**Exhibit 10.1**

 

**B&G FOODS, INC.**

 

**2008 OMNIBUS INCENTIVE COMPENSATION PLAN**

 

**Originally Adopted: March 10, 2008**

 

**Effective: May 6, 2008**

 

**As Amended on May 18, 2010**

 

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**B&G FOODS, INC.**

 

**2008 OMNIBUS INCENTIVE COMPENSATION PLAN**

 

**1.**                                      **Purpose of the Plan**.  The purpose of the Plan is to benefit theCompany’s stockholders by encouraging high levels of performance by individualswho contribute to the success of the Company and to assist the Company inattracting, motivating, retaining and rewarding talented and experiencedEmployees, Non-Employee Directors and Consultants by offering them a greaterstake in the Company’s success and a closer identity with it.  This purpose is to be accomplished byproviding Employees, Non-Employee Directors and Consultants with an opportunityto obtain or increase a proprietary interest in the Company and/or by providingEmployees, Non-Employee Directors and Consultants with additional incentives tojoin or remain with the Company.

 

**2.**                                      **Definitions**.   Asused herein, the following definitions shall apply:

 

2.1.                              “Award” means a grantof Restricted Stock, Options, SARs, Deferred Stock, Stock Units, PerformanceShare Awards or Cash-Based Awards under the Plan.

 

2.2.                              “Award Agreement”means the written agreement, instrument or document evidencing an Award.

 

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

 

2.4.                              “Cash-Based Award”means an award payable in cash only that is granted to a Participant under Section 12.

 

2.5.                              “Cause” means, unlessotherwise provided in an Award Agreement or an Employment Agreement to whichthe Participant is a party:  (i) grossmisconduct or gross negligence in the performance of the Participant’s dutiesto the Company or any of its Subsidiaries; (ii) conviction of a felony orany other crime involving moral turpitude, whether or not relating to theParticipant’s employment; (iii) material non-performance ormis-performance of a Participant’s duties; (iv) material violation ofpolicies or procedures established by the Company or any of its Subsidiaries,including, without limitation, the Company’s code of conduct and insidertrading policies; (v) habitual unexcused absence from the facilities ofthe Corporation; (vi) insobriety or use of drugs, chemicals or controlledsubstances either in the course of performing the Participant’s duties andresponsibilities or otherwise affecting the ability of the Participant toperform those duties and responsibilities; (vii) wanton or willful failureto comply with the lawful written directions of the Board or other superiors;or (v) material violation of any Employment Agreement, Award Agreement orany non-compete, non-solicitation, confidentiality or similar covenants orpolicies with or established by the Company or any of its Subsidiaries.

 

2.6.                              “Change in Control”means the occurrence after the Effective Date of any of the following events:

 

2.6.1.                     The acquisition by anyindividual, entity or group (within the meaning of section 13(d)(3) or14(d)(2) of the Exchange Act) (each, individually or collectively, a “Person”)of beneficial ownership (within the meaning of Rule 13d-3 promulgatedunder the Exchange Act) of 30% or more of the combined voting power of thethen-outstanding voting securities of the Company entitled to vote generally inthe election of directors (the “Outstanding Company Voting Securities”);provided, however, that, for purposes of this Section 2.6.1,the following acquisitions shall not constitute a Change in Control: (1) anyacquisition directly from the Company, other than an 

 

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acquisitionby virtue of the exercise of a conversion privilege unless the security beingso converted was itself acquired directly from the Company, (2) anyacquisition by the Company or any Subsidiary, (3) any acquisition by anyemployee benefit plan (or related trust) sponsored or maintained by the Companyor any of its Subsidiaries, or (4) any Business Combination (as defined inSection 2.6.3) pursuant to which all or substantially all of theindividuals and entities who are the beneficial owners of the OutstandingCompany Voting Securities immediately prior to such Business Combination willbeneficially own, directly or indirectly, more than 50% of the combined votingpower of the then outstanding voting securities entitled to vote generally inthe election of directors (or election of members of a comparable governingbody) of the surviving entity resulting from such Business Combination(including, without limitation, a corporation which as a result of suchtransaction owns the Company or all or substantially all of the Company’sassets either directly or through one or more subsidiaries) in substantiallythe same proportions as their ownership, immediately prior to such BusinessCombination, of the Outstanding Company Voting Securities; or

 

2.6.2.                     Any time at which individualswho, as of the Effective Date, constitute the Board (the “Incumbent Board”)cease for any reason to constitute at least a majority of the Board; provided,however, that any individual becoming a director subsequent to theEffective Date whose election, or nomination for election by the Company’sshareholders, was approved by a vote of at least a majority of the directorsthen comprising the Incumbent Board shall be considered as though suchindividual were a member of the Incumbent Board, but excluding, for thispurpose, any such individual whose initial assumption of office occurs as aresult of an actual or threatened election contest with respect to the electionor removal of directors or other actual or threatened solicitation of proxiesor consents by or on behalf of a Person other than the Board; or

 

2.6.3.                     Consummation of anyreorganization, merger, amalgamation, statutory share exchange or consolidationor other similar corporate transaction involving the Company or a sale or otherdisposition of all or substantially all, but in no event less than 40%, of theassets of the Company (a “Business Combination”); excluding, however,a Business Combination pursuant to which (A) all or substantially all ofthe beneficial owners of Outstanding Company Voting Securities immediatelyprior to such Business Combination will beneficially own, directly orindirectly, more than 50% of the combined voting power of the then outstandingvoting securities entitled to vote generally in the election of directors (or electionof members of a comparable governing body) of the surviving entity resultingfrom such Business Combination (including, without limitation, a corporationwhich as a result of such transaction owns the Company or all or substantiallyall of the Company’s assets either directly or through one or moresubsidiaries) in substantially the same proportions as their ownership,immediately prior to such Business Combination, of the Outstanding CompanyVoting Securities; (B) no Person (other than the Company, any employeebenefit plan (or related trust) of the Company or such surviving entityresulting from such Business Combination) will beneficially own, directly orindirectly, 30% or more of the combined voting power of the outstanding votingsecurities of such surviving entity entitled to vote generally in the electionof directors (or comparable governing body) except to the extent that suchownership existed prior to the Business Combination; and (C) individualswho were members of the Incumbent Board (including persons deemed to be membersof the Incumbent Board by reason of the proviso of Section 2.6.2) at thetime of the execution of the initial agreement or of the action of the Boardproviding for such Business Combination will constitute at least a majority ofthe members of the board of directors (or comparable governing body) of thesurviving entity resulting from such Business Combination; or

 

2.6.4.                     The approval by thestockholders of the Company of a complete liquidation or dissolution of theCompany.

 

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2.7.                              “Code” means theInternal Revenue Code of 1986, as amended, and the regulations promulgatedthereunder.  A reference to any provisionof the Code or regulation promulgated thereunder shall include reference to anysuccessor provision of the Code or regulation.

 

2.8.                              “Common Stock” meansthe Class A common stock of the Company, par value $0.01 per share, orsuch other class or kind of shares or other securities resulting from theapplication of Section 14.

 

2.9.                              “Company” meansB&G Foods, Inc., a Delaware corporation, or any successor corporation.

