exv10w10



 





Exhibit 10.10




TURNER INVESTMENTS, INC.




2007 OMNIBUS EQUITY COMPENSATION PLAN




 









 





TURNER INVESTMENTS, INC.




2007 OMNIBUS EQUITY COMPENSATION PLAN




     1. Purpose



     The purpose of the Turner Investments, Inc. 2007 Omnibus Equity Compensation Plan (the “Plan”)
is to provide designated (i) employees of Turner Investments, Inc. (the “Company”) and its parent
or subsidiaries, (ii) non-employee members of the board of directors of the Company, and (iii)
consultants and advisors who perform services for the Company and its parent or subsidiaries, with
the opportunity to receive grants of stock options, stock units, stock awards, stock appreciation
rights and other stock-based awards. The Company believes that the Plan will encourage the
participants to contribute materially to the growth of the Company, thereby benefiting the
Company’s shareholders, and will align the economic interests of the participants with those of the
shareholders.



     2. Definitions



     Whenever used in this Plan, the following terms will have the respective meanings set forth
below:



     (a) “Board” means the Company’s Board of Directors.



     (b) “Change of Control” shall be deemed to have occurred if:



          (i) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act)
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 50% of the voting power of the then
outstanding securities of the Company; provided that a Change of Control shall not be deemed to
occur as a result of a transaction in which the Company becomes a subsidiary of another corporation
and in which the shareholders of the Company, immediately prior to the transaction, will
beneficially own, immediately after the transaction, shares entitling such shareholders to more
than 50% of all votes to which all shareholders of the parent corporation would be entitled in the
election of directors;




          (ii) The consummation of (A) a merger or consolidation of the Company with another corporation
where the shareholders of the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares entitling such shareholders
to more than 50% of all votes to which all shareholders of the surviving corporation would be
entitled in the election of directors, (B) a sale or other disposition of all or substantially all
of the assets of the Company, or (C) a liquidation or dissolution of the Company; or




          (iii) After the Effective Date, directors are elected such that a majority of the members of
the Board shall have been members of the Board for less than one year, unless the


 









 







election or nomination for election of each new director who was not a director at the
beginning of such one-year period was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period.




     (c) “Code” means the Internal Revenue Code of 1986, as amended.



     (d) “Committee” means (i) with respect to Grants to Employees and Consultants, the
Compensation Committee of the Board or another committee appointed by the Board to administer the
Plan, (ii) with respect to Grants made to Non-Employee Directors, the Board, and (iii) with respect
to Grants that are intended to be “qualified performance-based compensation” under section 162(m)
of the Code, a committee that consists of two or more persons appointed by the Board, all of whom
shall be “outside directors” as defined under section 162(m) of the Code and related Treasury
regulations.



     (e) “Consultants” means an advisor or consultant who performs services for the Employer.



     (f) “Company” means Turner Investments, Inc. and any successor corporation.



     (g) “Company Stock” means the Class A Common Stock of the Company, par value $0.01 per share.



     (h) “Dividend Equivalent” means an amount calculated with respect to a Stock Unit, which is
determined by multiplying the number of shares of Company Stock subject to the Stock Unit by the
per-share cash dividend, or the per-share fair market value (as determined by the Committee) of any
dividend in consideration other than cash, paid by the Company on its Company Stock. If interest
is credited on accumulated dividend equivalents, the term “Dividend Equivalent” shall include the
accrued interest.



     (i) “Effective Date” of the Plan shall mean the day immediately preceding the date the
Underwriting Agreement is executed and the Company Stock is priced for the initial public offering
of such Company Stock.



     (j) “Employee” means an employee of the Employer (including an officer or director who is also
an employee), but excluding any person who is classified by the Employer as a “contractor” or
“consultant,” no matter how characterized by the Internal Revenue Service, other governmental
agency or a court. Any change of characterization of an individual by the Internal Revenue Service
or any court or government agency shall have no effect upon the classification of an individual as
an Employee for purposes of this Plan, unless the Committee determines otherwise.



     (k) “Employer” means the Company, its parent and subsidiaries.



     (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     (m) “Exercise Price” means the per share price at which shares of Company Stock may be
purchased under an Option, as designated by the Committee.



