EX-10.38 AMENDED STOCK INCENTIVE PLAN



 





Exhibit 10.38




AMENDED AND RESTATED RIVERWOOD HOLDING, INC.




STOCK INCENTIVE PLAN




Section 1. Purpose




     The purpose of this Amended and Restated Riverwood Holding, Inc. Stock Incentive Plan is to
foster and promote the long-term financial success of the Company and the Subsidiaries and to
increase materially stockholder value by (a) motivating superior performance by
participants in the Plan, (b) providing participants in the Plan with an ownership interest
in the Company and (c) enabling the Company and the Subsidiaries to attract and retain the
services of an outstanding management team upon whose judgment, interest and special effort the
successful conduct of its operations is largely dependent.



Section 2. Definitions




     2.1. Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below:




     (a) “Affiliate” means, with respect to any person, any other person controlled by,
controlling or under common control with such person.




     (b) “Award Agreement” means the agreement evidencing the grant of any Incentive Award
under the Plan, including a Subscription Agreement and an Option Agreement.




     (c) “Board” means the Board of Directors of the Company.




     (d) “CD&R Fund” means the Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman
Islands exempted limited partnership, and any successor investment vehicle managed by
Clayton, Dubilier & Rice, Inc.




     (e) “Cause” shall mean (i) the willful failure of the Participant to perform
substantially his employment-related duties, (ii) the Participant’s willful or
serious misconduct that has caused or could reasonably be expected to result in material
injury to the business or reputation of Company or any Subsidiary, (iii) the
Participant’s conviction of, or entering a plea of guilty or nolo contendere
to, a crime constituting a felony or (iv) the breach by the Participant of any
written covenant or agreement with the Company or any Subsidiary not to disclose any
information pertaining to the Company or any Subsidiary, not to compete or interfere with the
Company or any Subsidiary or relating to the take-along rights described in Section 10.3
hereof; provided that, with respect to any Participant who is party to an employment or
individual severance agreement with the Company or RIC, “Cause” shall have the meaning, if
any specified in such agreement.



 









 






     (f) “Change in Control” means the first to occur of the following events after the
Effective Date:




     (i) the acquisition by any person, entity or “group” (as defined in Section 13(d)
of the Securities Exchange Act of 1934, as amended), other than the Company, the
Subsidiaries, any employee benefit plan of the Company or the Subsidiaries, the CD&R
Fund, any Investor or any Affiliate of the CD&R Fund or of an Investor, of 50% or more
of the combined voting power of the Company’s or RIC’s then outstanding voting
securities;




     (ii) the merger or consolidation of the Company or RIC, as a result of which
persons who were stockholders of the Company or RIC, as the case may be, immediately
prior to such merger or consolidation, do not, immediately thereafter, own, directly
or indirectly, more than 50% of the combined voting power entitled to vote generally
in the election of directors of the merged or consolidated company;




     (iii) the liquidation or dissolution of the Company or RIC other than a
liquidation of RIC into the Company or into any Subsidiary; and




     (iv) the sale, transfer or other disposition of all or substantially all of the
assets of the Company or RIC to one or more persons or entities that are not,
immediately prior to such sale, transfer or other disposition, Affiliates of the
Company, RIC, the CD&R Fund or any Investor.




     (g) “Change in Control Price” means the price per share of Common Stock paid in
conjunction with any transaction resulting in a Change in Control (as determined in good
faith by the Board if any part of such price is payable other than in cash).




     (h) “Committee” means the Compensation Committee of the Board (or such other committee
of the Board which shall have jurisdiction over the compensation of officers).




     (i) “Common Stock” means the Class A Common Stock, par value $.01 per share, of the
Company.




     (j) “Company” means Riverwood Holding, Inc., a Delaware corporation formerly known as
New River Holding, Inc., and any successor thereto.




     (k) “EBITDA”, for any period, shall, unless otherwise provided in an Award Agreement,
have the meaning assigned to such term in the Credit Agreement, dated as of March 21, 1996,
among RIC Holding, Inc., the other borrowers party thereto, Chemical Bank, as administrative
agent, and the lenders party thereto from time to time, as such agreement may be assumed by
RIC as successor in interest to RIC Holding, Inc., and as the same may be amended from time
to time.




