Exhibit 10.1
PIKE ELECTRIC CORPORATION
2008 Omnibus Incentive Compensation Plan,
as Amended and Restated Effective November 3, 2011
SECTION 1. Purpose. The purpose of this Pike Electric Corporation 2008 Omnibus
Incentive Compensation Plan is to promote the interests of Pike Electric
Corporation, a Delaware corporation (the “Company”), and its stockholders by
(a) attracting and retaining exceptional directors, officers, employees and
consultants (including prospective directors, officers, employees and
consultants) of the Company and its Affiliates and (b) enabling such individuals
to participate in the long-term growth and financial success of the Company. The
Company originally established this Plan effective as of January 1, 2008. This
Plan is hereby being amended and restated, subject to and effective upon the
approval of the Company’s stockholders at the annual meeting of stockholders on
November 3, 2011. The purpose of amending and restating the Plan is to
(i) authorize the issuance of additional Shares under the Plan, (ii) extend the
term of the Plan by four years and (iii) make certain other design changes
consistent with changes in the economic and business environment since the Plan
was established.
SECTION 2. Definitions. As used herein, the following terms have the meanings
set forth below:
“Affiliate” means (a) any entity that, directly or indirectly, is controlled by,
controls or is under common control with, the Company and (b) any entity in
which the Company has a significant equity interest, in either case as
determined by the Committee.
“Award” means any award that is made to a Participant under Section 6.
“Award Agreement” means any written agreement, contract or other instrument or
document evidencing any Award, which may, but need not, require execution or
acknowledgment by a Participant.
“Beneficial Ownership” or “Beneficial Owners” have the meanings assigned to
those terms in Rule 13d-3 under the Exchange Act.
“Board” means the Board of Directors of the Company.
“Cash Incentive Award” has the meaning specified in Section 6(g).
“Change in Control” means the occurrence of any of the following events:
(a) at any time during any period of 24 consecutive months at least a majority
of the Board shall cease to consist of directors of the Company who either were
directors at the beginning of such period or who subsequently became directors
and whose election, or nomination for election by the Company’s stockholders,
was approved by a majority of the then Incumbent Directors (“Incumbent
Directors”); or
(b) any “person” or “group,” as determined in accordance with Section 13(d)(3)
of the Exchange Act (other than (A) any Subsidiary or employee benefit plan (or
related trust or fiduciary) sponsored or maintained by the Company or an
Affiliate or (B) Lindsay Goldberg, LLC and its affiliates) acquires Beneficial
Ownership of thirty-five percent (35%) or more of the combined voting power of
the then outstanding Company Voting Securities, unless such acquisition is
approved by a majority of the directors of the Company in office immediately
preceding such acquisition; or

 

 

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(c) the consummation of a merger, consolidation, statutory share exchange or
similar transaction to which the Company or any Subsidiary is a party (a
“Merger”), unless immediately following the Merger:
(1) the Beneficial Owners of the Company Voting Securities outstanding
immediately prior to such Merger are the Beneficial Owners of more than 50% of
the combined voting power of the then outstanding voting securities of the
corporation or other entity resulting from such Merger (including a corporation
or other entity that as a result of such Merger directly or indirectly owns the
Company or all or substantially all the Company’s assets) (the “Continuing
Company”), provided such Beneficial Ownership is attributable solely to Company
Voting Securities held immediately prior to such Merger; and
(2) at least a majority of the members of the board of directors (or equivalent
body) of the Continuing Company are Incumbent Directors; or
(d) the consummation of the sale of all, or substantially all, of the Company’s
assets; or
(e) the stockholders of the Company approve a plan of complete liquidation of
the Company.
Notwithstanding the foregoing, with respect to any Awards that provide or may
provide for a deferral of compensation within the meaning of Section 409A of the
Code and that provide for an accelerated payment in connection with a Change in
Control, a Change in Control shall not be deemed to have occurred unless the
event shall also qualify as a “change in control event” under Section 409A of
the Code.
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
together with the rules, regulations and interpretations promulgated thereunder.
“Committee” means the Compensation Committee of the Board, or such other
committee of the Board as may be designated by the Board to administer the Plan.
“Company Voting Securities” means the securities eligible to vote for the
election of the Board.
“Deferred Share Unit” means a deferred share unit Award that represents an
unfunded and unsecured promise to deliver Shares in accordance with the terms of
the applicable Award Agreement.
“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, together with the rules, regulations and interpretations promulgated
thereunder.
“Exercise Price” means (a) in the case of Options, the price specified in the
applicable Award Agreement as the price-per-Share at which Shares may be
purchased pursuant to such Option or (b) in the case of SARs, the price
specified in the applicable Award Agreement as the reference price-per-Share
used to calculate the amount payable to the Participant.

 

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“Fair Market Value” means
(a) with respect to any property other than Shares, the fair market value of
such property determined by such methods or procedures as shall be established
from time to time by the Committee; and
(b) with respect to the Shares, as of any date, (i) if the Shares are listed on
the NYSE or any other exchange or quotation system, the mean between the high
and low sales prices of the Shares on such exchange or quotation system for such
date or, if no sales occur on such date, then on the next preceding date on
which there were sales of Shares; or (ii) in the event the Shares are not listed
on an exchange or quotation system, the fair market value of the Shares as
determined in good faith by the Committee, in each case with respect to this
clause (b), as determined in accordance with Section 409A of the Code to the
extent required under Section 409A of the Code.
“Incentive Stock Option” means an option to purchase Shares from the Company
that (a) is granted under Section 6 and (b) is intended to be and is
specifically designated as an “incentive stock option” within the meaning of
Section 422 of the Code.
“Independent Director” means a member of the Board who is neither (a) an
employee of the Company nor (b) an employee of any Affiliate, and who, at the
time of acting, is a “Non-Employee Director” under Rule 16b-3.
“IRS” means the Internal Revenue Service or any successor thereto and includes
the staff thereof.
“Nonqualified Stock Option” means an option to purchase Shares from the Company
that (a) is granted under Section 6 and (b) is not an Incentive Stock Option.
“NYSE” means the New York Stock Exchange or any successor thereto.
“Option” means an Incentive Stock Option or a Nonqualified Stock Option or both,
as the context requires.
“Participant” means any director, officer, employee or consultant of the Company
or its Affiliates who is eligible for an Award under Section 5 and who is
selected by the Committee to receive an Award under the Plan or who receives a
Substitute Award pursuant to Section 4(c).
“Performance Compensation Award” means any Award designated by the Committee as
a Performance Compensation Award pursuant to Section 6(e).
“Performance Criteria” means the criterion or criteria that the Committee
selects for purposes of establishing a Performance Goal for a Performance Period
with respect to any Performance Compensation Award, Performance Unit or Cash
Incentive Award under the Plan.
“Performance Formula” means, for a Performance Period, the one or more objective
formulas applied against the relevant Performance Goal to determine, with regard
to the Performance Compensation Award, Performance Unit or Cash Incentive Award
of a particular Participant, whether all, a portion or none of the Award has
been earned for the Performance Period.
“Performance Goal” means, for a Performance Period, the one or more goals
established by the Committee for the Performance Period based upon the
Performance Criteria.
“Performance Period” means the one or more periods of time as the Committee may
select over which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Participant’s right to and the payment
of a Performance Compensation Award, Performance Unit or Cash Incentive Award.

