EX-10.1






Kansas City Southern




2008 Stock Option and

Performance Award Plan




1




Table of Contents




Page




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KANSAS CITY SOUTHERN




2008 STOCK OPTION AND PERFORMANCE AWARD PLAN




Article 1.




Effective Date, Objectives and Duration




1.1 Effective Date of the Plan. Kansas City Southern, a Delaware corporation (the
“Company”), hereby establishes the Kansas City Southern 2008 Stock Option and Performance Award
Plan (the “Plan”) as set forth herein effective October 14, 2008 (“Effective Date”), subject to
approval by the Company’s stockholders.



1.2 Objectives of the Plan. The Plan is intended (a) to allow selected employees and
officers of and consultants to the Company and its Affiliates to acquire or increase equity
ownership in the Company, thereby strengthening their commitment to the success of the Company and
stimulating their efforts on behalf of the Company, and to assist the Company and its Affiliates in
attracting new employees, officers and consultants and retaining existing employees, officers and
consultants, (b) to optimize the profitability and growth of the Company and its Affiliates through
incentives which are consistent with the Company’s goals, (c) to provide employees, officers and
consultants with an incentive for excellence in individual performance, (d) to promote teamwork
among employees, officers, consultants and non-employee directors, and (e) to attract and retain
highly qualified persons to serve as non-employee directors and to promote ownership by such
non-employee directors of a greater proprietary interest in the Company, thereby aligning such
non-employee directors’ interests more closely with the interests of the Company’s stockholders.



1.3 Duration of the Plan. The Plan shall commence on the Effective Date and shall
remain in effect, subject to the right of the Board or the Committee to amend or terminate the Plan
at any time pursuant to Article 16 hereof, until the earlier of October 14, 2018, or the date all
Shares subject to the Plan shall have been purchased or acquired and the restrictions on all
Restricted Shares granted under the Plan shall have lapsed, according to the Plan’s provisions.
The termination of the Plan shall not adversely affect any Awards outstanding on the date of
termination.



Article 2.




Definitions



Whenever used in the Plan, the following terms shall have the meanings set forth below:



2.1 “Affiliate” means any Person that directly or indirectly, through one or
more intermediaries, controls, or is controlled by or is under common control with the Company,
and, for all purposes other than for purposes of grants of Incentive Stock Options under Section
6.4, a United States or foreign corporation or partnership or other similar entity with respect to
which the Company owns, directly or indirectly, 50% (or such lesser percentage as the Committee may
specify, which percentage may be changed from time to time and may be different for different
entities) or more of the voting power of such entity.



2.2 “Award” means Options (including non-qualified options and Incentive Stock
Options), Restricted Shares, Restricted Share Units, Bonus Shares, Stock Appreciation Rights,
Limited Stock Appreciation Rights, Performance Units (which may be paid in cash or Shares),
Performance Shares, Deferred Stock, Dividend Equivalents, or Other Stock-Based Awards granted under
the Plan.



2.3 “Award Agreement” means the written agreement (which may be in paper or electronic
form as determined by the Committee) by which an Award shall be evidenced.



	 	 	 	 	 	 	 	 	 
	2.4	 	“Board” means the Board of Directors of the Company.
	 	 	 
	
 
	 	 	2.5	 	 	“Cause”(i)
	 	means unless otherwise defined in an Award Agreement,
	
 
	 	 	 	 	 	 
	 	







(i) before the occurrence of a Change of Control, any one or more of the following, as
determined by the Committee:




(A) a Grantee’s commission of a crime which, in the judgment of the
Committee, resulted or is likely to result in damage or injury, financial or
otherwise, to the Company or an Affiliate;




(B) the material violation by the Grantee of written policies of the
Company or an Affiliate;




(C) the habitual neglect or failure by the Grantee in the performance of
his or her duties to the Company or an Affiliate (but only if such neglect or
failure is not remedied within a reasonable remedial period after Grantee’s
receipt of written notice from the Company which describes such neglect or
failure in reasonable detail and specifies the remedial period); or




(D) action or inaction by the Grantee in connection with his or her duties
to the Company or an Affiliate resulting, in the judgment of the Committee, in
material injury to the Company or an Affiliate; and



(ii) from and after the occurrence of a Change of Control, the occurrence of any one or more
of the following, as determined in the good faith and reasonable judgment of the Committee:




(A) Grantee’s conviction for committing an act of fraud, embezzlement,
theft, or any other act constituting a felony involving moral turpitude or
causing material damage or injury, financial or otherwise, to the Company;




(B) a demonstrably willful and deliberate act or failure to act which is
committed in bad faith, without reasonable belief that such action or inaction
is in the best interests of the Company, which causes material damage or
injury, financial or otherwise, to the Company (but only if such act or
inaction is not remedied within 15 business days of Grantee’s receipt of
written notice from the Company which describes the act or inaction in
reasonable detail); or




(C) the consistent gross neglect of duties or consistent wanton negligence
by the Grantee in the performance of the Grantee’s duties (but only if such
neglect or negligence is not remedied within a reasonable remedial period after
Grantee’s receipt of written notice from the Company which describes such
neglect or negligence in reasonable detail and specifies the remedial period).



2.6 “Change of Control”, unless otherwise defined in the Award Agreement, shall be
deemed to have occurred if



(i) a majority of the members of the Board is replaced during any twelve (12) month period
with directors whose appointment or election was not endorsed by a majority of the members of the
Board in office immediately prior to the date of such appointment or election; or



(ii) any “person” (meaning for purposes of this Section 2.6 person as such term is used in
Sections 13(d) and 14(d) of the Exchange Act to the extent consistent with and not in violation of
Code Section 409A) or “group” (meaning for purposes of this Section 2.6 group as such term is used
in Section 13(d)(3) or 14(d)(2) of the 1934 Act to the extent consistent with and not in violation
of Code Section 409A) has acquired during a twelve (12) month period ending on the date of the most
recent acquisition by such person or group, ownership of stock of the Company possessing 30% or
more of the total voting power of the outstanding stock of the Company; or



(iii) any person or group has acquired ownership of stock of the Company that constitutes more
than 50% of the total fair market value or total voting power of the outstanding stock of the
Company; or



(iv) any person or group has acquired during a twelve (12) month period ending on the date of
the most recent acquisition by such person or group, assets of the Company that have a total gross
fair market value of more than 40% of the total gross fair market value of all of the assets of the
Company immediately before such acquisition.



2.7 “Code” means the Internal Revenue Code of 1986 (and any successor
Internal Revenue Code), as amended from time to time. References to a particular section of the
Code include references to regulations and rulings thereunder and to successor provisions.



2.8 “Code Section 409A Rules and Policies” means rules, regulations, policies and
procedures established by the Committee from time to time as authorized in Section 3.2(xi).



2.9 “Committee” has the meaning set forth in Section 3.1(i).



2.10 “Common Stock” means the common stock, $0.01 par value per share, of the Company.



2.11 “Company” has the meaning set forth in Section 1.1.



2.12 “Covered Employee” means a Grantee who, as of the last day of the fiscal year in
which the value of an Award is deductible by the Company for federal income tax purposes subject to
applicable limitations under Code Section 162(m), is one of the group of “covered employees,”
within the meaning of Code Section 162(m), with respect to the Company.



2.13 “Deferred Stock” means a right granted under Section 11.1 to receive Shares at
the end of a specified deferral period.



2.14 “Disability” means, unless otherwise defined in an Award Agreement, the inability
to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months.



2.15 “Dividend Equivalent” means a right to receive payments equal to dividends or
property, if and when paid or distributed, on Shares.



2.16 “Eligible Person” means any employee (including any officer) or non-employee
director of, or non-employee consultant to, the Company or any Affiliate, or potential employee
(including a potential officer) or non-employee director of, or non-employee consultant to, the
Company or an Affiliate. Solely for purposes of Section 5.5(ii), the term Eligible Employee
includes any current or former employee or non-employee director of, or consultant to, an Acquired
Entity (as defined in Section 5.5(ii)) who holds Acquired Entity Awards (as defined in Section
5.5(ii)) immediately prior to the Acquisition Date (as defined in Section 5.5(ii)).



2.17 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time. References to a particular section of the Exchange Act include references to successor
provisions.



2.18 “Fair Market Value” means (a) with respect to any property other than Shares, the
fair market value of such property determined by such methods or procedures as shall be established
from time to time by the Committee, and (b) with respect to Shares, unless otherwise determined by
the Committee as of any date, (i) if the Shares are listed for trading on the New York Stock
Exchange, the closing sale price of the Shares on such date, as reported on the New York Stock
Exchange Composite Tape or such other source as the Committee deems reliable, or if no such
reported sale of the Shares shall have occurred on such date, on the last day prior to such date on
which there was such a reported sale; (ii) if the Shares are not so listed, but is listed on
another national securities exchange, the closing sale price of the Shares on such date as reported
on such exchange, or if no such reported sale of the Shares shall have occurred on such date, on
the last day prior to such date on which there was such a reported sale; (iii) if the Shares are
not listed for trading on a national securities exchange but nevertheless are publicly traded and
reported (through the OTC Bulletin Board or otherwise), the closing sale price of the Shares on
such date, or if no such reported sale of the Shares shall have occurred on such date, on the last
day prior to such date on which there was such a reported sale; or (iv) if the Shares are not
publicly traded and reported, the fair market value as established in good faith by the Committee.



