Exhibit 10.21


 


MWI
VETERINARY SUPPLY, INC.


 


2005
STOCK-BASED INCENTIVE COMPENSATION PLAN


 


 


Adopted July 27, 2005


 





















 


MWI
VETERINARY SUPPLY, INC.


 


2005
STOCK-BASED INCENTIVE COMPENSATION PLAN


 


1.             Purpose
of the Plan


 


The
purpose of the Plan is to assist the Company, its Subsidiaries and Affiliates
in attracting and retaining valued employees by offering them a greater stake
in the Company’s success and a closer identity with it, and to encourage
ownership of the Company’s stock by such employees.


 


2.             Definitions


 


2.1             “Affiliate”
means any entity other than the Subsidiaries in which the Company has a
substantial direct or indirect equity interest, as determined by the Board.


 


2.2             “Award”
means an award of Deferred Stock, Restricted Stock, or Options under the Plan.


 


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


 


2.4             “Cause”
means: (i) the Holder’s willful misconduct or gross negligence in
connection with the performance of the Holder’s duties for the Company, its
Subsidiaries or Affiliates; (ii) the Holder’s conviction of, or a plea of nolo
contendre to, a felony or a crime involving fraud or moral turpitude; (iii) the
Holder’s engaging in any business that directly or indirectly competes with the
Company, its Subsidiaries or Affiliates; or (iv) disclosure of trade
secrets, customer lists or confidential information of the Company, its
Subsidiaries or Affiliates to a competitor or unauthorized person.


 





















 


2.5             “Change in Control” means:


 


(a)           the
acquisition in one or more transactions by any “Person” (as such term is used
for purposes of Section 13(d) or Section 14(d) of the 1934
Act) but excluding, for this purpose, the Company or its Subsidiaries, any
Stockholder of the Company immediately prior to the consummation of the Company’s
Initial Public Offering or any employee benefit plan of the Company or its
Subsidiaries, of “Beneficial Ownership” (within the meaning of Rule 13d-3
under the 1934 Act) of twenty percent (20%) or more of the combined voting
power of the Company’s then outstanding voting securities (the “Voting
Securities”);


 


(b)           the
individuals who, as of the effective date of the Plan, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that if the election, or nomination for
election by the Company’s stockholders, of any new director was approved by a
vote of at least a majority of the Incumbent Board, such new director shall be
considered as a member of the Incumbent Board, and provided further that any
reductions in the size of the Board that are instituted voluntarily by the
Incumbent Board shall not constitute a Change in Control, and after any such
reduction the “Incumbent Board” shall mean the Board as so reduced;


 


(c)           a merger
or consolidation involving the Company if the stockholders of the Company,
immediately before such merger or consolidation, do not own, directly or
indirectly, immediately following such merger or consolidation, more than seventy
percent (70%) of the combined voting power of
the outstanding Voting Securities of the corporation resulting from such merger
or consolidation;


 


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(d)           a complete
liquidation or dissolution of the Company or a sale or other disposition of all
or substantially all of the assets of the Company; or


 


(e)           acceptance
by stockholders of the Company of shares in a share exchange if the
stockholders of the Company immediately before such share exchange, do not own,
directly or indirectly, immediately following such share exchange, more than
seventy percent (70%) of the combined voting power of the outstanding Voting
Securities of the corporation resulting from such share exchange.


 


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


 


2.7             “Committee”
means the Board or such committee designated by the Board to administer the
Plan under Section 4.


 


2.8             “Common
Stock” means the common stock of the Company, par value $0.01 per share, or
such other class or kind of shares or other securities resulting from the application
of Section 9.


 


2.9             “Company”
means MWI Veterinary Supply, Inc., a Delaware corporation, or any
successor corporation.


 


2.10           “Company
Stock” means the Common Stock or Preferred Stock of the Company.


 


2.11           “Deferred
Stock” means an Award made under Section 6 of the Plan to receive Company
Stock at the end of a specified Deferral Period.


 


2.12           “Deferral
Period” means the period during which the receipt of a Deferred Stock Award
under Section 6 of the Plan will be deferred.


 


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2.13           “Disability”
means, as determined by the Committee in its sole discretion, that an Employee:


 


(a)           is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or


 


(b)           is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than 3 months under an accident and health plan covering employees
of the Company.


 


2.14           “Employee”
means an officer or other key employee of the Company, a Subsidiary or an
Affiliate including a director who is such an employee.


