exv10w1






EXHIBIT 10.1




VISTEON CORPORATION




2010 INCENTIVE PLAN



Section 1. PURPOSE AND DEFINITIONS




     (a) Purpose. This Plan, known as the “Visteon Corporation 2010 Incentive Plan”, is adopted in
connection with the Fifth Amended Joint Plan of Reorganization filed on August 27, 2010 with the
United States Bankruptcy Court for the District of Delaware (such plan of reorganization, together
with all exhibits, schedules, annexes, amendments and supplements thereto (the “Plan of
Reorganization”), and is intended to provide an incentive to certain employees and to certain
directors or other non-employees who provide services to Visteon Corporation and its subsidiaries,
in order to encourage them to remain in the employ or service of the Company and its subsidiaries
and to increase their interest in the Company’s success. It is intended that this purpose be
effected through awards or grants of stock options and various other rights with respect to shares
of the Company’s common stock, and through performance cash awards, as provided herein, to such
eligible persons.



     (b) Definitions. The following terms shall have the following respective meanings unless the
context requires otherwise:




     (1) The term “Affiliate” or “Affiliates” shall have the meaning set forth in Rule 12b-2
promulgated under Section 12 of the Exchange Act.




     (2) The term “Beneficial Owner” shall mean beneficial owner as set forth in Rule 13d-3 under
the Exchange Act.




     (3) The term “Board” shall mean the Board of Directors of Visteon Corporation.




     (4) The term “Change in Control” shall mean the occurrence of any one of the following:




     (A) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company (not including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its Affiliates) representing 40% or more of
the combined voting power of the Company’s then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a transaction described in clause (i)
of paragraph (C) below;




     (B) within any twelve (12) month period, the following individuals cease for any reason
to constitute a majority of the number of directors then serving: individuals who, on the
effective date of this Plan, constitute the Board and any new director (other than a director
whose initial assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board or nomination for
election by the Company’s stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was previously so approved or
recommended;




     (C) there is consummated a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than (i) a merger or
consolidation which results in the directors of the Company immediately prior to such merger
or consolidation continuing to constitute at least a majority of the board of directors of the
Company, the surviving entity or any parent thereof or (ii) a merger or consolidation effected
to implement a recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities Beneficially Owned by such Person any securities acquired directly
from the Company or its Affiliates) representing 40% or more of the combined voting power of
the Company’s then outstanding securities;




     (D) the stockholders of the Company approve a plan of complete liquidation or dissolution
of the Company or there is consummated an agreement for the sale or disposition by the Company
of more than 50% of the Company’s assets, other than a sale or disposition by the Company of
more than 50% of the Company’s assets to an entity, at least 50% of the combined voting power
of the voting securities of which are owned by stockholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to such sale; or



 









 






     (E) any other event that the Board, in its sole discretion, determines to be a Change in
Control for purposes of this Plan.




     Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred
by virtue of the consummation of (i) any transaction or series of integrated transactions
immediately following which the record holders of the common stock of the Company immediately
prior to such transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of the assets of the
Company immediately following such transaction or series of transactions, or (ii) any of the
transactions or other actions expressly contemplated by the Plan of Reorganization..




     If a Plan Award is considered deferred compensation subject to the provisions of Code
Section 409A, and if a payment under such Plan Award would be accelerated or otherwise
triggered upon a “change in control”, then the foregoing definition is modified, to the extent
necessary to avoid the imposition of an excise tax under Section 409A, to mean a “change in
control event” as such term is defined for purposes of Code Section 409A.




     (5) The term “Code” shall mean the Internal Revenue Code of 1986, or any successor thereto,
as the same may be amended and in effect from time to time.




     (6) The term “Committee” shall mean the committee appointed pursuant to Section 2 to
administer the Plan.




     (7) The term “Company” shall mean Visteon Corporation.




     (8) The term “Covered Executive” shall mean an employee of the Company or any Subsidiary
who, at the end of the Company’s tax year, is the principal executive officer of the Company (or
the employee who acts in such capacity), or is among the three highest compensated officers of
the Company or any Subsidiary (other than the Company’s principal executive officer or principal
financial officer) whose compensation is required to be reported in the Summary Compensation
Table of the Company’s Proxy Statement, or is employed in such other classification as the
Internal Revenue Service determines to be a “covered executive” for purposes of Code Section
162(m).




     (9) The term “Employee” shall mean an employee of the Company or any Subsidiary. The term
“Employee” shall also be deemed to include any person who is (i) a director of the Company or any
Subsidiary, (ii) an employee of any joint venture corporation or partnership, or comparable
entity, in which the Company or Subsidiary has a substantial equity interest; and (iii) a
non-employee who provides services to the Company or a Subsidiary. Notwithstanding the
foregoing, with respect to the granting of an Option or Stock Appreciation Right to an employee
of or a non-employee service provider to a joint venture corporation, partnership or comparable
entity in which the Company or a Subsidiary has an ownership interest, such person shall be
considered to be an Employee only if such corporation, partnership or entity itself constitutes a
Subsidiary.




     (10) The term “Exchange Act” shall mean the Securities Exchange Act of 1934, or any
successor thereto, as the same may be amended and in effect from time to time.




     (11) The term “Fair Market Value” shall mean (A) if the Stock is traded on a stock exchange,
the average of the highest and lowest sale prices at which a share of Stock shall have been sold
regular way on the principal securities exchange on which the Stock is traded on the date of
grant of any Option or Stock Appreciation Right or other relevant valuation date, (B) if the
Stock is not traded on a stock exchange but is traded in the over-the-counter market, the average
between the high bid and low asked prices on the date of grant of any Option or Stock
Appreciation Right or other relevant valuation date as reported in such over-the-counter market,
or (C) such value as determined in accordance with such other valuation methodology as shall be
determined by the Committee in its absolute discretion and that constitutes a reasonable
valuation method for purposes of Code Section 409A. In the event that no sales prices or bid and
asked prices for the Stock are available on the date of grant of any Option or Stock Appreciation
Right or other relevant valuation date, but the Stock continues to be traded in the
over-the-counter market, then the “Fair Market Value” shall be deemed to be such prices on the
next preceding day on which such sales were available.




     (12) The term “Final Award” shall mean the amount of compensation to be awarded finally to
the Participant who holds a Performance Cash Right pursuant to Section 3, the number of shares of
Stock to be awarded finally to the Participant who holds a Performance Stock Right pursuant to
Section 5, the number of shares of Restricted Stock to be retained by the Participant who holds
Restricted Stock pursuant to Section 6, or the number of shares of Stock or the amount of
compensation to be awarded finally to a Participant who holds Restricted Stock Units pursuant to
Section 6, in each case as determined by the Committee taking into account the extent to which
the Performance Goals have been satisfied.



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     (13) The term “Option” or “Options” shall mean the option to purchase Stock in accordance
with Section 7 and such other terms and conditions as may be prescribed by the Committee. An
Option may be either an “incentive stock option”, as such term is defined in the Code, or shall
otherwise be designated as an option entitled to favorable treatment under the Code (“ISO”) or a
“nonqualified stock option” (“NQO”). ISOs and NQOs are individually called an “Option” and
collectively called “Options”.




     (14) The term “Other Stock-Based Awards” shall mean awards of Stock or other rights made in
accordance with Section 8.




     (15) The term “Participant” shall mean an Employee who has been designated for participation
in the Plan.




     (16) The term “Performance Cash Right” shall mean the right to receive, pursuant to Section
3, a cash payment as described in the Participant’s award agreement, taking into account the
Target Award and the Performance Formula, upon the attainment of one or more specified
Performance Goals, subject to the terms and provisions of the award agreement and the Plan.




