exv10w14






Exhibit 10.14




VANGUARD HEALTH SYSTEMS, INC.

2011 STOCK INCENTIVE PLAN




1.  Purpose of the Plan




     The purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining
key employees, directors or other service providers and to motivate such employees, directors or
other service providers to exert their best efforts on behalf of the Company and its Affiliates by
providing incentives through the granting of Awards. The Company expects that it will benefit from
the added interest which such key employees, directors or service providers will have in the
welfare of the Company as a result of their proprietary interest in the Company’s success.



2.  Definitions




     The following capitalized terms used in the Plan have the respective meanings set forth in
this Section:



     (a) Act: The Securities Exchange Act of 1934, as amended, or any successor statute
thereto.



     (b) Affiliate: With respect to any Person, any other Person, directly or indirectly,
controlling, controlled by, or under common control with such Person or any other Person designated
by the Committee in which any Person has an interest.



     (c) Award: An Option, Stock Appreciation Right, Other Stock-Based Award or
Performance-Based Award granted pursuant to the Plan.



     (d) Blackstone: Each of Blackstone FCH Capital Partners IV L.P., Blackstone Health
Commitment Partners L.P., Blackstone Capital Partners IV-A L.P., Blackstone Family Investment
Partnership IV-A L.P., Blackstone Health Commitment Partners-A L.P., Blackstone FCH Capital
Partners IV-B L.P., and Blackstone FCH Capital Partners IV-A L.P., and their respective Affiliates.



     (e) Board: The Board of Directors of the Company.



     (f) Change in Control: The occurrence of any of the following events:




     (i) any person or group, other than the Permitted Holders, is or becomes the
“beneficial owner” (as defined in rules 13d-3 and 13d-5 under the Act) directly or
indirectly of more than 50% of the total voting power of the voting stock of the Company,
including by way of merger, consolidation or otherwise;




     (ii) a reorganization, recapitalization, merger or consolidation (a “Corporate
Transaction”) involving the Company, unless securities representing 50% or more of the
combined voting power of the then outstanding voting securities entitled to vote generally
in the election of directors of the Company or the corporation resulting
from such Corporate Transaction (or the parent of such corporation) are held subsequent



 









 






to such transaction by the person or persons who were the “beneficial owners” of the
outstanding voting securities entitled to vote generally in the election of directors of the
Company immediately prior to such Corporate Transaction, in substantially the same
proportions as their ownership immediately prior to such Corporate Transaction;




     (iii) the sale or disposition, in one or a series of related transactions, of all or
substantially all, of the assets of the Company to any “person” or “group” (as such terms
are defined in Sections 13(d)(3) or 14(d)(2) of the Act) other than the Permitted Holders;
or




     (iv) during any period of 12 months, individuals who at the beginning of such period
constituted the Board (together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company was approved by a vote of a
majority of the directors of the Company, then still in office, who were either directors at
the beginning of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board, then in office.



     (g) Code: The Internal Revenue Code of 1986, as amended, or any successor thereto,
and the regulations and guidance promulgated thereunder.



     (h) Committee: The Compensation Committee of the Board (or a subcommittee thereof),
or such other committee of the Board (including, without limitation, the full Board) to which the
Board has delegated power to act under or pursuant to the provisions of the Plan.



     (i) Company: Vanguard Health Systems, Inc., a Delaware corporation.



     (j) Effective Date: The date that the Securities and Exchange Commission declares the
Registration Statement effective in respect of the Company’s initial public offering of its Shares
(Registration Statement No. 333-173547, originally filed with the Securities and Exchange
Commission on April 15, 2011).



     (k) Employment: The term “Employment” as used herein shall be deemed to refer
to (i) a Participant’s employment if the Participant is an employee of the Company or any of its
Affiliates, (ii) a Participant’s services, if the Participant is another form of service provider
to the Company or any of its Affiliates and (iii) a Participant’s services as a non-employee
director, if the Participant is a non-employee member of the Board or the board of directors of an
Affiliate; provided, however, that unless otherwise determined by the Committee, a change in a
Participant’s status from employee to non-employee shall constitute a termination of employment
hereunder.