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     (n) “Fair Market Value” of Company Stock means, unless the Committee determines otherwise with
respect to a particular Grant, (i) if the principal trading market for the Company Stock is a
national securities exchange, the last reported sale price of Company Stock on the relevant date or
(if there were no trades on that date) the latest preceding date upon which a sale was reported,
(ii) if the Company Stock is not principally traded on such exchange, the mean between the last
reported “bid” and “asked” prices of Company Stock on the relevant date, as reported on the OTC
Bulletin Board, or (iii) if the Company Stock is not publicly traded or, if publicly traded, is not
so reported, the Fair Market Value per share shall be as determined by the Committee.



     (o) “Grant” means an Option, Stock Unit, Stock Award, SAR or Other Stock-Based Award granted
under the Plan.



     (p) “Grant Agreement” means the written instrument that sets forth the terms and conditions of
a Grant, including all amendments thereto.



     (q) “Incentive Stock Option” means an Option that is intended to meet the requirements of an
incentive stock option under section 422 of the Code.



     (r) “Non-Employee Director” means a member of the Board who is not an Employee.



     (s) “Nonqualified Stock Option” means an Option that is not intended to be taxed as an
incentive stock option under section 422 of the Code.



     (t) “1933 Act” means the Securities Act of 1933, as amended.



     (u) “Option” means an option to purchase shares of Company Stock, as described in Section 7.



     (v) “Other Stock-Based Award” means a grant that is based on, measured by or payable in
Company Stock (other than an Option, Stock Unit, Stock Award or SAR), as described in Section 11.



     (w) “Participant” means an Employee, Consultant or Non-Employee Director designated by the
Committee to participate in the Plan.



     (x) “Plan” means this Turner Investments, Inc. 2007 Omnibus Equity Compensation Plan, as may
be amended from time to time.



     (y) “SAR” means a stock appreciation right as described in Section 10.



     (z) “Stock Award” means an award of Company Stock as described in Section 9.



     (aa) “Stock Unit” means an award of a phantom unit representing a share of Company Stock, as
described in Section 8.



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     (bb) “Underwriting Agreement” means the agreement between the Company and the underwriter or
underwriters managing the initial public offering of the Company Stock.



     3. Administration



     (a) Committee. The Plan shall be administered and interpreted by the Committee.
Ministerial functions may be performed by an administrative committee comprised of Company
employees appointed by the Committee.



     (b) Committee Authority. The Committee shall have the sole authority to (i) determine
the Participants to whom Grants shall be made under the Plan, (ii) determine the type, size and
terms and conditions of the Grants to be made to each such Participant, (iii) determine the time
when the Grants will be made and the duration of any applicable exercise or restriction period,
including the criteria for exercisability and the acceleration of exercisability, (iv) amend the
terms and conditions of any previously issued Grant, subject to the provisions of Section 19 below,
and (v) deal with any other matters arising under the Plan.



     (c) Committee Determinations. The Committee shall have full power and express
discretionary authority to administer and interpret the Plan, to make factual determinations and to
adopt or amend such rules, regulations, agreements and instruments for implementing the Plan and
for the conduct of its business as it deems necessary or advisable, in its sole discretion. The
Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to
the powers vested in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the Committee shall be
executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly situated
Participants.



     4. Grants



     (a) Grants under the Plan may consist of Options as described in Section 7, Stock Units as
described in Section 8, Stock Awards as described in Section 9, SARs as described in Section 10 and
Other Stock-Based Awards as described in Section 11. All Grants shall be subject to such terms and
conditions as the Committee deems appropriate and as are specified in writing by the Committee to
the Participant in the Grant Agreement.



     (b) All Grants shall be made conditional upon the Participant’s acknowledgement, in writing or
by acceptance of the Grant, that all decisions and determinations of the Committee shall be final
and binding on the Participant, his or her beneficiaries and any other person having or claiming an
interest under such Grant. Grants under a particular Section of the Plan need not be uniform as
among the Participants.



     5. Shares Subject to the Plan



     (a) Shares Authorized. The total aggregate number of shares of Company Stock that may
be issued under the Plan is 6,000,000 shares, subject to adjustment as described in subsection (d)
below.



