Exhibit 10.1


 


ISLE OF
CAPRI CASINOS, INC.


2009
LONG-TERM STOCK INCENTIVE PLAN


 


SECTION 1


 


GENERAL


 


1.1.          Purpose and History.  The
Isle of Capri Casinos, Inc. 2009 Long-Term Stock Incentive Plan (the “Plan”)
has been established effective as of the Effective Date by Isle of Capri
Casinos, Inc. (the “Company”) to (a) attract and retain persons
eligible to participate in the Plan; (b) motivate Participants, by means
of appropriate incentives, to achieve long-range goals; (c) provide
incentive compensation opportunities that are competitive with those of other
similar companies; and (d) further identify Participants’ interests with
those of the Company’s other stockholders through compensation that is based on
the Company’s common stock, and thereby promote the long-term financial
interest of the Company and its Affiliates, including the growth in value of
the Company’s equity and enhancement of long-term stockholder return.  The Plan replaces the Isle of Capri Casinos, Inc.
Amended and Restated 2000 Long-Term Stock Incentive Plan (the “Prior Plan”).  The Plan was adopted by the Board on August 20,
2009 and shall become effective upon approval by the Company’s
stockholders.  No awards shall be made
under the Plan unless and until it is approved by the Company’s stockholders.


 


1.2.          Operation, Administration, and Definitions.  The operation and administration of the Plan,
including the Awards made under the Plan, shall be subject to the provisions of
Section 4 (relating to operation and administration).  Capitalized terms used in the Plan are
defined in Section 8.


 


1.3.          Participation.   Subject to the terms and conditions of the
Plan, the Committee shall determine and designate, from time to time, from
among the Eligible Persons those persons who will be granted one or more Awards
under the Plan and thereby become Participants in the Plan.


 


SECTION 2


 


OPTIONS AND
SARS


 


2.1.          Definitions.


 


(a)           The
grant of an “Option” under the Plan entitles the Participant to purchase shares
of Stock at an Exercise Price established by the Committee at the time the
Option is granted.  Any Option granted
under this Section 2 may be either an incentive stock option (an “ISO”) or
a non-qualified stock option (an “NQSO”), as determined in the discretion of
the Committee, provided that only employees of the Company or an Affiliate may
receive a grant of ISOs.  An “ISO” is an
Option that is intended to satisfy the requirements applicable to an “incentive
stock option” described in section 422(b) of the Code.  An “NQSO” is an Option that is not intended
to be an “incentive stock option” as that term is described in section 422(b) of
the Code.


 

















 


(b)           The
grant of a stock appreciation right (an “SAR”) under the Plan entitles the
Participant to receive, in cash or Stock (as determined in accordance with the
terms of the Plan), value equal to (or otherwise based on) the excess of: (a) the
Fair Market Value of a specified number of shares of Stock at the time of
exercise; over (b) the Exercise Price established by the Committee at the
time the SAR is granted.


 


2.2.          Exercise Price.  The “Exercise Price” of each Option and SAR
granted under this Section 2 shall be established by the Committee, or
shall be determined by a method established by the Committee, at the time the
Option or SAR is granted; provided, however, that the Exercise Price shall not
be less than 100% of the Fair Market Value of a share of Stock on the date of
grant (or, if greater, the par value of a share of Stock).


 


2.3.          Exercise/Vesting.  Except as otherwise expressly provided in the
Plan, Options and SARs shall become vested and exercisable in accordance with
such terms and conditions and during such periods as may be established by the
Committee as set forth in the Award Agreement; provided, however, that
notwithstanding any vesting dates set by the Committee in such Award Agreement,
the Committee may, in its sole discretion, accelerate the exercisability of any
Option or SAR, which acceleration shall not affect the terms and conditions of
such Option or SAR other than with respect to exercisability.  No Option or SAR may be exercised after the
Expiration Date applicable to that Option or SAR.


 


2.4.          Payment of Option
Exercise Price.  The payment of the Exercise Price of an
Option granted under this Section 2 shall be subject to the following:


 


(a)           Subject
to the following provisions of this subsection 2.4, the full Exercise Price for
shares of Stock purchased upon the exercise of any Option shall be paid at the
time of such exercise (except that, in the case of an exercise arrangement approved
by the Committee and described in paragraph 2.4(c), payment may be made as soon
as practicable after the exercise).


