Exhibit
10.16


 


HORIZON PCS, INC.



2004 STOCK INCENTIVE PLAN


 


SECTION 1


 


GENERAL


 


1.1                                 Purpose.  The Horizon PCS, Inc. 2004 Stock Incentive
Plan (the “Plan”) has been established by Horizon PCS, Inc. (the “Company”) to
(i) attract and retain persons eligible to participate in the Plan; (ii)
motivate Participants (as defined in Section 1.2 below), by means of
appropriate incentives, to achieve long-range goals; (iii) provide incentive
compensation opportunities that are competitive with those of other similar companies;
and (iv) further identify Participants’ interests with those of the Company’s
shareholders through compensation that is based on the Company’s common stock;
and thereby promote the long-term financial interest of the Company and its
Subsidiaries, as defined in Section 8(i), including the growth in value of
the Company’s equity and enhancement of long-term shareholder return.  Pursuant to the Plan, Participants may
receive Options, SARs, or Other Stock Awards, each as defined herein
(collectively referred to as “Awards”).


 


1.2                                 Participation.  Subject to the terms and conditions of the
Plan, the Committee (as defined in Section 6) shall determine and
designate, from time to time, from among the Eligible Grantees, as defined in Section 8(f)
(including transferees of Eligible Grantees to the extent the transfer is
permitted by the Plan and the applicable Award Agreement, as defined in Section 4.10),
those persons who will be granted one or more Awards under the Plan, and
thereby become “Participants” in the Plan. In the discretion of the Committee,
a Participant may be granted any Award permitted under the provisions of the
Plan, and more than one Award may be granted to a Participant. Awards may be
granted as alternatives to or in replacement of Awards outstanding under the
Plan, or any other plan or arrangement of the Company or a Subsidiary
(including a plan or arrangement of a business or entity, all or a portion of
which is acquired by the Company or a Subsidiary).


 


1.3                                 Operation, Administration, and Definitions.  The operation and administration of the Plan,
including the Awards made under the Plan, shall be subject to the provisions of
Section 4 (relating to operation and administration). Capitalized terms in
the Plan shall be defined as set forth in the Plan (including the definition
provisions of Section 8 of the Plan).


 


SECTION 2


 


OPTIONS
AND SARs


 


2.1                                 Definitions.


 


(a)                                  The
grant of an “Option” entitles the Participant to purchase shares of Stock at an
“Exercise Price” established by the Committee. Options granted under this Section 2
may either be Incentive Stock Options (“ISOs”) or Non-Qualified Options (“NQOs”),
as determined in the discretion of the Committee. An “ISO” is an Option that is
intended to satisfy


 





















 


the requirements applicable to an “incentive stock option” described in
Section 422(b) of the Internal Revenue Code of 1986, as amended (the “Code”).
An “NQO” is an Option that is not intended to be an “incentive stock option” as
that term is described in Section 422(b) of the Code.


 


(b)                                 A stock
appreciation right (an “SAR”) entitles the Participant to receive, in cash or
Stock (as determined in accordance with Section 2.5), value equal to (or
otherwise based on) the excess of: (a) the Fair Market Value (as defined in Section 8(g))
of a specified number of shares of Stock at the time of exercise; over (b) an
Exercise Price established by the Committee.


 


2.2                                 Exercise Price.  The Exercise Price of each Option and SAR
granted under this Section 2 shall be established by the Committee or shall
be determined by a method established by the Committee at the time the Option
or SAR is granted; provided, however, that the Exercise Price of an ISO shall
not be less than 100% of the Fair Market Value of a share of Stock on the date
of grant of the Award.


 


2.3                                 Exercise.  An Option and an SAR shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee; provided, however, that unless otherwise provided
in a Participant’s Award Agreement, if a Participant shall die while in the
employ of the Company or a Subsidiary and shall not have fully exercised an
Option or SAR, to the extent that the Participant’s right to exercise such
Option or SAR had accrued pursuant to this Section 2 of the Plan at the
time of his death and had not previously been exercised, the Option or SAR may
be exercised (subject to the condition that no Option or SAR shall be
exercisable after the Expiration Date, as defined in Section 2.6 below) at
any time within one (1) year after the Participant’s death, by the executors or
administrators of the Participant’s estate or by any person or persons who
shall have acquired the Option or SAR directly from the Participant by bequest
or inheritance.  No Option may be
exercised after the Expiration Date (as defined in Section 2.6 below)
applicable to that Option.