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     (b) Source of Shares; Share Counting. Shares issued under the Plan may be authorized
but unissued shares of Company Stock or reacquired shares of Company Stock, including shares
purchased by the Company on the open market for purposes of the Plan. If and to the extent Options
or SARs granted under the Plan terminate, expire, or are canceled, forfeited, exchanged or
surrendered without having been exercised, and if and to the extent that any Stock Awards, Stock
Units, or Other Stock-Based Awards are forfeited or terminated, or otherwise are not paid in full,
the shares reserved for such Grants shall again be available for purposes of the Plan. Shares of
Stock surrendered in payment of the Exercise Price of an Option, and shares withheld or surrendered
for payment of taxes, shall not be available for re-issuance under the Plan. If SARs are granted,
the full number of shares subject to the SARs shall be considered issued under the Plan, without
regard to the number of shares issued upon exercise of the SARs and without regard to any cash
settlement of the SARs. To the extent that a Grant of Stock Units is designated in the Grant
Agreement to be paid in cash, and not in shares of Company Stock, such Grants shall not count
against the share limits in subsection (a).



     (c) Individual Limits. All Grants under the Plan shall be expressed in shares of
Company Stock. The maximum aggregate number of shares of Company Stock with respect to which all
Grants may be made under the Plan to any individual during any calendar year shall be 1,000,000
shares, subject to adjustment as described in subsection (d) below. The individual limits of this
subsection (c) shall apply without regard to whether the Grants are to be paid in Company Stock or
cash. All cash payments (other than with respect to Dividend Equivalents) shall equal the Fair
Market Value of the shares of Company Stock to which the cash payments relate. A Participant may
not accrue Dividend Equivalents during any calendar year in excess of $1,000,000.



     (d) Adjustments. If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split, or
combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation,
(iii) by reason of a reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Company Stock as a class without the
Company’s receipt of consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary
dividend or distribution, the maximum number of shares of Company Stock available for issuance
under the Plan, the maximum number of shares of Company Stock for which any individual may receive
Grants in any year, the kind and number of shares covered by outstanding Grants, the kind and
number of shares issued and to be issued under the Plan, and the price per share or the applicable
market value of such Grants shall be equitably adjusted by the Committee, in such manner as the
Committee deems appropriate, to reflect any increase or decrease in the number of, or change in the
kind or value of, the issued shares of Company Stock to preclude, to the extent practicable, the
enlargement or dilution of rights and benefits under the Plan and such outstanding Grants;
provided, however, that any fractional shares resulting from such adjustment shall be eliminated.
In addition, in the event of a Change of Control of the Company, the provisions of Section 16 of
the Plan shall apply. Any adjustments to outstanding Grants shall be consistent with section 409A
or 422 of the Code, to the extent applicable. Any adjustments determined by the Committee shall be
final, binding and conclusive.



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     6. Eligibility for Participation



     (a) Eligible Persons. All Employees and Non-Employee Directors shall be eligible to
participate in the Plan. Consultants are eligible to participate in the Plan if they perform bona
fide services for the Employer, the services are not in connection with the offer or sale of
securities in a capital-raising transaction, and the Consultants do not directly or indirectly
promote or maintain a market for the Company’s securities.



     (b) Selection of Participants. The Committee shall select the Employees, Consultants
and Non-Employee Directors to receive Grants and shall determine the number of shares of Company
Stock subject to each Grant.



     7. Options



     (a) General Requirements. The Committee may grant Options to an Employee, Consultant
or Non-Employee Director upon such terms and conditions as the Committee deems appropriate under
this Section 7. The Committee shall determine the number of shares of Company Stock that will be
subject to each Grant of Options to Employees, Consultants and Non-Employee Directors.



     (b) Type of Option, Price and Term.



          (i) The Committee may grant Incentive Stock Options or Nonqualified Stock Options or any
combination of the two, all in accordance with the terms and conditions set forth herein.
Incentive Stock Options may be granted only to Employees of the Company or its parents or
subsidiaries, as defined in section 424 of the Code. Nonqualified Stock Options may be granted to
Employees, Consultants or Non-Employee Directors.




          (ii) The Exercise Price of Company Stock subject to an Option shall be determined by the
Committee and may be equal to or greater than the Fair Market Value of a share of Company Stock on
the date the Option is granted. However, an Incentive Stock Option may not be granted to an
Employee who, at the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary, as defined in
section 424 of the Code, unless the Exercise Price per share is not less than 110% of the Fair
Market Value of the Company Stock on the date of grant.




          (iii) The Committee shall determine the term of each Option, which shall not exceed ten years
from the date of grant. However, an Incentive Stock Option that is granted to an Employee who, at
the time of grant, owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary, as defined in section 424 of the Code,
may not have a term that exceeds five years from the date of grant.




     (c) Exercisability of Options.