2.19 “Grant Date”(i) means the date on which an Award is granted or such later date as
specified in advance by the Committee.



2.20 “Grantee” means a person who has been granted an Award.



2.21 “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422 of the Code.



2.22 “including” or “includes” means “including, without limitation,” or
“includes, without limitation,” respectively.



2.23 “Limited Stock Appreciation Right” has the meaning set forth in Section 7.1.



2.24 “Minimum Consideration” means $.01 per Share or such other amount that is from
time to time considered to be capital for purposes of Section 154 of the Delaware General
Corporation Law.



2.25 “Other Stock-Based Award” means a right, granted under Article 13 hereof, that
relates to or is valued by reference to Shares or other Awards relating to Shares.



2.26 “Option” means an option granted under Article 6 of the Plan.



2.27 “Option Price” means the price at which a Share may be purchased by a Grantee
pursuant to an Option.



2.28 “Option Term” means the period beginning on the Grant Date of an Option and
ending on the date such Option expires, terminates or is cancelled.



2.29 “Performance-Based Exception” means the performance-based exception from the tax
deductibility limitations of Code Section 162(m) contained in Code Section 162(m)(4)(C) (including
the special provisions for options thereunder).



2.30 “Performance Measures” has the meaning set forth in Section 4.4.



2.31 “Performance Period” means the time period during which performance goals must be
met.



2.32 “Performance Share” and “Performance Unit” have the respective meanings
set forth in Article 9.



2.33 “Period of Restriction” means the period during which, if conditions specified in
the Award Agreement are not satisfied, Restricted Shares are subject to forfeiture, or the transfer
of Restricted Shares is limited, or both.



2.34 “Person” means any individual, sole proprietorship, partnership, joint venture,
limited liability company, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government instrumentality, division, agency,
body or department.



2.35 “Restricted Shares” means Shares that are both subject to forfeiture and are
nontransferable if the Grantee does not satisfy the conditions specified in the Award Agreement
applicable to such Shares.



2.36 “Restricted Share Units” means rights to receive Shares which rights are
forfeitable if the Grantee does not satisfy the conditions specified in the Award Agreement.



2.37 “Retirement” means for any Grantee who is an employee, except as otherwise
specified in the Award Agreement or as specified by the Committee in rules, regulations or
policies, with respect to Restricted Shares, Termination of Affiliation by the Grantee on or after
the last business day of the month in which the Grantee has both attained age fifty-five (55) and
completed at least ten (10) years of service with the Company or an Affiliate, and with respect to
all other Awards, Termination of Affiliation by the Grantee on or after having both attained age
fifty-five (55) and completed at least ten (10) years of service with the Company or an Affiliate.



2.38 “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act, as
amended from time to time, together with any successor rule, as in effect from time to time.



2.39 “SEC” means the United States Securities and Exchange Commission, or any
successor thereto.



2.40 “Section 16 Non-Employee Director” means a member of the Board who satisfies the
requirements to qualify as a “non-employee director” under Rule 16b-3.



2.41 “Section 16 Person” means a person who is subject to potential liability under
Section 16(b) of the Exchange Act with respect to transactions involving equity securities of the
Company.



2.42 “Share” means a share of Common Stock, and such other securities of the Company
as may be substituted or resubstituted for Shares pursuant to Section 4.2 hereof.



2.43 “Stock Appreciation Right” or “SAR” means a right granted to an Eligible
Person pursuant to Article 7 to receive, upon exercise by the Grantee, an amount equal to the
number of Shares with respect to which the SAR is granted multiplied by the excess of (i) the Fair
Market Value of one Share on the date of exercise or, if the Committee shall so determine in the
case of any such right other than one related to any Incentive Stock Option, at any time during a
specified period before the date of exercise provided the Fair Market Value of one Share on such
date is less than the Fair Market Value of one Share on the date of exercise, over (ii) the grant
price of the right as specified in the Award Agreement.



2.44 “Surviving Company” means the Company or the surviving corporation in any merger
or consolidation, including the Company if the Company is the surviving corporation, or the direct
or indirect parent company of the Company or such surviving corporation following a Change of
Control.



2.45 “Termination of Affiliation” occurs, except where otherwise provided in the Award
Agreement, on the first day on which an individual is for any reason no longer providing services
to the Company or an Affiliate in the capacity of an employee, officer, consultant or non-employee
director or with respect to an individual who is an employee, officer or non-employee director of
or a consultant to an Affiliate, the first day on which such entity ceases to be an Affiliate of
the Company. A Termination of Affiliation will occur on account of, or by reason of, a Change of
Control if within two (2) years (or such other period specified in the Award Agreement) following
the Change of Control the Grantee is involuntarily terminated by the Company or an Affiliate (other
than for Cause) or voluntarily terminates employment for good reason as set forth in the Award
Agreement. Where specified in the Award Agreement or in the Code Section 409A Rules and Policies,
a Termination of Affiliation is a separation from service within the meaning of Code Section 409A.



2.46 “Vesting Date” means a date specified in the Award Agreement on which the Award
will become nonforfeitable subject to any conditions specified therein.



Article 3.




Administration




3.1 Committee.



(i) Subject to Section 3.2, the Plan shall be administered by a committee (“Committee”), the
members of which shall be appointed by the Board from time to time and may be removed by the Board
from time to time; provided that for purposes of Awards to non-employee directors, “Committee”
shall mean the full Board. The Committee shall consist of two or more directors of the Company,
all of whom qualify as “outside directors” within the meaning of Code Section 162(m) and Section 16
Non-Employee Directors and all of whom qualify as independent under the New York Stock Exchange
listing standards and under the listing standards of any other exchange on which the Company’s
securities are listed as in effect at any applicable time. The number of members of the Committee
shall from time to time be increased or decreased, and shall be subject to such conditions, in each
case if and to the extent the Board deems it appropriate, including to permit transactions in
Shares pursuant to the Plan to satisfy such conditions of Rule 16b-3 and the Performance-Based
Exception as then in effect.



(ii) The Committee may delegate to the Chief Executive Officer of the Company or to another
committee of the Company any or all of the authority of the Committee with respect to Awards to
Grantees, other than Grantees who are non-employee directors, executive officers, or are (or are
expected to be) Covered Employees and/or are Section 16 Persons at the time any such delegated
authority is exercised, to the extent such delegation is permissible under Delaware law.



3.2 Powers of Committee. Subject to and consistent with the provisions of the Plan,
the Committee has full and final authority and sole discretion as follows:



(i) to determine when, to whom and in what types and amounts Awards should be granted;



(ii) to grant Awards in any number, and to determine the terms and conditions applicable to
each Award (including the number of Shares or the amount of cash or other property to which an
Award will relate, any exercise price, grant price or purchase price, any limitation or
restriction, any schedule for or performance conditions relating to the earning of the Award or the
lapse of limitations, forfeiture restrictions, restrictions on exercisability or transferability,
any performance goals including those relating to the Company and/or an Affiliate and/or any
division or department thereof and/or an individual, and/or vesting based on the passage of time,
based in each case on such considerations as the Committee shall determine);



(iii) to determine the benefit payable under any Performance Unit, Performance Share, Dividend
Equivalent, or Other Stock-Based Award and to determine whether any performance or vesting
conditions have been satisfied;



(iv) to determine whether or not specific Awards shall be granted in connection with other
specific Awards, and if so, whether they shall be exercisable cumulatively with, or alternatively
to, such other specific Awards and all other matters to be determined in connection with an Award;



(v) to determine the Option Term and the SAR term;



(vi) to determine the amount, if any, that a Grantee shall pay for Restricted Shares, whether
to permit or require the payment of cash dividends thereon to be deferred and the terms related
thereto, when Restricted Shares (including Restricted Shares acquired upon the exercise of an
Option) shall be forfeited, and whether such shares shall be held in escrow;



(vii) to determine whether, to what extent and under what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards or other
property, or an Award may be accelerated, vested, canceled, forfeited or surrendered or any terms
of the Award may be waived, and to accelerate the exercisability of, and to accelerate or waive any
or all of the terms and conditions applicable to, any Award or any group of Awards for any reason;



(viii) to determine with respect to Awards whether, to what extent and under what
circumstances cash, Shares, other Awards, other property and other amounts payable with respect to
an Award will be deferred, either at the election of the Grantee or if and to the extent specified
in the Award Agreement automatically or at the election of the Committee (whether to limit loss of
deductions pursuant to Code Section 162(m) or otherwise);



(ix) to offer to exchange or buy out any previously granted Award for a payment in cash,
Shares or other Award;



(x) to construe and interpret the Plan and to make all determinations, including factual
determinations, necessary or advisable for the administration of the Plan;



(xi) to make, amend, suspend, waive and rescind rules, regulations, policies and procedures
relating to the Plan, including rules relating to electronic Award Agreements, rules with respect
to the exercisability and nonforfeitability of Awards upon the Termination of Affiliation of a
Grantee, and rules (including special definitions where applicable) established for the compliance
of the Plan, Awards and Award Agreements with Code Section 409A;



(xii) to appoint such agents as the Committee may deem necessary or advisable to administer
the Plan;



