Exhibit 10.12


 


COMPASS MINERALS INTERNATIONAL, INC.


 


2001 Stock Option Plan


 


Amended
and Restated as of December 11, 2003


 


(Formerly known as
the Salt Holdings Corporation 2001 Stock Option Plan)


 

















 


ARTICLE
I


 


HISTORY
AND PURPOSE OF THE PLAN


 


Compass Minerals
International, Inc., a Delaware corporation formerly known as Salt Holdings
Corporation (the “Company”), originally adopted this Compass Minerals
International, Inc. 2001 Stock Option Plan (formerly known as the Salt Holdings
Corporation 2001 Stock Option Plan) (the “Plan”), effective as of
November 28, 2001.  The Plan, as set
forth herein, has been amended and restated in its entirety, effective as of
December 11, 2003.  The full name of the
Plan, as amended and restated herein, shall be the “Compass Minerals
International, Inc. 2001 Stock Option Plan (Amended and Restated as of December
11, 2003).”  The purpose of the Plan is
(a) to further the growth and success of the Company and its Subsidiaries (as
hereinafter defined) by enabling directors and employees of, or consultants to,
the Company or any of its Subsidiaries to acquire Shares (as hereinafter
defined), thereby increasing their personal interest in such growth and
success, and (b) to provide a means of rewarding outstanding performance by such
persons to the Company and/or its Subsidiaries.  Options granted under the Plan (the “Options”) may be
either incentive stock options (“ISOs”), intended to qualify as such
under the provisions of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”), or non-qualified stock options (“NSOs”).  In this Plan, the terms “Parent” and
“Subsidiary” mean “Parent Corporation” and “Subsidiary Corporation,”
respectively, as such terms are defined in Sections 424(e) and (f) of the
Code.  Unless the context otherwise
requires, any ISO or NSO is referred to in this Plan as an “Option.”


 


ARTICLE II


 


DEFINITIONS


 


As used in the Plan, the
following terms shall have the meanings set forth below:


 


“Affiliate” means
with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries Controls, is Controlled by, or is under
common Control with, such Person and/or one or more Affiliates thereof.  The term “Control” includes, without
limitation, the possession, directly or indirectly, of the power to direct the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. 
The term “Affiliate” shall not include at any time any portfolio
companies of Apollo Management V, L.P. or its Affiliates.


 


“Award Limit” has
the meaning set forth in Section 5.6 hereof.


 


“Board” has the
meaning set forth in Section 3.1 hereof.


 


“Capital Stock”
means any and all shares, interests, participation or other equivalents
(however designated) of corporate stock, including all Common Stock and
preferred stock.


 


“Cause” means an
Optionee’s (a) conviction of a felony or a crime of moral turpitude (other than
a traffic violation), (b) willful commission of any action that is materially


 

















 


harmful to the Company or its Affiliates on a consolidated basis (other
than any action taken in good faith utilizing the Optionee’s business
judgement), or (c) failure to obey any communicated lawful directive of the
Board delivered to Optionee.


 


“Closing Date” means
November 28, 2001.


 


“Code” has the
meaning set forth in Article I hereof.


 


“Committee” has
the meaning set forth in Section 3.1 hereof.


 


“Common Stock”
means the common stock of the Company, par value $0.01 per share.


 


“Company” has the
meaning set forth in Article I hereof.


 


“Disqualifying
Disposition” has the meaning set forth in Article 15 hereof.


 


“Effective Date”
has the meaning set forth in Section 11.2 hereof.


 


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


 


“Fair Market Value”
has the meaning set forth in Section 6.2 hereof.


 


“Independent Director”
means an individual who is a member of the Board and who is not an employee of
the Company.


 


“Independent Third
Party” means, immediately prior to the contemplated transaction, any Person
which (a) does not own in excess of five percent (5%) of the Common Stock
deemed outstanding, at such time (on a fully diluted basis) and (b) is not an
Affiliate of any such owner.


 


“Investor” means
Apollo Investment Fund V, L.P., Apollo Overseas Partners V, L.P., or any
investment fund managed by Apollo Management V, L.P. or any of its Affiliates,
and any of their successors and assigns.


 


“Investor Investment”
means direct or indirect investments in Shares, preferred stock or other
securities of the Company made by the Investor on or after the Closing Date.


