exv10w1






TD AMERITRADE HOLDING CORPORATION

LONG-TERM INCENTIVE PLAN




(As
Amended and Restated on February 25, 2010)



     1. History, Purpose and Term of Plan.



          1.1. History. The Plan was originally adopted by the Ameritrade Holding Corporation
(“Old Ameritrade”) effective as of October 1, 1996 (the “Original Effective Date”). Pursuant to an
agreement and plan of merger, Old Ameritrade became a subsidiary of the Company, a newly formed
corporation, effective as of September 9, 2002, and thereafter the Company assumed the Plan, and
all outstanding obligations under the Plan. The Board approved an amendment and restatement of the
Plan on September 7, 2005, and Company stockholders approved such amendment and restatement on
January 4, 2006. The Board subsequently approved this amendment and restatement of the Plan on
January 19, 2006 (the “2006 Restatement Date”), and Company stockholders approved this amendment
and restatement of the Plan on March 9, 2006. The Board approved an additional amendment and
restatement of the Plan, subject to Company stockholder approval, on November 9, 2009, and
stockholders approved the Plan on February 25, 2010. The HR
& Compensation Committee approved additional amendments on
February 24, 2010.




          1.2. Purpose. The purposes of this Plan are to attract, retain and reward Service
Providers and to promote the success of the Company’s business. The Plan seeks to achieve this
purpose by providing for Awards in the form of Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares and Performance Units.




          1.3. Term. The Plan shall continue in effect until the earlier of its termination by
the Board or the date on which all of the shares of Stock available for issuance under the Plan
have been issued and all restrictions on such shares under the terms of the Plan and the agreements
evidencing Awards granted under the Plan have lapsed. However, all Incentive Stock Options shall
be granted, if at all, within ten (10) years from the 2006 Restatement Date.




     2. Definitions and Construction.



          2.1. Definitions. Whenever used herein, the following terms shall their respective
meanings set forth below:




               (a) “Administrator” means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 3 of the Plan.



               (b) “Applicable Laws” means the requirements relating to the administration of
stock-based awards or equity compensation programs under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation system on which the Stock is
listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are,
or will be, granted under the Plan.



               (c) “Award” means, individually or collectively, a grant under the Plan of Options,
SARs, Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units.



               (d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.



               (e) “Board” means the Board of Directors of the Company.



               (f) “Change in Control” means the occurrence of any of the following events after the
2006 Restatement Date:



                    (i) A change in the ownership of the Company. A change in the ownership of the Company will
occur on the date that any one person, or more than one person acting as a group, acquires
ownership of the Stock of



 









 




the Company that, together with the Stock held by such person or group, constitutes more than
fifty percent (50%) of the total fair market value or total voting power of the Stock of the
Company; provided, however, that for purposes of this subsection (i), the acquisition of additional
Stock by any one person, or more than one person acting as a group, who is considered to own more
than fifty percent (50%) of the total fair market value or total voting power of the Stock of the
Company shall not be considered a Change of Control; or




                    (ii) A change in the effective control of the Company. A change in the effective control of
the Company shall occur on the date that: (1) the Board determines, in its sole and absolute
discretion, that any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of the Stock of the Company possessing up to fifty percent (50%) or
more of the total voting power of the Stock of the Company, in each case whether such acquisition
is by means of a tender offer, exchange offer, merger, business combination or otherwise; or (2) a
majority of members of the Board of Directors is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the members of the Board of
Directors prior to the date of the appointment or election. For purposes of this subsection (ii),
if any one person, or more than one person acting as a group, is considered to effectively control
the Company, the acquisition of additional control of the Company by the same person or persons
shall not be considered a Change of Control; or



                    (iii) A change in the ownership of a substantial portion of the Company’s assets. A change in
the ownership of a substantial portion of the Company’s assets shall occur on the date that any one
person, or more than one person acting as a group, acquires (or has acquired during the 12-month
period ending on the date of the most recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more than fifty percent (50%) of the
total fair market value of all of the assets of the Company immediately prior to such acquisition
or acquisitions; provided, however, that for purposes of this subsection (iii), the following shall
not constitute a change in the ownership of a substantial portion of the Company’s assets: (1) a
transfer to an entity that is controlled by the Company’s stockholders immediately after the
transfer; or (2) a transfer of assets by the Company to: (A) a stockholder of the Company
(immediately before the asset transfer) in exchange for or with respect to the Company’s Stock; (B)
an entity, fifty percent (50%) or more of the total value or voting power of which is owned,
directly or indirectly, by the Company; (C) a person, or more than one person acting as a group,
that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power
of all the outstanding Stock of the Company; or (D) an entity, at least fifty percent (50%) of the
total value or voting power of which is owned, directly or indirectly, by a person described in
this subsection 2.1(f)(iii)(2)(C). For purposes of this subsection (iii), gross fair market value
means the value of the assets of the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with such assets.


For purposes of this Section 2.1(f), persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock,
or similar business transaction with the Company.



Additionally, for purposes of this Section 2.1(f), notwithstanding any public disclosure to the
contrary, TD and the R Parties (as such terms are defined in the Stockholders Agreement) together
will not be considered to have formed a group solely as a result of being parties or bound by the
Stockholders Agreement and any future actions, agreements or arrangements between TD and the R
Parties outside of the rights and obligations set forth in the Stockholders Agreement shall be
taken into account when considering whether TD and the R Parties shall have formed a group in the
future.




               (g) “Consultant” means any person, including an advisor, engaged by the Company or a
Related Entity to render services to such entity.



               (h) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein will be a reference to any successor or amended section of the Code.



               (i) “Committee” means a committee of Directors or other individuals satisfying
Applicable Laws appointed by the Board in accordance with Section 3 of the Plan.



