Exhibit 10.1





Exhibit 10.1




CLARIENT, INC.




2007 INCENTIVE AWARD PLAN




AS AMENDED BY RESOLUTION ADOPTED BY THE BOARD OF DIRECTORS ON APRIL 14, 2010,

AND APPROVED BY STOCKHOLDERS ON JUNE 8, 2010




ARTICLE 1




PURPOSE




The purpose of the Clarient, Inc. 2007 Incentive Award Plan (the “Plan”) is to promote the
success and enhance the value of Clarient, Inc. (the “Company”) by linking the personal interests
of the members of the Board, Employees and Consultants to those of Company stockholders and by
providing such individuals with an incentive for outstanding performance to generate superior
returns to Company stockholders. The Plan is further intended to provide flexibility to the
Company in its ability to motivate, attract, and retain the services of members of the Board,
Employees and Consultants upon whose judgment, interest, and special effort the successful conduct
of the Company’s operation is largely dependent.



ARTICLE 2




DEFINITIONS AND CONSTRUCTION




Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.



2.1 “Award” means an Option, a Restricted Stock award, a Stock Appreciation Right award, a
Performance Share award, a Performance Stock Unit award, a Dividend Equivalents award, a Stock
Payment award, a Deferred Stock award, a Restricted Stock Unit award, a Performance Bonus Award, or
a Performance-Based Award granted to a Participant pursuant to the Plan.



2.2 “Award Agreement” means any written agreement, contract, or other instrument or document
evidencing an Award, including through electronic medium.




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



2.4 “Change in Control” means the issuance, sale or transfer (including a transfer as a result
of death, disability, operation of law or otherwise) in a single transaction or group of related
transactions to any entity, person or group (other than Safeguard Scientifics, Inc. and/or its
affiliates) of the beneficial ownership of newly issued, outstanding or treasury shares of the
capital stock of the Company having 50% or more of the combined voting power of the Company’s then
outstanding securities entitled to vote for at least a majority of the authorized number of
directors of the Company, or any merger, consolidation, sale of all or substantially all of the
assets or other comparable transaction as a result of which all or substantially all of the assets
and business of the Company are acquired directly or indirectly by another entity which prior to
the acquisition was not an affiliate of the Company (as defined in the regulations of the
Securities and Exchange Commission under the Securities Act of 1933), other than any such merger,
consolidation, sale or other transaction which results in the Company’s voting securities
outstanding immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the Company or the person that, as a
result of the transaction, controls, directly or indirectly, the Company or owns, directly or
indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business
of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at
least 50% of the combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction; provided, however, that the transfer by Safeguard of Company
securities held by Safeguard to one or more persons or entities (whether or not part of a Group)
shall not constitute a Change of Control unless a majority of the Company’s securities not held by
Safeguard are also transferred to one or more persons or entities in the same transaction or group
of related transactions. Group shall have the same meaning as in
Section 13(d) of the Securities Exchange Act of 1934, and “affiliate” shall have the same
meaning as in Rule 405 of the Securities Exchange Commission adopted under the Securities Act of
1933.


 


 









 






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




2.6 “Committee” means the committee of the Board described in Article 12.



2.7 “Consultant” means any consultant or adviser if: (a) the consultant or adviser renders
bona fide services to the Company; (b) the services rendered by the consultant or adviser are not
in connection with the offer or sale of securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the Company’s securities; and (c) the
consultant or adviser is a natural person who has contracted directly with the Company to render
such services.



2.8 “Covered Employee” means an Employee who is, or could be, a “covered employee” within the
meaning of Section 162(m) of the Code.



2.9 “Deferred Stock” means a right to receive a specified number of shares of Stock during
specified time periods pursuant to Section 8.5.



2.10 “Disability” means that the Participant qualifies to receive long-term disability
payments under the Company’s long-term disability insurance program, as it may be amended from time
to time.



2.11 “Dividend Equivalents” means a right granted to a Participant pursuant to Section 8.3 to
receive the equivalent value (in cash or Stock) of dividends paid on Stock.




2.12 “Effective Date” shall have the meaning set forth in Section 13.1.



2.13 “Eligible Individual” means any person who is an Employee, a Consultant or an Independent
Director, as determined by the Committee.



2.14 “Employee” means any officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Company or any Subsidiary.




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



2.16 “Fair Market Value” means, as of any given date, (a) if Stock is traded on an exchange,
the closing price of a share of Stock as reported in the Wall Street Journal for such date (or, if
no sale occurred on such date, for the first trading date immediately prior to such date during
which a sale occurred); or (b) if Stock is not traded on an exchange but is quoted on a quotation
system, the mean between the closing representative bid and asked prices for the Stock on such date
as reported by such quotation system (or, if no bid and asked prices for the Stock were reported on
such date, on the date immediately prior to such date on which bid and asked prices are reported by
such quotation system); or (c) if Stock is not publicly traded, the fair market value established
by the Committee acting in good faith.



2.17 “Incentive Stock Option” means an Option that is intended to meet the requirements of
Section 422 of the Code or any successor provision thereto.




2.18 “Independent Director” means a member of the Board who is not an Employee of the Company.



2.19 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) under the Exchange Act, or any successor rule.



2.20 “Non-Qualified Stock Option” means an Option that is not intended to be an Incentive
Stock Option.


 


 









 





2.21 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to
purchase a specified number of shares of Stock at a specified price during specified time periods.
An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.



2.22 “Participant” means any Eligible Individual who, as a member of the Board, Consultant or
Employee, has been granted an Award pursuant to the Plan.