 


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


 


(a)                                  Subject
to the following provisions of this Section 2.4, the full Exercise Price
for shares of Stock purchased upon the exercise of any Option shall be paid at
the time of such exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in Section 2.4(c), payment may be
made as soon as practicable after the exercise).


 


(b)                                 The
Exercise Price shall be payable in cash or by tendering (either by actual
delivery of shares or by attestation) shares of Stock that are acceptable to
the Committee, have been held by the Participant for at least six months, and
were valued at Fair Market Value as of the day the shares are tendered, or in
any combination of cash, shares, or attested shares, as determined by the
Committee.


 


(c)                                  To the
extent permitted by applicable law, a Participant may elect to pay the Exercise
Price upon the exercise of an Option by irrevocably authorizing a third party
to sell shares of Stock (or a sufficient portion of the shares) acquired upon
exercise of the Option and


 


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remit to the Company a sufficient portion of the sale proceeds to pay
the entire Exercise Price and any tax withholding resulting from such exercise.


 


2.5                                 Settlement of Award.  Shares of Stock delivered pursuant to the
exercise of an Option or SAR shall be subject to such conditions, restrictions
and contingencies as the Committee may establish in the applicable Award
Agreement. Settlement of SARs may be made in shares of Stock (valued at their
Fair Market Value at the time of exercise), in cash, or in a combination
thereof, as determined in the discretion of the Committee. The Committee, in
its discretion, may impose such conditions, restrictions and contingencies with
respect to shares of Stock acquired pursuant to the exercise of an Option or an
SAR as the Committee determines to be desirable.


 


2.6                                 Expiration Date.  The “Expiration Date” with respect to an
Option means the date established as the Expiration Date by the Committee at
the time of the grant; provided, however, that the Expiration Date with respect
to any Option shall not be later than the ten-year anniversary of the date on
which the Option is granted; and further provided that an Option may be
terminated earlier than its Expiration Date in accordance with the terms of
this Plan or the Award Agreement evidencing the Option.


 


SECTION 3


 


OTHER
STOCK AWARDS


 


3.1                                 Definitions.  The term “Other Stock Awards” means any of
the following:


 


(a)                                  A “Stock
Unit” Award is the grant of a right to receive shares of Stock in the future.


 


(b)                                 A “Performance
Share” Award is a grant of a right to receive shares of Stock or Stock Units
which is contingent on the achievement of performance or other objectives
during a specified period.


 


(c)                                  A “Restricted
Stock” Award is a grant of shares of Stock, and a “Restricted Stock Unit” Award
is the grant of a right to receive shares of Stock in the future, with such
shares of Stock or right to future delivery of such shares of Stock subject to
a risk of forfeiture or other restrictions that will lapse upon the achievement
of one or more goals relating to completion of service by the Participant, or
achievement of performance or other objectives, as determined by the Committee.


 


3.2                                 Restrictions on Stock Awards.  Each Stock Unit Award, Restricted Stock
Award, Restricted Stock Unit Award and Performance Share Award shall be subject
to the following:


 


(a)                                  Any
such Award shall be subject to such conditions, restrictions and contingencies
as the Committee shall determine.


 


(b)                                 The
Committee may designate whether any such Awards being granted to any
Participant are intended to be “performance-based compensation” as that term is
used in Section 162(m) of the Code. Any such Awards designated as intended
to be “performance-based


 


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compensation” shall be conditioned on the achievement of one or more
Performance Measures. The Performance Measures that may be used by the
Committee for such Awards shall be based on any one or more of the following,
as selected by the Committee: return on capital or increase in pretax earnings
of the Company and/or one or more divisions and/or subsidiaries, return on
stockholders’ equity of the Company, increase in earnings per share of the
Company, sales of the Company and/or one or more divisions and/or subsidiaries,
pretax earnings of the Company and/or one or more divisions and/or
subsidiaries, net earnings of the Company and/or one or more divisions and/or
subsidiaries, control of operating and/or non-operating expenses of the Company
and/or one or more divisions and/or subsidiaries, margins of the Company and/or
one or more divisions and/or subsidiaries, market price of the Company’s
securities, and solely for an Award not intended to constitute “performance-based
compensation” under Section 162(m) of the Code, other objectively
measurable factors directly tied to the performance of the Company and/or one
or more divisions and/or subsidiaries. For Awards intended to be “performance-based
compensation,” the grant of the Awards and the establishment of the Performance
Measures shall be made during the period required under Code Section 162(m).


