**Exhibit10.4**

 

 

**JOSTENS HOLDING CORP.**

**2003 STOCK INCENTIVE PLAN**

 

 

**EFFECTIVE AS OF OCTOBER 30, 2003**

 

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Table of Contents

 
| 1.     | Purposes                                                      |                                                       |
|--------|---------------------------------------------------------------|------------------------------------------------------------|
|   |                                                          |                                                       |
| 2.     | Number of Shares  Subject to the Plan                         |                                                       |
|   |                                                          |                                                       |
| 3.     | Administration of the Plan                                    |                                                       |
|   |                                                          |                                                       |
| 4.     | Eligibility                                                   |                                                       |
|   |                                                          |                                                       |
| 5.     | Options                                                       |                                                       |
|   |                                                          |                                                       |
|   | A.                                                            | Option Price and Payment                                   |   |
|   |                                                          |                                                       |   |
|   | B.                                                            | Terms  of Options and Limitations on the Right of Exercise |   |
|   |                                                          |                                                       |   |
|   | C.                                                            | Termination of  Employment or Service                      |   |
|   |                                                          |                                                       |   |
|   | D.                                                            | Exercise of Options                                        |   |
|   |                                                          |                                                       |   |
|   | E.                                                            | Non-Transferability  of Options                            |   |
|   |                                                          |                                                       |   |
|   | F.                                                            | Transfer  Restrictions and Repurchase Rights               |   |
|   |                                                          |                                                       |
| 6.     | Stock Awards                                                  |                                                       |
|   |                                                          |                                                       |
| 7.     | Adjustment  of Shares; Effect of Certain Transactions         |                                                       |
|   |                                                          |                                                       |
| 8.     | Right to  Terminate Employment or Service                     |                                                       |
|   |                                                          |                                                       |
| 9.     | Compliance with  Legal Requirements                           |                                                       |
|   |                                                          |                                                       |
| 10.    | Issuance  of Stock Certificates; Legends; Payment of Expenses |                                                       |
|   |                                                          |                                                       |
| 11.    | Withholding Taxes                                             |                                                       |
|   |                                                          |                                                       |
| 12.    | Listing of Shares  and Related Matters                        |                                                       |
|   |                                                          |                                                       |
| 13.    | Amendment of the Plan                                         |                                                       |
|   |                                                          |                                                       |
| 14.    | Termination or  Suspension of the Plan                        |                                                       |
|   |                                                          |                                                       |
| 15.    | Governing Law                                                 |                                                       |
|   |                                                          |                                                       |
| 16.    | Partial Invalidity                                            |                                                       |
|   |                                                          |                                                       |
| 17.    | Effective Date                                                |                                                       |

 

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**JOSTENS HOLDING CORP.**

**2003 STOCK INCENTIVE PLAN**

 

**1.****             Purposes**

 

JostensHolding Corp., a Delaware corporation (the “***Company***”), desires to afford certainemployees, directors and other persons providing services for the Company orany parent corporation or subsidiary corporation of the Company now existing orhereafter formed or acquired who are responsible for the continued growth ofthe Company an opportunity to acquire a proprietary interest in the Company,and thereby create in such persons an increased interest in and a greaterconcern for the welfare of the Company and its subsidiaries.

 

TheCompany, by means of this 2003 Stock Incentive Plan (the “***Plan***”), seeks to retain for itself and anyparent corporation or subsidiary corporation of the Company the services ofpersons now holding key positions and also to secure and retain the services ofpersons capable of filling such positions.

 

Thestock options (“***Options***”)and stock awards (“***Awards***”)offered pursuant to the Plan are a matter of separate inducement and are not inlieu of any salary or other compensation for the services of any key employee,non-employee director or consultant.

 

TheOptions granted under the Plan are intended to be either incentive stockoptions (“***Incentive Options***”)within the meaning of Section 422 of the Internal Revenue Code of 1986, asamended (the “***Code***”),or options that do not meet the requirements for Incentive Options (“***Non-Qualified Options***”).  The Company makes no warranty, however, asto the qualification of any Option as an Incentive Option.

 

**2.****             Number of Shares Subject to the Plan**

 

Optionsand Awards granted under the Plan shall be exercisable for shares of Class BCommon Stock, $0.01 par value per share (the “***Class B Common Stock***” and together with theCompany’s Class A Common Stock, par value $0.01 per share, the “***Common Stock***”).  Subject to Section 7 hereof, the totalnumber of shares of Class B Common Stock of the Company authorized for issuanceupon the exercise of Options or in connection with Awards granted under the Planto employees of the Company or any parent corporation or subsidiary corporationof the Company shall not exceed, in the aggregate, 288,023 shares of the ClassB Common Stock (the “***Employee Shares***”) and the total number of shares ofClass B Common Stock of the Company authorized for issuance upon the exerciseof Options or in connection with Awards granted under the Plan to directors andother persons providing services for the Company or any parent corporation orsubsidiary corporation of the Company shall not exceed, in the aggregate,10,000 shares of the Class B Common Stock (the “***Non-Employee Shares***” and, together

 

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withthe Employee Shares, the “***Shares***”); provided, that the maximum number of Sharesthat may be purchased or acquired upon the exercise of Options or in connectionwith Awards granted under the Plan to any one person shall not exceed, in theaggregate, 70,400 Shares.