          (i) Options shall become exercisable in accordance with such terms and conditions as may be
determined by the Committee and specified in the Grant Agreement. The


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Committee may grant Options that are subject to achievement of performance goals or other
conditions. The Committee may accelerate the exercisability of any or all outstanding Options at
any time for any reason.




          (ii) The Committee may provide in a Grant Instrument that the Participant may elect to
exercise part or all of an Option before it otherwise has become exercisable. Any shares so
purchased shall be restricted shares and shall be subject to a repurchase right in favor of the
Company during a specified restriction period, with the repurchase price equal to the lesser of (A)
the Exercise Price or (B) the Fair Market Value of such shares at the time of repurchase, or such
other restrictions as the Committee deems appropriate.




          (iii) Options granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, may not be exercisable for at least six months after the date of grant
(except that such Options may become exercisable, as determined by the Committee, upon the
Participant’s death, disability or retirement, or upon a Change of Control or other circumstances
permitted by applicable regulations).




     (d) Termination of Employment or Service. Except as provided in the Grant Agreement,
an Option may only be exercised while the Participant is employed by the Employer, or providing
service as a Non-Employee Director or Consultant. The Committee shall determine in the Grant
Agreement under what circumstances and during what time periods a Participant may exercise an
Option after termination of employment or service.



     (e) Exercise of Options. A Participant may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the Company. The
Participant shall pay the Exercise Price for the Option (i) in cash, (ii) if permitted by the
Committee, by delivering shares of Company Stock owned by the Participant and having a Fair Market
Value on the date of exercise equal to the Exercise Price or by attestation to ownership of shares
of Company Stock having an aggregate Fair Market Value on the date of exercise equal to the
Exercise Price, (iii) by payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board, or (iv) by such other method as the Committee may
approve, to the extent permitted by applicable law. Shares of Company Stock used to exercise an
Option shall have been held by the Participant for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. Payment for the shares pursuant
to the Option, and any required withholding taxes, must be received by the time specified by the
Committee depending on the type of payment being made, but in all cases prior to the issuance of
the Company Stock.



     (f) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to
which Incentive Stock Options are exercisable for the first time by a Participant during any
calendar year, under the Plan or any other stock option plan of the Company or a parent or
subsidiary, as defined in section 424 of the Code, exceeds $100,000, then the Option, as to the
excess, shall be treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be
granted to any person who is not an Employee of the Company or a parent or subsidiary, as defined
in section 424 of the Code.



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     8. Stock Units



     (a) General Requirements. The Committee may grant Stock Units to an Employee,
Consultant or Non-Employee Director, upon such terms and conditions as the Committee deems
appropriate under this Section 8. Each Stock Unit shall represent the right of the Participant to
receive a share of Company Stock or an amount based on the value of a share of Company Stock. All
Stock Units shall be credited to bookkeeping accounts on the Company’s records for purposes of the
Plan.



     (b) Terms of Stock Units. The Committee may grant Stock Units that are payable on
terms and conditions determined by the Committee, which may include payment based on achievement of
performance goals. Stock Units may be paid at the end of a specified vesting or performance
period, or payment may be deferred to a date authorized by the Committee. The Committee shall
determine the number of Stock Units to be granted and the requirements applicable to such Stock
Units.



     (c) Payment With Respect to Stock Units. Payment with respect to Stock Units shall be
made in cash, in Company Stock, or in a combination of the two, as determined by the Committee.
The Grant Agreement shall specify the maximum number of shares that can be issued under the Stock
Units.



     (d) Requirement of Employment or Service. The Committee shall determine in the Grant
Agreement under what circumstances a Participant may retain Stock Units after termination of the
Participant’s employment or service, and the circumstances under which Stock Units may be
forfeited.



     (e) Dividend Equivalents. The Committee may grant Dividend Equivalents in connection
with Stock Units, under such terms and conditions as the Committee deems appropriate. Dividend
Equivalents may be paid to Participants currently or may be deferred. All Dividend Equivalents
that are not paid currently shall be credited to bookkeeping accounts on the Company’s records for
purposes of the Plan. Dividend Equivalents may be accrued as a cash obligation, or may be
converted to additional Stock Units for the Participant, and deferred Dividend Equivalents may
accrue interest, all as determined by the Committee. The Committee may provide that Dividend
Equivalents shall be payable based on the achievement of specific performance goals. Dividend
Equivalents may be payable in cash or shares of Company Stock or in a combination of the two, as
determined by the Committee.