 

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“Performance Unit” means an Award under Section 6(f) that has a value set by the
Committee (or that is determined by reference to a valuation formula specified
by the Committee or the Fair Market Value of Shares), which value may be paid to
the Participant by delivery of such property as the Committee shall determine,
upon achievement of such Performance Goals during the relevant Performance
Period as the Committee shall establish at the time of such Award or thereafter.
“Plan” means this Pike Electric Corporation 2008 Omnibus Incentive Compensation
Plan, as in effect from time to time.
“Restricted Share” means a Share delivered under the Plan that is subject to
certain transfer restrictions, forfeiture provisions and/or other terms and
conditions specified herein and in the applicable Award Agreement.
“RSU” means a restricted stock unit Award that is designated as such in the
applicable Award Agreement and that represents an unfunded and unsecured promise
to deliver Shares, cash, other securities, other Awards or other property in
accordance with the terms of the applicable Award Agreement.
“Rule 16b-3” means Rule 16b-3 as promulgated and interpreted by the SEC under
the Exchange Act or any successor rule or regulation thereto as in effect from
time to time.
“SAR” means a stock appreciation right Award that represents an unfunded and
unsecured promise to deliver Shares, cash, other securities, other Awards or
other property equal in value to the excess, if any, of the Fair Market Value
per Share over the Exercise Price per Share of the SAR, subject to the terms of
the applicable Award Agreement.
“SEC” means the Securities and Exchange Commission or any successor thereto and
shall include the staff thereof.
“Shares” means shares of common stock of the Company or such other securities of
the Company (a) into which such shares shall be changed by reason of a
recapitalization, merger, consolidation, split-up, combination, exchange of
shares or other similar transaction or (b) as may be determined by the Committee
pursuant to Section 4(b).
“Subsidiary” means any entity in which the Company, directly or indirectly,
possesses 50% or more of the total combined voting power of all classes of its
stock.
“Substitute Awards” have the meaning specified in Section 4(c).
“Substituted Options” have the meaning specified in Section 6(c)(v).
“Substitution SARs” have the meaning specified in Section 6(c)(v).
SECTION 3. Administration.
(a) Composition of Committee. The Plan shall be administered by the Committee,
which shall be composed of one or more directors, as determined by the Board;
provided that to the extent necessary to comply with the rules of the NYSE and
Rule 16b-3 and to satisfy any applicable requirements of Section 162(m) of the
Code and any other applicable laws or rules, the Committee shall be composed of
two or more directors, all of whom shall be Independent Directors and all of
whom shall (i) qualify as “outside directors” under Section 162(m) of the Code
and (ii) meet the independence requirements of the NYSE.

 

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(b) Authority of Committee. Subject to the terms of the Plan and applicable law,
and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee is authorized to grant Awards under the
Plan, to construe and interpret the Plan, to promulgate, amend and rescind rules
and regulations relating to the implementation of the Plan and to make all other
determinations necessary or advisable for the administration of the Plan;
provided, however, that any permitted accelerations, deferrals or payments in
respect of any Award granted under the Plan shall comply with all applicable
requirements of Section 409A of the Code, including the timing of any deferral
elections and the timing and form of payments. Unless otherwise expressly
provided in the Plan, all designations, determinations, interpretations and
other decisions under or with respect to the Plan or any Award shall be within
the sole and plenary discretion of the Committee, may be made at any time and
shall be final, conclusive and binding upon all persons, including the Company,
any Affiliate, any Participant, any person validly claiming under or through any
Participant, any holder or beneficiary of any Award and any stockholder. The
Company shall effect the granting of Awards under the Plan in accordance with
the determinations made by the Committee, by execution of instruments in writing
in such form as are approved by the Committee.
(c) Indemnification. No member of the Board, the Committee or any employee of
the Company (each such person, a “Covered Person”) shall be liable for any
action taken or omitted to be taken or any determination made in good faith with
respect to the Plan or any Award hereunder. Each Covered Person shall be
indemnified and held harmless by the Company against and from (i) any loss,
cost, liability or expense (including attorneys’ fees) that may be imposed upon
or incurred by such Covered Person in connection with or resulting from any
action, suit or proceeding to which such Covered Person may be a party or in
which such Covered Person may be involved by reason of any action taken or
omitted to be taken under the Plan or any Award Agreement and (ii) any and all
amounts paid by such Covered Person, with the Company’s approval, in settlement
thereof, or paid by such Covered Person in satisfaction of any judgment in any
such action, suit or proceeding against such Covered Person; provided that the
Company shall have the right, at its own expense, to assume and defend any such
action, suit or proceeding, and, once the Company gives notice of its intent to
assume the defense, the Company shall have sole control over such defense with
counsel of the Company’s choice. The foregoing right of indemnification shall
not be available to a Covered Person to the extent that a court of competent
jurisdiction in a final judgment or other final adjudication, in either case not
subject to further appeal, determines that the acts or omissions of such Covered
Person giving rise to the indemnification claim resulted from such Covered
Person’s bad faith, fraud or willful criminal act or omission or that such right
of indemnification is otherwise prohibited by law or by the Company’s
Certificate of Incorporation or Bylaws. The foregoing right of indemnification
shall not be exclusive of any other rights of indemnification to which Covered
Persons may be entitled under the Company’s Certificate of Incorporation or
Bylaws, as a matter of law, or otherwise, or any other power that the Company
may have to indemnify such persons or hold them harmless.
(d) Delegation of Authority to Senior Officers. To the extent permitted by
applicable law, the Committee may delegate, on such terms and conditions as it
determines in its sole and plenary discretion, to one or more senior officers of
the Company the authority to make grants of Awards to officers (other than
executive officers), employees and consultants of the Company and its Affiliates
(including any prospective officer, employee or consultant).