 


SECTION 4


 


OPERATION
AND ADMINISTRATION


 


4.1                                 Effective Date; Duration.  Subject to the approval (the “Requisite Approval”)
of the stockholders of the Company, or the United States Bankruptcy Court for
the Southern District of Ohio (the “Bankruptcy Court”), the Plan shall be
effective as of the effective date of the Company’s Plan of Reorganization (the
“Effective Date”), filed in connection with the Company’s chapter 11 case in
the Bankruptcy Court (the “Chapter 11 Case”). 
The Plan shall have a duration of ten years from the Effective Date;
provided that in the event of Plan termination, the Plan shall remain in effect
as long as any Awards under it are outstanding; provided further, however, that
no Award may be granted under the Plan on a date that is more than ten years
from the Effective Date.


 


4.2                                 Awards Subject to Plan.  Awards granted under the Plan shall be subject
to the following:


 


(a)                                  Subject
to adjustment as provided in the following provisions of this Section 4.2,
the maximum number of shares of Stock that may be delivered to Participants and
their beneficiaries under the Plan shall be 986,702 shares of Stock, all of
which may be issued upon the exercise of ISOs, and no Participant may be issued
Awards covering more than 500,000 shares of Stock in any one calendar year.


 


(b)                                 To the
extent any shares of Stock covered by an Award are not delivered to a
Participant or beneficiary because the Award is forfeited or canceled, or the
shares of Stock are not delivered because the Award is settled in cash or used
to satisfy the applicable tax withholding obligation, such shares shall not be
deemed to have been delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.  The maximum number of shares of Stock
available for delivery under the Plan shall not be reduced for shares subject
to plans assumed by the Company in an acquisition of an interest in another
company.


 


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(c)                                  Unless
otherwise determined by the Committee, if the outstanding shares of Stock are
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of any recapitalization, reclassification,
stock split, stock dividend, combination, subdivision or similar transaction,
or if the Company makes an extraordinary dividend or distribution to its
stockholders (including without limitation to implement a spinoff) (each, a “Corporate
Transaction”) then, subject to any required action by the stockholders of the
Company, both (a) the number and kind of shares of Company stock available
under the Plan and not then subject to outstanding Awards, and (b) the number
and kind of shares set forth as a limit or maximum hereunder shall
automatically be proportionately adjusted, with no action required on the part
of the Committee or otherwise.  Unless
otherwise provided in a Participant’s Award Agreement, and subject to any
required action by the stockholders, the number and kind of shares covered by
each outstanding Award, and the price per share provided under the terms of
each such Award, may, at the discretion of the Committee, be proportionately
adjusted for any increase or decrease in the number of issued shares of the
Company resulting from a Corporate Transaction or any other increase or
decrease in the number of such shares, or any decrease in the value of such
shares, effected without receipt of consideration by the Company.  Notwithstanding the foregoing, no fractional
shares shall be issued or made subject to an Option, SAR or Stock Award in
making the foregoing adjustments.  All
adjustments made by the Committee under this Section shall be final,
conclusive and binding upon the holders of Options, SARs and Stock Awards.


 


(d)                                 Unless
otherwise provided in a Participant’s Award Agreement, if the Company merges or
consolidates with another corporation, whether or not the Company is a
surviving corporation, or if the Company is liquidated or sells or otherwise
disposes of substantially all of its assets while unexercised Options or other
Awards remain outstanding under this Plan, (A) subject to the provisions of
clause (C) below, after the effective date of the merger, consolidation,
liquidation, sale or other disposition, as the case may be, each holder of an
outstanding Option or other Award shall be entitled, upon exercise of that
Option or Award or in place of it, as the case may be, to receive, at the
option of the Committee and in lieu of shares of Stock, (i) the number and
class or classes of shares of Stock or other securities or property to which
the holder would have been entitled if, immediately prior to the merger,
consolidation, liquidation, sale or other disposition, the holder had been the
holder of record of a number of shares of Stock equal to the number of shares
of Stock as to which that Option may be exercised or are subject to the Award
or (ii) shares of stock of the company that is the surviving corporation in
such merger, consolidation, liquidation, sale or other disposition having a
value, as of the date of payment under subsection 4.2(d)(i), as determined
by the Committee in its sole discretion, equal to the value of the shares of
Stock or other securities or property otherwise payable under subsection 4.2(d)(i);
(B) if Options or other Awards have not already become exercisable under Section 5
hereof, the Board of Directors may waive any limitations set forth in or
imposed pursuant to this Plan so that all Options or other Awards, from and
after a date prior to the effective date of that merger, consolidation,
liquidation, sale or other disposition, as the case may be, specified by the
Board of Directors, shall be exercisable in full; and (C) all outstanding
Options or SARs may be cancelled by the Board of Directors as of the effective
date of any merger, consolidation, liquidation, sale or other disposition,
provided that any optionee or SAR holder shall have the right immediately prior
to such event to exercise his or her Option or SAR to the extent such optionee
or holder is otherwise able to do so in accordance with this Plan (including Section 5
hereof) or his or her individual Award Agreement; provided, further, that in


