Filed by Bowne Pure Compliance



 




Exhibit 10.1




IDEXX LABORATORIES, INC.




2003 STOCK INCENTIVE PLAN




SECTION 1. PURPOSE. The purposes of the 2003 Stock Incentive Plan (the “Plan”) are to
encourage selected employees and Directors of IDEXX Laboratories, Inc., a Delaware corporation (the
“Company”), and its Affiliates to acquire a 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 Board.



(b) “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award, 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 agreement, contract or other instrument or document
evidencing any Award granted by the Board hereunder, in such form (written, electronic or
otherwise) as the Board shall determine, 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) “Change in Control” shall mean the occurrence of any of the following events:



(i) an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act) (an “Entity”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding Shares
(the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); excluding, however, the following: (1) any acquisition
directly from the Company, other than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted was itself acquired directly from the Company, (2)
any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the Company, or (4) any
acquisition by any corporation pursuant to a transaction that complies with clauses (A), (B) and
(C) of Section 2(e)(iii);



(ii) a change in the composition of the Board on the Plan’s effective date such that the
individuals who, as of the effective date, constitute the Board (such Board shall be hereinafter
referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that for purposes of this definition, any individual who
becomes a member of the Board subsequent to the effective date, whose election, or nomination for
election, by the Company’s stockholders was approved by a vote of at least a majority of those
individuals who are members of the Board and who were also members of the Incumbent Board (or
deemed to be such pursuant to this proviso) shall be considered as though such individual were a
member of the Incumbent Board; and provided further, however, that any such
individual whose initial assumption of office occurs as a result of or in connection with either an
actual or threatened solicitation with respect to the election of directors (as such terms are used
in Rule 14a-12(c) of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of an Entity other than the
Board shall not be so considered as a member of the Incumbent Board;


 


 









 





(iii) the consummation of a merger, reorganization or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (each, a “Corporate
Transaction”), excluding however, any Corporate Transaction pursuant to which (A) all or
substantially all of the individuals and entities who are the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Corporate Transaction will beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction (including, without
limitation, a corporation or other Person that as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one or more
subsidiaries (a “Parent Company”)) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Entity (other than the Company,
any employee benefit plan (or related trust) of the Company, such corporation resulting from such
Corporate Transaction or, if reference was made to equity ownership of any Parent Company for
purposes of determining whether clause (A) above is satisfied in connection with the applicable
Corporate Transaction, such Parent Company) will beneficially own, directly or indirectly, 30% or
more of, respectively, the outstanding shares of common stock of the corporation resulting from
such Corporate Transaction or the combined voting power of the outstanding voting securities of
such corporation entitled to vote generally in the election of directors unless such ownership
resulted solely from ownership of securities of the Company prior to the Corporate Transaction, and
(C) individuals who were members of the Incumbent Board will immediately after the consummation of
the Corporate Transaction constitute at least half of the members of the board of directors of the
corporation resulting from such Corporate Transaction (or, if reference was made to equity
ownership of any Parent Company for purposes of determining whether clause (A) above is satisfied
in connection with the applicable Corporate Transaction, of the Parent Company); or



(iv) the approval by the stockholders of the Company of a complete liquidation or dissolution
of the Company.



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



(g) “Compensation 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 within the meaning of Rule 16b-3(b)(3) of the Exchange Act, an “outside
director” within the meaning of Section 162(m) of the Code, or any successor provision thereto, and
independent under the rules of the NASDAQ Global Market.



(h) “Company” shall mean IDEXX Laboratories, Inc., a Delaware corporation.



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




(j) “Director” shall mean a member of the Board who is not an Employee.




(k) “Employee” shall mean any employee of the Company or any Affiliate.




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



(m) “Fair Market Value” shall mean, with respect to any property other than Shares, the market
value of such property determined by such methods or procedures as shall be established from time
to time by the Board. Unless otherwise determined by the Board, the Fair Market Value of Shares as
of any date shall be the last reported sales price for the Shares as reported on the NASDAQ Global
Market (or on any national securities exchange on the
Shares are then listed) for that date or, if no such price is reported for that date, the last
reported sales price on the next preceding date for which such price was reported.


 


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(n) “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.



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



(p) ’’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
Board shall determine.



(q) “Other Stock Unit Award” shall mean any right granted to a Participant by the Board
pursuant to Section 9.



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



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



(t) “Prior Plans” shall mean the Company’s 1991 Stock Option Plan, 1998 Stock Incentive Plan
and the 2000 Director Option Plan.