 









 





               (j) “Committee Designate” means any committee comprised of (1) one or more individual
(or individuals) who are then serving as a member(s) of the Board or (2) one or more Officer (or
Officers).



               (k) “Company” means TD Ameritrade Holding Corporation, a Delaware corporation, or any
successor thereto.



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



               (m) “Director” means a member of the Board.



               (n) “Disability” means, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, receipt by the Employee of income replacement benefits
for a period of not less than three (3) months under an applicable disability benefit plan of the
Company.



               (o) “Dividend Right” means a credit, made at the discretion of the Committee, to the
account of a Participant in an amount equal to the cash dividends paid on one Share for each Share
represented by an Award held by such Participant.



               (p) “Employee” means any person, including Officers and Directors, who are employed by
the Company or a Related Entity. Neither service as a Director nor payment of a director’s fee by
the Company or Related Entity will be sufficient to constitute “employment” by the Company or
Related Entity.



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



               (r) “Fair Market Value” means, as of any date and unless the Committee determines
otherwise, the value of Stock determined as follows:



                    (i) If the Stock is listed on any established stock exchange or a national market system,
including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the
Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing market
composite price for such Stock as quoted on such exchange or system for the day of determination,
as reported in The Wall Street Journal or such other source as the Committee deems reliable;



                    (ii) If the Stock is regularly quoted by a recognized securities dealer but selling prices are
not reported, the Fair Market Value of a Share of Stock will be the mean between the high bid and
low asked prices for the Stock for the day of determination, as reported in The Wall Street Journal
or such other source as the Committee deems reliable; or



                    (iii) In the absence of an established market for the Stock, the Fair Market Value will be
determined in good faith by the Committee.



                    (iv) Notwithstanding the preceding, for federal, state, and local income tax reporting
purposes and for such other purposes as the Committee deems appropriate, the Fair Market Value
shall be determined by the Committee in accordance with uniform and nondiscriminatory standards
adopted by it from time to time.



               (s) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.



               (t) “Non-Qualified Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.



               (u) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.



 









 





               (v) “Option” means an Incentive Stock Option or a Non-Qualified Stock Option granted
pursuant to Section 6 of the Plan.



               (w) “Option Price” means the price at which Shares may be purchased upon the exercise
of an Option pursuant to Section 6.3.



               (x) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.



               (y) “Participant” means the holder of an outstanding Award.



               (z) “Performance-Based Award” means any Award granted to selected Service Providers
pursuant to this Plan, but which are subject to the terms and conditions set forth in Section 12.
All Performance-Based Awards granted to Covered Employees are, unless specifically noted to the
contrary by the Committee, intended to qualify as performance-based compensation under Section
162(m) of the Code.



               (aa) “Performance Goals” means the goal(s) determined by the Committee (in its
discretion) to be applicable to a Participant with respect to an Award. As determined by the
Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels
of achievement using one or more of the following measures: (i) revenue, (ii) gross margin, (iii)
operating margin, (iv) operating income, (v) pre-tax profit, (vi) pre-tax margin, (vii) earnings
before interest, taxes, depreciation and amortization, (viii) net income, (ix) cash flow, (x)
operating expenses, (xi) the market price of the Share, (xii) earnings per share, (xiii) earnings
yield, (xiv) earnings yield spread, (xv) gross and net client asset growth, (xvi) gross and net
account growth, (xvii) total stockholder return, (xviii) return on capital, (xix) return on assets,
(xx) product quality, (xxi) economic value added, (xxii) number of customers, (xxiii) market share,
(xxiv) return on investments, (xxv) profit after taxes, (xxvi) customer satisfaction, (xxvii)
business divestitures and acquisitions, (xxviii) supplier awards from significant customers, (xxix)
new product development, (xxx) working capital, (xxxi) individual objectives, (xxxii) time to
market, (xxxiii) return on net assets, and (xxxiv) sales. The Performance Goals may differ from
Participant to Participant and from Award to Award. Any criteria used may be measured, as
applicable, (i) in absolute terms, (ii) in relative terms (including, but not limited to, passage
of time and/or against another company or companies), (iii) on a per-share basis, (iv) against the
performance of the Company as a whole or a segment of the Company, and (v) on a pre-tax or
after-tax basis.



               (bb) “Performance Period” means a period established by the Committee pursuant to
Section 12 of the Plan at the end of which one or more Performance Goals are to be measured.



               (cc) “Performance Share” means an Award granted to a Service Provider pursuant to
Section 10 of the Plan.



               (dd) “Performance Unit” means an Award granted to a Service Provider pursuant to
Section 10 of the Plan.



               (ee) “Period of Restriction” means the period during which the transfer of Restricted
Stock or Restricted Stock Units are subject to restrictions and therefore, the Shares are subject
to a substantial risk of forfeiture. Such restrictions may be based on the passage of time,
continued service, the achievement of Performance Goals, and/or the occurrence of other events as
determined by the Committee.



               (ff) “Plan” means this TD Ameritrade Holding Corporation Long-Term Incentive Plan.



               (gg) “Related Entity” means any Parent, Subsidiary and any business, corporation,
partnership, limited liability company or other entity in which the Company, a Parent or a
Subsidiary holds a substantial ownership interest, directly or indirectly.



               (hh) “Restricted Stock” means an Award granted to a Service Provider pursuant Section
8 of the Plan.




 











 





               (ii) “Restricted Stock Unit” means a bookkeeping entry representing a right granted to
a Participant pursuant to Section 9 of the Plan to receive the value associated with a share of
Stock on a date determined in accordance with the provisions of the Plan and the Participant’s
Award Agreement.



               (jj) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.



               (kk) “Section 16(b)” means Section 16(b) of the Exchange Act.



               (ll) “Service Provider” means an Employee, Director or Consultant.



               (mm) “Share” means a share of Stock, as adjusted in accordance with Section 5.3 of the Plan.