2.23 “Performance-Based Award” means an Award granted to selected Covered Employees pursuant
to Section 8.7, but which is subject to the terms and conditions set forth in Article 9.




2.24 “Performance Bonus Award” has the meaning set forth in Section 8.7.



2.25 “Performance Criteria” means the criteria that the Committee selects for purposes of
establishing the Performance Goal or Performance Goals for a Participant for a Performance Period.
The Performance Criteria that will be used to establish Performance Goals are limited to the
following: net earnings (either before or after interest, taxes, depreciation and amortization),
economic value-added, sales or revenue, net income (either before or after taxes), operating
earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), cash
flow return on capital, return on net assets, return on stockholders’ equity, return on assets,
return on capital, stockholder returns, return on sales, gross or net profit margin, productivity,
expense, margins, operating efficiency, customer satisfaction, working capital, earnings per share,
price per share of Stock, and market share, any of which may be measured either in absolute terms
or as compared to any incremental increase or as compared to results of a peer group. The
Committee shall define in an objective fashion the manner of calculating the Performance Criteria
it selects to use for such Performance Period for such Participant.



2.26 “Performance Goals” means, for a Performance Period, the goals established in writing by
the Committee for the Performance Period based upon the Performance Criteria. Depending on the
Performance Criteria used to establish such Performance Goals, the Performance Goals may be
expressed in terms of overall Company performance or the performance of a division, business unit,
or an individual. The Committee, in its discretion, may, within the time prescribed by
Section 162(m) of the Code, adjust or modify the calculation of Performance Goals for such
Performance Period in order to prevent the dilution or enlargement of the rights of Participants
(a) in the event of, or in anticipation of, any unusual or extraordinary corporate item,
transaction, event, or development, or (b) in recognition of, or in anticipation of, any other
unusual or nonrecurring events affecting the Company, or the financial statements of the Company,
or in response to, or in anticipation of, changes in applicable laws, regulations, accounting
principles, or business conditions.



2.27 “Performance Period” means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a Participant’s right to, and the
payment of, a Performance-Based Award.



2.28 “Performance Share” means a right granted to a Participant pursuant to Section 8.1, to
receive Stock, the payment of which is contingent upon achieving certain Performance Goals or other
performance-based targets established by the Committee.



2.29 “Performance Stock Unit” means a right granted to a Participant pursuant to Section 8.2,
to receive Stock, the payment of which is contingent upon achieving certain Performance Goals or
other performance-based targets established by the Committee.



2.30 “Prior Plan” means the ChromaVision Medical Systems, Inc. 1996 Equity Compensation Plan,
as such plan may be amended from time to time.



2.31 “Plan” means this Clarient, Inc. 2007 Incentive Award Plan and any Appendixes attached
hereto, as it may be amended from time to time.


 


 









 





2.32 “Qualified Performance-Based Compensation” means any compensation that is intended to
qualify as “qualified performance-based compensation” as described in Section 162(m)(4)(C) of the
Code.



2.33 “Restricted Stock” means Stock awarded to a Participant pursuant to Article 6 that is
subject to certain restrictions and may be subject to risk of forfeiture.




2.34 “Restricted Stock Unit” means an Award granted pursuant to Section 8.6.




2.35 “Securities Act” shall mean the Securities Act of 1933, as amended.



2.36 “Stock” means the common stock of the Company, par value $0.01 per share, and such other
securities of the Company that may be substituted for Stock pursuant to Article 11.



2.37 “Stock Appreciation Right” or “SAR” means a right granted pursuant to Article 7 to
receive a payment equal to the excess of the Fair Market Value of a specified number of shares of
Stock on the date the SAR is exercised over the Fair Market Value on the date the SAR was granted
as set forth in the applicable Award Agreement.



2.38 “Stock Payment” means (a) a payment in the form of shares of Stock, or (b) an option or
other right to purchase shares of Stock, as part of any bonus, deferred compensation or other
arrangement, made in lieu of all or any portion of the compensation, granted pursuant to
Section 8.4.



2.39 “Subsidiary” means any “subsidiary corporation” as defined in Section 424(f) of the Code
and any applicable regulations promulgated thereunder or any other entity of which a majority of
the outstanding voting stock or voting power is beneficially owned directly or indirectly by the
Company.



ARTICLE 3




SHARES SUBJECT TO THE PLAN





3.1 Number of Shares.



(a) Subject to Article 11 and Section 3.1(b), the aggregate number of shares of Stock which
may be issued or transferred pursuant to Awards under the Plan shall be the sum of (i) 12,000,000
shares and (ii) any shares of Stock which are subject to any award under the Prior Plan as of the
Effective Date and which award thereafter terminates, expires or lapses for any reason; provided,
however, that no more than 12,000,000 shares of Stock may be delivered upon the exercise of
Incentive Stock Options.



(b) To the extent that an Award terminates, expires, or lapses for any reason, any shares of
Stock subject to the Award shall again be available for the grant of an Award pursuant to the Plan.
Additionally, any shares of Stock tendered or withheld to satisfy the grant or exercise price or
tax withholding obligation pursuant to any Award shall again be available for the grant of an Award
pursuant to the Plan. To the extent permitted by applicable law or any exchange rule, shares of
Stock issued in assumption of, or in substitution for, any outstanding awards of any entity
acquired in any form of combination by the Company or any Subsidiary shall not be counted against
shares of Stock available for grant pursuant to this Plan. The payment of Dividend Equivalents in
cash in conjunction with any outstanding Awards shall not be counted against the shares available
for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no shares of
common stock may again be optioned, granted or awarded if such action would cause an Incentive
Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.



3.2 Stock Distributed. Any Stock distributed pursuant to an Award may consist, in whole or in
part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.


