Exhibit 10.1


 


2005
Omnibus Incentive Compensation Plan


 


Mirant Corporation


 


Effective December 2005


 


1





















 


Contents


 


 


	
  Article 1. Establishment, Purpose, and Duration

  	
  1

  
	
   

  	
   

  
	
  Article 2. Definitions

  	
  1

  
	
   

  	
   

  
	
  Article 3. Administration of the Plan

  	
  8

  
	
   

  	
   

  
	
  Article 4. Shares Subject to the Plan

  	
  8

  
	
   

  	
   

  
	
  Article 5. Eligibility and Participation

  	
  10

  
	
   

  	
   

  
	
  Article 6. Stock Options

  	
  11

  
	
   

  	
   

  
	
  Article 7. Stock Appreciation Rights

  	
  12

  
	
   

  	
   

  
	
  Article 8. Restricted Stock and Restricted Stock Units

  	
  14

  
	
   

  	
   

  
	
  Article 9. Performance Units, Performance Shares and Cash-Based
  Awards

  	
  15

  
	
   

  	
   

  
	
  Article 10. Other Stock-Based Awards

  	
  16

  
	
   

  	
   

  
	
  Article 11. Transferability of Awards

  	
  17

  
	
   

  	
   

  
	
  Article 12. Performance Measures

  	
  17

  
	
   

  	
   

  
	
  Article 13. Covered Employee Annual Incentive Award

  	
  18

  
	
   

  	
   

  
	
  Article 14. Nonemployee Director Awards

  	
  19

  
	
   

  	
   

  
	
  Article 15. Dividends and Dividend Equivalents

  	
  19

  
	
   

  	
   

  
	
  Article 16. Effects of Transfer, Leave of Absence, or a Change
  in Status

  	
  19

  
	
   

  	
   

  
	
  Article 17. Rights of Participants

  	
  20

  
	
   

  	
   

  
	
  Article 18. Withholding

  	
  20

  
	
   

  	
   

  
	
  Article 19. Change of Control

  	
  21

  
	
   

  	
   

  
	
  Article 20. Amendment, Modification, Suspension, and Termination

  	
  22

  
	
   

  	
   

  
	
  Article 21. Successors

  	
  23

  
	
   

  	
   

  
	
  Article 22. Miscellaneous Provisions

  	
  23

  



 


2





















 


MIRANT CORPORATION

2005 Omnibus Incentive Compensation Plan


 


Article 1. Establishment, Purpose, and Duration


 


1.1          Establishment.
Mirant Corporation, a Delaware corporation (hereinafter referred to as the “Company”),
establishes an incentive compensation plan to be known as the Mirant
Corporation 2005 Omnibus Incentive Plan, as set forth in this document.


 


This Plan permits the grant of Nonqualified Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Shares, Performance Units, Cash-Based Awards, Other
Stock-Based Awards, Covered Employee Annual Incentive Awards, and Nonemployee
Director Awards.


 


This Plan
shall become effective upon the Effective Date (as defined in Section 1.3) and shall remain in effect as
provided in Section 1.3 hereof.


 


1.2          Purpose
of the Plan. The purpose of this
Plan is to provide a means whereby Employees and Directors of the Company
develop a sense of proprietorship and personal involvement in the development
and financial success of the Company, and to encourage them to devote their
best efforts to the business of the Company, thereby advancing the interests of
the Company and its shareholders. A further purpose of this Plan is to provide
a means through which the Company may attract able individuals to become
Employees or serve as Directors of the Company and to provide a means whereby
those individuals upon whom the responsibilities of the successful
administration and management of the Company are of importance, can acquire and
maintain stock ownership, thereby strengthening their concern for the welfare
of the Company.


 


1.3          Duration
of the Plan. Following the adoption of the Plan by the Board, the Plan
shall become effective as of the Effective Date (as defined in the Reorganization
Plan), provided that the Reorganization Plan, which shall include the adoption
of the Plan, is approved by a majority of the amount of Allowed Claims (within
the meaning of the Reorganization Plan), within the 12-month period ending on
the Effective Date. The Plan shall continue in effect, subject to the right of
the Board to terminate the Plan at any time pursuant to Article 20, until
all Shares subject to the Plan are delivered pursuant to the Plan’s provisions
and all restrictions on such Shares have lapsed; provided, however, that no
Award may be granted under the Plan more than 10 years after the Effective
Date. Notwithstanding the foregoing, no Incentive Stock Options may be granted
more than 10 years after the earlier of (a) adoption of this Plan by the
Board, or (b) the Effective Date.


 


Article 2. Definitions


 


Whenever used in this Plan, the following capitalized terms shall have
the meanings set forth below:


 


2.1                               “Affiliate” shall mean any
corporation or other entity (including, but not limited to, a partnership or a
limited liability company) that is affiliated with the Company through stock or
equity ownership or otherwise, and is designated as an Affiliate for purposes
of this Plan by the Committee.


 





















 


2.2                               “Award” means a Nonqualified Stock
Option, Incentive Stock Option, SAR, Restricted Stock Award, Restricted Stock
Unit, Performance Share, Performance Unit, Cash-Based Award, Other Stock-Based
Award, Covered Employee Annual Incentive Award, and Nonemployee Director Award
granted pursuant to the terms and conditions of the Plan.


 


2.3                               “Award Agreement” means either: (i) a
written agreement entered into by the Company and a Participant setting forth
the terms and provisions applicable to an Award granted under this Plan, or (ii) a
written or electronic statement issued by the Company to a Participant
describing the terms and provisions of such Award, including any amendment or
modification thereof. The Committee may provide for the use of electronic,
internet or other non-paper Award Agreements, and the use of electronic,
internet or other non-paper means for the acceptance thereof and actions
thereunder by a Participant.


 


2.4                               “Beneficial Owner” or “Beneficial Ownership”
shall have the meaning ascribed to such term in Rule 13d-3 promulgated under
the Exchange Act.


 


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


 


2.6                               “Cash-Based Awards” means an Award
granted to a Participant as described in Article 9.


 


2.7                               “Cause” shall have the meaning
ascribed to such term in a Participant’s Award Agreement.


 


2.8                               “Change of Control” means the
occurrence of any of the following events:


 


(a)                                  Any
“person” (as that term is used in Sections 13 and 14(d)(2) of the
Securities Exchange Act of 1934 (“Exchange Act”)) becomes the beneficial
owner (as that term is used in Section 13(d) of the Exchange Act),
directly or indirectly, of fifty percent (50%) or more of the Company’s capital
stock entitled to vote in the election of directors;


 


(b)                                 Persons
who on 60th day following the Emergence Date constitute the Board
(the “Emergence Directors”) cease for any reason, including, without
limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority thereof, provided that any
person who becomes a director of the Company subsequent to the 60th
day following the Emergence Date shall be considered an Emergence Director if
such person’s election or nomination for election was approved by a vote of at
least two-thirds (2/3) of the Emergence Directors; but provided further that
any such person whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of members of
the Board or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board, including by reason of agreement
intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Emergence Director;


 


(c)                                  Consummation
of a reorganization, merger, consolidation, sale or other disposition of all or
substantially all of the assets of the Company (a “Business Combination”),


 





















 


in each case,
unless, following such Business Combination, all or substantially all of the
individuals and entities who were the beneficial owners of outstanding voting
securities of the Company immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the company resulting from
such Business Combination (including, without limitation, a company which, as a
result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the outstanding voting securities of the Company;
and


 


(d)                                 Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.


 


2.9                               “Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time. For
purposes of this Plan, references to sections of the Code shall be deemed to
include references to any applicable regulations thereunder and any successor
or similar provision.


 


2.10                        “Committee”
means the Compensation Committee of the Board or a subcommittee thereof, or
any other committee designated by the Board to administer this Plan. The members
of the Committee shall be appointed from time to time by and shall serve at the
discretion of the Board. If the Committee does not exist or cannot function for
any reason, the Board may take any action under the Plan that would otherwise
be the responsibility of the Committee, except with respect to matters which
under any applicable law, regulation or rule, including any exemptive rule under
Section 16 of the Exchange Act (including Rule 16b-3 thereunder) or
Code Section 162(m), are required to be determined in the sole discretion
of the Committee.


 


2.11                        “Company” means
Mirant Corporation or any successor entity.


 


2.12                        “Covered
Employee” means any Employee who is or may become a “Covered Employee,” as
defined in Code Section 162(m), and who is designated, either as an
individual Employee or a member of a class of Employees, by the Committee
within the shorter of (i) ninety (90) days after the beginning of the
Performance Period, or (ii) twenty-five percent (25%) of the Performance
Period has elapsed, as a “Covered Employee” under this Plan for such applicable
Performance Period.


 


2.13                        “Covered
Employee Annual Incentive Award” means an Award granted to a Covered
Employee as described in Article 13.


 


2.14                        “Director”
means any individual who is a member of the Board of Directors of the
Company.


 


2.15                        “Dividend
Equivalents” means the equivalent value (in cash or Shares) of dividends
that would otherwise be paid on the Shares subject to an Award but that have
not been issued or delivered, as described in Article 15.


 





















 


2.16                        “Employee”
means any person designated as an employee of the Company, its Affiliates,
and/or Subsidiaries on the payroll records thereof. An Employee shall not
include any individual during any period he or she is classified or treated by
the Company, its Affiliates, and/or Subsidiaries as an independent contractor,
a consultant, or any employee of
an employment, consulting, or temporary agency or any other entity other than
the Company, its Affiliates, and/or Subsidiaries without regard to whether such
individual is subsequently determined to have been, or is subsequently retroactively
reclassified as a common-law employee of
the Company, its Affiliates, and/or Subsidiaries during such period. As further
outlined in Section 16.2, for purposes of this Plan, upon approval by the
Committee, the term Employee may also include Employees that have been
terminated from the Company subsequent to being granted an Award under the
Plan.


