Exhibit 10.1


 


AMENDED AND RESTATED 2003 OMNIBUS
INCENTIVE PLAN


 


SECTION 1.  PURPOSE.  The purposes of the Amended and Restated 2003
Omnibus Incentive Plan (the “Plan”) are to encourage Directors and selected
employees of Blyth, Inc., a Delaware corporation (the “Company”), and its
Affiliates to acquire a proprietary and vested interest in the growth and
performance of the Company, to generate an increased incentive to contribute to
the Company’s future success and prosperity, thus enhancing the value of the
Company for the benefit of stockholders, and to enhance the ability of the
Company and its Affiliates to attract and retain individuals of exceptional
talent upon whom, in large measure, the sustained progress, growth and
profitability of the Company depends.


 


SECTION 2.  DEFINITIONS.  As used in the Plan, the following terms
shall have the meanings set forth below:


 


(a)   “Affiliate”
shall mean (i) any Person that directly, or through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Company or (ii) any entity in which the Company has a significant
equity interest, as determined by the Committee.


 


(b)   “Award”
shall mean any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Share, Performance Unit, dividend equivalent, Other Stock Unit
Award or any other right, interest or option relating to Shares or other
property granted pursuant to the provisions of the Plan.


 


(c)   “Award
Agreement” shall mean any written agreement, contract or other instrument or
document evidencing any Award granted by the Committee hereunder, which may,
but need not, be executed or acknowledged by both the Company and the
Participant.


 


(d)   “Board”
shall mean the Board of Directors of the Company.


 


(e)   “Cause”
shall mean, unless otherwise provided by the Committee, (1) “Cause” as
defined in any Individual Agreement to which the Participant is a party, or (2) if
there is no such Individual Agreement or, if it does not define Cause, any of
the following on the part of the Participant: an intentional failure to perform
assigned duties; willful misconduct in the course of the Participant’s
employment; breach of a fiduciary duty involving personal profit; or acts or
omissions of personal dishonesty, any of which results in material loss to the
Company or any of its Subsidiaries or Affiliates. The Committee shall, unless
otherwise provided in an Individual Agreement with the Participant, have the
sole discretion to determine whether “Cause” exists, and its determination
shall be final.


 


(f)    “Change in
Control” shall mean (i) in the case of an Employee, (A) a
reorganization, merger or consolidation (a “Corporate Transaction”) in which
the Company is not the surviving corporation; (B) a sale, lease, exchange
or other transfer (in one transaction or in a series of related transactions)
of all or substantially all of the assets of the Company to another person or
entity (an “Asset Sale”); or (C) approval by the stockholders of the
Company of a complete liquidation or dissolution of the Company, or (ii) in
the case of a Director, (A) any Corporate Transaction in which the Company
is not the continuing or surviving corporation or pursuant to which Shares are
converted into cash, securities or other property, other than a merger of the
Company in which the holders of the Shares immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger, (B) any Asset Sale; (C) approval by the
stockholders of the Company of a complete liquidation or dissolution of the
Company, (D) any person (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act, but excluding Robert B. Goergen and/or any
person controlled by Robert B Goergen and/or his affiliates, heirs, estate,
legal representative and/or beneficiaries), shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of 30% or more
of the outstanding Shares; or (E) during any period of two consecutive
years, 


 

















 


individuals
who at the beginning of such period constitute the entire Board shall cease for
any reason to constitute a majority thereof unless the election, or the
nomination for election by the Company’s stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period; provided, however, that in
the case of any Director, a Change in Control shall not be deemed to have
occurred unless, within one year after the occurrence of an event described in Section 2(f)(ii),
such Director shall have ceased for any reason to be a member of the Board.


 


(g)   “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
any successor thereto.


 


(h)   “Committee”
shall mean the Compensation Committee of the Board, or any successor to such
committee, composed of no fewer than two directors, each of whom is a Non-Employee
Director and an “outside director” within the meaning of Section 162(m) of
the Code, or any successor provision thereto.


 


(i)    “Company”
shall mean Blyth, Inc., a Delaware corporation.


 


(j)    “Corporate
Transaction” shall have the meaning ascribed thereto in Section 2(f)(i)(A).


 


(k)   “Covered
Employee” shall mean a “covered employee” within the meaning of Section 162(m)(3) of
the Code, or any successor provision thereto.


 


(l)    “Director”
shall mean a director of the Company who has not been, during the immediately
preceding 12-month period, an officer or employee of the Company or any
Subsidiary.


 


(m)  “Employee” shall
mean any employee of the Company or any Affiliate. Unless otherwise determined
by the Committee in its sole discretion, for purposes of the Plan, (1) an
Employee shall be considered to have terminated employment or services and to
have ceased to be an Employee if his or her employer ceases to be an Affiliate,
even if he or she continues to be employed by such employer and (2) temporary
absences from employment because of illness, vacation or an approved leaves of
absence and transfers among the Company and its Subsidiaries and Affiliates
shall not be considered terminations of employment or services.


 


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


 


(o)   “Fair
Market Value” shall mean, with respect to any property, the market value of
such property determined by such methods or procedures as shall be established
from time to time by the Committee. Unless otherwise determined by the
Committee, the Fair Market Value of Shares as of any date shall be the average
of the high and low trading prices for the Shares as reported on the New York
Stock Exchange (or on any national securities exchange on the Shares are then
listed) for that date or, if no such prices are reported for that date, the
average of the high and low trading prices on the next preceding date for which
such prices were reported.


