Exhibit 10.43


 


UNITED STATIONERS INC.


 


2004 LONG-TERM INCENTIVE PLAN


 


(As amended and restated January 1,
2009)


 


SECTION 1


 


GENERAL


 


1.1. Purpose. The United Stationers Inc. 2004
Long-Term Incentive Plan (the “Plan”) has been established by United Stationers
Inc. (the “Company”) to promote the long-term growth and financial success of
the Company and the interests of its stockholders by: (i) attracting and
retaining individuals with excellent managerial talent upon whom, in large
measure, the sustained progress, growth and profitability of the Company
depend; (ii) motivating those selected as participants, by means of
appropriate performance-based incentives, to achieve long-term performance
goals; (iii) further aligning the interests of selected employee and
Director participants with those of the Company’s other stockholders and
providing them with an effective means to acquire and maintain equity interests
in the Company; and (iv) providing incentive compensation opportunities
that are competitive with those of other similar companies.


 


1.2. Participation. Subject to the terms and
conditions of the Plan, the Committee shall determine and designate, from time
to time, from among the Eligible Individuals, those persons who will be granted
one or more Awards, and thereby become “Participants” in the Plan.


 


1.3. Operation, Administration, and Definitions. The
operation and administration of the Plan, including the Awards made under the
Plan, shall be subject to the provisions of Section 5 (relating to
operation and administration). Capitalized terms in the Plan shall be defined
as set forth in Section 9.


 


SECTION 2


 


OPTIONS AND SARS


 


2.1. Options. The grant of an “Option” entitles
the Participant to purchase shares of Stock at an Exercise Price established by
the Committee. Any Option granted under this Section 2 may be either a
non-qualified option (an “NQO”) or an incentive stock option (an “ISO”), as
determined in the discretion of the Committee.


 


(a) An “NQO” is an Option that is not intended to
be an “incentive stock option” as that term is described in section 422(b) of
the Code.


 


(b) An “ISO” is an Option that is intended to
satisfy the requirements applicable to an “incentive stock option” described in
section 422(b) of the Code and shall be subject to the following conditions,
limitations and restrictions:


 


(i)   ISOs may be granted only to
employees of the Company or a Subsidiary that is a subsidiary or parent
corporation of the Company, within the meaning of section 424 of the Code.


 


(ii)  ISOs shall not be granted under the
Plan after the 10-year anniversary of the date on which the Plan is adopted by
the Board or, if earlier, the date on which the Plan is approved by the Company’s
stockholders.


 


(iii) To
the extent required by applicable law, if the Committee permits an ISO to be
exercised by a Participant more than three months after the Participant has
ceased being an employee of the Company or a subsidiary as that term is defined
in Code section 424(f), or more than 12 months if the Participant is permanently
and totally disabled, within the meaning of section 22(e) of the Code, the
ISO shall thereafter be treated as an NQO.


 

















 


(iv) To
the extent required by applicable law, the Committee shall not permit an ISO to
be transferred by an employee other than by will or the laws of descent and
distribution, and any ISO granted under this Plan shall be exercisable only by
the employee during the employee’s lifetime.


 


2.2. Stock Appreciation Rights. A stock
appreciation right (an “SAR”) entitles the Participant to receive, in cash or
Stock (as determined in accordance with Subsection 5.7), value equal to (or
otherwise based on) the excess of: (a) the Fair Market Value of a
specified number of shares of Stock at the time of exercise; over (b) an
Exercise Price established by the Committee.


 


2.3. Exercise Price. The “Exercise Price” of
each Option and SAR granted under this Section 2 shall be established by
the Committee or shall be determined by a method established by the Committee
at the time the Option or SAR is granted; provided, that the Exercise Price
shall not be less than 100% of the Fair Market Value of a share of Stock on the
date of grant (or, if greater, the par value of a share of Stock).


 


2.4. Exercise. An Option and an SAR shall be
exercisable in accordance with such terms and conditions and during such
periods as may be established by the Committee. In no event, however, shall an
Option or SAR expire later than ten years after the date of its grant.


 


2.5. Payment of Option Exercise Price. The
payment of the Exercise Price of an Option granted under this Section 2
shall be subject to the following:


 


(a)   Subject to
the following provisions of this Subsection 2.5, the full Exercise Price for
shares of Stock purchased upon the exercise of any Option shall be paid at the
time of such exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in Paragraph 2.5(c), payment may be
made as soon as practicable after the exercise).


 


(b)   The
Exercise Price shall be payable in cash, or by tendering, by either actual
delivery of shares or by attestation, shares of Stock acceptable to the
Committee, and valued at the then current value as of the day of exercise, or
in any combination thereof, all as determined by the Committee. The Committee
may limit payments made with shares of Stock pursuant to this Paragraph 2.5(b) to
shares held by the Participant for not less than six months prior to the
payment date.


 


(c)   The
Committee may permit a Participant to elect to pay the Exercise Price upon the
exercise of an Option by irrevocably authorizing a third party to sell shares
of Stock (or a sufficient portion of the shares) acquired upon exercise of the
Option and remit to the Company a sufficient portion of the sale proceeds to pay
the entire Exercise Price and any tax withholding resulting from such exercise.


 


(d)   The
Committee, in its sole discretion, may permit the Participant to elect to pay
the Exercise Price by any other method.


 


2.6. Repricing. Except for either adjustments
pursuant to Paragraph 5.2(f) (relating to the adjustment of shares), or
reductions in the Exercise Price approved by the Company’s stockholders, (i) the
Exercise Price for any outstanding Option or SAR previously granted under the
Plan may not be decreased after the date of grant nor may an outstanding Option
or SAR previously granted under the Plan be surrendered to the Company as
consideration for the grant of a replacement Option or SAR with a lower
exercise price, and (ii) any other action with respect to Awards that is
treated as a repricing under accounting principles generally accepted in the
United States is prohibited. 
Notwithstanding anything in this Subsection 2.6 to the contrary, in no
event shall the Exercise Price of any Option, as reduced or otherwise
adjusted,  be less than the Fair Market
Value of a share of Stock on the date of grant of such Option.


 


2.7. Grants of Options and SARs. An Option may,
but need not be, in tandem with an SAR, and an SAR may, but need not be, in
tandem with an Option. Except as otherwise provided by the Committee, if an
Option is in tandem with an SAR, the exercise price of both the Option and SAR
shall be the same, and the exercise of the Option or SAR with respect to a
share of Stock shall cancel the corresponding tandem SAR or Option right with
respect to such share. If an SAR is in tandem with an Option but is granted
after the grant of the Option, or if an Option is in tandem with an SAR but is
granted after the grant of the SAR, the later granted tandem Award shall have
the same exercise price as the earlier granted Award; provided, however, that
the exercise price for the later granted Award shall not be less than the Fair
Market Value of the Stock at the time of such grant.