 


2.17                        “Exchange
Act” means the Securities Exchange Act of 1934, as it may be amended from
time to time.


 


2.18                        “Extraordinary
Items” means (i) extraordinary, unusual, and/or nonrecurring items of
gain or loss; (ii) gains or losses on the disposition of a business; (iii) changes
in tax or accounting regulations or laws; or (iv) the effect of a merger
or acquisition, all of which must be identified in the audited financial
statements, including footnotes, or Management Discussion and Analysis section of
the Company’s annual report.


 


2.19                        “Exercise
Price” means the price at which a Share may be purchased by a Participant
pursuant to an Option.


 


2.20                        “Fair
Market Value” or “FMV” means the opening, closing,
actual, high, or low selling prices of a Share reported on the principal
exchange on which the Shares are then listed or admitted for trading, on the
applicable date (or, if the Shares were not traded on such date, then on the
last preceding date on which the Shares were traded), the preceding trading day or an average of trading days during
a specified period within 30 days before and 30 days after the applicable date,
provided that the commitment to grant the Award based on such average of
trading days is irrevocable before the beginning of such specified period, as determined by the Committee in its
discretion. Unless the Committee determines otherwise and specifies in the
Award Agreement, the closing price of a Share reported on the principal
exchange on which the Shares are listed or admitted for trading on the
applicable date, or, if the Shares were not traded on such date, then on the
most recent date on which Shares were traded, shall be used for purposes of
applying the immediately preceding sentence. If the Shares are traded over the counter at the time as of
which a determination of its Fair Market Value is required to be made
hereunder, its Fair Market Value shall be deemed to be equal to the average
between the reported high and low selling prices, closing bid and asked prices,
or opening and closing prices of a Share on the applicable date (or, if such
prices are not reported for such date, then on the last preceding date for
which such prices were reported, or, if the Shares were not traded on such
date, then on the last preceding date
on which the Shares were traded), as determined by the Committee in its
discretion.  In the event Shares are not
publicly traded at the time as of which a determination of their value is
required to be made hereunder, the determination of their Fair Market Value
shall be made by the Committee in such manner through the reasonable application
of such reasonable valuation method as it


 





















 


deems
appropriate. Such definition(s) of Fair Market Value shall be specified in each
Award Agreement and may differ depending on whether Fair Market Value is in
reference to the grant, exercise, vesting, settlement, or payout of an Award. The basis for determining FMV shall be
consistently used as determined by the Committee; in addition, if an average of
trading days is used to determine FMV pursuant to the first sentence of this Section 2.20,
such valuation method shall be used consistently for grants of NQSOs and SARs
under the plan and such types of awards under similar programs of the
Company.  Notwithstanding the foregoing
to the contrary, for purposes of the Exercise Price of any ISO, FMV shall be
determined consistent with Code Section 422.  In each case, the Committee shall determine
Fair Market Value in a manner that satisfies the requirements of Code Section 409A,
and shall apply the definition of Fair Market Value consistently to the extent
required by Code Section 409A.


 


2.21                        “Freestanding
SAR” means an SAR that is granted independently of any Option, as described
in Article 7.


 


2.22                        “Grant
Price” means the price established at the time of grant of an SAR pursuant
to Article 7, used to determine whether there is any payment due upon
exercise of the SAR.


 


2.23                        “Incentive
Stock Option” or “ISO” means an Option to purchase Shares granted under Article 6
to an Employee and that is designated as an Incentive Stock Option and
that is intended to meet the requirements of Code Section 422, or any
successor provision.


 


2.24                        “Insider”
means an individual who is, on the relevant date, an officer or Director of the
Company, or a more than ten percent (10%) Beneficial Owner of any class of
the Company’s equity securities that is registered pursuant to Section 12
of the Exchange Act, as determined by the Board in accordance with Section 16
of the Exchange Act.


 


2.25                        “Nonemployee
Director” means a Director who is not an Employee.


 


2.26                        “Nonemployee
Director Award” means any Award granted, whether singly, in combination, or
in tandem, to a Participant who is a Nonemployee Director pursuant to such
applicable terms, conditions, and limitations as the Board or Committee may
establish in accordance with this Plan.


 


2.27                        “Nonqualified
Stock Option” or “NQSO” means an Option to purchase Shares granted to a
Participant under the Plan in accordance with the terms and conditions set
forth in Article 6 where such option is not intended to meet the requirements
of Section 422 of the Code or otherwise does not meet such requirements.


 


2.28                        “Notice” means
notice provided by the Participant to the Company in a manner prescribed by the
Committee.


 


2.29                        “Option” means
a right to purchase a Share granted to a Participant under the Plan in
accordance with the terms and conditions set forth in Article 6. Options
may be either ISOs or NQSOs.


 





















 


2.30                        “Other
Stock-Based Awards” means an equity-based or equity-related Award not
otherwise described by the terms of this Plan, granted in accordance with the
terms and conditions set forth in Article 10.


 


2.31                        “Participant”
means any eligible individual as set forth in Article 5 to whom an Award
is granted.


 


2.32                        “Performance-Based
Compensation” means compensation under an Award that is intended to satisfy
the requirements of Code Section 162(m) for certain performance-based
compensation paid to Covered Employees. Notwithstanding the foregoing, nothing
in this Plan shall be construed to mean that an Award which does not satisfy
the requirements for performance-based compensation under Code Section 162(m)
does not constitute performance-based compensation for other purposes,
including Code Section 409A.


 


2.33                        “Performance
Measure” means measures as described in Article 12 on which the
performance goals are based and which are approved by the Company’s
shareholders pursuant to this Plan in order to qualify Awards as
Performance-Based Compensation.


 


2.34                        “Performance
Period” means the period of time during which the performance goals must be
met in order to determine the degree of payout and/or vesting with respect to
an Award.


 


2.35                        “Performance
Share” means an Award granted to a Participant under the Plan in accordance
with the terms and conditions set forth in Article 9, denominated in
Shares, the value of which at the time it is payable is determined as a
function of the extent to which corresponding performance criteria have been
achieved.


 


2.36                        “Performance
Unit” means an Award granted to a Participant under the Plan in accordance
with the terms and conditions set forth in Article 9, denominated in
units, the value of which at the time it is payable is determined as a function
of the extent to which corresponding performance criteria have been achieved.


 


2.37                        “Period of
Restriction” means the period when Restricted Stock or Restricted Stock
Units are subject to a substantial risk of forfeiture (based on the passage of
time, the achievement of performance goals, or upon the occurrence of other
events as determined by the Committee, in its discretion), as provided in Article 8.


 


2.38                        “Person” shall
have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including
a “group” as defined in Section 13(d) thereof.


 


2.39                        “Plan” means
the Mirant Corporation 2005 Omnibus Incentive Plan.


 


2.40                        “Plan Year”
means any calendar year.


 





















 


2.41                        “Reorganization
Plan” means the certain Joint Chapter 11 Plan of Reorganization, filed September 30,
2005, for the Company and its affiliated debtors, as amended and/or
supplemented from time to time.


 


2.42                        “Restricted
Stock” means an Award granted to a Participant under the Plan in accordance
with the terms and conditions set forth in Article 8.


 


2.43                        “Restricted
Stock Unit” means an Award, whose value is equal to a Share, awarded under
the Plan in accordance with the terms and conditions set forth in Article 8.


 


2.44                        “SEC” means
the Securities and Exchange Commission.


 


2.45                        “Service
Vesting Award” means an Award, the vesting of which is contingent solely on
the continued service of the Participant as an Employee or a Director.


 


2.46                        “Share” means
a share of common stock of the Company, $0.01 par value per share.


 


2.47                        “Stock
Appreciation Right” or “SAR” means an Award granted to a Participant under
the Plan and in accordance with the terms and conditions of Article 7. An
SAR may be either a “Tandem SAR” or a “Freestanding SAR,” as defined in Article 7.


 


2.48                        “Subsidiary”
means any corporation or other entity, whether domestic or foreign, in which
the Company has or obtains, directly or indirectly, a proprietary interest of
more than twenty-five percent (25%) by reason of stock ownership or otherwise.


 


2.49                        “Substitute
Awards” means Awards granted or Shares issued by the Company in assumption
of, or in substitution or exchange for, options or other awards previously
granted, or the right or obligation to grant future options or other awards, by
a company acquired by the Company, its Affiliates, and/or Subsidiaries, or with
which the Company, its Affiliates, and/or Subsidiaries combine.


 


2.50                        “Tandem
SAR” means an SAR that is granted in connection with a related Option
pursuant to Article 7 herein, the exercise of which shall require
forfeiture of the right to purchase a Share under the related Option (and when
a Share is purchased under the Option, the Tandem SAR shall similarly be
canceled).


 


Article 3. Administration of the Plan


 


3.1          General.
The Committee shall be responsible for administering this Plan, subject to this
Article 3 and the other provisions of this Plan. The Committee may employ
attorneys, consultants, accountants, agents, and other individuals, any of whom
may be an Employee, and the Committee, the Company, and its officers and
Directors shall be entitled to rely upon the advice, opinions, or valuations of
any such individuals. All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Participants, the Company, and all other interested individuals.