 

2.10.                        “Committee” means thecommittee designated by the Board to administer the Plan under Section 4.  If no such committee has been established orthe Board determines it is necessary or advisable, then the Board shall performthe duties of the Committee hereunder. If such a committee is established, the Committee shall have at leasttwo members and each member of the Committee shall be a Non-Employee Directorand an Outside Director.  Notwithstandingthe foregoing, the Board may designate one or more of its members to serve as aSecondary Committee and delegate to the Secondary Committee authority to grantAwards to eligible individuals who are not subject to the requirements of Rule 16b-3under the Exchange Act or section 162(m) of the Code and the regulationsthereunder. The Secondary Committee shall have the same authority with respectto selecting the individuals to whom such Awards are granted and establishingthe terms and conditions of such Awards as the Committee has under the terms ofthe Plan.

 

2.11.                        “Consultant” means aconsultant, advisor or independent contractor retained by the Company or any ofits Subsidiaries.

 

2.12.                        “Covered Employee”means an Employee who is a “covered employee” within the meaning of section 162(m) ofthe Code, and the rules and regulations thereunder.

 

2.13.                        “Deferred Stock”means Common Stock to be delivered at the end of a Deferral Period and awardedby the Committee under Section 9 of the Plan.

 

2.14.                        “Deferral Period”means the period during which the receipt of Deferred Stock under Section 9of the Plan will be deferred.

 

2.15.                        “Director” means anyindividual who is a member of the Board of Directors of the Company.

 

2.16.                        “Disability” means,unless otherwise provided in an Award Agreement or an Employment Agreement towhich the Participant is a party, that the Participant is unable to engage inany substantial gainful activity by reason of any medically determinablephysical or mental impairment that can be expected to result in death or can beexpected to last for a continuous period of not less than 12 months, or theParticipant is, by reason of any medically determinable physical or mentalimpairment that can be expected to result in death or can be expected to lastfor a continuous period of not less than 12 months, receiving incomereplacement benefits for a period of not less than three months under anaccident and health plan covering employees of the Company.

 

2.17.                        “Exchange Act” meansthe Securities Exchange Act of 1934, as amended.  A reference to any provision of the ExchangeAct or rule promulgated under the Exchange Act shall include reference toany successor provision or rule.

 

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2.18.                        “Employee” means anindividual, including officers and directors, who is employed by the Company orany of its Subsidiaries.

 

2.19.                        “Employment Agreement”means any employment or consulting agreement, including without limitation, anychange in control, severance or other similar agreement, by and between theCompany or any of its Subsidiaries and a Participant, as such agreement is ineffect from time to time.

 

2.20.                        “Enhanced IncomeSecurities” or “EISs” means the Enhanced Income Securities of theCompany, each representing one share of the Company’s Class A common stockand $7.15 principal amount of the Company’s 12% Senior Subordinated Notes due2016.

 

2.21.                        “Fair Market Value”means, on any given date, the closing price of a share of Common Stock on theprincipal national securities exchange or quotation on which the Common Stockis listed or quoted on such date or, if Common Stock was not traded on suchdate, on the last preceding business day on which the Common Stock was traded.

 

2.22.                        “Incentive Stock Option”means an Option or a portion thereof intended to meet the requirements of anincentive stock option as defined in section 422 of the Code and designated asan Incentive Stock Option.

 

2.23.                        “Negative Discretion”means the discretion authorized by the Plan to be applied by the Committee indetermining the size of a Performance-Based Award for a Performance Period if,in the Committee’s sole judgment, such application is appropriate. NegativeDiscretion may only be used by the Committee to eliminate or reduce the size ofa Performance-Based Award. In no event shall any discretionary authoritygranted to the Committee by the Plan, including, but not limited to NegativeDiscretion, be used to: (a) grant Performance-Based Awards for aPerformance Period if the Performance Goals for such Performance Period havenot been attained; or (b) increase a Performance-Based Award above themaximum amount payable under Sections 5.2 or 5.3 of the Plan.

 

2.24.                        “Non-Employee Director”means a Director who meets the definition of a “non-employee director” under Rule 16b-3(b)(3) promulgatedby the Securities and Exchange Commission under the Exchange Act.

 

2.25.                        “Non-Qualified Option”means an Option or a portion thereof not intended to be an Incentive StockOption and designated as a Non-Qualified Option.

 

2.26.                        “Option” means aright to purchase a specified number of shares of Common Stock at a specifiedprice awarded by the Committee under Section 7 of the Plan.

 

2.27.                        “Outside Director”means a Director who meets the definition of an “outside director” undersection 162(m) of the Code.

 

2.28.                        “Participant” meansany Employee, Non-Employee Director or Consultant who receives an Award.

 

2.29.                        “Performance Goal”means a goal with respect to the Company, any of its Subsidiaries or affiliates(or any business unit or brand of the Company, any of its Subsidiaries oraffiliates) that must be met by the end of the Performance Period specified bythe Committee based upon: (i) the price of the Common Stock, (ii) theprice of the Enhanced Income Securities, (iii) market share, 

 

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(iv) revenue,(v) earnings per share, (vi) return on equity, (vii) costs, (viii) cashflow, (ix) excess or free cash flow, (x) return on total assets, (xi) returnon invested capital, (xii) return on net assets, (xiii) operatingincome, (xiv) net income, (xv) consolidated earnings before or aftertaxes (including, without limitation, EBITDA and adjusted EBITDA); (xvi) bookvalue per share of Common Stock; (xvii) expense management; (xviii) improvementsin capital structure; (xix) profitability; (xx) maintenance orimprovement of profit margins; or (xxi) any other financial or othermeasurement deemed appropriate by the Committee, as it relates to the resultsof operations or other measurable progress of the Company or any of itsSubsidiaries or affiliates (or any brand or business unit thereof).  The Committee shall have discretion to determinethe specific targets with respect to each of these categories of PerformanceGoals.

 

2.30.                        “Performance-Based Awards”  means Awards that are based upon theattainment of Performance Goals and that are granted in accordance with Section 13in a manner designed to be deductible by the Company under section 162(m) ofthe Code (or any successor section thereto).

 

2.31.                        “Performance Period”means the period selected by the Committee during which the performance of theCompany, any Subsidiary or any brand or business unit thereof, or any individualis measured for the purpose of determining the extent to which a PerformanceGoal has been achieved.

 

2.32.                        “Performance Share Award”means an award subject to such terms and conditions as are specified by theCommittee and which is granted to a Participant under Section 11.

 

2.33.                        “Permissible PaymentEvent” means any of a Participant’s death, Disability, Separation fromService, Change in Control, or specified date or fixed schedule (whichspecified date or fixed schedule may be based upon the attainment ofPerformance Goals) specified in an Award Agreement.

 

2.34.                        “Plan” means theB&G Foods, Inc. 2008 Omnibus Incentive Compensation Plan herein setforth, as amended from time to time.

 

2.35.                        “Restricted Stock”means Common Stock awarded by the Committee under Section 6 of the Plan.

 

2.36.                        “Restriction Period”means the period during which Restricted Stock awarded under Section 6 ofthe Plan is subject to forfeiture.

 

2.37.                        “SAR” means a stockappreciation right awarded by the Committee under Section 8 of the Plan.