     9. Stock Awards



     (a) General Requirements. The Committee may issue shares of Company Stock to an
Employee, Consultant or Non-Employee Director under a Stock Award, upon such terms and conditions
as the Committee deems appropriate under this Section 9. Shares of Company Stock issued pursuant
to Stock Awards may be issued for cash consideration or for no cash consideration, and subject to
restrictions or no restrictions, as determined by the Committee. The Committee may establish
conditions under which restrictions on Stock Awards shall lapse over a period of time or according
to such other criteria as the Committee deems appropriate, including



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restrictions based upon the achievement of specific performance goals. The Committee shall
determine the number of shares of Company Stock to be issued pursuant to a Stock Award.



     (b) Requirement of Employment or Service. The Committee shall determine in the Grant
Agreement under what circumstances a Participant may retain Stock Awards after termination of the
Participant’s employment or service, and the circumstances under which Stock Awards may be
forfeited.



     (c) Restrictions on Transfer. While Stock Awards are subject to restrictions, a
Participant may not sell, assign, transfer, pledge or otherwise dispose of the shares of a Stock
Award except upon death as described in Section 16(a). If certificates are issued, each
certificate for a share of a Stock Award shall contain a legend giving appropriate notice of the
restrictions in the Grant. The Participant shall be entitled to have the legend removed when all
restrictions on such shares have lapsed. The Company may retain possession of any certificates for
Stock Awards until all restrictions on such shares have lapsed.



     (d) Right to Vote and to Receive Dividends. The Committee shall determine to what
extent, and under what conditions, the Participant shall have the right to vote shares of Stock
Awards and to receive any dividends or other distributions paid on such shares during the
restriction period. The Committee may determine that dividends on Stock Awards shall be withheld
while the Stock Awards are subject to restrictions and that the dividends shall be payable only
upon the lapse of the restrictions on the Stock Awards, or on such other terms as the Committee
determines. Dividends that are not paid currently shall be credited to bookkeeping accounts on the
Company’s records for purposes of the Plan. Accumulated dividends may accrue interest, as
determined by the Committee, and shall be paid in cash, shares of Company Stock, or in such other
form as dividends are paid on Company Stock, as determined by the Committee.



     10. Stock Appreciation Rights 



     (a) General Requirements. The Committee may grant SARs to an Employee, Consultant or
Non-Employee Director separately or in tandem with an Option. The Committee shall establish the
number of shares, the terms and the base amount of the SAR at the time the SAR is granted. The
base amount of each SAR shall be not less than the Fair Market Value of a share of Company Stock as
of the date of grant of the SAR.



     (b) Tandem SARs. The Committee may grant tandem SARs either at the time the Option is
granted or at any time thereafter while the Option remains outstanding; provided, however, that, in
the case of an Incentive Stock Option, SARs may be granted only at the date of the grant of the
Incentive Stock Option. In the case of tandem SARs, the number of SARs granted to a Participant
that shall be exercisable during a specified period shall not exceed the number of shares of
Company Stock that the Participant may purchase upon the exercise of the related Option during such
period. Upon the exercise of an Option, the SARs relating to the Company Stock covered by such
Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to the
extent of an equal number of shares of Company Stock.



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     (c) Exercisability. An SAR shall become exercisable in accordance with such terms and
conditions as may be specified. The Committee may grant SARs that are subject to achievement of
performance goals or other conditions. The Committee may accelerate the exercisability of any or
all outstanding SARs at any time for any reason. The Committee shall determine in the Grant
Agreement under what circumstances and during what periods a Participant may exercise an SAR after
termination of employment or service. A tandem SAR shall be exercisable only while the Option to
which it is related is exercisable.



     (d) Grants to Non-Exempt Employees. SARs granted to persons who are non-exempt
employees under the Fair Labor Standards Act of 1938, as amended, may not be exercisable for at
least six months after the date of grant (except that such SARs may become exercisable, as
determined by the Committee, upon the Participant’s death, Disability or retirement, or upon a
Change of Control or other circumstances permitted by applicable regulations).



     (e) Exercise of SARs. When a Participant exercises SARs, the Participant shall
receive in settlement of such SARs an amount equal to the value of the stock appreciation for the
number of SARs exercised. The stock appreciation for an SAR is the amount by which the Fair Market
Value of the underlying Company Stock on the date of exercise of the SAR exceeds the base amount of
the SAR as specified in the Grant Agreement.