 

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(e) Awards to Independent Directors. Notwithstanding anything to the contrary
contained herein, the Board may, in its sole and plenary discretion, at any time
and from time to time, grant Awards to Independent Directors or administer the
Plan with respect to such Awards. In any such case, the Board shall have all the
authority and responsibility granted to the Committee herein.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(b), the
aggregate number of Shares that may be delivered pursuant to Awards granted
under the Plan shall be 5,000,000 (which is comprised of the original 2,500,000
Shares authorized upon establishment of the Plan plus an additional 2,500,000
Shares added effective upon approval by the stockholders of this amendment and
restatement of the Plan). The maximum number of Shares that may be delivered
pursuant to Incentive Stock Options granted under the Plan shall be 500,000. The
maximum number of each type of Award (other than Cash Incentive Awards) intended
to constitute “performance-based compensation” under Code Section 162(m) granted
to any Participant in any fiscal year shall not exceed the following:
Options/SARs, 600,000; performance-based Restricted Shares/RSUs, 600,000; and
Share-based Performance Units, 600,000. If, after the effective date of the
Plan, any Award granted under the Plan is forfeited, or otherwise expires,
terminates or is canceled without the delivery of Shares, then the Shares
covered by such forfeited, expired, terminated or canceled Award shall again
become available to be delivered pursuant to Awards under the Plan. If Shares
issued upon exercise, vesting or settlement of an Award, or Shares owned by a
Participant (which are not subject to any pledge or other security interest and
which have been owned by the Participant for such minimum period of time as the
Company determines necessary to avoid any adverse accounting consequences), are
surrendered or tendered to the Company in payment of the Exercise Price of an
Award or any taxes required to be withheld in respect of an Award, in each case,
in accordance with the terms and conditions of the Plan and any applicable Award
Agreement, such surrendered or tendered Shares shall again become available to
be delivered pursuant to Awards under the Plan.
(b) Adjustments for Changes in Capitalization and Similar Events. In the event
of any change in corporate capitalization, such as a stock split, or a corporate
transaction, such as any merger, consolidation, separation, including a
spin-off, or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization comes within the definition
of such term in Code Section 368) or any partial or complete liquidation of the
Company, such adjustment shall be made in (A) the number and class of Shares
which may be issued under the Plan, (B) the number and class of Shares that may
be granted as ISOs as specified in Section 4(a), (C) the maximum number and
class of Shares that may be granted to individuals in a fiscal year as specified
in Section 4(a), and (D) the number and class of and/or price of Shares subject
to outstanding Awards granted under the Plan, as may be determined to be
appropriate and equitable by the Committee, in its sole discretion, to prevent
dilution or enlargement of rights; provided, however, that (i) the number of
Shares subject to any Award shall always be a whole number and (ii) such
adjustment shall be made in a manner consistent with the requirements of Code
Section 409A in order for any Options or SARs to remain exempt from the
requirements of Code Section 409A. In connection with a corporate transaction,
the Committee may:
(i) if deemed appropriate or desirable by the Committee, make provision for a
cash payment to the holder of an outstanding Award in consideration for the
cancellation of such Award, including, in the case of an outstanding Option or
SAR, a cash payment to the holder of such Option or SAR in consideration for the
cancellation of such Option or SAR in an amount equal to the excess, if any, of
the Fair Market Value (as of a date specified by the Committee) of the Shares
subject to such Option or SAR over the aggregate Exercise Price of such Option
or SAR; and

 

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(ii) if deemed appropriate or desirable by the Committee, cancel and terminate
any Option or SAR having a per Share Exercise Price equal to, or in excess of,
the Fair Market Value of a Share subject to such Option or SAR without any
payment or consideration therefor.
(c) Substitute Awards. Awards may, in the discretion of the Committee, be
granted under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by a company acquired by the Company or any of its
Affiliates or with which the Company or any of its Affiliates combines
(“Substitute Awards”). Substitute Awards shall not be counted against the
aggregate number of Shares available for Awards under the Plan.
(d) Sources of Shares Deliverable Under Awards. Shares issued under the Plan may
be original issue shares, treasury stock or shares purchased in the open market
or otherwise, all as determined by the Chief Financial Officer of the Company
(or the Chief Financial Officer’s designee) from time to time, unless otherwise
determined by the Committee.
SECTION 5. Eligibility. Any director, officer, employee or consultant of the
Company or any of its Affiliates shall be eligible to be designated a
Participant.
SECTION 6. Awards.
(a) Types of Awards. Awards may be made under the Plan in the form of
(i) Options, (ii) SARs, (iii) Restricted Shares, (iv) RSUs, (v) Performance
Units, (vi) Cash Incentive Awards, (vii) Deferred Share Units and (viii) other
equity-based or equity-related Awards that the Committee determines are
consistent with the purpose of the Plan and the interests of the Company. Awards
may be granted in tandem with other Awards. No Incentive Stock Option (other
than an Incentive Stock Option that may be assumed or issued by the Company in
connection with a transaction to which Section 424(a) of the Code applies) may
be granted to a person who is ineligible to receive an Incentive Stock Option
under the Code.
(b) Options.
(i) Grant. Subject to the provisions of the Plan, the Committee has sole and
plenary authority to determine the Participants to whom Options shall be
granted, the number of Shares to be covered by each Option, whether the Option
will be an Incentive Stock Option or a Nonqualified Stock Option and the
conditions and limitations applicable to the vesting and exercise of the Option.
In the case of Incentive Stock Options, the terms and conditions of such grants
shall be subject to and comply with such rules as may be prescribed by
Section 422 of the Code and any regulations related thereto, as may be amended
from time to time. All Options granted under the Plan shall be Nonqualified
Stock Options unless the applicable Award Agreement expressly states that the
Option is intended to be an Incentive Stock Option. If an Option is intended to
be an Incentive Stock Option, and if for any reason such Option (or any portion
thereof) shall not qualify as an Incentive Stock Option, then, to the extent of
such nonqualification, such Option (or portion thereof) shall be regarded as a
Nonqualified Stock Option appropriately granted under the Plan; provided that
such Option (or portion thereof) otherwise complies with the Plan’s requirements
relating to Nonqualified Stock Options.
(ii) Exercise Price. Except for Substitute Awards, the Exercise Price of each
Share covered by an Option shall be not less than 100% of the Fair Market Value
of such Share (determined as of the date the Option is granted); provided,
however, that in the case of an Incentive Stock Option granted to an employee
who, at the time of the grant of such Option, owns stock representing more than
10% of the voting power of all classes of stock of the Company or any Affiliate,
the per Share Exercise Price shall be no less than 110% of the Fair Market Value
per Share on the date of the grant. Options are intended to qualify as
“qualified performance-based compensation” under Section 162(m) of the Code.