(xiii) to determine the terms and conditions of all Award Agreements (which need not be
identical) and, with the consent of the Grantee, to amend any such Award Agreement at any time,
among other things, to change the Option Price or grant price for an SAR or to permit transfers of
such Awards to the extent permitted by the Plan; provided that the consent of the Grantee shall not
be required for any amendment (i) which does not adversely affect the rights of the Grantee, or
(ii) which is necessary or advisable (as determined by the Committee) to carry out the purpose of
the Award as a result of any new applicable law or change in an existing applicable law, or (iii)
to the extent the Plan or Award Agreement specifically permits amendment without consent;



(xiv) to cancel, with the consent of the Grantee, outstanding Awards and to grant new Awards
in substitution therefor;



(xv) to impose such additional terms and conditions upon the grant, exercise or retention of
Awards as the Committee may, before or concurrently with the grant thereof, deem appropriate,
including limiting the percentage of Awards which may from time to time be exercised by a Grantee;



(xvi) to make such adjustments or modifications to Awards to Grantees working outside the
United States as are advisable to fulfill the purposes of the Plan or to comply with applicable
local law and to establish sub-plans for Eligible Persons outside the United States with such
provisions as are consistent with the Plan as may be suitable in other jurisdictions;



(xvii) to make adjustments in the terms and conditions of, and the criteria in, Awards in
recognition of unusual or nonrecurring events (including events described in Section 4.2) affecting
the Company or an Affiliate or the financial statements of the Company or an Affiliate, or in
response to changes in applicable laws, regulations or accounting principles; provided, however,
that in no event shall such adjustment increase the value of an Award for a person expected to be a
Covered Employee for whom the Committee desires to have the Performance-Based Exception apply;



(xviii) to correct any defect or supply any omission or reconcile any inconsistency, and to
construe and interpret the Plan, the rules and regulations, and Award Agreement or any other
instrument entered into or relating to an Award under the Plan; and



(xix) to take any other action with respect to any matters relating to the Plan for which it
is responsible and to make all other decisions and determinations as may be required under the
terms of the Plan or as the Committee may deem necessary or advisable for the administration of the
Plan.



Notwithstanding the authority of the Committee set forth in Sections 3.2(i) through 3.2(xix),
inclusive, and notwithstanding any other discretionary power granted to the Committee under the
Plan, except in connection with a corporate transaction involving the Company (including, without
limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the
terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options
or SARs or cancel outstanding Options or SARs in exchange for cash, other Awards or Options or SARs
with an exercise price that is less than the exercise price of the original Options or SARs without
the prior approval of the Company’s stockholders.



All determinations on all matters relating to the Plan or any Award Agreement may be made in
the sole and absolute discretion of the Committee. If not specified in the Plan, the time at which
the Committee must or may make any determination shall be determined by the Committee, and any such
determination may thereafter be modified by the Committee. Any action of the Committee with
respect to the Plan or any Award Agreement shall be final, conclusive and binding on all persons,
including the Company, its Affiliates, any Grantee, any person claiming any rights under the Plan
from or through any Grantee, and stockholders, except to the extent the Committee subsequently
modifies its prior action or takes further action that is inconsistent with its prior action. The
express grant of any specific power to the Committee, and the taking of any action by the
Committee, shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or any Affiliate the authority,
subject to such terms as the Committee shall determine, to perform specified functions under the
Plan (subject to Sections 4.3 and 5.6(iii)). No member of the Committee shall be liable for any
action or determination made with respect to the Plan or any Award.



Article 4.




Shares Subject to the Plan, Maximum Awards, and 162(m) Compliance



4.1 Number of Shares Available for Grants. Subject to adjustment as provided in
Section 4.2, the number of Shares hereby reserved for issuance under the Plan shall be 2,300,000;
and the number of Shares for which Awards may be granted to any Grantee on any Grant Date, when
aggregated with the number of Shares for which Awards have previously been granted to such Grantee
in the same calendar year, shall not exceed 2,000,000 Shares. Shares issued pursuant to Awards
made pursuant to Section 5.5(ii) will not be charged against the Shares authorized for issuance
under the Plan.



Only Shares actually issued shall be charged against the Shares authorized for issuance under
the Plan. If any Shares subject to an Award granted hereunder are forfeited or such Award
otherwise terminates without the delivery of such Shares, the Shares subject to such Award, to the
extent of any such forfeiture or termination, shall again be available for grant under the Plan.



The Committee shall from time to time determine the appropriate methodology for calculating
the number of Shares to which an Award relates pursuant to the Plan. Shares delivered pursuant to
the Plan may be, in whole or in part, authorized and unissued Shares, or treasury Shares, including
Shares repurchased by the Company for purposes of the Plan.



4.2 Adjustments in Authorized Shares and Awards; Liquidation, Dissolution or Change of
Control.



(i) Adjustment in Authorized Shares and Awards. In the event that the Committee determines
that any extraordinary dividend or other distribution (whether in the form of cash, Shares, or
other property), recapitalization, forward or reverse stock split, subdivision, consolidation or
reduction of capital, reorganization, merger, consolidation, scheme of arrangement, split-up,
spin-off or combination involving the Company or repurchase or exchange of Shares or other
securities of the Company or other rights to purchase Shares or other securities of the Company, or
other similar corporate transaction or event affects the Shares such that any adjustment is
determined by the Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, and in a manner consistent with and not in
violation of Code Section 409A, adjust any or all of (a) the number and type of Shares (or other
securities or property) with respect to which Awards may be granted, (b) the number and type of
Shares (or other securities or property) subject to outstanding Awards, (c) the grant or exercise
price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award, (d) the number and kind of Shares of outstanding Restricted Shares
or relating to any other outstanding Award in connection with which Shares are subject, and (e) the
number of Shares with respect to which Awards may be granted to a Grantee, as set forth in Section
4.3; provided, in each case, that with respect to Stock Options and SARs, no such adjustment shall
be authorized to the extent that such adjustment would cause the Option or SAR (determined as if
such Option or SAR was an Incentive Stock Option) to violate Section 424(a) of the Code; and
provided further that the number of Shares subject to any Award denominated in Shares shall always
be a whole number.



(ii) Liquidation, Dissolution or Change of Control. Notwithstanding any provisions hereunder
to the contrary, in the case of any liquidation, dissolution or Change of Control of the Company,
the Committee, in its sole discretion, and in a manner consistent with and not in violation of Code
Section 409A, may (i) cancel any or all outstanding Awards of Options, SARs, Performance Shares,
Performance Units and Restricted Share Units, in exchange for a payment (in cash, or in securities
or other property) in the amount that the Grantee would have received if such Performance Shares,
Performance Units and Restricted Share Units were vested and settled and if such Options and SARs
were fully vested and exercised immediately prior to the liquidation, dissolution or Change of
Control, and without payment with respect to the cancellation of any Option or SAR if at the time
of such cancellation the Option Price with respect to such Option or the grant price with respect
to such SAR exceeds the Fair Market Value at the time of such cancellation of the Shares subject to
the Option or the SAR, (ii) accelerate the vesting of any Restricted Shares immediately prior to
the Change of Control, and (iii) accelerate the vesting and settlement of any Deferred Stock
immediately prior to such Change of Control, reduced in each case by any applicable Federal, state
and local taxes required to be withheld by the Company. If the Committee fails to exercise the
discretion to cancel some or all outstanding Awards (or in the case of Restricted Shares and
Deferred Stock to accelerate vesting and settlement of such Awards) in connection with a
liquidation, dissolution or Change of Control of the Company pursuant to this Section 4.2(ii), any
Awards for which the Committee fails to exercise such discretion shall remain outstanding (subject
to adjustment in accordance with Section 4.2(i)) following such liquidation, dissolution or Change
of Control of the Company.



4.3 Compliance with Section 162(m) of the Code.



(i) Section 162(m) Compliance. To the extent the Committee determines that compliance
with the Performance-Based Exception is desirable with respect to an Award, this section 4.3(i)
shall apply. Each Award that is intended to meet the Performance-Based Exception and is granted to
a person the Committee believes is likely to be a Covered Employee at the time such Award is
settled shall comply with the requirements of the Performance-Based Exception; provided, however,
that to the extent Code Section 162(m) requires periodic stockholder approval of performance
measures, such approval shall not be required for the continuation of the Plan or as a condition to
grant any Award hereunder after such approval is required. In addition, in the event that changes
are made to Code Section 162(m) to permit flexibility with respect to the Award or Awards available
under the Plan, the Committee may, subject to this Section 4.3, make any adjustments to such Awards
as it deems appropriate.



(ii) Annual Individual Limitations. No Grantee may be granted Awards for Options,
SARs, Restricted Shares, Restricted Share Units, or Performance Shares (or any other Award which is
determined by reference to the value of Shares or appreciation in the value of Shares) in any
calendar year with respect to more than 2,000,000 Shares; provided, however, that these Awards are
subject to adjustment as provided in Section 4.2 and except as otherwise provided in
Section 5.5(ii). In the case of a Performance Unit Award that is cash-denominated and for which
the limitation set forth in the preceding sentence would not operate as an effective limitation
under Code Section 162(m), no Grantee may be granted an Award in any calendar year authorizing the
receipt of an amount that exceeds $5,000,000.