 


(p)   “Family
Member” shall mean any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law,
including adoptive relationships, any person sharing the Participant’s
household (other than a tenant or employee), a trust in which these persons
have more than fifty percent of the beneficial interest, a foundation in which
these persons (or the Participant) control the management of assets, and any
other entity in which these persons (or the Participant) own more than fifty
percent of the voting interests.


 


(q)   “Incentive
Stock Option” shall mean an Option granted under Section 6 that is
intended to meet the requirements of Section 422 of the Code or any
successor provision thereto.


 


(r)    “Individual
Agreement” shall mean a written employment or consulting agreement between the
Participant and the Company or an Affiliate.


 


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(s)   “Non-Employee
Director” shall have the meaning set forth in Rule 16b-3(b)(3) promulgated
under the Exchange Act, or any successor definition adopted by the Securities
and Exchange Commission.


 


(t)    “Nonstatutory
Stock Option” shall mean an Option granted under Section 6 that is not
intended to be an Incentive Stock Option.


 


(u)   “Option”
shall mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period
or periods as the Committee shall determine.


 


(v)   “Other
Stock Unit Award” shall mean any right granted to a Participant by the
Committee pursuant to Section 10.


 


(w)  “Participant”
shall mean a Director or an Employee who is selected by the Committee to
receive an Award under the Plan.


 


(x)    “Performance
Award” shall mean any Award of Performance Shares or Performance Units pursuant
to Section 9.


 


(y)   “Performance
Period” shall mean that period established by the Committee at the time any
Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are to
be measured.


 


(z)    “Performance
Share” shall mean any grant pursuant to Section 9 of a unit valued by
reference to a designated number of Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including, without limitation, cash, Shares, other property, or any combination
thereof, upon achievement of such performance goals during the Performance
Period as the Committee shall establish at the time of such grant or
thereafter.


 


(aa) “Performance
Unit” shall mean any grant pursuant to Section 9 of a unit valued by
reference to a designated amount of property other than Shares, which value may
be paid to the Participant by delivery of such property as the Committee shall
determine, including, without limitation, cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant
or thereafter.


 


(bb) “Person”
shall mean any individual, corporation, partnership, association, limited
liability company, joint-stock company, trust, unincorporated organization or
government or political subdivision thereof.


 


(cc) “Qualified
Performance-Based Award” shall have the meaning set forth in Section 13.


 


(dd) “Restricted
Stock” shall mean any Share issued with the restriction that the holder may not
sell, transfer, pledge or assign such Share and with such other restrictions as
the Committee, in its sole discretion, may impose (including, without
limitation, any restriction on the right to vote such Share, and the right to
receive any cash dividends), which restrictions may lapse separately or in
combination at such time or times, in installments or otherwise, as the
Committee may deem appropriate.


 


(ee) “Restricted
Stock Award” shall mean an award of Restricted Stock under Section 8.


 


(ff)   “Section 162(m) Exemption”
shall have the meaning set forth in Section 13.


 


(gg) “Shares”
shall mean the shares of common stock of the Company, par value $0.02 per
share.


 


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(hh) “Stock Appreciation
Right” shall mean any right granted to a Participant pursuant to Section 7
to receive, upon exercise by the Participant, the excess of (i) the Fair
Market Value of one Share on the date of exercise or, if the Committee shall so
determine in the case of any such right other than one related to any Incentive
Stock Option, at any time during a specified period before the date of exercise
over (ii) the grant price of the right on the date of grant, or if granted
in connection with an outstanding Option on the date of grant of the related
Option, as specified by the Committee in its sole discretion, which, except in
the case of Substitute Awards or in connection with an adjustment provided in Section 4(c),
shall not be less than the Fair Market Value of one Share on such date of grant
of the right or the related Option, as the case may be. Any payment by the
Company in respect of such right may be made in cash, Shares, other property,
or any combination thereof, as the Committee, in its sole discretion, shall
determine.


 


(ii)   “Subsidiary”
shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the
Award, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.


 


(jj)   “Substitute
Awards” shall mean Awards granted or Shares issued by the Company in assumption
of, or in substitution or exchange for, awards previously granted, or the right
or obligation to make future awards, by a company acquired by the Company or
with which the Company combines.


 


SECTION 3. 
ADMINISTRATION.


 


(a)   The Plan
shall be administered by the Committee. The Committee shall have full power and
authority, subject to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board, to:


 


(1)   select the
Employees of the Company and its Affiliates of the Company to whom Awards may
from time to time be granted hereunder;


 


(2)   determine
the type or types of Award to be granted to each Employee hereunder;


 


(3)   determine
the number of Shares to be covered by each Award granted to an Employee
hereunder;


 


(4)   determine
the terms and conditions of any Award granted to an Employee hereunder
(including, but not limited to, the option price, any vesting condition,
restriction or limitation (which may be related to the performance of the Participant,
the Company or any Subsidiary or Affiliate) and any vesting acceleration or
forfeiture waiver regarding any Award and the Shares relating thereto, based on
such factors as the Committee shall determine;


 


(5)   determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property or canceled or suspended;


 


(6)   to modify,
amend or adjust the terms and conditions of any Award, at any time or from time
to time, including but not limited to performance goals;


 


(7)   determine
whether, to what extent, and under what circumstances cash, Shares, other
property and other amounts payable with respect to an Award made under the Plan
shall be deferred either automatically or at the election of the Participant;


 


(8)   interpret
and administer the Plan and any instrument or agreement entered into under the
Plan;


 


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(9)   establish
such rules and regulations and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and


 


(10) make any
other determination and take any other action that the Committee deems
necessary or desirable for administration of the Plan.