 

Sharesavailable for issuance under the Plan may be either authorized but unissuedShares, Shares of issued stock held in the Company’s treasury, or both, at thediscretion of the Company.  If and tothe extent that Options or Awards expire or are cancelled or otherwiseterminated under the Plan, the Shares covered by the unexercised portion ofsuch Options or Awards may again be subject to an Option or Award under thePlan.

 

Exceptas provided in Sections 14 and 17 hereof, the Company may, from time to timeduring the period beginning on October 30, 2003 (the “***Effective Date***”), the date of approval of thePlan by the Company’s Board of Directors (the “***Board***”), and ending on July 29, 2013 (the “***Termination Date***”),grant to certain employees, directors and other persons providing services forthe Company or any parent corporation or subsidiary corporation of the Companynow existing or hereafter formed or acquired Incentive Options, Non-QualifiedOptions, and/or Awards under the terms hereinafter set forth.

 

Asused in the Plan, the term “***parent corporation***” and “***subsidiary corporation***” shall mean acorporation within the definitions of such terms contained in Sections 424(e)and 424(f) of the Code, respectively.

 

**3.****             Administration of the Plan**

 

TheBoard shall administer the Plan, provided that the Board may, from time totime, designate from among its members a compensation committee, which may alsobe any other committee of the Board (the “***Committee***”), to administer the Plan.  Whenever the Company shall have any class ofequity securities registered pursuant to Section 12 of the SecuritiesExchange Act of 1934, as amended (the “***Exchange Act***”), the Committee shall be composed solelyof two or more members who are “***Non-Employee Directors***” within the meaning of Rule16b-3, as amended (“***Rule 16b-3***”)promulgated under the Exchange Act and “***Outside Directors***” within the meaning of TreasuryRegulation Section 1.162-27(e)(3) under Section 162(m) of the Code, and shallmeet such other conditions as required by Rule 16b-3 or other applicable rulesunder Section 16(b) of the Exchange Act. A majority of the members of the Committee shall constitute a quorum andthe act of a majority of the members of the Committee shall be the act of theCommittee.  If the Board administers thePlan, then any reference herein, or in any agreement granting Options or Awardspursuant to the Plan, to the Committee shall, unless the context otherwiserequires, include references to the Board, as appropriate.

 

Subjectto the express provisions of the Plan, the Committee shall have the authority,in its sole discretion, to determine the employees, directors and serviceproviders to the Company or any parent corporation or subsidiary corporation towhom

 

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Optionsor Awards shall be granted (the “***Optionholders***”), the time when such persons shall begranted Options or Awards, the number of Shares which shall be subject to eachOption or Award, the purchase price of each Share which shall be subject toeach Option or Award, the period(s) during which such Options shall beexercisable (whether in whole or part), and the other terms and provisionsthereof (which need not be identical). In determining the persons to whom Options or Awards shall be grantedand the number of Shares for which Options or Awards are to be granted to eachperson, the Committee shall give due consideration to, among other things, thelength of service, performance and the responsibilities and duties of suchperson.

 

Subjectto the express provisions of the Plan, the Committee also shall have theauthority to construe the Plan and the Options and Awards granted hereunder, toprescribe, amend and rescind rules and regulations relating to the Plan, todetermine the terms and provisions of the Options and Awards (which need not beidentical) and to make all other determinations necessary or advisable foradministering the Plan.

 

TheCommittee may establish performance standards for determining the periodsduring which Options or Awards shall be granted or exercisable, includingwithout limitation, standards based on the earnings of the Company and itssubsidiaries for various fiscal periods. The Committee shall define such performance criteria and, from time totime, the Committee in its sole discretion and in administering the Plan maymake such adjustments to such performance criteria for any fiscal period sothat extraordinary or unusual charges or credits, changes to capitalexpenditure plans, acquisitions, mergers, consolidations, and other corporatetransactions and other elements of or factors influencing the calculations ofearnings or any other performance standard do not distort or affect theoperation of the Plan in an a manner inconsistent with the achievement of itspurpose.

 

Anydetermination of the Committee on the matters referred to in this Section 3shall be conclusive.

 

TheCommittee may delegate to one or more of its members, or to one or more agents,such administrative duties as it may deem advisable, and the Committee, or anyperson to whom it has delegated duties as aforesaid, may employ one or morepersons to render advice with respect to any responsibility the Committee orsuch person may have under the Plan. The Committee may employ such legal or other counsel, consultants andagents as it may deem desirable for the administration of the Plan and may relyupon any opinion or computation received from any such counsel, consultant oragent.  Expenses incurred by theCommittee in the engagement of such counsel, consultant or agent shall be paidby the Company or such subsidiary corporation or parent corporation of theCompany whose employees have benefited from the Plan, as determined by theCommittee.  No member or former memberof the Board or the Committee shall be liable for any action or determinationmade in good faith with respect to the Plan or any Awards or Options grantedhereunder.