     (l) Fair Market Value: On a given date, (i) if there should be a public market for
the Shares on such date, the closing price of the Shares as reported on such date on the Composite
Tape of the principal national securities exchange on which such Shares are listed or admitted to
trading, or if the Shares are not listed or admitted on any national securities exchange but are
quoted on an inter-dealer quotation system, the final ask price of the Shares on such system on
such date, or, if no sale of Shares shall have been reported on the Composite Tape of any
national securities exchange or quoted on an inter-dealer quotation system on such date, then
the



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closing price or final ask price on the immediately preceding date on which sales of the Shares
have been so reported or quoted shall be used, and (ii) if there should not be a public market for
the Shares on such date, the Fair Market Value shall be the fair market value of the Shares as
determined by the Committee in good faith.




     (m)  ISO: An Option that is also an incentive stock option granted pursuant to
Section 6(d) of the Plan.



     (n) Option: A stock option granted pursuant to Section 6 of the Plan.



     (o) Option Price: The purchase price per Share of an Option, as determined pursuant
to Section 6(a) of the Plan.



     (p) Other Stock-Based Awards: Awards granted pursuant to Section 8 of the Plan.



     (q) Participant: An employee, director or other service provider who is selected by
the Committee to participate in the Plan.



     (r) Performance-Based Awards: Certain Other Stock-Based Awards granted pursuant to
Section 9 of the Plan.



     (s) Permitted Holder: Any of (i) Blackstone or its Affiliates, (ii) an employee
benefit plan (or trust forming a part thereof) maintained by (A) the Company or (B) any corporation
or other Person of which a majority of its voting power of its voting equity securities or equity
interest is owned, directly or indirectly, by the Company, and (iii) VHS Holdings LLC, a Delaware
limited liability company, or any of its Subsidiaries.



     (t) Person: A “person”, as such term is used for purposes of Section 13(d) or 14(d)
of the Act.



     (u) Plan: The Vanguard Health Systems, Inc. 2011 Stock Incentive Plan.



     (v) Public Trading Date: the first date upon which Shares are listed (or approved for
listing) upon notice of issuance on any national securities exchange.



     (w) Service Recipient: The Company or any Affiliate of the Company that satisfies the
definition of “service recipient” within the meaning of Treasury Regulation Section 1.409A-1 (or
any successor regulation), with respect to which the person is a “service provider” within the
meaning of such Treasury Regulation Section 1.409A-1 (or any successor regulation).



     (x) Shares: Shares of common stock of the Company.



     (y) Stock Appreciation Right: A stock appreciation right granted pursuant to Section
7 of the Plan.



     (z) Subsidiary: A subsidiary corporation, as defined in Section 424(f) of the Code
(or any successor section thereto).



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3.  Shares Subject to the Plan




     (a) Generally. Subject to Section 10, the total number of Shares which may be issued
under the Plan is 14,000,000 and the maximum number of Shares for which ISOs may be granted is
14,000,000. Additionally, subject to Section 10, the maximum number of Shares for which Options or
Stock Appreciation Rights may be granted during a fiscal year to any Participant shall be
2,500,000. The Shares may consist, in whole or in part, of unissued Shares or treasury Shares.
The issuance of Shares or the payment of cash upon the exercise of an Award or in consideration of
the cancellation or termination of an Award shall reduce the total number of Shares available under
the Plan, as applicable. Shares which are subject to Awards which terminate or lapse without the
payment of consideration may be granted again under the Plan.



     (b) Prior Plans. Following the date of the Company’s initial public offering, no
further equity-based awards shall be granted under the Company’s 2004 Stock Incentive Plan, as
amended (the “2004 Stock Plan”), or the VHS Holdings LLC 2004 Unit Plan, as amended (the
“2004 Unit Plan”). Additionally, any Participant who receives an Award under this Plan
(including, without limitation, any Award granted in substitution of an equity interest previously
granted with respect to VHS Holdings LLC) shall, by acceptance of such Award, be deemed to have
acknowledged and agreed that such Participant has no further rights (i) with respect to any
previously granted equity interests in VHS Holdings LLC, pursuant to the 2004 Unit Plan or the
Amended and Restated Limited Liability Company Operating Agreement of VHS Holdings LLC, as amended
(the “VHS LLC Agreement”), or (ii) to receive any future equity grants pursuant to or
otherwise in connection with the VHS LLC Agreement, the 2004 Unit Plan or the 2004 Stock Plan. Any
equity-based awards granted under the 2004 Stock Plan prior to the date of the Company’s initial
public offering which are outstanding as of the date of such initial public offering shall remain
outstanding pursuant to the terms of the governing award agreement and the 2004 Stock Plan and,
upon settlement or forfeiture of any such award pursuant to its terms, no person shall be entitled
to receive any additional equity grants or other consideration with respect thereto.