     (17) The term “Performance Goals” shall mean, with respect to any Performance Cash Right,
Performance Stock Right, performance-based Restricted Stock or performance-based Restricted Stock
Unit granted to a Participant who is a Covered Executive and that is intended to constitute
performance-based compensation for purposes of Code Section 162(m), a performance measure that is
based upon one or more of the following objective business criteria established by the Committee
with respect to the Company and/or any Subsidiary, division, business unit or component thereof:
asset charge, asset turnover, capacity utilization, capital employed in the business, capital
spending, cash flow (including operating cash flow, free cash flow, cash flow return on equity,
and cash flow return on investment), cost structure improvements, cost reductions, restructuring
plans, complexity reductions, customer loyalty, customer value, diversity, debt (or the ratio of
debt to equity or to another financial measure that appears on the Company’s financial
statements), dividend payouts, earnings (before or after one or more of interest, taxes,
depreciation, amortization or special items), earnings growth, earnings per share, economic value
added (or similar measure of productivity that considers the cost of capital employed), employee
wellness, environmental health and/or safety, expense targets or reductions, facilities and
tooling spending, gross profit, hours per component, increase in customer base, inventory
turnover, market price appreciation, market share, net cash balance, net earnings or net income
(whether before or after tax, and including variations of net income, such as net income from
continuing operations), net income margin, net operating cash flow, margins (including operating
profit margin), order to delivery time, plant capacity, process time, production per employee,
profits before tax, quality, customer satisfaction, new business wins or rewins, realized return
(including return on assets, return on capital, return on equity, return on invested capital,
return on net operating assets, return on revenue or sales, or return on another financial
measure that appears in the Company’s financial statements or is derived from one or more amounts
that appear in the Company’s financial statements) revenue, sales or revenue growth, safety,
sales margin, sales volume, stock price, total stockholder return, variable margin, warranty
performance, workers’ compensation costs and working capital (including accounts receivable,
inventories, accounts payable or other components of working capital). With respect to each
Performance Goal that is financial in nature, the relevant measurement of performance shall be
computed in accordance with generally accepted accounting principles, to the extent applicable;
provided that unless otherwise determined by the Committee, which determination may be made at
any time with respect to a Right that is not intended to constitute performance-based
compensation for purposes of Code Section 162(m) and not later than 90 days after the beginning
of the Performance Period with respect to a Right that is intended to constitute
performance-based compensation for purposes of Code Section 162(m), the measurement of the
Performance Goal shall exclude, to the extent applicable under the particular Performance Goal,
the effects of (i) extraordinary, unusual and/or non-recurring items of income or expense, (ii)
gains or losses on the disposition of a business or business unit, (iii) changes in tax or
accounting laws or regulations, or (iv) a merger or acquisition. With respect to any Right
granted to a Participant who is not a Covered Executive, or with respect to any Right granted to
a Participant who is a Covered Executive but the Committee determines that the Right either is
not eligible for or is not to be considered performance-based compensation for purposes of Code
Section 162(m), the performance goals may be based on one or more of the business criteria
described above or any other criteria based on individual, business unit, group or Company
performance selected by the Committee. The Performance Goals may be expressed, without
limitation, in terms of attaining a specified level of a particular criterion or the attainment
of an increase or decrease (expressed as absolute numbers or as a percentage) in the particular
criterion or achievement in relation to the performance of other companies or to an index.




     (18) The term “Performance Formula” shall mean a formula to be applied in relation to the
Performance Goals in determining the amount of cash earned under a Performance Cash Right granted
pursuant to Section 3, the number of shares of Stock earned under a Performance Stock Right
granted pursuant to Section 5, performance-based Restricted Stock granted pursuant to Section 6,
or the amount of cash or shares of Stock earned under performance-based Restricted Stock Units
granted pursuant to Section 6, in each case expressed as a percentage of the Target Award.



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     (19) The term “Performance Period” shall mean the period of time for which performance with
respect to one or more Performance Goals with respect to any Performance Cash Right, Performance
Stock Right, Restricted Stock or Restricted Stock Unit award is to be measured.




     (20) The term “Performance Stock Right” shall mean the right to receive, pursuant to Section
5 and without payment to the Company, up to the number of shares of Stock described in the
Participant’s award agreement, taking into account the Target Award and the Performance Formula,
upon the attainment of one or more specified Performance Goals, subject to the terms and
provisions of the award agreement and the Plan.




     (21) The term “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act,
as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include
(A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its Affiliates, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities, or (D) a corporation
owned, directly or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of Stock of the Company.




     (22) The term “Plan” shall mean this Visteon Corporation 2010 Incentive Plan as the same
may be amended and in effect from time to time.




     (23) The term “Plan Awards” shall mean awards of cash or grants of Performance Stock Rights,
Restricted Stock, Restricted Stock Units, Options, Stock Appreciation Rights and various other
rights with respect to shares of Stock.




     (24) The term “Restricted Stock” means Stock issued to a Participant pursuant to Section 6
that is subject to forfeiture if one or more specified Performance Goals or minimum periods of
service are not attained.




     (25) The term “Restricted Stock Unit” means an award granted pursuant to Section 6
consisting of a unit credited to a hypothetical account, valued based on the Fair Market Value of
Visteon Stock, and is subject to forfeiture if one or more specified Performance Goals or minimum
periods of service are not attained.




     (26) The term “Right” shall mean a Performance Cash Right, Performance Stock Right, a
Restricted Stock award, or a Restricted Stock Unit, as required by the context.




     (27) The term “Stock Appreciation Right” shall mean the right to receive, without payment to
the Company, an amount of cash or Stock as determined in accordance with Section 7, based on the
amount by which the Fair Market Value of a share of Stock on the relevant valuation date exceeds
the grant price.




     (28) The term “Subsidiary” shall mean (A) any corporation a majority of the voting stock of
which is owned directly or indirectly by the Company or (B) any limited liability company or
entity a majority of the membership interest of which is owned, directly or indirectly, by the
Company. In addition, solely for purposes of determining those individuals to whom an Option
(other than an Option that is designated as an incentive stock option for purposes of the Code)
or a Stock Appreciation Right may be granted, the term “Subsidiary” includes an entity that would
be a Subsidiary if the preceding sentence were applied by substituting “at least twenty percent
(20%)” in lieu of “a majority” if the Committee determines that there are legitimate business
reasons for extending Options or Stock Appreciation Rights to individuals employed by such an
entity.




     (29) The term “Stock” shall mean shares of the Company’s common stock, par value $1.00 per
share.




     (30) The term “Target Award” shall mean the amount of compensation to be earned by a
Participant under a Performance Cash Right or the number of shares of Stock, subject to
adjustment pursuant to Section 13, to be earned by a Participant under a Performance Stock Right,
if all of the Performance Goals with respect to such Right are achieved at the targeted level of
performance.



Section 2. ADMINISTRATION




     (a) Committee. The Plan shall be administered by the Organization & Compensation Committee of
the Board consisting of not less than two (2) members of the Board who meet the “outside” director
requirements of Section 162(m) of the Code, the independence requirements of any stock exchange on
which the Company’s Stock is listed, and the “non-employee director” requirements under Rule
16b-3(b)(3) of the Exchange Act, or by any other committee appointed by the Board, provided the
members of such committee meet such requirements. The Committee shall administer the Plan and
perform such other functions as are assigned to it under the Plan. The Committee is authorized,
subject to the provisions of the Plan, from time to time, to establish such rules and



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regulations as it may deem appropriate for the proper administration of the Plan, and to make
such determinations under, and such interpretations of, and to take such steps in connection with,
the Plan and the Plan Awards as it may deem necessary or advisable, in each case in its sole
discretion. The Committee’s decisions and determinations under the Plan need not be uniform and may
be made selectively among Participants, whether or not they are similarly situated. Any authority
granted to the Committee may also be exercised by the Board, except to the extent that the grant or
exercise of such authority would cause any qualified performance based award to cease to qualify
for exemption under Section 162(m) of the Code. To the extent that any permitted action taken by
the Board conflicts with any action taken by the Committee, the Board action shall control.




     (b) Delegation of Authority. To the extent permitted by law, the Committee may delegate any
or all of its powers and duties under the Plan, including, but not limited to, its authority to
make awards under the Plan or to grant waivers pursuant to Section 10, to one or more other
committees (including a committee consisting of two or more corporate officers) as it shall
appoint, pursuant to such conditions or limitations as the Committee may establish; provided,
however, that the Committee shall not delegate its authority to (1) act on non-ministerial matters
affecting any Participant who is subject to the reporting requirements of Section 16(a) of the
Exchange Act, or the liability provisions of Section 16(b) of the Exchange Act (any such
Participant being called a “Section 16 Person”) or (2) amend or modify the Plan pursuant to the
provisions of Section 16(b). To the extent of any such delegation, the term “Committee” when used
herein shall mean and include any such delegate.



Section 3. PERFORMANCE CASH RIGHTS




     (a) Grant of Performance Cash Rights. The Committee, at any time and from time to time while
the Plan is in effect, may grant or authorize the granting of Performance Cash Rights to such
officers of the Company and any Subsidiary and other Employees, whether or not members of the
Board, as it may select and in such amount as it shall designate, subject to the provisions of this
Section 3.



     (b) Maximum Awards. The maximum amount granted to a Covered Executive as a Final Award with
respect to all Performance Cash Rights granted during a calendar year shall be $10 million.