 


“Investor IRR”
means the pre-tax compounded annual internal rate of return calculated on a
quarterly basis realized to the Investor on the Investor Investment, based on
the aggregate amount invested by the Investor for all Investor Investments and
the aggregate amount received by the Investor for all Investor Investments,
assuming all Investor Investments were purchased by one Person and were held
continuously by such Person.  The
Investor IRR shall be determined based on the actual time of each Investor
Investment and actual cash received by the Investor in respect of all Investor
Investments and including, as a return on such investment, any cash dividends,
cash distributions or cash interest made by the Company or any Subsidiary in
respect of such investment during such period, but excluding any other amounts
payable that are not directly attributable to the Investor Investment.


 


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“Investor Rights
Agreement” means the Investor Rights Agreement, dated as of the Closing
Date, among the Company and the holders party thereto, as it is amended,
supplemented or restated from time to time.


 


“ISOs” has the
meaning set forth in Article I hereof.


 


“Nasdaq” has the
meaning set forth in Section 6.2(a) hereof.


 


“Notice” has the
meaning set forth in Section 9.2 hereof.


 


“NSOs” has the
meaning set forth in Article I hereof.


 


“Option” has the
meaning set forth in Article I hereof.


 


“Option Agreement”
has the meaning set forth in Section 5.2 hereof.


 


“Option Price” has
the meaning set forth in Section 6.1 hereof.


 


“Option Shares”
has the meaning set forth in Section 9.2(b) hereof.


 


“Optionees” has
the meaning set forth in Section 5.1(a).


 


“Parent” has the
meaning set forth in Article I hereof.


 


“Person” shall be
construed broadly and shall include, without limitation, an individual, a
partnership, a corporation, an association, a joint stock company, a limited
liability company, a trust, a joint venture, an unincorporated organization and
a governmental entity or any department, agency or political subdivision
thereof.


 


“Plan” has the
meaning set forth in Article I hereof.


 


“Public Offering”
means the closing of a public offering of Common Stock pursuant to a registration
statement declared effective under the Securities Act, except that a Public
Offering shall not include an offering made in connection with an employee
benefit plan or made primarily to employees or consultants of the Company.


 


“Realization Event”
means (a) the consummation of a Sale of the Company or (b) any transaction or
series of related transactions in which the Investor sells at least 50% of the
Shares directly or indirectly acquired by it and at least 50% of the aggregate
of all of the Investor Investments.


 


“Reorganization”
has the meaning set forth in Section 10.1 hereof.


 


“Reserved Shares”
means, at any time, an aggregate of 2,783,283 shares of Common Stock (which
number reflects changes to the Company’s capital structure that have occurred
prior to December 11, 2003).


 


“Sale of the Company”
means the sale of the Company to one or more Independent Third Parties or IMC
Global, Inc. or its Affiliates, or any of their successors,


 


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pursuant to which such
party or parties acquire (a) Capital Stock of the Company possessing the voting
power to elect a majority of the Board (whether by merger, consolidation or
sale or transfer of the Company’s Capital Stock) or (b) all or substantially
all of the Company’s assets determined on a consolidated basis.


 


“Securities Act”
means the Securities Act of 1933, as amended.


 


“Shares” means
shares of Common Stock.


 


“Subsidiary” has
the meaning set forth in Article I hereof.


 


“Termination Date”
means the tenth anniversary of the Effective Date.


 


“Termination of
Relationship” means (a) if the Optionee is an employee of the Company or
any Subsidiary, the termination of the Optionee’s employment with the Company
and its Subsidiaries for any reason; (b) if the Optionee is a consultant to the
Company or any Subsidiary, the termination of the Optionee’s consulting
relationship with the Company and its Subsidiaries for any reason; and (c) if
the Optionee is a director of the Company or any Subsidiary, the termination of
the Optionee’s service as a director of such Company or Subsidiary for any
reason.


 


“Vested Options”
means Options that have vested in accordance with the applicable Option
Agreement.