               (nn) “Stock” means the common stock of the Company, or in the case of certain Stock
Appreciation Rights or Performance Units, the cash equivalent thereof.



               (oo) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with an Option, that pursuant to Section 7 of the Plan is designated as SAR.



               (pp) “Stockholders Agreement” means that certain Stockholders Agreement among TD
Ameritrade Holding Corporation, the stockholders listed on Exhibit A thereto and The
Toronto-Dominion Bank dated as of June 22, 2005, and as most recently amended as of August 3, 2009.



               (qq) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing,
as defined in Section 424(f) of the Code.



     3. Administration.



          3.1. Administration. The Plan shall be administered by the Administrator.
Notwithstanding the foregoing, the Administrator, subject to the terms and conditions of the Plan,
may delegate to any Committee Designate the authority to act as a subcommittee of the Board or
Committee, as applicable, for purposes of making grants or awards under the Plan to Service
Providers of the Company who are not subject to Section 16(a) of the Exchange Act as the Committee
Designate shall determine in his or her sole discretion and the Committee Designate shall have the
authority and duties of the Administrator with respect to such grants or awards, provided, however,
that (a) such Awards shall not be granted for shares in excess of the maximum aggregate number of
shares of Stock authorized for issuance pursuant to Section 5, (b) the exercise price per share of
each Option shall be not less than the Fair Market Value per share of the Stock on the effective
date of grant, and (c) each such Award shall be subject to the terms and conditions of the
appropriate standard form of Award Agreement approved by the Administrator and shall conform to the
provisions of the Plan and such other guidelines as shall be established from time to time by the
Administrator.



          3.2. Authority of the Administrator. In addition to any other powers set forth in the
Plan and subject to the provisions of the Plan, the Administrator shall have the full and final
power and authority, in its discretion:



               (a) to determine the Fair Market Value;



               (b) to select the Service Providers to whom Awards may be granted hereunder;



               (c) to determine the number of shares of Stock to be covered by each Award granted hereunder;



               (d) to approve forms of Award Agreements for use under the Plan;



               (e) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the Option
Price, the time or times when Awards may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of



 









 




forfeiture or repurchase restrictions, and any restriction or limitation regarding any Award
or the Shares relating thereto, based in each case on such factors as the Committee, in its sole
discretion, will determine;




               (f) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;



               (g) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws including qualifying for preferred tax treatment under such applicable foreign tax
laws;



               (h) to modify or amend each Award, including the discretionary acceleration of vesting and the
authority to extend the post-termination exercisability period of Awards longer than is otherwise
provided for in an applicable Award Agreement;



               (i) to allow Participants to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares or cash to be issued upon exercise, settlement or vesting of an
Award that number of Shares or cash having a Fair Market Value equal to the minimum amount required
to be withheld. The Fair Market Value of any Shares to be withheld will be determined on the date
that the amount of tax to be withheld is to be determined by the applicable closing price of the
Shares as reported on the applicable stock exchange or a national market system, including without
limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market
of The Nasdaq Stock Market, which the Stock is listed and as reported in The Wall Street Journal or
such other source as the Committee deems reliable. All elections by a Participant to have Shares
or cash withheld for this purpose will be made in such form and under such conditions as the
Committee may deem necessary or advisable;



               (j) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Committee;



               (k) to allow a Participant, subject to compliance with all Applicable Laws, to defer the
receipt of the payment of cash or the delivery of Shares that would otherwise be due to such
Participant under an Award;



               (l) to determine whether Awards will be settled in Shares, cash or in any combination thereof;



               (m) to determine whether Awards will be adjusted for Dividend Rights;



               (n) to establish a program whereby Service Providers designated by the Committee can, subject
to compliance with all Applicable Laws, reduce compensation otherwise payable in cash in exchange
for Awards under the Plan;



               (o) to issue Awards in satisfaction of obligations owed to any Participant under any other
Company incentive or deferred compensation plan;



               (p) to impose such restrictions, conditions or limitations as it determines appropriate as to
the timing and manner of any resales by a Participant or other subsequent transfers by the
Participant of any Shares issued as a result of or under an Award, including without limitation,
(A) restrictions under an insider trading policy, and (B) restrictions as to the use of a specified
brokerage firm for such resales or other transfers;



               (q) in accordance with Section 14 of the Plan, to specify in an Award Agreement at the time of
the Award, or later pursuant to an amendment of an outstanding Award, that the Participant’s
rights, payments and benefits with respect to an Award (including amounts received upon the
settlement or exercise of an Award) shall be subject to reduction, cancellation, forfeiture or
recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award; and



               (r) to make all other determinations deemed necessary or advisable for administering the Plan.



 









 





          3.3. Effect of Decisions and Determinations under Plan. The decisions, determinations
and interpretations of the Administrator will be final and binding on all Participants and any
other holders of Awards.



          3.4. Administration with Respect to Officers. With respect to participation by
Officers in the Plan, at any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the
requirements, if any, of Rule 16b-3.



          3.5. No Repricing. Notwithstanding anything in the Plan to the contrary, without the
affirmative vote of holders of a majority of the shares of Stock cast in person or by proxy at a
meeting of the stockholders of the Company at which a quorom representing a majority of all
outstanding shares of Stock is present or represented by proxy, the Administrator shall not approve
a program providing for either (a) the cancellation of outstanding Options and/or SARs and the
grant in substitution therefore of any new Awards, including specifically, without limitation, any
new Options and/or SARS having a lower exercise price or (b) the amendment of outstanding Options
and/or SARs to reduce the exercise price thereof. This Section 3.5 shall not be construed to apply
to “issuing or assuming a stock option in a transaction to which Section 424(a) applies” within the
meaning of Section 424 of the Code.



