EX-10.3






EXHIBIT 10.3




R.H. DONNELLEY CORPORATION




2005 STOCK AWARD AND INCENTIVE PLAN

As Amended and Restated as of December 31, 2008




 









 





R.H. DONNELLEY CORPORATION




2005 STOCK AWARD AND INCENTIVE PLAN

As Amended and Restated as of December 31, 2008




	 	 	 
	 	 	Page

	1. Purpose 
	 	1
	 
	 	 
	2. Definitions 
	 	1
	 
	 	 
	3. Administration 
	 	4
	 
	 	 
	4. Stock Subject to Plan 
	 	5
	 
	 	 
	5. Eligibility; Per-Person Award Limitations 
	 	6
	 
	 	 
	6. Specific Terms of Awards 
	 	7
	 
	 	 
	7. Performance Awards, Including Annual Incentive Awards
	 	10
	 
	 	 
	8. Nonemployee Director Awards 
	 	13
	 
	 	 
	9. Certain Provisions Applicable to Awards 
	 	20
	 
	 	 
	10. Change in Control 
	 	21
	 
	 	 
	11. Additional Award Forfeiture Provisions 
	 	25
	 
	 	 
	12. General Provisions
	 	27






2









 






R.H. DONNELLEY CORPORATION

2005 STOCK AWARD AND INCENTIVE PLAN

As Amended and Restated as of December 31, 2008




     1. Purpose. The purpose of this 2005 Stock Award and Incentive Plan, as amended and restated
(the “Plan”), is to aid R.H. Donnelley Corporation, a Delaware corporation (together with its
successors and assigns, the “Company”), in attracting, retaining, motivating and rewarding
employees and non-employee directors of the Company or its subsidiaries or affiliates, to provide
for equitable and competitive compensation opportunities, to recognize individual contributions and
reward achievement of Company goals, and promote the creation of long-term value for stockholders
by closely aligning the interests of Participants with those of stockholders. The Plan authorizes
stock-based and cash-based incentives for Participants.



     2. Definitions. In addition to the terms defined in Section 1 above and elsewhere in the
Plan, the following capitalized terms used in the Plan have the respective meanings set forth in
this Section:



     (a) “Annual Incentive Award” means a type of Performance Award granted to a Participant under
Section 7(c) representing a conditional right to receive cash, Stock or other Awards or payments,
as determined by the Committee, based on performance in a performance period of one fiscal year or
a portion thereof.



     (b) “Annual Limit” shall have the meaning specified in Section 5(b).



     (c) “Award” means any Option, SAR, Restricted Stock, Deferred Stock, Stock granted as a bonus
or in lieu of another award, Dividend Equivalent, Other Stock-Based Award, Performance Award or
Annual Incentive Award, together with any related right or interest, granted to a Participant under
the Plan.



     (d) “Beneficiary” means the legal representatives of the Participant’s estate entitled by will
or the laws of descent and distribution to receive the benefits under a Participant’s Award upon a
Participant’s death, provided that, if and to the extent authorized by the Committee, a Participant
may be permitted to designate a Beneficiary, in which case the “Beneficiary” instead will be the
person, persons, trust or trusts (if any are then surviving) which have been designated by the
Participant in his or her most recent written and duly filed beneficiary designation to receive the
benefits specified under the Participant’s Award upon such Participant’s death. Unless otherwise
determined by the Committee, any designation of a Beneficiary other than a Participant’s spouse
shall be subject to the written consent of such spouse.



     (e) “Board” means the Company’s Board of Directors.



     (f) “Cause” shall have the meaning defined in any employment agreement or severance agreement
between the Participant and the Company or a subsidiary or affiliate then in effect or, if no such
agreement is then in effect, “Cause” shall mean (i) the Participant’s willful and continued failure
substantially to perform the duties of his or her position after notice and opportunity to cure;
(ii) any willful act or omission by the Participant constituting dishonesty, fraud or other
malfeasance, which in any such case is demonstrably injurious to the financial condition or
business reputation of the Company or any of its subsidiaries or affiliates; (iii) an act that
constitutes misconduct resulting in a restatement of the Company’s financial statements due to
material non-compliance with any financial reporting requirement within the meaning of Section 304
of The Sarbanes-Oxley Act of 2002; or (iv) a felony conviction in a court of law under the laws of
the United States or any state thereof or any other jurisdiction in which the Company or a



 









 




subsidiary or affiliate conducts business which materially impairs the value of the Participant’s
service to the Company or any of its subsidiaries or affiliates; provided, however, that for
purposes of this definition, no act or failure to act shall be deemed “willful” unless effected by
the Participant not in good faith and without a reasonable belief that such action or failure to
act was in or not opposed to the Company’s best interests, and no act or failure to act shall be
deemed “willful” if it results from any incapacity of the Participant due to physical or mental
illness.




     (g) “Change in Control” and related terms have the meanings specified in Section 10.



     (h) “Code” means the Internal Revenue Code of 1986, as amended. References to any provision
of the Code or regulation thereunder shall include any successor provisions and regulations, and
reference to regulations includes any applicable guidance or pronouncement of the Department of the
Treasury and Internal Revenue Service.



     (i) “Committee” means the Compensation and Benefits Committee of the Board, the composition
and governance of which is established in the Committee’s Charter as approved from time to time by
the Board and subject to Section 303A.05 of the Listed Company Manual of the New York Stock
Exchange, and other corporate governance documents of the Company. No action of the Committee
shall be void or deemed to be without authority due to the failure of any member, at the time the
action was taken, to meet any qualification standard set forth in the Committee Charter or this
Plan. The full Board may perform any function of the Committee hereunder except to the extent
limited under Section 303A.05 of the Listed Company Manual, in which case the term “Committee”
shall refer to the Board.



     (j) “Covered Employee” means an Eligible Person who is a Covered Employee as specified in
Section 12(j).



     (k) “Deferral Account” means the account established and maintained by the Company for
Deferred Stock and/or deferred cash credited under Section 8. A Deferral Account shall include one
or more subaccounts, including a Deferred Stock Account for forfeitable Deferred Stock under
Section 8(c), a Deferred Stock Account for shares of Deferred Stock that have become nonforfeitable
under Section 8(c) or that are at all times nonforfeitable under Section 8(e)(iii), and a Deferred
Cash Account described in Section 8(e)(iv). The Deferral Account and subaccounts, and Deferred
Stock and deferred cash credited thereto, will be maintained solely as bookkeeping entries by the
Company to evidence unfunded obligations of the Company.



     (l) “Deferred Stock” means a right, granted under this Plan, to receive Stock or other Awards
or a combination thereof at the end of a specified deferral period.



     (m) “Disability” means, with respect to a non-employee director, termination of service as a
director of the Company due to a physical or mental incapacity of long duration which renders the
Participant unable to perform the duties of a director of the Company.



     (n) “Dividend Equivalent” means a right, granted under this Plan, to receive cash, Stock,
other Awards or other property equal in value to all or a specified portion of the dividends paid
with respect to a specified number of shares of Stock.



     (o) “Effective Date” means the effective date specified in Section 12(p).



     (p) “Eligible Person” has the meaning specified in Section 5(a).



2









 





     (q) “Exchange Act” means the Securities Exchange Act of 1934, as amended. References to any
provision of the Exchange Act or rule (including a proposed rule) thereunder shall include any
successor provisions and rules.



     (r) “Fair Market Value” means the fair market value of Stock, Awards or other property as
determined in good faith by the Committee or under procedures established by the Committee. Unless
otherwise determined by the Committee, the Fair Market Value of Stock shall be the average of the
high and low sales prices per share of Stock reported on a consolidated basis for securities listed
on the principal stock exchange or market on which Stock is traded on the day immediately preceding
the day as of which such value is being determined or, if there is no sale on that day, then on the
last previous day on which a sale was reported. Fair Market Value relating to the exercise price
or base price of any Non-409A Option or SAR and relating to the market value of Stock measured at
the time of exercise shall conform to requirements under Code Section 409A.



     (s) “409A Awards” means Awards that constitute a deferral of compensation under Code Section
409A and regulations thereunder. “Non-409A Awards” means Awards other than 409A Awards. Although
the Committee retains authority under the Plan to grant Options, SARs and Restricted Stock on terms
that will qualify those Awards as 409A Awards, Options, SARs, and Restricted Stock are intended to
be Non-409A Awards unless otherwise expressly specified by the Committee.



     (t) “Full-Value Award” means Awards relating to Stock other than (i) Options and SARs that are
treated as exercisable solely for Stock under applicable accounting rules and (ii) Awards for
which the Participant pays the full grant-date intrinsic value of underlying Stock directly or by
forgoing a right to receive a cash payment from the Company; provided, however, that the Committee
may designate any Option or SAR (including those previously granted but excluding any ISO) as
“Full-Value Awards” for purposes of the Plan. References to a “Full-Value Award” under a
Preexisting Plan mean an award of a type that would be a Full-Value Award if granted under the
Plan.



     (u) “Incentive Stock Option” or “ISO” means any Option designated as an incentive stock option
within the meaning of Code Section 422 and qualifying thereunder.



     (v) “Option” means a right, granted under this Plan, to purchase Stock.



     (w) “Option Valuation Methodology” means the method for determining the number of shares to be
subject to Options, and the exercise price thereof, granted in payment of Retainer Fees under
Section 8(e)(ii).



     (x) “Other Director Compensation” means fees payable to a director in his or her capacity as
such, other than Retainer Fees, for attending meetings and other service on the Board and Board
committees or otherwise.



     (y) “Other Stock-Based Awards” means Awards granted to a Participant under Section 6(h).



     (z) “Participant” means a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible Person.



     (aa) “Performance Award” means a conditional right, granted to a Participant under Sections
6(i) and 7, to receive cash, Stock or other Awards or payments.



3









 





     (bb) “Plan Year” means, with respect to a non-employee director, the period commencing at the
time of election of the director at an annual meeting of shareholders (or the election of a class
of directors if the Company then has a classified Board of Directors), or the director’s initial
appointment to the Board if not at an annual meeting of shareholders, and continuing until the
close of business of the day preceding the next annual meeting of shareholders.



