Exhibit 10.1





EXHIBIT 10.1




NASH-FINCH COMPANY

2009 INCENTIVE AWARD PLAN

(As Amended and Restated as of March 2, 2010)




ARTICLE 1.




PURPOSE




The purpose of the Nash-Finch Company 2009 Incentive Award Plan (the “Plan”) is to
support the maximization of long-term value creation for Nash-Finch Company (the “Company”)
and its stockholders by enabling the Company and its Subsidiaries to attract and retain persons of
ability to perform services for the Company and its Subsidiaries by providing an incentive to such
individuals through equity participation in the Company and by rewarding such individuals who
contribute to the achievement by the Company of its economic objectives. This Plan is intended to
comply with all applicable law, including the requirements of 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 of this amendment and restatement of the Plan, and shall be operated and interpreted in
accordance with this intention.



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 “Administrator” shall mean the Committee as defined in Article 12. With
reference to the duties of the Committee under the Plan which have been delegated to one or more
persons pursuant to Section 12.5, or as to which the Board has assumed, the term “Administrator”
shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the
Board has terminated the assumption of such duties.



2.2 “Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit
award, a Performance Award, a Dividend Equivalents award, a Deferred Stock award, a Stock Payment
award or a Stock Appreciation Right, which may be awarded or granted under the Plan
(collectively, “Awards”).



2.3 “Award Agreement” shall mean any written notice, agreement, terms and conditions,
contract or other instrument or document evidencing an Award, including through
electronic medium, which shall contain such terms and conditions with respect to an Award as
the Administrator shall determine consistent with the Plan.


 


 









 





2.4 “Award Limit” shall mean with respect to Awards that shall be payable in shares
of Common Stock or in cash, as the case may be, the respective limit set forth in Section 3.3



2.5 “Board” shall mean the Board of Directors of the Company.



2.6 “Change in Control” shall mean any of the following events or transactions:



(a) Any one person or more than one person acting as a group acquires ownership of stock of
the Company that, together with the stock held by such person or group, constitutes more than 50
percent of the total fair market value or total voting power of the stock of the Company. However,
if any one person or more than one person acting as a group, is considered to own more than 50
percent of the total fair market value or total voting power of the stock of the Company, the
acquisition of additional stock by the same person or persons is not considered to cause a Change
in Control;



(b) 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 stock of the Company possessing 30 percent or more of the total voting power of the
stock of the Company;



(c) 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)
all or substantially all of the assets of the Company; or



(d) A majority of the members of the Board 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 prior to
the date of the appointment or election;



provided, that the transaction or event described in subsection (a), (b), (c) or (d) also
constitutes a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5).



2.7 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.



2.8 “Committee” shall have the meaning set forth in Section 12.1.



2.9 “Common Stock” shall mean the common stock of the Company, par value $1.66-2/3
per share.



2.10 “Company” shall mean Nash-Finch Company, a Delaware corporation.



2.11 “Covered Employee” shall mean any Employee who is, or could be, a “covered
employee” within the meaning of Section 162(m) of the Code.



2.12 “Deferred Stock” shall mean a right to receive Common Stock awarded under
Section 9.4.


 


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2.13 “Director” shall mean a member of the Board, as constituted from time to time.



2.14 “Disability” or “Disabled” means that a Holder is, 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:




(a) unable to engage in any substantial gainful activity, or



(b) receiving income replacement benefits for a period of not less than 3 months under any
accident and health plan covering Employees.



2.15 “Dividend Equivalent” shall mean a right to receive the equivalent value (in
cash or Common Stock) of dividends paid on Common Stock, awarded under Section 9.2.



2.16 “DRO” shall mean a domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules
thereunder.



2.17 “Effective Date” shall mean March 10, 2009, the date the Plan was first approved
by the Board, subject to approval of the Plan by the Company’s stockholders.



2.18 “Eligible Individual” shall mean any person who is an Employee or a Non-Employee
Director, as determined by the Committee.



2.19 “Employee” shall mean any officer or other employee (as determined in accordance
with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or of any
Subsidiary.



2.20 “Equity Restructuring” shall mean a nonreciprocal transaction between the Company
and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or
recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of
shares of Common Stock (or other securities of the Company) or the share price of Common Stock (or
other securities) and causes a change in the per share value of the Common Stock underlying
outstanding Awards.



2.21 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.



2.22 “Fair Market Value” shall mean with respect to the Common Stock, as of any given
date (or, if no shares were traded or quoted on such date, as of the next preceding date on which
there was such a trade or quote)



(a) the mean between the reported high and low sale prices of the Common Stock during the
regular trading session if the Common Stock is listed, admitted to unlisted
trading privileges or reported on any foreign or national securities exchange or on the NASDAQ
Global Market or an equivalent foreign market on which sale prices are reported;


 


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(b) if the Common Stock is not so listed, admitted to unlisted trading privileges or reported,
the mean between the reported high and low bid prices as reported by the NASDAQ Capital Market, OTC
Bulletin Board or the National Quotation Bureau, Inc. or other comparable service; or



(c) if the Common Stock is not so listed or reported, such price as the Committee determines
in good faith in the exercise of its reasonable discretion.



2.23 “Full Value Award” means any Award other than an Option, Stock Appreciation
Right or other Award for which the Holder pays the intrinsic value existing as of the date of
grant (whether directly or by forgoing a right to receive a payment from the Company or any
Subsidiary).



2.24 “Greater Than 10% Stockholder” shall mean an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any subsidiary corporation (as defined in Section 424(f) of the
Code) or parent corporation thereof (as defined in Section 424(e) of the Code).



2.25 “Holder” shall mean a person who has been granted an Award.



2.26 “Incentive Stock Option” shall mean an Option that is intended to qualify as an
incentive stock option and conforms to the applicable provisions of Section 422 of the Code.



2.27 “Non-Employee Director” shall mean a Director of the Company who is not an
Employee.



2.28 “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock
Option.



2.29 “Option” shall mean a right to purchase shares of Common Stock at a specified
exercise price, granted under Article 6. An Option shall be either a Non-Qualified Stock Option
or an Incentive Stock Option; provided, however, that Options granted to
Non-Employee Directors shall be Non-Qualified Stock Options.



2.30 “Performance Award” shall mean a cash bonus award, stock bonus award,
performance award or incentive award that is paid in cash, Common Stock or a combination of both,
awarded under Section 9.1.



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



2.32 “Performance Criteria” shall mean the criteria (and adjustments) that the
Committee selects for an Award for purposes of establishing the Performance Goal or Performance
Goals for a Performance Period, determined as follows:


 


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(a) The Performance Criteria that shall be used to establish Performance Goals are limited to
the following: (i) net earnings (either before or after one or more of the following: (A)
interest, (B) taxes, (C) depreciation and (D) amortization), (ii) gross or net sales or revenue,
(iii) net income (either before or after taxes), (iv) operating earnings or profit, (v) cash flow
(including, but not limited to, operating cash flow and free cash flow), (vi) return on assets,
(vii) return on capital, (viii) return on stockholders’ equity, (ix) return on sales, (x) gross or
net profit or operating margin, (xi) costs, (xii) cost reduction goals (xxiii) funds from
operations, (xiv) expenses, (xv) working capital, (xvi) earnings per share (basic or diluted),
(xvii) price per share of Common Stock, (xviii) total return to stockholders, (xix) economic value
added, (xx) working capital and productivity improvements, (xxi) regulatory body approval for
commercialization of a product, (xxii) implementation or completion of critical projects, (xxiii)
market share, (xxiv) customer satisfaction, (xxv) employee engagement or employee relations, (xxvi)
employee safety, (xxvii) employee diversity, (xxviii) retail store performance as determined by
independent assessment and (xxix) operational performance as measured by on-time delivery, fill
rate, selector accuracy, cost per case, sales per square foot, sales per labor hour and other,
similar, objective productivity measures, any of which may be measured either in absolute terms or
as compared to any incremental increase or decrease or as compared to results of a peer group or to
market performance indicators or indices and, with respect to (xxiv) and (xxv), as measured by a
Company sponsored survey.



(b) The Committee may select one criterion or multiple criteria for measuring performance, and
the measurement may be based upon Company, Subsidiary or business unit performance, either absolute
or by relative comparison to other companies or any other external measure of the selected
criteria. The Committee may also determine that any of these performance goals shall be calculated
by including or excluding any one or more specific items or categories of items (including
projections) as designated by the Committee.



