Exhibit 10.1










Exhibit
10.1








































SOUTHERN
UNION COMPANY




AMENDED
AND RESTATED




2003
STOCK AND INCENTIVE PLAN

 

 

 

 

 

 

 

 

 

 

 

 


 


































 



 

TABLE
OF CONTENTS




                                                                                      Page


	
      I.
      
	
      PURPOSES ............................................................................................................................................................................................................................
	
      6

	
      1.1 
	
       
      Purposes. .............................................................................................................................................................................................................................
	
      6

	
      1.2 
	
       
      Types of
      Awards.................................................................................................................................................................................................................
	
      6

	
      1.3 
      
	
       
      Effectiveness. ......................................................................................................................................................................................................................
	
      6

	
      II.
      
	
      CERTAIN
      DEFINITIONS ....................................................................................................................................................................................................
	
      7

	
      2.1 
	
       
      “Annual Non-Employee Director
      Election” ...................................................................................................................................................................
	
      7

	
      2.2 
	
       
      “Arbitration
      Notice” ..........................................................................................................................................................................................................
	
      7

	
      2.3 
	
       
      “Available Shares”
       ...........................................................................................................................................................................................................
	
      7

	
      2.4 
	
       
      “Award” ..............................................................................................................................................................................................................................
	
      7

	
      2.5 
	
       
      “Award
      Agreement” .........................................................................................................................................................................................................
	
      7

	
      2.6 
	
       
      “Board of
      Directors” .........................................................................................................................................................................................................
	
      7

	
      2.7 
      
	
       
      “Business
      Day” .................................................................................................................................................................................................................
	
      7

	
      2.8 
	
       
      “Change in Control”
      .......................................................................................................................................................................................................... 
	
      7

	
      2.9 
	
       
      “Code”
       ................................................................................................................................................................................................................................
	
      8

	
      2.10 
	
       
      “Committee” .......................................................................................................................................................................................................................
	
      8

	
      2.11 
	
       
      “Company”
       ........................................................................................................................................................................................................................
	
      8

	
      2.12 
	
       
      “Covered
      Event”.................................................................................................................................................................................................................
	
      8

	
      2.13 
	
       
      “Date of
      Grant” ..................................................................................................................................................................................................................
	
      9

	
      2.14 
	
       
      “Designated
      Beneficiary” ................................................................................................................................................................................................
	
      9

	
      2.15 
	
       
      “Disability” ........................................................................................................................................................................................................................
	
      9

	
      2.16 
	
       
      “Dispute”
      ...........................................................................................................................................................................................................................
	
      9

	
      2.17 
	
       
      “Effective
      Date”.................................................................................................................................................................................................................
	
      9

	
      2.18 
	
       
      “Eligible
      Individuals” .......................................................................................................................................................................................................
	
      9

	
      2.19 
	
       
      “Exchange Act”
      ................................................................................................................................................................................................................ 
	
      9

	
      2.20 
	
       
      “Exercise
      Notice”...............................................................................................................................................................................................................
	
      9

	
      2.21 
	
       
      “Exercise
      Price”..................................................................................................................................................................................................................
      
	
      9

	
      2.22 
	
       
      “Fair Market
      Value”...........................................................................................................................................................................................................
	
      9

	
      2.23 
	
       
      “Holder”
      ............................................................................................................................................................................................................................. 
	
      11

	
      2.24 
	
       
      “Incentive
      Option”............................................................................................................................................................................................................
	
      11

	
      2.25 
	
       
      “Linked Stock Appreciation Right”
      ............................................................................................................................................................................... 
	
      11

	
      2.26 
	
       
      “Maximum Shares”
      ...........................................................................................................................................................................................................
	
      11

	
      2.27 
	
       
      “NASDAQ”
      .......................................................................................................................................................................................................................
	
      11

	
      2.28 
	
       
      “Non-Employee
      Director” ...............................................................................................................................................................................................
	
      11

	
      2.29 
	
       
      “Non-Employee Director Award”
      ..................................................................................................................................................................................
	
      11

	
      2.30 
	
       
      “Non-Linked Stock Appreciation
      Right” ......................................................................................................................................................................
	
      11

	
      2.31 
	
       
      “Nonstatutory
      Option”.....................................................................................................................................................................................................
	
      11

	
      2.32 
	
       
      “Normal
      Retirement” .........................................................................................................................................................................................................
	
      11

	
      2.33 
	
       
      “Notice 2005-1”
      ................................................................................................................................................................................................................. 
	
      11

	
      2.34 
	
       
      “Option”
      ............................................................................................................................................................................................................................. 
	
      11

	
      2.35
	
       
      “Option Agreement”
       .......................................................................................................................................................................................................
	
      11

	
      2.36  
	
       
      “Other Equity-Based Right”
      ...........................................................................................................................................................................................
	
      11


 

 

 



i











 

 

 

 







	
      2.37 
	
       
      “Outside Director”
      ............................................................................................................................................................................................................. 
	
      11

	
      2.38 
	
       
      “Performance
      Period” ........................................................................................................................................................................................................
	
      12

	
      2.39 
	
       
      “Performance
      Unit”............................................................................................................................................................................................................
	
      12

	
      2.40 
	
       
      “Person” .............................................................................................................................................................................................................................
	
      12

	
      2.41 
      
	
       
      “Plan”
       ................................................................................................................................................................................................................................
	
      12

	
      2.42 
	
       
      “Reload Option”
       ..............................................................................................................................................................................................................
	
      12

	
      2.43 
	
       
      “Restricted Stock
      Award”................................................................................................................................................................................................
	
      12

	
      2.44 
	
       
      “Rule
      16b-3”.......................................................................................................................................................................................................................
	
      12

	
      2.45 
	
       
      “SAR Exercise
      Price”........................................................................................................................................................................................................
	
      12

	
      2.46 
	
       
      “Section 162(m)”
       .............................................................................................................................................................................................................
	
      12

	
      2.47 
	
       
      “Section 409A”
       ...............................................................................................................................................................................................................
	
      12

	
      2.48 
	
       
      “Securities
      Act” ...............................................................................................................................................................................................................
	
      12

	
      2.49 
	
       
      “Stock” ..............................................................................................................................................................................................................................
	
      12

	
      2.50 
	
       
      “Stock Appreciation
      Right” ...........................................................................................................................................................................................
	
      12

	
      2.51 
	
       
      “Stock
      Award” .................................................................................................................................................................................................................
	
      13

	
      2.52 
	
       
      “Stock Bonus
      Award” .....................................................................................................................................................................................................
	
      13

	
      2.53 
	
       
      “Subsidiary” ......................................................................................................................................................................................................................
	
      13

	
      2.54 
	
       
      “Ten Percent
      Shareholder” ..............................................................................................................................................................................................
	
      13

	
      2.55 
	
       
      “Voting
      Securities” ...........................................................................................................................................................................................................
	
      13

	
      III.
      
	
      SHARES
      OF STOCK SUBJECT TO THE
      PLAN ............................................................................................................................................................
	
      13

	
      3.1 
	
       
      Maximum
      Shares. ..............................................................................................................................................................................................................
	
      13

	
      3.2 
	
       
      Available
      Shares. ..............................................................................................................................................................................................................
	
      14

	
      3.3 
	
       
      Restoration of Unused
      Shares.........................................................................................................................................................................................
	
      14

	
      3.4 
	
       
      Description of
      Shares. ......................................................................................................................................................................................................
	
      14

	
      3.5 
	
       
      Listing, Registration, etc. of
      Shares. ..............................................................................................................................................................................
	
      14

	
      3.6 
	
       
      Reduction in Outstanding Shares of
      Stock. .................................................................................................................................................................
	
      14

	
      IV.
      
	
      ADMINISTRATION
      OF THE
      PLAN ...............................................................................................................................................................................
	
      15

	
      4.1 
	
       
      Committee. ..........................................................................................................................................................................................................................
	
      15

	
      4.2 
	
       
      Duration, Removal,
      Etc. ....................................................................................................................................................................................................
	
      15

	
      4.3 
	
       
      Meetings and Actions of
      Committee. .............................................................................................................................................................................
	
      15

	
      4.4 
	
       
      Committee’s
      Powers. .........................................................................................................................................................................................................
	
      16

	
      4.5 
	
       
      Counsel, Consultants and
      Agents. ................................................................................................................................................................................
	
      16

	
      V.
      
	
      ELIGIBILITY
      AND PARTICIPATION; CERTAIN AWARD
      TERMS.........................................................................................................................
	
      17

	
      5.1 
	
       
      Eligible
      Individuals. ...........................................................................................................................................................................................................
	
      17

	
      5.2 
	
       
      Limitation for Incentive
      Options. ....................................................................................................................................................................................
	
      17

	
      5.3 
      
	
       
      Grant of
      Awards. ...............................................................................................................................................................................................................
	
      17

	
      5.4 
	
       
      Date of
      Grant. .....................................................................................................................................................................................................................
	
      17

	
      5.5 
	
       
      Award
      Agreements. ..........................................................................................................................................................................................................
	
      18

	
      5.6 
	
       
      No Right to
      Award. ...........................................................................................................................................................................................................
	
      18

	
      5.7
	
       
      Limitation on Individual
      Awards.....................................................................................................................................................................................
	
      18

	
      5.8 
	
       
      Payment of
      Taxes. .............................................................................................................................................................................................................
	
      18

	
      5.9 
	
       
      Forfeiture and Restrictions on Transfer; Other
      Conditions. ......................................................................................................................................
	
      19

	
      VI.
      
	
      TERMS
      AND CONDITIONS OF
      OPTIONS ...................................................................................................................................................................
	
      20

	
      6.1 
	
       
      Number of Shares; Type of
      Award. ...............................................................................................................................................................................
	
      20

	
      6.2  
	
       
      Vesting.  ..............................................................................................................................................................................................................................
	
      20




 

 

 



ii
















 

 

 


	
      6.3 
	
       
      Expiration. ...........................................................................................................................................................................................................................
	
      20

	
      6.4 
	
       
      Exercise
      Price. ....................................................................................................................................................................................................................
	
      20

	
      6.5 
	
       
      Method of
      Exercise. ..........................................................................................................................................................................................................
	
      21

	
      6.6 
	
       
      Incentive Option Exercises and Disqualifying
      Dispositions. ....................................................................................................................................
	
      21

	
      6.7 
	
       
      Medium and Time of
      Payment. .......................................................................................................................................................................................
	
      21

	
      6.8 
	
       
      Payment with Sale
      Proceeds. ...........................................................................................................................................................................................
	
      22

	
      6.9 
	
       
      Reload
      Provisions. .............................................................................................................................................................................................................
	
      22

	
      6.10 
	
       
      Limitation on Aggregate Value of Shares That May Become First Exercisable
      During Any Calendar Year Under an Incentive
      Option. ......
	
      23

	
      6.11 
	
       
      No Fractional
      Shares.........................................................................................................................................................................................................
	
      23

	
      6.12 
	
       
      Other Provisions Regarding Incentive
      Options. ..........................................................................................................................................................
	
      24

	
      VII.
      
	
      STOCK
      APPRECIATION
      RIGHTS ...................................................................................................................................................................................
	
      24

	
      7.1 
	
       
      Type of
      Award. .................................................................................................................................................................................................................
	
      25

	
      7.2 
	
       
      Linked Stock Appreciation
      Rights. ................................................................................................................................................................................
	
      25

	
      7.3 
	
       
      Non-Linked Stock Appreciation
      Rights. .......................................................................................................................................................................
	
      26

	
      7.4 
      
	
       
      Method of
      Exercise. ..........................................................................................................................................................................................................
	
      26

	
      7.5 
	
       
      Limitations on
      Rights........................................................................................................................................................................................................
	
      27

	
      7.6 
	
       
      Payment of
      Rights. ............................................................................................................................................................................................................
	
      27

	
      VIII.
      
	
      STOCK
      AWARDS ..............................................................................................................................................................................................................
	
      27

	
      8.1 
	
       
      Number of Shares; Type of
      Award. ................................................................................................................................................................................
	
      28

	
      8.2 
	
       
      Restrictions Applicable to Restricted Stock
      Awards....................................................................................................................................................
	
      28

	
      8.3 
	
       
      Stock Bonus
      Awards. .......................................................................................................................................................................................................
	
      29

	
      8.4 
	
       
      Purchase and
      Payment. .....................................................................................................................................................................................................
	
      29

	
      8.5 
	
       
      Compliance with Section
      409A. .......................................................................................................................................................................................
	
      29

	
      IX.
      
	
      PERFORMANCE
      UNITS ....................................................................................................................................................................................................
	
      29

	
      9.1 
	
       
      Number of
      Units. ...............................................................................................................................................................................................................
	
      30

	
      9.2 
	
       
      Performance Period, Vesting,
      Etc. ....................................................................................................................................................................................
	
      30

	
      9.3 
	
       
      Multiple
      Grants. .................................................................................................................................................................................................................
	
      30

	
      9.4 
	
       
      Performance
      Standards. ....................................................................................................................................................................................................
	
      30

	
      9.5 
	
       
      Modification of
      Standards. ..............................................................................................................................................................................................
	
      30

	
      9.6 
	
       
      Payment for
      Units. .............................................................................................................................................................................................................
	
      30

	
      9.7 
	
       
      Compliance with Section
      409A. .......................................................................................................................................................................................
	
      31

	
      X.
      
	
      AWARDS
      TO NON-EMPLOYEE
      DIRECTORS ..............................................................................................................................................................
	
      31

	
      10.1 
	
       
      Annual Awards to Non-Employee
      Directors.................................................................................................................................................................
	
      31

	
      10.2 
	
       
      Valuation of
      Awards. ........................................................................................................................................................................................................
	
      27

	
      10.3 
	
       
      Terms of
      Awards. ..............................................................................................................................................................................................................
	
      27

	
      10.4 
	
       
      Terms of Nonstatutory
      Options. .....................................................................................................................................................................................
	
      27

	
      XI.
      
	
      OTHER
      EQUITY-BASED
      RIGHTS ....................................................................................................................................................................................
	
      33

	
      XII.
      
	
      CHANGE
      IN CONTROL
      PROVISIONS ............................................................................................................................................................................
	
      34

	
      12.1 
	
       
      Changes in
      Control. ..........................................................................................................................................................................................................
	
      34

	
      XIII.
      
	
      ADDITIONAL
      PROVISIONS ............................................................................................................................................................................................
	
      34

	
      13.1 
	
       
      Adjustment of Awards and Authorized
      Stock. ............................................................................................................................................................
	
      35

	
      13.2 
	
       
      Termination of Employment Other than for Death, Disability or Normal
      Retirement. .............................................................................................
	
      36

	
      13.3 
	
       
      Termination of Employment for Death or
      Disability. ...................................................................................................................................................
	
      38

	
      13.4  
	
       
      Termination of Employment for Normal
      Retirement.  ...................................................................................................................................................
	
      39




 

 

 



iii
















 

 


	
      13.5 
	
       
      Cause of Termination; Employment
      Relationship. .......................................................................................................................................................
	
      40

	
      13.6 
	
       
      Exercise Following Death or
      Disability. .........................................................................................................................................................................
	
      41

	
      13.7 
	
       
      Transferability of
      Awards. ...............................................................................................................................................................................................
	
      41

	
      13.8 
	
       
      Delivery of Certificates of
      Stock. ....................................................................................................................................................................................
	
      42

	
      13.9 
	
       
      Certain
      Conditions. ...........................................................................................................................................................................................................
	
      42

	
      13.10 
	
       
      Certain Directors and
      Officers. ........................................................................................................................................................................................
	
      43

	
      13.11 
	
       
      Securities Act
      Legend. .....................................................................................................................................................................................................
	
      43

	
      13.12 
	
       
      Legend for Restrictions on
      Transfer. ..............................................................................................................................................................................
	
      44

	
      13.13 
	
       
      Rights as a Stockholder;
      Dividends. ...............................................................................................................................................................................
	
      44

	
      13.14 
	
       
      No
      Interest. .........................................................................................................................................................................................................................
	
      44

	
      13.15 
	
       
      Furnishing of
      Information. ...............................................................................................................................................................................................
	
      44

	
      13.16 
	
       
      No Obligation to
      Exercise. ...............................................................................................................................................................................................
	
      45

	
      13.17 
	
       
      Remedies. ...........................................................................................................................................................................................................................
	
      45

	
      13.18 
	
       
      Certain Information
      Confidential. ...................................................................................................................................................................................
	
      45

	
      13.19 
	
       
      Consideration. ...................................................................................................................................................................................................................
	
      45

	
      13.20 
	
       
      [Deliberately
      omitted] .......................................................................................................................................................................................................
	
      45

	
      13.21 
	
       
      [Deliberately
      omitted] .......................................................................................................................................................................................................
	
      45

	
      13.22 
	
       
      Dispute
      Resolution............................................................................................................................................................................................................
	
      45

	
      13.23 
	
       
      Awards to
      Non-Employees. .............................................................................................................................................................................................
	
      47

	
      13.24 
	
       
      Compliance with Section
      409A. .......................................................................................................................................................................................
	
      47

	
      XIV.
	
      DURATION
      AND AMENDMENT OF PLAN AND AWARD
      AGREEMENTS.........................................................................................................
	
      47

	
      14.1 
	
       
      Duration. ..............................................................................................................................................................................................................................
	
      47

	
      14.2 
	
       
      Amendment,
      etc. ................................................................................................................................................................................................................
	
      47

	
      XV.
      
	
      GENERAL ..............................................................................................................................................................................................................................
	
      49

	
      15.1 
	
       
      Application of
      Funds. .......................................................................................................................................................................................................
	
