EX-10.11:



 




Exhibit 10.11


THE HARTFORD 2005 INCENTIVE STOCK PLAN



(as amended effective December 21, 2005)





	 	1.	 	Purpose






          The purpose of the Plan is to motivate and reward superior performance on the part of
Key Employees of The Hartford Financial Services Group, Inc. (“The Hartford” or “the
Company”) and its subsidiaries and affiliates and to thereby attract and retain Key
Employees of superior ability. In addition, the Plan is intended to further opportunities
for stock ownership by such Key Employees and Directors in order to increase their
proprietary interest in The Hartford and, as a result, their interest in the success of the
Company. Awards will be made, in the discretion of the Committee, to Key Employees
(including officers and directors who are also Key Employees) whose responsibilities and
decisions directly affect the performance of any Participating Company and its subsidiaries,
and also to Directors. Such incentive awards may consist of Options, Rights, Performance
Shares, Restricted Stock, Restricted Units or any combination of the foregoing, as the
Committee may determine.




	 	2.	 	Definitions






          When used herein, the following terms shall have the following meanings:




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




          “Award” means an award granted to any Key Employee or Director in accordance with the
provisions of the Plan in the form of Options, Rights, Performance Shares, Restricted Stock
or Restricted Units, or any combination of the foregoing, as applicable.




          “Award Document” means the written notice, agreement, or other document evidencing each
Award granted under the Plan.




          “Beneficial Owner” means any Person who, directly or indirectly, has the right to vote
or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Act)
of any securities of a company, including any such right pursuant to any agreement,
arrangement or understanding (whether or not in writing), provided that: (a) a
Person shall not be deemed the Beneficial Owner of any security as a result of an agreement,
arrangement or understanding to vote such security (i) arising solely from a revocable proxy
or consent given in response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the Act and the applicable rules and regulations thereunder, or (ii)
made in connection with, or to otherwise participate in, a proxy or consent solicitation
made, or to be made, pursuant to, and in accordance with, the applicable provisions of the
Act and the applicable rules and regulations thereunder, in either case described in clause
(i) or (ii) above, whether or not such agreement, arrangement or understanding is also then
reportable by such Person on Schedule 13D



 









 







under the Act (or any comparable or successor report); and (b) a Person engaged in
business as an underwriter of securities shall not be deemed to be the Beneficial Owner of
any security acquired through such Person’s participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such acquisition.




          “Beneficiary” means the beneficiary or beneficiaries designated pursuant to the Plan to
receive the amount, if any, payable under the Plan upon the death of an Award recipient.




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




          “Change of Control” means the occurrence of an event defined in Section 9 of the Plan.




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




          “Committee” means the Compensation and Personnel Committee of the Board or such other
committee as may be designated by the Board to administer the Plan.




          “Company” means The Hartford Financial Services Group, Inc. and its successors and
assigns.




          “Director” means a member of the Board who is not an employee of any Participating
Company.




          “Dividend Equivalents” means an amount credited with respect to an outstanding
Restricted Unit equal to the cash dividends paid or property distributions awarded upon one
share of Stock.




          “Eligible Employee” means an Employee as defined in the Plan; provided, however, that
except as the Board or the Committee, pursuant to authority delegated by the Board, may
otherwise provide on a basis uniformly applicable to all persons similarly situated,
“Eligible Employee” shall not include any “Ineligible Person,” which includes: (a) a person
who (i) holds a position with the Company’s “HARTEMP” Program, (ii) is hired to work for a
Participating Company through a temporary employment agency, or (iii) is hired to a position
with a Participating Company with notice on his or her date of hire that the position will
terminate on a certain date; (b) a person who is a leased employee (within the meaning of
Code Section 414(n)(2)) of a Participating Company or is otherwise employed by or through a
temporary help firm, technical help firm, staffing firm, employee leasing firm, or
professional employer organization, regardless of whether such person is an Employee of a
Participating Company, and (c) a person who performs services for a Participating Company as
an independent contractor or under any other non-employee classification, or who is
classified by a Participating Company as, or determined by a Participating Company to be, an
independent contractor, regardless of whether such person is characterized or



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ultimately determined by the Internal Revenue Service or any other Federal, State or local
governmental authority or regulatory body to be an employee of a Participating Company or
its affiliates for income or wage tax purposes or for any other purpose.




          Notwithstanding any provision in the Plan to the contrary, if any person is an
Ineligible Person, or otherwise does not qualify as an Eligible Employee, or otherwise is
ineligible to participate in the Plan, and such person is later required by a court or
governmental authority or regulatory body to be classified as a person who is eligible to
participate in the Plan, such person shall not be eligible to participate in the Plan,
notwithstanding such classification, unless and until designated as an Eligible Employee by
the Committee, and if so designated, the participation of such person in the Plan shall be
prospective only.




          “Employee” means any person regularly employed by a Participating Company, but shall
not include any person who performs services for a Participating Company as an independent
contractor or under any other non-employee classification, or who is classified by a
Participating Company as, or determined by a Participating Company to be, an independent
contractor.




          “Fair Market Value,” unless otherwise indicated in the provisions of this Plan, means,
as of any date, the composite closing price for one share of Stock on the New York Stock
Exchange or, if no sales of Stock have taken place on such date, the composite closing price
on the most recent date on which selling prices were quoted, the determination to be made in
the discretion of the Committee.




          “Formula Price” means the highest of: (a) the highest composite daily closing
price of the Stock during the period beginning on the 60th calendar day prior to
the Change of Control and ending on the date of such Change of Control, (b) the highest
gross price paid for the Stock during the same period of time, as reported in a report on
Schedule 13D filed with the Securities and Exchange Commission, or (c) the highest gross
price paid or to be paid for a share of Stock (whether by way of exchange, conversion,
distribution upon merger, liquidation or otherwise) in any of the transactions set forth in
Section 9 of the Plan as constituting a Change of Control; provided that in the case of the
exercise of any such Right related to an Incentive Stock Option, “Formula Price” shall mean
the Fair Market Value of the Stock at the time of such exercise.




          “Incentive Stock Option” means a stock option qualified under Section 422 of the Code.




          “Key Employee” means an Eligible Employee (including any officer or director who is
also an Eligible Employee) whose responsibilities and decisions, in the judgment of the
Committee, directly affect the performance of the Company and its subsidiaries.




          “Option” means an option awarded under Section 5 of the Plan to purchase Stock of the
Company, which option may be an Incentive Stock Option or a non-qualified stock option.



