exv10w3






Exhibit 10.3




EURONET WORLDWIDE, INC.

2006 STOCK INCENTIVE PLAN

(Amended and Restated)




(As Amended by the Board in April, 2009)





 









 








EURONET WORLDWIDE, INC.

2006 STOCK INCENTIVE PLAN

(Amended and Restated)




I. INTRODUCTION





	1.01	 	Establishment. Euronet Worldwide, Inc., a corporation organized and existing under the laws
of the state of Delaware (the “Company”), established effective May 18, 2006 (the “Effective
Date”) the Euronet Worldwide, Inc. 2006 Stock Incentive Plan (the “Plan”) for certain current
or prospective directors, officers, key employees or outside consultants of the Company and
its affiliates.
	 
	1.02	 	Purpose. The purpose of this Plan is to encourage Participants to acquire a proprietary and
vested interest in the growth and performance of the Company. The Plan is also designed to
assist the Company in attracting and retaining employees, non-employee directors and other
Participants by providing them with the opportunity to participate in the success and
profitability of the Company.
	 
	1.03	 	Duration. The Plan shall commence on the Effective Date and shall remain in effect, subject
to the right of the Board to amend or terminate the Plan at any time pursuant to Section 15
hereof, until all Shares subject to it shall have been issued, purchased or acquired according
to the Plan’s provisions. Unless the Plan shall be reapproved by the stockholders of the
Company and the Board renews the continuation of the Plan, no Awards shall be issued pursuant
to the Plan after the tenth (10th) anniversary of the Plan’s Effective Date.





II. DEFINITIONS





	2.01	 	The following terms shall have the meanings set forth below.






	 	(a)	 	“1933 Act” means the Securities Act of 1933, as amended. Reference to a
specific section of the 1933 Act or regulation thereunder shall include such section or
regulation, any valid regulation promulgated under such section, and any comparable
provision of any future legislation or regulation amending, supplementing, or
superseding such section or regulation.
	 
	 	(b)	 	“1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to
a specific section of the 1934 Act or regulation thereunder shall include such section
or regulation, any valid regulation promulgated under such section, and any comparable
provision of any future legislation or regulation amending, supplementing, or
superseding such section or regulation.
	 
	 	(c)	 	“Affiliate” of the Company means any person, corporation, partnership,
association or other business or professional entity that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by, or is under common
Control with the Company.




 









 






	 	(d)	 	“Award” means a grant made under this Plan in any form which may include but is
not limited to Stock Options, Restricted Stock, Restricted Stock Units, Performance
Shares, Bonus Shares, Stock Appreciation Rights, Performance Awards and Performance
Units.
	 
	 	(e)	 	“Award Agreement” means a written agreement or instrument between the Company
and a Holder evidencing an Award.
	 
	 	(f)	 	“Beneficiary” means the person, persons, trust or trusts which have been
designated by a Holder in his or her most recent written beneficiary designation filed
with the Company to receive the benefits specified under this Plan upon the death of
the Holder, or, if there is no designated Beneficiary or surviving designated
Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of
descent and distribution to receive such benefits.
	 
	 	(g)	 	“Board” means the Board of Directors of the Company.
	 
	 	(h)	 	“Bonus Shares” means the Shares granted to a Participant in accordance with
Section 10.






	 	(i)	 	“Cause” means, unless otherwise defined in an Award Agreement,
	 
	 	(i)	 	Participant’s conviction of, plea of guilty to, or plea of nolo
contendere to a felony or other crime that involves fraud or dishonesty,
	 
	 	(ii)	 	any willful action or omission by a Participant which would
constitute grounds for immediate dismissal under the employment policies of the
Company by which Participant is employed, including but not limited to
intoxication with alcohol or illegal drugs while on the premises of the
Company, or violation of sexual harassment laws or the internal sexual
harassment policy of the Company by which Participant is employed,
	 
	 	(iii)	 	Participant’s habitual neglect of duties, including but not
limited to repeated absences from work without reasonable excuse, or
	 
	 	(iv)	 	Participant’s willful and intentional material misconduct in
the performance of his duties that results in financial detriment to the
Company;






	 	 	 	provided, however, that for purposes of clauses (ii), (iii) and (iv), Cause shall
not include any one or more of the following: bad judgment, negligence or any act
or omission believed by the Participant in good faith to have been in or not opposed
to the interest of the Company (without intent of the Participant to gain, directly
or indirectly, a profit to which the Participant was not legally entitled). A
Participant who agrees to resign from his affiliation with the Company in lieu of
being terminated for Cause may be deemed to have been terminated for Cause for
purposes of this Plan.




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	 	(j)	 	“Change in Control” means the first to occur of the following events:






	 	(i)	 	Any Person is or becomes the Beneficial Owner (within the
meaning set forth in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities of the Company (not including in the securities beneficially owned
by such Person any securities acquired directly from the Company or its
Affiliates) representing 50% or more of the combined voting power of the
Company’s then outstanding securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction described in clause (x) of
paragraph (iii) of this Section 2.01(j); or
	 
	 	(ii)	 	The following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
Effective Date, constitute the Board and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors on the date hereof or
whose appointment, election or nomination for election was previously so
approved or recommended; or
	 
	 	(iii)	 	There is consummated a merger or consolidation of the Company
with any other corporation, OTHER THAN (x) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company at least 50% of the combined voting power of the securities
of the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (y) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Company or its Affiliates other than in connection with the
acquisition by the Company or its Affiliates of a business) representing 50% or
more of the combined voting power of the Company’s then outstanding securities;
or
	 
	 	(iv)	 	The stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all




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	 	 	 	or substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale.






	 	 	 	Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of integrated
transactions immediately following which the record holders of the Company’s common
stock immediately prior to such transaction or series of transactions continue to
have substantially the same proportionate ownership in an entity which owns all or
substantially all of the Company’s assets immediately following such transaction or
series of transactions.
	 
	 	(k)	 	“Code” means the Internal Revenue Code of 1986, as it may be amended from time
to time, and the rules and regulations promulgated thereunder.
	 
	 	(l)	 	“Committee” means (i) the Board, or (ii) one or more committees of the Board to
whom the Board has delegated all or part of its authority under this Plan.
	 
	 	(m)	 	“Company” means Euronet Worldwide, Inc., a Delaware corporation, and any
successor thereto.
	 
	 	(n)	 	“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise.
	 
	 	(o)	 	“Covered Employee” means an Employee that meets the definition of “covered
employee” under section 162(m)(3) of the Code, or any successor provision thereto.
	 
	 	(p)	 	“Date of Grant” or “Grant Date” means, with respect to any Award, the date as
of which such Award is granted under the Plan.
	 
	 	(q)	 	“Disabled” or “Disability” means an individual (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than 3 months
under a Company-sponsored accident and health plan. Notwithstanding the above, with
respect to an Incentive Stock Option and the period after time following a separation
from service a Holder has to exercise such Incentive Stock Option, “disabled” shall
have the same meaning as defined in Code section 22(e)(3).




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	 	(r)	 	“Effective Date” means May 18, 2006, such date being the date this Plan was
originally approved by the Company’s stockholders.
	 
	 	(s)	 	“Eligible Employees” means key employees (including, without limitations,
officers and directors who are also employees) of the Company or an Affiliate upon
whose judgment, initiative and efforts the Company is, or will be, important to the
successful conduct of its business.
	 
	 	(t)	 	“Executive Officer” means (i) the president of the Company, any vice president
of the Company in charge of a principal business unit, division or function (such as
sales, administration, or finance), any other officer who performs a policy making
function or any other person who performs similar policy making functions for the
Company and (ii) Executive Officers (as defined in part (i) of this definition) of
subsidiaries of the Company who perform policy making functions for the Company.
	 
