Ex-10.4






Exhibit 10.4




LIFEPOINT HOSPITALS, INC.




OUTSIDE DIRECTORS STOCK AND INCENTIVE COMPENSATION PLAN




Amended and Restated

Effective May 14, 2008




 









 








LIFEPOINT HOSPITALS, INC.

OUTSIDE DIRECTORS STOCK AND INCENTIVE COMPENSATION PLAN




Table of Contents




	 	 	 	 	 	 	 
	1.
	 	Introduction	 	 	1	 
	2.
	 	Definitions	 	 	1	 
	 
	 	(a) Agreement	 	 	1	 
	 
	 	(b) Annual Award	 	 	1	 
	 
	 	(c) Annual Retainer	 	 	1	 
	 
	 	(d) Award	 	 	1	 
	 
	 	(e) Board	 	 	1	 
	 
	 	(f) Board Term	 	 	1	 
	 
	 	(g) Code	 	 	1	 
	 
	 	(h) Common Stock	 	 	1	 
	 
	 	(i) Company	 	 	2	 
	 
	 	(j) Deferred Restricted Stock	 	 	2	 
	 
	 	(k) Deferred Restricted Stock Account	 	 	2	 
	 
	 	(l) Deferred Stock Unit	 	 	2	 
	 
	 	(m) Deferred Stock Unit Account	 	 	2	 
	 
	 	(n) Disability	 	 	2	 
	 
	 	(o) Discretionary Option	 	 	2	 
	 
	 	(p) Election Notice	 	 	2	 
	 
	 	(q) Exchange Act	 	 	2	 
	 
	 	(r) Fair Market Value	 	 	2	 
	 
	 	(s) Initial Award	 	 	2	 
	 
	 	(t) Option	 	 	3	 
	 
	 	(u) Option Price	 	 	3	 
	 
	 	(v) Outside Director	 	 	3	 
	 
	 	(w) Participant	 	 	3	 
	 
	 	(x) Plan	 	 	3	 
	 
	 	(y) Realization Date	 	 	3	 
	 
	 	(z) Restricted Stock	 	 	3	 
	 
	 	(aa) Separation from Service	 	 	3	 
	 
	 	(bb) Shares	 	 	4	 
	 
	 	(cc) Subsidiary	 	 	4	 
	3.
	 	Administration of the Plan	 	 	4	 
	4.
	 	Stock Subject to Plan	 	 	4	 
	 
	 	4.1 Number of Shares	 	 	4	 
	 
	 	4.2 Reuse of Shares	 	 	4	 
	5.
	 	Award Grants	 	 	4	 
	 
	 	5.1 Initial Awards	 	 	4	 
	 
	 	5.2 Annual Awards	 	 	4	 
	 
	 	5.3 Discretionary Awards	 	 	5	 
	6.
	 	Options	 	 	5	 
	 
	 	6.1 Grant of Options	 	 	5	 
	 
	 	6.2 Option Price	 	 	5	 






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	 	6.3 Option Term	 	 	5	 
	 
	 	6.4 Option Vesting	 	 	5	 
	 
	 	6.5 Option Exercise	 	 	5	 
	 
	 	6.6 Limited Transferabilitv of Options	 	 	6	 
	 
	 	6.7 Death of Optionee	 	 	6	 
	 
	 	6.8 Disability	 	 	7	 
	 
	 	6.9 Other Termination of Service	 	 	7	 
	7.
	 	Restricted Stock	 	 	7	 
	 
	 	7.1 Grant of Restricted Stock	 	 	7	 
	 
	 	7.2 Deferred Restricted Stock Awards	 	 	7	 
	 
	 	7.3 Vesting	 	 	8	 
	 
	 	7.4 Restrictions	 	 	8	 
	 
	 	7.5 Rights as Stockholder	 	 	8	 
	 
	 	7.6 Section 83(b) Election	 	 	8	 
	8.
	 	Deferred Stock Units	 	 	8	 
	 
	 	8.1 Grant of Deferred Stock Units	 	 	8	 
	 
	 	8.2 Deferred Stock Unit Awards	 	 	8	 
	 
	 	8.3 Deferred Stock Unit Deferral Elections	 	 	9	 
	9.
	 	Change in Control	 	 	10	 
	 
	 	9.1 Effect of Change in Control	 	 	10	 
	 
	 	9.2 Definition	 	 	10	 
	 
	 	9.3 Realization Date upon Change in Control	 	 	12	 
	10.
	 	Anti-dilution Adjustments	 	 	12	 
	11.
	 	Conditions of Issuance of Stock Certificates	 	 	13	 
	 
	 	11.1 Applicable Conditions	 	 	13	 
	 
	 	11.2 Legends	 	 	13	 
	12.
	 	No Rights to Continued Service	 	 	13	 
	13.
	 	No Rights to Assets of the Company	 	 	13	 
	14.
	 	Amendment and Termination of the Plan	 	 	13	 
	15.
	 	Term of the Plan	 	 	14	 
	16.
	 	Governing Law	 	 	14	 






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LIFEPOINT HOSPITALS, INC.