4.  Administration




     (a) The Plan shall be administered by the Committee; provided, however, that the Board may, in
its sole discretion, take any action designated to the Committee under this Plan as it may deem
necessary for the effective administration of this Plan. The Committee may delegate its duties and
powers in whole or in part to any subcommittee thereof consisting solely of at least two
individuals who are intended to qualify as “Non-Employee Directors” within the meaning of
Rule 16b-3 under the Act (or any successor rule thereto), “independent directors” within the
meaning of the New York Stock Exchanges listed company rules and “outside directors” within the
meaning of Section 162(m) of the Code (or any successor section thereto), to the extent such
qualification requirements apply in connection with the contemplated Award grant. Additionally,
the Committee may delegate the authority to grant Awards under the Plan to any employee or group of
employees of the Company or an Affiliate; provided that such delegation and grants
are consistent with applicable law and guidelines established by the Board from time to time.



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     (b) The Committee shall have the full power and authority to establish the terms and
conditions of any Award consistent with the provisions of the Plan and to waive any such terms and
conditions at any time (including, without limitation, accelerating or waiving any vesting
conditions). Awards may, in the discretion of the Committee, be made under the Plan in assumption
of, or in substitution for, outstanding awards previously granted by the Company or its Affiliates
or a company acquired by the Company or with which the Company combines. The number of Shares
underlying such substitute awards shall be counted against the aggregate number of Shares available
for Awards under the Plan.



     (c) In each case subject to Section 15, the Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of the Plan, and may
delegate such authority, as it deems appropriate. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned (including, but not limited to,
Participants and their beneficiaries or successors).



     (d) The Committee shall require payment of any amount it may determine to be necessary to
withhold for federal, state, local or other taxes as a result of the exercise, grant or vesting of
an Award and the Company or any of its Subsidiaries shall have the right and is authorized to
withhold any applicable withholding taxes in respect to the Award, its exercise or any payment or
transfer under or with respect to the Award and to take such other action as may be necessary in
the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.
To the extent permitted by the Committee, the Participant may elect to pay a portion or all of such
withholding taxes by (i) delivery of Shares, provided that such Shares have been held by the
Participant for such period of time as the Company’s accountants may require or (ii) with respect
to minimum withholding amounts only, having Shares with a Fair Market Value equal to the amount of
such withholding taxes withheld by the Company from any Shares that would have otherwise been
received by the Participant.



5.  Limitations




     No Award may be granted under the Plan after the tenth anniversary of the Effective Date, but
Awards theretofore granted may extend beyond that date.



6.  Options




     Options granted under the Plan shall be non qualified stock options unless specifically
identified as incentive stock options for federal income tax purposes, as determined by the
Committee and evidenced by the related Award agreements, and shall be subject to such other terms
and conditions not inconsistent therewith. In addition to the foregoing, except as otherwise
determined by the Committee and evidenced by the related Award agreements, the Options shall also
be subject to the following terms and conditions:



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     (a) Option Price. The Option Price per Share shall be determined by the Committee,
but shall not be less than 100% of the Fair Market Value of a Share on the date an Option is
granted (other than in the case of Options granted in substitution of previously granted awards, as
described in Section 4(b)).



     (b) Exercisability. Options granted under the Plan shall be exercisable at such time
and upon such terms and conditions as may be determined by the Committee, but in no event shall an
Option be exercisable more than ten years after the date it is granted.