 

2.38.                        “Separation from Service”means a Participant’s termination of employment or other separation fromservice, as applicable, with the Company and its Subsidiaries.

 

2.39.                        “Specified Employee”means a Participant that is a “specified employee” within the meaning of thesection 409A of the Code and the regulations thereunder as of the date of suchParticipant’s Separation from Service.

 

2.40.                        “Stock Unit” means aright that is granted under Section 10 to receive either Common Stock orcash equal to the Fair Market Value of a share of Common Stock.

 

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2.41.                        “Subsidiary” meansany corporation (other than the Company), partnership, joint venture or otherbusiness entity of which 50% or more of the outstanding voting power isbeneficially owned, directly or indirectly, by the Company.

 

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

 

**3.**                                      **Eligibility****. **All Employees,Non-Employee Directors and Consultants are eligible to participate in the Plan.

 

**4.**                                      **Administration and Implementation of Plan****.**

 

4.1.                              Administration by theCommittee.  The Planshall be administered by the Committee. Any action of the Committee in administering the Plan shall be final,conclusive and binding on all persons, including the Company, its Subsidiaries,their respective Employees, Participants, persons claiming rights from orthrough Participants and stockholders of the Company.

 

4.2.                              Authority of the Committee.  The Committee shall have full discretionaryauthority in all matters related to the discharge of its responsibilities andthe exercise of its authority under the Plan including, without limitation, itsconstruction of the terms of the Plan and its determination of eligibility forparticipation and Awards under the Plan. Without limiting the generality of the immediately preceding sentenceand subject to the provisions of the Plan, the Committee shall have full andfinal authority in its discretion (a) to select the Employees,Non-Employee Directors and Consultants who will receive Awards pursuant to thePlan, (b) to determine the type or types of Awards to be granted to eachParticipant, (c) to determine the number of shares of Common Stock, ifany, to which an Award will relate, the terms and conditions of any Awardgranted under the Plan (including, but not limited to, restrictions as tovesting, transferability or forfeiture, exercisability or settlement of anAward and waivers or accelerations thereof, and waivers of or modifications toperformance conditions relating to an Award, based in each case on suchconsiderations as the Committee shall determine) and all other matters to bedetermined in connection with an Award; (d) to determine whether, to whatextent, and under what circumstances an Award may be canceled, forfeited, orsurrendered; (e) to determine whether, and to certify that, PerformanceGoals to which the settlement of an Award is subject are satisfied; (f) tocorrect any defect or supply any omission or reconcile any inconsistency in thePlan, and to adopt, amend and rescind such rules and regulations as, inits opinion, may be advisable in the administration of the Plan; (g) toconstrue and interpret the Plan and to make all other determinations as it maydeem necessary or advisable for the administration of the Plan, and (h) toestablish any “blackout” period that the Committee in its sole discretion deemsnecessary or advisable.

 

4.3.                              Additional Terms andConditions; Award Agreements.  The Committee may impose on any Award or theexercise thereof, at the date of grant or thereafter, such terms andconditions, not inconsistent with the provisions of the Plan, as the Committeeshall determine, including terms requiring forfeiture of Awards in the event ofthe Participant’s Separation from Service with the Company or any Subsidiary; provided,however, that the Committee shall retain full power to accelerate orwaive any such term or condition as it may have previously imposed (except thatthe Committee may not accelerate the delivery of Deferred Stock).  All Awards shall be evidenced by an AwardAgreement.  The right of a Participant toexercise or receive a grant or settlement of any Award, and the timing thereof,may be subject to such Performance Goals as may be specified by theCommittee.  The conditions for grant orvesting and the other provisions of Awards (including without limitation anyapplicable Performance Goals) need not be the same with respect to eachParticipant.

 

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4.4.                              Action by the Committee.  The Committee may act at a meeting only by amajority of its members.  Anydetermination of the Committee may be made, without a meeting, by a writing orwritings signed by all of the members of the Committee. In addition, theCommittee may authorize any one or more of its members to execute and deliverdocuments on behalf of the Committee.

 

4.5.                              Allocation and Delegation ofAuthority.  TheCommittee may allocate all or any portion of its responsibilities and powersunder the Plan to any one or more of its members, the Chief Executive Officerof the Company or the Secondary Committee as the Committee deems appropriateand may delegate all or any part of its responsibilities and powers to any suchperson or persons, provided that any such allocation or delegation be inwriting; provided, however, that only the Committee may selectand grant Awards to Participants who are subject to section 16 of the ExchangeAct or are Covered Employees.  TheCommittee may revoke any such allocation or delegation at any time for anyreason with or without prior notice.

 

4.6.                              Indemnification of theCommittee and the Board.  TheCompany shall indemnify and hold harmless the members of the Committee and theBoard, from and against any and all liabilities, costs and expenses incurred bysuch persons as a result of any act or omission to act in connection with theperformance of such person’s duties, responsibilities and obligations under thePlan, to the maximum extent permitted by law, other than such liabilities,costs and expenses as may result from the gross negligence, bad faith, willfulmisconduct or criminal acts of such persons.

 

**5.**                                      **Shares of Stock Subject to the Plan****and Maximum Awards**

 

5.1.                              Number of Shares Availablefor Awards.  Subject toadjustment as provided in Section 14, the total number of shares of CommonStock available for Awards under the Plan, whether pursuant to Incentive StockOptions or otherwise, shall be 4,500,000 shares.

 

5.2.                              Annual Award Limit forOptions and SARS.  Subject toadjustment as provided in Section 14, the maximum number of shares ofCommon Stock available for Options or SARS that may be granted to any oneParticipant shall not exceed 900,000 during any fiscal year.

 

5.3.                              Annual Award Limit forPerformance-Based Awards.  Themaximum amount of any Performance-Based Award that may be granted, paid,credited or vested, as applicable, to any one Participant in any fiscal year inthe event the Performance-Based Awards is paid in shares of Common Stock shallbe, subject to adjustment as provided in Section 14, 400,000 shares ofCommon Stock or, in the event the Performance-Based Award is paid in cash,$2,000,000.

 

5.4.                              Forfeited or TerminatedAwards.  If any shares subject to anAward are forfeited or such Award otherwise terminates or is settled for anyreason whatsoever without an actual distribution of shares to the Participant,any shares counted against the number of shares available for issuance pursuantto the Plan with respect to such Award shall, to the extent of any suchforfeiture, settlement or termination, again be available for Awards under thePlan; provided, however, that the Committee may adopt proceduresfor the counting of shares relating to any Award to ensure appropriatecounting, avoid double counting, and provide for adjustments in any case inwhich the number of shares actually distributed differs from the number ofshares previously counted in connection with such Award.

 

5.5.                              Treasury Shares.  Any shares issued hereunder may consist, inwhole or in part, of authorized and unissued shares or treasury shares.

 

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5.6.                              Corporate Transactions.  Any shares issued by the Company through theassumption or substitution of outstanding grants in connection with theacquisition of another entity shall not reduce the maximum number of sharesavailable for delivery under the Plan.