OUTSIDE DIRECTORS STOCK AND INCENTIVE COMPENSATION PLAN




1. Introduction.




     This Plan is maintained by LifePoint Hospitals, Inc. (the “Company”) as the “LifePoint
Hospitals, Inc. Outside Directors Stock and Incentive Compensation Plan” (the “Plan”). The Plan was
adopted by the Company to encourage ownership of stock in the Company by Outside Directors, to
provide an incentive to such directors to continue to serve the Company and to aid the Company in
attracting qualified director candidates in the future.



     The provisions of the Plan are intended to satisfy any applicable requirements of section
16(b) of the Securities Exchange Act of 1934, and shall be interpreted in a manner consistent with
any such requirements thereof, as now or hereafter construed, interpreted and applied by
regulation, rulings and cases.



     The Plan has been amended from time to time by the Company. The Company now desires to amend
and restate the Plan to consolidate all amendments into a single document, to comply with section
409A of the Code, and to provide for the discretionary granting of Deferred Stock Unit Awards.
This amendment and restatement is effective as of May 14, 2008 in accordance with the terms and
condition set forth herein.


2. Definitions. As used in the Plan, the following words and phrases shall have the
meanings indicated:




	 	(a)	 	“Agreement” shall mean a written agreement entered into between the Company and
a Participant in connection with any Award granted under the Plan.
	 
	 	(b)	 	“Annual Award” shall mean an Award granted pursuant to Section 5.2 hereof.
	 
	 	(c)	 	“Annual Retainer” shall mean the annual fee earned by the Participant for his
or her service on the Board, which shall not include committee chair fees and meeting
fees.
	 
	 	(d)	 	“Award” shall mean the grant of Options, Restricted Stock, Deferred Restricted
Stock and/or Deferred Stock Units.
	 
	 	(e)	 	“Board” shall mean the Board of Directors of the Company.
	 
	 	(f)	 	“Board Term” shall mean each Board year beginning on the date of an annual
meeting of the Company’s stockholders and ending on the date immediately preceding the
next annual meeting of the Company’s stockholders.
	 
	 	(g)	 	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.
	 
	 	(h)	 	“Common Stock” shall mean the common stock of the Company.




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	 	(i)	 	“Company” shall mean LifePoint Hospitals, Inc., a Delaware corporation, or any
successor corporation.
	 
	 	(j)	 	“Deferred Restricted Stock” shall mean a bookkeeping unit entitling a
Participant to a share of Common Stock on the Realization Date (and shall include
fractional units).
	 
	 	(k)	 	“Deferred Restricted Stock Account” shall mean a bookkeeping account maintained
by the Company reflecting the number of shares of Restricted Stock credited to a
Participant pursuant to Section 7.2 hereof.
	 
	 	(l)	 	“Deferred Stock Unit” shall mean a bookkeeping unit entitling a Participant to
a Share on the Realization Date (and shall include fractional units).
	 
	 	(m)	 	“Deferred Stock Unit Account” shall mean a bookkeeping account maintained by
the Company reflecting the number of Deferred Stock Units credited to a Participant
pursuant to Section 8.2 and/or 8.3 hereof.
	 
	 	(n)	 	“Disability” shall mean that a Participant is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or last for a continuous period of
not less than 12 months.
	 
	 	(o)	 	“Discretionary Award” shall mean an Award granted pursuant to Section 5.3.
	 
	 	(p)	 	“Election Notice” shall mean a written election, in such form as the Board
shall prescribe, submitted by a Participant to the Company in connection with a
Deferred Stock Unit under the Plan.
	 
	 	(q)	 	“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time and as now or hereafter construed, interpreted and applied by regulations,
rulings and cases.
	 
	 	(r)	 	“Fair Market Value” per Share or per Deferred Stock Unit as of a given date
shall mean the closing sales price of the Common Stock on the Nasdaq Stock Market on
the trading day immediately preceding the date as of which the Fair Market Value is to
be determined, or, in the absence of any reported sales of Shares on such date, on the
first preceding date on which any such sale shall have been reported. If the Shares
are not listed on the Nasdaq Stock Market on the date as of which Fair Market Value is
to be determined, the Board shall in good faith determine the Fair Market Value in
whatever manner it considers appropriate, provided, however, that such determination
shall be made in a manner that complies with the rules regarding determination of fair
market value under section 409A of the Code.
	 