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          “Participating Company” means the Company or any subsidiary or other affiliate of the
Company; provided, however, for Incentive Stock Options only, “Participating Company” means
the Company or any corporation which at the time such Option is granted qualifies as a
“subsidiary” of the Company under Section 424(f) of the Code.




          “Performance Share” means a performance share awarded under Section 6 of the Plan.




          “Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as
supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not
include: (a) the Company, any subsidiary of the Company or any other Person controlled by
the Company, (b) any trustee or other fiduciary holding securities under any employee
benefit plan of the Company or of any subsidiary of the Company, or (c) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of securities of the Company.




          “Plan” means The Hartford 2005 Incentive Stock Plan, as the same may be amended,
administered or interpreted from time to time.




          “Plan Year” means the calendar year.




          “Potential Change of Control” means the occurrence of an event defined in Section 9 of
the Plan.




          “Retirement” means the following:




          (a) Key Employees Hired Before 2001. Solely with respect to
a Key



Employee with an original hire date with a Participating Company before January 1, 2001 who:
(i) is covered in whole or in part under the final average pay formula of the Retirement
Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” means
satisfaction of the requirements for early or normal retirement under the final average pay
formula of the Retirement Plan (assuming such Key Employee were covered under the final
average pay formula of the Retirement Plan), provided such event results in such Key
Employee’s separation from employment with the Company, or




          (b) Key Employees Hired During 2001. Solely with respect to a Key Employee
with an original hire date with a Participating Company on or after January 1, 2001 but
before January 1, 2002 who: (i) is covered under the cash balance formula of the Retirement
Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” means
satisfaction of the requirements for early or normal retirement under the final average pay
formula of the Retirement Plan (assuming such Key Employee were covered under the final
average pay formula of the Retirement Plan), provided such event results in such Member’s
separation from the employment of the Company.



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          “Retirement Plan” means The Hartford Retirement Plan for U.S. Employees, as amended
from time to time.




          “Restricted Stock” means Stock awarded under Section 7 of the Plan subject to such
restrictions as the Committee deems appropriate or desirable.




          “Restricted Unit” means a contractual right awarded under Section 7 of the Plan to
receive pursuant to the Plan one share of Stock at the end of a specified period of time,
subject to such restrictions as the Committee deems appropriate or desirable.




          “Restriction Period” means, in the case of Performance Shares, Restricted Stock or
Restricted Units the period established by the Committee pursuant to Section 6 or 7, as
applicable, during which shares of Stock or other rights of the recipient of such an Award
(or his or her permissive assigns) remain subject to forfeiture pending completion of a
period of service or such other criteria or conditions as the Committee shall specify.




          ”Right” means a stock appreciation right awarded under Section 5 of the Plan.




          “Stock” means the common stock ($.01 par value) of The Hartford.




          “The Hartford” means the Company and its subsidiaries, and their successors and
assigns.




          “Total Disability” means the complete and permanent inability of a Key Employee to
perform all of his or her duties under the terms of his or her employment with any
Participating Company, as determined by the Committee upon the basis of such evidence,
including independent medical reports and data, as the Committee deems appropriate or
necessary.




          “Transferee” means any person or entity to whom or to which a non-qualified stock
option has been transferred and assigned in accordance with Section 5(h) of the Plan.
Unless the Committee shall expressly permit otherwise, with respect to any Key Employee or
Director, only (i) the Key Employee’s or Director’s child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, mother-in-law, father-in-law, son-in-law or daughter-in-law
(including adoptive relationships), (ii) trusts for the exclusive benefit of one or more
such persons and/or the Key Employee or Director, and (iii) another entity owned solely by
one or more such persons and/or the Key Employee or Director shall be a Transferee.




	 	3.	 	Shares Subject to the Plan






          Subject to adjustments in accordance with Section 13, the aggregate number of shares of
Stock which may be awarded under the Plan shall be subject to a maximum limit applicable to
all Awards for the duration of the Plan (the “Maximum Limit”). The Maximum Limit shall be
7,000,000 shares of Stock. The maximum number of shares of



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Stock with respect to which Awards may be granted under the Plan in the form of Incentive
Stock Options shall be 7,000,000.




          Subject to adjustments in accordance with Section 13, and subject to the Maximum Limit
set forth above on the number of Shares that may be awarded in the aggregate under the Plan,
the maximum number of shares that may be awarded to Directors under the Plan shall be
500,000 shares of Stock. Additionally, a Director may not be granted an Award covering more
than 25,000 shares of Stock in any Plan Year, except that this annual limit on Director
Awards shall be 50,000 shares of Stock for any Director serving as Chairman of the Board and
provided, however, that in the Plan Year in which an individual is first appointed or
elected as a Director, the limit applicable to such Director shall be increased by 25,000
shares of Stock.




          In addition to the foregoing, in any Plan Year: (a) no individual Key Employee may
receive an Award of Options or Rights for more than 1,000,000 shares, and (b) no individual
Key Employee may receive an Award of Restricted Stock, Restricted Units or Performance
Shares for more than 200,000 shares.




          Except with respect to shares of Stock equivalent to a maximum of five percent of the
Maximum Limit authorized above in this Section 3, and except as may be provided in Section 9
regarding a Change of Control, any Full Value Awards which vest on the basis of a Key
Employee’s continued employment with the Company shall not provide for vesting, other than
vesting upon death, Total Disability or Retirement, or such other circumstances, such as a
substantial reduction in force or a divestiture or sale of a business or unit, that the
Committee finds than a waiver of the applicable restrictions (or any portion thereof) would
be in the best interests of the Company, which is more rapid than pro rata annual vesting
over a three year period, and any Full Value Awards which vest upon the attainment of
performance objectives shall provide for a performance period of at least twelve months.
For purposes of this paragraph, a “Full Value Award” is an Award other than in the form of
an Option or Right. Notwithstanding the foregoing, Awards of Restricted Units attributable
to a Key Employee’s voluntary deferral of an amount which would otherwise have been payable
to the Key Employee in cash shall not be subject to the restrictions set forth in this
paragraph and shall not be counted against the five percent limit referenced above.




          Subject to the above limitations, shares of Stock to be issued under the Plan may be
made available from the authorized but unissued shares, or shares held by the Company in
treasury or from shares purchased in the open market.