 


2.15           “Fair
Market Value” means, on any given date, the closing price of a share of Company
Stock on the principal national securities exchange on which the Company Stock
is listed on such date or, if Company Stock was not traded on such date, on the
last preceding day on which the Company Stock was traded.


 


2.16           “Holder”
means an Employee to whom an Award is made.


 


2.17           “Incentive
Stock Option” means an Option intended to meet the requirements of an incentive
stock option as defined in section 422 of the Code and designated as an
Incentive Stock Option.


 


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2.18           “Initial
Public Offering” means the first underwritten public offering of the Company’s
Common Stock pursuant to a Registration Statement filed with the United States
Securities and Exchange Commission on Form S-1, or its then equivalent.


 


2.19           “1934
Act” means the Securities Exchange Act of 1934, as amended.


 


2.20           “Non-Qualified
Option” means an Option not intended to be an Incentive Stock Option, and
designated as a Non-Qualified Option.


 


2.21           “Option”
means any stock option granted from time to time under Section 8 of the
Plan.


 


2.22           “Plan”
means the MWI Veterinary Supply, Inc. 2005 Stock-Based Incentive
Compensation Plan herein set forth, as amended from time to time.


 


2.23           “Preferred
Stock” means the preferred stock of the Company, par value $1.00 per share, or
such other class or kind of shares or other securities resulting from the
application of Section 9


 


2.24           “Restricted
Stock” means Company Stock awarded by the Committee under Section 7 of the
Plan.


 


2.25           “Restriction
Period” means the period during which Restricted Stock awarded under Section 7
of the Plan is subject to forfeiture.


 


2.26           “Retirement”
means retirement from the active employment of the Company, a Subsidiary or an
Affiliate pursuant to the relevant provisions of the applicable pension plan of
such entity or as otherwise determined by the Board.


 


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


 


2.28           “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company (or any subsequent parent of the
Company) if each of the corporations other than the last corporation in the
unbroken chain owns stock possession 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.


 


2.29           “Ten
Percent Stockholder” means a person who on any given date owns, either directly
or indirectly (taking into account the attribution rules contained in section 424(d) of
the Code), stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or a Subsidiary.


 


3.             Eligibility


 


Any
Employee is eligible to receive an Award.


 


4.             Administration
and Implementation of Plan


 


4.1             The
Plan shall be administered by the Committee, which shall have full power to
interpret and administer the Plan and full authority to act in selecting the
Employees to whom Awards will be granted, in determining the type and amount of
Awards to be granted to each such Employee, the terms and conditions of Awards
granted under the Plan and the terms of agreements which will be entered into
with Holders.


 


4.2             The
Committee’s powers shall include, but not be limited to, the power to determine
whether, to what extent and under what circumstances an Option may be exchanged
for cash, Company Stock or some combination thereof; to determine whether, to
what


 


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extent and under what circumstances an Award is made
hereunder; to determine whether, to what extent and under what circumstances Company
Stock or cash payable with respect to an Award shall be deferred, either
automatically or at the election of the Holder (including the power to add
deemed earnings to any such deferral); to grant Awards (other than Incentive
Stock Options) that are transferable by the Holder; and to determine the
effect, if any, of a Change in Control of the Company upon outstanding
Awards.  Upon a Change in Control, the
Committee may, at its discretion, (i) fully vest all Awards made under the
Plan, (ii) cancel any outstanding Awards in exchange for a cash payment of
an amount equal to the difference between the then Fair Market Value of the stock
underlying the Award less the option or base price of the Award, (iii) after
having given the Award Holder a chance to exercise any outstanding Options,
terminate any or all of the Award Holder’s unexercised Options, or (iv) if
the Company is not the surviving corporation, cause the surviving corporation
to assume or replace all outstanding Awards with comparable awards.


 


4.3             The
Committee shall have the power to adopt regulations for carrying out the Plan
and to make changes in such regulations as it shall, from time to time, deem
advisable.  The Committee shall endeavor,
in good faith, to avoid the application of section 409A of the Code to any
Award by taking such action, including suspending the operation of any
provision of this Plan or any Award, as it reasonably determines to be
necessary or appropriate to that result. 
No such action shall be deemed to be an amendment adverse to the Holder
within the meaning of Section 12.6. 
Any interpretation by the Committee of the terms and provisions of the


 


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Plan and the administration thereof, and all action
taken by the Committee, shall be final and binding on Holders.


