Exhibit
4.1


 


NEW
YORK & COMPANY, INC.


AMENDED
AND RESTATED


2006
LONG-TERM INCENTIVE PLAN


ARTICLE
I


ESTABLISHMENT,
PURPOSE AND TERM


 


1.1
Establishment. The New York & Company,
Inc. Amended and Restated 2006 Long-Term Incentive Plan (“Plan”)
is hereby established by New York & Company, Inc. (“Company”),
effective as of the Effective Date. Subject to Section 13.1,
Awards may be granted as provided herein for the term of the Plan.


 


1.2
Purposes. The purposes of the Plan are
to foster and promote the long-term financial success of the Company and
materially increase shareholder value by motivating performance through
incentive compensation. The Plan also is intended to encourage Participant
ownership in the Company, attract and retain talent, and enable Participants to
participate in the long-term growth and financial success of the Company. In
addition, the Plan provides the ability to make Awards linked to the
profitability of the Company’s businesses and increases in shareholder value.


 


1.3
Term. The term of the Plan shall extend
from the Effective Date until the tenth anniversary thereof. No additional
Awards shall be made after the expiration of such term, but outstanding awards
shall be administered in accordance with the provisions thereof. The Plan shall
continue in effect until all matters relating to the settlement of Awards and
administration of the Plan have been completed.


 


ARTICLE II


DEFINITIONS


 


For
purposes of the Plan, the following terms are defined as set forth below:


 


2.1
“2002 Plan” means the New York &
Company, Inc. Amended and Restated 2002 Stock Option Plan.


 


2.2
“Affiliate” means any individual,
corporation, partnership, association, limited liability company, joint-stock
company, trust, unincorporated association or other entity that directly or
indirectly through one or more intermediaries, controls, is controlled by, or
is under control with, the Company.


 


2.3
“Agreement” means any agreement entered
into pursuant to the Plan by which an Award is granted to a Participant.


 


2.4
“Award” means any Stock Option, Stock
Appreciation Right, Restricted Stock, Deferred Stock, or Performance Award
granted to a Participant under the Plan. Awards shall be subject to the terms
and conditions of the Plan and shall be evidenced by an Agreement containing such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable.


 


2.5
“Beneficiary” means any person or other
entity, which has been designated by a Participant in his or her most recent
written beneficiary designation filed with the Committee to 


 

















 


receive
the compensation, specified under the Plan to the extent permitted. If there is
no designated beneficiary, then the term means any person or other entity
entitled by will or the laws of descent and distribution to receive such
compensation.


 


2.6
“Board of Directors” or “Board” means the Board of Directors of the Company.


 


2.7
“Cause” means, unless otherwise
specifically provided in an Agreement, any act or omission which permits the
Company to terminate the written employment agreement or arrangement between
the Participant and the Company or an Affiliate for “cause” as defined in such
agreement or arrangement, or in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the term “Cause,”
then “Cause” means the occurrence of one or more of the following events:


 


(1)    misappropriation of the Company’s assets or
business opportunities;


 


(2)    alcoholism or drug addiction which impairs
one’s ability to perform his duties and responsibilities hereunder or is
injurious to the business of the Company;


 


(3)    the commission by such Participant of, or
the plea of nolo contendere with respect to, a felony or crime involving moral
turpitude;


 


(4)    intentionally causing the Company to violate
a local, state or federal law in any material respect;


 


(5)    gross negligence or willful misconduct in
the conduct or management of the Company not remedied within 10 days after
receipt of written notice from the Company; or willful refusal to comply with
any significant policy, directive or decision of the Board in furtherance of a
legitimate business purpose or willful refusal to perform the duties reasonably
assigned to the individual by the Board consistent with the functions, duties
and responsibilities of his position and only if not remedied within 10 days
after receipt of written notice from the Company; or


 


(6)    such other meaning as may be specified with
respect to any particular Award or in any employment or other agreement entered
into at or before the time the Award is granted (or, with the consent of the
Participant, after such time).


 


2.8
“Code” means the Internal Revenue Code of
1986, as amended from time to time, and any successor thereto.


 


2.9
“Commission” means the Securities and
Exchange Commission or any successor thereto.


 


2.10
“Committee” means the committee of the
Board responsible for granting and administering Awards under the Plan, which
initially shall be the Compensation Committee of the Board, until such time as
the Board may designate another committee. The Committee shall consist solely
of two or more directors and each member of the Committee shall be a “non-employee
director” within the meaning of Rule 16b-3 and also an “outside director” under
Section 162(m) of the Code. In addition, each member of the Compensation
Committee shall satisfy any independence or other corporate governance
standards imposed by the New York Stock Exchange or other securities market on
which the Stock shall be listed from time to time.


 

















 


2.11
“Company” means New York and Company, Inc.,
a Delaware corporation, and includes any successor or assignee corporation or
corporations into which the Company may be merged, changed or consolidated; any
corporation for whose securities the securities of the Company shall be
exchanged; and any assignee of or successor to substantially all of the assets
of the Company. Wherever the context of the Plan so admits or requires, “Company” also means “Affiliate.”


 


2.12
“Covered Employee” means a Participant
who is a “covered employee” within the meaning of Section 162(m) of the Code.


 


2.13
“Deferred Stock” means a right granted to
a Participant under Section 9.1
hereof to receive Stock at the end of a specified deferral period.


 


2.14
“Domestic Relations Order” has the
meaning set forth in the Code.


 


2.15
“Effective Date” means the date that the
Plan is approved by the Company’s shareholders.


 


2.16
“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.


 


2.17
“Exercise Price” means the price that a
Participant must pay to exercise an Award or the amount upon which the value of
an Award is based.


 


2.18
“Fair Market Value” means, as of any
given date, the closing market price on the New York Stock Exchange  or such other public trading market on which the Stock is
traded on that date. If there is no regular public trading market for such
Stock, the Fair Market Value of the Stock shall be determined by the Committee
in good faith. In each case, the Fair Market Value shall be determined without
regard to whether the Stock is restricted or represents a minority interest.


 


2.19
“Grant Date” means the date as of which
an Award is granted pursuant to the Plan. In no event may the Grant Date be
earlier than the Effective Date.


 


2.20
“Incentive Stock Option” means any Option
that is intended to be, is designated as, and actually qualifies as, an “incentive
stock option” within the meaning of Section 422 of the Code.


 


2.21
“Non-Qualified Stock Option” means a
Stock Option that is not an Incentive Stock Option.


 


2.22
“Option Period” means the period during
which the Option shall be exercisable in accordance with an Agreement and Article VI.


 


2.23
“Participant” means a person who
satisfies the eligibility conditions of Article V and
to whom an Award has been granted by the Committee under the Plan. In the event
that a Representative is appointed for a Participant, then the term “Participant”
shall mean such appointed Representative. Notwithstanding the appointment of a
Representative, the term “Termination of Employment”
shall mean the Termination of Employment of the Participant.