	 	(u)	 	“Fair Market Value” means, as of any date, the value of the Stock determined in
good faith, from time to time, by the Committee in its sole discretion and the
Committee may adopt such formulas as in its opinion shall reflect the true fair market
value of such stock from time to time and may rely on such independent advice with
respect to such fair market value as the Committee shall deem appropriate. In the
event that the Shares of the Company are traded on a national securities exchange, the
Committee may determine that the Fair Market Value of the Stock shall be based upon the
last sale before or the first sale after the Grant Date, the closing price on the
trading day before or the trading day of the grant, or any other reasonable basis using
actual transactions in such Stock as reported in The Wall Street Journal and
consistently applied. The determination of Fair Market Value also may be based upon an
average selling price during a specified period that is within 30 days before or 30
days after the Grant Date, provided that the commitment to grant the stock right based
on such valuation method must be irrevocable before the beginning of the specified
period, and such valuation method must be used consistently for grants of stock rights
under the same and substantially similar programs.
	 
	 	(v)	 	“Freestanding SAR” means any SAR that is granted independently of any Option.
	 
	 	(w)	 	“Good Reason” shall mean any of the following events, which has not been either
consented to in advance by the Participant in writing or cured by the Company within a
reasonable period of time not to exceed 20 days after the Participant provides written
notice thereof: (i) the requirement that the Participant’s principal service for the
Company be performed more than 30 miles from the Participant’s primary office as of the
effective date of a Change in Control, (ii) other than as part of an across-the-board
reduction affecting all similarly-situated employees, a material reduction in the
Participant’s base compensation in effect immediately before the Change in Control;
(iii) other than as part of an across-the-board reduction affecting all
similarly-situated employees, the failure by the Company to
continue to provide the Participant with the same level of overall compensation




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	 	 	 	and benefits provided immediately before the Change in Control, or the taking of any
action by the Company which would directly or indirectly reduce any of such benefits
or deprive the Participant of any material fringe benefit; (iv) the assignment to
the Participant of duties and responsibilities materially different from those
associated with his position immediately before the Change in Control; or (v) a
material diminution or reduction, on or after a Change in Control, in the
Participant’s responsibilities or authority, including reporting responsibilities in
connection with the Participant’s service with the Company.
	 
	 	(x)	 	“Holder” means a Participant, Beneficiary or Permitted Transferee who is in
possession of an Award Agreement representing an Award that (i) in the case of a
Participant has been granted to such individual, (ii) in the case of a Beneficiary has
transferred to such person under the laws of descent and distribution or (iii) in the
case of a Permitted Transferee, has been transferred to such person as permitted by the
Committee, and such Award Agreement has not expired, been canceled or terminated.
	 
	 	(y)	 	“Incentive Stock Option” means any Option designated as such and granted in
accordance with the requirements of section 422 of the Code or any successor provisions
thereto.
	 
	 	(z)	 	“Nonqualified Stock Option” means any Option to purchase Shares that is not an
Incentive Stock Option.
	 
	 	(aa)	 	“Option” means a right to purchase Stock at a stated price for a specified
period of time. Such definition includes both Nonqualified Stock Options and Incentive
Stock Options.
	 
	 	(bb)	 	“Option Agreement” or “Option Award Agreement” means a written agreement or
instrument between the Company and a Holder evidencing an Option.
	 
	 	(cc)	 	“Option Exercise Price” means the price at which Shares subject to an Option
may be purchased, determined in accordance with Section 6.02(b).
	 
	 	(dd)	 	“Option Holder” shall have the meaning as set forth in Section 6.02. For the
avoidance of any doubt, in situations where the Option has been transferred to a
Permitted Transferee or passed to a Beneficiary in accordance with the laws of descent
and distribution, the Option Holder will not be the same person as the Holder of the
Option.
	 
	 	(ee)	 	“Participant” means a Service Provider of the Company designated by the
Committee from time to time during the term of the Plan to receive one or more Awards
under the Plan.
	 
	 	(ff)	 	“Performance Award” means any Award that will be issued or granted, or become
vested or payable, as the case may be, upon the achievement of certain





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	 	 	 	performance goals (as described in Section 17) to a Participant pursuant to Section
17.
	 
	 	(gg)	 	“Performance Period” means the period of time as specified by the Committee
over which Performance Units are to be earned.
	 
	 	(hh)	 	“Performance Shares” means an Award made pursuant to Section 9 which entitles a
Holder to receive Shares, their cash equivalent, or a combination thereof based on the
achievement of performance targets during a Performance Period.
	 
	 	(ii)	 	“Performance Units” means an Award made pursuant to Section 9 which entitles a
Holder to receive cash, Stock or a combination thereof based on the achievement of
performance targets during a Performance Period.
	 
	 	(jj)	 	“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
1934 Act and used in Sections 13(d) and 14(d) thereof, including “group” as defined in
Section 13(d) thereof.
	 
	 	(kk)	 	“Plan” means the Euronet Worldwide, Inc. 2006 Stock Incentive Plan, as set
forth in this instrument and as hereafter amended from time to time.
	 
	 	(ll)	 	“Plan Year” means each 12-month period beginning January 1 and ending the
following December 31, except that for the first year of the Plan it shall begin on the
Original Effective Date and extend to December 31 of that year.
	 
	 	(mm)	 	“Restricted Stock” means Stock granted under Section 8 that is subject those
restrictions set forth therein and the Award Agreement.
	 
	 	(nn)	 	“Restricted Stock Unit” means an Award granted under Section 8 evidencing the
Holder’s right to receive a Share (or cash payment equal to the Fair Market Value of a
Share) at some future date.
	 
	 	(oo)	 	“Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any future
regulation amending, supplementing, or superseding such regulation.
	 
	 	(pp)	 	“SAR” or “Stock Appreciation Right” means an Award, granted either alone or in
connection with an Option, that is designated as a SAR pursuant to Section 7.
	 
	 	(qq)	 	“SAR Holder” shall have the meaning as set forth in Section 7.02.
	 
	 	(rr)	 	“Section 16 Person” means a Person who is subject to obligations under section
16 of the 1934 Act with respect to transactions involving equity securities of the
Company.
	 
	 	(ss)	 	“Service Provider” means an Eligible Employee, non-employee director, officer,
or outside consultant of the Company or any Subsidiary, as well as to any
prospective director, officer, employee, or outside consultant of the Company or any
Subsidiary.




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	 	(tt)	 	“Share” means a share of Stock.
	 
	 	(uu)	 	“Stock” means authorized and issued or unissued common stock of the Company, at
such par value as may be established from time to time.
	 
	 	(vv)	 	“Subsidiary” means (i) in the case of an Incentive Stock Option a “subsidiary
corporation,” whether now or hereafter existing, as defined in section 424(f) of the
Code, and (ii) in the case of any other type of Award, in addition to a subsidiary
corporation as defined in (i), a limited liability company, partnership or other entity
in which the Company controls fifty percent (50%) or more of the voting power or equity
interests.
	 
	 	(ww)	 	“Tandem SAR” means a SAR which is granted in connection with, or related to, an
Option, and which requires forfeiture of the right to purchase an equal number of
Shares under the related Option upon the exercise of such SAR; or alternatively, which
requires the cancellation of an equal amount of SARs upon the purchase of the Shares
subject to the Option.
	 
	 	(xx)	 	“Vested Option” means any Option, or portion thereof, which is fully
exercisable by the Holder. Vested Options remain exercisable only for that period of
time as provided for under this Plan and any applicable Option Award Agreement. Once a
Vested Option is no longer exercisable after otherwise having been exercisable, the
Option shall become null and void.






	2.02	 	Gender and Number. Except when otherwise indicated by the context, the masculine gender
shall also include the feminine gender, and the definition of any term herein in the singular
shall also include the plural.





III. PLAN ADMINISTRATION





	3.01	 	Composition of Committee. The Plan shall be administered by the Committee. To the extent
the Board considers it desirable for transactions relating to Awards to be eligible to qualify
for an exemption under Rule 16b-3, the Committee shall consist of two or more directors of the
Company, all of whom qualify as “non-employee directors” within the meaning of Rule 16b-3. To
the extent the Board considers it desirable for compensation delivered pursuant to Awards to
be eligible to qualify for an exemption from the limit on tax deductibility of compensation
under section 162(m) of the Code, the Committee shall consist of two or more directors of the
Company, all of whom shall qualify as “outside directors” within the meaning of Code section
162(m).
	 