 


(b)   Decisions
of the Committee shall be final, conclusive and binding on all Persons,
including the Company, any Participant, any stockholder and any Employee of the
Company or any Affiliate. A majority of the members of the Committee may
determine its actions and fix the time and place of its meetings.


 


(c)   Any
authority granted to the Committee may also be exercised by the full Board,
except to the extent that the grant or exercise of such authority would cause
any Award or transaction to become subject to (or lose an exemption under) Section 16(b) of
the Exchange Act or cause an Award designated as a Qualified Performance-Based
Award to not qualify for, or cease to qualify for, the Section 162(m) Exemption.
To the extent that any permitted action taken by the Board conflicts with any
action taken by the Committee, the Board action shall control.


 


(d)   The
Committee may delegate to a committee of one or more directors of the Company
or, to the extent permitted by Delaware law, to one or more officers or a
committee of officers the right to grant Awards to Employees who are not
officers or directors of the Company.


 


(e)   Notwithstanding
the foregoing or anything else to the contrary in the Plan, any action or
determination by the Committee specifically affecting or relating to an Award
to a Director shall be approved and ratified by the full Board.


 


(f)    Notwithstanding
any provision of the Plan to the contrary, administration of the Plan shall at
all times be limited by the requirement that any administrative action or
exercise of discretion shall be void (or suitably modified when possible) if
necessary to avoid the application to any Participant of immediate taxation
and/or tax penalties under Section 409A of the Code. For purposes of
clarification, (i) the Committee shall not modify, amend or adjust the
terms and conditions of any Award if such modification, amendment or adjustment
would cause such Award to become subject to Code Section 409A(a)(1) and
(ii) this subsection (f) shall apply to any modification,
amendment or adjustment made to an Award in connection with a Change in
Control.


 


SECTION 4.  SHARES
SUBJECT TO THE PLAN.


 


(a)   Subject to
adjustment as provided in Section 4(d), a total of 4,081,793 Shares shall
be authorized for issuance under the Plan. In the event that any Option or
other Award granted hereunder is exercised through the tendering of Shares
(either actually or by attestation) or in the event that withholding tax
liabilities arising from such Option or other Award are satisfied by the
tendering of Shares or by the withholding of Shares by the Company, only the
number of Shares issued net of the Shares tendered or withheld shall be counted
for purposes of determining the maximum number of Shares available for issuance
under the Plan. In addition, Substitute Awards shall not reduce the Shares
authorized for issuance under the Plan or authorized for grant to a Participant
in any calendar year.


 


(b)   Any Shares
issued hereunder may consist, in whole or in part, of authorized and unissued
Shares, treasury Shares or Shares purchased in the open market or otherwise.


 


(c)   Subject to
adjustment as provided in Section 4(d), the number of Shares that may be
issued pursuant to Options intended to qualify as Incentive Stock Options shall
be 3,373,526.


 


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(d)   In the
event of any change in corporate capitalization, such as a stock dividend,
stock split or reverse stock split, or an extraordinary corporate transaction,
such as any merger, reorganization, consolidation, recapitalization, spin-off,
separation or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization comes within the definition
of such term in Section 368 of the Code), or any partial or complete
liquidation of the Company, the Committee shall make substitutions or
adjustments to reflect such change or transaction in (i) the aggregate
number and kind of shares reserved for issuance of Awards under the Plan
(including specific limits applicable to Incentive Stock Options, Restricted
Stock Awards, Performance Awards, Other Stock Unit Awards and other types of
Awards), (ii) the limitation upon Options, Stock Appreciation Rights,
Restricted Stock Awards, Performance Awards and Performance Units to be granted
to any Participant in any specific period, to the extent such adjustment does
not cause any Qualified Performance-Based Award to fail to qualify for the Section 162(m) Exemption,
(iii) the number, kind and grant price of shares subject to outstanding
Options and Stock Appreciation Rights, (iv) the number and kind of shares
subject to other outstanding Awards granted under the Plan and/or (v) such
other equitable substitutions or adjustments, in each case, as it determines to
be appropriate in its sole discretion; provided,
however, that the number of
Shares subject to any Award shall always be a whole number.


 


SECTION 5.  ELIGIBILITY.  Any Employee or Director shall be eligible to
be selected as a Participant; provided,
however, that pursuant to Section 422
of the Code, Incentive Stock Options shall only be awarded to employees of the
Company and its Subsidiaries or “parent corporation” (within the meaning of Section 424(f) of
the Code).


 


SECTION 6.  STOCK
OPTIONS.  Options may be
granted hereunder to Participants either alone or in addition to other Awards
granted under the Plan. Any Option granted under the Plan shall be evidenced by
an Award Agreement in such form as the Committee may from time to time approve.
Any such Option shall be subject to the following terms and conditions and to
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall deem desirable:


 


(a)          OPTION
PRICE.


 


(1)   The
purchase price per Share purchasable under an Option shall be determined by the
Committee in its sole discretion on or before the date of grant; provided, however,
that except in the case of Substitute Awards or in connection with an
adjustment provided for in Section 4(d), such purchase price of an Option
shall not be less than the Fair Market Value of a Share on the date of grant.