 


2.24
“Performance Award” means an Award
consisting of Performance Shares, Performance Units or other Award described in
Article X that is dependent upon the
achievement of Performance Goals.


 

















 


2.25
“Performance Goals” mean the level of
performance established by the Committee as the Performance Goal with respect
to a Performance Measure. Performance Goals may vary from Performance Period to
Performance Period and from Participant to Participant and may be established
on a stand-alone basis, in tandem or in the alternative.


 


2.26
“Performance Measure” means any measure
based on any of the performance criteria set out in this Section, either alone
or in any combination, and, if not based on individual performance, on either a
consolidated or a division or business unit level, as the Committee may
determine: individual Participant financial or non-financial performance goals;
sales; cash flow; cash flow from operations; operating profit or income; net
income; operating margin; net income margin; return on net assets; four-wall
contribution; economic value added; return on total assets; return on equity;
return on total capital; total shareholder return; revenue; revenue growth;
earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA growth; basic earnings per share; diluted
earnings per share; funds from operations per share and per share growth; cash
available for distribution; cash available for distribution per share and per
share growth; share price performance on an absolute basis and relative to an
index of earnings per share or improvements in the Company’s attainment of
expense levels; or implementing or completion of critical projects. The
foregoing criteria shall have any reasonable definitions that the Committee may
specify, which may include or exclude any or all of the following items as the
Committee may specify: extraordinary, unusual or non-recurring items; effects
of accounting changes; effects of financing activities; expenses for
restructuring or productivity initiatives; other non-operating items; spending
for acquisitions; effects of divestitures; and effects of litigation activities
and settlements. Any such performance criterion or combination of such criteria
may apply to the Participant’s Award opportunity in its entirety or to any
designated portion or portions of the Award opportunity, as the Committee may
specify. In the event Code Section 162(m) or applicable tax or other laws
change to permit the Committee discretion to alter the governing performance
measures without obtaining shareholder approval of such changes, the Committee
shall have sole discretion to make such changes without obtaining shareholder
approval. Performance Measures may vary from Performance Period to Performance
Period and from Participant to Participant.


 


2.27
“Performance Period” means the time
period during which a Performance Award shall be earned shall be the “Performance
Period,” and shall be at least one (1) fiscal year in length, unless otherwise
determined by the Committee. Performance Awards shall be subject to Performance
Goals which shall be established by the Committee.


 


2.28
“Performance Unit” means a right granted
pursuant to the terms and conditions established by the Committee which is
described in Section 10.1.


 


2.29
“Performance Share” means a right granted
pursuant to the terms and conditions established by the Committee which is
described in Section 10.1.


 


2.30
“Plan” means the New York & Company, Inc.
Amended and Restated 2006 Long Term Incentive Plan, as herein set forth and as
may be amended from time to time.


 


2.31
“Representative” means (a) the person or
entity acting as the executor or administrator of a Participant’s estate
pursuant to the last will and testament of a Participant or pursuant to the
laws of the jurisdiction in which the Participant had the Participant’s primary
residence at the date of the Participant’s death; (b) the person or entity
acting as the guardian or temporary 


 

















 


guardian
of a Participant; or (c) the person or entity which is the Beneficiary of the
Participant upon or following the Participant’s death; provided that only one
of the foregoing shall be the Representative at any point in time as determined
under applicable law and recognized by the Committee.


 


2.32
“Restricted Stock” means Stock granted to
a Participant under Section 8.1
hereof and which is subject to certain restrictions and to a risk of forfeiture
or repurchase by the Company.


 


2.33
“Rule 16b-3” means Rule 16b-3, as from
time to time in effect and applicable to the Plan and Participants, promulgated
by the Commission under Section 16 of the Exchange Act.


 


2.34
“Stock” means the Company’s common stock,
$0.001 par value per share, whether presently or hereafter issued, and any
other stock or security resulting from adjustment thereof as described
hereinafter.


 


2.35
“Stock Appreciation Right” means a right
granted under Section 7.1.


 


2.36
“Stock Option” or “Option”
means a right, granted to a Participant under Section 6.1
hereof, to purchase Stock at a specified price during specified time periods.


 


2.37
“Termination of Employment” means the
occurrence of any act or event whether pursuant to an employment agreement or
otherwise that actually or effectively causes or results in the person’s
ceasing, for whatever reason, to be an officer or employee of the Company or of
any Affiliate, including, without limitation, death, disability, dismissal,
severance at the election of the Participant, retirement, or severance as a
result of the discontinuance, liquidation, sale or transfer by the Company or
its Affiliates of a business owned or operated by the Company or its
Affiliates. With respect to any non-employee member of the Board, Termination
of Employment means the termination of a Participant’s status as a non-employee
director of the Board. With respect to any other person who is not an employee
with respect to the Company or an Affiliate, the Agreement shall establish what
act or event shall constitute a Termination of Employment for purposes of the
Plan. A Termination of Employment shall occur with respect to an employee who
is employed by an Affiliate if the Affiliate shall cease to be an Affiliate and
the Participant shall not immediately thereafter become an employee of the
Company or an Affiliate.


 


In
addition, certain other terms used herein have definitions given to them in the
first place in which they are used.


 


ARTICLE III


COMPENSATION COMMITTEE ADMINISTRATION


 


3.1  Committee
Structure. The Plan shall be administered by the
Committee, but any action that may be taken by the Committee may also be taken
by the full Board of Directors of the Company.


 


3.2  Committee
Actions. Subject to the Committee’s charter, the
Committee may authorize any one or more of its members or an officer of the
Company to execute and deliver documents on behalf of the Committee or the
Committee may allocate among one or more of its members, or may delegate to one
or more of its agents, such duties and responsibilities as it determines,
provided that the Committee shall not delegate the authority to grant Awards. A



 

















 


member
of the Committee shall be recused from Committee action regarding an Award
granted or to be granted to such member.


 


3.3  Committee
Authority. Subject to applicable law, the Company’s
certificate of incorporation and by-laws, the Committee’s charter or the terms
of the Plan, the Committee shall have the authority:


 


(1)    to select those persons to whom Awards may
be granted from time to time;


 


(2)    to determine whether and to what extent
Awards are to be granted hereunder;


 


(3)    to determine the number of shares of Stock
to be covered by each Award granted hereunder;


 


(4)    to determine the terms and conditions of any
Award granted hereunder (including any provisions deemed by the Committee in
good faith to be necessary or appropriate for a “nonqualified deferred
compensation plan,” as defined in Code Section 409A(d)(1), to avoid being
subject to taxation under Code Section 409A(a)(1)), provided that the Exercise
Price of any Option or Stock Appreciation Right shall not be less than the Fair
Market Value per share of the underlying stock as of the Grant Date;


 


(5)    to adjust the terms and conditions, at any
time or from time to time, of any Award, subject to the limitations contained
elsewhere herein, including but not limited to Sections 13.1
and 13.11;


 