 


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the case of an in-the-money Option or SAR, any such cancellation
pursuant to this Section 4.2(d) shall be contingent upon the payment to
the affected Participants of an amount in cash, property or a combination
thereof having an aggregate value equal to the excess of the value of the
per-share amount of consideration paid pursuant to the merger, consolidation,
liquidation, sale or other disposition, as the case may be, giving rise to such
cancellation, over the per-share exercise price of such Option or SAR,
multiplied by the number of shares of Stock subject to the Option or SAR.  No payments will be made for out-of-the-money
Options or SARs that are cancelled under this provision.


 


(e)                                  In the
event of a change in the shares of the Company as presently constituted, which
is limited to a change of all of its authorized shares with par value into the
same number of shares with a different par value or without par value, the
shares resulting from any such change shall be deemed to be the shares within
the meaning of this Plan.


 


(f)                                    Any
adjustments pursuant to Section 4.2(d) shall be made by the Board or
Committee, as the case may be, whose determination in that respect shall be
final, binding and conclusive, regardless of whether or not any such adjustment
shall have the result of causing an ISO to cease to qualify as an ISO.


 


(g)                                 Except
as hereinbefore expressly provided in this Section 4, a Participant shall
have no rights by reason of any subdivision or consolidation of shares of stock
of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off of assets or
stock of another corporation, and any issue by the Company of shares of stock
of any class, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of shares of Stock subject to an Award,
unless the Committee shall otherwise determine.


 


(h)                                 The
grant of any Award pursuant to this Plan shall not affect in any way the right
or power of the Company (A) to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, (B) to merge
or consolidate, (C) to dissolve, liquidate or sell, or transfer all or any part
of its business or assets or (D) to issue any bonds, debentures, preferred or
other preference stock ahead of or affecting the Stock. If any action described
in the preceding sentence results in a fractional share for any Participant
under any Award hereunder, such fraction shall be completely disregarded and
the Participant shall only be entitled to the whole number of shares resulting
from such adjustment.


 


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


 


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


 


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


 


4.4                                 Tax Withholding.  All distributions under the Plan are subject
to withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of the
applicable withholding obligations. The Committee, in its discretion, and
subject to such requirements as the Committee may impose prior to the
occurrence of such withholding, may permit such withholding obligations to be
satisfied through cash payment by the Participant, through the surrender of
shares of Stock which the Participant already owns, or through the surrender of
shares of Stock to which the Participant is otherwise entitled under the Plan,
but only to the extent of the minimum amount required to be withheld under
applicable law.


 


4.5                                 Use of Shares.  Subject to the overall limitation on the
number of shares of Stock that may be delivered under the Plan, the Committee
may use available shares of Stock as the form of payment for compensation,
grants or rights earned or due under any other compensation plans or
arrangements of the Company or a Subsidiary, including the plans and
arrangements of the Company or a Subsidiary assumed in business combinations.


 


4.6                                 Dividends and Dividend Equivalents.  An Award (including without limitation an
Option or SAR Award) may provide the Participant with the right to receive
dividend payments or dividend equivalent payments with respect to Stock subject
to the Award (both before and after the Stock subject to the Award is earned,
vested, or acquired), which payments may be either made currently or credited
to an account for the Participant, and may be settled in cash or Stock as determined
by the Committee. Any such settlements, and any such crediting of dividends or
dividend equivalents or reinvestment in shares of Stock, may be subject to such
conditions, restrictions and contingencies as the Committee shall establish,
including the reinvestment of such credited amounts in Stock equivalents.


 


4.7                                 Payments.  Awards may be settled through cash payments,
the delivery of shares of Stock, the granting of replacement Awards, or any
combination thereof as the Committee shall determine. Any Award settlement,
including payment deferrals, may be subject to such conditions, restrictions
and contingencies as the Committee shall determine. The Committee may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred Stock equivalents.  Each
Subsidiary shall be liable for payment of cash due under the Plan with respect
to any Participant to the extent that such benefits are attributable to the
services rendered for that Subsidiary by the Participant.  Any disputes relating to liability of a
Subsidiary for cash payments shall be resolved by the Committee.