(u) “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 Board, 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 Board may
deem appropriate.



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



(w) “Shares” shall mean the shares of common stock of the Company, par value $.10 per share.



(x) ’’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 over (ii) the grant price of the right on the date of grant, as
specified by the Board 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. Any payment by the Company in respect of
such right may be made in cash, Shares, other property, or any combination thereof, as the Board,
in its sole discretion, shall determine.



(y) “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.



(z) “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.


 


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SECTION 3. ADMINISTRATION.



(a) The Plan will be administered by the Board. The Board shall have authority to grant
Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating
to the Plan as it shall deem
advisable. The Board 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 expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency. All decisions by the
Board shall be made in the Board’s sole discretion and shall be final and binding on all persons
having or claiming any interest in the Plan or in any Award. No director or person acting pursuant
to the authority delegated by the Board shall be liable for any action or determination relating to
or under the Plan made in good faith.



(b) To the extent permitted by applicable law, the Board may delegate any or all of its powers
under the Plan to one or more committees or subcommittees of the Board (a “Committee”), at least
one of which shall be the Compensation Committee. All references in the Plan to the “Board” shall
mean the Board or a Committee of the Board or the executive officers referred to in Section 3(c) to
the extent that the Board’s powers or authority under the Plan have been delegated to such
Committee or executive officers.



(c) To the extent permitted by applicable law, the Board may delegate to one or more executive
officers of the Company the power to grant Awards to employees or officers of the Company or any of
its present or future subsidiary corporations and to exercise such other powers under the Plan as
the Board may determine, provided that the Board shall fix the terms of the Awards to be
granted by such executive officers (including the exercise price of such Awards, which may include
a formula by which the exercise price will be determined) and the maximum number of shares subject
to Awards that the executive officers may grant; provided further, however,
that no executive officer shall be authorized to grant Awards to any “executive officer” of the
Company (as defined by Rule 3b-7 under the Exchange Act) or to any “officer” of the Company (as
defined by Rule 16a-1 under the Exchange Act).



SECTION 4. SHARES SUBJECT TO THE PLAN.



(a) Subject to adjustment as provided in Section 4(c), a total of 3,150,000 Shares shall be
authorized for issuance under the Plan. Any Shares that are subject to Awards of Options or Stock
Appreciation Rights shall be counted against this limit as one (1) Share for every one (1) Share
granted. Any Shares that are subject to Awards other than Options or Stock Appreciation Rights
shall be counted against this limit as 2.1 Shares for every one (1) Share granted. If any Shares
subject to an Award or to an award under the Prior Plans are forfeited or if any Award or award
under the Prior Plans based on Shares is settled for cash or expires, the Shares subject to such
Award shall, to the extent of such forfeiture, cash settlement or expiration, again be available
for Awards under the Plan. Notwithstanding anything to the contrary contained herein, the
following Shares shall not be added to the Shares authorized for grant under paragraph (a) of this
Section: (i) Shares tendered by the Participant or withheld by the Company in payment of the
purchase price of an Option, (ii) Shares tendered by the Participant or withheld by the Company to
satisfy any tax withholding obligation with respect to an Award, and (iii) Shares subject to a
Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock
Appreciation Right on exercise thereof. Substitute Awards shall not reduce the Shares authorized
for issuance under the Plan or authorized for grant to a Participant in any calendar year under
Section 11(e). In the event that a company acquired by the Company or with which the Company
combines has shares available under a pre-existing plan not adopted in contemplation of such
acquisition or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition or combination to determine the
consideration payable to the holders of common stock of the entities party to such acquisition or
combination) may be used for Awards (other than Incentive Stock Options) under the Plan and shall
not reduce the Shares authorized for issuance under the Plan; provided that Awards using
such available shares shall not be made after the date awards or grants could have been made under
the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made
to individuals who were not Employees or Directors of the Company or an Affiliate prior to such
acquisition or combination. Any Shares that again become available for grant pursuant to this
Section shall be added back as (i) one (1) Share if such Shares were subject to Options or Stock
Appreciation Rights granted under the Plan or options or stock appreciation rights granted under
the Prior Plans, and (ii) as 2.1 Shares if such Shares were subject to Awards other than Options or
Stock Appreciation Rights granted under the Plan or the Prior Plans.



(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.