 


ARTICLE III


 


ADMINISTRATION OF THE PLAN; SHARES SUBJECT TO THE PLAN


 


3.1                           Committee.


 


The Plan shall be
administered by the Board of Directors of the Company (the “Board”) or a
committee (the “Committee”) appointed from time to time by the
Board.  With respect to Options granted
to Independent Directors, the Plan shall be administered by the Board.  The term “Committee” shall, for all purposes
of the Plan other than this Section 3, be deemed to refer to the Board if the
Board is administering the Plan. 
Notwithstanding the foregoing, however, from and after the effective date
of a Public Offering, with respect to Options granted to any individual other
than an Independent Director, a Committee of the Board shall administer the
Plan and the Committee shall consist solely of two or more Independent
Directors, each of whom is both an “outside director,” within the meaning of
Section 162(m) of the Code, and a “non-employee director” within the meaning of
Rule 16b-3 under the Exchange Act.


 


3.2                           Procedures.


 


The Committee shall adopt
such rules and regulations as it shall deem appropriate concerning the holding
of meetings and the administration of the Plan.  The entire Committee shall constitute a quorum and the actions of
the entire Committee present at a meeting, or actions approved in writing by
the entire Committee, shall be the actions of the Committee.


 


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3.3                           Interpretation.


 


Except as may otherwise
be expressly reserved to the Board as provided herein, and with respect to any
Option, except as may otherwise be provided in the Option Agreement evidencing
such Option, the Committee shall have all powers with respect to the
administration of the Plan, including the interpretation of the provisions of
the Plan and any Option Agreement (including, without limitation, whether any
particular termination of employment is for Cause), and all decisions of the
Board or the Committee, as the case may be, shall be reasonable and made in
good faith and shall be conclusive and binding on all participants in the Plan.


 


3.4                           Number of Shares.


 


Subject to the provisions
of Article X (relating to adjustments upon changes in capital structure and
other corporate transactions), the aggregate number of Shares with respect to
which Options may be granted under the Plan shall not exceed the Reserved
Shares.  If and to the extent that
Options granted under the Plan terminate, are reduced in number, expire or are
canceled without having been fully exercised, new Options may be granted under
the Plan with respect to the Shares covered by the unexercised portion of such
terminated, expired or canceled Options.


 


3.5                           Reservation of Shares.


 


The number of Shares
reserved for issuance upon the exercise of Options granted under the Plan shall
at no time be less than the maximum number of Shares which may be purchased at
any time pursuant to outstanding Options.


 


ARTICLE IV


 


ELIGIBILITY


 


4.1                           General.


 


Options may be granted
under the Plan only to persons who are employees or directors of, or
consultants to, the Company or any of its Subsidiaries on the date of the
grant.  Options granted to consultants
and non-employee directors shall be NSOs. 
Options granted to employees of the Company or any of its Subsidiaries
shall be, in the discretion of the Committee, either ISOs or NSOs on the date
of the grant.


 


4.2                           Exceptions.


 


Notwithstanding anything
contained in Section 4.1 to the contrary, no ISO may be granted under the Plan
to an employee who owns, directly or indirectly (within the meaning of Sections
422(b)(6) and 425(d) of the Code), stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of its Parent,
if any, or any of its Subsidiaries, unless (a) the Option Price of the Shares
subject to such ISO is fixed at not less than 110% of the Fair Market Value of
such Shares on the date of the grant (as determined in accordance with Section
6.2), and (b) such ISO by its terms is not exercisable after the expiration of
five years from the date it is granted.


 


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ARTICLE V


 


GRANT OF OPTIONS


 


5.1                           General.


 


Subject to Section 5.6,
Options may be granted under the Plan at any time and from time to time on or
prior to the Termination Date.  Subject
to the provisions of the Plan, the Committee shall have plenary authority, in
its sole discretion, to determine:


 


(a)                                  The persons (from among the class of
persons eligible to receive Options under the Plan) to whom Options shall be
granted (the “Optionees”)


 


(b)                                 The time or times at which Options
shall be granted; and


 


(c)                                  The number of Shares for which an
Option may be exercisable.


 


5.2                           Option Agreements.


 


Each Option granted under
the Plan shall be designated as an ISO or an NSO and shall be subject to the
terms and conditions applicable to ISOs and/or NSOs (as the case may be) set
forth in the Plan.  Each Option shall
specify the number of Shares for which such Option shall be exercisable and the
exercise price for such Shares.  In
addition, each Option shall be evidenced by a written agreement (an “Option
Agreement”) that shall be executed by the Company and the Optionee.