 

















 


SECTION 3


 


FULL VALUE AWARDS


 


3.1. Full Value Awards. A “Full Value Award” is
a grant of one or more shares of Stock or a right to receive one or more shares
of Stock in the future, with such grant subject to one or more of the
following, as determined by the Committee:


 


(a)   The grant
shall be in return for the Participant’s previously performed services, or in
return for the Participant surrendering other compensation that may be due.
Awards under this Paragraph (a) may include, without limitation, bonus
stock. Generally, “bonus stock” is the grant of stock in return for previously
performed services or the surrender of other compensation that may be due.


 


(b)   The grant
shall be contingent on the achievement of performance or other objectives
during a specified period. Awards under this Paragraph (b) may include,
without limitation, performance shares and performance units. Generally, “performance
shares” are grants of actual shares of stock whose payment is contingent on
performance as measured against predetermined objectives over a one-year or
multi-year period of time. Generally, “performance units” are grants of stock
units whose payment is contingent on performance as measured against
predetermined objectives over a one-year or multi-year period of time and whose
value fluctuates with stock price changes and performance against objectives.


 


(c) The
grant shall be subject to a risk of forfeiture or other restrictions that will
lapse upon the achievement of one or more goals relating to completion of
service by the Participant or achievement of performance or other objectives.
Awards under this Paragraph (c) may include, without limitation,
restricted stock and restricted stock units. Generally, “restricted stock” and “restricted
stock units” are grants of actual shares of stock or stock units subject to
restrictions and risk of forfeiture until vested by continued employment and/or
attainment of specified performance objectives.


 


The grant of Full
Value Awards may also be subject to such other conditions, restrictions and
contingencies as determined by the Committee.


 


3.2. Performance-Based Compensation. The
Committee may designate a Full Value Award being granted to a Participant as
intended to be “performance-based compensation” as that term is used in section
162(m) of the Code. Any such Award designated as intended to be “performance-based
compensation” shall be conditioned on the achievement of one or more
Performance Measures, to the extent required by Code section 162(m). For Awards
under this Section 3 intended to be “performance-based compensation,” the
grant of the Awards and the establishment of the Performance Measures shall be
made during the period required under Code section 162(m).


 


3.3. Restrictions on Awards. If the right to
become vested in a Full Value Award granted under this Section 3 is
conditioned on the completion of a specified period of service with the Company
or the Subsidiaries, without achievement of Performance Measures or other
performance objectives being required as a condition of vesting, and without it
being granted in lieu of other compensation, then the required period of
service for full vesting shall be not less than three years (subject to
acceleration of vesting, to the extent provided by the Committee, in the event
of the Participant’s death, disability, retirement, Change of Control or
termination of employment).


 


SECTION 4


 


CASH INCENTIVE AWARD


 


A “Cash Incentive Award” is the grant of a right to receive a payment
of cash (or in the discretion of the Committee, Stock having value equivalent
to the cash otherwise payable) that is contingent on achievement of performance
objectives over a specified period established by the Committee. The grant of
Cash Incentive Awards may also be subject to such other conditions,
restrictions and contingencies, as determined by the Committee. The Committee
may designate a Cash Incentive Award granted to any Participant as “performance-based
compensation” as that term is used in section 162(m) of the Code. To the
extent required by Code section 162(m), any such Award so designated shall be
conditioned on the achievement of one or more performance objectives. The
performance objectives shall be based on Performance Measures as selected by
the Committee. For Awards under this Section 4 intended to be “performance-based
compensation,” the grant of the Awards and the establishment of the performance
objectives shall be made during the period required under Code section 162(m).
Except as otherwise provided in the applicable plan, arrangement or agreement,
distribution of any Cash Incentive Awards by the Company or its Subsidiaries
(whether granted this Plan or otherwise), for a performance period ending in a
calendar year, shall be made to the Participant not later than March 15 of
the following calendar year; provided, however, that for purposes of
determining compliance with Code section 409A, a payment will be considered to
satisfy the requirement of this sentence if distribution is made no later than
the end of the calendar year following the end of the applicable performance
period.


 

















 


SECTION 5


 


OPERATION AND ADMINISTRATION


 


5.1. Effective Date. Subject to the approval of
the stockholders of the Company at the Company’s 2004 annual meeting of its
stockholders, the Plan shall be effective as of May 1, 2004 (the “Effective
Date”). No Awards may be granted under the Plan prior to its approval by
stockholders. In the event of Plan termination, the Plan shall remain in effect
as long as any Awards under it are outstanding; provided, however, that no
Awards may be granted under the Plan after the ten-year anniversary of the
Effective Date.


 


5.2. Shares Subject to Plan. The shares of
Stock for which Awards may be granted under the Plan shall be subject to the
following:


 


(a) The shares of
Stock with respect to which Awards may be made under the Plan shall be shares
currently authorized but unissued or currently held or to the extent permitted
by applicable law, subsequently acquired by the Company as treasury shares,
including shares purchased in the open market or in private transactions.


 


(b) Subject to the
following provisions of this Subsection 5.2, the maximum number of shares of
Stock that may be delivered to Participants and their beneficiaries under the
Plan shall be equal to the sum of Paragraphs (i) and (ii) below:


 


(i) 4,625,000 shares of Stock; provided, however,
that for purposes of applying the limitations of this Paragraph (b), each share
of Stock delivered pursuant to Section 3 (relating to Full Value Awards),
shall be counted as covering 1.85 shares of Stock, and shall reduce the number
of shares of Stock available for delivery under this Paragraph (b) by 1.85
shares.


 


(ii) Any shares of Stock that are represented by
awards granted under the 2000 Management Equity Plan and the 1992 Management
Equity Plan of the Company (the “Prior Equity Plans”) that are forfeited,
expire or are canceled after the Effective Date without delivery of shares of
Stock or which result in the forfeiture of the shares of Stock back to the
Company to the extent that such shares would have been added back to the
reserve under the terms of the applicable Prior Equity Plan.


 


(c) To the extent
provided by the Committee pursuant to Subsection 5.7, any Award may be settled
in cash rather than Stock.


 


(d) Any shares of
Stock subject to an Award which for any reason expires or terminates
unexercised or is not earned in full may again be made subject to an Award
under the Plan. The following shares of Stock may not again be made available
for issuance as Awards under the Plan: (i) shares of Stock not issued or
delivered as a result of the net settlement of an outstanding SAR, (ii) shares
of Stock used to pay the exercise price or withholding taxes related to an
outstanding Award, or (iii) shares of Stock repurchased on the open market
with the proceeds of the option exercise price.


 


(e) Subject
to Paragraph 5.2(f), the following additional maximums are imposed under the
Plan:


 


(i) The maximum number of shares that may be
covered by Awards granted to any one Participant pursuant to Section 2
(relating to Options and SARs) shall be 500,000 shares during any
one-calendar-year period. If an Option is in tandem with an SAR, such that the
exercise of the Option or SAR with respect to a share of Stock cancels the
tandem SAR or Option right, respectively, with respect to such share, the
tandem Option and SAR rights with respect to each share of Stock shall be
counted as covering but one share of Stock for purposes of applying the
limitations of this Paragraph (i).