          3.6. Indemnification. In addition to such other rights of indemnification as they may
have as members of the Board, Officers or Employees of the Company, members of the Board and any
Officers or Employees of the Company to whom authority to act for the Board or the Company is
delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’
fees, actually and necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as
to which it shall be adjudged in such action, suit or proceeding that such person is liable for
gross negligence, bad faith or intentional misconduct in duties; provided, however, that within
sixty (60) days after the institution of such action, suit or proceeding, such person shall offer
to the Company, in writing, the opportunity at its own expense to handle and defend the same.



     4. Participation. Subject to the terms and conditions of the Plan, the Administrator
shall determine and designate, from time to time, from among the Service Providers those who will
be granted one or more Awards under the Plan. In the discretion of the Administrator, and subject
to the terms of the Plan, a Service Provider may be granted any Award permitted under the
provisions of the Plan, and more than one Award may be granted to a Service Provider. Except as
otherwise agreed by the Administrator and the Participant, or except as otherwise provided in the
Plan, an Award under the Plan shall not affect any previous Award under the Plan or an award under
any other plan maintained by the Company.



     5. Shares Subject to the Plan.



          5.1. Number of Shares Reserved. The shares of Stock with respect to which Awards may
be made under the Plan shall be shares currently authorized but unissued or currently held or
subsequently acquired by the Company as treasury shares, including shares purchased in the open
market or in private transactions. Subject to the provisions of subsection 5.4, the number of
shares of Stock which may be issued with respect to Awards under the Plan shall not exceed
39,000,000 shares in the aggregate.



          5.2. Reusage of Shares.



               (a) In the event of the exercise or termination (by reason of forfeiture, expiration,
cancellation, surrender or otherwise) of any Award under the Plan, that number of shares of Stock
that was subject to the Award but not delivered shall again be available for Awards under the Plan.



               (b) In the event that shares of Stock are delivered under the Plan as Restricted Stock or
Restricted Stock Units and are thereafter forfeited or reacquired by the Company pursuant to rights
reserved in the Award Agreement, such forfeited or reacquired shares of Stock shall again be
available for Awards under the Plan.



 









 





               (c) Notwithstanding the provisions of Sections 5.2(a) or (b), the following shares of Stock
shall not be available for reissuance under the Plan: (i) shares of Stock with respect to which the
Participant has received the benefits of ownership (other than voting rights), either in the form
of dividends or otherwise; (ii) shares of Stock which are withheld from any Award or payment under
the Plan to satisfy tax withholding obligations; (iii) shares of Stock which are surrendered to
fulfill tax obligations; (iv) shares of Stock which are surrendered in payment of the Option Price
upon the exercise of an Option; and (v) shares of Stock subject to the grant of SAR which are not
issued upon settlement of the SAR.



          5.3. Adjustments to Shares Reserved. In the event of any merger, consolidation,
reorganization, recapitalization, spinoff, stock dividend, stock split, reverse stock split,
exchange or other distribution with respect to shares of Stock or other change in the corporate
structure or capitalization affecting the Stock, the type and number of shares of stock which are
or may be subject to awards under the Plan and the terms of any Awards (including the price at
which shares of stock may be issued pursuant to an Award) shall be equitably adjusted by the
Administrator, in its sole discretion, to preserve the value of benefits awarded or to be awarded
to Participants under the Plan.



          5.4. Individual Limits on Awards. Notwithstanding any other provision of the Plan to
the contrary, the following limitations shall apply to Awards under the Plan:



               (a) No Service Provider shall be granted, in any fiscal year of the Company (1) an Option or
SAR to purchase more than 4,000,000 Shares, (2) Restricted Stock or Restricted Stock Units covering
more than 2,000,000 Shares, (3) Performance Shares covering more than 2,000,000 Shares or (4)
Performance Units which could result in such Service Provider receiving more than $6,000,000.



               (b) In connection with her or her initial employment and/or service with the Company, a
Service Provider may be granted Options or SARs to purchase up to an additional 2,000,000 Shares,
which shall not count against the limit set forth in subsection (a) above.



               (c) The foregoing limitations shall be adjusted proportionately in connection with any change
in the Company’s capitalization as described in Section 5.3.



               (d) If an Award is cancelled in the same fiscal year of the Company in which it was granted
(other than in connection with a Change in Control), the cancelled Award will also be counted
against the limits set forth in subsections (a) and (b) above.



               (e) The determination made under this Section 5.4 shall be based on the shares subject to the
Awards at the time of grant, regardless of when the Awards become exercisable and/or are settled.



     6. Options.



          6.1. Term of Option. The term of each Option will be stated in the Award Agreement.
In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or
such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive
Stock Option granted to a Participant who, at the time of the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or a Related Entity, the term of the Incentive Stock Option will be
five (5) years from the date of grant or such shorter term as may be provided in the Award
Agreement.



          6.2. Restrictions Relating to Incentive Stock Options. To the extent that the
aggregate fair market value of Stock with respect to which Incentive Stock Options are exercisable
for the first time by any individual during any calendar year (under all plans of the Company)
exceeds $100,000, such options shall be treated as Non-Qualified Stock Options, to the extent
required by Section 422 of the Code.



          6.3. Option Price. The Option Price shall be established by the Administrator or
shall be determined by a method established by the Administrator at the time the Option is granted;
provided, however, that in no event shall



 









 




such price be less than 100% of the Fair Market Value of a share of Stock as of the date on
which the Option is granted. Notwithstanding the foregoing, any Incentive Stock Option granted to
an Employee who, at the time of grant, owns Stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or a Related Entity, the Option Price will be
no less than 110% of the Fair Market Value on the date of grant.