 


5.3                           Vesting.


 


The Committee shall
determine whether and to what extent any Options which are exercisable for
Shares are also subject to vesting based upon the Optionee’s continued service
to, or the performance of duties for, the Company and its Subsidiaries.


 


5.4                           No Evidence of Employment or Service.


 


Nothing contained in the
Plan or in any Option Agreement shall confer upon any Optionee any right with
respect to the continuation of his or her employment by or service with the
Company or any of its Subsidiaries or interfere in any way with the right of
the Company or any such Subsidiary (subject to the terms of any separate
agreement to the contrary) at any time to terminate such employment or service
or to increase or decrease the compensation of the Optionee from the rate in
existence at the time of the grant of an Option.


 


5.5                           Date of Grant.


 


The date of grant of an
Option under this Plan shall be the date as of which the Committee approves the
grant; provided, however, that in the case of an ISO, the date of grant shall
in no event be earlier than the date as of which the Optionee becomes an
employee, director or consultant of the Company or one of its Subsidiaries.


 


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5.6                           Shares.


 


Options shall be granted
to purchase a specified number of Shares not to exceed, in the aggregate, the
Reserved Shares.  Options may only be
exercisable for whole Shares.  Notwithstanding
the foregoing, no Optionee shall be granted, in any calendar year, Options to
purchase more than 1,000,000 Shares (the “Award Limit”); provided, however, that the Award
Limit shall not apply prior to the effective date of a Public Offering and,
following the effective date of a Public Offering, the Award Limit shall not
apply until the earliest of: (a) the first material modification of the Plan
(including any increase in the number of Reserved Shares); (b) the issuance of
all of the Reserved Shares under the Plan; (c) the expiration of the Plan; (d)
the first meeting of stockholders at which members of the Board are to be
elected that occurs after the close of the third calendar year following the
calendar year in which occurred the first registration of an equity security of
the Company under Section 12 of the Exchange Act; or (e) such other date
required by Section 162(m) of the Code and the rules and regulations
promulgated thereunder.  The Award Limit
shall be adjusted proportionately in connection with any change in the
Company’s capital structure as described in Article X.  For purposes of this Section 5.6, if an
Option is canceled in the same calendar year it was granted (other than in
connection with a transaction described in Article X), the canceled Option will
be counted against the Award Limit.  For
this purpose, if the exercise price of an Option is reduced, the transaction
shall be treated as a cancellation of the Option and the grant of a new Option.


 


ARTICLE VI


 


OPTION PRICE


 


6.1                               General.


 


The price (the “Option
Price”) at which each Share may be purchased shall be determined by the
Committee and set forth in the Option Agreement; provided, however, that in the
case of an ISO, such Option Price shall in no event be less than 100% (or 110%
if Section 4.2(a) hereof is applicable) of the Fair Market Value of the Shares
on the date of the grant (as determined in accordance with Section 6.2).


 


6.2                           Determination of Fair Market Value.


 


Subject to the
requirements of Section 422 of the Code regarding ISO’s, for purposes of the
Plan, the “Fair Market Value” of a Share as of a particular date shall be
determined as follows:


 


(a)                                  If such Shares are publicly traded,
(i) the closing price on the business day immediately preceding such date if
any trades were made on such business day and such information is available,
otherwise the average of the last bid and asked prices on the business day
immediately preceding such date in the over-the-counter market as reported by
the National Association of Securities Dealers Automated Quotations System (“Nasdaq”)
or (ii) if such Shares are then traded on the New York Stock Exchange or other
national securities exchange, the closing price on the business day immediately
preceding such date, if any trades were made on such business day and such
information is available, otherwise the average of the high and


 


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low prices on the business day immediately preceding such
date on the New York Stock Exchange or principal other national securities
exchange on which it is so traded; or


 


(b)                                 If there is no public trading market
for such Shares, the Fair Market Value of a Share shall be determined based
upon the method set forth in the definition of “Fair Market Value” contained in
the Investor Rights Agreement; provided that if there is no public trading
market for such Shares the Committee may, in its sole discretion, determine
that Fair Market Value shall be equal to such other value as shall be
determined in good faith by the Committee.