	3.02	 	Authority of Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority to:






	 	(a)	 	select the Service Providers to whom Awards may from time to time be granted
hereunder;




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	 	(b)	 	determine the type or types of Awards to be granted to eligible Service
Providers;
	 
	 	(c)	 	determine the number of Shares to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in connection with, Awards;
	 
	 	(d)	 	determine the terms and conditions of any Award;
	 
	 	(e)	 	determine whether, and to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property;
	 
	 	(f)	 	determine whether, and to what extent, and under what circumstance Awards may
be canceled, forfeited, or suspended and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended;
	 
	 	(g)	 	correct any defect, supply an omission, reconcile any inconsistency and
otherwise interpret and administer the Plan and any instrument or Award Agreement
relating to the Plan or any Award hereunder;
	 
	 	(h)	 	accelerate the exercisability of any Option, the vesting of any Restricted
Shares or otherwise remove any restriction on any Award such that the Award becomes
fully payable;
	 
	 	(i)	 	modify and amend the Plan, establish, amend, suspend, or waive such rules,
regulations and procedures of the Plan, and appoint such agents as it shall deem
appropriate for the proper administration of the Plan; and
	 
	 	(j)	 	make any other determination and take any other action that the Committee deems
necessary or desirable for the administration of the Plan.






	3.03	 	Committee Delegation. The Committee may delegate to any member of the Board or committee of
Board members such of its powers as it deems appropriate, including the power to sub-delegate,
except that only a member of the Board (or a committee thereof) may grant Awards from time to
time to specified categories of Service Providers in amounts and on terms to be specified by
the Board; provided that no such grants shall be made other than by the Board or the Committee
to individuals who are then Section 16 Persons or other than by the Committee to individuals
who are then or are deemed likely to become a “covered employee” within the meaning of Code
section 162(m). A majority of the members of the Committee may determine its actions and fix
the time and place of its meetings.
	 
	3.04	 	Determination Under the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, adjustments, interpretations, and other decisions under or with
respect to the Plan, any Award or Award Agreement shall be within the sole
discretion of the Committee, may be made at any
time and shall be final, conclusive, and binding
upon all persons, including the Company, any
Participant, any Holder, and any




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	 	 	stockholder. No member of the Committee shall be liable for any
action, determination or interpretation made in
good faith, and all members of the Committee
shall, in addition to their rights as directors,
be fully protected by the Company with respect to
any such action, determination or interpretation.





IV. STOCK SUBJECT TO THE PLAN



	4.01	 	Number of Shares. Subject to adjustment as provided in Section 4.03 and subject to the
maximum amount of Shares that may be granted to an individual in a calendar year as set forth
in Section 5.05, no more than a total of Four Million (4,000,000) Shares are authorized for
issuance under the Plan (the “Maximum Limitation”) in accordance with the provisions of the
Plan and subject to such restrictions or other provisions as the Committee may from time to
time deem necessary. Any Shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares or treasury shares. The Shares may be divided among the various
Plan components as the Committee shall determine; provided, however, the maximum number of
Shares that may be issued pursuant to Incentive Stock Options shall be the Maximum Limitation.
Shares that are subject to an underlying Award and Shares that are issued pursuant to the
exercise of an Award shall be applied to reduce the maximum number of Shares remaining
available for use under the Plan. The Company shall at all times during the term of the Plan
and while any Awards are outstanding retain as authorized and unissued Stock, or as treasury
Stock, at least the number of Shares from time to time required under the provisions of the
Plan, or otherwise assure itself of its ability to perform its obligations hereunder.
	 
	4.02	 	Unused and Forfeited Stock. Any Shares that are subject to an Award under this Plan that are
not used because the terms and conditions of the Award are not met, including any Shares that
are subject to an Award that expires or is terminated for any reason, any Shares that are used
for full or partial payment of the purchase price of Shares with respect to which an Option is
exercised and any Shares retained by the Company pursuant to Section 16.02 shall automatically
become available for use under the Plan. Notwithstanding the foregoing, any Shares used for
full or partial payment of the purchase price of the Shares with respect to which an Option is
exercised and any Shares retained by the Company pursuant to Section 16.02 that were
originally Incentive Stock Option Shares must still be considered as having been granted for
purposes of determining whether the Share limitation provided for in Section 4.01 has been
reached for purposes of Incentive Stock Option grants.
	 
	4.03	 	Adjustment in Authorized Shares. If, without the receipt of consideration therefore by the
Company, the Company shall at any time increase or decrease the number of its outstanding
Shares or change in any way the rights and privileges of such Shares such as, but not limited
to, the payment of a stock dividend or any other distribution upon such Shares payable in
Stock, or through a stock split, subdivision, consolidation, combination, reclassification or
recapitalization involving the Stock, such that an adjustment is necessary in order to prevent
dilution or enlargement of the benefits or
potential benefits intended to be made available
under the Plan, then in relation to the Shares
that are affected by one or more of the above
events, the numbers, rights and





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	 	 	privileges of (i)
the Shares as to which Awards may be granted under
the Plan, (ii) the exercise or purchase price of
each outstanding Award, and (iii) the Shares then
included in each outstanding Award granted
hereunder, shall be increased, decreased or
changed in like manner, as if the Shares
underlying the Award had been issued and
outstanding, fully paid and non assessable at the
time of such occurrence. The manner in which
Awards are adjusted pursuant to this Section 4.03
is to be determined by the Board or the Committee;
provided that all adjustments must be determined
by the Board or Committee in good faith, and must
be effectuated so as to preserve the value that
any Participant has in outstanding Awards as of
the time of the event giving rise to any potential
dilution or enlargement of rights.
	 
	4.04	 	General Adjustment Rules.






	 	(a)	 	If any adjustment or substitution provided for in this Section 4 shall result
in the creation of a fractional Share under any Award, such fractional Share shall be
rounded to the nearest whole Share and fractional Shares shall not be issued.
	 
	 	(b)	 	In the case of any such substitution or adjustment affecting an Option or a SAR
(including a Nonqualified Stock Option) such substitution or adjustments shall be made
in a manner that is in accordance with the substitution and assumption rules set forth
in Treasury Regulations 1.424-1 and the applicable guidance relating to Code section
409A.





V. PARTICIPATION





	5.01	 	Basis of Grant. Participants in the Plan shall be those Service Providers, who, in the
judgment of the Committee, are performing, or during the term of their incentive arrangement
will perform, important services in the management, operation and development of the Company,
and significantly contribute, or are expected to significantly contribute, to the achievement
of long-term corporate economic objectives. Participants may also include Service Providers
who, in the Committee’s discretion, are entitled to receive Awards as an inducement to perform
services for the Company or any Subsidiary; provided that an Award Agreement may contain terms
and conditions providing for the termination of such inducement Award in the event that such
Service Provider is not retained to perform services for the Company with the period specified
therein.
	 
	5.02	 	Types of Grants; Limits. Participants may be granted from time to time one or more Awards;
provided, however, that the grant of each such Award shall be separately approved by the
Committee or its designee, and receipt of one such Award shall not result in the automatic
receipt of any other Award. Written notice shall be given to such Person, specifying the
terms, conditions, right and duties related to such Award. Under no circumstance shall
Incentive Stock Options be granted to (i) non-employee directors, (ii)
Consultants, (iii) any prospective non-employee director, employee or consultant, or (iv)
any person not permitted to receive Incentive Stock Options under the Code.




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	5.03	 	Award Agreements. Each Participant shall enter into an Award Agreement(s) with the Company,
in such form as the Committee shall determine and which is consistent with the provisions of
the Plan, specifying such terms, conditions, rights and duties. Unless otherwise explicitly
stated in the Award Agreement, Awards shall be deemed to be granted as of the date specified
in the grant resolution of the Committee, which date shall be the date of any related
agreement(s) with the Participant. Unless explicitly provided for in a particular Award
Agreement that the terms of the Plan are being superseded, in the event of any inconsistency
between the provisions of the Plan and any such Award Agreement(s) entered into hereunder, the
provisions of the Plan shall govern.
	 
