exv10w2



 





Exhibit 10.2




ARBITRON INC.

1999 STOCK INCENTIVE PLAN

(Amended as of May 15, 2007)



1. Purpose of Plan.




     The purpose of the Arbitron Inc. 1999 Stock Incentive Plan (the “Plan”) is to advance the
interests of Arbitron Inc. (the “Company”) and its stockholders by enabling the Company and its
Subsidiaries to attract and retain persons of ability to perform services for the Company and its
Subsidiaries by providing an incentive to such individuals through equity participation in the
Company and by rewarding such individuals who contribute to the achievement by the Company of its
economic objectives.


2. Definitions.




     The following terms will have the meanings set forth below, unless the context clearly
otherwise requires:



     2.1 “Board” means the Board of Directors of the Company.



     2.2 “Broker Exercise Notice” means a written notice pursuant to which a Participant,
upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of
shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the
Option and/or any related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such exercise directly to such
broker or dealer.



     2.3 “Change of Control” means an event described in Section 13.1 of the Plan or such
other definition as may be adopted by the Committee from time to time in its sole discretion.



     2.4 “Code” means the Internal Revenue Code of 1986, as amended.



     2.5 “Committee” means the group of individuals administering the Plan, as provided in
Section 3 of the Plan.



     2.6 “Common Stock” means the common stock of the Company, par value $0.50 per share,
or the number and kind of shares of stock or other securities into which such Common Stock may be
changed in accordance with Section 4.4 of the Plan.



     2.7 “Disability” means the disability of the Participant such as would entitle the
Participant to receive disability income benefits pursuant to the long-term disability plan of the
Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to
the Participant, the permanent and total disability of the Participant within the meaning of
Section 22(e)(3) of the Code.



     2.8 “Dividend Equivalents” shall have the meaning set forth in Section 14.3.



     2.9 “Eligible Recipients” means all employees (including, without limitation, officers
and directors who are also employees) of the Company or any Subsidiary and any non-employee
directors, consultants and independent contractors of the Company or any Subsidiary.



     2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     2.11 “Fair Market Value” means, with respect to the Common Stock as of any date, the
closing market price per share of the Common Stock at the end of the regular way trading session,
which as of the effective date of this Plan is 4:00 p.m., New York City time, as reported on the
New York Stock Exchange Composite Tape on that date (or, if no shares were traded or quoted on such
date, as of the next preceding date on which there was such a trade or quote).



 









 





     2.12 “Freestanding Stock Appreciation Right” shall have the meaning set forth in
Section 7.1.



     2.13 “Incentive Award” means an Option, Stock Appreciation Right, Restricted Stock
Award, Performance Unit or Dividend Equivalent granted to an Eligible Recipient pursuant to the
Plan.



     2.14 “Incentive Stock Option” means a right to purchase Common Stock granted to an
Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option”
within the meaning of Section 422 of the Code.



     2.15 “Non-Statutory Stock Option” means a right to purchase Common Stock granted to an
Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive Stock
Option.



     2.16 “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.



     2.17 “Participant” means an Eligible Recipient who receives one or more Incentive
Awards under the Plan.



     2.18 “Performance Goal” means one or more of the following performance goals, either
individually, alternatively or in any combination, applied on a corporate, subsidiary or business
unit basis: cash flow, earnings (including one or more of gross profit, earnings before interest
and taxes, earnings before interest, taxes, depreciation and amortization and net earnings),
earnings per share, individually, margins (including one or more of gross, operating and net income
margins), returns (including one or more of return on assets, equity, investment, capital and
revenue and total stockholder return), stock price, economic value added, working capital, market
share, cost reductions and strategic plan development and implementation. Such goals may reflect
absolute entity or business unit performance or a relative comparison to the performance of a peer
group of entities or other external measure of the selected performance criteria. The Committee
may appropriately adjust any evaluation of performance under such goals to exclude any of the
following events: asset write-downs, litigation or claim judgments or settlements, the effect of
changes in tax law, accounting principles or other such laws or provisions affecting reported
results, accruals for reorganization and restructuring programs, uninsured catastrophic losses, and
any extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 or
in management’s discussion and analysis of financial performance appearing in the Company’s annual
report to stockholders for the applicable year.



     2.19 “Performance Unit” means a right granted to an Eligible Recipient pursuant to
Section 9 of the Plan to receive a payment from the Company, in the form of Common Stock, cash,
Stock Units or a combination of the foregoing, upon the achievement of established performance
criteria.



     2.20 “Previously Acquired Shares” means shares of Common Stock that are already owned
by the Participant or, with respect to any Incentive Award, that are to be issued upon the grant,
exercise or vesting of such Incentive Award.