      49

	
      15.2 
	
       
      Right of the Company and Subsidiaries to Terminate
      Employment. .........................................................................................................................
	
      49

	
      15.3 
	
       
      No Liability for Good Faith
      Determinations. .................................................................................................................................................................
	
      49

	
      15.4 
	
       
      Other
      Benefits. ...................................................................................................................................................................................................................
	
      49

	
      15.5 
	
       
      Exclusion From Pension and Profit-Sharing
      Compensation. ......................................................................................................................................
	
      49

	
      15.6 
	
       
      Execution of Receipts and
      Releases. .............................................................................................................................................................................
	
      50

	
      15.7 
	
       
      Unfunded
      Plan. .................................................................................................................................................................................................................
	
      50

	
      15.8 
	
       
      No Guarantee of
      Interests. ..............................................................................................................................................................................................
	
      50

	
      15.9 
	
       
      Payment of
      Expenses. ......................................................................................................................................................................................................
	
      50

	
      15.10 
	
       
      Company
      Records. ...........................................................................................................................................................................................................
	
      50

	
      15.11 
	
       
      No Liability of
      Company. ................................................................................................................................................................................................
	
      51

	
      15.12 
	
       
      Company
      Action. ..............................................................................................................................................................................................................
	
      51

	
      15.13 
	
       
      Severability. .......................................................................................................................................................................................................................
	
      51

	
      15.14 
	
       
      Notices. ...............................................................................................................................................................................................................................
	
      51

	
      15.15 
	
       
      No
      Waiver. ..........................................................................................................................................................................................................................
	
      51

	
      15.16 
	
       
      Successors. ........................................................................................................................................................................................................................
	
      52

	
      15.17 
	
       
      Further
      Assurances. .........................................................................................................................................................................................................
	
      52

	
      15.18 
	
       
      Governing
      Law. ..................................................................................................................................................................................................................
	
      52

	
      15.19 
	
       
      Jurisdiction and
      Venue. .....................................................................................................................................................................................................
	
      52

	
      15.20 
	
       
      Interpretation. .....................................................................................................................................................................................................................
	
      52

	
      15.21  
	
       
      No
      Representations.  .........................................................................................................................................................................................................
	
      53




 

 

 







iv












 




SOUTHERN
UNION COMPANY




AMENDED
AND RESTATED




2003
STOCK AND INCENTIVE PLAN




 

I.  

 

PURPOSES

 




1.1  Purposes.

The
purposes of this Amended and Restated 2003 Stock and Incentive Plan (as the same
may be amended from time to time, the “Plan”) are (i) to advance the
interest of Southern Union Company, a Delaware corporation (the “Company”), and
its Subsidiaries (as defined below) and shareholders by strengthening the
ability of the Company and its Subsidiaries to attract and retain salaried
employees of experience and ability and (ii) to furnish an additional incentive
to such persons to expend their best efforts on behalf of the Company or any
such Subsidiary.




1.2  Types
of Awards.

The Plan
provides for the granting of the following types of awards:




(a)  Incentive
Options (as defined below);

 

(b)  Nonstatutory
Options (as defined below);

 

(c)  Stock
Appreciation Rights (as defined below);

 

(d)  Stock
Awards (as defined below);

 

(e)  Performance
Units (as defined below); and




(f)  Other
Equity-Based Rights (as defined below).

 

1.3  Effectiveness. 

The
Southern Union Company 2003 Stock and Incentive Plan (the “Initial Plan”) was
adopted by the Board of Directors on, and was effective as of, September 28,
2003 and was subsequently approved by the shareholders of the Company on
November 4, 2003. This Plan was adopted by the Board of Directors, and will be
effective, as of March 15, 2005 (the “Effective Date”) and Awards may be made
hereunder immediately, provided that no Award shall be effective unless and
until the Plan has been approved by the shareholders of the Company and, if such
approval is not obtained, any Awards previously given under this Plan shall
automatically be void. If this Plan is not so approved by the shareholders, then
this Plan shall be void ab
initio, and the
Initial Plan shall continue in effect as if this amendment and restatement had
not occurred; provided, however, that thereafter Awards may continue to be
granted pursuant to the terms of the Initial Plan, as in effect prior to this
amendment and 

 

 

 










1















Plan, as
in effect prior to this amendment and restatement and as may be otherwise
amended hereafter. Notwithstanding the foregoing or anything to the contrary
contained herein, any Awards granted under the Initial Plan prior to the
Effective Date shall continue in effect under the terms of the Award Agreements
and be controlled by the terms of the Initial Plan. Further, the status of any
Award granted under this Plan as an Incentive Option shall be subject to such
approval by the shareholders of the Company taking place within twelve (12)
months after the Effective Date.

 

II.  

 

 

CERTAIN
DEFINITIONS

 




In
addition to any terms defined elsewhere in the Plan, the following capitalized
terms shall have the following respective meanings as used in the
Plan:




2.1  “Annual
Non-Employee Director Election” has the meaning given to that term in Section
10.1.




2.2  “Arbitration
Notice” has the meaning given to that term in
Section 13.22(b).




2.3  “Available
Shares” has the meaning given to that term in Section 3.2.




2.4  “Award”
means the grant of any form of Option, Stock Appreciation Right, Stock Award,
Performance Unit or Other Equity-Based Right under the Plan, whether granted
singly, in combination, or in tandem, to a Holder pursuant to such terms,
conditions and limitations as the Committee may establish from time to time in
order to fulfill the objectives of the Plan. 




2.5  “Award
Agreement” means the written document or agreement evidencing the grant of an
Award by the Company to a Holder and any additional terms, conditions or
limitations with respect to such grant.




2.6  “Board of
Directors” means the board of directors of the Company.




2.7  “Business
Day” means any day other than a Saturday, a Sunday, or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.




2.8  “Change
in Control” means:




(a)  Any
“person” (solely for purposes of this Section 2.7, defined as such term is used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), or more than one person
acting as a group (as defined in paragraph (c) below), (i) becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power of the
Company’s outstanding Voting Securities or (ii) notwithstanding the occurrence
of a Change of Control pursuant to Section 2.7(a)(i), acquires (or has acquired


 



 

 


 







2


















(b)  during
the 12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of securities of the Company representing thirty
five percent (35%) or more of the combined voting power of the Company’s
outstanding Voting Securities; 

 

(c)  There is
a change in the composition of the Board of Directors over a period of twelve
(12) consecutive months or less such that a majority of the members of the Board
of Directors (rounded up to the nearest whole number) cease to be individuals
who either (x) have been members of the Board of Directors continuously since
the beginning of such period or (y) have been elected or nominated for election
as members of the Board of Directors during such period by at least two-thirds
(2/3) of the members of the Board of Directors described in clause (x) who were
still in office at the time such election or nomination was approved by the
Board of Directors; or 

 

(d)  The sale
of all or substantially all of the assets of the Company or any merger,
consolidation, issuance of securities or purchase of assets, the results of
which merger, consolidation, issuance of securities or purchase is the
occurrence of any event described in clause (a) or (b) above. Notwithstanding
anything to the contrary contained herein, no Change in Control shall be
considered to occur where there is a transfer of all or substantially all of the
assets of the Company to (i) a shareholder of the Company (immediately before
the asset transfer) in exchange for or with respect to its stock; (ii) an
entity, fifty percent (50%) or more of the total value or voting power of which
is owned, directly or indirectly, by the Company; (iii) a person, or more than
one person acting as a group, that owns, directly or indirectly, fifty percent
(50%) or more of the total value or voting power of all the outstanding stock of
the Company; or (iv) an entity, at least fifty percent (50%) of the total value
or voting power of which is owned, directly or indirectly, by a person described
in paragraph (iii).

 

For
purposes of this definition of Change in Control, persons will be considered to
be acting as a group if they are owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of assets, or similar business
transaction with the Company. It is intended that the Change in Control events
described in this definition meet the requirements for a “Change in Control
Event” as described in Notice 2005-1, as such requirements may be modified from
time to time by further IRS guidance under Section 409A, and the term “Change in
Control” shall be interpreted and applied for all purposes of this Plan in a
manner consistent with such intent.

 

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




2.10  “Committee”
means the committee appointed by the Board of Directors pursuant to Article IV
to administer the Plan.




2.11  “Company”
has the meaning given to that term in Section 1.1.




2.12  “Covered
Event” means (a) the commission by a Holder of a criminal or other act that
causes or probably will cause substantial economic damage to the Company or a
Subsidiary 

 

 







3











 

 

or
substantial injury to the business reputation of the Company or a Subsidiary;
(b) the commission by a Holder of an act of fraud in the performance of
such Holder’s duties on behalf of the Company or a Subsidiary; (c) the
continuing failure of a Holder to perform the duties of such Holder to the
Company or a Subsidiary (other than such failure resulting from the Holder’s
incapacity due to physical or mental illness) after written notice thereof
(specifying the particulars thereof in reasonable detail) and a reasonable
opportunity to be heard and cure such failure are given to the Holder by the
Company; or (d) the order of a court of competent jurisdiction requiring the
termination of the Holder’s employment. 





2.13  “Date of
Grant” has the meaning given to that term in Section  5.4 or (with respect
to Reload Options) Section 6.9.




2.14  “Designated
Beneficiary” has the meaning given to that term in Section 13.6(a).




2.15  “Disability”
has the meaning given it in the employment agreement between the Company or a
Subsidiary and the Holder; provided, however, that if the Holder has no such
employment agreement or such term is not defined in the employment agreement,
“Disability” shall mean that (1) the Committee has determined that the
Holder has a permanent physical or mental impairment of sufficient severity as
to prevent the Holder from performing duties for the Company or Subsidiary, as
applicable, and (2) the Committee or the Company or the relevant Subsidiary
has provided written notice to the Holder that the Holder’s employment is
terminated due to a permanent “Disability” pursuant to this Section.
Notwithstanding the preceding sentence, with respect to any Award constituting a
deferral of compensation subject to the requirements of Section 409A,
“Disability” shall mean that a Holder is “disabled” within the meaning of
Section 409(a)(2)(C). The Committee may establish any process or procedure it
deems appropriate for determining whether a Holder has a
“Disability.” 




2.16  “Dispute”
has the meaning given to that term in Section 13.22.




2.17  “Effective
Date” has the meaning given to that term in Section 1.3.




2.18  “Eligible
Individuals” means directors, officers, employees and agents of, and other
providers of services to, the Company or any of its Subsidiaries.




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




2.20  “Exercise
Notice” has the meaning given to that term in Section 6.5 (with respect to
Options) or Section 7.4 (with respect to Stock Appreciation Rights). 




2.21  “Exercise
Price” has the meaning given to that term in Section 6.4.




2.22  “Fair
Market Value” means a per share value defined as follows, for a
particular day:



 

 


 







4





















(a)  Subject
to Paragraph 2.21(e), if shares of Stock of the same class are listed or
admitted to unlisted trading privileges on any national securities exchange at
the date of determination of Fair Market Value, then the closing price of one
share on that exchange (or, if more than one exchange, the exchange determined
by the Committee to be used for such purpose) on the date in question or, if
such day is not a Business Day or no such closing price is reported for that
day, on the last Business Day for which such a closing price is reported before
the date in question, in any case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
unlisted trading privileges on that exchange; or

 

(b)  Subject
to Paragraph 2.21(e), if shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in Paragraph 2.21(a)
and if sales prices for shares of Stock of the same class in the
over-the-counter market are reported by the National Association of Securities
Dealers, Inc. Automated Quotations (“NASDAQ”) National Market System (or such
other system then in use) at the date of determination of Fair Market Value,
then the closing price of one share as reported on the NASDAQ National Market
System (or such other system then in use) on the date in question or, if such
day is not a Business Day or no such closing price is reported that day, on the
last Business Day for which such a closing price is reported before the date in
question; or




(c)  Subject
to Paragraph 2.21(e), if shares of Stock of the same class are not listed or
admitted to unlisted trading privileges as provided in Paragraph 2.21(a)
and closing prices for shares of Stock of the same class are not reported by the
NASDAQ National Market System (or such other system then in use) as provided in
Paragraph 2.21(b), and if bid and asked prices for shares of Stock of the
same class in the over-the-counter market are reported by NASDAQ (or, if not so
reported, by the National Quotation Bureau Incorporated) at the date of
determination of Fair Market Value, then the mean between the high bid and low
asked prices on the date in question or, if such day is not a Business Day or no
such prices are reported that day, on the last Business Day for which such
prices are reported before the date in question; or




(d)  If shares
of Stock of the same class are not listed or admitted to unlisted trading
privileges as provided in Paragraph 2.21(a) and closing prices therefor are
not reported by the NASDAQ National Market System as provided in
Paragraph 2.21(b) and bid and asked prices therefor are not reported by
NASDAQ (or the National Quotation Bureau Incorporated) as provided in
Paragraph 2.21(c) at the date of determination of Fair Market Value, then
the value determined by the Committee; or




(e)  If shares
of Stock of the same class are listed or admitted to unlisted trading privileges
as provided in Paragraph 2.21(a) or closing prices therefor are reported by
the NASDAQ National Market System as provided in Paragraph 2.21(b) or bid
and asked prices therefor are reported by NASDAQ (or the National Quotation
Bureau Incorporated) as provided in Paragraph 2.21(c) at the date of
determination of Fair Market Value, but the volume of trading is so low that the
Committee determines that such prices are not indicative of the fair value of
the Stock, then the value determined by the Committee.

 

 







5















2.23  “Holder”
means an Eligible Individual to whom an Award has been granted.




2.24  “Incentive
Option” means an incentive stock option as defined under Section 422 of the
Code.




2.25  “Linked
Stock Appreciation Right” has the meaning given to that term in
Section 7.1.




2.26  “Maximum
Shares” has the meaning given to that term in Section 3.1.




2.27  “NASDAQ”
has the meaning given to that term in Section 2.21.




2.28  “Non-Employee
Director” means a person who is a “Non-Employee Director” as that term is used
in Rule 16b-3.




2.29  “Non-Employee
Director Award” has the meaning given to that term in Section 10.1.




2.30  “Non-Linked
Stock Appreciation Right” has the meaning given to that term in Section
7.1.




2.31  “Nonstatutory
Option” means a stock option that (i) does not satisfy the requirements for an
incentive stock option under Section 422 of the Code; (ii) that is
designated at the Date of Grant or in the applicable Option Agreement to be an
option other than an Incentive Option; or (iii) is modified in accordance with
Paragraph 14.2(b) to be an option other than an Incentive Option.




2.32  “Normal
Retirement” means the termination of the Holder’s employment with the Company
and its Subsidiaries on account of retirement at any time on or after the date
on which the Holder attains fifty-five (55) (but for purposes of clarification
excludes any termination of employment as a result of a
Covered Event).




2.33  “Notice
2005-1” means IRS Notice 2005-1, 2005-2 I.R.B. 274.




2.34  “Option”
means either an Incentive Option or a Nonstatutory Option, or both. 




2.35  “Option
Agreement” means an Award Agreement for an Option.




2.36  “Other
Equity-Based Right” means an Award granted under Article XI of
the Plan.




2.37  “Outside
Director” means an “outside director” as that term is used in
Section 162(m).






 

 


 







6





















2.38  “Performance
Period” means a period over which performance is measured for the purpose of
determining the payment value of Performance Units.




2.39  “Performance
Unit” means a unit representing a contingent right to receive a specified amount
of cash or shares of Stock at the end of a Performance Period.




2.40  “Person”
means any individual, partnership, joint venture, corporation, trust,
unincorporated organization, association, limited liability company, joint stock
company, government or any department or agency thereof, or any other form of
association or entity.




2.41  “Plan”
has the meaning given to that term in Section 1.1.

 




2.42  “Reload
Option” has the meaning given to that term in Section 6.9.




2.43  “Restricted
Stock Award” means the grant or purchase, on the terms, conditions and
limitations that the Committee determines or on the terms, conditions and
limitations of Article VIII, of Stock that may be nontransferable and/or subject
to substantial risk of forfeiture until specific conditions are met; provided,
however, that this term shall not apply to shares of Stock issued or transferred
in connection with the exercise or settlement of an Option, a Stock Appreciation
Right, a Performance Unit or an Other Equity-Based Right, whether or not such
shares of Stock are nontransferable or subject to substantial risk of forfeiture
when issued or transferred. 




2.44  “Rule 16b-3”
means Rule 16b-3 under Section 16(b) of the Exchange Act. 




2.45  “SAR
Exercise Price” means the price specified in the Award Agreement related to a
Non-Linked Stock Appreciation Right as the exercise price per share of Stock for
that Non-Linked Stock Appreciation Right.




2.46  “Section 162(m)”
means Section 162(m) of the Code.




2.47  “Section
409A” means Section 409A of the Code.




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




2.49  “Stock”
means the Company’s authorized common stock, par value $1.00 per share, or any
other securities, property or assets that are substituted for the Stock as
provided in Section 13.1.




2.50  “Stock
Appreciation Right” means the right to receive an amount equal to the excess of
the Fair Market Value of a share of Stock (as determined on the date of
exercise) over, as appropriate, the Exercise Price of a related Option or over
the SAR Exercise Price.






 

 

 


 







7





















2.51  “Stock
Award” means the grant or purchase, on the terms, conditions and limitations
that the Committee determines or on the terms, conditions and limitations of
Article VIII, of a Restricted Stock Award or a Stock Bonus
Award. 




2.52  “Stock
Bonus Award” means the grant or purchase, on the terms, conditions and
limitations that the Committee determines or on the terms, conditions and
limitations of Article VIII, of Stock that may not be subject to a
substantial risk of forfeiture if conditions imposed by the Committee are not
satisfied; provided,
however, that this term shall not apply to shares of Stock issued or transferred
in connection with the exercise or settlement of an Option, a Stock Appreciation
Right, a Performance Unit or an Other Equity-Based Right, whether or not such
shares of Stock are nontransferable or subject to substantial risk of forfeiture
when issued or transferred.