 


(ii) To the extent required by applicable law,
the aggregate Fair Market Value (as of the date of grant) of the shares of
Stock with respect to which the ISOs granted to any employee first become
exercisable during any calendar year may not exceed $100,000. For purposes of
this $100,000 limit, the employee’s ISOs under this Plan and all other plans
maintained by the Company and its Subsidiaries will be aggregated. To the
extent any ISOs would exceed the $100,000 limit, the ISO shall thereafter be
treated as an NQO.


 


(iii) For
Full Value Awards that are intended to be “performance-based compensation” (as
that term is used for purposes of Code section 162(m)), no more than 300,000
shares of Stock may be delivered pursuant to such Awards granted to any one
Participant during any one-calendar-year period (regardless of whether
settlement of the Award is to occur prior to, at the time of, or after the time
of vesting); provided that Awards described in this Paragraph (iii) shall
be subject to the following:


 

















 


(A)    If the
Awards are denominated in Stock but an equivalent amount of cash is delivered
in lieu of delivery of shares of Stock, the foregoing limit shall be applied
based on the methodology used by the Committee to convert the number of shares
of Stock into cash.


 


(B)    If
delivery of Stock or cash is deferred until after shares of Stock have been
earned, any adjustment in the amount delivered to reflect actual or deemed
investment experience after the date the shares are earned shall be
disregarded.


 


(iv) For
Cash Incentive Awards that are intended to be “performance-based compensation”
(as that term is used for purposes of Code section 162(m)), no more than
$2,000,000 may be paid to any one Participant for performance periods beginning
in any one calendar year, regardless of whether the applicable performance period
during which the Award is earned ends in the same year in which it begins or in
a later calendar year; provided that Awards described in this Paragraph (iv) shall
be subject to the following:


 


(A)  If the
Awards are denominated in cash but an equivalent amount of Stock is delivered
in lieu of delivery of cash, the foregoing limit shall be applied to the cash
based on the methodology used by the Committee to convert the cash into shares
of Stock.


 


(B)   If delivery
of Stock or cash is deferred until after cash has been earned, any adjustment
in the amount delivered to reflect actual or deemed investment experience after
the date the cash is earned shall be disregarded.


 


(f)    In the
event of 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 Committee shall proportionally adjust outstanding
Awards to preserve the benefits or potential benefits of the Awards. Action by
the Committee may include: (i) adjustment of the number and kind of shares
(or other securities) which may be delivered under the Plan; (ii) adjustment
of the number and kind of shares (or other securities) subject to outstanding
Awards; (iii) adjustment of the Exercise Price of outstanding Options and
SARs; and (iv) any other adjustments to outstanding Awards that the
Committee determines to be equitable, which may include, without limitation, (I) replacement
of Awards with other Awards which the Committee determines have comparable
value and which are based on stock of a company resulting from or involved in
the transaction, (II) cancellation of the Award in return for cash payment
of the current value of the Award, determined as though the Award is fully
vested at the time of payment, provided that in the case of an Option, the
amount of such payment may be the excess of value of the Stock subject to the
Option at the time of the transaction over the exercise price; and (III) replacement
with other types of Awards.  In no event
shall this Paragraph 5.2(f) be construed to permit an adjustment
(including a replacement) of an Option, SAR or other Award if such modification
either: (x) would result in accelerated recognition of income or
imposition of additional tax under Code section 409A; or (y) would cause
the Option, SAR or other Award subject to the adjustment (or cause a
replacement Option, SAR or other award) to be subject to Code section 409A,
provided that the restriction of this clause (y) shall not apply to any
Option, SAR or other Award that, at the time it is granted or otherwise, is
designated as being deferred compensation subject to Code section 409A.


 


(g)   The maximum
number of shares of Stock that may be delivered to Participants and their
beneficiaries with respect to ISOs granted under the Plan shall be 4,625,000
shares; provided, however, that to the extent that shares not delivered must be
counted against this limit as a condition of satisfying the rules applicable
to ISOs, such rules shall apply to the limit on ISOs granted under the
Plan.


 


5.3. General Restrictions. Delivery of shares
of Stock or other amounts under the Plan shall be subject to the following:


 


(a)   Notwithstanding
any other provision of the Plan, the Company shall have no obligation to
deliver any shares of Stock or make any other distribution of benefits under
the Plan unless such delivery or distribution would comply with all applicable
laws (including, without limitation, the requirements of the Securities Act of
1933), and the applicable requirements of any securities exchange or similar
entity.


 


(b)   To the
extent that the Plan provides for issuance of stock certificates to reflect the
issuance of shares of Stock, the issuance may be effected on a non-certificated
basis, to the extent not prohibited by applicable law or the applicable rules of
any stock exchange.


 


5.4. Tax Withholding. All distributions under
the Plan are subject to withholding of all applicable taxes, and the Committee
may condition the delivery of any shares or other benefits under the Plan on
satisfaction of the applicable withholding obligations. 


 

















 


Except as
otherwise provided by the Committee, such withholding obligations may be
satisfied (i) through cash payment by the Participant, (ii) through
the surrender of shares of Stock which the Participant already owns (provided,
however, that to the extent shares described in this clause (ii) are used
to satisfy more than the minimum statutory withholding obligation, as described
below, then, except as otherwise provided by the Committee, payments made with
shares of Stock in accordance with this clause (ii) shall be limited to
shares held by the Participant for not less than six months prior to the
payment date), or (iii) through the surrender of shares of Stock to which
the Participant is otherwise entitled under the Plan; provided, however, that
such shares under this clause (iii) may be used to satisfy not more than
the Company’s minimum statutory withholding obligation (based on minimum
statutory withholding rates for Federal, state and local tax purposes,
including payroll taxes, that are applicable to such supplemental taxable
income).


 


5.5. Grant and Use of Awards. In the discretion
of the Committee, a Participant may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be granted to a
Participant. Subject to Subsection 2.6 (relating to repricing), Awards may be
granted as alternatives to or replacement of awards granted or outstanding
under the Plan or any other plan or arrangement of the Company or a Subsidiary
(including a plan or arrangement of a business or entity, all or a portion of
which is acquired by the Company or a Subsidiary). Subject to the overall
limitation on the number of shares of Stock that may be delivered under the
Plan, the Committee may use available shares of Stock as the form of payment
for compensation, grants or rights earned or due under any other compensation
plans or arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.
Notwithstanding the provisions of Subsection 2.3, Options and SARs granted
under the Plan in replacement for awards under plans and arrangements of the
Company or a Subsidiary assumed in business combinations may be adjusted by the
Committee to preserve the benefit of the award. 
The provisions of this Subsection 5.5 shall be subject to the provisions
of Subsection 5.18.