 


(2)   Except for
adjustments pursuant to Section 4(d) (relating to the adjustment of
Shares), the purchase price for any outstanding Option granted under the Plan
may not be decreased after the date of grant nor may an outstanding Option
granted under the Plan be surrendered to the Company as consideration for the
grant of a new Option with a lower price.


 


(b)   OPTION
PERIOD.  The term of each Option shall be
fixed by the Committee in its sole discretion and set forth in the Award
Agreement; provided that no
Option shall be exercisable after the expiration of ten years from the date the
Option is granted.


 


(c)   EXERCISABILITY.  Options shall be exercisable at such time or
times as determined by the Committee at the time of grant (except as otherwise
permitted under Section 3(a)) or as set forth in Section 12.


 


(d)   METHOD OF
EXERCISE.  Subject to the other
provisions of the Plan, any vested and exercisable Option may be exercised by
the Participant in whole or in part, at any time during the Option term, by
giving written notice of exercise to the Company specifying the number of
Shares 


 


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subject
to the Option to be purchased. Such notice shall be accompanied by payment in
full of the purchase price by certified to bank check or such other instrument
as the Company may accept.


 


(1)   If approved
by the Committee, payment, in full or in part, may be made in the form of
unrestricted Shares (by delivery of such Shares or by attestation) already
owned by the Participant of the same class as the Shares subject to the Option
based on the Fair Market Value of the Shares on the date the Option is
exercised; provided, however, that in the case of an Incentive
Stock Option, the right to make a payment in the form of already owned Shares
of the same class as the Shares subject to the Option may be authorized only at
the time the Option is granted; and provided, further, that such already owned
Shares have been held by the Participant unencumbered for at least six months
(or any shorter period sufficient to avoid a charge to the Company’s earnings
for financial reporting purposes).


 


(2)   Payment in
full or in part may also be made by delivering a properly executed exercise
notice to the Company, together with a copy of irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale proceeds necessary
to pay the purchase price and, if requested, reduced by the amount of any
federal, state, local or foreign withholding and employment taxes, unless
otherwise determined by the Committee. To facilitate the foregoing, the Company
may enter into agreements for coordinated procedures with one or more brokerage
firms.


 


(3)   In
addition, if approved by the Committee, payment in full or in part may also be
made by instructing the Committee to withhold a number of such Shares having a
Fair Market Value on the date of exercise equal to the aggregate exercise price
of such Option (or applicable portion thereof).


 


(4)   No Shares
shall be issued until full payment therefor has been made. Except as otherwise
provided in Sections 3(a)(7), 15(g) and 15(i), an optionee shall have
all of the rights of a shareholder of the Company holding the Shares subject to
such Option (including, if applicable, the right to vote the Shares and the
right to receive dividends), when the optionee has given written notice of
exercise, has paid in full for such Shares and, if requested by the Company,
has given the representation described in Section 14(i).


 


(e)   FORM OF
SETTLEMENT.  In its sole discretion, the
Committee may provide, at the time of grant, that the Shares to be issued upon
an Option’s exercise shall be in the form of Restricted Stock or other similar
securities, or may reserve the right so to provide after the time of grant.


 


SECTION 7.  STOCK
APPRECIATION RIGHTS.  Stock
Appreciation Rights may be granted hereunder to Participants either alone or in
addition to other Awards granted under the Plan and may, but need not, relate
to a specific Option granted under Section 6. The provisions of Stock
Appreciation Rights need not be the same with respect to each recipient. Any
Stock Appreciation Right related to a Nonstatutory Stock Option may be granted
at the same time such Option is granted or at any time thereafter before
exercise or expiration of such Option. Any Stock Appreciation Right related to
an Incentive Stock Option must be granted at the same time such Option is
granted. In the case of any Stock Appreciation Right related to any Option, the
Stock Appreciation Right or applicable portion thereof shall terminate and no
longer be exercisable upon the termination or exercise of the related Option,
except that a Stock Appreciation Right granted with respect to less than the
full number of Shares covered by a related Option shall not be reduced until
the exercise or termination of the related Option exceeds the number of Shares
not covered by the Stock Appreciation Right. Any Option related to any Stock
Appreciation Right shall no longer be exercisable to the extent the related
Stock Appreciation Right has been exercised. The Committee may impose such
conditions or restrictions on the exercise of any Stock Appreciation Right as
it shall deem appropriate; provided that a Stock Appreciation Right shall not
have a term of greater than ten years.


 


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SECTION 8.  RESTRICTED
STOCK.


 


(a)   ISSUANCE.  A Restricted Stock Award shall be subject to
restrictions imposed by the Committee during a period of time specified by the
Committee (the “Restriction Period”). Restricted Stock Awards may be issued
hereunder to Participants, for no cash consideration or for such minimum
consideration as may be required by applicable law, either alone or in addition
to other Awards granted under the Plan. The provisions of Restricted Stock Awards
need not be the same with respect to each recipient. Except with respect to
Restricted Stock awarded in lieu of bonuses or other similar awards, Restricted
Stock Awards granted to Employees shall vest over a minimum period of three
years from the date of grant.


 


(b)   REGISTRATION.  Any Restricted Stock issued hereunder may be
evidenced in such manner, as the Committee, in its sole discretion, shall deem
appropriate, including, without limitation, book entry registration or issuance
of a stock certificate or certificates. In the event any stock certificates are
issued in respect of shares of Restricted Stock awarded under the Plan, such
certificates shall be registered in the name of the Participant and shall bear
an appropriate legend referring to the terms, conditions and restrictions
applicable to such Award. The Committee may require that the certificates
evidencing such Shares be held in custody by the Company until the restrictions
thereon shall have lapsed and that, as a condition of any Award of Restricted
Stock, the Participant shall have delivered a stock power, endorsed in blank,
relating to the Shares covered by the Award.