 


 









 





3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the
Plan to the contrary, and subject to Article 11, the maximum number of shares of Stock with respect
to one or more
Awards that may be granted to any one Participant during any one calendar year period
(measured from the date of any grant) shall be 750,000 and the maximum amount that may be paid in
cash during any one calendar year period (measured from the date of any payment) with respect to
any Performance-Based Award (including, without limitation, any Performance Bonus Award) shall be
$750,000.



ARTICLE 4




ELIGIBILITY AND PARTICIPATION




4.1 Eligibility. Each Eligible Individual shall be eligible to be granted one or more Awards
pursuant to the Plan.



4.2 Participation. Subject to the provisions of the Plan, the Committee may, from time to
time, select from among all Eligible Individuals, those to whom Awards shall be granted and shall
determine the nature and amount of each Award. No Eligible Individual shall have any right to be
granted an Award pursuant to this Plan.



4.3 Foreign Participants. Notwithstanding any provision of the Plan to the contrary, in order
to comply with the laws in other countries in which the Company and its Subsidiaries operate or
have Eligible Individuals, the Committee, in its sole discretion, shall have the power and
authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine which
Eligible Individuals outside the United States are eligible to participate in the Plan;
(iii) modify the terms and conditions of any Award granted to Eligible Individuals outside the
United States to comply with applicable foreign laws; (iv) establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be necessary or advisable
(any such subplans and/or modifications shall be attached to this Plan as appendices); provided,
however, that no such subplans and/or modifications shall increase the share limitations contained
in Sections 3.1 and 3.3 of the Plan; and (v) take any action, before or after an Award is made,
that it deems advisable to obtain approval or comply with any necessary local governmental
regulatory exemptions or approvals. Notwithstanding the foregoing, the Committee may not take any
actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, the Code,
any securities law or governing statute or any other applicable law.



ARTICLE 5




STOCK OPTIONS




5.1 General. The Committee is authorized to grant Options to Participants on the following
terms and conditions:



(a) Exercise Price. The exercise price per share of Stock subject to an Option shall
be determined by the Committee and set forth in the Award Agreement; provided, that, subject to
Section 5.2(d), the exercise price for any Option shall not be less than 100% of the Fair Market
Value of a share of Stock on the date of grant.



(b) Time and Conditions of Exercise. The Committee shall determine the time or times
at which an Option may be exercised in whole or in part; provided that the term of any Option
granted under the Plan shall not exceed ten years. The Committee shall also determine the
performance or other conditions, if any, that must be satisfied before all or part of an Option may
be exercised.



(c) Payment. The Committee shall determine the methods by which the exercise price of
an Option may be paid, the form of payment, including, without limitation: (i) cash, (ii) shares
of Stock which have been held for such period of time as may be required by the Committee in order
to avoid adverse accounting consequences to the Company and which have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the shares as to which such Option shall
be exercised or (iii) other property acceptable to the Committee, and the methods by which shares
of Stock shall be delivered or deemed to be delivered to Participants. Notwithstanding any other
provision of the Plan to the contrary, no Participant who is a member of the Board or an “executive
officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted
to pay the exercise price of an Option, or continue any extension of credit with respect to the
exercise price of an Option with a loan from the Company or a loan arranged by the Company in
violation of Section 13(k) of the Exchange Act.


 


 









 





(d) Evidence of Grant. All Options shall be evidenced by an Award Agreement between
the Company and the Participant. The Award Agreement shall include such additional provisions as
may be specified by the Committee.



5.2 Incentive Stock Options. Incentive Stock Options shall be granted only to Employees and
the terms of any Incentive Stock Options granted pursuant to the Plan, in addition to the
requirements of Section 5.1, must comply with the provisions of this Section 5.2.



(a) Expiration. Subject to Section 5.2(c), an Incentive Stock Option shall expire and
may not be exercised to any extent by anyone after the first to occur of the following events:



(i) Ten years from the date it is granted, unless an earlier time is set in the Award
Agreement;




(ii) Three months after the Participant’s termination of employment as an Employee; and



(iii) One year after the date of the Participant’s termination of employment or service on
account of Disability or death. Upon the Participant’s Disability or death, any Incentive Stock
Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s
legal representative or representatives, by the person or persons entitled to do so pursuant to the
Participant’s last will and testament, or, if the Participant fails to make testamentary
disposition of such Incentive Stock Option or dies intestate, by the person or persons entitled to
receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution.



(b) Dollar Limitation. The aggregate Fair Market Value (determined as of the time the
Option is granted) of all shares of Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation
as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive
Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall
be considered Non-Qualified Stock Options.



(c) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual
who, at the date of grant, owns stock possessing more than ten percent of the total combined voting
power of all classes of Stock of the Company only if such Option is granted at a price that is not
less than 110% of Fair Market Value on the date of grant and the Option is exercisable for no more
than five years from the date of grant.



(d) Notice of Disposition. The Participant shall give the Company prompt notice of
any disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (i) two
years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of
such shares of Stock to the Participant.



(e) Right to Exercise. During a Participant’s lifetime, an Incentive Stock Option may
be exercised only by the Participant.



(f) Failure to Meet Requirements. Any Option (or portion thereof) purported to be an
Incentive Stock Option, which, for any reason, fails to meet the requirements of Section 422 of the
Code shall be considered a Non-Qualified Stock Option.



5.3 Substitution of Stock Appreciation Rights. The Committee may provide in the Award
Agreement evidencing the grant of an Option that the Committee, in its sole discretion, shall have
to right to substitute a Stock Appreciation Right for such Option at any time prior to or upon
exercise of such Option; provided, that such Stock Appreciation Right shall be exercisable with
respect to the same number of shares of Stock for which such substituted Option would have been
exercisable.