     (cc) “Preexisting Plans” means each of the following Company plans: The 2001 Stock Award and
Incentive Plan, the 1991 Key Employees’ Stock Option Plan, as amended and restated; the Key
Employees’ Performance Unit Plan, as amended and restated; and the 1998 Directors’ Stock Plan, as
amended and restated.



     (dd) “Restricted Stock” means Stock granted under this Plan which is subject to certain
restrictions and to a risk of forfeiture.



     (ee) “Retainer Fees” means annual Board and chair retainer fees payable to a director in his
or her capacity as such for service on the Board and Board committees.



     (ff) “Retirement” means, with respect to a non-employee director, termination of service as a
director of the Company at or after age 65.



     (gg) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to
Participants, promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act.



     (hh) “Stock” means the Company’s Common Stock, par value $1.00 per share, and any other equity
securities of the Company that may be substituted or resubstituted for Stock pursuant to Section
12(c).



     (ii) “Stock Appreciation Rights” or “SAR” means a right granted to a Participant under Section
6(c).



     (jj) “Valuation Date” shall mean the close of business on the last business day of each
calendar quarter and, in the case of any final distribution from a Participant’s Deferred Cash
Account (described in Section 8(e)(iv)), the day preceding such distribution.



     3. Administration.



     (a) Authority of the Committee. The Plan shall be administered by the Committee, which shall
have full and final authority, in each case subject to and consistent with the provisions of the
Plan, to select Eligible Persons to become Participants; to grant Awards; to determine the type and
number of Awards, the dates on which Awards may be exercised and on which the risk of forfeiture or
deferral period relating to Awards shall lapse or terminate, the acceleration of any such dates,
the expiration date of any Award, whether, to what extent, and under what circumstances an Award
may be settled, or the exercise price of an Award may be paid, in cash, Stock, other Awards, or
other property, and other terms and conditions of, and all other matters relating to, Awards; to
prescribe documents evidencing or setting terms of Awards (such Award documents need not be
identical for each Participant), amendments thereto, and rules and regulations for the
administration of the Plan and amendments thereto; to construe and interpret the Plan and Award
documents and correct defects, supply omissions or reconcile inconsistencies therein; and to make
all other decisions and determinations as the Committee may deem necessary or advisable for the
administration of the Plan. Decisions of the Committee with respect to the administration and
interpretation of the Plan shall be final, conclusive, and binding upon all persons interested in
the Plan, including Participants, Beneficiaries, transferees



4









 




under Section 12(b) and other persons claiming rights from or through a Participant, and
stockholders. The foregoing notwithstanding, the Board shall perform the functions of the
Committee for purposes of granting Awards under the Plan to non-employee directors (the functions
of the Committee with respect to other aspects of non-employee director awards is not exclusive to
the Board, however).




     (b) Manner of Exercise of Committee Authority. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed as limiting any
power or authority of the Committee. The Committee may act through subcommittees, including for
purposes of perfecting exemptions under Rule 16b-3 or qualifying Awards under Code Section 162(m)
as performance-based compensation, in which case the subcommittee shall be subject to and have
authority under the charter applicable to the Committee, and the acts of the subcommittee shall be
deemed to be acts of the Committee hereunder. The Committee may delegate to officers or managers
of the Company or any subsidiary or affiliate, or committees thereof, the authority, subject to
such terms as the Committee shall determine, to perform such functions, including administrative
functions, as the Committee may determine, to the extent (i) that such delegation will not result
in the loss of an exemption under Rule 16b-3(d) for Awards granted to Participants subject to
Section 16 of the Exchange Act in respect of the Company and will not cause Awards intended to
qualify as “performance-based compensation” under Code Section 162(m) to fail to so qualify, and
(ii) permitted under Section 157 and other applicable provisions of the Delaware General
Corporation Law.



     (c) Limitation of Liability. The Committee and each member thereof, and any person acting
pursuant to authority delegated by the Committee, shall be entitled, in good faith, to rely or act
upon any report or other information furnished by any executive officer, other officer or employee
of the Company or a subsidiary or affiliate, the Company’s independent auditors, consultants or any
other agents assisting in the administration of the Plan. Members of the Committee, any person
acting pursuant to authority delegated by the Committee, and any officer or employee of the Company
or a subsidiary or affiliate acting at the direction or on behalf of the Committee or a delegee
shall not be personally liable for any action or determination taken or made in good faith with
respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected
by the Company with respect to any such action or determination.



     4. Stock Subject To Plan.



     (a) Overall Number of Shares Available for Delivery. The total number of shares of Stock
reserved and available for delivery in connection with Awards under the Plan shall be (i) five
million shares, plus (ii) the number of shares that, immediately prior to the Effective Date,
remain available for new awards under the 2001 Stock Award and Incentive Plan plus (iii) the number
of shares subject to awards under the Preexisting Plans which become available in accordance with
Section 4(b) after the Effective Date; provided, however, that the total number of shares with
respect to which ISOs may be granted shall not exceed the number specified under clause (i) above.
The shares available under this Section 4(a) shall consist of two designated “share pools,” of
which one (“Pool 1”) shall be available for Full-Value Awards and the other (“Pool 2”) shall be
available for Awards relating to Stock that are not Full-Value Awards. Pool 1 shall consist of
3.75 million shares plus shares added to Pool 1 under clause (iii) above, and Pool 2 shall consist
of all other shares available under the Plan; provided, however, that the Committee may increase
Pool 1 above its existing limit by reducing the shares available in Pool 2 by four shares for each
share added to Pool 1 (which shall have the net effect of reducing the total number of shares
available under the Plan). The total number of shares available and the shares designated for Pool
1 and Pool 2 are subject to adjustment as provided in Section 12(c). Any shares of Stock delivered
under the Plan shall consist of authorized and unissued shares or treasury shares.



5









 





     (b) Share Counting Rules. The Committee may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in the case of tandem or substitute
awards) and make adjustments in accordance with this Section 4(b). For purposes of Pool 1, shares
shall be counted against those reserved to the extent such shares have been delivered and are no
longer subject to a risk of forfeiture. Accordingly, (i) to the extent that a Full-Value Award
under the Plan or a Preexisting Plan is canceled, expired, forfeited, settled in cash, settled by
issuance of fewer shares than the number underlying the award, or otherwise terminated without
delivery of shares to the Participant, the shares retained by or returned to the Company will be
available under the Plan and Pool 1; and (ii) shares that are withheld from such an award or
separately surrendered by the Participant in payment of the exercise price or taxes relating to
such an award shall be deemed to constitute shares not delivered to the Participant and will be
available under the Plan and Pool 1. The Committee may determine that Full-Value Awards may be
outstanding that relate to more shares than the aggregate remaining available under Pool 1 so long
as such Awards will not in fact result in delivery and vesting of shares in excess of the number
then available under Pool 1. For purposes of Pool 2, shares shall be counted against those
reserved to the full extent of the shares underlying the non-Full-Value Award under the Plan or a
Preexisting Plan, except that, to the extent such a non-Full-Value Award expires or is forfeited,
the shares retained by the Company will be available again under the Plan and Pool 2. In
addition, in the case of any Award granted in assumption of or in substitution for an award of a
company or business acquired by the Company or a subsidiary or affiliate or with which the Company
or a subsidiary or affiliate combines, shares issued or issuable in connection with such substitute
Award shall not be counted against the number of shares reserved under the Plan.



     5. Eligibility; Per-Person Award Limitations.



     (a) Eligibility. Awards may be granted under the Plan only to Eligible Persons. For purposes
of the Plan, an “Eligible Person” means an employee of the Company or any subsidiary or affiliate,
including any executive officer or non-employee director of the Company or a subsidiary or
affiliate, and any person who has been offered employment by the Company or a subsidiary or
affiliate, provided that such prospective employee may not receive any payment or exercise any
right relating to an Award until such person has commenced employment with the Company or a
subsidiary or affiliate. An employee on leave of absence may be considered as still in the employ
of the Company or a subsidiary or affiliate for purposes of eligibility for participation in the
Plan. For purposes of the Plan, a joint venture in which the Company or a subsidiary has a
substantial direct or indirect equity investment shall be deemed an affiliate, if so determined by
the Committee. Holders of awards granted by a company or business acquired by the Company or a
subsidiary or affiliate, or with which the Company or a subsidiary or affiliate combines, are
eligible for grants of substitute awards granted in assumption of or in substitution for such
outstanding awards previously granted under the Plan in connection with such acquisition or
combination transaction.



     (b) Per-Person Award Limitations. In each calendar year during any part of which the Plan is
in effect, an Eligible Person may be granted Awards intended to qualify as “performance-based
compensation” under Code Section 162(m) under each of Section 6(b), 6(c), 6(d), 6(e), 6(f), 6(g) or
6(h) relating to up to his or her Annual Limit (such Annual Limit to apply separately to the type
of Award authorized under each specified subsection, except that the limitation applies to Dividend
Equivalents under Section 6(g) only if such Dividend Equivalents are granted separately from and
not as a feature of another Award). A Participant’s Annual Limit, in any year during any part of
which the Participant is then eligible under the Plan, shall equal one million shares plus the
amount of the Participant’s unused Annual Limit relating to the same type of Award as of the close
of the previous year, subject to adjustment as provided in Section 12(c). In the case of an Award
which is not valued in a way in which the limitation set forth in the preceding sentence would
operate as an effective limitation satisfying applicable law (including Treasury Regulation
1.162-27(e)(4)), an Eligible Person may not be granted Awards authorizing



6









 




the earning during any calendar year of an amount that exceeds the Eligible Person’s Annual Limit,
which for this purpose shall equal $5 million plus the amount of the Eligible Person’s unused cash
Annual Limit as of the close of the previous year (this limitation is separate and not affected by
the number of Awards granted during such calendar year subject to the limitation in the preceding
sentence). For this purpose, (i) “earning” means satisfying performance conditions so that an
amount becomes payable, without regard to whether it is to be paid currently or on a deferred basis
or continues to be subject to any service requirement or other non-performance condition, and (ii)
a Participant’s Annual Limit is used to the extent an amount or number of shares may be potentially
earned or paid under an Award, regardless of whether such amount or shares are in fact earned or
paid.