(6)    to determine to what extent and under what
circumstances Stock and other amounts payable with respect to an Award shall be
deferred, subject to compliance in good faith with the requirements of the Plan
and Code Section 409A to avoid the Award being subject to taxation under Code Section
409A(a)(1);


 


(7)    to provide for the forms of Agreement to be
utilized in connection with this Plan;


 


(8)    to determine what legal requirements are
applicable to the Plan, Awards, and the issuance of Stock, and to require of a
Participant that appropriate action be taken with respect to such requirements;


 


(9)    to cancel, with the consent of the
Participant or as otherwise provided in the Plan or an Agreement, outstanding
Awards;


 


(10)  to require as a condition of the exercise of
an Award or the issuance or transfer of a certificate (or other representation
of title) of Stock, the withholding from a Participant of the amount of any
taxes as may be necessary in order for the Company or any other employer to
obtain a deduction or as may be otherwise required by law;


 


(11)  to determine whether and with what effect an
individual has incurred a Termination of Employment;


 


(12)  to determine the restrictions or limitations
on the transfer of Stock;


 


(13)  to determine whether an Award is to be
adjusted, modified or purchased, or is to become fully or partially
exercisable, under the Plan or the terms of an Agreement;


 


(14) to determine the permissible methods of Award
exercise and payment within the terms and conditions of the Plan and the
particular Agreement;


 

















 


(15)  to adopt, amend and rescind such rules and
regulations as, in its opinion, may be advisable in the administration of this
Plan;


 


(16)  to appoint and compensate agents, counsel,
auditors or other specialists to aid it in the discharge of its duties; and


 


(17)  to make all other determinations which may be
necessary or advisable for the administration of the Plan.


 


The
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan (and any Agreement) and to otherwise
supervise the administration of the Plan. The Committee’s policies and
procedures may differ with respect to Awards granted at different times and may
differ with respect to a Participant from time to time, or with respect to
different Participants at the same or different times.


 


3.4  Committee
Determinations and Decisions. Any
determination made by the Committee pursuant to the provisions of the Plan
shall be made in its sole discretion, and in the case of any determination
relating to an Award may be made at the time of the grant of the Award or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company
and Participants unless revised by the Committee, subject to any ratifications
or approvals of the Board that the Committee or Board may request. Any determination
shall not be subject to de novo review if challenged in court. Neither the
Committee (including any member thereof) nor the Company shall have any
liability to any Participant for any matter it determined in good faith as
being in compliance with the Code even if such determination was later proved
incorrect.


 


ARTICLE IV


SHARES SUBJECT TO PLAN


 


4.1  Number
of Shares.  The
maximum number of shares of Stock which may be used for Awards under this Plan
(all of which may, in the discretion of the Company, be Incentive Stock
Options) shall be equal to 4,668,496; provided that in any case the maximum
number of such shares which may be used for Awards other than Stock Options or
Stock Appreciation Rights shall be 1,750,000 shares. Upon approval of the Company’s
2006 Long-Term Incentive Plan by shareholders on June 21, 2006, the 2002 Plan
immediately ceased to be available for use for the grant of new incentive
awards other than awards granted wholly from shares returned to the 2002 Plan
by forfeiture after May 5, 2006. The shares of Stock available under the Plan
may be authorized and unissued shares, treasury shares or a combination
thereof, as the Committee shall determine.


 


4.2  Release
of Shares. Subject to Section 4.1,
the Committee shall have full authority to determine the number of shares of
Stock available for Awards. In its discretion the Committee may include
(without limitation), as available for distribution, (a) shares of Stock
subject to any Award that have been previously forfeited; or (b) shares under
an Award that otherwise terminates without issuance of Stock being made to a
Participant. Any shares that are available


 
















 


immediately
prior to the termination of the Plan, or any shares of Stock returned to the
Company for any reason subsequent to the termination of the Plan, may be
transferred to a successor plan.


 


4.3  Restrictions
on Shares.  Stock
issued upon exercise of an Award shall be subject to the terms and conditions
specified herein and to such other terms, conditions and restrictions as the
Committee in its discretion may determine or provide in the Award Agreement.
The Company shall not be required to issue or deliver any certificates for
Stock, cash or other property prior to (i) the completion of any registration
or qualification of such shares under federal, state or other law, or any
ruling or regulation of any government body which the Committee determines to be
necessary or advisable; (ii) the satisfaction of any applicable withholding
obligation in order for the Company or an Affiliate to obtain a deduction or
discharge its legal obligation with respect to the exercise of an Award and (iii)
satisfaction of any other terms, conditions or restrictions specified herein.
The Company may cause any certificate (or other representation of title) for
any shares of Stock to be delivered to be properly marked with a legend or
other notation reflecting the limitations on transfer of such Stock as provided
in this Plan, any stockholder agreement then in effect, or as the Committee may
otherwise require. The Committee may require any person exercising an Award to
make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of the Stock in
compliance with applicable law or otherwise. Fractional shares shall not be
delivered, but shall be rounded to the next lower whole number of shares.


 


4.4  Shareholder
Rights.  No
person shall have any rights of a shareholder as to Stock subject to an Award
until, after proper exercise of the Award or other action required, such shares
shall have been recorded on the Company’s official shareholder records as
having been issued and transferred. Upon exercise of the Award or any portion
thereof, the Company will have a reasonable period in which to issue and
transfer the shares, and a Participant will not be treated as a shareholder for
any purpose whatsoever prior to such issuance and transfer. No adjustment shall
be made for cash dividends or other rights for which the record date is prior
to the date such shares are recorded as issued and transferred in the Company’s
official shareholder records, except as provided herein or in an Agreement.


 


4.5  Effect
of Certain Corporate Changes.  Notwithstanding
anything to the contrary herein, in the event of any share dividend, share
split, combination or exchange of shares, recapitalization or other change in
the capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company shareholders other than a normal cash dividend),
reorganization, rights offering, a partial or complete liquidation, or any
other corporate transaction, Company securities offering or event involving the
Company and having an effect similar to any of the foregoing, then the
Committee may make appropriate adjustments or substitutions as described below
in this Section and in compliance with the Code. The adjustments or
substitutions may relate to the number of shares of Stock available for Awards
under the Plan, the number of shares of Stock covered by outstanding Awards,
the Exercise Price per share of outstanding Awards, and any other
characteristics or terms of the Awards as the Committee may deem necessary or
appropriate to reflect equitably the effects of such changes to the
Participants; provided, however, that to the extent that Code Section 409A
shall apply to an Award, any such adjustments or substitutions shall only be
made to the extent that, in the Committee’s good faith determination, they
comply with the requirements of Code Section 409A to avoid being subject 


 

















 


to
taxation under Code Section 409A(a)(1). Notwithstanding the foregoing, any
fractional shares resulting from such adjustment shall be eliminated by
rounding down to the nearest whole share.