     2.21 “Prior Plans” mean the Ceridian Corporation 1993 Long-Term Incentive Plan and the
Ceridian Corporation 1990 Long-Term Incentive Plan.



     2.22 “Restricted Stock Award” means an award of Common Stock or Stock Units granted to
an Eligible Recipient pursuant to Section 8 of the Plan that is subject to the restrictions on
transferability and the risk of forfeiture imposed by the provisions of such Section 8.



     2.23 “Retirement” means the termination (other than for Cause or by reason of death or
Disability) of a Participant’s employment or other service on or after the date on which the
Participant has attained the age of 55 and has completed 10 years of continuous service to the
Company or any Subsidiary (such period of service to be determined in accordance with the
retirement/pension plan or practice of the Company or Subsidiary then covering the Participant,
provided that if the Participant is not covered by any such plan or practice, the Participant will
be deemed to be covered by the Company’s plan or practice for purposes of this determination).



2









 





     2.24 “Section 162(m)” means Section 162(m) of the Code and the applicable Treasury
Regulations promulgated thereunder.



     2.25 “Securities Act” means the Securities Act of 1933, as amended.



     2.26 “Stock Appreciation Right” shall mean the right granted to a Participant pursuant
to Section 7.



     2.27 “Stock Unit” means a bookkeeping entry representing the equivalent of one share
of Common Stock that is payable in the form of Common Stock, cash or any combination of the
foregoing.



     2.28 “Subsidiary” means any entity that is directly or indirectly controlled by the
Company or any entity in which the Company has a significant equity interest, as determined by the
Committee.



     2.29 “Substitute Awards” shall mean Incentive Awards granted or shares of Common Stock
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
any Subsidiary or with which the Company or any Subsidiary combines.



     2.30 “Tandem Stock Appreciation Right” shall have the meaning set forth in Section 7.1.



     2.31 “Tax Date” means the date any withholding tax obligation arises under the Code
for a Participant with respect to an Incentive Award.


3. Plan Administration.




     3.1 The Committee. So long as the Company has a class of its equity securities
registered under Section 12 of the Exchange Act, the Plan will be administered by a committee (the
“Committee”) consisting solely of not less than two members of the Board who are “Non-Employee
Directors” within the meaning of Rule 16b-3 under the Exchange Act, who are “independent directors”
for purposes of the rules and regulations of the New York Stock Exchange, and, if the Board so
determines in its sole discretion, who are “outside directors” within the meaning of Section
162(m). To the extent consistent with corporate law, the Committee may delegate to any directors
or officers of the Company the duties, power and authority of the Committee under the Plan pursuant
to such conditions or limitations as the Committee may establish; provided, however, that only the
Committee may exercise such duties, power and authority with respect to Eligible Recipients who are
subject to Section 16 of the Exchange Act and Section 162(m). Each determination, interpretation
or other action made or taken by the Committee pursuant to the provisions of the Plan will be
conclusive and binding for all purposes and on all persons, and no member of the Committee will be
liable for any action or determination made in good faith with respect to the Plan or any Incentive
Award granted under the Plan.



     3.2 Authority of the Committee.



          (a) In accordance with and subject to the provisions of the Plan, the Committee will have the
authority to determine all provisions of Incentive Awards as the Committee may deem necessary or
desirable and as consistent with the terms of the Plan, including, without limitation, the
following: (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent
of the Incentive Awards to be made to each Participant (including the number of shares of Common
Stock to be subject to each Incentive Award, any exercise price, the manner in which Incentive
Awards will vest or become exercisable and whether Incentive Awards will be granted in tandem with
other Incentive Awards) and the form of written agreement, if any, evidencing such Incentive Award;
(iii) the time or times when Incentive Awards will be granted; (iv) the duration of each Incentive
Award; and (v) the restrictions and other conditions to which the payment or vesting of Incentive
Awards may be subject. In addition, the Committee will have the authority under the Plan in its
sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock,
Stock Units or any combination of the foregoing.



          (b) Except as otherwise provided in the remainder of this Section 3.2(b), the Committee will
have the authority under the Plan to amend or modify the terms of any outstanding Incentive Award
in any manner, including, without limitation, the authority to modify the number of shares or other
terms and conditions of an



3









 







Incentive Award, extend the term of an Incentive Award or accelerate the
exercisability or vesting or otherwise terminate any restrictions relating to an Incentive Award;
provided, however that the amended or modified terms are permitted by the Plan as then in effect
and that any Participant adversely affected by such amended or modified terms has consented to such
amendment or modification. Without prior approval of the Company’s stockholders, the Committee
shall not have the authority under the Plan to (i) amend or modify the terms of any pre-existing
Option awards to lower the Option exercise price or (ii) authorize the grant of replacement Option
awards in substitution for pre-existing Option awards that have been or are to be surrendered and
canceled at any time when the Fair Market Value of the Common Stock is less than the exercise price
applicable to such surrendered and canceled Option awards.