 

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**4.****             Eligibility**

 

Optionsor Awards may be granted only to key employees, non-employee directors andconsultants providing services to the Company or any parent corporation orsubsidiary corporation of the Company now existing or hereafter formed oracquired; provided, however that Incentive Options may only begranted to key employees of the Company or any parent corporation or subsidiarycorporation of the Company now existing or hereafter formed or acquired.  The Plan does not create a right in anyperson to participate in, or be granted Options or Awards under, the Plan.

 

**5.****             Options**

 

**A.****    OptionPrice and Payment**

 

Theprice for each Share purchasable under any Option granted hereunder shall be determinedby the Committee; provided, however, that in the case of anIncentive Option, the purchase price for each Share shall not be less than onehundred percent (100%) of the Fair Market Value (as defined below) per Share atthe date the Option is granted; and provided further, that in the caseof an Incentive Option granted to a key employee who, at the time such Optionis granted, owns stock possessing more than ten percent (10%) of the totalcombined voting power of all classes of stock of the Company or any subsidiarycorporation or parent corporation, the purchase price for each Share shall benot less than one hundred ten percent (110%) of the Fair Market Value per Shareat the date the Option is granted.  Indetermining the stock ownership of a key employee for any purpose under thePlan, the rules of Section 424(d) of the Code shall be applied, and theCommittee may rely on representations of fact made to it by the key employeeand believed by it to be true.

 

Forpurposes of the Plan, the “***Fair Market Value***” of the Shares with respect to anydate of determination, means:

 

(i)            $87.12 per Share as ofthe date hereof;

 

(ii)           if the Shares arelisted or admitted to trading on a national securities exchange in the UnitedStates or reported through The Nasdaq Stock Market (“***Nasdaq***”) then the closing sale price on suchexchange or Nasdaq on such date or, if no trading occurred or quotations wereavailable on such date, then the closest preceding date on which such Shareswere traded or quoted; or

 

(iii)          if not so listed orreported but a regular, active public market for the Shares exists (asdetermined in the sole discretion of the Committee, whose discretion shall beconclusive and binding), then the average of the closing bid and ask quotationsper Share in the over-the-counter market for such Shares in the United Stateson such date or, if no such quotations are available on such date, then on theclosest date preceding such date.  Forpurposes of the foregoing, a market in which trading is sporadic and the askquotations generally exceed the bid quotations by more than fifteen percent(15%) shall not be deemed to be a “regular, active public market.”

 

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If theBoard determines that a regular, active public market does not exist for theShares, the Board shall determine the Fair Market Value of the Shares in itsgood faith judgment based on the total number of shares of Common Stock thenoutstanding, taking into account all outstanding options, warrants, rights orother securities exercisable or exchangeable for, or convertible into, sharesof Common Stock.  The Board shall makeits determination of Fair Market Value from time to time not less than annually(the “***Valuation***”)and such determination shall remain in effect until the Board makes the nextValuation (provided that, at any relevant date of determination, the Valuationapproximates the Fair Market Value at that date and, if it does not, the Boardshall make a new determination of Fair Market Value which shall applyretroactively at such date of determination). Notwithstanding the foregoing, if an investment banker or appraiserappointed by the Company makes a determination of Fair Market Value subsequentto a Valuation, such subsequent determination shall supersede the Valuationthen in effect and shall establish the Fair Market Value until the nextValuation.

 

Forpurposes of this Plan, the determination of the Board of the Fair Market Valueshall be conclusive.

 

Uponthe exercise of an Option granted hereunder, the Company shall cause thepurchased Shares to be issued only when it shall have received the fullpurchase price therefor in cash; provided, however, that in lieuof cash, the holder of an Option may, if the terms of such Option so provide andto the extent permitted by applicable law, exercise an Option (a) in whole orin part, by delivering to the Company shares of Class B Common Stock (in properform for transfer and accompanied by all requisite stock transfer tax stamps orcash in lieu thereof) owned by such holder having a Fair Market Value equal tothe cash exercise price applicable to that portion of the Option beingexercised, the Fair Market Value of the shares of Class B Common Stock sodelivered to be determined as of the date immediately preceding the date ofexercise, or as otherwise may be required to comply with or conform to therequirements of any applicable law or regulations, or (b) by delivering to theCompany such other form of payment as the Committee shall permit in its solediscretion at the time of grant of the Option; provided that any such shares ofClass B Common Stock to be delivered by the holder of an Option shall have beenowned by such holder for at least six (6) months.

