Filed by Bowne Pure Compliance





Exhibit 10.09




THE HARTFORD INCENTIVE STOCK PLAN




(Including amendments effective through January 1, 2009)




1. Purpose



The purpose of the Plan is to motivate and reward superior performance on the part of
Key Employees of The Hartford and to thereby attract and retain Key Employees of superior
ability. In addition, the Plan is intended to further opportunities for stock ownership by
such Key Employees and Directors in order to increase their proprietary interest in The
Hartford and, as a result, their interest in the success of the Company. Awards will be
made, in the discretion of the Committee, to Key Employees (including officers and directors
who are also Key Employees) whose responsibilities and decisions directly affect the
performance of any Participating Company and its subsidiaries, and also to Directors. Such
incentive awards may consist of stock options and stock appreciation rights payable in stock
or cash for Key Employees or Directors, and performance shares, restricted stock, restricted
units or any combination of the foregoing for Key Employees, as the Committee may determine.



2. Definitions




When used herein, the following terms shall have the following meanings:




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



“Award” means an award granted to any Key Employee or Director in accordance with the
provisions of the Plan in the form of Options, Rights, Performance Shares or Restricted
Stock, or any combination of the foregoing, as applicable.



“Award Document” means the written notice, agreement, or other document evidencing each
Award granted under the Plan.



“Beneficial Owner” means any Person who, directly or indirectly, has the right to vote
or dispose of or has “beneficial ownership” (within the meaning of Rule 13d-3 under the Act)
of any securities of a company, including any such right pursuant to any agreement,
arrangement or understanding (whether or not in writing), provided that: (a) a
Person shall not be deemed the Beneficial Owner of any security as a result of an agreement,
arrangement or understanding to vote such security (i) arising solely from a revocable proxy
or consent given in response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the Act and the applicable rules and regulations thereunder, or (ii)
made in connection with, or to otherwise participate in, a proxy or consent solicitation
made, or to be made, pursuant to, and in accordance with, the applicable provisions of the
Act and the applicable rules and regulations thereunder, in either case described in clause
(i) or (ii) above, whether or not such agreement, arrangement or understanding is also then
reportable by such Person on Schedule 13D under the Act (or any comparable or successor
report); and (b) a Person engaged in
business as an underwriter of securities shall not be deemed to be the Beneficial Owner
of any security acquired through such Person’s participation in good faith in a firm
commitment underwriting until the expiration of forty days after the date of such
acquisition.


 


 









 








“Beneficiary” means the beneficiary or beneficiaries designated pursuant to the Plan to
receive the amount, if any, payable under the Plan upon the death of an Award recipient.




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




“Change of Control” means the occurrence of an event defined in Section 9 of the Plan.




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



“Committee” means the Compensation and Personnel Committee of the Board or such other
committee as may be designated by the Board to administer the Plan.



“Company” means The Hartford Financial Services Group, Inc. and its successors and
assigns.



“Director” means a member of the Board who is not an employee of any Participating
Company.



“Dividend Equivalents” means an amount credited with respect to an outstanding
Restricted Unit equal to the cash dividends paid or property distributions awarded upon one
share of Stock.



“Eligible Employee” means an Employee as defined in the Plan; provided, however, that
except as the Board or the Committee, pursuant to authority delegated by the Board, may
otherwise provide on a basis uniformly applicable to all persons similarly situated,
“Eligible Employee” shall not include any “Ineligible Person,” which includes: (a) a person
who (i) holds a position with the Company’s “HARTEMP” Program, (ii) is hired to work for a
Participating Company through a temporary employment agency, or (iii) is hired to a position
with a Participating Company with notice on his or her date of hire that the position will
terminate on a certain date; (b) a person who is a leased employee (within the meaning of
Code Section 414(n)(2)) of a Participating Company or is otherwise employed by or through a
temporary help firm, technical help firm, staffing firm, employee leasing firm, or
professional employer organization, regardless of whether such person is an Employee of a
Participating Company, and (c) a person who performs services for a Participating Company as
an independent contractor or under any other non-employee classification, or who is
classified by a Participating Company as, or determined by a Participating Company to be, an
independent contractor, regardless of whether such person is characterized or ultimately
determined by the Internal Revenue Service or any other Federal, State or local governmental
authority or regulatory body to be an employee of a Participating Company
or its affiliates for income or wage tax purposes or for any other purpose.


 


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Notwithstanding any provision in the Plan to the contrary, if any person is an
Ineligible Person, or otherwise does not qualify as an Eligible Employee, or otherwise is
ineligible to participate in the Plan, and such person is later required by a court or
governmental authority or regulatory body to be classified as a person who is eligible to
participate in the Plan, such person shall not be eligible to participate in the Plan,
notwithstanding such classification, unless and until designated as an Eligible Employee by
the Committee, and if so designated, the participation of such person in the Plan shall be
prospective only.



“Employee” means any person regularly employed by a Participating Company, but shall
not include any person who performs services for a Participating Company as an independent
contractor or under any other non-employee classification, or who is classified by a
Participating Company as, or determined by a Participating Company to be, an independent
contractor.



“Fair Market Value,” unless otherwise indicated in the provisions of this Plan, means,
as of any date, the composite closing price for one share of Stock on the New York Stock
Exchange or, if no sales of Stock have taken place on such date, the composite closing price
on the most recent date on which selling prices were quoted, the determination to be made in
the discretion of the Committee.



“Formula Price” means (i) in the case of the exercise of any Right or Option, the Fair
Market Value of the Stock at the time of such exercise and (ii) in the case of any other
Award, the highest of: (a) the highest composite daily closing price of the Stock
during the period beginning on the 60th calendar day prior to the Change of
Control and ending on the date of such Change of Control, (b) the highest gross price paid
for the Stock during the same period of time, as reported in a report on Schedule 13D filed
with the Securities and Exchange Commission, or (c) the highest gross price paid or to be
paid for a share of Stock (whether by way of exchange, conversion, distribution upon merger,
liquidation or otherwise) in any of the transactions set forth in Section 9 of the Plan as
constituting a Change of Control.