 


4.4             The
Committee may condition the grant of any Award or the lapse of any Deferral or
Restriction Period (or any combination thereof) upon the Holder’s achievement
of a Performance Goal that is established by the Committee before the grant of
the Award.  For this purpose, a “Performance
Goal” shall mean a goal that must be met by the end of a period specified by
the Committee (but that is substantially uncertain to be met before the grant
of the Award) based upon: (i) the price of Common Stock, (ii) the
market share of the Company, its Subsidiaries or Affiliates (or any business
unit thereof), (iii) sales by the Company, its Subsidiaries or Affiliates
(or any business unit thereof), (iv) earnings per share of Common Stock, (v) return
on shareholder equity of the Company, (vi) costs of the Company, its
Subsidiaries or Affiliates (or any business unit thereof), (vii) cash flow
of the Company, its Subsidiaries or Affiliates (or any business unit thereof), (viii) return
on total assets of the Company, its Subsidiaries or Affiliates (or any business
unit thereof), (ix) return on invested capital of the Company, its
Subsidiaries or Affiliates (or any business unit thereof), (x) return on net
assets of the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (xi) operating income of the Company, its Subsidiaries or Affiliates
(or any business unit thereof), or (xii) net income of the Company, its
Subsidiaries or Affiliates (or any business unit thereof).  The Committee shall have discretion to
determine the specific targets with respect to each of these categories of
Performance Goals.  Before granting an
Award or permitting the lapse of any


 


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Deferral or Restriction Period subject to this
Section, the Committee shall certify that an individual has satisfied the
applicable Performance Goal.


 


5.             Shares
of Stock Subject to the Plan


 


5.1             Subject
to adjustment as provided in Section 9, the total number of shares of
Common Stock available for Awards under the Plan shall be the number of shares
equal to twelve percent (12%) of the total number of shares of the Company’s
Common Stock outstanding after the consummation of the Company’s Initial Public
Offering, including after the exercise, if any, of the underwriters’ option to
cover over-allotments.  The final number
of shares of Common Stock available for Awards under the Plan shall be
determined by resolution of the Committee or the Board subsequent to the consummation
of the Company’s Initial Public Offering.


 


5.2             The
maximum number of shares of Company Stock subject to Awards that may be granted
to any Employee shall not exceed 200,000 shares during any calendar year (the “Individual
Limit”).  Subject to Section 5.3, Section 9
and Section 12.6, any Award that is canceled or amended by the Committee
shall count against the Individual Limit. 
Notwithstanding the foregoing, the Individual Limit may be adjusted to
reflect the effect on Awards of any transaction or event described in Section 9.


 


5.3             Any
shares issued by the Company through the assumption or substitution of
outstanding grants from an acquired company shall not (i) reduce the
shares available for Awards under the Plan, or (ii) be counted against the
Individual Limit.  Any shares issued
hereunder may consist, in whole or in part, of authorized and unissued shares
or treasury


 


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shares.  If any
shares subject to any Award granted hereunder are forfeited or such Award
otherwise terminates without the issuance of such shares or the payment of
other consideration in lieu of such shares, the shares subject to such Award,
to the extent of any such forfeiture or termination, shall again be available
for Awards under the Plan.


 


6.             Deferred
Stock


 


An
Award of Deferred Stock is an agreement by the Company to deliver to the
recipient a specified number of shares of Company Stock at the end of a
specified deferral period or periods. 
Such an Award shall be subject to the following terms and conditions:


 


6.1             Deferred
Stock Awards shall be evidenced by Deferred Stock agreements.  Such agreements shall conform to the
requirements of the Plan and may contain such other provisions as the Committee
shall deem advisable.


 


6.2             Upon
determination of the number of shares of Deferred Stock to be awarded to a
Holder, the Committee shall direct that the same be credited to the Holder’s
account on the books of the Company but that issuance and delivery of the same
shall be deferred until the date or dates provided in Section 6.5
hereof.  Prior to issuance and delivery
hereunder the Holder shall have no rights as a stockholder with respect to any
shares of Deferred Stock credited to the Holder’s account.


 


6.3             No
dividends shall be paid with respect to Deferred Stock.  In lieu thereof, at the end of the Deferral
Period the Holder will be credited with that number of additional whole shares
of Company Stock that can be purchased (based on their Fair Market Value at the
end of the Deferral Period) with the sum of the dividends that would have been
paid


 


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with respect to an equal number of shares of Company
Stock between the grant date of such Deferred Stock and the end of the Deferral
Period.