(c) The Administrator may, in its sole discretion, provide that one or more objectively
determinable adjustments shall be made to one or more of the Performance Goals. Such adjustments
may include one or more of the following: (i) items related to a change in accounting principle;
(ii) items relating to financing activities; (iii) expenses for restructuring or productivity
initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items
attributable to the business operations of any entity acquired by the Company during the
Performance Period; (vii) items related to the disposal of a business or segment of a business;
(viii) items related to discontinued operations that do not qualify as a segment of a business
under United States generally accepted accounting principles (“GAAP”); (ix) items
attributable to any stock dividend, stock split, combination or exchange of shares occurring during
the Performance Period; or (x) any other items of significant income or expense which are
determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate
transactions, events or developments, (xii) items related to amortization of acquired intangible
assets; (xiii) items that are outside the scope of the Company’s core, on-going business
activities; or (xiv) items relating to any other unusual or nonrecurring events or changes in
applicable laws, accounting principles or business conditions. For all Awards intended to qualify
as Performance-Based Compensation, such determinations shall be made within the time prescribed by,
and otherwise in compliance with, Section 162(m) of the Code.


 


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2.33 “Performance Goals” shall mean, for a Performance Period, one or more goals
established in writing by the Administrator for the Performance Period based upon one or more
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 achievement of each Performance
Goal shall be determined in accordance with GAAP to the extent applicable.



2.34 “Performance Period” shall mean one or more periods of time, which may be of
varying and overlapping durations, as the Administrator may select, over which the attainment of
one or more Performance Goals will be measured for the purpose of determining a Holder’s right to,
and the payment of, a Performance Award; provided, however, that in no event shall
a Performance Period be less than one year.



2.35 “Plan” shall mean this Nash-Finch Company 2009 Incentive Award Plan, as it may
be amended or restated from time to time.



2.36 “Prior Plan” shall mean the Nash-Finch Company 2000 Stock Incentive Plan as such
plan may be amended from time to time.



2.37 “Restricted Stock” shall mean Common Stock awarded under Article 8 that is
subject to certain restrictions and may be subject to risk of forfeiture or repurchase.



2.38 “Restricted Stock Units” shall mean the right to receive Common Stock awarded
under Section 9.5.



2.39 “Retirement” shall mean, with respect to a Holder, separation from service with
the Company or any Subsidiary for any reason on or after the earlier of the attainment of (i) age
65 or (ii) age 55 with 10 years of service with the Company or any Subsidiary.



2.40 “Section 409A” shall mean 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 of the Plan.



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



2.42 “Stock Appreciation Right” shall mean a stock appreciation right granted under
Article 10.



2.43 “Stock Payment” shall mean (a) a payment in the form of shares of Common Stock,
or (b) an option or other right to purchase shares of Common Stock, as part of a bonus, deferred
compensation or other arrangement, awarded under Section 9.3.



2.44 “Subsidiary” shall mean any entity (other than the Company), whether domestic or
foreign, in an unbroken chain of entities beginning with the Company if each of the entities other
than the last entity in the unbroken chain beneficially owns, at the time of the determination,
securities or interests representing more than fifty percent (50%) of the total
combined voting power of all classes of securities or interests in one of the other entities
in such chain.


 


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2.45 “Substitute Award” shall mean an Award granted under the Plan upon the
assumption of, or in substitution for, outstanding equity awards previously granted by a company
or other entity in connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock; provided, however, that in no
event shall the term “Substitute Award” be construed to refer to an award made in connection with
the cancellation and repricing of an Option or Stock Appreciation Right.



2.46 “Termination of Service” shall mean,



(a) As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director
ceases to be a Director for any reason, including, without limitation, a termination by
resignation, failure to be elected, death or Retirement, but excluding terminations where the
Holder simultaneously commences or remains in employment or service with the Company or any
Subsidiary.



(b) As to an Employee, the time when the employee-employer relationship between a Holder and
the Company or any Subsidiary is terminated for any reason, including, without limitation, a
termination by resignation, discharge, death, disability or Retirement; but excluding terminations
where the Holder simultaneously commences or remains in employment or service with the Company or
any Subsidiary.



The Administrator, in its sole discretion, shall determine the effect of all matters and
questions relating to Terminations of Service, including, without limitation, the question of
whether a Termination of Service resulted from a discharge for cause and all questions of whether
particular leaves of absence constitute a Termination of Service; provided,
however, that, with respect to Incentive Stock Options, unless the Administrator otherwise
provides in the terms of the Award Agreement or otherwise, a leave of absence, change in status
from an employee to an independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Service only if, and to the extent that, such leave of absence,
change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the
Code and the then applicable regulations and revenue rulings under said Section. For purposes of
the Plan, a Holder’s employee-employer relationship shall be deemed to be terminated in the event
that the Subsidiary employing or contracting with such Holder ceases to remain a Subsidiary
following any merger, sale of stock or other corporate transaction or event (including, without
limitation, a spin-off).



ARTICLE 3.




SHARES SUBJECT TO THE PLAN




3.1 Number of Shares.



(a) Subject to Section 13.2 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) 700,000
shares and (ii) any shares of Stock which were the subject of Awards under the
2000 Stock Incentive Plan as of the Effective Date but which subsequently are settled without
delivery of Shares to the Holder (whether through forfeiture or otherwise). Upon approval of this
plan by the Company’s stockholders, no new awards will be granted under the 2000 Stock Incentive
Plan.


 


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(b) To the extent that an Award terminates, expires, or lapses for any reason, or an Award is
settled in cash without the delivery of shares to the Holder, then any shares of Common Stock
subject to the Award shall again be available for the grant of an Award pursuant to the Plan.
Shares of Common Stock tendered or withheld to satisfy the grant or exercise price or tax
withholding obligation pursuant to any Option shall not be available for the grant of an Award
pursuant to the Plan. Any shares of Common Stock repurchased by the Company under Section 8.4 at
the same price paid by the Holder so that such shares are returned to the Company will again be
available for Awards. To the extent permitted by applicable law or any exchange rule, shares of
Common 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 Common Stock available for grant pursuant to the 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 Common Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or
Common 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 Section 13.2, the maximum aggregate number of shares
of Common Stock with respect to one or more Awards that may be granted to any one person during
any calendar year shall be 150,000, provided, however, that an Eligible Individual
who is first appointed or elected as an officer or hired as an employee by the Company or who
receives a promotion that results in an increase in responsibilities or duties may be granted,
during the fiscal year of such appointment, election, hiring or promotion, Options relating to up
to 250,000 shares of Common Stock.


 


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ARTICLE 4.




GRANTING OF AWARDS




4.1 Participation. The Administrator may, from time to time, select from among all
Eligible Individuals, those to whom an Award shall be granted and shall determine the nature and
amount of each Award, which shall not be inconsistent with the requirements of the Plan. No
Eligible Individual shall have any right to be granted an Award pursuant to the Plan.



4.2 Award Agreement. Each Award shall be evidenced by an Award Agreement. Award
Agreements evidencing Awards intended to qualify as Performance-Based Compensation shall contain
such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m)
of the Code. Award Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.



4.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any individual 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 Rule 16b-3
of the Exchange Act and any amendments thereto) 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.



4.4 At-Will Employment. Nothing in the Plan or in any Award Agreement hereunder
shall confer upon any Holder any right to continue in the employ of, or as a Director for, the
Company or any Subsidiary, or shall interfere with or restrict in any way the rights of the
Company and any Subsidiary, which rights are hereby expressly reserved, to discharge any Holder at
any time for any reason whatsoever, with or without cause, except to the extent expressly provided
otherwise in a written agreement between the Holder and the Company or any Subsidiary.



4.5 Foreign Holders. 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 Employees or Non-Employee Directors, or in order to comply with the requirements of any
foreign stock exchange, the Administrator, in its sole discretion, shall have the power and
authority to: (a) determine which Subsidiaries shall be covered by the Plan; (b) determine which
Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify
the terms and conditions of any Award granted to Eligible Individuals outside the United States to
comply with applicable foreign laws or listing requirements of any such foreign stock exchange;
(d) 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 the Plan as appendices); provided, however, that no such subplans
and/or modifications shall increase the share limitations contained in Sections


 


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3.1 and 3.3; and (e) 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 or listing requirements of any such foreign stock exchange. Notwithstanding the
foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted,
that would violate the Code, the Exchange Act, the Securities Act or any other securities law or
governing statute or any other applicable law.



4.6 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
sole discretion of the Administrator, 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.



