exv10w1



 





Exhibit 10.1




AMENDED AND RESTATED

1998 INCENTIVE PLAN

of

LENNOX INTERNATIONAL INC.




          1. Plan. This Amended and Restated 1998 Incentive Plan of Lennox International Inc. (the
“Plan”) is an amendment and restatement of the 1998 Incentive Plan of Lennox International Inc.
(the “Existing Plan”), which amended and restated the Lennox International Inc. 1994 Stock Option
and Restricted Stock Plan, which was adopted by Lennox International Inc. to reward certain
corporate officers and employees of Lennox International Inc. and its Subsidiaries (as herein
defined) by providing them stock options and other stock and cash incentives, and which replaced
and incorporated certain provisions of the Company’s then-existing incentive plans. Upon the
Amendment Effective Date (as hereinafter defined), the Existing Plan shall be amended and restated
in its entirety as set forth herein.




          2. Objectives. This Plan is designed to attract and retain employees of the Company and its
Subsidiaries, to attract and retain qualified directors of the Company, to attract and retain
consultants and other independent contractors, to encourage the sense of proprietorship of such
employees, directors and independent contractors and to stimulate the active interest of such
persons in the development and financial success of the Company and its Subsidiaries. These
objectives are to be accomplished by making Awards (as hereinafter defined) under this Plan and
thereby providing Participants (as hereinafter defined) with a proprietary interest in the growth
and performance of the Company.




          3. Definitions. As used herein, the terms set forth below shall have the following
respective meanings:





          “Amendment Effective Date” has the meaning set forth in paragraph 20 hereof.




          “Annual Management Incentive Awards” has the meaning set forth in paragraph 7(a)(v)(C)
hereof.




          “Authorized Officer” means the Chairman of the Board or the Chief Executive Officer of
the Company (or any other senior officer of the Company to whom either of them shall
delegate the authority to execute any Award Agreement).




          “Award” means an Employee Award, a Director Award or an Independent Contractor Award.




          “Award Agreement” means any Employee Award Agreement, Director Award Agreement or
Independent Contractor Award Agreement.




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




          “Cash Award” means an award denominated in cash.




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




          “Committee” means the Compensation Committee of the Board or such other committee of
the Board as is designated by the Board to administer the Plan.



 









 






          “Common Stock” means the Common Stock, par value $.01 per share, of the Company.




          “Company” means Lennox International Inc., a Delaware corporation.




          “Director” means an individual serving as a member of the Board.




          “Director Award” means the grant of any Nonqualified Stock Option, SAR, Stock Award,
Cash Award, Performance Award, Performance Units, Restricted Stock, Stock Units or any other
award to which the Committee may deem appropriate to meet the objectives of the Plan,
whether granted singly, in combination or in tandem, to a Nonemployee Director pursuant to
such applicable terms, conditions and limitations as the Committee may establish in order to
fulfill the objectives of the Plan.




          “Director Award Agreement” means a written agreement between the Company and a
Nonemployee Director setting forth the terms, conditions and limitations applicable to a
Director Award.




          “Disability” means, with respect to a Nonemployee Director, the inability to perform
the duties of a Director for a continuous period of more than three months by reason of any
medically determinable physical or mental impairment.




          “Dividend Equivalents” means, with respect to Stock Units or shares of Restricted Stock
that are to be issued at the end of the Restriction Period, an amount equal to all dividends
and other distributions (or the economic equivalent thereof) that are payable to
stockholders of record during the Restriction Period on a like number of shares of Common
Stock.




          “Employee” means an employee of the Company or any of its Subsidiaries and an
individual who has agreed to become an Employee of the Company or any of its Subsidiaries
and actually becomes such an Employee within the following six months.




          “Employee Award” means the grant of any Option, SAR, Stock Award, Cash Award,
Performance Award, Performance Units, Restricted Stock, Stock Units, Annual Management
Incentive Awards or any other award to which the Committee may deem appropriate to meet the
objectives of the Plan, whether granted singly, in combination or in tandem, to an Employee
pursuant to such applicable terms, conditions and limitations as the Committee may establish
in order to fulfill the objectives of the Plan.




          “Employee Award Agreement” means a written agreement between the Company and an
Employee setting forth the terms, conditions and limitations applicable to an Employee
Award.