 


ARTICLE V


ELIGIBILITY


 


5.1
Eligibility. Except as herein provided,
the persons who shall be eligible to participate in the Plan and be granted
Awards shall be those persons who are employees of, or consultants or advisors
to, the Company or any Affiliate, or non-employee members of the Board of
Directors. Of those persons described in the preceding sentence, the Committee
may, from time to time, select persons to be granted Awards and shall determine
the terms and conditions with respect thereto. In making any such selection and
in determining the form of the Award, the Committee shall give consideration to
such factors deemed appropriate by the Committee.


 


ARTICLE VI


STOCK OPTIONS


 


6.1
General. The Committee shall have
authority to grant Options under the Plan at any time or from time to time. The
Committee shall consider the potential impact of Code Section 409A on each
grant of Options and, if necessary, shall make the terms and conditions of the
Options, in its good faith determination, comply with the requirements of Code Section
409A to avoid being subject to taxation under Code Section 409A(a)(1). An
Option shall entitle the Participant to receive Stock upon exercise of such
Option, subject to the Participant’s satisfaction in full of any conditions,
restrictions or limitations imposed in accordance with the Plan or an Agreement
(the terms and provisions of which may differ from other Agreements) including,
without limitation, payment of the Exercise Price.


 


6.2
Grant. The grant of an Option shall
occur as of the Grant Date determined by the Committee, provided that the Grant
Date shall not be earlier than the date upon which the Committee acts to grant
the Option. Options may be granted alone or in connection with other Awards. An
Award of Options shall be evidenced by, and subject to the terms of, an
Agreement. Only a person who is a common-law employee of the Company, any “parent
corporation” of the Company, or a “subsidiary corporation” of the Company (each
term as defined in Section 424 of the Code) on the date of grant shall be
eligible to be granted an Incentive Stock Option. To the extent that any Option
is not designated as an Incentive Stock Option or even if so designated does
not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified
Stock Option.


 


6.3
Terms and Conditions. Options shall be
subject to such terms and conditions as shall be determined by the Committee,
including and subject to the following:


 


(1)    Exercise Price.
The Exercise Price per share shall not be less than the Fair Market Value per
share on the Grant Date. If an Option which is intended to qualify as an Incentive
Stock Option is granted to an individual (a “10% Owner”)
who owns or who is deemed to own shares possessing more than ten percent (10%)
of the combined voting power of all classes of shares of the Company, a parent
corporation or any subsidiary corporation (each term as defined in Section 6.2), the Exercise Price per share shall not be less
than one hundred ten percent (110%) of the Fair Market Value per share on the
Grant Date.


 

















 


(2)    Option Period.
The Option Period of each Option shall be fixed by the Committee. In the case
of an Incentive Stock Option granted to a 10% Owner, the Option Period shall
not exceed ten (10) years from the date the Option is granted. No Option which
is intended to be an Incentive Stock Option shall be granted more than ten (10)
years from the date the Plan is adopted by the Company or the date the Plan is
approved by the shareholders of the Company, whichever is earlier.


 


(3)    Exercisability.
Subject to Section 11.1 and Section 6.4,
an Option shall be exercisable in whole or in such installments and at such
times, as established by the Committee in an Agreement. The Committee may
provide in an Agreement for an accelerated exercise of all or part of an Option
upon such events or standards that it may determine, including one or more
Performance Measures. In addition, the Committee may at any time accelerate the
exercisability of all or part of any Option. If an Option is designated as an
Incentive Stock Option, the aggregate Fair Market Value (determined at the date
of grant of the Option) of the Stock as to which such Incentive Stock Option
which is exercisable for the first time during any calendar year (under the
Plan or any other plan of the Company or any parent corporation or subsidiary
corporation) shall not exceed $100,000. Except as otherwise provided in Article
XI in connection with acceleration events, or certain occurrences of
termination, no Award granted under this Plan to an officer or director of the
Company may be exercised, and no restrictions relating thereto may lapse,
within six months of the date of such grant if:


 


(i)
the requirements of Exchange Act Rule 16b-3(d)(1) were not satisfied with
respect to the issuance of such Award and (ii) the Committee has not otherwise
waived such limitation.


 


(4)   Method of Exercise.
Subject to the provisions of this Article VI and
the Agreement, a Participant may exercise Options, in whole or in part, during
the Option Period by giving written notice of exercise on a form provided by
the Committee to the Company specifying the number of shares of Stock subject
to the Option to be purchased. Such notice shall be accompanied by payment in
full of the purchase price by cash or certified check or such other form of
payment as the Company may accept. If permitted in the applicable Agreement,
payment in full or in part may also be made by (i) delivering Stock already
owned by the Participant (for any minimum period required by the Committee)
having a total Fair Market Value on the date of such delivery equal to the
Exercise Price; (ii) the delivery of cash by a broker-dealer as a “cashless”
exercise, provided such method of payment may not be used by an executive
officer of the Company or a member of the Board to the extent such payment
method would violate Rule 16b-3 or the Exchange Act; (iii) withholding by the
Company of Stock subject to the Option having a total Fair Market Value as of
the date of delivery equal to the Exercise Price; or (iv) any combination of
the foregoing.


 


(5)    Conditions for Issuance of
Shares. No shares of Stock shall be issued until full payment
therefore has been made. A Participant shall have all of the rights of a
shareholder of the Company holding the class of shares that is subject to such
Option (including, if applicable, the right to vote the shares and the right to
receive dividends) when the Participant has given written notice of exercise,
has paid in full for such shares, and such shares have been recorded on the
Company’s official shareholder records as having been issued and transferred.


 

















 


(6)    Non-transferability of
Options. Unless otherwise specifically provided in an Agreement, no
Option shall be sold, assigned, margined, transferred, encumbered, conveyed,
gifted, alienated, hypothecated, pledged, or otherwise disposed of, other than
by will or by the laws of descent and distribution, and all Options shall be
exercisable during the Participant’s lifetime only by the Participant;
provided, however, under no circumstances may a Participant assign, transfer,
convey or otherwise dispose of an Option for consideration unless pursuant to a
Domestic Relations Order.


 


6.4
Termination of Employment. Except as
otherwise provided by the Committee in an Award Agreement, any portion of the
Option that was not vested and exercisable on the date of Termination of
Employment shall expire and be forfeited on such date, and any portion of the
Option that was vested and exercisable on date of Termination of Employment
shall also expire and be forfeited on such date; provided that if the
Termination of Employment was other than for Cause, the portion of the Option
that is vested as of the date of Termination of Employment shall expire and be
forfeited at midnight ninety (90) days from the date of such termination.