“Incentive Stock Option” means a stock option qualified under Section 422 of the Code.



“Key Employee” means an Eligible Employee (including any officer or director who is
also an Eligible Employee) whose responsibilities and decisions, in the judgment of the
Committee, directly affect the performance of the Company and its subsidiaries.



“Option” means an option awarded under Section 5 of the Plan to purchase Stock of the
Company, which option may be an Incentive Stock Option or a non-qualified stock option.



“Participating Company” means the Company or any subsidiary or other affiliate of the
Company; provided, however, for Incentive Stock Options only,
“Participating Company” means the Company or any corporation which at the time such
Option is granted qualifies as a “subsidiary” of the Company under Section 424(f) of the
Code.



 


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“Performance Share” means a performance share awarded under Section 6 of the Plan.



“Person” has the meaning ascribed to such term in Section 3(a)(9) of the Act, as
supplemented by Section 13(d)(3) of the Act; provided, however, that Person shall not
include: (a) the Company, any subsidiary of the Company or any other Person controlled by
the Company, (b) any trustee or other fiduciary holding securities under any employee
benefit plan of the Company or of any subsidiary of the Company, or (c) a corporation owned,
directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of securities of the Company.



“Plan” means The Hartford Incentive Stock Plan, as the same may be amended,
administered or interpreted from time to time.




“Plan Year” means the calendar year.



“Potential Change of Control” means the occurrence of an event defined in Section 9 of
the Plan.




“Retirement” means the following:




(a) Key Employees Hired Before 2001. Solely with respect to
a Key
Employee with an original hire date with a Participating Company before January 1, 2001 who:
(i) is covered in whole or in part under the final average pay formula of the Retirement
Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” means
satisfaction of the requirements for early or normal retirement under the final average pay
formula of the Retirement Plan (assuming such Key Employee were covered under the final
average pay formula of the Retirement Plan), provided such event results in such Key
Employee’s separation from employment with the Company, or




(b)
Key Employees Hired During 2001. Solely with respect to a Key Employee
with an original hire date with a Participating Company on or after January 1, 2001 but
before January 1, 2002 who: (i) is covered under the cash balance formula of the Retirement
Plan, or (ii) is not eligible for coverage under the Retirement Plan, “Retirement” means
satisfaction of the requirements for early or normal retirement under the final average pay
formula of the Retirement Plan (assuming such Key Employee were covered under the final
average pay formula of the Retirement Plan), provided such event results in such Member’s
separation from the employment of the Company.



“Retirement Plan” means The Hartford Retirement Plan for U.S. Employees, as amended
from time to time.



“Restricted Stock” means Stock awarded under Section 7 of the Plan subject to
such restrictions as the Committee deems appropriate or desirable.


 


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“Restricted Unit” means a contractual right awarded under Section 7 of the Plan to
receive pursuant to the Plan one share of Stock at the end of a specified period of time,
subject to such restrictions as the Committee deems appropriate or desirable.



“Restriction Period” means, in the case of Performance Shares, Restricted Stock or
Restricted Units the period established by the Committee pursuant to Section 6 or 7, as
applicable, during which shares of Stock or other rights of the recipient of such an Award
(or his or her permissive assigns) remain subject to forfeiture pending completion of a
period of service or such other criteria or conditions as the Committee shall specify.



“Right” means a stock appreciation right awarded in connection with an Option under
Section 5 of the Plan.




“Stock” means the common stock ($.01 par value) of The Hartford.



“The Hartford” means the Company and its subsidiaries, and their successors and
assigns.



“Total Disability” means the complete and permanent inability of a Key Employee to
perform all of his or her duties under the terms of his or her employment with any
Participating Company, as determined by the Committee upon the basis of such evidence,
including independent medical reports and data, as the Committee deems appropriate or
necessary.



“Transferee” means any person or entity to whom or to which a non-qualified stock
option has been transferred and assigned in accordance with Section 5(h) of the Plan.




3. Shares Subject to the Plan



The aggregate number of shares of Stock which may be awarded under the Plan shall be
subject to a maximum limit applicable to all Awards for the duration of the Plan (the
“Maximum Limit”). The Maximum Limit shall be eight percent (8%) of the total of the
outstanding shares of Stock as of the date of shareholder approval of the Plan.



In addition to the foregoing, in no event shall more than twenty percent (20%) of the
total number of shares on a cumulative basis be available for Restricted Stock, Restricted
Units and Performance Share Awards. Further, for any Plan Year: (a) no individual Key
Employee may receive an Award of Options for more than 1,000,000 shares, and (b) no
individual Key Employee may receive an Award of Performance Shares for more than 200,000
shares.



Subject to the above limitations, shares of Stock to be issued under the Plan may be
made available from the authorized but unissued shares, or shares held by the
Company in treasury or from shares purchased in the open market.


 


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For the purpose of computing the total number of shares of Stock available for Awards
under the Plan, there shall be counted against the foregoing limitations the number of
 shares of Stock subject to issuance upon exercise or settlement of Awards and the number of
 shares of Stock which equals the value of performance share Awards, in each case determined
as at the dates on which such Awards are granted. If any Awards under the Plan are
forfeited, terminated, expire unexercised, are settled in cash in lieu of Stock or are
exchanged for other Awards, the shares of Stock which were theretofore subject to such
Awards shall again be available for Awards under the Plan to the extent of such forfeiture,
termination, expiration, cash settlement or exchange of such Awards. Further, any shares of
Stock that are exchanged (either actually or constructively) by optionees as full or partial
payment to the Company of the purchase price of shares of Stock being acquired through the
exercise of an Option granted under the Plan may be available for subsequent Awards.




4. Grant of Awards and Award Documents



(a) Subject to the provisions of the Plan, the Committee shall: (i) determine and
designate from time to time those Key Employees and Directors or groups of Key Employees and
Directors to whom Awards are to be granted, (ii) determine the form or forms of Award to be
granted to any Key Employee and any Director; (iii) determine the amount or number of shares
of Stock subject to each Award; and (iv) determine the terms and conditions of each Award.