	5.04	 	Restrictive Covenants. The Committee may, in its sole and absolute discretion, place certain
restrictive covenants in an Award Agreement requiring the Participant to agree to refrain from
certain actions. Such Restrictive Covenants, if contained in the Award Agreement, will be
binding on the Participant.
	 
	5.05	 	Maximum Annual Award. The maximum number of Shares with respect to which an Award or Awards
may be granted to any Participant in any one taxable year of the Company (the “Maximum Annual
Participant Award”) shall not exceed Four Hundred Thousand (400,000) Shares (increased,
proportionately, in the event of any stock split or stock dividend with respect to the
Shares). The Maximum Annual Participant Award shall include any Bonus Shares that are paid to
a Participant in that taxable year pursuant to the achievement of one or more established and
objective performance goals under the Company’s Executive Annual Incentive Plan or pursuant to
any other Company-sponsored compensation plan or program. If an Option is in tandem with a
SAR, such that the exercise of the Option or SAR with respect to a Share cancels the tandem
SAR or Option right, respectively, with respect to each Share, the tandem Option and SAR
rights with respect to each Share shall be counted as covering but one Share for purposes of
the Maximum Annual Participant Award.





VI. STOCK OPTIONS





	6.01	 	Grant of Options. A Participant may be granted one or more Options. The Committee in its
sole discretion shall designate whether an Option is an Incentive Stock Option or a
Nonqualified Stock Option. The Committee may grant both an Incentive Stock Option and a
Nonqualified Stock Option to the same Participant at the same time or at different times.
Incentive Stock Options and Nonqualified Stock Options, whether granted at the same or
different times, shall be deemed to have been awarded in separate grants, shall be clearly
identified, and in no event shall the exercise of one Option affect the right to exercise any
other Option or affect the number of Shares for which any other Option may be exercised.
	 
	6.02	 	Option Agreements. Each Option granted under the Plan shall be evidenced by a written Option
Award Agreement which shall be entered into by the Company and the Participant
to whom the Option is granted (the “Option Holder”), and which shall contain, or be subject
to, the following terms and conditions, as well as such other terms and conditions not
inconsistent therewith, as the Committee may consider appropriate in each case.




12









 












	 	(a)	 	Number of Shares. Each Option Award Agreement shall state that it covers a
specified number of Shares, as determined by the Committee. To the extent that the
aggregate Fair Market Value of Shares with respect to which Options designated as
Incentive Stock Options are exercisable for the first time by any Option Holder during
any calendar year exceeds $100,000 or, if different, the maximum limitation in effect
at the time of grant under section 422(d) of the Code, or any successor provision, such
Options in excess of such limit shall be treated as Nonqualified Stock Options. The
foregoing shall be applied by taking Options into account in the order in which they
were granted. For the purposes of the foregoing, the Fair Market Value of any Share
shall be determined as of the time the Option with respect to such Share is granted. In
the event the foregoing results in a portion of an Option designated as an Incentive
Stock Option exceeding the $100,000 limitation, only such excess shall be treated as a
Nonqualified Stock Option.
	 
	 	(b)	 	Price. Each Option Award Agreement shall state the Option Exercise Price at
which each Share covered by an Option may be purchased. Such Option Exercise Price
shall be determined in each case by the Committee; provided, however, that the Option
Exercise Price for each Share covered by an Incentive Stock Option shall not be less
than the Fair Market Value of the Stock on the Option’s Grant Date and provided further
that the Incentive Stock Option granted to an Eligible Employee who then owns stock
possessing 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 must be at least
110% of the Fair Market Value of the Stock subject to the Incentive Stock Option on the
Option’s Grant Date.
	 
	 	(c)	 	Duration of Options. Each Option Award Agreement shall state the period of
time, determined by the Committee, within which the Option may be exercised by the
Option Holder (the “Option Period”). The Option Period must expire, in all cases, not
more than ten years from the Option’s Grant Date; provided, however, that the Option
Period of an Incentive Stock Option granted to an Eligible Employee who then owns Stock
possessing more than 10% of the total combined voting power of all classes of Stock of
the Company must expire not more than five years from the Option’s Grant Date. Each
Option Award Agreement shall also state the periods of time, if any, as determined by
the Committee, when incremental portions of each Option shall become exercisable. If
any Option or portion thereof is not exercised during its Option Period, such
unexercised portion shall be deemed to have been forfeited and have no further force or
effect. Due to Code section 409A’s treatment of an extension or renewal of an Option as
the granting of a new Option, the Committee shall not extend or renew the term of an
Option without the consent of the Holder.
	 
	 	(d)	 	Termination of Service, Death, Disability, etc. Each Option Agreement shall
state the period of time, if any, determined by the Committee, within which the Vested
Option may be exercised after an Option Holder ceases to be a Service Provider on
account of the Participant’s death, Disability, voluntary resignation, removal




13









 






	 	 	 	from the Board or the Company having terminated such Option Holder’s employment with or without
Cause. Unless an Option Award Agreement provides otherwise, a Participant’s change in
status between serving as an employee and/or director will not be considered a
cessation of the Participant as a Service Provider for purposes of any Option
expiration period under the Plan.
	 
	 	(e)	 	Transferability. Except as otherwise determined by the Committee, Options
shall not be transferable by the Option Holder except by will or pursuant to the laws
of descent and distribution. Each Vested Option shall be exercisable during the Option
Holder’s lifetime only by him or her, or in the event of Disability or incapacity, by
his or her guardian or legal representative. Shares issuable pursuant to any Option
shall be delivered only to or for the account of the Option Holder, or in the event of
Disability or incapacity, to his or her guardian or legal representative.
	 
	 	(f)	 	Exercise, Payments, etc.






	 	(i)	 	Unless otherwise provided in the Option Award Agreement, each
Vested Option may be exercised by delivery to the Corporate Secretary of the
Company a written notice specifying the number of Shares with respect to which
such Option is exercised and payment of the Option Exercise Price. Such notice
shall be in a form satisfactory to the Committee or its designee and shall
specify the particular Vested Option that is being exercised and the number of
Shares with respect to which the Vested Option is being exercised. The exercise
of the Vested Option shall be deemed effective upon receipt of such notice by
the Corporate Secretary and payment to the Company. The purchase of such Stock
shall take place at the principal offices of the Company upon delivery of such
notice, at which time the purchase price of the Stock shall be paid in full by
any of the methods or any combination of the methods set forth in (ii) below.
	 
	 	(ii)	 	The Option Exercise Price may be paid by any of the following
methods:






	 	1.	 	Cash or Certified bank check;
	 
	 	2.	 	By delivery to the Company of a number of
Shares then owned by the Holder, the Fair Market Value of which equals
the purchase price of the Stock purchased pursuant to the Vested
Option,; provided, however, that Shares used for this purpose must have
been held by the Holder for such minimum period of time as may be
established from time to time by the Committee; and provided further
that the Fair Market Value of any Shares delivered in
payment of the purchase price upon exercise of the Options shall be
the Fair Market Value as of the exercise date, which shall be the
date of delivery of the certificates for the Stock used as payment of
the Option Exercise Price.




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	 	 	 	In lieu of actually surrendering to the Company a number of Shares
then owned by the Holder, the Committee may, in its discretion permit
the Holder to submit to the Company a statement affirming ownership
by the Holder of such number of Shares and request that such Shares,
although not actually surrendered, be deemed to have been surrendered
by the Holder as payment of the exercise price.
	 
	 	3.	 	For any Holder other than an Executive Officer
or except as otherwise prohibited by the Committee, by payment through
a broker in accordance with procedures permitted by Regulation T of the
Federal Reserve Board.
	 
	 	4.	 	For any Nonqualified Stock Option, by a “net
exercise” arrangement pursuant to which the Company will not require a
payment of the Option Exercise Price but will reduce the number of
Shares of Stock upon the exercise by the largest number of whole shares
that has a Fair Market Value on the date of exercise that does not
exceed the aggregate Option Exercise Price.
	 
