as were
applicable to the Option immediately before the transfer.

 

16.                               Consequences of a Change in Control

 

(a)           Assumption of Outstanding Grants.  Upon a Change in Control where
the Company is not the surviving corporation (or survives only as a Subsidiary
of another corporation), unless the Committee determines otherwise, all
outstanding Grants that are not exercised or paid at the time of the Change in
Control shall be assumed by, or replaced with grants that have comparable terms
by, the surviving corporation (or a parent or Subsidiary of the surviving
corporation).  After a Change in Control, references to the “Company” as they
relate to employment matters shall include the successor employer.

 

(b)           Vesting Upon Certain Terminations of Employment.  Unless the Grant
Agreement provides otherwise, if a Participant’s employment or service is
terminated (i) by the Employer other than for Cause (excluding on account of
death or Disability) within six months prior to the date on which a Change in
Control occurs, and it is reasonably demonstrated that such termination (A) was
at the request of a third party who has taken steps reasonably calculated or
intended to effect a Change in Control or (B) otherwise arose in connection with
or

 

16

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anticipation of a Change in Control, or (ii) (A) by the Employer other than for
Cause (excluding on account of death or Disability), (B) by the Participant for
Good Reason, (C) on account of the Participant’s Disability or (D) on account of
the Participant’s death, in each case, upon or following the Change in Control
and during the period in which any of such Participant’s Grants are subject to
vesting or exercisability restrictions, the Participant’s outstanding Grants
shall become fully vested and exercisable in accordance with the timing
described below; provided that if the vesting and exercisability of any such
Grants is based, in whole or in part, on performance, the applicable Grant
Agreement, Subplan or VCSUA Subplan shall specify how the portion of the Grant
that becomes vested pursuant to this Section 16(b) shall be calculated.  To the
extent Options and SARs vest and become exercisable in accordance with this
Section 16, they will remain exercisable for 12 months following the termination
of the Participant’s employment or service, provided that, in no event shall any
Option or SAR be exercisable after the expiration of its term.  To the extent
the termination of employment or service is on account of the reason in
Section 16(b)(i) above, the unvested portion of the applicable Grant will be
suspended and no vesting shall occur unless and until a Change in Control occurs
during the six month period following the termination of employment or service.
If a Change in Control does not occur during the six month period following the
termination of employment or service, or the termination of employment or
service was not at the request of a third party who has taken steps reasonably
calculated or intended to effect a Change in Control or was not in connection
with or in anticipation of a Change in Control, the unvested portion of the
applicable Grant will be forfeited automatically on the date that is six months
following the termination of employment or service, unless otherwise determined
by the Committee. To the extent the termination of employment or service is on
account of the reason in Section 16(b)(ii) above, the unvested portion of any
applicable Grant will become fully vested and exercisable as of the date of the
applicable Participant’s termination.

 

(c)           Other Alternatives.  In the event of a Change in Control, if all
outstanding Grants are not assumed by, or replaced with Grants that have
comparable terms by, the surviving corporation (or a parent or Subsidiary of the
surviving corporation), the Committee may take any of the following actions with
respect to any or all outstanding Grants, without the consent of any
Participant:  (i) the Committee may determine that outstanding Options and SARs
shall be fully exercisable, and restrictions on outstanding Stock Awards and
Stock Units shall lapse, as of the date of the Change in Control or at such
other time as the Committee determines, (ii) the Committee may require that
Participants surrender their outstanding Options and SARs in exchange for one or
more payments by the Company, in cash or Company Stock as determined by the
Committee, in an amount equal to the amount by which the then Fair Market Value
of the shares of Company Stock subject to the Participant’s unexercised Options
and SARs exceeds the Exercise Price, or base amount, as applicable, if any, and
on such terms as the Committee determines, (iii) after giving Participants an
opportunity to exercise their outstanding Options and SARs, the Committee may
terminate any or all unexercised Options and SARs at such time as the Committee
deems appropriate, (iv) with respect to Participants holding Stock Units, Other
Stock-Based Awards or Dividend Equivalents, the Committee may determine that
such Participants shall receive one or more payments in settlement of such Stock
Units, Other Stock-Based Awards or Dividend Equivalents, in such amount and form
and on such terms as may be determined by the Committee, or (v) if the Company
is the surviving corporation, the Committee may determine that Grants will
remain outstanding after the Change in Control.  Such

 

17

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acceleration, surrender, termination, settlement or conversion shall take place
as of the date of the Change in Control or such other date as the Committee may
specify.  Without limiting the foregoing, if the per share Fair Market Value of
the Company Stock does not exceed the per share Exercise Price or base amount,
as applicable, the Company shall not be required to make any payment to the
participant upon surrender of the Option or SAR.