     6. Specific Terms Of Awards.



     (a) General. Awards may be granted on the terms and conditions set forth in this Section 6.
In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or
thereafter (subject to Sections 12(e) and 12(k)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment or service by the
Participant, terms requiring forfeiture of Awards and gains realized upon exercise, vesting or
settlement of Awards in cases in which the Participant engages in conduct harmful to the Company,
and terms permitting a Participant to make elections relating to his or her Award. The Committee
shall retain full power and discretion with respect to any term or condition of an Award that is
not mandatory under the Plan, subject to Section 12(k). The Committee shall require the payment of
lawful consideration for an Award to the extent necessary to satisfy the requirements of the
Delaware General Corporation Law, and may otherwise require payment of consideration for an Award
except as limited by the Plan.



     (b) Options. The Committee is authorized to grant Options to Participants on the following
terms and conditions:




	 	(i)	 	Exercise Price. The exercise price per share of Stock purchasable under an
Option (including both ISOs and non-qualified Options) shall be determined by the
Committee, provided that such exercise price shall be not less than the Fair Market
Value of a share of Stock on the effective date of grant of such Option (which
effective date in no event may be earlier than the date definitive action is taken
approving such grant), subject to Section 9(a). Notwithstanding the foregoing, any
substitute award granted in assumption of or in substitution for an outstanding award
granted by a company or business acquired by the Company or a subsidiary or affiliate,
or with which the Company or a subsidiary or affiliate combines may be granted with an
exercise price per share of Stock other than as required above.
	 
	 	(ii)	 	Option Term; Time and Method of Exercise. The Committee shall determine the
term of each Option, provided that in no event shall the term of any Option exceed a
period of ten years from the date of grant. The Committee shall determine the time or
times at which or the circumstances under which an Option may be exercised in whole or
in part (including based on achievement of performance goals and/or future service
requirements), the methods by which such exercise price may be paid or deemed to be
paid and the form of such payment (subject to Section 12(k)), including, without
limitation, cash, Stock (including by withholding Stock deliverable upon exercise, if
such withholding or withholding feature will not result in additional accounting
expense to the Company), other Awards or awards granted under other plans of the
Company or any subsidiary or affiliate, or other property (including through
broker-assisted “cashless exercise” arrangements, to the extent permitted by
applicable law),




7









 






	 	 	 	and the methods by or forms in which Stock will be delivered or deemed to be
delivered in satisfaction of Options to Participants (including, in the case of
409A Awards, deferred delivery of shares subject to the Option, as mandated by the
Committee, with such deferred shares subject to any vesting, forfeiture or other
terms as the Committee may specify).
	 
	 	(iii)	 	ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Code Section 422.





     (c) Stock Appreciation Rights. The Committee is authorized to grant SAR’s to Participants on
the following terms and conditions:




	 	(i)	 	Right to Payment. An SAR shall confer on the Participant to whom it is
granted a right to receive, upon exercise thereof, the excess of (A) the Fair Market
Value of one share of Stock on the date of exercise over (B) the grant price of the
SAR, which shall be determined by the Committee but which in any event shall be not
less than the Fair Market Value of a share of Stock on the effective date of grant of
the SAR (which effective date in no event may be earlier than the date definitive
action is taken approving such grant), subject to Section 9(a).
	 
	 	(ii)	 	Other Terms. The Committee shall determine the term of each SAR, provided
that in no event shall the term of an SAR exceed a period of ten years from the date
of grant. The Committee shall determine at the date of grant or thereafter, the time
or times at which and the circumstances under which a SAR may be exercised in whole or
in part (including based on achievement of performance goals and/or future service
requirements), the method of exercise, method of settlement, form of consideration
payable in settlement, method by or forms in which Stock will be delivered or deemed
to be delivered to Participants, whether or not a SAR shall be free-standing or in
tandem or combination with any other Award, and whether or not the SAR will be a 409A
Award or Non-409A Award (cash SARs will in all cases be 409A Awards). Limited SARs
that may only be exercised in connection with a Change in Control or termination of
service following a Change in Control as specified by the Committee may be granted on
such terms, not inconsistent with this Section 6(c), as the Committee may determine.
The Committee may require that an outstanding Option be exchanged for an SAR
exercisable for Stock having vesting, expiration, and other terms substantially the
same as the Option, so long as such exchange will not result in additional accounting
expense to the Company.





     (d) Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants
on the following terms and conditions:




	 	(i)	 	Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions, if any, as
the Committee may impose, which restrictions may lapse separately or in combination at
such times, under such circumstances (including based on achievement of performance
goals and/or future service requirements), in such installments or otherwise and under
such other circumstances as the Committee may determine at the date of grant or
thereafter. Except to the extent restricted under the terms of the Plan and any Award
document relating to the Restricted Stock, a Participant granted Restricted Stock
shall have all of the rights of a stockholder, including the right to vote the
Restricted Stock and the right to receive dividends thereon (subject to any mandatory
reinvestment or other requirement imposed by the Committee).




8









 






	 	(ii)	 	Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be forfeited and
reacquired by the Company; provided that the Committee may provide, by rule or
regulation or in any Award document, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Stock will lapse in whole
or in part, including in the event of terminations resulting from specified causes.
	 
	 	(iii)	 	Certificates for Stock. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant, the
Committee may require that such certificates bear an appropriate legend referring to
the terms, conditions and restrictions applicable to such Restricted Stock, that the
Company retain physical possession of the certificates, and that the Participant
deliver a stock power to the Company, endorsed in blank, relating to the Restricted
Stock.
	 
	 	(iv)	 	Dividends and Splits. As a condition to the grant of an Award of Restricted
Stock, the Committee may require that any dividends paid on a share of Restricted
Stock shall be either (A) paid with respect to such Restricted Stock at the dividend
payment date in cash, in kind, or in a number of shares of unrestricted Stock having a
Fair Market Value equal to the amount of such dividends, or (B) automatically
reinvested in additional Restricted Stock or held in kind, which shall be subject to
the same terms as applied to the original Restricted Stock to which it relates, or (C)
deferred as to payment, either as a cash deferral or with the amount or value thereof
automatically deemed reinvested in shares of Deferred Stock, other Awards or other
investment vehicles, subject to such terms as the Committee shall determine or permit
a Participant to elect. Unless otherwise determined by the Committee, Stock
distributed in connection with a Stock split or Stock dividend, and other property
distributed as a dividend, shall be subject to restrictions and a risk of forfeiture
to the same extent as the Restricted Stock with respect to which such Stock or other
property has been distributed.





     (e) Deferred Stock. The Committee is authorized to grant Deferred Stock to Participants,
subject to the following terms and conditions:




	 	(i)	 	Award and Restrictions. Issuance of Stock will occur upon expiration of the
deferral period specified for an Award of Deferred Stock by the Committee (or, if
permitted by the Committee, as elected by the Participant). In addition, Deferred
Stock shall be subject to such restrictions on transferability, risk of forfeiture and
other restrictions, if any, as the Committee may impose, which restrictions may lapse
at the expiration of the deferral period or at earlier specified times (including
based on achievement of performance goals and/or future service requirements),
separately or in combination, in installments or otherwise, and under such other
circumstances as the Committee may determine at the date of grant or thereafter.
Deferred Stock may be satisfied by delivery of Stock, other Awards, or a combination
thereof, as determined by the Committee at the date of grant or thereafter.
	 
	 	(ii)	 	Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service during the applicable deferral period or portion
thereof to which forfeiture conditions apply (as provided in the Award document
evidencing the Deferred Stock), all Deferred Stock that is at that time subject to
such forfeiture conditions shall be forfeited; provided that the Committee may




9









 






	 	 	 	provide, by rule or regulation or in any Award document, or may determine in any
individual case, that restrictions or forfeiture conditions relating to Deferred
Stock will lapse in whole or in part, including in the event of terminations
resulting from specified causes. Deferred Stock subject to a risk of forfeiture
may be called “restricted stock units” or otherwise designated by the Committee.
	 
	 	(iii)	 	Dividend Equivalents. Unless otherwise determined by the Committee,
Dividend Equivalents on the specified number of shares of Stock covered by an Award of
Deferred Stock shall be either (A) paid with respect to such Deferred Stock at the
dividend payment date in cash or in shares of unrestricted Stock having a Fair Market
Value equal to the amount of such dividends, or (B) deferred with respect to such
Deferred Stock, either as a cash deferral or with the amount or value thereof
automatically deemed reinvested in additional Deferred Stock, other Awards or other
investment vehicles having a Fair Market Value equal to the amount of such dividends,
as the Committee shall determine or permit a Participant to elect.





     (f) Bonus Stock and Awards in Lieu of Obligations. The Committee is authorized to grant Stock
as a bonus, or to grant Stock or other Awards in lieu of obligations of the Company or a subsidiary
or affiliate to pay cash or deliver other property under the Plan or under other plans or
compensatory arrangements, subject to such terms as shall be determined by the Committee.



     (g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a
Participant, which may be awarded on a free-standing basis or in connection with another Award.
The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles,
and subject to restrictions on transferability, risks of forfeiture and such other terms as the
Committee may specify.



     (h) Other Stock-Based Awards. The Committee is authorized, subject to limitations under
applicable law, to grant to Participants such other Awards that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related to, Stock or factors
that may influence the value of Stock, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock,
Awards with value and payment contingent upon performance of the Company or business units thereof
or any other factors designated by the Committee, and Awards valued by reference to the book value
of Stock or the value of securities of or the performance of specified subsidiaries or affiliates
or other business units. The Committee shall determine the terms and conditions of such Awards.
Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section
6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in
such forms, including, without limitation, cash, Stock, other Awards, or other property, as the
Committee shall determine. Cash awards, as an element of or supplement to any other Award under
the Plan, may also be granted pursuant to this Section 6(h).



     (i) Performance Awards. Performance Awards, denominated in cash or in Stock or other Awards,
may be granted by the Committee in accordance with Section 7. A Performance Award denominated in
shares constitutes an Award authorized under Section 6(b) — (h) to which performance conditions
have been attached.