 


5.6. Dividends and Dividend Equivalents. An
Award (including without limitation an Option or SAR Award) may provide the
Participant with the right to receive dividend payments or dividend equivalent
payments with respect to Stock subject to the Award, provided that, except as
otherwise provided by the Committee, payment of any dividend or dividend
equivalent shall be subject to the same conditions, restrictions and
contingencies (including vesting) as the underlying shares of Stock, and
further provided that such dividend and dividend equivalent payments shall be
subject to adjustment by the Committee pursuant to Paragraph 5.2(f) (relating
to the adjustment of shares).  The
provisions of this Subsection 5.6 shall be subject to the provisions of
Subsection 5.18.


 


5.7. Settlement of Awards. The settlement of
Awards under the Plan shall be subject to the following:


 


(a)   The
obligation to make payments and distributions with respect to Awards may be
satisfied through cash payments, the delivery of shares of Stock, the granting
of replacement Awards, or combination thereof as the Committee shall determine.
Satisfaction of any such obligations under an Award, which is sometimes
referred to as “settlement” of the Award, may be subject to such conditions,
restrictions and contingencies as the Committee shall determine. The Committee
may permit or require the deferral of any Award payment, subject to such rules and
procedures as it may establish, which may include provisions for the payment or
crediting of interest or dividend equivalents, and may include converting such
credits into deferred Stock equivalents.


 


(b)   Each
Subsidiary shall be liable for payment of cash due under the Plan with respect
to any Participant to the extent that such benefits are attributable to the
services rendered for that Subsidiary by the Participant. Any disputes relating
to liability of a Subsidiary for cash payments shall be resolved by the
Committee; provided, however, that no such dispute shall result in a delay in
payment to a Participant beyond the latest date by which such payment is due
under the terms of the applicable Award.


 


(c)   Except for
Options and SARs designated at the time of grant or otherwise as intended to be
subject to Code section 409A, this Subsection 5.7 shall not be construed to
permit the deferred settlement of Options or SARs, if such settlement would
result in deferral of compensation under Treas. Reg. §1.409A-1(b)(5)(i)(A)(3) (except
as permitted in paragraphs (i) and (ii) of that section).


 


(d)   The
provisions of this Subsection 5.7 shall be subject to the provisions of
Subsection 5.18.


 


5.8. Transferability. Except as otherwise
provided by the Committee (subject to Paragraph 2.1(b)(iv)), Awards under the
Plan are not transferable except as designated by the Participant by will or by
the laws of descent and distribution.


 


5.9. Form and Time of Elections. Unless
otherwise specified herein, each election required or permitted to be made by
any Participant or other person entitled to benefits under the Plan, and any permitted
modification, or revocation thereof, shall be in writing filed with the
Committee at such times, in such form, and subject to such restrictions and
limitations, not inconsistent with the terms of the Plan, as the Committee
shall require.


 

















 


5.10. Agreement With Company. An Award under the
Plan shall be subject to such terms and conditions, not inconsistent with the
Plan, as the Committee shall, in its sole discretion, prescribe. The terms and
conditions of any Award to any Participant shall be reflected in such form of
written document as is determined by the Committee. A copy of such document
shall be provided to the Participant, and the Committee may, but need not
require that the Participant sign a copy of such document. Such document is
referred to in the Plan as an “Award Agreement” regardless of whether any
Participant signature is required. 
Except for Awards designated at the time of grant or otherwise as
intended to be deferred compensation subject to Code section 409A, this
Subsection 5.10 shall not be construed to permit the grant of an Award if such
action would cause the Award being granted to be subject to Code section 409A.


 


5.11. Action by Company or Subsidiary. Any
action required or permitted to be taken by the Company or any Subsidiary shall
be by resolution of its board of directors, or by action of one or more members
of its board of directors (including a committee of the board) who are duly
authorized to act for the board, or (except to the extent prohibited by
applicable law or applicable rules of any stock exchange) by a duly
authorized officer of the Company or Subsidiary.


 


5.12. Gender and Number. Where the context
admits, words in any gender shall include any other gender, words in the
singular shall include the plural and the plural shall include the singular.


 


5.13. Limitation of Implied Rights.


 


(a)   Neither a
Participant nor any other person shall, by reason of participation in the Plan,
acquire any right in or title to any assets, funds or property of the Company
or any Subsidiary whatsoever, including, without limitation, any specific
funds, assets, or other property which the Company or any Subsidiary, in its
sole discretion, may set aside in anticipation of a liability under the Plan. A
Participant shall have only a contractual right to the Stock or amounts, if
any, payable under the Plan, unsecured by any assets of the Company or any
Subsidiary, and nothing contained in the Plan shall constitute a guarantee that
the assets of the Company or any Subsidiary shall be sufficient to pay any
benefits to any person.


 


(b)   The Plan
does not constitute a contract of employment, and selection as a Participant
will not give any participating employee or other individual the right to be
retained in the employ of the Company or any Subsidiary or the right to
continue to provide services to the Company or any Subsidiary, nor any right or
claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan. Except as otherwise expressly
provided in an Award Agreement or the Plan, no Award under the Plan shall
confer upon the holder thereof any rights as a stockholder of the Company prior
to the date on which the individual fulfills all conditions for receipt of such
rights or any rights to receive any additional Awards under the Plan or any
other Plan or arrangement of the Company or any Subsidiary.


 


5.14. Evidence. Evidence required of anyone
under the Plan may be by certificate, affidavit, document or other information
which the person acting on it considers pertinent and reliable, and signed,
made or presented by the proper party or parties.


 


5.15. Section 83(b) Election. For an
Award of Stock that is subject to a substantial risk of forfeiture, the
Committee may: (a) permit the Participant to make an election to
accelerate the recognition of income from the Award to the date of grant by
properly filing an election under section 83(b) of the Code; (ii) not
permit the Participant from making such an election; or (iii) require the
Participant to make such an election as a condition of receiving such Award. In
the absence of a provision in the Award Agreement to the contrary, such an
Award of Stock shall be deemed to permit the Participant to make such election.


 


5.16. Registration. If the Committee determines
that registration of Awards under the Plan is necessary or appropriate, it may
use a Form S-8 or, in the event that such a form is unavailable because
the Awards are granted to employees of companies which are not at least 50%
owned by the Company or for any other reason, the Committee may direct the
Company to use such other registration procedures as it deems appropriate.


 


5.17. Governing Law. The Plan and the rights and
obligations hereunder shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to principles of conflicts of law
of Delaware or any other jurisdiction.


 


5.18         Limitations
under Code Section 409A. 
The provisions of the Plan shall be subject to the following:


 


(a)           No provision of the Plan shall be
construed to permit the grant of an Option or SAR if such action would cause
the Option or SAR being granted or the option or stock appreciation right being
replaced to be subject to Code section 409A, 


 

















 


provided that this
paragraph (a) shall not apply to any Option or SAR (or option or stock
appreciation right granted under another plan) being replaced that, at the time
it is granted or otherwise, is designated as being deferred compensation
subject to Code section 409A.