 

(d)           Other Transactions.  The Committee may provide in a Grant
Agreement that a sale or other transaction involving a Subsidiary or other
business unit of the Company shall be considered a Change in Control for
purposes of a Grant, or the Committee may establish other provisions that shall
be applicable in the event of a specified transaction.

 

17.                               Requirements for Issuance of Shares

 

No Company Stock shall be issued in connection with any Grant hereunder unless
and until all legal requirements applicable to the issuance of such Company
Stock have been complied with to the satisfaction of the Committee.  The
Committee shall have the right to condition any Grant made to any Participant
hereunder on such Participant’s undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable, and certificates
representing such shares may be legended to reflect any such restrictions. 
Certificates representing shares of Company Stock issued under the Plan will be
subject to such stop-transfer orders and other restrictions as may be required
by applicable laws, regulations and interpretations, including any requirement
that a legend be placed thereon.  Except as determined under Section 9(a), no
Participant shall have any right as a shareholder with respect to Company Stock
covered by a Grant until shares have been issued to the Participant.

 

18.                               Amendment and Termination of the Plan

 

(a)           Amendment.  The Board may amend or terminate the Plan at any time;
provided, however, that the Board shall not amend the Plan without approval of
the stockholders of the Company if such approval is required in order to comply
with the Code or applicable laws, or to comply with applicable stock exchange
requirements.  No amendment or termination of this Plan shall, without the
consent of the Participant, materially impair any rights or obligations under
any Grant previously made to the Participant under the Plan, unless such right
has been reserved in the Plan or the Grant Agreement, or except as provided in
Section 19(b) below.  Notwithstanding anything in the Plan to the contrary, the
Board may amend the Plan in such manner as it deems appropriate in the event of
a change in applicable law or regulations.

 

(b)           No Repricing Without Stockholder Approval.  Except as otherwise
provided in Section 5(d), the terms of outstanding Grants may not be amended to
reduce the exercise price of outstanding Options or the base amount of
outstanding SARs or to cancel outstanding Options or SARs in exchange for cash,
other awards, Options with an exercise price that is less than the exercise
price of the original Options or SARs with a base amount that is less than the
base amount for the original SARs, without stockholder approval.

 

(c)           Stockholder Approval for “Qualified Performance-Based
Compensation.”  If Grants are made under Section 12 above, the Plan must be
reapproved by the Company’s

 

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stockholders no later than the first stockholders meeting that occurs in the
fifth year following the year in which the stockholders previously approved the
provisions of Section 12, if additional Grants are to be made under Section 12
and if required by section 162(m) of the Code or the regulations thereunder.

 

(d)                                 Termination of Plan.  The Plan shall
terminate on June 10, 2025, unless the Plan is terminated earlier by the Board
or is extended by the Board with the approval of the stockholders.  The
termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Grant.

 

19.                               Miscellaneous

 

(a)                                 Grants in Connection with Corporate
Transactions and Otherwise.  Nothing contained in this Plan shall be construed
to (i) limit the right of the Committee to make Grants under this Plan in
connection with the acquisition, by purchase, lease, merger, consolidation or
otherwise, of the business or assets of any corporation, firm or association,
including Grants to employees thereof who become Employees, or for other proper
corporate purposes, or (ii) limit the right of the Company to grant stock
options or make other stock-based awards outside of this Plan.  Without limiting
the foregoing, the Committee may make a Grant to an employee of another
corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company in substitution for a grant made by such corporation.  The
terms and conditions of the Grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives, as
determined by the Committee.

 

(b)                                 Compliance with Law.

 

(i)                                     The Plan, the exercise of Options and
the obligations of the Company to issue or transfer shares of Company Stock
under Grants shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required.  With respect to persons
subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act.  In addition,
it is the intent of the Company that Incentive Stock Options comply with the
applicable provisions of section 422 of the Code and that Grants of “qualified
performance-based compensation” comply with the applicable provisions of section
162(m) of the Code.  To the extent that any legal requirement of section 16 of
the Exchange Act or section 422, 162(m) or 409A of the Code as set forth in the
Plan ceases to be required under section 16 of the Exchange Act or section 422,
162(m) or 409A of the Code, that Plan provision shall cease to apply.  The
Committee may revoke any Grant if it is contrary to law or modify a Grant to
bring it into compliance with any valid and mandatory government regulation. 
The Committee may also adopt rules regarding the withholding of taxes on
payments to Participants.