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




          “Fair Market Value” means a price that is based on the opening, closing, actual, high,
low, or average selling prices of a share of Common Stock on the New York Stock Exchange
(NYSE) or other established stock exchange (or exchanges) on the applicable date, the
preceding trading day, the next succeeding trading day, or an average of trading days, as
determined by the Committee in its discretion. Such definition of Fair Market Value shall
be specified in the Award Agreement and may differ depending on whether Fair Market Value is
in reference to the grant, exercise, vesting, or settlement or payout of an Award. If,
however, the accounting standards used to account for equity awards granted to Participants
are substantially modified subsequent to



 









 






the Effective Date of the Plan, the Committee shall
have the ability to determine an Award’s Fair Market Value based on relevant facts and
circumstances. If shares of Common Stock are not traded on an established stock exchange,
Fair Market Value shall be determined by the Committee based on objective criteria.




          “Grant Price” means the price at which a Participant may exercise his or her right to
receive cash or Common Stock, as applicable, under the terms of an Award.




          “Incentive Option” means an Option that is intended to comply with the requirements set
forth in Section 422 of the Code.




          “Independent Contractor” means a person other than an Employee or a Nonemployee
Director providing bona fide services to the Company or any of its Subsidiaries as a
consultant or advisor, as applicable, provided that such person is a natural person and that
such services are not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly promote or maintain a market
for any securities of the Company.




          “Independent Contractor Award” means the grant of any Nonqualified Stock Option, SAR,
Stock Award, Cash Award, Performance Award, Performance Units, Restricted Stock, Stock Units
or any other award to which the Committee may deem appropriate to meet the objectives of the
Plan, whether granted singly, in combination or in tandem, to an Independent Contractor
pursuant to such applicable terms, conditions and limitations as the Committee may establish
in order to fulfill the objectives of the Plan.




          “Independent Contractor Award Agreement” means a written agreement between the Company
and an Independent Contractor setting forth the terms, conditions and limitations applicable
to an Independent Contractor Award.




          “Nonemployee Director” has the meaning set forth in paragraph 4(b) hereof.




          “Nonqualified Stock Option” means an Option that is not an Incentive Option.




          “Option” means a right to purchase a specified number of shares of Common Stock at a
specified price.




          “Participant” means an Employee, Director or Independent Contractor to whom an Award
has been made under this Plan.




          “Performance Award” means an Award awarded pursuant to this Plan to a Participant that
is subject to the attainment of one or more Performance Goals.




          “Performance Goal” means one or more standards established by the Committee, to
determine in whole or in part whether a Performance Award shall be earned. A Performance
Goal may include, but not be limited to, one or more of the following: cash flow; ratio of
debt to debt plus equity; earnings before taxes; earnings before interest and taxes;
earnings before interest, taxes, depreciation and amortization; earnings per share;
operating earnings; economic value added; ratio of operating earnings to capital spending;
free cash flow; net profit; net sales; sales growth; working capital ratio; stock price;
return on net assets, equity or stockholders’ equity; or total return to stockholders.



 









 






          “Performance Shares” means an award in the form of common stock to Participants upon
the attainment of long-term Performance Goals and other terms and conditions specified by
the Committee.




          “Performance Units” means an award in the form of a payment in cash to Participants
upon the attainment of long-term Performance Goals and other terms and conditions specified
by the Committee.




          “Qualified Performance Award” means a Performance Award made to an Employee that is
intended to qualify as qualified performance-based compensation under Section 162(m) of the
Code, as described in paragraph 7(a)(v)(B) of the Plan.




          “Restricted Stock” means any Common Stock that is restricted or subject to forfeiture
provisions.




          “Restriction Period” means a period of time beginning as of the date upon which an
Award of Restricted Stock or Stock Units is made pursuant to this Plan and ending as of the
date upon which the Common Stock subject to such Award is no longer restricted or subject to
forfeiture provisions.




          “SAR” means a right to receive a payment, in cash or Common Stock, equal to the excess
of the Fair Market Value or other specified valuation of a specified number of shares of
Common Stock on the date the stock appreciation right is exercised over a specified strike
price, in each case, as determined by the Committee.




          “Stock Award” means an award in the form of whole shares of Common Stock or Stock
Units, including an Award of Restricted Stock.




          “Stock Units” means a unit evidencing the right to receive in specified circumstances a
share of Common Stock or portion or multiple thereof which may be restricted or subject to
forfeiture provisions.