 


(c)   FORFEITURE.  Except as otherwise determined by the
Committee at the time of grant or thereafter, upon termination of employment or
services for any reason during the Restriction Period, all Shares of Restricted
Stock still subject to restriction shall be forfeited by the Participant and
reacquired by the Company. Unrestricted Shares, evidenced in such manner as the
Committee shall deem appropriate, shall be issued to the grantee promptly after
expiration of the period of forfeiture, as determined or modified by the
Committee.


 


SECTION 9.  PERFORMANCE
AWARDS.  Performance Awards
may be issued hereunder to Participants, for no cash consideration or for such
minimum consideration as may be required by applicable law, either alone or in
addition to other Awards granted under the Plan. The performance criteria to be
achieved during any Performance Period and the length of the Performance Period
shall be determined by the Committee upon the grant of each Performance Award.
Except as provided in Section 12, Performance Awards will be distributed
only after the end of the relevant Performance Period. Performance Awards may
be paid in cash, Shares, other property, or any combination thereof, in the
sole discretion of the Committee at the time of payment. The performance levels
to be achieved for each Performance Period and the amount of the Award to be
distributed shall be conclusively determined by the Committee. Performance
Awards may be paid in a lump sum or in installments following the close of the
Performance Period or, in accordance with procedures established by the
Committee, on a deferred basis.


 


SECTION 10.  OTHER STOCK
UNIT AWARDS.


 


(a)   STOCK AND
ADMINISTRATION.  Other Awards of Shares
and other Awards that are valued in whole or in part by reference to, or are
otherwise based on, Shares or other property (“Other Stock Unit Awards”) may be
granted hereunder to Participants, either alone or in addition to other Awards
granted under the Plan, and such other Stock Unit Awards shall also be
available as a form of payment in the settlement of other Awards granted under
the Plan. Other Stock Unit Awards may be paid in Shares, cash or any other form
of property, as the Committee shall determine. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to determine the
Employees of the Company and its Affiliates to whom and the time or times at
which such Awards shall be made, the number of Shares to be granted pursuant to
such


 


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Awards,
and all other conditions of the Awards. The provisions of Other Stock Unit
Awards need not be the same with respect to each recipient.


 


(b)   TERMS AND
CONDITIONS.  Shares (including securities
convertible into Shares) subject to Awards granted under this Section 10
may be issued for no cash consideration or for such minimum consideration as
may be required by applicable law. Shares (including securities convertible
into Shares) purchased pursuant to a purchase right awarded under this Section 10
shall be purchased for such consideration as the Committee shall determine in
its sole discretion, which, except in the case of Substitute Awards, shall not
be less than the Fair Market Value of such Shares or other securities as of the
date such purchase right is awarded.


 


SECTION 11.  DIRECTOR
AWARDS


 


(a)   ELIGIBILITY;
GRANTS.  Each Director who is elected to
office for the first time after March 1, 1994 shall automatically be a
Participant. Options will be granted in the following manner: (1) each
Director who is elected to office for the first time after January 31,
2002 and before the date of the annual stockholders’ meeting to be held in June 2004
shall automatically be granted an Option to acquire 10,000 Shares under the
Plan, effective as of the date of such election; and (2) with respect to
the annual meeting of the Company’s stockholders to be held in June, 2003, each
Director shall, on the date of such annual meeting, automatically be granted an
Option to acquire 5,000 Shares under the Plan provided, that such Director (A) has
been in office for at least six months at the time of such annual meeting and (B) will
remain in office following such annual meeting.


 


(b)   OPTION
AGREEMENT.  Each Option granted under the
Plan shall be evidenced by an Award Agreement, which Award Agreements may but
need not be identical and which shall (1) comply with and be subject to
the terms and conditions of the Plan and (2) provide that the Director
agrees to continue to serve as a director of the Company during the term for
which he or she was elected. Any Agreement may contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined
by the Board.


 


(c)   OPTION
EXERCISE PRICE.  The purchase price per
Share for an Option granted under the Plan shall be the Fair Market Value (as
hereinafter defined) of a Share on the date on which such Option is granted or,
if such date is not a business day on which the Shares are traded, the next
immediately preceding trading day (the “Pricing Date”).


 


(d)   TIME AND
MANNER OF EXERCISE OF OPTION


 


(1)   Each Option
granted under Section 11(a)(1) shall become exercisable as follows: 50%
of such Option shall become exercisable on the first anniversary of the date of
grant and 50% of such Option shall become exercisable on the second anniversary
of the date of grant.


 


(2)   Each Option
granted under Sections 11(a)(2) shall become exercisable in full on
the earlier of the first anniversary of the date of grant or the date of the
next annual meeting of the Company to occur after the date of grant.


 


(3)   Options
granted to Directors may be exercised pursuant to the procedures set forth in Section 6(d).


 


(4)   Upon
exercise of the Option, delivery of a certificate for fully paid and non-assessable
Shares shall be made at the principal office of the Company to the person or
persons exercising the Option as soon as practicable (but in no event more than
30 days) after the date of receipt of the notice of exercise by the
Company, or at such time, place and manner as may be agreed upon by the Company
and the person or persons exercising the Option.