     (f) Form of Payment. The Committee shall determine whether the stock appreciation for
an SAR shall be paid in the form of shares of Company Stock, cash or a combination of the two. For
purposes of calculating the number of shares of Company Stock to be received, shares of Company
Stock shall be valued at their Fair Market Value on the date of exercise of the SAR. If shares of
Company Stock are to be received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.



     11. Other Stock-Based Awards



     The Committee may grant other awards not specified in Sections 7, 8, 9 or 10 above that are
based on or measured by Company Stock to Employees, Consultants and Non-Employee Directors, on such
terms and conditions as the Committee deems appropriate. Other Stock-Based Awards may be granted
subject to achievement of performance goals or other conditions and may be payable in Company Stock
or cash, or in a combination of the two, as determined by the Committee in the Grant Agreement.



     12. Qualified Performance-Based Compensation



     (a) Designation as Qualified Performance-Based Compensation. The Committee may
determine that Stock Units, Stock Awards, Dividend Equivalents or Other Stock-Based Awards granted
to an Employee shall be considered “qualified performance-based compensation” under section 162(m)
of the Code, in which case the provisions of this Section 12 shall apply.



     (b) Performance Goals. When Grants are made under this Section 12, the Committee
shall establish in writing (i) the objective performance goals that must be met, (ii) the period
during which performance will be measured, (iii) the maximum amounts that may be paid if the



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performance goals are met, and (iv) any other conditions that the Committee deems appropriate
and consistent with the requirements of section 162(m) of the Code for “qualified performance-based
compensation.” The performance goals shall satisfy the requirements for “qualified
performance-based compensation,” including the requirement that the achievement of the goals be
substantially uncertain at the time they are established and that the performance goals be
established in such a way that a third party with knowledge of the relevant facts could determine
whether and to what extent the performance goals have been met. The Committee shall not have
discretion to increase the amount of compensation that is payable, but may reduce the amount of
compensation that is payable, pursuant to Grants identified by the Committee as “qualified
performance-based compensation.”



     (c) Criteria Used for Objective Performance Goals. The Committee shall use
objectively determinable performance goals based on one or more of the following criteria: stock
price, earnings per share, price-earnings multiples, net earnings, operating earnings, revenue,
number of days sales outstanding in accounts receivable, productivity, margin, EBITDA (earnings
before interest, taxes, depreciation and amortization), net capital employed, return on assets,
shareholder return, return on equity, return on capital employed, growth in assets, unit volume,
sales, cash flow, market share, relative performance to a comparison group designated by the
Committee, or strategic business criteria consisting of one or more objectives based on meeting
specified revenue goals, market penetration goals, customer growth, geographic business expansion
goals, cost targets or goals relating to acquisitions or divestitures. The performance goals may
relate to one or more business units or the performance of the Company and its subsidiaries as a
whole, or any combination of the foregoing. Performance goals need not be uniform as among
Participants.



     (d) Timing of Establishment of Goals. The Committee shall establish the performance
goals in writing either before the beginning of the performance period or during a period ending no
later than the earlier of (i) 90 days after the beginning of the performance period or (ii) the
date on which 25% of the performance period has been completed, or such other date as may be
required or permitted under applicable regulations under section 162(m) of the Code.



     (e) Certification of Results. The Committee shall certify the performance results for
the performance period specified in the Grant Agreement after the performance period ends. The
Committee shall determine the amount, if any, to be paid pursuant to each Grant based on the
achievement of the performance goals and the satisfaction of all other terms of the Grant
Agreement.



     (f) Death, Disability or Other Circumstances. The Committee may provide in the Grant
Agreement that Grants under this Section 12 shall be payable, in whole or in part, in the event of
the Participant’s death or disability, a Change of Control or under other circumstances consistent
with the Treasury regulations and rulings under section 162(m) of the Code.



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     13. Deferrals



     The Committee may permit or require a Participant to defer receipt of the payment of cash or
the delivery of shares that would otherwise be due to the Participant in connection with any Grant.
The Committee shall establish rules and procedures for any such deferrals, consistent with
applicable requirements of section 409A of the Code.



     14. Withholding of Taxes



     (a) Required Withholding. All Grants under the Plan shall be subject to applicable
federal (including FICA), state and local tax withholding requirements. The Company may require
that the Participant or other person receiving or exercising Grants pay to the Company the amount
of any federal, state or local taxes that the Company is required to withhold with respect to such
Grants, or the Company may deduct from other wages paid by the Company the amount of any
withholding taxes due with respect to such Grants.