     7. Performance Awards, Including Annual Incentive Awards.



10









 





     (a) Performance Awards Generally. Performance Awards may be denominated as a cash amount,
number of shares of Stock, or specified number of other Awards (or a combination) which may be
earned upon achievement or satisfaction of performance conditions specified by the Committee. In
addition, the Committee may specify that any other Award shall constitute a Performance Award by
conditioning the right of a Participant to exercise the Award or have it settled, and the timing
thereof, upon achievement or satisfaction of such performance conditions as may be specified by the
Committee. The Committee may use such business criteria and other measures of performance as it
may deem appropriate in establishing any performance conditions, and may exercise its discretion to
reduce or increase the amounts payable under any Award subject to performance conditions, except as
limited under Sections 7(b) and 7(c) in the case of a Performance Award intended to qualify as
“performance-based compensation” under Code Section 162(m).



     (b) Performance Awards Granted to Covered Employees. If the Committee determines that a
Performance Award to be granted to an Eligible Person who is designated by the Committee as likely
to be a Covered Employee should qualify as “performance-based compensation” for purposes of Code
Section 162(m), the grant, exercise and/or settlement of such Performance Award shall be contingent
upon achievement of a preestablished performance goal and other terms set forth in this Section
7(b).




	 	(i)	 	Performance Goal Generally. The performance goal for such Performance Awards
shall consist of one or more business criteria and a targeted level or levels of
performance with respect to each of such criteria, as specified by the Committee
consistent with this Section 7(b). The performance goal shall be objective and shall
otherwise meet the requirements of Code Section 162(m) and regulations thereunder,
including the requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being “substantially
uncertain.” The Committee may determine that such Performance Awards shall be granted,
exercised and/or settled upon achievement of any one performance goal or that two or
more of the performance goals must be achieved as a condition to grant, exercise
and/or settlement of such Performance Awards. Performance goals may differ for
Performance Awards granted to any one Participant or to different Participants.
	 
	 	(ii)	 	Business Criteria. One or more of the following business criteria for the
Company, on a consolidated basis, and/or for specified subsidiaries or affiliates or
other business units of the Company shall be used by the Committee in establishing
performance goals for such Performance Awards: (1) advertising sales (either calendar
cycle or publication cycle basis) or other sales or revenue measures; (2) operating
income, earnings from operations, earnings before or after taxes, earnings before or
after interest, depreciation, amortization, or extraordinary or special items, (3) net
income or net income per common share (basic or diluted); (4) return on assets, return
on investment, return on capital, or return on equity; (5) cash flow, free cash flow,
cash flow return on investment, or net cash provided by operations; (6) interest
expense after taxes; (7) economic profit or value created; (8) operating margin; (9)
stock price or total stockholder return; and (10) strategic business criteria,
consisting of one or more objectives based on meeting specified market penetration,
geographic business expansion goals, operating goals, cost targets, customer
satisfaction, employee satisfaction, human resources management , supervision of
litigation and information technology, and goals relating to acquisitions or
divestitures of subsidiaries, affiliates or joint ventures. The targeted level or
levels of performance with respect to such business criteria may be established at
such levels and in such terms as the Committee may determine, in its discretion,
including in absolute terms, as a goal relative to performance in prior periods, or as
a goal compared




11









 






	 	 	 	to the performance of one or more comparable companies or an index covering
multiple companies. Performance goals based upon these business criteria may be
based upon generally accepted accounting principles (“GAAP”) or may be non-GAAP
measures, and in either case may be adjusted for purchase accounting impacts
related to acquisitions and other extraordinary, non-recurring or unusual events or
accounting treatments.
	 
	 	(iii)	 	Performance Period; Timing for Establishing Performance Goals. Achievement
of performance goals in respect of such Performance Awards shall be measured over a
performance period of up to one year or more than one year, as specified by the
Committee. A performance goal shall be established not later than the earlier of (A)
90 days after the beginning of any performance period applicable to such Performance
Award or (B) the time 25% of such performance period has elapsed.
	 
	 	(iv)	 	Performance Award Pool. The Committee may establish a Performance Award
pool, which shall be an unfunded pool, for purposes of measuring performance of the
Company in connection with Performance Awards. The amount of such Performance Award
pool shall be based upon the achievement of a performance goal or goals based on one
or more of the business criteria set forth in Section 7(b)(ii) during the given
performance period, as specified by the Committee in accordance with Section 7(b)(iv).
The Committee may specify the amount of the Performance Award pool as a percentage of
any of such business criteria, a percentage thereof in excess of a threshold amount,
or as another amount which need not bear a strictly mathematical relationship to such
business criteria.
	 
	 	(v)	 	Settlement of Performance Awards; Other Terms. Settlement of Performance
Awards shall be in cash, Stock, other Awards or other property, in the discretion of
the Committee. The Committee may, in its discretion, increase or reduce the amount of
a settlement otherwise to be made in connection with such Performance Awards, but may
not exercise discretion to increase any such amount payable to a Covered Employee in
respect of a Performance Award subject to this Section 7(b). Any settlement which
changes the form of payment from that originally specified shall be implemented in a
manner such that the Performance Award and other related Awards do not, solely for
that reason, fail to qualify as “performance-based compensation” for purposes of Code
Section 162(m). The Committee shall specify the circumstances in which such
Performance Awards shall be paid or forfeited in the event of termination of
employment by the Participant or other event (including a Change in Control) prior to
the end of a performance period or settlement of such Performance Awards.





     (c) Annual Incentive Awards Granted to Designated Covered Employees. The Committee may grant
an Annual Incentive Award to an Eligible Person who is designated by the Committee as likely to be
a Covered Employee. Such Annual Incentive Award will be intended to qualify as “performance-based
compensation” for purposes of Code Section 162(m), and its grant, exercise and/or settlement shall
be contingent upon achievement of preestablished performance goals and other terms set forth in
this Section 7(c).




	 	(i)	 	Grant of Annual Incentive Awards. Not later than the earlier of 90 days
after the beginning of any performance period applicable to such Annual Incentive
Award or the time 25% of such performance period has elapsed, the Committee shall
determine the Covered Employees who will potentially receive Annual Incentive Awards,
and the amount(s) potentially payable thereunder, for that performance period. The
amount(s) potentially payable shall be based upon the achievement




12









 






	 	 	 	of a performance goal or goals based on one or more of the business criteria set
forth in Section 7(b)(ii) in the given performance period, as specified by the
Committee. The Committee may designate an annual incentive award pool as the means
by which Annual Incentive Awards will be measured, which pool shall conform to the
provisions of Section 7(b)(iv). In such case, the portion of the Annual Incentive
Award pool potentially payable to each Covered Employee shall be preestablished by
the Committee. In all cases, the maximum Annual Incentive Award of any Participant
shall be subject to the limitation set forth in Section 5.
	 
	 	(ii)	 	Payout of Annual Incentive Awards. After the end of each performance period,
the Committee shall determine the amount, if any, of the Annual Incentive Award for
that performance period payable to each Participant. The Committee may, in its
discretion, determine that the amount payable to any Participant as a final Annual
Incentive Award shall be reduced from the amount of his or her potential Annual
Incentive Award, including a determination to make no final Award whatsoever, but may
not exercise discretion to increase any such amount. The Committee shall specify the
circumstances in which an Annual Incentive Award shall be paid or forfeited in the
event of termination of employment by the Participant or other event prior to the end
of a performance period or settlement of such Annual Incentive Award.





     (d) Written Determinations. Determinations by the Committee as to the establishment of
performance goals, the amount potentially payable in respect of Performance Awards and Annual
Incentive Awards, the level of actual achievement of the specified performance goals relating to
Performance Awards and Annual Incentive Awards, and the amount of any final Performance Award and
Annual Incentive Award shall be recorded in writing in the case of Performance Awards intended to
qualify under Code Section 162(m). Specifically, the Committee shall certify in writing, in a
manner conforming to applicable regulations under Code Section 162(m), prior to settlement of each
such Award granted to a Covered Employee, that the performance objective relating to the
Performance Award and other material terms of the Award upon which settlement of the Award was
conditioned have been satisfied.



     8. Non-Employee Director Awards. Options, Deferred Stock, Restricted Stock and other Awards
(which other Awards, if granted, will be governed by Sections 6 and 7 of this Plan) shall be
granted to non-employee directors of the Company or a subsidiary or an affiliate in accordance with
policies established from time to time by the Board specifying the classes of non-employee
directors to be granted such Awards, the number of shares to be subject to each Award, and the time
or times at which such Awards shall be granted. All Options granted to non-employee directors
shall be non-qualified stock options and shall be Non-409A Awards. The foregoing notwithstanding,
the aggregate number of shares that may be delivered in connection with Awards granted to
non-employee directors shall be five percent of the total reserved under the Plan, and in each
calendar year a non-employee director may be granted Awards relating to no more than 6,000 shares,
subject to adjustment as provided in Section 11(c).



     (a) Initial Policy — Option Grants. The initial policy with respect to Options granted under
this Section 8(a), effective as of the Effective Date and continuing until modified or revoked by
the Board from time to time, shall be as follows:




	 	(i)	 	Initial Grants. At the date of a person’s initial election or appointment as
a member of the Board after the Effective Date, such person, if he or she is a
non-employee director of the Company eligible to participate upon such election or
appointment, shall be granted an Option to purchase 1,500 shares of Stock, subject to
adjustment as provided in Section 12(c). At the Effective Date, each person who is a
non-employee director of the Company eligible to participate at
that date shall be granted an Option to purchase 1,500 shares of Stock, subject to
adjustment as provided in Section 12(c).




13









 






	 	(ii)	 	Annual Grants. At the date of each annual meeting of shareholders following
the Effective Date at which a director is elected or reelected as a member of the
Board (or at which members of another class of directors are elected or reelected, if
the Company then has a classified Board), such director, if he or she is a
non-employee director of the Company eligible to participate at that date and if he or
she has not been granted an Option under this Section 8(a) previously during the same
calendar year, shall be granted an Option to purchase 1,500 shares of Stock, subject
to adjustment as provided in Section 12(c).





     (b) Terms of Options Granted Under Section 8(a). Each Option granted under Section 8(a) shall
be subject to the following terms and conditions:




	 	(i)	 	Exercise Price. The exercise price per share of Stock purchasable under an
Option shall be equal to 100% of the Fair Market Value of Stock on the date of grant
of the Option, subject to Section 9(a).
	 