     (c) Exercise of Options. Except as otherwise provided in the Plan or in an Award
agreement, an Option may be exercised for all, or from time to time any part, of the Shares for
which it is then exercisable. For purposes of Section 6 of the Plan, the exercise date of an
Option shall be the later of the date a notice of exercise is received by the Company and, if
applicable, the date payment is received by the Company pursuant to clauses (i), (ii), (iii), (iv)
or (v) in the following sentence. The purchase price for the Shares as to which an Option is
exercised shall be paid to the Company in full at the time of exercise at the election of the
Participant: (i) in cash or its equivalent (e.g., by check); (ii) to the extent permitted by the
Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares
being purchased and satisfying such other requirements as may be imposed by the Committee,
provided, that such Shares have been held by the Participant for such period of time as the
Company’s accountants may require to avoid adverse accounting treatment; (iii) partly in cash and,
to the extent permitted by the Committee, partly in such Shares; (iv) if there should be a public
market for the Shares at such time, to the extent permitted by, and subject to such rules as may be
established by the Committee, through the delivery of irrevocable instructions to a broker to sell
Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount
out of the proceeds of such sale equal to the aggregate Option Price for the Shares being
purchased; or (v) allow for payment through a “net settlement” feature (i.e., having Shares with a
Fair Market Value equal to the aggregate Option Price withheld by the Company from any Shares that
would have otherwise been received by the Participant upon exercise of the Option). No Participant
shall have any rights to dividends or other rights of a stockholder with respect to Shares subject
to an Option until the Participant has given written notice of exercise of the Option, paid in full
for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee
pursuant to the Plan.



     (d) ISOs. The Committee may grant Options under the Plan that are intended to be
“incentive stock options” (within the meaning of Section 422 of the Code) (“ISOs”). Such
ISOs shall comply with the requirements of Section 422 of the Code (or any successor section
thereto). No ISO may be granted to any Participant who at the time of such grant, owns more than
10% of the total combined voting power of all classes of stock of the Company or of any Subsidiary,
unless (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on
the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than
the day preceding the fifth anniversary of the date on which the ISO is granted. Any Participant
who disposes of Shares acquired upon the exercise of an ISO either (x) within two years after the
date of grant of such ISO or (y) within one year after the transfer of such Shares to the
Participant, shall notify the Company of such disposition and of the amount realized upon such
disposition. All Options granted under the Plan are intended to be nonqualified stock options,
unless the applicable Award agreement expressly states that the Option is intended to be an ISO.



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If an Option is intended to be an ISO, and if for any reason such Option (or portion thereof)
shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion
thereof) shall be regarded as a nonqualified stock option granted under the Plan; provided
that such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to
nonqualified stock options. In no event shall any member of the Committee, the Company or any of
its Affiliates (or their respective employees, officers or directors) have any liability to any
Participant (or any other Person) due to the failure of an Option to qualify for any reason as an
ISO.




     (e) Attestation. Wherever in this Plan or any agreement evidencing an Award a
Participant is permitted to pay the Option Price of an Option or taxes relating to the exercise of
an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the
Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such
Shares, in which case the Company shall treat the Option as exercised without further payment
and/or shall withhold such number of Shares from the Shares acquired by the exercise of the Option,
as appropriate.



     (f) Repricing of Options. Notwithstanding any provision herein to the contrary, the
repricing of an Option, once granted hereunder, is prohibited without prior approval of the
Company’s stockholders. For this purpose, a “repricing” means any of the following (or any other
action that has the same effect as any of the following): (i) changing the terms of an Option to
lower the Option Price; (ii) any other action that is treated as a “repricing” under generally
accepted accounting principles; and (iii) repurchasing for cash or canceling an Option in exchange
for another Award at a time when the Option Price is greater than the Fair Market Value of the
underlying Shares, unless the cancellation and exchange occurs in connection with a change in
capitalization or similar change permitted under Section 10(a) below. Such cancellation and
exchange would be considered a “repricing” regardless of whether it is treated as a “repricing”
under generally accepted accounting principles and regardless of whether it is voluntary on the
part of the Participant.



7.  Stock Appreciation Rights




     (a) Grants. The Committee may also grant (i) a Stock Appreciation Right independent
of an Option or (ii) a Stock Appreciation Right in connection with an Option, or a portion thereof.
A Stock Appreciation Right granted pursuant to clause (ii) of the preceding sentence (A) may be
granted at the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same number of Shares covered by an Option
(or such lesser number of Shares as the Committee may determine) and (C) shall be subject to the
same terms and conditions as such Option except for such additional limitations as are contemplated
by this Section 7 (or such additional limitations as may be included in an Award agreement).