 


ARTICLE VII


 


AUTOMATIC TERMINATION OF OPTIONS


 


Each Option granted under
the Plan shall automatically terminate and shall become null and void and be of
no further force or effect upon such date or dates set forth in the applicable
Option Agreement, consistent with the terms of this Plan.  Any Shares that are not acquired as a result
of an Option expiring without being fully exercised shall be available for
award by the Committee to another eligible person.


 


ARTICLE VIII


 


LIMITATIONS ON ISOS; NOTICE TO OPTIONEES GRANTED ISOS


 


In accordance with
Section 422(d) of the Code, to the extent that the aggregate Fair Market Value
of all stock with respect to which incentive stock options are exercisable for
the first time by such Optionee during any calendar year (under all plans of
the Company and its subsidiaries) exceeds $100,000, such ISOs shall be treated
as NSOs.


 


Under certain
circumstances, the exercise of an ISO may disqualify the holder from recovering
the favorable tax benefits ISOs offer. 
Therefore, the Company recommends that each Optionee holding an ISO
consult with a competent tax advisor before taking any action with respect to
his or her ISOs.


 


ARTICLE IX


 


PROCEDURE FOR EXERCISE


 


9.1                           Payment.


 


An Optionee shall pay for
the exercise of a Vested Option in United States currency by cash or personal
or certified check payable to the Company in an amount equal to the aggregate
Option Price of the Shares with respect to which the Option is being exercised.


 


9.2                           Notice.


 


An Optionee (or other
person, as provided in Section 11.2) may exercise an Option (for the Shares
represented thereby) granted under the Plan in whole or in part (but for the
purchase of whole Shares only), as provided in the Option Agreement evidencing
his or her


 


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Option, by delivering a
written notice (the “Notice”) to the Secretary of the Company.  The Notice shall state:


 


(a)                                  That the Optionee elects to exercise
the Option;


 


(b)                                 The number of Shares with respect to
which the Option is being exercised (the “Option Shares”);


 


(c)                                  The method of payment for the Option
Shares (which method must be available to the Optionee under the terms of his
or her Option Agreement);


 


(d)                                 The date upon which the Optionee
desires to consummate the purchase (which date must be prior to the termination
of such Option);


 


(e)                                  A copy of any election filed or
intended to be filed by the Optionee with respect to such Option Shares
pursuant to Section 83(b) of the Code; and


 


(f)                                    Any additional provisions consistent
with the Plan as the Committee may from time to time require.


The exercise date of an
Option shall be the date on which the Company receives the Notice from the
Optionee.  To the extent required by the
Investor Rights Agreement, such Notice shall also contain, to the extent such
Optionee is not then a party to the Investor Rights Agreement, an Adoption
Agreement, in form and substance satisfactory to the Board pursuant to which
the Optionee agrees to become a party to the Investor Rights Agreement.


 


9.3                           Issuance of Certificates.


 


The Company shall issue
stock certificates in the name of the Optionee (or such other person exercising
the Option in accordance with the provisions of Section 11.2), for the
securities purchased upon exercise of an Option as soon as practicable after
receipt of the Notice and payment of the aggregate Option Price for such
securities; provided that the Company may elect to not issue any fractional
Shares upon the exercise of any Options (determining the fractional Shares
after aggregating all Shares issuable to a single holder as a result of an
exercise of an Option for more than one Share) and in lieu of issuing such
fractional Shares, shall pay the Optionee the Fair Market Value thereof.  Neither the Optionee nor any person
exercising an Option in accordance with the provisions of Section 11.2 shall
have any privileges as a stockholder of the Company with respect to any Shares
of stock subject to an Option granted under the Plan until the date of issuance
of stock certificates pursuant to this Section 9.3.