 

**B.****    Termsof Options and Limitations on the Right of Exercise**

 

AnyOption granted hereunder shall be exercisable at such times, in such amountsand during such period or periods as the Committee shall determine at the dateof the grant of such Option; provided, however, that an IncentiveOption shall not be exercisable after the expiration of ten (10) years from thedate such Option is granted; and provided further, that in the case ofan Incentive Option granted to a key employee who, at the time such IncentiveOption is granted, owns stock possessing more than ten percent (10%) of thetotal combined voting power of all classes of stock of the Company or of anysubsidiary corporation or parent corporation of the Company, such IncentiveOption shall not be exercisable after the expiration of five (5) years from thedate such Incentive Option is granted.

 

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TheCommittee shall have the right to accelerate, in whole or in part, from time totime, conditionally or unconditionally, rights to exercise any Option grantedhereunder.

 

To theextent that an Option granted hereunder is not exercised within the period ofexercisability specified therein, it shall expire as to the then unexercisedpart.

 

Exceptas otherwise provided under the Code, to the extent that the aggregate FairMarket Value of stock for which Incentive Options (under all stock option plansof the Company and of any parent corporation or subsidiary corporation of theCompany) are exercisable for the first time by a key employee during any calendaryear exceeds one hundred thousand dollars ($100,000), such Options shall betreated as Non-Qualified Options.  Forpurposes of this limitation, (a) the Fair Market Value of stock is determinedas of the time the Option is granted and (b) Options will be taken into accountin the order in which they were granted.

 

In noevent shall an Option granted hereunder be exercised for a fraction of a Share.

 

Aperson entitled to receive Shares upon the exercise of an Option grantedhereunder shall not have the rights of a stockholder with respect to suchShares until the date of issuance of a stock certificate to him or her for suchShares; provided, however, that until such stock certificate isissued, any holder of an Option using previously acquired shares of CommonStock in payment of the exercise price shall continue to have the rights of astockholder with respect to such previously acquired shares of Common Stock.

 

**C.****    Terminationof Employment or Service**

 

Upontermination of employment of any employee or termination of service of anynon-employee director or of any consultant with the Company and all subsidiarycorporations and parent corporations of the Company, any Option previouslygranted to such person, unless otherwise specified by the Committee in theagreement granting such Option or otherwise, to the extent not theretoforeexercised, shall terminate and become null and void; provided, however,that:

 

(i)            if any Optionholdershall die while in the employ or service of such corporation or during eitherthe ninety (90) day or thirty (30) day period, whichever is applicable,specified in clauses (ii) and (iii) below, any Option granted hereunder, unlessotherwise specified by the Committee in the letter granting such Option, shallbe exercisable for any or all of such number of Shares that such Optionholderis entitled to purchase at the time of death, by the legal representative ofsuch Optionholder or by such person who acquired such Option by bequest orinheritance or by reason of the death of such Optionholder, at any time up toand including ninety (90) days after the date of death;

 

(ii)           if the employment orservice of any Optionholder shall terminate by reason of such Optionholder’sDisability (as defined below), any Option granted

 

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hereunder, unless otherwise specified by the Committeein the letter granting such Option, shall be exercisable for any or all of suchnumber of Shares that such Optionholder is entitled to purchase at theeffective date of termination of employment or service by reason of Disability,at any time up to and including ninety (90) days after the effective date ofsuch termination of employment or service;

 

(iii)          (x) in the case of anemployee, if the employment of such employee shall terminate (i) by reason ofthe employee’s retirement (at such age or upon such conditions as shall bespecified by the Committee in the letter granting such Option) or (ii) by theCompany or a subsidiary corporation or parent corporation of the Company otherthan for Cause, and (y) in the case of a non-employee director or consultant,if the service of such director or consultant shall terminate (i) by reason ofthe non-employee director’s voluntary retirement from service as a director,(ii) due to failure on the part of the Company or a subsidiary corporation orparent corporation of the Company to retain or nominate for re-election suchdirector who is otherwise eligible, unless due to an act of (a) fraud orintentional misrepresentation or (b) embezzlement, misappropriation orconversion of assets or opportunities of the Company or any subsidiarycorporation or parent corporation of the Company, or (iii) by the Company or asubsidiary corporation or parent corporation of the Company other than forCause, any Option granted hereunder, unless otherwise specified by theCommittee in the letter granting such Option, shall be exercisable for any orall of such number of Shares that such Optionholder is entitled to exercise atthe effective date of termination of employment or service, at any time up toand including thirty (30) days after the effective date of such termination ofemployment or service; and

 

(iv)          if the employment orservice of any Optionholder shall terminate by any reason other than thatprovided for in clauses (i), (ii) or (iii) above, any Option granted hereunder,unless otherwise specified by the Committee in the letter granting such Optionshall, to the extent not theretofore exercised, become null and void.

 

Noneof the events described in clauses (i), (ii) or (iii) above shall extend theperiod of exercisability of the Option beyond the expiration date thereof.

 

If anOption granted hereunder shall be exercised by the legal representative of adeceased Optionholder or by a person who acquired an Option granted hereunderby bequest or inheritance or by reason of the death of any current or formeremployee, non-employee director or consultant, written notice of such exerciseshall be accompanied by a certified copy of letters testamentary or equivalentproof of the right of such legal representative or other person to exercisesuch Option.