	 	5.	 	Any combination of the consideration provided
in the foregoing subsections (1), (2), (3) and (4).






	 	(iii)	 	The Company shall not guarantee a third-party loan obtained by
a Holder to pay part or the entire Option Exercise Price of the Shares.






	 	(g)	 	Date of Grant. An option shall be considered as having been granted on the
date the Committee or its delegate completes the corporate action necessary to create a
legally binding right constituting the option, as set forth under the applicable
Treasury Regulations issued under Section 409A.
	 
	 	(h)	 	Withholding.






	 	(i)	 	Nonqualified Stock Options. Upon any exercise of a
Nonqualified Stock Options, the Option Holder shall make appropriate
arrangements with the Company to provide for the minimum amount of additional
withholding required by applicable federal and state income tax and payroll
laws, including payment of such taxes through delivery of Stock or by
withholding Stock to be issued under the Option, as provided in Section 16.
	 
	 	(ii)	 	Incentive Stock Options. In the event that an Option Holder
makes a disposition (as defined in section 424(c) of the Code) of any Stock
acquired pursuant to the exercise of an Incentive Stock Option prior to the
later of (a) the expiration of two years from the date on which the
Incentive Stock Option was granted or (b) the expiration of one year from
the date on which the Option was exercised, the Participant shall send




15









 






	 	 	 	written notice to the Company at its principal office (Attention: Corporate
Secretary) of the date of such disposition, the number of shares disposed
of, the amount of proceeds received from such disposition, and any other
information relating to such disposition as the Company may reasonably
request. The Option Holder shall, in the event of such a disposition, make
appropriate arrangements with the Company to provide for the amount of
additional withholding, if any, required by applicable Federal and state
income tax laws.






	 	(i)	 	Adjustment of Options. Subject to the limitations set forth below and those
contained in Sections 6, 13.04 and 15, the Committee may make any adjustment in the
Option Exercise Price, the number of Shares subject to, or the terms of, an outstanding
Option and a subsequent granting of an Option by amendment or by substitution of an
outstanding Option. Such amendment, substitution, or re-grant may result in terms and
conditions (including Option Exercise Price, number of Shares covered, vesting schedule
or exercise period) that differ from the terms and conditions of the original Option.
The Committee may not, however, adversely affect the rights of any Option Holder to
previously granted Options without the consent of such Option Holder. If such action
is affected by the amendment, the effective date of such amendment shall be the date of
the original grant. Any adjustment, modification, extension or renewal of an Option
shall be effected such that the Option is either exempt from, or is compliant with,
Code section 409A.






	6.03	 	Stockholder Privileges. No Holder shall have any rights as a stockholder with respect to any
Shares covered by an Option until the Holder becomes the holder of record of such Stock, and
no adjustments shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Holder becomes the holder of record of such
Stock, except as provided in Section 4.





VII. STOCK APPRECIATION RIGHTS





	7.01	 	Grant of SARs. Subject to the terms and conditions of this Plan, a SAR may be granted to a
Participant at any time and from time to time as shall be determined by the Committee in its
sole discretion. The Committee may grant Freestanding SARs or Tandem SARs, or any combination
thereof.






	 	(a)	 	Number of Shares. The Committee shall have complete discretion to determine
the number of SARs granted to any Participant, subject to the limitations imposed in
this Plan and by applicable law.
	 
	 	(b)	 	Exercise Price and Other Terms. The Committee, subject to the provisions of
this Plan, shall have complete discretion to determine the terms and conditions of
SARs granted under this Plan. The exercise price per Share of Tandem SARs shall
equal the exercise price per Share of the related Option. In no event shall a SAR
granted to a Section 16 Person become exercisable until at least six (6)





16








 






	 	 	 	months after the Date of Grant or such shorter period as may be permissible while
maintaining compliance with Rule 16b-3.






	7.02	 	SAR Award Agreement. Each SAR granted under the Plan shall be evidenced by a written SAR
Award Agreement which shall be entered into by the Company and the Participant to whom the SAR
is granted (the “SAR Holder”), and which shall specify the exercise price per share, the terms
of the SAR, the conditions of exercise, and such other terms and conditions as the Committee
in its sole discretion shall determine.
	 
	7.03	 	Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject
to the related Option upon the surrender of the right to exercise the equivalent portion of
the related Option. A Tandem SAR may be exercised only with respect to the Shares for which
its related Option is then exercisable. With respect to a Tandem SAR granted in connection
with an Incentive Stock Option: (a) the Tandem SAR shall expire no later than the expiration
of the underlying Incentive Stock Option; (b) the value of the payout with respect to the
Tandem SAR shall be for no more than one hundred percent (100%) of the difference between the
Exercise Price per Share of the underlying Incentive Stock Option and the Fair Market Value
per Share of the Shares subject to the underlying Incentive Stock Option at the time the
Tandem SAR is exercised; and (c) the Tandem SAR shall be exercisable only when the Fair Market
Value per Share of the Shares subject to the Incentive Stock Option exceeds the per share
Option Price per Share of the Incentive Stock Option.
	 
	7.04	 	Exercise of Freestanding SARs. Freestanding SARs shall be exercisable on such terms and
conditions as the Committee in its sole discretion shall determine; provided, however, that no
Freestanding SAR granted to a Section 16 Person shall be exercisable until at least six (6)
months after the Date of Grant or such shorter period as may be permissible while maintaining
compliance with Rule 16b-3.
	 
	7.05	 	Expiration of SARs. A SAR granted under this Plan shall expire on the date set forth in the
SAR Award Agreement, which date shall be determined by the Committee in its sole discretion.
Unless otherwise specifically provided for in the SAR Award Agreement, a Freestanding SAR
granted under this Plan shall terminate according to the same rules under which a Nonqualified
Stock Option would terminate in the event of a SAR Holder’s termination of employment, death
or Disability as provided for in the SAR Award Agreement. Unless otherwise specifically
provided for in the SAR Award agreement, a Tandem SAR granted under this Plan shall be
exercisable at such time or times and only to the extent that the related Option is
exercisable. The Tandem SAR shall terminate and no longer be exercisable upon the termination
or exercise of the related Options, except that Tandem SARs 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 SARs.
	 
	7.06	 	Payment of SAR Amount. Upon exercise of a SAR, a Holder shall be entitled to receive payment
from the Company in an amount determined by multiplying (i) the positive difference between
the Fair Market Value of a Share on the date of exercise over the exercise price per Share by
(ii) the number of Shares with respect to which the SAR is




17









 






	 	 	exercised. The payment upon a SAR
exercise may be in whole Shares of equivalent value, cash, or a combination of whole Shares
and cash. Fractional Shares shall be rounded down to the nearest whole Share.





VIII. AWARDS OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS





	8.01	 	Restricted Stock Awards Granted by Committee. Coincident with or following designation for
participation in the Plan and subject to the terms and provisions of the Plan, the Committee,
at any time and from time to time, may grant Restricted Stock to any Service Provider in such
amounts as the Committee shall determine.
	 
	8.02	 	Restricted Stock Unit Awards Granted by Committee. Coincident with or following designation
for participation in the Plan and subject to the terms and provisions of the Plan, the
Committee may grant a Service Provider Restricted Stock Units, in connection with or separate
from a grant of Restricted Stock. Upon the vesting of Restricted Stock Units, the Holder
shall be entitled to receive the full value of the Restricted Stock Units payable in either
Shares or cash.
	 
	8.03	 	Restrictions. A Holder’s right to retain Shares of Restricted Stock or be paid with respect
to Restricted Stock Units shall be subject to such restrictions, including but not limited to,
him or her continuing to perform as a Service Provider for a restriction period specified by
the Committee, or the attainment of specified performance goals and objectives, as may be
established by the Committee with respect to such Award. The Committee may in its sole
discretion require different periods of service or different performance goals and objectives
with respect to (i) different Holders, (ii) different Restricted Stock or Restricted Stock
Unit Awards, or (iii) separate, designated portions of the Shares constituting a Restricted
Stock Award. Any grant of Restricted Stock or Restricted Stock Units shall contain terms such
that the Award is either exempt from Code section 409A or complies with such section.
	 