 


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(c) In the event of any merger, reorganization, consolidation, recapitalization, stock
dividend, extraordinary cash dividend, stock split, reverse stock split, spin-off or similar
transaction or other change in corporate structure affecting the Shares, the Board shall make
appropriate and equitable adjustments and other substitutions to the Plan and to Awards, including,
without limitation, such adjustments in the aggregate number, class and kind of securities that may
be delivered under the Plan, in the aggregate or to any one Participant, in the number, class, kind
and option or exercise price of securities subject to outstanding Options, Stock Appreciation
Rights or other Awards granted under the Plan, and in the number, class and kind of securities
subject to Awards granted under the Plan (including, if the Board deems appropriate, the
substitution of similar options to purchase the shares of, or other awards denominated in the
shares of, another company) as the Board may determine 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 Incentive Stock Options shall only be awarded to Employees of
the Company or a Subsidiary of the Company.



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 Board 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 Board shall deem desirable:



(a) OPTION PRICE. The purchase price per Share purchasable under an Option shall not be less
than the Fair Market Value of the Share on the date of the grant, except in the case of Substitute
Awards or in connection with an adjustment provided for in Section 4(c).



(b) OPTION PERIOD. The term of each Option shall be fixed by the Board in its sole
discretion; 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
Board at or subsequent to grant.



(d) METHOD OF EXERCISE. Subject to the other provisions of the Plan, any Option may be
exercised by the Participant in whole or in part at such time or times, and the Participant may
make payment of the option price in such form or forms, including, without limitation: (i) payment
by delivery of cash; (ii) delivery of other consideration (including, where permitted by law and
the Board, Awards) having a Fair Market Value on the exercise date equal to the total option price;
(iii) to the extent permitted by the Board, in its sole discretion, by delivery of an irrevocable
and unconditional undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding, or delivery by the
Participant to the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding; or (iv) by any combination of cash and other
consideration as the Board may specify in the applicable Award Agreement.



(e) INCENTIVE STOCK OPTIONS. In accordance with rules and procedures established by the
Board, and except as otherwise provided in Section 10 or any other provision of the Plan permitting
or providing for acceleration of options, the aggregate Fair Market Value (determined as of the
time of grant) of the Shares with respect to which Incentive Stock Options held by any Participant
which are exercisable for the first time by such Participant during any calendar year under the
Plan (and under any other employee benefit plans of the Company or any Subsidiary) shall not exceed
$100,000 or, if different, the maximum limitation in effect at the time of grant under Section 422
of the Code, or any successor provision, and any regulations promulgated thereunder. Incentive
Stock Options shall be granted only to Participants who are Employees of the Company or a
Subsidiary of the Company. The terms of any Incentive Stock Option granted hereunder shall comply
in all respects with the provisions of Section 422 of the Code or any successor provision, and any
regulations promulgated thereunder; provided, however that the Company shall have no liability to a
Participant or to any other person in the event that an option that is intended to be an Incentive
Stock Option is not an Incentive Stock Option. Subject to adjustment as provided in
Section 4(c), the aggregate number of Shares with respect to which Incentive Stock Options may
be issued under the Plan shall not exceed 3,150,000.


 


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SECTION 7. STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be granted hereunder to
Participants either alone (“freestanding”) 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. 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 Board may impose such conditions or restrictions on the exercise of
any Stock Appreciation Right, as it shall deem appropriate; provided that a freestanding
Stock Appreciation Right shall not have an exercise price less than Fair Market Value on the date
of grant or a term of greater than ten years.



SECTION 8. RESTRICTED STOCK.



(a) ISSUANCE. A Restricted Stock Award shall be subject to restrictions imposed by the Board
during a period of time specified by the Board (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.



(b) REGISTRATION. Any Restricted Stock issued hereunder may be evidenced in such manner, as
the Board, 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. Unless
otherwise determined by the Board, such certificates shall be deposited by the Participant,
together with a stock power endorsed in blank, with the Company or its designee.



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



SECTION 9. 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. Such Other Stock Unit Awards shall also be available as a form of payment
in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to
which such recipient otherwise is entitled. Other Stock Unit Awards may be paid in Shares or cash,
as the Board shall determine, in its sole discretion. Subject to the provisions of the Plan, the
Board shall have sole and complete authority to determine the Employees of the Company and its
Affiliates and Directors to whom and the time or times at which such Awards shall be made, the
number of Shares to be granted pursuant to such 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.