 

Forpurposes of the Plan, the term “***for Cause***” shall mean (a) with respect to an employeewho is a party to a written employment agreement with the Company or asubsidiary corporation or parent corporation of the Company, which agreementcontains a definition of “for cause” or “cause” (or words of like import) forpurposes of termination of employment or services thereunder by the Company orsuch subsidiary corporation or parent corporation of the Company, “for cause”or “cause” as defined therein; or (b) in all other cases, as determined by theCommittee or the Board in its sole discretion, (i) the

 

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intentionalor willful commission or failure due to bad faith by an Optionholder of an actthat causes or may cause substantial damage or significant injury to theCompany or a subsidiary corporation or parent corporation of the Company; (ii)the commission by an Optionholder of an act of fraud or willful dishonesty inthe performance of such Optionholder’s duties on behalf of the Company or asubsidiary corporation or parent corporation of the Company; (iii) convictionof an Optionholder for commission of a felony or a plea of guilty or nolocontendere to a felony; (iv) the breach by an Optionholder of anynon-competition, non-solicitation or confidentiality provision or agreemententered into with the Company or a subsidiary corporation or parent corporationof the Company; (v) the Optionholder’s being repeatedly under the influence ofillegal drugs and alcohol while performing his duties to the Company or asubsidiary corporation or parent corporation of the Company, or (vi) thecontinuing willful failure of an Optionholder to perform the duties of suchOptionholder to the Company or a subsidiary corporation or parent corporationof the Company that has not been cured within fifteen (15) days after writtennotice thereof has been given to the Optionholder by the Committee or itsdesignee.

 

Forpurposes of the Plan, the term “***Disability***” means (i) with respect to an Optionholderwho is a party to a written employment agreement with the Company, whichagreement contains a definition for “disability” or “permanent disability” (orwords of like import) for purposes of termination of employment thereunder bythe Company, “disability” or “permanent disability” in the most recentagreements, or (ii) in all other cases, means, as determined by the Committeeor the Board in its sole discretion, such Optionholder’s inability to performsubstantially his or her duties and responsibilities to the Company or anysubsidiary corporation or parent corporation any reason of physical or mentalillness, injury, infirmity or condition for a continuous period of six (6)months or one or more periods aggregating twelve (12) months in any two-yearperiod.

 

Forpurposes of the Plan, an employment relationship shall be deemed to existbetween an individual and a corporation if, at the time of determination, theindividual is an “employee” of such corporation for purposes of Section 422(a)of the Code.  An employment relationshipshall be deemed to continue while an individual is on a bona fide leave ofabsence if the period of such leave does not exceed ninety (90) days or, iflonger, if such individual’s right to reemployment is guaranteed by statute orcontract.

 

Atermination of employment shall not be deemed to occur by reason of (i) thetransfer of an employee from employment by the Company to employment by asubsidiary corporation or a parent corporation of the Company or (ii) thetransfer of an employee from employment by a subsidiary corporation or a parentcorporation of the Company to employment by the Company or by another subsidiarycorporation or parent corporation of the Company.

 

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**D.****    Exercise of Options**

 

Subjectto the limitations on exercise referred to in Sections 5.B and 5.C hereof,Options granted under the Plan shall be exercised by the Optionholder as to allor part of the Shares covered thereby by giving written notice of exercise tothe Corporate Secretary of the Company at the principal business office of theCompany, specifying the number of Shares to be purchased (including the classof such Shares), and specifying a business day not more than ten (10) days fromthe date such notice is given for the payment of the purchase price againstdelivery of the Shares being purchased. Subject to the terms of Sections 9, 10 and 11 hereof, the Company shallcause certificates for the Shares so purchased to be delivered at the principalbusiness office of the Company, against payment of the full purchase price, onthe date specified in the notice of exercise.

 

**E.****     Non-Transferabilityof Options**

 

AnOption granted hereunder shall not be transferable, whether by operation of lawor otherwise, other than, in the case of Non-Qualified Options, to (a) anyspouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentarytrustee, legatee or beneficiary of such Optionholder or (B) a trust that is forthe exclusive benefit of such Optionholder or the person set forth under clause(a) above (each a “***Permitted Transferee***”),and any Option granted hereunder shall be exercisable, during the lifetime ofthe holder, only by such holder.  Exceptto the extent provided above, Options may not be assigned, transferred,pledged, hypothecated or disposed of in any way (whether by operation of law orotherwise) and shall not be subject to execution, attachment or similarproceeding.  Any attempted assignment,transfer, pledge, hypothecation or other disposition of an Option grantedhereunder contrary to the provisions hereof, and the levy of any attachment orsimilar proceeding upon such Option, shall be null and void and without effect.