 


4.8                                 Transferability.  Except as otherwise provided by the
Committee, Awards under the Plan are not transferable except as designated by
the Participant by will or by the laws of descent and distribution.


 


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


 


4.10                           Agreement with Company.  An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any Award
to any Participant shall be reflected in such form of written document as is
determined by the Committee. A copy of such document shall be provided to the
Participant, and the Committee may, but need not, require that the Participant
shall sign a copy of such document. Such document is referred to in the Plan as
an “Award Agreement” regardless of whether any Participant signature is
required.


 


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


 


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


 


4.13                           Limitation
of Implied Rights.


 


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


 


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


 


(c)                                  The
Plan is intended to be an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to
a Participant pursuant to an Award, nothing


 


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contained in the Plan or any Award Agreement will give the Participant
any rights that are greater than those of a general creditor of the Company or
any Subsidiary.


 


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


 


4.15                           Forfeiture.  Notwithstanding anything in the Plan to the
contrary, and unless otherwise specifically provided in an Award Agreement, all
unvested Awards shall be forfeited upon termination of employment or service
for any reason, subject to acceleration of vesting in the event of a Change in
Control as provided in Section 5 and subject to any provisions contained
in an Award Agreement providing for the acceleration of vesting in the event of
the Participant’s death, disability, or retirement.


 


SECTION 5


 


CHANGE
IN CONTROL


 


Subject to the provisions of Section 4.2(d)
(relating to the adjustment of shares), and except as otherwise provided in the
Plan or the Award Agreement reflecting the applicable Award, upon the
occurrence of a Change in Control as defined in Section 8(d), the
Committee may elect to permit one or more of the following:


 


(a)                                  All
outstanding Options (regardless of whether in tandem with SARs) shall become
fully exercisable.


 


(b)                                 All
outstanding SARs (regardless of whether in tandem with Options) shall become
fully exercisable.


 


(c)                                  All
Stock Units, Restricted Stock, Restricted Stock Units, and Performance Shares
shall become fully vested.


 


SECTION 6


 


COMMITTEE


 


6.1           Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in a committee (the “Committee”)
in accordance with this Section 6. 
The Committee shall be selected by the Board, and shall consist of at
least one member of the Board.  If the
Committee does not exist, or for any other reason determined by the Board, the
Board may take any action under the Plan that would otherwise be the
responsibility of the Committee.  The
composition of the Committee shall comport with all applicable law and the
rules of any exchange or quotation system upon which the Stock is traded.


 


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


 


(a)                                  Subject
to the provisions of the Plan, the Committee will have the authority and
discretion to select from among the Eligible Grantees those persons who shall
receive Awards, to determine the time or times of receipt, to determine the
types of Awards and the number of shares covered by the Awards, to establish
the terms, conditions, performance criteria, restrictions, and other provisions
of such Awards, and (subject to the restrictions imposed by Section 7) to
cancel or suspend Awards.


 


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


 


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


 


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


 


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


 


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


 


SECTION 7


 


AMENDMENT
AND TERMINATION


 


(a)                                  The
Plan may be terminated or amended by the Board of Directors at any time, except
that the following actions may not be taken without shareholder approval:


 


(i)                                     any
increase in the number of shares that may be issued under the Plan (except by
certain adjustments provided for under the Plan);


 


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(ii)                                  any
change in the class of persons eligible to receive ISOs under the Plan; or


 


(iii)                               any
other amendment to the Plan that would require approval of the Company’s
shareholders under applicable law, regulation, rule, or listing standard of any
exchange or automatic quotation system.


 


Notwithstanding any of the foregoing, adjustments
pursuant to Paragraphs (c) and (d) of Section 4.2 shall not be subject to
the limitations set forth above in Paragraphs (a)(i) and (a)(ii) of this Section 7.


 


(b)                                 Options
may not be granted under the Plan after the date of termination of the Plan,
but Options granted prior to that date shall continue to be exercisable
according to their terms.


 


SECTION 8


 


DEFINED
TERMS


 


Except as otherwise provided in a Participant’s Award
Agreement, in addition to the other definitions contained herein, the following
definitions shall apply:


 


(a)                                  Affiliated
Company.  The term “Affiliated
Company” means any company controlled by, controlling or under common control
with the Company.