          For the purpose of computing the total number of shares of Stock available for Awards
under the Plan, there shall be counted against the foregoing limitations the number of shares of Stock
subject to issuance upon exercise or settlement of Awards and the number of shares of Stock which equals the value of Performance Share Awards based upon their target
payout, in each case determined as at the dates on which such Awards are granted. If any
Awards under the Plan are forfeited, terminated, expire unexercised, or are settled in cash
in lieu of Stock, the shares of Stock which were



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theretofore subject to such Awards shall again be available for Awards under the Plan
to the extent of such forfeiture, termination, expiration, or cash settlement of such
Awards. If any award under the prior The Hartford Incentive Stock Plan (as approved by the
Company’s shareholders in 2000), or under The Hartford Restricted Stock Plan for
Non-Employee Directors, is forfeited, terminated or expires unexercised, or is settled in
cash in lieu of Stock, the shares of Stock subject to such award (or the relevant portion
thereof) shall be available for Awards under the Plan and such shares shall be added to the
Maximum Limit.




	 	4.	 	Grant of Awards and Award Documents






          (a) Subject to the provisions of the Plan, the Committee shall: (i) determine and
designate from time to time those Key Employees and Directors or groups of Key Employees and
Directors to whom Awards are to be granted, (ii) determine the form or forms of Award to be
granted to any Key Employee and any Director; (iii) determine the amount or number of shares
of Stock subject to each Award; and (iv) determine the terms and conditions of each Award.




          (b) Each Award granted under the Plan shall be evidenced by a written Award Document.
Such Award Document shall be subject to and incorporate the express terms and conditions of
each Award, if any, required under the Plan or required by the Committee.




	 	5.	 	Options and Rights






          (a) With respect to Options and Rights, the Committee shall: (i) authorize the
granting of Incentive Stock Options, non-qualified stock options, or a combination of
Incentive Stock Options and non-qualified stock options; (ii) authorize the granting of
Rights which may or may not be granted in connection with all or part of any Option granted
under this Plan; (iii) determine the number of shares of Stock subject to each Option or the
number of shares of Stock that shall be used to determine the value of a Right; and (iv)
determine the time or times when and the manner in which each Option or Right shall be
exercisable and the duration of the exercise period.




          (b) Any option issued hereunder which is intended to qualify as an Incentive Stock
Option shall be subject to such limitations or requirements as may be necessary for the
purposes of Section 422 of the Code or any regulations and rulings thereunder to the extent
and in such form as determined by the Committee in its discretion.




          (c) The exercise period for an Option and a Right shall not exceed ten years from the
date of grant.




          (d) The Option price per share shall be determined by the Committee at the time any
Option is granted and shall be not less than the Fair Market Value of one share



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of Stock on the date the Option is granted. The grant price related to each Right
shall be determined by the Committee at the time any Right is granted; however, such grant
price shall not be less than the Fair Market Value of one share of Stock on the date the
Right is granted.




          (e) No part of any Option or Right may be exercised until the Key Employee who has been
granted the Award shall have remained in the employ of a Participating Company for such
period after the date of grant as the Committee may specify, if any, and the Committee may
further require exercisability in installments.




          (f) Except as provided in Section 9, the purchase price of the shares of
Stock as to which an Option is exercised shall be paid to the Company at the time of
exercise either in cash, Stock already owned by the optionee, or a combination of the
foregoing having a total Fair Market Value equal to the purchase price. The Committee shall
determine acceptable methods for tendering Stock as payment upon exercise of an Option and
may impose such limitations and prohibitions on the use of Stock for such purpose as it
deems appropriate.




          (g) Unless otherwise set forth in the Award Document, in case of a Key Employee’s
termination of employment with all Participating Companies, the following provisions shall
apply:




               (i) If a Key Employee who has been granted an Option or Right shall die before such
Option or Right has expired, his or her Option or Right may be exercised in full by: (A)
the person or persons to whom the Key Employee’s rights under the Option or Right pass upon
his or her death pursuant to the terms of the Plan, or if no such person has such right, by
his or her executors or administrators; (B) his or her Transferee(s) (with respect to
non-qualified Options or Rights); or (C) his or her Beneficiary designated pursuant to the
Plan, at any time, or from time to time, within five years after the date of the Key
Employee’s death or within such other period, and subject to such terms and conditions as
the Committee may specify, but not later than the expiration date specified in Section 5(c)
above. Any such Options or Rights not fully exercisable immediately prior to such optionee’s
death shall become fully exercisable upon such death unless the Committee, in its sole
discretion, shall otherwise determine.




               (ii) If the Key Employee’s employment with all Participating Companies terminates:
(A) because of his or her Total Disability, or (B) solely in the case of a Key Employee with
an original hire date with a Participating Company before January 1, 2002, because of his or
her voluntary termination of employment due to Retirement; he or she may exercise his or her
Options or Rights in full at any time, or from time to time, within five years after the
date of the termination of his or her employment, or within such other period, and subject
to such terms and conditions as the Committee may specify, but not later than the expiration
date specified in Section 5(c) above. Any such Options or Rights not fully exercisable
immediately prior to such optionee’s Total Disability or Retirement shall become fully
exercisable upon such Total Disability or Retirement unless the Committee, in its sole
discretion, shall otherwise determine at the time of grant.



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               (iii) If the Key Employee shall be terminated for cause as determined by the Committee,
all of such Key Employee’s Options or Rights outstanding at the date of such termination
(whether or not then exercisable) shall be canceled without further action by the Key
Employee, the Committee or the Company coincident with the effective date of such
termination.




               (iv) Except as provided in Section 5(g)(ii) and Section 9, if a Key
Employee’s employment terminates for any other reason (including a voluntary resignation),
he or she may exercise his or her Options or Rights, to the extent that he or she shall have
been entitled to do so at the date of the termination of his or her employment, at any time,
or from time to time, within four months after the date of the termination of his or her
employment, or within such other period, and subject to such terms and conditions, as the
Committee may specify, but not later than the expiration date specified in Section 5(c)
above. All Options and Rights held by such Key Employee or any of his or her assigns that
are not eligible to be exercised upon the date of such termination shall be canceled without
further action by the Key Employee, the Committee or the Company coincident with the
effective date of such termination.




               (v) Any Options or Rights not exercised within the period established in accordance
with this Section 5(g) shall be canceled without further action by the Key Employee, the
Committee or the Company on the date following the last date on which such Option or Right
may have been exercised in accordance with this Section 5(g).