     (b) Terms. The exercise price per Share of a Stock Appreciation Right shall be an
amount determined by the Committee but in no event shall such amount be less than 100% of the Fair
Market Value of a Share on the date the Stock Appreciation Right is granted (other than in the case
of Stock Appreciation Rights granted in substitution of previously granted awards, as described in
Section 4(b)); provided, however, that in the case of a Stock Appreciation Right



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granted in conjunction with an Option, or a portion thereof, the exercise price may not be
less than the Option Price of the related Option; and provided, further, that the exercise
price of a Stock Appreciation Right that is granted in exchange for an Option may be less than the
Fair Market Value on the grant date if such exercise price is equal to the Option Price of the
exchanged Option. Each Stock Appreciation Right granted independent of an Option shall entitle a
Participant upon exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the
exercise date of one Share over (B) the exercise price per Share, times (ii) the number of Shares
covered by the Stock Appreciation Right. Each Stock Appreciation Right granted in conjunction with
an Option, or a portion thereof, shall entitle a Participant to surrender to the Company the
unexercised Option, or any portion thereof, and to receive from the Company in exchange therefor an
amount equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over
(B) the Option Price per Share, times (ii) the number of Shares covered by the Option, or portion
thereof, which is surrendered. The date a notice of exercise is received by the Company shall be
the exercise date. Payment to the Participant shall be made in Shares or in cash, or partly in
Shares and partly in cash (any such Shares valued at such Fair Market Value), all as shall be
determined by the Committee. Stock Appreciation Rights may be exercised from time to time upon
actual receipt by the Company of written notice of exercise stating the number of Shares with
respect to which the Stock Appreciation Right is being exercised. No fractional Shares will be
issued in payment for Stock Appreciation Rights, but instead cash will be paid for a fraction or,
if the Committee should so determine, the number of Shares will be rounded downward to the next
whole Share.




     (c) Limitations. The Committee may impose, in its discretion, such conditions upon
the exercisability or transferability of Stock Appreciation Rights as it may deem fit, but in no
event shall a Stock Appreciation Right be exercisable more than ten years after the date it is
granted.



     (d) Repricing of Stock Appreciation Rights. Notwithstanding any provision herein to
the contrary, the repricing of a Stock Appreciation Right, once granted hereunder, is prohibited
without prior approval of the Company’s stockholders. For this purpose, a “repricing” means any of
the following (or any other action that has the same effect as any of the following): (i) changing
the terms of a Stock Appreciation Right to lower its exercise price; (ii) any other action that is
treated as a “repricing” under generally accepted accounting principles; and (iii) repurchasing for
cash or canceling a Stock Appreciation Right in exchange for another Award at a time when its
exercise price is greater than the Fair Market Value of the underlying Shares, unless the
cancellation and exchange occurs in connection with a change in capitalization or similar change
permitted under Section 10(a) below. Such cancellation and exchange would be considered a
“repricing” regardless of whether it is treated as a “repricing” under generally accepted
accounting principles and regardless of whether it is voluntary on the part of the Participant.



8.  Other Stock-Based Awards




     The Committee, in its sole discretion, may grant or sell Awards of Shares, Awards of
restricted Shares and Awards that are valued in whole or in part by reference to, or are otherwise
based on the Fair Market Value of, Shares (such Awards, “Other Stock-Based Awards”). Such
Other Stock-Based Awards shall be in such form, and dependent on such conditions, as the



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Committee shall determine, including, without limitation, the right to receive, or vest with
respect to, one or more Shares (or the equivalent cash value of such Shares) upon the completion of
a specified period of service, the occurrence of an event and/or the attainment of performance
objectives. Other Stock-Based Awards may be granted alone or in addition to any other Awards
granted under the Plan. Subject to the provisions of the Plan, the Committee shall determine to
whom and when Other Stock-Based Awards will be made, the number of Shares to be awarded under (or
otherwise related to) such Other Stock-Based Awards, whether such Other Stock-Based Awards shall be
settled in cash, Shares or a combination of cash and Shares, and all other terms and conditions of
such Awards (including, without limitation, the vesting provisions thereof and provisions ensuring
that all Shares so awarded and issued shall be fully paid and non-assessable).