 

**F.****     TransferRestrictions and Repurchase Rights**

 

Itshall be a condition to the grant of any Option hereunder that the Optionholderagrees to become bound by certain transfer restrictions and repurchase rightsset forth in the agreement granting such Option, which provisions may beamended or modified from time to time as more fully specified by the Committeein connection with the grant of the Option.

 

**6.****             Stock Awards**

 

TheCommittee may, in its discretion, grant Awards (which may include mandatorypayment of bonus incentive compensation in stock) consisting of Class B CommonStock issued or transferred to participants with or without other paymentstherefor.  Awards may be subject to suchterms and conditions as the Committee determines appropriate, including,without limitation, restrictions on the sale or other disposition of suchShares, and the right of the Company to reacquire such Shares for noconsideration upon termination of the participant’s employment or servicewithin specified periods.  The Committeemay require the participant to deliver a duly signed

 

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stockpower, endorsed in blank, relating to the Class B Common Stock covered by suchan Award.  The Committee may alsorequire that the stock certificates evidencing such Shares be held in custodyor bear restrictive legends until the restrictions thereon shall have lapsed.  The Award shall specify whether theparticipant shall have, with respect to the Shares subject to an Award, all ofthe rights of a holder of Class B Common Stock, including the right to receivedividends and to vote the Shares.  Itshall be a condition to the grant of any Award hereunder that the participantagree to become bound by certain transfer restrictions and repurchase rightsset forth in the agreement granting such Award, which provisions may be amendedor modified from time to time as more fully specified by the Committee inconnection with the grant of the Award.

 

**7.****             Adjustment of Shares; Effect of CertainTransactions**

 

If byreason of a corporate merger, consolidation, acquisition of property or stock,separation, reorganization, recapitalization or liquidation the Board shallauthorize the issuance or assumption of a stock option in a transaction towhich Section 424(a) of the Code applies, then, notwithstanding any otherprovision of this Plan, the Board may grant an option upon such terms andconditions as it may deem appropriate for the purpose of assumption of oldoption, or substitution of a new option for the old option, in conformity withthe provisions of said Section 424(a) of the Code and the Treasury Regulationsthereunder.

 

Notwithstandingany other provision contained herein, in the event of any change in the Sharessubject to the Plan or to any Option or other right to acquire Shares grantedunder the Plan (through merger, consolidation, reorganization,recapitalization, stock dividend, stock split, split-up, split-off, spin-off,combination of shares, exchange of shares, or other like change in the capitalstructure of the Company), an adjustment shall be made to each outstandingOption or other right to acquire Shares under the Plan such that each suchOption or right shall thereafter be exercisable for such securities, cashand/or other property as would have been received in respect of the Sharessubject to such Option or right had such Option or right been exercised in fullimmediately prior to such change, and such an adjustment shall be madesuccessively each time any such change shall occur.  The term “Shares” after any such change shall refer to thesecurities, cash and/or property then receivable upon exercise of an Option orother right to acquire Shares under the Plan. In addition, in the event of any such change, the Committee shall makeany further adjustment to the maximum number of Shares which may be acquiredunder the Plan pursuant to the exercise of Options or other right to acquireShares, the maximum number of Shares for which Options or Awards may be grantedto any one participant and the number of Shares and exercise price per Sharesubject to outstanding Options or other right to acquire Shares under the Planas shall be equitable to prevent dilution or enlargement of rights under suchOptions or rights, and the determination of the Committee as to these mattersshall be conclusive and binding on the Optionholder; provided, however,that (a) each such adjustment with respect to an Incentive Option shall complywith the rules of Section 424(a) of the Code (or any successor provision) and(b) in no event shall any adjustment be made which would render any IncentiveOption granted hereunder other than an “incentive stock option” as defined inSection 422 of the Code.

 

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Exceptas specifically provided in the agreement granting the Option or Award, in theevent of a Change in Control (as defined below), and in anticipation thereof ifrequired by the circumstances, the Board, in its sole discretion may also (i)accelerate the exercisability, prior to the effective date of such change incontrol, of additional percentages of all outstanding Options granted underthis Plan (and redesignate as Non-Qualified Options any Options or portionsthereof that were originally designated as Incentive Options but that no longerso qualify under Section 422 of the Code), (ii) arrange, if there is asurviving or acquiring corporation, subject to the consummation of a change incontrol, to have that corporation or an affiliate of that corporation grant toemployees and other optionholders replacement options with substantiallysimilar or, if not adverse to the optionholders, different provisions withrespect to exercisability (upon which grant the Options granted under this Planshall immediately terminate and be of no further force or effect) which,however, in the case of Incentive Options, satisfy, in the determination of theBoard, the requirements of Section 424(a) of the Code, (iii) cancel all outstandingOptions in exchange for consideration in cash or in kind in an amount equal tothe value of the Shares, as determined by the Board in good faith, theoptionholder would have received had the Option been exercised (to the extentthen exercisable or to a greater extent, including in full, as the Board maydetermine) less the option price therefor (upon which cancellation such Optionsshall immediately terminate and be of no further force or effect), (iv) cancelall outstanding options to the extent then exercisable for no consideration,(v) permit the purchaser of the Company’s stock or assets to deliver to theoptionholders the same kind of consideration that is delivered to thestockholders of the Company in cancellation of such Options in an amount equalto the value of the Shares as determined by the Board in good faith, theoptionholder would have received had the Option been exercised (to the extentthen exercisable or to a greater extent, including in full, as the Board maydetermine), less the option price therefor, or (vi) take any combination (ornone) of the foregoing actions.