 


(b)                                 Award.  The term “Award” shall mean any
award or benefit granted under the Plan, including, without limitation, the
grant of Options, SARs, Stock Unit Awards, Restricted Stock Awards, Restricted
Stock Unit Awards and Performance Share Awards.


 


(c)                                  Board.  The term “Board” shall mean the
Board of Directors of the Company.


 


(d)                                 Change
in Control.  The term “Change in Control” shall mean:


 


(i)                                     The
acquisition by any individual, entity or group constituting a “Person” within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) (other than Apollo Investment Fund IV,
LP or its affiliated entities) of “beneficial ownership” (as that term is
defined by Rule 13d 3 under the Exchange Act) of 50% or more of either (A) the
then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided,
however, that, for purposes of this Section 8(d),
the following acquisitions shall not constitute a Change in Control:  (1) any acquisition directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Affiliated Company or (4) any acquisition by any corporation pursuant to
a transaction that complies with Sections 8(d)(ii)(A), 8(d)(ii)(B) and
8(d)(ii)(C);


 


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(ii)                                  Consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or any of its subsidiaries,
a sale or other disposition of all or substantially all of the assets of the
Company, or the acquisition of assets or stock of another entity by the Company
or any of its subsidiaries (each, a “Business Combination”), in each case
unless, following such Business Combination, (A) all or substantially all of
the individuals and entities that were the beneficial owners of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that, as a result of such transaction, owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 50% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting securities
of such corporation, except to the extent that such ownership existed prior to
the Business Combination, and (C) at least 50% of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board providing for such Business
Combination; or


 


(iii)                               Approval
by the shareholders and the start of effectuation of a complete liquidation or
dissolution of the Company.


 


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


 


(f)                                    Eligible
Grantee.  With
respect to Awards other than ISOs, the term “Eligible Grantee” shall mean any
employee, consultant or director of the Company or a Subsidiary. With respect
to ISOs, the term “Eligible Grantee” shall mean any employee of the Company, a
Subsidiary (but only within the meaning of Section 424 of the Code), and a
Parent.  An Award may be granted to an
employee, in connection with hiring, retention or otherwise, prior to the date
the employee first performs services for the Company or the Subsidiaries,
provided that such Award shall not become vested prior to the date the employee
first performs such services.


 


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(g)                                 Fair
Market Value.  For purposes of determining the “Fair Market
Value” of a share of Stock as of any date, the following rules shall apply,
except as otherwise determined by the Committee:


 


(i)                                     With
respect to certain designated Options to be granted to management of the
Company as agreed to by the Company and the Official Bondholders Committee in
the Chapter 11 Case, the “Fair Market Value” shall equal the average closing
price for the Company’s Stock during the first twenty days after the first day
of trading of the Company’s Stock on either a national securities exchange or
the Nasdaq stock market or as reported on the Nasdaq OTC Bulletin Board
Service, the National Quotation Bureau, Incorporated, or a comparable service.


 


(ii)                                  If the
principal market for the Stock is a national securities exchange or the Nasdaq
stock market, then the “Fair Market Value” as of that date shall be the closing
sale price of the Stock on the first business day prior to that date on the
principal exchange or market on which the Stock is then listed or admitted to
trading.


 


(iii)                               If sale
prices are not available, or if the principal market for the Stock is not a
national securities exchange and the Stock is not quoted on the Nasdaq stock
market, then the “Fair Market Value” as of that date shall be the average
between the highest bid and lowest asked prices for the Stock on the first
business day prior to that date, as reported on the Nasdaq OTC Bulletin Board
Service, the National Quotation Bureau, Incorporated, or a comparable service.


 


If paragraphs (i), (ii) or (ii) above are for any reason
inapplicable, then the Fair Market Value of the Stock shall be determined in
good faith by the Committee.


 


(h)                                 Parent.  The term “Parent” means any
present or future parent corporation of the Company within the meaning of Section 424(e)
of the Code.


 


(i)                                     Subsidiary.  The term “Subsidiary” means any
present or future subsidiary corporation of the Company within the meaning of Section 424(f)
of the Code, and any present or future business venture designated by the
Committee in which the Company has a significant interest, as determined in the
discretion of the Committee.


 


(j)                                     Stock.  The term “Stock” shall mean
shares of common stock of the Company.


 


SECTION 9


 


GOVERNING
LAW


 


Except to the extent governed by the General Corporation
Law of Delaware, this Plan shall be governed by and construed in accordance
with the laws of the State of Ohio.


 


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