 


(b)           Subject
to applicable law, the Exercise Price shall be payable (i) in cash or cash
equivalents, (ii) by tendering, by either actual delivery or by
attestation, shares of Stock acceptable to the Committee, and valued at Fair
Market Value as of the day of exercise, or (iii) in any combination of (i) and
(ii), as determined by the Committee.


 


(c)           Subject
to applicable law and procedures established by the Committee, the Committee
may permit a Participant to elect to pay the Exercise Price upon the exercise
of an Option by irrevocably authorizing a third party to sell shares of Stock
(or a sufficient portion of the shares) acquired upon exercise of the Option
and remit to the Company a sufficient portion of the sale proceeds to pay the
entire Exercise Price and any tax withholding resulting from such exercise.


 


2.5.          Settlement of Award. 
Settlement of Options and SARs is subject to subsection 4.8.


 


2.6.          Post-Exercise Limitations.  The Committee, in its discretion, may impose
such restrictions on shares of Stock acquired pursuant to the exercise of an
Option or SAR as it determines to be desirable, including, without limitation,
restrictions relating to the disposition of the shares and forfeiture
restrictions based on service, performance, Stock ownership by the Participant
and such other factors as the Committee determines to be appropriate.


 


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2.7.          No Repricing.  Except for either adjustments pursuant to
subsection 4.3 (relating to the adjustment of shares), or reductions of the
Exercise Price approved by the Company’s stockholders, the Exercise Price for
any outstanding Option or SAR may not be decreased after the date of grant nor
may an outstanding Option or SAR granted under the Plan be surrendered to the
Company for cash (other than pursuant to subsection 4.5), other Awards, or as
consideration for the grant of a replacement Option or SAR with a lower
exercise price.  In addition, no
repricing of an Option or SAR shall be permitted without the approval of the
Company’s stockholders if such approval is required under the rules of any
stock exchange on which such shares of Stock are listed.


 


2.8.          Required Notice of ISO Share Disposition.  Each Participant who is awarded an ISO under
the Plan shall notify the Company in writing immediately after the date he or
she makes a disqualifying disposition of any Stock acquired pursuant to the exercise
of such ISO.  A disqualifying disposition
is any disposition (including any sale) of such Stock before the later of (a) two
years after the date of grant of the ISO or (b) one year after the date
the Participant acquired the Stock upon exercise of the ISO.


 


2.9.          Limits on ISOs.  Notwithstanding anything to the contrary in
this Section 2, if an ISO is granted to a Participant who owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or of an Affiliate, the Expiration Date shall not be later than
the fifth anniversary of the date on which the ISO was granted and the Exercise
Price shall be at least 110 percent of the Fair Market Value of the Stock
subject to the ISO (determined on the date of grant).  To the extent that the aggregate fair market
value of shares of Stock with respect to which ISOs are exercisable for the
first time by any individual during any calendar year (under all plans of the
Company and all Affiliates) exceeds $100,000, such Options shall be treated as
NQSOs to the extent required by section 422 of the Code.


 


2.10.        Expiration Date.  The “Expiration Date” with respect to an
Option or SAR means the date established as the Expiration Date by the
Committee at the time of grant.  In no event
shall the Expiration Date of an Option or SAR be later than the ten-year
anniversary of the date on which the Option or SAR is granted.


 


SECTION 3


 


FULL VALUE AWARDS


 


3.1.          Definition.  A
“Full Value Award” is a grant of one or more shares of Stock or a right to
receive one or more shares of Stock in the future (other than the grant of an
Option or SAR), with such grant subject to one or more of the following, as
determined by the Committee:


 


(a)           The
grant shall be in consideration of a Participant’s previously performed
services or surrender of other compensation that may be due.


 


(b)           The
grant shall be contingent on the achievement of performance or other objectives
during a specified period.


 


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(c)           The
grant shall be subject to a risk of forfeiture or other restrictions that will
lapse upon the achievement of one or more goals relating to completion of
service by the Participant, or achievement of performance or other objectives.


 


(d)           The
grant of Full Value Awards may also be subject to such other conditions,
restrictions and contingencies, as determined by the Committee, including
dividend or dividend equivalent rights and deferred payment or settlement.