 


3.2          Authority
of the Committee. The Committee shall have full and exclusive discretionary
power to interpret the terms and the intent of this Plan and any Award
Agreement or other agreement


 





















 


or document ancillary to or in connection with this Plan, to determine
eligibility for Awards and to adopt such rules, regulations, forms,
instruments, and guidelines for administering this Plan as the Committee may
deem necessary or proper. Such authority shall include, but not be limited to,
selecting Award recipients, establishing all Award terms and conditions,
including the terms and conditions set forth in Award Agreements, granting
Awards as an alternative to or as the form of payment for grants or rights
earned or due under compensation plans or arrangements of the Company, and,
subject to Article 20, adopting modifications and amendments to this Plan
or any Award Agreement, including, without limitation, any that are necessary
to comply with the laws of the countries and other jurisdictions in which the
Company, its Affiliates, and/or Subsidiaries operate.


 


3.3          Delegation.
The Committee may delegate to one or more of its members or to one or more
officers of the Company or to one or more agents or advisors, such
administrative duties or powers as it may deem advisable, and the Committee or any
individuals to whom it has delegated duties or powers as aforesaid may employ
one or more individuals to render advice with respect to any responsibility the
Committee or such individuals may have under this Plan. The Committee may, by
resolution, authorize one or more officers of the Company to do one or both of
the following on the same basis as can the Committee: (a) designate
Employees to be recipients of Awards; and (b) determine the size of any
such Awards; provided, however, (i) the Committee shall not delegate such
responsibilities to any such officer with respect to Awards granted to an
Employee who is considered an Insider; (ii) the resolution providing such
authorization sets forth the total number of Shares and Awards such officer(s)
may grant; and (iii) the officer(s) shall report periodically to the
Committee regarding the nature and scope of the Shares and Awards granted
pursuant to the authority delegated.


 


Article 4. Shares Subject to the Plan


 


4.1          Number of Shares Available for Award. Subject
to adjustment as provided in Section 4.4 herein, the maximum number of
Shares available for issuance to Participants under this Plan (the “Share
Authorization”) shall be 18,575,851 Shares.


 


Subject to the foregoing limit on the number of Shares that may be
delivered in the aggregate under the Plan, the maximum number of Shares that
may be delivered with respect to the following types of Awards shall be as
follows:


 


(a)                                  The
maximum number of Shares that may be issued as ISOs shall be 5,000,000.


 


(b)                                 The
maximum number of Shares that may be issued to Nonemployee Directors shall be
2,500,000 Shares. A Nonemployee Director may not be granted an Award covering
more than 2,500,000 Shares in any Plan Year, except that this annual limit on
Nonemployee Director Awards shall be increased to 5,000,000 Shares for any
Nonemployee Director serving as Chairman of the Board; provided, however, that
in the Plan Year in which an individual is first appointed or elected to the
Board as a Nonemployee Director, such individual may be granted an Award
covering up to an additional 2,500,000 Shares.


 


4.2          Share
Usage. Shares covered by an Award shall only be counted as used to the
extent they are actually issued. Any Shares related to Awards which terminate
by expiration, forfeiture, cancellation, or otherwise without the issuance of
such Shares, are settled in cash in lieu of Shares, or are exchanged with the
Committee’s permission, prior to the issuance of Shares, for Awards not
involving Shares, shall be available again for grant under this Plan. Moreover,
if the


 





















 


exercise price of an Option is satisfied by delivering Shares to the
Company (whether by actual delivery or by attestation), only the net number of
Shares actually issued by the Company shall be considered for purposes of
determining the number of Shares remaining available for issuance pursuant to
Awards granted under the Plan. Shares withheld
from an Option or other Award to satisfy minimum tax withholding requirements
will again be available for issuance pursuant to Awards granted under the Plan,
but Shares delivered by a
Participant (whether by actual delivery or by attestation) to satisfy tax
withholding requirements shall not be added back to the number of Shares
available for issuance under the Plan. If an SAR is exercised, only the number
of Shares issued, net of the Shares tendered, if any, will be deemed delivered
for purposes of determining the maximum number of Shares available for delivery
under this Plan. The Shares available for issuance under this Plan may be
authorized and unissued Shares or treasury Shares.


 


4.3          Annual
Award Limits. Unless and until the Committee determines that an Award to a
Covered Employee shall not be designed to qualify as Performance-Based
Compensation, the following limits (each an “Annual Award Limit” and,
collectively, “Annual Award Limits”) shall apply to grants of such Awards under
this Plan:


 


(a)                                  Options: The maximum aggregate number of
Shares subject to Options granted in any one Plan Year to any one Participant
shall be 5,000,000.


 


(b)                                 SARs: The maximum number of Shares subject
to Stock Appreciation Rights granted in any one Plan Year to any one
Participant shall be 5,000,000.


 


(c)                                  Restricted Stock or Restricted Stock Units:
The maximum aggregate grant with respect to Awards of Restricted Stock or
Restricted Stock Units in any one Plan Year to any one Participant shall be
5,000,000 Shares.


 


(d)                                 Performance Shares or Performance Units:
The maximum aggregate grant with respect to Awards of Performance Shares made
in any Plan Year to any one Participant shall be 5,000,000 Shares. The maximum
aggregate amount awarded with respect to Performance Units made in any Plan
Year to any one Participant shall not exceed the value of 5,000,000 Shares.


 


(e)                                  Cash-Based Awards: The maximum aggregate
amount awarded with respect to Cash-Based Awards made in any Plan Year to any
one Participant shall not exceed $20,000,000.


 


(f)                                    Other
Stock-Based Awards. The maximum aggregate grant with respect to Other
Stock-Based Awards made in any one Plan Year to any one Participant shall be
5,000,000 Shares.


 


(g)                                 Covered Employee Annual Incentive Award. The maximum
aggregate amount awarded with respect to Covered Employee Annual Incentive
Awards made in any Plan Year to a Covered Employee shall not exceed $6 million
dollars.


 


4.4          Adjustments
in Authorized Shares. In the event of any corporate event or transaction
(including, but not limited to, a change in the Shares of the Company or the
capitalization of the Company) such as a merger, consolidation, reorganization,
recapitalization, separation, stock


 





















 


dividend, stock split, reverse stock split, split up, spin-off, or
other distribution of stock or property of the Company, combination of Shares,
exchange of Shares, dividend in kind, or other like change in capital structure
or distribution (other than normal cash dividends) to shareholders of the
Company, or any similar corporate event or transaction, the Committee, in its
sole discretion, in order to prevent dilution or enlargement of Participants’
rights under this Plan, shall substitute or adjust, as applicable, the number
and kind of Shares that may be issued under this Plan or under particular forms
of Awards, the number and kind of Shares subject to outstanding Awards, the
Exercise Price or Grant Price applicable to outstanding Awards, the Annual
Award Limits, and other value determinations applicable to outstanding Awards.


 


The Committee,
in its sole discretion, may also make appropriate adjustments in the terms of
any Awards under this Plan to reflect or related to such changes or
distributions and to modify any other terms of outstanding Awards, including
modifications of performance goals and changes in the length of Performance
Periods, subject to the requirements of Article 12 in the case of Awards
intended to qualify as Performance-Based Compensation. The Committee shall not
make any adjustment pursuant to this Section 4.4 that would cause an Award
that is otherwise exempt from Code Section 409A to become subject to Section 409A;
or that would cause an Award that is subject to Code Section 409A to fail
to satisfy the requirements of Section 409A.  The determination of the Committee as to the
foregoing adjustments, if any, shall be conclusive and binding on Participants
under this Plan.


 


Subject to the provisions of Article 20, without affecting the
number of Shares reserved or available hereunder, the Committee may authorize
the issuance or assumption of benefits under this Plan in connection with any
merger, consolidation, acquisition of property or stock, or reorganization upon
such terms and conditions as it may deem appropriate, subject to compliance
with the ISO rules under Code Section 422 and deferred compensation rules under
Code Section 409A, where applicable.


 


4.5          Substitute Awards. Any Shares delivered
upon exercise or satisfaction of Substitute Awards shall not reduce the Shares
available for delivery under the Plan; provided, however, that the maximum
number of Shares that may be delivered pursuant to Incentive Stock Options
granted under the Plan shall be the number of Shares set forth in Section 4.1(a),
as adjusted pursuant to Section 4.4.


 


Article 5. Eligibility and Participation


 


5.1          Eligibility.
Individuals eligible to participate in this Plan include all Employees and
Directors.


 


5.2          Actual
Participation. Subject to the provisions of this Plan, the Committee may,
from time to time, select from all eligible individuals, those individuals to
whom Awards shall be granted and shall determine, in its sole discretion, the
nature of any and all terms permissible by law and the amount of each Award.


 


5.3          Nonemployee
Director Awards. Each Director shall be eligible to receive Nonemployee
Director Awards, all in accordance with the terms and conditions of the Plan,
provided that, as of the grant date of such a Nonemployee Director Award, such
Director is not an Employee of the Company.