 

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(iii) Exercisability. Each Option shall be vested and exercisable at such times,
in such manner and subject to such terms and conditions as the Committee may, in
its sole and plenary discretion, specify in the applicable Award Agreement or
thereafter. Except as otherwise specified by the Committee in the applicable
Award Agreement, an Option may only be exercised to the extent that it has
already vested at the time of exercise. Except as otherwise specified by the
Committee in the applicable Award Agreement, Options shall become vested and
exercisable with respect to one-third of the Shares subject to such Options on
each of the first three anniversaries of the date of grant.
(iv) Method of Exercise. An Option shall be deemed to be exercised when written
or electronic notice of such exercise has been given to the Company in
accordance with the terms of the Award by the person entitled to exercise the
Award and full payment for the Shares with respect to which the Award is
exercised has been received by the Company. The Committee may impose such
conditions with respect to the exercise of Options, including, without
limitation, any relating to the application of Federal or state securities laws,
as it may deem necessary or advisable. No Shares shall be delivered pursuant to
any exercise of an Option until payment in full of the aggregate Exercise Price
therefor is received by the Company, and the Participant has paid to the Company
an amount equal to any Federal, state, local and foreign income and employment
taxes required to be withheld.
The Exercise Price due upon exercise of any Option shall be payable to the
Company in full either: (A) in cash or its equivalent or (B) in the Committee’s
sole and plenary discretion, by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the aggregate
Exercise Price (provided that the shares which are tendered must have been held
by the Participant for such minimum period of time as the Company determines
necessary to avoid any adverse accounting consequences), or (C) by a combination
of (A) and (B).
As soon as practicable after notification of exercise and full payment, the
Company shall deliver the shares to the Participant in an appropriate amount
based upon the number of shares purchased under the Option.
Notwithstanding the foregoing provisions of this paragraph 6(b)(iv), (A) unless
the Committee determines otherwise, Options may be exercised by means of
cashless exercises (including “broker assisted” cashless exercises and “net
exercises”) and (B) the Committee, in its sole and plenary discretion, may also
allow exercises by any other means which the Committee determines to be
consistent with the Plan’s purpose and applicable law.
(v) Expiration. Except as otherwise set forth in the applicable Award Agreement,
each Option shall expire immediately, without any payment, upon the earlier of
(A) the tenth anniversary of the date the Option is granted and (B) 90 days
after the date the Participant who is holding the Option ceases to be a
director, officer, employee or consultant of the Company or one of its
Affiliates. In no event may an Option be exercisable after the tenth anniversary
of the date the Option is granted.
(c) SARs.
(i) Grant. Subject to the provisions of the Plan, the Committee has sole and
plenary authority to determine the Participants to whom SARs shall be granted,
the number of Shares to be covered by each SAR, the Exercise Price thereof and
the conditions and limitations applicable to the exercise thereof. SARs may be
granted in tandem with another Award, in addition to another Award or
freestanding and unrelated to another Award. SARs granted in tandem with, or in
addition to, an Award may be granted either at the same time as the Award or at
a later time.

 

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(ii) Exercise Price. Except for Substitute Awards and Substitution SARs (see
below), the Exercise Price of each Share covered by a SAR shall be not less than
100% of the Fair Market Value of such Share (determined as of the date the SAR
is granted). SARs are intended to qualify as “qualified performance-based
compensation” under Section 162(m) of the Code.
(iii) Exercise. A SAR shall entitle the Participant to receive an amount equal
to the excess, if any, of the Fair Market Value of a Share on the date of
exercise of the SAR over the Exercise Price thereof. The Committee shall
determine, in its sole and plenary discretion, whether a SAR shall be settled in
cash, Shares, other securities, other Awards, other property or a combination of
any of the foregoing.
(iv) Other Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine, at or after the grant
of a SAR, the vesting criteria, term, methods of exercise, methods and form of
settlement and any other terms and conditions of any SAR. Any such determination
by the Committee may be changed by the Committee from time to time and may
govern the exercise of SARs granted or exercised thereafter. The Committee may
impose such conditions or restrictions on the exercise of any SAR as it shall
deem appropriate or desirable.
(v) Substitution SARs. The Committee may substitute, without the consent of the
affected Participant or any holder or beneficiary of SARs, SARs settled in
Shares (or SARs settled in Shares or cash in the Committee’s discretion)
(“Substitution SARs”) for outstanding Nonqualified Stock Options (“Substituted
Options”); provided that (A) the substitution shall not otherwise result in a
modification of the terms of any Substituted Option, (B) the number of Shares
underlying the Substitution SARs shall be the same as the number of Shares
underlying the Substituted Options and (C) the Exercise Price of the
Substitution SARs shall be equal to the Exercise Price of the Substituted
Options. If, in the opinion of the Company’s auditors, this provision creates
adverse accounting consequences for the Company, it shall be considered null and
void.
(d) Restricted Shares and RSUs.
(i) Grant. Subject to the provisions of the Plan, the Committee has sole and
plenary authority to determine the Participants to whom Restricted Shares and
RSUs shall be granted, the number of Restricted Shares and RSUs to be granted to
each Participant, the duration of the period during which, and the conditions,
if any, under which, the Restricted Shares and RSUs may vest or may be forfeited
to the Company and the other terms and conditions of such Awards.
(ii) Transfer Restrictions. Restricted Shares and RSUs may not be sold,
assigned, transferred, pledged or otherwise encumbered except as provided in the
Plan or as may be provided in the applicable Award Agreement; provided, however,
that the Committee may in its discretion determine that Restricted Shares and
RSUs may be transferred by the Participant. Certificates issued in respect of
Restricted Shares shall be registered in the name of the Participant and
deposited by such Participant, together with a stock power endorsed in blank,
with the Company or such other custodian as may be designated by the Committee
or the Company, and shall be held by the Company or other custodian, as
applicable, until such time as the restrictions applicable to such Restricted
Shares lapse. Upon the lapse of the restrictions applicable to such Restricted
Shares, the Company or other custodian, as applicable, shall deliver such
certificates to the Participant or the Participant’s legal representative
(unless the Shares are held in book entry form).