 


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(b) TERMS AND CONDITIONS. Subject to the provisions of the Plan and any applicable Award
Agreement, Awards and Shares subject to Awards made under this Section 9 may not be sold, assigned,
transferred, pledged or otherwise encumbered prior to the date on which the Shares are issued, or,
if later, the date on which any applicable restriction, performance or deferral period lapses.
Shares (including securities convertible into Shares) subject to Awards granted under this Section
9 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 9 shall be purchased for such consideration as the Board
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 10. CHANGE IN CONTROL PROVISIONS.



(a) IMPACT OF EVENT. Subject to Section 10(a)(v) and notwithstanding any other provision of
the Plan to the contrary, unless the Board shall determine otherwise at the time of grant with
respect to a particular Award, in the event of a Change in Control:



(i) 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
immediately exercisable and vested as to 25% of the number of shares to which such Options and
Stock Appreciation Rights would otherwise not then be exercisable, and the number of shares as to
which such Options and Stock Appreciation Rights shall become exercisable and vested on each
vesting date set forth in the applicable agreement shall be reduced by 25%;



(ii) the restrictions and deferral limitations applicable to any Restricted Stock Award shall
immediately lapse as to 25% of the remaining number of shares subject to such Award as to which
such restrictions and deferral limitations are then in effect, and the number of shares subject to
such Restricted Stock Award as to which such restrictions and deferral limitations terminate on
each subsequent vesting date shall be reduced by 25%;



(iii) the restrictions, deferral limitations and other conditions applicable to any Other
Stock Unit Awards or any other Awards shall immediately lapse as to 25% of the remaining number of
shares subject to Other Stock Unit Awards or other Awards as to which such restrictions, deferral
limitations and other conditions are then in effect, and the number of shares subject to such Other
Stock Unit Awards or other Awards as to which such restrictions, deferral limitations and other
conditions terminate on each subsequent vesting date shall be reduced by 25%; and



(iv) in the event of an involuntary termination of a Participant’s employment or directorship
by the successor company without Cause (as defined below) during the 24-month period following such
Change in Control, then each Award held by such Participant at the time of the Change in Control
shall immediately become fully exercisable and vested to the full extent of the original grant and
all restrictions and deferral limitation shall lapse. “Cause” shall mean: (A) the failure of the
Participant to perform substantially the Participant’s duties with the Company (other than any such
failure resulting from incapacity due to physical or mental illness), which failure is not cured
within 30 days after a written demand for substantial performance is delivered to the Participant
by the Participant’s manager or the Board which specifically identifies the manner in which such
manager or the Board, as applicable, believes that the Participant has not substantially performed
the Participant’s duties, (B) or the engaging by the Participant in illegal conduct or gross
misconduct which is injurious to the Company.



(v) Notwithstanding the foregoing, if in the event of a Corporate Transaction the successor
company does not assume or substitute for an Option, Stock Appreciation Right, Share of Restricted
Stock or Other Stock Unit Award not granted pursuant to Section 11, then each outstanding Option,
Stock Appreciation Right, Share of Restricted Stock or Other Stock Unit Award shall not be
accelerated as described in Sections 10(a)(i), (ii) and (iii), but rather shall be accelerated with
respect to 100% of such Awards. For the purposes of this Section 10(a)(v), an Option, Stock
Appreciation Right, Share of Restricted Stock or Other Stock Unit Award shall be considered assumed
or substituted for if following the Corporate Transaction the award confers the right to purchase
or receive, for each Share subject to the Option, Stock Appreciation Right, Restricted Stock Award
or Other Stock Unit Award immediately prior to the Corporate Transaction, the consideration
(whether stock, cash or other



 


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securities or property) received in the Corporate Transaction 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 the Corporate
Transaction is not solely common stock of the successor company, the Board may, with the consent of
the successor company, provide that the consideration to be received upon the exercise or vesting
of an Option, Stock Appreciation Right, Restricted Stock Award or Other Stock Unit 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 the Corporate
Transaction. The determination of such substantial equality of value of consideration shall be
made by the Board in its sole discretion and its determination shall be conclusive and binding.



(b) CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision of the Plan, in the event
of a Change in Control the Board may, in its discretion, provide that each Option or Stock
Appreciation Right shall, upon the occurrence of a Change in Control, be cancelled in exchange for
a payment in an amount equal to the amount by which the fair market value per Share immediately
prior to the Change in Control exceeds the purchase price per Share under the Option or Stock
Appreciation Right (the “spread”) multiplied by the number of Shares granted under the Option or
Stock Appreciation Right.