9.  Performance-Based Awards.




     (a) The Committee, in its sole discretion, may grant Awards which are denominated in Shares or
cash (such Awards, “Performance-Based Awards”), which Awards may, but for the avoidance of
doubt are not required to, be granted in a manner which is intended to be deductible by the Company
under Section 162(m) of the Code (or any successor section thereto). Such Performance-Based Awards
shall be in such form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive, or vest with respect to, one or more Shares or
the cash value of the Award upon the completion of a specified period of service, the occurrence of
an event and/or the attainment of performance objectives. Performance-Based Awards may be granted
alone or in addition to any other Awards granted under the Plan. Subject to the provisions of the
Plan, the Committee shall determine to whom and when Performance-Based Awards will be made, the
number of Shares or aggregate amount of cash to be awarded under (or otherwise related to) such
Performance-Based Awards, whether such Performance-Based Awards shall be settled in cash, Shares or
a combination of cash and Shares, and all other terms and conditions of such Awards (including,
without limitation, the vesting provisions thereof and provisions ensuring that all Shares so
awarded and issued, to the extent applicable, shall be fully paid and non-assessable).



     (b) A Participant’s Performance-Based Award shall be determined based on the attainment of
written performance goals approved by the Committee for a performance period established by the
Committee. During any period when Section 162(m) of the Code is applicable to the Company and the
Plan (after giving effect to Treas. Reg. Section 1.162-27(f)), such determination shall be made (i)
while the outcome for that performance period is substantially uncertain and (ii) no more than 90
days after the commencement of the performance period to which the performance goal relates or, if
less, the number of days which is equal to 25% of the relevant performance period. The performance
goals, which must be objective, shall be based upon one or more of the following criteria: (i)
consolidated income before or after taxes (including income before interest, taxes, depreciation
and amortization); (ii) EBITDA; (iii) adjusted EBITDA; (iv) operating income; (v) net income; (vi)
net income per Share; (vii) book value per Share; (viii) return on members’ or stockholders’
equity; (ix) expense management; (x) return on investment; (xi) improvements in capital structure;
(xii) profitability of an identifiable business unit or product; (xiii) maintenance or improvement
of profit margins; (xiv) stock price; (xv) market share; (xvi) revenue or sales; (xvii) costs;
(xviii) cash flow; (xix) working capital; (xx) multiple of invested capital; and (xxi) total
return. The foregoing criteria may relate to the



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Company, one or more of its Subsidiaries or one or more of its or their divisions or units, or
any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one
or more peer group companies or indices, or any combination thereof, all as the Committee shall
determine. In addition, to the degree consistent with Section 162(m) of the Code (or any successor
section thereto), the performance goals may be calculated without regard to extraordinary items.
The maximum amount of a Performance-Based Award that may be earned during each fiscal year during a
performance period by any Participant shall be: (x) with respect to Performance-Based Awards that
are denominated in Shares, 2,500,000 Shares and (y) with respect to Performance-Based Awards that
are denominated in cash, $10,000,000. To the extent that a Performance-Based Award may be earned
over a period that is longer than one fiscal year, the foregoing limitations shall apply to each
full or partial fiscal year during or in which such Award may be earned.




     (c) The Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to a given Participant and, if they have,
during any period when Section 162(m) of the Code is applicable to the Company and the Plan (after
giving effect to Treas. Reg. Section 1.162-27(f)) and such Performance-Based Award is intended to
be deductible by the Company under Section 162(m) of the Code, shall so certify and ascertain the
amount of the applicable Performance-Based Award. No Performance-Based Awards will be paid for
such performance period until such certification, to the extent applicable, is made by the
Committee. The amount of the Performance-Based Award actually paid to a given Participant may be
less than the amount determined by the applicable performance goal formula, at the discretion of
the Committee. The amount of the Performance-Based Award determined by the Committee for a
performance period shall be paid to the Participant at such time as determined by the Committee in
its sole discretion after the end of such performance period; provided, however, that a Participant
may, if and to the extent permitted by the Committee and consistent with the provisions of Sections
162(m) and 409A of the Code, to the extent applicable, elect to defer payment of a
Performance-Based Award.