 


 









 





5.4 Granting of Options to Independent Directors. The Board may from time to time, in its
sole discretion, and subject to the limitations of the Plan:



(a) Select from and grant Options to any Independent Directors (including Independent
Directors who have previously been granted Options under the Plan);



(b) Subject to Section 3.3, determine the number of shares of Stock that may be purchased upon
exercise of the Options granted to such selected Independent Directors; and



(c) Subject to the provisions of this Article 5, determine the terms and conditions of such
Options, consistent with the Plan.




Options granted to Independent Directors shall be Non-Qualified Stock Options.



ARTICLE 6




RESTRICTED STOCK AWARDS




6.1 Grant of Restricted Stock. The Committee is authorized to make Awards of Restricted Stock
to any Participant selected by the Committee in such amounts and subject to such terms and
conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by an
Award Agreement.



6.2 Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on
transferability and other restrictions as the Committee may impose (including, without limitation,
limitations on the right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock). These restrictions may lapse separately or in combination at such times,
pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at
the time of the grant of the Award or thereafter.



6.3 Forfeiture. Except as otherwise determined by the Committee at the time of the grant of
the Award or thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to restrictions shall be
forfeited; provided, however, that the Committee may (a) provide in any Restricted Stock Award
Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in
whole or in part in the event of terminations resulting from specified causes, and (b) in other
cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.



6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be
evidenced in such manner as the Committee shall determine. If certificates representing shares of
Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.



ARTICLE 7




STOCK APPRECIATION RIGHTS





7.1 Grant of Stock Appreciation Rights.



(a) A Stock Appreciation Right may be granted to any Participant selected by the Committee. A
Stock Appreciation Right shall be subject to such terms and conditions not inconsistent with the
Plan as the Committee shall impose and shall be evidenced by an Award Agreement.



(b) A Stock Appreciation Right shall entitle the Participant (or other person entitled to
exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion
of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount equal to the product of (i) the excess of (A) the Fair Market
Value of the Stock on the date the Stock Appreciation
Right is exercised over (B) the Fair Market Value of the Stock on the date the Stock
Appreciation Right was granted and (ii) the number of shares of Stock with respect to which the
Stock Appreciation Right is exercised, subject to any limitations the Committee may impose.


 


 









 






7.2 Payment and Limitations on Exercise.



(a) Subject to Section 7.2(b), payment of the amounts determined under Section 7.1(b) above
shall be in cash, in Stock (based on its Fair Market Value as of the date the Stock Appreciation
Right is exercised) or a combination of both, as determined by the Committee in the Award
Agreement.



(b) To the extent any payment under Section 7.1(b) is effected in Stock, it shall be made
subject to satisfaction of the provisions of Sections 5.1 and 5.4 pertaining to Options.



7.3 Time and Conditions of Exercise. The term of any Stock Appreciation Right granted under
the Plan shall not exceed ten years.



ARTICLE 8




OTHER TYPES OF AWARDS




8.1 Performance Share Awards. Any Participant selected by the Committee may be granted one or
more Performance Share awards which shall be denominated in a number of shares of Stock and which
may be linked to any one or more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or dates or over any
period or periods determined by the Committee. In making such determinations, the Committee shall
consider (among such other factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular Participant.



8.2 Performance Stock Units. Any Participant selected by the Committee may be granted one or
more Performance Stock Unit awards which shall be denominated in unit equivalent of shares of Stock
and/or units of value including dollar value of shares of Stock and which may be linked to any one
or more of the Performance Criteria or other specific performance criteria determined appropriate
by the Committee, in each case on a specified date or dates or over any period or periods
determined by the Committee. In making such determinations, the Committee shall consider (among
such other factors as it deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular Participant.




8.3 Dividend Equivalents.



(a) Any Participant selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on the shares of Stock that are subject to any Award, to be credited as of
dividend payment dates, during the period between the date the Award is granted and the date the
Award is exercised, vests or expires, as determined by the Committee. Such Dividend Equivalents
shall be converted to cash or additional shares of Stock by such formula and at such time and
subject to such limitations as may be determined by the Committee.



(b) Dividend Equivalents granted with respect to Options or SARs that are intended to be
Qualified Performance-Based Compensation shall be payable, with respect to pre-exercise periods,
regardless of whether such Option or SAR is subsequently exercised.



8.4 Stock Payments. Any Participant selected by the Committee may receive Stock Payments in
the manner determined from time to time by the Committee; provided, that unless otherwise
determined by the Committee such Stock Payments shall be made in lieu of base salary, bonus, or
other cash compensation otherwise payable to such Participant. The number of shares shall be
determined by the Committee and may be based upon the Performance Criteria or other specific
performance criteria determined appropriate by the Committee, determined on the date such Stock
Payment is made or on any date thereafter.


 


 









 





8.5 Deferred Stock. Any Participant selected by the Committee may be granted an award of
Deferred Stock in the manner determined from time to time by the Committee. The number of shares
of Deferred Stock shall be determined by the Committee and may be linked to the Performance
Criteria or other specific performance criteria determined to be appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined by the Committee.
Stock underlying a Deferred Stock award will not be issued until the Deferred Stock award has
vested, pursuant to a vesting schedule or performance criteria set by the Committee. Unless
otherwise provided by the Committee, a Participant awarded Deferred Stock shall have no rights as a
Company stockholder with respect to such Deferred Stock until such time as the Deferred Stock Award
has vested and the Stock underlying the Deferred Stock Award has been issued. Deferred Stock
Awards shall either be exempt from the requirements of Section 409A of the Code or, if they are not
exempt from such requirements, shall satisfy such requirements.