	8.04	 	Privileges of a Stockholder, Transferability. Unless otherwise provided in the Award
Agreement, a Participant shall have all voting, dividend, liquidation and other rights with
respect to Shares of Restricted Stock, provided however that any dividends paid on Shares of
Restricted Stock prior to such Shares becoming vested shall be held in escrow by the Company
and subject to the same restrictions on transferability and forfeitability as the underlying
Shares of Restricted Stock. Any voting, dividend, liquidation or other rights shall accrue to
the benefit of a Holder only with respect to Shares of Restricted Stock held by, or for the
benefit of, the Holder on the record date of any such dividend or voting date. A Participant’s
right to sell, encumber or otherwise transfer such Restricted Stock shall, in addition to the
restrictions otherwise provided for in the Award Agreement, be subject to the limitations of
Section 12.02 hereof. The Committee may determine that a Holder of Restricted Stock Units is
entitled to receive dividend
equivalent payments on such units. If the Committee determines that Restricted Stock Units
shall receive dividend equivalent payments, such feature will be specified in the applicable
Award Agreement. Restricted Stock Units shall not have any voting rights.




18









 






	8.05	 	Enforcement of Restrictions. The Committee may in its sole discretion require one or more of
the following methods of enforcing the restrictions referred to in Sections 8.03 and 8.04:






	 	(a)	 	placing a legend on the stock certificates, or the Restricted Stock Unit Award
Agreement, as applicable, referring to restrictions;
	 
	 	(b)	 	requiring the Holder to keep the stock certificates, duly endorsed, in the
custody of the Company while the restrictions remain in effect;
	 
	 	(c)	 	requiring that the stock certificates, duly endorsed, be held in the custody of
a third party nominee selected by the Company who will hold such Shares of Restricted
Stock on behalf of the Holder while the restrictions remain in effect; or
	 
	 	(d)	 	inserting a provision into the Restricted Stock Award Agreement prohibiting
assignment of such Award Agreement until the terms and conditions or restrictions
contained therein have been satisfied or released, as applicable.






	8.06	 	Termination of Service, Death, Disability, etc. Except as otherwise provided in an Award
Agreement, in the event of the death or Disability of a Participant, all service period and
other restrictions applicable to Restricted Stock Awards then held by him or her shall lapse,
and such Awards shall become fully nonforfeitable. Subject to Section 11 and except as
otherwise provided in an Award Agreement, in the event a Participant ceases to be a Service
Provider for any other reason, any Restricted Stock Awards as to which the service period or
other vesting conditions have not been satisfied shall be forfeited.





IX. PERFORMANCE SHARES AND PERFORMANCE UNITS





	9.01	 	Awards Granted by Committee. Coincident with or following designation for participation in
the Plan, a Participant may be granted Performance Shares or Performance Units.
	 
	9.02	 	Amount of Award. The Committee shall establish a maximum amount of a Holder’s Award, which
amount shall be denominated in Shares in the case of Performance Shares or in dollars in the
case of Performance Units.
	 
	9.03	 	Communication of Award. Written notice of the maximum amount of a Holder’s Award and the
Performance Period determined by Committee shall be given to a Participant as soon as
practicable after approval of the Award by the Committee.
	 
	9.04	 	Amount of Award Payable. The Committee shall establish maximum and minimum performance
targets to be achieved during the applicable Performance Period. Performance targets
established by the Committee shall relate to corporate, group, unit or
individual performance and may be established in terms of (i) specified levels of earnings
per share from continuing operations, (ii) operating income, (iii) revenues, (iv) gross
margin, (v) return on operating assets (whether all assets or designated assets), (vi)




19









 






	 	 	return on equity, (vii) economic value added, (viii) stock price appreciation, (ix) total
stockholder return (measured in terms of stock price appreciation and dividend growth), (x)
net income, (xi) debt reduction, (xii) cost control, or (xiii) such other measures or
standards determined by the Committee. Multiple performance targets may be used and the
components of multiple performance targets may be given the same or different weighting in
determining the amount of an Award earned, and may relate to absolute performance or
relative performance measured against other groups, units, individual or entities.
Achievement of the maximum performance target shall entitle the Holder to payment (subject
to Sections 9.05, 9.06 and 9.07) at the full or maximum amount specified with respect to the
Award: provided, however, that notwithstanding any other provisions of this Plan, in the
case of an Award of Performance Shares the Committee in its discretion may establish an
upper limit on the amount payable (whether in cash or Stock) as a result of the achievement
of the maximum performance target. The Committee may also establish that a portion of a full
or maximum amount of a Holder’s Award will be paid (subject to Section 9.05, 9.06 and 9.07)
for performance which exceeds the minimum performance target but falls below the maximum
performance target applicable to such Award.
	 
	9.05	 	Adjustments. At any time prior to payment of a Performance Share or Performance Unit Award,
the Committee may adjust previously established performance targets or other terms and
conditions to reflect events such as changes in law, regulations, or accounting practice, or
mergers acquisitions or divestitures.
	 
	9.06	 	Payment of Awards. Following the conclusion of each Performance Period, the Committee shall
determine the extent to which performance targets have been attained, and the satisfaction of
any other terms and conditions with respect to an Award relating to such Performance Period.
The Committee shall determine what, if any, payment is due with respect to an Award and
whether such payment shall be made in cash, Stock or some combination, as determined by the
Committee. Payment shall be made in a lump sum, during the calendar year that first follows
the end of the calendar year in which the applicable Performance Period ends.
	 
	9.07	 	Termination of Employment. If a Participant ceases to be a Service Provider for any reason
other than having been terminated for Cause after the end of a Performance Period yet before
receiving payment as provided for in Section 9.06, the Holder (or the Holder’s Beneficiaries)
shall be entitled to receive the full amount of such payment. If a Holder ceases to be a
Service Provider before the end of a Performance Period by reason of his or her death or
Disability, the Performance Period for such Holder for the purpose of determining the amount
of the Award payable shall end at the end of the calendar quarter immediately preceding the
date on which such Holder ceased to be a Service Provider. The amount of an Award payable to a
Holder to whom the preceding sentence is applicable shall be paid in a lump sum, during the
calendar year that first follows the end of the calendar year in which the applicable
Performance Period would have ended but
for the Holder’s cessation as a Service Provider and shall be that fraction of the Award
computed pursuant to the preceding sentence the numerator of which is the number of calendar
quarters during the Performance Period during all of which said Holder was a




20









 






	 	 	Service
Provider and the denominator of which is the number of full calendar quarters in the
Performance Period. In the event a Holder is terminated as a Service Provider for Cause,
either before the end of the Performance Period or after the end of the Performance Period
but prior to the amount of the Award having been paid, the Holder’s participation in the
Plan shall cease, all outstanding Awards of Performance Shares or Performance Units to such
Participant and any right to receive the payment for any Awards (whether or not any
Performance Period has been completed) shall be canceled.





X. BONUS SHARES



Subject to the terms of the Plan, the Committee may grant Bonus Shares to any Participant in such
amount and upon such terms and at any time and from time to time as shall be determined by the
Committee. The Committee may grant such Bonus Shares in connection with or pursuant to another
Company-sponsored compensation plan or program.




XI. REORGANIZATION, CHANGE IN CONTROL OR LIQUIDATION





	11.01	 	Except as otherwise provided in an Award Agreement or other agreement approved by the
Committee to which any Participant is a party, in the event that within the period commencing
on a Change in Control and ending on the first anniversary of the Change in Control, a
Participant resigns for Good Reason or the Company terminates the Participant’s employment
other than for cause, each Option, share of Restricted Stock and/or other Award shall without
regard to any vesting schedule, restriction or performance target, automatically become fully
exercisable, fully vested or fully payable, as the case may be, as of the date of such
termination of employment; provided, however, to the extent required by Code section 409A, if
the Participant was a “specified employee” as defined under Code section 409A as of the time
of such Participant’s separation from service, no share of Restricted Stock or other Award
shall become payable until six months and one day from the effective date of such
Participant’s separation from service.
	 