          (c) In the event of (i) any reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering,
extraordinary dividend or divestiture (including a spin-off) or any other similar change in
corporate structure or shares, (ii) any purchase, acquisition, sale or disposition of a significant
amount of assets or a significant business, (iii) any change in accounting principles or practices,
or (iv) any other similar change, in each case with respect to the Company (or any Subsidiary or
division thereof) or any other entity whose performance is relevant to the grant or vesting of an
Incentive Award, the Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) may, without the consent of any
affected Participant, amend or modify the grant or vesting criteria of any outstanding Incentive
Award that is based in whole or in part on the financial performance of the Company (or any
Subsidiary or division thereof) or such other entity so as equitably to reflect such event, with
the desired result that the criteria for evaluating such financial performance of the Company or
such other entity will be substantially the same (in the sole discretion of the Committee or the
board of directors of the surviving corporation) following such event as prior to such event;
provided, however, that the amended or modified terms are permitted by the Plan as then in effect.



          (d) The Committee may permit or require the deferral of any payment, issuance or other
settlement of an Incentive Award subject to such rules and procedures as the Committee may
establish, including the conversion of such payment, issuance or other settlement into Options or
Stock Units and the payment or crediting of interest, dividends or dividend equivalents.


4. Shares Available for Issuance.




     4.1 Maximum Number of Shares Available. Subject to adjustment as provided in Section
4.4 of the Plan, the maximum number of shares of Common Stock that will be available for issuance
under the Plan will be 4,204,009 shares. The Committee may use shares available for issuance under
the Plan as the form of payment for compensation, awards or rights earned or due under deferred or
any other compensation plans or arrangements of the Company or any Subsidiary. The shares
available for issuance under the Plan may, at the election of the Committee, be either treasury
shares or shares authorized but unissued, and, if treasury shares are used, all references in the
Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of
shares from treasury.



     4.2 Calculation of Shares Available. Shares of Common Stock that are issued under the
Plan or that are subject to outstanding Incentive Awards will be applied to reduce the maximum
number of shares of Common Stock remaining available for issuance under the Plan. To the extent
that any shares of Common Stock that are subject to an Incentive Award under the Plan or the Prior
Plan (a) are not issued to a Participant due to the fact that such Incentive Award lapses, expires,
is forfeited or for any reason is terminated unexercised or unvested, or is settled or paid in cash
or (b) are used to satisfy any exercise price or withholding obligations, such shares will
automatically again become available for issuance under the Plan. In addition, to the extent that
a Participant tenders (either by actual delivery or by attestation) shares of Common Stock already
owned by the Participant to the Company in satisfaction of any exercise price or withholding tax
obligations, such shares will automatically again become available for issuance under the Plan.



     4.3 Additional Limitations. Notwithstanding any other provisions of the Plan to the
contrary and subject, in each case, to adjustment as provided in Section 4.4 of the Plan, (a) no
more than 2,000,000 shares of Common Stock may be issued under the Plan with respect to Incentive
Stock Options, (b) no more than 700,000 shares of Common Stock may be issued under the Plan with
respect to Restricted Stock Awards that are not granted
in lieu of cash compensation that would
otherwise be payable to Participants, and (c) no Participant in the Plan may be granted Incentive
Awards relating to more than 300,000 shares of Common Stock in the aggregate during any period of
three consecutive fiscal years of the Company.



4









 





     4.4 Adjustments to Shares and Incentive Awards. In the event of any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock
split, combination of shares, rights offering, divestiture or extraordinary dividend (including a
spin-off) or any other similar change in the corporate structure or shares of the Company, the
Committee (or, if the Company is not the surviving corporation in any such transaction, the board
of directors of the surviving corporation) will make appropriate adjustments (which determination
will be conclusive) as to the number and kind of securities or other property (including cash)
available for issuance or payment under the Plan and, in order to prevent dilution or enlargement
of the rights of Participants, (a) the number and kind of securities or other property (including
cash) subject to outstanding Options and Stock Appreciation Rights, and (b) the exercise price of
outstanding Options and Stock Appreciation Rights.