4.7 Special Provisions for Awards to Non-Employee Directors. Notwithstanding any
other provision of this Plan to the contrary, Awards granted to Non-Employee Directors shall
become vested over a period of not less than six months (other than in connection with the
Non-Employee Director’s Death or Disability or a Change in Control), provided that Awards in the
form of



(a) an Option or a Stock Appreciation Right shall not become exercisable,



(b) a Restricted Stock award shall not become transferable, or



(c) a Restricted Stock Unit award, a Performance Award, a Deferred Stock award, or a Stock
Payment award shall not become payable or otherwise settle,



until the Termination of Service of such non-Employee Director, or, if earlier, the day such Award
would otherwise have expired.



ARTICLE 5.




PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS

PERFORMANCE-BASED COMPENSATION.




5.1 Purpose. The Committee, in its sole discretion, may determine whether an Award
is to qualify as Performance-Based Compensation. If the Committee, in its sole discretion, decides
to grant such an Award to an Eligible Individual that is intended to qualify as Performance-Based
Compensation, then the provisions of this Article 5 shall control over any contrary provision
contained in the Plan. The Administrator may in its sole discretion grant Awards to other
Eligible Individuals that are based on Performance Criteria or Performance Goals but that do not
satisfy the requirements of this Article 5 and that are not intended to qualify as
Performance-Based Compensation. Unless otherwise specified by the Administrator at the time of
grant, the Performance Criteria with respect to an Award intended to be Performance-Based
Compensation payable to a Covered Employee shall be determined on the basis of GAAP.


 


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5.2 Applicability. The grant of an Award to an Eligible Individual for a particular
Performance Period shall not require the grant of an Award to such Individual in any subsequent
Performance Period and the grant of an Award to any one Eligible Individual shall not require the
grant of an Award to any other Eligible Individual in such period or in any other period.



5.3 Types of Awards. Notwithstanding anything in the Plan to the contrary, the
Committee may grant any Award to an Eligible Individual intended to qualify as Performance-Based
Compensation, including, without limitation, Restricted Stock the restrictions with respect to
which lapse upon the attainment of specified Performance Goals, and any performance or incentive
Awards described in Article 9 that vest or become exercisable or payable upon the attainment of
one or more specified Performance Goals. Any such Award will comply with the requirements of
Section 162(m) giving due regard to the disparate treatment under Section 162(m) of Options and
Stock Appreciation Rights (where compensation is determined based solely on an increase in the
value of the underlying stock after the date of grant or award), as compared to other forms of
compensation, including Restricted Stock awards, Performance Units and Stock Payments.



5.4 Procedures with Respect to Performance-Based Awards. To the extent necessary to
comply with the requirements of Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Articles 7 or 8 to one or more Eligible Individuals and which is intended to qualify
as Performance-Based Compensation, no later than 90 days following the commencement of any
Performance Period or any designated fiscal period or period of service (or such earlier time as
may be required under Section 162(m) of the Code), the Committee shall, in writing, (a) designate
one or more Holders, (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 based on the Performance Criteria, 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 and the
extent to which the applicable Performance Goals have been achieved for such Performance Period.
In determining the amount earned under such Awards, the Committee shall not have the right 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.



5.5 Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Award Agreement and only to the extent otherwise permitted by Section 162(m)(4)(C) of the Code, as
to an Award that is intended to qualify as Performance-Based Compensation, the Holder must be
employed by the Company or a Subsidiary throughout the Performance Period. Furthermore, a Holder
shall be eligible to receive payment pursuant to such Awards for a Performance Period only if and
to the extent the Performance Goals for such period are achieved.


 


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5.6 Additional Limitations. Notwithstanding any other provision of the Plan, any
Award which is granted to an Eligible Individual and is intended to qualify as Performance-
Based Compensation shall be subject to any additional limitations set forth in Section 162(m)
of the Code or any regulations or rulings issued thereunder that are requirements for
qualification as Performance-Based Compensation, and the Plan and the Award Agreement shall be
deemed amended to the extent necessary to conform to such requirements.



ARTICLE 6.




GRANTING OF OPTIONS




6.1 Granting of Options to Eligible Individuals. The Administrator is authorized to
grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and
conditions as it may determine which shall not be inconsistent with the Plan.



6.2 Qualification of Incentive Stock Options. No Incentive Stock Option shall be
granted to any person who is not an Employee of the Company or any subsidiary corporation of the
Company (as defined in Section 424(f) of the Code). No person who qualifies as a Greater Than 10%
Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms
to the applicable provisions of Section 422 of the Code. Any Incentive Stock Option granted under
the Plan may be modified by the Administrator, with the consent of the Holder, to disqualify such
Option from treatment as an “incentive stock option” under Section 422 of the Code. To the extent
that any Incentive Stock Option granted under the Plan ceases for any reason to qualify as an
“incentive stock option” for purposes of Section 422 of the Code, such Incentive Stock Option will
continue to be outstanding for purposes of the Plan but will thereafter be deemed to be a
Non-Statutory Stock Option. To the extent that the aggregate fair market value of stock with
respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but
without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder
during any calendar year under the Plan, and all other plans of the Company and any Subsidiary or
parent corporation thereof (as defined in Section 424(e) of the Code), exceeds $100,000, the
Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of
the Code. The rule set forth in the preceding sentence shall be applied by taking Options and
other “incentive stock options” into account in the order in which they were granted and the fair
market value of stock shall be determined as of the time the respective options were granted. If
such excess only applies to a portion of an Incentive Stock Option, the Committee, in its
discretion, will designate which shares will be treated as shares to be acquired upon exercise of
an Incentive Stock Option.



6.3 Option Exercise Price. The exercise price per share of Common Stock subject to
each Option shall be set by the Administrator, but shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date the Option is granted (or, as to Incentive Stock
Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of
the Code). In addition, in the case of Incentive Stock Options granted to a Greater Than 10%
Stockholder, such price shall not be less than 110% of the Fair Market Value of a share of Common
Stock on the date the Option is granted (or the date the Option is modified, extended or renewed
for purposes of Section 424(h) of the Code).


 


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6.4 Option Term. The term of each Option shall be set by the Administrator in its
sole discretion; provided, however, that no portion of an Option may be
exercisable prior to six
months from its date of grant (other than in connection with a Holder’s death or Disability)
and no Option may be exercised more than ten (10) years from the date the Option is granted, or
five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10%
Stockholder; provided, further, that, subject to Section 4.7, each Option shall
become vested over a period of not less than three years (or, in the case of vesting based upon
the attainment of Performance Goals or other performance-based objectives, over a period of not
less than one year measured from the commencement of the period over which performance is
evaluated). The Administrator shall determine the time period, including the time period
following a Termination of Service, during which the Holder has the right to exercise the vested
Options, which time period may not extend beyond the term of the Option term. Except as limited
by the requirements of Section 409A or Section 422 of the Code and regulations and rulings
thereunder, the Administrator may extend the term of any outstanding Option, and may extend the
time period during which vested Options may be exercised, in connection with any Termination of
Service of the Holder, and may amend any other term or condition of such Option relating to such a
Termination of Service.



6.5 Option Vesting.



(a) The period during which the right to exercise, in whole or in part, an Option vests in the
Holder shall be set by the Administrator and the Administrator may determine that an Option may not
be exercised in whole or in part for a specified period after it is granted. Such vesting may be
based on service with the Company or any Subsidiary, any of the Performance Criteria, or any other
criteria selected by the Administrator. At any time after grant of an Option, the Administrator
may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the
period during which an Option vests; provided, however, except in the case of
death, Disability, Retirement, or Change in Control, the Administrator’s discretion to accelerate
the period during which an Award vests is limited to 10% of the shares of Stock authorized by the
Plan under Section 3.1, as adjusted pursuant to Section 13.2.



(b) No portion of an Option which is unexercisable at a Holder’s Termination of Service shall
thereafter become exercisable, except as may be otherwise provided by the Administrator either in
the Award Agreement or by action of the Administrator following the grant of the Option.



6.6 Substitute Awards. Notwithstanding the foregoing provisions of this Article 6 to
the contrary, in the case of an Option that is a Substitute Award, the price per share of the
 shares subject to such Option may be less than the Fair Market Value per share on the date of
grant, provided, that Substitute Award meets the requirements of Treasury Regulation
Section 1.409A-1(b)(5)(v)(D).



6.7 Substitution of Stock Appreciation Rights. The Administrator may provide in the
Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion,
shall have the 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 Common Stock for which such substituted
Option would have been exercisable.


 


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ARTICLE 7.