(b) Each Award granted under the Plan shall be evidenced by a written Award Document.
Such Award Document shall be subject to and incorporate the express terms and conditions of
each Award, if any, required under the Plan or required by the Committee.




5. Stock Options and Rights



(a) With respect to Options and Rights, the Committee shall: (i) authorize the
granting of Incentive Stock Options, non-qualified stock options, or a combination of
Incentive Stock Options and non-qualified stock options; (ii) authorize the granting of
Rights which may be granted in connection with all or part of any Option granted under this
Plan, either concurrently with the grant of the Option or at any time thereafter during the
term of the Option; (iii) determine the number of shares of Stock subject to each Option or
the number of shares of Stock that shall be used to determine the value of a Right; and (iv)
determine the time or times when and the manner in which each Option or Right shall be
exercisable and the duration of the exercise period.



(b) Any option issued hereunder which is intended to qualify as an Incentive Stock
Option shall be subject to such limitations or requirements as may be necessary for the
purposes of Section 422 of the Code or any regulations and rulings thereunder to the
extent and in such form as determined by the Committee in its discretion.


 


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(c) The exercise period for a non-qualified stock option and any related Right shall
not exceed ten years and two days from the date of grant, and the exercise period for an
Incentive Stock Option and any related Right shall not exceed ten years from the date of
grant.



(d) The Option price per share shall be determined by the Committee at the time any
Option is granted and shall be not less than the Fair Market Value of one share of Stock on
the date the Option is granted.



(e) No part of any Option or Right may be exercised until the Key Employee who has been
granted the Award shall have remained in the employ of a Participating Company for such
period after the date of grant as the Committee may specify, if any, and the Committee may
further require exercisability in installments.



(f) Except as provided in Section 9, the purchase price of the shares of Stock as to
which an Option is exercised shall be paid to the Company at the time of exercise either in
cash, Stock already owned by the optionee, or a combination of the foregoing having a total
Fair Market Value equal to the purchase price. The Committee shall determine acceptable
methods for tendering Stock as payment upon exercise of an Option and may impose such
limitations and prohibitions on the use of Stock for such purpose as it deems appropriate.



(g) In case of a Key Employee’s termination of employment with all Participating
Companies, the following provisions shall apply:



(i) If a Key Employee who has been granted an Option shall die before such Option has
expired, his or her Option may be exercised in full by: (A) the person or persons to whom
the Key Employee’s rights under the Option pass by will, or if no such person has such
right, by his or her executors or administrators; (B) his or her Transferee(s) (with respect
to non-qualified Options); or (C) his or her Beneficiary designated pursuant to the Plan,
at any time, or from time to time, within five years after the date of the Key Employee’s
death or within such other period, and subject to such terms and conditions as the Committee
may specify, but not later than the expiration date specified in Section 5(c) above. Any
such Options not fully exercisable immediately prior to such optionee’s death shall become
fully exercisable upon such death unless the Committee, in its sole discretion, shall
otherwise determine.



(ii) If the Key Employee’s employment with all Participating Companies terminates:
(A) because of his or her Total Disability, or (B) solely in the case of a Key Employee with
an original hire date with a Participating Company before January 1, 2002, because of his or
her voluntary termination of employment due to Retirement; he or she may exercise his or her
Options in full at any time, or from time to time, within five years after the date of the
termination of his or her employment, or within such other period, and subject to such terms
and conditions as the Committee may specify, but not later than the expiration date
specified in Section 5(c) above. Any such Options not fully exercisable immediately prior to
such optionee’s Total Disability or Retirement shall
become fully exercisable upon such Total Disability or Retirement unless the Committee,
in its sole discretion, shall otherwise determine.


 


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(iii) If the Key Employee shall be terminated for cause as determined by the Committee,
all of such Key Employee’s Options or Rights outstanding at the date of such termination
(whether or not then exercisable) shall be canceled without further action by the Key
Employee, the Committee or the Company coincident with the effective date of such
termination.



(iv) Except as provided in Section 5(g)(ii) or Section 9, if a Key Employee’s
employment terminates for any other reason (including a voluntary resignation), he or she
may exercise his or her Options or Rights, to the extent that he or she shall have been
entitled to do so at the date of the termination of his or her employment, at any time, or
from time to time, within four months after the date of the termination of his or her
employment, or within such other period, and subject to such terms and conditions, as the
Committee may specify, but not later than the expiration date specified in Section 5(c)
above; provided however that, in the case of a voluntary resignation, in no event shall the
Key Employee’s period to exercise his or her Options or Rights extend beyond the later of
the 15th day of the third month following the Key Employee’s date of termination
of employment or December 31 of the calendar year in which such Key Employee’s date of
termination occurs unless such a later date would not, in accordance with guidance issued by
the Internal Revenue Service, cause the Plan to be subject to the provisions of Section 409A
of the Internal Revenue Code. All Options and Rights held by such Key Employee or any of
his or her assigns that are not eligible to be exercised upon the date of such termination
shall be canceled without further action by the Key Employee, the Committee or the Company
coincident with the effective date of such termination.



(v) Any Options or Rights not exercised within the period established in accordance
with this Section 5(g) shall be subject to Section 5(l) herein.



(h) Except as provided in this Section 5(h) or required by applicable law, no Option or
Right granted under the Plan shall be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the optionee, an Option or Right shall be
exercisable only by the Key Employee or Director to whom the Option or Right is granted.
Notwithstanding the foregoing, all or a portion of a non-qualified Option may be transferred
and assigned by such persons designated by the Committee, to such persons or groups of
persons designated as permissible Transferees by the Committee, and upon such terms and
conditions as the Committee may from time to time authorize and determine in its sole
discretion.



(i) Except as provided in Section 9, if a Director’s service on the Board terminates
for any reason, including without limitation, termination due to death, disability or
retirement, such Director (or Beneficiary, in the event of death) may exercise any Option or
Right granted to him or her only to the extent determined by the
Committee as set forth in such Director’s Award Document and/or any administrative
rules or other terms and conditions adopted by the Committee from time to time applicable to
such Option or Right granted to such Director.