2.53  “Subsidiary”
means an entity, as may from time to time be designated by the Committee, that
is (i) a subsidiary corporation, or is treated as, or as part of, a subsidiary
corporation of the Company (within the meaning of Section 424 of the Code), or
(ii) any other entity that the Company has a significant interest in, directly
or indirectly, including, without limitation, CCE Holdings, LLC, CrossCountry
Energy, LLC, each wholly owned subsidiary thereof and Citrus Corp. For purposes
of this definition, “control” means the power to direct the management and
policies of such entity, whether through the ownership of Voting Securities, by
contract or otherwise.




2.54  “Ten
Percent Shareholder” shall have the meaning given to that term in
Section 5.2.




2.55  “Voting
Securities” means any securities that at the applicable time are entitled to
vote generally in the election of directors, in the admission of general
partners, or in the selection of any other similar governing body.

 

III.  

 

 

SHARES
OF STOCK SUBJECT TO THE PLAN

 




3.1  Maximum
Shares.

Subject
to the provisions of Section 3.6 and Section 13.1, the aggregate
number of shares of Stock that may be issued or transferred pursuant to Awards
under the Plan (the “Maximum Shares”) shall be Seven Million (7,000,000);
provided, however, that, notwithstanding anything to the contrary contained
herein: (a) the total number of shares of Stock that can be issued or
transferred pursuant to Stock Awards, Performance Units and Other Equity Based
Rights shall not exceed Seven Hundred Twenty-Five Thousand (725,000) Shares, and
(b) the total number of shares of Stock that can be issued or transferred
through Incentive Options shall not exceed Six Million Nine Hundred Ninety Five
Thousand (6,995,000) shares.

 

 


 












8





















3.2  Available
Shares.

Except as
otherwise provided in Section 3.3, at any time, the number of shares of
Stock that may then be made subject to issuance or transfer pursuant to new
Awards under the Plan (the “Available Shares”) shall be equal to (a) the
number of Maximum Shares minus
(b) the sum of (1) the number of shares of Stock subject to issuance
or transfer upon exercise or settlement of then outstanding Awards (provided
that shares of Stock subject to issuance or transfer upon exercise or settlement
of then outstanding Linked Stock Appreciation Rights shall only be counted once,
and not for both the Option and related Linked Stock Appreciation Right and
provided further that Awards that may but need not be settled in Stock shall be
charged against the number of Maximum Shares in such amounts and at such times
as the Committee shall determine from time to time) and (2) the number of
shares of Stock that have been issued or transferred upon exercise or settlement
of Awards.




3.3  Restoration
of Unused Shares.

If Stock
subject to any Award is not issued or transferred, or ceases to be issuable or
transferable, for any reason, including because an Award is forfeited,
terminated, expires unexercised, is settled in cash in lieu of Stock or is
exchanged for other Awards, the shares of Stock that were subject to that Award
shall no longer be charged against the number of Maximum Shares in calculating
the number of Available Shares under Section 3.2 and shall again be
included in Available Shares.




3.4  Description
of Shares.

The
shares of Stock to be delivered under the Plan shall be made available from
(a) authorized but unissued shares of Stock, (b) Stock held in the
treasury of the Company, or (c) previously issued shares of Stock
reacquired by the Company, including shares purchased on the open market, in
each situation as the Board of Directors or the Committee may determine from
time to time. All shares of Stock issued or transferred as provided in the Plan
shall be fully paid and non-assessable to the extent permitted by
law.




3.5  Listing,
Registration, etc. of Shares.

If at any
time the Board of Directors shall determine in its discretion that the listing,
registration or qualification of the shares of Stock covered by the Plan upon
any national securities exchange or other trading system or under any state or
federal law, or the consent or approval of any governmental or regulatory body,
is necessary or desirable as a condition of, or in connection with, the issuance
or transfer of shares of Stock under the Plan, no shares of Stock shall be
issued or transferred under the Plan unless and until such listing,
registration, qualification, consent or approval shall have been effected or
obtained, or otherwise provided for, free of any conditions not acceptable to
the Board of Directors. Nothing in the Plan shall require the Company to
list, register or qualify any securities, to obtain any such consent or
approval, or to maintain any such listing, registration, qualification, consent
or approval.




3.6  Reduction
in Outstanding Shares of Stock.

Nothing
in this Article III shall impair the right of the Company to reduce the
number of outstanding shares of Stock pursuant to repurchases, redemptions, or
otherwise; provided, however, that no reduction in the number of 



 

 


 







9


















outstanding
shares of Stock shall (a) impair the validity of any outstanding Award,
whether or not that Award is fully exercisable or fully vested, or
(b) impair the status of any shares of Stock previously issued or
transferred pursuant to an Award or thereafter issued or transferred pursuant to
a then-outstanding Award as duly authorized, validly issued, fully paid, and
nonassessable shares.

 

IV.  

 

 

ADMINISTRATION
OF THE PLAN

 




4.1  Committee.

The Board
of Directors shall designate the Committee to administer the Plan, each member
of which shall at all times be (a) a Non-Employee Director and (b) an Outside
Director. The number of individuals that shall constitute the Committee shall be
determined from time to time by the Board of Directors, but shall be no fewer
than two (2) individuals. 




4.2  Duration,
Removal, Etc.

The members
of the Committee shall serve at the pleasure of the Board of Directors, which
shall have the power, at any time and from time to time, to remove members from
or add members to the Committee. Removal from the Committee may be with or
without cause. Any individual serving as a member of the Committee shall have
the right to resign from membership on the Committee by written notice to the
Board of Directors. The Board of Directors, and not the remaining members of the
Committee, shall have the power and authority to fill vacancies on the
Committee, however caused. The Board of Directors shall promptly fill any
vacancy that causes the number of members of the Committee to be below two (2)
or any other number that Rule 16b-3 or Section 162(m) may require from time
to time.




4.3  Meetings
and Actions of Committee.

The Board
of Directors shall designate which of the Committee members shall be the
chairman of the Committee. If the Board of Directors fails to designate a
Committee chairman, the members of the Committee shall elect one of the
Committee members as chairman, who shall act as chairman until the director
ceases to be a member of the Committee or until the Board of Directors elects a
new chairman. The Committee shall hold its meetings at such times and
places as the chairman of the Committee may determine. At all meetings of the
Committee, a quorum for the transaction of business shall be required, and a
quorum shall be deemed present if at least a majority of the members of the
Committee are present. At any meeting of the Committee, each member shall have
one vote. All decisions and determinations of the Committee shall be made by the
majority vote or majority decision of all of its members present at a meeting at
which a quorum is present; provided, however, that any decision or determination
reduced to writing and signed by all of the members of the Committee shall be as
fully effective as if it had been made at a meeting that was duly called and
held. The Committee may make any rules and regulations for the conduct of
its business that are not inconsistent with the provisions of the Plan, the
Certificate of Incorporation of the Company, the Bylaws of the Company,
Rule 16b-3 and Section 162(m), to the extent applicable, as the Committee
may deem advisable.






 

 


 







10





















4.4  Committee’s
Powers. 
Subject
to the express provisions of the Plan, any applicable Award Agreement,
Rule 16b-3 and Section 162(m), to the extent applicable, the Committee
shall have the authority (a) to adopt, amend, and rescind administrative,
interpretive and other rules and regulations relating to the Plan;
(b) to determine the Eligible Individuals to whom, and the time or times at
which, Awards shall be granted; (c) to determine the number of shares of
Stock, or amount of cash or other property or assets, that shall be the subject
of each Award; (d) to determine the terms and provisions of each Award
Agreement and any amendments thereto, including provisions defining or otherwise
relating to (i) the term and the period or periods and extent of
exercisability of the Options, Stock Appreciation Rights and other Awards,
(ii) the extent to which the transferability of shares of Stock issued or
transferred pursuant to any Award is restricted, (iii) the effect of
termination of employment on the Award, and (iv) except as provided in
Section 13.5, the effect of leaves of absence and the effect of transfers of an
Eligible Individual’s employment from the Company to a Subsidiary or from a
Subsidiary to the Company (consistent with any applicable regulations of the
Internal Revenue Service and any other requirements of applicable law with
respect to the same); (e) to construe the respective Award Agreements, the
Plan, and any rules or regulations with respect thereto; (f) to make
determinations of the Fair Market Value of the Stock pursuant to the Plan;
(g) to amend any Award Agreement or waive any provision, condition or
limitation thereof; (h) to delegate its duties under the Plan to such
agents as it may appoint from time to time, provided that the Committee may not
delegate its duties with respect to making Awards to Eligible Individuals;
(i) to take or refrain from taking such other actions as are described in
the Plan as within the purview of the Committee; and (j) to make all other
determinations, perform all other acts, and exercise all other powers and
authority necessary or advisable for administering the Plan, including the
delegation of those ministerial acts and responsibilities as the Committee deems
appropriate. Subject to Rule 16b-3 and Section 162(m), to the extent
applicable, the Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan, in any Award, or in any Award Agreement
in the manner and to the extent it deems necessary or desirable to carry the
Plan into effect. Any determinations and other actions of the Committee
with respect to any of the matters referred to in this Section 4.4 or elsewhere
in the Plan or in any Award Agreement need not be consistent, even among
Eligible Individuals who are similarly situated and/or who have previously
received similar or other Awards, except as may be specifically provided to the
contrary in the Plan or in the applicable Award Agreement.
The determinations and other actions of the Committee with respect to any
of the matters referred to in this Section 4.4 or elsewhere in the Plan or
in any Award Agreement shall, except as may be specifically provided to the
contrary in the Plan or in the applicable Award Agreement, be made in the sole
discretion of the Committee (subject to modification or rescission by the Board
of Directors, if consistent with Rule 16b-3 and Section 162(m), to the
extent applicable) and shall be final, binding and conclusive.




4.5  Counsel,
Consultants and Agents.

The
Committee may employ such legal counsel, consultants and agents as it may deem
desirable for the administration of the Plan and may rely upon any opinion
received from any such counsel or consultants and any computation 



 

 


 







11


















received
from any such consultants or agents. Expenses incurred by the Committee in the
engagement of any such counsel, consultants or agents shall be paid by the
Company.

 

V.  

 

 

ELIGIBILITY
AND PARTICIPATION; CERTAIN AWARD TERMS

 




5.1  Eligible
Individuals.

Awards
may be granted pursuant to the Plan only to persons who are Eligible Individuals
at the time of the grant thereof (and, with respect to Incentive Options,
satisfy the requirements of Section 5.2). Notwithstanding the preceding
sentence, except as may otherwise be provided in guidance issued by the IRS
under Section 409A, a person shall not be awarded an Option or Stock
Appreciation Right pursuant to the Plan if the Subsidiary by which such person
is employed (or to which such person provides services) would not be considered
part of the same “single employer” as the Company under Sections 414(b) and
414(c) of the Code. 




5.2  Limitation
for Incentive Options.

Notwithstanding
any provision contained in the Plan to the contrary, (a) a person shall not be
eligible to receive an Incentive Option unless the person is an Eligible
Individual employed by the Company or any Subsidiary of the Company that is a
subsidiary corporation, or is treated as, or as part of, a subsidiary
corporation of the Company (within the meaning of Section 424 of the Code) at
the time of the grant thereof, and (b) a person shall not be eligible to receive
an Incentive Option if, immediately before the time the Option is granted, that
person owns (within the meaning of Sections 422 and 424 of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or a Subsidiary of the Company that is a
subsidiary corporation, or is treated as, or as part of, a subsidiary
corporation of the Company (within the meaning of Section 424 of the Code) (a
“Ten Percent Shareholder”). Nevertheless, clause (b) of the foregoing sentence
of this Section 5.2 shall not apply if, at the time the Incentive Option is
granted, the Exercise Price of the Incentive Option is at least one hundred and
ten percent (110%) of the Fair Market Value per share of Stock and the Incentive
Option is not, by its terms, exercisable after the expiration of five (5) years
from the Date of Grant.




5.3  Grant
of Awards.

Subject
to the express provisions of the Plan, the Committee shall determine which
Eligible Individuals shall be granted Awards from time to time. In making
grants, the Committee may take into consideration the contribution the potential
Holder has made or may make to the success of the Company or its Subsidiaries
and such other considerations as the Committee may from time to time determine.
The Committee shall also determine the number (or the method of determining the
number) of shares of Stock, or amounts (or method of determining the amounts) of
cash or other property or assets, subject to each of the Awards.




5.4  Date
of Grant.

The date
on which the Award covered by an Award Agreement is granted (the “Date of
Grant”) shall be the date specified by the Committee as the effective date




 

 


 







12


















or date
of grant of an Award. Except as otherwise determined by the Committee, in no
event shall a Holder gain any rights with respect to an Award in addition to
those specified by the Committee in its grant, regardless of the time that may
pass between the grant of the Award and the actual execution or delivery of the
Award Agreement by the Company and (if required in the Award Agreement)
the Holder. The Committee may invalidate an Award at any time before the
Award Agreement is executed by the Holder (if such execution is required) or is
delivered to the Holder (if such execution is not required), and any such
invalidated Award shall be treated as never having been granted.




5.5  Award
Agreements.

Each
Award granted under the Plan shall be evidenced by an Award Agreement that is
executed by the Company and, if required in the Award Agreement, by the Eligible
Individual to whom the Award is granted, and that includes such terms,
conditions and limitations that the Committee shall deem necessary or desirable.
More than one Award may be granted under the Plan to the same Eligible
Individual and be outstanding concurrently (provided, however, that the grant of
certain rights in tandem with an Incentive Option may result in the Incentive
Option being treated as a Nonstatutory Option). 




5.6  No
Right to Award.

The
adoption of the Plan shall not be deemed to give any person a right to be
granted an Award.




5.7  Limitation
on Individual Awards.

No
Eligible Individual shall, in one calendar year, be granted Awards to which more
than Five Hundred Thousand (500,000) shares of Stock are subject, without regard
to any vesting limitations with respect to such grant.




5.8  Payment
of Taxes.

The
Committee may require a Holder to pay to the Company (or, if the Holder is an
employee of a Subsidiary of the Company, to such Subsidiary), with respect to an
Option or Stock Appreciation Right, at the time of the exercise of such Option
or Stock Appreciation Right, with respect to a Stock Award, at such time or
times as may be designated by the Committee, with respect to a Performance Unit,
at the time of the payment of cash or Stock in connection with the Performance
Unit, and with respect to Other Equity-Based Rights, at such time or times as
may be designated by the Committee, the amount that the Committee deems
necessary to satisfy the Company’s or such Subsidiary’s current or future
obligation to withhold federal, state or local income or other taxes associated
with the exercise, grant or payment with respect to the relevant Award. Upon the
exercise of an Option or Stock Appreciation Right requiring tax withholding (or,
with respect to a Stock Award, a Performance Unit, or an Other Equity-Based
Right, prior to such time or times as such payment is due from the Holder to the
Company or such Subsidiary), the Holder may (a) request that the Company
withhold from the shares of Stock to be issued or transferred to the Holder, or
the amount of cash to be paid to the Holder, the number of shares (based upon
the shares’ Fair Market Value per share as of the day before the date of
withholding) or the amount of cash necessary to satisfy the Company’s or such
Subsidiary’s obligation to withhold taxes, the determination as to such
obligation to be based on the shares’ Fair Market Value per share as of the day
before the date of exercise (with respect to an Option or Stock Appreciation
Right) or as of the date on which tax 



 

 


 







13


















withholding
is to be made (with respect to Stock Awards, Performance Units or Other
Equity-Based Rights); (b) request that the Holder be allowed to deliver to
the Company sufficient shares of Stock (based upon the shares’ Fair Market Value
per share as of the day before the date of such delivery) to satisfy the
Company’s or such Subsidiary’s tax withholding obligations; or (c) deliver
sufficient cash to the Company to satisfy the Company’s or such Subsidiary’s tax
withholding obligations. Holders who wish to proceed under clause (a) or
(b) above must make their request to do so at such time and in such manner that
the Committee prescribes from time to time, and such transaction shall be
effected in accordance with such procedures as the Committee may establish from
time to time. Notwithstanding the foregoing, however, the Committee may, at
its sole option, deny any Holder’s request to proceed under clause (a) or (b)
above or may impose any conditions it deems appropriate on such action,
including the escrow of shares of Stock or cash. In the event the Committee
subsequently determines that the cash amount or the aggregate Fair Market Value
(as determined above) of any shares of Stock withheld or tendered as payment of
any tax withholding obligation is insufficient to discharge that tax withholding
obligation, then the Holder shall pay to the Company, immediately upon the
Committee’s request, the amount of that deficiency. The Company may also,
if the Committee so elects, retain any cash and any certificates evidencing
shares of Stock to which such Holder is entitled upon the exercise of the Option
or Stock Appreciation Right or in connection with a Stock Award or upon
settlement of a Performance Unit or with respect to any Other Equity-Based Right
as security for the payment of any tax withholding obligation until satisfied,
and the Company shall have all rights of a secured creditor under the Uniform
Commercial Code with respect to the same. Each Holder acknowledges that the
delivery to the Company of Stock acquired by such Holder upon exercise of an
Incentive Option may constitute a disqualifying disposition of such Stock for
purposes of the Code.