EXERCISE OF OPTIONS




7.1 Partial Exercise. An exercisable Option may be exercised in whole or in part.
However, an Option shall not be exercisable with respect to fractional shares and the
Administrator may require that, by the terms of the Option, a partial exercise must be with
respect to a minimum number of shares.



7.2 Manner of Exercise. All or a portion of an exercisable Option shall be deemed
exercised upon delivery of all of the following to the Secretary of the Company, or such other
person or entity designated by the Administrator, or his, her or its office, as applicable:



(a) A written notice complying with the applicable rules established by the Administrator
stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the
Holder or other person then entitled to exercise the Option or such portion of the Option;



(b) Such representations and documents as the Administrator, in its sole discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal, state or foreign securities laws or regulations. The Administrator may, in
its sole discretion, also take whatever additional actions it deems appropriate to effect such
compliance including, without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars;



(c) In the event that the Option shall be exercised pursuant to Section 11.3 by any person or
persons other than the Holder, appropriate proof of the right of such person or persons to exercise
the Option; and



(d) Full payment of the exercise price and applicable withholding taxes to the Secretary of
the Company for the shares with respect to which the Option, or portion thereof, is exercised, in a
manner permitted by Section 11.1 and 11.2.



7.3 Notification Regarding Disposition. The Holder shall give the Company prompt
notice of any disposition of shares of Common Stock acquired by exercise of an Incentive Stock
Option which occurs within (a) two years from the date of granting (including the date the Option
is modified, extended or renewed for purposes of Section 424(h) of the Code) such Option to such
Holder, or (b) one year after the transfer of such shares to such Holder.


 


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ARTICLE 8.




AWARD OF RESTRICTED STOCK




8.1 Award of Restricted Stock.



The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall
determine the terms and conditions, including the restrictions applicable to each award of
Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may
impose such conditions on the issuance of such Restricted Stock as it deems appropriate;
provided, however, that no portion of a Restricted Stock award may vest prior to
six months from its date of grant (other than in connection with a Holder’s death or Disability);
provided, further, that, subject to Section 4.7, each Restricted Stock award shall
become vested over a period of not less than three years (or, in the case of vesting based upon the
attainment of Performance Goals or other performance-based objectives, over a period of not less
than one year measured from the commencement of the period over which performance is evaluated).



(a) The Administrator shall establish the purchase price, if any, and form of payment for
Restricted Stock; provided, however, that such purchase price shall be no less than
the par value of the Common Stock to be purchased, unless otherwise permitted by applicable state
law. In all cases, legal consideration shall be required for each issuance of Restricted Stock.



8.2 Rights as Stockholders. Except as provided in Sections 8.1, 8.3 and 11.3 and
subject to Section 8.4, upon issuance of Restricted Stock, the Holder shall have, unless otherwise
provided by the Administrator, all the rights of a stockholder with respect to said shares,
subject to the restrictions in his or her Award Agreement, including the right to receive all
dividends and other distributions paid or made with respect to the shares; provided,
however, that, in the sole discretion of the Administrator, any extraordinary
distributions with respect to the Common Stock shall be subject to the restrictions set forth in
Section 8.3.


 


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8.3 Restrictions. All shares of Restricted Stock (including any shares received by
Holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock
splits or any other form of recapitalization) and dividends or cash distributions paid with
respect to shares of unvested Restricted Stock shall, in the terms of each individual Award
Agreement, be subject to such restrictions and vesting requirements as the Administrator shall
provide. Such restrictions may include, without limitation, restrictions concerning voting rights
and transferability and such restrictions may lapse separately or in combination at such times and
pursuant to such circumstances or based on such criteria as selected by the Administrator,
including, without limitation, criteria based on the Holder’s duration of employment or
directorship with the Company, the Performance Criteria, Company performance, individual
performance or other criteria selected by the Administrator. In the event the Committee
determines not to pay dividends or distributions currently, the Committee will determine in its
sole discretion whether any interest will be paid on such dividends or distributions. In
addition, the Committee in its sole discretion may require such dividends and distributions to be
reinvested (and in such case the Holder consents to such reinvestment) in shares of Common Stock
that will be subject to the same restrictions as the shares to which such dividends or
distributions relate. By action taken after the Restricted Stock is issued, the Administrator
may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of
such Restricted Stock by removing any or all of the restrictions imposed by the terms of the Award
Agreement; provided, however, except in the case of death, Disability, Retirement,
or Change in Control, the Administrator’s discretion to accelerate the period during which an
Award vests is limited to 10% of the shares of Stock authorized by the Plan under Section 3.1, as
adjusted pursuant to Section 13.2. Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire.



8.4 Repurchase or Forfeiture of Restricted Stock. If no price was paid by the Holder
for the Restricted Stock, upon a Termination of Service the Holder’s rights in unvested Restricted
Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to
the Company and cancelled without consideration. If a price was paid by the Holder for the
Restricted Stock, upon a Termination of Service the Company shall have the right to repurchase
from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per
share equal to the price paid by the Holder for such Restricted Stock or such other amount as may
be specified in the Award Agreement The Administrator in its sole discretion may provide that in
the event of certain events, including a Change in Control, the Holder’s death, Retirement or
disability or any other specified Termination of Service or any other event, the Holder’s rights
in unvested Restricted Stock shall not lapse, such Restricted Stock shall vest and, if applicable,
the Company shall not have a right of repurchase.



8.5 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Administrator shall determine. Certificates or book
entries evidencing shares of Restricted Stock must include an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, in
it sole discretion, retain physical possession of any stock certificate until such time as all
applicable restrictions lapse.


 


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8.6 Section 83(b) Election. If a Holder makes an election under Section 83(b) of the
Code to be taxed with respect to the Restricted Stock as of the date of transfer of the
Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be
taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such
election to the Company promptly after filing such election with the Internal Revenue Service.



ARTICLE 9.




AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED

STOCK, STOCK PAYMENTS, RESTRICTED STOCK UNITS




9.1 Performance Awards.



(a) The Administrator is authorized to grant Performance Awards to any Eligible Individual and
to determine whether such Performance Awards shall be Performance-Based Compensation. The value of
Performance Awards may be linked to any one or more of the Performance Criteria or other specific
criteria determined by the Administrator, in each case on a specified date or dates or over any
period or periods determined by the Administrator. In making such determinations, the
Administrator 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 Eligible Individual. Performance Awards may be paid in cash, shares of Common Stock, or
both, as determined by the Administrator.



(b) Without limiting Section 9.1(a), the Administrator may grant Performance Awards to any
Eligible Individual in the form of a cash bonus payable upon the attainment of objective
Performance Goals, or such other criteria, whether or not objective, which are established by the
Administrator, in each case on a specified date or dates or over any period or periods determined
by the Administrator. Any such bonuses paid to a Holder which are intended to be Performance-Based
Compensation shall be based upon objectively determinable bonus formulas established in accordance
with the provisions of Article 5. Additionally, any such bonuses paid to any Eligible Individual
shall be subject to the Award Limit.



9.2 Dividend Equivalents.



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



(b) Notwithstanding the foregoing, (i) no Dividend Equivalents shall be payable with respect
to Options or Stock Appreciation Rights that are either forfeited or cancelled prior to vesting,
and (ii) no Dividend Equivalents shall be earned with respect to Awards that vest based upon the
attainment of Performance Goals or other performance-based objectives prior to the attainment of
such Performance Goals or objectives.



9.3 Stock Payments. The Administrator is authorized to make Stock Payments to any
Eligible Individual. The number or value of shares of any Stock Payment shall be determined by
the Administrator and may be based upon one or more Performance Criteria or
any other specific criteria, including service to the Company or any Subsidiary, determined
by the Administrator. Stock Payments may, but are not required to be made in lieu of base salary,
bonus, fees or other cash compensation otherwise payable to such Eligible Individual.


 


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9.4 Deferred Stock. The Administrator is authorized to grant Deferred Stock to any
Eligible Individual. The number of shares of Deferred Stock shall be determined by the
Administrator and may be based on one or more Performance Criteria or other specific criteria,
including service to the Company or any Subsidiary, as the Administrator determines, in each case
on a specified date or dates or over any period or periods determined by the Administrator.
Common Stock underlying a Deferred Stock award will not be issued until the Deferred Stock award
has vested, pursuant to a vesting schedule or other conditions or criteria set by the
Administrator. Unless otherwise provided by the Administrator, a Holder of Deferred Stock shall
have no rights as a Company stockholder with respect to such Deferred Stock until such time as the
Award has vested and the Common Stock underlying the Award has been issued to the Holder.