5. Participation.




     Participants in the Plan will be those Eligible Recipients who, in the judgment of the
Committee, have contributed, are contributing or are expected to contribute to the achievement of
economic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from
time to time one or more Incentive Awards, singly or in combination or in tandem with other
Incentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awards
will be deemed to be granted as of the date specified in the grant resolution of the Committee,
which date will be the date of any related agreement with the Participant.


6. Options.




     6.1 Grant. An Eligible Recipient may be granted one or more Options under the Plan,
and such Options will be subject to such terms and conditions, consistent with the other provisions
of the Plan, as may be determined by the Committee in its sole discretion and reflected in the
award agreement evidencing such Option. The Committee may designate whether an Option is to be
considered an Incentive Stock Option or a Non-Statutory Stock Option. To the extent that any
Incentive Stock Option granted under the Plan ceases for any reason to qualify as an “incentive
stock option” for purposes of Section 422 of the Code, such Incentive Stock Option will continue to
be outstanding for purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock
Option.



     6.2 Exercise Price. The per share price to be paid by a Participant upon exercise of
an Option will be determined by the Committee in its discretion at the time of the Option grant;
provided, however, that such price will not be less than 100% of the Fair Market Value of one share
of Common Stock on the date of grant or, with respect to an Incentive Stock Option (110% of the
Fair Market Value if, at the time the Incentive Stock Option is granted, the Participant owns,
directly or indirectly, more than 10% of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation of the Company).



     6.3 Exercisability and Duration. An Option will become exercisable at such times and
in such installments as may be determined by the Committee in its sole discretion at the time of
grant; provided, however, that no Option may be exercisable after 10 years from its date of grant
(five years from its date of grant if the Option is an Incentive Stock Option and if, at the time
the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10%
of the total combined voting power of all classes of stock of the Company or any parent or
subsidiary corporation of the Company).



     6.4 Payment of Exercise Price. The total purchase price of the shares to be purchased
upon exercise of an Option will be paid entirely in cash (including check, bank draft or money
order); provided, however, that the Committee, in its sole discretion and upon terms and conditions
established by the Committee, may allow such payments to be made, in whole or in part, by tender of
a Broker Exercise Notice, Previously Acquired Shares (including through delivery of a written
attestation of ownership of such Previously Acquired Shares if permitted, and on terms acceptable,
to the Committee in its sole discretion) or by a combination of such methods.



     6.5 Manner of Exercise. An Option may be exercised by a Participant in whole or in
part from time to time, subject to the conditions contained in the Plan and in the agreement
evidencing such Option, by delivery in
person, by facsimile or electronic transmission or through
the mail of written notice of exercise to the Company, Attention: Corporate Treasury, at its
principal executive office in Minneapolis, Minnesota and by paying in full the total exercise price
for the shares of Common Stock to be purchased in accordance with Section 6.4 of the Plan.



5









 





     6.6 Aggregate Limitation of Stock Subject to Incentive Stock Options. To the extent
that the aggregate Fair Market Value (determined as of the date an Incentive Stock Option is
granted) of the shares of Common Stock with respect to which incentive stock options (within the
meaning of Section 422 of the Code) are exercisable for the first time by a Participant during any
calendar year (under the Plan and any other incentive stock option plans of the Company or any
subsidiary or parent corporation of the Company (within the meaning of the Code)) exceeds $100,000
(or such other amount as may be prescribed by the Code from time to time), such excess Options will
be treated as Non-Statutory Stock Options. The determination will be made by taking incentive
stock options into account in the order in which they were granted. If such excess only applies to
a portion of an Incentive Stock Option, the Committee, in its discretion, will designate which
shares will be treated as shares to be acquired upon exercise of an Incentive Stock Option.


7. Stock Appreciation Rights.




     7.1 Grant and Exercise. The Committee may provide Stock Appreciation Rights (a) in
conjunction with all or part of any Option granted under the Plan or at any subsequent time during
the term of such Option (“Tandem Stock Appreciation Right”), (b) in conjunction with all or part of
any Incentive Award (other than an Option) granted under the Plan or at any subsequent time during
the term of such Incentive Award, or (c) without regard to any Option or other Incentive Award (a
“Freestanding Stock Appreciation Right”), in each case upon such terms and conditions as the
Committee may establish in its sole discretion.



     7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to such terms
and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time
to time by the Committee, including the following:



          (a) Upon the exercise of a Stock Appreciation Right, the holder shall have the right to
receive the excess of (i) the Fair Market Value of one share of Common Stock on the date of
exercise or such other amount as the Committee shall so determine 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
in the case of a Tandem Stock Appreciation Right granted 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 4.4, shall not be less
than the Fair Market Value of one share of Common Stock on such date of grant of the right or the
related Option, as the case may be.