 

**6.**                                      **Restricted Stock**.  An Award of Restricted Stock is a grant bythe Company of a specified number of shares of Common Stock to the Participant,which shares are subject to forfeiture upon the happening of specifiedevents.  Such an Award shall be subjectto the following terms and conditions:

 

6.1.                              Terms.  The Committee shall determine all of thematerial terms of the Award of Restricted Stock, including, but not limited to,the Restriction Period, the Performance Goals applicable, if any, and theamount, if any, the Participant must pay to receive the Restricted Stock.

 

6.2.                              Restricted Stock Account.  Upon the Award of Restricted Stock, theCommittee shall direct that the number of shares of Common Stock subject tosuch Award be placed in a restricted stock account with the transfer agent anddesignating the Participant as the registered owner.  The shares shall be legended as to sale,transfer, assignment, pledge or other encumbrances during the RestrictionPeriod.  The Participant shall sign astock power endorsed in blank to the Company to be held in escrow during theRestriction Period.

 

6.3.                              Voting Rights.  During the Restriction Period, unlessotherwise determined by the Committee, the Participant shall have the right tovote the shares of Restricted Stock.

 

6.4.                              Termination of theRestriction Period.  Providedthat the Restricted Stock has not been previously forfeited, at the end of theRestriction Period, provided that any Performance Goals or other criteria orconditions set forth in the applicable Award Agreement have been satisfied, therestrictions imposed under the Award Agreement shall lapse with respect to thenumber of shares specified thereunder, and the legend imposed hereunder shallbe removed and such number of shares delivered to the Participant (or, whereappropriate, the Participant’s legal representative).

 

6.5.                              Tax Reimbursement.  In the sole discretion of the Committee, anAward Agreement regarding Restricted Stock may provide for a tax reimbursementcash payment to be made by the Company to any Participant in connection withthe tax consequences resulting from an Award of Restricted Stock, the lapse ofrestrictions on any Restricted Stock or the payment by a Participant of anytaxes related thereto, subject to such conditions as the Committee may specify.

 

6.6.                              Separation from Service.  Except as otherwise provided by the Committeein an Award Agreement, all Restricted Stock with respect to which theRestriction Period has not expired shall be immediately forfeited upon aParticipant’s Separation from Service.

 

**7.**                                      **Options****. **Options give aParticipant the right to purchase a specified number of shares of Common Stockfrom the Company for a specified time period at a fixed exercise price (“ExercisePrice”).  Options may be eitherIncentive Stock Options or Non-Qualified Stock Options.  The Award Agreement for an Option shallspecify whether the Option is intended to be an Incentive Stock Option or aNon-Incentive Stock Option.  The grant ofOptions shall be subject to the following terms and conditions:

 

7.1.                              Exercise Price.  The price per share at which Common Stock maybe purchased upon exercise of an Option shall be determined by the Committee,but shall be not less than (i) 110% of the Fair Market Value of a share ofCommon Stock on the date of grant in the case of a grant to a 

 

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TenPercent Stockholder, or (ii) 100% of the Fair Market Value of a share ofCommon Stock on the date of grant in the case of a grant to any otherParticipant, unless in either case the Option was granted through theassumption of, or in substitution for, outstanding awards previously granted byan entity acquired by the Company or any Subsidiary or with which the Companyor any Subsidiary combines.

 

7.2.                              Option Term.  The term of an Option shall in no event begreater than ten years (five years in the case of an Incentive Stock Optiongranted to a Ten Percent Shareholder).

 

7.3.                              Vesting.  Except as otherwise provided by the Committeein an Award Agreement, 25% of an Option shall become vested and exercisable oneach of the first, second, third and fourth anniversaries of the grant date ofsuch Option.

 

7.4.                              Incentive Stock Options.  Each provision of the Plan and each AwardAgreement relating to an Incentive Stock Option shall be construed so that eachIncentive Stock Option shall be an incentive stock option as defined in section422 of the Code, and any provisions of an Award Agreement that cannot be soconstrued shall be disregarded.  In noevent may a Participant be granted an Incentive Stock Option which does notcomply with the grant and vesting limitations prescribed by section 422(b) ofthe Code.  Incentive Stock Options mayonly be granted to Employees.  IncentiveStock Options may not be granted to Non-Employee Directors or Consultants.

 

7.5.                              Method of Exercise.  The Exercise Price of the shares of CommonStock received upon the exercise of an Option shall be paid within three daysof the date of exercise: (a) in cash, (b) with the proceeds receivedfrom a broker-dealer whom the Participant has authorized to sell all or aportion of the Common Stock covered by the Option, (c) with the consent ofthe Committee in an Award Agreement, in whole or in part in Common Stock heldby the Participant and valued at Fair Market Value on the date of exercise, or (d) withthe consent of the Committee in an Award Agreement or otherwise, by requestingthe Company withhold a number of shares of Common Stock having a Fair MarketValue on the date of exercise equal to the product of (i) the ExercisePrice multiplied by (ii) the number of shares of Common Stock in respectof which the Option is being exercised. With the consent of the Committee, payment upon the exercise of aNon-Qualified Option may be made in whole or in part by Restricted Stock heldby the Participant and valued at Fair Market Value on the date the Option isexercised.  In such case, the CommonStock to which the Option relates shall be subject to the same forfeiturerestrictions originally imposed on the Restricted Stock exchangedtherefor.  An Option may be exercisedonly for a whole number of shares of Common Stock.  If a Participant is permitted to pay the exerciseprice of an Option or taxes relating to the exercise of an Option by deliveringshares of Common Stock, the Participant may, subject to procedures satisfactoryto the Committee, satisfy such delivery requirement by presenting proof ofbeneficial ownership of such shares of Common Stock, in which case the Companyshall treat the Option as exercised without further payment and shall withholdsuch number of shares of Common Stock from the shares of Common Stock acquiredby the exercise of the Option.

 

7.6.                              Separation from Service.  Except as otherwise provided by the Committeein an Award Agreement:

 

7.6.1.                     If the Participant has aSeparation from Service due to retirement, Disability or death, the unexercisedand vested portion of the Option will remain exercisable by the Participant orhis or her successors, as the case may be, until the earlier of the end of the180-day period immediately following the Participant’s Separation from Serviceor the last day of the term of the Option. Such portion of the Option shall terminate to the extent not exercisedwithin such 180-day period.  Any unvestedportion of the Option will immediately terminate and be forfeited upon suchSeparation from Service.

 

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7.6.2.                     If the Participant has aSeparation from Service due to a termination by the Company for Cause, theOption will immediately expire on the date of such Separation from Service.

 

7.6.3.                     If the Participant has aSeparation from Service as a result of any reason other than retirement,Disability, death or for Cause, any unexercised and vested portion of theOption will remain exercisable until the earlier of the end of the 90-dayperiod immediately following such Separation from Service or the last day ofthe term of the Option.  Such portion ofthe Option shall terminate to the extent not exercised within such 90-dayperiod.  Any unvested portion of theOption will terminate and will be forfeited upon such Separation from Service.