4.4 Performance-Based Exception Under Section 162(m). Unless and until the Committee
proposes for stockholder vote and stockholders approve a change in the general performance measures
set forth in this Section 4.4, for Awards (other than Options and SARs) designed to qualify for the
Performance-Based Exception, the objective Performance Measure(s) shall be chosen from among the
following:



(i) Earnings (either in the aggregate or on a per-share basis);



	 	 	 
	(ii)

(iii)

(iv)

	 	Net income (before or after taxes);

Operating income;

Cash flow;






(v) Return measures (including return on assets, equity, or sales);



(vi) Earnings before or after either, or any combination of, taxes, interest or depreciation
and amortization;



(vii) Gross revenues;



(viii) Share price (including growth measures and stockholder return or attainment by the
Shares of a specified value for a specified period of time);



(ix) Reductions in expense levels in each case, where applicable, determined either on a
Company-wide basis or in respect of any one or more business units;



(x) Net economic value;



	 	 	 
	(xi)

(xii)

(xiii)

	 	Market share;

Operating profit;

Costs;






(xiv) Operating and maintenance cost management and employee productivity;



(xv) Stockholder returns (including return on assets, investments, equity, or gross sales);



(xvi) Economic value added;



(xvii) Aggregate product unit and pricing targets;



(xviii) Strategic business criteria, consisting of one or more objectives based on meeting
specified revenue, market share, market penetration, geographic business expansion goals,
objectively identified project milestones, production volume levels, cost targets, and goals
relating to acquisitions or divestitures;



(xix) Achievement of business or operational goals such as market share and/or business
development;



	 	 	 
	(xx)

(xxi)

(xxii)

(xxiii)

(xxiv)

	 	Results of customer satisfaction surveys;

Safety record;

Network and service reliability;

Debt ratings, debt leverage and debt service; and/or

Operating ratio;






provided that applicable performance measures may be applied on a pre- or post-tax basis; and
provided further that the Committee may, on the Grant Date of an Award intended to comply with the
Performance-Based Exception, and in the case of other grants, at any time, provide that the formula
for such Award may include or exclude items to measure specific objectives, such as losses from
discontinued operations, extraordinary gains or losses, the cumulative effect of accounting
changes, acquisitions or divestitures, foreign exchange impacts and any unusual, nonrecurring gain
or loss. For Awards intended to comply with the Performance-Based Exception, the Committee shall
set the Performance Measures within the time period prescribed by Section 162(m) of the Code. The
levels of performance required with respect to Performance Measures may be expressed in absolute or
relative levels and may be based upon a set increase, set positive result, maintenance of the
status quo, set decrease or set negative result. Performance Measures may differ for Awards to
different Grantees. The Committee shall specify the weighting (which may be the same or different
for multiple objectives) to be given to each performance objective for purposes of determining the
final amount payable with respect to any such Award. Any one or more of the Performance Measures
may apply to the Grantee, a department, unit, division or function within the Company or any one or
more Affiliates; and may apply either alone or relative to the performance of other businesses or
individuals (including industry or general market indices) or relative to the past performance of
the Company or a department, unit, division or function within the Company or any one or more
Affiliates.



The Committee shall have the discretion to adjust the determinations of the degree of
attainment of the pre-established performance goals; provided, however, that Awards which are
designed to qualify for the Performance-Based Exception may not (unless the Committee determines to
amend the Award so that it no longer qualified for the Performance-Based Exception) be adjusted
upward (the Committee shall retain the discretion to adjust such Awards downward). The Committee
may not, unless the Committee determines to amend the Award so that it no longer qualifies for the
Performance-Based Exception, delegate any responsibility with respect to Awards intended to qualify
for the Performance-Based Exception. All determinations by the Committee as to the achievement of
the Performance Measure(s) shall be in writing prior to payment of the Award.



In the event that applicable laws change to permit Committee discretion to alter the governing
performance measures without obtaining stockholder approval of such changes, and still qualify for
the Performance-Based Exception, the Committee shall have sole discretion to make such changes
without obtaining stockholder approval.



Article 5.




Eligibility and General Conditions of Awards



5.1 Eligibility. The Committee may in its discretion grant Awards to any Eligible
Person, whether or not he or she has previously received an Award.



5.2 Award Agreement. To the extent not set forth in the Plan, the terms and
conditions of each Award shall be set forth in an Award Agreement.



5.3 General Terms, Termination of Affiliation and Change of Control. Except as
provided in an Award Agreement or as otherwise provided below in this Section 5.3, all Options or
SARs that have not been exercised, or any other Awards that remain subject to a risk of forfeiture
or which are not otherwise vested, or which have outstanding Performance Periods, at the time of a
Termination of Affiliation shall be forfeited to the Company. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise or vesting of an Award as it may deem
advisable, including restrictions under applicable federal securities laws.



(i) Options and SARs. Except as otherwise provided in an Award Agreement:




(A) If Termination of Affiliation occurs for a reason other than
Retirement, death, Disability or Cause, Options and SARs which were vested and
exercisable immediately before such Termination of Affiliation, or become
exercisable upon such Termination of Affiliation, shall remain exercisable for
a period of three (3) months following such Termination of Affiliation (but not
for more than ten (10) years from the Grant Date of the Award or expiration of
the Option Term, if earlier) and shall then terminate.




(B) If Termination of Affiliation occurs by reason of Retirement, Options
and SARs will become immediately vested and exercisable upon such Termination
of Affiliation and shall remain exercisable for a period of five (5) years
following such Termination of Affiliation (but not more than ten (10) years
from the Grant Date of the Award or expiration of the Option Term, if earlier)
and shall then terminate.




(C) If Termination of Affiliation occurs by reason of death or Disability,
Options and SARs will become immediately vested and exercisable upon such
Termination of Affiliation and shall remain exercisable for a period of one (1)
year following such Termination of Affiliation (but not for more than ten (10)
years from the Grant Date of the Award or expiration of the Option Term, if
earlier) and shall then terminate.




(D) If Termination of Affiliation occurs on account of a Change of
Control, any unexercised Option or SAR, whether or not exercisable on the date
of the Change of Control, shall thereupon be fully exercisable and may be
exercised, in whole or in part, subject to the provisions of Section 5.3(i)(A).




(E) If Termination of Affiliation is for Cause, then any unexercised
Option or SAR shall be thereupon cancelled.



(ii) Restricted Shares and Restricted Share Units. Except as otherwise provided in an
Award Agreement:




(A) If Termination of Affiliation occurs by reason of death prior to the
last day of the Period of Restriction, Restricted Shares and Restricted Share
Units will become immediately vested.




(B) If Termination of Affiliation occurs by reason of Retirement prior to
the last day of the Period of Restriction, then upon such Termination of
Affiliation the Grantee will become immediately vested in a number of the
Grantee’s Restricted Shares and Restricted Share Units which will be determined
by multiplying the total number of the Grantee’s Restricted Shares and
Restricted Share Units by a fraction, the numerator of which shall be the
number of consecutive 12-month periods of employment completed by the Grantee
with the first such period commencing on the Grant Date, and the denominator of
which shall be the total number of 12-month periods in the Period of
Restriction. Any Restricted Shares and Restricted Share Units that remain
unvested following such Termination of Affiliation shall be forfeited by the
Grantee.




(C) If Termination of Affiliation occurs by reason of Disability prior to
the last day of the Period of Restriction, then upon such Termination of
Affiliation the Grantee will become immediately vested in a number of the
Grantee’s Restricted Shares and Restricted Share Units which will be determined
by multiplying the total number of the Grantee’s Restricted Shares and
Restricted Share Units by a fraction, the numerator of which shall be the
number of consecutive 12-month periods of employment completed by the Grantee
with the first such period commencing on the Grant Date, and the denominator of
which shall be the total number of 12-month periods in the Period of
Restriction. Any Restricted Shares and Restricted Share Units that remain
unvested following such Termination of Affiliation shall be forfeited by the
Grantee.




(D) If Termination of Affiliation occurs prior to the last day of the
Period of Restriction on account of a Change of Control, Restricted Shares and
Restricted Share Units will become immediately vested.




(E) If Termination of Affiliation occurs prior to the last day of the
Period of Restriction for any reason other than death or Disability or
Retirement or a Change of Control, all Restricted Shares and Restricted Share
Units shall be forfeited by the Grantee.




(F) Any Restricted Shares that are forfeited by the Grantee shall be
reacquired by the Company, and the Grantee shall sign any document and take any
other action required to assign such Shares back to the Company.



(iii) Deferred Stock. Except as otherwise provided in an Award Agreement:




(A) If Termination of Affiliation occurs by reason of death or Disability
or Retirement or a Change of Control, Shares subject to a Deferred Stock Award
will become immediately vested. The Company shall settle all Deferred Stock as
provided in the Award Agreement.




(B) If Termination of Affiliation occurs by reason other than death or
Disability or Retirement or a Change of Control, the Grantee’s Deferred Stock,
to the extent not vested before such Termination of Affiliation, will be
cancelled and forfeited to the Company.



(iv) Performance Shares and Performance Units. Except as otherwise provided in an
Award Agreement, Performance Shares and Performance Units will become nonforfeitable on the Vesting
Date, and if, prior to the Vesting Date,




(A) A Termination of Affiliation occurs during a Performance Period for a
reason other than Disability, Retirement, Change of Control or death, all
Performance Shares and Performance Units shall be forfeited upon such
Termination of Affiliation.




(B) A Termination of Affiliation occurs during a Performance Period by
reason of Disability or Retirement, the Grantee shall become vested immediately
in the Award earned with respect to any completed Performance Period as of the
date of the Grantee’s Termination of Affiliation, and will forfeit the Award
with respect to any Performance Periods that are not completed as of the date
of the Grantee’s Termination of Affiliation.