          “Subsidiary” means (i) in the case of a corporation, any corporation of which the
Company directly or indirectly owns shares representing more than 50% of the combined voting
power of the shares of all classes or series of capital stock of such corporation which have
the right to vote generally on matters submitted to a vote of the stockholders of such
corporation, and (ii) in the case of a partnership or other business entity not organized as
a corporation, any such business entity of which the Company directly or indirectly owns
more than 50% of the voting, capital or profits interests (whether in the form of
partnership interests, membership interests or otherwise), and (iii) any other corporation,
partnership or other entity that is a “subsidiary” of the Company within the meaning of Rule
405 promulgated by the Securities and Exchange Commission under the Securities Act of 1933,
as amended, and (iv) at the discretion of the Committee, in the case of a corporation,
any other corporation which the Company directly or indirectly owns shares representing less
than 50% of the combined voting power of the shares of all classes or series of capital
stock of such corporation which have the right to vote generally on matters submitted to a
vote of the stockholders of such corporation, and (v) at the discretion of the Committee, in
the case of any partnership or other business entity not organized as a corporation, any
such business entity of which the Company directly or indirectly owns less than 50% of the
voting, capital or profits interests (whether in the form of partnership interests,
membership interests or otherwise).



 









 





          4. Eligibility.





          (a) Employees. All Employees are eligible for Employee Awards under this Plan.




          (b) Directors. Directors eligible for Director Awards under this Plan are those who
are not Employees of the Company or any of its Subsidiaries (“Nonemployee Directors”).




          (c) Independent Contractors. Independent Contractors eligible for Independent
Contractor Awards under this Plan are those Independent Contractors providing services to,
or who will provide services to, the Company or any of its Subsidiaries.



          5. Common Stock Available for Awards. Subject to the provisions of paragraph 13 hereof, there
shall be available for Awards under this Plan granted or payable wholly or partly in Common Stock
(including rights or Options that may be exercised for or settled in Common Stock) an aggregate of
24,254,706 shares, of which 22,094,706 shares are available for Awards to Employees and Independent
Contractors and 2,160,000 shares are available for Awards to Nonemployee Directors; provided,
however, that, with respect to Awards made under this Plan after December 31, 2004, no more than
4,280,385 shares shall be available for Stock Awards, Stock Unit Awards or Restricted Stock or Unit
Awards (including such Awards made in the form of Performance Awards) to Employees, Nonemployee
Directors or Independent Contractors. All of the shares authorized for issuance to Employees and
Independent Contractors may be issued pursuant to Incentive Options granted to Employees,
Nonqualified Stock Options granted to Employees or Independent Contractors or any combination
thereof. The number of shares of Common Stock that are the subject to Awards under this Plan or the
Existing Plan, which are cancelled, terminated, forfeited, expire unexercised, and, except for
Awards of Options or SARs, are settled in cash in lieu of Common Stock, or are exchanged for a
consideration that does not involve Common Stock, will immediately become available for Awards
under this Plan. Effective as of April 15, 2005, no further awards shall be made under any prior
plans. Additionally, the number of shares of Common Stock that are the subject of Awards under this
Plan, that are forfeited or terminated, expire unexercised, and, except for Awards of Options or
SARs, are settled in cash in lieu of Common Stock or in a manner such that all or some of the
shares covered by an Award are not issued to a Participant or are exchanged for Awards that do not
involve Common Stock, shall not be counted against the aggregate Plan maximum or any sublimit set
forth in this paragraph 5 and shall again immediately become available for Awards hereunder. The
number of Shares reserved for issuance under the Plan shall be reduced only to the extent that
Shares of Common Stock are actually issued in connection with the exercise or settlement of an
Award; provided, however, that the number of Shares reserved for issuance shall be reduced by the
total number of Options or SARs exercised. Under the Plan, subject to Paragraph 7(d)(vi) herein,
no Participant may be granted in any calendar year (i) Options relating to more than 1,000,000
shares, (ii) Stock Awards relating to more than 500,000 shares of Common Stock, (iii) SARs relating
to more than 1,000,000 shares, or (iv) Cash Awards resulting in payments in excess of $5,000,000.
The shares reserved for issuance and the limitation set forth above shall be subject to adjustment
in accordance with Section 13 hereof. If the Grant Price or other purchase price of any Option or
other Award granted under the Plan or the Existing Plan is satisfied by tendering shares of Common
Stock to the Company, or if the tax withholding obligation resulting from the settlement of any
such Option or other Award is satisfied by tendering or withholding shares of Common Stock, only
the number of shares of Common Stock issued net of the shares of Common Stock tendered or withheld
shall be deemed delivered for purposes of determining usage of shares against the maximum number of
shares of Common Stock available for delivery under the Plan or any sublimit set forth
above. Shares of Common Stock delivered under the Plan as an Award or in settlement, of an Award
issued or made (a) upon the assumption, substitution, conversion or replacement of outstanding
awards under a plan or arrangement of an entity acquired in a merger or other acquisition or (b) as
a post-transaction grant under such a plan or arrangement of an acquired entity shall not reduce or
be counted against the maximum number of shares




 









 








of Common Stock available for delivery under the
Plan, to the extent that the exemption for transactions in connection with mergers and acquisitions
from the stockholder approval requirements of the New York Stock Exchange for equity compensation
plan applies. The Committee may from time to time adopt and observe such rules and procedures
concerning the counting of shares against the Plan maximum as it may deem appropriate, including
rules more restrictive than those set forth above to the extent necessary to satisfy the
requirements of any national stock exchange on which the Common Stock is listed or any applicable
regulatory requirement. The Board and the appropriate officers of the Company are authorized to
take from time to time whatever actions are necessary, and to file any required documents with
governmental authorities, stock exchanges and transaction reporting systems to ensure that shares
of Common Stock are available for issuance pursuant to Awards.