9.5 Restricted Stock Units. The Administrator is authorized to grant Restricted
Stock Units to any Eligible Individual. The number and terms and conditions of Restricted Stock
Units shall be determined by the Administrator. The Administrator 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, including conditions based on one or more
Performance Criteria or other specific criteria, including service to the Company or any
Subsidiary, in each case on a specified date or dates or over any period or periods, as the
Administrator determines,. The Administrator shall specify, or permit the Holder to elect, the
conditions and dates upon which the shares of Common Stock underlying the Restricted Stock Units
which shall be issued, which dates shall not be earlier than the date as of which the Restricted
Stock Units vest and become nonforfeitable and which conditions and dates shall be subject to
compliance with Section 409A of the Code. On the distribution dates, the Company shall issue to
the Holder one unrestricted, fully transferable share of Common Stock for each vested and
nonforfeitable Restricted Stock Unit.



9.6 Term. The term of a Performance Award, Dividend Equivalent award, Deferred Stock
award, Stock Payment award and/or Restricted Stock Unit award shall be set by the Administrator in
its sole discretion.



9.7 Exercise or Purchase Price. The Administrator may establish the exercise or
purchase price of a Performance Award, shares of Deferred Stock, shares distributed as a Stock
Payment award or shares distributed pursuant to a Restricted Stock Unit award; provided,
however, that value of the consideration shall not be less than the par value of a share
of Common Stock, unless otherwise permitted by applicable law.



ARTICLE 10.

AWARD OF STOCK APPRECIATION RIGHTS




10.1 Grant of Stock Appreciation Rights.


 


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(a) The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals
from time to time, in its sole discretion, on such terms and conditions as it may determine
consistent with the Plan.



(b) A Stock Appreciation Right shall entitle the Holder (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 determined by multiplying the difference obtained by subtracting the exercise
price per share of the Stock Appreciation Right from the Share Value on the date of exercise of the
Stock Appreciation Right by the number of shares of Common Stock with respect to which the Stock
Appreciation Right shall have been exercised, subject to any limitations the Administrator may
impose. Except as described in (c) below, the exercise price per share of Common Stock subject to
each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of
the Share Value on the date the Stock Appreciation Right is granted.



(c) Notwithstanding the foregoing provisions of Section 10.1(b) to the contrary, in the case
of an Stock Appreciation Right that is a Substitute Award, the price per share of the shares
subject to such Stock Appreciation Right may be less than the Fair Market Value per share on the
date of grant, provided, that that Substitute Award meets the requirements of Treasury
Regulation Section 1.409A-1(b)(5)(v)(D).



10.2 Stock Appreciation Right Vesting.



(a) The period during which the right to exercise, in whole or in part, a Stock Appreciation
Right vests in the Holder shall be set by the Administrator and the Administrator may determine
that a Stock Appreciation Right may not be exercised in whole or in part for a specified period
after it is granted; provided, however, that no portion of a Stock Appreciation
Right may be exercisable prior to six months from its date of grant (other than in connection with
a Holder’s death or Disability) or after 10 years from its date of grant; provided,
further, that, subject to Section 4.7, each Stock Appreciation Right shall become vested
over a period of not less than three years (or, in the case of vesting based upon the attainment of
Performance Goals or other performance-based objectives, over a period of not less than one year
measured from the commencement of the period over which performance is evaluated). Such vesting
may be based on service with the Company or any Subsidiary, or any other criteria selected by the
Administrator. At any time after grant of a Stock Appreciation Right, the Administrator may, in
its sole discretion and subject to whatever terms and conditions it selects, accelerate the period
during which a Stock Appreciation Right vests; provided, however, except in the
case of death, Disability, Retirement, or Change in Control, the Administrator’s discretion to
accelerate the period during which an Award vests is limited to 10% of the shares of Stock
authorized by the Plan under Section 3.1, as adjusted pursuant to Section 13.2.



(b) No portion of a Stock Appreciation Right which is unexercisable at Termination of Service
shall thereafter become exercisable, except as may be otherwise provided by the Administrator
either in the Award Agreement or by action of the Administrator following the grant of the Stock
Appreciation Right.


 


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10.3 Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right
shall be deemed exercised upon delivery of all of the following to the Secretary of the Company,
or such other person or entity designated by the Administrator, or his, her or its office, as
applicable:



(a) A written notice complying with the applicable rules established by the Administrator
stating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be
signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such
portion of the Stock Appreciation Right;



(b) Such representations and documents as the Administrator, in its sole discretion, deems
necessary or advisable to effect compliance with all applicable provisions of the Securities Act
and any other federal, state or foreign securities laws or regulations. The Administrator may, in
its sole discretion, also take whatever additional actions it deems appropriate to effect such
compliance; and



(c) In the event that the Stock Appreciation Right shall be exercised pursuant to this Section
10.3 by any person or persons other than the Holder, appropriate proof of the right of such person
or persons to exercise the Stock Appreciation Right.



10.4 Payment. Payment of the amounts determined under Section 10.2(c) and 10.3(b)
above shall be in cash, shares of Common 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
Administrator.



ARTICLE 11.




ADDITIONAL TERMS OF AWARDS




11.1 Payment. The Administrator shall determine the methods by which payments by any
Holder with respect to any Awards granted under the Plan shall be made, including, without
limitation: (a) cash or check, (b) shares of Common Stock (including, in the case of payment of
the exercise price of an Award, shares of Common Stock issuable pursuant to the exercise of the
Award) or shares of Common Stock held for such period of time as may be required by the
Administrator in order to avoid adverse accounting consequences, in each case, having a Fair
Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a
notice that the Holder has placed a market sell order with a broker with respect to shares of
Common Stock then issuable upon exercise or vesting of an Award, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the aggregate payments required, provided, that payment of such proceeds
is then made to the Company upon settlement of such sale, (d) a promissory note (on terms
acceptable to the Committee in its sole discretion) or (e) other form of legal consideration
acceptable to the Administrator. The Administrator shall also determine the methods by which
 shares of Common Stock shall be delivered or deemed to be delivered to Holders. Notwithstanding
any other provision of the Plan to the contrary, no Holder who is a Director or an “executive
officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted
to make payment with respect to any Awards granted under
the Plan, or continue any extension of credit with respect to such payment with a loan from
the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.


 


20









 





11.2 Tax Withholding. The Company or any Subsidiary shall have the authority and the
right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to
satisfy federal, state, local and foreign taxes (including the Holder’s FICA or employment tax
obligation) required by law to be withheld with respect to any taxable event concerning a Holder
arising as a result of the Plan. The Administrator may in its sole discretion and in satisfaction
of the foregoing requirement allow a Holder to elect to have the Company withhold shares of Common
Stock otherwise issuable under an Award (or allow the surrender of shares of Common Stock). The
number of shares of Common Stock which may be so withheld or surrendered 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. The Administrator shall determine the fair market value of the Common
Stock, consistent with applicable provisions of the Code, for tax withholding obligations due in
connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving
the sale of shares to pay the Option or Stock Appreciation Right exercise price or any tax
withholding obligation.



11.3 Transferability of Awards.




(a) Except as otherwise provided in Section 11.3(b):



(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other
than by will or the laws of descent and distribution or, subject to the consent of the
Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;



(ii) No Award or interest or right therein shall be liable for the debts, contracts or
engagements of the Holder or his successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other
means whether such disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect, except to the extent
that such disposition is permitted by the preceding sentence; and



(iii) During the lifetime of the Holder, only the Holder may exercise an Award (or any portion
thereof) granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the
death of the Holder, any exercisable portion of an Award may, prior to the time when such portion
becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by his
personal representative or by any person empowered to do so under the deceased Holder’s will or
under the then applicable laws of descent and distribution.


 


21









 





(b) Notwithstanding Section 11.3(a), the Administrator, in its sole discretion, may determine
to permit a Holder to transfer an Award other than an Incentive Stock Option to any one or more
Permitted Transferees (as defined below), subject to the following terms and conditions: (i) an
Award transferred to a Permitted Transferee shall not be assignable or transferable by the
Permitted Transferee other than by will or the laws of descent and distribution; (ii) an Award
transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions
of the Award as applicable to the original Holder (other than the ability to further transfer the
Award); and (iii) the Holder and the Permitted Transferee shall execute any and all documents
requested by the Administrator, including, without limitation documents to (A) confirm the status
of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the
transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer.
For purposes of this Section 11.3(b), “Permitted Transferee” shall mean, with respect to a
Holder, any “family member” of the Holder, as defined under the instructions to use of the Form S-8
Registration Statement under the Securities Act, or any other transferee specifically approved by
the Administrator after taking into account any state, federal, local or foreign tax and securities
laws applicable to transferable Awards.