 


3.2.          Special Vesting Rules.  If an employee’s right to become vested in a
Full Value Award is conditioned on the completion of a specified period of
service with the Company or the Affiliates, without achievement of performance
targets or other performance objectives (whether or not related to Performance
Measures) being required as a condition of vesting, and without it being
granted in lieu of other compensation, then the required period of service for
full vesting shall be not less than one year (subject, to the extent provided
by the Committee, to pro rated vesting over the course of such one year period
and to acceleration of vesting in the event of the Participant’s death,
disability, retirement, Change in Control or involuntary termination).  The foregoing requirements shall not apply to
(a) grants made to newly eligible Participants to replace awards from a
prior employer and (b) grants that are a form of payment of earned
performance awards or other incentive compensation.


 


3.3.          Performance-Based Compensation.  The Committee may designate a Full Value
Award granted to any Participant as “Performance-Based Compensation” within the
meaning of section 162(m) of the Code and regulations thereunder. To the
extent required by section 162(m) of the Code, any such Award so
designated shall be conditioned on the achievement of one or more performance
targets and Performance Measures as determined by the Committee and the
following additional requirements shall apply:


 


(a)           The
performance targets established for the performance period established by the
Committee shall be objective (as that term is described in regulations under
section 162(m) of the Code), and shall be established in writing by the
Committee not later than 90 days after the beginning of the performance period
(but in no event after 25% of the performance period has elapsed), and while
the outcome as to the performance targets is substantially uncertain.  The performance targets established by the
Committee may be with respect to corporate performance, operating group or
sub-group performance, individual company performance, other group or
individual performance, or division performance.


 


(b)           A
Participant otherwise entitled to receive a Full Value Award for any
performance period shall not receive a settlement or payment of the Award until
the Committee has determined that the applicable performance target(s) have
been attained.  To the extent that the
Committee exercises discretion in making the determination required by this
paragraph 3.3(b), such exercise of discretion may not result in an increase in
the amount of the payment.


 


(c)           To
the extent provided by the Committee, if a Participant’s employment terminates
because of death or disability, or if a Change in Control occurs prior to the
Participant’s termination date, the Participant’s Full Value Award may become
vested without regard to whether the Full Value Award would be
Performance-Based Compensation.


 


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Nothing in this Section 3 shall preclude
the Committee from granting Full Value Awards under the Plan that are not
intended to be Performance-Based Compensation; provided, however, that, at the
time of grant of Full Value Awards by the Committee, the Committee shall
designate whether such Awards are intended to constitute Performance-Based Compensation.  To the extent that the provisions of this Section 3
reflect the requirements applicable to Performance-Based Compensation, such
provisions shall not apply to the portion of the Award, if any, that is not
intended to constitute Performance-Based Compensation.


 


SECTION 4


 


OPERATION
AND ADMINISTRATION


 


4.1.          Duration. 
The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Awards may be granted under the Plan
after the ten-year anniversary of the Effective Date.


 


4.2.          Shares Subject to Plan.  The shares of Stock for which Awards may be
granted under the Plan shall be subject to the following:


 


(a)           The
shares of Stock with respect to which Awards may be made under the Plan shall
be shares currently authorized but unissued or, to the extent permitted by
applicable law,  currently held or
subsequently acquired by the Company as treasury shares, including shares
purchased in the open market or in private transactions.


 


(b)           Subject
to the provisions of subsection 4.3, the maximum number of shares of Stock that
may be delivered to Participants and their beneficiaries under the Plan shall
be equal to the sum of: (i) 1,000,000 shares of Stock; (ii) any
shares of Stock available for future awards under the Prior Plan as of the
Effective Date (including any shares added back to the Prior Plan, pursuant to
the terms of the Prior Plan, from a plan other than the Prior Plan), and (iii) any
shares of Stock that would have been available for awards granted under the
Prior Plan due to forfeiture, expiration or cancellation of such awards without
delivery of shares of Stock or which result in the forfeiture of the shares of
Stock back to the Company (including any such shares which would have been
available under the Prior Plan, pursuant to the terms of the Prior Plan, due to
forfeiture, expiration or cancellation of awards made under a plan other than
the Prior Plan).


 


(c)           Except
as expressly provided by the terms of this Plan, the issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property or for labor or services, either upon direct
sale, upon the exercise of rights or warrants to subscribe therefor or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof,
shall be made with respect to Awards then outstanding hereunder.