	 	(s)	 	“Initial Award” shall mean an award granted pursuant to Section 5.1 hereof.




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	 	(t)	 	“Option” shall mean the right that is granted hereunder to a Participant to
purchase from the Company a stated number of shares of Common Stock at the price set
forth in an Agreement.
	 
	 	(u)	 	“Option Price” shall mean the price at which each share of Common Stock subject
to an Option may be purchased, determined in accordance with Section 6.2 hereof.
	 
	 	(v)	 	“Outside Director” shall mean any member of the Board who is not also an
employee of the Company (or any Subsidiary thereof).
	 
	 	(w)	 	“Participant” shall mean any Outside Director who has received an Option or
other award (or credit) hereunder that has not yet terminated.
	 
	 	(x)	 	“Plan” shall mean this LifePoint Hospitals, Inc. Outside Directors Stock and
Incentive Compensation Plan.
	 
	 	(y)	 	“Realization Date” shall mean the date that an applicable account or any
portion thereof is settled in Common Stock or other payment to the Participant. With
respect to any Deferred Restricted Stock allocated to a Participant’s Deferred
Restricted Stock Account under Section 7.2, the Realization Date shall be the date
established by the Board at the time of grant. With respect to any Deferred Stock Unit
allocated to a Participant’s Deferred Stock Unit Account under Section 8.3, the
Realization Date shall be, as elected by the Participant, the first business day
following (i) the second anniversary of the date such Deferred Stock Unit is credited
to the Participant’s Deferred Stock Unit Account, or (ii) the date the Participant
ceases to be a member of the Board. The Realization Date must be either the date on
which a Director experiences a Separation from Service or a specified date determined
at the time of the grant or, if applicable, the Election Notice. In the case of a
specified employee, as defined in section 409A of the Code, any settlement of an Award
or payment as the result of a Director’s Separation from Service must be six months
after the date of such Separation from Service except as otherwise allowed by section
409A of the Code and regulations thereunder.
	 
	 	(z)	 	“Restricted Stock” shall mean an Award entitling a Participant to shares of
Common Stock that are nontransferable and subject to forfeiture until specific
conditions established by the Board are satisfied.
	 
	 	(aa)	 	“Separation from Service” shall mean the later of (i) the date on which the
Participant ceases to be a Director, or (ii) the date the Participant is no longer
providing services to the Company or a Related Company as an independent contractor or
otherwise. A reduction in bona fide services to 20 percent or less of the services
performed by the Participant for the Company during the immediately preceding 36 months
(or complete period of service, if less than 36 months) shall be considered Separation
from Service. For purposes of determining whether a Director has experienced a
Separation from Service, the





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phrase “Related Company” shall mean any company or business within the controlled
group with the Company as determined by section 414(b) and (c) of the Code except
that in applying section 1563(a)(1), (2) and (3) of the Code “at least 50 percent”
shall be substituted for “at least 80 percent” each place that it appears in such
section.




	 	(bb)	 	“Shares” shall mean shares of Common Stock of the Company.
	 
	 	(cc)	 	“Subsidiary” shall have the meaning set forth in Section 9.2.





3. Administration of the Plan.




     The Plan shall be administered by the Board. The Board shall have plenary authority in its
discretion, but subject to the express provisions of the Plan, to administer the Plan and to
exercise all the powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without limitation, to
interpret the Plan, to prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the details and provisions of the Election Notices and Agreements and to make all other
determinations deemed necessary or advisable for the administration of the Plan. The Board’s
determinations on the foregoing matters shall be final and conclusive. No member of the Board shall
be liable for any action taken or determination made in good faith with respect to the Plan or any
grant hereunder.



4. Stock Subject to Plan.




     4.1 Number of Shares. The maximum number of Shares of Common Stock that may be issued
pursuant to Awards under the Plan shall be 375,000, which number shall be subject to adjustment as
provided in Section 10 hereof. Such Shares may be either authorized but unissued shares, or Shares
that shall have been or may be reacquired by the Company.



     4.2 Reuse of Shares. If an Option, Restricted Stock, Deferred Restricted Stock or a
Deferred Stock Unit Award under the Plan is canceled, terminates, expires unexercised or is
exchanged for a different award without the issuance of Shares of Common Stock, the covered Shares
shall, to the extent of such termination or non-use, again be available for Awards thereafter
granted during the term of the Plan.



5. Award Grants.




     5.1 Initial Awards. Upon commencement of service as an Outside Director, the Board
may, in its sole discretion, grant such Outside Director an Initial Award which shall cover a
number of shares and in such form as shall be determined by the Board. An Initial Award in the
form of Restricted Stock shall be subject to the vesting requirements specified by the Board.