     (c) Terms and Provisions of Performance Cash Rights. Prior to the grant of any Performance
Cash Right, the Committee shall determine the terms and provisions of such Right, including,
without limitation (1) the Target Award; (2) one or more Performance Goals to be used to measure
performance under such Right, and the Performance Formula to be applied against the Performance
Goals in determining the amount of compensation earned under such Right as a percentage of the
Target Award; (3) the Performance Period, and (4) the effect of the Participant’s termination of
employment, death or disability. With respect to any Performance Cash Right that is intended to
constitute qualified performance-based compensation for purposes of Code Section 162(m), such
actions shall be completed within 90 days of the commencement of the Performance Period. The
Committee may establish a minimum threshold objective for any Performance Goal for such Performance
Period which, if not met, would result in no Final Award being made to any Participant with respect
to such Performance Goal for such Performance Period. During and after the Performance Period, but
prior to the Committee’s final determination of the Participant’s Final Award as provided in
subsection (d), the Committee may adjust the Performance Goals, Performance Formula and Target
Award and otherwise modify the terms and provisions of a Right granted to a Participant, subject to
the terms and conditions of the Plan; provided that if the Committee acts more than 90 days
following commencement of the Performance Period, to adjust or modify the terms and provisions of a
Right granted to a Participant who is a Covered Executive, other than to decrease the amount of
compensation that may be paid under such Right, any Final Award with respect to such Right shall
not constitute qualified performance-based compensation for purposes of Code Section 162(m). .
Each Right shall be evidenced by an award agreement or notification in such form as the Committee
may determine.



     (d) Final Awards. As soon as practicable following the completion of the Performance Period
relating to any Performance Cash Right, but not later than 12 months following such completion, the
Committee shall determine the extent to which the Performance Goals have been achieved and the
amount of compensation to be awarded as a Final Award to the Participant who holds such Right. In
making such determination, the Committee shall apply the applicable Performance Formula for the
Participant for the Performance Period against the accomplishment of the related Performance Goals.
The Committee may, in its sole discretion, reduce the amount of any Final Award that otherwise
would be awarded to any Participant for any Performance Period. In addition, the Committee may, in
its sole discretion, increase the amount of any Final Award that otherwise would be awarded to any
Participant; provided that in no event shall such positive discretion apply to any Final Award that
is intended to constitute qualified performance-based compensation for purposes of Code Section
162(m). Any such determination shall take into account (A) the extent to which the Performance
Goals provided in such Right were, in the Committee’s sole opinion, achieved, (B) the individual
performance of such Participant during the related Performance Period and (C) such other factors as
the Committee may deem relevant, including, without limitation, any change in circumstances or
unforeseen events, relating to the Company, the economy or otherwise, since the date of grant of
such Right. The Committee shall notify such Participant of such Participant’s Final Award as soon
as practicable following such determination.



     (e) Following the determination of each Final Award, unless the Participant is eligible and
has elected to defer payment of all or a portion of the Final Award, the Final Award will be
payable to the Participant in cash.



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Section 4. STOCK AVAILABLE FOR PLAN AWARDS




     (a) Stock Subject to Plan. The Stock that may be issued under the Plan may be either
authorized and unissued or held in the treasury of the Company. The maximum number of shares of
Stock that may be issued with respect to Plan Awards, subject to adjustment in accordance with the
provisions of Section 13, shall be 5,555,556 shares. Notwithstanding the foregoing, (1) the
aggregate number of shares that may be issued upon exercise of ISOs shall not exceed 5,555,556
shares, subject to adjustment in accordance with the provisions of Section 13; (2) the maximum
number of shares subject to Options, with or without any related Stock Appreciation Rights, or
Stock Appreciation Rights (not related to Options) that may be granted pursuant to Section 7 to any
Covered Executive during any calendar year shall be 1,000,000, subject to adjustment in accordance
with the provisions of Section 13; and (3) the maximum number of shares of Stock that may be issued
pursuant to such Performance Stock Rights and performance-based Restricted Stock Awards when
combined with the number of performance-based Restricted Stock Units granted pursuant to Section 6
(whether such Restricted Stock Units are settled in cash or in Stock), to any Covered Executive
during any calendar year shall be 1,000,000 shares and/or units, subject to adjustment in
accordance with the provisions of Section 13.



     (b) Computation of Stock Available for Plan Awards. For the purpose of computing the total
number of shares of Stock remaining available for Plan Awards at any time while the Plan is in
effect, and for the purpose of determining the maximum number of shares of Stock that remain
available to be issued with respect to Performance Stock Rights, Restricted Stock Awards,
Restricted Stock Units, and Other Stock-Based Awards under clause (3) of subsection (a) there shall
be debited against the total number of shares determined to be available pursuant to subsections
(a) and (c) of this Section 4, (1) the maximum number of shares of Stock subject to issuance upon
exercise of Options or Stock Appreciation Rights granted under this Plan, (2) the maximum number of
shares of Stock issued or issuable under Performance Stock Rights, Restricted Stock Awards and
Restricted Stock Units granted under this Plan, and (3) the number of shares of Stock related to
Other Stock-Based Awards granted under this Plan, as determined by the Committee in each case as of
the dates on which such Plan Awards were granted, provided, however, that a Restricted Stock Unit
or Other Stock-Based Award that is or may be settled only in cash shall not be counted against any
of the share limits under this Section 4, except as required by Section 162(m) of the Code to
preserve the status of an award as “performance-based compensation” as set forth under clause (4)
of subsection (a) above.



     (c) Terminated, Expired or Forfeited Plan Awards. The shares involved in the unexercised,
undistributed or unvested portion of any terminated, expired or forfeited Plan Award shall be made
available for further Plan Awards. Any shares of Stock made available for Plan Awards pursuant to
this subsection (c) shall be in addition to the shares available pursuant to subsection (a) of this
Section 4. Notwithstanding the foregoing, in the event any Option or Stock Appreciation Right
granted to a Covered Executive is canceled, the number of shares of Stock subject to such canceled
Option or Stock Appreciation Right shall continue to count against the individual limit specified
in subsection (a), in accordance with the requirements of Code Section 162(m).



     (d) Rights Settled in Cash. The shares involved in any Plan Award that is settled in cash
shall be reinstated to the pool of available shares, and any applicable limit against which such
shares are counted, and shall be made available for further Plan Awards. Notwithstanding the
foregoing, in the event any Plan Award is settled in cash, the number of shares of Stock subject to
such Plan Award shall continue to count against the individual limit specified in subsection (a),
in accordance with the requirements of Code Section 162(m).



     (e) Certain Mergers and Acquisitions. Without affecting the number of shares otherwise
reserved or available under this Plan, in connection with any merger, consolidation, acquisition of
property or stock, or reorganization, the Committee may authorize the issuance of awards under this
Plan upon such terms and conditions as it may deem appropriate in exchange for the cancellation,
exchange or assumption of awards held by individuals affected by such merger, consolidation,
acquisition or reorganization.



Section 5. PERFORMANCE STOCK RIGHTS




     (a) Grant of Performance Stock Rights. The Committee, at any time and from time to time while
the Plan is in effect, may grant, or authorize the granting of, Performance Stock Rights to such
officers of the Company and any Subsidiary, and other Employees, whether or not members of the
Board, as it may select and for such numbers of shares as it shall designate, subject to the
provisions of this Section 5 and Section 4.



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     (b) Terms and Provisions of Performance Stock Rights. Prior to the grant of any Performance
Stock Right, the Committee shall determine the terms and provisions of each Right, including,
without limitation (1) the Target Award; (2) one or more Performance Goals to be used to measure
performance under such Right, and the Performance Formula to be applied against the Performance
Goals in determining the number of shares of Stock earned under such Right as a percentage of the
Target Award; (3) the Performance Period; (4) the period of time, if any, during which the
disposition of shares of Stock issuable under such Right shall be restricted as provided in
subsection (a) of Section 11, provided, however, that the Committee may establish restrictions
applicable to any Right at the time of or at any time prior to the granting of the related Final
Award rather than at the time of granting such Right; and (5) the effect of the Participant’s
termination of employment, death or disability. With respect to any Right that is intended to
constitute qualified performance-based compensation for purposes of Code Section 162(m), such
actions shall be completed within 90 days of the commencement of the Performance Period. The
Committee may establish a minimum threshold objective for any Performance Goal for such Performance
Period which, if not met, would result in no Final Award being made to any Participant with respect
to such Performance Goal for such Performance Period. During and after the Performance Period, but
prior to the Committee’s final determination of the Participant’s Final Award as provided in
subsection (d), the Committee may adjust the Performance Goals, Performance Formula and Target
Award and otherwise modify the terms and provisions of a Right granted to a Participant subject to
the terms and conditions of the Plan; provided that the Committee shall not, more than 90 days
following commencement of the Performance Period, adjust or modify the terms and provisions of a
Right, other than to decrease the amount of compensation that may be paid under such Right, that is
intended to constitute qualified performance-based compensation for purposes of Code Section
162(m). Each Right shall be evidenced by an award agreement or notification in such form as the
Committee may determine.