          (b) Upon the exercise of a Stock Appreciation Right, the Committee shall determine in its sole
discretion whether payment shall be made in cash, in whole shares of Common Stock or other
property, or any combination thereof.



          (c) Any Tandem Stock Appreciation Right may be granted at the same time as the related Option
is granted or at any time thereafter before exercise or expiration of such Option.



          (d) Any Tandem Stock Appreciation Right related to an Option may be exercised only when the
related Option would be exercisable and the Fair Market Value of the shares of Common Stock subject
to the related Option exceeds the option price at which shares of Common Stock can be acquired
pursuant to the Option. In addition, (i) if a Tandem Stock Appreciation Right exists with respect
to less than the full number of shares of Common Stock covered by a related Option, then an
exercise or termination of such Option shall not reduce the number of shares to which the Tandem
Stock Appreciation Right applies until the number of shares then exercisable under such Option
equals the number of shares of Common Stock to which the Tandem Stock Appreciation Right applies,
and (ii) no Tandem Stock Appreciation Right granted under the Plan to a person then subject to
Section 16 of the Exchange Act shall be exercised during the first six months of its term for cash.



          (e) Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to
the extent the Tandem Stock Appreciation Right has been exercised.



6









 





          (f) The provisions of Stock Appreciation Rights need not be the same with respect to each
recipient.



          (g) The Committee may impose such other conditions or restrictions on the terms of exercise
and the exercise price of any Stock Appreciation Right, as it shall deem appropriate, including
providing that the exercise price of a Tandem Stock Appreciation Right may be less than the Fair
Market Value on the date of grant if the Tandem Stock Appreciation Right is added to an Option
following the date of the grant of the Option. In connection with the foregoing, the Committee
shall consider the applicability and effect of Section 162(m) of the Code. Notwithstanding the
foregoing provisions of this Section 7.2(g), but subject to Section 4.4, a Freestanding Stock
Appreciation Right shall not have (i) an exercise price less than Fair Market Value on the date of
grant, or (ii) a term of greater than ten years. In addition to the foregoing, but subject to
Section 4.4, the base amount of any Stock Appreciation Right shall not be reduced after the date of
grant.



          (h) The Committee may impose such terms and conditions on Stock Appreciation Rights granted in
connection with any Award (other than an Option) as the Committee shall determine in its sole
discretion.


8. Restricted Stock Awards.




     8.1 Grant. An Eligible Recipient may be granted one or more Restricted Stock Awards
under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions,
consistent with the provisions of the Plan, as may be determined by the Committee in its sole discretion and reflected in the
award agreement evidencing such Restricted Stock Award. The Committee may impose such restrictions
or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Restricted
Stock Awards as it deems appropriate, including, without limitation, that the Participant remain in
the continuous employ or service of the Company or a Subsidiary for a certain period or that the
Participant or the Company (or any Subsidiary or division thereof) satisfy certain performance
criteria. Notwithstanding the foregoing and except as result of a Participant’s death or
Disability or in connection with a Change of Control of the Company, Restricted Stock Awards that
provide for (a) vesting upon the satisfaction of certain performance criteria shall vest over a
period of not less than one year from its date of grant and (b) time based vesting shall vest over
a period of not less than three years from its date of grant; provided, however, that Restricted
Stock Awards granted in lieu of some other form of compensation to an Eligible Recipient would be
permitted without such vesting restrictions.



     8.2 Rights as a Stockholder; Transferability. Except as provided in Sections 8.1, 8.3
and 14.3 of the Plan, a Participant will have all voting, dividend, liquidation and other rights
with respect to shares of Common Stock issued to the Participant as a Restricted Stock Award under
this Section 8 upon the Participant becoming the holder of record of such shares as if such
Participant were a holder of record of shares of unrestricted Common Stock.



     8.3 Dividends and Distributions. Unless the Committee determines otherwise in its
sole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grant
or at any time after the grant of the Restricted Stock Award), any dividends or distributions
(including regular quarterly cash dividends) paid with respect to shares of Common Stock subject to
the unvested portion of a Restricted Stock Award will not be subject to the same restrictions as
the shares to which such dividends or distributions relate and will be paid currently to the
Participant. In the event the Committee determines not to pay such dividends or distributions
currently, the Committee will determine in its sole discretion whether any interest will be paid on
such dividends or distributions. In addition, the Committee, in its sole discretion, may require
such dividends and distributions to be reinvested (and in such case the Participants consent to
such reinvestment) in shares of Common Stock that will be subject to the same restrictions as the
shares to which such dividends or distributions relate.