 

**8.**                                      **Stock Appreciation Rights****. **SARs give the Participant the right to receive, upon exercise of theSAR, the excess of (a) the Fair Market Value of one share of Common Stockon the date of exercise over (b) the base price of the SAR as determinedby the Committee, but which may never be less than the Fair Market Value of ashare of Common Stock on the date of grant. The grant of SARs shall be subject to the following terms andconditions:

 

8.1.                              SAR Term.  The term of a SAR shall in no event begreater than ten years.

 

8.2.                              Terms and Conditions.  The Committee shall determine the time ortimes at which a SAR may be exercised in whole or in part, the method ofexercise, the method of settlement, form of consideration payable in settlement(whether in shares of Common Stock or cash), method by which Common Stock, ifapplicable, shall be delivered or deemed to be delivered to Participants,whether or not a SAR shall be in tandem with any other Award, and any otherterms and conditions of any SAR.

 

8.3.                              Vesting.  Except as otherwise provided by the Committeein an Award Agreement, 25% of a SAR shall become vested and exercisable on eachof the first, second, third and fourth anniversaries of the grant date of suchSAR.

 

8.4.                              Separation from Service.  Except as otherwise provided by the Committeein an Award Agreement:

 

8.4.1.                     If the Participant has aSeparation from Service due to retirement, Disability or death, the unexercisedand vested portion of the SAR will remain exercisable by the Participant or hisor her successors, as the case may be, until the earlier of the end of the180-day period immediately following the Participant’s Separation from Serviceor the last day of the term of the SAR. Such portion of the SAR shall terminate to the extent not exercisedwithin such 180-day period.  Any unvestedportion of the SAR will immediately terminate and be forfeited upon suchSeparation from Service.

 

8.4.2.                     If the Participant has aSeparation from Service due to a termination by the Company for Cause, the SARwill immediately expire on the date of such Separation from Service.

 

8.4.3.                     If the Participant has aSeparation from Service as a result of any reason other than retirement,Disability, death or for Cause, any unexercised and vested portion of the SARwill remain exercisable until the earlier of the end of the 90-day periodimmediately following such Separation from Service or the last day of the termof the SAR.  Such portion of the SARshall terminate 

 

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tothe extent not exercised within such 90-day period.  Any unvested portion of the SAR willterminate and will be forfeited upon such Separation from Service.

 

**9.**                                      **Deferred Stock****. **An Award ofDeferred Stock is an agreement by the Company to deliver to the Participant aspecified number of shares of Common Stock at the end of a specified DeferralPeriod or Periods.  Such an Award shallbe subject to the following terms and conditions:

 

9.1.                              Terms and Conditions.  Upon the Award of Deferred Stock, theCommittee shall direct that the number of shares subject to such Award becredited to the Participant’s account on the books of the Company but thatissuance and delivery of the same shall be deferred until the occurrence of aPermissible Payment Event specified in an Award Agreement.  In no event shall the delivery of suchDeferred Stock be accelerated if to do so would subject the Participant to anadditional tax pursuant to section 409A of the Code.  Prior to issuance and delivery of theDeferred Stock, the Participant shall have no rights as a stockholder withrespect to any shares of Deferred Stock credited to the Participant’s account.

 

9.2.                              Deferral Period Installments.  The Deferral Period may consist of one ormore installments.  Provided that theDeferred Stock has not been previously forfeited, at the end of the DeferralPeriod or any installment thereof the shares of Deferred Stock applicable tosuch installment, shall be issued and delivered to the Participant (or, whereappropriate, the Participant’s legal representative) in accordance with theterms of the Award Agreement.

 

9.3.                              Separation from Service.  Except as otherwise provided by the Committeein an Award Agreement, all Deferred Stock with respect to which the DeferralPeriod has not expired shall be immediately forfeited upon a Participant’sSeparation from Service.

 

**10.****                              ****Stock Units****. **StockUnits are Awards that represent the right of the grantee to receive a paymentupon a Permissible Payment Event specified by the Committee in an AwardAgreement equal to the Fair Market Value of a specified number of shares ofCommon Stock as of the date of grant, vesting date, Permissible Payment Eventdate or such other date set forth in an Award Agreement.  Stock Units shall be subject to the followingterms and conditions:

 

10.1.                        Terms and Conditions.  The Committee may condition the vesting ofStock Units upon the attainment of a Performance Goal or upon the continuedservice of the Participant.  TheCommittee may provide in an Award Agreement a limitation on the amount payablein respect of each Stock Unit and/or for the settlement of Stock Units in cashor with Common Stock having a Fair Market Value equal to the payment to whichthe grantee has become entitled.  In noevent shall the payment of Stock Units be accelerated if to do so would subjectthe Participant to an additional tax pursuant to section 409A of the Code.

 

10.2.                        Stock Unit RestrictionPeriod.  Subject to the provisions ofthe Plan and the applicable Award Agreement, during the period, if any, set bythe Committee, commencing with the date of such Stock Unit Award for which suchParticipant’s continued service is required (the “Stock Unit RestrictionPeriod”), and until the later of (A) the expiration of the Stock UnitRestriction Period and (B) the date the applicable Performance Goals (ifany) are satisfied, the Participant shall not be permitted to sell, assign,transfer, pledge or otherwise encumber Stock Units.

 

10.3.                        Separation from Service.  Except as otherwise provided by the Committeein an Award Agreement, all Stock Units that are unvested upon a Participant’sSeparation from Service shall be immediately forfeited upon such Participant’sSeparation from Service.

 

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**11.**                               **Performance Share Awards****.**  A Performance Share Award is an Awardentitling the recipient to receive shares of Common Stock upon a PermissiblePayment Event, including, without limitation, the attainment of PerformanceGoals during a Performance Period as specified in the Award Agreement.  Performance Share Awards shall be subject tothe following terms and conditions:

 

11.1.                        Terms and Conditions.  The Committee in its sole discretion shalldetermine whether and to whom Performance Share Awards shall be made, thePerformance Goals applicable under each such Award, the Performance Periods,the price, if any, to be paid by the Participant for such Performance Sharesupon the achievement of the Performance Goals, and all other limitations andconditions applicable to the Performance Share Awards.  In no event shall the payment of aPerformance Share Award be accelerated if to do so would subject theParticipant to an additional tax pursuant to section 409A of the Code.

 

11.2.                        Rights as a Stockholder.  A Participant receiving a Performance ShareAward shall have the rights of a stockholder only as to shares of Common Stockactually received by the Participant upon satisfaction of all conditionsspecified in the Award Agreement evidencing the Performance Share Award and notwith respect to shares subject to the Award but not actually received by theParticipant.

 

11.3.                        Separation from Service.  Except as otherwise provided by the Committeein an Award Agreement, all PerformanceShare Awards that are unvested upon a Participant’s Separation fromService shall be immediately forfeited upon such Participant’s Separation fromService.

 

**12.**                               **Cash-Based Awards****.**

 

12.1.                        Terms and Conditions.  TheCommittee, in its sole discretion, may grant Awards to Participants denominatedin cash in such amounts and subject to such terms and conditions as theCommittee may determine, including, but not limited to, vestingconditions.  Each such Cash-Based Awardshall specify a payment amount, payment formula or payment range as determinedby the Committee.  The Award Agreement shallset forth the Permissible Payment Event on which the Cash-Based Award shall besettled.  In no event shall thepayment of a Cash-Based Award be accelerated if to do so would subject theParticipant to an additional tax pursuant to section 409A of the Code.

 

12.2.                        Separation from Service.  Except as otherwise provided by the Committeein an Award Agreement, all Cash-Based Awards that are unvested upon aParticipant’s Separation from Service shall be immediately forfeited upon suchParticipant’s Separation from Service.