	 	(ii)	 	Option Term. Each Option shall expire not later than ten years after the
date of grant, or such earlier date as the Option may no longer be exercised and
cannot, by its terms, thereafter become exercisable. For options granted under the
initial policy, the stated expiration date shall be seven years after the date of
grant.
	 
	 	(iii)	 	Vesting and Exercisability. The Board may establish terms regarding the
times at which Options shall become vested and exercisable. Unless otherwise
determined by the Board, an Option granted under this Section 8(a) and not previously
forfeited shall vest and become exercisable by a Participant as to one-third of the
number of shares subject to the Option at the close of business on the day preceding
each of the three annual meetings of shareholders following the year of grant of the
Option, rounded to the nearest number of whole shares. The foregoing notwithstanding,
an Option not previously forfeited shall vest and become exercisable on an accelerated
basis upon a Change in Control or upon the termination of the Participant’s service as
a director due to death, Disability or Retirement. Unless otherwise determined by the
Board, an Option will cease to vest and become exercisable upon the termination of the
Participant’s service prior to a Change in Control for any reason other than death,
Disability or Retirement, and such portion that has not vested and become exercisable
at the time of such termination shall be forfeited.
	 
	 	(iv)	 	Payment. The exercise price of an Option shall be paid to the Company either
in cash or by the surrender of Stock, or any combination thereof, or in such other
form or manner as may be consistent with Section 6(b)(ii).





     (c) Initial Policy — Grant of Deferred Stock and Restricted Stock. The initial policy with
respect to Awards granted under this Section 8(c), effective as of the Effective Date and
continuing until modified or revoked by the Board from time to time, shall be as follows:




	 	(i)	 	Initial Grant. At the date of a person’s initial election or appointment as
a member of the Board after the Effective Date, such person, if he or she is a
non-employee director of the Company eligible to participate upon such election or
appointment, shall be granted 1,500 shares of Deferred Stock, subject to adjustment as
provided in Section 12(c). At the Effective Date, each person who is a non-employee
director of the Company eligible to participate at that date
shall be granted 1,500 shares of Deferred Stock, subject to adjustment as provided
in Section 12(c).




14









 






	 	(ii)	 	Annual Grants. At the date of each annual meeting of shareholders following
the Effective Date at which a director is elected or reelected as a member of the
Board (or at which members of another class of directors are elected or reelected, if
the Company then has a classified Board), such director, if he or she is a
non-employee director of the Company eligible to participate at that date and if he or
she has not been granted Deferred Stock or Restricted Stock under Section 8(c)
previously during the same calendar year, shall be granted 1,500 shares of Deferred
Stock, unless the director has elected (at the time elections are required to be filed
under Section 8(e)(i)) to receive such grant in the form of an equal number of shares
of Restricted Stock. The number of shares subject to such annual grants shall be
subject to adjustment as provided in Section 12(c).





     (d) Terms of Deferred Stock and Restricted Stock Granted Under Section 8(c). Deferred Stock
granted under Section 8(c) shall be subject to the terms and conditions of Deferred Stock specified
in Sections 8(f), unless otherwise determined by the Board. Deferred Stock and Restricted Stock
granted under this Section 8(c) shall also be subject to the following additional terms and
conditions:




	 	(i)	 	Vesting and Forfeiture. The Board may establish terms regarding the times at
which Deferred Stock and Restricted Stock shall become vested and non-forfeitable.
Unless otherwise determined by the Board, an Award granted under Section 8(c) and not
previously forfeited shall become vested and non-forfeitable as to one-third of the
number of shares of Deferred Stock or Restricted Stock at the close of business on the
day preceding each of the three annual meetings of shareholders following the date of
grant of such Award, rounded to the nearest number of whole shares. The foregoing
notwithstanding, an Award of Deferred Stock or Restricted Stock not previously vested
or forfeited shall vest and become non-forfeitable on an accelerated basis upon a
Change in Control or upon the termination of the Participant’s service as a director
due to death, Disability or, in the case of Deferred Stock, Retirement. Unless
otherwise determined by the Board, an Award of Deferred Stock or Restricted Stock not
previously vested or forfeited will cease to vest and will be forfeited upon the
termination of the Participant’s service prior to a Change in Control for any reason
other than death, Disability or, in the case of Deferred Stock, Retirement. Deferred
Stock shall be settled within 30 days after the vesting date, unless a later
settlement date applies under a mandatory or elective deferral. Any elective deferral
of such settlement, if permitted, shall meet the requirements of Section 8(f), and
during any period of deferral following vesting such Deferred Stock shall be subject
to applicable provisions of Sections 8(e), (f) and (g).
	 
	 	(ii)	 	Deferred Stock Credited as a Result of Dividend Equivalents. Unless
otherwise determined by the Board, Deferred Stock credited as a result of Dividend
Equivalents under Section 8(f)(i) shall be subject to the same terms, including risk
of forfeiture, as the Deferred Stock with respect to which the dividend equivalents
were credited.
	 
	 	(iii)	 	Dividends on Restricted Stock. Unless otherwise determined by the Board,
dividends on Restricted Stock declared and paid prior to the lapse of the risk of
forfeiture on such Restricted Stock shall be automatically deemed to be reinvested in
additional shares of Restricted Stock, which shall be subject to the same terms,
including risk of forfeiture, as the Restricted Stock on which the dividend was paid.




15









 






	 	(iv)	 	Awards Nontransferable. Deferred Stock and Restricted Stock shall be
nontransferable by the Participant at any time that the Award remains subject to a
risk of forfeiture.





     (e) Options Granted in Payment of Fees and Deferral of Fees in Deferred Stock and Deferred
Cash. Except to the extent limited by the Committee, each non-employee director of the Company may
elect, in accordance with Section 8(e)(i), to be paid Retainer Fees in the form of Options (or, if
so determined by the Committee, stock SARs with terms qualifying such Awards as 409A Awards) under
Section 8(e)(ii) or to defer receipt of Retainer Fees and Other Director Compensation in the form
of Deferred Stock under Section 8(e)(iii) or deferred cash under Section 8(e)(iv).




	 	(i)	 	Elections. A director shall elect to participate and the terms of such
participation by filing an election with the Company prior to the beginning of the
calendar year in which a Plan Year commences (Plan Years generally begin at each
annual meeting of shareholders or, in the case of a new director, upon initial
appointment) .






	 	(A)	 	Effect and Irrevocability of Elections. Elections shall be
deemed continuing, and therefore applicable to Plan Years after the initial
Plan Year covered by the election, until the election is modified or
superseded by the Participant. Elections relating to a specified Plan Year
shall become irrevocable at the commencement of the calendar year in which the
Plan Year commences. Elections may be modified or revoked by filing a new
election prior to the time the election to be modified or revoked has become
irrevocable. The latest election filed with the Board shall be deemed to
revoke all prior inconsistent elections that remain revocable at the time of
filing of the latest election.
	 
	 	(B)	 	Matters To Be Elected. The Company will provide a form of
election which will permit a director to make appropriate elections with
respect to all relevant matters under this Section 8.
	 
	 	(C)	 	Prior Elections under the 2001 Stock Award and Incentive
Plan. The deferral features of the Plan for non-employee directors represent
a continuation of the similar deferral features under the 2001 Stock Award and
Incentive Plan. Any amounts both deferred and vested before 2005 shall be
treated as “grandfathered” under Code Section 409A, and no change representing
a material modification of the terms of such grandfathered deferrals, after
October 3, 2004, shall apply thereto, including changes resulting under the
terms of this Plan.






	 	(ii)	 	Options Granted in Payment of Retainer Fees. A Participant who has elected
to be paid a specified amount of Retainer Fees in the form of Options shall be
granted, at the close of business on the day the Participant’s Plan Year commences, an
Option to purchase the number of whole shares of Stock determined in accordance with
the Option Valuation Methodology specified by the Board. Each Option granted under
this Section 8(e)(ii) shall be subject to the following terms and conditions:






	 	(A)	 	Option Valuation Methodology. The Board shall determine,
prior to the calendar year in which the Plan Year commences, the Option
Valuation Methodology which will be used to determine the number of Options
granted and the Option exercise price. The Option Valuation Methodology
shall be based upon a reasonable valuation.




16









 






	 	(B)	 	Option Term. Each Option will expire at a date specified by
the Board at the time the Option Valuation Methodology is established, which
expiration shall not be later than ten years after the date of grant;
provided, however, that, unless otherwise determined by the Board or otherwise
expressly provided in this Plan, any portion of an Option that is not yet
exercisable as of the date a Participant ceases to serve as a director for any
reason will expire at the date such service ceases.
	 
	 	(C)	 	Vesting and Exercisability. Unless otherwise determined by
the Board, each Option will vest and become exercisable as to 25% of the
underlying shares on the June 30, September 30, December 31, and March 31
following the date of grant; provided, however, that, in the case of a Plan
Year which begins on or after June 30 and before September 30, the vesting
percentage shall be 33%, and in the case of a Plan Year which begins on or
after September 30 and before December 31, the vesting percentage shall be
50%; and provided further, that an Option will become fully vested and
exercisable at the close of business on the last day of the Plan Year in which
it was granted. The number of shares as to which the Option becomes vested
and exercisable will be rounded to the nearest whole number. The foregoing
notwithstanding, (i) upon a Change in Control a Participant’s Option not
previously forfeited shall vest and become exercisable in full, and (ii) upon
termination of the Participant’s service as a director due to death,
Disability, or Retirement, that portion of the Option which would become
vested and exercisable on the last day of the calendar quarter in which such
death, Disability, or Retirement occurred will become immediately vested and
exercisable.
	 
	 	(D)	 	Exercise Price. The exercise price per share of Stock
purchasable under an Option will be 100% of the Fair Market Value of the
underlying shares. The exercise price of an Option shall be paid to the
Company either in cash or by the surrender of Stock, or any combination
thereof, or in such other form or manner as then may be permitted under
Section 6(b)(ii).
	 