          6.4. Waiting Period and Exercise Dates. At the time an Option is granted, the
Committee will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised. The Administrator, in its
discretion, may impose such restrictions on shares of Stock acquired pursuant to the exercise of an
Option (including stock acquired pursuant to the exercise of a tandem Stock Appreciation Right) as
it determines to be desirable, including, without limitation, restrictions relating to disposition
of the shares and forfeiture restrictions based on service, performance, Stock ownership by the
Participant, and such other factors as the Administrator determines to be appropriate.



          6.5. Form of Consideration. The Committee will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Committee will determine the acceptable form of consideration at the
time of grant. Such consideration to the extent permitted by Applicable Laws may consist entirely
of: (a) cash; (b) check; (c) other shares of Stock which meet the conditions established by the
Committee to avoid any adverse financial accounting consequences (as determined solely by the
Committee); (d) consideration received by the Company under a cashless exercise program implemented
by the Company in connection with the Plan; (e) consideration received by the Company under a net
exercise program implemented by the Company in connection with the Plan, (f) any combination of the
foregoing methods of payment; or (g) such other consideration and method of payment for the
issuance of shares of Stock to the extent permitted by Applicable Laws.



          6.6. Exercise of Option.



               (a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Committee and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.


An Option will be deemed exercised when the Company receives: (x) written or electronic notice of
exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option,
and (y) full payment for the Shares with respect to which the Option is exercised (together with
any applicable withholding taxes). Full payment may consist of any consideration and method of
payment authorized by the Committee and permitted by the Award Agreement and the Plan. Shares
issued upon exercise of an Option will be issued in the name of the Participant or, if requested by
the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a stockholder
will exist with respect to the shares of Stock underlying such Option, notwithstanding the exercise
of the Option. The Company will issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except as provided in the applicable Award
Agreement.



Exercising an Option in any manner will decrease the number of Shares thereafter available for sale
under the Option, by the number of Shares as to which the Option is exercised. In addition, the
exercise of an Option will result in the surrender of the corresponding rights under a tandem Stock
Appreciation Right, if any.




               (b) Termination of Service Provider Relationship. If a Participant ceases to be an
Service Provider, other than upon the Participant’s death or Disability, the Participant may
exercise his or her Option within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, and except to the extent terminated earlier pursuant to the
Award Agreement, the Option will remain exercisable for three (3) months following the
Participant’s termination. Unless otherwise provided by the Committee, if on the date of
termination the Participant is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option will revert to



 









 




the Plan. If after termination the Participant does not exercise his or her Option within the
time specified by the Committee, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.




               (c) Disability of Participant. If a Participant ceases to be a Service Provider as a
result of the Participant’s Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent the Option is vested on the
date of termination (but in no event later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the Participant’s termination as a
result of Disability. Unless otherwise provided by the Committee, if on the date of termination
the Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option will revert to the Plan. If after termination the Participant does not
exercise his or her Option within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.



               (d) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised following the Participant’s death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of death (but in no event
may the option be exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has
been designated prior to Participant’s death in a form acceptable to the Committee. If no such
beneficiary has been designated by the Participant, then such Option may be exercised by the
personal representative of the Participant’s estate or by the person(s) to whom the Option is
transferred pursuant to the Participant’s will or in accordance with the laws of descent and
distribution. In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the
Committee, if at the time of death Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the
Option is not so exercised within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.



          6.7. Reload Provision. In the event the Participant exercises an Option that was
granted on or prior to the 2006 Restatement Date and pays all or a portion of the Option Price in
Stock, such Participant (either pursuant to the terms of the Option Award, or pursuant to the
exercise of Committee discretion at the time the Option is exercised) may be issued a new Option to
purchase additional shares of Stock equal to the number of shares of Stock surrendered to the
Company in such payment. Such new Option shall have an exercise price equal to the Fair Market
Value per share on the date such new Option is granted, shall first be exercisable six months from
the date of grant of the new Option and shall expire on the same date as the expiration date of the
original Option so exercised by payment of the Option Price in shares of Stock. Options granted
after the 2006 Restatement Date will not be subject to this reload provision in this Section 6.7.



     7. Stock Appreciation Rights.



          7.1. Types of SARs Authorized. SARs may be granted in tandem with all or any portion
of a related Option or may be granted independently of any Option.



          7.2. Exercise Price and Other Terms. The Administrator, subject to the provisions of
the plan, will have complete discretion to determine the terms and conditions of each SAR granted
under the Plan; provided, however, that (a) the exercise price per share subject to a tandem SAR
shall be the exercise price per share under the related Option and (b) the exercise price per share
subject to an independently granted SAR shall not be less than the Fair Market Value of a share of
Stock on the effective date of grant of the SAR.



          7.3. Exercise. If a SAR is not in tandem with an Option, then the SAR shall be
exercisable in accordance with the terms established by the Administrator at the time of grant and
set forth in the Award Agreement. If a SAR is granted in tandem with an Option, then the SAR shall
be exercisable at the time the tandem Option is exercisable. The exercise of a tandem SAR will
result in the surrender of the corresponding rights under the related Option.



          7.4. Settlement of Award. Upon the exercise of a SAR, a Participant will be entitled
to receive payment from the Company in an amount determined by multiplying: (a) the difference
between the Fair Market Value of a Share on the date of exercise over the exercise price; times (b)
the number of shares of Stock with respect to which



 









 




the SAR is exercised. At the discretion of the Administrator, the payment upon SAR exercise
may be in cash, in shares of Stock of equivalent value, or in some combination thereof.




          7.5. Terms and Expiration of SARs. The Administrator, in its discretion, may impose
such restrictions on shares of Stock acquired pursuant to the exercise of a SAR as it determines to
be desirable, including, without limitation, restrictions relating to disposition of the shares and
forfeiture restrictions based on service, performance, ownership of Stock by the Participant, and
such other factors as the Administrator determines to be appropriate. Each SAR grant under the
Plan will expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement. Notwithstanding the foregoing, the requirements of Section 6.6 also
will apply to SARs.