 

**13.****                              ****Performance-Based Awards****.**

 

13.1.                        General.  The purpose of this Section 13 is toprovide the Committee the ability to design any Award so that the amounts orshares payable or distributed pursuant to such Award qualify as “performance-basedcompensation” under section 162(m) of the Code.  For purposes of Performance-Based Awardsgranted to Covered Employees, the provisions of this Section 13 shallapply in addition to and, where necessary, in lieu of the provisions of theother provisions of this Plan.  OnlyCovered Employees shall be subject to the restrictions contained in this Section 13and only with respect to Awards intended to be Performance-Based Awards.

 

13.2.                        Establishment of PerformanceGoals for Covered Employees.  The Committee will, in its sole discretion,designate within the earlier of the (a) first 90 days of a PerformancePeriod and (b) lapse of 25% of the period of service to which thePerformance Goals relate, which 

 

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CoveredEmployees will be Participants for such period. However, designation of aCovered Employee as a Participant for a Performance Period shall not in anymanner entitle the Participant to receive an Award for the period. Thedetermination as to whether or not such Participant becomes entitled to anAward for such Performance Period shall be decided solely in accordance withthe provisions of this Section 13. Moreover, designation of a Covered Employee as a Participant for aparticular Performance Period shall not require designation of such CoveredEmployee as a Participant in any subsequent Performance Period and designationof one Covered Employee as a Participant shall not require designation of anyother Covered Employee as a Participant in such period or in any other period.

 

13.3.                        Discretion of Committee withRespect to Performance-Based Awards.  With regards to a particular PerformancePeriod, the Committee shall have full discretion to select the length of suchPerformance Period, the types of Awards to be issued, the kinds and/or levelsof the Performance Goals, whether the Performance Goals are to apply to theCompany or any one or more subunits thereof. Within the earlier of (a) thefirst 90 days of a Performance Period and (b) the lapse of 25% of theperiod of service, and in any event while the outcome is substantiallyuncertain, the Committee shall, with regards to the Performance-Based Awards tobe issued for such Performance Period, exercise its discretion with respect toeach of the matters enumerated in the immediately preceding sentence of this Section andrecord the same in writing.

 

13.4.                        Conditions to Receipt ofPerformance-Based Awards. Except as otherwise provided in such Participant’s Employment Agreement,a Participant shall be eligible to receive a Performance-Based Award for aPerformance Period only to the extent that the Performance Goals for suchperiod are achieved.  In addition, unlessotherwise provided in the relevant Award Agreement or Employment Agreement, aParticipant must be employed by the Company on the last day of a PerformancePeriod to be eligible for a Performance-Based Award for such PerformancePeriod.

 

13.5.                        Modification of PerformanceGoals.  The Committee, in its solediscretion, may modify the Performance Goals for Performance-Based Awardsapplicable to a Performance Period, provided that such modification is madeonly to reflect a change in the capitalization of the Company or a Subsidiary,such as a stock split or dividend, or a corporate transaction, such as amerger, any consolidation of the Company or a Subsidiary into anothercorporation, any separation of the Company or a Subsidiary (including a spinoffor other distribution of stock or property), any reorganization of a theCompany or a Subsidiary, or any partial or complete liquidation of the Companyor a Subsidiary.

 

13.6.                        Certification ofPerformance; Negative Discretion.  Following the completion of a PerformancePeriod, the Committee shall meet to review and certify in writing whether, andto what extent, the Performance Goals for the Performance Period have beenachieved and, if so, to also calculate and certify in writing the amount of thePerformance-Based Awards earned for the period. The Committee shall thendetermine the actual size of each Participant’s Award for the PerformancePeriod and, in so doing, may apply Negative Discretion, if and when it deemsappropriate, to reduce or eliminate the amount of the Performance-Based Awardearned for the Performance Period through the use of Negative Discretion, if inits sole judgment, such reduction or elimination is appropriate.

 

13.7.                        Timing of Performance-BasedAward Payments. Performance-Based Awards granted for a Performance Period shall be paidto Participants as soon as administratively practicable following thecompletion of the certifications required by Section 13.6.

 

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**14.**                               **Adjustments to Shares, Terms and Conditions and Performance Goals****.**

 

14.1.                        Adjustments to Shares.  In the event that the Committee shalldetermine that any stock dividend, recapitalization, forward stock split orreverse stock split, reorganization, division, merger, consolidation, spin-off,combination, repurchase or share exchange, extraordinary or unusual cash distributionor other similar corporate transaction or event, affects the Common Stock suchthat an adjustment is appropriate in order to prevent dilution or enlargementof the rights of Participants under the Plan, then the Committee shall, in anequitable manner, adjust any or all of (i) the number and kind of sharesof Common Stock which may thereafter be issued in connection with Awards, (ii) thenumber and kind of shares of Common Stock issuable in respect of outstandingAwards, (iii) the aggregate number and kind of shares of Common Stockavailable under the Plan, and (iv) the exercise or grant price relating toany Award or, if deemed appropriate, make provision for a cash payment withrespect to any outstanding Award; provided, however, in eachcase, that no adjustment shall be made that would cause the Plan to violatesection 422 of the Code with respect to Incentive Stock Options or that wouldadversely affect the status of any Performance-Based Award.

 

14.2.                        Adjustments to Terms andConditions and Performance Goals.  In addition, the Committee is authorized tomake adjustments in the terms and conditions of, and the criteria included in,Awards, including any Performance Goals, in recognition of any unforeseenevents or changes in circumstances, or in response to changes in applicablelaws, regulations, accounting principles or otherwise.  Notwithstanding the foregoing, no adjustmentshall be made in any outstanding Performance-Based Award to the extent thatsuch adjustment would adversely affect the status of the Award as aPerformance-Based Award.

 

**15.**                               **Section 409A****.**

 

15.1.                        General.  To the extent determined necessary oradvisable by the Committee in its sole discretion, Awards hereunder shall beinterpreted to the extent possible to comply with the provisions of section409A of the Code (or avoid application of such Code section), to the extentapplicable.  Participants shall be deemedto consent to any changes to Awards that the Board determines are necessary oradvisable to comply with the provisions of section 409A of the Code.  Adjustments made pursuant to Section 14shall, to the extent determined necessary or advisable in the sole discretionof the Committee, be made in compliance with the requirements of section 409Aof the Code or, if applicable, to avoid application of section 409A of theCode.

 

15.2.                        Specified Employees.Notwithstanding anything set forth in the Plan or an Award Agreement to thecontrary, if any Award pursuant to Section 6, 9, 10, 11 or 12 that isscheduled to be paid or delivered to a Participant that is a Specified Employeeupon such Participant’s Separation from Service would subject such Participantto any tax, interest or penalty imposed under section 409A of the Code if suchAward were paid or delivered to such Participant within six months after suchSeparation from Service, then such Award shall not be paid or delivered to suchParticipant until the date which is six months and one day after the date ofParticipant’s Separation from Service or, if earlier, the date of Participant’sdeath following such Separation from Service (the “Delayed Payment Date”).All such amounts that would, but for this Section 15.2, become payable ordeliverable prior to the Delayed Payment Date will be accumulated and paid onthe Delayed Payment Date without interest.