 

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(iii) Payment/Lapse of Restrictions. Each RSU shall have a value equal to the
Fair Market Value of a Share. RSUs shall be paid in cash, Shares, other
securities, other Awards or other property, as determined in the sole and
plenary discretion of the Committee, upon the lapse of restrictions applicable
thereto, or otherwise in accordance with the applicable Award Agreement. If a
Restricted Share or an RSU is intended to qualify as “qualified
performance-based compensation” under Section 162(m) of the Code, all
requirements set forth in Section 6(e) must be satisfied in order for the
restrictions applicable thereto to lapse.
(e) Performance Compensation Awards.
(i) General. The Committee has the authority, at the time of grant of any Award,
to designate such Award (other than Options and SARs) as a Performance
Compensation Award in order to qualify such Award as “qualified
performance-based compensation” under Section 162(m) of the Code or to qualify
such Award as “performance-based compensation” under Section 409A of the Code.
Options and SARs granted under the Plan shall not be included among Awards that
are designated as Performance Compensation Awards under this Section 6(e).
(ii) Eligibility. The Committee shall, in its sole discretion, designate within
the time period prescribed under Section 162(m) of the Code which Participants
will be eligible to receive Performance Compensation Awards in respect of such
Performance Period. However, designation of a Participant eligible to receive an
Award hereunder for a Performance Period shall not in any manner entitle the
Participant to receive payment in respect of any Performance Compensation Award
for such Performance Period. The determination as to whether or not such
Participant becomes entitled to payment in respect of any Performance
Compensation Award shall be decided solely in accordance with the provisions of
this Section 6(e). Designation of a Participant eligible to receive an Award
hereunder for a particular Performance Period shall not require designation of
such Participant eligible to receive an Award hereunder in any subsequent
Performance Period and designation of one person as a Participant eligible to
receive an Award hereunder shall not require designation of any other person as
a Participant eligible to receive an Award hereunder.
(iii) Discretion of Committee with Respect to Performance Compensation Awards.
With regard to a particular Performance Period, the Committee has full
discretion to select the length of such Performance Period, the types of
Performance Compensation Awards to be issued, the Performance Criteria that will
be used to establish the Performance Goals, and the Performance Formula. Within
the time period prescribed under Section 162(m) of the Code, the Committee
shall, with regard to the Performance Compensation Awards to be issued for such
Performance Period, exercise its discretion with respect to each of the matters
enumerated in the immediately preceding sentence and record the same in writing.
(iv) Performance Criteria. Notwithstanding the foregoing, the Performance
Criteria that will be used to establish the Performance Goals shall be (A) based
on the attainment of specific levels of performance of the Company or any of its
Subsidiaries, Affiliates, divisions, regions, departments, operational units, or
any combination of the foregoing, (B) established within the time period
prescribed by Section 162(m) of the Code, and (C) limited to one or more of the
following:

  •  
Net income before or after taxes;
    •  
Earnings before or after taxes (including earnings before interest, taxes,
depreciation and amortization);
    •  
Operating income;
    •  
Earnings per share;
    •  
Return on shareholders’ equity;

 

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  •  
Return on investment or capital;
    •  
Return on assets;
    •  
Level or amount of acquisitions,
    •  
Share price;
    •  
Profitability and profit margins;
    •  
Market share;
    •  
Revenues or sales (based on units or dollars);
    •  
Costs;
    •  
Cash flow;
    •  
Working capital;
    •  
Safety and accident rates; and
    •  
Implementation, completion or attainment of measurable objectives with respect
to specific operational goals and targets, such as: (A) implementation of new
systems or processes, (B) specific projects, (C) M&A completion/integration,
(D) recruitment or retention of personnel and (E) customer satisfaction.

(v) Modification of Performance Goals. The Committee is authorized at any time
within the time period permitted by Section 162(m) of the Code, or any time
thereafter (but only to the extent the exercise of such authority after such
period would not cause the Performance Compensation Awards granted to any
Participant for the Performance Period to fail to qualify as “qualified
performance-based compensation” under Section 162(m) of the Code), in its sole
and plenary discretion, to adjust or modify the calculation of a Performance
Goal for such Performance Period to the extent permitted under Section 162(m) of
the Code (A) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event or development affecting the
Company or any of its Affiliates, Subsidiaries, divisions or operating units (to
the extent applicable to such Performance Goal) or (B) in recognition of, or in
anticipation of, any other unusual or nonrecurring events affecting the Company
or any of its Affiliates, Subsidiaries, divisions or operating units (to the
extent applicable to such Performance Goal), or the financial statements of the
Company or any of its Affiliates, Subsidiaries, divisions or operating units (to
the extent applicable to such Performance Goal), or of changes in applicable
rules, rulings, regulations or other requirements of any governmental body or
securities exchange, accounting principles, law or business conditions.
(vi) Payment of Performance Compensation Awards.
(A) Condition to Receipt of Payment. A Participant must be employed by the
Company on the last day of a Performance Period (or such later date as
determined by the Committee and set forth in the applicable Award Agreement) to
be eligible for payment in respect of a Performance Compensation Award for such
Performance Period. Notwithstanding the foregoing, in the discretion of the
Committee, Performance Compensation Awards may be paid to Participants who have
retired or whose employment has terminated after the beginning of the
Performance Period for which a Performance Compensation Award is made or to the
designee or estate of a Participant who died prior to the last day of a
Performance Period.
(B) Limitation. Except as otherwise determined by the Committee and set forth in
the applicable Award Agreement, a Participant shall be eligible to receive
payments in respect of a Performance Compensation Award only to the extent that
(1) the Performance Goals for such period are achieved and certified by the
Committee in accordance with Section 6(e)(vi)(C), and (2) the Performance
Formula as applied against such Performance Goals determines that all or some
portion of such Participant’s Performance Compensation Award has been earned for
the Performance Period.