 


ARTICLE X


 


ADJUSTMENTS


 


10.1                    Changes in Capital Structure.


 


If the Common Stock is
changed by reason of a stock split, reverse stock split, or stock combination,
dividend (whether in the form of cash, Common Stock, other securities or


 


9

















 


other property),
distribution, or other similar transaction or event or is converted into or
exchanged for other securities as a result of a merger, consolidation or
reorganization (a “Reorganization”), the Board may make such adjustments
in the number and kind of shares of stock available under the Plan as it shall
determine to be necessary or appropriate to preserve to an Optionee rights
substantially proportionate to his rights existing immediately prior to such Reorganization
or other transaction or event (but subject to the limitations and restrictions
on such rights), including, without limitation, a corresponding adjustment
changing the number and kind of shares allocated to, and the Option Price of,
each Option or portion thereof outstanding at the time of such change.  Notwithstanding anything contained in the
Plan to the contrary, in the case of ISOs, no adjustment under this Section
10.1 shall be appropriate if such adjustment (a) would constitute a modification,
extension or renewal of such ISOs within the meaning of Sections 422 and 424 of
the Code, and the regulations promulgated by the Treasury Department
thereunder, or (b) would, under Section 422 of the Code and the regulations
promulgated by the Treasury Department thereunder, be considered as the
adoption of a new plan requiring stockholder approval.  The Company will not, in any event, permit
the exercise price of any Option to be less than the par value of the Common
Stock.


 


10.2                    Special Rules.


 


Any adjustments referred
to in Section 10.1 shall be made by the Board in its reasonable discretion and
shall, absent manifest error, be conclusive and binding on all persons holding
any Options granted under the Plan.


 


10.3                    Right to Include Vested Options upon a Realization Event.


 


Upon a Realization Event,
the Company may, but is not obligated to, purchase each outstanding Vested
Option for an amount equal to (a) the amount per share received in respect of
the Shares sold in such transaction constituting the Realization Event (b) less
the Option Price thereof.


 


ARTICLE XI


 


RESTRICTIONS ON OPTIONS AND OPTION SHARES


 


11.1                    Compliance With Securities Laws.


 


No Options shall be
granted under the Plan, and no securities shall be issued and delivered upon
the exercise of Options granted under the Plan, unless and until the Company
and/or the Optionee shall have complied with all applicable Federal or state
registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction.


 


The Committee in its
discretion may, as a condition to the exercise of any Option granted under the
Plan, require an Optionee (a) to represent in writing that the securities
received upon exercise of an Option are being acquired for investment and not
with a view to distribution and (b) to make such other representations and
warranties as are deemed reasonably appropriate by the Company.  Stock certificates representing securities
acquired upon the exercise of Options that have not been registered under the
Securities Act shall, if required by the Committee, bear


 


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the legends as may be
required by the Investor Rights Agreement and Option Agreement evidencing a
particular Option.


 


11.2                    Nonassignability of Option Rights.


 


No Option granted under
this Plan shall be assignable or otherwise transferable by the Optionee, except
by will or by the laws of descent and distribution.  An Option may be exercised during the lifetime of the Optionee
only by the Optionee.  If an Optionee
dies, his or her Options shall thereafter be exercisable, during the period
specified in the applicable Option Agreement (as the case may be), by his or
her executors or administrators to the full extent (but only to such extent) to
which such Options were exercisable by the Optionee at the time of his or her
death.


 


Before issuing any Shares
upon exercise of Options to any person who is not already a party to the
Investor Rights Agreement, the Company shall obtain, in appropriate form, an
executed Adoption Agreement from such person unless a Public Offering shall
have already occurred.


 


This Plan originally
became effective as of November 28, 2001 (the “Effective Date”).  This Plan, as amended and restated, became
effective as of December 11, 2003.


 


11.3                    Restrictions for the United Kingdom and Canada.


 


All Optionees who are
residents of the United Kingdom shall be subject to the additional restrictions
set forth on Schedule I attached hereto. 
All Optionees who are residents of Canada shall be subject to
the additional restrictions set forth on Schedule II attached hereto.


 


ARTICLE XII


 


TERMINATION OF THE PLAN


 


No Options may be granted
after the Termination Date.  Any Option
outstanding as of the Termination Date shall remain in effect until the earlier
of the exercise thereof and the Option Term with respect to such Option.