     5.2 Annual Awards. The Board may, in its sole discretion, grant each person who is an
Outside Director on the first business day of any Board Term an Annual Award on such date which
shall cover a number of Shares determined by the Board.



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     5.3 Discretionary Awards. The Board may, from time to time, in its sole discretion,
designate Outside Directors who are to be granted Discretionary Awards and determine the number of
shares subject to such Discretionary Awards.



6. Options.




     6.1 Grant of Options. Awards of Options are Awards that entitle a Participant to
purchase from the Company a stated number of shares of Common Stock at the price set forth in an
Agreement.



     6.2 Option Price. The Option Price of each Share subject to an Option under an Annual
Award or Initial Award shall be 100 percent of the Fair Market Value of a Share on the date of
grant. The Option Price of each Share subject to an Option under a Discretionary Award shall be
determined by the Board; provided, however, that the Option Price of each Share
under any Option shall not be less than 100 percent of the Fair Market Value of a Share on the date
of grant.



     6.3 Option Term. The term of any Option issued pursuant to the Plan shall be ten
years from the date of grant and may extend beyond the date of termination of the Plan;
provided, however, that the Board may, in the case of a Discretionary Award,
provide for a shorter exercise period in the Agreement.



     6.4 Option Vesting. An Initial Award in the form of an Option shall become fully
exercisable no sooner than the third anniversary of the date of grant. An Option granted as an
Annual Award shall become exercisable no earlier than in three cumulative installments, each of
which shall relate to 33 1/3% of the Shares covered by the Option, on the date of grant and the two
next succeeding anniversary dates thereof, respectively. For an Option under a Discretionary
Award, the Board, in its sole discretion, shall prescribe the time or times at which, or the
conditions upon which, such Option or portion thereof shall become vested and exercisable, and may
accelerate the exercisability or vesting of any such Option at any time.



     6.5 Option Exercise. An Option may be exercised in whole or in part at any time to
the extent vested, with respect to whole Shares only, within the period permitted thereunder for
the exercise thereof, and shall be exercised by written notice of intent to exercise the Option
with respect to a specified number of Shares, delivered to the Company at its principal office, and
payment in full to the Company at said office of the amount of the Option Price for the number of
Shares with respect to which the Option is then being exercised. Payment of the Option Price shall
be made (i) in cash or cash equivalents, (ii) in whole Shares valued at the closing sales price of
the Common Stock on the Nasdaq Stock Market on the date of exercise (or next succeeding trading
date, if the date of exercise is not a trading date, in which case the exercise date shall instead
be considered to be such next trading date) or (iii) by a combination of such cash (or cash
equivalents) and such Common Stock; provided, however, that the optionee shall not
be entitled to tender Shares pursuant to successive, substantially simultaneous exercises of an
Option or any other stock option of the Company. Subject to applicable securities laws, an Option
may also be exercised by delivering a notice of exercise of the Option and simultaneously selling
the Shares thereby acquired pursuant to a brokerage or similar agreement approved in advance by
proper officers of the Company, using the proceeds of such sale as payment of the exercise price.



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Subject to the provisions of Section 11 hereof, the Company shall issue a stock certificate
for the Shares purchased by exercise of an Option, in the name of the optionee (or other person
exercising the Option in accordance with the provisions of the Plan), as soon as practicable after
due exercise and payment of the aggregate Option Price for such Shares.



     6.6 Limited Transferability of Options. All Options shall be nontransferable except
(i) upon the optionee’s death, by the optionee’s will or the laws of descent and distribution or
(ii) on a case-by-case basis, as may be approved by the Board in its discretion, in accordance with
the terms provided below. Each Agreement shall provide that the optionee may, during his or her
lifetime and subject to the prior approval of the Board at the time of proposed transfer, transfer
all or part of the Option to a Family Member (as defined below), provided that such transfer is
made for estate planning, tax planning, donative purposes or pursuant to a domestic relations
order, and no consideration (other than nominal consideration) is received by the Optionee. The
transfer of an Option shall be subject to such other terms and conditions as the Board may in its
discretion impose from time to time, including (without limitation) a condition that the portion of
the Option to be transferred be vested and exercisable by the optionee at the time of the transfer
and a requirement that the terms of such transfer be documented in a written agreement (in such
form as the Board may prescribe). Subsequent transfers of an Option transferred under this Section
6.6 shall be prohibited, other than by will or the laws of descent and distribution upon the death
of the transferee.