 

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(C) Certification. Following the completion of a Performance Period, the
Committee shall meet to review and certify in writing whether, and to what
extent, the Performance Goals for the Performance Period have been achieved and,
if so, to calculate and certify in writing that amount of the Performance
Compensation Awards earned for the period based upon the Performance Formula.
The Committee shall then determine the actual size of each Participant’s
Performance Compensation Award for the Performance Period and, in so doing, may
apply negative discretion as authorized by Section 6(e)(vi)(D).
(D) Negative Discretion. In determining the actual size of an individual
Performance Compensation Award for a Performance Period, the Committee may, in
its sole and plenary discretion, reduce or eliminate the amount of the Award
earned in the Performance Period, even if applicable Performance Goals have been
attained.
(E) Timing of Award Payments. Except as otherwise determined by the Committee
and set forth in the applicable Award Agreement, the Performance Compensation
Awards granted for a Performance Period shall be paid to Participants as soon as
administratively possible following completion of the certifications required by
Section 6(e)(vi)(C).
(F) Discretion. In no event shall any discretionary authority granted to the
Committee by the Plan be used to (1) grant or provide payment in respect of
Performance Compensation Awards for a Performance Period if the Performance
Goals for such Performance Period have not been attained, (2) increase a
Performance Compensation Award for any Participant at any time after the time
period prescribed under Section 162(m) of the Code, or (3) increase a
Performance Compensation Award above the maximum amount payable under
Sections 4(a), 6(f)(iii) or 6(g) of the Plan.
(f) Performance Units.
(i) Grant. Subject to the provisions of the Plan, the Committee has sole and
plenary authority to determine the Participants to whom Performance Units shall
be granted.
(ii) Value of Performance Units. Each Performance Unit shall have an initial
value that is established by the Committee at the time of grant. The Committee
shall set Performance Goals in its discretion which, depending on the extent to
which they are met during a Performance Period, will determine the number and
value of Performance Units that will be paid out to the Participant.
(iii) Earning of Performance Units. Subject to the provisions of the Plan, after
the applicable Performance Period has ended, the holder of Performance Units
shall be entitled to receive a payout of the number and value of Performance
Units earned by the Participant over the Performance Period, to be determined by
the Committee, in its sole and plenary discretion, as a function of the extent
to which the corresponding Performance Goals have been achieved. No cash-based
Performance Unit under the Plan shall permit a payment to any Participant in
excess of $2,000,000 during any Performance Period.
(iv) Form and Timing of Payment of Performance Units. Subject to the provisions
of the Plan, the Committee, in its sole and plenary discretion, may pay earned
Performance Units in the form of cash or in Shares (or in a combination thereof)
that has an aggregate Fair Market Value equal to the value of the earned
Performance Units at the close of the applicable Performance Period. Such Shares
may be granted subject to any restrictions in the applicable Award Agreement
deemed appropriate by the Committee. The determination of the Committee with
respect to the form and timing of payout of such Awards shall be set forth in
the applicable Award Agreement. If a Performance Unit is intended to qualify as
“qualified performance-based compensation” under Section 162(m) of the Code or
“performance based compensation” under Section 409A of the Code, all
requirements set forth in Section 6(e) must be satisfied in order for a
Participant to be entitled to payment.

 

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(g) Cash Incentive Awards. Subject to the provisions of the Plan, the Committee,
in its sole and plenary discretion, has the authority to grant Cash Incentive
Awards. The Committee shall establish Cash Incentive Award levels to determine
the amount of a Cash Incentive Award payable upon the attainment of Performance
Goals. No Cash Incentive Award under the Plan for any Participant shall exceed
$2,000,000 during any Performance Period. If a Cash Incentive Award is intended
to qualify as “qualified performance-based compensation” under Section 162(m) of
the Code or “performance based compensation” under Section 409A of the Code, all
requirements set forth in Section 6(e) must be satisfied in order for a
Participant to be entitled to payment.
(h) Other Stock-Based Awards. Subject to the provisions of the Plan, the
Committee has the sole and plenary authority to grant to Participants other
equity-based or equity-related Awards (including, but not limited to, Deferred
Share Units and fully-vested Shares) in such amounts and subject to such terms
and conditions as the Committee shall determine, provided that any such Awards
must comply, to the extent deemed desirable by the Committee, with Rule 16b-3
and applicable law.
(i) Dividend Equivalents. In the sole and plenary discretion of the Committee,
an Award, other than an Option, SAR or Cash Incentive Award, may provide the
Participant with dividends or dividend equivalents, payable in cash, Shares,
other securities, other Awards or other property, on a current or deferred
basis, on such terms and conditions as may be determined by the Committee in its
sole and plenary discretion, in accordance with Section 409A of the Code, to the
extent applicable, including, without limitation, payment directly to the
Participant, withholding of such amounts by the Company subject to vesting of
the Award or reinvestment in additional Shares, Restricted Shares or other
Awards.
SECTION 7. Amendment and Termination.
(a) Amendments to the Plan. Subject to any government regulation, to any
requirement that must be satisfied if the Plan is intended to be a shareholder
approved plan for purposes of Section 162(m) of the Code and to the rules of the
NYSE or any successor exchange or quotation system on which the Shares may be
listed or quoted, the Plan may be amended, modified or terminated by the Board
without the approval of the stockholders of the Company, except that stockholder
approval shall be required for any amendment that would (i) increase the maximum
number of Shares for which Awards may be granted under the Plan (provided, that
any adjustment under Section 4(b) shall not constitute an increase for purposes
of this Section 7(a)) or (ii) change the class of employees or other individuals
eligible to participate in the Plan. No modification, amendment or termination
of the Plan may, without the consent of the Participant to whom any Award shall
theretofor have been granted, materially and adversely affect the rights of such
Participant (or his or her transferee) under such Award, unless otherwise
provided by the Committee in the applicable Award Agreement. Notwithstanding the
foregoing, the Company reserves the right to amend the Plan, by action of the
Board or the Committee without the consent of any affected Participant, to the
extent deemed necessary or appropriate for purposes of maintaining compliance
with Section 409A of the Code.