	 	(E)	 	Changes in Fees; Changes in Service as a Director. If the
amount of Retainer Fees is increased during a Plan Year, or if a Director is
appointed chair of a Board committee or Lead Director, such that an additional
Retainer Fee is payable during a Plan Year, such increased or additional fees
will not be paid in the form of Options. If a Director has been granted an
Option in respect of a Plan Year (or a portion thereof) in payment of Retainer
Fees which included committee-related fees for service as Lead Director, chair
or a member of any Board committee, and during such Plan Year (or portion
thereof) he or she ceases such service but remains on the Board, the Option
will expire in part at the time such service ceases, to the extent of that
portion of the Option which is not yet exercisable multiplied by a fraction
the numerator of which is the amount of fees related to such additional
service included in such Retainer Fees and the denominator of which is the
total amount of such Retainer Fees.






	 	(iii)	 	Deferral of Retainer Fees and Other Director Compensation in the Form of
Deferred Stock. If a Participant has elected to defer receipt of a specified




17









 






	 	 	 	amount of Retainer Fees or Other Director Compensation in the form of Deferred
Stock, a number of shares of Deferred Stock shall be credited to the Participant’s
Deferred Stock Account, as of the date such Retainer Fees or Other Director
Compensation otherwise would have been payable to the Participant but for such
election to defer, equal to (i) such amount otherwise payable divided by (ii) the
Fair Market Value of a share of Stock at that date. Deferred Shares credited under
this Section 8(e)(iii) shall be subject to the terms and conditions applicable to
Deferred Stock specified in Sections 8(f). The right and interest of each
Participant in Deferred Stock credited to the Participant’s Deferred Stock Account
under this Section 8(e)(iii) at all times will be nonforfeitable.
	 
	 	(iv)	 	Deferral of Retainer Fees and Other Director Compensation in the Form of
Deferred Cash. If a Participant has elected to defer receipt of a specified amount of
Retainer Fees or Other Director Compensation in the form of deferred cash, an amount
equal to such specified amount shall be credited to the Participant’s Deferred Cash
Account as of the date such Retainer Fees or Other Director Compensation otherwise
would have been payable to the Participant but for such election to defer. Each
Participant shall be entitled to direct the manner in which his or her Deferred Cash
Account will be deemed to be invested, selecting among the same investment
alternatives (other than Company common stock) as are offered from time to time to
participants in the Company’s Deferred Compensation Plan. The right and interest of
each Participant relating to his or her Deferred Cash Account at all times will be
nonforfeitable.
	 
	 	(v)	 	Cessation of Service as a Director. If any Retainer Fee or Other Director
Compensation otherwise subject to an election would be paid to a Participant after he
or she has ceased to serve as a director, such payment shall not be subject to
deferral under this Section 8(e), but shall instead be paid in accordance with the
Company’s regular non-employee director compensation policies.





     (f) Other Terms of Deferral Accounts.




	 	(i)	 	Dividend Equivalents on Deferred Stock. Dividend Equivalents will be
credited on Deferred Stock credited to a Participant’s Deferred Stock Account(s) as
follows:






	 	(A)	 	Cash and Non-Share Dividends. If the Company declares and
pays a dividend on Stock in the form of cash or property other than shares of
Stock, then a number of additional shares of Deferred Stock shall be credited
to a Participant’s Deferred Stock Account(s) as of the payment date for such
dividend equal to (i) the number of shares of Deferred Stock credited to the
respective Account as of the record date for such dividend, multiplied by (ii)
the amount of cash plus the Fair Market Value of any property other than shares actually paid as a dividend on each share at such payment date, divided
by (iii) the Fair Market Value of a share of Stock at such payment date.
	 
	 	(B)	 	Share Dividends and Splits. If the Company declares and pays
a dividend on Stock in the form of additional shares of Stock, or there occurs
a forward split of Stock, then a number of additional shares of Deferred Stock
shall be credited to the Participant’s Deferred Stock Account(s) as of the
payment date for such dividend or forward Stock split equal to (i) the number
of shares of Deferred Stock credited to the respective Account as of the
record date for such dividend or split
multiplied by (ii) the number of additional shares actually paid as a
dividend or issued in such split in respect of each share of Stock.




18









 












	 	(ii)	 	Reallocation of Accounts. A Participant may allocate amounts credited to his
or her Deferred Cash Account to one or more of the investment vehicles authorized
under the Company’s Deferred Compensation Plan. Subject to the rules established by
the Board and subject to the provisions of this Section 8(f), a Participant may
reallocate amounts credited to his or her Deferred Cash Account as of the Valuation
Date following the Participant’s election, to one or more of such investment vehicles,
by filing with the Company a notice, in such form, and in accordance with such
procedures, as the Board shall determine from time to time. The Board may, in its
discretion, restrict allocation into or reallocation by specified Participants into or
out of special investment vehicles or specify minimum or maximum amounts that may be
allocated or reallocated by Participants. Notwithstanding the foregoing, a
Participant shall have no right to have amounts credited as cash to the Participant’s
Deferred Cash Account reallocated or switched to his or her Deferred Stock Account or
amounts credited to the Participant’s Deferred Stock Account reallocated or switched
to his or her Deferred Cash Account, except as may be permitted by the Board.
	 
	 	(iii)	 	Elections as to Settlement. Each Participant’s election under Section
8(e)(i) shall specify the time or times at which the Participant’s Deferral Account
will be settled, which may be a fixed date or a date at or following the Participant’s
termination of service as a director of the Company, and whether distribution will be
in a single lump sum or in a number of annual installments not exceeding ten (or such
other number as may be determined by the Board); provided, however, that, if no valid
election has been filed as to the time of settlement of a Participant’s Deferral
Account or any portion thereof, such Deferral Account or portion thereof shall be
distributed in a single lump sum on the first business day of the year following the
year in which the Participant ceases to serve as a director. If installments are
elected, such installments must be annual installments (unless otherwise permitted by
the Company and validly elected in the Participant’s deferral election form,
commencing not later than the first year following the year in which the Participant
ceases to serve as a director (on such annual installment date as may be specified in
such election form) and extending over the period elected by the Participant (not to
exceed ten years).






	 	(A)	 	Matters Covered by Election. Subject to the terms of the
Plan, the Company shall determine whether all deferrals under the Plan must be
subject to a single election as to the time or times of settlement, or whether
settlement elections may relate to a specified sub-account (i.e., the Deferred
Stock Account or the Deferred Cash Account) and/or deferrals in a specified
Plan Year. If the Company permits elections to relate to a specified Plan
Year, such election shall apply to the amounts originally credited to the
specified sub account in respect of such Plan Year and to any additional
amounts credited as Dividend Equivalents or interest or earnings in respect of
such originally credited amounts and previously credited additional amounts.
	 
	 	(B)	 	Modifying Elections. A Participant may modify a prior
election as to the time at which a Participant’s Deferral Account (including a
specified sub account, but only to the extent permitted under the 2001 Stock
Award and Incentive Plan in the case of grandfathered deferrals) will be
settled in accordance with Code Section 409A(a)(4)(C) and applicable
transition rules under Section 409A, subject to such additional requirements
as may be specified by the Company. Such modification shall be made by
filing a new election with the Company.




19









 












	 	(iv)	 	Election Forms. Elections under the Plan shall be made in writing on such
form or forms as may be specified from time to time by the Board.
	 
	 	(v)	 	Statements. The Company will furnish statements to each Participant
reflecting the amount credited to a Participant’s Deferral Account, transactions
therein, and other related information no less frequently than once each calendar
year.
	 
	 	(vi)	 	Fractional Shares. The Company may specify a reasonable method to account
for fractional shares of Deferred Stock, which may include rounding downward or upward
to eliminate such fractional shares at each crediting date.





     (g) Settlement of Deferral Accounts. The Company will settle a Participant’s Deferral Account
by making one or more distributions to the Participant (or his or her Beneficiary, following
Participant’s death) at the time or times, in a lump sum or installments, as specified in the
Participant’s election filed in accordance with Sections 8(e)(i) and 8(f)(iii); provided, however,
that a Deferral Account will be settled at times earlier than those specified in such election in
accordance with Section 8(g).




	 	(i)	 	Form of Distribution. Distributions in respect of a Participant’s Deferred
Stock Account shall be made only in shares of Stock, together with cash in lieu of any
fractional share remaining at a time that less than one whole share of Deferred Stock
is credited to such Deferred Stock Account. Shares may be delivered in certificate
form to a Participant (or his or her Beneficiary) or to a nominee for the account of
the Participant (or his or her Beneficiary), or in such other manner as the Board may
determine. Distributions in respect of a Participant’s Deferred Cash Account shall be
made only in cash.
	 
	 	(ii)	 	Death. If a Participant ceases to serve as a director due to death or dies
prior to distribution of all amounts from his or her Deferral Account, the Company
shall make a single lump-sum distribution to the Participant’s Beneficiary. Any such
distribution shall be made on the 60th day following formal notification to
the Company of the Participant’s death.
	 
	 	(iii)	 	Unforeseeable Emergency and Other Payments. Other provisions of the Plan
notwithstanding, if, upon the written application of a Participant, the Board
determines that the Participant has had an Unforeseeable Emergency as defined in
Section 12(k)(i)(E)(3), the Board shall direct the payment to the Participant of all
or a portion of the balance of a Deferral Account (to the extent of then vested
amounts) in accordance with Section 12(k)(i)(D)(1).
	 
	 	(iv)	 	Change in Control. In the event of a Change in Control which also
constitutes a 409A Ownership/Control Change, payments in settlement of any Deferral
Account (including a Deferral Account with respect to which one or more installment
payments have previously been made) shall be made on the date fifteen (15) business
days following such 409A Ownership/Control Change.





     9. Certain Provisions Applicable To Awards.



     (a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted under the Plan
may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with,
or in substitution or exchange for, any other Award or any award granted under



20









 




another plan of the Company, any subsidiary or affiliate, or any business entity to be acquired by
the Company or a subsidiary or affiliate, or any other right of a Participant to receive payment
from the Company or any subsidiary or affiliate; provided, however, that a 409A Award may not be
granted in tandem with a Non-409A Award. Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different time from the grant of
such other Awards or awards. The Committee may determine that, in granting a new Award, the
in-the-money value or fair value of any surrendered Award or award or the value of any other right
to payment surrendered by the Participant may be applied to reduce the exercise price of any
Option, grant price of any SAR, or purchase price of any other Award. This Section 9(a) shall be
subject to Section 12(e) (including the limitation on repricing) and subject to Section 12(k).