 


(d)           To
the extent provided by the Committee, any Award may be settled in cash rather
than Stock.  To the extent any shares of
Stock covered by an Award are not delivered to a Participant or beneficiary
because the Award is forfeited or canceled, or the shares of Stock are not
delivered because the Award is settled in cash or used to satisfy the
applicable tax withholding obligation, such shares shall not be deemed to 


 


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have
been delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan.


 


(e)           If
the exercise price of an Option granted under the Plan is satisfied by
tendering shares of Stock to the Company (by either actual delivery or by
attestation), only the number of shares of Stock issued net of the shares of
Stock tendered shall be deemed delivered for purposes of determining the
maximum number of shares of Stock available for delivery under the Plan.


 


(f)            Subject
to the provisions of subsection 4.3, the following additional maximums are
imposed under the Plan:


 


(i)            The
maximum number of shares of Stock that may be issued by Options intended to be
ISOs shall be 1,000,000.


 


(ii)           For
Awards of Options or SARs that are intended to be Performance-Based
Compensation, no more than 500,000 shares of Stock may be subject to such
Awards granted to any one individual during any one fiscal year period.  If an Option is in tandem with an SAR, such
that the exercise of the Option or SAR with respect to a share of Stock cancels
the tandem SAR or Option right, respectively, with respect to such share, the
tandem Option and SAR rights with respect to each share of Stock shall be
counted as covering but one share of Stock for purposes of applying the
limitations of this subparagraph (ii).


 


(iii)          For
Full Value Awards that are intended to be Performance-Based Compensation, no
more than 500,000 shares of Stock may be subject to such Awards granted to any
one individual during any one fiscal year period.  If, after shares have been earned, the
delivery is deferred, any additional shares attributable to dividends during
the deferral period shall be disregarded. 
For Full Value Awards that are intended to be Performance-Based Compensation
and that are denominated in cash, no more than $1,500,000 may be subject to
such Awards granted to any one individual during any one fiscal year period.


 


(1)           If
the Awards are denominated in Stock but an equivalent amount of cash is
delivered in lieu of delivery of shares of Stock, the foregoing limit shall be
applied based on the methodology used by the Committee to convert the number of
shares of Stock into cash.


 


(2)           If
the Awards are denominated in cash but an equivalent amount of Stock is
delivered in lieu of delivery of cash, the foregoing limit shall be applied to
the cash based on the methodology used by the Committee to convert the cash
into shares of Stock.


 


(3)           Any
adjustment in the number of shares of Stock or amount of cash delivered to
reflect actual or deemed investment experience shall be disregarded.


 


4.3.          Adjustments to Shares.  In
the event of a corporate transaction involving the Company (including, without
limitation, any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination 


 


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or exchange of shares),
the Committee shall adjust Awards to preserve the benefits or potential
benefits of the Awards.  Action by the
Committee may include, in its sole discretion: (a) adjustment of the
number and kind of shares which may be delivered under the Plan (including
adjustments to the number and kind of shares that may be granted to an
individual during any specified time as described in subsection 4.2); (b) adjustment
of the number and kind of shares subject to outstanding Awards; (c) adjustment
of the Exercise Price of outstanding Options and SARs; and (d) any other
adjustments that the Committee determines to be equitable (which may include,
without limitation, (i) replacement of Awards with other Awards which the
Committee determines have comparable value and which are based on stock of a
company resulting from the transaction, and (ii) cancellation of the Award
in return for cash payment of the current value of the Award, determined as
though the Award is fully vested at the time of payment, provided that in the
case of an Option or SAR, the amount of such payment may be the excess of value
of the Stock subject to the Option or SAR at the time of the transaction over
the Exercise Price).


 


4.4.          General Restrictions.  Delivery of shares of Stock or other amounts
under the Plan shall be subject to the following:


 


(a)           Notwithstanding
any other provision of the Plan, neither the Company nor any Affiliate shall
have any obligation to deliver any shares of Stock under the Plan or make any
other distribution of benefits under the Plan unless such delivery or
distribution would comply with all applicable laws (including, without
limitation, the requirements of the Securities Act of 1933), and the applicable
requirements of any securities exchange or similar entity.