     (c) Dividend Equivalents on Rights. If the Committee shall determine, each Participant to
whom a Right is granted shall be entitled to receive payment of the same amount of cash that such
Participant would have received as cash dividends if, on each record date during the Performance
Period relating to such Right, such Participant had been the holder of record of a number of shares
of Stock equal to 100% of the related Target Award (as adjusted pursuant to Section 13). Any such
payment may be made at the same time as a dividend is paid or may be deferred until the date that a
Final Award is determined, as determined by the Committee in its sole discretion. Such cash
payments are hereinafter called “dividend equivalents”. Notwithstanding anything to the contrary
herein, if the Committee determines that dividend equivalents should be granted with respect to any
“stock right” within the meaning of Code Section 409A, the terms and conditions of the dividend
equivalent rights shall be set forth in writing, and to the extent that the dividend equivalents
are considered deferred compensation subject to Code Section 409A, the writing shall include terms
and conditions, including payment terms, that comply with the provisions of Code Section 409A.



     (d) Final Awards.




     (1) As soon as practicable following the completion of the Performance Period relating to
any Performance Stock Right, but not later than 12 months following such completion, the
Committee shall determine the extent to which the Participant achieved the Performance Goals
and the number of shares of Stock to be awarded as a Final Award to the Participant who holds
such Right. Each Final Award shall represent only full shares of Stock, and any fractional
share that would otherwise result from such Final Award calculation shall be disregarded. In
making such determination, the Committee shall apply the applicable Performance Formula for
the Participant for the Performance Period against the accomplishment of the related
Performance Goals. The Committee may, in its sole discretion, reduce the amount of any Final
Award that otherwise would be awarded to any Participant for any Performance Period. In
addition, the Committee may, in its sole discretion, increase the amount of any Final Award
that otherwise would be awarded to any Participant; provided that in no event shall such
positive discretion apply to any Final Award that is intended to constitute qualified
performance-based compensation for purposes of Code Section 162(m). Any such determination
shall take into account (A) the extent to which the Performance Goals provided in such Right
was, in the Committee’s sole opinion, achieved, (B) the individual performance of such
Participant during the related Performance Period and (C) such other factors as the Committee
may deem relevant, including, without limitation, any change in circumstances or unforeseen
events, relating to the Company, the economy or otherwise, since the date of grant of such
Right. The Committee shall notify such Participant of such Participant’s Final Award as soon
as practicable following such determination.




     (2) Following the determination of each Final Award, the Company shall issue or cause to
be issued certificates for the number of shares of Stock representing such Final Award,
registered in the name of the Participant who received such Final Award. Such Participant
shall thereupon become the holder of record of the number of shares of Stock evidenced by such
certificates, entitled to dividends, voting rights and other rights of a holder thereof,
subject to the terms and provisions of the Plan, including, without limitation, the provisions
of this subsection (d) and Sections 10, 11 and 13. The Committee may require that such
certificates bear such restrictive legend as the Committee may specify and be held by the
Company in escrow or otherwise pursuant to any form of agreement or instrument that the
Committee may specify. If the Committee has determined that deferred dividend equivalents
shall be payable to a Participant with respect to any Performance Stock Right



7









 






pursuant to subsection (c) of this Section 5, then concurrently with the issuance of such
certificates, the Company shall deliver to such Participant a cash payment or additional
shares of Stock in settlement of such dividend equivalents. Notwithstanding the foregoing, the
Committee, in its sole discretion, may permit a Participant to defer receipt of a Final Award
and to instead receive stock units that represent hypothetical shares of Stock of the Company,
or such other deemed investment made available by the Committee for this purpose. Any such
election, if permitted by the Committee, must be made at such time and in such form as
prescribed by the Committee consistent with Code Section 409A, and is subject to such other
terms and conditions as the Committee, in its sole discretion, may prescribe.




     (3) Notwithstanding the provisions of this subsection (d) or any other provision of the
Plan, the Committee may specify that a Participant’s Final Award shall not be represented by
certificates for shares of Stock but shall be represented by rights approximately equivalent
(as determined by the Committee) to the rights that such Participant would have received if
certificates for shares of Stock had been issued in the name of such Participant in accordance
with subsection (d) (such rights being called “Stock Equivalents”). Subject to the provisions
of Section 13 and the other terms and provisions of the Plan, if the Committee shall so
determine, each Participant who holds Stock Equivalents shall be entitled to receive the same
amount of cash that such Participant would have received as dividends if certificates for
shares of Stock had been issued in the name of such Participant pursuant to subsection (d)
covering the number of shares equal to the number of shares to which such Stock Equivalents
relate. Notwithstanding any other provision of the Plan to the contrary, the Stock Equivalents
representing any Final Award may, at the option of the Committee, be converted into an
equivalent number of shares of Stock or, upon the expiration of any restriction period imposed
on such Stock Equivalents, into cash, under such circumstances and in such manner as the
Committee may determine.



Section 6. RESTRICTED STOCK AND RESTRICTED STOCK UNITS




     (a) Grant of Restricted Stock. The Committee, at any time and from time to time while the
Plan is in effect, may grant, or authorize the granting of, Restricted Stock to such officers of
the Company and any Subsidiary, and other Employees, whether or not members of the Board, as it may
select. In lieu of, or in addition to, such Restricted Stock, the Committee may grant, or authorize
the granting of, awards denominated in the form of Restricted Stock Units to such eligible
Employees.



     (b) Terms and Provisions of Restricted Stock and Restricted Stock Units. Subject to the
provisions of the Plan, the Committee shall have the authority to determine the time or times at
which Restricted Stock or Restricted Stock Units shall be granted and the number of shares of
Restricted Stock or the number of Restricted Stock Units to be granted (subject to the provisions
of Section 4). Prior to the grant of any Restricted Stock or Restricted Stock Units, the Committee
shall determine such time-based or performance-based restrictions as the Committee shall deem
appropriate, and all other terms and conditions of such Restricted Stock and Restricted Stock
Units, including, without limitation (1) the number of shares of Restricted Stock or Restricted
Stock Units to be issued; (2) in the case of time-based Restricted Stock or Restricted Stock Units,
the minimum period of service required for the Participant to receive a Final Award; (3) in the
case of performance-based Restricted Stock or performance-based Restricted Stock Units, one or more
Performance Goals to be used to measure performance with respect to such Restricted Stock or
Restricted Stock Units; (4) the Performance Period applicable to any such performance-based award;
(5) whether Final Awards pursuant to such Restricted Stock Units shall be payable in Stock, cash or
otherwise; (6) the period of time, if any, during which the disposition of the Restricted Stock or
Final Award pursuant to a Restricted Stock Unit is restricted as provided in subsection (a) of
Section 10, provided, however, that the Committee may establish restrictions applicable to
Restricted Stock or Restricted Stock Units at the time of or at any time prior to the granting of
the related Final Award rather than at the time of granting such Right; and (7) the effect of the
Participant’s termination of employment, death or disability. The Committee may establish a
minimum threshold objective for any Performance Goal for such Performance Period which, if not met,
would result in no Final Award being made to any Participant with respect to such Performance Goal
for such Performance Period. During and after the Performance Period, but prior to the Committee’s
final determination of the Participant’s Final Award as provided in subsection (d), the Committee
may adjust the Performance Goals and otherwise modify the terms and provisions of the Restricted
Stock or Restricted Stock Unit grant to a Participant,. subject to the terms and conditions of the
Plan; provided that if the Committee acts more than 90 days following commencement of the
Performance Period, to adjust or modify the terms and provisions of a Right granted to a
Participant who is a Covered Executive, other than to decrease the amount of compensation that may
be paid under such Right, any Final Award with respect to such Right shall not constitute qualified
performance-based compensation for purposes of Code Section 162(m).. Each grant of Restricted Stock
or Restricted Stock Units shall be evidenced by an award agreement or notification in such form as
the Committee may determine.



     (c) Dividend and Dividend Equivalents.




     (1) During any period that Restricted Stock has been issued to the Participant and
remains outstanding, the Participant shall be entitled to receive all dividends and other
distributions paid with respect to the Restricted Stock. If any such dividends or



8









 






distributions are paid in Stock and such distribution occurs when the restrictions
applicable to such shares are still in effect, such shares shall be subject to the same
restrictions as the Restricted Stock with respect to which they were paid.




     (2) If the committee shall determine, each Participant to whom a Restricted Stock Unit is
granted and remains outstanding shall be entitled to receive payment of the same amount of
cash that such Participant would have received as cash dividends as if, on each record date
during the minimum period of service or the Performance Period related to the Restricted Stock
Unit, such Participant had been the holder of record of a number of shares of Stock equal to
100% of the Restricted Stock Units (as adjusted pursuant to Section 13). Any such payment may
be made at the same time as a dividend is paid, or may be deferred until the date that a Final
Award is determined, as determined by the Committee in its sole discretion. Such cash payments
are hereinafter called “dividend equivalents.” Notwithstanding anything to the contrary
herein, if the Committee determines that dividend equivalents should be granted with respect
to any “stock right” within the meaning of Code Section 409A, the terms and conditions of the
dividend equivalent rights shall be set forth in writing, and to the extent that the dividend
equivalents are considered deferred compensation subject to Code Section 409A, the writing
shall include terms and conditions, including payment terms, that comply with the provisions
of Code Section 409A.