 


ARTICLE VII


STOCK APPRECIATION RIGHTS


 


7.1
General. The Committee shall have
authority to grant Stock Appreciation Rights under the Plan at any time or from
time to time. Stock Appreciation Rights may be awarded alone or in tandem with
other Awards granted under the Plan. The Committee shall consider the potential
impact of Code Section 409A on each grant of Stock Appreciation Rights and, if
determined to be necessary, shall make the terms of conditions of the Stock
Appreciation Rights, in its good faith determination, comply with the
requirements of Code Section 409A to avoid being subject to taxation under Code
Section 409A(a)(1). Subject to the Participant’s satisfaction in full of any
conditions, restrictions or limitations imposed in accordance with the Plan or
an Agreement, a Stock Appreciation Right shall entitle the Participant to
surrender to the Company the Stock Appreciation Right and to receive in Stock
the number of shares described in Section 7.3(2).


 


7.2
Grant. The grant of a Stock Appreciation
Right shall occur as of the Grant Date determined by the Committee. A Stock
Appreciation Right entitles a Participant to receive Stock as described in Section 7.3(2). An Award of Stock Appreciation Rights shall
be evidenced by, and subject to the terms of an Agreement, which shall become
effective upon execution by the Participant.


 


7.3
Terms and Conditions. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined by
the Committee and set forth in an Agreement, including (but not limited to) the
following:


 


(1)    Period and Exercise.
The term of a Stock Appreciation Right shall be established by the Committee. A
Stock Appreciation Right shall be for such period and, subject to Section 11.1 and Section 7.3(4),
shall be exercisable in whole or in installments and at such times as
established by the Committee in an Agreement. The Committee may provide in an
Agreement for an accelerated exercise of all or part of a Stock Appreciation
Right upon such events or standards that it may determine, including one or
more Performance Measures. In addition, the Committee may at any time
accelerate the exercisability of all or part of any 


 

















 


Stock
Appreciation Right. Stock Appreciation Rights shall be exercised by the
Participant’s giving written notice of exercise, on a form provided by the
Committee, to the Company specifying the portion of the Stock Appreciation
Right to be exercised.


 


(2)    Delivery of Stock.
Upon the exercise of a Stock Appreciation Right, a Participant shall receive a
number of shares of Stock equal in value to the excess of the Fair Market Value
per share of Stock over the Exercise Price per share of Stock specified in the
related Agreement, multiplied by the number of shares in respect of which the
Stock Appreciation Right is exercised. The Exercise Price per share shall not
be less than the Fair Market Value per share on the Grant Date. The aggregate
Fair Market Value per share of Stock shall be determined as of the date of
exercise of such Stock Appreciation Right.


 


(3)    Non-transferability of
Stock Appreciation Rights. Except as specifically provided in the
Plan or in an Agreement, no Stock Appreciation Rights shall be sold, assigned,
margined, transferred, encumbered, conveyed, gifted, alienated, hypothecated,
pledged or otherwise disposed of, other than by will or the laws of descent and
distribution, and all Stock Appreciation Rights shall be exercisable during the
Participant’s lifetime only by the Participant; provided, however, under no
circumstances may a Participant assign or transfer a Stock Appreciation Right
for consideration unless pursuant to a Domestic Relations Order.


 


(4)    Termination of Employment.
A Stock Appreciation Right shall be forfeited or terminated at such time as an
Option would be forfeited or terminated under the Plan, unless otherwise specifically
provided in an Agreement.


 


ARTICLE VIII


RESTRICTED STOCK


 


8.1
General. The Committee shall have
authority to grant Restricted Stock under the Plan at any time or from time to
time. The Committee shall consider the potential impact of Code Section 409A on
each grant of Restricted Stock and, if determined to be necessary, shall make
the terms and conditions of the Restricted Stock, in its good faith
determination, comply with the requirements of Code Section 409A to avoid being
subject to taxation under Code Section 409A(a)(1). The Committee may also
require the recipient of the grant to make an election under Section 83(b) of
the Code if the restricted stock so granted is subject to transfer restrictions
or a substantial risk of forfeiture. The Committee shall determine the number
of shares of Restricted Stock to be awarded to any Participant, the time or
times within which such Awards may be subject to forfeiture, and any other
terms and conditions of the Awards. Each Award shall be confirmed by, and be
subject to the terms of, an Agreement which contains the applicable terms and
conditions of the Award, including the rate or times provided by the Committee
for the lapse of any forfeiture restrictions or other conditions regarding the
Award. The Committee may provide in an Agreement for an accelerated lapse of
any such restrictions upon such events or standards that it may determine,
including one or more Performance Measures. In addition, the Committee may at
any time accelerate the lapse of any such restrictions with respect to all or
part of any Restricted Stock. Each Award of Restricted Stock shall become
effective upon execution by the Participant of an Agreement.


 


8.2
Grant, Awards and Certificates. The
grant of an Award of Restricted Stock shall occur as of the Grant Date
determined by the Committee. Restricted Stock may be awarded either 


 

















 


alone
or in addition to other Awards granted under the Plan. Notwithstanding the
limitations on issuance of Stock otherwise provided in the Plan, each Participant
receiving an Award of Restricted Stock shall be issued a certificate (or other
representation of title) in respect of such Restricted Stock. Such certificate
shall be registered in the name of such Participant and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award as determined by the Committee and any restrictions
the Stock may be subject to, including any shareholder agreement then in
effect. The Committee may require that the certificates evidencing such shares
be held in custody by the Company until the restrictions thereon shall have
lapsed and that, as a condition of any Award of Restricted Stock, the
Participant shall have delivered a share power, endorsed in blank, relating to
the Stock covered by such Award.


 


8.3
Terms and Conditions. Restricted Stock
shall be subject to such terms and conditions as shall be determined by the
Committee, including the following:


 


(1)    Rights. Except
as provided in Section 8.3(3) and
notwithstanding Section 4.4, the Participant
shall have, with respect to the Restricted Stock, all of the rights of a
shareholder of the Company holding the class of Stock that is the subject of
the Restricted Stock, including, if applicable, the right to vote the shares and
the right to receive any dividends. If any dividends or other distributions are
paid in shares of Stock, all such shares shall be subject to the same
restrictions on transferability as the shares of Restricted Stock with respect
to which they were paid.


 


(2)    Criteria. As
described in Section 8.1 above, the Committee
may provide in an Agreement for the lapse of restrictions in installments and
may accelerate the vesting of all or any part of any Award and waive the
restrictions for all or any part of such Award; such provisions of an Agreement
or Committee action may be based on service, performance by the Participant or
by the Company or the Affiliate, including any division or department for which
the Participant is employed or such other factors or criteria as the Committee
may determine.


 


(3)    Limitations on
Transferability. Subject to the provisions of the Plan and the
Agreement, during a period set by the Committee, commencing with the date of
such Award (the “Restriction Period”), the
Participant shall not be permitted to sell, assign, margin, transfer, encumber,
convey, gift, alienate, hypothecate, pledge or otherwise dispose of Restricted
Stock; provided, however, under no circumstances may a Participant assign,
transfer, convey or otherwise dispose of Restricted Stock for consideration
unless pursuant to a Domestic Relations Order.