 


6.4             The
Committee may condition the grant of an Award of Deferred Stock or the
expiration of the Deferral Period upon the Employee’s achievement of one or
more Performance Goal(s) specified in the Deferred Stock agreement.  If the Employee fails to achieve the
specified Performance Goal(s), the Committee shall not grant the Deferred Stock
Award to the Employee, or the Holder shall forfeit the Award and no Company
Stock shall be transferred to him pursuant to the Deferred Stock Award.


 


6.5             The
Deferred Stock agreement shall specify the duration of the Deferral Period
taking into account termination of employment on account of death, Disability,
Retirement or other cause.  The Deferral
Period may consist of one or more installments. 
At the end of the Deferral Period or any installment thereof the shares
of Deferred Stock applicable to such installment credited to the account of a
Holder shall be issued and delivered to the Holder (or, where appropriate, the
Holder’s legal representative) in accordance with the terms of the Deferred
Stock agreement.  The Committee may, in
its sole discretion, amend a Deferred Stock Award pursuant to Section 4.3
hereof.


 


7.             Restricted
Stock


 


An
Award of Restricted Stock is a grant by the Company of a specified number of
shares of Company Stock to the Employee, which shares are subject to forfeiture
upon the happening of specified events. 
Such an Award shall be subject to the following terms and conditions:


 


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7.1             Restricted
Stock shall be evidenced by Restricted Stock agreements.  Such agreements shall conform to the
requirements of the Plan and may contain such other provisions as the Committee
shall deem advisable.


 


7.2             Upon
determination of the number of shares of Restricted Stock to be granted to the
Holder, the Committee shall direct that a certificate or certificates
representing the number of shares of Company Stock be issued to the Holder with
the Holder designated as the registered owner. 
The certificate(s) representing such shares shall be legended as to
sale, transfer, assignment, pledge or other encumbrances during the Restriction
Period and deposited by the Holder, together with a stock power endorsed in
blank, with the Company, to be held in escrow during the Restriction Period.


 


7.3             During
the Restriction Period the Holder shall have the right to receive dividends
from and to vote the shares of Restricted Stock.


 


7.4             The
Committee may condition the grant of an Award of Restricted Stock or the
expiration of the Restriction Period upon the Employee’s achievement of one or
more Performance Goal(s) specified in the Restricted Stock Agreement.  If the Employee fails to achieve the
specified Performance Goal(s), the Committee shall not grant the Restricted
Stock to the Employee, or the Holder shall forfeit the Award of Restricted
Stock and the Company Stock shall be forfeited to the Company.


 


7.5             The
Restricted Stock agreement shall specify the duration of the Restriction Period
and the performance, employment or other conditions (including termination of
employment on account of death, Disability, Retirement or other cause) under
which the


 


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Restricted Stock may be forfeited to the Company.  At the end of the Restriction Period the
restrictions imposed hereunder shall lapse with respect to the number of shares
of Restricted Stock as determined by the Committee, and the legend shall be
removed and such number of shares delivered to the Holder (or, where
appropriate, the Holder’s legal representative).  The Committee may, in its sole discretion,
amend a Restricted Stock Award pursuant to Section 4.3 hereof.


 


8.             Options


 


Options
give an Employee the right to purchase a specified number of shares of Company
Stock from the Company for a specified time period at a fixed price. Options
may be either Incentive Stock Options or Non-Qualified Stock Options.  The grant of Options shall be subject to the
following terms and conditions:


 


8.1             Option
Grants:  Options shall be evidenced by
Option agreements.  Such agreements shall
conform to the requirements of the Plan, and may contain such other provisions
as the Committee shall deem advisable.


 


8.2             Option
Price:  The price per share at which Company
Stock may be purchased upon exercise of an Option shall be determined by the
Committee, but shall be not less than the Fair Market Value of a share of Company
Stock on the date of grant.  In the case
of any Incentive Stock Option granted to a Ten Percent Stockholder, the option
price per share shall not be less than 110% of the Fair Market Value of a share
of Company Stock on the date of grant.


 


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8.3             Term
of Options:  The Option agreements shall
specify when an Option may be exercisable and the terms and conditions
applicable thereto.  The term of an
Option shall in no event be greater than ten years (five years in the case of
an Incentive Stock Option granted to a Ten Percent Stockholder and ten years in
the case of all other Incentive Stock Options).