 

(ii)                                  The Plan is intended to comply with the
requirements of Section 409A of the Code, to the extent applicable.  All Grants
shall be construed and administered such that the Grant either (A) qualifies for
an exemption from the requirements of Section 409A of the Code or (B) satisfies
the requirements of Section 409A of the Code.  If a Grant is subject to Section

 

19

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409A of the Code, (1) distributions shall only be made in a manner and upon an
event permitted under Section 409A of the Code, (2) payments to be made upon a
termination of employment shall only be made upon a “separation from service”
under Section 409A of the Code, (3) payments to be made upon a Change in Control
shall only be made upon a “change of control event” under Section 409A of the
Code, (4) unless the Grant specifies otherwise, each payment shall be treated as
a separate payment for purposes of Section 409A of the Code, and (5) in no event
shall a Participant, directly or indirectly, designate the calendar year in
which a distribution is made except in accordance with Section 409A of the Code.

 

(iii)                               Any Grant made under the Plan that is
subject to Section 409A of the Code and that is to be distributed to a Key
Employee (as defined below) upon separation from service shall be administered
so that any distribution with respect to such Grant shall be postponed for six
months following the date of the Participant’s separation from service, if
required by Section 409A of the Code.  If a distribution is delayed pursuant to
Section 409A of the Code, the distribution shall be paid within 30 days after
the end of the six-month period.  If the Participant dies during such six-month
period, any postponed amounts shall be paid within 90 days of the Participant’s
death.  The determination of Key Employees, including the number and identity of
persons considered Key Employees and the identification date, shall be made by
the Committee or its delegate each year in accordance with Section 416(i) of the
Code and the “specified employee” requirements of Section 409A of the Code.

 

(iv)                              Notwithstanding anything in the Plan or any
Grant agreement to the contrary, each Participant shall be solely responsible
for the tax consequences of Grants under the Plan, and in no event shall the
Company have any responsibility or liability if a Grant does not meet any
applicable requirements of section 409A of the Code.  Although the Company
intends to administer the Plan to prevent taxation under section 409A of the
Code, the Company does not represent or warrant that the Plan or any Grant
complies with any provision of federal, state, local or other tax law.

 

(c)                                  Enforceability.  The Plan shall be binding
upon and enforceable against the Company and its successors and assigns.

 

(d)                                 Funding of the Plan; Limitation on Rights. 
This Plan shall be unfunded.  The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Grants under this Plan.  Nothing contained in the Plan and no
action taken pursuant hereto shall create or be construed to create a fiduciary
relationship between the Company and any Participant or any other person.  No
Participant or any other person shall under any circumstances acquire any
property interest in any specific assets of the Company.  To the extent that any
person acquires a right to receive payment from the Company hereunder, such
right shall be no greater than the right of any unsecured general creditor of
the Company.

 

(e)                                  Rights of Participants.  Nothing in this
Plan shall entitle any Employee, Non-Employee Director or other person to any
claim or right to receive a Grant under this Plan.  Neither this Plan nor any
action taken hereunder shall be construed as giving any individual any rights to
be retained by or in the employment or service of the Employer.

 

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(f)                                   No Fractional Shares.  No fractional
shares of Company Stock shall be issued or delivered pursuant to the Plan or any
Grant.  The Committee shall determine whether cash, other awards or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.

 

(g)                                  Employees Subject to Taxation Outside the
United States.  With respect to Participants who are subject to taxation in
countries other than the United States, the Committee may make Grants on such
terms and conditions as the Committee deems appropriate to comply with the laws
of the applicable countries, and the Committee may create such procedures,
addenda and subplans and make such modifications as may be necessary or
advisable to comply with such laws.

 

(h)                                 Governing Law.  The validity, construction,
interpretation and effect of the Plan and Grant Agreements issued under the Plan
shall be governed and construed by and determined in accordance with the laws of
the State of New York, without giving effect to the conflict of laws provisions
thereof.

 

(i)                                     Recoupment Policy.  All Grants under
this Plan will be subject to any compensation clawback or recoupment policies
that may be applicable to any Employee, as in effect from time to time and as
approved by the Committee or Board.

 

(j)                                    Statute of Limitations.  A Participant or
any other person filing a claim for benefits under the Plan must file the claim
within one year after the Participant or other person knew or reasonably should
have known of the principal facts on which the claim is based.

 

21

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