SECTION 11. CODE SECTION 162(m) PROVISIONS.



(a) Notwithstanding any other provision of the Plan, if the Compensation Committee determines
at the time Restricted Stock 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
Compensation Committee may provide that this Section 11 is applicable to such Award.



(b) If Restricted Stock or an Other Stock Unit Award is subject to this Section 11, then the
lapsing of restrictions thereon and the distribution of cash or Shares pursuant thereto, as
applicable, shall be subject to the achievement of one or more objective performance goals
established by the Compensation Committee, which shall be based on the attainment of specified
levels of one or any combination of the following: earnings before interest, taxes, depreciation
and amortization (EBITDA), net cash provided by operating activities, free cash flow, earnings per
share, earnings per share from continuing operations, operating income, revenues, operating
margins, return on operating assets, return on equity, economic value added, stock price
appreciation, total stockholder return, cost control, strategic initiatives, market share, before-
or after-tax income, or return on invested capital of the Company or the Affiliate or division of
the Company for or within which the Participant is primarily employed. 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. Such performance goals may be applied by
excluding 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 the
Compensation 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 10, with respect to any
Restricted Stock or Other Stock Unit Award that is subject to this Section 11, the Compensation
Committee may adjust downwards, but not upwards, the amount payable pursuant to such Award, and the
Compensation Committee may not waive the achievement of the applicable performance goals except, in
its sole discretion, in the case of the death or disability of the Participant



(d) The Compensation Committee shall have the power to impose such other restrictions on
Awards subject to this Section 11 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.


 


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(e) Notwithstanding any provision of the Plan other than Section 4(c), no Participant may be
granted Awards during any year with respect to more than 600,000 Shares. For purposes of the
foregoing limit, the combination of an Option in tandem with a Stock Appreciation Right shall be
treated as a single Award. The per Participant limit described in this Section 11(e) shall be
construed and applied consistently with Section 162(m) of the Code or any successor provision
thereto, and the regulations thereunder (“Section 162(m)”).



SECTION 12. AMENDMENTS AND TERMINATION. The Board may amend, alter, suspend, discontinue or
terminate the Plan or any portion thereof at any time; provided, however, that no
amendment or alteration, shall be made without (a) stockholder approval if such approval is
necessary to qualify for or comply with any tax or regulatory requirement for which or with which
the Board deems it necessary or desirable to qualify or comply, (b) the consent of the affected
Participant, if such action would impair the rights of such Participant under any outstanding
Award, or (c) stockholder approval if such amendment or alteration is material, including, without
limitation, any amendment or alteration that (i) would reduce the exercise price of outstanding
Options or Stock Appreciation Rights or cancel or amend outstanding Options or Stock Appreciation
Rights for the purpose of repricing, replacing or regranting such Options or Stock Appreciation
Rights with an exercise price that is less than the exercise price of the original Options or Stock
Appreciation Rights, or in exchange for cash or another Award, (ii) materially increases the
benefits accruing to Participants, (iii) materially increases the number of Shares that may be
issued under the Plan, except for any increase permitted under Section 4(a) or 4(c) of the Plan,
(iv) materially modifies the requirements for eligibility to participate in the Plan, or (v)
expands the types of Awards issuable under the Plan. Notwithstanding anything to the contrary
herein, the Board may amend the Plan in such manner as may be necessary so as to have the Plan
conform to local rules and regulations in any jurisdiction outside the United States.



The Board may amend the terms of any Award theretofore granted, prospectively or
retroactively, including to provide that any Award shall become immediately exercisable in full or
in part, free of some or all restrictions or conditions, or otherwise realizable in full or in
part, as the case may be; provided, however, that no such amendment shall (a)
impair the rights of any Participant without his or her consent, (b) except for adjustments made
pursuant to Section 4(c) or in connection with Substitute Awards, reduce the exercise price of
outstanding Options or Stock Appreciation Rights or cancel or amend outstanding Options or Stock
Appreciation Rights for the purpose of repricing, replacing or regranting such Options or Stock
Appreciation Rights with an exercise price that is less than the exercise price of the original
Options or Stock Appreciation Rights, or in exchange for cash or another Award, without stockholder
approval, or (c) require the exchange of Options or Stock Appreciation Rights for cash
Notwithstanding the foregoing, any adjustments made pursuant to Section 4(c) shall not be subject
to these restrictions.