          6. Administration.





          (a) This Plan shall be administered by the Committee.




          (b) Subject to the provisions hereof, the Committee shall have full and exclusive power
and authority to administer this Plan and to take all actions that are specifically
contemplated hereby or are necessary or appropriate in connection with the administration
hereof. The Committee shall also have full and exclusive power to interpret this Plan and
to adopt such rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper. The Committee may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an Award, eliminate
or make less restrictive any restrictions contained in an Award, waive any restriction or
other provision of this Plan or an Award or otherwise amend or modify an Award in any manner
that is either (i) not adverse to the Participant to whom such Award was granted or (ii)
consented to by such Participant. Notwithstanding anything herein to the contrary, without
the prior approval of the Company’s stockholders, Options issued under the Plan will not be
repriced, replaced, or regranted through cancellation or by decreasing the exercise price of
a previously granted Option. The Committee may make an award to an individual who it expects
to become an Employee of the Company or any of its Subsidiaries within the next six months,
with such award being subject to the individual actually becoming an Employee within such
time period, and subject to such other terms and conditions as may be established by the
Committee. The Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent the Committee
deems necessary or desirable to further the Plan purposes. Any decision of the Committee in
the interpretation and administration of this Plan shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all parties concerned.




          (c) Each person who is or shall have been a member of the Board, or a Committee
appointed by the Board, or an officer of the Company to whom authority was delegated in
accordance with the Plan shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred
by him or her in connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts paid by him
or her in settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him or her,
provided he or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or her own
behalf, unless such loss, cost liability, or expense is a result of his or her own willful
misconduct or except as expressly provided by statute.



 









 





          7. Awards.





          (a) Awards under the Plan shall consist of Options, Stock Appreciation Rights, Stock Awards, Cash
Awards, Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units, or
Annual Management Incentive Awards. The Committee shall determine the type or types of Awards
to be made under this Plan and shall designate from time to time the Participants who are to
be the recipients of such Awards. Each Award may be embodied in an Award Agreement, which
shall contain such terms, conditions and limitations as shall be determined by the Committee
in its sole discretion and shall be signed by the Participant to whom the Award is made and by
an Authorized Officer for and on behalf of the Company. Awards may consist of those listed in
this paragraph 7 hereof and may be granted singly, in combination or in tandem. Awards may
also be made in combination or in tandem with, in replacement of (subject to paragraph 11), or
as alternatives to, grants or rights under this Plan or any other plan of the Company or any
of its Subsidiaries, including the plan of any acquired entity. An Award may provide for the
grant or issuance of additional, replacement or alternative Awards upon the occurrence of
specified events, including the exercise of the original Award granted to a Participant. All
or part of an Award may be subject to conditions established by the Committee, which may
include, but are not limited to, continuous service with the Company and its Subsidiaries,
achievement of specific business objectives, items referenced to in clause (v) below, and
other comparable measurements of performance. Upon resignation, termination, death,
disability or retirement of an Employee, any unexercised, deferred, unvested or unpaid
Employee Awards shall be treated as set forth in the applicable Employee Award Agreement or as
otherwise specified by the Committee. Upon resignation, termination, death or disability of
an Independent Contractor, any unexercised, deferred, unvested or unpaid Independent
Contractor Awards shall be treated as set forth in the applicable Independent Contractor Award
Agreement or as otherwise specified by the Committee. Upon resignation, termination, death,
Disability or retirement of a Nonemployee Director, all unvested Director Awards shall be
treated as set forth in the applicable Director Award Agreement or as otherwise specified by
the Committee.




          (i) Stock Option. An Employee Award may be in the form of an Option. An
Option awarded pursuant to this Plan may consist of an Incentive Option or a
Nonqualified Option. The Grant Price of an Incentive Option shall be not less than
the Fair Market Value of the Common Stock subject to such Incentive Option on the
date of grant. The Grant Price of a Nonqualified Option shall be not less than the
Fair Market Value of the Common Stock subject to such Nonqualified Stock Option on
the date of grant. Options may not include provisions that “reload” the Option upon
exercise. Subject to the foregoing provisions, the terms, conditions and limitations
applicable to any Options awarded pursuant to this Plan, including the term of any
Options and the date or dates upon which they become exercisable, shall be
determined by the Committee.