(C) A Termination of Affiliation occurs on account of a Change of Control
or by reason of death, the Grantee shall become immediately vested in the
earned Award with respect to any completed Performance Period as of the date of
the Grantee’s Termination of Affiliation, and with respect to any Performance
Period that is not complete as of the date of Grantee’s Termination of
Affiliation, the Grantee will vest in the Award that would be earned for such
Performance Period as if the performance goals for such Performance Period were
met at target.



(v) Dividend Equivalents. If Dividend Equivalents have been credited with respect to
any Award and such Award (in whole or in part) is forfeited, all Dividend Equivalents issued in
connection with such forfeited Award (or portion of an Award) shall also be forfeited to the
Company.



(vi) Waiver by Committee. Notwithstanding the foregoing provisions of this
Section 5.3, the Committee may in its sole discretion as to all or part of any Award as to any
Grantee, at the time the Award is granted or thereafter, determine that Awards shall become
exercisable or vested upon a Termination of Affiliation, determine that Awards shall continue to
become exercisable or vested in full or in installments after Termination of Affiliation, extend
the period for exercise of Options or SARs following Termination of Affiliation (but not beyond ten
(10) years from the date of grant of the Option or SAR), or provide that any Restricted Share
Award, Deferred Stock Award or Performance Award shall in whole or in part not be forfeited upon
such Termination of Affiliation.



5.4 Nontransferability of Awards.



(i) Each Award and each right under any Award shall be exercisable only by the Grantee during
the Grantee’s lifetime, or, if permissible under applicable law, by the Grantee’s guardian or legal
representative or by a transferee receiving such Award pursuant to a qualified domestic relations
order (a “QDRO”) as defined in the Code or Title I of the Employee Retirement Income Security Act
of 1974, as amended, or the rules thereunder or by an agent acting exclusively for the benefit of
the Grantee pursuant to a power of attorney. Nothing herein shall be construed as requiring the
Committee to honor a QDRO except to the extent required under applicable law.



(ii) No Award (prior to the time, if applicable, Shares are delivered in respect of such
Award), and no right under any Award, may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Grantee otherwise than by will or by the laws of descent
and distribution (or in the case of Restricted Shares, to the Company) or pursuant to a QDRO, and
any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall
be void and unenforceable against the Company or any Affiliate; provided that the designation of a
beneficiary to receive benefits in the event of the Grantee’s death shall not constitute an
assignment, alienation, pledge, attachment, sale, transfer or encumbrance.



(iii) Notwithstanding subsections (i) and (ii) above, to the extent provided in the Award
Agreement, Deferred Stock and Awards other than Incentive Stock Options, may be transferred,
without consideration, to a Permitted Transferee. For this purpose, a “Permitted Transferee” in
respect of any Grantee means any member of the Immediate Family of such Grantee, any trust of which
all of the primary beneficiaries are such Grantee or members of his or her Immediate Family, or any
partnership (including limited liability companies and similar entities) of which all of the
partners or members are such Grantee or members of his or her Immediate Family; and the “Immediate
Family” of a Grantee means the Grantee’s spouse, children, stepchildren, grandchildren, parents,
stepparents, siblings, grandparents, nieces and nephews or the spouse of any of the foregoing
individuals. Such Award may be exercised by such transferee in accordance with the terms of such
Award. If so determined by the Committee, a Grantee may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to exercise the rights of the Grantee, and to
receive any distribution with respect to any Award upon the death of the Grantee. A transferee,
beneficiary, guardian, legal representative or other person claiming any rights under the Plan from
or through any Grantee shall be subject to the provisions of the Plan and any applicable Award
Agreement, except to the extent the Plan and Award Agreement otherwise provide with respect to such
persons, and to any additional restrictions or limitations deemed necessary or appropriate by the
Committee.



5.5 Stand-Alone, Tandem and Substitute Awards.



(i) Awards granted under the Plan may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution for, any other Award granted under the
Plan or any award or benefit granted by the Company or any Affiliate under any other plan, program,
arrangement, contract or agreement (a “Non-Plan Award”); provided that if the stand-alone, tandem
or substitute Award is intended to qualify for the Performance-Based Exception, it must separately
satisfy the requirements of the Performance-Based Exception. If an Award is granted in
substitution for another Award or any Non-Plan Award, the Committee shall require the surrender of
such other Award or Non-Plan Award in consideration for the grant of the new Award. Awards granted
in addition to or in tandem with other Awards or Non-Plan Awards may be granted either at the same
time as or at a different time from the grant of such other Awards or Non-Plan Awards.



(ii) The Committee may, in its discretion and on such terms and conditions as the Committee
considers appropriate in the circumstances, grant Awards under the Plan (“Substitute Awards”) in
substitution for stock and stock-based awards (“Acquired Entity Awards”) held by current and former
employees or non-employee directors of, or consultants to, another corporation or entity who become
Eligible Persons as the result of a merger or consolidation of the employing corporation or other
entity (the “Acquired Entity”) with the Company or an Affiliate or the acquisition by the Company
or an Affiliate of property or stock of the Acquired Entity immediately prior to such merger,
consolidation or acquisition (“Acquisition Date”) in order to preserve for the Grantee the economic
value of all or a portion of such Acquired Entity Award at such price as the Committee determines
necessary to achieve preservation of economic value and in a manner consistent with and not in
violation of Code Section 409A. The limitations of Sections 4.1 and 4.3 on the number of Shares
reserved or available for grants, and the limitations under Sections 6.3 and 7.3 with respect to
Option Prices and grant prices for SARs, shall not apply to Substitute Awards granted under this
subsection (ii).



5.6 Compliance with Rule 16b-3.



(i) Six-Month Holding Period Advice. Unless a Grantee could otherwise dispose of or
exercise a derivative security or dispose of Shares delivered under the Plan without incurring
liability under Section 16(b) of the Exchange Act, the Committee may advise or require a Grantee to
comply with the following in order to avoid incurring liability under Section 16(b): (a) at least
six months must elapse from the date of acquisition of a derivative security under the Plan to the
date of disposition of the derivative security (other than upon exercise or conversion) or its
underlying equity security, and (b) Shares granted or awarded under the Plan other than upon
exercise or conversion of a derivative security must be held for at least six months from the date
of grant of an Award.



(ii) Reformation to Comply with Exchange Act Rules. To the extent the Committee
determines that a grant or other transaction by a Section 16 Person should comply with applicable
provisions of Rule 16b-3 (except for transactions exempted under alternative Exchange Act rules),
the Committee shall take such actions as necessary to make such grant or other transaction so
comply, and if any provision of this Plan or any Award Agreement relating to a given Award does not
comply with the requirements of Rule 16b-3 as then applicable to any such grant or transaction,
such provision will be construed or deemed amended, if the Committee so determines, to the extent
necessary to conform to the then applicable requirements of Rule 16b-3.



(iii) Rule 16b-3 Administration. Any function relating to a Section 16 Person shall
be performed solely by the Committee if necessary to ensure compliance with applicable requirements
of Rule 16b-3, to the extent the Committee determines that such compliance is desired. Each member
of the Committee or person acting on behalf of the Committee shall be entitled to, in good faith,
rely or act upon any report or other information furnished to him by any officer, manager or other
employee of the Company or any Affiliate, the Company’s independent certified public accountants or
any executive compensation consultant or attorney or other professional retained by the Company to
assist in the administration of the Plan.



5.7 Cancellation and Rescission of Awards. Unless the Award Agreement specifies
otherwise, the Committee may cancel, rescind, suspend, withhold, or otherwise limit or restrict any
unexercised Award at any time if the Grantee is not in compliance with all applicable provisions of
the Award Agreement and the Plan or if the Grantee has a Termination of Affiliation for Cause.



Article 6.




Stock Options



6.1 Grant of Options. Subject to and consistent with the provisions of the Plan,
Options may be granted to any Eligible Person in such number, and upon such terms, and at any time
and from time to time as shall be determined by the Committee. Without in any manner limiting the
generality of the foregoing, the Committee may grant to any Eligible Person, or permit any Eligible
Person to elect to receive, an Option in lieu of or in substitution for any other compensation
(whether payable currently or on a deferred basis, and whether payable under this Plan or
otherwise) which such Eligible Person may be eligible to receive from the Company or an Affiliate.



6.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement that
shall specify the Option Price, the Option Term (not to exceed ten (10) years from its Grant Date),
the number of Shares to which the Option pertains, the time or times at which such Option shall be
exercisable and such other provisions as the Committee shall determine.



6.3 Option Price. The Option Price of an Option under this Plan shall be determined
in the sole discretion of the Committee, but in no case shall the Option Price be less than 100% of
the Fair Market Value of a Share on the Grant Date.