	11.02	 	In addition to the foregoing, in the event the Company undergoes a Change in Control or in
the event of a corporate merger, consolidation, major acquisition of property (or stock),
separation, reorganization or liquidation in which the Company is a party and in which a
Change in Control does not occur, the Committee, or the board of directors of any corporation
assuming the obligations of the Company, shall have the full power and discretion to take any
one or more of the following actions:






	 	(a)	 	Without reducing the economic value of outstanding Awards, prescribe and amend
the terms and conditions for the exercise of, or settlement of, outstanding Awards
granted hereunder;
	 
	 	(b)	 	Remove restrictions on Restricted Stock, Restricted Stock Units or, as
applicable, Performance Award;




21









 






	 	(c)	 	Provide that Options or SARs granted hereunder must be exercised in connection
with the closing of such transactions, and that if not so exercised such Options or
SARs will expire; or
	 
	 	(d)	 	Cause any Award then outstanding to be assumed, or new rights of equivalent
economic value substituted therefore, by the acquiring or surviving corporation.






	 	 	Any such determinations by the Committee may be made generally with respect to all
Participants, or may be made on a case-by-case basis with respect to particular
Participants. Notwithstanding the foregoing, any transaction undertaken for the purpose of
reincorporating the Company under the laws of another jurisdiction, if such transaction does
not materially affect the beneficial ownership of the Company’s Shares, such transaction
shall not constitute a merger, consolidation, major acquisition of property for stock,
separation, reorganization, liquidation, or Change in Control.





XII. RIGHTS OF EMPLOYEES; PARTICIPANTS





	12.01	 	Employment. Nothing contained in the Plan or in any Award granted under the Plan shall
confer upon any Participant any right with respect to the continuation of his or her services
as a Service Provider or interfere in any way with the right of the Company, subject to the
terms of any separate employment or consulting agreement to the contrary, at any time to
terminate such services or to increase or decrease the compensation of the Participant from
the rate in existence at the time of the grant of an Award. Whether an authorized leave of
absence, or absence in military or government service, shall constitute a termination of
Participant’s services as a Service Provider shall be determined by the Committee at the time.
	 
	12.02	 	Nontransferability. Except as provided in Section 12.03, no right or interest of any Holder
in an Award granted pursuant to the Plan shall be assignable or transferable during the
lifetime of the Participant, either voluntarily or involuntarily, or be subjected to any lien,
directly or indirectly, by operation of law, or otherwise, including execution, levy,
garnishment, attachment, pledge or bankruptcy. In the event of a Participant’s death, a
Holder’s rights and interests in all Awards shall, to the extent not otherwise prohibited
hereunder, be transferable by testamentary will or the laws of descent and distribution, and
payment of any amounts due under the Plan shall be made to, and exercise of any Options or
SARs may be made by, the Holder’s legal representatives, heirs or legatees. If, in the opinion
of the Committee, a person entitled to payments or to exercise rights with respect to the Plan
is disabled from caring for his or her affairs because of a mental condition, physical
condition or age, payment due such person may be made to, and such rights shall be exercised
by, such person’s guardian, conservator, or other legal personal representative upon
furnishing the Committee with evidence satisfactory to the Committee of such status.
“Transfers” shall not be deemed to include transfers to the Company or “cashless exercise”
procedures with third parties who provide financing for
the purpose of (or who otherwise facilitate) the exercise of Awards consistent with
applicable laws and the authorization of the Committee.




22









 






	12.03	 	Permitted Transfers. Pursuant to conditions and procedures established by the Committee
from time to time, the Committee may permit Awards to be transferred to, exercised by and paid
to certain persons or entities related to a Participant, including but not limited to members
of the Participant’s immediate family, charitable institutions, or trusts or other entities
whose beneficiaries or beneficial owners are members of the Participant’s immediate family
and/or charitable institutions (a “Permitted Transferee”). In the case of initial Awards, at
the request of the Participant, the Committee may permit the naming of the related person or
entity as the Award recipient. Any permitted transfer shall be subject to the condition that
the Committee receive evidence satisfactory to it that the transfer is being made for estate
and/or tax planning purposes on a gratuitous or donative basis and without consideration
(other than nominal consideration). Notwithstanding the foregoing, Incentive Stock Options
shall only be transferable to the extent permitted in section 422 of the Code, or such
successor provision thereto, and the treasury regulations thereunder.





XIII. GENERAL RESTRICTIONS





	13.01	 	Investment Representations. The Company may require any person to whom an Option or other
Award is granted, as a condition of exercising such Option or receiving Stock under the Award,
to give written assurances in substance and form satisfactory to the Company and its counsel
to the effect that such person is acquiring the Stock subject to the Option or the Award for
his own account for investment and not with any present intention of selling or otherwise
distributing the same, and to such other effects as the Company deems necessary or appropriate
in order to comply with federal and applicable state securities laws. Legends evidencing such
restrictions may be placed on the certificates evidencing the Stock.
	 
	13.02	 	Compliance with Securities Laws.






	 	(a)	 	Each Award shall be subject to the requirement that, if at any time counsel to
the Company shall determine that the listing, registration or qualification of the
Shares subject to such Award upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, is necessary as
a condition of, or in connection with, the issuance or purchase of Shares thereunder,
such Award may not be accepted or exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or obtained
on conditions acceptable to the Committee. Nothing herein shall be deemed to require
the Company to apply for or to obtain such listing, registration or qualification.
	 
	 	(b)	 	Each Holder who is a director or an Executive Officer is restricted from taking
any action with respect to any Award if such action would result in a (i) violation of
Section 306 of the Sarbanes-Oxley Act of 2002, and the regulations
promulgated thereunder, whether or not such law and regulations are applicable to
the Company, or (ii) any policies adopted by the Company restricting transactions in
the Stock.




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	13.03	 	Stock Restriction Agreement. The Committee may provide that Shares issuable upon the
exercise of an Option shall, under certain conditions, be subject to restrictions whereby the
Company has (i) a right of first refusal with respect to such shares, (ii) specific rights or
limitations with respect to the Participant’s ability to vote such shares, or (iii) a right or
obligation to repurchase all or a portion of such shares, which restrictions may survive a
Participant’s cessation or termination as a Service Provider.
	 
	13.04	 	Prohibition on Repricings. Except in connection with a corporate transaction involving the
Company (including, without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, or exchange of shares), the terms of outstanding Options or SARs may not be
amended to reduce the exercise price of outstanding Options or SARs or cancel outstanding
Options or SARs in exchange for other Options or SARs with an exercise price that is less than
the exercise price of the original Options or SARs without stockholder approval.





XIV. OTHER EMPLOYEE BENEFITS



The amount of any compensation deemed to be received by a Participant as a result of the exercise
of an Option or the grant, payment or vesting of any other Award shall not constitute “earnings”
with respect to which any other benefits of such Participant are determined, including without
limitation benefits under (a) any pension, profit sharing, life insurance or salary continuation
plan or other employee benefit plan of the Company or (b) any agreement between the Company and the
Participant, except as such plan or agreement shall otherwise expressly provide.




XV. PLAN AMENDMENT, MODIFICATION AND TERMINATION





	15.01	 	Amendment, Modification, and Termination. The Board may at any time terminate, and from
time to time may amend or modify, the Plan; provided, however, that no amendment or
modification may become effective without approval of the amendment or modification by the
stockholders if stockholder approval is required to enable the Plan to satisfy any applicable
statutory or regulatory requirements, to comply with the requirements for listing on any
exchange where the Shares are listed, or if the Company, on the advice of counsel, determines
that stockholder approval is otherwise necessary or desirable.
	 
	15.02	 	Adjustment Upon Certain Unusual or Nonrecurring Events. The Board may make adjustments in
the terms and conditions of Awards in recognition of unusual or nonrecurring events (including
the events described in Section 4.03) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles, whenever the
Board determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
	 
	15.03	 	Awards Previously Granted. Notwithstanding any other provision of the Plan to the contrary
(but subject to Section 2.01(i) and Section 15.02), no termination, amendment or




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	 	 	modification
of the Plan shall adversely affect in any material way any Award previously granted under the
Plan, without the written consent of the Holder of such Award.