 


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(j) With respect to an Incentive Stock Option, the Committee shall specify such terms
and provisions as the Committee may determine to be necessary or desirable in order to
qualify such Option as an “incentive stock option” within the meaning of Section 422 of the
Code.




(k) With respect to the exercisability and settlement of Rights:



(i) Upon exercise of a Right, a Key Employee or Director shall be entitled, subject to
such terms and conditions the Committee may specify, to receive upon exercise thereof all or
a portion of the excess of (A) the Fair Market Value of a specified number of shares of
Stock at the time of exercise, as determined by the Committee, over (B) a specified amount
which shall not, subject to Section 5(d), be less than the Fair Market Value of such
specified number of shares of Stock at the time the Right is granted. Upon exercise of a
Right, payment of such excess shall be made as the Committee shall specify in cash, the
issuance or transfer to the Key Employee or Director of whole shares of Stock with a Fair
Market Value at such time equal to any excess, or a combination of cash and shares of Stock
with a combined Fair Market Value at such time equal to any such excess, all as determined
by the Committee. The Company will not issue a fractional share of Stock and, if a
fractional share would otherwise be issuable, the Company shall pay cash equal to the Fair
Market Value of the fractional share of Stock at such time.



(ii) In the event of the exercise of such Right, the Company’s obligation in respect of
any related Option or such portion thereof will be discharged by payment of the Right so
exercised.



(l) Each outstanding Option and Right shall be deemed to be exercised, in the manner
set forth below, at the close of business on the scheduled expiration date of such Option or
Right if at such time the Option or Right by its terms remains exercisable and, if so
exercised, would result in a distribution to the holder of such Option or Right of at least
one share of Stock of the Company net of any applicable tax withholding requirements (a
“Deemed Exercise”). Such Deemed Exercise may be effected without notification by the
Director or Key Employee to the Company or by the Company to the Key Employee or Director.
Upon such Deemed Exercise, the Company shall issue and deliver to the Director or Key
Employee the greatest number of whole shares of Stock equal to the quotient of (i) divided
by (ii), with the quotient reduced as necessary to satisfy any applicable tax withholding
requirements, where (i) and (ii) are:



(i) The product of (x) the number of shares of Stock as to which the Option or Right is
being deemed exercised and (y) the excess of the Fair Market Value on the Deemed Exercise
date over the exercise price per share of such Option or the specified amount for such
Right, and


(ii) The Fair Market Value on such date.



with any remainder being payable in cash to the Participant. If, on the scheduled
expiration date of any Option or Right, the exercise of such Option or Right would not
result in a Deemed Exercise, then such Option or Right shall be canceled without further
action by the Key Employee or Director, the Committee or the Company on the date following
the last date on which such Option or Right may have been exercised in accordance with this
Section 5.




 


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6. Performance Shares




(a) Subject to the provisions of the Plan, the Committee shall: (i) determine and
designate from time to time those Key Employees or groups of Key Employees to whom Awards of
Performance Shares are to be made, (ii) determine the performance period (the “Performance
Period”) and performance objectives (the “Performance Objectives”) applicable to such
Awards, (iii) determine whether to impose a restriction period (the “Restriction Period”)
following the completion of the Performance Period applicable to any Key Employees or groups
of Key Employees, (iv) determine the form of settlement of a Performance Share, and (v)
generally determine the terms and conditions of each such Award. At any date, each
Performance Share shall have a value equal to the Fair Market Value of a share of Stock at
such date; provided that the Committee may limit the aggregate amount payable upon the
settlement of any Award. The maximum award for any individual employee in any given year
shall be 200,000 Performance Shares.



(b) The Committee shall determine a Performance Period of not less than one nor more
than five years. Performance Periods may overlap and Key Employees may participate
simultaneously with respect to Performance Shares for which different Performance Periods
are prescribed.



(c) The Committee may impose a Restriction Period of any duration determined
appropriate in its sole discretion, which shall apply immediately following the completion
of the Performance Period to which it relates.



(d) The Committee shall determine the Performance Objectives of Awards of Performance
Shares. Performance Objectives may vary from Key Employee to Key Employee and between groups
of Key Employees and shall be based upon one or more of the following objective criteria, as
the Committee deems appropriate, which may be (i) determined solely by reference to the
performance of the Company, any subsidiary or affiliate of the Company or any division or
unit of any of the foregoing, or (ii) based on comparative performance of any one or more of
the following relative to other entities: (A) earnings per share, (B) return on equity, (C)
cash flow, (D) return on total capital, (E) return on assets, (F) economic value added, (G)
increase in surplus, (H) reductions in operating expenses, (I) increases in operating
margins, (J) earnings before income taxes and depreciation, (K) total shareholder return,
(L) return on invested capital, (M) cost reductions and savings, (N) earnings before
interest, taxes, depreciation and amortization
(“EBITDA”), (O) pre-tax operating income, (P) productivity improvements, or (iii) a Key
Employee’s attainment of personal objectives with respect to any of the foregoing criteria
or other criteria such as growth and profitability, customer satisfaction, leadership
effectiveness, business development, negotiating transactions and sales or developing long
term business goals. If during the course of a Performance Period there shall occur
significant events which the Committee expects to have a substantial effect on the
applicable Performance Objectives during such period, the Committee may revise such
Performance Objectives.



 


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(e) At the beginning of a Performance Period, the Committee shall determine for each
Key Employee or group of Key Employees the number of Performance Shares or the percentage of
Performance Shares which shall be paid to the Key Employee or member of the group of Key
Employees following completion of the Performance Period or if later, following any
applicable Restriction Period, if the applicable Performance Objectives are met in whole or
in part.