     8. Restricted Stock.



          8.1. Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant Restricted Stock to Service Providers in
such amounts as the Committee, in its sole discretion, will determine.



          8.2. Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Committee, in its sole discretion, will determine. Unless
the Committee determines otherwise, Restricted Stock will be held by the Company as escrow agent
until the restrictions on such Shares have lapsed.



          8.3. Other Restrictions. The Committee, in its sole discretion, may impose such other
restrictions on Restricted Stock as it may deem advisable or appropriate, including granting such
an Award of Restricted Stock subject to Performance Goals or to the requirements of Section 12.



          8.4. Removal of Restrictions. Except as otherwise provided in the Plan or the
applicable Award Agreement, Shares of Restricted Stock covered by each Restricted Stock grant made
under the Plan will be released from escrow as soon as practicable after the last day of the Period
of Restriction. The Committee, in its discretion, may accelerate the time at which any
restrictions will lapse or be removed.



          8.5. Voting Rights. During the Period of Restriction, Service Providers holding
Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those
Shares, unless the Committee determines otherwise and as set forth in the Award Agreement.



          8.6. Dividend Rights. During the Period of Restriction, Service Providers holding
Shares of Restricted Stock may be entitled to Dividend Rights with respect to such Shares to the
extent provided in the Award Agreement. If any such Dividend Rights are paid in shares of Stock,
the shares of Stock will be subject to the same restrictions on transferability and forfeitability
as the Restricted Stock with respect to which they were paid. Dividend Rights shall be settled in
cash or in shares of Stock, as determined by the Administrator, shall be payable at the time and in
the form determined by the Administrator, and shall be subject to such other terms and conditions
as the Administrator may determine.



          8.7. Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.



     9. Restricted Stock Units.



          9.1. Grant of Restricted Stock Units. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Restricted Stock Units to Service
Providers in such amounts as the Committee, in its sole discretion, will determine.



 









 





          9.2. Restricted Stock Unit Agreement. Each Award of Restricted Stock Units will be
evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares
to be issued in settlement of the Award, and such other terms and conditions as the Committee, in
its sole discretion, will determine.



          9.3. Other Restrictions. The Committee, in its sole discretion, may impose such other
restrictions on Restricted Stock Units as it may deem advisable or appropriate, including granting
such an Award of Restricted Stock Units subject to Performance Goals or to the requirements of
Section 12.



          9.4. Settlement of Restricted Stock Units. At the time of grant of any Restricted
Stock Unit, the Committee will specify the settlement date applicable to each grant of Restricted
Stock Units which will be no earlier than the vesting date or dates of the Award and may be
determined at the election of the Participant. On the settlement date, the Company will transfer
to the Participant either (a) one share of Stock or (ii) cash equal to the value of one such share
of Stock for each Restricted Stock Unit scheduled to be paid out on such date and which was not
previously forfeited.



          9.5. Voting Rights. Service Providers holding Restricted Stock Units will not have
any right to exercise voting rights with respect to the shares of Stock underlying such Restricted
Stock Unit.



          9.6. Dividend Rights. During the Period of Restriction, Service Providers holding
Shares of Restricted Stock Units may be entitled to Dividend Rights with respect to such Shares to
the extent and in the manner provided in the Award Agreement. Dividend Rights shall be settled in
cash or in shares of Stock, as determined by the Administrator, shall be payable at the time and in
the form determined by the Administrator, and shall be subject to such other terms and conditions
as the Administrator may determine.



          9.7. Return of Restricted Stock Units to Company. On the date set forth in the Award
Agreement, the Restricted Stock Units for which restrictions have not lapsed, and for which shares
of Stock have not been issued in settlement of the Award, will revert to the Company and again will
become available for grant under the Plan.



     10. Performance Units and Performance Shares.



          10.1. Grant of Performance Units/Shares. Subject to the terms and conditions of the
Plan, Performance Units and Performance Shares may be granted to Service Providers at any time and
from time to time, as will be determined by the Administrator, in its sole discretion. The
Administrator will have complete discretion in determining the number of Performance Units and
Performance Shares granted to each Participant.



          10.2. Value of Performance Units/Shares. Each Performance Unit will have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.



          10.3. Performance Objectives and Other Terms. The Administrator will set performance
objectives or other vesting provisions (including, without limitation, continued status as a
Participant) in its discretion which, depending on the extent to which they are met, will determine
the number or value of Performance Units/Shares that will be paid out to the Participants. The
time period during which the performance objectives must be met will be called the “Performance
Period.” Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will
specify the Performance Period, and such other terms and conditions as the Administrator, in its
sole discretion, will determine. The Administrator may set Performance Goals based upon the
achievement of Company-wide, divisional, or individual goals, applicable federal or state
securities laws, or any other basis determined by the Administrator in its discretion.



          10.4. Earning of Performance Units/Shares. After the applicable Performance Period
has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the
number of Performance Units/Shares earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding performance objectives have been
achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion,
may reduce or waive any performance objectives for such Performance Unit/Share.



 









 





          10.5. Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon after the expiration of the applicable Performance
Period at the time determined by the Administrator. The Administrator, in its sole discretion, may
pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair
Market Value equal to the value of the earned Performance Units/Shares at the close of the
applicable Performance Period) or in a combination thereof.



          10.6. Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and
again will be available for grant under the Plan.