5.9  Forfeiture
and Restrictions on Transfer; Other Conditions.

Without
limitation of any other provisions of the Plan or any power of the Board of
Directors or the Committee hereunder, any Award Agreement may contain or
otherwise provide for, in addition to any terms, conditions or limitations
required or permitted by other provisions of the Plan, such other terms,
conditions or limitations as the Committee may deem advisable or proper from
time to time provided any such additional term, condition or limitation is not
inconsistent with the terms of the Plan, including (i) restrictions on the
transferability of the Award; (ii) restrictions or the removal of
restrictions upon the exercise of an Award; (iii) restrictions or the
removal of restrictions on the retention or transfer of any shares of Stock
acquired pursuant to an Award or otherwise; (iv) options and rights of
first refusal in favor of the Company and one or more stockholders of the
Company; (v) requirements that the Holder render substantial services to
the Company or one or more of its Subsidiaries for a specified period of time;
(vi) restrictions on disclosure and use of certain information regarding
the Company or other Persons; (vii) restrictions on solicitation of
employees and other Persons; (viii) restrictions on competition; and (ix) other
terms, conditions or limitations; all of which as the Committee may deem proper
or advisable from time to time.

 

 


 












14


















 

VI.  

 

 

TERMS
AND CONDITIONS OF OPTIONS

 




All
Options granted under the Plan shall comply with, and the related Option
Agreements shall be subject to, the terms, conditions and limitations set forth
in this Article VI (to the extent each such term, condition or limitation
applies to the form of Option and provided that, if any such term, condition or
limitation is left to the discretion of the Committee, the Committee determines
to apply it to such Option) and also to the terms, conditions and limitations
set forth in Article XIII (to the extent each such term, condition or
limitation applies to the form of Option and provided that, if any such term,
condition or limitation is left to the discretion of the Committee, the
Committee determines to apply it to such Option); provided, however, that the
Committee may authorize an Option Agreement that expressly contains or is
subject to terms, conditions and limitations that differ from any of the terms,
conditions and limitations of Article XIII. The Committee may also
authorize an Option Agreement that contains or is subject to any or all of the
terms, conditions and limitations of Article XII (to the extent each such term,
condition or limitation applies to the form of Option and provided that, if any
such term, condition or limitation is left to the discretion of the Committee,
the Committee determines to apply it to such Option) or similar terms,
conditions and limitations; nevertheless, no term, condition or limitation of
Article XII (or any similar term, condition or limitation) shall apply to an
Option Agreement unless the Option Agreement expressly states that such term,
condition or limitation applies.

 

6.1  Number
of Shares; Type of Award.

Each
Option Agreement shall state the total number of shares of Stock to which
it relates. Each Option Agreement shall identify the Option evidenced
thereby as an Incentive Option or Nonstatutory Option, as the case may be, and
no Option Agreement shall cover both an Incentive Option and a Nonstatutory
Option. 




6.2  Vesting.

Each
Option Agreement shall state (i) any time, periods or other conditions in or
pursuant to which the right to exercise the Option or a portion thereof shall
vest and (ii) the number (or method of determining the number) of shares of
Stock with respect to each such vesting.




6.3  Expiration.

Nonstatutory
Options and Incentive Options may be exercised during the term determined by the
Committee and set forth in the Option Agreement; provided that no Incentive
Option shall be exercised after the expiration of a period of ten (10) years
(or, with respect to a Ten Percent Shareholder, five (5) years) commencing on
the Date of Grant of the Incentive Option.




6.4  Exercise
Price.

Each
Option Agreement shall state the exercise price per share of Stock (the
“Exercise Price”), which shall not be less than the greatest of (a) the par
value per share of the Stock, (b) one hundred percent (100%) of the Fair
Market Value per share of the Stock on the Date of Grant of the Option, or (c)
in the case of an Incentive Option granted to a 

 

 

 

 







15












 

Ten
Percent Shareholder, one hundred ten percent (110%) of the Fair Market Value per
share of the Stock on the Date of Grant of the Option. 




6.5  Method
of Exercise.

Each
Option shall be exercisable only by notice of exercise (the “Exercise Notice”)
in the manner (including the time period) specified by the Committee from time
to time (which need not comply with Section 15.14 if expressly so provided by
the Committee) to the Secretary of the Company at the chief executive office of
the Company (or to such other person and location as may be designated from time
to time by the Committee) during the term of the Option, which notice shall
(a) state the number of shares of Stock with respect to which the Option is
being exercised, (b) be signed or otherwise given by the Holder of the
Option or by another Person authorized to exercise the Option pursuant to
Section 13.6 or 13.7 (to the extent that each is applicable to the Option) or
pursuant to the relevant Option Agreement, (c) be accompanied by the
aggregate Exercise Price for all shares of Stock for which the Option is
exercised in accordance with Section 6.7, and (d) include such other
information, instruments, and documents as may be required to satisfy any other
condition under the Plan or the relevant Option Agreement or as may be
reasonably imposed by the Committee. The Option shall not be deemed to have been
exercised unless all of the requirements of the preceding provisions of this
Section 6.5 have been satisfied.




6.6  Incentive
Option Exercises and Disqualifying Dispositions.

Except as
provided in Paragraph 13.6(b) or Section 13.7 (to the extent that each is
applicable to the Option), during the Holder’s lifetime, only the Holder may
exercise an Incentive Option. The Holder of an Incentive Option shall
immediately notify the Company in writing of any disposition of any Stock
acquired pursuant to the Incentive Option that would disqualify the Incentive
Option from being treated as an incentive stock option under Section 422 of the
Code (including any disposition of Stock upon exercise of an Award requiring
exercise, or in connection with the payment of taxes with respect to an Award,
if the same would constitute such a disqualifying disposition). The notice shall
state the number of shares disposed of, the dates of acquisition and disposition
of the shares, and the consideration received in connection with each
disposition. 




6.7  Medium
and Time of Payment.

The
Exercise Price of an Option shall be payable in full upon the exercise of the
Option (a) in cash, by cashier’s check, by wire transfer or by other means
as may be acceptable to the Committee from time to time, (b) with the
Committee’s prior consent (which consent, with respect to an Incentive Option,
must be evidenced in the relevant Option Agreement as of the Date of Grant), and
to the extent permitted by applicable law, with shares of Stock that would
otherwise be issued or transferred to the Holder upon the exercise of the Option
or with shares of Stock already owned by the Holder (but in all events excluding
any shares that are to be or were issued or transferred pursuant to a Restricted
Stock Award with respect to which the restrictions have not yet expired or been
removed or that otherwise are or will be subject to restrictions on
transferability or a substantial risk of forfeiture) and having an aggregate
Fair Market Value at least equal to the aggregate Exercise Price payable




 

 


 







16


















in
connection with such exercise, and pursuant to such procedures (including
constructive delivery of such shares of Stock) as the Committee may establish
from time to time for such purpose, (c) with the Committee’s prior consent
(which consent, with respect to an Incentive Option, must be evidenced in the
relevant Option Agreement as of the Date of Grant), and to the extent permitted
by applicable law, in such other forms, under such other terms, and by such
other means (including those specified in Section 6.8) as may be acceptable to
the Committee from time to time, and pursuant to such procedures as the
Committee may establish from time to time for such purpose, or (d) with the
Committee’s prior consent (which consent, with respect to an Incentive Option,
must be evidenced in the relevant Option Agreement as of the Date of Grant), by
any combination of clauses (a), (b) and (c). Unless otherwise provided in
the relevant Option Agreement, any portion of the Exercise Price that is paid
with shares of Stock that the Holder acquired from the Company, directly or
indirectly, shall be paid only with shares of Stock that the Holder has owned
for more than six (6) months (or such longer or shorter period of time, if any,
as may be required to avoid payment with such shares resulting in a charge to
earnings for financial accounting purposes). If the Committee elects to
accept shares of Stock in payment of all or any portion of the aggregate
Exercise Price, then (for purposes of payment of the aggregate Exercise Price)
unless otherwise provided in the relevant Option Agreement those shares of Stock
shall be deemed to have a cash value equal to their aggregate Fair Market Value
determined as of the day before the date of the delivery of the
Exercise Notice. Each Holder acknowledges that the delivery to the Company
of Stock acquired by such Holder upon exercise of an Incentive Option may
constitute a disqualifying disposition of such Stock for purposes of the Code.





6.8  Payment
with Sale Proceeds.

The Committee
may (but shall not be required to) approve from time to time (which approval,
with respect to an Incentive Option, must be evidenced in the relevant Option
Agreement as of the Date of Grant) arrangements with a brokerage firm (provided
that such arrangements comply with applicable law, including Regulation T of the
Board of Governors of the Federal Reserve System), under which that brokerage
firm, on behalf of the Holder, shall pay to the Company the aggregate Exercise
Price of the Option being exercised (either as a loan to the Holder or from the
proceeds of the sale of Stock issued or transferred pursuant to that exercise of
the Option), and the Company shall cause the shares with respect to which the
Option was so exercised to be delivered to the brokerage firm. Such
transactions shall be effected in accordance with such procedures (which may
include payment of the exercise price by, or delivery of Stock to, such
brokerage firm) as the Committee may establish from time
to time.




6.9  Reload
Provisions.

The
Committee may cause one or more Option Agreements to contain provisions pursuant
to which a Holder who pays all or a portion of the Exercise Price of an Option,
or the tax required to be withheld pursuant to the exercise of an Option, by
surrendering (or having withheld) shares of Stock shall automatically be granted
an Option for the purchase of the number of shares of Stock equal to the number
of shares so surrendered (or withheld) (a “Reload Option”). With respect to an
Incentive Option, no Holder shall be entitled to a Reload Option unless the
Holder’s Option Agreement, as of the Date of Grant, provides for the Reload
Option. The Date of Grant of the Reload Option shall be the date on which the
Holder surrenders (or the Company withholds) the shares of Stock in respect of
which the 

 

 

 

 







17












 

Reload
Option is granted. The Reload Option shall have an Exercise Price equal to the
Fair Market Value per share of Stock on the Date of Grant of the Reload Option
and shall have a term that is no longer than the remaining term of the
underlying Option. If a Reload Option relates to shares surrendered or withheld
in connection with the exercise of an Incentive Option, then for purposes of the
Plan such Reload Option shall be considered an Incentive Option provided that
such Reload Option otherwise satisfies the requirements for an incentive stock
option under Section 422 of the Code; otherwise, a Reload Option shall be
treated as a Nonstatutory Option for purposes of the Plan. Option Agreements
containing provisions for Reload Options may contain such terms, conditions and
limitations with respect to such Reload Options as the Committee may determine
(which may include vesting provisions, limitations on the number of shares
subject to Reload Options or the number of times Reload Options shall be
granted, or prohibitions on the grant of Reload Options with respect to options
exercised following acceleration of vesting or following or in anticipation of a
Change in Control). Separate Option Agreements may from time to time be
granted by the Company to existing Holders of Nonstatutory Options or Incentive
Options to provide the same benefit to such Holders as the Reload Options
described in the foregoing provisions of this Section 6.9, but any such stand
alone Options shall not be deemed to be Reload Options for purposes of the
Plan.




6.10  Limitation
on Aggregate Value of Shares That May Become First Exercisable During Any
Calendar Year Under an Incentive Option.

With
respect to any Incentive Option granted under the Plan, the aggregate Fair
Market Value of shares of Stock subject to an incentive stock option that first
becomes exercisable by a Holder in any calendar year (under all plans of the
Company, its Subsidiaries that are subsidiary corporations, or are treated as,
or as part of, a subsidiary corporation of the Company (within the meaning of
Section 424 of the Code) or any predecessor corporation) may not (with respect
to that Holder) exceed $100,000, or such other amount as may be prescribed under
Section 422 of the Code. As used in the previous sentence, Fair Market
Value shall be determined as of the date the Incentive Option is granted, and
the limitation shall be applied by taking into account Incentive Options in the
order in which they were granted. For purposes of this Section 6.10,
“predecessor corporation” means (a) a corporation that was a party to a
transaction described in Section 424(a) of the Code (or which would be so
described if a substitution or assumption under that section had been
effected) with the Company, (b) a corporation which, at the time the new
incentive stock option (within the meaning of Section 422 of the Code) is
granted, is a related corporation of the Company, or (c) a predecessor
corporation of any such corporations. Failure to comply with this Section 6.10
(including any such failure resulting from accelerated vesting of an Incentive
Option, whether under Section 12.1 or Section 13.21 (to the extent that either
is applicable) or otherwise) shall not impair the enforceability or
exercisability of any Incentive Option, but shall cause the Incentive Option to
be treated as a Nonstatutory Option for federal tax purposes to the extent that
it exceeds the $100,000 limitation described in this Section 6.10.




6.11  No
Fractional Shares.

The
Company shall not in any case be required to sell, issue, transfer or deliver
any fractional shares with respect to any Option. In lieu of the issuance or
transfer of any fractional share of Stock, the Company shall pay to the Holder
an amount in 



 

 


 







18


















cash
equal to the same fraction (as the fractional share) of the Fair Market Value of
a share of Stock determined as of the date of the applicable Exercise
Notice.




6.12  Other
Provisions Regarding Incentive Options.

With
respect to any Option that is designated in the governing Option Agreement as an
Incentive Option, (i) if any of the terms, conditions or limitations of the
Plan or the relevant Option Agreement conflict with the requirements of
Sections 421, 422 and 424 of the Code, as applicable, then those
conflicting terms, conditions and limitations shall be deemed inoperative to the
extent they so conflict with such requirements, and (ii) if the Plan or
such Option Agreement does not contain any provision required to be included
herein or therein under Sections 421, 422 and 424 of the Code, as
applicable, that provision shall be deemed to be incorporated herein or therein
with the same force and effect as if that provision had been set out at length
herein or therein, in each case unless the Committee determines to treat such
Option (in whole or in part) as a Nonstatutory Option. Notwithstanding the
foregoing, however, (i) to the extent that any Option that was intended to
qualify as an Incentive Option nevertheless cannot so qualify, that Option (to
that extent) shall be deemed a Nonstatutory Option for all purposes of
the Plan, and (ii) in no event shall this Section 6.12 operate to overcome
the terms under which such Option vests (including any accelerated vesting, to
the extent applicable).

 

VII.  

 

 

STOCK
APPRECIATION RIGHTS

 




All Stock
Appreciation Rights granted under the Plan shall comply with, and the related
Award Agreements shall be subject to, the terms, conditions and limitations set
forth in this Article VII (to the extent each such term, condition or limitation
applies to the form of Stock Appreciation Right and provided that, if any such
term, condition or limitation is left to the discretion of the Committee, the
Committee determines to apply it to such Stock Appreciation Right) and also to
the terms, conditions or limitations set forth in Article XIII (to the extent
each such term, condition or limitation applies to the form of Stock
Appreciation Right and provided that, if any such term, condition or limitation
is left to the discretion of the Committee, the Committee determines to apply it
to such Stock Appreciation Right); provided, however, that the Committee may
authorize an Award Agreement governing a Stock Appreciation Right that expressly
contains or is subject to terms, conditions and limitations that differ from any
of the terms, conditions and limitations set forth in Article XIII.
The Committee may also authorize an Award Agreement governing a Stock
Appreciation Right that contains or is subject to any or all of the terms,
conditions and limitations of Article XII (to the extent each such term,
condition or limitation applies to the form of Stock Appreciation Right and
provided that, if any such term, condition or limitation is left to the
discretion of the Committee, the Committee determines to apply it to such Stock
Appreciation Right) or
similar terms, conditions and limitations; nevertheless, no term, condition or
limitation of Article XII (or any similar term, condition or limitation) shall
apply to an Award Agreement governing a Stock Appreciation Right unless such
Award Agreement expressly states that such term, condition or
limitation applies.

 

 

 












19





















 

7.1  Type
of Award.

A Stock
Appreciation Right may be granted to an Eligible Individual (a) in
connection with an Option, either at the time of grant or at any time during the
term of the Option (a “Linked Stock Appreciation Right”), or (b) without
relation to an Option (a “Non-Linked Stock Appreciation Right”). Each Award
Agreement relating to a Stock Appreciation Right shall identify the Stock
Appreciation Rights evidenced thereby as Linked Stock Appreciation Rights or
Non-Linked Stock Appreciation Rights, as the case may be, and no Award Agreement
with respect to Stock Appreciation Rights shall cover both Linked Stock
Appreciation Rights and Non-Linked Stock Appreciation Rights.




7.2  Linked
Stock Appreciation Rights.

A Linked
Stock Appreciation Right shall entitle the Holder, upon exercise, to surrender
the related Option or any portion thereof, to the extent unexercised, and to
receive payment of an amount computed pursuant to Paragraph 7.2(b). That
Option shall then cease to be exercisable to the extent surrendered. No Linked
Stock Appreciation Right shall be issued if the Committee determines that such
issuance may cause the Limited Stock Appreciation Right, the related Option, or
both to constitute or to include a deferral of compensation subject to Section
409A. A Linked Stock Appreciation Right shall relate to the same number of
shares of Stock as the Option to which it relates, and shall be subject to the
terms of the Option Agreement for the related Option, but shall also be subject
to the following additional provisions:




(a)  Exercise
and Transfer. A
Linked Stock Appreciation Right shall be exercisable only at such time or times
and only to the extent that the related Option is exercisable (provided,
however, that a Linked Stock Appreciation Right shall be exercisable only if and
to the extent that the Fair Market Value per share of Stock that is subject to
the related Option exceeds the Exercise Price for such Option) and shall not be
transferable except to the extent that the related Option is transferable.
Without limitation of the foregoing, to the extent that the related Option
terminates, expires or has been exercised, the Linked Stock Appreciation Right
shall terminate.