     (l) “Effective Date” means April 8, 1996.



 









 






     (m) “Employee” means any executive officer or other key management employee of the
Company.




     (n) “Extraordinary Termination” means a termination of a Participant’s employment with
the Company and the Subsidiaries by reason of the Participant’s death, Permanent Disability
or Retirement.




     (o) “Fair Market Value” means, as of any date, the fair market value on such date per
share of Common Stock as determined in good faith by the Executive Committee of the Board.
In making a determination of Fair Market Value, the Executive Committee shall give due
consideration to such factors as it deems appropriate, including, without limitation, the
earnings and certain other financial and operating information of the Company and the
Subsidiaries in recent periods, the potential value of the Company and the Subsidiaries as a
whole, the future prospects of the Company and the Subsidiaries and the industries in which
they compete, the history and management of the Company and the Subsidiaries, the general
condition of the securities markets, the fair market value of securities of companies engaged
in businesses similar to those of the Company and the Subsidiaries and a valuation of the
Common Stock, which shall be performed, with respect to the 1996 fiscal year, as promptly as
practicable following the first business day of the 1997 fiscal year of the Company and each
subsequent fiscal year by an independent valuation firm chosen by the Executive Committee,
provided, however, that the Fair Market Value per share of Common Stock determined as of any
date prior to January 1, 1997 shall be deemed to equal $100 unless the Executive Committee
determines otherwise. Notwithstanding the foregoing, following a Public Offering, Fair
Market Value shall mean the average of the high and low trading prices for a share of Common
Stock on the primary national exchange (including NASDAQ) on which the Common Stock is then
traded on the trading day immediately preceding the date as of which such Fair Market Value
is determined. The determination of Fair Market Value will not give effect to any
restrictions on transfer of the shares of Common Stock or the fact that such Common Stock
would represent a minority interest in the Company.




     (p) “Incentive Award” means an award of Options under the Plan or the right to purchase
Common Stock pursuant to Article VIII of the Plan.




     (q) “Investors” means each of the investors who purchased shares of Common Stock or
shares of Class B Common Stock of the Company concurrently with the consummation of the
merger contemplated by the Merger Agreement, and their “specified affiliates”, within the
meaning of the Stockholders Agreement of the Company, as amended from time to time.




     (r) “Merger Agreement” means the Agreement and Plan of Merger, dated as of October 25,
1995, among CDRO Acquisition Corporation, an indirect, wholly owned subsidiary of the
Company, RIC Holding, Inc. a wholly owned subsidiary of the Company, and Riverwood
International Corporation.




     (s) “New Employer” means a Participant’s employer, or the parent or a subsidiary of such
employer, immediately following a Change in Control.




     (t) “Option” means the right granted to a Participant under the Plan to purchase a
stated number of shares of Common Stock at a stated price, not less than Fair Market Value on
the date of grant, for a specified period of time.



 









 






     (u) “Option Agreement” means an agreement between the Company and the Participant
setting forth the terms and conditions of any Options granted hereunder, which agreement
shall, unless the Board otherwise determines, be substantially in the form attached hereto as
Exhibit B.




     (v) “Participant” means any Employee designated by the Board to participate in the
Plan.




     (w) “Performance Option” means an Option granted pursuant to the Plan which vests in
accordance with the provisions of Section 6.3(b) based upon the financial performance of the
Company and the Subsidiaries.




     (x) “Permanent Disability” means a physical or mental disability or infirmity that
prevents the performance of a Participant’s employment-related duties lasting (or likely to
last, in the judgment of the Board) for a period of six months or longer and within 30 days
after RIC notifies the Participant in writing that it intends to replace him, the Participant
shall not have returned to the performance of his employment-related duties on a full-time
basis. The Board’s reasoned and good faith judgment of Permanent Disability shall be final,
binding and conclusive and shall be based on such competent medical evidence as shall be
presented to it by such Participant and/or by any physician or group of physicians or other
competent medical expert employed by the Participant, the Company or RIC to advise the Board;
provided that, with respect to any Participant who is party to an employment or individual
severance agreement with the Company or RIC, “Permanent Disability” shall have the meaning,
if any, assigned in such agreement to such term or to a similar term such as “Disability” or
“Disabled”.