     (d) Voting Rights. Subject to the restrictions established by the Committee pursuant to the
Plan, Participants shall be entitled to vote Restricted Shares granted under this Section 6, unless
and until such shares are forfeited pursuant to subsection (e) below. Participants shall have no
voting rights with respect to Restricted Stock Units.



     (e) Final Awards. As soon as practicable following the completion of the Performance Period
relating to any Restricted Stock or Restricted Stock Unit, but not later than 12 months following
such completion, the Committee shall determine (1) the extent to which the Participant achieved the
minimum period of service, with respect to time-based awards, or the applicable Performance Goals,
with respect to performance-based awards, (2) the number of shares of Restricted Stock to be
retained as a Final Award by the Participant who holds such Restricted Stock, (3) the number of
shares of Restricted Stock to be forfeited by such Participant, (4) the number of shares of Stock
or amount of other compensation to be issued as a Final Award to the Participant who holds
Restricted Stock Units, and (5) the number of Restricted Stock Units to be forfeited by such
Participant. Each Final Award shall represent only full shares of Stock and any fractional share
that would otherwise result from such Final Award calculation shall be forfeited. In making such
determination, the Committee shall apply the applicable minimum period of service or Performance
Goals that the Committee had established. The Committee may, in its sole discretion, increase the
amount of any Final Award that otherwise would be awarded to any Participant who is not a Covered
Executive by determining that the Participant should be allowed to retain some or all of the
Restricted Stock that would otherwise be forfeited, or should receive Stock or other consideration
for Restricted Stock Units that would otherwise be forfeited, notwithstanding the fact that the
minimum period of service or Performance Goals were not satisfied in full. Any such determination
shall take into account (A) the extent to which the Performance Goals that relate to such
Restricted Stock or Restricted Stock Units were, in the Committee’s sole opinion, achieved, (B) the
individual performance of such Participant during the related period of service or Performance
Period and (C) such other factors as the Committee may deem relevant, including, without
limitation, any change in circumstances or unforeseen events, relating to the Company, the economy
or otherwise, since the date of grant of such Restricted Stock. The Committee shall notify such
Participant of such Participant’s Final Award as soon as practicable following such determination.



     (f) Election of Deferred Stock Units. The Committee, in its sole discretion, may permit a
Participant to defer or otherwise exchange receipt of a Final Award relating to Restricted Stock or
Restricted Stock Units and to instead receive stock units that represent hypothetical shares of
Stock of the Company, or such other deemed investment made available by the Committee for this
purpose. Any such election, if permitted by the Committee, must be made at such time and in such
form as prescribed by the Committee consistent with Code Section 409A. If the Committee so permits
and a Participant makes an appropriate election, the Participant’s right to receive a benefit with
respect to such stock units is contingent upon attainment of the applicable minimum period of
service or Performance Goals and such other terms and conditions as the Committee, in its sole
discretion, may prescribe.



Section 7. OPTIONS AND STOCK APPRECIATION RIGHTS




     (a) Grant of Options.




     (1) The Committee, at any time and from time to time while the Plan is in effect, may
authorize the granting of Options to such officers of the Company and any Subsidiary and other
Employees, whether or not members of the Board, as it may select, and for such numbers of
shares as it shall designate, subject to the provisions of this Section 7 and Section 4. Each
Option granted pursuant to the Plan shall be a NQO unless Option is both (A) granted to an
Employee who is eligible to receive an ISO under the Code, and (B) designated by the Committee
at the time of grant as an ISO.



9









 






     (2) The date on which an Option shall be granted shall be the date of authorization of
such grant or such later date as may be determined by the Committee at the time such grant is
authorized. Any individual may hold more than one Option.



     (b) Price. In the case of each Option granted under the Plan the option price shall be the
Fair Market Value of Stock on the date of grant of such Option; provided, however, that the
Committee may in its discretion fix an option price in excess of the Fair Market Value of Stock on
such date.



     (c) Grant of Stock Appreciation Rights.




     (1) The Committee, at any time and from time to time while the Plan is in effect, may
authorize the granting of Stock Appreciation Rights to such officers of the Company and any
Subsidiary and other Employees, whether or not members of the Board, as it may select, and for
such numbers of shares as it shall designate, subject to the provisions of this Section 7 and
Section 4. Each Stock Appreciation Right may relate to all or a portion of a specific Option
granted under the Plan and may be granted concurrently with the Option to which it relates or
at any time prior to the exercise, termination or expiration of such Option (a “Tandem SAR”),
or may be granted independently of any Option, as determined by the Committee. If the Stock
Appreciation Right is granted independently of an Option, the grant price of such right shall
be the Fair Market Value of Stock on the date of grant; provided, however, that the Committee
may, in its discretion, fix a grant price in excess of the Fair Market Value of Stock on such
grant date.




     (2) Upon exercise of a Stock Appreciation Right, the Participant shall be entitled to
receive, without payment to the Company, either (A) that number of shares of Stock determined
by dividing (i) the total number of shares of Stock subject to the Stock Appreciation Right
being exercised by the Participant, multiplied by the amount by which the Fair Market Value of
a share of Stock on the day the right is exercised exceeds the grant price (such amount being
hereinafter referred to as the “Spread”), by (ii) the Fair Market Value of a share of Stock on
the exercise date; or (B) cash in an amount determined by multiplying (i) the total number of
shares of Stock subject to the Stock Appreciation Right being exercised by the Participant, by
(ii) the amount of the Spread; or (C) a combination of shares of Stock and cash, in amounts
determined as set forth in clauses (A) and (B) above, as determined by the Committee in its
sole discretion; provided, however, that, in the case of a Tandem SAR, the total number of
shares which may be received upon exercise of a Stock Appreciation Right for Stock shall not
exceed the total number of shares subject to the related Option or portion thereof, and the
total amount of cash which may be received upon exercise of a Stock Appreciation Right for
cash shall not exceed the Fair Market Value on the date of exercise of the total number of
shares subject to the related Option or portion thereof.



     (d) Terms and Conditions.




     (1) Each Option and Stock Appreciation Right granted under the Plan shall be exercisable
on such date or dates, during such period, for such number of shares and subject to such
further conditions as shall be determined pursuant to the provisions of the award agreement
with respect to such Option and Stock Appreciation Right; provided, however, that a Tandem SAR
shall not be exercisable prior to or later than the time the related Option could be
exercised; and provided, further, that in any event no Option or Stock Appreciation Right
shall be exercised beyond ten years from the date of grant.




     (2) The Committee may impose such conditions as it may deem appropriate upon the exercise
of an Option or a Stock Appreciation Right, including, without limitation, a condition that
the Stock Appreciation Right may be exercised only in accordance with rules and regulations
adopted by the Committee from time to time.




     (3) With respect to Options issued with Tandem SARs, the right of a Participant to
exercise the Tandem SAR shall be cancelled if and to the extent the related Option is
exercised, and the right of a Participant to exercise an Option shall be cancelled if and to
the extent that shares covered by such Option are used to calculate shares or cash received
upon exercise of the Tandem SAR.




     (4) If any fractional share of Stock would otherwise be payable to a Participant upon the
exercise of an Option or Stock Appreciation Right, the Participant shall be paid a cash amount
equal to the same fraction of the Fair Market Value of the Stock on the date of exercise.



     (e) Award Agreement. Each Option and Stock Appreciation Right shall be evidenced by an award
agreement or notification in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve.



10









 





     (f) Payment for Option Shares.




     (1) Payment for shares of Stock purchased upon exercise of an Option granted hereunder
shall be made, either in full or, if the Committee shall so determine and at the election of
the Participant, in installments, in such manner as is provided in the applicable award
agreement or otherwise determined in accordance with Committee rules.




     (2) Unless the Committee has determined otherwise, taking into account applicable law
and/or accounting expense implications, the consideration to be paid for shares of Stock
purchased upon exercise of an Option granted hereunder shall be determined by the Committee,
which, in addition to any other types of consideration the Committee may so determine, may
include the acceptance of the following: (i) cash, (ii) the delivery or surrender of shares
of Stock (including the withholding of Stock otherwise deliverable upon exercise of the
Option), (iii) a “cashless” sale and remittance procedure executed through a broker-dealer, or
(iv) any combination of the foregoing methods of payment. Any such shares of Stock so
delivered or surrendered shall be valued at their Fair Market Value on the date of such
exercise. The Committee shall determine whether and if so the extent to which actual delivery
of share certificates to the Company shall be required.