 

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(b) Amendments to Awards. The Committee may waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate
any Award theretofor granted, prospectively or retroactively; provided, however,
that, except as set forth in the Plan, unless otherwise provided by the
Committee in the applicable Award Agreement, any such waiver, amendment,
alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely impair the rights of any Participant or any holder or
beneficiary of any Award theretofor granted shall not to that extent be
effective without the consent of the impaired Participant, holder or
beneficiary. Notwithstanding the foregoing, the Company reserves the right to
amend any Award granted under the Plan, by action of the Board or the Committee
without the consent of any affected Participant, to the extent deemed necessary
or appropriate for purposes of maintaining compliance with Section 409A of the
Code.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee is authorized to make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4(b) or the occurrence of a Change in Control) affecting the Company,
any Affiliate, or the financial statements of the Company or any Affiliate, or
of changes in applicable rules, rulings, regulations or other requirements of
any governmental body or securities exchange, accounting principles or law
(i) whenever the Committee, in its sole and plenary discretion, determines that
such adjustments are appropriate or desirable, including, without limitation,
providing for a substitution or assumption of Awards, accelerating the
exercisability of, lapse of restrictions on, or termination of, Awards or
providing for a period of time for exercise prior to the occurrence of such
event, (ii) if deemed appropriate or desirable by the Committee, in its sole and
plenary discretion, by providing for a cash payment to the holder of an Award in
consideration for the cancellation of such Award, including, in the case of an
outstanding Option or SAR, a cash payment to the holder of such Option or SAR in
consideration for the cancellation of such Option or SAR in an amount equal to
the excess, if any, of the Fair Market Value (as of a date specified by the
Committee) of the Shares subject to such Option or SAR over the aggregate
Exercise Price of such Option or SAR, and (iii) if deemed appropriate or
desirable by the Committee, in its sole and plenary discretion, by canceling and
terminating any Option or SAR having a per Share Exercise Price equal to, or in
excess of, the Fair Market Value of a Share subject to such Option or SAR
without any payment or consideration therefor.
(d) Prohibition of Certain Amendments and Re-Pricings. Notwithstanding any
provision herein to the contrary, the repricing of Options or SARs is prohibited
without prior approval of the Company’s stockholders. For this purpose, a
“repricing” means any of the following (or any other action that has the same
effect as any of the following): (A) changing the terms of an Option or SAR to
lower its Option Price or grant price; (B) any other action that is treated as a
“repricing” under generally accepted accounting principles; and (C) repurchasing
for cash or canceling an Option or SAR at a time when its Option Price or grant
price is greater than the Fair Market Value of the underlying Shares in exchange
for another Award, unless the cancellation and exchange occurs in connection
with a change in capitalization or similar change under Section 4.6 above. Such
cancellation and exchange would be considered a “repricing” regardless of
whether it is treated as a “repricing” under generally accepted accounting
principles and regardless of whether it is voluntary on the part of the
Participant. Furthermore, neither the Board nor the Committee shall, without
further approval of the stockholders of the Company, authorize any Option grant
to provide for automatic “reload” rights, the automatic grant of Options to the
Optionee upon the exercise of Options using Shares or other equity.
SECTION 8. Change in Control. In the event of a Change in Control after the date
of the adoption of the Plan, unless (i) otherwise provided in the applicable
Award Agreement or (ii) provision is made in connection with the Change in
Control for (A) assumption of Awards previously granted or (B) substitution for
previously granted Awards with new awards (which, in the discretion of the
Committee, may have the same vesting schedule as the awards assumed) covering
stock of a successor corporation or its “parent corporation” (as defined in
Section 424(e) of the Code) or “subsidiary corporation” (as defined in Section
424(f) of the Code) with appropriate adjustments as to the number and kinds of
shares and the Exercise Prices, if applicable:
(a) any outstanding Options or SARs then held by Participants that are
unexercisable or otherwise unvested shall automatically be deemed exercisable or
otherwise vested, as the case may be, as of immediately prior to such Change in
Control;

 

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(b) all Performance Units and Cash Incentive Awards shall be paid out as if the
date of the Change in Control were the last day of the applicable Performance
Period and “target” performance levels had been attained; and
(c) all other outstanding Awards (i.e., other than Options, SARs, Performance
Units and Cash Incentive Awards) then held by Participants that are
unexercisable, unvested or still subject to restrictions or forfeiture, shall
automatically be deemed exercisable and vested and all restrictions and
forfeiture provisions related thereto shall lapse as of immediately prior to
such Change in Control.
Notwithstanding the foregoing, nothing contained in this Section 8 shall affect
the Committee’s authority to make the adjustments provided in Section 7(c) in
the event of a Change in Control.
SECTION 9. General Provisions.
(a) Nontransferability. Except as otherwise specified in the applicable Award
Agreement, during the Participant’s lifetime each Award (and any rights and
obligations thereunder) shall be exercisable only by the Participant, or, if
permissible under applicable law, by the Participant’s legal guardian or
representative, and no Award (or any rights and obligations thereunder) may be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Participant otherwise than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void and unenforceable against the
Company or any Affiliate; provided that (i) the designation of a beneficiary
shall not constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance and (ii) the Board or the Committee may permit further
transferability, on a general or specific basis, and may impose conditions and
limitations on any permitted transferability; provided, however, that
(A) Incentive Stock Options granted under the Plan shall not be transferable in
any way that would violate Section 1.422-2(a)(2) of the Treasury Regulations and
(B) in no event may a Nonqualified Stock Option or SAR be transferred for
consideration. All terms and conditions of the Plan and all Award Agreements
shall be binding upon any permitted successors and assigns.
(b) No Rights to Awards. No Participant or other Person shall have any claim to
be granted any Award, and there is no obligation for uniformity of treatment of
Participants or holders or beneficiaries of Awards. The terms and conditions of
Awards and the Committee’s determinations and interpretations with respect
thereto need not be the same with respect to each Participant and may be made
selectively among Participants, whether or not such Participants are similarly
situated.
(c) Share Certificates. All certificates for Shares or other securities of the
Company or any Affiliate delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan, the applicable
Award Agreement or the rules, regulations and other requirements of the SEC, the
NYSE or any other stock exchange or quotation system upon which such Shares or
other securities are then listed or reported and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions. Notwithstanding
any other provision of this Plan to the contrary, the Company may elect to
satisfy any requirement under this Plan for the delivery of stock certificates
through the use of book-entry.