     (y) “Plan” means this Amended and Restated Riverwood Holding, Inc. Stock Incentive
Plan, as the same may be amended from time to time.




     (z) “Public Offering” means the first day as of which sales of Common Stock are made to
the public in the United States pursuant to an underwritten public offering of the Common
Stock led by one or more underwriters at least one of which is an underwriter of nationally
recognized standing.




     (aa) “Registration and Participation Agreement” means the Registration and Participation
Agreement, dated as of March 27, 1996, among the Company and certain stockholders of the
Company, as the same may be amended from time to time.




     (bb) “Retirement” means a Participant’s termination of employment with the Company or
its Subsidiaries with age and years of service credit totaling at least 65, with the minimum
age at which a participant may be considered retired being 55.




     (cc) “RIC” means Riverwood International Corporation, a Delaware corporation formerly
known as Riverwood International USA, Inc., and any successor thereto.




     (dd) “Service Option” means an Option granted pursuant to the Plan which vests in
accordance with the provisions of Section 6.3(a) based upon a Participant’s completion of
service.




     (ee) “Subscription Agreement” means the management stock subscription agreement entered
into by the Company and a Participant setting forth the terms and
conditions of any purchase of Common Stock by such Participant under the Plan which agreement shall be
substantially in the form attached hereto as Exhibit A, unless the Board determines
otherwise.




 









 




     (ff) “Subsidiary” means any corporation or other person, a majority of whose
outstanding voting securities or other equity interests is owned, directly or indirectly, by
the Company.



     2.2. Gender and Number. Except when otherwise indicated by the context, words in the
masculine gender used in the Plan shall include the feminine gender, the singular shall include the
plural, and the plural shall include the singular.



Section 3. Eligibility and Participation




     Participants in the Plan shall be those Employees selected by the Board to participate in the
Plan from time to time. The selection of an Employee as a Participant shall neither entitle such
Employee to nor disqualify such Employee from participation in any other award or incentive plan.



Section 4. Powers of the Board




     4.1. Power to Grant and Establish Terms of Awards. The Board shall, subject to the
terms of the Plan, determine the Participants to whom Incentive Awards shall be granted and the
terms and conditions of such Incentive Awards, provided that nothing in the Plan shall limit the
right of members of the Board who are Employees to receive Incentive Awards hereunder.



     4.2. Administration. The Board shall be responsible for the administration of the
Plan. Any authority exercised by the Board under the Plan shall be exercised by the Board in its
sole discretion. The Board, by majority action thereof, is authorized to prescribe, amend and
rescind rules and regulations relating to the administration of the Plan, to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the Company and the
Subsidiaries, and to make all other determinations necessary or advisable for the administration
and interpretation of the Plan or to carry out its provisions and purposes. Determinations,
interpretations or other actions made or taken by the Board pursuant to the provisions of the Plan
shall be final, binding and conclusive for all purposes and upon all persons.



     4.3 Delegation by the Board. All of the powers, duties and responsibilities of the
Board specified in the Plan may, to the full extent permitted by applicable law, be exercised and
performed by the Committee or any other duly constituted committee of the Board, in any such case,
to the extent authorized by the Board to exercise and perform such powers, duties and
responsibilities.



Section 5. Stock Subject to Plan




     5.1. Number. Subject to the provisions of Section 5.3, the maximum number shares of
Common Stock subject to Incentive Awards under the Plan (including shares that become available for
grant pursuant to Section 5.2) may not exceed, in the aggregate, (i) 695,000 shares,
reduced by (ii) the number of shares of Common Stock, not to exceed 5,000 shares, covered
by Awards offered but not granted under Plan in the initial offering and grant of Awards hereunder.
The shares to be delivered under the Plan may consist, in whole or in part, of Common Stock held
in treasury or authorized but unissued shares of Common Stock, not reserved for any other purpose.