 





















 


Article 6. Stock Options


 


6.1          Grant
of Options. Subject to the terms and provisions of this Plan, Options may
be granted to Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the Committee, in its sole
discretion; provided that ISOs may be granted only to eligible Employees of the
Company or of any parent or subsidiary corporation (as permitted under Code Section 422).
However, if a Participant provides services to an Affiliate and/or Subsidiary
and not to the Company, the Participant may be granted an Option only to the
extent that the Company qualifies as a “service recipient” with respect to the
Participant for purposes of Code Section 409A; provided that such
definition of “service recipient” shall be determined by (a) applying Code
Section 1563(a)(1), (2) and (3), for purposes of determining a
controlled group of corporations under Code Section 414(b), using the
language “at least 50 percent” instead of “at least 80 percent” each place it
appears in Code Section 1563(a)(1), (2) and (3), and by applying
Treasury Regulations Section 1.414(c)-2, for purposes of determining
trades or businesses (whether or not incorporated) that are under common
control for purposes of Code Section 414(c), using the language “at least
50 percent” instead of “at least 80 percent” each place it appears in Treasury
Regulations Section 1.414(c)-2, and (b) where the use of Shares with
respect to the grant of an Option to such a Participant is based upon
legitimate business criteria, by applying Code Section 1563(a)(1), (2) and
(3), for purposes of determining a controlled group of corporations under Code Section 414(b),
using the language “at least 20 percent” instead of “at least 80 percent” at
each place it appears in Code Section 1563(a)(1), (2) and (3), and by
applying Treasury Regulations Section 1.414(c)-2, for purposes of
determining trades or businesses (whether or not incorporated) that are under
common control for purposes of Code Section 414(c), using the language “at
least 20 percent” instead of “at least 80 percent” at each place it appears in
Treasury Regulations Section 1.414(c)-2.


 


6.2          Award
Agreement. Each Option grant shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the maximum duration of the Option, the
number of Shares to which the Option pertains, the conditions upon which an
Option shall become vested and exercisable, and such other provisions as the
Committee shall determine which are not inconsistent with the terms of this
Plan. The Award Agreement also shall specify whether the Option is intended to
be an ISO or a NQSO.


 


6.3          Exercise
Price. The Exercise Price for each grant of an Option under this Plan shall
be determined by the Committee, in its discretion, and shall be specified in
the Award Agreement; provided, however, the Exercise Price on the date of grant
must be at least equal to one hundred percent (100%) of the FMV of the Shares
on the date of grant.


 


6.4          Term
of Options. Each Option granted to a Participant shall expire at such time
as the Committee shall determine at the time of grant; provided, however, no
Option shall be exercisable later than the tenth (10th) anniversary
date of its grant. Notwithstanding the foregoing, for Nonqualified Stock
Options granted to Participants outside the United States, the Committee has
the authority to grant Nonqualified Stock Options that have a term greater than
ten (10) years.


 


6.5          Exercise
of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which terms and restrictions need
not be the same for each grant or for each Participant.


 





















 


6.6          Payment.
Options granted under this Article 6 shall be exercised by the delivery of
a Notice of exercise to the Company or an agent designated by the Company in a
form specified or accepted by the Committee, or by complying with any
alternative procedures which may be authorized by the Committee, setting forth
the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.


 


A condition of
the issuance of the Shares as to which an Option shall be exercised shall be
the payment of the Exercise Price. The Exercise Price of any Option shall be
payable to the Company in full either: (a) in cash or its equivalent; (b) by
tendering (either by actual delivery or attestation) previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the
Exercise Price prior to their tender to satisfy the Exercise Price if acquired
under this Plan or any other compensation plan maintained by the Company or
have been purchased on the open market); (c) by a combination of (a) and
(b); or (d) any other method approved or accepted by the Committee in its
sole discretion, including, without limitation, if the Committee so determines,
a cashless (broker-assisted) exercise.


 


Subject to any
governing rules or regulations, as soon as practicable after receipt of
written notification of exercise and full payment (including satisfaction of
any applicable tax withholding), the Company shall deliver to the Participant
evidence of book entry Shares, or upon the Participant’s request, Share
certificates in an appropriate amount based upon the number of Shares purchased
under the Option(s).


 


Unless
otherwise determined by the Committee, all payments under all of the methods
indicated above shall be paid in United States dollars.


 


6.7          Restrictions on Share Transferability.
The Committee may impose such restrictions on any Shares acquired pursuant to
the exercise of an Option granted under this Article 6 as it may deem
advisable, including, without limitation, minimum holding period requirements,
restrictions under applicable federal securities laws, under the requirements
of any stock exchange or market upon which such Shares are then listed
and/or traded, or under any blue sky or state or non-U.S. securities laws
applicable to such Shares.


 


6.8          Termination of Employment or Directorship. Each Participant’s Award Agreement shall
set forth the extent to which the Participant shall have the right to exercise
the Option following termination of the Participant’s employment or provision
of services to the Company, its Affiliates, and/or its Subsidiaries, as the
case may be. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this Article 6,
and may reflect distinctions based on the reasons for termination.


 


6.9          Notification of Disqualifying Disposition.
If any Participant shall make any disposition of Shares issued pursuant to the
exercise of an ISO under the circumstances described in Code Section 421(b) (relating
to certain disqualifying dispositions), such Participant shall notify the
Company of such disposition within ten (10) days thereof.


 





















 


Article 7. Stock Appreciation Rights


 


7.1          Grant
of SARs. Subject to the terms and conditions of this Plan, SARs may be
granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SARs. However, if a Participant
provides services to an Affiliate and/or Subsidiary and not to the Company, the
Participant may be granted an SAR only to the extent that the Company qualifies
as a “service recipient” with respect to the Participant for purposes of Code Section 409A;
provided that such definition of “service recipient” shall be determined by (a) applying
Code Section 1563(a)(1), (2) and (3), for purposes of determining a
controlled group of corporations under Code Section 414(b), using the
language “at least 50 percent” instead of “at least 80 percent” each place it
appears in Code Section 1563(a)(1), (2) and (3), and by applying
Treasury Regulations Section 1.414(c)-2, for purposes of determining
trades or businesses (whether or not incorporated) that are under common
control for purposes of Code Section 414(c), using the language “at least
50 percent” instead of “at least 80 percent” each place it appears in Treasury
Regulations Section 1.414(c)-2, and (b) where the use of Shares with
respect to the grant of a SAR to such a Participant is based upon legitimate
business criteria, by applying Code Section 1563(a)(1), (2) and (3),
for purposes of determining a controlled group of corporations under Code Section 414(b),
using the language “at least 20 percent” instead of “at least 80 percent” at
each place it appears in Code Section 1563(a)(1), (2) and (3), and by
applying Treasury Regulations Section 1.414(c)-2, for purposes of
determining trades or businesses (whether or not incorporated) that are under
common control for purposes of Code Section 414(c), using the language “at
least 20 percent” instead of “at least 80 percent” at each place it appears in
Treasury Regulations Section 1.414(c)-2.


 


Subject to the
terms and conditions of this Plan, the Committee shall have complete discretion
in determining the number of SARs granted to each Participant and, consistent
with the provisions of this Plan, in determining the terms and conditions
pertaining to such SARs.


 


The Grant
Price for each grant of a Freestanding SAR shall be determined by the Committee
and shall be specified in the Award Agreement; provided, however, the Grant
Price on the date of grant must be at least equal to one hundred percent (100%)
of the FMV of the Shares on the date of grant. The Grant Price of Tandem SARs
shall be equal to the Exercise Price of the related Option.


 


7.2          SAR Agreement. Each SAR Award shall be
evidenced by an Award Agreement that shall specify the Grant Price, the term of
the SAR, and such other provisions as the Committee shall determine.


 


7.3          Term of SAR. The term of an SAR granted
under this Plan shall be determined by the Committee, in its sole discretion,
and except as determined otherwise by the Committee and specified in the SAR
Award Agreement, no SAR shall be exercisable later than the tenth (10th)
anniversary date of its grant. Notwithstanding the foregoing, for SARs granted
to Participants outside the United States, the Committee has the authority to
grant SARs that have a term greater than ten (10) years.


 


7.4          Exercise of Freestanding SARs.
Freestanding SARs may be exercised upon whatever terms and conditions the
Committee, in its sole discretion, imposes.


 





















 


7.5.         Exercise of Tandem SARs. Tandem SARs may
be exercised for all or part of the Shares subject to the related Option upon
the surrender of the right to exercise the equivalent portion of the related
Option. A Tandem SAR may be exercised only with respect to the Shares for which
its related Option is then exercisable.


 


Notwithstanding
any other provision of this Plan to the contrary, with respect to a Tandem SAR
granted in connection with an ISO: (a) the Tandem SAR will expire no later
than the expiration of the underlying ISO; (b) the value of the payout
with respect to the Tandem SAR may be for no more than one hundred percent
(100%) of the excess of the Fair Market Value of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised over the Exercise Price
of the underlying ISO; and (c) the Tandem SAR may be exercised only when
the Fair Market Value of the Shares subject to the ISO exceeds the Exercise
Price of the ISO.


 


7.6          Settlement of SAR Amount. Upon the
exercise of an SAR, a Participant shall be entitled to receive payment from the
Company in an amount determined by multiplying:


 


(a)                                  The
excess of the Fair Market Value of a Share on the date of exercise over the
Grant Price; by


 


(b)                                 The
number of Shares with respect to which the SAR is exercised.


 


The payment
upon SAR exercise shall be in Shares or cash, as determined by the Committee.


 


7.7          Termination of Employment or Directorship.
Each Award Agreement shall set forth the extent to which the Participant shall
have the right to exercise the SAR following termination of the Participant’s
employment with or provision of services to the Company, its Affiliates, and/or
its Subsidiaries, as the case may be. Such provisions shall be determined in
the sole discretion of the Committee, shall be included in the Award Agreement
entered into with Participants, need not be uniform among all SARs issued
pursuant to this Plan, and may reflect distinctions based on the reasons for
termination.