     (b) Term of Awards. The term of each Award shall be for such period as may be determined by
the Committee, subject to the express limitations set forth in Sections 6(b)(ii), 6(c)(ii) and 8
and other applicable provisions of the Plan.



     (c) Form and Timing of Payment under Awards; Deferrals. Subject to the terms of the Plan
(including Section 12(k)) and any applicable Award document, payments to be made by the Company or
a subsidiary or affiliate upon the exercise of an Option or other Award or settlement of an Award
may be made in such forms as the Committee shall determine, including, without limitation, cash,
Stock, other Awards or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Award may be accelerated, and cash
paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or
upon occurrence of one or more specified events, subject to Section 12(k). Subject to Section
12(k), installment or deferred payments may be required by the Committee (subject to Section 12(e))
or permitted at the election of the Participant on terms and conditions established by the
Committee. Payments may include, without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant or crediting of Dividend
Equivalents or other amounts in respect of installment or deferred payments denominated in Stock.
In the case of any 409A Award that is vested and no longer subject to a risk of forfeiture (within
the meaning of Code Section 83), such Award will be distributed to the Participant, upon
application of the Participant, if the Participant has had an Unforeseeable Emergency as defined in
Section 12(k)(i)(E)(3), in accordance with Section 12(k)(i)(D)(1) .



     (d) Limitation on Vesting of Certain Awards. Subject to Section 8, Restricted Stock will vest
over a minimum period of three years except in the event of a Participant’s death, disability, or
retirement, or in the event of a Change in Control or other special circumstances. The foregoing
notwithstanding, (i) Restricted Stock as to which either the grant or vesting is based on, among
other things, the achievement of one or more performance conditions generally will vest over a
minimum period of one year except in the event of a Participant’s death, disability, or retirement,
or in the event of a Change in Control or other special circumstances, and (ii) up to 5% of the
shares of Stock authorized under the Plan may be granted as Restricted Stock without any minimum
vesting requirements. For purposes of this Section 9(d), (i) a performance period that precedes
the grant of the Restricted Stock will be treated as part of the vesting period if the participant
has been notified promptly after the commencement of the performance period that he or she has the
opportunity to earn the Award based on performance and continued service, and (ii) vesting over a
three-year period or one-year period will include periodic vesting over such period if the rate of
such vesting is proportional (or less rapid) throughout such period.



     10. Change in Control.



     (a) Effect of “Change in Control” on Non-Performance Based Awards. For awards granted on
or before December 31, 2008, in the event of a “Change in Control,” the following provisions
shall apply to non-performance based Awards, including Awards as to which
performance conditions previously have been satisfied or are deemed satisfied under Section 10(b),
unless otherwise provided by the Committee in the Award document:



21









 






	 	(i)	 	In the case of Non-409A Awards:






	 	(A)	 	All forfeiture conditions and other restrictions applicable
to Awards granted under the Plan shall lapse and such Awards shall be fully
payable as of the time of the Change in Control without regard to vesting or
other conditions, except to the extent of any waiver by the Participant and
subject to applicable restrictions set forth in Section 12(a);
	 
	 	(B)	 	Any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and vested as
of the time of the Change in Control and shall remain exercisable and vested
for the balance of the stated term of such Award without regard to any
termination of employment or service by the Participant other than a
termination for Cause, subject only to applicable restrictions set forth in
Section 12(a); and
	 
	 	(C)	 	The Committee may, in its discretion, during the 60-day
period immediately following the Change in Control, cancel an outstanding
Option or SAR or permit the Participant to elect to surrender the outstanding
Option or SAR in exchange for a cash payment equal to the excess of the Fair
Market Value of a share at the cancellation date over the exercise price of
such Option or grant price of such SAR, multiplied by the number of shares of
Stock covered by such Option or SAR, and, with respect to other types of
Awards denominated in shares, to cancel such an Award or permit the
Participant to elect to surrender the Award in exchange for a cash payment
equal to the Fair Market Value of a share at the surrender date multiplied
by the number of shares of Stock covered by such Award.






	 	(ii)	 	In the case of 409A Awards, if and to the extent permitted under Code Section
409A (for this purpose, if Section 409A would permit any of the following events to
occur following a 409A Ownership/Control Change but not otherwise, such event shall
occur only in the case of a 409A Ownership/Control Change):






	 	(A)	 	All deferral of settlement, forfeiture conditions and other
restrictions applicable to an unvested Award granted under the Plan shall
lapse and such Awards shall be fully payable as of the time of the Change in
Control without regard to deferral and vesting conditions, except to the
extent of any waiver by the Participant (if permitted under Section 409A) and
subject to applicable restrictions set forth in Sections 12(a) and 12(k);
	 
	 	(B)	 	Any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and vested as
of the time of the Change in Control and shall remain exercisable and vested
for the balance of the stated term of such Award without regard to any
termination of employment or service by the Participant other than a
termination for Cause, subject only to applicable restrictions set forth in
Sections 12(a) and 12(k); and




22









 






	 	(C)	 	The Committee may, in its discretion, during the 60-day
period immediately following the Change in Control, provide for the
cancellation of an outstanding 409A Award or permit the Participant to elect
to surrender the outstanding 409A Award in exchange for a cash payment or a
right to a cash payment at the cancellation date equal to the excess of the
Change in Control Price or the fair market value of Stock over the exercise
price or grant price of such 409A Award, if any, multiplied by the number of
shares of Stock covered by such 409A Award, provided that any such transaction
shall change the distribution date for the Award only if such change is
permitted under Code Section 409A, and provided further that the Change in
Control Price may be used only if doing so does not result in an impermissible
change to a deferral under Code Section 409A.




For Awards granted on or after January 1, 2009, the rights described in this Section 10(a)
shall only apply if and to the extent expressly provided for by the Committee in the Award document
governing such Award or other agreement with the Participant. 




     (b) Effect of “Change in Control” on Performance-Based Awards. In the event of a “Change in
Control,” with respect to an outstanding Award subject to achievement of performance goals and
conditions, such performance goals and conditions shall be deemed to be met or exceeded if and to
the extent so provided by the Committee in the Award document governing such Award or other
agreement with the Participant, to the maximum extent permitted under Section 409A in the case of
409A Awards.



     (c) Definition of “Change in Control.” A “Change in Control” shall be deemed to have occurred
if, after the Effective Date, there shall have occurred any of the following:




	 	(i)	 	Any “person,” as such term is used in Section 13(d) and 14(d) of the Exchange
Act (other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company, or any company owned, directly or indirectly,
by the shareholders of the Company in substantially the same proportions as their
ownership of stock of the Company), acquires voting securities of the Company and
immediately thereafter is a “20% Beneficial Owner.” For purposes of this provision, a
“20% Beneficial Owner” shall mean a person who is the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company’s
then-outstanding voting securities; provided that the term “20% Beneficial Owner”
shall not include any person who, at all times following such an acquisition of
securities, remains eligible to file a Schedule 13G pursuant to Rule 13d-1(b) under
the Exchange Act, or remains exempt from filing a Schedule 13D under Section
13(d)(6)(b) of the Exchange Act, with respect to all classes of Company voting
securities; and provided further, that a person who is a “Purchaser” as defined in
Amendment No. 2, dated as of September 21, 2002, to the Rights Agreement, dated as of
October 27, 1998, as amended through the Effective Date, by and between the Company
and The Bank of New York, as successor Rights Agent (the “Rights Agreement”), or who
acquires beneficial ownership of Stock from a “Purchaser” as a result of a transfer of
Preferred Shares and/or Warrants pursuant to and in accordance with Section 4.10 of
the Preferred Stock and Warrant Purchase Agreement, dated as of September 21, 2002,
shall not be deemed a 20% Beneficial Owner hereunder unless such person constitutes an
“Acquiring Person” under the Rights Agreement as in effect at the Effective Date;




23









 






	 	(ii)	 	During any period of two consecutive years commencing on or after the
Effective Date, individuals who at the beginning of such period constitute the Board,
and any new director (other than a director designated by a person (as defined above)
who has entered into an agreement with the Company to effect a transaction described
in subsections (i), (iii) or (iv) of this definition) whose election by the Board or
nomination for election by the Company’s shareholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election was
previously so approved (the “Continuing Directors”) cease for any reason to constitute
at least a majority thereof;
	 
	 	(iii)	 	The shareholders of the Company have approved a merger, consolidation,
recapitalization, or reorganization of the Company, or a reverse stock split of any
class of voting securities of the Company, or the consummation of any such transaction
if shareholder approval is not obtained, other than any such transaction which would
result in at least 60% of the combined voting power of the voting securities of the
Company or the surviving entity outstanding immediately after such transaction being
beneficially owned by persons who together beneficially owned at least 80% of the
combined voting power of the voting securities of the Company outstanding immediately
prior to such transaction, with the relative voting power of each such continuing
holder compared to the voting power of each other continuing holder not substantially
altered as a result of the transaction; provided that, for purposes of this paragraph
(iii), such continuity of ownership (and preservation of relative voting power) shall
be deemed to be satisfied if the failure to meet such 60% threshold (or to
substantially preserve such relative voting power) is due solely to the acquisition of
voting securities by an employee benefit plan of the Company, such surviving entity or
a subsidiary thereof; and provided further, that, if consummation of the corporate
transaction referred to in this Section 10(c)(iii) is subject, at the time of such
approval by shareholders, to the consent of any government or governmental agency or
approval of the shareholders of another entity or other material contingency, no
Change in Control shall occur until such time as such consent and approval has been
obtained and any other material contingency has been satisfied;
	 
	 	(iv)	 	The shareholders of the Company have approved a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets (or any transaction having a similar
effect); provided that, if consummation of the transaction referred to in this
Section 10(c)(iv) is subject, at the time of such approval by shareholders, to the
consent of any government or governmental agency or approval of the shareholders of
another entity or other material contingency, no Change in Control shall occur
until such time as such consent and approval has been obtained and any other
material contingency has been satisfied; and
	 
	 	(v)	 	any other event which the Board of Directors of the Company determines shall
constitute a Change in Control for purposes of this Plan.