 


(b)           Except with respect to an Option or SAR
that, at the time it is granted or otherwise, is designated as being deferred
compensation subject to Code section 409A, no Option or SAR shall condition the
receipt of dividends with respect to an Option or SAR on the exercise of such
Award, or otherwise provide for payment of such dividends in a manner that
would cause the payment to be treated as an offset to or reduction of the
exercise price of the Option or SAR pursuant Treas. Reg. §1.409A-1(b)(5)(i)(E).


 


(c)           The Plan shall not be construed to permit
a modification of an Award, or to permit the payment of a dividend or dividend
equivalent, if such actions would result in accelerated recognition of taxable
income or imposition of additional tax under Code section 409A.


 


SECTION 6


 


CHANGE OF CONTROL


 


6.1. Effect of Change of Control. Notwithstanding
any provision in the Plan (including, without limitation, Paragraph 5.2(f)) and
unless otherwise indicated in the Award Agreement, upon the occurrence of a
Change of Control:


 


(a)   If (i) a
Participant’s Date of Termination does not occur between the date of grant of
an Option or SAR and the date of a Change of Control; and (ii) as of the
Change of Control, the Participant is not vested in all of such Option or SAR,
then, as of the date of the Change of Control, the Participant shall become
vested in the Affected Portion of such Option or SAR.


 


(b)   If (i) a
Participant’s Date of Termination does not occur between the date of grant of a
Full Value Award and the date of a Change of Control (regardless of whether
settlement of the Award is to occur prior to, at the time of, or after
vesting); and (ii) as of the Change of Control, the Participant is not
vested in all of such Award, then, as of the date of the Change of Control, the
Participant shall become vested in the Affected Portion of such Award. If (i) a
Participant’s Date of Termination does not occur between the date of grant of a
Cash Incentive Award and the date of a Change of Control (regardless of whether
settlement of the Award is to occur at the time of or after vesting); and (ii) as
of the Change of Control, the Participant is not vested in all of such Award,
then, as of the date of the Change of Control, the Participant shall become
vested in the Affected Portion of such Award.


 


(c)  For purposes
of this Subsection 6.1, the “Affected Portion” of any Option or SAR or other
Award (excluding a Cash Incentive Award) shall be 50% of the shares covered by
the Award as to which the Award is not vested immediately prior to the Change
of Control; provided that if the vesting of the Award is contingent on the
achievement of performance objectives (that is, objectives other than the
completion of service, and referred to as “Performance-Contingent Vesting”),
the Affected Portion of the Award shall be the number of shares that would be
delivered to the Participant if the target level of performance objectives were
achieved for the applicable performance period multiplied by a fraction, the
numerator of which is the number of days during the period beginning on the
first day of the performance period and ending on the date of the Change of
Control and the denominator of which is the number of days in the total
performance period. For purposes of this Subsection 6.1, the “Affected Portion”
of a Cash Incentive Award shall be 50% of the amount covered by the Award which
is not vested immediately prior to the Change of Control; provided that if the
vesting of the Cash Incentive Award is Performance-Contingent Vesting, the “Affected
Portion” of such Cash Incentive Award shall be the amount that would be earned
by the Participant if the target level of performance objectives were achieved
for the applicable performance period multiplied by a fraction, the numerator
of which is the number of days during the period beginning on the first day of
the performance period and ending on the date of the Change of Control (but not
less than 365 days or, if the performance period is less than 365 days, the
number of days in the total performance period) and the denominator of which is
the number of days in the total performance period.


 


(d) If different
portions of any Award that are not vested on the date of a Change of Control
are scheduled to vest on different dates, then the provisions of this
Subsection 6.1 shall be applied to each such portion as though it were a
separate Award.


 

















 


(e)  Subject to
Paragraph (f) below, the vesting of the portion of any Award that is not
the Affected Portion of the Award shall vest without regard to the acceleration
effected by reason of this Subsection 6.1.


 


(f)  Except as
otherwise provided by the Committee, if the Performance-Contingent Vesting of
any Award is accelerated by reason of this Subsection 6.1, then at the end of
the applicable performance period for such Award, the Participant shall become
vested in the number of shares or cash amount in which the Participant would
have become vested in accordance with the terms of the Award, if any (without
regard to the acceleration under this Subsection 6.1) reduced by the number of
shares or cash amount vested under the Award by reason of the acceleration
under this Subsection 6.1.


 


(g) If (i) during the two-year period
following the date of the Change of Control, a Participant’s Date of
Termination occurs by the Company or its Subsidiaries without Cause or by the
Participant for Good Reason, and (ii) at the Date of Termination, any
Award granted before the Change of Control is not fully vested, then any and
all such Awards granted before the Change of Control held by the Participant
shall become fully vested (and, in the case of Options or SARs, exercisable) on
the Date of Termination.


 


(h) If (i) a Participant’s Date of
Termination occurs during an Anticipated Change of Control by the Company or
its Subsidiaries without Cause or by the Participant for Good Reason, and (ii) within
two years following the Date of Termination, a Change of Control occurs, then
the Participant’s Awards (including Awards that otherwise may have expired on
or after the Date of Termination and prior to the Change of Control date unless
inclusion of such expired Awards would result in the imposition of additional
tax under Code section 409A) shall become vested and, in the case of Options or
SARs, exercisable by the Participant (or, in the event of the Participant’s
death after the Date of Termination, the Participant’s beneficiary) on the date
of the Change of Control, and, in the case of Options or SARs, shall remain
exercisable for the exercise period that would have applied if the Date of
Termination (by the Company or its Subsidiaries without Cause or by the
Participant for Good Reason) occurred on the Change of Control date, provided
that such exercise period shall expire in no event later than the date on which
the Option or SAR would have expired if the Participant had remained employed
by the Company or its Subsidiaries or, if later, 30 days after the Change of
Control (provided that in no event shall an ISO be exercisable more than ten
years after the date of grant).


 


6.2. Definition of Change of Control. For
purposes of the Plan, the term “Change of Control” shall mean:


 


(a) Any
“Person” (having the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” within the meaning of Section 13(d)(3)) has or
acquires “Beneficial Ownership” (within the meaning of Rule 13d-3 under
the Exchange Act) of 30% or more of the combined voting power of the Company’s
then outstanding voting securities entitled to vote generally in the election
of directors (“Voting Securities”); provided, however, that the acquisition or
holding of Voting Securities by (i) the Company or any of its
subsidiaries, or (ii) an employee benefit plan (or a trust forming a part
thereof) maintained by the Company or any of its subsidiaries shall not
constitute a change of control; and provided further that the acquisition or
holding of Voting Securities by any Person in which a Participant has a
substantial equity interest shall not constitute a Change of Control with
respect to such Participant. Notwithstanding the foregoing, a Change of Control
shall not be deemed to occur solely because any Person acquired Beneficial
Ownership of more than the permitted amount of Voting Securities as a result of
the issuance of Voting Securities by the Company in exchange for assets
(including equity interests) or funds with a fair value equal to the fair value
of the Voting Securities so issued; provided that if a Change of Control would
occur (but for the operation of this sentence) as a result of the issuance of
Voting Securities by the Company, and after such issuance of Voting Securities
by the Company, such Person becomes the Beneficial Owner of any additional
Voting Securities which increases the percentage of the Voting Securities
Beneficially Owned by such Person to more than 50% of the Voting Securities of
the Company, then a Change of Control shall occur.