XVI. WITHHOLDING





	16.01	 	Withholding Requirement. The Company’s obligations to deliver Shares upon the exercise of
an Option, or upon the vesting of any other Award, shall be subject to the Holder’s
satisfaction of all applicable federal, state and local income and other tax withholding
requirements.
	 
	16.02	 	Withholding with Stock. For Eligible Employees, the Company may permit the Holder to pay
all minimum required amounts of tax withholding, or any part thereof, by electing to transfer
to the Company, or to have the Company withhold from Shares otherwise issuable to the Holder,
Shares having a value not to exceed the minimum amount required to be withheld under federal,
state or local law or such lesser amount as may be elected by the Holder. For non-employees,
including non-employee directors, the Company may also permit the Holder to transfer to the
Company or have the Company withhold from Shares otherwise issuable to the Holder, an amount
of Shares determined by the Holder necessary to cover applicable federal, state or local
income or self-employment taxes relating to the exercise, vesting or payment of the Award.
All elections shall be subject to the approval or disapproval of the Committee or its
delegate. The value of Shares to be withheld shall be based on the Fair Market Value of the
Stock on the date that the amount of tax to be withheld is to be determined (the “Tax Date”),
as determined by the Committee. Any such elections by Holder to have Shares withheld for this
purpose will be subject to the following restrictions:






	 	(a)	 	All elections must be made prior to the Tax Date;
	 
	 	(b)	 	All elections shall be irrevocable; and
	 
	 	(c)	 	If the Holder is an officer or director of the Company within the meaning of
Section 16 of the 1934 Act (“Section 16”), the Holder must satisfy the requirements of
such Section 16 and any applicable rules thereunder with respect to the use of Stock to
satisfy such tax withholding obligation.





XVII. SECTION 162(m) PROVISIONS





	17.01	 	Limitations. Notwithstanding any other provision of this Plan, if the Committee determines
at the time any Award is granted to a Participant that such Participant is, or is likely to be
at the time he or she recognizes income for federal income tax purposes in connection with
such Award, a Covered Employee, then the Committee may provide that this Section 17 is
applicable to such Performance Award.
	 
	17.02	 	Performance Goals. If a Performance Award is subject to this Section 17, then the lapsing
of restrictions thereon and the distribution of cash, Shares or other property pursuant
thereto, as applicable, shall be subject to the achievement of one or more




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	 	 	objective
performance goals established by the Committee, which shall be based on the attainment of one
or any combination of the following:






	 	(a)	 	Earnings (either in the aggregate or on a per-Share basis);
	 
	 	(b)	 	Growth or rate of growth in earnings (either in the aggregate or on a per Share
basis);
	 
	 	(c)	 	Net income or loss (either in the aggregate or on a per-Share basis);
	 
	 	(d)	 	Cash flow provided by operations, either in the aggregate or on a per-Share
basis;
	 
	 	(e)	 	Growth or rate of growth in cash flow (either in the aggregate or on a per
Share basis);
	 
	 	(f)	 	Free cash flow (either in the aggregate on a per-Share basis);
	 
	 	(g)	 	Reductions in expense levels, determined either on a Corporation-wide basis or
in respect of any one or more business units;
	 
	 	(h)	 	Operating and maintenance cost management and employee productivity;
	 
	 	(i)	 	Stockholder returns (including return on assets, investments, equity, or gross
sales);
	 
	 	(j)	 	Return measures (including return on assets, equity, or sales);
	 
	 	(k)	 	Growth or rate of growth in return measures (including return on assets,
equity, or sales);
	 
	 	(l)	 	Share price (including attainment of a specified per-Share price during the
Incentive Period; growth measures and total stockholder return or attainment by the
Shares of a specified price for a specified period of time);
	 
	 	(m)	 	Strategic business criteria, consisting of one or more objectives based on
meeting specified revenue, market share, market penetration, geographic business
expansion goals, objectively identified project milestones, production volume levels,
cost targets, and goals relating to acquisitions or divestitures; and/or
	 
	 	(n)	 	Achievement of business or operational goals such as market share and/or
business development;






	 	 	provided that applicable incentive goals may be applied on a pre- or post-tax basis; and
provided further that the Committee may, when the applicable incentive goals are
established, provide that the formula for such goals may include or exclude items to
measure specific objectives, such as losses from discontinued operations, extraordinary
gains or losses, the cumulative effect of accounting changes, acquisitions or divestitures,
foreign exchange impacts and any unusual, nonrecurring gain or loss. In addition to the




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	 	 	foregoing performance goals, the performance goals shall also include any performance goals
which are set forth in the Company’s Executive Annual Incentive Plan, if any, which has been
approved by the Company’s stockholders, which are incorporated herein by reference. Such
performance goals shall be set by the Committee within the time period prescribed by, and
shall otherwise comply with the requirements of, section 162(m) of the Code and the
regulations thereunder.






	17.03	 	Adjustments. Notwithstanding any provision of the Plan other than Section 4.03 or Section
11, with respect to any Award that is subject to Section 17, the Committee may not adjust
upwards the amount payable pursuant to such Award, nor may it waive the achievement of the
applicable performance goals except in the case of the death or disability of the Participant.
	 
	17.04	 	Other Restrictions. The Committee shall have the power to impose such other restrictions on
Awards subject to this Section 17 as it may deem necessary or appropriate to insure that such
Awards satisfy all requirements for “performance-based compensation” within the meaning of
section 162(m)(4)(B) of the Code or any successor thereto.





XVIII. NONEXCLUSIVITY OF THE PLAN





	18.01	 	Neither the adoption of the Plan by the Board nor the submission of the Plan to stockholders
of the Company for approval shall be construed as creating any limitations on the power or
authority of the Board to continue to maintain or adopt such other or additional incentive or
other compensation arrangements of whatever nature as the Board may deem necessary or
desirable or preclude or limit the continuation of any other plan, practice or arrangement for
the payment of compensation or fringe benefits to employees, or non-employee directors
generally, or to any class or group of employees, or non-employee directors, which the Company
now has lawfully put into effect, including, without limitation, any retirement, pension,
savings and stock purchase plan, insurance, death and disability benefits and executive
short-term incentive plans.





XIX. REQUIREMENTS OF LAW





	19.01	 	Requirements of Law. The issuance of Stock and the payment of cash pursuant to the Plan
shall be subject to all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or stock exchanges as may be required. Notwithstanding any provision of
the Plan or any Award, Holders shall not be entitled to exercise, or receive benefits under
any Award, and the Company shall not be obligated to deliver any Shares or other benefits to a
Holder, if such exercise or delivery would constitute a violation by the Holder or the Company
of any applicable law or regulation.
	 
	19.02	 	Code Section 409A. This Plan is intended to meet or to be exempt from the requirements of
Code section 409A, and shall be administered, construed and interpreted in a manner that is in
accordance with and in furtherance of such intent. Any provision of this Plan that would
cause an Award to fail to satisfy Code section 409A or, if applicable, an exemption from the
requirements of that Section, shall be amended (in a manner that as




27









 






	 	 	closely as practicable
achieves the original intent of this Plan) to comply with Code section 409A or any such
exemption on a timely basis, which may be made on a retroactive basis, in accordance with
regulations and other guidance issued under Code section 409A.
	 
	19.03	 	Rule 16b-3. Transactions under the Plan and to the extent even applicable, within the scope
of Rule 16b-3 are intended to comply with all applicable conditions of Rule 16b-3. To the
extent any provision of the Plan or any action by the Committee under the Plan fails to so
comply, such provision or action shall, without further action by any person, be deemed to be
automatically amended to the extent necessary to effect compliance with Rule 16b-3; provided,
however, that if such provision or action cannot be amended to effect such compliance, such
provision or action shall be deemed null and void to the extent permitted by law and deemed
advisable by the Committee.
	 
	19.04	 	Governing Law. The Plan and all agreements hereunder shall be construed in accordance with
and governed by the laws of the State of Delaware without giving effect to the principles of
the conflict of laws to the contrary.






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