 


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(e)   TERM OF
OPTIONS.  Each Option shall expire
10 years from the date of grant, but shall be subject to earlier
termination as follows:


 


(1)   In the
event of the death of a Director, any Option granted to such Director may be
exercised, to the extent exercisable on the date of death pursuant to Section 11(a),
by the estate of such Director, or by any person or persons who acquired the
right to exercise such Option by will or by the laws of descent and
distribution. Such Option may be exercised at any time within 12 months
after the date of death of such Director or prior to the date on which the
Option expires by its terms, whichever is earlier.


 


(2)   In the
event that a Director ceases to be a director of the Company, other than by
reason of his or her death, the Option granted to such Director may be
exercised, to the extent exercisable on the date the Director ceases to be a
director, for a period of 365 days after such date, or prior to the date
on which the Option expires by its terms, whichever is earlier.


 


(f)    GRANTS.  With respect to each annual meeting of the
Company’s stockholders to be held on or after June 2004, the Board shall
determine the amount, type and combination of Awards, if any, to be granted to
each Director on the date of such annual meeting, which may consist of any type
and/or any combination of Awards authorized under the Plan, provided, that the
maximum number of Shares (subject to adjustment under Section 4(d)) that
may be subject to an Award (1) shall be 5,000 with respect to an initial
grant to a new Director and (2) 2,500 with respect to an annual grant to a
continuing director.


 


SECTION 12.  CHANGE IN
CONTROL PROVISIONS.  Subject
to Section 12(f) and notwithstanding any other provision of the Plan
to the contrary, unless the Committee shall determine otherwise at the time of
grant with respect to a particular Award, in the event of a Change in Control:


 


(a)   any Options
and Stock Appreciation Rights outstanding as of the date such Change in Control
is determined to have occurred, and which are not then exercisable and vested,
shall become fully exercisable and vested to the full extent of the original
grant;


 


(b)   the vesting
restrictions and any minimum Share ownership requirements applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of
all such restrictions and limitations and become fully vested to the full
extent of the original grant;


 


(c)   all
Performance Awards shall be considered to be earned in full, and any vesting or
other restriction (including any minimum Share ownership requirements but
excluding any deferral limitations) shall lapse; provided, however,
that if the Change in Control also constitutes a change in the “ownership or
effective control” of the Company, or a change in the “ownership of a
substantial portion of the assets” of the Company (in each case as determined
under Section 409A(a)(2)(A)(v) of the Code), any deferral
restrictions shall lapse and such Performance Awards shall be immediately
settled or distributed; and


 


(d)   the restrictions
and other conditions (including any minimum Share ownership requirements but
excluding any deferral limitations) applicable to any Other Stock Unit Awards
or any other Awards shall lapse, and such Other Stock Unit Awards or such other
Awards shall become free of all restrictions, limitations or conditions
(including any minimum Share ownership requirements but excluding any deferral
limitations) and become fully vested and transferable to the full extent of the
original grant; provided, however, that if the Change in Control
also constitutes a change in the “ownership or effective control” of the
Company, or a change in the “ownership of a substantial portion of the assets”
of the Company (in each case as determined under Section 409A(a)(2)(A)(v) of
the Code), any deferral restrictions shall also lapse.


 


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(e)   The
Committee may also make additional adjustments and/or settlements of
outstanding Awards as it deems appropriate and consistent with the Plan’s
purposes, including, without limitation, terminating fully-vested Options and
Stock Appreciation Rights immediately following a Change in Control (after
providing an opportunity for Participants to exercise such Awards) and/or
canceling an Option or Stock Appreciation Right if the price paid in connection
with such Change in Control is less than the grant price of such Award.


 


(f)    Notwithstanding
the foregoing, if in the event of a Corporate Transaction or an Asset Sale (in
each case, that constitutes a Change in Control) in which the successor company
assumes or replaces an Option, Stock Appreciation Right, Restricted Stock
Award, Performance Award, or Other Stock Unit Award that is held by an
Employee, then each outstanding Option, Stock Appreciation Right, Restricted
Stock Award, Performance Award, or Other Stock Unit Award so assumed or
replaced shall not be accelerated as described above (unless otherwise provided
in the underlying Award Agreement). For the purposes of this Section 12(f),
an Award shall be considered assumed or replaced if following such Change in
Control the award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to such Change in Control, the
consideration (whether stock, cash or other securities or property) received in
such Change in Control by holders of Shares for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided,
however, that if such
consideration received in such Change in Control is not solely common stock of
the successor company, the Committee may, with the consent of the successor
company, provide that the consideration to be received with respect to the
Award, for each Share subject thereto, will be solely common stock of the
successor company substantially equal in fair market value to the per share
consideration received by holders of Shares in such Change in Control. The
determination of such substantial equality of value of consideration shall be
made by the Committee in its sole discretion and its determination shall be
conclusive and binding.


 


SECTION 13.  CODE SECTION 162(m) PROVISIONS.


 


(a)   Notwithstanding
any other provision of the Plan, if the Committee determines at the time
Restricted Stock, a Performance Award or an Other Stock Unit Award is granted
to a Participant who is then an officer that such Participant is, or is likely
to be as of the end of the tax year in which the Company would claim a tax
deduction in connection with such Award, a Covered Employee, then the Committee
may provide that this Section 13 is applicable to such Award.