 







 





     5.2. Canceled, Terminated or Forfeited Awards. Any shares of Common Stock subject to
any portion of an Incentive Award which for any reason expires, or is canceled, terminated,
forfeited or otherwise settled without the issuance of such shares of Common Stock, shall again be
available for award under the Plan, subject to the maximum limitation specified in Section 5.1.



     5.3. Adjustment in Capitalization. The number and class of Incentive Awards (and the
number of shares of Common Stock available for issuance upon exercise or settlement of such
Incentive Awards) granted under the Plan, and the number, class and exercise price of any
outstanding Options, may be adjusted by the Board, in its sole discretion, if it shall deem such an
adjustment to be necessary or appropriate to reflect any Common Stock dividend, stock split or
share combination or any recapitalization, merger, consolidation, exchange of shares, liquidation
or dissolution of the Company.



Section 6. Terms of Options




     6.1. Grant of Options. Options may be granted to Participants at such time or times
as shall be determined by the Board. Each Option granted to a Participant shall be evidenced by an
Option Agreement that shall specify the exercise price at which a share of Common Stock may be
purchased pursuant to such Option, the duration of such Option and such other terms and conditions
consistent with the Plan as the Board shall determine, including customary representations,
warranties and covenants with respect to securities law matters. Unless otherwise determined by
the Board, such Option Agreement shall also state that the holder thereof is entitled to the
benefits of and shall be bound by the obligations set forth in the Registration and Participation
Agreement, dated as of March 27, 1996 and as the same may be amended from time to time, among the
Company and certain stockholders of the Company, to the extent set forth therein.



     6.2. Option Price. The exercise price per share of Common Stock to be purchased upon
exercise of an Option shall be determined by the Board but shall not be less than the Fair Market
Value on the date the option is granted.



     6.3. Exercise of Options.




     (a) Service Options. Unless otherwise provided by the Board in the Option
Agreement evidencing such Award, subject to the continuous employment of the Participant with
the Company or one of the Subsidiaries, Service Options granted to a Participant shall become
vested in five equal annual installments on each of the first five anniversaries of the date
of grant, provided that in all events 100% of such Service Options shall become
exercisable (i) at the time and under the circumstances described in Sections 9.1 or
10, if applicable, or (ii)(x) in the event that the CD&R
Fund and, if applicable, its Affiliates effect a sale or other disposition of all of the
Common Stock then held by the CD&R Fund and its Affiliates to one or more persons other than
any person who is an Affiliate of the CD&R Fund and (y) thereafter, the Participant’s
employment with the Company and the Subsidiaries is terminated by the Company other than for
Cause or, to the extent provided in the Award Agreement evidencing such Service Options, by
the Participant for “good reason” (as defined in such Option Agreement) (a “Disposition
Transaction and Termination”), as of the date of such termination.




     (b) Performance Options. Unless otherwise provided by the Board in the Option
Agreement evidencing such Award, subject to Section 9.1 and 10, no portion of any Performance
Options shall become vested unless and until the Company shall have achieved the EBITDA
target



 









 







specified in the Option Agreement evidencing such Performance Options and provided the
Participant is in the continuous employment of the Company or one of the Subsidiaries from
the date of grant to the date such target is achieved, provided, however, that in the event
of a Disposition Transaction and Termination, a proportionate share of any Performance
Options that have not vested and become exercisable on or prior to the date of such
Disposition Transaction and Termination shall vest and become exercisable as of such date,
such proportionate share to equal the product of (i) the percentage obtained by
dividing (x) the cumulative EBITDA achieved by the Company as of the last day of the
calendar quarter ending coincident with or immediately prior to the date of the Disposition
Transaction and Termination by (y) the EBITDA target specified in the Option
Agreement, multiplied by (ii) the total number of Shares subject to the Performance
Options. Notwithstanding the foregoing provisions of this paragraph (b), subject to the
continuous employment of the Participant with the Company or one of the Subsidiaries,
Performance Options shall become vested in full, nine years and six months following the date
of grant, regardless of whether the applicable EBITDA target shall have been achieved.