     (b) Election to Withhold Shares. If the Committee so permits, shares of Company Stock
may be withheld to satisfy the Company’s tax withholding obligation with respect to Grants paid in
Company Stock, at the time such Grants become taxable, up to an amount that does not exceed the
minimum applicable withholding tax rate for federal (including FICA), state and local tax
liabilities.



     15. Transferability of Grants



     (a) Restrictions on Transfer. Except as described in subsection (b) below, only the
Participant may exercise rights under a Grant during the Participant’s lifetime, and a Participant
may not transfer those rights except by will or by the laws of descent and distribution. When a
Participant dies, the personal representative or other person entitled to succeed to the rights of
the Participant may exercise such rights. Any such successor must furnish proof satisfactory to
the Company of his or her right to receive the Grant under the Participant’s will or under the
applicable laws of descent and distribution.



     (b) Transfer of Nonqualified Stock Options to or for Family Members. Notwithstanding
the foregoing, the Committee may provide, in a Grant Agreement, that a Participant may transfer
Nonqualified Stock Options to family members, or one or more trusts or other entities for the
benefit of or owned by family members, consistent with applicable securities laws, according to
such terms as the Committee may determine; provided that the Participant receives no consideration
for the transfer of a Nonqualified Stock Option and the transferred Nonqualified Stock Option shall
continue to be subject to the same terms and conditions as were applicable to the Nonqualified
Stock Option immediately before the transfer.



     16. Consequences of a Change of Control 



     In the event of a Change of Control, the Committee may take any one or more of the following
actions with respect to all outstanding Grants, without the consent of any Participant: (i) the
Committee may determine that outstanding Options and SARs shall be fully exercisable, and
restrictions on outstanding Stock Awards and Stock Units shall lapse, as of the date of the



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Change of Control or at such other time as the Committee determines, (ii) the Committee may require
that Participants surrender their outstanding Options and SARs in exchange for one or more payments
by the Company, in cash or Company Stock as determined by the Committee, in an amount equal to the
amount, if any, by which the then Fair Market Value of the shares of Company Stock subject to the
Participant’s unexercised Options and SARs exceeds the Exercise Price, and on such terms as the
Committee determines, (iii) after giving Participants an opportunity to exercise their outstanding
Options and SARs, the Committee may terminate any or all unexercised Options and SARs at such time
as the Committee deems appropriate, (iv) with respect to Participants holding Stock Units and Other
Stock-Based Awards, the Committee may determine that such Participants shall receive one or more
payments in settlement of such Stock Units and Other Stock-Based Awards, in such amount and form
and on such terms as may be determined by the Committee, or (v) determine that all outstanding
Options and SARs that are not exercised shall be assumed by, or replaced with comparable options or
rights by the surviving corporation (or a parent or subsidiary of the surviving corporation), and
other outstanding Grants that remain in effect after the Change of Control shall be converted to
similar grants of the surviving corporation (or a parent or subsidiary of the surviving
corporation). Such acceleration, surrender, termination, settlement or conversion shall take place
as of the date of the Change of Control or such other date as the Committee may specify. The
Committee may provide in a Grant Agreement that a sale or other transaction involving a subsidiary
or other business unit of the Company shall be considered a Change of Control for purposes of a
Grant, or the Committee may establish other provisions that shall be applicable in the event of a
specified transaction.



     17. Requirements for Issuance of Shares



     No Company Stock shall be issued in connection with any Grant hereunder unless and until all
legal requirements applicable to the issuance of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition any Grant made to
any Participant hereunder on such Participant’s undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company Stock as the Committee
shall deem necessary or advisable, and certificates representing such shares may be legended to
reflect any such restrictions. Certificates representing shares of Company Stock issued under the
Plan will be subject to such stop-transfer orders and other restrictions as may be required by
applicable laws, regulations and interpretations, including any requirement that a legend be placed
thereon. No Participant shall have any right as a shareholder with respect to Company Stock
covered by a Grant until shares have been issued to the Participant.



     18. Amendment and Termination of the Plan



     (a) Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without approval of the shareholders of the
Company if such approval is required in order to comply with the Code or applicable laws, or to
comply with applicable stock exchange requirements. No amendment or termination of this Plan
shall, without the consent of the Participant, materially impair any rights or obligations under
any Grant previously made to the Participant under the Plan, unless such right has been reserved in



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the Plan or the Grant Agreement, or except as provided in Section 19(b) below.
Notwithstanding anything in the Plan to the contrary, the Board may amend the Plan in such manner
as it deems appropriate in the event of a change in applicable law or regulations.