 


7.8          Other Restrictions. The Committee shall
impose such other conditions and/or restrictions on any Shares received upon
exercise of an SAR granted pursuant to this Plan as it may deem advisable or
desirable. These restrictions may include, but shall not be limited to, a
requirement that the Participant hold the Shares received upon exercise of an
SAR for a specified period of time.


 


Article 8. Restricted Stock and Restricted Stock Units


 


8.1          Grant
of Restricted Stock or Restricted Stock Units. Subject to the terms and
provisions of this Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock and/or Restricted Stock Units to Participants
in such amounts as the Committee shall determine. Restricted Stock Units shall
be similar to Restricted Stock except that no Shares are actually awarded to
the Participant on the date of grant.


 


8.2          Restricted Stock or Restricted Stock Unit
Award Agreement. Each Restricted Stock and/or Restricted Stock Unit grant
shall be evidenced by an Award Agreement that shall specify the Period(s) of
Restriction, the number of Shares of Restricted Stock or the number of
Restricted Stock Units granted, and such other provisions as the Committee
shall determine.


 





















 


8.3          Other
Restrictions. The Committee shall impose such other conditions and/or
restrictions on any Shares of Restricted Stock or Restricted Stock Units
granted pursuant to this Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock or each Restricted Stock Unit, restrictions
based upon the achievement of specific performance goals, time-based
restrictions on vesting following the attainment of the performance goals,
time-based restrictions, and/or restrictions under applicable laws or under the
requirements of any stock exchange or market upon which such Shares are listed
or traded, or holding requirements or sale restrictions placed on the Shares by
the Company upon vesting of such Restricted Stock or Restricted Stock Units.


 


To the extent
deemed appropriate by the Committee, the Company may retain the certificates
representing Shares of Restricted Stock in the Company’s possession until such
time as all conditions and/or restrictions applicable to such Shares have been
satisfied or lapse.


 


Except as
otherwise provided in this Article 8, Shares of Restricted Stock covered
by each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to such Shares
have been satisfied or lapse (including satisfaction of any applicable tax
withholding obligations), and Restricted Stock Units shall be paid in cash,
Shares, or a combination of cash and Shares as the Committee, in its sole
discretion shall determine.


 


8.4          Certificate
Legend. In addition to any legends placed on certificates pursuant to Section 8.3,
each certificate representing Shares of Restricted Stock granted pursuant to
this Plan may bear a legend such as the following or as otherwise determined by
the Committee in its sole discretion:


 


The sale or
transfer of Shares of stock represented by this certificate, whether voluntary,
involuntary, or by operation of law, is subject to certain restrictions on
transfer as set forth in the Mirant Corporation 2005 Omnibus Incentive Plan,
and in the associated Award Agreement. A copy of this Plan and such Award
Agreement may be obtained from Mirant Corporation.


 


8.5          Voting Rights. Unless otherwise
determined by the Committee and set forth in a Participant’s Award Agreement,
to the extent permitted or required by law, as determined by the Committee,
Participants holding Shares of Restricted Stock granted hereunder may be
granted the right to exercise full voting rights with respect to those Shares
during the Period of Restriction. A Participant shall have no voting rights
with respect to any Restricted Stock Units granted hereunder.


 


8.6          Termination of Employment or Directorship.
Each Award Agreement shall set forth the extent to which the Participant shall
have the right to retain Restricted Stock and/or Restricted Stock Units
following termination of the Participant’s employment with or provision of
services to the Company, its Affiliates, and/or its Subsidiaries, as the case
may be. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock or
Restricted Stock Units issued pursuant to this Plan, and may reflect
distinctions based on the reasons for termination.


 


8.7          Section 83(b) Election. The
Committee may provide in an Award Agreement that the Award of Restricted Stock
is conditioned upon the Participant making or refraining from making an
election with respect to the Award under Code Section 83(b). If a
Participant makes an election


 





















 


pursuant to Code Section 83(b) concerning
a Restricted Stock Award, the Participant shall be required to file promptly a
copy of such election with the Company.


 


8.8          Compliance
With Section 409A.  Unless the
Committee provides otherwise in an Award Agreement, each Restricted Stock Unit
shall be paid in full to the Participant no later than the 15th day of the
third month after the end of the first calendar year in which the Restricted
Stock Unit is no longer subject to a “substantial risk of forfeiture” within
the meaning of Code Section 409A. 
If the Committee provides in an Award Agreement that a Restricted Stock
Unit is intended to be subject to Code Section 409A, the Award Agreement
shall include terms that are designed to satisfy the requirements of Section 409A.


 


Article 9. Performance Units, Performance Shares and Cash-Based
Awards


 


9.1          Grant of Performance Units, Performance
Shares, and Cash-Based Awards. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant Performance
Units, Performance Shares, and/or Cash-Based Awards to Participants in such
amounts and upon such terms as the Committee shall determine.


 


9.2          Value of Performance Units, Performance
Shares, and Cash-Based Awards. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. Each Cash-Based Award shall have a value as
determined by the Committee. The Committee shall set performance goals in its
discretion which, depending on the extent to which they are met, will determine
the value and/or number of Performance Units, Performance Shares or Cash-Based
Awards that will be paid out to the Participant.


 


9.3          Earning of Performance Units, Performance
Shares and Cash-Based Awards. Subject to the terms of this Plan, after
the applicable Performance Period has ended, the holder of Performance Units,
Performance Shares or Cash-Based Awards shall be entitled to receive payout on
the value and number of Performance Units, Performance Shares or Cash-Based
Awards earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding performance goals
have been achieved.


 


9.4          Form and Timing of Payment of
Performance Units, Performance Shares, and Cash-Based Awards. Payment of
earned Performance Units, Performance Shares or Cash-Based Awards shall be as
determined by the Committee and as evidenced in the Award Agreement. Subject
to the terms of this Plan, the Committee, in its sole discretion, may
pay earned Performance Units, Performance Shares or Cash-Based Awards in
the form of cash or in Shares (or in a combination thereof) equal to the value
of the earned Performance Units, Performance Shares, or Cash-Based Awards as
soon as practicable after the end of the Performance Period and following the
Committee’s determination of actual performance against the Performance
Measures and related goals established by the Committee. Any Shares may be
granted subject to any restrictions deemed appropriate by the Committee. The
determination of the Committee with respect to the form of payout of such
Awards shall be set forth in the Award Agreement pertaining to the grant of the
Award.


 


9.5          Termination of Employment or Directorship.
Each Award Agreement shall set forth the extent to which the Participant shall
have the right to retain Performance Units, Performance Shares, and/or
Cash-Based Awards following termination of the Participant’s employment with or


 





















 


provision of services to the
Company, its Affiliates, and/or its Subsidiaries, as the case may be. Such
provisions shall be determined in the sole discretion of the Committee, shall
be included in the Award Agreement entered into with each Participant, need not
be uniform among all Awards of Performance Units, Performance Shares, or
Cash-Based Awards issued pursuant to this Plan, and may reflect distinctions
based on the reasons for termination.


 


9.6          Compliance
With Section 409A.  Unless the
Committee provides otherwise in an Award Agreement, each Performance Share or
Performance Unit shall be paid in full to the Participant no later than the
15th day of the third month after the end of the first calendar year in which
the Performance Share or Performance Unit is no longer subject to a “substantial
risk of forfeiture” within the meaning of Code Section 409A.  If the Committee provides in an Award
Agreement that a Performance Share or Performance Unit is intended to be
subject to Code Section 409A, the Award Agreement shall include terms that
are designed to satisfy the requirements of Section 409A.


 


Article 10. Other Stock-Based Awards


 


10.1        Other Stock-Based Awards. The Committee may
grant other types of equity-based or equity-related Awards not otherwise
described by the terms of this Plan (including the grant or offer for sale of
unrestricted Shares) in such amounts and subject to such terms and conditions,
as the Committee shall determine. Such Awards may involve the transfer of
actual Shares to Participants, or payment in cash or otherwise of amounts based
on the value of Shares and may include, without limitation, Awards designed to comply
with or take advantage of the applicable local laws of jurisdictions other than
the United States.


 


10.2        Value of Other Stock-Based Awards. Each
Other Stock-Based Award shall be expressed in terms of Shares or units based on
Shares, as determined by the Committee. The Committee may establish performance
goals in its discretion. If the Committee exercises its discretion to establish
performance goals, the number and/or value of Other Stock-Based Awards that
will be paid out to the Participant will depend on the extent to which the
performance goals are met.


 


10.3        Payment of Other Stock-Based Awards.
Payment, if any, with respect to an Other Stock-Based Award shall be made in
accordance with the terms of the Award, in cash or Shares as the Committee
determines.


 


10.4        Termination of Employment or Directorship.
The Committee shall determine the extent to which the Participant shall have
the right to receive Other Stock-Based Awards following termination of the
Participant’s employment with or provision of services to the Company, its
Affiliates, and/or its Subsidiaries, as the case may be. Such provisions shall
be determined in the sole discretion of the Committee, such provisions may be
included in an Award Agreement entered into with each Participant, but need not
be uniform among all Awards of Other Stock-Based Awards issued pursuant to this
Plan, and may reflect distinctions based on the reasons for termination.