 


(4)    Termination of Employment.
Unless otherwise provided in an Agreement or determined by the Committee, if
the Participant incurs a Termination of Employment all shares of Restricted
Stock still subject to restriction shall be forfeited by the Participant,
except the Committee shall have the discretion to waive in whole or in part any
or all remaining restrictions with respect to any or all of such Participant’s
Restricted Stock.


 

















 


ARTICLE IX


DEFERRED STOCK


 


9.1
General. The Committee shall have
authority to grant an Award of Deferred Stock under the Plan at any time or
from time to time. Deferred Stock may be awarded either alone or in addition to
other Awards granted under the Plan. The Committee may denominate a Deferred
Stock Award in either shares or units. The Committee shall consider the impact
of Code Section 409A on each grant of Deferred Stock and, if determined to be
necessary, shall make the terms and conditions of the Deferred Stock, in its
good faith determination, comply with the requirements of Code 409A to avoid
being subject to taxation under Code Section 409A(a)(1). The Committee shall
determine the number of shares of Deferred Stock to be awarded to any
Participant, the duration of the period (the “Deferral
Period”) prior to which the Common Stock will be delivered, and the
conditions under which receipt of the Stock will be deferred and any other
terms and conditions of the Awards. Each Deferred Stock Award shall be
evidenced by, and subject to the terms of, an Agreement, which will become
effective upon execution by the Participant.


 


9.2
Terms and Conditions. Deferred Stock
Awards shall be subject to such terms and conditions as shall be determined by
the Committee, including the following:


 


(1)    Rights. Any
rights, other than any rights explicitly set forth herein, with respect to
Deferred Stock shall be provided for in an Agreement.


 


(2)    Criteria. Based
on service, performance by the Participant or by the Company or the Affiliate,
including any division or department for which the Participant is employed, or
such other factors or criteria as the Committee may determine, the Committee
may provide for the lapse of deferral limitations in installments and may
accelerate the vesting of all or any part of any Award and waive the deferral
limitations for all or any part of such Award.


 


(3)    Limitations on
Transferability. Subject to the provisions of the Plan and the
Agreement, Deferred Stock Awards may not be sold, assigned, margined,
transferred, encumbered, conveyed, gifted, alienated, hypothecated, pledged, or
otherwise disposed of during the Deferral Period; provided, however, under no
circumstances may a Participant assign, transfer, convey or otherwise dispose
of Deferred Stock Award for consideration unless pursuant to a Domestic
Relations Order. Subject to the provisions of an Agreement, at the expiration
of the Deferral Period, the Committee shall deliver Stock to the Participant
pursuant to the Deferred Stock Award.


 


(4)    Termination of Employment.
Unless otherwise provided in an Agreement or determined by the Committee, if
the Participant incurs a Termination of Employment the rights to the shares
still covered by the Award shall be forfeited by the Participant, except the
Committee shall have the discretion to waive in whole or in part any or all
remaining deferral limitations with respect to any or all of such Participant’s
Deferred Stock.


 


(5)    Delivery.
Subject to the provisions of an Agreement, at the expiration of the Deferral
Period, the Committee shall deliver Stock to the Participant pursuant to the
Deferred Stock Award.


 


(6)    Election. A
Participant may elect to further defer receipt of the Deferred Stock payable
under an Award (or an installment of an Award) for a specified time (or
pursuant to 


 

















 


a
fixed schedule) or until the occurrence of a permissible distribution event
under Code Section 409A, subject to such terms and conditions determined by the
Committee. Any such election must be made no later than the time provided by Section
409A(a)(4) of the Code, as determined by the Committee.


 


ARTICLE X


PERFORMANCE AWARDS


 


10.1
General. The Committee shall have
authority to grant Performance Awards under the Plan at any time or from time
to time. The Committee shall consider the impact of Code Section 409A on each
grant of a Performance Award and, if determined to be necessary, shall make the
terms and conditions of the Performance Awards, in its good faith
determination, comply with the requirements of Code Section 409A to avoid being
subject to taxation under Code Section 409A(a)(1). A Performance Unit and a
Performance Share each consist of the right to receive shares of Stock or cash,
as provided in the particular Award Agreement, upon achievement of certain
Performance Goals and may be awarded either alone or in addition to other
Awards granted under the Plan. Performance Units shall be denominated in units
of value (including dollar value of shares of Stock) and Performance Shares
shall be denominated in a number of shares of Stock.


 


Subject
to the terms of the Plan, the Committee shall have complete discretion to
determine the number of Performance Units and Performance Shares, if any,
granted to each Participant. Each Performance Award shall be evidenced by, and
be subject to the terms of, an Agreement which will become effective upon
execution by the Participant.


 


10.2
Earning Performance Awards. After the
applicable Performance Period shall have ended, the Committee shall determine
the extent to which the established Performance Goals have been achieved.


 


10.3
Termination of Employment. Unless
otherwise specifically provided in an Agreement or determined by the Committee,
in the event that a Participant’s incurs a Termination of Employment, all Performance
Awards shall be forfeited by the Participant to the Company. Any distribution
of earned Performance Awards authorized by an Agreement or determined by the
Committee may be made at the same time payments are made to Participants who
did not incur a Termination of Employment during the applicable Performance
Period.


 


10.4
Nontransferability. Unless otherwise
specifically provided in an Agreement, Performance Awards may not be sold,
assigned, margined, transferred, encumbered, conveyed, gifted, alienated,
hypothecated, pledged, or otherwise disposed of, other than by will or by the
laws of descent and distribution; provided, however, under no circumstances may
a Participant assign, transfer, convey or otherwise dispose of a Performance
Award for consideration unless pursuant to a Domestic Relations Order.


 


ARTICLE XI


CHANGE IN CONTROL PROVISIONS


 


11.1
Impact of Event. Notwithstanding any
other provision of the Plan to the contrary, other than Section 11.2,
and unless otherwise specifically provided in an Agreement, in the event of a
company sale or a registered public offering of equity securities, the
Committee may


 
















 


provide,
in its discretion, that (i) the Stock Options, Stock Appreciation Rights,
Restricted Stock and Deferred Stock shall immediately vest and any Performance
Goal or other condition with respect to any Performance Shares or Performance
Units shall be deemed satisfied for such Participants who are employed by the
Company at the time of such event or (ii) the Committee may also, in its
discretion, determine that any Stock Option, Stock Appreciation Right or
Restricted Stock shall terminate or be cancelled if not exercised as of the
date of such event.


 


11.2 Additional Discretion. The Committee shall have full
discretion, notwithstanding anything herein or in an Agreement to the contrary,
with respect to an outstanding Award upon a company sale to provide that the
securities of another entity be substituted hereunder for the Stock and to make
equitable adjustment with respect thereto.