     For purposes hereof, a “family member” shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the employee’s household (other than a tenant or employee), a
trust in which these persons have more than fifty percent of the beneficial interest, a foundation
in which these persons (or the employee) control the management of assets, and any other entity in
which these persons (or the employee) own more than fifty percent of the voting interests.



     No transfer of an Option by the optionee by will or by laws of descent and distribution shall
be effective to bind the Company unless the Company shall have been furnished with written notice
thereof and an authenticated copy of the will and/or such other evidence as the Board may deem
necessary to establish the validity of the transfer. During the lifetime of an optionee, except as
provided above, the Option shall be exercisable only by the optionee, except that, in the case of
an optionee who is legally incapacitated, the Option shall be exercisable by the optionee’s
guardian or legal representative. In the event of any transfer of an Option to a Family Member in
accordance with the provisions of this Section 6.6, such Family Member shall thereafter have all
rights that would otherwise be held by such optionee (or by such optionee’s guardian, legal
representative or beneficiary), except as otherwise provided herein. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of the Option contrary to the provisions
hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null
and void and without effect.



     6.7 Death of Optionee. If an optionee dies while he or she is an Outside Director,
the executor or administrator of the estate of the decedent (or the person or persons to whom an
Option shall have been validly transferred in accordance with Section 6.6) shall have the right,
during the period ending six months after the date of the optionee’s death (subject to the



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provisions of Section 6.3 hereof concerning the maximum term of an Option), to exercise the
Option to the extent that it was exercisable at the date of such optionee’s death and shall not
have been previously exercised.



     6.8 Disability. If an optionee’s service as an Outside Director shall be terminated
as a result of Disability, the optionee (or in the case of an optionee who is legally
incapacitated, his or her guardian or legal representative) shall have the right, during a period
ending six months after the date of his or her disability (subject to the provisions of Section 6.3
hereof concerning the maximum term of an Option), to exercise the Option to the extent that it was
exercisable at the date of such optionee’s Disability and shall not have been previously exercised.



     6.9 Other Termination of Service. If an optionee’s service as an Outside Director
shall be terminated for any reason other than death or Disability, the optionee shall have the
right, during the period ending ninety days after such termination (subject to the provisions of
Section 6.3 hereof concerning the maximum term of an Option), to exercise the Option to the extent
that it was exercisable on the date of such termination of service and shall not have been
previously exercised.



7. Restricted Stock.




     7.1 Grant of Restricted Stock. Awards of Restricted Stock are Awards that entitle a
Participant to shares of Common Stock that are nontransferable and subject to forfeiture until
specific conditions established by the Board are satisfied.



     7.2 Deferred Restricted Stock Awards. The Board may designate any Award of Restricted
Stock as a Deferred Restricted Stock Award. The Agreement granting an Award of Deferred Restricted
Stock shall set forth the terms of the Award, including, but not limited to, the terms and
conditions under which the Award shall vest and become nonforfeitable subject to the following
terms and conditions:




	 	(a)	 	Dividend Equivalents. A Participant shall be credited with dividend
equivalents on all Deferred Restricted Stock credited to his or her Deferred
Restricted Stock Account at the time of any payment of dividends on Shares to
stockholders. The amount of any such dividend equivalents shall equal the amount that
would have been payable to the Participant as a stockholder in respect of a number of
Shares equal to the number of shares of Deferred Restricted Stock then credited to him
or her. Any such dividend equivalent shall be credited to the Participant’s Deferred
Restricted Stock Account as of the date on which such dividend would have been payable
and shall be converted into additional Deferred Restricted Stock shares based upon the
Fair Market Value of a Share on the date of such crediting.






	 	(b)	 	Payment of Awards. With respect to any Deferred Restricted Stock Award, a
Participant shall be entitled to payment on the Realization Date for such Award.
Subject to the provisions of Section 11, such payment in respect of any Deferred
Restricted Stock Awards shall be made through the issuance to the Participant of




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	 	 	 	a stock certificate for a number of Shares equal to the number of shares designated
in the Award, as adjusted pursuant to Section 7.2(a).





     7.3 Vesting. The restrictions imposed on Shares granted under a Restricted Stock Award
(including a Deferred Restricted Stock Award) shall lapse in accordance with the vesting
requirements specified by the Board, which may be specified in an Agreement. Such vesting
requirements may be based on the continued service of the Participant as a member of the Board for
a specified time period or periods. Such vesting requirements may, in addition to or in the
alternative, be based on the attainment of specified business goals or measures established by the
Board in its sole discretion.