 


10.6        Compliance
With Section 409A.  Unless the
Committee provides otherwise in an Award Agreement, each Cash-Based Award or
Other Stock-Based Award shall be paid in full to the Participant no later than
the 15th day of the third month after the end of the first calendar year in
which the Cash-Based Award or Other Stock-Based Award is no longer subject to a
“substantial risk of forfeiture” within the meaning of Code Section 409A.  If the Committee provides in an Award
Agreement that a Cash-Based Award or Other Stock-Based Award is intended to be
subject to Code


 





















 


Section 409A, the Award
Agreement shall include terms that are designed to satisfy the requirements of Section 409A.


 


Article 11. Transferability of Awards


 


11.1        Transferability of Incentive Stock Options.
No ISO granted under this Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, all ISOs granted to a Participant under Article 6
shall be exercisable during his or her lifetime only by such Participant.


 


11.2        All Other Awards. Except as otherwise
provided in a Participant’s Award Agreement or otherwise determined at any time
by the Committee, no Award granted under this Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution; provided that the Board or
Committee may permit further transferability, on a general or a specific basis,
and may impose conditions and limitations on any permitted transferability,
subject to Section 11.1. Further, except as otherwise provided in a
Participant’s Award Agreement or otherwise determined at any time by the
Committee, or unless the Board or Committee decides to permit further
transferability, subject to Section 11.1, all Awards granted to a
Participant under this Plan shall be exercisable during his or her lifetime
only by such Participant. With respect to those Awards (other than ISOs), if
any, that are permitted to be transferred to another individual, references in
this Plan to exercise or payment related to such Awards by or to the
Participant shall be deemed to include, as determined by the Committee, the
Participant’s permitted transferee.


 


Article 12. Performance Measures


 


12.1        Performance
Measures. The objective performance goals upon which the payment or vesting
of an Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures:


 


(a)                                  Net
earnings or net income (before or after taxes);


(b)                                 Earnings
per share;


(c)                                  Net
sales or revenue;


(d)                                 Net
operating profit;


(e)                                  Return
measures (including return on assets, capital, invested capital, equity, sales,
or revenue);


(f)                                    Cash
flow (including, but not limited to, operating cash flow, free cash flow, cash
flow return on equity, and cash flow return on investment);


(g)                                 Earnings
before or after taxes, interest, depreciation, and/or amortization;


(h)                                 Gross
or operating margins;


(i)                                     Productivity
ratios;


(j)                                     Share
price (including, but not limited to, growth measures and total shareholder
return);


(k)                                  Expenses;


(l)                                     Margins;


(m)                               Operating
efficiency;


(n)                                 Market
share;


(o)                                 Customer
satisfaction;


(p)                                 Working
capital; and


 





















 


(q)                                 Economic
value added or EVA® (net operating profit after tax minus the sum of
capital multiplied by the cost of capital).


 


Such
performance goals shall be established by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of, Code
Section 162(m)(4)(C), or any successor provision thereto, and the regulations
thereunder, for performance-based compensation, and may be set forth in the
applicable Award Agreement.  Any
Performance Measure(s) may be used to measure the performance of the Company,
its Affiliates, and/or Subsidiaries as a whole or any business unit of the
Company, its Affiliates, and/or Subsidiaries or any combination thereof, as the
Committee may deem appropriate, or any of the above Performance Measures as
compared to the performance of a group of comparator companies, or published or
special index that the Committee, in its sole discretion, deems appropriate, or
the Company may select Performance Measure (j) above as compared to various
stock market indices. The Committee also has the authority to provide for
accelerated vesting of any Award based on the achievement of performance goals
pursuant to the Performance Measures specified in this Article 12.


 


12.2        Evaluation of
Performance.  Notwithstanding any other provision of this
Plan, payment or vesting of any such Award shall not be made until the
Committee certifies in writing that the applicable performance goals and any
other material terms of such Award were in fact satisfied, except as otherwise
provided in Section 12.3.  The
Committee may provide in any such Award that any evaluation of performance may
include or exclude any of the following events that occurs during a Performance
Period: (a) asset write-downs, (b) litigation or claim judgments or
settlements, (c) the effect of changes in tax laws, accounting principles,
or other laws or provisions affecting reported results, (d) any
reorganization and restructuring programs, (e) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to shareholders for the
applicable year, (f) acquisitions or divestitures, and (g) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect
Awards to Covered Employees, they shall be prescribed in a form that meets the
requirements of Code Section 162(m) for deductibility.


 


12.3        Adjustment of Performance-Based Compensation.
Awards that are intended to qualify as Performance-Based Compensation may not
be adjusted upward. The Committee shall retain the discretion to adjust such
Awards downward, either on a formula or discretionary basis or any combination,
as the Committee determines.


 


12.4        Committee Discretion. In the event that
applicable tax and/or securities laws change to permit Committee discretion to
alter the governing Performance Measures without obtaining shareholder approval
of such changes, the Committee shall have sole discretion to make such changes
without obtaining shareholder approval. In addition, in the event that the
Committee determines that it is advisable to grant Awards that shall not
qualify as Performance-Based Compensation, the Committee may make such grants
without satisfying the requirements of Code Section 162(m) and base
vesting of such Awards on performance measures other than those set forth in Section 12.1.


 





















 


Article 13. Covered Employee Annual Incentive Award


 


The Committee
may designate Covered Employees who are eligible to receive an annual incentive
award with respect to any Plan
Year based on the attainment of certain goals, which may determine the degree
of the payout and/or vesting which are designed to qualify for the
Performance-Based Exception. The performance measure(s) to be used for purposes
of determining a Covered Employees annual incentive award shall be selected
from the list provided in Article 12 of this Plan. The provisions,
including but not limited to the evaluation of performance and adjustment
provisions set forth in Article 12 of this Plan, shall also be applicable
to any Covered Employee Annual Incentive Award.


 


Article 14. Nonemployee Director Awards


 


Nonemployee
Directors may only be granted Awards under the Plan in accordance with this Article 14
and which shall not be subject to management’s discretion. From time to time,
the Board shall set the amount(s) and type(s) of equity awards that shall be
granted to all Nonemployee Directors on a periodic, nondiscriminatory basis
pursuant to the Plan, as well as any additional amount(s), if any, to be
awarded, also on a periodic, nondiscriminatory basis, based on each of the
following: the number of committees of the Board on which a Nonemployee
Director serves, service of a Nonemployee Director as the chair of a Committee
of the Board, service of a Nonemployee Director as Chairman of the Board, or
the first selection or appointment of an individual to the Board as a
Nonemployee Director. Subject to the limits set forth in Section 4.1(b) and
the foregoing, the Board shall grant such Awards to Nonemployee Directors and
any Nonemployee Chairman of the Board, and grant new Nonemployee Director
Awards, as it shall from time to time determine.


 


Article 15. Dividends and Dividend Equivalents


 


The Committee
may grant dividends or dividend equivalents based on the dividends declared on
Shares that are subject to any Award. The dividends or dividend equivalents may
be credited as of the dividend payment dates, during the period between the
date the Award is granted and the date the Award vests. The dividends or
dividend equivalents may be subject to any limitations and/or restrictions
determined by the Committee. Dividend equivalents shall be converted to cash or
additional Shares by such formula and at such time, and shall be paid at such
times, as may be determined by the Committee. 
Unless the Award Agreement provides otherwise, such dividend equivalents
shall be paid to the Participant at least annually, not later than the 15th day
of the third month following the end of the calendar year in which the dividend
equivalents are credited (or, if later, the 15th day of the third month
following the end of the calendar year in which the dividend equivalents are no
longer subject to a substantial risk of forfeiture within the meaning of Code Section 409A).  Any dividend equivalents that are accumulated
and paid after the date specified in the preceding sentence shall be explicitly
set forth in a separate arrangement that provides for the payment of the
dividend equivalents at a time and in a manner that satisfies the requirements
of Code Section 409A.


 


Article 16. Effects of Transfer, Leave of Absence, or a Change in
Status


 


16.1        Transfer of Employment or Leave of Absence. For
purposes of the Plan, a transfer of an Employee from the Company to an
Affiliate or Subsidiary (or, for purposes of any ISO granted under the Plan,
only a Subsidiary), or vice versa, or from one Affiliate or Subsidiary to
another (or, in the case of an ISO, only from one Subsidiary to another), and a
leave of absence, duly authorized in writing by the Company, shall not be
deemed a termination of employment of the Employee for


 





















 


purposes of the Plan or with
respect to any Award (in the case of ISOs, to the extent permitted by the
Code).


 


16.2        Change in Status. The Committee shall have
the discretion to determine the effects upon any Award, upon an individual’s
status as an Employee or Director for purposes of the Plan (including whether a
Participant shall be deemed to have experienced a termination of employment or
other change in status) and upon the exercisability, vesting, termination or
expiration of any Award in the case of: (a) any Participant who is
employed by an entity that ceases to be an Affiliate or Subsidiary (whether due
to a spin-off or otherwise), (b) any transfer of a Participant between
locations of employment with the Company, an Affiliate, and/or Subsidiary or
between the Company, an Affiliate or Subsidiary or between Affiliates or
Subsidiaries, (c) any leave of absence of a Participant, (d) any
change in a Participant’s status from an Employee to a consultant or Director,
or vice versa; and (e) upon approval by the Committee, any Employee who is
terminated by the Company however becomes employed by a partnership, joint
venture, corporation or other entity not meeting the requirements of an Affiliate
or Subsidiary, subject, in each case, to the requirements of Code Section 422
applicable to any ISOs.