 

(b)  Value
of Right. Upon
the exercise of a Linked Stock Appreciation Right, the Holder shall be entitled
to receive payment from the Company of an amount determined
by multiplying:





	(1)  	
      The
      difference obtained by subtracting the Exercise Price of a share of Stock
      specified in the related Option from the Fair Market Value of a share of
      Stock on the date of exercise of the Linked Stock Appreciation Right,
      by




 


	(2)  	
      The
      number of shares as to which that Linked Stock Appreciation Right has been
      exercised.




 




 

 

 












20


















7.3  Non-Linked
Stock Appreciation Rights.

A
Non-Linked Stock Appreciation Right shall be exercisable as determined by the
Committee and set forth in the Award Agreement governing the Non-Linked Stock
Appreciation Right, which Award Agreement shall comply with the following
provisions:




(a)  Number
of Shares. Each
Award Agreement shall state the total number of shares of Stock to which the
Non-Linked Stock Appreciation Right relates.

 

(b)  Vesting. Each
Award Agreement shall state (i) any time, periods or other conditions in or
pursuant to which the right to exercise the Non-Linked Stock Appreciation Right
or a portion thereof shall vest and (ii) the number (or method of determining
the number) of shares of Stock with respect to each such vesting.

 

(c)  Expiration. Each
Award Agreement shall state the date at which the Non-Linked Stock Appreciation
Right shall expire to the extent not previously exercised.

 

(d)  SAR
Exercise Price; Value of Right. Each
Award Agreement shall state the SAR Exercise Price, which SAR Exercise Price
shall not be less than one hundred percent (100%) of the Fair Market Value per
share of the Stock on the Date of Grant of the Non-Linked Stock Appreciation
Right. A Non-Linked Stock Appreciation Right shall entitle the Holder, upon
exercise of the Non-Linked Stock Appreciation Right, to receive payment of an
amount determined by multiplying:

 


	(1)  	
      the
      difference obtained by subtracting the SAR Exercise Price from the Fair
      Market Value of a share of Stock on the date of exercise of the Non-Linked
      Stock Appreciation Right, by




 


	(2)  	
      the
      number of vested rights as to which the Non-Linked Stock Appreciation
      Right has been exercised.




 

7.4  Method
of Exercise.

Each
Stock Appreciation Right shall be exercisable only by notice of exercise (the
“Exercise Notice”) in the manner specified by the Committee from time to time
(which need not comply with Section 15.14 if expressly so provided by the
Committee) to the Secretary of the Company at the chief executive office of the
Company (or to such other person and location as may be designated from time to
time by the Committee) during the term of the Stock Appreciation Right, which
notice shall (a) state the number of shares of Stock with respect to which
the Stock Appreciation Right is being exercised, (b) be signed or otherwise
given by the Holder of the Stock Appreciation Right or by another person
authorized to exercise the Stock Appreciation Right pursuant to the Plan or the
relevant Award Agreement, and (c) include such other information,
instruments and documents as may be required to satisfy any other condition
under the Plan or the relevant Award Agreement. The Stock Appreciation
Right shall not be deemed to have been exercised unless all of the requirements
of the preceding provisions of this Section 7.4 have been satisfied.
Notwithstanding the foregoing, a Non-Linked Stock Appreciation Right shall
be deemed exercised in full (to the extent that it is vested) on the last day of
its term, if not otherwise exercised by the Holder, provided that the Fair
Market Value 



 

 


 







21


















per share
of the shares of Stock subject to the Non-Linked Stock Appreciation Right
exceeds the SAR Exercise Price of such Non-Linked Stock Appreciation Right on
such date.  




7.5  Limitations
on Rights.

Notwithstanding
Paragraph 7.2(b) and Paragraph 7.3(d), the Committee may limit the
amount payable upon exercise of a Stock Appreciation Right. Any such
limitation must be set forth in the Award Agreement governing the Holder’s Stock
Appreciation Right.




7.6  Payment
of Rights.

Payment
of the amount determined under Paragraph 7.2(b) or Paragraph 7.3(d)
and Section 7.5 may be made solely in whole shares of Stock valued at the
Fair Market Value per share of Stock on the date of exercise of the Stock
Appreciation Right or, if so determined by the Committee, solely in cash or a
combination of cash and Stock; provided, however, that no such payment shall be
made in cash unless the Committee determines that a payment in such form will
not cause the Stock Appreciation Right or any payment made with respect thereto
to be treated as a deferral of compensation subject to the requirements of
Section 409A. If the Committee decides to make full payment in shares of Stock
and the amount payable results in a fractional share, payment for the fractional
share shall be made in cash (subject to the proviso in the preceding sentence).


 

VIII.  

 

 

STOCK
AWARDS

 




All Stock
Awards granted under the Plan shall comply with, and the related Award
Agreements shall be subject to, the terms, conditions and limitations set forth
in this Article VIII (to the extent each such term, condition or limitation
applies to the form of Stock Award and provided that, if any such term,
condition or limitation is left to the discretion of the Committee, the
Committee determines to apply it to such Stock Award) and also to the terms,
conditions and limitations set forth in Article XIII (to the extent applicable
to the form of Stock Award and provided that, if any such term, condition or
limitation is left to the discretion of the Committee, the Committee determines
to apply it to such Stock Award); provided, however, that the Committee may
authorize an Award Agreement governing a Stock Award that expressly contains or
is subject to terms, conditions and limitations that differ from the terms,
conditions and limitations set forth in Article XIII. The Committee may
also authorize an Award Agreement governing a Stock Award that contains or is
subject to any or all of the terms, conditions and limitations of Article XII
(to the extent applicable to the form of Stock Award and provided that, if any
such term, condition or limitation is left to the discretion of the Committee,
the Committee determines to apply it to such Stock Award) or similar terms,
conditions and limitations; nevertheless, no term, condition or limitation of
Article XII (or any similar term, condition or limitation) shall apply to an
Award Agreement governing a Stock Award unless the Award Agreement expressly
states that such term, condition or limitation applies.

 

 

 




 












22


















8.1  Number
of Shares; Type of Award.

Each
Award Agreement governing a Stock Award shall state the total number of shares
of Stock to which it relates and shall designate each share as either associated
with a Restricted Stock Award or a Stock Bonus Award.







8.2  Restrictions
Applicable to Restricted Stock Awards.

Unless
otherwise provided in the relevant Award Agreement, all shares of Stock granted
or sold pursuant to Restricted Stock Awards made under the Plan shall be subject
to the following terms, conditions and limitations:




(a)  Transferability. The
shares may not be sold, transferred or otherwise alienated or hypothecated until
the restrictions are removed or expire.

 

(b)  Legend. Each
certificate representing such shares shall bear a legend making appropriate
reference to the restrictions imposed.

 

(c)  Possession. The
Committee may (i) authorize issuance of a certificate for shares associated
with a Restricted Stock Award only upon removal or expiration of the applicable
restrictions, (ii) require the Company to retain physical custody of
certificates representing shares issued or transferred pursuant to Restricted
Stock Awards during the restriction period and require the Holder of the Award
to execute stock powers in blank for those certificates and deliver those stock
powers to the Company, (iii) require the Holder to enter into an escrow
agreement providing that the certificates representing shares issued or
transferred pursuant to Restricted Stock Awards shall remain in the physical
custody of an escrow holder until all restrictions are removed or expire, or
(iv) take such other steps as the Committee may determine in order to
enforce such restrictions.

 

(d)  Expiration
or Removal of Restrictions. The
restrictions imposed pursuant to this Section 8.2 on Restricted Stock
Awards shall expire as determined by the Committee and set forth in the
applicable Award Agreement. Expiration of the restrictions may be based on or
conditioned on the passage of time, continuing employment or service as an
employee or officer, achievement of performance objectives, or other events,
occurrences or conditions determined by the Committee. Each Restricted
Stock Award may have different restrictions, including a different restriction
period, as determined by the Committee. The Committee may remove any
restriction or reduce any restriction period applicable to a particular
Restricted Stock Award. Upon the expiration or removal of all restrictions, the
Company shall deliver to the Holder of the Restricted Stock Award, as soon as
practicable following the request of such Holder, a certificate representing the
number of shares for which such restrictions have expired or been removed, free
of any restrictive legend relating to the expired or removed restrictions.


 

(e)  Rights
as Stockholder. Subject
to the provisions of this Section 8.2, the Committee may determine what
rights, if any, the Holder shall have with respect to the Restricted Stock
Awards granted or sold, including any right to vote the related shares or to


 



 

 


 







23


















receive
dividends and other distributions paid or made with respect
thereto.

 

(f)  Other
Conditions. The
Committee may impose such other terms, conditions or limitations on any shares
granted or sold pursuant to Restricted Stock Awards made under the Plan as it
may deem advisable, including (i) restrictions under the Securities Act or
Exchange Act, (ii) restrictions relating to the requirements of any
securities exchange or quotation system upon which the shares or shares of the
same class are listed or traded, and (iii) restrictions relating to any
state or foreign securities law applicable to the shares.

 

8.3  Stock
Bonus Awards.

Any
shares of Stock granted or sold pursuant to Stock Bonus Awards made under the
Plan shall not be subject to vesting or other restrictions under Section 8.2
unless the Committee specifically provides otherwise in the related Award
Agreement; however, the Committee may, in the related Award Agreement or
otherwise, impose other terms, conditions and limitations with respect to any
such shares of Stock, even if similar or identical to the provisions set forth
in Section 8.2.




8.4  Purchase
and Payment.

If any
shares of Stock are to be sold rather than granted pursuant to Restricted Stock
Awards or Stock Bonus Awards made under the Plan, then the relevant Award
Agreement shall set forth the price to be paid for such shares and the method
of payment.




8.5  Compliance
with Section 409A. Each
Restricted Stock Award or Stock Bonus Award shall comply with the requirements
of subsection (a) of Section 409A, if applicable, and be operated in accordance
with such requirements.

 

IX.  

 



PERFORMANCE
UNITS

 




All
Performance Units granted under the Plan shall comply with, and the related
Award Agreements shall be subject to, the terms, conditions and limitations set
forth in this Article IX (to the extent each such term, condition or limitation
applies to the form of Performance Unit and provided that, if any such term,
condition or limitation is left to the discretion of the Committee, the
Committee determines to apply it to such Performance Unit) and also to the
terms, conditions and limitations set forth in Article XIII (to the extent each
such term, condition or limitation applies to the form of Performance Unit and
provided that, if any such term, condition or limitation is left to the
discretion of the Committee, the Committee determines to apply it to such
Performance Unit); provided, however, that the Committee may authorize an Award
Agreement governing a Performance Unit that expressly contains or is subject to
terms, conditions and limitations that differ from the terms, conditions and
limitations set forth in Article XIII. The Committee may also authorize an
Award Agreement governing a Performance Unit that contains or is subject to any
or all of the terms, conditions and limitations of Article XII (to the extent
each such term, condition or limitation applies to the form of Performance Unit
and provided that, if any such term, condition or limitation is left to the
discretion of the Committee, the Committee determines to apply it to such
Performance Unit) or similar terms, conditions and 

 

 

 












24


















limitations;
nevertheless, no term or provision of Article XII (or any similar term,
condition or limitation) shall apply to an Award Agreement governing a
Performance Unit unless such Award Agreement expressly states that such term,
condition or limitation applies.

 

9.1  Number
of Units.

Each
Award Agreement governing a Performance Unit shall state the total number of
Performance Units to be awarded under that Award Agreement. 




9.2  Performance
Period, Vesting, Etc.

Each
Award Agreement governing a Performance Unit shall state (i) the beginning and
ending dates of the relevant Performance Period(s), (ii) any time, periods or
other conditions in or pursuant to which the right to receive the Performance
Unit or a portion thereof shall vest and (iii) the number of Performance Units
(or portions thereof) with respect to each such vesting. 




9.3  Multiple
Grants.

The
Committee may make grants of Performance Units in such a manner that two or more
Performance Periods (which need not be the same period or of the same duration)
are in progress simultaneously. At or before the beginning of each Performance
Period, the Committee shall establish the contingent value of each Performance
Unit for that Performance Period, which may vary depending on the degree to
which performance objectives established by the Committee are met.




9.4  Performance
Standards.

At or
before the beginning of each Performance Period, the Committee shall
(i) establish for that Performance Period such specific performance
objectives as the Committee believes are relevant to the Company’s overall
business objectives, (ii) determine the minimum and maximum value of a
Performance Unit (which may be equal to the Fair Market Value per share of Stock
as of a specified date) and the value of a Performance Unit based on the degree
to which performance objectives are achieved, exceeded or not achieved,
(iii) determine a minimum performance level below which Performance Units
will be assigned a value of zero, and a maximum performance level above which
the value of Performance Units will not increase, and (iv) notify each
Holder of a Performance Unit for that Performance Period in writing of the
established performance objectives and minimum, target, and maximum Performance
Unit value for that Performance Period.




9.5  Modification
of Standards.

If the
Committee determines that the established performance measures or objectives are
no longer suitable to the Company’s objectives because of a change in the
Company’s business, operations, corporate structure, capital structure, or other
conditions the Committee deems to be material, the Committee may modify the
performance measures and objectives as it considers appropriate
and equitable.




9.6  Payment
for Units.

The basis
for payment of Performance Units for a given Performance Period shall be the
achievement of those performance objectives determined by the 



 

 


 







25


















Committee
at the beginning of the Performance Period (subject to modification pursuant
to Section 9.5). If minimum performance is not achieved or exceeded for a
Performance Period, no payment shall be made and all contingent rights
shall cease. If minimum performance is achieved or exceeded, the value of a
Performance Unit shall be based on the degree (as determined by the Committee)
to which actual performance exceeded the pre-established (or modified) minimum
performance standards. Unless otherwise provided in the relevant Award
Agreement, the amount of payment shall be determined by multiplying the number
of Performance Units granted at the beginning of the Performance Period that
have vested by the final Performance Unit value. Payments shall be made in whole
shares of Stock valued at Fair Market Value on the last day of the applicable
Performance Period or, if so determined by the Committee, solely in cash or a
combination of cash and Stock. If the Committee decides to make full payment in
shares of Stock and the amount payable results in a fractional share, payment
for the fractional share shall be made in cash. In the event that shares of
Stock that are subject to substantial risk of forfeiture are awarded in
satisfaction of Performance Units, such shares may be registered in the name of
the Holder and deposited, together with a stock power endorsed in blank, with
the Company. Except as may be otherwise provided in the relevant Award
Agreement, any payments with respect to Performance Units may be made in a lump
sum or in installments, as the Committee may determine, and any lump sum
payments shall be made as soon as practicable following the end of the relevant
Performance Period(s). 




9.7  Compliance
with Section 409A. Each
Performance Unit granted under the Plan shall comply with the requirements of
subsection (a) of Section 409A, if applicable, and be operated in accordance
with those requirements.

 

X.  

 

 

AWARDS
TO NON-EMPLOYEE DIRECTORS

 




10.1 Annual
Awards to Non-Employee Directors. Subject
to adjustment pursuant to Section 13.1, each Non-Employee Director shall
receive, for each calendar year that the Plan is in effect, pursuant to an
irrevocable election to be made by each individual Non-Employee Director by the
later of the end of the calendar year immediately preceding the calendar year
for which such grant is made or 30 days after his initial appointment or
election as a director (each, an “Annual Non-Employee Director Election”), one
of the following (each of (a), (b) or (c) below is hereinafter referred to as a
“Non-Employee Director Award”):




(a)  a
Restricted Stock Award totaling 2,000 shares (or such lesser or greater amount
(but not to exceed 4,000 shares) as may be determined by the Committee in its
discretion);

 

(b)  an Award
of Nonstatutory Options having a value equivalent to the value of the Restricted
Stock Award contemplated by Section 10.1(a) above as of the Date of Grant,


 



 

 


 







26


















which
equivalent value shall be determined in accordance with Section 10.2;
or

 

(c)  a
combination of Awards of Restricted Stock and Nonstatutory Options in such
proportions as may as specified by the Non-Employee Director in his or her
Annual Non-Employee Director Election, which together have a value equivalent to
the value of the Restricted Stock Award contemplated by Section 10.1(a) above as
of the Date of Grant, which equivalent value shall be determined in accordance
with Section 10.2.

 

10.2 Valuation
of Awards. The
Committee shall determine the value of any Award of Restricted Stock or
Nonstatutory Options pursuant to Section 10.1 using any recognized valuation
methodology (including assumptions) selected by the Committee in its absolute
discretion.

 

10.3 Terms
of Awards. The
Committee in its discretion shall determine the Date of Grant and the amount and
terms of each Non-Employee Director Award, in each case subject to the terms,
conditions and limitations of this Plan. Notwithstanding the foregoing, (a) each
Non-Employee Director’s Award for the calendar year ending December 31, 2005
shall consist solely of Restricted Stock; (b) any Non-Employee Director who
fails to make an Annual Non-Employee Director Election for any calendar year
shall receive an Award consisting solely of Restricted Stock, notwithstanding
any election from any prior year to the contrary; (c) if an individual serving
as a Non-Employee Director on the Date of Grant for a calendar year pursuant to
Section 10.1 commenced service as a Non-Employee Director after January 1 of
such calendar year, the Committee may (but shall not be required to) determine
that the Non-Employee Director Award be reduced to reflect such individual’s
partial year of service; and (d) if a Non-Employee Director is not a member of
the Board of Directors on the Date of Grant, such Non-Employee Director shall
not be entitled to a Non-Employee Director Award for such calendar year pursuant
to Section 10.1, provided, that the Committee may (but shall not be required to)
determine that a Non-Employee Director Award be made to such Non-Employee
Director as of a date in such calendar year designated by the Committee and be
reduced to reflect such individual’s partial year of service.