Section 8. STOCK AND OTHER STOCK-BASED AWARDS




     (a) Grants of Other Stock-Based Awards. The Committee, at any time and from time to time
while the Plan is in effect, may grant Other Stock-Based Awards to such officers of the Company and
its Subsidiaries and other Employees, whether or not members of the Board, as it may select. Such
Plan Awards pursuant to which Stock is or may in the future be acquired, or Plan Awards valued or
determined in whole or part by reference to, or otherwise based on, Stock, may include, but are not
limited to, awards of restricted Stock (in addition to or in lieu of Restricted Stock under Section
6) or Plan Awards denominated in the form of “stock units” (in addition to or in lieu of Restricted
Stock Units under Section 6), grants of so-called “phantom stock” and options containing terms or
provisions differing in whole or in part from Options granted pursuant to Section 7. Other
Stock-Based Awards may be granted either alone, in addition to, in tandem with or as an alternative
to any other kind of Plan Award, grant or benefit granted under the Plan or under any other
employee plan of the Company, including a plan of any acquired entity.



     (b) Terms and Conditions. Subject to the provisions of the Plan, the Committee shall have the
authority to determine the time or times at which Other Stock-Based Awards shall be made, the
number of shares of Stock or stock units and the like to be granted or covered pursuant to such
Plan Awards (subject to the provisions of Section 4) and all other terms and conditions of such
Plan Awards, including, but not limited to, whether such Plan Awards shall be payable or paid in
cash, Stock or otherwise.



     (c) Consideration for Other Stock-Based Awards. In the discretion of the Committee, any Other
Stock-Based Award may be granted as a Stock bonus for no consideration other than services
rendered.



Section 9. CASH AWARDS TO EMPLOYEES OF FOREIGN SUBSIDIARIES OR BRANCHES OR JOINT VENTURES




     In order to facilitate the granting of Plan Awards to Participants who are foreign nationals
or who are employed outside of the United States of America, the Committee may provide for such
special terms and conditions, including without limitation substitutes for Plan Awards, as the
Committee may consider necessary or appropriate to accommodate differences in local law, tax policy
or custom. Such substitutes for Plan Awards may include a requirement that the Participant receive
cash, in such amount as the Committee may determine in its sole discretion, in lieu of any Plan
Award or share of Stock that would otherwise have been granted to or delivered to such Participant
under the Plan. The Committee may approve any supplements to, or amendments, restatements or
alternative versions of the Plan as it may consider necessary or appropriate for purposes of this
Section 9 without thereby affecting the terms of the Plan as in effect for any other purpose, and
the Secretary or other appropriate officer of the Company may certify any such documents as having
been approved and adopted pursuant to properly delegated authority; provided, however, that no such
supplements, amendments, restatements or alternative versions shall include any provision that is
inconsistent with the terms of the Plan as then in effect. Participants subject to the laws of a
foreign jurisdiction may request copies of, or the right to view, any materials that are required
to be provided by the Company pursuant to the laws of such jurisdiction.



Section 10. PAYMENT OF PLAN AWARDS AND CONDITIONS THEREON




     (a) Effect of Competitive Activity. Anything contained in the Plan to the contrary
notwithstanding, unless otherwise set forth in the terms of a Plan Award granted to a Participant,
if the employment of any Participant shall terminate, for any reason other than death, while any
Plan Award granted to such Participant is outstanding hereunder, and such Participant has not yet
received the Stock or cash covered by such Plan Award or otherwise received the full benefit of
such Plan Award, such Participant, if otherwise entitled thereto, shall receive such Stock, cash or
benefit only if, during the entire period from the date of such Participant’s termination to the
date of



11









 




such receipt, such Participant shall have (1) made himself or herself available, upon request,
at reasonable times and upon a reasonable basis, to consult with, supply information to and
otherwise cooperate with the Company or any Subsidiary with respect to any matter that shall have
been handled by him or her or under his or her supervision while he or she was in the employ of the
Company or of any Subsidiary, and (2) refrained from engaging in any activity that is directly or
indirectly in competition with any activity of the Company or any Subsidiary.




     (b) Nonfulfillment of Competitive Activity Conditions: Waivers Under the Plan. In the event
of a Participant’s nonfulfillment of any condition set forth in subsection (a) of this Section 10,
such Participant’s rights under any Plan Award shall be forfeited and cancelled forthwith;
provided, however, that the nonfulfillment of such condition may at any time (whether before, at
the time of or subsequent to termination of employment) be waived in the following manner:




     (1) with respect to any such Participant who at any time shall have been a Section 16
Person, such waiver may be granted by the Committee upon its determination that in its sole
judgment there shall not have been and will not be any substantial adverse effect upon the
Company or any Subsidiary by reason of the nonfulfillment of such condition; and




     (2) with respect to any other such Participant, such waiver may be granted by the Committee
(or any delegate thereof) upon its determination that in its sole judgment there shall not have
been and will not be any such substantial adverse effect.



     (c) Effect of Detrimental Conduct. Anything contained in the Plan to the contrary
notwithstanding, unless otherwise set forth in the terms of a Plan Award granted to a Participant,
all rights of a Participant under any Plan Award shall cease on and as of the date on which it has
been determined by the Committee that such Participant at any time (whether before or subsequent to
termination of such Participant’s employment) acted in a manner detrimental to the best interests
of the Company or any Subsidiary.



     (d) Taxes and Tax Withholding. Prior to any distribution of cash, Stock or Other Stock-Based
Awards (including payments under Section 5(c)) to any Participant, arrangements deemed appropriate
by the Committee shall be made for the payment of any taxes and other amounts required to be
withheld by federal, state or local law. The Committee may defer making payment or delivery under
any Plan Award until tax withholding and payment matters have been resolved to the Committee’s
satisfaction. Notwithstanding anything to the contrary, neither the Company nor the Committee nor
any other person guarantees to any Participant or any other person with an interest in a Plan Award
that (i) any Plan Award intended to be exempt from Code Section 409A shall be so exempt, (ii) any
Plan Award intended to comply with Code Section 409A or Code Section 422 shall so comply, or (3)
any Plan Award shall receive specific tax treatment under the Code or other applicable tax law.
Neither the Company nor the Committee nor any other person shall have any duty to indemnify, defend
or hold harmless any person with respect to the tax consequences of any Plan Award.



     (e) Substitution. The Committee, in its sole discretion, may substitute a Plan Award (except
ISOs) for another Plan Award or Plan Awards of the same or different type; provided, however, that
the Committee shall not, without shareholder approval, substitute Options or any other Plan Award
for outstanding Options with a higher price than the substitute Option or other Plan Award.



     (f) Section 409A Separation from Service. For purposes of any Plan Award that is subject to
Code Section 409A and with respect to which the terms and conditions of the Plan Award, as
determined by the Committee (or if applicable, elected by the Participant) at the time of grant
provide for distribution or settlement of the Plan Award upon the Participant’s termination of
employment, the Participant will be deemed to have terminated employment on the date on which the
Participant incurs a “separation from service” within the meaning of Code Section 409A, and to the
extent required in order to comply with Code Section 409A, no distribution or settlement of the
Plan Award shall be made until the date that is six months and one day following the date of the
Participant’s “separation from service”.



Section 11. NON-TRANSFERABILITY OF PLAN AWARDS; RESTRICTIONS ON DISPOSITION AND EXERCISE OF PLAN AWARDS




     (a) Restrictions on Transfer of Rights or Final Awards. No Performance Cash Right,
Performance Stock Right, Restricted Stock Unit or, until the expiration of any restriction period
imposed by the Committee, no shares of Stock acquired under the Plan, shall be transferred,
pledged, assigned or otherwise disposed of by a Participant, except as permitted by the Plan,
without the consent of the Committee, otherwise than by will or the laws of descent and
distribution; provided, however, that the Committee may permit, on such terms as it may deem
appropriate, use of Stock included in any Final Award as partial or full payment upon exercise of
an Option under the Plan or a stock option under any other stock option plan of the Company prior
to the expiration of any restriction period relating to such Final Award.



     (b) Restrictions on Transfer of Options or Stock Appreciation Rights. Unless the Committee
determines otherwise, no Option or Stock Appreciation Right shall be transferable by a Participant
otherwise than by will or the laws of descent and distribution, and during the lifetime of a
Participant the Option or Stock Appreciation Right shall be exercisable only by such Participant or
such



12









 




Participant’s guardian or legal representative; provided, however, that no Option or Stock
Appreciation Right shall be transferred for consideration.