     11. Replacement Awards. Each holder of an Award related to the common stock of Old
Ameritrade which was granted pursuant to the Plan prior to the Assumption Date and which was
outstanding as of the Assumption Date after giving effect to the transactions contemplated by the
Merger Agreement (the “Existing Awards”), will, as of the Assumption Date, be automatically granted
a “Replacement Award” under the Plan and the Existing Awards shall be cancelled in exchange for the
Replacement Awards. The number of shares of Stock and, if applicable, the Option Price per share
of Stock, subject to a Replacement Award shall be equal to the same number of shares of common
stock of Old Ameritrade and, if applicable, the same Option Price per share, subject to
corresponding Existing Award. Except as provided in the preceding sentence, the Replacement Awards
granted pursuant to this Section 11 shall be subject to the same terms and conditions as the
corresponding Existing Awards.



     12. Terms and Conditions of Any Performance-Based Award.



          12.1. Purpose. The purpose of this Section 12 is to provide the Committee the ability
to qualify Awards (other than Options and SARs) that are granted pursuant to the Plan as qualified
performance-based compensation under Section 162(m) of the Code. If the Committee, in its
discretion, decides to grant a Performance-Based Award subject to Performance Goals to a Covered
Employee, the provisions of this Section 12 will control over any contrary provision in the Plan;
provided, however, that the Committee may in its discretion grant Awards to such Covered Employees
that are based on Performance Goals or other specific criteria or goals but that do not satisfy the
requirements of this Section 12.



          12.2. Applicability. This Section 12 will apply to those Covered Employees which are
selected by the Committee to receive any Award subject to Performance Goals. The designation of a
Covered Employee as being subject to Section 162(m) of the Code will not in any manner entitle the
Covered Employee to receive an Award under the Plan. Moreover, designation of a Covered Employee
subject to Section 162(m) of the Code for a particular Performance Period will not require
designation of such Covered Employee in any subsequent Performance Period and designation of one
Covered Employee will not require designation of any other Covered Employee in such period or in
any other period.



          12.3. Procedures with Respect to Performance Based Awards. To the extent necessary to
comply with the performance-based compensation of Section 162(m) of the Code, with respect to any
Award granted subject to Performance Goals, no later than ninety (90) days following the
commencement of any fiscal year in question or any other designated period of time or period of
service (or such other time as may be required or permitted by Section 162(m)), the Committee will,
in writing, (a) designate one or more Participants who are Covered Employees, (b) select the
Performance Goals 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 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 will certify in writing whether the applicable Performance
Goals have been achieved for such Performance Period. In determining the amounts earned by a
Covered Employee, the Committee will 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. Unless specifically provided otherwise by the Committee when establishing any
Performance Goal, and only to the extent applicable to each particular Performance Goal, such
Performance Goals shall be automatically adjusted to (a) the reflect the impact of any change in
accounting standards that may be required by the Financial Accounting Standards Board after the
adoption of the Performance Goal and (b) reflect the



 









 




impact of any restatement of the Company’s financial statements as result of such a change in
the accounting standards.




          12.4. Payment of Performance Based Awards. Unless otherwise provided in the
applicable Award Agreement, a Covered Employee must be employed by the Company or a Related Entity
on the day a Performance-Based Award for such Performance Period is paid to the Covered Employee.
Furthermore, a Covered Employee will 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.



          12.5. 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 under Section 162(m) of the Code will be subject to any additional limitations
set forth in the Code (including any amendment to Section 162(m)) or any regulations and ruling
issued thereunder that are requirements for qualification as qualified performance-based
compensation as described in Section 162(m) of the Code, and the Plan will be deemed amended to the
extent necessary to conform to such requirements.



     13. Change in Control.



          13.1. Options and SARs. In the event of a Change in Control, an outstanding Option or
SAR that was granted on or after the 2006 Restatement Date may be (i) assumed or substituted with
an equivalent option or SAR of the successor corporation or a Parent or Subsidiary of the successor
corporation, (ii) replaced with a cash incentive program of the successor corporation or a Parent
or Subsidiary of the successor corporation, or (iii) terminated. Unless determined otherwise by
the Committee, in the event that the successor corporation does not assume, substitute or replace a
Participant’s Option or SAR that was granted on or after the 2006 Restatement Date, the Participant
shall, immediately prior to the Change in Control, fully vest in and have the right to exercise
such Option or SAR that was granted on or after the 2006 Restatement Date and which is not assumed,
substituted or replaced as to all of the Stock underlying the Award, including Shares as to which
it would not otherwise be vested or exercisable. If an Option or SAR that was granted on or after
the 2006 Restatement Date is not assumed, substituted or replaced in the event of a Change in
Control, the Committee shall notify the Participant in writing or electronically that the Option or
SAR that was granted on or after the 2006 Restatement Date shall be exercisable, to the extent
vested, for a period of up to fifteen (15) days from the date of such notice, and the Option or SAR
that was granted on or after the 2006 Restatement Date shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or SAR that was granted on or after the
2006 Restatement Date shall be considered assumed if, following the Change in Control, the option
or stock appreciation right confers the right to purchase or receive, for each Share of Stock
subject to such Option or SAR immediately prior to the Change in Control, the consideration
(whether stock, cash, or other securities or property) received in the Change in Control by holders
of Stock for each Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a majority of the
outstanding Shares); provided, however, that if such consideration received in the Change in
Control is not solely common stock of the successor corporation or its Parent, the Committee may,
with the consent of the successor corporation, provide for the consideration to be received upon
the exercise of the Option or SAR that was granted on or after the 2006 Restatement Date, for each
Share of Stock subject to the Option or SAR that was granted on or after the 2006 Restatement Date,
to be solely common stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Stock in the Change in Control. Notwithstanding
anything herein to the contrary, an Award that vests, is earned or paid-out upon the satisfaction
of one or more Performance Goals will not be considered assumed if the Company or its successor
modifies any of such Performance Goals without the Participant’s consent; provided, however, a
modification to such Performance Goals only to reflect the successor corporation’s post-merger or
post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid
Award assumption.