 

Forpurposes of the Plan, a “***Change in Control***” shall occur if (a) any person orother entity (other than any of the Company’s subsidiaries), including anyperson as defined in Section 13(d)(3) of the Exchange Act, other than (1) (A) DLJ Merchant Banking Partners III, L.P., DLJOffshore Partners III-1, C.V., DLJ Offshore Partners III-2, C.V., DLJ OffshorePartners III, C.V., DLJMB Partners III GmbH & Co. KG, Millennium PartnersII, L.P. and MBP III Plan Investors, L.P. (the “***DLJMB Funds***”), (B) any shareholder,member or general or limited partner of any DLJMB Fund (a “***DLJMB******Partner***”), and any corporation, partnership, limitedliability company, or other entity that is an Affiliate (as defined below) ofany DLJMB Partner (collectively, “***DLJMB******Affiliates***”), (C) any managing director, generalpartner, director, limited partner, officer or employee of any DLJMB Fund orany DLJMB Affiliate, or any spouse, lineal descendant, sibling, parent, heir,executor, administrator, testamentary trustee, legatee or beneficiary of any ofthe foregoing persons described in this clause (C) (collectively, “***DLJMB******Associates***”), or (D)any trust the beneficiaries of which, or any corporation, limited liabilitycompany or partnership the stockholders, members or general or limited partnersof which, include only such DLJMB Funds, DLJMB Affiliates, DLJMB Associates,their spouses or other lineal descendants, or (2) any “group” (within themeaning of Section 13(d)(3) of the Exchange Act) of which any DLJMB Fund ispart, becomes the beneficial owner, as defined in Rule 13d-3 of the

 

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ExchangeAct, directly or indirectly, in a single transaction or a series of relatedtransactions, by way of merger, consolidation or other business combination,securities of the Company representing more than fifty-one percent (51%) of thetotal combined voting power of all classes of capital stock of the Company (orits successor) normally entitled to vote for the election of directors of theCompany or (b) the sale of all or substantially all of the property or assetsof the Company to any unaffiliated person or entity other than one of theCompany’s subsidiaries is consummated. For purposes of this Plan, an “***Affiliate***” means, with respect to any person, any otherperson directly or indirectly controlling, controlled by or under commoncontrol with such person; provided that no securityholder of the Company or anyparent corporation or subsidiary corporation of the Company shall be deemed anAffiliate of any person solely by reason of an investment in the Company or anyparent corporation or subsidiary corporation of the Company.  For the purposes of this Plan, the term “***control***” (including,with correlative meanings, the terms “***controlling***”, “***controlled by***” and “***under common control with***”), as used with respect to anyperson, shall mean the possession, directly or indirectly, of the power todirect or cause the direction of the management and policies of such person,whether through the ownership of voting securities, by contract or otherwise.

 

**8.****             Right to Terminate Employment orService**

 

ThePlan shall not impose any obligation on the Company or on any subsidiarycorporation or parent corporation thereof to continue the employment or serviceof any Optionholder and it shall not impose any obligation on the part of anyOptionholder to remain in the employ or service of the Company or anysubsidiary corporation or parent corporation thereof.

 

**9.****             Compliance with Legal Requirements**

 

TheCommittee may refuse to issue or transfer any Shares or other considerationunder an Option if, acting in its sole discretion, it determines that theissuance or transfer of such Shares or such other consideration might violateany applicable law or regulation or entitle the Company to recover the sameunder Section 16(b) of the Exchange Act, and any payment tendered to theCompany by an Optionholder in connection therewith shall be promptly refundedto the relevant Optionholder.  Withoutlimiting the generality of the foregoing, no Option granted hereunder shall beconstrued as an offer to sell securities of the Company, unless and until theCommittee in its sole discretion has determined that any such offer, if made,would be in compliance with all applicable requirements of the federal andstate securities laws and any other laws to which such offer, if made, would besubject.

 

**10.****          Issuance of Stock Certificates;Legends; Payment of Expenses**

 

Uponany exercise of an Option or acquisition of Shares granted hereunder andpayment of the purchase price therefor, a certificate or certificatesrepresenting the Shares shall be issued by the Company in the name of theperson exercising the Option and shall be delivered to or upon the order ofsuch person.