SECTION 13. GENERAL PROVISIONS.



(a) Notwithstanding any other provision of the Plan, except under certain circumstances in
connection with a Participant’s hire or termination or in the event of a Change in Control, no
Award issued to an Employee (except in lieu of compensation to which such Employee is otherwise
entitled) shall vest less than one year from the date of grant.



(b) Awards shall not be sold, assigned, transferred, pledged or otherwise
encumbered by the person to whom they are granted, either voluntarily or by operation of law,
except by will or the laws of descent and distribution, and, during the life of the Participant,
shall be exercisable only by the Participant; provided, however, that, if so determined by the
Board, a Participant may, in the manner established by the Board, designate a beneficiary to
exercise the rights of the Participant with respect to any Award upon the death of the Participant;
and provided, further, 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. 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. References to a
Participant, to the extent relevant in the context, shall include references to authorized
transferees.



(c) 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.


 


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(d) 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 received an agreement or other instrument (written,
electronic or otherwise) evidencing the Award, which may, but need not, be executed or acknowledged
by both the Company and the Participant, and delivered a copy thereof to the Company, and otherwise
complied with the then applicable terms and conditions.



(e) 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.



(f) Except as provided in Section 11, the Board shall be authorized to make adjustments in
performance award criteria or in the terms and conditions of other Awards in recognition of unusual
or nonrecurring events affecting the Company or its financial statements or changes in applicable
laws, regulations or accounting principles. The Board 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 Board may, in
its discretion, make such adjustments in the terms of Awards under the Plan as it shall deem
appropriate.



(g) The Board shall have full power and authority to determine whether, to what extent and
under what circumstances any Award shall be canceled or suspended.



(h) All certificates for Shares delivered under the Plan pursuant to any Award shall be
subject to such stock-transfer orders and other restrictions as the Board may deem advisable under
the rules, regulations and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any applicable federal or state securities law,
and the Board may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.



(i) 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 Board in its sole discretion
has determined that any such offer, if made, would comply with all applicable requirements of the
U.S. federal securities laws and any other laws to which such offer, if made, would be subject.



(j) No Award shall provide for deferral of compensation that does not comply with
Section 409A of the Code, unless the Board, at the time of grant, specifically provides
that the Award is not intended to comply with Section 409A of the Code. The Company shall
have no liability to a Participant, or any other party, if an Award that is intended to be
exempt from, or compliant with, Section 409A is not so exempt or compliant or for any
action taken by the Board. 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 Board, 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 Board, in its sole discretion, and the Board may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Shares or otherwise reinvested.



(k) 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.



(l) The Company shall be authorized to withhold from any Award granted or payment due under
the Plan the amount of withholding taxes due in connection with an Award or payment hereunder and
to take such other action as may be necessary in the opinion of the Company to satisfy all Company
obligations for the payment of such taxes. The Board shall be authorized to establish procedures
for election by Participants to satisfy such obligation
for the payment of such taxes by directing the Company to retain Shares (not exceeding the
minimum required tax withholding obligations if such a limitation is necessary to avoid a charge to
the Company for financial reporting purposes) otherwise deliverable in connection with the Award.


 


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(m) 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.



(n) 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, without regard to applicable conflicts of laws.



(o) 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 Board, 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 Board, materially
altering the intent of the Plan, it shall be stricken and the remainder of the Plan shall remain in
full force and effect.



(q) 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 Board, be necessary or
desirable in order to recognize differences in local law or tax policy. The Board 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.



SECTION 14. EFFECTIVE DATE OF PLAN. The Plan shall be effective as of May 21, 2003.



SECTION 15. TERM OF PLAN. The Plan shall terminate on the tenth anniversary of the effective
date, unless sooner terminated by the Board pursuant to Section 12, but Awards previously granted
may extend beyond that date; provided, however, that no Incentive Stock Options may
be granted more than ten years after the later of (i) the adoption of the Plan by the Board and
(ii) the adoption by the Board of any amendment to the Plan that constitutes the adoption of a new
plan for purposes of Section 422 of the Code.



Adopted by the Board of Directors on February 25, 2003, subject to stockholder approval.



Approved by the stockholders on May 21, 2003.



Amended by the Board of Directors on July 16, 2003.



Amended by the Board of Directors on October 12, 2005.



Amended by the Board of Directors on February 14, 2007, subject to stockholder approval.



Approved by the stockholders on May 9, 2007.




 


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