 


8.4             Incentive
Stock Options:  Each provision of the
Plan and each Option agreement relating to an Incentive Stock Option shall be
construed so that each Incentive Stock Option shall be an incentive stock
option as defined in section 422 of the Code, and any provisions of the
Option agreement thereof that cannot be so construed shall be disregarded.  In no event may a Holder be granted an
Incentive Stock Option which does not comply with such grant and vesting
limitations as may be prescribed by section 422(b) of the Code.  Incentive Stock Options may not be granted to
employees of Affiliates.


 


8.5             Restrictions
on Transferability:  No Incentive Stock
Option shall be transferable otherwise than by will or the laws of descent and
distribution and, during the lifetime of the Holder, shall be exercisable only
by the Holder.  Upon the death of a
Holder, the person to whom the rights have passed by will or by the laws of
descent and distribution may exercise an Incentive Stock Option only in
accordance with this Section 8.


 


8.6             Payment
of Option Price:  The option price of the
shares of Company Stock upon the exercise of an Option shall be paid: (i) in
full in cash at the time of the exercise or, (ii) with the consent of the
Committee, in whole or in part in Company Stock held by the Holder for at least
six months valued at Fair Market Value on the date of exercise.  With the


 


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consent of the Committee, payment upon the exercise of
a Non-Qualified Option may be made in whole or in part by Restricted Stock
which has been held by the Holder for at least six months (based on the fair
market value of the Restricted Stock on the date the Option is exercised, as
determined by the Committee).  In such
case the Company Stock to which the Option relates shall be subject to the same
forfeiture restrictions originally imposed on the Restricted Stock exchanged therefor.


 


8.7             Termination
by Death:  If a Holder’s employment by
the Company, a Subsidiary or Affiliate terminates by reason of death, any
Option granted to such Holder may thereafter be exercised (to the extent such
Option was exercisable at the time of death or on such accelerated basis as the
Committee may determine at or after grant) by, where appropriate, the Holder’s
transferee or by the Holder’s legal representative, for a period of 12 months
from the date of death or until the expiration of the stated term of the
Option, whichever period is shorter.


 


8.8             Termination
by Reason of Disability:  If a Holder’s
employment by the Company, a Subsidiary or Affiliate terminates by reason of
Disability, any unexercised Option granted to the Holder may thereafter be
exercised by the Holder (or, where appropriate, the Holder’s transferee or
legal representative), to the extent it was exercisable at the time of
termination, for a period of 24 months or such shorter term as determined by
the Committee (12 months in the case of an Incentive Stock Option) from the
date of such termination of employment or until the expiration of the stated
term of the Option, whichever period is shorter.


 


8.9             Termination
by Reason of  Retirement:  If a Holder’s employment by the Company, a
Subsidiary or Affiliate terminates by reason of Retirement, any unexercised


 


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Option granted to the Holder may thereafter be
exercised by the Holder (or, where appropriate, the Holder’s transferee or
legal representative), to the extent it was exercisable at the time of
termination, for a period of 5 years or such shorter term as determined by the
Committee (12 months in the case of an Incentive Stock Option) from the date of
such termination of employment or until the expiration of the stated term of
the Option, whichever period is shorter. 
Notwithstanding the foregoing, if, and to the extent, required by section 409A
of the Code in the case of a Specified Employee, as defined in section 409A(a)(2)(B) of
the Code, any unexercised Option shall not be exercised earlier than six months
after the date of retirement.


 


8.10           Termination
Not for Cause:  If a Holder’s employment
by the Company, a Subsidiary or Affiliate is terminated by the Company, the
Subsidiary or Affiliate not for Cause, any unexercised Option granted to the
Holder may thereafter be exercised by the Holder (or, where appropriate, the
Holder’s transferee or legal representative), to the extent it was exercisable
at the time of termination, for a period of 60 days or such shorter term as
determined by the Committee from the date of such termination of employment or
until the expiration of the stated term of the Option, whichever period is
shorter.  Notwithstanding the foregoing,
and to the extent required by section 409A of the Code in the case of a
Specified Employee, as defined in section 409A(a)(2)(B) of the Code,
any unexercised Option shall not be exercised earlier than six months after the
date of termination not for cause.


 


8.11           Termination
for Cause or Other Reason:  If a Holder’s
employment with the Company, a Subsidiary or Affiliate is terminated by the Company,
the Subsidiary or Affiliate for Cause, or otherwise terminates for any reason
not specified in this Section 8


 


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(including a voluntary termination), all unexercised
Options awarded to the Holder shall terminate on the date of such termination.