(f) If a Key Employee terminates service with all Participating Companies during a
Performance Period or any applicable Restriction Period: (i) because of death, (ii)
because of Total Disability, (iii) solely in the case of a Key Employee with an original
hire date with a Participating Company before January 1, 2002, because of his or her
voluntary termination of employment due to Retirement, or (iv) under other circumstances
where the Committee in its sole discretion finds that a waiver would be in the best
interests of the Company; that Key Employee may, as determined by the Committee, be entitled
to payment in settlement of such Performance Shares at the end of the Performance Period or
if later, at the end of any applicable Restriction Period, based upon the extent to which
the Performance Objectives were satisfied at the end of such Performance Period and prorated
for the portion of the Performance Period together with any applicable Restriction Period
during which the Key Employee was actively employed by any Participating Company. If a Key
Employee terminates service with all Participating Companies during a Performance Period or
any applicable Restriction Period for any other reason, then such Key Employee shall not be
entitled to any Award with respect to that Performance Period and/or Restriction Period
unless the Committee shall otherwise determine.



(g) Each Award of a Performance Share shall be paid in whole shares of Stock, or cash,
or a combination of Stock and cash either as a lump sum payment or, if the Committee shall
so determine at the time of the grant, in annual installments, with payment to commence as
soon as practicable (but in any event within 90 days) after the end of the relevant
Performance Period or if later, at the end of any applicable Restriction Period.



(h) Except as otherwise required by applicable law, no Performance Share granted under
the Plan shall be transferable other than by will or by the laws of descent or distribution.


 


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7. Restricted Stock and Restricted Units



(a) Except as provided in Section 9, Restricted Stock and Restricted Units shall be
subject to a Restriction Period specified by the Committee. The Committee may provide for
the lapse of a Restriction Period in installments where deemed appropriate, and it may also
require the achievement of predetermined performance objectives in order for such
Restriction Period to lapse. Except as otherwise provided in the Plan or as specified by
the Committee, certificates for shares related to an award of Restricted Stock or Restricted
Units shall be delivered to a Key Employee or Director as soon as administratively
practicable (but in no event later than 90 days) following the end of the applicable
Restriction Period.



(b) Except when the Committee determines otherwise pursuant to Section 7(d), if a Key
Employee terminates employment with all Participating Companies for any reason before the
expiration of the Restriction Period, all shares of Restricted Stock and all rights with
respect to any award of Restricted Units still subject to restriction shall be forfeited by
the Key Employee and shall be reacquired by the Company.



(c) Except as otherwise provided in this Section 7 or required by applicable law, no
 shares of Restricted Stock received by a Key Employee or Director and no rights conveyed by
an award of Restricted Units shall be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of during the Restriction Period.



(d) In the event that a Key Employee’s employment terminates due to: (i) death, (ii)
Total Disability, (iii) solely in the case of a Key Employee with an original hire date with
a Participating Company before January 1, 2002, a voluntary termination of employment due to
Retirement, or (iv) such other circumstances that the Committee finds that a waiver or
modification of the applicable restrictions (or any portion thereof) would be in the best
interests of the Company, any or all remaining restrictions (or the designated portion
thereof) with respect to such Key Employee’s Restricted Stock or Restricted Units shall
lapse upon the date of such termination; provided that, while the Committee may waive or
modify the vesting conditions, the payment terms in effect under such Award Documents, rules
or terms and conditions at the date the Award is granted to the Key Employee shall not be
modified. With respect to any Award of Restricted Units, unless otherwise expressly
provided herein or otherwise determined by the Committee (and specified in writing) at the
time of grant, any amount payable to the Key Employee or his or her Beneficiary in
accordance with this Section 7(d) shall be paid within 90 days following the end of the
applicable Restriction Period determined without regard to this paragraph.



(e) Except as provided in Section 9, if a Director’s service on the Board terminates
for any reason, including without limitation due to death, disability or retirement, prior
to the lapse of any applicable Restriction Period, such Director (or Beneficiary, in the
event of death) shall be or become vested in, or entitled to payment in respect of, such
Award to the extent determined by the Committee as set forth in such Director’s Award
Document and/or any administrative rules or other terms and conditions adopted by the
Committee from time to time applicable to such Award granted
to such Director; provided that, to the extent that any such rules or terms and conditions
establish a payment term not associated directly with the vesting of any such Award, only
the payment terms established under such rules or terms and conditions as are in effect at
the date the Award is granted to the Director shall apply to such Award.


 


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(f) The Committee may require, on such terms and conditions as it deems appropriate or
desirable, that the certificates for Stock delivered under the Plan in respect of any grant
of Restricted Stock may be held in custody by a bank or other institution, or that the
Company may itself hold such shares in custody until the Restriction Period expires or until
restrictions thereon otherwise lapse, or later as provided in Section 14 hereof. The
Committee may require, as a condition of any Award of Restricted Stock that the Key Employee
shall have delivered a stock power endorsed in blank relating to the Restricted Stock.



(g) At the discretion of the Committee, the Restricted Unit account of a Key Employee
or Director may be credited with Dividend Equivalents during the Restricted Period which
shall be subject to the same terms and conditions (and become payable and be paid) as the
Restricted Units to which they relate. Unless the Committee shall otherwise determine at or
after grant, all Dividend Equivalents payable in respect of Restricted Units shall be deemed
reinvested in that number of Restricted Units determined based on the Fair Market Value on
the date the corresponding dividend on the Stock is payable to stockholders.



(h) Nothing in this Section 7 shall preclude a Key Employee from exchanging any shares
of Restricted Stock subject to the restrictions contained herein for any other shares of
Stock that are similarly restricted.