 

15

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(d) Withholding. A Participant may be required to pay to the Company or any
Affiliate, and the Company or any Affiliate has the right and is hereby
authorized to withhold from any Award, from any payment due or transfer made
under any Award or under the Plan or from any compensation or other amount owing
to a Participant, the amount (in cash, Shares, other securities, other Awards or
other property) of any applicable withholding taxes in respect of an Award, its
exercise or any payment or transfer under an Award or under the Plan and to take
such other action as may be necessary in the opinion of the Committee or the
Company to satisfy all obligations for the payment of such taxes. If Share
withholding is applied, to the extent necessary to avoid adverse accounting
consequences, the Company will withhold Shares having a Fair Market Value on the
date the tax is to be determined equal to the minimum statutory total tax which
could be imposed on the transaction.
(e) Award Agreements. Each Award hereunder shall be evidenced by an Award
Agreement, which shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto, including,
but not limited to, the effect on such Award of the death, disability or
termination of employment or service of a Participant and the effect, if any, of
such other events as may be determined by the Committee.
(f) No Limit on Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or continuing in effect
other compensation arrangements, which may, but need not, provide for the grant
of options, restricted stock, shares and other types of equity-based awards
(subject to stockholder approval if such approval is required), and such
arrangements may be either generally applicable or applicable only in specific
cases.
(g) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained as a director, officer, employee
or consultant of or to the Company or any Affiliate, nor shall it be construed
as giving a Participant any rights to continued service on the Board. Further,
the Company or an Affiliate may at any time dismiss a Participant from
employment or discontinue any consulting relationship, free from any liability
or any claim under the Plan, unless otherwise expressly provided in the Plan or
in any Award Agreement.
(h) No Rights as Stockholder. No Participant or holder or beneficiary of any
Award has any rights as a stockholder with respect to any Shares to be
distributed under the Plan until he or she has become the holder of such Shares.
In connection with each grant of Restricted Shares, except as provided in the
applicable Award Agreement, the Participant shall not be entitled to the rights
of a stockholder in respect of such Restricted Shares. Except as otherwise
provided in Section 4(b), Section 7(c) or the applicable Award Agreement, no
adjustments shall be made for dividends or distributions on (whether ordinary or
extraordinary, and whether in cash, Shares, other securities or other property),
or other events relating to, Shares subject to an Award for which the record
date is prior to the date such Shares are delivered.
(i) Governing Law. The validity, construction and effect of the Plan and any
rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Delaware, without giving
effect to the conflict of laws provisions thereof.
(j) Severability. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any
Person or Award, or would disqualify the Plan or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be construed or deemed
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.

 

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(k) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole and plenary
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole and plenary discretion has determined that any
such offer, if made, would be in compliance with all applicable requirements of
the U.S. Federal and any other applicable securities laws.
(l) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate, on one hand, and a
Participant or any other Person, on the other hand. To the extent that any
Person acquires a right to receive payments from the Company or any Affiliate
pursuant to an Award, such right shall be no greater than the right of any
unsecured general creditor of the Company or such Affiliate.
(m) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities or other property shall be paid or transferred in lieu of
any fractional Shares or whether such fractional Shares or any rights thereto
shall be canceled, terminated or otherwise eliminated.
(n) Requirement of Consent and Notification of Election Under Section 83(b) of
the Code or Similar Provision. No election under Section 83(b) of the Code (to
include in gross income in the year of transfer the amounts specified in Section
83(b) of the Code) or under a similar provision of law may be made unless
expressly permitted by the terms of the applicable Award Agreement or by action
of the Committee in writing prior to the making of such election. If an Award
recipient, in connection with the acquisition of Shares under the Plan or
otherwise, is expressly permitted under the terms of the applicable Award
Agreement or by such Committee action to make such an election and the
Participant makes the election, the Participant shall notify the Committee of
such election within ten days of filing notice of the election with the IRS or
other governmental authority, in addition to any filing and notification
required pursuant to regulations issued under Section 83(b) of the Code or other
applicable provision.
(o) Requirement of Notification Upon Disqualifying Disposition Under Section
421(b) of the Code. If any Participant shall make any disposition of Shares
delivered pursuant to the exercise of an Incentive Stock Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions) or any successor provision of the Code, such
Participant shall notify the Company of such disposition within ten days of such
disposition.
(p) Compliance with Code Section 409A. The Plan is intended to comply with
Section 409A of the Code. Notwithstanding any provision of the Plan to the
contrary, the Plan shall be interpreted, operated and administered consistent
with this intent. For each Award intended to comply with the short-term deferral
exception provided for under Section 409A of the Code, the related Award
Agreement shall provide that such Award shall be paid out by the later of
(i) the 15th day of the third month following the Participant’s first taxable
year in which the Award is no longer subject to a substantial risk of forfeiture
or (ii) the 15th day of the third month following the end of the Company’s first
taxable year in which the Award is no longer subject to a substantial risk of
forfeiture. To the extent that the Committee determines that a Participant would
be subject to the additional 20% tax imposed on certain deferred compensation
arrangements pursuant to Section 409A of the Code as a result of any provision
of any Award, to the extent permitted by Section 409A of the Code, such
provision shall be deemed amended to the minimum extent necessary to avoid
application of such additional tax. The Committee shall determine the nature and
scope of such amendment. To the extent required by Section 409A of the Code, any
payment under the Plan made in connection with the separation from service of a
“specified employee” (within the meaning of Section 409A of the Code) of an
Award that is deferred compensation that is subject to Section 409A of the Code
shall not be made earlier than six (6) months after the date of such separation
from service.

 

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(q) Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 10. Term of the Plan.
(a) Effective Date. The Plan shall be effective as of January 1, 2008, subject
to approval by the holders of the Company’s common stock, in accordance with
applicable law and the listing requirements of the NYSE, at the annual Meeting
of Stockholders held on December 5, 2007 or any adjournment thereof.
(b) Expiration Date. No Award shall be granted under the Plan after December 31,
2021. Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue or terminate any
such Award or to waive any conditions or rights under any such Award shall,
nevertheless continue thereafter.

 

18