 


(b)   If
Restricted Stock, a Performance Award or an Other Stock Unit Award is subject
to this Section 13, then the lapsing of restrictions thereon and the
distribution of cash, Shares or other property pursuant thereto, as applicable,
shall be subject to the achievement of one or more objective performance goals
established by the Committee, which shall be based on the attainment of
specified levels of one or any combination of the following: revenue, profit or
cash generation targets on an absolute and per share basis (including, but not
limited to, (1) earnings before interest and taxes, (2) earnings
before interest, taxes depreciation and amortization, (3) operating
income, (4) earnings per share, (5) cash flow, (6) gross margin
percent and (7) operating income as a percent of sales), market share
targets, profitability targets as measured through return ratios, such as
return on average equity, return on net assets employed, return on capital
employed and total shareholder returns. Such performance goals also may be
based on the achievement of specified levels of Company performance (or
performance of an applicable Affiliate or division of the Company) under one or
more of the measures described above relative to the performance of other
corporations or an index covering multiple companies. The measurement of
performance goals may exclude the impact of charges for restructurings,
discontinued operations, extraordinary items and other unusual or non-recurring
items, and the cumulative effects of accounting changes, each as defined by
generally accepted accounting principles. Such performance goals shall be set
by 


 


11

















 


the
Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m) of the Code, or any successor
provision thereto, and the regulations thereunder.


 


(c)   Notwithstanding
any provision of the Plan other than Section 12, with respect to any
Restricted Stock, Performance Award or Other Stock Unit Award that is subject
to this Section 13, the Committee may adjust downwards, but not upwards,
the amount payable pursuant to such Award and the Committee may not waive the
achievement of the applicable performance goals except in the case of death or
disability of the Participant or such other event as permitted under the Section 162(m) Exemption
(as defined below).


 


(d)   The
Committee shall have the power to impose such other restrictions on Awards
subject to this Section 13 (“Qualified Performance-Based Awards”) as it
may deem necessary or appropriate to ensure that such Awards satisfy all
requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of
the Code, or any successor provision thereto (the “Section 162(m) Exemption”).


 


(e)   Notwithstanding
any provision of the Plan other than Section 4(c), no Participant may be
granted Options or Stock Appreciation Rights during any three-year period with
respect to more than 500,000 Shares, or Restricted Stock or Performance Awards
subject to this Section 13 that are denominated in Shares, in any three-year
period with respect to more than 250,000 Shares, and the maximum dollar value
payable with respect to Performance Units and/or Other Stock Unit Awards that
are valued with reference to property other than Shares and granted to any
Participant in any performance period is $2,000,000 times the number of years
in such performance period.


 


(f)    Except as
provided in Section 13, the Committee shall be authorized to make
adjustments in performance award criteria or in the terms and conditions of
other Awards in recognition of changes in applicable laws, regulations or
accounting principles. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem desirable to carry it into effect. In the event
that the Company shall assume outstanding employee benefit awards or the right
or obligation to make future such awards in connection with the acquisition of
or combination with another corporation or business entity, the Committee may,
in its discretion, make such adjustments in the terms of Awards under the Plan
as it shall deem appropriate.


 


SECTION 14.  AMENDMENTS
AND TERMINATION.


 


The
Board may amend, alter, or discontinue the Plan, but no amendment alteration or
discontinuation shall be made which would impair the rights of an optionee
under a Stock Option or a recipient of a Stock Appreciation Right, Restricted
Stock Award, Performance Unit Award or other stock-based Award theretofore
granted without the optionee’s or recipient’s consent, except such an amendment
made to comply with applicable law, stock exchange rules or accounting
rules. In addition, no such amendment shall be made without the approval of the
Company’s stockholders to the extent such approval is required by applicable
law or stock exchange rules; provided,
however, that stockholder
approval shall be required for any amendment (i) which increases the
maximum number of Shares for which Awards may be granted under the Plan
(subject, however, to the provisions of Section 4(d) hereof), (ii) amends
the provisions of Section 6(a)(2) (relating to Option repricing), (iii) extends
the period during which Stock Options may be granted beyond the times
originally prescribed, (iv) changes the persons eligible to participate in
the Plan, or (v) materially increases the benefits accruing to
Participants under the Plan.


 


SECTION 15.  GENERAL
PROVISIONS.


 


(a)   No Award,
and no Shares subject to Awards that have not been issued or as to which any
applicable restriction, performance or deferral period has not lapsed, may be
sold, assigned, 


 


12

















 


transferred,
pledged or otherwise encumbered, except by will or by the laws of descent and
distribution; provided, however, that, if so determined by the
Committee, a Participant may, in the manner established by the Committee,
designate a beneficiary to exercise the rights of the Participant with respect
to any Award upon the death of the Participant. Each Award shall be exercisable,
during the Participant’s lifetime, only by the Participant or, if permissible
under applicable law, by the Participant’s guardian or legal representative.
Notwithstanding the foregoing, and subject to Section 422 of the Code, the
Committee, in its sole discretion, may permit a Participant to assign or
transfer an Award to a Family Member; provided,
however, that an Award so
assigned or transferred shall be subject to all the terms and conditions of the
Plan and the instrument evidencing the Award.


 


(b)   No Employee
or Participant shall have any claim to be granted any Award under the Plan, and
there is no obligation for uniformity of treatment of Employees or Participants
under the Plan.