The amount and other terms and conditions (including any which may be required under
Section 409A of the Code) to which such Deferred Stock Award is subject to shall be set forth in
the Participant’s Award Agreement.



8.6 Restricted Stock Units. The Committee is authorized to make Awards of Restricted Stock
Units to any Participant selected by the Committee in such amounts and subject to such terms and
conditions as determined by the Committee. At the time of grant, the Committee shall specify the
date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and
may specify such conditions to vesting as it deems appropriate. At the time of grant, the
Committee shall specify the maturity date applicable to each grant of Restricted Stock Units which
shall be no earlier than the vesting date or dates of the Award and may be determined at the
election of the grantee. On the maturity date, the Company shall, subject to Section 10.5(b),
transfer to the Participant one unrestricted, fully transferable share of Stock for each Restricted
Stock Unit scheduled to be paid out on such date and not previously forfeited.



8.7 Performance Bonus Awards. Any Participant selected by the Committee may be granted one or
more Performance-Based Awards in the form of a cash bonus (a “Performance Bonus Award”) payable
upon the attainment of Performance Goals that are established by the Committee and relate to one or
more of the Performance Criteria, in each case on a specified date or dates or over any period or
periods determined by the Committee. Any such Performance Bonus Award paid to a Covered Employee
shall be based upon objectively determinable bonus formulas established in accordance with
Article 9.



8.8 Term. Except as otherwise provided herein, the term of any Award of Performance Shares,
Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted Stock
Units shall be set by the Committee in its discretion.



8.9 Exercise or Purchase Price. The Committee may establish the exercise or purchase price,
if any, of any Award of Performance Shares, Performance Stock Units, Deferred Stock, Stock Payments
or Restricted Stock Units; provided, however, that such price shall not be less than the par value
of a share of Stock on the date of grant, unless otherwise permitted by applicable state law.



8.10 Exercise upon Termination of Employment or Service. An Award of Performance Shares,
Performance Stock Units, Dividend Equivalents, Deferred Stock, Stock Payments and Restricted Stock
Units shall only be exercisable or payable while the Participant is an Employee, Consultant or a
member of the Board, as applicable; provided, however, that the Committee in its sole and absolute
discretion, at the time of grant or any time thereafter, may provide that an Award of Performance
Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted
Stock Units may be exercised or paid subsequent to a termination of employment or service, as
applicable, or following a Change in Control of the Company, or because of the Participant’s
retirement, death or disability, or otherwise; provided, however, that any such provision with
respect to Performance Shares or Performance Stock Units shall be subject to the requirements of
Section 162(m) of the Code that apply to Qualified Performance-Based Compensation.



8.11 Form of Payment. Payments with respect to any Awards granted under this Article 8 shall
be made in cash, in Stock or a combination of both, as determined by the Committee.



8.12 Award Agreement. All Awards under this Article 8 shall be subject to such additional
terms and conditions as determined by the Committee and shall be evidenced by an Award Agreement.


 


 









 





ARTICLE 9




PERFORMANCE-BASED AWARDS




9.1 Purpose. The purpose of this Article 9 is to provide the Committee the ability to qualify
Awards other than Options and SARs and that are granted pursuant to Articles 6 and 8 as Qualified
Performance-Based Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9 shall control over
any contrary provision contained in Articles 6 or 8; provided, however, that the Committee may in
its discretion grant Awards to Covered Employees that are based on Performance Criteria or
Performance Goals but that do not satisfy the requirements of this Article 9.



9.2 Applicability. This Article 9 shall apply only to those Covered Employees selected by the
Committee to receive Performance-Based Awards. The designation of a Covered Employee as a
Participant for a Performance Period shall not in any manner entitle the Participant to receive an
Award for the period. Moreover, designation of a Covered Employee as a Participant for a
particular Performance Period shall not require designation of such Covered Employee as a
Participant in any subsequent Performance Period and designation of one Covered Employee as a
Participant shall not require designation of any other Covered Employees as a Participant in such
period or in any other period.



9.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to comply
with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of the Code,
with respect to any Award granted under Articles 6 or 8 which may be granted to one or more Covered
Employees, no later than ninety (90) days following the commencement of any fiscal year in question
or any other designated fiscal period or period of service (or such other time as may be required
or permitted by Section 162(m) of the Code), the Committee shall, in writing, (a) designate one or
more Covered Employees, (b) select the Performance Criteria applicable to the Performance Period,
(c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned
for such Performance Period, and (d) specify the relationship between Performance Criteria and the
Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered
Employee for such Performance Period. Following the completion of each Performance Period, the
Committee shall certify in writing whether the applicable Performance Goals have been achieved for
such Performance Period. In determining the amount earned by a Covered Employee, the Committee
shall have the right to reduce or eliminate (but not to increase) the amount payable at a given
level of performance to take into account additional factors that the Committee may deem relevant
to the assessment of individual or corporate performance for the Performance Period.



9.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable Award
Agreement, a Participant must be employed by the Company or a Subsidiary on the day a
Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a
Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved. In determining the
amount earned under a Performance-Based Award, the Committee may reduce or eliminate the amount of
the Performance-Based Award earned for the Performance Period, if in its sole and absolute
discretion, such reduction or elimination is appropriate.



9.5 Additional Limitations. Notwithstanding any other provision of the Plan, any Award which
is granted to a Covered Employee and is intended to constitute Qualified Performance-Based
Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code
(including any amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as qualified performance-based compensation as
described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent
necessary to conform to such requirements.