     (c) Conditions. Notwithstanding any other provision herein, the Board may
accelerate the vesting or exercisability of any Option, all Options or any class of Options,
at any time and from time to time. On or before the date upon which any Employee will
exercise any exercisable Option, the Company and such Employee shall enter into a
Subscription Agreement with respect to the Common Stock to be purchased upon exercise of such
Option. Notwithstanding any other provision of the Plan, no Option shall be exercisable for
more than 13 years after the date on which it is granted.



     6.4. Payment. The Board shall establish procedures governing the exercise of
Options, which procedures shall generally require that written notice of the exercise thereof be
given and that the exercise price thereof be paid in full in cash or cash equivalents, including by
personal check, at the time of exercise. The exercise price of any Options exercised at any time
following a Public Offering may be paid in full or in part in the form of shares of Common Stock
owned by the Participant, based on the Fair Market Value of such shares of Common Stock on the date
of exercise, subject to such rules and procedures as may be adopted by the Board and, if the Board
deems it necessary or appropriate, subject to shareholder approval of the Plan. Subject to Section
6.3, as soon as practicable after receipt of a written exercise notice and payment in full of the
exercise price of any Options, the Company shall deliver to the Participant a certificate or
certificates representing the shares of Common Stock acquired upon the exercise thereof, bearing
appropriate legends if applicable.



 









 





Section 7. Terms of Offers to Purchase Common Stock




     7.1. Offers to Purchase Common Stock. Offers to purchase Common Stock may be made to
Participants at such time or times as shall be determined by the Board. Each purchase of Common
Stock by a Participant shall be made pursuant to a Subscription Agreement that shall include
customary representations, warranties, covenants and other terms and conditions with respect to
securities law matters and such other terms and conditions as the Board shall determine. Unless
otherwise determined by the Board, such Subscription Agreement shall also state that in respect of
any shares of Common Stock purchased by the Participant pursuant to such Subscription Agreement
(i) prior to a Public Offering, such shares shall be subject to certain repurchase rights
of Holding and the CD&R Fund and (ii) such Participant shall be entitled to certain of the
benefits (relating to the right to participate in certain sales and purchases of Common Stock by
the Investors) set forth in the Registration and Participation Agreement and shall be bound by the
obligations set forth in such Registration and Participation Agreement, in each case, to the extent
set forth in the Subscription Agreement evidencing the purchase of such Common Stock.



     7.2. Purchase Price. The purchase price per share of Common Stock to be purchased
under the Plan shall be determined by the Board.



Section 8. Termination of Employment




     8.1. Extraordinary Termination. Unless otherwise provided in the Option Agreement or
otherwise determined by the Board, in the event that a Participant’s employment with the Company
and the Subsidiaries terminates by reason of an Extraordinary Termination, then (i) all
Service Options granted to such Participant shall become fully vested as of the date of such
termination, (ii) if the Performance Options granted to such Participant have not become
vested on or prior to the date of such termination, a proportionate share of such Performance
Options shall become vested as of the date of such termination, such proportionate share to equal
the percentage obtained by dividing (A) the cumulative EBITDA achieved during the period
from the date of grant (or such other date specified in the applicable Option Agreement) to the
last day of the calendar quarter ending coincident with or immediately prior to the Participant’s
termination of employment, by (B) the cumulative EBITDA target specified in such Option
Agreement and (iii) all such Service Options and vested Performance Options shall remain
exercisable solely until the first to occur of (x) the one year anniversary of the
Participant’s termination of employment due to death or Permanent Disability or the third
anniversary of the Participant’s termination of employment due to Retirement or (y) the
expiration of the term of any such Option. Any Performance Options held by the Participant that
are not vested as of the date of an Extraordinary Termination shall terminate and be canceled
immediately upon such Extraordinary Termination and all other Options that are not exercised within
the period described in the preceding sentence shall terminate and be canceled upon the expiration
of such period.