          (ii) Stock Appreciation Right. An Employee Award may be in the form of a SAR.
The terms, conditions and limitations applicable to any SAR awarded pursuant to this
Plan, including the term of any SAR and the date or dates upon which they become
exercisable, shall be determined by the Committee.




          (iii) Stock Award, Restricted Stock and Stock Units. An Employee Award may be
in the form of a Stock Award, Restricted Stock or Stock Units. The terms,
conditions and limitations applicable to any such Awards granted pursuant to this
Plan shall be determined by the Committee; provided that any Restricted Stock Award
shall have a minimum Restriction Period of one year from the date of grant, provided
that the



 









 






Committee may provide for earlier vesting by reason of death, disability,
retirement or change in control.




          (iv) Cash Award. An Employee Award may be in the form of a Cash Award. The
terms, conditions and limitations applicable to any Cash Awards granted pursuant to
this Plan shall be determined by the Committee.




          (v) Performance Award. Without limiting the type or number of Awards that may
be made under the other provisions of this Plan, an Employee Award may be in the
form of a Performance Award. The terms, conditions and limitations applicable to
any Performance Award granted to Participants pursuant to this Plan shall be
determined by the Committee, subject to the limitations set forth below. Any Stock
Award granted as an Employee Award which is a Performance Award shall have a minimum
Restriction Period of one year from the date of grant, provided that the Committee
may provide for earlier vesting upon a termination of employment by reason of death,
disability, retirement or change in control. The Committee shall set Performance
Goals in its discretion which, depending on the extent to which they are met, will
determine the value and/or amount of Performance Awards that will be paid out to the
Participant and/or the portion of an Award that may be exercised.




          (A) Nonqualified Performance Awards. Performance Awards granted to
Employees that are not intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code, or that are Options or SARs,
shall be based on achievement of such goals and be subject to such terms,
conditions and restrictions as the Committee or its delegate shall
determine.




          (B) Qualified Performance Awards. A Qualified
Performance Award shall be paid, vested or otherwise deliverable solely on
account of the attainment of one or more pre-established, objective
Performance Goals established by the Committee prior to the earlier to occur
of (x) 90 days after the commencement of the period of service to which the
Performance Goal relates and (y) the lapse of 25% of the period of service
(as scheduled in good faith at the time the goal is established), and in any
event while the outcome is substantially uncertain. A Performance Goal is
objective if a third party having knowledge of the relevant facts could
determine whether the goal is met. Such a Performance Goal may be based on
one or more business criteria that apply to the individual, one or more
business units, divisions, segments or sectors of the Company, or the
Company as a whole, and if so desired by the Committee, by comparison with a
peer group of companies. Unless otherwise stated, such a Performance Goal
need not be based upon an increase or positive result under a particular
business criterion and could include, for example, maintaining the status
quo or limiting economic losses (measured, in each case, by reference to
specific business criteria). In interpreting Plan provisions applicable to
Qualified Performance Awards, it is the intent of the Plan to
conform with the standards of Section 162(m) of the Code and Treasury
Regulation § 1.162-27(e)(2)(i), as to grants to those Participants whose
compensation is, or likely to be, subject to Section 162(m) of the Code, and
the Committee in establishing such goals and interpreting the Plan shall be
guided by such provisions. Prior to the payment of any compensation based
on the achievement of Performance Goals, the Committee must certify in
writing that applicable Performance Goals and any of



 









 






the material terms
thereof were, in fact, satisfied. Subject to the foregoing provisions, the
terms, conditions and limitations applicable to any Qualified
Performance Awards made pursuant to this Plan shall be determined by the
Committee.




          (C) Annual Management Incentive Awards. As one form of
Qualified Performance Award, the Committee may designate Participants
who are eligible to receive a monetary payment in any calendar year based
upon Performance Goals for the Company (“Annual Management Incentive
Awards”). Within the first 90 Days of each fiscal year of
the Company, the Committee shall establish (i) Performance Goals for the
Company for such fiscal year (the “Performance Period”) and (ii) target
awards (“Target Awards”) that correspond to the Performance Goals. The
Committee shall, promptly after the date on which the necessary financial or
other information for a particular Performance Period becomes available,
certify in writing whether any Performance Goal has been achieved and, if
so, the highest
Performance Target that has been achieved, all in a manner required by
Section 162(m) of the Code. If any Performance Target has been achieved,
the Award, determined for each Participant with reference to the Target
Award that corresponds to the highest Performance Target achieved for such
Performance Period shall have been earned, except that the Committee may, in
its sole discretion, reduce the amount of any Award to reflect the
Committee’s assessment of the Participant’s individual performance, to
reflect the failure of the Participant to remain in the continuous employ of
the Company or its Subsidiaries, or for any other reason. Such Awards shall
become payable in cash as promptly as practicable thereafter.