     8.4 Enforcement of Restrictions. To enforce the restrictions referred to in this
Section 8, the Committee may (a) place a legend on the stock certificates referring to such
restrictions and may require Participants, until the restrictions have lapsed, to keep the stock
certificates, together with duly endorsed stock powers, in the custody of the Company or its
transfer agent, or (b) maintain evidence of stock ownership, together with duly endorsed stock
powers, in a certificateless book-entry stock account with the Company’s transfer agent for its
Common Stock.



7









 




9. Performance Units.




     An Eligible Recipient may be granted one or more Performance Units under the Plan, and such
Performance Units will be subject to such terms and conditions, consistent with the other
provisions of the Plan, as may be determined by the Committee in its sole discretion. The
Committee may impose such restrictions or conditions, not inconsistent with the provisions of the
Plan, to the vesting of such Performance Units as it deems appropriate, including, without
limitation, that the Participant remain in the continuous employ or service of the Company or any
Subsidiary for a certain period or that the Participant or the Company (or any Subsidiary or
division thereof) satisfy certain performance goals or criteria. The Committee will have the sole
discretion to determine the form in which payment of the economic value of Performance Units will
be made to a Participant (i.e., cash, Common Stock, Stock Units or any combination of the
foregoing) or to consent to or disapprove the election by a Participant of the form of such
payment. Notwithstanding the foregoing, Performance Units that provide for vesting upon the
satisfaction of certain performance criteria shall vest over a period of not less than three years
from its date of grant; provided, however, that Performance Units granted in lieu of some other
form of compensation to an Eligible Recipient would be permitted without such vesting restrictions.


10. Performance-Based Compensation Provisions.




     The Committee, when it is comprised solely of two or more outside directors meeting the
requirements of Section 162(m), in its sole discretion, may designate whether any Incentive Awards
are intended to be “performance-based compensation” within the meaning of Section 162(m). Any
Incentive Awards so designated will, to the extent required by Section 162(m), be conditioned on
the achievement of one or more Performance Goals, and such Performance Goals will be established by
the Committee within the time period prescribed by, and will otherwise comply with the requirements
of, Section 162(m) giving due regard to the disparate treatment under
Section 162(m) of the stock options and stock appreciation rights where compensation is determined
based solely on an increase in the value of the underlying stock after the date of grant or award,
as compared to other forms of compensation, including restricted stock awards. The maximum dollar
value payable to any Participant with respect to Incentive Awards that are designated as such
“performance-based compensation” and that are valued with reference to property other than shares
of Common Stock may not exceed $5,000,000 in the aggregate during any period of three consecutive
fiscal years of the Company. Such Committee shall also certify in writing that such performance
goals have been met prior to payment of compensation to the extent required by Section 162(m).


11. Effect of Termination of Employment or Other Service.




     11.1 Rights Upon Termination. The Committee will have the authority, in its sole
discretion, to determine the effect that termination of a Participant’s employment or other service
with the Company and all Subsidiaries, whether due to death, Disability, Retirement or any other
reason, will have on outstanding Incentive Awards then held by such Participant.



     11.2 Modification of Rights Upon Termination. Notwithstanding the other provisions of
this Section 11, upon a Participant’s termination of employment or other service with the Company
and all Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any time
on or after the date of grant, including following such termination), cause Options (or any part
thereof) or Stock Appreciation Rights then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination of employment or service and
Restricted Stock Awards and Performance Units then held by such Participant to vest and/or continue
to vest or become free of restrictions following such termination of employment or service, in each
case in the manner determined by the Committee; provided, however, that no Option, Stock
Appreciation Right or Restricted Stock Award may continue to vest beyond its expiration date.



     11.3 Date of Termination of Employment or Other Service. Unless the Committee
otherwise determines in its sole discretion, a Participant’s employment or other service will, for
purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other
records of the Company or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such records.



8









 




12. Payment of Withholding Taxes.




     12.1 General Rules. The Company is entitled to (a) withhold and deduct from future
wages of the Participant (or from other amounts which may be due and owing to the Participant from
the Company or a Subsidiary), or make other arrangements for the collection of, all legally
required amounts necessary to satisfy any and all federal, state and local withholding and
employment-related tax requirements attributable to an Incentive Award, including, without
limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an
Incentive Award or a disqualifying disposition of stock received upon exercise of an Incentive
Stock Option, or (b) require the Participant promptly to remit the amount of such withholding to
the Company before taking any action with respect to an Incentive Award.