          (h) Except as provided in this Section 5(h) or required by applicable law, no Option or
Right granted under the Plan shall be transferable other than upon the death of the
recipient of such Option or Right. During the lifetime of the optionee, an Option or Right
shall be exercisable only by the Key Employee or Director to whom the Option or Right is
granted. Notwithstanding the foregoing, all or a portion of a non-qualified Option or Right
may be transferred and assigned by such persons designated by the Committee, to such
persons or groups of persons designated as permissible Transferees by the Committee, and
upon such terms and conditions as the Committee may from time to time authorize and
determine in its sole discretion. Notwithstanding the preceding sentence, no Award under
the Plan may be transferred for value (as defined in the General Instructions to Form S-8
with respect to the registration, pursuant to the Securities Act of 1933, of employee
benefit plan securities and/or interests).




          (i)
Except as provided in Section 9, if a Director’s service on the Board
terminates for any reason, including without limitation, termination due to death,
disability or retirement, such Director (or Beneficiary, in the event of death) may exercise
any Option or Right granted to him or her only to the extent determined by the Committee as
set forth in such Director’s Award Document and/or any administrative rules or other terms
and conditions adopted by the Committee from time to time applicable to such Option or Right
granted to such Director.




          (j) With respect to an Incentive Stock Option, the Committee shall specify



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such terms and provisions as the Committee may determine to be necessary or desirable
in order to qualify such Option as an “incentive stock option” within the meaning of Section
422 of the Code.




          (k) With respect to the exercisability and settlement of Rights:




               (i) Except as expressly provided below, upon exercise of a Right, a Key Employee or
Director shall be entitled, subject to such terms and conditions as the Committee may
specify, to receive all or a portion of the excess of (A) the Fair Market Value of a
specified number of shares of Stock at the time of exercise, as determined by the Committee,
over (B) a specified amount which shall not, subject to Section 5(d), be less than the Fair
Market Value of such specified number of shares of Stock at the time the Right is granted.
Payment of any such excess shall be made as the Committee shall specify in cash, the
issuance or transfer to the Key Employee or Director of whole shares of Stock with a Fair
Market Value at such time equal to any excess, or a combination of cash and shares of Stock
with a combined Fair Market Value at such time equal to any such excess, all as determined
by the Committee. The Company will not issue a fractional share of Stock and, if a
fractional share would otherwise be issuable, the Company shall pay cash equal to the Fair
Market Value of the fractional share of Stock at such time.




               (ii) Notwithstanding Section 5(k)(i), the Committee may specify at grant that payment
of any excess referenced in the first sentence of Section 5(k)(i) shall not be paid until a
specified date or, if earlier, upon the termination of the Key Employee’s employment, the
cessation of the Director’s service on the Board or a Change of Control. To the extent
permissible without adverse tax consequences for the Key Employee or Director, the Committee
may permit the Key Employee or Director to elect when such payment is made. Amounts, if
any, deferred pursuant to this Section 5(k)(ii) shall be subject to such terms and
conditions as the Committee shall determine, including the manner in which any deemed
earnings on such deferred amounts shall be determined.




               (iii) In the event of the exercise of such Right, the Company’s obligation in respect
of any related Option or such portion thereof will be discharged by payment of the Right so
exercised.




	 	6.	 	Performance Shares






          (a) Subject to the provisions of the Plan, the Committee shall: (i) determine and
designate from time to time those Key Employees and Directors or groups of Key Employees and
Directors to whom Awards of Performance Shares are to be made, (ii) determine the
performance period (the “Performance Period”) and performance objectives (the “Performance
Objectives”) applicable to such Awards, (iii) determine whether to impose a Restriction
Period following the completion of the Performance Period applicable to any Key Employees
and Directors or groups of Key Employees and Directors, (iv) determine the form of
settlement of a Performance Share, 
and (v)



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generally determine the terms and conditions of each such Award. At any date, each
Performance Share shall have a value equal to the Fair Market Value of a share of Stock at
such date; provided that the Committee may limit the aggregate amount payable upon the
settlement of any Award.




          (b) The Committee shall determine a Performance Period of not less than one nor more
than five years. Performance Periods may overlap and Key Employees or Directors may
participate simultaneously with respect to Performance Shares for which different
Performance Periods are prescribed.




          (c) The Committee may impose a Restriction Period of any duration with respect to any shares of stock issued in payment of a Performance Share Award, which shall apply
immediately following the completion of the Performance Period to which it relates.




          (d) The Committee shall determine the Performance Objectives of Awards of Performance
Shares. Performance Objectives may vary from Key Employee to Key Employee, Director to
Director and between groups of Key Employees and Directors, and shall be based upon one or
more of the following objective criteria, as the Committee deems appropriate: (A) earnings
per share, (B) return on equity, (C) cash flow, (D) return on total capital, (E) return on
assets, (F) economic value added, (G) increase in surplus, (H) reductions in operating
expenses, (I) increases in operating margins, (J) earnings before income taxes and
depreciation, (K) total shareholder return, (L) return on invested capital, (M) cost
reductions and savings, (N) earnings before interest, taxes, depreciation and amortization
(“EBITDA”), (O) pre-tax operating income, (P) net income, (Q) after-tax operating income,
and/or (R) productivity improvements. The objective criteria shall be (i) determined solely
by reference to any one or more of the above performance factors of the Company (or the
performance factors of any subsidiary or affiliate of the Company or any division or unit
thereof), or (ii) based on any one or more of the above performance factors of the Company
(or the performance factors of any subsidiary or affiliate of the Company or any division or
unit thereof), as compared with the performance factors of other companies or entities, or
(iii) based on a Key Employee’s attainment of personal objectives with respect to any one or
more of the performance factors of the Company (or the performance factors of any subsidiary
or affiliate of the Company or any division or unit thereof), or with respect to any one or
more of the following: growth and profitability, customer satisfaction, leadership
effectiveness, business development, negotiating transactions and sales or developing long
term business goals. If during the course of a Performance Period there shall occur
significant events which the Committee expects to have a substantial effect on the
applicable Performance Objectives during such period, the Committee may revise such
Performance Objectives.




          (e) At the beginning of a Performance Period, the Committee shall determine for each
Key Employee or group of Key Employees the number of Performance Shares or the percentage of
Performance Shares which shall be paid to the Key Employee or member of the group of Key
Employees following completion of the Performance Period



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or if later, following any applicable Restriction Period, if the applicable Performance
Objectives are met in whole or in part.