     (c) Restrictions on Transfer of Certain Other Stock-Based Awards. Unless the Committee
determines otherwise, no Other Stock-Based Award shall be transferable by a Participant otherwise
than by will or the laws of descent and distribution, and during the lifetime of a Participant any
such Other Stock-Based Award shall be exercisable only by such Participant or such Participant’s
guardian or legal representative.



     (d) Attachment and Levy. No Plan Award shall be subject, in whole or in part, to attachment,
execution or levy of any kind, and any purported transfer in violation hereof shall be null and
void. Without limiting the generality of the foregoing, no domestic relations order purporting to
authorize a transfer of a Plan Award, or to grant to any person other than the Participant the
authority to exercise or otherwise act with respect to a Plan Award, shall be recognized as valid.



Section 12. DESIGNATION OF BENEFICIARIES




     Anything contained in the Plan to the contrary notwithstanding, a Participant may file with
the Company a written designation of a beneficiary or beneficiaries under the Plan, subject to such
limitations as to the classes and number of beneficiaries and contingent beneficiaries and such
other limitations as the Committee from time to time may prescribe. A Participant may from time to
time revoke or change any such designation of beneficiary. If a Participant designates his spouse
as a Beneficiary, such designation automatically shall become null and void on the date of the
Participant’s divorce or legal separation from such spouse. Any designation of a beneficiary under
the Plan shall be controlling over any other disposition, testamentary or otherwise; provided,
however, that if the Committee shall be in doubt as to the entitlement of any such beneficiary to
receive any Right, Final Award, Restricted Stock, Restricted Stock Unit, Option, Stock Appreciation
Right, or Other Stock-Based Award, or if applicable law requires the Company to do so, the
Committee may recognize only the legal representative of such Participant, in which case the
Company, the Committee and the members thereof shall not be under any further liability to anyone.
In the event of the death of any Participant, the term “Participant” as used in the Plan shall
thereafter be deemed to refer to the beneficiary designated pursuant to this Section 12 or, if no
such designation is in effect, the executor or administrator of the estate of such Participant,
unless the context otherwise requires.



Section 13. MERGER, CONSOLIDATION, STOCK DIVIDENDS, ETC.




     (a) Adjustments. In the event of any merger, share exchange, consolidation, reorganization,
recapitalization, stock split, stock dividend or other event affecting Stock, an appropriate
adjustment shall be made in the total number of shares available for Plan Awards and in all other
provisions of the Plan that include a reference to a number of shares or units, and in the numbers
of shares or units covered by, and other terms and provisions (including but not limited to the
grant or exercise price of any Plan Award) of outstanding Plan Awards.



     (b) Committee Determinations. The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole discretion. Any such
adjustment may provide for the elimination of any fractional share which might otherwise become
subject to a Plan Award.



Section 14. ACCELERATION OF PAYMENT OR MODIFICATION OF PLAN AWARDS




     (a) Acceleration and Modification. The Committee, in the event of the death of a Participant
or in any other circumstance, may cancel and outstanding Plan Award without payment, or may
accelerate distribution of any Plan Award in its entirety or in a reduced amount, in cash or in
Stock, or modify any Plan Award, in each case on such basis and in such manner as the Committee may
determine in its sole discretion; provided that in no event shall the Committee decrease the grant
or exercise price of an Outstanding Option or Stock Appreciation Right to provide for an exercise
price that is less than the Fair Market Value of the Stock on the date on which the Option or Stock
Appreciation Right was originally granted. Notwithstanding the foregoing, unless determined
otherwise by the Committee, any such action shall be taken in a manner that will enable a Plan
Award that is intended to be exempt from Code Section 409A to continue to be so exempt, or to
enable a Plan Award that is intended to comply with Code Section 409A to continue to so comply.



     (b) Change in Control. Notwithstanding any other provision of the Plan, unless the Committee
determines otherwise at the time of grant, upon the occurrence of a Change in Control, (1) any Plan
Awards outstanding as of the date of such Change in Control that relate to Performance Periods that
have been completed as of the date of the Change in Control, but that have not yet been paid, shall
be paid in accordance with the terms of such Plan Awards, (2) any Plan Awards outstanding as of the
date of such Change in Control that relate to Performance Periods that have not been completed as
of the date of the Change in Control, and that are not then vested, shall become fully vested if
vesting is based solely upon the length of the employment relationship as opposed to the
satisfaction of



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one or more Performance Goals, and (3) any other Plan Awards outstanding as of the date of
such Change in Control that relate to Performance Periods that have not been completed as of the
date of the Change in Control, and that are not then vested, shall be treated as vested and earned
pro rata, as if the Performance Goals for the Target Award associated with a Performance Cash Right
or a Performance Stock Right or the Performance Goals with respect to Restricted Stock, Restricted
Stock Units or Other Stock Based Awards are attained as of the effective date of the Change in
Control, by taking the product of (A) the Target Award (in the case of a Performance Cash Right or
a Performance Stock Right) or the number of shares of Restricted Stock, Restricted Stock Units or
Other Stock Based Awards granted to the Participant, and (B) a fraction, the numerator of which is
the number of full or partial months that have elapsed from the beginning of the Performance Period
to the date of the Change in Control and the denominator of which is the total number of months in
the original Performance Period; provided, however, that any such Plan Award shall be immediately
vested and payable to the Participant to the extent of the foregoing formula, and shall be free of
all restrictions and conditions that would otherwise apply to such Plan Award. The foregoing
provisions are subject to the terms of any employment contract governing the employment of a
Participant to the extent that such contract provides greater rights to the Participant in the
event of a Change in Control. Notwithstanding the foregoing provisions of Section 14(b), unless
determined otherwise by the Committee, Section 14(b) shall be applied in a manner that will enable
a Plan Award that is intended to be exempt from Code Section 409A to continue to be so exempt, or
to enable a Plan Award that is intended to comply with Code Section 409A to continue to so comply.




     (c) Maximum Payment Limitation. If any portion of the payments or benefits described in this
Plan or under any other agreement with or plan of the Company (in the aggregate, “Total Payments”),
would constitute an “excess parachute payment”, then the Total Payments to be made to the
Participant shall be reduced such that the value of the aggregate Total Payments that the
Participant is entitled to receive shall be one dollar ($1) less than the maximum amount which the
Participant may receive without becoming subject to the tax imposed by Section 4999 of the Code or
which the Company may pay without loss of deduction under Section 280G(a) of the Code; provided
that this Section shall not apply in the case of a Participant who has in effect a valid employment
contract providing that the Total Payments to the Participant shall be determined without regard to
the maximum amount allowable under Section 280G of the Code. The terms “excess parachute payment”
and “parachute payment” shall have the meanings assigned to them in Section 280G of the Code, and
such “parachute payments” shall be valued as provided therein. Present value shall be calculated in
accordance with Section 280G(d)(4) of the Code. Within forty (40) days following delivery of notice
by the Company to the Participant of its belief that there is a payment or benefit due the
Participant which will result in an excess parachute payment as defined in Section 280G of the
Code, the Participant and the Company, at the Company’s expense, shall obtain the opinion (which
need not be unqualified) of nationally recognized tax counsel selected by the Company’s independent
auditors and acceptable to the Participant in his sole discretion (which may be regular outside
counsel to the Company), which opinion sets forth (A) the amount of the Base Period Income, (B) the
amount and present value of Total Payments and (C) the amount and present value of any excess
parachute payments determined without regard to the limitations of this Section. As used in this
Section, the term “Base Period Income” means an amount equal to the Participant’s “annualized
includible compensation for the base period” as defined in Section 280G(d)(1) of the Code. For
purposes of such opinion, the value of any noncash benefits or any deferred payment or benefit
shall be determined by the Company’s independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code, which determination shall be evidenced in a certificate of
such auditors addressed to the Company and the Participant. Such opinion shall be addressed to the
Company and the Participant and shall be binding upon the Company and the Participant. If such
opinion determines that there would be an excess parachute payment, the payments hereunder that are
includible in Total Payments or any other payment or benefit determined by such counsel to be
includible in Total Payments shall be reduced or eliminated, so that under the bases of
calculations set forth in such opinion there will be no excess parachute payment. Such reduction
will be achieved by reducing or eliminating payments or benefits in the manner that produces the
highest economic value to the Executive; provided that in the event it is determined that the
foregoing methodology for reduction would violate Code Section 409A, the reduction shall be made
pro rata among the benefits and/or payments (on the basis of the relative present value of the
parachute payments). If such legal counsel so requests in connection with the opinion required by
this Section, the Participant and the Company shall obtain, at the Company’s expense, and the legal
counsel may rely on in providing the opinion, the advice of a firm of recognized executive
compensation consultants as to the reasonableness of any item of compensation to be received by the
Participant. If the provisions of Sections 280G and 4999 of the Code (or any successor provisions)
are repealed without succession, then this Section shall be of no further force or effect.