 

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TheCompany may endorse such legend or legends upon the certificates for Sharesissued pursuant to the Plan and may issue such “stop transfer” instructions toits transfer agent in respect of such Shares as the Committee, in its solediscretion, determines to be necessary or appropriate to (a) prevent aviolation of, or to comply with the procedures for an exemption from, theregistration requirements of the Securities Act, (b) implement the provisionsof the Plan and any agreement between the Company and the Optionholder withrespect to such Shares or (c) permit the Company to determine the occurrence ofa disqualifying disposition, as described in Section 421(b) of the Code, ofShares transferred upon exercise of an Incentive Option granted under the Plan.

 

TheCompany shall pay all issue or transfer taxes with respect to the issuance ortransfer of Shares, as well as all fees and expenses necessarily incurred bythe Company in connection with such issuance or transfer, except fees andexpenses which may be necessitated by the filing or amending of a registrationstatement under the Securities Act, which fees and expenses shall be borne bythe recipient of the Shares unless such registration statement has been filedby the Company for its own corporate purposes (and the Company so states).

 

AllShares issued as provided herein shall be fully paid and nonassessable to theextent permitted by law.

 

**11.****          Withholding Taxes**

 

Allpayments or distributions of Options or Awards made pursuant to the Plan shallbe net of any amounts required to be withheld pursuant to applicable federal,state and local tax withholding requirements. If the Company proposes or is required to distribute Class B CommonStock pursuant to the Plan, it may require the recipient to remit to it or tothe corporation that employs such recipient an amount sufficient to satisfysuch tax withholding requirements prior to the delivery of any certificates forsuch Class B Common Stock.  In lieuthereof, the Company or the employing corporation shall have the right towithhold the amount of such taxes from any other sums due or to become due fromsuch corporation to the recipient as the Committee shall prescribe.  The Committee may, in its discretion andsubject to such rules as it may adopt (including any as may be required tosatisfy applicable tax and/or non-tax regulatory requirements), permit anoptionee or award or right holder to pay all or a portion of the federal, stateand local withholding taxes arising in connection with any Option or Awardconsisting of shares of Class B Common Stock by electing to have the Companywithhold shares of Class B Common Stock having a Fair Market Value equal to theamount of tax to be withheld, such tax calculated at rates required by statuteor regulation; provided that any such shares withheld shall have been owned bythe optionee or award or right holder for at least six (6) months.

 

**12.****          Listing of Shares and Related Matters**

 

If atany time the Committee shall determine that the listing, registration orqualification of the Shares subject to an Option or other right to acquireShares on any securities exchange or under any applicable law, or the consentor approval of any

 

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governmentalregulatory authority, is necessary or desirable as a condition of, or inconnection with, the granting of an Option or Award, or the issuance of Sharesthereunder, such Option or Award may not be exercised in whole or in partunless such listing, registration, qualification, consent or approval shallhave been effected or obtained free of any conditions not acceptable to theCommittee.

 

**13.****          Amendment of the Plan**

 

TheBoard may, from time to time, amend the Plan, provided that no amendment shallbe made, without the approval of the stockholders of the Company, that will (a)increase the total number of Shares issuable under the Plan or the maximumnumber of Shares for which Options and Awards may be granted to any oneOptionholder (other than an increase resulting from an adjustment provided forin Section 7 hereof), (b) reduce the exercise price of any Incentive Optiongranted hereunder or (c) modify the provisions of the Plan relating toeligibility.  The Committee shall beauthorized to amend the Plan and the Options granted thereunder to permit theIncentive Options granted thereunder to qualify as “incentive stock options”within the meaning of Section 422 of the Code and the Treasury Regulationspromulgated thereunder.  The rights andobligations under any Option or Award granted before amendment of the Plan orany unexercised portion of such Option or Award shall not be adversely affectedby amendment of the Plan or the Option or Award without the consent of theholder of such Option or Award.

 

**14.****          Termination or Suspension of the Plan**

 

TheBoard may at any time suspend or terminate the Plan.  The Plan, unless sooner terminated under Section 17 or by actionof the Board, shall terminate at the close of business on the TerminationDate.  Options or Awards may not begranted while the Plan is suspended or after it is terminated.  Rights and obligations under any Option orAward granted while the Plan is in effect shall not be altered or impaired bysuspension or termination of the Plan, except upon the consent of the person towhom the Option or other right was granted. The power of the Committee to construe and administer any Options or Awardsunder Section 3 that are granted prior to the termination or suspension of thePlan shall continue after such termination or during such suspension.

 

**15.****          Governing Law**

 

ThePlan, the Options and Awards granted hereunder and all related matters shall begoverned by, and construed and enforced in accordance with, the laws of theState of Delaware from time to time obtaining.

 

**16.****          Partial Invalidity**

 

Theinvalidity or illegality of any provision herein shall not be deemed to affectthe validity of any other provision.

 

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**17.****          Effective Date**

 

ThePlan shall become effective at 5:00 P.M., New York City time, on the EffectiveDate; provided, however, that if the Plan is not approved by a vote of thestockholders of the Company at an annual meeting or any special meeting, or byunanimous written consent of the stockholders, within (12) months after theEffective Date, the Plan and any Options and Awards granted thereunder shallterminate.

 

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