     7.4 Restrictions. Restricted Stock may not be transferred, assigned or subject to any
encumbrance, pledge, or charge until all applicable restrictions are removed or have expired,
unless otherwise allowed by the Board. The Board may require the Participant to enter into an
escrow agreement providing that the certificates representing the Restricted Stock will remain in
the physical custody of an escrow holder until all restrictions are removed or have expired.
Failure to satisfy any applicable restrictions shall result in the applicable shares of Restricted
Stock being forfeited and returned to the Company, with any purchase price paid by the Participant
to be refunded, unless otherwise provided by the Board. The Board may require that certificates
representing the Restricted Stock bear a legend making appropriate reference to the restrictions
imposed. The Board may, in connection with an Award of Restricted Stock, require the payment of a
specified purchase price.



     7.5 Rights as Stockholder. Subject to the foregoing provisions of this Section and
the applicable Agreement, the Participant will have all rights of a stockholder with respect to the
Restricted Stock, including the right to vote the Restricted Stock and receive all dividends and
other distributions paid or made with respect thereto, unless the Board determines otherwise at the
time the Restricted Stock is granted. The Participant will not have rights of a stockholder with
respect to Deferred Restricted Stock until the Realization Date.



     7.6 Section 83(b) Election. The Board may provide in an Award of Restricted Stock,
which may be set forth in the terms of an Agreement, that the Restricted Stock is conditioned upon
the Participant’s refraining from making an election with respect to the Award under section 83(b)
of the Code. Irrespective of whether an Award is so conditioned, if a Participant makes an election
pursuant to section 83(b) of the Code with respect to Restricted Stock, the participant shall be
required to promptly file a copy of such election with the Company.



8. Deferred Stock Units.




     8.1 Grant of Deferred Stock Units. Awards of Deferred Stock Units are Awards that
entitle a Participant to receive shares of Common Stock at the Realization Date upon terms and
conditions set forth in an Agreement or Election Notice. A Deferred Stock Unit represents an
unfunded promise by the Company and is not a transfer of property within the meaning of section 83
of the Code.



     8.2 Deferred Stock Unit Awards. A Participant may receive a Deferred Stock Unit Award
as determined from time to time at the discretion of the Board. Further, pursuant to



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Section 8.3, a Participant shall receive a Deferred Stock Unit Award for each Board Term in
respect of which he makes an Election Notice. Such Deferred Stock Unit Award shall be granted as of
the first business day of the Board Term and shall be for a number of Deferred Stock Units
determined by dividing (A) the additional Annual Retainer amount that would have been payable to
the Participant in cash in the absence of his or her Election Notice, by (B) the Fair Market Value
of a Share on the date of grant. Any Agreement for an Award of Deferred Stock Units shall set
forth the terms of the Award, including, but not limited to, the terms and conditions under which
the Award shall vest and become nonforfeitable subject to the following terms and conditions:




	 	(a)	 	Vesting. Deferred Stock Units shall become vested as determined by the Board
at the time of grant, except as otherwise provided in Section 8.3.
	 
	 	(b)	 	Dividend Equivalents. A Participant shall be credited with dividend
equivalents on all Deferred Stock Units credited to his or her Deferred Stock Unit
Account at the time of any payment of dividends on Shares to stockholders. The amount
of any such dividend equivalents shall equal the amount that would have been payable
to the Participant as a stockholder in respect of a number of Shares equal to the
number of Deferred Stock Units then credited to him. Any such dividend equivalent
shall be credited to the Participant’s Deferred Stock Unit Account as of the date on
which such dividend would have been payable and shall be converted into additional
Deferred Stock Units (which shall be immediately vested) based upon the Fair Market
Value of a Share on the date of such crediting.
	 
	 	(c)	 	Payment of Awards. A Participant shall be entitled to payment, in respect of
Deferred Stock Units credited to him, on the Realization Date for such Deferred Stock
Units provided in an Agreement or as indicated by Participant in the applicable
Election Notice as described in Section 8.3. Subject to the provisions of Section 11,
such payment in respect of any Deferred Stock Units shall be made through the issuance
to the Participant of a stock certificate for a number of Shares equal to the number
of such Deferred Stock Units, as adjusted by Section 8.2(b).





     8.3 Deferred Stock Unit Deferral Elections.




	 	(a)	 	For each Board Term during which the Plan is in effect, a Participant may elect
to receive, in lieu of all or any portion (in multiples of 25%) of his or her Annual
Retainer payable for such Board Term, an Award of Deferred Stock Units pursuant to
Section 8.2 hereof.
	 
	 	(b)	 	A Participant’s election shall be made for each calendar year by filing an
Election Notice with the Company, in accordance with procedures adopted by the Board,
on or before December 15 of the calendar year immediately preceding the calendar year
for which such Annual Retainer is to be paid. In addition, all elections under this
Section 8.3 must be in compliance with the Company’s




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	 	 	 	insider trading policy. All Deferred Stock Units granted pursuant to a
Participant’s deferral election shall be immediately 100% vested.