     12.2 Special Rules. The Committee may, in its sole discretion and upon terms and
conditions established by the Committee, permit or require a Participant to satisfy, in whole or in
part, any withholding or employment-related tax obligation described in Section 12.1 of the Plan
(up to the minimum statutory rate) by electing to tender Previously Acquired Shares, a Broker
Exercise Notice or a promissory note (on terms acceptable to the Committee in its sole discretion),
or by a combination of such methods.


13. Change of Control.




     13.1 Definitions. For purposes of this Section 13, the following definitions will
apply:



          (a) “Benefit Plan” means any formal or informal plan, program or other arrangement heretofore
or hereafter adopted by the Company or any Subsidiary for the direct or indirect provision of
compensation to the Participant (including groups or classes of participants or beneficiaries of
which the Participant is a member), whether or not such compensation is deferred, is in the form of
cash or other property or rights, or is in the form of a benefit to or for the Participant.



          (b) “Change of Control” means any of the following events:



               (1) a merger or consolidation to which the Company is a party if the individuals and entities
who were stockholders of the Company immediately prior to the effective date of such merger or
consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less
than 50% of the total combined voting power for election of directors of the surviving corporation
immediately following the effective date of such merger or consolidation;



               (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) in the aggregate of securities of the Company representing 25% or more of the total combined
voting power of the Company’s then issued and outstanding securities by any person or entity, or
group of associated persons or entities acting in concert;



               (3) the sale of the properties and assets of the Company, substantially as an entirety, to any
person or entity which is not a wholly-owned subsidiary of the Company;



               (4) the stockholders of the Company approve any plan or proposal for the liquidation of the
Company; or



               (5) a change in the composition of the Board at any time during any consecutive 24 month
period such that the “Continuity Directors” cease for any reason to constitute at least a 70%
majority of the Board. For purposes of this clause, “Continuity Directors” means those members of
the Board who either (1) were directors at the beginning of such consecutive 24 month period, or
(2) were elected by, or on the nomination or recommendation of, at least a two-thirds majority of
the then-existing Board of Directors.



     13.2 Effect of a Change of Control. The Committee will have the authority, in its
sole discretion, to determine the effect that a Change of Control of the Company will have on
outstanding Incentive Awards then held by such Participant.



9









 





     13.3 Authority to Modify Change of Control Provisions. Prior to a Change of Control
of the Company, unless otherwise provided in the agreement evidencing the Incentive Award, the
Participant will have no rights under this Section 13, and the Committee will have the authority,
in its sole discretion, to rescind, modify or amend the provisions of this Section 13 without the
consent of any Participant.


14. Rights of Eligible Recipients and Participants; Transferability.




     14.1 Employment or Service. Nothing in the Plan will interfere with or limit in any
way the right of the Company or any Subsidiary to terminate the employment or service of any
Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or
Participant any right to continue in the employ or service of the Company or any Subsidiary.



     14.2 Rights as a Stockholder. As a holder of Incentive Awards (other than Restricted
Stock Awards), a Participant will have no rights as a stockholder unless and until such Incentive
Awards are exercised for, or paid in the form of, shares of Common Stock and the Participant
becomes the holder of record of such shares. Except as provided in Section 14.3 or as otherwise
provided in the Plan, no adjustment will be made for dividends or distributions with respect to
such Incentive Awards as to which there is a record date preceding the date the Participant becomes
the holder of record of such shares.



     14.3 Dividend Equivalents. Subject to the provisions of the Plan and any Incentive
Award, the recipient of an Incentive Award (including any Incentive Award deferred in accordance
with procedures established pursuant to Section 3(d)) may, if so determined by the Committee, be
entitled to receive, currently or on a deferred basis, cash, stock or other property dividends, or
cash payments in amounts equivalent to cash, stock or other property dividends on shares of Common
Stock (“Dividend Equivalents”) with respect to the number of shares of Common Stock covered by the
Incentive 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.



     14.4 Restrictions on Transfer.



          (a) Except pursuant to testamentary will or the laws of descent and distribution and except as
expressly permitted by Section 14.4(b) of the Plan, no right or interest of any Participant in an
Incentive Award prior
to the exercise or vesting of such Incentive Award will be assignable or transferable, or subjected
to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly
or indirectly, by operation of law or otherwise. A Participant will, however, be entitled to
designate a beneficiary to receive an Incentive Award upon such Participant’s death. In the event
of a Participant’s death, payment of any amounts due under the Plan will be made to, and exercise
of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 11 of the
Plan) will be made by, the Participant’s designated beneficiary. For purposes of the Plan, a
“designated beneficiary” will be the beneficiary or beneficiaries designated by the Participant in
a writing filed with the Committee in such form and at such time as the Committee will require in
its sole discretion. If a Participant fails to designate a beneficiary, or if the designated
beneficiary does not survive the Participant or dies before the designated beneficiary’s exercise
of all rights under the Plan, payment of any amounts due under the Plan will be made to, and
exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section
11 of the Plan) may be made by, the Participant’s personal representative.