 


Article 17. Rights of Participants


 


17.1        Rights or Claims.  No individual shall have any rights or claims
under the Plan except in accordance with the provisions of the Plan and any
applicable Award Agreement. The grant of an Award under the Plan shall not
confer any rights upon the Participant holding such Award other than with such
terms, and subject to such conditions, as are specified in the Plan as being
applicable to such type of Award, or to all Awards, or as are expressly set
forth in the Award Agreement evidencing such Award. Without limiting the
generality of the foregoing, nothing contained in the Plan or in any Award
Agreement shall be deemed to:


 


(a)          Give any Employee or
Director the right to be retained in the service of the Company, its Affiliates
and/or Subsidiaries, whether in any particular position, at any particular rate
of compensation, for any particular period of time or otherwise;


 


(b)         Restrict in any way the
right of the Company, its Affiliates and/or Subsidiaries to terminate, change
or modify any Employee’s employment or any Director’s service as a Director at
any time with or without cause;


 


(c)          Give any Employee or
Director the right to receive any bonus, whether payable in cash or in Shares,
or in any combination thereof, from the Company, its Affiliates and/or
Subsidiaries, nor be construed as limiting in any way the right of the Company,
its Affiliates and/or Subsidiaries to determine, in its sole discretion,
whether or not it shall pay any Employee or Director bonuses, and, if so paid,
the amount thereof and the manner of such payment; or


 


(d)         Give any Participant any
rights whatsoever with respect to an Award except as specifically provided in
the Plan and the Award Agreement.


 


17.2        Adoption of Plan. The adoption of the Plan
shall not be deemed to give any Employee or Director of the Company, its
Affiliates and/or Subsidiaries or any other individual any right to be selected
as a Participant or to be granted an Award.


 





















 


Article 18. Withholding


 


18.1        Tax Withholding. The Company, its
Affiliates and/or Subsidiaries are authorized to withhold from any Award
granted or payment due under the Plan the amount of all Federal, state, local
and non-United States taxes due in respect of such Award or payment and to take
any such other action as may be necessary or appropriate in the opinion of the
Committee to satisfy all obligations for the payment of such taxes.


 


The recipient
of any payment or distribution under the Plan shall make arrangements
satisfactory to the Company, as determined in the Committee’s discretion, for
the satisfaction of any withholding tax obligations that arise by reason of any
payment or distribution. The Company shall not be required to make any payment
or distribution under or relating to the Plan or any Award until such
obligations are satisfied or such arrangements are made, as determined by the
Committee in its discretion.


 


18.2        Withholding or Tendering Shares. Without
limiting the generality of Section 18.1, the Committee in its discretion
may permit a Participant to satisfy or arrange to satisfy, in whole or in part,
the withholding tax obligations incident to an Award by: (a) electing to
have the Company withhold a portion of the Award otherwise deliverable to such
Participant pursuant to such Award (provided, however, that the amount of any
Award so withheld shall not exceed the amount necessary to satisfy required
withholding tax obligations using the minimum statutory withholding rates for
Federal, state, local and/or non-United States tax purposes, including payroll
taxes, that are applicable to supplemental taxable income) and/or (b) tendering
to the Company Shares owned by such Participant and purchased or held for the
requisite period of time as may be required to avoid the Company’s, its
Affiliates’ and/or Subsidiaries’ incurring an adverse accounting charge, based,
in each case, on the Fair Market Value of a Share on the payment date as
determined by the Committee.


 


The satisfaction of withholding taxes pursuant to this Article 18
shall be subject to such restrictions as the Committee may impose, including
any restrictions required by applicable law or the rules and regulations
of the SEC.


 


Article 19. Change of Control


 


19.1
Change of Control of the Company.
Notwithstanding any other provision of this Plan to the contrary, the
provisions of this Article 19 shall apply in the event of a Change of
Control, unless otherwise determined by the Committee in connection with the
grant of an Award as reflected in the applicable Award Agreement.


 


Upon a Change
of Control, except to the extent that another Award meeting the requirements of
Section 19.2 (a “Replacement Award”) is provided to the Participant to
replace such Award (the “Replaced Award”), and except as provided in the
following paragraph, all then-outstanding Options and Stock Appreciation Rights
shall become fully vested and exercisable, and all other then-outstanding
Awards that are Service Vesting Awards shall vest in full and be free of
restrictions. In such event, the Committee shall notify the Participant that
his or her Awards shall be fully exercisable for a period of not less than fifteen (15) days from the date of such
notice, contingent upon the consummation of the event giving rise to the Change
of Control, and upon the expiration of such period any unexercised Awards shall
terminate. The treatment of any other Awards shall be as determined by the
Committee in connection with the grant thereof, as reflected in the applicable
Award Agreement.


 





















 


If an Award is
subject to Code Section 409A, the Committee may accelerate the vesting of
the Award upon a Change in Control, but the Committee shall not accelerate the
date on which the Award is paid.  The
Committee shall not extend the period to exercise an Option or Stock
Appreciation Right to the extent that the extension would cause the Option or
Stock Appreciation Right to become subject to Code Section 409A.


 


19.2        Replacement Awards. An Award shall meet the
conditions of this Section 19.2 (and hence qualify as a Replacement Award)
if: (i) it has a value at least equal to the value of the Replaced Award
as determined by the Committee in its sole discretion; (ii) it relates to
publicly traded equity securities of the Company or its successor in the Change
of Control or another entity that is affiliated with the Company or its
successor following the Change of Control; and (iii) its other terms and
conditions are not less favorable to the Participant than the terms and
conditions of the Replaced Award (including the provisions that would apply in
the event of a subsequent Change of Control). Without limiting the generality
of the foregoing, the Replacement Award may take the form of a continuation of
the Replaced Award if the requirements of the preceding sentence are satisfied.
The determination of whether the conditions of this Section 19.2 are
satisfied shall be made by the Committee, as constituted immediately before the
Change of Control, in its sole discretion. 
Any such Replacement Awards shall comply with the requirements of Code
Sections 422, 424 and 409A, as the Committee determines applicable.


 


19.3        Termination of Employment. Unless otherwise
determined by the Committee in connection with the grant of an Award as
reflected in the applicable Agreement, upon a termination of employment or
termination of directorship of a Participant occurring in connection with or
during the period of two (2) years after such Change of Control, other
than for Cause, (i) all Replacement Awards held by the Participant shall
become fully vested and (if applicable) exercisable and free of restrictions,
and (ii) all Options and Stock Appreciation Rights held by the Participant
immediately before the termination of employment or termination of directorship
that the Participant held as of the date of the Change of Control or that
constitute Replacement Awards shall remain exercisable for not less than one (1) year
following such termination or until the expiration of the stated term of such
Option or SAR, whichever period is shorter; provided, that if the applicable
Award Agreement provides for a longer period of exercisability, that provision
shall control.


 


Article 20. Amendment, Modification, Suspension, and Termination


 


20.1        Amendment,
Modification, Suspension, and Termination. Subject to Section 20.3,
the Committee may, at any time and from time to time, alter, amend,
modify, suspend, or terminate this Plan and any Award Agreement in whole
or in part; provided, however, that, without the prior approval of the Company’s
shareholders and except as provided in Section 4.4, Options or SARs issued
under this Plan will not be repriced, replaced, or regranted through
cancellation, or by lowering the Exercise Price of a previously granted Option
or the Grant Price of a previously granted SAR, and no material amendment of this Plan shall be made without shareholder approval if
shareholder approval is required by law, regulation, or stock exchange rule.


 


20.2        Adjustment of Awards Upon the
Occurrence of Certain Unusual or Nonrecurring Events. The
Committee may make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4.4
hereof) affecting the Company or the financial statements of the Company or of
changes in applicable laws, regulations, or accounting principles,


 





















 


whenever
the Committee determines that such adjustments are appropriate in order to
prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under this Plan. Any such adjustment
made with respect to an Award intended to be an ISO shall be made only to the
extent consistent with such intent, unless the Committee determines otherwise,
and any such adjustment that is made with respect to an Award that is intended
to qualify as Performance-Based Compensation shall be made consistent with the
intent that such Award qualify for the performance-based compensation exception
under Code Section 162(m) (or any successor provision). Additionally, the Committee shall not make any adjustment
pursuant to this Section 20.2 that would cause an Award that is otherwise
exempt from Code Section 409A to become subject to Section 409A; or
that would cause an Award that is subject to Code Section 409A to fail to
satisfy the requirements of Section 409A. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under this Plan.


 


20.3        Awards Previously Granted. Notwithstanding
any other provision of this Plan to the contrary (other than Section 20.4),
no termination, amendment, suspension, or modification of this Plan or an Award
Agreement shall adversely affect in any material way any Award previously
granted under this Plan, without the written consent of the Participant holding
such Award.


 


20.4        Amendment to Conform to Law.  Notwithstanding any other provision of this
Plan to the contrary, the Board may amend the Plan or an Award Agreement, to
take effect retroactively or otherwise, as deemed necessary or advisable for
the purpose of conforming the Plan or an Award Agreement to any present or
future law relating to plans of this or similar nature (including, but not
limited to, Code Section 409A), and to the administrative regulations and
rulings promulgated there under.


 


Article 21. Successors


 


All
obligations of the Company under this Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business and/or assets of the Company.


 


Article 22. Miscellaneous Provisions


 


22.1        Consent to Terms and Conditions. By
accepting any benefit under the Plan, each Participant and each individual
claiming under or through such Participant shall be conclusively deemed to have
indicated their acceptance and ratification of, and consent to, all of the
terms and conditions of the Plan and any action taken under the Plan by the
Committee, the Company or the Board.