          13.2. Restricted Stock, Restricted Stock Units, Performance Shares and Performance
Units. In the event of a Change in Control, an outstanding Award of Restricted Stock,
Restricted Stock Unit, Performance Share or Performance Unit that was granted on or after the 2006
Restatement Date may be (i) assumed or substituted with an equivalent restricted stock, restricted
stock unit, performance share or performance unit award of the successor corporation or a Parent or
Subsidiary of the successor corporation, (ii) replaced with a cash incentive program of the
successor corporation or a Parent or Subsidiary of the successor corporation, or (iii) terminated.
Unless determined



 









 




otherwise by the Committee, in the event that the successor corporation refuses to assume,
substitute or replace a Participant’s Restricted Stock, Restricted Stock Unit, Performance Share or
Performance Unit that was granted on or after the 2006 Restatement Date, the Participant shall,
immediately prior to the Change in Control, fully vest in such Restricted Stock, Restricted Stock
Unit, Performance Share or Performance Unit that was granted on or after the 2006 Restatement Date
including as to Shares which would not otherwise be vested. For the purposes of this paragraph, a
Restricted Stock, Restricted Stock Unit, Performance Share or Performance Unit award that was
granted on or after the 2006 Restatement Date shall be considered assumed if, following the Change
in Control, the award confers the right to purchase or receive, for each Share subject to the Award
immediately prior to the Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the Change in Control by holders of Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the Change in Control is not solely common stock of
the successor corporation or its Parent, the Committee may, with the consent of the successor
corporation, provide for the consideration to be received, for each Share and each unit/right to
acquire a Share subject to the Award, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by holders of Stock in
the Change in Control. Notwithstanding anything herein to the contrary, an Award that vests, is
earned or paid-out upon the satisfaction of one or more Performance Goals will not be considered
assumed if the Company or its successor modifies any of such Performance Goals without the
Participant’s consent; provided, however, a modification to such Performance Goals only to reflect
the successor corporation’s post-merger or post-Change in Control corporate structure will not be
deemed to invalidate an otherwise valid Award assumption.




     14. Forfeiture Events. The Administrator may specify in an Award Agreement that the
Participant’s rights, payments, and benefits with respect to an Award shall be subject to
reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events,
in addition to any otherwise applicable vesting or performance conditions of an Award. Such events
may include, but shall not be limited to, fraud, breach of a fiduciary duty, restatement of
financial statements as a result of fraud or willful errors or omissions, termination of employment
for cause, violation of material Company and/or Subsidiary policies, breach of non-competition,
confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct
by the Participant that is detrimental to the business or reputation of the Company and/or its
Subsidiaries.



     15. Miscellaneous.



          15.1. Limit on Distribution. Distribution of shares of Stock or other amounts under
the Plan shall be subject to the following:



               (a) Notwithstanding any other provision of the Plan, the Company shall have no liability to
deliver any shares of Stock under the Plan or make any other distribution of benefits under the
Plan unless such delivery or distribution would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity.



               (b) In the case of a Participant who is subject to Section 16(a) and 16(b) of the Exchange
Act, the Administrator may, at any time, add such conditions and limitations to any Award to such
Participant, or any feature of any such Award, as the Administrator, in its sole discretion, deems
necessary or desirable to comply with Section 16(a) or 16(b) of the Exchange Act and the rules and
regulations thereunder or to obtain any exemption therefrom.



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



          15.2. Withholding. All Awards and other payments under the Plan are subject to
withholding of all applicable taxes, which withholding obligations may be satisfied, with the
consent of the Administrator, through the surrender of shares of Stock which the Participant
already owns, or to which a Participant is otherwise entitled under the Plan; provided, however,
that in no event shall the Fair Market Value of the number of shares withheld from any Award to
satisfy tax withholding obligations exceed the amount necessary to meet the required Federal, state
and local withholding tax rates then in effect that are applicable to the participant and to the
particular transaction.



 









 





          15.3. Transferability. Awards under the Plan are not transferable except as
designated by a Participant by will or by the laws of descent and distribution. To the extent that
the Participant who receives an Award under the Plan has the right to exercise such Award, the
Award may be exercised during the lifetime of the Participant only by the Participant.



          15.4. Notices. Any notice or document required to be filed with the Administrator
under the Plan will be properly filed if delivered or mailed by registered mail, postage prepaid,
to the Administrator, in care of the Company, at its principal executive offices. The
Administrator may, by advance written notice to affected persons, revise such notice procedure from
time to time. Any notice required under the Plan (other than a notice of election) may be waived
by the person entitled to notice.



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



          15.6. Agreement With Company. At the time of an Award to a Participant under the
Plan, the Administrator may require a Participant to enter into an Award Agreement with the Company
in a form specified by the Administrator, agreeing to the terms and conditions of the Plan and to
such additional terms and conditions, not inconsistent with the Plan, as the Administrator may, in
its sole discretion, prescribe.



          15.7. Limitation of Implied Rights.



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



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



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



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



          15.10. Severability. Notwithstanding any contrary provision of the Plan or an Award
to the contrary, if any one or more of the provisions (or any part thereof) of this Plan or the
Awards shall be held invalid, illegal or unenforceable in any respect, such provision shall be
modified so as to make it valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions (or any part thereof) of the Plan or Award, as
applicable, shall not in any way be affected or impaired thereby.



          15.11. Date of Grant. The date of grant of an Award will be, for all purposes, the
date on which the Committee makes the determination granting such Award, or such other later date
as is determined by the Committee. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.



     16. Amendment and Termination




 












 





          16.1. Amendment and Termination. The Administrator may at any time amend, alter,
suspend or terminate the Plan.




          16.2. Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws. Other than
pursuant to Section 13, the Company also will obtain stockholder approval before implementing a
program to reduce the exercise price of outstanding Options and/or SARs through a repricing or
Award exchange.




          16.3. Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Company, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Committee’s ability to
exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to
the date of such termination.