     8.2. Termination for Cause. Unless otherwise provided in the Award Agreement or
otherwise determined by the Board, in the event a Participant’s employment with the Company and the
Subsidiaries is terminated by the Company or a Subsidiary for Cause, any Options held by such
Participant (whether or not then vested or exercisable) shall terminate and be canceled immediately
upon such termination of employment and any Common Stock purchased by the Participant may be
repurchased for a purchase price calculated in accordance with the terms of the Subscription
Agreement.



 









 





     8.3. Other Termination of Employment. Unless otherwise determined by the Board at
the time of grant, the Board shall provide in the Option Agreement evidencing options granted
hereunder that,, in the event that a Participant’s employment with the Company and the Subsidiaries
terminates for any reason other than (i) an Extraordinary Termination or (ii) for
Cause, any Options then held by such Participant that have become vested on or prior to the date of
such termination shall, subject to Section 8.4, remain exercisable until the first to occur of
(x) the 60th day after the expiration of the period, if any, specified in such
Participant’s Option Agreement during which the Company or the CD&R Fund has a right to purchase
such Options from the Participant or (y) the expiration of the term of such Option. Any
Options held by the Participant that are not vested Options as of the date of the Participant’s
termination of employment shall terminate and be canceled immediately upon such termination, and
any vested Options that are not exercised within the period described in the preceding sentence
shall terminate and be canceled upon the expiration of such period.



     8.4. Certain Rights upon Termination of Employment Prior to Public Offering. Unless
otherwise determined by the Board at the time of grant, the Board shall provide in each Award
Agreement evidencing Incentive Awards granted hereunder that, upon a termination of a Participant’s
employment with the Company and the Subsidiaries prior to a Public Offering for any reason, the
Company and the CD&R Fund and its Affiliates shall have successive rights to repurchase for cash
any vested Options or shares of Common Stock then held by the Participant, and, upon an
Extraordinary Termination, the Participant shall have the right to require the Company to
repurchase shares of Common Stock then owned by him (provided the Participant has held such shares
of Common Stock for at least six months), for a repurchase price equal to the Fair Market Value,
reduced in the case of any Options by the exercise price per share of Common Stock for such Option,
and upon such additional terms and conditions as are set forth in such Award Agreement.



Section 9. Change in Control




     9.1. Accelerated Vesting and Payment.




     (a)
Service Options and Vested Performance Options. Unless the Board otherwise
determines in the manner set forth in Section 9.2, in the event of a Change in Control, each
outstanding Service Option (regardless of whether such Option is at such time otherwise
exercisable) and each outstanding Performance Option that has become vested prior to the
Change in Control, without regard to this Section 9.1, shall be canceled in exchange for a
payment in cash of an amount equal to the product of (i) the excess, if any, of the
Change in Control Price over the Option Price, multiplied by
(ii) the number of shares of Common
Stock covered by such Option.




     (b) Performance Options. Unless the Board otherwise determines in the manner
set forth in Section 9.2, in the event of a Change of Control prior to the date as of which
Performance Options have become vested in accordance with Section 6.3(b), a proportionate
share (determined in accordance with the immediately succeeding sentence) of each outstanding
Performance Option shall be canceled in exchange for a payment in cash of an amount equal to
the product of (i) the excess, if any, of the Change in Control Price over the Option
Price, multiplied by (ii) the number of shares of Common Stock covered by the vested
portion of the Performance Option. Such proportionate share shall be determined in
accordance with the formula described in Section 8.1 based on the cumulative EBITDA achieved
as of the date of the Change in Control.



 









 






     (c) Timing of Option Cancellation Payments. The cash payment described in
paragraphs (a) and (b) above shall be payable in full, as soon as reasonably practicable, but
in no event later than, 30 days following the Change in Control, unless provided otherwise by
the Board in the Award Agreement evidencing such Options.