 


 









 





ARTICLE 10




PROVISIONS APPLICABLE TO AWARDS




10.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other
Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards
may be granted either at the same time as or at a different time from the grant of such other
Awards.



10.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set
forth the terms, conditions and limitations for each Award which may include the term of an Award,
the provisions applicable in the event the Participant’s employment or service terminates, and the
Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an
Award.



10.3 Limits on Transfer. No right or interest of a Participant in any Award may be pledged,
encumbered, or hypothecated to or in favor of any party other than the Company or a Subsidiary, or
shall be subject to any lien, obligation, or liability of such Participant to any other party other
than the Company or a Subsidiary. Except as otherwise provided by the Committee at the time of
grant or any time thereafter, no Award shall be assigned, transferred, or otherwise disposed of by
a Participant other than by will or the laws of descent and distribution. The Committee by express
provision in the Award or an amendment thereto may permit an Award (other than an Incentive Stock
Option) to be transferred to, exercised by and paid to certain persons or entities related to the
Participant, including but not limited to members of the Participant’s family, charitable
institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of
the Participant’s family and/or charitable institutions, or to such other persons or entities as
may be expressly approved by the Committee, pursuant to such conditions and procedures as the
Committee may establish. Any permitted transfer shall be subject to the condition that the
Committee receive evidence satisfactory to it that the transfer is being made for estate and/or tax
planning purposes (or to a “blind trust” in connection with the Participant’s termination of
employment or service with the Company or a Subsidiary to assume a position with a governmental,
charitable, educational or similar non-profit institution) and on a basis consistent with the
Company’s lawful issue of securities.



10.4 Beneficiaries. Notwithstanding Section 10.3, a Participant may, in the manner determined
by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive
any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject
to all terms and conditions of the Plan and any Award Agreement applicable to the Participant,
except to the extent the Plan and Award Agreement otherwise provide, and to any additional
restrictions deemed necessary or appropriate by the Committee. If the Participant is married and
resides in a community property state, a designation of a person other than the Participant’s
spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the
Award shall not be effective without the prior written consent of the Participant’s spouse. If no
beneficiary has been designated or survives the Participant, payment shall be made to the person
entitled thereto pursuant to the Participant’s will or the laws of descent and distribution.
Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at
any time provided the change or revocation is filed with the Committee.




10.5 Stock Certificates; Book Entry Procedures.



(a) Notwithstanding anything herein to the contrary, the Company shall not be required to
issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award,
unless and until the Board has determined, with advice of counsel, that the issuance and delivery
of such certificates is in compliance with all applicable laws, regulations of governmental
authorities and, if applicable, the requirements of any exchange on which the shares of Stock are
listed or traded. All Stock certificates delivered pursuant to the Plan are subject to any
stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply
with federal, state, or foreign jurisdiction, securities or other laws, rules and regulations and
the rules of any national securities exchange or automated quotation system on which the Stock is
listed, quoted, or traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the
Board may require that a Participant make such reasonable covenants, agreements, and
representations as the Board, in its discretion, deems advisable in order to comply with any such
laws, regulations, or requirements. The Committee shall have the right to require any
Participant to comply with any timing or other restrictions with respect to the settlement or
exercise of any Award, including a window-period limitation, as may be imposed in the discretion of
the Committee.


 


 









 





(b) Notwithstanding any other provision of the Plan, unless otherwise determined by the
Committee or required by any applicable law, rule or regulation, the Company shall not be required
to deliver to any Participant certificates evidencing shares of Stock issued in connection with any
Award and instead such shares of Stock shall be recorded in the books of the Company (or, as
applicable, its transfer agent or stock plan administrator).



10.6 Paperless Exercise. In the event that the Company establishes, for itself or using the
services of a third party, an automated system for the exercise of Awards, such as a system using
an internet website or interactive voice response, then the paperless exercise of Awards by a
Participant may be permitted through the use of such an automated system.



ARTICLE 11




CHANGES IN CAPITAL STRUCTURE





11.1 Adjustments.



(a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation, spin-off, recapitalization or other distribution (other than normal cash
dividends) of Company assets to stockholders, or any other change affecting the shares of Stock or
the share price of the Stock, the Committee shall make proportionate adjustments to any or all of
the following in order to reflect such change: (a) the aggregate number and kind of shares that
may be issued under the Plan (including, but not limited to, adjustments of the limitations in
Sections 3.1 and Section 3.3 hereof); (b) the terms and conditions of any outstanding Awards
(including, without limitation, any applicable performance targets or criteria with respect
thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan.
Any adjustment affecting an Award intended as Qualified Performance-Based Compensation shall be
made consistent with the requirements of Section 162(m) of the Code.



(b) In the event of any transaction or event described in Section 11.1(a) hereof or any
unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company,
or the financial statements of the Company or any affiliate, or of changes in applicable laws,
regulations or accounting principles, the Committee, in its sole and absolute discretion, and on
such terms and conditions as it deems appropriate, either by the terms of the Award or by action
taken prior to the occurrence of such transaction or event and either automatically or upon the
Participant’s request, is hereby authorized to take any one or more of the following actions in
order to prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or principles:



(i) To provide for either (A) termination of any such Award in exchange for an amount of cash,
if any, equal to the amount that would have been attained upon the exercise of such Award or
realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction or event described in this Section 11.2 the Committee determines in
good faith that no amount would have been attained upon the exercise of such Award or realization
of the Participant’s rights, then such Award may be terminated by the Company without payment) or
(B) the replacement of such Award with other rights or property selected by the Committee in its
sole discretion;



(ii) To provide that such Award be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices;


 


 









 





(iii) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock
or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price),
and the criteria included in, outstanding options, rights and awards and options, rights and awards
which may be granted in the future;



(iv) To provide that such Award shall be exercisable or payable or fully vested with respect
to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the
applicable Award Agreement; and




(v) To provide that the Award cannot vest, be exercised or become payable after such event.