 


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


 


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


 


4.5.          Tax Withholding.  All Awards and other payments and
distributions under the Plan are subject to withholding of all applicable
taxes, and the Committee may condition the delivery of any shares or other
payments or benefits under the Plan on satisfaction of the applicable
withholding obligations.  The Committee,
in its discretion, and subject to such requirements as the Committee may impose
prior to the occurrence of such withholding, may permit such withholding obligations
to be satisfied through (a) cash payment by the Participant, (b) through
the surrender of shares of Stock acceptable to the Committee which the
Participant already owns, or (c) through the surrender of shares of Stock
to which the Participant is otherwise entitled under the Plan; provided,
however, that previously-owned shares of Stock that have been held by the
Participant or to which the Participant is entitled under the Plan may only be
used to satisfy the minimum tax withholding required by applicable law (or
other rates that will not have a negative accounting impact).


 


4.6.          Grant and Use of Awards.  In the discretion of the Committee, a
Participant may be granted any Award permitted under the provisions of the
Plan, and more than one 


 


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Award may be granted to
a Participant.  Subject to subsection 2.7
(relating to repricing) Awards may be granted as alternatives to or replacement
of awards granted or outstanding under the Plan, or any other plan or
arrangement of the Company or an Affiliate (including a plan or arrangement of
a business or entity, all or a portion of which is acquired by the Company or
an Affiliate).  Subject to the overall
limitation on the number of shares of Stock that may be delivered under the
Plan, the Committee may use available shares of Stock as the form of payment
for compensation, grants or rights earned or due under any other compensation
plans or arrangements of the Company or an Affiliate, including the plans and arrangements
of the Company or an Affiliate assumed in business combinations.   Notwithstanding the provisions of
subsection 2.2, Options and SARs granted under the Plan in replacement for
awards under plans and arrangements of the Company or an Affiliate assumed in
business combinations may provide for Exercise Prices that are less than the
Fair Market Value of the Stock at the time of the replacement grants, if the
Committee determines that such Exercise Price is appropriate to preserve the
economic benefit of the award and provided that all requirements of section
409A of the Code are satisfied.


 


4.7.          Dividends and Dividend Equivalents.  An Award (other than an Option or SAR Award)
may provide the Participant with the right to receive dividend payments or dividend
equivalent payments with respect to Stock subject to the Award (both before and
after the Stock subject to the Award is earned, vested, or acquired), which
payments may be either made currently or credited to an account for the
Participant, and may be settled in cash or Stock, as determined by the
Committee.  Any such settlements, and any
such crediting of dividends or dividend equivalents or reinvestment in shares
of Stock, may be subject to such conditions, restrictions and contingencies as
the Committee shall establish, including the reinvestment of such credited
amounts in Stock equivalents


 


4.8.          Settlement of Awards.  The obligation to make payments and
distributions with respect to Awards may be satisfied through cash payments,
the delivery of shares of Stock, the granting of replacement Awards, or
combination thereof as the Committee shall determine.  Satisfaction of any such obligations under an
Award, which is sometimes referred to as “settlement” of the Award, may be
subject to such conditions, restrictions and contingencies as the Committee
shall determine.  The Committee may
permit or require the deferral of any Award payment, subject to such rules and
procedures as it may establish, which may include provisions for the payment or
crediting of interest or dividend equivalents may include converting such
credits into deferred Stock equivalents; provided, however, that dividend
equivalents may not be granted with respect to Options or SARs and neither
Options nor SARs may be converted to Stock equivalents.  Each Affiliate shall be liable for payment of
cash due under the Plan with respect to any Participant to the extent that such
benefits are attributable to the services rendered for that Affiliate by the
Participant.  Any disputes relating to liability
of an Affiliate for cash payments shall be resolved by the Committee.


 


4.9.          Transferability.  Except as otherwise provided by the
Committee, Awards under the Plan are not transferable except as designated by
the Participant by will or by the laws of descent and distribution.  In no event, however, shall any Award be
transferred for value.  To the extent
that the Participant who receives an Award under the Plan has the right to
exercise such Award, the Award may be exercised during the lifetime of the
Participant only by the Participant.


 


4.10.        Form and Time of Elections.  Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification, or
revocation thereof, shall be in writing filed with the 


 


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Committee at such times,
in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall require.


 


4.11.        Agreement With Company.  An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. 
The terms and conditions of any Award to any Participant shall be
reflected in an Award Agreement.  A copy
of the Award Agreement shall be provided to the Participant and the Committee
may, but need not, require that the Participant sign a copy thereof.