6.4 Grant of Incentive Stock Options. At the time of the grant of any Option, the
Committee may in its discretion designate that such Option shall be made subject to additional
restrictions to permit it to qualify as an Incentive Stock Option. Any Option designated as an
Incentive Stock Option:



(i) shall be granted only to an employee of the Company or a Subsidiary Corporation (as
defined below);



(ii) shall be granted within ten (10) years from the earlier of the date the Plan is adopted
or the date the Plan is approved by stockholders of the Company;



(iii) shall have an Option Price of not less than 100% of the Fair Market Value of a Share on
the Grant Date, and, if granted to a person who owns capital stock (including stock treated as
owned under Section 424(d) of the Code) possessing more than 10% of the total combined voting power
of all classes of capital stock of the Company or any Subsidiary Corporation (a “10% Owner”), have
an Option Price not less than 110% of the Fair Market Value of a Share on its Grant Date;



(iv) shall have an Option Term of not more than ten (10) years (five years if the Grantee is a
10% Owner) from its Grant Date, and shall be subject to earlier termination as provided herein or
in the applicable Award Agreement;



(v) shall not have an aggregate Fair Market Value (as of the Grant Date) of the Shares with
respect to which Incentive Stock Options (whether granted under the Plan or any other stock option
plan of the Grantee’s employer or any parent or Subsidiary Corporation (“Other Plans”)) are
exercisable for the first time by such Grantee during any calendar year (“Current Grant”),
determined in accordance with the provisions of Section 422 of the Code, which exceeds $100,000
(the “$100,000 Limit”);



(vi) shall, if the aggregate Fair Market Value of the Shares (determined on the Grant Date)
with respect to the Current Grant and all Incentive Stock Options previously granted under the Plan
and any Other Plans which are exercisable for the first time during a calendar year (“Prior
Grants”) would exceed the $100,000 Limit, be, as to the portion in excess of the $100,000 Limit,
exercisable as a separate option that is not an Incentive Stock Option at such date or dates as are
provided in the Current Grant;



(vii) shall require the Grantee to notify the Committee of any disposition of any Shares
delivered pursuant to the exercise of the Incentive Stock Option under the circumstances described
in Section 421(b) of the Code (relating to holding periods and certain disqualifying dispositions)
(“Disqualifying Disposition”), within 10 days of such a Disqualifying Disposition;



(viii) shall by its terms not be assignable or transferable other than by will or the laws of
descent and distribution and may be exercised, during the Grantee’s lifetime, only by the Grantee;
provided, however, that the Grantee may, to the extent provided in the Plan in any manner specified
by the Committee, designate in writing a beneficiary to exercise his or her Incentive Stock Option
after the Grantee’s death; and



(ix) shall, if such Option nevertheless fails to meet the foregoing requirements, or otherwise
fails to meet the requirements of Section 422 of the Code for an Incentive Stock Option, be treated
for all purposes of this Plan, except as otherwise provided in subsections (iv) and (v) above, as
an Option that is not an Incentive Stock Option.



Notwithstanding the foregoing and Section 3.2, the Committee may, without the consent of the
Grantee, at any time before the exercise of an Option (whether or not an Incentive Stock Option),
take any action necessary to prevent such Option from being treated as an Incentive Stock Option.



For purposes of this Section 6.4, “Subsidiary Corporation” means a corporation other than the
Company in an unbroken chain of corporations beginning with the Company if, at the time of granting
the Option, each of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.



6.5 Payment. Except as otherwise provided by the Committee in an Award Agreement,
Options shall be exercised by the delivery of a written notice of exercise to the Company, setting
forth the number of Shares with respect to which the Option is to be exercised, accompanied by full
payment for the Shares made by any one or more of the following means subject to the approval of
the Committee:



(i) cash, personal check or wire transfer;



(ii) Shares, valued at their Fair Market Value on the date of exercise (or by delivering a
certification or attestation of ownership of such Shares);



(iii) with the approval of the Committee, Restricted Shares held by the Grantee, with each
Share valued at the Fair Market Value of a Share on the date of exercise; or



(iv) subject to applicable law (including the prohibited loan provisions of Section 402 of the
Sarbanes-Oxley Act of 2002), pursuant to procedures approved by the Committee, through the sale of
the Shares acquired on exercise of the Option through a broker-dealer to whom the Grantee has
submitted an irrevocable notice of exercise and irrevocable instructions to deliver promptly to the
Company the amount of sale proceeds sufficient to pay for such Shares, together with, if requested
by the Company, the amount of federal, state, local or foreign withholding taxes payable by Grantee
by reason of such exercise.



The Committee may in its discretion specify that, if any Restricted Shares (“Tendered
Restricted Shares”) are used to pay the Option Price, (x) all the Shares acquired on exercise of
the Option shall be subject to the same restrictions as the Tendered Restricted Shares, determined
as of the date of exercise of the Option, or (y) a number of Shares acquired on exercise of the
Option equal to the number of Tendered Restricted Shares shall be subject to the same restrictions
as the Tendered Restricted Shares, determined as of the date of exercise of the Option.



Article 7.




Stock Appreciation Rights and Limited Stock Appreciation Rights



7.1 Issuance. Subject to and consistent with the provisions of the Plan, the
Committee, at any time and from time to time, may grant SARs to any Eligible Person either alone or
in addition to other Awards granted under the Plan. Such SARs may, but need not, be granted in
connection with a specific Option granted under Article 6. Any SAR related to a non-qualified
Option (i.e., an Option that is not intended to be an Incentive Stock Option) may be granted at the
same time such Option is granted or at any time thereafter before exercise or expiration of such
Option. Any SAR related to an Incentive Stock Option must be granted at the same time such Option
is granted. The Committee may impose such conditions or restrictions on the exercise of any SAR as
it shall deem appropriate. Subject to and consistent with the provisions of the Plan, the
Committee, at any time and from time to time, may grant Limited Stock Appreciation Rights to any
Eligible Person either alone or in addition to other Awards granted under the Plan. Each Limited
Stock Appreciation Right shall be identified with a Share subject to an Option or SAR held by the
Grantee, which may include an Option or SAR previously granted under the Plan. Upon the exercise,
expiration, termination, forfeiture or cancellation of the Option or SAR with which an Limited
Stock Appreciation Right is identified, such Limited Stock Appreciation Right shall terminate.



7.2 Award Agreements. Each SAR grant shall be evidenced by an Award Agreement in such
form as the Committee may approve and shall contain such terms and conditions not inconsistent with
other provisions of the Plan as shall be determined from time to time by the Committee; provided
that no SAR grant shall have a term of more than ten (10) years from the date of grant of the SAR.



7.3 Grant Price. The grant price of an SAR shall be determined by the Committee in
its sole discretion; provided that the grant price shall not be less than the lesser of 100% of the
Fair Market Value of a Share on the date of the grant of the SAR, or the Option Price under the
non-qualified Option to which the SAR relates.



7.4 Exercise and Payment.



(i) Upon the exercise of SARs, the Grantee shall be entitled to receive payment from the
Company in an amount determined by multiplying: (A) the excess of the Fair Market Value of a Share
on the date of exercise over 100% of the Fair Market Value of a Share on the Grant Date of the SAR
(or such higher strike price as specified in the Award Agreement), by (B) the number of Shares with
respect to which the SAR is exercised; provided that the Committee may provide in the Award
Agreement that the benefit payable on exercise of an SAR shall not exceed such percentage of the
Fair Market Value of a Share on the Grant Date as the Committee shall specify. The Fair Market
Value of a Share on the Grant Date and date of exercise of SARs shall be determined in the same
manner as the Fair Market Value of a Share on the date of grant of an Option is determined. SARs
shall be deemed exercised on the date written notice of exercise in a form acceptable to the
Committee is received by the Secretary of the Company. Unless the Award Agreement provides
otherwise, the Company shall make payment in respect of any SAR within five (5) days of the date
the SAR is exercised. Any payment by the Company in respect of an SAR may be made in cash, Shares,
other property, or any combination thereof, as the Committee, in its sole discretion, shall
determine.



(ii) The provisions of this Section 7.4(ii) shall apply to a Limited Stock Appreciation Right
except as otherwise provided in the Award Agreement. Each Limited Stock Appreciation Right shall
automatically be exercised upon a Termination of Affiliation on account of a Change of Control.
The exercise of a Limited Stock Appreciation Right shall result in the cancellation of the Option
or SAR with which such Limited Stock Appreciation Right is identified, to the extent of such
exercise. Within 10 business days after the exercise of a Limited Stock Appreciation Right, the
Company shall pay to the Grantee, in cash, an amount equal to the difference between (A) the Fair
Market Value of a Share on the exercise date; minus (B) either (i) in the case of a Limited Stock
Appreciation Right identified with an Option, the Option Price of such Option or (ii) in the case
of a Limited Stock Appreciation Right identified with an SAR, the strike price of such SAR.



7.5 Grant Limitations. The Committee may at any time impose any other limitations
upon the exercise of SARs which, in the Committee’s sole discretion, are necessary or desirable in
order for Grantees to qualify for an exemption from Section 16(b) of the Exchange Act.



Article 8.




Restricted Shares and Restricted Share Units



8.1 Grant of Restricted Shares and Restricted Share Units. Subject to and consistent
with the provisions of the Plan, the Committee, at any time and from time to time, may grant
Restricted Shares and Restricted Share Units to any Eligible Person in such amounts as the
Committee shall determine.



8.2 Award Agreement. Each grant of Restricted Shares and Restricted Share Units shall
be evidenced by an Award Agreement that shall specify the Period(s) of Restriction, the number of
Restricted Shares or Restricted Share Units granted, and such other provisions as the Committee
shall determine. The Committee may impose such conditions and/or restrictions on any Restricted
Shares and Restricted Share Units granted pursuant to the Plan as it may deem advisable, including,
but not limited to, restrictions based upon the achievement of specific performance goals,
time-based restrictions, time-based restrictions following the attainment of the performance goals,
and/or restrictions under applicable securities laws.