10. Adjustments Upon Certain Events




     Notwithstanding any other provisions in the Plan to the contrary, the following provisions
shall apply to all Awards granted under the Plan:



     (a) Generally. In the event of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or transaction or exchange of Shares
or other corporate exchange, any equity restructuring (as defined under Financial Accounting
Standards Board (FASB) Accounting Standards Codification 718), or any distribution to stockholders
other than regular cash dividends or any transaction similar to the foregoing, the Committee in its
sole discretion and without liability to any Person shall make such substitution or adjustment as
it deems reasonably necessary to address, on an equitable basis, the effect of such event (subject
to Section 18), as to (i) the number or kind of Shares or other securities issued or reserved for
issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum number of Shares
for which Options or Stock Appreciation Rights may be granted during a fiscal year to any
Participant, (iii) the maximum amount of a Performance Based Award that may be granted during a
fiscal year to any Participant, (iv) the Option Price or exercise price of any Award and/or (v) any
other affected terms of such Awards.



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     (b) Change in Control. In the event of a Change in Control after the Effective Date,
(i) if determined by the Committee in the applicable Award agreement or otherwise, any outstanding
Awards then held by Participants which are unexercisable or otherwise unvested or subject to lapse
restrictions shall automatically be deemed exercisable or otherwise vested or no longer subject to
lapse restrictions, as the case may be, as of immediately prior to such Change of Control and (ii)
the Committee may (subject to Section 18), but shall not be obligated to, (A) accelerate, vest or
cause the restrictions to lapse with respect to all or any portion of an Award, (B) cancel such
Awards for cash payment of fair value (as determined in the sole discretion of the Committee)
which, in the case of Options and Stock Appreciation Rights, may equal the excess, if any, of value
of the consideration to be paid in the Change in Control transaction to holders of the same number
of Shares subject to such Options or Stock Appreciation Rights (or, if no consideration is paid in
any such transaction, the Fair Market Value of the Shares subject to such Options or Stock
Appreciation Rights) over the aggregate exercise price of such Options or Stock Appreciation Rights
(and otherwise, the Committee may cancel Awards for no consideration if the aggregate Fair Market
Value of the shares subject to such Awards is less than or equal to the aggregate Option Price of
such Options or exercise price of such Stock Appreciation Rights), (C) provide for the issuance of
substitute Awards that will substantially preserve the otherwise applicable terms of any affected
Awards previously granted hereunder as determined by the Committee in its sole discretion or (D)
provide that for a period of at least 30 days prior to the Change in Control, such Options or Stock
Appreciation Rights shall be exercisable as to all shares subject thereto and that upon the
occurrence of the Change in Control, such Options or Stock Appreciation Rights shall terminate and
be of no further force and effect.



11. No Right to Employment or Awards




     The granting of an Award under the Plan shall impose no obligation on the Company or any
Affiliate to continue the Employment of a Participant and shall not lessen or affect the Company’s
or Affiliate’s right to terminate the Employment of such Participant. No Participant or other
Person shall have any claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards. The terms and conditions of
Awards and the Committee’s determinations and interpretations with respect thereto need not be the
same with respect to each Participant (whether or not such Participants are similarly situated).



12. Securities Laws




     The Board may refuse to instruct the Company to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines that the issuance or
transfer of such Shares or such other consideration might violate any applicable law or regulation
and any payment tendered to the Company by a Participant, other holder or beneficiary in connection
with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or
beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be
construed as an offer to sell securities of the Company, and no such offer shall be outstanding,
unless and until the Committee in its sole discretion has determined that any such offer, if made,
would be in compliance with the applicable requirements of applicable securities laws.



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13. Successors and Assigns




     The Plan shall be binding on all successors and assigns of the Company and a Participant,
including without limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or representative of the
Participant’s creditors.



14. Nontransferability of Awards




     Unless otherwise determined by the Committee, an Award shall not be transferable or assignable
by the Participant otherwise than by will or by the laws of descent and distribution. An Award
exercisable after the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant.