 


ARTICLE XIII


 


AMENDMENT OF PLAN


 


The Plan may be modified
or amended in any respect by the Committee with the prior approval of the
Board; provided, however, that the approval of the holders of a majority of the
votes that may be cast by all of the holders of shares of common stock of the
Company entitled to vote (voting together as a single class, with each such
holder entitled to cast one vote per share held by such holder) shall be
obtained prior to any such amendment becoming effective if such approval is
required by law or is necessary to comply with (a) regulations promulgated by
the Securities and Exchange Commission under Section 16(b) of the Exchange Act,
(b) Section 422 of the Code or the regulations promulgated by the Treasury
Department thereunder or (c) any rule or regulation promulgated by the New York
Stock Exchange (or, if applicable, the


 


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Nasdaq or other exchange
or quotation system).  Notwithstanding
the foregoing, the Plan may not be modified or amended with respect to any
existing Option Agreement if such change would impair the rights of the applicable
Optionee without the consent of such Optionee.


 


ARTICLE XIV


 


CAPTIONS


 


The use of captions in
this Plan is for convenience.  The
captions are not intended to provide substantive rights.


 


ARTICLE XV


 


DISQUALIFYING DISPOSITIONS


 


If securities acquired by
exercise of an ISO granted under this Plan are disposed of within two years
following the date of grant of the ISO or one year following the issuance of
the securities to the Optionee (a “Disqualifying Disposition”), the
holder of such securities shall, immediately prior to such Disqualifying
Disposition, notify the Company in writing of the date and terms of such
Disqualifying Disposition and provide such other information regarding the
Disqualifying Disposition as the Company may reasonably require.


 


ARTICLE XVI


 


WITHHOLDING TAXES


 


Whenever, under the Plan,
securities are to be delivered to an Optionee upon exercise of an NSO (or an
exercise of an ISO that will be taxed as an NSO), such Optionee shall remit or,
in appropriate circumstances, agree to remit when due, an amount sufficient to
satisfy all current or estimated future Federal, state, local and foreign
withholding tax and employment tax requirements relating thereto.  The Company shall deduct from such number of
securities to be delivered to Optionee the number of securities necessary for
the Company to satisfy all current or estimated future Federal, state, local
and foreign withholding tax and employment tax requirements relating thereto.


 


ARTICLE XVII


 


OTHER PROVISIONS


 


Each Option granted under
the Plan may contain such other terms and conditions not inconsistent with the
Plan as may be determined by the Committee, in its sole discretion.  Notwithstanding the foregoing, each ISO
granted under the Plan shall include those terms and conditions which are
necessary to qualify the ISO as an “incentive stock option” within the meaning
of Section 422 of the Code and the regulations thereunder and shall not include
any terms or conditions which are inconsistent therewith.


 


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ARTICLE XVIII


 


NUMBER AND GENDER


 


With respect to words
used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, and vice-versa, as the
context requires.


 


ARTICLE XIX


 


GOVERNING LAW


 


All questions concerning
the construction, interpretation and validity of this Plan and the instruments
evidencing the Options granted hereunder shall be governed by and construed and
enforced in accordance with the domestic laws of the State of New York, without
giving effect to any choice or conflict of law provision or rule (whether in
the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.  In furtherance of the foregoing, the
internal law of the State of New York will control the interpretation and
construction of this Plan, even if under such jurisdiction’s choice of law or
conflict of law analysis, the substantive law of some other jurisdiction would
ordinarily apply.


 


*   *  
*   *   *   *


 


The Plan was originally
adopted by the Board of Directors of the Company, and approved by the Company’s
stockholders, as of November 28, 2001.


 


The Plan, as amended and
restated, was adopted by the Board of Directors of the Company, and approved by
the Company’s stockholders, as of December 11, 2003.


 


13

















 


SCHEDULE I


 


The following additional
conditions shall apply to Optionees who are resident in the United Kingdom and
subject to income tax under the Income Tax and Corporation Taxes Act 1988.