          (f) If a Key Employee terminates service with all Participating Companies during a
Performance Period or any applicable Restriction Period: (i) because of death, (ii)
because of Total Disability, (iii) solely in the case of a Key Employee with an original
hire date with a Participating Company before January 1, 2002, because of his or her
voluntary termination of employment due to Retirement, or (iv) under other circumstances
where the Committee in its sole discretion finds that a waiver would be in the best
interests of the Company; that Key Employee may, as determined by the Committee, be entitled
to payment in settlement of such Performance Shares at the end of the Performance Period or
if later, at the end of any applicable Restriction Period, based upon the extent to which
the Performance Objectives were satisfied at the end of such Performance Period and prorated
for the portion of the Performance Period together with any applicable Restriction Period
during which the Key Employee was actively employed by any Participating Company; provided,
however, the Committee may provide for an earlier payment in settlement of such Performance
Shares in such amount and under such terms and conditions as the Committee deems appropriate
or desirable. If a Key Employee terminates service with all Participating Companies during a
Performance Period or any applicable Restriction Period for any other reason, then such Key
Employee shall not be entitled to any Award with respect to that Performance Period and
shall forfeit any shares of Stock subject to a Restriction Period unless the Committee shall
otherwise determine.




          (g) Except as provided in Section 9, if a Director’s service on the Board terminates
for any reason, including, without limitation, termination due to death, disability or
retirement, prior to the lapse of any applicable Restriction Period, such Director (or
Beneficiary, in the event of death) shall be or become vested in, or entitled to payment in
respect of, such Award to the extent determined by the Committee as set forth in such
Director’s Award Document and/or any administrative rules or other terms and conditions
adopted by the Committee from time to time applicable to such Award granted to such
Director.




          (h) Each Award of a Performance Share shall be paid in whole shares of Stock, or cash,
or a combination of Stock and cash either as a lump sum payment or in annual installments,
all as the Committee shall determine, with payment to commence as soon as practicable after
the end of the relevant Performance Period or if later, at the end of any applicable
Restriction Period.




          (i) Except as otherwise required by applicable law, no Performance Share granted under
the Plan shall be transferable other than on account of death in accordance with the terms
of the Plan.




          (j) Notwithstanding anything else contained in the Plan to the contrary, unless the
Committee otherwise determines at the time of grant, any Award of Performance Shares, to an
officer of the Company or a Subsidiary who is subject to the reporting




12










 





requirements of Section 16(a) of the Act, shall become vested, if at all, upon the
determination by the Committee that Performance Objectives established by the Committee have
been attained, in whole or in part, to the extent required to ensure that such Award is
deductible by the Company or such Subsidiary pursuant to Section 162(m) of the Code. To the
extent such Award is so intended to qualify as performance-based compensation under Section
162(m), notwithstanding anything else in the Plan to the contrary, the Committee shall not
have any discretionary power or authority to increase the amount payable with respect to
such Award after it has been granted, and shall be deemed not to have and may not exercise
with respect to such Award any authority or discretion afforded to it under the Plan that
would cause the Award to fail to so qualify.




7. Restricted Stock and Restricted Units




     (a) Except as provided in Section 9, Restricted Stock and Restricted Units
shall be subject to a Restriction Period specified by the Committee. The Committee may
provide for the lapse of a Restriction Period in installments where deemed appropriate, and
it may also require the achievement of predetermined performance objectives in order for
such Restriction Period to lapse. Except as otherwise provided in the Plan or as specified
by the Committee, certificates for shares related to an Award of Restricted Stock or
Restricted Units shall be delivered to a Key Employee or Director as soon as
administratively practicable following the end of the applicable Restriction Period.



     (b) Except when the Committee determines otherwise pursuant to Section 7(d), if a Key
Employee terminates employment with all Participating Companies for any reason before the
expiration of the Restriction Period, all shares of Restricted Stock and all rights with
respect to any Award of Restricted Units still subject to restriction shall be forfeited by
the Key Employee and shall be reacquired by the Company.



     (c) Except as otherwise provided in this Section 7 or required by applicable law, no
shares of Restricted Stock received by a Key Employee or Director and no rights conveyed by
an Award of Restricted Units shall be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of during the Restriction Period.



     (d) In the event that a Key Employee’s employment terminates due to (i) death, (ii)
Total Disability, (iii) solely in the case of a Key Employee with an original hire date with
a Participating Company before January 1, 2002, a voluntary termination of employment due to
Retirement, or (iv) such other circumstances, such as a substantial reduction in force or a
divestiture or sale of a business or unit, that the Committee finds that a waiver of the
applicable restrictions (or any portion thereof) would be in the best interests of the
Company, such Key Employee (or Beneficiary, in the event of death) shall be or become vested
in, or entitled to payment in respect of, Restricted Stock or Restricted Units then held by
such Key Employee to the extent determined by the Committee as set forth in such Key
Employee’s Award Documents and/or any administrative rules or other terms and conditions
adopted by the Committee from time to time applicable to such Restricted Stock or Restricted
Units granted to such Key



13









 







Employee. With respect to any Award of Restricted Units, unless otherwise determined
by the Committee, any amount payable to the Key Employee or his or her Beneficiary in
accordance with this Section 7(d) shall be paid promptly following the end of the applicable
Restriction Period determined without regard to this paragraph.



     (e) Except as provided in Section 9, if a Director’s service on the Board terminates
for any reason, including without limitation termination due to death, disability or
retirement, prior to the lapse of any applicable Restriction Period, such Director (or
Beneficiary, in the event of death) shall be or become vested in, or entitled to payment in
respect of, such Award to the extent determined by the Committee as set forth in such
Director’s Award Document and/or any administrative rules or other terms and conditions
adopted by the Committee from time to time applicable to such Award granted to such
Director.



     (f) The Committee may require, on such terms and conditions as it deems appropriate or
desirable, that the certificates for Stock delivered under the Plan in respect of any grant
of Restricted Stock may be held in custody by a bank or other institution, or that the
Company may itself hold such shares in custody until the Restriction Period expires or until
restrictions thereon otherwise lapse, or later as provided in Section 14 hereof. The
Committee may require, as a condition of any Award of Restricted Stock that the Key Employee
or Director shall have delivered a stock power endorsed in blank relating to the Restricted
Stock. Notwithstanding any provision of the Plan to the contrary, Restricted Stock may be
evidenced on a book entry or electronic basis or pursuant to other arrangements (including,
without limitation, in an omnibus or nominee account administered by a third party) until
restrictions thereon otherwise lapse, in lieu of issuing physical certificates to the Key
Employee or Director.