8.3 Consideration for Restricted Shares. The Committee shall determine the amount, if
any, that a Grantee shall pay for Restricted Shares, which shall be (except with respect to
Restricted Shares that are treasury shares) at least the Minimum Consideration for each Restricted
Share. Such payment shall be made in full by the Grantee before the delivery of the shares and in
any event no later than 10 business days after the Grant Date for such shares.



8.4 Effect of Forfeiture of Restricted Shares. If Restricted Shares are forfeited,
and if the Grantee was required to pay for such shares or acquired such Restricted Shares upon the
exercise of an Option, the Grantee shall be deemed to have resold such Restricted Shares to the
Company at a price equal to the lesser of (x) the amount paid by the Grantee for such Restricted
Shares, or (y) the Fair Market Value of a Share on the date of such forfeiture. The Company shall
pay to the Grantee the deemed sale price as soon as is administratively practical. Such Restricted
Shares shall cease to be outstanding, and shall no longer confer on the Grantee thereof any rights
as a stockholder of the Company, from and after the date of the event causing the forfeiture,
whether or not the Grantee accepts the Company’s tender of payment for such Restricted Shares.



8.5 Restricted Shares Book Entry, Escrow, Certificate Legends. The Committee may
provide that Restricted Shares be held in book entry with the transfer agent until there is a lapse
of the Period of Restriction with respect to such Restricted Shares and certificates are issued or
until such Restricted Shares are forfeited, or the Committee may provide that the certificates for
any Restricted Shares (x) shall be held (together with a stock power executed in blank by the
Grantee) in escrow by the Secretary of the Company until such Restricted Shares become
nonforfeitable or are forfeited and/or (y) shall bear an appropriate legend restricting the
transfer of such Restricted Shares under the Plan. If any Restricted Shares become nonforfeitable,
the Company shall cause certificates for such shares to be delivered without such legend.



Article 9.




Performance Units and Performance Shares



9.1 Grant of Performance Units and Performance Shares. Subject to and consistent with
the provisions of the Plan, Performance Units or Performance Shares may be granted to any Eligible
Person in such amounts and upon such terms, and at any time and from time to time, as shall be
determined by the Committee.



9.2 Value/Performance Goals. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine the number or value
of Performance Units or Performance Shares that will be paid to the Grantee. With respect to
Covered Employees and to the extent the Committee deems it appropriate to comply with Section
162(m) of the Code, all performance goals shall be objective Performance Measures satisfying the
requirements for the Performance-Based Exception, and shall be set by the Committee within the time
period prescribed by Section 162(m) of the Code and related regulations.



(i) Performance Unit. Each Performance Unit may be denominated in cash and shall have
an initial value that is established by the Committee at the time of grant.



(ii) Performance Share. Each Performance Share shall have an initial value equal to
the Fair Market Value of a Share on the date of grant.



9.3 Earning and Form and Timing of Payment of Performance Units and Performance
Shares. After the applicable Performance Period has ended, the amount earned by the Grantee
shall be based on the level of achievement of performance goals set by the Committee. If a
Performance Unit or Performance Share Award is intended to comply with the Performance-Based
Exception, the Committee shall certify the level of achievement of the performance goals in writing
before the Award is settled.



The settlement of Performance Units or Performance Shares shall be in Shares, unless at the
discretion of the Committee and as set forth in the Award Agreement, settlement is to be in cash or
in some combination of cash and Shares.



If a Grantee is promoted, demoted or transferred to a different business unit of the Company
during a Performance Period, then, to the extent the Committee determines that the Award, the
performance goals, or the Performance Period are no longer appropriate, the Committee may adjust,
change, eliminate or cancel the Award, the performance goals, or the applicable Performance Period,
as it deems appropriate in order to make them appropriate and comparable to the initial Award, the
performance goals, or the Performance Period; provided, however, no such action may be taken by the
Committee with respect to an Award if the Grantee is or becomes or is anticipated to become a
Covered Employee if such action would disqualify the Award from the Performance-Based Exception.



Payment of earned Performance Units or Performance Shares shall be made in a lump sum
following the latest to occur of (a) the vesting event, or (b) the determination of the level of
achievement of the performance goals for the applicable Performance Period; provided, however,
payment may be deferred to a later date in accordance with a deferral rule, policy or procedure
established pursuant to Article 15. The Committee may pay earned Performance Units or Performance
Shares in the form of cash or in Shares (or in a combination thereof). Such Shares may be granted
subject to any restrictions deemed appropriate by the Committee. The form of payout of such Awards
shall be set forth in the Award Agreement pertaining to the grant of the Award.



At the discretion of the Committee, a Grantee may be entitled to receive any dividends or
Dividend Equivalents declared with respect to Shares deliverable in connection with grants of
Performance Units or Performance Shares which have been earned, but not yet delivered to the
Grantee.



Article 10.




Bonus Shares




Subject to the terms of the Plan, the Committee may grant Bonus Shares to any Eligible Person,
in such amount and upon such terms and at any time and from time to time as shall be determined by
the Committee. The terms of such Bonus Shares shall be set forth in the Award Agreement pertaining
to the grant of the Award.



Article 11.




	 	 	 
	Deferred Stock
	11.1

	 	Grant of Deferred Stock.
	
 
	 	 






(i) Subject to and consistent with the provisions of the Plan, the Committee, at any time and
from time to time, may grant Deferred Stock to any Eligible Person, in such amount and upon such
terms as the Committee shall determine, including the conditions under such Deferred Stock will
vest.



(ii) In addition, if and to the extent permitted by the Committee, an Eligible Person may
elect (a “Deferral Election”) at such times and consistent with and not in violation of Code
Section 409A and such rules and procedures adopted by the Committee, to receive all or any portion
of his salary and/or bonus in the form of a number of shares of Deferred Stock equal to the
quotient of the amount of salary and/or cash bonus to be paid in the form of Deferred Stock divided
by the Fair Market Value of a Share on the date such salary or bonus would otherwise be paid in
cash.



11.2 Delivery and Limitations. Delivery of Shares will occur upon expiration of the
deferral period specified for the Award of Deferred Stock by the Committee. A Grantee awarded
Deferred Stock will have no voting rights with respect to such Deferred Stock. Except to the
extent provided otherwise in the Award Agreement, a Grantee will have the rights to receive
Dividend Equivalents in respect of Deferred Stock, which Dividend Equivalents shall be deemed
reinvested in additional Shares of Deferred Stock.



Article 12.




Dividend Equivalents



The Committee is authorized to grant Awards of Dividend Equivalents alone or in conjunction
with another Award. The Committee may provide that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in additional Shares or
additional Awards or otherwise reinvested.



Article 13.




Other Stock-Based Awards



The Committee is authorized, subject to limitations under applicable law, to grant such other
Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise
based on, or related to, Shares, as deemed by the Committee to be consistent with the purposes of
the Plan including Shares awarded which are not subject to any restrictions or conditions and
Awards valued by reference to the value of securities of or the performance of specified
Affiliates. Subject to and consistent with the provisions of the Plan, the Committee shall
determine the terms and conditions of such Awards. Except as provided by the Committee, Shares
delivered pursuant to a purchase right granted under this Article 13 shall be purchased for such
consideration, paid for by such methods and in such forms, including cash, Shares, outstanding
Awards or other property, as the Committee shall determine.



Article 14.




Beneficiary Designation




Each Grantee under the Plan may, from time to time, name any beneficiary or beneficiaries (who
may be named contingently or successively) to whom any benefit under the Plan is to be paid in case
of his or her death before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Grantee, shall be in a form prescribed by the
Company, and will be effective only when filed by the Grantee in writing with the Company during
the Grantee’s lifetime. In the absence of any such designation, benefits remaining unpaid at the
Grantee’s death shall be paid to the Grantee’s estate.



Article 15.




Deferrals




The Committee may permit or require a Grantee to defer receipt of the payment of cash or the
delivery of Shares that would otherwise be due by virtue of the exercise of an Option or SAR, the
lapse or waiver of restrictions with respect to Restricted Shares, the satisfaction of any
requirements or goals with respect to Performance Units or Performance Shares, or the grant of
Bonus Shares. If any such deferral is required or permitted, such deferral shall be in accordance
with applicable rules, policies and/or procedures established by the Committee, including, but not
limited to, the Code Section 409A Rules and Policies. Except as otherwise provided in the Award
Agreement or pursuant to applicable Grantee elections, and subject to the Code Section 409A Rules
and Policies, any payment or any Shares that are subject to such deferral shall be made or
delivered to the Grantee upon the Grantee’s Termination of Affiliation.



Article 16.




Amendment, Modification, and Termination



16.1 Amendment, Modification, and Termination. Subject to Section 16.3, the Board
may, at any time and from time to time, alter, amend, suspend, discontinue or terminate the Plan in
whole or in part without the approval of the Company’s stockholders, except that any amendment or
alteration shall be subject to the approval of the Company’s stockholders if (a) such stockholder
approval is required by any federal or state law or regulation or the rules of any stock exchange
or automated quotation system on which the Shares may then be listed or quoted, or (b) the Board,
in its discretion, determines to submit such amendments or alterations to stockholders for
approval. The Board may delegate to the Committee any or all of the authority of the Board under
this Section 16.1.



16.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring
Events. The Committee may make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events (including the events
described in Section 4.2) affecting the Company or the financial statements of the Company or of
changes in applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan; provided that no such
adjustment shall be authorized to the extent that such authority would be inconsistent with the
Plan’s meeting the requirements of the Performance-Based Exception.