	 	(c)	 	Unless stated otherwise in an Election Notice that is authorized by the Board,
an Election Notice shall continue in effect at the end of each calendar year and apply
to each succeeding calendar year unless the Participant changes or revokes his or her
election prior the beginning of a succeeding election year.





9. Change in Control.




     9.1 Effect of Change in Control. Unless stated otherwise in an Agreement, the
provisions of this Section 9.1 will apply to outstanding Awards at the time of a Change in Control
to the extent of rights under such awards that have not been previously forfeited. The surviving
corporation or entity or acquiring corporation or entity, or affiliate of such corporation or
entity, may assume any Awards outstanding under the Plan or substitute similar equity and incentive
awards (including an award to acquire the same consideration paid to the stockholders in the
transaction described in this Section 9) for those outstanding under the Plan.



     In the event that any surviving corporation or entity or acquiring corporation or entity in a
Change in Control, or affiliate of such corporation or entity, does not assume such Awards and does
not substitute similar awards for those outstanding under the Plan, then (i) all Awards outstanding
shall, immediately prior to the Change in Control event, become fully vested to the extent not
previously forfeited and, with respect to Options, fully exercisable, and (ii) any Options that are
not exercised shall be terminated upon the completion of the transaction that is the Change in
Control event.



     In the event that any surviving corporation or entity or acquiring corporation or entity in a
Change in Control, or affiliate of such corporation or entity, assumes Awards outstanding under the
Plan at the time of the Change in Control, or substitutes Awards with similar stock awards
(including an award to acquire the same consideration paid to the stockholders in the transaction
described in this Section 9 for those outstanding under the Plan), and the directorship of a
Participant is terminated within 18 months after the effective date of the Change in Control event,
all Awards held by such Participant shall become fully vested to the extent not previously
forfeited and, with respect to Options, fully exercisable.



     9.2 Definition. For purposes of Section 9.1 hereof, “change in control” of the
Company shall be deemed to have occurred upon the occurrence of any of the following:




	 	(a)	 	An acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “Person” (as the term
Person is used for purposes of Section 13(d) or 14(d) of the Exchange Act immediately
after which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of the combined
voting power of the then outstanding Voting Securities; provided,
however, that in determining whether a change in control has occurred, Voting
Securities which are acquired in a “Non-Control Acquisition” (as hereinafter defined)
shall not constitute an acquisition which would cause a change in control. A
“Non-Control Acquisition” shall mean an acquisition by (i) an





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	 	 	 	employee benefit plan (or a trust forming a part thereof) maintained by (A) the
Company or (B) any corporation or other Person of which a majority of its voting
power or its equity securities or equity interest is owned directly or indirectly by
the Company (a “Subsidiary”) or (ii) the Company or any Subsidiary.






	 	(b)	 	The individuals who, as of the date the Company issues any class of equity
securities required to be registered under Section 12 of the Exchange Act, are members
of the Board (the “Incumbent Board”), cease for any reason to constitute at least
two-thirds of the Board; provided, however, that if the election, or
nomination for election, by the Company’s stockholders of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Agreement, be considered as a member of the Incumbent
Board; provided, further, however, that no individual shall be
considered a member of the Incumbent Board if (1) such individual initially assumed
office as a result of either an actual or threatened “Election Contest” (as described
in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board
(a “Proxy Contest”) including by reason of any agreement intended to avoid or settle
any Election Contest or Proxy Contest or (2) such individual was designated by a
Person who has entered into an agreement with the Company to effect a transaction
described in clause (a) or (c) of this Section 9.2; or
	 
	 	(c)	 	Consummation, after approval by stockholders of the Company, of:






	 	(1)	 	A merger, consolidation or reorganization involving the
Company, unless,






	 	(A)	 	The stockholders of the Company, immediately
before such merger, consolidation or reorganization, own, directly or
indirectly immediately following such merger, consolidation or
reorganization, at least seventy-five percent (75%) of the combined
voting power of the outstanding Voting Securities of the corporation
resulting from such merger or consolidation or reorganization or its
parent corporation (the “Surviving Corporation”) in substantially the
same proportion as their ownership of the Voting Securities immediately
before such merger, consolidation or reorganization;
	 
	 	(B)	 	The individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least
two-thirds of the members of the board of directors of the Surviving
Corporation; and
	 
	 	(C)	 	No Person (other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a part
thereof) maintained by the




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	 	 	 	Company, the Surviving Corporation or any Subsidiary, or any Person
who, immediately prior to such merger, consolidation or
reorganization, had Beneficial Ownership of twenty percent (20%) or
more of the then outstanding Voting Securities) has Beneficial
Ownership of twenty percent (20%) or more of the combined voting power
of the Surviving Corporation’s then outstanding Voting Securities.