     (g) At the discretion of the Committee, the Restricted Unit account of a Key Employee
or Director may be credited with Dividend Equivalents during the Restricted Period which
shall be subject to the same terms and conditions (and become payable and be paid) as the
Restricted Units to which they relate. Unless the Committee shall otherwise determine at or
after grant, all Dividend Equivalents payable in respect of Restricted Units shall be deemed
reinvested in that number of Restricted Units determined based on the Fair Market Value on
the date the corresponding dividend on the Stock is payable to stockholders.



     (h) Nothing in this Section 7 shall preclude a Key Employee or Director from exchanging
any shares of Restricted Stock subject to the restrictions contained herein for any other shares of Stock that are similarly restricted.



     (i) Subject to Section 7(f) and Section 8, a stock certificate shall be issued in the
name of each Key Employee or Director awarded Restricted Stock under the Plan. Such
certificate shall be registered in the name of the Key Employee or Director, and shall bear
an appropriate legend reciting the terms, conditions and restrictions, if any, applicable to
such Award and shall be subject to appropriate stop-transfer orders. Upon the lapse of the
Restricted Period with respect to Restricted Stock, such shares shall no



14









 







longer be subject to the restrictions imposed under this Section 7 and the Company shall
issue or have issued new share certificates, or otherwise render available the shares
represented by the certificate, without the legend referred to herein in exchange for those
certificates previously issued. Upon the lapse of the Restricted Period with respect to any
Restricted Units, the Company shall deliver (or otherwise render available) to the Key
Employee or Director (or, if applicable, his or her beneficiary or permitted assigns, one
share of Stock for each Restricted Unit as to which restrictions have lapsed (including any
such Restricted Units related to any Dividend Equivalents credited with respect to such
Restricted Units). The Committee may, in its sole discretion, elect to pay cash or part
cash and part Stock in lieu of delivering only Stock for Restricted Units. If a cash
payment is made in lieu of delivering Stock, the amount of such cash payment for each share
of Stock to which a Key Employee or Director is entitled shall be equal to the Fair Market
Value on the date on which the Restricted Period lapsed with respect to the related
Restricted Unit. Notwithstanding the foregoing, the Committee may, to the extent possible
without adverse tax consequences to the Key Employee or Director, require or permit the
deferral of payment in respect of Restricted Units to a date or dates (including, without
limitation, the date the Key Employee’s employment or a Director’s services on the Board
terminates) subsequent to the date that the Restriction Period lapses on such terms and
conditions (including, without limitation, the manner in which the amounts payable shall be
deemed invested during the period of deferral) as it shall determine from time to time.



     (j) Except for the restrictions set forth herein and unless otherwise determined by the
Committee, a Key Employee or Director shall have all the rights of a shareholder with
respect to shares of Restricted Stock, including but not limited to, the right to vote and
the right to receive dividends. A Key Employee or Director shall not have any right, in
respect of Restricted Units awarded pursuant to the Plan, to vote on any matter submitted to
the Company’s stockholders until such time, if at all, as the shares of Stock attributable
to such Restricted Units have been issued.



     (k) In addition, the Committee may permit Key Employees and Directors or any group of
Key Employees and Directors to elect to receive Restricted Units in exchange for or in lieu
of other compensation (including salaries, annual bonuses, annual retainer and meeting fees)
that would otherwise have been payable to such Key Employees and Directors in cash. The
Committee shall establish the terms and conditions of any such Restricted Units, including
the Restriction Period applicable thereto, and the date on which Stock shall be issued in
respect thereof. The Committee shall establish the terms and conditions applicable to any
election by a Key Employee or Director to receive Restricted Units (including the time at
which any such election shall be made).



     (l) Notwithstanding anything else contained in the Plan to the contrary, the Committee
may determine at the time of grant that any Award of Restricted Stock or Restricted Units to
a Key Employee or Director shall become vested, if at all, only upon the determination by
the Committee that Performance Objectives established by the Committee have been attained,
in whole or in part. In such case, the Performance



15









 







Objectives determined by the Committee may vary from Key Employee to Key Employee, Director
to Director and between groups of Key Employees and Directors, and shall be established by
the Committee and determined by applying the standards (and selecting from the criteria)
applicable to Performance Shares under Section 6(d). If there shall occur significant
events which the Committee expects to have a substantial effect on the applicable
Performance Objectives, the Committee may revise such Performance Objectives. Unless the
Committee otherwise determines at the time of grant, any Award of Restricted Stock or
Restricted Units that is subject to performance-based vesting in accordance with this
Section 7(l), to an officer of the Company or a Subsidiary who is subject to the reporting
requirements of Section 16(a) of the Act, shall be subject to the same requirements and
restrictions as apply to a Performance Share Award under Section 6(j).



8. Issuance of Stock




     (a) The Company shall not be required to issue or deliver any shares of Stock prior to:
(i) the listing of such shares on any stock exchange on which the Stock may then be listed,
(ii) the completion of any registration or qualification of such shares under any federal or
state law, or any ruling or regulation of any government body which the Company shall, in
its sole discretion, determine to be necessary or advisable, and (iii) the satisfaction of
any tax withholding obligations as provided in Section 14 hereof.



     (b) All shares of Stock delivered under the Plan shall also be subject to such
stop-transfer orders and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of the Securities and Exchange Commission, any
stock exchange upon which the Stock is then listed and any applicable federal or state
securities laws, and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. In making such
determination, the Committee may rely upon an opinion of counsel for the Company.



     (c) Except to the extent such shares are subject to forfeiture during any applicable
Restriction Period, each Key Employee or Director who receives Stock in settlement of or as
part of an Award, shall have all of the rights of a shareholder with respect to such shares,
including the right to vote the shares and receive dividends and other distributions. No Key
Employee or Director awarded an Option, a Right, a Restricted Unit or a Performance Share
shall have any right as a shareholder with respect to any shares of Stock covered by his or
her Option, Right, Restricted Unit or Performance Share prior to the date of issuance to him
or her of such shares.