 


ARTICLE XII


PROVISIONS APPLICABLE TO SHARES ACQUIRED
UNDER THIS PLAN


 


12.1 No Company Obligation. Except to the extent specifically
required by applicable securities laws, none of the Company, an Affiliate or
the Committee shall have any duty or obligation to affirmatively disclose
material information to a record or beneficial holder of Stock or an Award, and
such holder shall have no right to be advised of any material information
regarding the Company or any Affiliate at any time prior to, upon, or in
connection with receipt or the exercise or distribution of an Award. The
Company makes no representation or warranty as to the future value of the Stock
issued or acquired in accordance with the provisions of the Plan.


 


ARTICLE XIII


MISCELLANEOUS


 


13.1 Amendments and Termination. The Board may amend, alter, or
discontinue the Plan at any time, but no amendment, alteration or discontinuation
shall be made which would materially impair the rights of a Participant under
an Award theretofore granted without the Participant’s consent. Notwithstanding
the immediately preceding sentence, an amendment may be made without a
Participant’s consent to (a) cause the Plan or an Award to comply with
applicable law (including, but not limited to, any changes needed to avoid
taxation of an Award as a “nonqualified deferred compensation plan” under Code Section
409A or Code Section 280G) or (b) permit the Company or an Affiliate a tax
deduction under applicable law including, without limitation, Section 162(m) of
the Code. The Committee may amend, alter or discontinue the terms of any Award
theretofore granted, prospectively or retroactively, on the same conditions and
limitations (and exceptions to limitations) as apply to the Board, and further
subject to any approval or limitations the Board may impose. Notwithstanding
the foregoing, any amendments to the Plan shall require shareholder approval to
the extent required by Federal or state law or any regulations or rules promulgated
thereunder or the rules of the national securities exchange or market on which
shares of Stock are listed.


 


13.2 Unfunded Status of Plan. It is intended that the Plan be an “unfunded”
plan for incentive compensation. The Company may create trusts or other
arrangements to meet the obligations created under the Plan to deliver Stock or
make payments; provided, however, that the existence of such trusts or other
arrangements is consistent with the “unfunded” status of the Plan and all
property held thereunder and income thereon shall remain solely the property
and 


 

















 


rights
of the Company (without being restricted to satisfying the obligations created
under the Plan) and shall be subject to the claims of the Company’s general
creditors. The Company’s obligations created under the Plan shall constitute a
general, unsecured obligation, payable solely out of its general assets.


 


13.3 Listing, Registration and Compliance with Laws and Regulations.
All Awards made under this Plan shall be subject to the requirement that if at
any time the Committee shall determine, in its discretion, that the listing,
registration or qualification of the Stock subject to such Award upon any
securities exchange or under any state or federal securities or other law or
regulation, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition to or in connection with the granting of
the Awards or the issuance or purchase of shares thereunder, no Awards may be
granted or exercised and no restrictions of Restricted Stock or Deferred Stock
be lifted, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. The holders of such Awards
shall supply the Company with such certificates, representations and
information as the Company shall request and shall otherwise cooperate with the
Company in obtaining such listing, registration, qualification, consent or
approval. In the case of officers and other Persons subject to Section 16(b) of
the Exchange Act, the Committee may at any time impose any limitations upon the
exercise of an Option, Stock Appreciation Right or Restricted Stock or the
lifting of restrictions on an Award of Deferred Stock or a Performance Award
that, in the Committee’s discretion, are necessary or desirable in order to
comply with such Section 16(b) and the rules and regulations thereunder. If the
Company, as part of an offering of securities or otherwise, finds it desirable
because of federal or state regulatory requirements to reduce the period during
which any Options, Stock Appreciation Rights or Restricted Stock may be exercised,
the Committee, may, in its discretion and without the Participant’s consent, so
reduce such period on not less than 15 days written notice to the holders
thereof.


 


13.4 Provisions Relating to Internal Revenue Code Section 162(m).
To the extent that Section 162(m) of the Code applies with respect to Awards to
Covered Employees under the Plan, the Plan shall be administered, and the
provisions of the Plan shall be interpreted, in a manner consistent with Code Section
162(m). If any provision of the Plan or any Agreement relating to such an Award
does not comply or is inconsistent with the requirements of Code Section 162(m),
such provision shall be construed or deemed amended to the extent necessary to
conform to such applicable requirements. In addition, the following provisions
shall apply to the Plan or an Award to the extent necessary to obtain a tax
deduction for the Company or an Affiliate:


 


(1)    Determination of Awards.
Not later than the date required or permitted for “qualified performance-based
compensation” under Code Section 162(m), the Committee shall determine the
Participants who are Covered Employees who will receive Awards that are
intended as qualified performance-based compensation and the amount or method
for determining the amount of such compensation.


 


(2)    Limitations on Awards.
During any one calendar year period, the maximum number of shares of Stock for
which Options and Stock Appreciation Rights, in the aggregate, may be granted
to any Covered Employee shall not exceed 750,000 shares. For Performance Awards
that are intended to constitute “performance-based compensation” (as 


 

















 


that term is
used in Code Section 162(m)), no more than $1,000,000 (based upon fair market
value, if applicable, on the date of grant) may be subject to such Awards
granted to any Covered Employee during any three-consecutive calendar year
period. Further, for any Restricted Stock Awards that are intended to
constitute performance-based compensation, no more than $1,000,000 (based upon
fair market value, if applicable, on the date of grant) may be subject to such
Awards granted to any Covered Employee during any three-consecutive calendar
year period. The limitations on Awards under this Section are subject to
adjustment as provided in Section 4.5 to
the extent that needed to obtain tax deductibility under Code Section 162(m).


 


(3)    Earning Performance Awards.
Subject to the provisions of Section 13.4(4) below,
payment with respect to Performance Awards for Covered Employees shall be a
direct function of the extent to which the Company’s Performance Goals have
been achieved. A Performance Award to a Participant who is a Covered Employee
shall (unless the Committee determines otherwise) provide that in the event of
the Participant’s Termination of Employment prior to the end of the Performance
Period for any reason, such Award will be payable only (a) if the applicable
Performance Goals are achieved and (b) to the extent, if any, as the Committee
shall determine.


 


(4)    Other Section 162(m) Provisions.
In the manner required by Section 162(m) of the Code, the Committee shall,
promptly after the date on which the necessary financial and other information
for a particular Performance Period becomes available, certify the extent to
which Performance Goals have been achieved with respect to any Performance
Award or Restricted Stock Award intended to qualify as performance-based
compensation under Section 162(m) of the Code. In addition, the Committee may,
in its discretion, reduce or eliminate the amount of any Performance Award
payable to any Participant, based on such factors as the Committee may deem
relevant, but the Committee may not increase the amount of any Performance
Award payable to any Participant above the amount established in accordance
with the relevant Performance Goals with respect to any Performance Award
intended to qualify as performance-based compensation.


 


13.5 Misconduct of a Participant. Notwithstanding anything to the
contrary in the Plan, the Committee, in its sole discretion, may establish
procedures, at or before the time that an Award is granted (or, with the
consent of the Participant, after such time), in the applicable Award Agreement
or in a separate agreement, providing for the forfeiture or cancellation of
such Award (whether vested or unvested), or the disgorgement of gains from the
exercise, vesting or settlement of the Award, in each case to be applied if the
Participant incurs a Termination of Employment for Cause.