 


4.12.        Action by Company or Affiliate.  Any action required or permitted to be taken
by the Company or any Affiliate shall be by resolution of its board of
directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or
(except to the extent prohibited by applicable law or applicable rules of
any stock exchange) by a duly authorized officer of such company.  Any action required or permitted to be taken
by an Affiliate which is a partnership shall be by a general partner of such
partnership or by a duly authorized officer thereof.


 


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


 


4.14.        Limitation of Implied Rights.


 


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


 


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


 


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


 


4.16.        Payments to Persons Other Than Participants.  If the Committee shall find that any person
to whom any amount is payable under the Plan is unable to care for his affairs
because of illness or accident, or is a minor, or has died, then any payment
due to such person or his estate (unless a prior claim therefor has been made
by a duly appointed legal


 


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representative) may, if
the Committee so directs the Company, be paid to his spouse, child, relative,
an institution maintaining or having custody of such person, or any other
person deemed by the Committee to be a proper recipient on behalf of such person
otherwise entitled to payment.  Any such
payment shall be a complete discharge of the liability of the Committee and the
Company therefor.


 


4.17.        Governing Law.  The Plan shall be governed by and construed
in accordance with the internal laws of the State of Delaware applicable to
contracts made and performed wholly within the State of Delaware.


 


4.18.        Severability.  If any provision of the Plan or any Award
agreement is or becomes or is deemed to be invalid, illegal, or unenforceable
in any jurisdiction or as to any person or Award, or would disqualify the Plan
or any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if
it cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award and the
remainder of the Plan and any such Award shall remain in full force and effect.


 


SECTION 5


 


CHANGE IN
CONTROL


 


Subject to the provisions of subsection 4.3
(relating to the adjustment of shares), and except as otherwise provided in the
Plan or the Award Agreement reflecting the applicable Award, upon the
occurrence of a Change in Control:


 


(a)           All
outstanding Options (regardless of whether in tandem with SARs) shall become
fully exercisable.


 


(b)           All
outstanding SARs (regardless of whether in tandem with Options) shall become
fully exercisable.


 


(c)           All
Full Value Awards shall become fully vested.


 


SECTION 6


 


COMMITTEE


 


6.1.          Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in the Stock Option
and Compensation Committee of the Board (the “Committee”) in accordance with
this Section 6.  So long as the
Company is subject to Section 16 of the Exchange Act, the Committee shall
be selected by the Board and shall consist of not fewer than two members of the
Board or such greater number as may be required for compliance with Rule 16b-3
issued under the Exchange Act and shall be comprised of persons who are
independent for purposes of applicable stock exchange listing
requirements.  Any Award granted under
the Plan which is intended to constitute Performance-Based Compensation
(including Options and SARs) shall be granted by a 


 


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Committee consisting
solely of two or more “outside directors” within the meaning of section 162(m) of
the Code and applicable regulations.  If
the Committee does not exist, or for any other reason determined by the Board,
and to the extent not prohibited by applicable law or the applicable rules of
any stock exchange, the Board may take any action under the Plan that would
otherwise be the responsibility of the Committee.


 


6.2.          Powers of Committee.  The Committee’s administration of the Plan
shall be subject to the following:


 


(a)           Subject
to the provisions of the Plan, the Committee will have the authority and
discretion to select from among the Eligible Persons those persons who shall
receive Awards, to determine the time or times of receipt, to determine the
types of Awards and the number of shares covered by the Awards, to establish
the terms, conditions, performance criteria, restrictions, and other provisions
of such Awards, and (subject to the restrictions imposed by Section 7) to
amend, cancel or suspend Awards.


 


(b)           To
the extent that the Committee determines that the restrictions imposed by the
Plan preclude the achievement of the material purposes of the Awards in
jurisdictions outside the United States, the Committee will have the authority
and discretion to modify those restrictions as the Committee determines to be
necessary or appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.


 


(c)           Subject
to the provisions of the Plan, the Committee will have the authority and
discretion to determine the extent to which Awards under the Plan will be
structured to conform to the requirements applicable to Performance-Based
Compensation, and to take such action, establish such procedures, and impose
such restrictions at the time such Awards are granted as the Committee
determines to be necessary or appropriate to conform to such requirements.