     9.2. Alternative Options. Notwithstanding Section 9.1, no cash settlement or other
payment shall be made with respect to any Option in the event that the transaction constituting the
Change in Control is to be accounted for using the “pooling of interest” method of accounting. In
such event, each Option then held by a Participant shall become fully vested immediately prior to
the consummation of such transaction and each such Participant shall have the right, subject to
compliance with all applicable securities laws, to (i) exercise his Options in connection
with the Change in Control or (ii) provided such opportunity is made available by the New
Employer, exchange such Options for fully exercisable options to purchase common stock of the New
Employer having substantially equivalent economic value to the Options being exchanged therefor
(determined at the time of the Change in Control).



     9.3 Certain Take-Along Rights Prior to a Public Offering. Unless otherwise
determined by the Board at time of grant, the Board shall provide in each Subscription Agreement
evidencing Incentive Awards granted hereunder that, upon certain transactions constituting a Change
in Control, the Participant will be required to sell shares of Common Stock then owned by him, for
a cash payment per share of Common Stock equal to the Change in Control Price, and upon such
additional terms and conditions as are set forth in such Subscription Agreement.



Section 10. Amendment, Modification, and




Termination of the Plan




     The Board at any time may terminate or suspend the Plan, and from time to time may amend or
modify the Plan. No amendment, modification, termination or suspension of the Plan shall in any
manner adversely affect any Incentive Award theretofore granted under the Plan, without the consent
of the Participant holding such Incentive Award. Shareholder approval of any such amendment,
modification, termination or suspension shall be obtained to the extent mandated by applicable law,
or if otherwise deemed appropriate by the Board.



Section 11. Miscellaneous Provisions




     11.1. Nontransferability of Awards. No Options granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by
the laws of descent and distribution. All rights with respect to any Option granted to a
Participant under the Plan shall be exercisable during his lifetime only by such Participant.
Restrictions, if any, on the transfer of Common Stock purchased pursuant to Section 7.1 of the Plan
or upon exercise of any Options shall be set forth in the applicable Award Agreement evidencing
such Incentive Award, including without limitations, restrictions described in Section 8.4 herein.



     11.2. Beneficiary Designation. Each Participant under the Plan may from time to time
name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid or by whom any right under the Plan is to be exercised in case
of his
death. Each designation will revoke all prior designations by the same Participant, shall be
in a form pre-



 









 







scribed by the Board and will be effective only when filed by the Participant in
writing with the Board during his lifetime. In the absence of any such designation, benefits
remaining unpaid or Options or Deferred Stock Units outstanding at the Participant’s death shall be
paid to or exercised by the Participant’s surviving spouse, if any, or otherwise to or by his
estate.



     11.3. No Guarantee of Employment or Participation. Nothing in the Plan shall
interfere with or limit in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment at any time and for any reason, nor confer upon any Participant any right
to continue in the employ of the Company or any Subsidiary. No Employee shall have a right to be
selected as a Participant, or, having been so selected, to receive any Incentive Awards under the
Plan.



     11.4. Tax Withholding. The Company and the Subsidiaries shall have the power to
withhold, or require a Participant to remit to the Company or a Subsidiary promptly upon
notification of the amount due, an amount determined by the Company or such Subsidiary to be
sufficient to satisfy all Federal, state, local and foreign withholding tax requirements in respect
of any Incentive Award and the Company may (or may cause a Subsidiary to) defer payment of cash or
issuance or delivery of Common Stock until such requirements are satisfied. The Board may permit
or require a Participant to satisfy his tax withholding obligation hereunder in such other manner,
subject to such conditions, as the Board shall determine.



     11.5. Indemnification. Each person who is or shall have been a member of the
Committee or the Board shall be indemnified and held harmless by the Company and RIC to the fullest
extent permitted by law against and from any loss, cost, liability or expense (including any
related attorney’s fees and advances thereof) in connection with, based upon or arising or
resulting from any claim, action, suit or proceeding to which he may be made a party or in which he
may be involved by reason of any action taken or failure to act under or in connection with the
Plan or any Award Agreement and from and against any and all amounts paid by him in settlement
thereof, with the Company’s approval, or paid by him in satisfaction of any judgment in any such
action, suit or proceeding against him, provided he shall give the Company an opportunity, at its
own expense, to handle and defend the same before he undertakes to handle and defend it on his own
behalf. The foregoing right of indemnification shall not be exclusive and shall be independent of
any other rights of indemnification to which such persons may be entitled under the Company’s or
RIC’s Articles of Incorporation or By-laws, by contract, as a matter of law or otherwise.