 

**16.****                              ****Dividends and Dividend Equivalents****.**

 

16.1.                        General.  If an Award is granted in the form ofRestricted Stock, Deferred Stock, Stock Units or Performance Share Awards, theCommittee may choose, at the time of the 

 

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grantof the Award or any time thereafter up to the time of the Award’s payment, toinclude as part of such Award an entitlement to receive dividends or dividendequivalents, subject to such terms, conditions, restrictions and/orlimitations, if any, as the Committee may establish.  Dividends and dividend equivalents shall bepaid in such form and manner (i.e., lump sum or installments), and at such time(s) asthe Committee shall determine in the Award Agreement.  The Award Agreement may provide, in theCommittee’s discretion, that dividends or dividend equivalents that are notpaid currently accrue interest, be reinvested into additional shares of CommonStock or be credited as additional Restricted Stock, Deferred Stock, StockUnits or Performance Shares and paid to the Participant if and when, and to theextent that, payment is made pursuant to such Award.

 

16.2.                        Reinvestment of Dividends.  Reinvestment of dividends paid in accordancewith Section 16.1 in additional Awards payable in Common Stock shall onlybe permissible if sufficient shares of Common Stock are available for suchreinvestment or payment (taking into account then outstanding Awards).  In the event that sufficient shares of CommonStock are not available for such reinvestment or payment, such reinvestment orpayment shall, as set forth in the Award Agreement, be either payableimmediately in cash or made in the form of a grant of Stock Units equal innumber to the shares that would have been obtained by such payment orreinvestment, the terms of which Stock Units shall provide for settlement incash and for dividend equivalent reinvestment in further Stock Units.

 

**17.****                              ****Change in Control****.**

 

17.1.                        Full Vesting.  Except to the extent the Committeespecifically establishes otherwise in an Award Agreement, immediately upon theoccurrence of a Change in Control:  (a) anyOptions and SARs outstanding which are not then exercisable and vested shallbecome fully exercisable and vested; (b) the Restriction Period applicableto any Restricted Stock shall lapse; (c) the Deferral Period applicable toany Deferred Stock shall lapse; (d) all Stock Units, Performance ShareAwards and Cash-Based Awards shall vest in full and any conditions applicablethereto shall be deemed satisfied; (e) all Performance Goals applicable toany Award shall be deemed to have been met at 100% of target; and (f) theCommittee may also make additional adjustments and/or settlements ofoutstanding Awards as it deems appropriate and consistent with the Plan’spurposes.

 

17.2.                        Options and SARs.                                         With respect toall Options or SARs that are unexercised and outstanding upon a Change inControl, the Committee may, in its sole discretion in an Award Agreement orotherwise, provide for one or more of the following:

 

17.2.1.               such Options or SARs shall be cancelled inexchange for a cash payment in an amount equal to the excess, if any, of theFair Market Value of the Common Stock underlying an Option or SAR (to theextent such Option or SAR is exercisable at such time) as of the date of theChange of Control over the Exercise Price of the Option or SAR.  If the Fair Market Value of the Common Stockunderlying an Option or SAR does not exceed the Exercise Price, then the Optionor SAR may be cancelled without any payment; and/or

 

17.2.2.               such Options or SARs shall be terminatedimmediately prior to the Change of Control, if the Participant fails toexercise the Option or SAR (to the extent such Option or SAR is exercisable atsuch time) within a specified period (of at least seven days) following theParticipant’s receipt of a written notice of such Change of Control and of theCompany’s intention to terminate the Option or SAR prior to such Change ofControl; and/or

 

17.2.3.               such Options or SARs shall be assumed by thesuccessor corporation, and shall be substituted with options involving thecommon stock of the successor 

 

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corporationwith equivalent value and with terms and conditions substantially similar tothose Options or SARs granted by the Company.

 

17.3.                        Restricted Stock, DeferredStock, Stock Units or Performance Share Awards.  With respect to Restricted Stock, DeferredStock, Stock Units or Performance Share Awards, the Committee may, upon aChange in Control, in its sole discretion in an Award Agreement or otherwise,provide for one or more of the following:

 

17.3.1.               such Award shall be cancelled in exchange fora payment in cash or Common Stock in an amount equal to the Fair Market Valueof the applicable Award; and/or

 

17.3.2.               such Award shall be assumed by the successorcorporation, and shall be substituted with a similar award involving the commonstock of the successor corporation with equivalent value and with terms andconditions substantially similar to the applicable Award awarded by theCompany.

 

17.4.                        Cash-Based Awards.  With respect to Cash-Based Awards, theCommittee may, upon a Change in Control, in its sole discretion in an AwardAgreement or otherwise, provide for one or more of the following:

 

17.4.1.               all or a portion of the Cash-Based Awardshall be settled in an amount to be determined by the Committee in its solediscretion; provided, that notwithstanding anything in the Plan to thecontrary, the Committee may determine, in its sole discretion, the portion ofany Cash-Based Award that is a Performance-Based Award to be settled and/orpayable; and/or

 

17.4.2.               such Cash-Based Award shall be assumed by thesuccessor corporation, and shall be substituted with a cash-based award withequivalent value and with terms and conditions that are substantially similarto those of the substituted Cash-Based Award awarded by the Company.

 

**18.**                               **Amendment and Termination****.**

 

18.1.                        Amendment and Termination ofthe Plan.  The Boardmay amend, alter, suspend, discontinue, or terminate the Plan without theconsent of the Company’s stockholders or Participants, except that any suchamendment, alteration, suspension, discontinuation, or termination shall besubject to the approval of the Company’s stockholders if (a) such actionwould increase the number of shares subject to the Plan, (b) such actionresults in the “repricing” of any Option or SAR otherwise than in accordancewith Section 14.1, or (c) such stockholder approval is required byany federal or state law or regulation or the rules of any stock exchangeor automated quotation system on which the Common Stock may then be listed orquoted; provided, however, that, subject to Section 15,without the consent of an affected Participant, no amendment, alteration, suspension,discontinuation, or termination of the Plan may materially and adversely affectthe rights of such Participant under any Award theretofore granted and anyAward Agreement relating thereto.

 

18.2.                        Amendment and Termination ofAwards.  The Committee may waive anyconditions or rights under, or amend, alter, suspend, discontinue, orterminate, any Award theretofore granted and any Award Agreement relatingthereto; provided, however, that, subject to Section 18.4,without the consent of an affected Participant, no such amendment, alteration,suspension, discontinuation, or termination of any Award may materially andadversely affect the rights of such Participant under such Award; provided,further, however, that each Participant shall be deemed to haveconsented to any amendments to an Award to the extent necessary for that Awardto satisfy Section 15.

 

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18.3.                        Substitution of Awards.  The Committee may, without the consent of anyParticipant, substitute any Award granted under the Plan which by its terms isintended to be settled in shares of Common Stock for any other type of Awardintended to be settled in shares of Common Stock, including without limitation,the substitution of SARs intended to be settled in shares of Common Stock forOptions; provided, however, that the terms of the substitutedAward and the economic benefit of the substituted Award are substantiallysimilar to the terms and economic benefit of the Award being replaced.