(i) Subject to Section 7(f) and Section 8, each Key Employee or Director awarded
Restricted Stock under the Plan shall be issued a certificate for the shares of Stock. Such
certificate shall be registered in the name of the Key Employee or Director, and shall bear
an appropriate legend reciting the terms, conditions and restrictions, if any, applicable to
such Award and shall be subject to appropriate stop-transfer orders. Upon the lapse of the
Restricted Period with respect to Restricted Stock, such shares shall no longer be subject
to the restrictions imposed under this Section 7 and the Company shall issue or have issued
new share certificates without the legend referred to herein in exchange for those
certificates previously issued. Upon the lapse of the Restricted Period with respect to any
Restricted Units, the Company shall deliver to the Key Employee or Director (or, if
applicable, his or her beneficiary or permitted assigns, one share of Stock for each
Restricted Unit as to which restrictions have lapsed (including any such Restricted Units
related to any Dividend Equivalents credited with respect to such Restricted Units). The
Committee may, in its sole discretion, elect to pay cash or part cash and part Stock in lieu
of delivering only Stock for Restricted Units. If a cash payment is made in lieu of
delivering Stock, the amount of such cash payment for each share of Stock to which a Key
Employee or Director is entitled shall be equal to the Fair Market Value on the date on
which the Restricted Period lapsed with respect to the related Restricted Unit.
Notwithstanding the foregoing, the Committee may require or permit the deferral of payment
in respect of Restricted Units to a date or dates (including,
without limitation, the date the Key Employee’s employment or a Director’s services on the
Board terminates) subsequent to the date that the Restriction Period lapses on such terms
and conditions (including, without limitation, the manner in which the amounts payable shall
be deemed invested during the period of deferral) as it shall determine from time to time.


 


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(j) Except for the restrictions set forth herein and unless otherwise determined by the
Committee, the Key Employee or Director shall have all the rights of a shareholder with
respect to such shares of Restricted Stock, including but not limited to, the right to vote
and the right to receive dividends. A Key Employee or Director shall not have any right, in
respect of Restricted Units awarded pursuant to the Plan, to vote on any matter submitted to
the Company’s stockholders until such time, if at all, as the shares of Stock attributable
to such Restricted Units have been issued.



(k) In addition, the Committee may permit Key Employees and Directors or any group of
Key Employees and Directors to elect to receive Restricted Units in exchange for or in lieu
of other compensation (including salaries, annual bonuses, annual retainer and meeting fees)
that would otherwise have been payable to such Key Employees or Directors in cash. The
Committee shall establish the terms and conditions of any such Restricted Units, including
the Restriction Period applicable thereto, and the date on which Stock shall be issued in
respect thereof. The Committee shall establish the terms and conditions applicable to any
election by a Director to receive Restricted Units (including the time at which any such
election shall be made).



8. Certificates for Awards of Stock



(a) The Company shall not be required to issue or deliver any certificates for shares
of Stock prior to: (i) the listing of such shares on any stock exchange on which the Stock
may then be listed, (ii) the completion of any registration or qualification of such shares
under any federal or state law, or any ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be necessary or advisable, and (iii) the
satisfaction of any tax withholding obligations as provided in Section 14 hereof.



(b) All certificates for shares of Stock delivered under the Plan shall also be subject
to such stop-transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed and any applicable
federal or state securities laws, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such restrictions. In
making such determination, the Committee may rely upon an opinion of counsel for the
Company.



(c) Except to the extent such shares are subject to forfeiture during any applicable
Restriction Period, each Key Employee or Director who receives Stock in settlement of or as
part of an Award, shall have all of the rights of a shareholder with
respect to such shares, including the right to vote the shares and receive dividends
and other distributions. No Key Employee or Director awarded an Option, a Right, a
Restricted Unit or a Performance Share shall have any right as a shareholder with respect to
any shares of Stock covered by his or her Option, Right, Restricted Unit or Performance
Share prior to the date of issuance to him or her of a certificate or certificates for such
 shares.



 


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9. Change of Control




(a) For purposes of this Plan, a Change of Control shall occur if:



(i) a report on Schedule 13D shall be filed with the Securities and Exchange Commission
pursuant to Section 13(d) of the Act disclosing that any Person, other than the Company or a
subsidiary of the Company or any employee benefit plan sponsored by the Company or a
subsidiary of the Company is the Beneficial Owner of forty percent or more of the
outstanding stock of the Company entitled to vote in the election of directors of the
Company;



(ii) any Person other than the Company or a subsidiary of the Company or any employee
benefit plan sponsored by the Company or a subsidiary of the Company shall purchase shares
pursuant to a tender offer or exchange offer to acquire any stock of the Company (or
securities convertible into stock) for cash, securities or any other consideration, provided
that after consummation of the offer, the Person in question is the Beneficial Owner of
fifteen percent or more of the outstanding stock of the Company entitled to vote in the
election of directors of the Company (calculated as provided in paragraph (d) of Rule 13d-3
under the Act in the case of rights to acquire stock);



(iii) any merger, consolidation, recapitalization or reorganization of the Company
approved by the stockholders of the Company shall be consummated, other than any such
transaction immediately following which the persons who were the Beneficial Owners of the
outstanding securities of the Company entitled to vote in the election of directors of the
Company immediately prior to such transaction are the Beneficial Owners of at least 55% of
the total voting power represented by the securities of the entity surviving such
transaction entitled to vote in the election of directors of such entity (or the ultimate
parent of such entity) in substantially the same relative proportions as their ownership of
the securities of the Company entitled to vote in the election of directors of the Company
immediately prior to such transaction; provided that, such continuity of ownership (and
preservation of relative voting power) shall be deemed to be satisfied if the failure to
meet such threshold (or to preserve such relative voting power) is due solely to the
acquisition of voting securities by an employee benefit plan of the Company, such surviving
entity or any subsidiary of such surviving entity;



(iv) any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all the assets of the Company approved by the
stockholders of the Company shall be consummated; or


 


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(v) within any 24 month period, the persons who were directors of the Company
immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for
any reason other than death) to constitute at least a majority of the Board or the board of
directors of any successor to the Company, provided that any director who was not a director
at the beginning of such period shall be deemed to be an Incumbent Director if such director
(A) was elected to the Board by, or on the recommendation of or with the approval of, at
least two-thirds of the directors who then qualified as Incumbent Directors either actually
or by prior operation of this clause (v), and (B) was not designated by a Person who has
entered into an agreement with the Company to effect a transaction described in Section
9(a)(iii) or Section 9(a)(iv) of the Plan.