          (b) As of December 31, 2004, certain awards consisting of options on 8,257,642 shares
of Common Stock (the “Existing Options”) have been granted under the Existing Plan or its
predecessor as in effect from time to time. As of the Amendment Effective Date, each
Existing Option shall continue to be outstanding and the shares of Common Stock that are the
subject of such Existing Options shall be subject to adjustment in accordance with paragraph
13 and to the other provisions of the Plan.




          (c) The Committee shall have the sole responsibility and authority to determine the
type or types of Independent Contractor Awards to be made under this Plan and may make any
such Awards as could be made to an Employee, other than Incentive Options.




          (d) The Committee may grant Director Awards to the Nonemployee Directors of
the Company from time to time in accordance with this Paragraph 7(d). Each Director Award
may, in the discretion of the Committee, be embodied in a Director Award Agreement, which
shall contain such terms, conditions and limitations as shall be determined by the Committee
in its sole discretion and, if required by the Committee, shall be signed by the Nonemployee
Director to whom the Director Award is granted and signed for and on behalf of the
Company.




          (i) Stock Option. A Director Award may be in the form of a
Nonqualified Stock Option. The Grant Price of the Option shall be not less than
the Fair Market Value of the Common Stock subject to such Option on the date of
grant. Options may not include provisions that “reload” the option upon exercise.
Subject to the foregoing provisions, the terms, conditions and limitations
applicable to any Options awarded to Nonemployee Directors pursuant to this Plan,
including the Grant Price, the term of the



 









 






Options, the number of shares subject to
the Option and the date or dates upon which they become exercisable, shall be
determined by the Committee.




          (ii) Stock Appreciation Right. A Director Award may be in the form of a SAR.
The terms, conditions and limitations applicable to any SAR awarded to Nonemployee
Directors pursuant to this Plan, including the term of any SAR and the date or dates
upon which they become exercisable, shall be determined by the Committee.




          (iii) Stock Award, Restricted Stock and Stock Units. A Director Award may be
in the form of a Stock Award, Restricted Stock or Stock Units. The terms,
conditions and limitations applicable to any such Director Award granted to
Nonemployee Directors pursuant to this Plan shall be determined by the Committee;
provided that any Restricted Stock Award shall have a minimum Restriction Period of
one year from the date of grant, provided that the Committee may provide for earlier
vesting by reason of death, Disability, retirement or change in control.




          (iv) Cash Award. A Director Award may be in the form of a Cash Award. The
terms, conditions and limitations applicable to any Cash Awards granted pursuant to
this Plan shall be determined by the Committee.




          (v) Performance Award. Without limiting the type or number of Director Awards
that may be made under the other provisions of this Plan, a Director Award may be in
the form of a Performance Award. The terms, conditions and limitations
applicable to any Performance Award granted to Nonemployee Directors pursuant to
this Plan shall be determined by the Committee, subject to the limitations set forth
below. Any Stock Award granted as a Director Award which is a Performance Award
shall have a minimum Restriction Period of one year from the date of grant, provided
that the Committee may provide for earlier vesting by reason of death, Disability,
retirement or change in control. The Committee shall set Performance Goals in its
discretion which, depending on the extent to which they are met, will determine the
value and/or amount of Performance Awards that will be paid out to the Nonemployee
Director and/or the portion of an Award that may be exercised.




          (A) Nonqualified Performance Awards. Performance Awards granted to
Nonemployee Directors that are not intended to qualify as qualified
performance-based compensation under Section 162(m) of the Code, or that are
Options or SARs, shall be based on achievement of such goals and be subject
to such terms, conditions and restrictions as the Committee or its delegate
shall determine.




          (vi)
Notwithstanding anything to the contrary contained in this
Plan, no Nonemployee Director may be granted, during any calendar year, Director
Awards consisting of more than 40,000 shares of Common Stock; provided, however,
that a non-employee Vice Chairman of the Board may be granted Director Awards that
are up to three times that amount; provided, further, that a non-employee Chairman
of the Board may be granted during any calendar year Director Awards that are up to
five times that amount.