(c) Notwithstanding Section 11.3(a), a Holder may, in the manner determined by the
Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any
distribution with respect to any Award upon the Holder’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 Holder, except to the
extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed
necessary or appropriate by the Administrator. If the Holder is married and resides in a community
property state, a designation of a person other than the Holder’s spouse as his or her beneficiary
with respect to more than 50% of the Holder’s interest in the Award shall not be effective without
the prior written consent of the Holder’s spouse. If no beneficiary has been designated or
survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s
will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation
may be changed or revoked by a Holder at any time provided the change or revocation is
filed with the Administrator prior to the Holder’s death.



11.4 Conditions to Issuance of Shares.



(a) Notwithstanding anything herein to the contrary, the Company shall not be required to
issue or deliver any certificates or make any book entries evidencing shares of Common Stock
pursuant to the exercise of any Award, unless and until the Board has determined, with advice of
counsel, that the issuance of such shares is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on which the shares
of Common Stock are listed or traded, and the shares of Common Stock are covered by an effective
registration statement or applicable exemption from registration. In addition to the terms and
conditions provided herein, the Board may require that a Holder 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.


 


22









 





(b) All Common Stock certificates delivered pursuant to the Plan and all shares issued
pursuant to book entry procedures are subject to any stop-transfer orders and other
restrictions as the Administrator deems necessary or advisable to comply with federal, state,
or foreign securities or other laws, rules and regulations and the rules of any securities exchange
or automated quotation system on which the Common Stock is listed, quoted, or traded. The
Administrator may place legends on any Common Stock certificate or book entry to reference
restrictions applicable to the Common Stock.



(c) The Administrator shall have the right to require any Holder to comply with any timing or
other restrictions with respect to the settlement, distribution or exercise of any Award, including
a window-period limitation, as may be imposed in the sole discretion of the Administrator.



(d) No fractional shares of Common Stock shall be issued and the Administrator shall
determine, in its sole discretion, whether cash shall be given in lieu of fractional shares or
whether such fractional shares shall be eliminated by rounding down.



11.5 Forfeiture Provisions. Pursuant to its general authority to determine the terms
and conditions applicable to Awards under the Plan, the Administrator shall have the right to
provide, in the terms of Awards made under the Plan, or to require a Holder to agree by separate
written instrument, that: (a)(i) any proceeds, gains or other economic benefit actually or
constructively received by the Holder upon any receipt or exercise of the Award, or upon the
receipt or resale of any Common Stock underlying the Award, must be paid to the Company, and (ii)
the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall
be forfeited, if (b)(i) a Termination of Service occurs prior to a specified date, or within a
specified time period following receipt or exercise of the Award, or (ii) the Holder at any time,
or during a specified time period, engages in any activity in competition with the Company, or
which is inimical, contrary or harmful to the interests of the Company, as further defined by the
Administrator or (iii) the Holder incurs a Termination of Service for “cause” (as such term is
defined in the sole discretion of the Administrator, or as set forth in a written agreement
relating to such Award between the Company and the Holder).



(a) Modification of Rights Upon Termination. Notwithstanding the other provisions of
this Section 11.5, and subject to Section 11.6 and Section 13.2(d), upon a Holder’s termination of
employment or other service with the Company and all Subsidiaries, the Committee may, in its sole
discretion (which may be exercised at any time on or after the date of grant, including following
such termination), cause the Holder’s Options and Stock Appreciation Rights (or any part thereof)
to become or continue to become exercisable and/or remain exercisable following such termination of
employment or service and the Holder’s Restricted Stock, Performance Units and Stock Payments to
vest and/or continue to vest or become free of transfer restrictions, as the case may be, following
such termination of employment or service, in each case in the manner determined by the Committee;
provided, however, that no Option or Restricted Stock may become exercisable or
vest prior to six months from its date of grant (other than in connection with Holder’s death or
Disability) or remain exercisable or continue to vest beyond its expiration date.



(b) Exercise of Incentive Stock Options Following Termination. Any Incentive Stock
Option that remains unexercised more than one year following termination of employment by reason of
Disability or more than three months following termination for any
reason other than death or Disability will thereafter be deemed to be a Non-Statutory Stock
Option.


 


23









 





(c) Date of Termination of Employment or Other Service. Unless the Committee
otherwise determines in its sole discretion, a Holder’s employment or other service will, for
purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other
records of the Company or the Subsidiary for which the Holder provides employment or other service,
as determined by the Committee in its sole discretion based upon such records.



11.6 Breach of Confidentiality or Non-Compete Agreements. Notwithstanding anything
in the Plan to the contrary, in the event that a Holder materially breaches the terms of any
confidentiality or non-compete agreement entered into with the Company or any Subsidiary, whether
such breach occurs before or after termination of such Holder’s employment or other service with
the Company or any Subsidiary, the Committee in its sole discretion may immediately terminate all
rights of the Holder under the Plan and any applicable Award Agreements without notice of any
kind.]



11.7 Prohibition on Repricing. Subject to Section 13.2, the Administrator shall not,
without the approval of the stockholders of the Company, authorize the amendment of any
outstanding Award to reduce its price per share. Furthermore, subject to Section 13.2, no Award
shall be canceled and replaced with the grant of an Award having a lesser price per share without
the further approval of stockholders of the Company. Subject to Section 13.2, the Administrator
shall have the authority, without the approval of the stockholders of the Company, to amend any
outstanding award to increase the price per share or to cancel and replace an Award with the grant
of an Award having a price per share that is greater than or equal to the price per share of the
original Award. Notwithstanding any other provision of the Plan to the contrary, no Award shall
be exchanged for cash.



11.8 Full Value Award Vesting Limitations. Notwithstanding any other provision of
the Plan to the contrary, Full Value Awards made to Employees shall become vested over a period of
not less than three years (or, in the case of vesting based upon the attainment of Performance
Goals or other performance-based objectives, over a period of not less than one year measured from
the commencement of the period over which performance is evaluated) following the date the Award
is made; provided, however, that, notwithstanding the foregoing, Full Value Awards
that result in the issuance of an aggregate of up to 10% of the shares of Stock available pursuant
to Section 3.1(a) may be granted to any one or more Holders without respect to such minimum
vesting provisions.



11.9 Deferrals and Settlements. The Committee may permit Holders to elect to defer
the issuance of shares or the settlement of Awards in cash under such rules and procedures as it
may establish under the Plan; provided that any such election to defer shares or the
settlement of Awards shall comply with Section 409A. It may also provide that deferred
settlements include the payment or crediting of interest or dividend equivalents on the deferral
amounts.


 


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ARTICLE 12.




ADMINISTRATION




12.1 Administrator. The Plan will be administered by the Compensation and Management
Development Committee or its delegate (the “Committee”). So long as the Company has a
class of its equity securities registered under Section 12 of the Exchange Act, the Committee
administering the Plan will consist solely of two or more members of the Board who are
“non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act and, if the Board
so determines in its sole discretion, who are “outside directors” within the meaning of Section
162(m) of the Code. The Committee will act by majority approval of the members (but may also take
action with the written consent of all of the members of the Committee), and a majority of the
members of the Committee will constitute a quorum. To the extent consistent with applicable
corporate law of the Company’s jurisdiction of incorporation, the Committee may delegate to any
officers of the Company the duties, power and authority of the Committee under the Plan pursuant
to such conditions or limitations as the Committee may establish; provided,
however, that only the Committee may exercise such duties, power and authority with
respect to Eligible Recipients who are subject to Section 16 of the Exchange Act. The Committee
may exercise its duties, power and authority under the Plan in its sole and absolute discretion
without the consent of any Holder or other party, unless the Plan specifically provides otherwise.
Each determination, interpretation or other action made or taken by the Committee pursuant to the
provisions of the Plan will be final, conclusive and binding for all purposes and on all persons,
including, without limitation, the Company, the stockholders of the Company, the Holders and their
respective successors-in-interest. No member of the Committee will be liable for any action or
determination made in good faith with respect to the Plan or any Incentive Award granted under the
Plan.