	 	(b)	 	For purposes of this Plan, a Potential Change of Control shall
occur if:






(i) A Person shall commence a tender offer, which if successfully consummated, would
result in such Person being the Beneficial Owner of at least 15% of the stock of the Company
entitled to vote in the election of directors of the Company;



(ii) The Company enters into an agreement, the consummation of which would constitute a
Change of Control;



(iii) Solicitation of proxies for the election of directors of the Company by anyone
other than the Company, which, if such directors were elected, would result in the
occurrence of a Change of Control as described in Section 9(a)(v); or



(iv) Any other event shall occur which is deemed to be a Potential Change of Control by
the Board, the Committee, or any other appropriate committee of the Board in its sole
discretion.



(c) Notwithstanding any provision in this Plan to the contrary, upon the occurrence of
a Change of Control:



(i) Each Option and related Right outstanding on the date such Change of Control
occurs, and which is not then fully vested and exercisable, shall immediately vest and
become exercisable to the full extent of the original grant for the remainder of its term.



(ii) The surviving or resulting corporation may, in its discretion, provide for the
assumption or replacement of each outstanding Option and related Right granted under the
Plan on terms which are no less favorable to the optionee than those applicable to the
Options and Rights immediately prior to the Change of Control.



(iii) Except to the extent otherwise expressly provided in Section 9(c)(vi), the
restrictions applicable to shares of Restricted Stock or to Restricted Units held by Key
Employees pursuant to Section 7 shall lapse upon the occurrence of a Change of Control, and
such Key Employees shall receive immediately unrestricted certificates for all of such
 shares.


 


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(iv) If a Change of Control occurs during the course of a Performance Period or any
Restriction Period applicable to an Award of Performance Shares pursuant to Section 6, then
a Key Employee shall be deemed to have satisfied the Performance Objectives at the target
level specified in the Key Employee’s Award agreement or, if greater, otherwise specified by
the Committee at or after grant, and to have completed any applicable Restriction Period
effective on the date of such occurrence. Except to the extent otherwise expressly
provided in Section 9(c)(vi), distribution of amounts payable in connection with an Award of
Performance Shares shall be made immediately following (but in no event later than 30 days)
following the occurrence of the Change of Control.



(v) Without limiting the provisions of this Section 9(c), in the event of a Change of
Control the Committee may, in its discretion, provide any of the following either absolutely
or subject to the election of such Key Employees:




a. Each Option and related Right shall be surrendered or exercised for an immediate
lump sum cash amount equal to the excess of the Formula Price over the exercise
price;




b. Each Restricted Stock Award, Restricted Unit Award and Performance Share Award
shall be exchanged for an immediate lump sum cash amount equal to the number of
outstanding units or shares awarded to such Key Employee multiplied by the Formula
Price.



(vi) Notwithstanding the foregoing provisions of this Section 9(c), unless the event
constituting a Change of Control for purposes of the Plan shall also constitute a “change in
control” as defined in the regulations promulgated under Section 409A of the Code, no
distribution or payment shall be made upon or in connection with the occurrence of a Change
of Control with respect to (x) any Restricted Units or Performance Shares or (y) any other
Award that the Committee shall determine, on or before the later of December 31, 2008 (or
such later date as shall be permitted under transitional relief provided under Section 409A
of the Code) and the date the Award is granted, does not qualify for any applicable
exemption from the application of Section 409A of the Code (such as by reason of being a
stock right or qualifying as a short-term deferral). To the extent that, pursuant to the
immediately preceding sentence, an Award is not distributable or payable upon the occurrence
of a Change of Control, distribution or payment of such Award shall be made at the time
otherwise specified under the Plan or the Award Documents without regard to the occurrence
of a Change of Control. Without limiting the generality of the foregoing, nothing in this
Section 9(c)(vi) shall be construed to prevent any Key Employee’s rights in respect of any
Award from becoming non-forfeitable upon the occurrence of a Change of Control.



(d) Notwithstanding any provision in this Plan to the contrary, in the event of a
Change of Control as described in Section 9(a)(iii) or Section 9(a)(iv) of the Plan, in the
case of an awardee whose employment or service involuntarily terminates on or after the date
of a shareholder approval described in either of such Sections but before the date of
a consummation described in either of such Sections, and the consummation occurs within 60
days of such date of termination, then the date of termination of such an awardee’s
employment or service shall be deemed for purposes of the Plan to be the day following the
date of the applicable consummation.


 


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10. Beneficiary



(a) Each Key Employee, Director and/or his or her Transferee may file with the Company
a written designation of one or more persons as the Beneficiary who shall be entitled to
receive the Award, if any, payable under the Plan upon his or her death. A Key Employee,
Director or Transferee may from time to time revoke or change his or her Beneficiary
designation without the consent of any prior Beneficiary by filing a new designation with
the Company. The last such designation received by the Company shall be controlling;
provided, however, that no designation, or change or revocation thereof, shall be effective
unless received by the Company prior to the Key Employee’s, Director’s or Transferee’s
death, as the case may be, and in no event shall it be effective as of a date prior to such
receipt.



(b) If no such Beneficiary designation is in effect at the time of death of a Key
Employee, Director or Transferee, as the case may be, or if no designated Beneficiary
survives the Key Employee, Director or Transferee or if such designation conflicts with
applicable law, the estate of the Key Employee, Director or Transferee, as the case may be,
shall be entitled to receive the Award, if any, payable under the Plan upon his or her
death. If the Committee is in doubt as to the right of any person to receive such Award, the
Company may retain such Award, without liability for any interest thereon, until the
Committee determines the rights thereto, or the Company may pay such Award into any court of
appropriate jurisdiction and such payment shall be a complete discharge of the liability of
the Company therefore.


 


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11. Administration of the Plan



(a) All decisions, determinations or actions of the Committee made or taken pursuant to
grants of authority under the Plan shall be made or taken in the sole discretion of the
Committee and shall be final, conclusive and binding on all persons for all purposes.



(b) The Committee shall have full power, discretion and authority to interpret,
construe and administer the Plan and any part thereof, and its interpretations and
constructions thereof and actions taken thereunder shall be, except as otherwise determined
by the Board, final, conclusive and binding on all persons for all purposes.



(c) The Committee’s decisions and determinations under the Plan need not be uniform and
may be made selectively among Key Employees and Directors, whether or not such Key Employees
and Directors are similarly situated.