16









 





9. Change of Control




     (a) For purposes of this Plan, a Change of Control shall occur if:



          (i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission
pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a
subsidiary of the Company or any employee benefit plan sponsored by the Company or a
subsidiary of the Company is the Beneficial Owner of twenty percent or more of the
outstanding stock of the Company entitled to vote in the election of directors of the
Company;




          (ii) any Person other than the Company or a subsidiary of the Company or any employee
benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares
pursuant to a tender offer or exchange offer to acquire any stock of the Company (or
securities convertible into stock) for cash, securities or any other consideration, provided
that after consummation of the offer, the Person in question is the Beneficial Owner of
fifteen percent or more of the outstanding stock of the Company entitled to vote in the
election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3
under the Act in the case of rights to acquire stock);




          (iii) any merger, consolidation, recapitalization or reorganization of the Company
approved by the stockholders of the Company shall be consummated, other than any such
transaction immediately following which the persons who were the Beneficial Owners of the
outstanding securities of the Company entitled to vote in the election of directors of the
Company immediately prior to such transaction are the Beneficial Owners of at least 55% of
the total voting power represented by the securities of the entity surviving such
transaction entitled to vote in the election of directors of such entity (or the ultimate
parent of such entity) in substantially the same relative proportions as their ownership of
the securities of the Company entitled to vote in the election of directors of the Company
immediately prior to such transaction; provided that, such continuity of ownership (and
preservation of relative voting power) shall be deemed to be satisfied if the failure to
meet such threshold (or to preserve such relative voting power) is due solely to the
acquisition of voting securities by an employee benefit plan of the Company, such surviving
entity or any subsidiary of such surviving entity;




          (iv) any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the Company approved by the
stockholders of the Company shall be consummated; or




          (v) within any 24 month period, the persons who were directors of the Company
immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for
any reason other than death) to constitute at least a majority of the Board or the board of
directors of any successor to the Company, provided that any director who was not a director
at the beginning of such period shall be deemed to be an Incumbent Director if such director
(A) was elected to the Board by, or on the recommendation of or

17









 








with the approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually or by prior operation of this clause (v), and (B) was
not designated by a Person who has entered into an agreement with the Company to effect a
transaction described in Section 9(a)(iii) or Section 9(a)(iv) of the Plan.




     (b) For purposes of this Plan, a Potential Change of Control shall
occur if:



          (i) A Person shall commence a tender offer, which if successfully consummated, would
result in such Person being the Beneficial Owner of at least 15% of the stock of the Company
entitled to vote in the election of directors of the Company;




          (ii) The Company enters into an agreement, the consummation of which would constitute a
Change of Control;




          (iii) Solicitation of proxies for the election of directors of the Company by anyone
other than the Company, which, if such directors were elected, would result in the
occurrence of a Change of Control as described in Section 9(a)(v); or




          (iv) Any other event shall occur which is deemed to be a Potential Change of Control by
the Board, the Committee, or any other appropriate committee of the Board in its sole
discretion.




     (c) Notwithstanding any provision in this Plan to the contrary, upon the occurrence of a
Change of Control:



          (i) Each Option and Right outstanding on the date such Change of Control occurs, and
which is not then fully vested and exercisable, shall immediately vest and become
exercisable to the full extent of the original grant for the remainder of its term.




          (ii) The surviving or resulting corporation may, in its discretion, provide for the
assumption or replacement of each outstanding Option and Right granted under the Plan on
terms which are no less favorable to the optionee than those applicable to the Options and
Rights immediately prior to the Change of Control.




          (iii) The restrictions applicable to shares of Restricted Stock or to Restricted Units
held by Key Employees pursuant to Section 7 shall lapse upon the occurrence of a Change of
Control, and such Key Employees shall receive immediately unrestricted certificates for all
of such shares.




          (iv) If a Change of Control occurs during the course of a Performance Period or any
Restriction Period applicable to an Award of Performance Shares pursuant to Section 6, then
a Key Employee shall be deemed to have satisfied the Performance Objectives and to have
completed any applicable Restriction Period effective on the date of such occurrence.




18









 








          (v) Notwithstanding any provision in this Plan to the contrary, in the event of a
Change of Control the Committee may, in its discretion, provide any of the following either
absolutely or subject to the election of such Key Employees:





a. Each Option and Right shall be surrendered or exercised for an immediate lump sum
cash amount equal to the excess of the Formula Price over the exercise price;




b. Each Restricted Stock, Restricted Unit and Award of Performance Shares shall be
exchanged for an immediate lump sum cash amount equal to the number of outstanding units or shares awarded to such Key Employee multiplied by the Formula Price.



     (d) Notwithstanding any provision in this Plan to the contrary, in the event of a
Change of Control as described in Section 9(a)(iii) or Section 9(a)(iv) of the Plan, in the
case of an awardee whose employment or service involuntarily terminates on or after the date
of a shareholder approval described in either of such Sections but before the date of a
consummation described in either of such Sections, the date of termination of such an
awardee’s employment or service shall be deemed for purposes of the Plan to be the day
following the date of the applicable consummation.



10. Beneficiary




     (a) Each Key Employee, Director and/or his or her Transferee may file with the Company
a written designation of one or more persons as the Beneficiary who shall be entitled to
receive the Award, if any, payable under the Plan upon his or her death. A Key Employee,
Director or Transferee may from time to time revoke or change his or her Beneficiary
designation without the consent of any prior Beneficiary by filing a new designation with
the Company. The last such designation received by the Company shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall be effective
unless received by the Company prior to the Key Employee’s, Director’s or Transferee’s
death, as the case may be, and in no event shall it be effective as of a date prior to such
receipt.



     (b) If no such Beneficiary designation is in effect at the time of death of a Key
Employee, Director or Transferee, as the case may be, or if no designated Beneficiary
survives the Key Employee, Director or Transferee or if such designation conflicts with
applicable law, the estate of the Key Employee, Director or Transferee, as the case may be,
shall be entitled to receive the Award, if any, payable under the Plan upon his or her
death. If the Committee is in doubt as to the right of any person to receive such Award, the
Company may retain such Award, without liability for any interest thereon, until the
Committee determines the rights thereto, or the Company may pay such Award into any court of
appropriate jurisdiction and such payment shall be a complete discharge of the liability of
the Company therefore.



19









 





11. Administration of the Plan




     (a) All decisions, determinations or actions of the Committee made or taken pursuant to
grants of authority under the Plan shall be made or taken in the sole discretion of the
Committee and shall be final, conclusive and binding on all persons for all purposes.



     (b) The Committee shall have full power, discretion and authority to interpret,
construe and administer the Plan and any part thereof, and its interpretations and
constructions thereof and actions taken thereunder shall be, except as otherwise determined
by the Board, final, conclusive and binding on all persons for all purposes. Except to the
extent otherwise expressly provided in the Plan, any action, authority or power reserved to
the Committee shall be within the Committee’s sole and absolute discretion.



     (c) The Committee’s decisions and determinations under the Plan need not be uniform and
may be made selectively among Key Employees and Directors, whether or not such Key Employees
and Directors are similarly situated.