12.2 Duties and Powers of Committee. It shall be the duty of the Committee to
conduct the general administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Award Agreement, and to adopt such rules for
the administration, interpretation and application of the Plan as are not inconsistent therewith,
to interpret, amend or revoke any such rules and to amend any Award Agreement provided
that the rights or obligations of the holder of the Award that is the subject of any such Award
Agreement are not affected adversely by such amendment, unless the consent of the Holder is
obtained or such amendment is otherwise permitted under Section 13.10. Any such grant or award
under the Plan need not be the same with respect to each holder. No amendment or modification to
an Award, whether pursuant to this Section 12.2 or any other provisions of the Plan, will be
deemed to be a re-grant of such Award for purposes of this Plan. Any such interpretations and
rules with respect to Incentive Stock Options shall be consistent with the provisions of Section
422 of the Code. 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 any successor rule, 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.



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


 


25









 





(a) Designate Eligible Individuals to receive Awards;



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



(c) Determine the number of Awards to be granted and the number of shares of Common 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 vesting, lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any
provisions related to non-competition and recapture of gain on an Award, based in each case on such
considerations as the Administrator in its sole discretion determines;



(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, Common 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 Holder;



(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 Administrator deems necessary or advisable to administer the Plan.



12.4 Decisions Binding. The Administrator’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the
Administrator 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 Board
or 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; provided,
however, that in no event shall an officer be delegated the authority to grant awards to,
or amend awards held by, the following individuals: (a) individuals who are subject to Section 16
of the Exchange Act, (b) Covered Employees, (c) Directors, or (d) officers of the Company (or
Directors) 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 Board or Committee
specifies at the time of such delegation, and the Board 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 Board
and the Committee.


 


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ARTICLE 13.




MISCELLANEOUS PROVISIONS




13.1 Amendment, Suspension or Termination of the Plan. Except as otherwise provided
in this Section 13.1, the Plan may be wholly or partially amended or otherwise modified, suspended
or terminated at any time or from time to time by the Board. However, without approval of the
Company’s stockholders given within twelve (12) months before or after the action by the
Administrator, no action of the Administrator may, except as provided in Section 13.2, (i)
increase the limits imposed in Section 3.1 on the maximum number of shares which may be issued
under the Plan, (ii) increase the limits imposed in Section 3.3 on the maximum number of shares
that may be granted to any one person during any calendar year or (iii) decrease the exercise
price of any outstanding Option or Stock Appreciation Right granted under the Plan; or (iv)
otherwise cause or effect a material modification of the Plan. Except as provided in Section
13.10, no amendment, suspension or termination of the Plan shall, without the consent of the
Holder, impair any rights or obligations under any Award theretofore granted or awarded, unless
the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any
period of suspension or after termination of the Plan, and in no event may any Award be granted
under the Plan after the tenth (10th) anniversary of the Effective Date.



13.2 Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the
Company and Other Corporate Events.



(a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation or other distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting the shares of the Company’s stock or the share price of
the Company’s stock other than an Equity Restructuring, the Administrator shall make equitable
adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of
shares that may be issued under the Plan (including, but not limited to, adjustments of the
limitations in Section 3.1 on the maximum number and kind of shares which may be issued under the
Plan, adjustments of the Award Limit and adjustments of the manner in which shares subject to Full
Value Awards will be counted); (ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Awards; (iii) the terms and conditions of any
outstanding Awards (including, without limitation, any applicable performance targets or criteria
with respect thereto); and (iv) the grant or exercise price per share for any outstanding Awards
under the Plan. Any adjustment affecting an Award intended as Performance-Based Compensation shall
be made consistent with the requirements of Section 162(m) of the Code.


 


27









 





(b) In the event of any transaction or event described in Section 13.2(a) 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 Administrator, in its sole 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 Holder’s request, is hereby authorized to take any one or more of the following actions
whenever the Administrator determines that such action is appropriate 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 Holder’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 13.2 the Administrator determines
in good faith that no amount would have been attained upon the exercise of such Award or
realization of the Holder’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
Administrator in its sole discretion having an aggregate value not exceeding the amount that could
have been attained upon the exercise of such Award or realization of the Holder’s rights had such
Award been currently exercisable or payable or fully vested;



(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 the Company’s 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 Awards 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.



(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Sections 13.2(a) and 13.2(b):



(i) The number and type of securities subject to each outstanding Award and the exercise price
or grant price thereof, if applicable, shall be equitably adjusted. The adjustments provided under
this Section 13.2(c) shall be nondiscretionary and shall be final and binding on the affected
Holder and the Company.


 


28









 





(ii) The Administrator shall make such equitable adjustments, if any, as the Administrator in
its discretion may deem appropriate to reflect such Equity Restructuring with respect to the
aggregate number and kind of shares that may be issued under the Plan (including, but not limited
to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares which
may be issued under the Plan, adjustments of the Award Limit and adjustments of the manner in which
shares subject to Full Value Awards will be counted).



(d) Without limiting the authority of the Committee otherwise set forth in this Article 13 or
Article 12, if a Change in Control of the Company occurs, then, unless otherwise provided by the
Committee in its sole discretion in the Award Agreement and subject to Section 11.5, (a) all
Options and Stock Appreciation Rights that have been outstanding for at least six months will
become immediately exercisable in full and will remain exercisable for the remainder of their
terms, regardless of whether the Holder to whom such Options or Stock Appreciation Rights have been
granted remains in the employ or service of the Company or any Subsidiary; (b) all Restricted Stock
that have been outstanding for at least six months will become immediately fully vested and
non-forfeitable; and (c) all outstanding Performance Awards and Stock Payments then held by the
Holder will vest and/or continue to vest in the manner determined by the Committee and set forth in
the agreement evidencing such Stock Payments.



(e) If a Change in Control of the Company occurs, then the Committee, if approved by the
Committee in its sole discretion in an Award Agreement, and without the consent of any Holder
affected thereby, may determine that some or all Holders holding outstanding Options will receive,
with respect to some or all of the shares of Common Stock subject to such Options, as of the
effective date of any such Change in Control of the Company, cash in an amount equal to the excess
of the Fair Market Value of such shares immediately prior to the effective date of such Change in
Control of the Company over the exercise price per share of such Options.



(f) Notwithstanding anything in Section 13.2(d) or Section 13.2(e) to the contrary, if, with
respect to a Holder, the acceleration of the vesting of an Award as provided in Section 13.2(d) or
the payment of cash in exchange for all or part of an Award as provided in Section 13.2(e) (which
acceleration or payment could be deemed a “payment” within the meaning of Section 280G(b)(2) of the
Code), together with any other “payments” that such Holder has the right to receive from the
Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504(a)
of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would
constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the
“payments” to such Holder pursuant to Section 13.2(d) or 13.2(e) of the Plan will be reduced to the
largest amount as will result in no portion of such “payments” being subject to the excise tax
imposed by Section 4999 of the Code; provided, however, that if a Holder is subject
to a separate agreement with the Company or a Subsidiary that expressly addresses the potential
application of Sections 280G or 4999 of the Code (including, without limitation, that “payments”
under such agreement or otherwise will be reduced, that the Holder will have the discretion to
determine which “payments” will be reduced, that such “payments” will not be reduced or that such
“payments” will be “grossed up” for tax purposes), then this Section 13.2(f) will not apply, and
any “payments” to a Holder pursuant to
Section 13.2(d) or 13.2(e) of the Plan will be treated as “payments” arising under such
separate agreement.


 


29









 





(g) The Administrator may, in its sole discretion, include such further provisions and
limitations in any Award, agreement or certificate, as it may deem equitable and in the best
interests of the Company that are not inconsistent with the provisions of the Plan.



(h) With respect to Awards which are granted to Covered Employees and are intended to qualify
as Performance-Based Compensation, no adjustment or action described in this Section 13.2 or in any
other provision of the Plan shall be authorized to the extent that such adjustment or action would
cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator
determines that the Award should not so qualify. No adjustment or action described in this Section
13.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment
or action would cause the Plan to violate Section 422(b)(1) of the Code. Furthermore, no such
adjustment or action shall be authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3
unless the Administrator determines that the Award is not to comply with such exemptive conditions.



(i) The existence of the Plan, the Award Agreement and the Awards granted hereunder shall not
affect or restrict in any way the right or power of the Company or the stockholders of the Company
to make or authorize any adjustment, recapitalization, reorganization or other change in the
Company’s capital structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or
prior preference stocks whose rights are superior to or affect the Common Stock or the rights
thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or otherwise.



(j) No action shall be taken under this Section 13.2 which shall cause an Award to fail to
comply with Section 409A of the Code or the Treasury Regulations thereunder, to the extent
applicable to such Award.