(d) The Committee may, in its sole discretion, delegate such of its powers as it deems
appropriate to the Company’s Executive Vice President, Human Resources (or other person
holding a similar position) or the Company’s Chief Executive Officer, except that Awards to
executive officers shall be made, and matters related thereto shall be determined, solely by
the Committee or the Board or any other appropriate committee of the Board.



12. Amendment, Extension or Termination



The Board or the Committee may, at any time, amend or modify the Plan and, specifically, may
make such modifications to the Plan as it deems necessary to avoid the application of Section
162(m) of the Code and the Treasury regulations issued thereunder. However: (i) with respect only
to Incentive Stock Options, no amendment shall, without approval by a majority of the Company’s
stockholders, (A) alter the group of persons eligible to participate in the Plan, or (B) except as
provided in Section 13 increase the maximum number of shares of Stock which are available for
Awards under the Plan; or, (ii) with respect to all Options, allow the Committee to reprice the
Options. The Board may suspend or terminate the Plan at any time without the consent of such
person. Notwithstanding anything in this Plan to the contrary, the Plan shall not be amended,
modified, suspended or terminated during the period in which a Change of Control is threatened.
For purposes of the preceding sentence, a Change of Control shall be deemed to be threatened for
the period beginning on the date of any Potential Change of Control, and ending upon the earlier
of: (I) the second anniversary of the date of such Potential Change of Control, (II) the date a
Change of Control occurs, or (III) the date the Board or the Committee determines in good faith
that a Change of Control is no longer threatened. Further, notwithstanding anything in this Plan to
the contrary, no amendment, modification, suspension or termination following a Change of Control
shall adversely impair or reduce the rights of any person with respect to a prior Award without the
consent of such person. Notwithstanding the preceding provisions, the Board or the Committee may
amend the Plan or an Award Document to take effect retroactively or otherwise, as deemed necessary
or advisable for the purpose of conforming the Plan or an Award Document to any present or future
law
relating to plans of this or similar nature and the administrative regulations and rulings
promulgated thereunder (including, but not limited to, amendments deemed necessary or advisable to
avoid payments being subject to additional tax under Code Section 409A).


 


19









 





13. Adjustments in Event of Change in Common Stock



In the event of any reorganization, merger, recapitalization, consolidation,
liquidation, stock dividend, stock split, reclassification, combination of shares, rights
offering, split-up or extraordinary dividend (including a spin-off) or divestiture, or any
other change in the corporate structure or shares, the Committee shall make such adjustment
in the Stock subject to Awards, including Stock subject to purchase by an Option or issuable
in respect of Restricted Units, or the terms, conditions or restrictions on Stock or Awards,
including the price payable upon the exercise of such Option and the number of shares
subject to Restricted Stock or Restricted Unit Awards, as shall be necessary to preserve Key
Employee rights substantially proportionate to those rights existing immediately prior to
such transaction or event.



14. Miscellaneous



(a) If a Change of Control has not occurred and if the Committee determines that a Key
Employee has taken action inimical to the best interests of any Participating Company, the
Committee may, in its sole discretion, terminate in whole or in part such portion of any
Option (including any related Right) as has not yet become exercisable at the time of
termination, terminate any Performance Share Award for which the Performance Period or any
applicable Restriction Period has not been completed or terminate any Award of Restricted
Stock or Restricted Units for which the Restriction Period has not lapsed.



(b) Except as provided in Section 9, nothing in this Plan or any Award granted
hereunder shall confer upon any employee any right to continue in the employ of any
Participating Company or interfere in any way with the right of any Participating Company to
terminate his or her employment at any time. No Award payable under the Plan shall be deemed
salary or compensation for the purpose of computing benefits under any employee benefit plan
or other arrangement of any Participating Company for the benefit of its employees unless
the Company shall determine otherwise. No Key Employee shall have any claim to an Award
until it is actually granted under the Plan. To the extent that any person acquires a right
to receive payments from the Company under this Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company. All payments to be made hereunder
shall be paid from the general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such amounts
except as provided in Section 7(e) with respect to Restricted Stock.


 


20









 





(c) The Committee shall have the right to make such provisions as deemed
appropriate in its sole discretion to satisfy any obligation of the Company to withhold
federal, state or local income or other taxes (including FICA obligations) incurred by
reason of the operation of the Plan or an Award under the Plan, including but not limited to
at any time: (i) requiring a Key Employee to submit payment to the Company for such taxes
before making settlement of any Award of Stock or other amount due under the Plan, (ii)
withholding such taxes from wages or other amounts due to the Key Employee before making
settlement of any Award of Stock or other amount due under the Plan, (iii) making settlement
of any Award of Stock or other amount due under the Plan to a Key Employee part in Stock and
part in cash to facilitate satisfaction of such withholding obligations, or (iv) receiving
Stock already owned by, or withholding Stock otherwise due to, the Key Employee in an amount
determined necessary to satisfy such withholding obligations; provided, however, that,
notwithstanding any language herein to the contrary, any Key Employee who is an executive
officer of the Company (within the meaning of Section 16 of the Act) shall have the right to
satisfy his or her obligations to the Company pursuant to this Section 14(c) by instructing
the Company not to deliver to the Key Employee Stock otherwise deliverable to the Key
Employee in an amount sufficient to satisfy such obligations to the Company.



(d) The Plan and the grant of Awards shall be subject to all applicable federal and
state laws, rules, and regulations and to such approvals by any government or regulatory
agency as may be required.



(e) The terms of the Plan shall be binding upon the Company and its successors and
assigns.



(f) Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provision hereof.



15. Effective Date, Term of Plan and Shareholder Approval



The effective date of the Plan shall be May 18, 2000. No Award shall be granted under
this Plan after the Plan’s termination date. The Plan’s termination date shall be the
earlier of: (a) May 18, 2010, or (b) the date on which the Maximum Limit (as defined in
Section 3 of the Plan) is reached; provided, however, that the Plan will continue in effect
for existing Awards as long as any such Award is outstanding.




 


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