 


(d)           Subject
to the terms and conditions of the Plan, the Committee will have the authority
and discretion to conclusively interpret the Plan, to establish, amend, and
rescind any rules and regulations relating to the Plan, to determine the
terms and provisions of any Award Agreement made pursuant to the Plan, and to
make all other determinations that may be necessary or advisable for the
administration of the Plan.


 


(e)           Any
interpretation of the Plan by the Committee and any decision made by it under
the Plan is final and binding on all persons.


 


(f)            In
controlling and managing the operation and administration of the Plan, the
Committee shall take action in a manner that conforms to the certificate of
incorporation and by-laws of the Company, and applicable state corporate law.


 


6.3.          Delegation by Committee.  Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities
and powers to any person or persons selected by it.  Any such allocation or delegation may be
revoked by the Committee at any time.


 


6.4.          Information to be
Furnished to Committee.  The Company and the Affiliates shall furnish
the Committee with such data and information as it determines may be required 


 


11

















 


for
it to discharge its duties.  The records
of the Company and the Affiliates as to an employee’s or Participant’s
employment, termination of employment, leave of absence, reemployment and
compensation shall be conclusive on all persons unless determined to be
incorrect.  Participants and other
persons entitled to benefits under the Plan must furnish the Committee such
evidence, data or information as the Committee considers desirable to carry out
the terms of the Plan.


 


SECTION 7


 


AMENDMENT
AND TERMINATION


 


The Board may, at any time, amend or terminate the
Plan, provided, however, that:


 


(a)           no amendment or termination may, in the
absence of written consent to the change by the affected Participant (or, if
the Participant is not then living, the affected beneficiary), adversely affect
the rights of any Participant or beneficiary under any Award granted under the
Plan prior to the date such amendment is adopted by the Board;


 


(b)           adjustments pursuant to subsection 4.3
shall not be subject to the foregoing limitations of this Section 7;


 


(c)           the provisions of subsection 2.6
(relating to repricing) cannot be amended unless the amendment is approved by
the Company’s stockholders; and


 


(d)           no such amendment or termination shall be
made without stockholder approval if such approval is necessary to comply with
any tax or regulatory requirement applicable to the Plan (including as
necessary to comply with any applicable stock exchange listing requirement or
to prevent the Company from being denied a tax deduction on account of section
162(m) of the Code).


 


SECTION 8


 


DEFINED TERMS


 


In addition to the other definitions contained
herein, the following definitions shall apply:


 


(a)           Affiliate.  The term 
“Affiliate” means any corporation, partnership, joint venture or other
entity during any period in which (i) the Company, directly or indirectly,
owns at least 50% of the combined voting power of all classes of stock of such
entity or at least 50% of the ownership interests in such entity or (ii) such
entity, directly or indirectly, owns at least 50% of the combined voting power
of all classes of stock of the Company; provided, however, for purposes of
ISOs, an “Affiliate” means an entity that satisfies the definition of a “parent
corporation” (as defined in section 424(e) of the Code) or a “subsidiary
corporation” (as defined in section 424(f) of the Code).


 


(b)           Award.  The term “Award” shall mean, individually or
collectively, any award or benefit granted under the Plan, including, without
limitation, the grant of Options, SARs, or Full Value Awards.


 


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(c)           Award
Agreement.  The term “Award Agreement” means the written
agreement (including electronic) evidencing the grant of Awards under the Plan,
which agreement shall be in the form specified by the Committee.  The document evidencing an Award under the
Plan shall constitute an “Award Agreement” regardless of whether any
Participant signature is required.


 


(d)           Board.  The term “Board” shall mean the Board of
Directors of the Company.


 


(e)           Change in Control.  The term “Change of Control” means the
occurrence of any of the following: (i) the direct or indirect sale,
transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Company and its Affiliates
taken as a whole to any person (as such term is used in Section 13(d) of
the Exchange Act) other than the Company and its Affiliates; (ii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any person (as such term is used in Section 13(d) of
the Exchange Act) who is not a Permitted Equity Holder becomes the beneficial
owner, directly or indirectly, of more than 50% of the then outstanding number
of shares of the Company’s voting stock; (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that (A) any person (as such term is used in Section 13(d) of
the Exchange Act), regardless of that person’s direct or indirect beneficial
ownership interest prior to such transaction, becomes the beneficial owner,
directly or indirectly, of more than 50% of the then outstanding number of
shares of the Company’s voting stock and (B) the Company’s voting
stock ceases to be traded on any national securities exchange; or (iv) the
first day on which a majority of the members of the Board are not Continuing
Directors.