	 	(2)	 	A complete liquidation or dissolution of the Company; or
	 
	 	(3)	 	An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
transfer to a Subsidiary).





Notwithstanding the foregoing, a change in control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership of
more than the permitted amount of the outstanding Voting Securities as a result of
the acquisition of Voting Securities by the Company which, by reducing the number of
Voting Securities outstanding, increased the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a change in control would
occur (but for the operation of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such share acquisition by the Company,
the Subject Person becomes the Beneficial Owner of any additional Voting Securities
which increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a change in control shall occur.



     9.3 Realization Date upon Change in Control. Notwithstanding anything herein to the
contrary, a Change in Control shall not affect the Realization Date of any Award.



10. Anti-dilution Adjustments.




     In the event of a reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger or consolidation, or the sale, conveyance, lease or other transfer by the Company
of all or substantially all of its property, or any other change in the corporate structure or
shares of the Company, pursuant to any of which events the then outstanding Shares are split up or
combined, or are changed into, become exchangeable at the holder’s election for, or entitle the
holder thereof to, other shares of stock, or in the case of any other transaction described in
section 424(a) of the Code, the Board may make such adjustment or substitution (including by
substitution of shares of another corporation) as it may determine to be appropriate, in its sole
discretion, in (i) the aggregate number and kind of shares that may be distributed in respect of
Option exercises and/or awards under the Plan, (ii) the number and kind of shares subject to
outstanding Options and/or the Option Price of such shares and (iii) the number and kind of shares
represented by Deferred Stock Units outstanding under the Plan.



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11. Conditions of Issuance of Stock Certificates.




     11.1 Applicable Conditions. The Company shall not be required to issue or deliver any
certificate for Shares under the Plan prior to fulfillment of all of the following conditions:




	 	(a)	 	the completion of any registration or other qualification of such Shares,
under any federal or state law, or under the rulings or regulations of the Securities
and Exchange Commission or any other governmental regulatory body, that the Board
shall, in its sole discretion, deem necessary or advisable;
	 
	 	(b)	 	the obtaining of any approval or other clearance from any federal or state
governmental agency that the Board shall, in its sole discretion, determine to be
necessary or advisable;
	 
	 	(c)	 	the lapse of such reasonable period of time following the event triggering
the obligation to distribute shares as the Board from time to time may establish for
reasons of administrative convenience; and
	 
	 	(d)	 	if required by the Board, in its sole discretion, the receipt by the Company
from a Participant of (i) a representation in writing that the Shares received
pursuant to the Plan are being acquired for investment and not with a view to
distribution and (ii) such other representations and warranties as are deemed
necessary by counsel to the Company.





     11.2 Legends. The Company reserves the right to legend any certificate for Shares,
conditioning sales of such shares upon compliance with applicable federal and state securities laws
and regulations.



12. No Rights to Continued Service.




     Nothing in the Plan, in any grant made, or in any Election Notice or Agreement entered into
pursuant hereto shall confer upon any Participant the right to continue service as a member of the
Board or to be entitled to any remuneration or benefits not set forth in the Plan, Election Notice
or Agreement



13. No Rights to Assets of the Company.




     Nothing in the Plan, in any grant made, or in any Election Notice or Agreement entered into
pursuant hereto shall confer upon any Participant any right to any particular assets of the
Company. A Participant’s rights under the Plan are limited to those rights of an unsecured creditor
except to the extent Shares are actually issued to such Participant.



14. Amendment and Termination of the Plan.




     The Board, at any time and from time to time, may suspend, terminate, modify or amend the
Plan; provided, however, that an amendment which requires stockholder approval for
the Plan to continue to comply with any law, regulation or stock exchange requirement shall not be
effective unless approved by the requisite vote of stockholders. No suspension, termination,



13









 




modification or amendment of the Plan shall adversely affect any grants previously made,
unless the written consent of the Participant is obtained.



15. Term of the Plan.




     The Plan shall have a term of ten years. No grants or awards may be made after such
termination, but termination of the Plan shall not, without the consent of any Participant who then
holds Awards, alter or impair any rights or obligations in respect of such Awards.



16. Governing Law.




     The Plan and the rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Delaware without giving effect to the choice of law
principles thereof, except to the extent that such laws are preempted by Federal law.



***




	 	 	 	 	 
	 	 	 
	 	/s/ John Bumpus	 
	 	Executive Vice President and	 
	 	Chief Administrative Officer	 
	 




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