 

10.4 Terms
of Nonstatutory Options. Any
Award of Nonstatutory Options pursuant to Section 10.1 shall have the following
terms, subject to any additional or different terms, conditions or limitations
specified pursuant to this Plan or in the Award Agreement relating to such
Award: 

 

(a) such
Nonstatutory Options shall become exercisable in full six months after their
Date of Grant and shall not be exercisable after the tenth (10th)
anniversary of their Date of Grant; and 

 

(b)  the
Exercise Price under each Nonstatutory Option shall be 100% of the 



 

 


 







27


















Fair
Market Value per share of the Stock on the Date of Grant of the Nonstatutory
Option.

 

XI.  

 

 

OTHER
EQUITY-BASED RIGHTS

 




The
Committee is authorized to grant to Eligible Individuals such Awards (other than
Options, Stock Appreciation Rights, Stock Awards, or Performance Units) that are
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Stock (including, without limitation,
securities convertible into Stock), as may be deemed by the Committee to be
consistent with the purposes of the Plan; provided, however, that such grants
must comply with applicable law. Without limitation of the foregoing, each such
Award shall comply with the requirements of Section 409A of the Code, if
applicable, and be operated in accordance with such requirements. The terms,
conditions and limitations of Other Equity-Based Rights shall be set forth in
the Award Agreements governing the relevant Other Equity-Based Rights and may
contain or be subject to such provisions in addition to those required by the
Plan as the Committee may deem advisable. All Other Equity-Based Rights
granted under the Plan shall be subject to the terms, conditions and limitations
set forth in Article XIII (to the extent each such term, condition or limitation
applies to the form of Other Equity-Based Right and provided that, if any such
term, condition or limitation is left to the discretion of the Committee, the
Committee determines to apply it to such Other Equity-Based Right); provided,
however, that the Committee may authorize an Award Agreement governing an Other
Equity-Based Right which expressly contains or is subject to terms, conditions
and limitations that differ from any of the terms, conditions and limitations
set forth in Article XIII. The Committee may also authorize an Award Agreement
governing an Other Equity-Based Right that contains or is subject to any or all
of the terms, conditions and limitations of Article XII (to the extent that each
such term, condition or limitation applies to the form of Other Equity-Based
Right and provided that, if any such term, condition or limitation is left to
the discretion of the Committee, the Committee determines to apply it to such
Other Equity-Based Right) or similar terms, conditions and limitations;
nevertheless, no term, condition or limitation of Article XII (or any similar
term, condition or limitation) shall apply to an Award Agreement governing an
Other Equity-Based Right unless such Award Agreement expressly states that such
term, condition or limitation applies. Shares of Stock or other securities
delivered pursuant to a purchase right granted under an Award related to an
Other Equity-Based Right shall be purchased for such consideration, which may be
paid by such method or methods and in such form or forms, including cash, Stock,
other securities, other Awards, other property or assets, or any combination
thereof, as the Committee shall determine, the value of which consideration, as
established by the Committee, shall not be less than the aggregate Fair Market
Value of such shares of Stock or the fair market value (as determined by the
Committee) of such other securities, other Awards or other property or assets as
of the Date of Grant (or, if the Committee so determines, in the case of any
such purchase right retroactively granted in tandem with or in substitution for
another Award or any outstanding award granted under any other plan of the
Company, on the Date of Grant of such other Award or award).






 

 


 







28


















 

XII.  

 

 

CHANGE
IN CONTROL PROVISIONS

 




The
Committee may authorize an Award that contains or is subject to any or all of
the terms, conditions and limitations of this Article XII or similar terms,
conditions and limitations; nevertheless, no term, condition or limitation of
this Article XII (or any similar term, condition or limitation) shall apply to
an Award unless the related Award Agreement expressly states that such term,
condition or limitation applies.




12.1  Changes
in Control.

Immediately
prior to the occurrence of a Change in Control (or at such other time prior to a
Change in Control or proposed Change in Control as may be determined by the
Committee), (a) all outstanding Options and Stock Appreciation Rights shall
immediately become fully vested and exercisable in full, including that portion
of any Options or Stock Appreciation Rights that pursuant to the terms and
provisions of the applicable Award Agreement had not yet become exercisable;
(b) the expiration of the restrictions applicable to all outstanding
Restricted Stock Awards shall immediately be accelerated so that the Stock
subject to those Awards shall be owned by the Holders thereof without transfer
restrictions or risks of forfeiture; and (c) such other results shall take place
with respect to any outstanding Stock Bonus Awards, Performance Units or Other
Equity-Based Rights as may be set forth in the relevant Award Agreements for
such Stock Bonus Awards, Performance Units and Other Equity-Based Rights.
Nothing in this Section 12.1 shall impose on any Holder any obligation to
exercise any Award immediately before or upon any Change in Control, nor shall
any Holder forfeit the right to exercise any Award during the remainder of the
original term of the Award because of a Change in Control, except as provided
under Article XIII (if applicable), under other provisions governing
termination or expiration of the applicable Award, or as provided in the
following sentence. Notwithstanding the foregoing, the Committee may, by notice
to any or all Holders, provide that all or any portion of any outstanding Option
or Stock Appreciation Right (whether vested prior to the Change in Control or
subject to accelerated vesting due to the Change in Control) that is not
exercised within a specified time period (as determined by the Committee) ending
on or before the Change in Control shall terminate upon the Change in Control
(or at such later time as may be determined by the Committee) and in such event
such unexercised Options or Stock Appreciation Rights shall terminate upon the
Change in Control, notwithstanding any provisions of this Plan that would allow
for a later exercise, including Article XIII if applicable.

 

XIII.  

 

 

ADDITIONAL
PROVISIONS

 




The
terms, conditions and limitations of this Article XIII shall apply to each Award
(unless, pursuant to the relevant Award Agreement, such term, condition or
limitation is inapplicable or is altered); provided, however, that the Committee
may authorize an Award 



 

 


 







29


















Agreement
that expressly contains terms, conditions and limitations that differ from the
terms, conditions and limitations set forth in this Article XIII.




13.1  Adjustment
of Awards and Authorized Stock.

The terms
of an Award and the Stock authorized for issuance or transfer under the Plan
shall be subject to adjustment from time to time in accordance with the
following provisions:




(a)  In the
event that the Committee shall determine that any dividend or other distribution
(whether in the form of cash, Stock, other securities, or other property or
assets), reclassification, consolidation, Stock split, reverse Stock split,
recapitalization, reorganization, merger, plan of exchange, split-up, spin off,
combination, repurchase, issuance or transfer of securities or other similar
transaction or event affects the shares of Stock such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits made or intended to be made
available under the Plan, then the Committee shall, in such manner as it may
deem equitable, (i) adjust any or all of (w) the number and type of shares
of Stock (or other securities, property or assets) which thereafter may be made
the subject of Awards, (x) the number and type of shares of Stock (or other
securities, property or assets) subject to outstanding Awards, (y) the
number and type of shares of Stock (or other securities, property or assets)
specified as the Maximum Shares, Available Shares, any limitation per Eligible
Individual (pursuant to Section 5.7 or otherwise) or other restriction, and
(z) the grant, purchase or exercise price of, or amount payable with
respect to, any Award; or (ii) if deemed appropriate by the Committee, provide
for a cash payment to the Holder of an outstanding Award. Notwithstanding the
foregoing, however, with respect to any Awards of Incentive Options, no such
adjustment shall be authorized except to the extent that such adjustment
complies with the rules of Section 424(a) of the Code, and in no event
shall any such adjustment be made that would render any Incentive Option granted
hereunder other than an “incentive stock option” for purposes of
Section 422 of the Code (unless the Committee determines to treat such
Option as a Nonstatutory Option). In addition, notwithstanding the foregoing,
with respect to any Option or Stock Appreciation Right, no adjustment shall be
made that would cause such Option or Stock Appreciation Right to constitute a
deferral of compensation subject to the requirements of Section
409A.

 

(b)  Whenever
outstanding Awards are required to be adjusted as provided in this Section 13.1,
the Committee shall promptly prepare and provide to each Holder a notice setting
forth, in reasonable detail, the event requiring adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the change
in price and the number of shares of Stock, other securities, cash, property or
assets purchasable subject to each Award after giving effect to the
adjustments.




(c)  Adjustments
under Paragraph 13.1(a) shall be made by the Committee.
No fractional interests shall be issued or transferred under the Plan on
account of any such adjustments.




(d)  The
existence of the Plan and any Awards granted hereunder shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any 



 

 


 







30


















and all
adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or business, or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stock
or other securities ahead of or affecting the Company’s common stock or the
rights thereof, or the dissolution or liquidation of the Company or any sale,
exchange or transfer of all or any part of its assets or business, or any other
corporate act or proceedings, whether of a character similar to that described
in Paragraph 13.1(a) or this Paragraph 13.1(d) or otherwise. Except as may be
expressly provided in this Section 13.1, the Company’s issuance or transfer
of securities of any class, for money, services, other property or assets, or
otherwise, upon direct sales, upon the exercise of rights or warrants to
subscribe therefor, upon conversion of shares or obligations of the Company
convertible into shares, or otherwise, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number, price or other
attributes of Stock subject to the Plan or to Awards granted
hereunder.




13.2  Termination
of Employment Other than for Death, Disability or Normal
Retirement.

Subject
to Sections 13.23 and 13.24, if a Holder’s employment is terminated for any
reason other than that Holder’s death, Disability or Normal Retirement, then the
following provisions shall apply to all Awards held by that Holder:




(a)  If such
termination was by the Company or a Subsidiary, as applicable, as a result of a
Covered Event, then the following provisions shall apply to all Awards held by
that Holder:

 


	(1)  	
      That
      portion, if any, of all Options or Stock Appreciation Rights held by that
      Holder that have not been exercised as of the time of the termination of
      employment shall be null and void as of the time of the termination of
      employment; 




 


	(2)  	
      That
      portion, if any, of any Restricted Stock Awards held by that Holder with
      respect to which the restrictions have not expired or been removed (by
      acceleration or otherwise) as of the time of the termination of employment
      shall be forfeited as of the time of the termination of employment; and
      




 


	(3)  	
      Except
      as may be expressly provided in this Paragraph 13.2(a) or in the relevant
      Award Agreement, all other Awards held by that Holder shall be null and
      void as of the time of the termination of employment; provided, however,
      that the foregoing shall not result in the forfeiture of any cash
      previously paid to, or shares of Stock (other than shares subject to
      restrictions at the time of the termination of employment) previously
      issued or transferred to, such Holder under the
Plan.









 

 


 







31





















(b)  If such
termination was (i) by the Company or a Subsidiary, as applicable, but not as a
result of a Covered Event or (ii) by the Holder, then the following provisions
shall apply to all Awards held by that Holder: 

 


	(1)  	
      That
      portion, if any, of all Options or Stock Appreciation Rights held by that
      Holder that are not yet exercisable (by acceleration or otherwise) as of
      the time of the termination of employment shall be null and void as of the
      time of the termination of employment; 




 


	(2)  	
      That
      portion, if any, of all Options or Stock Appreciation Rights held by that
      Holder that are exercisable (by acceleration or otherwise) but have not
      been exercised as of the time of the termination of employment shall be
      exercisable by that Holder until the earlier
of:








	(A)  	
      The
      termination of the Option or Stock Appreciation Right;
  or




 


	(B)  	
      (i) three
      (3) months after the date of the termination of employment in the case of
      termination by the Company or a Subsidiary but not as a result of a
      Covered Event; and (ii) thirty (30) days after the date of the
      termination of employment in the case of termination by the Holder;
      provided, however, that if the termination was by the Company but not as a
      result of a Covered Event and the Holder dies within the three (3) month
      period described in clause (i) of this subparagraph or if the termination
      was by the Holder and the Holder dies with the thirty (30) day period
      described in clause (ii) of this subparagraph, then such three (3) month
      period or such thirty (30) day period, as applicable, shall automatically
      be extended to one (1) year after the date of the termination of
      employment;







(and any
portion of any Option or Stock Appreciation Right not exercised prior to the
expiration of the relevant period shall be null and void);





	(3)  	
      That
      portion, if any, of any Restricted Stock Awards held by that Holder with
      respect to which the restrictions have not expired or been removed (by
      acceleration or otherwise) as of the time of the termination of employment
      shall be forfeited as of the time of the termination of
      employment;




 

 


 












32






















	(4)  	
      That
      portion, if any, of any Performance Units held by that Holder that have
      not been fully earned (by acceleration or otherwise) at the time of the
      termination of employment shall be forfeited as of the time of termination
      of employment; and




 


	(5)  	
      Except
      as may be expressly provided in this Paragraph 13.2(b) or in the relevant
      Award Agreement, all other Awards held by that Holder shall be null and
      void as of the time of the termination of employment; provided, however,
      that the foregoing shall not result in the forfeiture of any cash
      previously paid to, or shares of Stock (other than shares subject to
      restrictions at the time of the termination of employment) previously
      issued or transferred to, such Holder under the Plan.








13.3  Termination
of Employment for Death or Disability.

Subject
to Sections 13.23 and 13.24, if a Holder’s employment is terminated by reason of
the death or Disability of such Holder, then the following provisions shall
apply to all Awards held by that Holder: 







(a)  That
portion, if any, of all Options or Stock Appreciation Rights held by that Holder
that are not yet exercisable (by acceleration or otherwise) as of the time of
the termination of employment shall be null and void as of the time of the
termination of employment; 

 

(b)  That
portion, if any, of all Options or Stock Appreciation Rights held by that Holder
that are exercisable (by acceleration or otherwise) but have not been exercised
as of the time of the termination of employment shall be exercisable by that
Holder or that Holder’s Designated Beneficiary, guardian, legal representatives,
legatees or distributees until the earlier of: 

 


	(1)  	
      The
      termination of the Option or Stock Appreciation Right; or
  




 


	(2)  	
      one
      (1) year after the date of the termination of employment;
  




 

(and any
portion of any Option or Stock Appreciation Right not exercised prior to
expiration of the relevant period shall be null and void);

 

(c)  That
portion, if any, of any Restricted Stock Awards held by that Holder with respect
to which the restrictions have not expired or been removed (by acceleration or
otherwise) as of the time of the termination of employment shall be forfeited as
of the time of the termination of employment; provided, however, that, (i)
subject to clause (ii) below, upon the time of the termination of employment,
such restrictions shall be deemed removed with respect to such number of shares
of Stock subject to each such Restricted Stock Award as is equal to the product
of (x) a fraction, the numerator of which is the number of completed months
elapsed 

 



 

 


 







33


















from the
Date of Grant through the time of the termination of employment and the
denominator of which is the number of months in the original restriction period
for the relevant Restricted Stock Award and (y) the number of shares of Stock
subject to the relevant Restricted Stock Award; and (ii) clause (i) above shall
not apply if such restrictions, pursuant to the relevant Award Agreement, were
to expire on a monthly or daily basis;

 

(d)  That
portion, if any, of any Performance Units held by that Holder that have not been
fully earned (by acceleration or otherwise) at the time of the termination of
employment shall be forfeited as of the time of termination of employment,
unless the Committee, taking into consideration the performance of such Holder
and the performance of the Company over the relevant Performance Period (or, in
the discretion of the Committee, that portion of the relevant Performance Period
which has been completed at the time of the termination of employment),
specifically authorizes the payment to such Holder (or such Holder’s Designated
Beneficiary, guardian, legal representatives, legatees, heirs or distributees)
of all or portion of the amount which would have been paid to such Holder had
such Holder continued as an employee through the end of the Performance Period
(any such payment to be made in such a time and manner as would have occurred if
the Holder’s employment had not terminated before the expiration of the
Performance Period, unless otherwise determined by the Committee);
and

 

(e)  Except as
may be expressly provided in this Section 13.3 or in the relevant Award
Agreement, all other Awards held by that Holder shall be null
and void as of the time of the termination of employment; provided, however,
that the foregoing shall not result in the forfeiture of any cash previously
paid to, or shares of Stock (other than shares subject to restrictions at the
time of the termination of employment) previously issued or transferred to, such
Holder under the Plan.

 

(f)  If a
Holder’s employment is terminated due to a physical or mental impairment or
condition of any degree of severity or permanence, but the Committee does not
inform the Holder in writing that the Holder’s employment is terminated due to
“Disability” for the purposes of this Section, such Holder’s employment is not
terminated due to “Disability” for the purposes of this Section.

 

13.4  Termination
of Employment for Normal Retirement.

Subject
to Sections 13.23 and 13.24, if a Holder’s employment is terminated by reason of
the Holder’s Normal Retirement, then the following provisions shall apply to all
Awards held by that Holder:




(a)  That
portion, if any, of all Options or Stock Appreciation Rights held by that Holder
that are not yet exercisable (by acceleration or otherwise) as of the time of
the termination of employment shall be null and void as of the time of the
termination of employment;

 

(b)  That
portion, if any, of all Options or Stock Appreciation Rights held by that Holder
that are exercisable (by acceleration or otherwise) but have not been exercised
as of the time of the termination of employment shall be exercisable by that
Holder until the earlier of:

 



 

 


 







34





















 


	(1)  	
      The
      termination of the term of the Option or Stock Appreciation Right; or
      




 


	(2)  	
      three
      (3) months after the date of the termination of employment; provided,
      however, that if that Holder dies within such three (3) month period, then
      such three (3) month period shall automatically be extended to one (1)
      year after the date of the termination of employment;





 

(and any
portion of any Option or Stock Appreciation Right not exercised prior to the
expiration of the relevant period shall be null and void); 

 

(c)  That
portion, if any, of any Restricted Stock Awards held by that Holder with respect
to which the restrictions have not expired or been removed (by acceleration or
otherwise) as of the time of the termination of employment shall continue until
they expire or are removed; provided, however, that any restrictions that
require forfeiture of the Restricted Stock Award solely based on termination of
employment shall be deemed removed as of the time of the termination of
employment;

 

(d)  That
portion, if any, of any Performance Units held by that Holder that have not been
fully earned (by acceleration or otherwise) at the time of the termination of
employment shall be forfeited as of the time of termination of employment,
unless the Committee, taking into consideration the performance of such Holder
and the performance of the Company over the relevant Performance Period (or, in
the discretion of the Committee, that portion of the Performance Period which
has been completed at the time of the termination of employment), specifically
authorizes the payment to such Holder of all or portion of the amount which
would have been paid to such Holder had such Holder continued as an employee
through the end of the Performance Period (any such payment to be made in such a
time and manner as would have occurred if the Holder’s employment had not
terminated before the expiration of the Performance Period, unless otherwise
determined by the Committee); and

 

(e)  Except as
may be expressly provided in this Section 13.4 or in the relevant Award
Agreement, all other Awards held by that Holder shall be null and void as of the
time of the termination of employment; provided, however, that the foregoing
shall not result in the forfeiture of any cash previously paid to, or any shares
of Stock (other than shares subject to restrictions at the time of the
termination of employment) previously issued or transferred to, such Holder
under the Plan.