 









 





          8. Payment of Awards.





          (a) General. Payment of Awards may be made in the form of cash or Common Stock, or a
combination thereof, and may include such restrictions as the Committee shall determine,
including, in the case of Common Stock, restrictions on transfer and forfeiture provisions.
If payment of an Award is made in the form of Restricted Stock, the applicable Award
Agreement relating to such shares shall specify whether the underlying shares are to be
issued at the beginning or end of the Restriction Period. In the event that shares of
Restricted Stock are to be issued at the beginning of the Restriction Period, the
certificates evidencing such shares (to the extent that such shares are so evidenced) shall
contain appropriate legends and restrictions that describe the terms and conditions of the
restrictions applicable thereto. In the event that shares of Restricted Stock are to be
issued at the end of the Restricted Period, the right to receive such shares shall be
evidenced by book entry registration or in such other manner as the Committee may determine.




          (b) Deferral. With the approval of the Committee amounts payable in respect of Awards
may be deferred and paid either in the form of installments or as a lump-sum payment. The
Committee may permit selected Participants to elect to defer payments of some or all types
of Awards or any other compensation otherwise payable by the Company in accordance with
procedures established by the Committee and may provide that such deferred compensation may
be payable in shares of Common Stock. Any deferred payment pursuant to an Award, whether
elected by the Participant or specified by the Award Agreement or the terms of the Award or
by the Committee, may be forfeited if and to the extent that the Award Agreement or terms of
the Award provides.




          (c) Dividends, Earnings and Interest. Rights to dividends or Dividend Equivalents may
be extended to and made part of any Award consisting of shares of Common Stock or units
denominated in shares of Common Stock, subject to such terms, conditions and restrictions as
the Committee may establish. The Committee may also establish rules and procedures for the
crediting of interest or other earnings on deferred cash payments and Dividend Equivalents
for Awards consisting of shares of Common Stock or units denominated in shares of Common
Stock.




          (d)
Substitution of Awards. Subject to paragraphs 6(b), 11 and 13 hereof, at
the discretion of the Committee, an Employee or Independent Contractor may be offered an
election to
substitute an Award for another Award or Awards of the same or different type.



          9. Stock Option Exercise. The Grant Price shall be paid in full at the time of exercise in
cash or, if permitted by the Committee and elected by the optionee, the optionee may purchase such
shares by means of tendering Common Stock or surrendering another Award, including Restricted
Stock, valued at Fair Market Value on the date of exercise, or any combination thereof. The
Committee shall determine acceptable methods for Participants to tender Common Stock or other
Awards; provided that any Common Stock that is or was the subject of an Award may be so tendered
only if it has been held by the Participant for six months unless otherwise determined by the
Committee. The Committee may provide for procedures to permit the exercise or purchase of such
Awards by use of the proceeds to be received from the sale of Common Stock issuable pursuant to an
Award. Unless otherwise provided in the applicable Award Agreement, in the event shares of
Restricted Stock are tendered as consideration for the exercise of an Option, a number of the
shares issued upon the exercise of the Option, equal to the number of shares of Restricted Stock
used as consideration therefore, shall be subject to the same restrictions as the Restricted Stock
so submitted as well as any additional restrictions that may be imposed by the Committee. The
Committee may adopt additional rules and procedures regarding the exercise of




 









 








Options from time to
time, provided that such rules and procedures are not inconsistent with the provisions of this
paragraph.




          10. Taxes. The Company or its designated third party administrator shall have the right to
deduct applicable taxes from any Employee Award payment and withhold, at the time of delivery or
vesting of cash or whole shares of Common Stock under this Plan, an appropriate amount of cash or
number of shares of Common Stock or a combination thereof for payment of taxes or other amounts
required by law or to take such other action as may be necessary in the opinion of the Company to
satisfy all obligations for withholding of such taxes or other amounts. The Committee may also
permit withholding to be satisfied by the transfer to the Company of whole shares of Common Stock
theretofore owned by the holder of the Employee Award with respect to which withholding is
required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be
valued based on the Fair Market Value when the tax withholding is required to be made.




          11. Amendment, Modification, Suspension or Termination of the Plan. The Board may amend,
modify, suspend or terminate this Plan for the purpose of meeting or addressing any changes in
legal requirements or for any other purpose permitted by law, except that (i) no amendment or
alteration that would adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such Participant and (ii) no
amendment or alteration shall be effective prior to its approval by the stockholders of the Company
to the extent such approval is required by applicable legal requirements or the applicable
requirements of any securities exchange on which the Company’s Common Stock is listed.