11.2 Change of Control. Notwithstanding Section 11.1, and except as may otherwise be provided
in any applicable Award Agreement or other written agreement entered into between the Company and a
Participant, if a Change in Control occurs then any surviving corporation or entity or acquiring
corporation or entity, or affiliate of such corporation or entity, may assume any or all Awards
outstanding under the Plan or may substitute comparable stock, cash or other awards (including an
award to acquire the same consideration paid to the stockholders in the transaction described in
this subsection) for those outstanding under the Plan, which substituted awards may be subject to
vesting or the lapsing of restrictions, as applicable, on terms no less favorable to the affected
Holder than the terms of any Award for which such new award is substituted. In the event any
surviving corporation or entity or acquiring corporation or entity in a Change of Control, or
affiliate of such corporation or entity, does not assume such Awards or does not substitute similar
stock, cash or other awards for those outstanding under the Plan, then with respect to (i) Awards
held by participants in the Plan whose status as a Service Provider has not terminated prior to
such event, the vesting of such Awards (and, if applicable, the time during which such awards may
be exercised) shall be accelerated and made fully exercisable and all restrictions thereon shall
lapse not later than immediately prior to the closing of the Change of Control (and any Options
shall be terminated if not exercised prior to the closing of such Change of Control), and (ii) any
other Options outstanding under the Plan, such Options shall be terminated if not exercised prior
to the closing of the Change of Control.



11.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision or consolidation of shares of stock of any class, the payment
of any dividend, any increase or decrease in the number of shares of stock of any class or any
dissolution, liquidation, merger, or consolidation of the Company or any other corporation. Except
as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.



ARTICLE 12




ADMINISTRATION




12.1 Committee. Unless and until the Board delegates administration of the Plan to a
Committee as set forth below, the Plan shall be administered by the full Board, and for such
purposes the term “Committee” as used in this Plan shall be deemed to refer to the Board. The
Board, at its discretion or as otherwise necessary to comply with the requirements of
Section 162(m) of the Code, Rule 16b-3 promulgated under the Exchange Act or to the extent required
by any other applicable rule or regulation, shall delegate administration of the Plan to a
Committee. Unless otherwise determined by the Board, the Committee shall consist solely of two or
more members of the Board each of whom is an “outside director,” within the meaning of
Section 162(m) of the Code. Notwithstanding the foregoing: (a) the full Board, acting by a
majority of its members in office, shall conduct the general administration of the Plan with
respect to all Awards granted to Independent Directors and for purposes of such Awards the term
“Committee” as used in this Plan shall be deemed to refer to the Board and (b) the Committee may
delegate its authority hereunder to the extent permitted by Section 12.5. Appointment of Committee
members shall be effective upon acceptance of appointment. In its sole discretion, the Board may
at any time and from time to time exercise any and all rights and duties of the Committee under the
Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or Section 162(m)
of the Code, or any regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may only be filled by the Board.


 


 









 





12.2 Action by the Committee. A majority of the Committee shall constitute a quorum. The
acts of a majority of the members present at any meeting at which a quorum is present, and acts
approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts
of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any
report or other information furnished to that member by any officer or other employee of the
Company or any Subsidiary, the Company’s independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist in the
administration of the Plan.



12.3 Authority of Committee. Subject to any specific designation in the Plan, the Committee
has the exclusive power, authority and discretion to:




(a) Designate Participants to receive Awards;




(b) Determine the type or types of Awards to be granted to each Participant;



(c) Determine the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;



(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any restrictions or
limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the
exercisability of an Award, and accelerations or waivers thereof, any provisions related to
non-competition and recapture of gain on an Award, based in each case on such considerations as the
Committee in its sole discretion determines; provided, however, that the Committee shall not have
the authority to accelerate the vesting or waive the forfeiture of any Performance-Based Awards;



(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other
property, or an Award may be canceled, forfeited or surrendered;



(f) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;




(g) Decide all other matters that must be determined in connection with an Award;



(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;



(i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and



(j) Make all other decisions and determinations that may be required pursuant to the Plan or
as the Committee deems necessary or advisable to administer the Plan.



12.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted
pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee
with respect to the Plan are final, binding, and conclusive on all parties.



12.5 Delegation of Authority. To the extent permitted by applicable law, the Committee may
from time to time delegate to a committee of one or more members of the Board or one or more
officers of the Company the authority to grant or amend Awards to Participants other than
(a) senior executives of the Company who are subject to Section 16 of the Exchange Act, (b) Covered
Employees, or (c) officers of the Company (or members of the Board) to whom authority to grant or
amend Awards has been delegated hereunder. Any delegation hereunder shall be subject to the
restrictions and limits that the Committee specifies at the time of such delegation, and the
Committee may at any time rescind the authority so delegated or appoint a new delegatee. At
all times, the delegatee appointed under this Section 12.5 shall serve in such capacity at the
pleasure of the Committee.


 


 









 





ARTICLE 13




EFFECTIVE AND EXPIRATION DATE




13.1 Effective Date. The Plan is effective as of the date the Plan is approved by the
Company’s stockholders (the “Effective Date”). The Plan will be deemed to be approved by the
stockholders if it receives the affirmative vote of the holders of a majority of the shares of
stock of the Company present or represented and entitled to vote at a meeting duly held in
accordance with the applicable provisions of the Company’s Bylaws.