 


(f)            Code.  The term “Code” shall mean the Internal
Revenue Code of 1986, as amended.  A
reference to any provision of the Code shall include reference to any successor
provision of the Code.


 


(g)           Committee.  The term “Committee” is defined in subsection
6.1.


 


(h)           Company.  The term “Company” is defined in subsection
1.1 of the Plan.


 


(i)            Continuing
Directors.  The term “Continuing Directors” means, as of
any date of determination, any member of the Board who (i) was a member of
the Board on the Effective Date; or (ii) was nominated for election or
elected to the Board with the approval of a majority of the Continuing
Directors who were members of the Board at such date.


 


(j)            Effective
Date.  The term “Effective Date” means the date the
Plan is approved by the Company’s stockholders.


 


(k)           Eligible
Person.  The term “Eligible Person” shall mean any
person employed within the meaning of section 3401(c) of the Code and
the regulations promulgated thereunder by the Company or an Affiliate; and any
officer or director of the Company or an Affiliate even if he or she is not an
employee within the meaning of section 3401(c) of the Code.


 


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(l)            Exchange
Act. The term “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.


 


(m)          Exercise
Price.  The term “Exercise Price” is defined in
subsection 2.2 of the Plan.


 


(n)           Expiration
Date.  The term “Expiration Date” is defined in
subsection 2.10 of the Plan.


 


(o)           Fair Market Value.  The term “Fair Market Value” shall mean: (i) if
the Stock is traded in a market in which actual transactions are reported, the
mean of the high and low prices at which the Stock is reported to have traded
on the relevant date in all markets on which trading in the Stock is reported
or, if there is no reported sale of the Stock on the relevant date, the mean of
the highest reported bid price and lowest reported asked price for the Stock on
the relevant date; (ii) if the Stock is publicly traded but only in
markets in which there is no reporting of actual transactions, the mean of the
highest reported bid price and the lowest reported asked price for the Stock on
the relevant date; or (iii) if the Stock is not publicly traded, the value
of a share of Stock as determined by the most recent valuation prepared by an
independent expert at the request of the Committee.  With respect to Options and SARs, Fair Market
Value shall be determined in accordance with section 409A of the Code.


 


(p)           Full
Value Award.  The term “Full Value Award” is defined in
subsection 3.1 of the Plan.


 


(q)           ISO.  The term “ISO” is defined in subsection 2.1(a) of
the Plan.


 


(r)            NQSO.  The term “NQSO” is defined in subsection 2.1(a) of
the Plan.


 


(s)           Option.  The term “Option” is defined in subsection
2.1(a) of the Plan.


 


(t)            Participant.   The term “Participant” shall mean any
Eligible Person who has been granted an Award under the Plan.


 


(u)           Performance-Based
Compensation.  The term “Performance-Based Compensation” is
defined in subsection 3.3 of the Plan.


 


(v)           Performance
Measures.  For purposes of the Plan, the term “Performance
Measures” shall mean performance targets based on one or more of the following
criteria:  revenue; increases in stock
price; market share; primary or fully diluted earnings per share; earnings
before interest, taxes, depreciation and/or amortization; free cash flow; cash
flow from operations; total cash flow; return on equity; return on capital;
return on assets; management staffing; or any combination thereof.


 


(w)          Permitted
Equity Holder.  The term “Permitted Equity Holder” means
Bernard Goldstein, Irene Goldstein and their lineal descendants (including
adopted children and their lineal descendants) and any entity the equity
interests of which are owned by only such persons or which was established for
the exclusive benefit of, or the estate of, any of the foregoing.


 


(x)            Plan.  The term “Plan” is defined in subsection 1.1
of the Plan.


 


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(y)           Prior
Plan.  The term “Prior Plan” is defined in
subsection 1.1 of the Plan.


 


(z)            SAR.  The term “SAR” is defined in subsection 2.1(b) of
the Plan.


 


(aa)         Stock.  The term “Stock” shall mean common stock, par
value $.  01 per share, of the Company.


 


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