 


9.             Adjustments
upon Changes in Capitalization


 


 In the event of a reorganization,
recapitalization, stock split, spin-off, split-off, split-up, stock dividend,
issuance of stock rights, combination of shares, merger, consolidation or any
other change in the corporate structure of the Company affecting Company Stock,
or any distribution to stockholders other than a cash dividend, the Board shall
make appropriate adjustment in the number and kind of shares authorized by the
Plan and any other adjustments to outstanding Awards as it determines
appropriate.  No fractional shares of Company
Stock shall be issued pursuant to such an adjustment. The Fair Market Value of
any fractional shares resulting from adjustments pursuant to this Section shall,
where appropriate, be paid in cash to the Holder.


 


10.          Effective
Date, Termination and Amendment


 


Subject
to stockholder approval, the Plan shall become effective on the date the
Company’s common stock is first listed on a national securities exchange or the
Nasdaq Stock Market.  Options granted under
the Plan prior to such stockholder approval shall expressly not be exercisable
prior to such approval.  The Plan shall
remain in full force and effect until the earlier of [ten] years from the date
of its adoption by the Board, or the date it is terminated by the Board.  The Board shall have the power to amend,
suspend or terminate the Plan at any time, provided that no such amendment
shall be made without stockholder approval which shall (i) increase
(except as provided in Section 9) the total number of shares available for
issuance pursuant to the


 


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Plan; (ii) change
the class of employees eligible to be Holders; (iii) modify the Individual
Limit (except as provided Section 9) or the categories of Performance
Goals set forth in Section 4.4; or (iv) change the provisions of this
Section 10.  Termination of the Plan
pursuant to this Section 10 shall not affect Awards outstanding under the
Plan at the time of termination.


 


11.          Transferability


 


Except
as provided below, Awards may not be pledged, assigned or transferred for any
reason during the Holder’s lifetime, and any attempt to do so shall be void and
the relevant Award shall be forfeited. 
The Committee may grant Awards (except Incentive Stock Options) that are
transferable by the Holder during his lifetime, but such Awards shall be
transferable only to the extent specifically provided in the agreement entered
into with the Holder.  The transferee of
the Holder shall, in all cases, be subject to the provisions of the agreement
between the Company and the Holder.


 


12.          General
Provisions


 


12.1           Nothing
contained in the Plan, or any Award granted pursuant to the Plan, shall confer
upon any Employee any right to continued employment by the Company, a
Subsidiary or Affiliate, nor interfere in any way with the right of the
Company, a Subsidiary or Affiliate to terminate the employment of any Employee
at any time.


 


12.2           For
purposes of this Plan, transfer of employment between the company and its
Subsidiaries and Affiliates shall not be deemed termination of employment.


 


12.3           Holders
shall be responsible to make appropriate provision for all taxes required to be
withheld in connection with any Award, the exercise thereof and the transfer


 


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of shares of Company Stock pursuant to this Plan.  Such responsibility shall extend to all
applicable Federal, state, local or foreign withholding taxes.  In the case of the payment of Awards in the
form of Company Stock, or the exercise of Options, the Company shall, at the
election of the Holder, have the right to retain the number of shares of Company
Stock whose Fair Market Value equals the amount legally required to be withheld
in satisfaction of the applicable withholding taxes.  Agreements evidencing such Awards shall
contain appropriate provisions to effect withholding in this manner.


 


12.4           Without
amending the Plan, Awards may be granted to Employees who are foreign nationals
or employed outside the United States or both, on such terms and conditions
different from those specified in the Plan as may, in the judgment of the
committee, be necessary or desirable to further the purpose of the Plan.


 


12.5           To
the extent that Federal laws (such as the 1934 Act, the Code or the Employee
Retirement Income Security Act of 1974) do not otherwise control, the Plan and
all determinations made and actions taken pursuant hereto shall be governed by
the law of Delaware and construed accordingly.


 


12.6           The
Committee may amend any outstanding Awards to the extent it deems appropriate; provided,
however, except as provided in Section 9, no Award may be repriced, replaced, regranted
through cancellation, or modified without stockholder approval.  The Committee may amend Awards without the
consent of the Holder, except in the case of amendments adverse to the Holder,
in which case the Holder’s consent is required to any such amendment.


 


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