 


(b)           At any time during a period of two
consecutive years, the individuals who at the beginning of such period constituted
the Board (the “Incumbent Board”) cease for any reason to constitute more than
50% of the Board; provided, however, that if the election, or nomination for
election by the Company’s stockholders, of any new director was approved by a
vote of more than 50% of the directors then comprising the Incumbent Board,
such new director shall, for purposes of this Paragraph (b), be considered as
though such person were a member of the Incumbent Board; provided, further,
however, that no individual shall be considered a member of the Incumbent Board
if such individual initially assumed office as a result of (i) either an
actual “Election Contest” (as described in Rule 14a-1 1 promulgated under
the Exchange Act) or other actual solicitation of proxies or contest by or on
behalf of a Person other than the Incumbent Board (a “Proxy Contest”), or (ii) by
reason of an agreement intended to avoid or settle any actual or threatened
Election Contest or Proxy Contest.


 


(c) Consummation
of a merger, consolidation or reorganization or approval by the Company’s
stockholders of a liquidation or dissolution of the Company or the occurrence
of a liquidation or dissolution of the Company (“Business Combination”),
unless, following such Business Combination:


 

















 


(i)  the Persons with Beneficial Ownership
of the Company, immediately before such Business Combination, have Beneficial
Ownership of more than 50% of the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of directors of the
corporation (or in the election of a comparable governing body of any other
type of entity) resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) (the “Surviving Company”) in substantially the same
proportions as their Beneficial Ownership of the Voting Securities immediately
before such Business Combination;


 


(ii)  the individuals who were members of
the Incumbent Board immediately prior to the execution of the initial agreement
providing for such Business Combination constitute more than 50% of the members
of the board of directors (or comparable governing body of a noncorporate
entity) of the Surviving Company; and


 


(iii) no
Person (other than the Company, any of its subsidiaries or any employee benefit
plan (or any trust forming a part thereof) maintained by the Company, the
Surviving Company or any Person who immediately prior to such Business
Combination had Beneficial Ownership of 30% or more of the then Voting
Securities) has Beneficial Ownership of 30% or more of the then combined voting
power of the Surviving Company’s then outstanding voting securities; provided,
that notwithstanding this clause (iii), a Change of Control shall not be deemed
to occur solely because any Person acquired Beneficial Ownership of more than
30% of Voting Securities as a result of the issuance of Voting Securities by
the Company in exchange for assets (including equity interests) or funds with a
fair value equal to the fair value of the Voting Securities so issued;
provided, however that a Business Combination with a Person in which a
Participant has a substantial equity interest shall not constitute a Change of
Control with respect to such Participant.


 


(d) Approval
by the Company’s stockholders of an agreement for the assignment, sale,
conveyance, transfer, lease or other disposition of all or substantially all of
the assets of the Company to any Person (other than a Person in which a
Participant has a substantial equity interest (in which case there shall not be
a Change of Control with respect to such Participant) and other than a
subsidiary of the Company or other entity, the Persons with Beneficial
Ownership of which are the same Persons with Beneficial Ownership of the
Company and such Beneficial Ownership is in substantially the same
proportions), or the occurrence of the same. Notwithstanding the foregoing, a
Change of Control shall not be deemed to occur solely because any Person
acquired Beneficial Ownership of more than the permitted amount of Voting
Securities as a result of the acquisition of Voting Securities by the Company
which, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by such Person; provided that
if a Change of Control would occur (but for the operation of this sentence) as
a result of the acquisition of Voting Securities by the Company, and after such
acquisition of Voting Securities by the Company, such Person becomes the
Beneficial Owner of any additional Voting Securities which increases the
percentage of the Voting Securities Beneficially Owned by such Person, then a
Change of Control shall occur.


 


Notwithstanding
this Subsection 6.2 or Subsection 6.3 below, if any Award under the Plan
constitutes Deferred Compensation (as defined in Paragraph 9(m)(vi) below)
and becomes payable upon a Change of Control, a change of control event that
otherwise is a Change of Control under the Plan shall be a Change of Control
for purposes of the Plan only if such event also satisfies the requirements of
Treas. Reg. §1.409A-3(i)(5).


 


6.3. Definition of Anticipated Change of Control. An
“Anticipated Change of Control” shall exist during any period in which the
circumstances described in Paragraphs (a) or (b), below, exist (provided,
however, that an Anticipated Change of Control shall cease to exist not later
than the occurrence of a Change of Control):


 


(a)   The Company
enters into an agreement, the consummation of which would result in the
occurrence of a Change of Control, provided that an Anticipated Change of
Control described in this Paragraph (a) shall cease to exist upon the
expiration or other termination of all such agreements.


 


(b)   Any person
(including, without limitation, the Company) publicly announces an intention to
take or to consider taking actions the consummation of which would constitute a
Change of Control; provided that an Anticipated Change of Control described in
this Paragraph (b) shall cease to exist upon the withdrawal of such
intention, or upon a reasonable determination by the Committee that there is no
reasonable chance that such actions would be consummated.


 

















 


SECTION 7


 


COMMITTEE


 


7.1. Administration. The authority to control
and manage the operation and administration of the Plan shall be vested in a
committee (the “Committee”) in accordance with this Section 7. The
Committee shall be selected by the Board, and shall consist solely of two or
more members of the Board who are outside directors within the meaning of
section 162(m)(4)(C)(i) of the Code and the applicable regulations and
nonemployee directors within the meaning of Rule 16b-3 under the Exchange
Act. The Human Resources Committee shall administer the Plan unless otherwise
determined by the Board. The Board may delegate the authority to grant and
administer non-employee director compensation to the Governance Committee. If
the Committee does not exist, or for any other reason determined by the Board,
the Board may take any action under the Plan that would otherwise be the
responsibility of the Committee.


 


7.2. Powers of Committee. The Committee’s
administration of the Plan shall be subject to the following:


 


(a) Subject to the provisions of the Plan, the
Committee will have the authority and discretion to select from among the
Eligible Individuals those persons who shall receive Awards, to determine the
time or times of receipt, to determine the types of Awards and the number of
shares covered by the Awards, to establish the terms, conditions, performance
criteria, restrictions, and other provisions of such Awards, and (subject to
the restrictions imposed by Section 8) to amend, cancel or suspend Awards.


 


(b) To the extent that the Committee determines
that the restrictions imposed by the Plan preclude the achievement of the
material purposes of the Awards in jurisdictions outside the United States, the
Committee will have the authority and discretion to modify those restrictions
as the Committee determines to be necessary or appropriate to conform to
applicable requirements or practices of jurisdictions outside of the United
States.