          12. Assignability. Unless otherwise determined by the Committee and provided in the Award
Agreement or the terms of the Award, no Award or any other benefit under this Plan shall be
assignable or otherwise transferable except by will, by beneficiary designation or the laws of
descent and distribution or pursuant to a qualified domestic relations order as defined by the Code
or Title I of the Employee Retirement Income Security Act, or the rules thereunder. In the event
that a beneficiary designation conflicts with an assignment by will, the beneficiary designation
will prevail. The Committee may prescribe and include in applicable Award Agreements or the terms
of the Award other restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this paragraph 12 shall be null and void.




          13. Adjustments.





          (a) The existence of outstanding Awards shall not affect in any manner the right or
power of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the capital stock of the Company or
its business or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock (whether or not such issue is prior to, on a
parity with or junior to the existing Common Stock) or the dissolution or liquidation of the
Company, or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding of any kind,
whether or not of a character similar to that of the acts or proceedings enumerated above.




          (b) In the event of any corporate event or transaction (including, but not limited to,
a change in the shares of the Company or the capitalization of the Company) such as a
merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock
split, reverse stock split, split up, spin-off, or other distribution of stock or property
of the Company, combination of shares, exchange of shares, dividend in kind, or other like
change in capital structure or distribution (including cash dividends that the Board
determines are not in the ordinary course of business but excluding normal cash
dividends) to stockholders of the



 









 






Company, or any similar corporate event or transaction,
the Board, in its sole discretion, in order to prevent dilution or enlargement of
Participants’ rights under the Plan, shall substitute or adjust, in an equitable manner, as
applicable, the number and kind of shares that may be issued under the Plan, the number and
kind of shares subject to outstanding Awards, the Grant Price applicable to outstanding
Awards, the Award limits, and other value determinations applicable to outstanding Awards.



          14. Restrictions. No Common Stock or other form of payment shall be issued with respect to
any Award unless the Company shall be satisfied based on the advice of its counsel that such
issuance will be in compliance with applicable federal and state securities laws. Certificates
evidencing shares of Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may 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 securities exchange or transaction reporting system upon which the Common Stock is
then listed or to which it is admitted for quotation and any applicable federal or state securities
law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to
make appropriate reference to such restrictions.




          15. Unfunded Plan. Insofar as it provides for Awards of cash, Common Stock or rights thereto,
this Plan shall be unfunded. Although bookkeeping accounts may be established with respect to
Participants under this Plan, any such accounts shall be used merely as a bookkeeping convenience,
including bookkeeping accounts established by a third party administrator retained by the Company
to administer the Plan. The Company shall not be required to segregate any assets for purposes of
this Plan or Awards hereunder, nor shall the Company, the Board or the Committee be deemed to be a
trustee of any benefit to be granted under this Plan. Any liability or obligation of the Company
to any Participant with respect to an Award under this Plan shall be based solely upon any
contractual obligations that may be created by this Plan and any Award Agreement or the terms of
the Award, and no such liability or obligation of the Company shall be deemed to be secured by any
pledge or other encumbrance on any property of the Company. Neither the Company nor the Board nor
the Committee shall be required to give any security or bond for the performance of any obligation
that may be created by this Plan.




          16. Governing Law. This Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by mandatory provisions of the Code or the securities laws of
the United States, shall be governed by and construed in accordance with the laws of the State of
Delaware.




          17. Non-United States Participants. The Committee may grant Awards to persons outside the
United States under such terms and conditions as may, in the judgment of the Committee, be
necessary or advisable to comply with the laws of the applicable foreign jurisdiction and, to that
end, may establish sub-plans, modified option exercise procedures and other terms and procedures.
Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be
granted, that would violate the Exchange Act, the Code, any securities law, any governing statute,
or any other applicable law.




          18. Right to Employment. Nothing in the Plan or an Award Agreement shall interfere with or
limit in any way the right of the Company to terminate any Participant’s employment or other
service relationship at any time, or confer upon any Participant any right to continue in the
capacity in which he or she is employed or otherwise serves the Company.




          19. Successors. All obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the existence of such




 









 








successor
is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.




          20. Effectiveness. The Existing Plan shall be amended and restated in its entirety as set
forth herein as of the effective date of the Board action approving this Plan, subject only to
approval of the Plan by the stockholders of the Company (the “Amendment Effective Date”). No
new Awards may be granted after the tenth anniversary of the Amendment Effective Date.




          21. Code Section 409A. Notwithstanding anything in this Plan to the contrary, if any Plan
provision or Award under the Plan would result in the imposition of an additional tax under Code
Section 409A and related regulations and Treasury pronouncements (“Section 409A”), that Plan
provision or Award will be reformed to avoid imposition of the additional tax and no action taken
to comply with Section 409A shall be deemed to adversely affect the Participant’s rights to an
Award.