 


22.2        Beneficiary Designation. Each Participant
under this Plan may, from time to time, name any beneficiary or beneficiaries
(who may be named contingently or successively) to whom any benefit under this
Plan is to be paid in case of the Participant’s death before the Participant
receives any or all of such benefit. Each such designation shall revoke
all prior designations by the same Participant, shall be in a form prescribed
by the Committee, and will be effective only when filed by the Participant in
writing with the Company during the Participant’s lifetime. In the absence of
any such beneficiary designation, benefits remaining unpaid or rights remaining
unexercised at the Participant’s death shall be paid or exercised by the
Participant’s executor, administrator, or legal representative.


 





















 


22.3        Forfeiture Events.


 


(a)                                  The
Committee may specify in an Award Agreement that the Participant’s rights,
payments, and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture, or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable vesting or
performance conditions of an Award. Such events may include, but shall not be
limited to, termination of employment for Cause, termination of the Participant’s
provision of services to the Company, Affiliate, and/or Subsidiary, violation
of material Company, Affiliate, and/or Subsidiary policies, breach of
noncompetition, confidentiality, or other restrictive covenants that may apply
to the Participant, or other conduct by the Participant that is detrimental to
the business or reputation of the Company, its Affiliates, and/or its
Subsidiaries.


 


(b)                                 If
the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, if the Participant
knowingly or grossly negligently engaged in the misconduct, or knowingly or
grossly negligently failed to prevent the misconduct, or if the Participant is
one of the individuals subject to automatic forfeiture under Section 304
of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company
the amount of any payment in settlement of an Award earned or accrued during
the twelve- (12-) month period following the first public issuance or filing
with the SEC (whichever just occurred) of the financial document embodying such
financial reporting requirement.


 


22.4        Legend. The certificates for Shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer of such Shares.


 


22.5        Drafting Context. The words “Article” and “Section”
shall refer to provisions of the Plan, unless expressly indicated otherwise.
Wherever any words are used in the Plan or any Award Agreement in the masculine
gender they shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and wherever any words are used
herein in the singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply.


 


22.6        Severability. In the event any provision of
the Plan shall be held illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions of the Plan, and the Plan
shall be construed and enforced as if the illegal or invalid provision had not
been included.


 


22.7        Requirements of Law. The granting of Awards and the issuance of
Shares under this Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.


 


22.8        Delivery of Title. The Company shall have no obligation to
issue or deliver evidence of title for Shares issued under this Plan prior to:


 


(a)                                  Obtaining
any approvals from governmental agencies that the Company determines are
necessary or advisable; and


 





















 


(b)                                 Completion
of any registration or other qualification of the Shares under any applicable
national or foreign law or ruling of any governmental body that the Company
determines to be necessary or advisable.


 


22.9        Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.


 


22.10      Investment Representations. The Committee may
require each individual receiving Shares in connection with any Award under the
Plan to represent and agree with the Company in writing that such individual is
acquiring Shares for investment without a view to the distribution thereof,
and/or provide such other representations and agreements as the Committee may
prescribe.


 


22.11      Unfunded Plan. The Plan shall be unfunded.
The Company shall not be required to establish any special or separate fund or
to make any other segregation of assets to assure the issuance of Shares or the
payment of cash upon exercise or payment of any Award. Proceeds from the sale
of Shares pursuant to Options granted under the Plan shall constitute general
funds of the Company. The costs and expenses of the Plan shall be borne by the
Company, including expenses of issuing Shares pursuant to any Awards granted
hereunder.


 


22.12      Uncertificated Shares. To the extent that
this Plan provides for issuance of certificates to reflect the transfer of
Shares, the transfer of such Shares may be effected on a noncertificated basis,
to the extent not prohibited by applicable law or the rules of any stock
exchange.


 


22.13      Fractional Shares. An Option or other Award
shall not be exercisable with respect to a fractional Share. No fractional
Shares shall be issued upon the exercise or payment of an Option or other
Award.


 


22.14      Retirement and Welfare Plans. Payments and
other compensation received by a Participant under an Award shall not be deemed
part of such Participant’s regular, recurring compensation for purposes of any
termination, indemnity or severance pay laws and shall not be included in, nor
have any effect on, the determination of benefits under any other employee
benefit plan, contract or similar arrangement provided by the Company, its
Affiliates and/or Subsidiaries, unless expressly so provided by such other
plan, contract or arrangement.


 


22.15      Nonexclusivity of this Plan. Neither the
adoption of the Plan nor anything contained herein shall affect any other
compensation or incentive plans or arrangements of the Company, its Affiliates
and/or Subsidiaries, or prevent or limit the right of the Company, its
Affiliates and/or Subsidiaries to establish any other forms of incentives or
compensation for their Employees or Directors.


 


22.16      No Constraint on Corporate Action. Nothing in
this Plan shall be construed to: (i) limit, impair, or otherwise affect
the Company’s, its Affiliates’ and/or Subsidiaries’ right or power to make
adjustments, reclassifications, reorganizations, or changes of its capital or
business structure, or to merge or consolidate, or dissolve, liquidate, sell,
or transfer all or any part of its business or assets;


 





















 


or, (ii) limit the right
or power of the Company, its Affiliates, and/or Subsidiaries to take any action
which such entity deems to be necessary or appropriate.


 


22.17      Limits of Liability. Any liability of the
Company, its Affiliates and/or Subsidiaries to any Participant with respect to
any Award shall be based solely upon contractual obligations created by the
Plan and the Award Agreement.


 


None of the Company, any Affiliate or Subsidiary or
any member of the Committee or the Board, or any other Person participating in
any determination of any question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any liability, in the
absence of bad faith, to any party for any action taken or not taken in
connection with the Plan, except as may expressly be provided by statute.


 


22.18      Deferred Compensation. If any Award would be
considered deferred compensation as defined under Code Section 409A and
would fail to meet the requirements of Code Section 409A, then such Award
shall be null and void. However, the Committee may permit deferrals of
compensation pursuant to the terms of a Participant’s Award Agreement, a
separate plan, or a subplan which (in each case) meets the requirements of Code
Section 409A. Additionally, to the extent any Award is subject to Code Section 409A,
notwithstanding any provision herein to the contrary, the Plan does not permit
the acceleration of the time or schedule of any distribution related to
such Award, except as permitted by Code Section 409A


 


22.19      Employees Based Outside of the United States.
Notwithstanding any provision of this Plan to the contrary, in order to comply
with the laws in other countries in which the Company, its Affiliates, and/or
its Subsidiaries operate or have Employees or Directors, the Committee, in its
sole discretion, shall have the power and authority to:


 


(a)                                  Determine
which Affiliates and Subsidiaries shall be covered by this Plan;


 


(b)                                 Determine
which Employees and/or Directors outside the United States are eligible to
participate in this Plan;


 


(c)                                  Modify
the terms and conditions of any Award granted to Employees and/or Directors
outside the United States to comply with applicable foreign laws;


 


(d)                                 Establish
subplans and modify exercise procedures and other terms and procedures, to the
extent such actions may be necessary or advisable. Any subplans and
modifications to Plan terms and procedures established under this Section 22.19
by the Committee shall be attached to this Plan document as appendices; and


 


(e)                                  Take
any action, before or after an Award is made, that it deems advisable to obtain
approval or comply with any necessary local government regulatory exemptions or
approvals.


 


Notwithstanding
the above, the Committee may not take any actions hereunder, and no Awards
shall be granted, that would violate applicable law.


 





















 


22.20      Governing Law. Except as to matters
concerning the issuance of Shares or other matters of corporate governance,
which shall be determined, and related Plan and Award provisions construed,
under the General Corporation Law of the State of Delaware, the Plan and each
Award Agreement shall be governed by the laws of the State of Delaware,
excluding any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of the Plan to the substantive
law of another jurisdiction. Unless otherwise provided in the Award Agreement,
Participants are deemed to submit to the exclusive jurisdiction and venue of
the federal or state courts of Delaware, to resolve any and all issues that may
arise out of or relate to the Plan or any related Award Agreement.


 


22.21      Indemnification. Subject to requirements of
Delaware law, each individual who is or shall have been a member of the Board,
or a Committee appointed by the Board, or an officer of the Company to whom
authority was delegated in accordance with Article 3, shall be indemnified
and held harmless by the Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by the individual in
connection with or resulting from any claim, action, suit, or proceeding to
which the individual may be a party or in which he or she may be involved by
reason of any action taken or failure to act under this Plan and against and
from any and all amounts paid by the individual in settlement thereof, with the
Company’s approval, or paid by the individual in satisfaction of any judgment
in any such action, suit, or proceeding against the individual, provided the
individual shall give the Company an opportunity, at its own expense, to handle
and defend the same before the individual undertakes to handle and defend it on
the individuals own behalf, unless such loss, cost, liability, or expense is a
result of the individuals own willful misconduct or except as expressly
provided by statute.


 


The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such individual may be entitled under the Company’s
Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold them harmless.


 


22.22      No
Guarantee of Favorable Tax Treatment.  Although
the Company intends to administer the Plan so that Awards will be exempt from,
or will comply with, the requirements of Code Section 409A, the Company
does not warrant that any Award under the Plan will qualify for favorable tax
treatment under Code Section 409A or any other provision of federal,
state, local, or foreign law.  The
Company shall not be liable to any Participant for any tax, interest, or
penalties the Participant might owe as a result of the grant, holding, vesting,
exercise, or payment of any Award under the Plan.