 


13.6 No Additional Obligation. Nothing contained in the Plan
shall prevent the Company or an Affiliate from adopting, other or additional
compensation or benefit arrangements for its employees.


 


13.7 Withholding. No later than the date as of which an amount
first becomes includible in the gross income of the Participant for federal
income tax purposes with respect to any Award, the Participant shall pay to the
Company (or other entity identified by the Committee), or make arrangements
satisfactory to the Company or other entity identified by the Committee
regarding the payment of, any federal, state, or local taxes of any kind
(including any employment taxes) 


 

















 


required
by law to be withheld with respect to such income. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements,
and the Company and its Affiliates shall, to the extent permitted by law, have
the right to deduct any such taxes from any payment otherwise due to the
Participant. Subject to approval by the Committee, a Participant may elect to
have such tax withholding obligation satisfied, in whole or in part, by (i) authorizing
the Company to withhold from shares of Stock to be issued pursuant to any Award
a number of shares with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the required statutory minimum (but
no more than such required minimum) with respect to the Company’s withholding
obligation, or (ii) transferring to the Company shares of Stock owned by the
Participant with an aggregate Fair Market Value (as of the date the withholding
is effected) that would satisfy the required statutory minimum (but no more
than such required minimum) with respect to the Company’s withholding
obligation.


 


13.8 Controlling Law. The Plan and all Awards made and actions
taken thereunder shall be governed by and construed in accordance with the laws
of the state of Delaware (other than its law respecting choice of law). The
Plan shall be construed to comply with all applicable law and to avoid
liability to the Company, an Affiliate or a Participant. In the event of
litigation arising in connection with actions under the Plan, the parties to
such litigation shall submit to the jurisdiction of courts located in New York
County, New York, or to the federal district court that encompasses said county.


 


13.9 Offset. Any amounts owed to the Company or an Affiliate by
the Participant of whatever nature may be offset by the Company from the value
of any Award to be transferred to the Participant, and Stock, cash or other
thing of value under this Plan or an Agreement may be held by the Company and
not transferred to such Participant unless and until all disputes between the
Company and the Participant have been fully and finally resolved and the
Participant has waived all claims to such against the Company or an Affiliate.


 


13.10
No Rights with Respect to Continuance of Employment.
Nothing contained herein shall be deemed to alter the relationship between the
Company or an Affiliate and a Participant, or the contractual relationship
between a Participant and the Company or an Affiliate if there is a written
contract regarding such relationship. Nothing contained herein shall be
construed to constitute a contract of employment between the Company or an
Affiliate and a Participant. The Company or an Affiliate and each of the
Participants continue to have the right to terminate the employment or service
relationship at any time for any reason, except as provided in a written
contract. The Company or an Affiliate shall have no obligation to retain the
Participant in its employ or service as a result of this Plan. There shall be
no inference as to the length of employment or service hereby, and the Company
or an Affiliate reserves the same rights to terminate the Participant’s
employment or service as existed prior to the individual becoming a Participant
in this Plan.


 


13.11 Limits on Repricing and Regranting of Awards.
Notwithstanding anything else contained herein except Sections 4.5,
11.2 and 13.12
hereof, unless approved by the Company’s shareholders; in no event may the
Exercise Price per share of Stock covered by an Option, or the Exercise Price
of a Stock Appreciation Right, be reduced, directly or indirectly, through the
technique commonly known as “repricing” or through the cancellation and regrant
of such Award; and no outstanding Award may be substituted for another type of
Award.


 

















 


13.12 Awards in Substitution for Awards Granted by Other Corporations.
Awards may be granted under the Plan from time to time in substitution for
awards held by employees, directors or service providers of other corporations
who are about to become officers or employees of the Company or an Affiliate as
the result of a merger or consolidation of the employing corporation with the
Company or an Affiliate, or the acquisition by the Company or an Affiliate of
the assets of the employing corporation, or the acquisition by the Company or
Affiliate of the share of the employing corporation, as the result of which it
becomes an Affiliate. The terms and conditions of the Awards so granted may
vary from the terms and conditions set forth in this Plan at the time of such
grant as the Committee may deem appropriate to conform, in whole or in part, to
the provisions of the awards in substitution for which they are granted and to
ensure that the requirements imposed under Code Sections 409A and 424 are met.


 


13.13 Delivery of Stock Certificates. To the extent the Company
uses certificates to represent shares of Stock, certificates to be delivered to
Participants under this Plan shall be deemed delivered for all purposes when
the Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the Participant, at the
Participant’s last known address on file with the Company. Any reference in
this Section or elsewhere in the Plan or an Agreement to actual stock
certificates and/or the delivery of actual stock certificates shall be deemed
satisfied by the electronic record-keeping and electronic delivery of shares of
Stock or other mechanism then utilized by the Company and its agents for
reflecting ownership of such shares.


 


13.14 Indemnification. To the maximum extent permitted under the
Company’s Restated Articles of Incorporation and by-laws, each person who is or
shall have been a member of the Committee, or of the Board, shall be
indemnified and held harmless by the Company against and from (a) any loss,
cost, liability or expense (including attorneys’ fees) that may be imposed upon
or reasonably incurred by him or her in connection with or resulting from any
claim, action, suit or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
this Plan or any Award Agreement, and (b) from any and all amounts paid by him
or her in settlement thereof, with the Company’s prior written approval, or
paid by him or her in satisfaction of any judgment in any such claim, action,
suit or proceeding against him or her; provided, however, that he or she shall
give the Company an opportunity, at its own expense, to handle and defend the
same before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under the
Company’s Restated Articles of Incorporation or by-laws, by contract, as a
matter of law or otherwise, or under any power that the Company may have to
indemnify them or hold them harmless.


 


13.15 Severability. If any provision of this Plan shall for any
reason be held to be invalid or unenforceable, such invalidity or
unenforceability shall not effect any other provision hereby, and this Plan
shall be construed as if such invalid or unenforceable provision were omitted.


 


13.16 Successors and Assigns. This Plan shall inure to the benefit
of and be binding upon each successor and assign of the Company. All
obligations imposed upon a Participant, and all rights granted to the Company
hereunder, shall be binding upon the Participant’s heirs, legal representatives
and successors.


 

















 


13.17 Entire Agreement. This Plan and the Agreements constitute
the entire agreement with respect to the subject matter hereof and thereof,
provided that in the event of any inconsistency between the Plan and the
Agreement, the terms and conditions of this Plan shall control.


 


13.18 Term. No Award shall be granted under the Plan after the
tenth anniversary of the Effective Date.


 


13.19 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular, and the singular shall include the plural.


 


13.20 Headings. The headings contained in this Plan are for
reference purposes only and shall not affect the meaning or interpretation of
this Plan.