Section 15. RIGHTS AS A STOCKHOLDER




     Except with respect to shares of Restricted Stock, a Participant shall not have any rights as
a stockholder with respect to any share covered by any Plan Award until such Participant shall have
become the holder of record of such share.



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Section 16. TERM, AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN AND AGREEMENTS




     (a) Term. Unless terminated earlier pursuant to subsection (b), the Plan shall terminate on
October 1, 2020.



     (b) Amendment, Modification and Termination of Plan. The Board may, from time to time, amend
or modify the Plan or any outstanding Plan Award, including without limitation, to authorize the
Committee to make Plan Awards payable in other securities or other forms of property of a kind to
be determined by the Committee, and such other amendments as may be necessary or desirable to
implement such Plan Awards, or may terminate the Plan or any provision thereof; provided, however,
that no such action of the Board, without approval of the stockholders, may (1) increase the total
number of shares of Stock with respect to which Plan Awards may be granted under the Plan or the
individual limits specified in Section 4(a), (2) increase the maximum amount that may be paid to an
individual with respect to a Performance Cash Award, as specified in Section 3(b), (3) extend the
term of the Plan as set forth in paragraph (a) of this Section 16, or (4) permit the Company to
decrease the grant or exercise price of any outstanding Option or Stock Appreciation Right to
provide for an exercise price that is less than the Fair Market Value of the Stock on the date on
which the Option or Stock Appreciation Right was originally granted.



     (c) Limitation and Survival. Except as provided herein, no amendment to or termination of the
Plan or any provision hereof, and no amendment or cancellation of any outstanding Plan Award, by
the Board or the stockholders of the Company, shall, without the written consent of the affected
Participant, adversely affect any outstanding Plan Award. The Committee’s authority to act and to
apply the terms of the Plan with respect to any outstanding Plan Award, and a Participant’s ability
to exercise any rights that the Participant may have with respect to an outstanding Plan Award,
shall survive termination of the Plan.



     (d) Amendments for Changes in Law. Notwithstanding anything to the contrary herein, the Board
shall have the authority to amend outstanding Plan Awards and the Plan to take into account changes
in law and tax and accounting rules as well as other developments, and to grant Plan Awards that
qualify for beneficial treatment under such rules, without stockholder approval. Further, the
provisions of Code Section 409A are incorporated into the Plan by reference to the extent necessary
for any Plan Award that is subject to Code Section 409A to comply with such requirements, and
except as otherwise determined by the Committee, the Plan shall be administered in accordance with
Section 409A as if the requirements of Code Section 409A were set forth herein.



Section 17. INDEMNIFICATION AND EXCULPATION




     (a) Indemnification. Each person who is or shall have been a member of the Board, the
Committee, or of any other committee of the Board administering the Plan or of any committee
appointed by the foregoing committees, shall be indemnified and held harmless by the Company
against and from any and all loss, cost, liability or expense that may be imposed upon or
reasonably incurred by such person in connection with or resulting from any claim, action, suit or
proceeding to which such person may be or become a party or in which such person may be or become
involved by reason of any action taken or failure to act under the Plan and against and from any
and all amounts paid by such person in settlement thereof (with the Company’s written approval) or
paid by such person in satisfaction of a judgment in any such action, suit or proceeding, except a
judgment in favor of the Company based upon a finding of such person’s lack of good faith; subject,
however, to the condition that, upon the institution of any claim, action, suit or proceeding
against such person, such person shall in writing give the Company an opportunity, at its own
expense, to handle and defend the same before such person undertakes to handle and defend it on
such person’s behalf. The foregoing right of indemnification shall not be exclusive of any other
right to which such person may be entitled as a matter of law or otherwise, or any power that the
Company may have to indemnify or hold such person harmless.



     (b) Exculpation. Each member of the Board, the Committee, or of any other committee of the
Board administering the Plan or any committee appointed by the foregoing committees, and each
officer and employee of the Company, shall be fully justified in relying or acting in good faith
upon any information furnished in connection with the administration of the Plan by any appropriate
person or persons other than such person. In no event shall any person who is or shall have been a
member of the Board, the Committee, or of any other committee of the Board administering the Plan
or of any committee appointed by the foregoing committees, or an officer or employee of the
Company, be held liable for any determination made or other action taken or any omission to act in
reliance upon any such information, or for any action (including the furnishing of information)
taken or any failure to act, if in good faith.



Section 18. EXPENSES OF PLAN




     The entire expense of offering and administering the Plan shall be borne by the Company and
its participating Subsidiaries; provided, that the costs and expenses associated with the
redemption or exercise of any Plan Award, including but not limited to commissions charged by any
agent of the Company, may be charged to the Participants.



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Section 19. FINALITY OF DETERMINATIONS




     Each determination, interpretation, or other action made or taken pursuant to the provisions
of the Plan by the Board, the Committee or any committee of the Board administering the Plan or any
committee appointed by the foregoing committees, shall be final and shall be binding and conclusive
for all purposes and upon all persons, including, but without limitation thereto, the Company, the
stockholders, the Committee and each of the members thereof, and the directors, officers, and
employees of the Company and its Subsidiaries, the Participants, and their respective successors in
interest.



Section 20. NO RIGHTS TO CONTINUED EMPLOYMENT OR TO PLAN AWARD




     (a) No Right to Employment. Nothing contained in this Plan, or in any booklet or document
describing or referring to the Plan, shall be deemed to confer on any Participant the right to
continue as an Employee or director of the Company or Subsidiary, whether for the duration of any
Performance Period, the duration of any vesting period under a Plan Award, or otherwise, or affect
the right of the Company or Subsidiary to terminate the employment of any Participant for any
reason.



     (b) No Right to Award. No Employee or other person shall have any claim or right to be
granted a Plan Award under the Plan. Having received an Award under the Plan shall not give a
Participant or any other person any right to receive any other Plan Award under the Plan. A
Participant shall have no rights in any Plan Award, except as set forth herein and in the
applicable award grant.



Section 21. GOVERNING LAW, LIMITATION ON ACTIONS AND CONSTRUCTION




     The Plan and all actions taken hereunder shall be governed by, and the Plan shall be construed
in accordance with, the laws of the State of Delaware without regard to the principle of conflict
of laws. As a condition of receiving benefits pursuant to any Plan Award, a Participant agrees, on
behalf of the Participant and all persons or entities that may claim through the Participant, that
(i) any legal action or other legal proceeding concerning the Plan or a Plan Award may only be
heard in a “bench” trial, and (ii) any right to a jury trial is waived. No legal action or other
legal proceeding may be brought with respect to the Plan or any Plan Award more than one (1) year
after the later of (x) the last date on which the act or omission giving rise to the legal action
or proceeding occurred, or (y) the date on which the individual or entity bringing such legal
action or proceeding had knowledge (or reasonably should have had knowledge) of the act of
omission. Titles and headings to Sections are for purposes of reference only, and shall in no way
limit, define or otherwise affect the meaning or interpretation of the Plan.



Section 22. SECURITIES AND STOCK EXCHANGE REQUIREMENTS




     (a) Restrictions on Resale. Notwithstanding any other provision of the Plan, no person who
acquires Stock pursuant to the Plan may, during any period of time that such person is an affiliate
of the Company (within the meaning of the rules and regulations of the Securities Exchange
Commission) sell or otherwise transfer such Stock, unless such offer and sale or transfer is made
(1) pursuant to an effective registration statement under the Securities Act of 1933 (“1933 Act”),
which is current and includes the Stock to be sold, or (2) pursuant to an appropriate exemption
from the registration requirements of the 1933 Act, such as that set forth in Rule 144 promulgated
pursuant thereto.



     (b) Registration, Listing and Qualification of Shares of Common Stock. Notwithstanding any
other provision of the Plan, if at any time the Committee shall determine that the registration,
listing or qualification of the Stock covered by a Plan Award upon any securities exchange or under
any foreign, federal, state or local law or practice, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in connection with,
the granting of such Plan Award or the purchase or receipt of Stock in connection therewith, no
Stock may be purchased, delivered or received pursuant to such Plan Award unless and until such
registration, listing, qualification, consent or approval shall have been effected or obtained free
of any condition not acceptable to the Committee. Any person receiving or purchasing Stock pursuant
to a Plan Award shall make such representations and agreements and furnish such information as the
Committee may request to assure compliance with the foregoing or any other applicable legal
requirements. The Company shall not be required to issue or deliver any certificate or certificates
for Stock under the Plan prior to the Committee’s determination that all related requirements have
been fulfilled. The Company shall in no event be obligated to register any securities pursuant to
the 1933 Act or applicable state or foreign law or to take any other action in order to cause the
issuance and delivery of such certificates to comply with any such law, regulation, or requirement.




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