16.3 Awards Previously Granted. Except as otherwise specifically permitted in the
Plan or an Award Agreement, no termination, amendment, or modification of the Plan shall adversely
affect in any material way any Award previously granted under the Plan, without the written consent
of the Grantee of such Award.



Article 17.




	 	 	 
	Withholding
	17.1

	 	Required Withholding.
	
 
	 	 






(i) The Committee in its sole discretion may provide that when taxes are to be withheld in
connection with the exercise of an Option or SAR, or upon the lapse of restrictions on Restricted
Shares, or upon the transfer of Deferred Stock, or upon payment of any other benefit or right under
this Plan (the date on which such exercise occurs or such restrictions lapse or such payment of any
other benefit or right occurs hereinafter referred to as the “Tax Date”), the Grantee may elect to
make payment for the withholding of federal, state, local and foreign taxes, including Social
Security and Medicare (“FICA”) taxes by one or a combination of the following methods:




(A) payment of an amount in cash equal to the amount to be withheld;




(B) delivering part or all of the amount to be withheld in the form of
Shares valued at their Fair Market Value on the Tax Date;




(C) requesting the Company to withhold from those Shares that would
otherwise be received upon exercise of the Option or SAR, upon the lapse of
restrictions on Restricted Shares or Restricted Share Units, upon the transfer
of Deferred Stock, or upon the payment of a Performance Shares Award, a number
of Shares having a Fair Market Value on the Tax Date equal to the amount to be
withheld; or




(D) withholding from any compensation otherwise due to the Grantee.



The maximum amount of tax withholding with respect to any Awards to be satisfied by
withholding Shares upon the Tax Date pursuant to clause (C) above shall not exceed the minimum
statutory amount of taxes, including FICA taxes, required to be withheld under federal, state,
local and foreign law. An election by Grantee under this subsection is irrevocable. Any
fractional share amount and any additional withholding not paid by the withholding or surrender of
Shares or delivery of Shares must be paid in cash. If no timely election is made, the Grantee must
deliver cash to satisfy all tax withholding requirements.



(ii) Any Grantee who makes a Disqualifying Disposition (as defined in Section 6.4(vi)) or an
election under Section 83(b) of the Code shall remit to the Company, and the Company shall have the
right to withhold, an amount sufficient to satisfy all resulting tax withholding requirements in
the same manner as set forth in subsection (i).



17.2 Notification under Code Section 83(b). If the Grantee, in connection with the
exercise of any Option, or the grant of Restricted Shares, makes the election permitted under
Section 83(b) of the Code to include in such Grantee’s gross income in the year of transfer the
amounts specified in Section 83(b) of the Code, then such Grantee shall notify the Company of such
election within 10 days of filing the notice of the election with the Internal Revenue Service, in
addition to any filing and notification required pursuant to regulations issued under Section 83(b)
of the Code. The Committee may, in connection with the grant of an Award or at any time
thereafter, prohibit a Grantee from making the election described above.



Article 18.




Additional Provisions



18.1 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.



18.2 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall include the singular
and the singular shall include the plural.



18.3 Severability. If any part of the Plan is declared by any court or governmental
authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other
part of the Plan. Any Section or part of a Section so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such Section or part of a
Section to the fullest extent possible while remaining lawful and valid.



18.4 Requirements of Law. The granting of Awards and the delivery of Shares under the
Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required. Notwithstanding any
provision of the Plan or any Award, Grantees shall not be entitled to exercise, or receive benefits
under, any Award, and the Company (and any Affiliate) shall not be obligated to deliver any Shares
or deliver benefits to a Grantee, if such exercise or delivery would constitute a violation by the
Grantee or the Company of any applicable law or regulation.



18.5 Securities Law Compliance.



(i) If the Committee deems it necessary to comply with any applicable securities law, or the
requirements of any stock exchange upon which Shares may be listed, the Committee may impose any
restriction on Awards or Shares acquired pursuant to Awards under the Plan as it may deem
advisable. All certificates for Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall 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 SEC, any
stock exchange upon which Shares are then listed, any applicable securities law, and the Committee
may cause a legend or legends to be put on any such certificates to make appropriate reference to
such restrictions. If so requested by the Company, the Grantee shall make a written representation
to the Company that he or she will not sell or offer to sell any Shares unless a registration
statement shall be in effect with respect to such Shares under the Securities Act of 1993, as
amended, and any applicable state securities law or unless he or she shall have furnished to the
Company, in form and substance satisfactory to the Company, that such registration is not required.



(ii) If the Committee determines that the exercise or nonforfeitability of, or delivery of
benefits pursuant to, any Award would violate any applicable provision of securities laws or the
listing requirements of any national securities exchange or national market system on which are
listed any of the Company’s equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as applicable, but the Company shall use all reasonable efforts to
cause such exercise, nonforfeitability or delivery to comply with all such provisions at the
earliest practicable date.



18.6 No Rights as a Stockholder. No Grantee shall have any rights as a stockholder of
the Company with respect to the Shares (other than Restricted Shares) which may be deliverable upon
exercise or payment of such Award until such Shares have been delivered to him or her. Restricted
Shares, whether held by a Grantee or in escrow by the Secretary of the Company, shall confer on the
Grantee all rights of a stockholder of the Company, except as otherwise provided in the Plan or
Award Agreement. At the time of a grant of Restricted Shares, the Committee may require the
payment of cash dividends thereon to be deferred and, if the Committee so determines, reinvested in
additional Restricted Shares. Stock dividends and deferred cash dividends issued with respect to
Restricted Shares shall be subject to the same restrictions and other terms as apply to the
Restricted Shares with respect to which such dividends are issued. The Committee may in its
discretion provide for payment of interest on deferred cash dividends.



18.7 Nature of Payments. Unless otherwise specified in the Award Agreement, Awards
shall be special incentive payments to the Grantee and shall not be taken into account in computing
the amount of salary or compensation of the Grantee for purposes of determining any pension,
retirement, death or other benefit under (a) any pension, retirement, profit sharing, bonus,
insurance or other employee benefit plan of the Company or any Affiliate, except as such plan shall
otherwise expressly provide, or (b) any agreement between (i) the Company or any Affiliate and (ii)
the Grantee, except as such agreement shall otherwise expressly provide.



18.8 Non-Exclusivity of Plan. Neither the adoption of the Plan by the Board nor its
submission to the stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other compensatory arrangements for employees
as it may deem desirable.



18.9 Governing Law. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Delaware, other than its laws respecting
choice of law.



18.10 Share Certificates. All certificates for Shares delivered under the terms of
the Plan shall be subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under federal or state securities laws, rules and regulations thereunder, and the
rules of any national securities laws, rules and regulations thereunder, and the rules of any
national securities exchange or automated quotation system on which Shares are listed or quoted.
The Committee may cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions or any other restrictions or limitations that may be
applicable to Shares. In addition, during any period in which Awards or Shares are subject to
restrictions or limitations under the terms of the Plan or any Award Agreement, or during any
period during which delivery or receipt of an Award or Shares has been deferred by the Committee or
a Grantee, the Committee may require any Grantee to enter into an agreement providing that
certificates representing Shares deliverable or delivered pursuant to an Award shall remain in the
physical custody of the Company or such other person as the Committee may designate.



18.11 Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an “unfunded” plan for incentive and deferred compensation. With respect to any
payments not yet made to a Grantee pursuant to an Award, nothing contained in the Plan or any Award
Agreement shall give any such Grantee any rights that are greater than those of a general creditor
of the Company; provided, however, that the Committee may authorize the creation of trusts or make
other arrangements to meet the Company’s obligations under the Plan to deliver cash, Shares or
other property pursuant to any Award which trusts or other arrangements shall be consistent with
the “unfunded” status of the Plan unless the Committee otherwise determines.



18.12 Affiliation. Nothing in the Plan or an Award Agreement shall interfere with or
limit in any way the right of the Company or any Affiliate to terminate any Grantee’s employment or
consulting contract at any time, nor confer upon any Grantee the right to continue in the employ of
or as an officer of or as a consultant to the Company or any Affiliate.



18.13 Participation. No employee or officer shall have the right to be selected to
receive an Award under this Plan or, having been so selected, to be selected to receive a future
Award.



18.14 Military Service. Awards shall be administered in accordance with
Section 414(u) of the Code and the Uniformed Services Employment and Reemployment Rights Act of
1994 as amended, supplemented or replaced from time to time.



18.15 Construction. The following rules of construction will apply to the Plan: (a)
the word “or” is disjunctive but not necessarily exclusive, and (b) words in the singular include
the plural, words in the plural include the singular, and words in the neuter gender include the
masculine and feminine genders and words in the masculine or feminine gender include the other
neuter genders.



18.16 Headings. The headings of articles and sections are included solely for
convenience of reference, and if there is any conflict between such headings and the text of this
Plan, the text shall control.



18.17 Obligations. Unless otherwise specified in the Award Agreement, the obligation
to deliver, pay or transfer any amount of money or other property pursuant to Awards under this
Plan shall be the sole obligation of a Grantee’s employer; provided that the obligation to deliver
or transfer any Shares pursuant to Awards under this Plan shall be the sole obligation of the
Company.



18.18 Stockholder Approval. All Awards granted on or after the Effective Date and
prior to the date the Company’s stockholders approve the Plan are expressly conditioned upon and
subject to approval of the Plan by the Company’s stockholders.




3