 

18.4.                        Performance Goals.  The foregoing notwithstanding, anyPerformance Goal or other performance condition specified in connection with anAward shall not be deemed a fixed contractual term, but shall remain subject toadjustment by the Committee, in its discretion at any time in view of theCommittee’s assessment of the Company’s strategy, performance of comparablecompanies, and other circumstances, except, with respect to Performance-BasedAwards, to the extent that any such adjustment to a performance condition wouldadversely affect the status of such Award as a Performance-Based Award.

 

**19.**                               **No Right to Employment or Service****.**  Neither the Plan nor any action takenhereunder shall be construed as giving any Participant any right to be retainedin the employ or service of the Company or any Subsidiary.  For purposes of this Plan, transfer ofemployment between the Company and its Subsidiaries shall not be deemed atermination of employment or service, and, to the extent provided by theCommittee, change in status between an Employee, Consultant and/or Non-EmployeeDirector shall also not be deemed a termination of employment or service.

 

**20.**                               **Taxes****.**

 

20.1.                        Withholding.  The Company or any Subsidiary is authorizedto withhold from any payment relating to an Award under the Plan, includingfrom a distribution of Common Stock or any payroll or other payment to aParticipant amounts of withholding and other taxes due in connection with anytransaction involving an Award, and to take such other action as the Committeemay deem advisable to enable the Company or the Subsidiary and Participants tosatisfy obligations for the payment of withholding taxes and other taxobligations relating to any Award.  Thisauthority shall include authority to withhold or receive Common Stock or otherproperty and to make cash payments in respect thereof in satisfaction of aParticipant’s tax obligations, provided that in the event the Company withholdsor receives Common Stock or other property, the amounts withheld may not exceedminimum statutory withholding requirements.

 

20.2.                        No Tax Advice or Guaranteeof Tax Consequences.  No personconnected with the Plan in any capacity, including, but not limited to, theCompany and its directors, officers, agents and employees, and the Committee,makes any representation, commitment, or guarantee that any particular specificor favorable tax treatment, including, but not limited to, federal, state andlocal income, excise, estate and gift tax treatment, will be applicable withrespect to the tax treatment of any Award, or that such tax treatment willapply to or be available to a Participant on account of participation in thePlan.  All taxes are the responsibilityof the Participant, who should consult his or her tax advisor.

 

**21.**                               **Limits on Transferability; Beneficiaries.**** **No Award or other right orinterest of a Participant under the Plan shall be pledged, encumbered, orhypothecated to, or in favor of, or subject to any lien, obligation, orliability of such Participant to, any party, other than the Company or anySubsidiary, or assigned or transferred by such Participant otherwise than bywill or the laws of descent and distribution, and such Awards and rights shallbe exercisable during the lifetime of the Participant only by the Participantor his or her guardian or legal representative. Notwithstanding the foregoing, the Committee may, in its discretion,provide that Awards or other rights or interests of a Participant granted 

 

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pursuantto the Plan (other than an Incentive Stock Option) be transferable, withoutconsideration, to immediate family members (i.e., children, grandchildren orspouse), to trusts for the benefit of such immediate family members and topartnerships in which such family members are the only partners.  The Committee may attach to suchtransferability feature such terms and conditions as it deems advisable.  In addition, a Participant may, in the mannerestablished by the Committee, designate a beneficiary (which may be a person ora trust) to exercise the rights of the Participant, and to receive anydistribution, with respect to any Award upon the death of the Participant.  A beneficiary, guardian, legal representativeor other person claiming any rights under the Plan from or through anyParticipant shall be subject to all terms and conditions of the Plan and anyAward Agreement applicable to such Participant, except as otherwise determinedby the Committee, and to any additional restrictions deemed necessary orappropriate by the Committee.

 

**22.**                               **Planis Unfunded**.  It ispresently intended that the Plan constitute an “unfunded” plan for incentiveand deferred compensation. The Committee may authorize the creation of trustsor other arrangements to meet the obligations created under the Plan to deliverCommon Stock or make payments; provided, however, that unless theCommittee otherwise determines, the existence of such trusts or otherarrangements is consistent with the “unfunded” status of the Plan.

 

**23.**                               **No Rights to Awards; No Stockholder Rights****. **No Participant shall haveany claim to be granted any Award under the Plan, and there is no obligationfor uniformity of treatment of Participants. No Award shall confer on any Participant any of the rights of a stockholderof the Company unless and until Common Stock is duly issued or transferred tothe Participant in accordance with the terms of the Award.

 

**24.**                               **Foreign Nationals**.  Without amending the Plan, Awards may begranted to Employees who are foreign nationals or employed outside the UnitedStates or both, on such terms and conditions different from those specified inthe Plan as may, in the judgment of the Committee, be necessary or desirable tofurther the purpose of the Plan and to comply with local law.

 

**25.**                               **Securities Law Requirements****.**

 

25.1.                        No Award granted hereundershall be exercisable if the Company shall at any time determine that (a) thelisting upon any securities exchange, registration or qualification under anystate or federal law of any Common Stock otherwise deliverable upon suchexercise, or (b) the consent or approval of any regulatory body or thesatisfaction of withholding tax or other withholding liabilities, is necessaryor appropriate in connection with such exercise.  In any of the events referred to in clause (a) orclause (b) above, the exercisability of such Awards shall be suspended andshall not be effective unless and until such withholding, listing,registration, qualifications or approval shall have been effected or obtainedfree of any conditions not acceptable to the Company in its sole discretion,notwithstanding any termination of any Award or any portion of any Award duringthe period when exercisability has been suspended.

 

25.2.                        The Committee may require,as a condition to the right to exercise any Award that the Company receive fromthe Participant, at the time any such Award is exercised, vests or anyapplicable restrictions lapse, representations, warranties and agreements tothe effect that the shares are being purchased or acquired by the Participantfor investment only and without any present intention to sell or otherwisedistribute such shares and that the Participant will not dispose of such sharesin transactions which, in the opinion of counsel to the Company, would violatethe registration provisions of the Securities Act of 1933, as then amended, andthe rules and regulations thereunder. Such shares shall bear appropriate legends summarizing such restrictionson the disposition thereof.

 

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**26.**                               **DataProtection**. By participating in the Plan, the Participantconsents to the collection, processing, transmission and storage by theCompany, in any form whatsoever, of any data of a professional or personalnature which is necessary for the purposes of administering the Plan

 

**27.**                               **Termination; Rescission**.  Unless the Plan shall theretofore have beenterminated, the Plan shall terminate on the 10-year anniversary of theeffective date, and no Awards under the Plan shall thereafter be granted.

 

**28.**                               **Fractional Shares****. **The Company will not be required to issue any fractional shares ofCommon Stock pursuant to the Plan.  TheCommittee may provide for the elimination of fractions and for the settlementof fractions in cash.

 

**29.**                               **Governing Law.**** **To the extentthat Federal laws do not otherwise control, the validity and construction ofthe Plan and any Award Agreement entered into thereunder shall be construed andenforced in accordance with the laws of the State of Delaware, but withoutgiving effect to the choice of law principles thereof.

 

**30.**                               **Effective Date; Shareholder Approval**.  The Plan shall be effective on the date it isadopted by the Board and approved by the shareholders.

 

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