     (d) The Committee may, in its sole discretion, delegate such of its powers as it deems
appropriate to the Company’s Executive Vice President, Human Resources (or other person
holding a similar position) or the Company’s Chief Executive Officer, except that Awards to
executive officers shall be made, and matters related thereto shall be determined, solely by
the Committee or the Board or any other appropriate committee of the Board.



12. Amendment, Extension or Termination




   The Board or the Committee may, at any time, amend or modify the Plan and,
specifically, may make such modifications to the Plan as it deems necessary to avoid the
application of Section 162(m) of the Code and the Treasury regulations issued thereunder.
However: (i) with respect only to Incentive Stock Options, no amendment shall, without
approval by a majority of the Company’s stockholders, (A) alter the group of persons
eligible to participate in the Plan, or (B) except as provided in Section 13 increase the
maximum number of shares of Stock which are available for Awards under the Plan; or, (ii)
with respect to all Options and Rights, allow the Committee to reprice the Options or
Rights. The Board may suspend or terminate the Plan at any time without the consent of any
person. Notwithstanding anything in this Plan to the contrary, the Plan shall not be
amended, modified, suspended or terminated during the period in which a Change of Control is
threatened. For purposes of the preceding sentence, a Change of Control shall be deemed to
be threatened for the period beginning on the date of any Potential Change of Control, and
ending upon the earlier of: (I) the second anniversary of the date of such Potential Change
of Control, (II) the date a Change of Control occurs, or (III) the date the Board or the
Committee determines in good faith that a Change of Control is no longer threatened.
Further, notwithstanding anything in this Plan to the



20









 







contrary, no amendment, modification, suspension or termination following a Change of
Control shall adversely impair or reduce the rights of any person with respect to a prior
Award without the consent of such person. Notwithstanding any other provision of the Plan
to the contrary, the Board or the Committee may amend the Plan or an Award Document to take
effect retroactively or otherwise, as deemed necessary or advisable for the purpose of
conforming the Plan or an Award Document to any present or future law relating to plans of
this or similar nature (including, but not limited to, Code Section 409A) and the
administrative regulations and rulings promulgated thereunder.



13. Adjustments in Event of Change in Common Stock




     In the event of any reorganization, merger, recapitalization, consolidation,
liquidation, stock dividend, stock split, reclassification, combination of shares, rights
offering, split-up or extraordinary dividend (including a spin-off) or divestiture, or any
other change in the corporate structure or shares, the Committee may make such adjustment in
the Stock subject to Awards, including Stock subject to purchase by an Option or issuable in
respect of Restricted Units, or the terms, conditions or restrictions on Stock or Awards,
including the price payable upon the exercise of such Option and the number of shares
subject to Restricted Stock or Restricted Unit Awards, as the Committee deems equitable.



14. Miscellaneous




     (a) If a Change of Control has not occurred and if the Committee determines that a Key
Employee has taken action inimical to the best interests of any Participating Company, the
Committee may, in its sole discretion, terminate in whole or in part such portion of any
Option or Right as has not yet become exercisable at the time of termination, terminate any
Performance Share Award for which the Performance Period or any applicable Restriction
Period has not been completed or terminate any Award of Restricted Stock or Restricted Units
for which the Restriction Period has not lapsed.



     (b) Except as provided in Section 9, nothing in this Plan or any Award granted
hereunder shall confer upon any employee any right to continue in the employ of any
Participating Company or interfere in any way with the right of any Participating Company to
terminate his or her employment at any time. No Award payable under the Plan shall be deemed
salary or compensation for the purpose of computing benefits under any employee benefit plan
or other arrangement of any Participating Company for the benefit of its employees unless
the Company shall determine otherwise. No Key Employee shall have any claim to an Award
until it is actually granted under the Plan. To the extent that any person acquires a right
to receive payments from the Company under this Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company. All payments to be made hereunder
shall be paid from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such amounts
except as provided in Section



21









 




7(e) with respect to Restricted Stock.




     (c) The Committee shall have the right to make such provisions as deemed appropriate in
its sole discretion to satisfy any obligation of the Company to withhold federal, state or
local income or other taxes incurred by reason of the operation of the Plan or an Award
under the Plan, including but not limited to at any time: (i) requiring a Key Employee to
submit payment to the Company for such taxes before making settlement of any Award of Stock
or other amount due under the Plan, (ii) withholding such taxes from wages or other amounts
due to the Key Employee before making settlement of any Award of Stock or other amount due
under the Plan, (iii) making settlement of any Award of Stock or other amount due under the
Plan to a Key Employee part in Stock and part in cash to facilitate satisfaction of such
withholding obligations, or (iv) receiving Stock already owned by, or withholding Stock
otherwise due to, the Key Employee in an amount determined necessary to satisfy such
withholding obligations; provided, however, that, notwithstanding any language herein to the
contrary, any Key Employee who is an executive officer of the Company (within the meaning of
Section 16 of the Act) shall have the right to satisfy his or her obligations to the Company
pursuant to this Section 14(c) by instructing the Company not to deliver to the Key Employee
Stock otherwise deliverable to the Key Employee in an amount sufficient to satisfy such
obligations to the Company.



     (d) The Committee may permit deferrals of compensation pursuant to the Plan or any
subplan hereof which meet the requirements of Code Section 409A and the regulations
thereunder. Additionally, to the extent any Award is subject to Code Section 409A,
notwithstanding any provision herein to the contrary, the Plan does not permit the
acceleration of the time or schedule of any distribution related to such Award, except as
permitted by Code Section 409A and the regulations and rulings promulgated thereunder.



     (e) The Plan and the grant of Awards shall be subject to all applicable federal and
state laws, rules, and regulations and to such approvals by any government or regulatory
agency as may be required. The Plan and each Award Document shall be governed by the laws
of the State of Delaware, excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of the Plan to the substantive law of
another jurisdiction. Unless otherwise provided in the Award Document, recipients of an
Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the
federal or state courts of Connecticut to resolve any and all issues that may arise out of
or relate to the Plan or any related Award Document.



     (f) The terms of the Plan shall be binding upon the Company and its successors and
assigns.



     (g) Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provision hereof.



22









 





15. Effective Date, Term of Plan and Shareholder Approval




     The effective date of the Plan shall be May 18, 2005. No Award shall be granted under
this Plan after the Plan’s termination date. The Plan’s termination date shall be the
earlier of: (a) May 18, 2015, or (b) the date on which the Maximum Limit (as defined in
Section 3 of the Plan) is reached; provided, however, that the Plan will continue in effect
for existing Awards as long as any such Award is outstanding.




23