13.3  Approval of Plan by Stockholders. The Plan will be submitted for the approval
of the Company’s stockholders within twelve (12) months after the date of the Board’s initial
adoption of the Plan. Awards may be granted or awarded prior to such stockholder approval,
provided that such Awards shall not be exercisable, shall not vest and the restrictions
thereon shall not lapse and no shares of Common Stock shall be issued pursuant thereto prior to
the time when the Plan is approved by the stockholders, and provided, further,
that if such approval has not been obtained at the end of said twelve (12) month period, all
Awards previously granted or awarded under the Plan shall thereupon be canceled and become null
and void.



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


 


30









 





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



13.6 Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall
not affect any other compensation or incentive plans in effect for the Company or any Subsidiary.
Nothing in the Plan shall be construed to limit the right of the Company or any Subsidiary: (a)
to establish any other forms of incentives or compensation for Employees or Directors of the
Company or any Subsidiary, or (b) to grant or assume options or other rights or awards otherwise
than under the Plan in connection with any proper corporate purpose including without limitation,
the grant or assumption of options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation, partnership,
limited liability company, firm or association.



13.7 Compliance with Laws. The Plan, the granting and vesting of Awards under the
Plan and the issuance and delivery of shares of Common Stock and the payment of money under the
Plan or under Awards granted or awarded hereunder are subject to compliance with all applicable
federal, state, local and foreign laws, rules and regulations (including but not limited to state,
federal and foreign securities law and margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the Company, be
necessary or advisable in connection therewith. Any securities delivered under the Plan shall be
subject to such restrictions, and the person acquiring such securities shall, if requested by the
Company, provide such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal requirements. 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 laws, rules and regulations.



13.8 Titles and Headings, References to Sections of the Code or Exchange Act. 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.
References to sections of the Code or the Exchange Act shall include any amendment or successor
thereto.



13.9 Governing Law. The Plan and any agreements hereunder shall be administered,
interpreted and enforced under the internal laws of the State of Delaware without regard to
conflicts of laws thereof.



13.10 Section 409A.



(a) 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



 


31









 






Administrator 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 Administrator may adopt (without any obligation to do so or to
indemnify any Holder for failure to do so) 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 Administrator 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 and thereby
avoid the application of any penalty taxes under such Section.



(b) To the extent that the Administrator determines that any Award granted under the Plan is
subject to Section 409A of the Code (a “Section 409A Award”), the Award Agreement
evidencing such Award shall incorporate the terms and conditions required by Section 409A of the
Code, including, without limitation, the terms set forth on Annex A hereto.



13.11 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 Administrator
is obligated to treat Eligible Individuals, Holders or any other persons uniformly.



13.12 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 Holder pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Holder any rights that
are greater than those of a general creditor of the Company or any Subsidiary.



13.13 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.



13.14 Relationship to other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits under 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.



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


 


32









 





* * * * *




 


33









 







I hereby certify that the foregoing Plan was first adopted by the Board of Directors of Nash-Finch
Company on March 10, 2009. This amended and restated Plan document was adopted on                     
   , 2010.



* * * * *




I hereby certify that the foregoing Plan was approved by the stockholders of Nash-Finch Company on
May 20, 2009.



Executed on this            day of                     , 2010.



	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Corporate Secretary 	 
	 	 	 



 


34









 





	 	 	 	 	 



Section 409A Annex





	1.	 	Distributions under a Section 409A Award.







	 	a.	 	Subject to subsection (b), any shares of Common Stock or other property or amounts to
be paid or distributed upon the grant, issuance, vesting, exercise or payment of a Section
409A Award shall be distributed in accordance with the requirements of Section 409A(a)(2)
of the Code, and shall not be distributed earlier than:







	 	i.	 	the Holder’s separation from service, as determined by the
Secretary of the Treasury,

	 
	 	ii.	 	the date the Holder becomes disabled,

	 
	 	iii.	 	the Holder’s death,

	 
	 	iv.	 	a specified time (or pursuant to a fixed schedule) specified under
the Award Agreement at the date of the deferral compensation,

	 
	 	v.	 	to the extent provided by the Secretary of the Treasury, a change
in the ownership or effective control of the Company or a Subsidiary, or in the
ownership of a substantial portion of the assets of the Company or a Subsidiary,
or

	 
	 	vi.	 	the occurrence of an unforeseeable emergency with respect to the
Holder.







	 	b.	 	In the case of a Holder who is a “specified employee”, the requirement of paragraph
(1)(a) shall be met only if the distributions with respect to the Section 409A Award may
not be made before the date which is six months after the Holder’s separation from service
(or, if earlier, the date of the Holder’s death). For purposes of this subsection (b), a
Holder shall be a “specified employee” if such Holder is a key employee (as defined in
Section 416(i) of the Code without regard to paragraph (5) thereof) of a corporation any
stock of which is publicly traded on an established securities market or otherwise, as
determined under Section 409A(a)(2)(B)(i) of the Code and the Treasury Regulations
thereunder.

	 
	 	c.	 	The requirement of paragraph (1)(a)(vi) shall be met only if, as determined under
Treasury Regulations under Section 409A(a)(2)(B)(ii) of the Code, the amounts distributed
with respect to the unforeseeable emergency do not exceed the amounts necessary to satisfy
such unforeseeable emergency plus amounts necessary to pay taxes reasonably anticipated as
a result of the distribution, after taking into account the extent to which such
unforeseeable emergency is or may be relieved through reimbursement or compensation by
insurance or otherwise or by liquidation of the Holder’s assets (to the extent the
liquidation of such assets would not itself cause severe financial hardship).

	 
	 	d.	 	For purposes of this subsection, the terms specified therein shall have the respective
meanings ascribed thereto under Section 409A of the Code and the Treasury Regulations
thereunder.





 


 









 











	2.	 	Prohibition on Acceleration of Benefits. The time or schedule of any distribution or
payment of any shares of Common Stock or other property or amounts under a Section 409A Award
shall not be accelerated, except as otherwise permitted under Section 409A(a)(3) of the Code
and the Treasury Regulations thereunder.

	 
	3.	 	Elections under Section 409A Awards.







	 	a.	 	Any deferral election provided under or with respect to an Award to any Employee or
Non-Employee Director, or to the Holder of a Section 409A Award, shall satisfy the
requirements of Section 409A(a)(4)(B) of the Code, to the extent applicable, and, except as
otherwise permitted under paragraph (i) or (ii), any such deferral election with respect to
compensation for services performed during a taxable year shall be made not later than the
close of the preceding taxable year, or at such other time as provided in Treasury
Regulations.







	 	i.	 	In the case of the first year in which an Employee or Non-Employee
Director, or the Holder, becomes eligible to participate in the Plan (or any
other plan or arrangement of the Company that is aggregated with the Plan
pursuant to Treasury Regulation Section 1.409A-1(c)), any such deferral election
may be made with respect to services to be performed subsequent to the election
with thirty (30) days after the date the Employee or Non-Employee Director, or
the Holder, becomes eligible to participate in the Plan (or any other plan or
arrangement of the Company that is aggregated with the Plan pursuant to Treasury
Regulation Section 1.409A-1(c)), as provided under Section 409A(a)(4)(B)(ii) of
the Code.

	 
	 	ii.	 	In the case of any performance-based compensation based on services
performed by an Employee or Non-Employee Director, or the Holder, over a period
of at least twelve (12) months, any such deferral election may be made no later
than six months before the end of the period, as provided under Section
409A(a)(4)(B)(iii) of the Code.







	 	b.	 	In the event that a Section 409A Award permits, under a subsequent election by the
Holder of such Section 409A Award, a delay in a distribution or payment of any shares of
Common Stock or other property or amounts under such Section 409A Award, or a change in the
form of distribution or payment, such subsequent election shall satisfy the requirements of
Section 409A(a)(4)(C) of the Code, such subsequent election may not take effect until at
least twelve (12) months after the date on which the election is made, and in the case such
subsequent election relates to a distribution or payment not described in Section
(1)(a)(ii), (iii) or (vi), the first payment with respect to such election may be deferred
for a period of not less than five years from the date such distribution or payment
otherwise would have been made, and in the case such subsequent election relates to a
distribution or payment described in Section (1)(a)(iv), such election may not
be made less than twelve (12) months prior to the date of the first scheduled distribution
or payment under Section (1)(a)(iv).





 


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	4.	 	Compliance in Form and Operation. A Section 409A Award, and any election under or
with respect to such Section 409A Award, shall comply in form and operation with the
requirements of Section 409A of the Code and the Treasury Regulations thereunder.







 


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