 


(c)   The
prospective recipient of any Award under the Plan shall not, with respect to
such Award, be deemed to have become a Participant, or to have any rights with
respect to such Award, until and unless such recipient shall have executed an
agreement or other instrument evidencing the Award and delivered a copy thereof
to the Company, and otherwise complied with the then applicable terms and
conditions.


 


(d)   Nothing in
the Plan or any Award granted under the Plan shall be deemed to constitute an
employment or service contract or confer or be deemed to confer on any Participant
any right to continue in the employ or service of, or to continue any other
relationship with, the Company or any Affiliate or limit in any way the right
of the Company or any Affiliate to terminate a Participant’s employment or
service or other relationship at any time, with or without cause. For purposes
of clarification, Awards granted under the Plan shall not guarantee employment
or service for the length of any portion of the vesting schedule of any Award.


 


(e)   The
Committee shall have full power and authority to determine whether an
outstanding Awards to any Participant shall be canceled if the Participant,
without the consent of the Company, while employed by the Company or after
termination of such employment or service, establishes a relationship with a
competitor of the Company or engages in activity that is materially in conflict
with or adverse to the interest of the Company, as determined by the Company.


 


(f)    The
Company shall be authorized to withhold from any Award granted or payment due under
the Plan the amount of withholding taxes due in respect of an Award or payment
hereunder and to take such other action as may be necessary in the opinion of
the Company to satisfy all obligations for the payment of such taxes. The
Committee shall be authorized to establish procedures for election by
Participants to satisfy such obligation for the payment of such taxes by
delivery of or transfer of Shares to the Company (up to the employer’s minimum
required tax withholding rate to the extent the Participant has owned the
surrendered Shares for less than six months if such a limitation is necessary
to avoid a charge to the Company for financial reporting purposes), or by
directing the Company to retain Shares (up to the employer’s minimum required
tax withholding rate) otherwise deliverable in connection with the Award.


 


(g)   The
Committee shall be authorized to establish procedures pursuant to which the
payment of any Award may be deferred. Subject to the provisions of the Plan and
any Award Agreement, the recipient of an Award (including, without limitation,
any deferred Award) may, if so determined by the Committee, be entitled to
receive, currently or on a deferred basis, cash dividends, or cash payments in
amounts equivalent to cash dividends on Shares (“dividend equivalents”) with
respect to the number of Shares covered by the Award, as determined by the
Committee, in its sole discretion, and the Committee may provide that such
amounts (if any) shall be deemed to have been reinvested in additional Shares
or otherwise reinvested.


 


13

















 


(h)   Except as
otherwise required in any applicable Award Agreement or by the terms of the
Plan, recipients of Awards under the Plan shall not be required to make any
payment or provide consideration other than the rendering of services.


 


(i)    The
Committee may require each person purchasing or receiving Shares pursuant to an
Award to represent to and agree with the Company in writing that such person is
acquiring the Shares without a view to the distribution thereof. The
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. Notwithstanding any other
provision of the Plan or agreements made pursuant thereto, the Company shall
not be required to issue or deliver any certificate or certificates for Shares
under the Plan prior to fulfillment of all of the following conditions:


 


(1)   listing or
approval for listing upon notice of issuance of such Shares on the New York
Stock Exchange, or such other securities exchange as may at the time be the
principal market for the Shares;


 


(2)   any
registration or other qualification of such Shares under any state of federal
law or regulation, or the maintaining in effect of any such registration or
other qualification which the Committee shall, in its absolute discretion upon
the advice of counsel, deem necessary or advisable;


 


(3)   obtaining
any other consent, approval, or permit from any state or federal governmental
agency which the Committee shall, in its absolute discretion after receiving
the advice of counsel, determine to be necessary or advisable.


 


(j)    Nothing
contained in the Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or
applicable only in specific cases.


 


(k)   The
validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the State of Delaware and applicable federal law.


 


(l)    If any
provision of the Plan is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, 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 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, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.


 


(m)  Awards may
be granted to Participants who are foreign nationals or employed outside the
United States, or both, on such terms and conditions different from those
applicable to Awards to Employees employed in the United States as may, in the
judgment of the Committee, be necessary or desirable in order to recognize
differences in local law or tax policy. The Committee also may impose conditions
on the exercise or vesting of Awards in order to minimize the Company’s
obligation with respect to tax equalization for Employees on assignments
outside their home country.


 


(n)   It is
presently intended that the Plan constitute an “unfunded” plan for incentive
and deferred compensation. The Committee may authorize the creation or trusts
or other arrangements to meet the obligations created under the Plan to deliver
Shares or make payments; provided,
however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the “unfounded” status of the Plan.


 


(o)   In the case
of a grant of an Award to any Employee of a Subsidiary of the Company, the
Company may, if the Committee so directs, issue or transfer the Shares, if any,
covered by the 


 


14

















 


Award
to the Subsidiary, for such lawful consideration as the Committee may specify,
upon the condition or understanding the Subsidiary will transfer the Shares to
the employee in accordance with the terms of the Award specified by the
Committee pursuant to the provisions of the Plan. All Shares underlying Awards
that are forfeited or canceled should revert to the Company.


 


SECTION 16.  EFFECTIVE
DATE OF PLAN.  The Plan shall
be effective as of June 4, 2003, subject to the approval of at least a
majority of the outstanding Shares.


 


SECTION 17.  TERM OF PLAN.  The Plan will terminate on the tenth
anniversary of the effective date of the Plan. Awards outstanding under the
Plan as of such date shall not be affected or impaired by the termination of
the Plan.


 


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