13.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant to the
Plan after the tenth anniversary of the Effective Date, except that no Incentive Stock Options may
be granted under the Plan after the earlier of the tenth anniversary of (i) the date the Plan is
approved by the Board or (ii) the Effective Date. Any Awards that are outstanding on the tenth
anniversary of the Effective Date shall remain in force according to the terms of the Plan and the
applicable Award Agreement.



ARTICLE 14




AMENDMENT, MODIFICATION, AND TERMINATION




14.1 Amendment, Modification, and Termination. Subject to Section 15.14, with the approval of
the Board, at any time and from time to time, the Committee may terminate, amend or modify the
Plan; provided, however, that (a) to the extent necessary and desirable to comply with any
applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder approval
of any Plan amendment in such a manner and to such a degree as required, and (b) stockholder
approval is required for any amendment to the Plan that (i) increases the number of shares
available under the Plan (other than any adjustment as provided by Article 11), (ii) permits the
Committee to grant Options with an exercise price that is below Fair Market Value on the date of
grant or (iii) permits the Committee to extend the exercise period for an Option beyond ten years
from the date of grant. Notwithstanding any provision in this Plan to the contrary, absent
approval of the stockholders of the Company, no Option may be amended to reduce the per share
exercise price of the shares subject to such Option below the per share exercise price as of the
date the Option is granted and, except as permitted by Article 11, no Option may be granted in
exchange for, or in connection with, the cancellation or surrender of an Option having a higher per
share exercise price.



14.2 Awards Previously Granted. Except with respect to amendments made pursuant to
Section 15.14, no termination, amendment, or modification of the Plan shall adversely affect in any
material way any Award previously granted pursuant to the Plan without the prior written consent of
the Participant.



ARTICLE 15




GENERAL PROVISIONS




15.1 No Rights to Awards. No Eligible Individual or other person shall have any claim to be
granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to
treat Eligible Individuals, Participants or any other persons uniformly.



15.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall have
none of the rights of a stockholder with respect to shares of Stock covered by any Award until the
Participant becomes the record owner of such shares of Stock.


 


 









 





15.3 Withholding. The Company or any Subsidiary shall have the authority and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to
satisfy federal, state, local and foreign taxes (including the Participant’s employment tax
obligations) required by law to be withheld with respect to
any taxable event concerning a Participant arising as a result of this Plan. The Committee
may in its discretion and in satisfaction of the foregoing requirement allow a Participant to elect
to have the Company withhold shares of Stock otherwise issuable under an Award (or allow the return
of shares of Stock) having a Fair Market Value equal to the sums required to be withheld.
Notwithstanding any other provision of the Plan, the number of shares of Stock which may be
withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be
repurchased from the Participant of such Award within six months (or such other period as may be
determined by the Committee) after such shares of Stock were acquired by the Participant from the
Company) in order to satisfy the Participant’s federal, state, local and foreign income and payroll
tax liabilities with respect to the issuance, vesting, exercise or payment of the Award shall be
limited to the number of shares which have a Fair Market Value on the date of withholding or
repurchase equal to the aggregate amount of such liabilities based on the minimum statutory
withholding rates for federal, state, local and foreign income tax and payroll tax purposes that
are applicable to such supplemental taxable income.



15.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall
interfere with or limit in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment or services at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company or any Subsidiary.



15.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentive
compensation. With respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are
greater than those of a general creditor of the Company or any Subsidiary.



15.6 Indemnification. To the extent allowable pursuant to applicable law, each member of the
Committee or of the Board shall be indemnified and held harmless by the Company from any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure to act pursuant to
the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in
such action, suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled pursuant to
the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.



15.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into
account in determining any benefits pursuant to any pension, retirement, savings, profit sharing,
group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the
extent otherwise expressly provided in writing in such other plan or an agreement thereunder.



15.8 Expenses. The expenses of administering the Plan shall be borne by the Company and its
Subsidiaries.



15.9 Titles and Headings. The titles and headings of the Sections in the Plan are for
convenience of reference only and, in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.



15.10 Fractional Shares. No fractional shares of Stock shall be issued and the Committee
shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or
whether such fractional shares shall be eliminated by rounding up or down as appropriate.



15.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of
the Plan, the Plan, and any Award granted or awarded to any Participant who is then subject to
Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any
applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.


 


 









 





15.12 Government and Other Regulations. The obligation of the Company to make payment of
awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations, and
to such approvals by government agencies as may be required. The Company shall be under no
obligation to register pursuant to the Securities Act, as amended, any of the shares of Stock paid
pursuant to the Plan. If the shares paid pursuant to the Plan may in certain circumstances be
exempt from registration pursuant to the Securities Act, as amended, the Company may restrict the
transfer of such shares in such manner as it deems advisable to ensure the availability of any such
exemption.



15.13 Governing Law. The Plan and all Award Agreements shall be construed in accordance with
and governed by the laws of the State of Delaware.



15.14 Section 409A. To the extent that the Committee determines that any Award granted under
the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall
incorporate the terms and conditions required by Section 409A of the Code. To the extent
applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of
the Code and Department of Treasury regulations and other interpretive guidance issued thereunder,
including without limitation any such regulations or other guidance that may be issued after the
Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that
following the Effective Date the Committee determines that any Award may be subject to Section 409A
of the Code and related Department of Treasury guidance (including such Department of Treasury
guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the
Plan and the applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other actions, that the
Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the
Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award,
or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury
guidance.