          (b) The Committee may, in its discretion, authorize all or a portion of the Options to be
granted to a Participant to be on terms which permit transfer by such Participant to (i) the
spouse, ex-spouse, children, step-children or grandchildren of the Participant (the “Family
Members”), (ii) a trust or trusts for the exclusive benefit of such Family Members, (iii) a
partnership in which such Family Members are the only partners, or (iv) such other persons or
entities as the Committee, in its discretion, may permit, provided that (1) there may be no
consideration for such a transfer (other than the possible receipt of an ownership interest in an
entity to which such a transfer is made), (2) the award agreement pursuant to which such Options
are granted must be approved by the Committee and must expressly provide for transferability in a
manner consistent with this Section 14.4(b), (3) timely written notice of the transfer must be
provided to the Company by the Participant, and (4) subsequent transfers of the transferred Options
shall be prohibited except for those in accordance with Section 14.4(a).



10









 







Following transfer, any
such Option and the rights of any transferee with respect thereto will continue to be subject to
the same terms and conditions as were applicable immediately prior to the transfer, including that
the events of termination of employment or other service as provided in the Plan and in any
applicable award agreement will continue to be applied with respect to the original Participant,
with the transferee bound by the consequences of any such termination of employment or service as
specified in the Plan and the applicable award agreement. The Company will be under no obligation
to provide notice of termination of a Participant’s employment or other service to any transferee
of such Participant’s Options. Notwithstanding any Option transfer pursuant to this Section
14.4(b), the Participant will remain subject to and liable for any employment-related taxes in
connection with the exercise of such Option.



     14.5 Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to modify
or rescind any previously approved compensation plans or programs of the Company or create any
limitations on the power or authority of the Board to adopt such additional or other compensation
arrangements as the Board may deem necessary or desirable.


15. Securities Law and Other Restrictions.




     Notwithstanding any other provision of the Plan or any agreements entered into pursuant to the
Plan, the Company will not be required to issue any shares of Common Stock under this Plan, and a
Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued
pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to
such shares a registration statement under the Securities Act and any applicable state securities
laws or an exemption from such registration under the Securities Act and applicable state
securities laws, and (b) there has been obtained any other consent, approval or permit from any
other regulatory body which the Committee, in its sole discretion, deems necessary or advisable.
The Company may condition such issuance, sale or transfer upon the receipt of any representations
or agreements from the parties involved, and the placement of any legends on certificates
representing shares of Common Stock, as may be deemed necessary or advisable by the Company in
order to comply with such securities law or other restrictions.


16. Plan Amendment, Modification and Termination.




     The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend
the Plan from time to time in such respects as the Board may deem advisable in order that Incentive
Awards under the Plan will conform to any change in applicable laws or regulations or in any other
respect the Board may deem to be in the best interests of the Company; provided, however, that no
Material Amendment of the Plan shall be made without approval of the stockholders of the Company.
For the purposes hereof, a “Material Amendment of the Plan” shall mean any amendment that (a)
requires stockholder approval pursuant to Section 422 of the Code or the rules of the New York
Stock Exchange or (b) increases the authorized shares, the benefits to Participants, or the class
of Participants under the Plan. No termination, suspension or amendment of the Plan may adversely
affect any outstanding Incentive Award without the consent of the affected Participant; provided,
however, that this sentence will not impair the right of the Committee to take whatever action it
deems appropriate under Section 4.4 and Section 13 of the Plan.


17. Effective Date and Duration of the Plan.




     The Plan is effective as of February 3, 1999, the date it was adopted by the Board. The Plan
will terminate at midnight on February 2, 2009, and may be terminated prior thereto by Board
action, and no Incentive Award will be granted after such termination. Incentive Awards
outstanding upon termination of the Plan may continue to vest, or become free of restrictions, in
accordance with their terms.


18. Miscellaneous.




     18.1 Governing Law. The validity, construction, interpretation, administration and
effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by
and construed exclusively in accordance with the laws of the State of Delaware.



     18.2 Successors and Assigns. The Plan will be binding upon and inure to the benefit
of the successors and permitted assigns of the Company and the Participants.



As Amended: May 15, 2007




11