     (b) No Repricing Without Shareholder Approval. Notwithstanding anything in the Plan
to the contrary, the Committee may not reprice Options or SARs, nor may the Board amend the Plan to
permit repricing of Options or SARs, unless the shareholders of the Company provide prior approval
for such repricing. The term “repricing” shall have the meaning given that term in accordance with
the applicable stock exchange in which such shares of Company Stock are registered, as in effect
from time to time.



     (c) Shareholder Approval for “Qualified Performance-Based Compensation.” If Grants
are made under Section 12 above, the Plan must be reapproved by the Company’s shareholders no later
than the first shareholders meeting that occurs in the fifth year following the year in which the
shareholders previously approved the provisions of Section 13, if additional Grants are to be made
under Section 12 and if required by section 162(m) of the Code or the regulations thereunder.



     (d) Termination of Plan. The Plan shall terminate on the day immediately preceding
the tenth anniversary of its Effective Date, unless the Plan is terminated earlier by the Board or
is extended by the Board with the approval of the shareholders. The termination of the Plan shall
not impair the power and authority of the Committee with respect to an outstanding Grant.



     19. Miscellaneous



     (a) Effective Date. The Plan shall be effective as of the Effective Date.



     (b) Grants in Connection with Corporate Transactions and Otherwise. Nothing contained
in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this
Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of
the business or assets of any corporation, firm or association, including Grants to employees
thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of
the Company to grant stock options or make other stock-based awards outside of this Plan. Without
limiting the foregoing, the Committee may make a Grant to an employee of another corporation who
becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or
property, reorganization or liquidation involving the Company in substitution for a grant made by
such corporation. The terms and conditions of the Grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives, as determined by the
Committee.



     (c) Compliance with Law. The Plan, the exercise of Options and the obligations of the
Company to issue or transfer shares of Company Stock under Grants shall be subject to all
applicable laws and to approvals by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or
its successors under the Exchange Act. In addition, it is the intent of the Company that



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Incentive Stock Options comply with the applicable provisions of section 422 of the Code, that
Grants of “qualified performance-based compensation” comply with the applicable provisions of
section 162(m) of the Code and that, to the extent applicable, Grants comply with the requirements
of section 409A of the Code or an exception from such requirements. To the extent that any legal
requirement of section 16 of the Exchange Act or section 422, 162(m) or 409A of the Code as set
forth in the Plan ceases to be required under section 16 of the Exchange Act or section 422, 162(m)
or 409A of the Code, that Plan provision shall cease to apply. The Committee may revoke any Grant
if it is contrary to law or modify a Grant to bring it into compliance with any valid and mandatory
government regulation. The Committee may also adopt rules regarding the withholding of taxes on
payments to Participants. The Committee may, in its sole discretion, agree to limit its authority
under this Section.



     (d) Enforceability. The Plan shall be binding upon and enforceable against the
Company and its successors and assigns.



     (e) Funding of the Plan; Limitation on Rights. This Plan shall be unfunded. The
Company shall not be required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under this Plan. Nothing contained in
the Plan and no action taken pursuant hereto shall create or be construed to create a fiduciary
relationship between the Company and any Participant or any other person. No Participant or any
other person shall under any circumstances acquire any property interest in any specific assets of
the Company. To the extent that any person acquires a right to receive payment from the Company
hereunder, such right shall be no greater than the right of any unsecured general creditor of the
Company.



     (f) Rights of Participants. Nothing in this Plan shall entitle any Employee,
Consultant, Non-Employee Director or other person to any claim or right to receive a Grant under
this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any
individual any rights to be retained by or in the employment or service of the Employer.



     (g) No Fractional Shares. No fractional shares of Company Stock shall be issued or
delivered pursuant to the Plan or any Grant. The Committee shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise eliminated.



     (h) Employees Subject to Taxation Outside the United States. With respect to
Participants who are subject to taxation in countries other than the United States, the Committee
may make Grants on such terms and conditions as the Committee deems appropriate to comply with the
laws of the applicable countries, and the Committee may create such procedures, addenda and
subplans and make such modifications as may be necessary or advisable to comply with such laws.



     (i) Governing Law. The validity, construction, interpretation and effect of the Plan
and Grant Agreements issued under the Plan shall be governed and construed by and determined in
accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflict
of laws provisions thereof.



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