     11.6. No Limitation on Compensation. Nothing in the Plan shall be construed to limit
the right of the Company to establish other plans or to pay compensation to its employees in cash
or property, in a manner which is not expressly authorized under the Plan.



     11.7. Requirements of Law. The granting of Incentive Awards and the issuance of
shares of Common Stock shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national or foreign securities exchanges as may be
appropriate or required, as determined by the Board. Notwithstanding any other provision of the
Plan or any Award Agreement, no Incentive Awards shall be granted under the Plan, and no shares of
Common Stock shall be issued upon exercise of, or otherwise in connection with, any Incentive Award
granted under the Plan, if such grant or issuance would result in a violation of applicable law,
including the federal securities laws and any applicable state or foreign securities laws.



     11.8. Governing Law. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of New York, except to the extent that the
corporate law of the State of Delaware specifically and mandatorily applies.



 









 





     11.9. No Impact On Benefits. Incentive Awards granted under the Plan are not
compensation for purposes of calculating an Employee’s rights under any employee benefit plan,
except to the extent provided in any such plan.



     11.10. Freedom of Action. Subject to Section 10, nothing in the Plan or any Award
Agreement shall be construed as limiting or preventing the Company or any Subsidiary from taking
any action with respect to the operation or conduct of its business that it deems appropriate or in
its best interest.



     11.11. Term of Plan. The Plan shall be effective as of the Effective Date. The Plan
shall expire on the tenth anniversary of the Effective Date (except as to Incentive Awards
outstanding on that date), unless sooner terminated pursuant to Section 10.



     11.12. No Right to Particular Assets. Nothing contained in this Plan and no action
taken pursuant to this Plan shall create or be construed to create a trust of any kind or any
fiduciary relationship between the Company and the Subsidiaries, on the one hand, and any
Participant or executor, administrator or other personal representative or designated beneficiary
of such Participant, on the other hand, or any other persons. Any reserves that may be established
by the Company or any Subsidiary in connection with this Plan shall continue to be held as part of
the general funds of the Company or such Subsidiary, and no individual or entity other than the
Company or such Subsidiary shall have any interest in such funds until paid to a Participant. To
the extent that any Participant or his executor, administrator or other personal representative, as
the case may be, acquires a right to receive any payment from the Company or any Subsidiary
pursuant to this Plan, such right shall be no greater than the right of an unsecured general
creditor of the Company or such Subsidiary.



     11.13. Notices. Each Participant shall be responsible for furnishing the Board with
the current and proper address for the mailing of notices and delivery of agreements and shares of
Common Stock. Any notices required or permitted to be given shall be deemed given if directed to
the person to whom addressed at such address and mailed by regular United States mail, first-class
and prepaid. If any item mailed to such address is returned as undeliverable to the addressee,
mailing will be suspended until the Participant furnishes the proper address.



     11.14. Severability of Provisions. If any provision of this Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions
hereof, and this Plan shall be construed and enforced as if such provision had not been included.



     11.15. Incapacity. Any benefit payable to or for the benefit of a minor, an
incompetent person or other person incapable of receiving such benefit shall be deemed paid when
paid to such person’s guardian or to the party providing or reasonably appearing to provide for the
care of such person, and such payment shall fully discharge the Committee, the Company and other
parties with respect thereto.



     11.16. No Rights as Stockholder. No Participant shall have any voting or other
rights as a stockholder of the Company with respect to any Common Stock covered by any Incentive
Award until the issuance of a certificate or certificates to the Participant for such Common Stock.
No adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such
certificate or certificates.



     11.17. Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of this Plan and shall not be employed
in the construction of this Plan.