 

13.5  Cause
of Termination; Employment Relationship.

For
purposes of this Article XIII, the Committee shall have the authority to
determine whether any Eligible Individual’s employment with the Company or any
Subsidiary, as applicable, terminated as a result of death, Disability, Normal
Retirement, a Covered Event, or any other cause or reason. For purposes of
Incentive Options, an employment relationship shall be deemed to exist between a
Holder and the Company or a Subsidiary that is a subsidiary corporation, or is




 

 


 







35


















treated
as, or as part of, a subsidiary corporation of the Company (within the meaning
of Section 424 of the Code) while the Holder is on military leave, sick leave or
other bona fide leave of absence (such as temporary employment by the
government) if the period of such leave does not exceed ninety (90) days, or, if
longer, so long as the Holder’s right to re-employment with the Company or
Subsidiary that is a subsidiary corporation, or is treated as, or as part of, a
subsidiary corporation of the Company (within the meaning of Section 424 of the
Code) is guaranteed either by statute or by contract. Where the period of leave
exceeds ninety (90) days and where the Holder’s right to re-employment is not
guaranteed by statute or by contract, termination of employment shall be deemed
to have occurred on the ninety-first (91st) day of
such leave.




13.6  Exercise
Following Death or Disability.




(a)  All
Options or Stock Appreciation Rights or other Awards requiring exercise that
remain subject to exercise following the death of the Holder may be exercised by
the Holder’s beneficiary as designated by the Holder on such forms and in
accordance with such procedures as may be required or authorized by the
Committee from time to time (a “Designated Beneficiary”) or, in the absence of
an authorized designation, by the legatee or legatees of such Options or Stock
Appreciation Rights or other Awards requiring exercise under the Holder’s last
will, or by such Holder’s legal representatives, heirs or distributees. If an
Option or Stock Appreciation Right or other Award requiring exercise shall be
exercised by any Person referenced above (other than a Designated Beneficiary),
notice of exercise shall be accompanied by a certified copy of letters
testamentary or equivalent proof of the right of such Person to exercise such
Option or Stock Appreciation Right or other Award requiring exercise.


 

(b)  All
Options or Stock Appreciation Rights or other Awards requiring exercise that
remain subject to exercise following the Disability of the Holder may be
exercised by the Holder or by the Holder’s guardian or legal representative that
meets the requirements of Section 13.7 on such forms and in accordance with such
procedures as may be required or authorized by the Committee from time to time
(which may include proof of the status of such guardian or legal
representative).

 

13.7  Transferability
of Awards.

No Option,
Stock Appreciation Right, Restricted Stock Award, Performance Unit, or Other
Equity-Based Right shall be transferable or subject to pledge, encumbrance or
any other disposition in any manner, whether by operation of law or otherwise,
other than (to the extent such a transfer is not prohibited by Paragraph 8.2(a)
or other provisions of this Plan or the relevant Award Agreement) by (i) will or
the laws of descent and distribution or (ii) with respect to all Awards other
than Incentive Awards (and with the approval of the Committee), by a domestic
relations order. Any Award requiring exercise shall be exercisable during a
Holder’s lifetime only by that Holder or by that Holder’s guardian or legal
representative; provided, however, that, under applicable state law, the
guardian or legal representative is a mere custodian of the Holder’s property or
assets, standing in a fiduciary relationship to the Holder and subject to court
supervision.  Notwithstanding
anything in this Section 13.7 to the contrary, however, the Committee may
determine to grant a Nonstatutory Option that is transferable by a Holder (but
not by a Holder’s transferee) to any member of the 



 

 


 







36


















Holder’s
immediate family, to a trust established for the exclusive benefit of one or
members of the Holder’s immediate family, to a partnership or other entity of
which the only partners or interest holders are members of the Holder’s
immediate family, and to a charitable organization, or to any of the foregoing;
provided, however, that (i) the Holder receives no consideration for the
transfer, (ii) the Holder gives the Committee at least fifteen (15) days prior
written notice of any proposed transfer, and (iii) the Holder and
transferee shall comply with such other requirements as the Committee may
require from time to time to assure compliance with applicable laws, including
federal, state and foreign securities laws. Following any transfer permitted by
the preceding sentence, a transferred Nonstatutory Option shall continue to be
subject to the same terms, conditions and limitations that were applicable
immediately prior to its transfer and shall be exercisable by the transferee
only to the extent and for the periods that it would have been exercisable by
the Holder. The Committee may amend an outstanding Nonstatutory Option to
provide that the Nonstatutory Option shall be transferable in the manner
described in the two immediately preceding sentences. As used in this Section
13.7, the term “immediate family” shall mean any child, step-child, grandchild,
parent, step-parent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include
relationships arising from legal adoption. A beneficiary designation
authorized pursuant to any provision of the Plan or relevant Award Agreement
shall not be deemed a transfer or encumbrance for purposes of this
Section 13.7.




13.8  Delivery
of Certificates of Stock.

Subject
to Section 13.9 and upon receipt by the Company of any tax withholding as may be
required, the Company shall promptly deliver one or more certificates
representing the number of shares of Stock as to which vested Awards payable in
Stock have been properly exercised or are otherwise payable (and, with respect
to Restricted Stock Awards, with respect to which restrictions have expired or
been removed). 
If a Holder is entitled to receive certificates representing Stock received
for more than one form of Award under the Plan, separate Stock certificates may
be delivered with respect to each such Award; further, separate Stock
certificates may be delivered with respect to shares of Stock issued or
transferred upon exercise of Incentive Options and Nonstatutory
Options respectively.




13.9  Certain
Conditions.

Nothing
herein or in any Award Agreement shall require the Company to permit any
exercise of, or issue or transfer any shares with respect to, any Award if (i)
the Holder has failed to satisfy any term, condition or limitation of the Plan
or the relevant Award Agreement or (ii) that issuance or transfer would, in the
opinion of counsel for the Company, constitute a violation of the Securities
Act, any other applicable law or regulation (including state and foreign
securities laws and regulations), or any rule of any applicable securities
exchange or securities association. At the time of any grant or exercise of an
Option or Stock Appreciation Right, at the time of any grant or vesting of a
Stock Award, and at the time of any grant or settlement of any other Award, the
Company may, as a condition precedent to such grant or exercise of that Option
or Stock Appreciation Right, grant or vesting of the Stock Award, or grant or
settlement of such other Award, require
from the Holder of the Award (or in the event of the Holder’s death or
Disability, the Holder’s Designated Beneficiary, guardian, legal
representatives, heirs, legatees, or distributees) such written representations,
if any, 



 

 


 







37


















concerning
the Holder’s or such Persons’ intentions with regard to the retention or
disposition of the shares of Stock being acquired pursuant to the Award and such
written covenants and agreements, if any, as to the manner of disposal of such
shares as, in the opinion of counsel to the Company, may be necessary or
appropriate to ensure that any disposition by that Holder or such other Person
will not involve a violation of the Securities Act, any other applicable law or
regulation (including state and foreign securities laws and regulations), or any
rule of any applicable securities exchange or securities association.
The Company may also endorse such legend or legends upon certificates for
any shares of Stock issued or transferred pursuant to the Plan, and may issue
such “stop transfer” instructions to its transfer agent in respect of such
shares, as the Committee determines from time to time to be necessary or
appropriate to (i) prevent a violation of, or perfect an exemption from, the
registration requirements of the Securities Act or any other applicable state or
foreign securities law, (ii) implement the provisions of the Plan and any
relevant Award Agreement, or (iii) permit the Company to determine the
occurrence of any disposition of shares of Stock issued or transferred upon
exercise of an Incentive Option that would disqualify the Incentive Option from
the incentive option tax treatment afforded by Section 422 of the Code.





13.10  Certain
Directors and Officers.

If any of
the terms, conditions or limitations of the Plan or any Award Agreement would
preclude any award to an Eligible Individual who is subject to
Section 16(b) of the Exchange Act from qualifying for the exemptions from
Section 16(b) of the Exchange Act provided by Rule 16(b)-(3), then
those conflicting terms, conditions or limitations shall be deemed inoperative
to the extent necessary to allow such qualification (unless the Board of
Directors has expressly determined that the Plan, or the Committee has expressly
determined that the Award, should not comply with Rule 16(b)-(3)).
In addition, all Award Agreements for Eligible Individuals who are subject
to Section 16(b) of the Exchange Act shall be deemed to include such
additional terms, conditions and limitations as may be required in order for the
related Award to qualify for the exemptions from Section 16(b) of the
Exchange Act provided by Rule 16(b)-(3) (unless the Committee has expressly
determined that any such Award should not comply with the requirements of
Rule 16b-3). 




13.11  Securities
Act Legend.

The
Committee may require that certificates for some or all shares of Stock issued
or transferred pursuant to the Plan have a legend similar to the following, or
statements of other applicable restrictions, endorsed thereon:




THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THE SHARES
MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED
OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER (WHICH,
IN THE DISCRETION OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION
WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.

 

 

 

 







38













 

This
legend shall not be required for shares of Stock issued or transferred pursuant
to an effective registration statement under the Securities Act.




13.12  Legend
for Restrictions on Transfer.

Each
certificate representing shares of Stock issued or transferred to a Holder
pursuant to an Award granted under the Plan shall, if such shares are subject to
any transfer restriction, including a right of first refusal, provided for under
the Plan or the relevant Award Agreement, bear a legend that complies with
applicable law with respect to such transfer restriction, such as:




THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY IMPOSED BY THE SOUTHERN UNION COMPANY AMENDED AND RESTATED 2003
STOCK OPTION AND INCENTIVE PLAN AS ADOPTED BY SOUTHERN UNION COMPANY (THE
“COMPANY”) ON ________________, ___ AND AN AWARD AGREEMENT THEREUNDER BETWEEN
THE COMPANY AND ___________
DATED
______________, _____, AND MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE DISPOSED
OF EXCEPT AS THEREIN PROVIDED. THE COMPANY WILL FURNISH A COPY OF SUCH
INSTRUMENT AND AGREEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE
ON REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED
OFFICE.




13.13  Rights
as a Stockholder; Dividends.

Except as
may be specifically provided to the contrary by the Committee pursuant to
Paragraph 8.2(e) with respect to a particular Restricted Stock Award, a Holder
shall have no right as a stockholder with respect to any shares of Stock covered
by the Holder’s Award until a certificate representing those shares is issued in
the Holder’s name and subject to any further restrictions imposed in accordance
with the Plan. Except as may be expressly determined by the Committee from time
to time with respect to one or more Awards, and subject to such terms,
conditions and limitations as the Committee may establish with respect to the
same, no adjustment shall be made for dividends (whether ordinary or
extraordinary, whether in cash or other property or assets) or distributions or
other rights for which the record date is before the date that the certificate
is issued and any such restrictions have expired or been removed.




13.14  No
Interest.

Neither
the value of any shares of Stock, nor any cash or other property or assets,
issued, transferred or delivered with respect to any Award under the Plan shall
bear any interest, even if not issued, transferred or delivered when required by
the Plan, except as may be otherwise provided in the applicable Award Agreement
or as may be required pursuant to rules and procedures established by the
Committee from time to time for the crediting of
such interest.




13.15  Furnishing
of Information.

Each
Holder shall furnish to the Company all information requested by the Company
that the Committee deems necessary or appropriate in 



 

 


 







39


















order to
allow the Company to administer the Plan and any Awards or to enable it to
comply with any reporting or other requirement imposed upon the Company by or
under any applicable law or regulation.




13.16  No
Obligation to Exercise.

No grant
of any Award shall impose any obligation upon the Holder or any other Person to
exercise the same or any part thereof.




13.17  Remedies.

The
Company shall be entitled to recover from a Holder the Company’s damages, costs
and expenses, including reasonable attorneys’ fees, incurred in connection with
the enforcement of any of the terms, conditions or limitations of the Plan or
any Award Agreement, whether by an action to enforce specific performance, for
damages for breach, or otherwise.




13.18  Certain
Information Confidential.

As
partial consideration for the granting of each Award hereunder, each Holder
agrees with the Company that such Holder shall keep confidential all information
and knowledge that such Holder may have relating to the manner, extent and
amount of the Holder’s (or any other Holder’s) participation in the Plan;
provided, however, that the Holder may disclose such information or knowledge to
the Holder’s spouse or to the Holder’s tax or financial advisors, provided such
disclosure is made pursuant to similar terms and conditions (but without any
further rights of distribution). The foregoing obligations of
confidentiality shall not apply to the extent that the Company specifically
consents in writing to further disclosure or to the extent that the information
or knowledge becomes generally and readily available to the public without
breach by the Holder or any other Person of any contractual, fiduciary or other
duty owed to the Company or any of its affiliates. In addition, the foregoing
obligations of confidentiality shall not prohibit a Holder from disclosing such
information or knowledge to the extent such Holder is required to do so by
government or judicial order, provided that such Holder gives the Company prompt
written notice of such order and a reasonable opportunity to limit such
disclosure and reasonable assistance in contesting or limiting any such
disclosure.




13.19  Consideration.

No Option
or Stock Appreciation Right shall be exercisable, no restriction on any
Restricted Stock Award shall lapse, and no other Award shall be settled in Stock
with respect to a Holder unless and until the Holder shall have paid cash or
other property to, or performed services for, the Company or any of its
Subsidiaries that the Committee believes is equal to or greater in value than
the par value of the Stock subject to such Award.




13.20  [Deliberately
omitted]




13.21  [Deliberately
omitted] 




13.22  Dispute
Resolution. 




(a)  Any
claim, demand, cause of action, dispute or controversy arising out of or
relating to the Plan, any Award Agreement, any Award, the parties’ performance
with respect 

 



 

 


 







40


















(b)  to any
thereof, or any alleged breach of any thereof, and any claims, demands, causes
of actions, disputes or controversies that are pursuant to a separate written
agreement to be dealt with pursuant to the provisions of this Section (each, a
“Dispute”), shall be settled by binding arbitration in accordance with the then
current rules of the American Arbitration Association by three (3) independent
and impartial arbitrators of whom each party shall appoint one, and those
appointed arbitrators shall select a third arbitrator, who shall be the
presiding arbitrator. Judgment upon any award rendered by the arbitrators may be
entered by any court having jurisdiction thereof.

 

(c)  Either
party may commence arbitration proceedings by giving notice (the “Arbitration
Notice”) to the other party demanding that the Dispute be arbitrated, specifying
in reasonable detail the nature of the Dispute and the amount, if any, to be
submitted to arbitration. The arbitration hearing shall take place in any city
on which the parties agrees, or failing such agreement within ten (10) days
after the date the Arbitration Notice is given, in New York, New York. The
arbitration hearing shall be continuous subject to weekends, holidays or other
days to be mutually agreed.

 

(d)  The
arbitrators shall render their award no later than thirty (30) days after the
conclusion of the hearing. The arbitrators shall base their awards on the terms
of the Plan and the relevant Award Agreements and shall follow the law and
judicial precedents which a United States Judicial District Judge sitting in New
York, New York would apply in the event the Dispute was litigated in such court.
The parties expressly agree that this Section shall confer no power or authority
upon the arbitrators to render any judgment or award that is erroneous in its
application of substantive law and expressly agree that no such erroneous
judgment or award shall be eligible for confirmation. The arbitrators shall
render their award in writing and, unless both parties agree otherwise, shall
include the findings of fact and conclusions of law upon which their award is
based. Nothing in this Section shall preclude the parties from contractually
agreeing to maximum and/or minimum levels of damages applicable to any such
award, whether or not such agreement is disclosed to the arbitrators and any
award shall be subject to such agreement. The arbitrators shall apply the
substantive laws of the State of New York, without regard to principles of
conflicts of laws.

 

(e)  Unless
otherwise agreed, and unless otherwise determined by the arbitrators, each party
shall bear its own costs and expenses, including attorneys’ fees, in connection
with the arbitration, including the fees and expenses of the arbitrator
appointed by them, except that the expenses and fees of the third arbitrator,
expenses for hearing facilities, and other expenses of the arbitration itself
shall be shared equally between the parties.

 

(f)  The
existence and results of any arbitration under this Section shall be treated as
confidential under Section 13.18 of the Plan.