 


1                                         Recovery of
taxes


 


1.1                                 Without
prejudice to the generality of Article XVI of the Plan, the exercise of an
Option by a Optionee shall constitute the agreement and undertaking of the
Optionee with the Company (for itself and as trustee for its Subsidiaries) that
he will forthwith upon written demand from the Company pay to the Company or as
the Company may direct:


 


(a)                                  the
amount of any income tax or other tax of the United Kingdom and primary
national insurance contributions of the United Kingdom for which the Optionee
may be liable or which may be payable in respect of the Optionee as a
consequence of such exercise and which the Company is required (whether such
requirement is legally enforceable or not) to pay to the Inland Revenue or any
other taxation authority; and


 


(b)                                 the
amount of any secondary national insurance contributions for which the Company
is liable as a consequence of such exercise, other than any such amount or part
thereof in respect of which the Company has previously given notice in writing
to the Optionee that it will not require payment under this paragraph 1.1;


 


and shall also constitute
authority to the Company and every Subsidiary and former Subsidiary (in so far
as not otherwise prohibited by law) to deduct any amount so demanded which
remains unpaid from payments otherwise payable to the Optionee, including but
not limited to authority to deduct from wages or salary for the purposes of
Part II of the Employment Rights Act 1996.


 


1.2                                 Without
prejudice to the generality of paragraph 1.1, the Company may, as soon as
practicable following receipt of the Notice in accordance with Section 9.2 of
the Plan, notify the Optionee in writing of the amount (if any) (“the Notified
Sum”) which in its reasonable opinion it estimates the Company or any
Subsidiary or former Subsidiary will be required (whether such requirement is
legally enforceable or not) to pay to the Inland Revenue or any other taxation
authority in respect of:


 


(a)                                  income
tax and primary national insurance contributions of the United Kingdom for
which the Optionee is liable or which is payable in respect of the Optionee as
a consequence of the exercise of the Option; and


 


(b)                                 the
amount of any secondary national insurance contributions which the Optionee is
obliged to pay in accordance with paragraph 1.1(b).


 


Subject as hereafter
provided, upon the giving of such a notice the Optionee shall thereupon be
bound and obliged to pay to the Company within seven days thereafter the
Notified Sum and any obligation of the Company pursuant to Section 9.3 of the
Plan shall


 

















 


be conditional upon
receipt by the Company of the Notified Sum. 
In the event that the Notified Sum proves to be an over-estimate, the
Company shall on the date on which there is paid to the Inland Revenue or other
taxation authority the sum actually so due repay to the Optionee or procure the
repayment to the Optionee of the excess of that part of the Notified Sum
estimated to be due to the Inland Revenue or other taxation authority (as the
case may be) not so paid.  In the event
that the Notified Sum is less than the aggregate amount which is required to be
so paid to the Inland Revenue or other taxation authority and which may be
lawfully recovered from the Optionee, the Optionee shall forthwith on demand
pay to the Company (or as it may direct) the balance of so much of the amount
so paid as may lawfully be recovered from the Optionee.  The Board may in its absolute discretion
accept security in form and substance satisfactory to the Board for payment to
the Company of the Notified Sum and any further sum which may become due from
the Optionee as aforesaid in lieu of payment of the Notified Sum.


 


2                                         No
compensation for the loss of rights


 


2.1                                 The
terms of employment of a Optionee by the Company or its Subsidiaries shall not
be affected by his participation in the Plan which shall not form part of such
terms.  In no circumstances shall a
Optionee in the event of cessation, lapse or alteration of any rights under the
Plan be entitled to or claim against the Company or its Subsidiaries for any
compensation for or in respect of any diminution or extinction of his rights or
benefits (actual or prospective) under any Options then held by him or
otherwise in connection with the Plan.


 


3                                         Bankruptcy


 


3.1                                 Notwithstanding
Rule 7.1 of the Plan, the Option shall terminate on the Optionee becoming
bankrupt.


 


2

















 


SCHEDULE II


 


The following additional
conditions shall apply to Optionees who are resident in Canada and subject to
income tax under the Income Tax Act (Canada).


 


1.                                       Notwithstanding
Section 6.1 of the Plan, the Option Price shall in no event be less than 100
percent of the Fair Market Value of the Shares on the date the Option Agreement
is made.


 


2.                                       For
the purposes of the Plan, an Optionee’s employment with the Company or a
Subsidiary shall be considered to have terminated effective on the last day of
the Optionee’s actual and active employment with the Company or Subsidiary,
whether such day is selected by agreement with the individual or unilaterally
by the Company or Subsidiary and whether with or without advance notice to the
Optionee. For the avoidance of doubt, no period of notice that is given or that
ought to have been given under applicable law in respect of such termination of
employment will be utilized in determining entitlement under the Plan.


 


3