 


(c) The Committee will have the authority and
discretion to interpret the Plan, to establish, amend, and rescind any rules and
regulations relating to the Plan, to determine the terms and provisions of any
Award Agreement made pursuant to the Plan, and to make all other determinations
that may be necessary or advisable for the administration of the Plan.


 


(d) Any interpretation of the Plan by the
Committee and any decision made by it under the Plan is final and binding on
all persons.


 


(e) In
controlling and managing the operation and administration of the Plan, the
Committee shall take action in a manner that conforms to the articles and
by-laws of the Company, and applicable state corporate law.


 


7.3. Delegation by Committee. Except to the
extent prohibited by applicable law or the applicable rules of a stock
exchange or automated quotation system on which the Stock is listed, the
Committee may allocate all or any portion of its responsibilities and powers to
any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it. Any such
allocation or delegation may be revoked by the Committee at any time.


 


7.4. Information to be Furnished to Committee. The
Company and Subsidiaries shall furnish the Committee with such data and
information as it determines may be required for it to discharge its duties.
The records of the Company and Subsidiaries as to an employee’s or Participant’s
employment (or other provision of services), termination of employment (or
cessation of the provision of services), leave of absence, reemployment and compensation
shall be conclusive on all persons unless determined to be incorrect. Participants
and other persons entitled to benefits under the Plan must furnish the
Committee such evidence, data or information as the Committee considers
desirable to carry out the terms of the Plan.


 


SECTION 8


 


AMENDMENT AND TERMINATION


 


The Board may, at
any time, amend or terminate the Plan, and the Board or the Committee may amend
any Award Agreement, provided that no amendment or termination may, in the
absence of written consent to the change by the affected Participant (or, if
the Participant is not then living, the affected beneficiary), adversely affect
the rights of any Participant or beneficiary under any Award granted under the
Plan prior to the date such amendment is adopted by the Board or the Committee
(if applicable); and further provided that adjustments pursuant to Paragraph
5.2(f) shall not be subject to the foregoing limitations of this Section 8;
and further provided that the provisions of Subsection 2.7 (relating to
repricing) cannot be amended unless the amendment is approved by the Company’s
stockholders.  No amendment or
termination of the Plan shall be adopted or effective if it would result in
accelerated recognition of income or imposition of additional tax under Code
section 409A or, except as otherwise provided in the amendment, would cause
amounts that were not otherwise subject to Code section 409A to become subject
to Code section 409A.


 

















 


SECTION 9


 


DEFINED TERMS


 


In addition to the
other definitions contained herein, the following definitions shall apply:


 


(a) Affected Portion. The
term “Affected Portion” shall have the meaning set forth in Paragraph 6.1(c).


 


(b) Anticipated Change of
Control. The term “Anticipated Change of Control” shall have the
meaning set forth in Subsection 6.3.


 


(c) Award. The
term “Award” means any award or benefit granted under the Plan, including,
without limitation, the grant of Options, SARs, Full Value Awards and Cash
Incentive Awards.


 


(d) Award Agreement. The
term “Award Agreement” shall have the meaning set forth in Subsection 5.10.


 


(e) Board. The
term “Board” means the Board of Directors of the Company.


 


(f)  Bonus Stock. The
term “bonus stock” shall have the meaning set forth in Paragraph 3.1(a).


 


(g)    Cash Incentive Award. The
term “Cash Incentive Award” shall have the meaning set forth in Section 4.


 


(h)   Cause. Except as
otherwise provided by the Committee, and subject to the last sentence of this
definition, “Cause” shall mean: (i) the Participant’s continued failure to
perform substantially the duties of the Participant with the Company and its
Subsidiaries (other than any such failure resulting from incapacity due to
physical or mental illness or death), after a written demand for improvement
and substantial performance is delivered to the Participant (by the Board for
the chief executive officer of the Company, by the chief executive officer of
the Company for officers other than the chief executive officer, and by an
officer of the Company for Participants other than officers) which specifically
identifies the failure which, when judged by objective standards, is clearly
and significantly detrimental to the Company and its Subsidiaries; (ii) the
Participant’s engaging in an intentional, fraudulent act in the conduct of the
business of the Company or its Subsidiaries which is demonstrably injurious to
the Company or its Subsidiaries; or (iii) the Participant’s conviction of,
or plea of guilty or nolo contendere to, any criminal violation (other than a
traffic-related violation) involving dishonesty, fraud, breach of trust or
sexual offense or any criminal felony violation (other than a traffic-related
violation). If a non-employee director ceases to be a member of the Board, he
or she shall be treated as having been terminated by a Company without Cause on
the date of such cessation unless the director is removed from the Board for
cause (as that term is defined in Article Sixth, Section 5 of the
Company’s Restated Certificate of Incorporation as in effect on the Effective
Date).


 


(i) Change of Control. The term “Change
of Control” shall have the meaning set forth in Subsection 6.2.


 


(j) Code. The term “Code” means the
Internal Revenue Code of 1986, as amended. A reference to any provision of the
Code shall include reference to any successor provision of the Code.


 


(k) Committee. The term “Committee”
shall have the meaning set forth in Subsection 7.1.


 


(l) Company. The term “Company” shall
have the meaning set forth in Subsection 1.1.


 


(m) Date of Termination. The term “Date
of Termination” with respect to an Award granted to any Participant shall mean
the first day occurring on or after the grant date of the Award on which the
Participant is not employed by the Company or any Subsidiary, regardless of the
reason for the termination of employment; provided that a termination of
employment shall not be deemed to occur by reason of a transfer of the
Participant between the Company and a Subsidiary or between two Subsidiaries;
and further provided that the Participant’s employment shall not be considered
terminated while the Participant is on a leave of absence from the Company or a
Subsidiary approved by the Participant’s employer. If, as a result of a sale or
other transaction, the Participant’s employer ceases to be a Subsidiary (and
the Participant’s employer is or becomes an entity that is separate from the
Company), and the Participant is not, at the end of the 30-day period following
the transaction, employed by the Company or an entity that is then a Subsidiary,
then the occurrence of such transaction shall be treated as the Date of
Termination caused by the Participant being discharged by the employer. For
purposes of applying the foregoing definition of Date of Termination, a
Participant shall be deemed to be employed by the Company or Subsidiary during
any period in which he or she is a member of the Board of Directors of the
Company or a Subsidiary.  With respect to
Awards that constitute Deferred Compensation, references to the Participant’s
termination of employment (including references to the Participant’s employment
termination, and to the Participant terminating employment, a Participant’s
separation from service, and other similar reference) and references to a
Participant’s termination as a 


 

















 


director
(including separation from service and other similar references) shall mean,
respectively, the Participant ceasing to be employed by, or ceasing to perform
director services for, the Company and the Affiliates, subject to the
following:


 


(i)    The employment relationship or director
relationship will be deemed to have ended at the time the Participant and the
applicable company reasonably anticipate that a level of bona fide services the
Participant would perform for the Company and the Affiliates after such date
would permanently decrease to no more than 20% of the average level of bona
fide services performed over the immediately preceding 36 month period (or the
full period of service to the Company and the Affiliates if the Participant has
performed services for the Company and the Affiliates for less than 36
months).  In the absence of an
expectation that the Participant will perform at the above-described level, the
date of termination of employment or termination as a director will not be
delayed solely by reason of the Participant continuing to be on the Company’s
and the Affiliates’ payroll after such date.