15. Amendments or Termination




     Subject to the limitations imposed under Sections 6(f) and 7(d) of this Plan, the Board may
amend, alter or discontinue the Plan or any outstanding Award, but no amendment, alteration or
discontinuation shall be made, (a) without the approval of the stockholders of the Company to the
extent such approval is (i) required by or (ii) desirable to satisfy the requirements of, in each
case, any applicable law, regulation or other rule, including, the listing standards of the
securities exchange, which is, at the applicable time, the principal market for the Shares, or (b)
without the consent of a Participant, if such action would materially and adversely affect any of
the rights of the Participant under any Award theretofore granted to such Participant under the
Plan; provided, however, that the Committee may amend the Plan in such manner as it
deems necessary to permit the granting of Awards meeting the requirements of the Code or other
applicable laws (including, without limitation, to avoid adverse tax or accounting consequences to
the Company or to Participants).



     Without limiting the generality of the foregoing, to the extent applicable, notwithstanding
anything herein to the contrary, this Plan and Awards issued hereunder shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date. Notwithstanding any provision of the
Plan to the contrary, in the event that the Committee determines that any amounts payable hereunder
will be taxable to a Participant under Section 409A of the Code and related Department of Treasury
guidance prior to payment to such Participant of such amount, the Company may (a) adopt such
amendments to the Plan and Awards and appropriate policies and procedures, including amendments and
policies with retroactive effect, that the Committee determines necessary or appropriate to
preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder
and/or (b) take such other actions as the Committee determines necessary or appropriate to avoid
the imposition of an additional tax under Section 409A of the Code.



16. Choice of Law




     The Plan shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflicts of laws.



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17. Effectiveness of the Plan




     The Plan shall be effective as of the Effective Date, subject to the approval of the
stockholders of the Company.



18. Section 409A of the Code




     Notwithstanding other provisions of the Plan or any Award agreements thereunder, no Award
shall be granted, deferred, accelerated, extended, paid out or modified under this Plan in a manner
that would result in the imposition of an additional tax under Section 409A of the Code upon a
Participant. In the event that it is reasonably determined by the Committee that, as a result of
Section 409A of the Code, payments in respect of any Award under the Plan may not be made at the
time contemplated by the terms of the Plan or the relevant Award agreement, as the case may be,
without causing the Participant holding such Award to be subject to taxation under Section 409A of
the Code, the Company will make such payment on the first day that would not result in the
Participant incurring any tax liability under Section 409A of the Code. References under the Plan
or an Award to the Participant’s termination of Employment shall be deemed to refer to the date
upon which the Participant has experienced a “separation from service” within the meaning of
Section 409A of the Code. Notwithstanding anything herein to the contrary, (a) if at the time of
the Participant’s separation from service with any Service Recipient the Participant is a
“specified employee” as defined in Section 409A of the Code, and the deferral of the commencement
of any payments or benefits otherwise payable hereunder as a result of such separation from service
is necessary in order to prevent the imposition of any accelerated or additional tax under Section
409A of the Code, then the Company will defer the commencement of the payment of any such payments
or benefits hereunder (without any reduction in such payments or benefits ultimately paid or
provided to the Participant) to the minimum extent necessary to satisfy Section 409A of the Code
until the date that is six months and one day following the Participant’s separation from service
with all Service Recipients (or the earliest date as is permitted under Section 409A of the Code),
if such payment or benefit is payable upon a termination of Employment and (b) if any other
payments of money or other benefits due to the Participant hereunder would cause the application of
an accelerated or additional tax under Section 409A of the Code, such payments or other benefits
shall be deferred, if deferral will make such payment or other benefits compliant under Section
409A of the Code, or otherwise such payment or other benefits shall be restructured, to the minimum
extent necessary, in a manner, reasonably determined by the Board, that does not cause such an
accelerated or additional tax or result in an additional cost to the Company (without any reduction
in such payments or benefits ultimately paid or provided to the Participant).



     The Company shall use commercially reasonable efforts to implement the provisions of this
Section 18 in good faith; provided that neither the Company, the Board, the Committee nor
any of the Company’s employees, directors or representatives shall have any liability to
Participants with respect to this Section 18.



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19. Awards Subject to the Plan




     In the event of a conflict between any term or provision contained in the Plan and a term
contained in any Award agreement, the applicable terms and provisions of the Plan will govern and
prevail.



20. Severability




     If any provision of the Plan or any Award is, or becomes or is deemed to be invalid, illegal,
unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Committee, materially altering the intent of the Plan or the Award,
such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the
Plan and any such Award shall remain in full force and effect.




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