 

(g)  Notwithstanding
the foregoing provisions of this Section, and whether or not an arbitration
proceeding has been initiated, any party shall be entitled to seek, and all
courts having jurisdiction are authorized to issue and enforce in any lawful
manner, (i) such temporary restraining orders, preliminary injunctions and other
interim measures of relief as may be necessary to prevent harm to the Company’s,
any of its Subsidiaries’ or such party’s interest or 

 



 

 


 







41


















(h)  as
otherwise may be appropriate pending the conclusion of the arbitration
proceedings pursuant to this Section, and (ii) such judgments for permanent and
equitable relief as may be necessary to prevent harm to the Company’s, any
Subsidiaries’ or such party’s interest or as otherwise may be appropriate
following the issuance of arbitration awards pursuant to this
Section.

 

13.23  Awards
to Non-Employees. The
provisions of Sections 13.2, 13.3 and 13.4 shall not apply to any Awards made to
any Holder that was not an employee of the Company or any of its Subsidiaries on
the date of the making of the Award.




13.24  Compliance
with Section 409A. No
provision of this Article XIII shall be interpreted to require a payment or
other transfer with respect to an Award at a time or in a manner that would
violate any requirement of subsection (a) of Section 409A; and the Committee may
defer or otherwise change the terms of payment with respect to any Award, as
otherwise set forth in this Article XIII or any related Award Agreement, if and
to the extent necessary to comply with the requirements of Section 409A (if
applicable). With respect to any Award constituting a deferral of compensation
to which Section 409A applies and that is made to a “specified employee” of the
Company or its Subsidiaries as defined in Section 409A(a)(2)(B)(i) of the Code,
no payment resulting from a separation from service of such employee shall be
made with respect to the Award before the date which is 6 months after the date
of separation from service (or, if earlier, the date of death of the
employee).

 

XIV.  

 

 

DURATION
AND AMENDMENT OF PLAN AND AWARD AGREEMENTS

 




14.1  Duration.

No Awards
may be granted hereunder after the date that is ten (10) years after the
Effective Date; provided, however, that Awards granted prior to the expiration
of such period may extend beyond the expiration of such period, in accordance
with the terms of the Plan (including all rights of the Company and the
Committee hereunder) and the relevant Award.




14.2  Amendment,
etc.




(a)  The Board
of Directors may, at any time and from time to time, insofar as is permitted by
law, suspend or terminate the Plan, in whole or in part, but without the consent
of such Holder no such action shall adversely affect any rights, or increase any
obligations, of any Holder with respect to any Award previously granted to such
Holder hereunder. The Board of Directors may also, at any time and from time to
time, insofar as is permitted by law, amend or modify the Plan in any respect
whatsoever including (i) for purposes of making the Plan comply with Section
16(b) of the Exchange Act and the exemptions from that Section, the Code
(including Section 409A and Section 422 of the Code), or the Employee Retirement
Income Security Act of 1974, as amended, (ii) for purposes of meeting or
addressing any changes in any legal requirements applicable to the Company or
the Plan or (iii) for any other purpose permitted by law. Notwithstanding the
foregoing, (i) any amendment or modification of the Plan is subject




 

 


 







42


















(b)  to any
other applicable restrictions on such amendment or modification set forth in the
Plan, (ii) without the consent of such Holder, no such amendment or
modification shall adversely affect any rights, or increase any obligations, of
any Holder under any Award previously granted to such Holder hereunder and
(iii) without the consent of the holders of a majority of the shares of
Stock represented and voting on such amendment or modification at a
shareholders’ meeting duly called and held, no amendment or modification to the
Plan may be made that would (a) increase the aggregate number of shares of
Stock that may be issued or transferred under the Plan or increase the aggregate
number of shares of Stock subject to Awards that may be granted to any Eligible
Individual in one calendar year pursuant to Section 5.7 (except for acceleration
of vesting or other adjustments pursuant to Sections 12.1 or 13.1 of the Plan,
to the extent each is applicable), or (b) modify the requirements regarding
eligibility for participation in the Plan; provided, however, that such
amendments or modifications may be made without the consent of stockholders of
the Company if (x) necessary to permit Incentive Options granted under the
Plan to qualify as incentive stock options within the meaning of Section 422 of
the Code, or (y) necessary to comply with changes that occur in law or in other
legal requirements (including Rule 16b-3, Section 162(m), Section 409A, and
the Employee Retirement Income Security Act of 1974, as amended).




(c)  Subject
to the terms, conditions and limitations of the Plan, Rule 16b-3, to the extent
it is applicable, and any consent required by the last three sentences of this
Paragraph 14.2(b), the
Committee may (a) modify, amend, extend or renew outstanding Awards granted
under the Plan, and (b) accept the surrender of Awards requiring exercise that
may be outstanding under the Plan (to the extent not previously exercised) and
authorize the granting of new Awards in substitution for such outstanding Awards
(or portion thereof) so surrendered. Without the consent of the Holder, the
Committee may not modify or amend the terms of an Incentive Option at any time
to include provisions that have the effect of changing the Incentive Option to a
Nonstatutory Option; provided, however, that the consent of the Holder is not
required to the extent that the acceleration of the vesting of an Incentive
Option (whether under Section 12.1 or otherwise) causes the Incentive Option to
be treated as a Nonstatutory Option, for federal tax purposes, to the extent
that it exceeds the $100,000 limitation described in Section 6.10. Without the
consent of the Holder and of the holders of a majority of the shares of Stock
represented and voting on such modification or amendment at a shareholders’
meeting duly called and held, the Committee may not modify or amend any
outstanding Option so as to specify a higher or lower exercise price or accept
the surrender of outstanding Incentive Options and authorize the granting of new
Options in substitution therefor specifying a higher or lower exercise price, or
take any other action to “reprice” any option if the effect of such repricing
would be to increase or decrease the exercise price applicable to such Option.
In addition, no modification or amendment of an Award shall, without the
consent of the Holder, adversely affect any rights of the Holder or increase the
obligations of the Holder under such Award except, with respect to Incentive
Options, as may be necessary to satisfy the requirements of Section 422 of the
Code.






 

 


 







43


















 

XV.  

 

 

GENERAL

 

15.1  Application
of Funds.

The
proceeds received by the Company from the sale of shares of Stock pursuant to
Awards shall be used for general corporate purposes or any other purpose
permitted by law.




15.2  Right
of the Company and Subsidiaries to Terminate Employment.

Nothing
contained in the Plan, or in any Award Agreement, shall confer upon any Holder
any right to continue in the employ of the Company or any Subsidiary, or
interfere in any way with the rights of the Company or any Subsidiary to
terminate any such employment relationship at any time.




15.3  No
Liability for Good Faith Determinations.

Neither
the Board of Directors nor the Committee nor any member of either shall be
liable for any act, omission, or determination taken or made in good faith with
respect to the Plan or any Award granted under the Plan, and members of the
Board of Directors and the Committee shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage, or expense
(including attorneys’ fees, the costs of settling any suit, provided such
settlement is approved by independent legal counsel selected by the Company, and
amounts paid in satisfaction of a judgment, except a judgment based on a finding
of bad faith) arising therefrom to the full extent permitted by law and under
any directors and officers liability or similar insurance coverage that may from
time to time be in effect. This right to indemnification shall be in
addition to, and not a limitation on, any other indemnification rights any
member of the Board of Directors or the Committee may have.




15.4  Other
Benefits.

Participation
in the Plan shall not preclude any Holder from eligibility in (or entitle any
Holder to participate in) any other stock or stock option plan of the Company or
any Subsidiary or any old age benefit, insurance, pension, profit sharing,
retirement, bonus, or other extra compensation plan that the Company or any
Subsidiary has adopted or may, at any time, adopt for the benefit of its
employees or other Persons. Neither the adoption of the Plan by the Board of
Directors nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board of Directors to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options and the
awarding of securities and cash otherwise than under the Plan, and such
arrangements may be either generally applicable or applicable only in
specific cases.




15.5  Exclusion
From Pension and Profit-Sharing Compensation.

By
acceptance of an Award (whether in Stock or cash), as applicable, each Holder
shall be deemed to have agreed that the Award is special incentive compensation
that will not be taken into account in any manner as salary, compensation or
bonus in determining the amount of any payment under any pension, retirement or
other employee benefit plan of the Company or any Subsidiary except as




 

 


 







44


















may
otherwise be specifically provided in such plan. In addition, each
beneficiary of a deceased Holder shall be deemed to have agreed that no Award to
such Holder shall affect the amount of any life insurance coverage, if any,
provided by the Company or a Subsidiary on the life of the Holder that is
payable to the beneficiary under any life insurance plan covering employees of
the Company or any Subsidiary.




15.6  Execution
of Receipts and Releases.

Any
payment of cash or other property or assets or any issuance or transfer of
shares of Stock to the Holder, or to the Holder’s Designated Beneficiary,
guardian, legal representatives, heirs, legatees, distributees or permitted
assigns, in accordance with the provisions hereof, shall, to the extent thereof,
be in full satisfaction of all claims of such Persons hereunder. The Committee
may require any Holder, Designated Beneficiary, guardian, legal representative,
heir, legatee, distributee or assignee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as the Committee
shall determine.




15.7  Unfunded
Plan.

Insofar
as it provides for Awards of cash, Stock or other property or assets, the Plan
shall be unfunded. Although bookkeeping accounts may be established with respect
to Holders who are entitled to cash, Stock, other property or assets or rights
thereto under the Plan, any such accounts shall be used merely as a bookkeeping
convenience. The Company shall not be required to segregate any assets that may
at any time be represented by cash, Stock, other property or assets or rights
thereto, nor shall the Plan be construed as providing for such segregation, nor
shall the Company nor the Board of Directors nor the Committee be deemed to be a
trustee of any cash, Stock, other property or assets or rights thereto to be
granted under the Plan. Any liability of the Company to any Holder with respect
to a grant of cash, Stock, other property or assets or rights thereto under the
Plan shall be based solely upon any contractual obligations that may be created
by the Plan and any Award Agreement; no such obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance on any property or
assets of the Company. Neither the Company nor the Board of Directors nor the
Committee shall be required to give any security or bond for the performance of
any obligation that may be created by the Plan.




15.8  No
Guarantee of Interests.

Neither the
Company, the Board of Directors nor the Committee guarantees the Stock of the
Company from loss or depreciation.




15.9  Payment
of Expenses.

Subject
to Section 13.17, all expenses incident to the administration, termination or
protection of the Plan, including legal and accounting fees and any issue taxes
with respect to the issuance of shares of Stock pursuant to the Plan, shall be
paid by the Company or its Subsidiaries.




15.10  Company
Records.

The
records of the Company or its Subsidiaries regarding any Holder’s period of
employment, termination of employment and the reason therefor, leaves of
absence, re-employment, and other matters shall be conclusive for all purposes
hereunder, unless 



 

 


 







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determined
by the Committee to be incorrect.




15.11  No
Liability of Company.

The Company
assumes no obligation or responsibility to the Holder or the Holder’s Designated
Beneficiary, guardian, legal representatives, heirs, legatees, distributees or
assignees for any act of, or failure to act on the part of,
the Committee.




15.12  Company
Action.

Any
action required of the Company shall be by resolution of its Board of Directors
or by a duly authorized officer of the Company or by another Person authorized
to act by resolution of the Board of Directors.




15.13  Severability.

Whenever
possible, each provision of the Plan and each Award Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of the Plan or any Award Agreement, or the application
thereof to any Person or under any circumstances, is invalid or unenforceable to
any extent under applicable law, then such provision shall be deemed severed
from the Plan or such Award Agreement with respect to such Person or
circumstance, without invalidating the remainder of the Plan or such Award
Agreement or the application of such provision to other Persons or
circumstances, and a new provision shall be deemed substituted in lieu of the
provision so severed which new provision shall, to the extent possible,
accomplish the intent of the parties as evidenced by the provision so severed.





15.14  Notices.

Except as
may be expressly provided in the Plan or the relevant Award Agreement, whenever
any notice is required or permitted to be given under the Plan or such Award
Agreement, such notice must be in writing and delivered (including delivery by
private courier or facsimile transmittal) or sent by mail (which if to the
Company must be certified or registered, return receipt requested) postage and
charges prepaid, addressed to the Person for whom the communication is intended
(which for the Company shall be the address of the Company’s chief executive
office from time
to time, or such other address as may be established from time to time by the
Committee, and which for any Holder shall be the address for such Holder set
forth in the relevant Award Agreement or such other address as shall have been
furnished by notice by such Holder to the Company). Any such notice shall be
deemed to be given on the date received or (if mailed in the manner set forth
herein) three (3) Business Days after the date of mailing. Any person entitled
to notice hereunder may waive such notice. 




15.15  No
Waiver.

No waiver
of any provision of the Plan or any Award Agreement shall be effective unless
made in writing and signed by the party to be charged with the waiver. Failure
of any party at any time to require any other party’s performance of any
obligation under the Plan or Award Agreement shall not affect the right to
require performance of that obligation. Any waiver by any party of any
breach of any provision of the Plan or any Award Agreement 



 

 


 







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shall not
be construed as a waiver of any continuing or succeeding breach of such
provision, or as a waiver or modification of the provision itself.




15.16  Successors.

Subject
to the restrictions contained herein, the Plan shall be binding upon the Holder,
the Holder’s Designated Beneficiaries, guardian, legal representatives, heirs,
legatees, distributees and permitted assigns, and upon the Company, its
successors and assigns.




15.17  Further
Assurances.

Each
Holder shall execute and deliver such documents, and take or cause to be taken
such other actions, as may be reasonably requested by the Committee in order to
implement the terms of the Plan and any Award Agreement with respect to that
Holder.




15.18  Governing
Law.

EXCEPT AS
MAY BE OTHERWISE PROVIDED IN A PARTICULAR AWARD AGREEMENT, TO THE EXTENT NOT
GOVERNED BY FEDERAL LAW, THIS PLAN AND EACH AWARD AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT ISSUES
REGARDING THE INTERNAL AFFAIRS OF THE COMPANY SHALL BE GOVERNED BY THE LAW OF
THE COMPANY’S JURISDICTION OF ORGANIZATION.




15.19  Jurisdiction
and Venue.

EXCEPT AS
MAY BE OTHERWISE PROVIDED IN A PARTICULAR AWARD AGREEMENT AND SUBJECT TO
SECTION 13.22, EACH HOLDER HEREBY SUBMITS TO THE JURISDICTION OF ALL
FEDERAL AND STATE COURTS OF NEW YORK AND HEREBY AGREES THAT ANY SUCH COURT SHALL
BE A PROPER FORUM FOR THE DETERMINATION OF ANY DISPUTE ARISING UNDER THE PLAN OR
ANY AWARD AGREEMENT WITH RESPECT TO SUCH HOLDER.




15.20  Interpretation.

When a
reference is made in the Plan or any Award Agreement to Schedules, Exhibits or
Addenda, such reference shall be to a schedule, exhibit or addendum to this Plan
or the relevant Award Agreement unless otherwise indicated. Each instance
in the Plan or any Award Agreement of the words “include,” “includes,” and
“including” shall be deemed to be followed by the words “without limitation.” As
used in the Plan or any Award Agreement, the term “days” means calendar days,
not business days, unless otherwise specified. Unless otherwise specified,
the words “herein,” “hereof,” and “hereunder” and other words of similar import
refer to the Plan or relevant Award Agreement as a whole and not to any
particular article, section, paragraph, subparagraph, schedule, exhibit,
addendum or other subdivision. Similarly, unless otherwise specified, the words
“therein,” “thereof” and “thereunder” and other words of similar import refer to
a particular agreement or other instrument as a whole and not to any particular
article, section, paragraph, subparagraph, schedule, exhibit, addendum or other
subdivision. Unless otherwise specified, any reference to a statute includes and
refers to the statute itself, as well as to any rules and regulations made and




 

 


 







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duly
promulgated pursuant thereto, and all amendments made thereto and in force
currently from time to time and any statutes, rules or regulations thereafter
duly made, enacted and/or promulgated, as may be appropriate, and/or any other
governmental actions thereafter duly taken from time to time having the effect
of supplementing or superseding such statute, rules, and/or regulations.
The language in all parts of the Plan and each Award Agreement shall be in all
cases construed simply, fairly, equitably, and reasonably, according to its
plain meaning and not strictly for or against one or more of the parties. Any
table of contents or headings contained in the Plan or any Award Agreement are
for reference purposes only and shall not be construed to affect the meaning or
interpretation of the Plan or any Award Agreement. When required by the
context, (i) whenever the singular number is used in the Plan or any Award
Agreement, the same shall include the plural, and the plural shall include the
singular; and (ii) the masculine gender shall include the feminine and
neuter genders and vice versa.




15.21  No
Representations.

NEITHER
THE COMPANY, ANY OF ITS SUBSIDIARIES OR OTHER AFFILIATES, THE BOARD OF DIRECTORS
OR THE COMMITTEE, OR ANY MEMBER OF EITHER THEREOF MAKES ANY REPRESENTATIONS OR
WARRANTIES WHATSOEVER REGARDING THE LEGAL, TAX OR ACCOUNTING CONSEQUENCES OF ANY
ASPECT OF THE PLAN OR ANY AWARDS, INCLUDING ANY REPRESENTATION OR WARRANTY THAT
ANY OPTION SHALL BE TREATED AS AN INCENTIVE STOCK OPTION UNDER THE CODE. BY
ACCEPTING ANY AWARD, EACH HOLDER ACKNOWLEDGES THAT SUCH HOLDER HAS CONSULTED
WITH SUCH ADVISORS AS THE HOLDER HAS DEEMED APPROPRIATE WITH RESPECT TO ANY OF
SUCH MATTERS.

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Adopted
as of the Effective Date.




        SOUTHERN UNION
COMPANY,

        a Delaware
corporation







        By: /s/
Thomas F.
Karam              
 

                            Thomas F.
Karam                     

       (Print
Name)

                         President
and Chief Operating Officer

      (Print
Title)

























 

 


 












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