 


(ii)   The employment or director relationship will
be treated as continuing intact while the Participant is on a bona fide leave
of absence (determined in accordance with Treas. Reg. §409A-1(h)).


 


(iii)  The determination of a Participant’s
termination of employment or termination as a director by reason of a sale of
assets, sale of stock, spin-off, or other similar transaction of the Company or
an Affiliate will be made in accordance with Treas. Reg. §1.409A-1(h).


 


(iv)  If a Participant performs services both as an
employee of the Company or an Affiliate, and a member of the board of directors
of the Company or an Affiliate, the determination of whether termination of
employment or termination of service as a director shall be made in accordance
with Treas. Reg. §1.409A-1(h)(5) (relating to dual status service
providers).


 


(v)   For purposes of this Paragraph 9(m), the term
“Affiliates” means all persons with whom the Company is considered to be a
single employer under Code section 414(b) and all persons with whom the
Company would be considered a single employer under Code section 414(c) thereof.


 


(vi)  For purposes of this Paragraph 9(m), the term “Deferred
Compensation” means payments or benefits that would be considered to be
provided under a nonqualified deferred compensation plan as that term is
defined in Treas. Reg. §1.409A-1.


 


(n) Effective Date. The term “Effective
Date” shall have the meaning set forth in Subsection 5.1.


 


(o) Eligible Individual. Subject to
the provisions of Paragraph 2.1(b) (relating to ISOs), the term “Eligible
Individual” means any employee of the Company or a Subsidiary, and any
non-employee member of the Board of Directors of the Company or the Board of
Directors of any Subsidiary.


 


(p) Exchange Act. The term “Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


(q) Exercise Price. The term “Exercise
Price” shall have the meaning set forth in Subsection 2.3.


 


(r) Fair Market Value. Except as
otherwise provided by the Committee, “Fair Market Value” for a share of Stock
for a day shall be the closing price per share on such day on the principal
exchange on which shares of Stock are listed or admitted to trading or on the
Nasdaq National Market or the Nasdaq SmallCap Market (or the closing bid if no
sales were reported); if shares of Stock are listed or admitted to trading on
an exchange but such day is not a trading day, Fair Market Value shall be
determined as of the last preceding trading day. If the preceding sentence is
not applicable, Fair Market Value shall be determined in good faith by the
Committee in accordance with Treas. Reg. 1.409A-1(b)(5)(iv).


 


(s) Full Value Award. The term “Full
Value Award” shall have the meaning set forth in Subsection 3.1.


 


(t) Good Reason. Except as otherwise
provided by the Committee, “Good Reason” shall exist upon the occurrence of any
of the following events: (i) a diminution in the Participant’s position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities (including the assignment to the Participant of any
duties inconsistent with the Participant’s position, authority, duties or
responsibilities), excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
or its Subsidiaries promptly after receipt of notice thereof given by the
Participant; (ii) the Company or its Subsidiaries shall (A) reduce
the base salary or bonus or incentive opportunity of the Participant or (B) 


 

















 


substantially
reduce in the aggregate the Participant’s benefits; or (iii) the Company
shall require the Participant to relocate the Participant’s principal business
office to any location more than 50 miles from its location prior to the Change
of Control or Anticipated Change of Control.


 


(u) ISO. The term “ISO” shall have
the meaning set forth in Subsection 2.1.


 


(v) NQO. The term “NQO” shall have
the meaning set forth in Subsection 2.1.


 


(w) Option. The term “Option” shall
have the meaning set forth in Subsection 2.1.


 


(x) Participant. The term “Participant”
shall have the meaning set forth in Subsection 1.2.


 


(y) Performance-Based Compensation. The term “Performance-Based
Compensation” shall have the meaning ascribed to it under section 162(m) of
the Code.


 


(z) Performance-Contingent Vesting. The term “Performance-Contingent
Vesting” shall have the meaning set forth in Paragraph 6.1(c).


 


(aa) Performance Measures. The “Performance
Measures” may be based on any one or more of the following, as selected by the
Committee: (a) earnings per share; (b) net earnings/income; (c) net
operating earnings/income; (d) net operating earnings/income after taxes; (e) net
operating earnings/income per share; (f) EPS from continuing operations; (g) EBIT;
(h) stock price appreciation; (i) total shareholder return; (j) relative
total shareholder return (for example, as compared to peer group performance); (k) sales/revenues,
or any component thereof; (l) sales/revenue growth; (m) unit volume; (n) gross
or operating margins/margin contribution; (o) economic value added or
economic profit; (p) return on assets (net assets or operating assets); (q) return
on equity; (r) return on invested capital or invested capital efficiency; (s) working
capital or working capital efficiency; (t) cash flow/free cash flow; (u) net
cash provided by operating activities; (v) cash return on assets; (w) waste
recovery, cost control and/or operating efficiency targets; (x) expense
targets; and (y) safety goals. Each goal may be expressed on an absolute
and/or relative basis, may be based on or otherwise employ comparisons based on
internal targets, the past performance of the Company and/or the past or
current performance of other companies, and in the case of earnings-based
measures, may use or employ comparisons relating to capital, shareholders
equity and/or shares outstanding, investments or assets or net assets.


 


(bb) Performance Shares. The term “performance
shares” shall have the meaning set forth in Paragraph 3.1(b).


 


(cc) Performance Units. The term “performance
units” shall have the meaning set forth in Paragraph 3.1(b).


 


(dd) Plan. The “Plan” means the United
Stationers Inc. 2004 Long-Term Incentive Plan.


 


(ee) Prior Equity Plans. The term “Prior Equity
Plans” shall have the meaning set forth in Paragraph 5.2(b)(ii).


 


(ff) Restricted Stock. The term “restricted
stock” shall have the meaning set forth in Paragraph 3.1(c).


 


(gg) Restricted Stock Units. The term “restricted
stock units” shall have the meaning set forth in Paragraph 3.1(c).


 


(hh) SAR. The term “SAR” shall have the meaning
set forth in Subsection 2.2.


 


(ii) Stock. The term “Stock” means Common Stock
of the Company.


 


(jj) Subsidiary. For purposes of the Plan and
subject to Subsection 2.1(b) (relating to ISOs), the term “Subsidiary”
means any corporation, partnership, joint venture or other entity during any
period in which at least a fifty percent voting or profits interest is owned,
directly or indirectly, by the Company (or by any entity that is a successor to
the Company), and any other business venture designated by the Committee in
which the Company (or any entity that is a successor to the Company) has a
significant interest.