     (d) Definition of “409A Ownership/Control Change.” A “409A Ownership/Control Change” shall be
deemed to have occurred if a Change in Control occurs in connection with which there occurs a
change in the ownership of the Company, a change in effective control of the Company, or a change
in the ownership of a substantial portion of the assets of the Company, as defined in Treasury
Regulation § 1.409A-3(i)(5).



24









 





     (e) Definition of “Change in Control Price.” The “Change in Control Price” means an amount in
cash equal to the higher of (i) the amount of cash and fair market value of property that is the
highest price per share paid (including extraordinary dividends) in any transaction triggering the
Change in Control or any liquidation of shares following a sale of substantially all assets of the
Company, or (ii) the highest Fair Market Value per share at any time during the 60-day period
preceding and 60-day period following the Change in Control.



     (f) Termination of Employment After Change in Control Negotiations Have Commenced. To the
extent an Award document or other agreement with a Participant provides for additional rights or
benefits with respect to an Award in the event of termination of Participant’s employment within a
fixed period following a Change in Control, a termination of a Participant’s employment by the
Company without Cause after the commencement of negotiations with a potential acquirer or business
combination partner will be deemed to constitute such a termination if such negotiations result in
a transaction constituting a Change in Control within 24 months of the commencement date of such
negotiations; provided, however, that in the case of a 409A Award, a Participant’s termination will
only be deemed to be a termination of employment in connection with a Change in Control if such
Change in Control also constitutes a 409A Ownership / Control Change.



     11. Additional Award Forfeiture Provisions.



     (a) Forfeiture of Options and Other Awards and Gains Realized Upon Prior Option Exercises or
Award Settlements. Unless otherwise determined by the Committee, each Award granted hereunder,
other than Awards granted to non-employee directors, shall be subject to the following additional
forfeiture conditions, to which the Participant, by accepting an Award hereunder, agrees. If any
of the events specified in Section 11(b)(i), (ii), or (iii) occurs (a “Forfeiture Event”), all of
the following forfeitures will result:




	 	(i)	 	The unexercised portion of the Option, whether or not vested, and any other
Award not then settled (except for an Award that has not been settled solely due to an
elective deferral by the Participant and otherwise is not forfeitable in the event of
any termination of service of the Participant) will be immediately forfeited and
canceled upon the occurrence of the Forfeiture Event; and
	 
	 	(ii)	 	The Participant will be obligated to repay to the Company, in cash, within
five business days after demand is made therefor by the Company the total amount of
Award Gain (as defined herein) realized by the Participant upon each exercise of an
Option or settlement of an Award (regardless of any elective deferral) that occurred
on or after (A) the date that is six months prior to the occurrence of the Forfeiture
Event, if the Forfeiture Event occurred while the Participant was employed by the
Company or a subsidiary or affiliate, or (B) the date that is six months prior to the
date the Participant’s employment by the Company or a subsidiary or affiliate
terminated, if the Forfeiture Event occurred after the Participant ceased to be so
employed. For purposes of this Section, the term “Award Gain” shall mean (i), in
respect of a given Option exercise, the product of (X) the Fair Market Value per share
of Stock at the date of such exercise (without regard to any subsequent change in the
market price of shares) minus the exercise price times (Y) the number of shares as to
which the Option was exercised at that date, and (ii), in respect of any other
settlement of an Award granted to the Participant, the Fair Market Value of the cash
or Stock paid or payable to Participant (regardless of any elective deferral) less any
cash or the Fair Market Value of any Stock or property (other than an Award or award
which would have itself then been forfeitable hereunder and excluding any payment of
tax withholding) paid by the Participant to the Company as a condition of or in
connection such settlement.




25









 











     (b) Events Triggering Forfeiture. The forfeitures specified in Section 11(a) will be
triggered upon the occurrence of any one of the following Forfeiture Events at any time during the
Participant’s employment by the Company or a subsidiary or affiliate and resulting in his or her
termination of employment, or during the one-year period following termination of such employment:




	 	(i)	 	The Participant, acting alone or with others, directly or indirectly, prior
to a Change in Control, (A) engages, either as employee, employer, consultant,
advisor, or director, or as an owner, investor, partner, or stockholder unless the
Participant’s interest is insubstantial, in any business in an area or region in which
the Company conducts business at the date the event occurs, which is directly in
competition with a business then conducted by the Company or a subsidiary or
affiliate; (B) induces any customer or supplier of the Company or a subsidiary or
affiliate, or a telephone company with which the Company or a subsidiary or affiliate
has a business relationship, to curtail, cancel, not renew, or not continue his or her
or its business with the Company or any subsidiary or affiliate; or (C) induces, or
attempts to influence, any employee of or service provider to the Company or a
subsidiary or affiliate to terminate such employment or service. The Committee shall,
in its discretion, determine which lines of business the Company conducts on any
particular date and which third parties may reasonably be deemed to be in competition
with the Company. For purposes of this Section 11(b)(i), a Participant’s interest as
a stockholder is insubstantial if it represents beneficial ownership of less than five
percent of the outstanding class of stock, and a Participant’s interest as an owner,
investor, or partner is insubstantial if it represents ownership, as determined by the
Committee in its discretion, of less than five percent of the outstanding equity of
the entity;
	 
	 	(ii)	 	The Participant discloses, uses, sells, or otherwise transfers, except in the
course of employment with or other service to the Company or any subsidiary or
affiliate, any confidential or proprietary information of the Company or any
subsidiary or affiliate, including but not limited to information regarding the
Company’s current and potential customers, organization, employees, finances, and
methods of operations and investments, so long as such information has not otherwise
been disclosed to the public or is not otherwise in the public domain, except as
required by law or pursuant to legal process, or the Participant makes statements or
representations, or otherwise communicates, directly or indirectly, in writing,
orally, or otherwise, or takes any other action which may, directly or indirectly,
disparage or be damaging to the Company or any of its subsidiaries or affiliates or
their respective officers, directors, employees, advisors, businesses or reputations,
except as required by law or pursuant to legal process; or
	 
	 	(iii)	 	The Participant fails to cooperate with the Company or any subsidiary or
affiliate in any way, including, without limitation, by making himself or herself
available to testify on behalf of the Company or such subsidiary or affiliate in any
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, or otherwise fails to assist the Company or any subsidiary or affiliate
in any way, including, without limitation, in connection with any such action, suit,
or proceeding by providing information and meeting and consulting with members of
management of, other representatives of, or counsel to, the Company or such subsidiary
or affiliate, as reasonably requested.





     (c) Plan Does Not Prohibit Competition or Other Participant Activities. Although the
conditions set forth in this Section 11 shall be deemed to be incorporated into an Award, a
Participant is not thereby prohibited from engaging in any activity, including but not



26









 




limited to competition with the Company and its subsidiaries and affiliates. Rather, the
non-occurrence of the Forfeiture Events set forth in Section 11(b) is a condition to the
Participant’s right to realize and retain value from his or her compensatory Options and Awards,
and the consequence under the Plan if the Participant engages in an activity giving rise to any
such Forfeiture Event are the forfeitures specified herein. The Company and the Participant shall
not be precluded by this provision or otherwise from entering into other agreements concerning the
subject matter of Sections 11(a) and 11(b).




     (d) Committee Discretion. The Committee may, in its discretion, waive in whole or in part the
Company’s right to forfeiture under this Section, but no such waiver shall be effective unless
evidenced by a writing signed by a duly authorized officer of the Company. In addition, the
Committee may impose additional conditions on Awards, by inclusion of appropriate provisions in the
document evidencing or governing any such Award.



     12. General Provisions.



     (a) Compliance with Legal and Other Requirements. The Company may, to the extent deemed
necessary or advisable by the Committee and subject to Section 12(k), postpone the issuance or
delivery of Stock or payment of other benefits under any Award until completion of such
registration or qualification of such Stock or other required action under any federal or state
law, rule or regulation, listing or other required action with respect to any stock exchange or
automated quotation system upon which the Stock or other securities of the Company are listed or
quoted, or compliance with any other obligation of the Company, as the Committee may consider
appropriate, and may require any Participant to make such representations, furnish such information
and comply with or be subject to such other conditions as it may consider appropriate in connection
with the issuance or delivery of Stock or payment of other benefits in compliance with applicable
laws, rules, and regulations, listing requirements, or other obligations. The foregoing
notwithstanding, in connection with a Change in Control, the Company shall take or cause to be
taken no action, and shall undertake or permit to arise no legal or contractual obligation, that
results or would result in any postponement of the issuance or delivery of Stock or payment of
benefits under any Award or the imposition of any other conditions on such issuance, delivery or
payment, to the extent that such postponement or other condition would represent a greater burden
on a Participant than existed on the 90th day preceding the Change in Control.



     (b) Limits on Transferability; Beneficiaries. No Award or other right or interest of a
Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any
lien, obligation or liability of such Participant to any party (other than the Company or a
subsidiary or affiliate thereof), or assigned or transferred by such Participant otherwise than by
will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant,
and such Awards or rights that may be exercisable shall be exercised during the lifetime of the
Participant only by the Participant or his or her guardian or legal representative, except that
Awards and other rights (other than ISOs and SARs in tandem therewith) may be transferred to one or
more transferees during the lifetime of the Participant, and may be exercised by such transferees
in accordance with the terms of such Award, but only if and to the extent such transfers are
permitted by the Committee, subject to any terms and conditions which the Committee may impose
thereon (which may include limitations the Committee may deem appropriate in order that offers and
sales under the Plan will meet applicable requirements of registration forms under the Securities
Act of 1933 specified by the Securities and Exchange Commission). A Beneficiary, transferee, or
other person claiming any rights under the Plan from or through any Participant shall be subject to
all terms and conditions of the Plan and any Award document applicable to such Participant, except
as otherwise determined by the Committee, and to any additional terms and conditions deemed
necessary or appropriate by the Committee.



     (c) Adjustments. In the event that any large, special and non-recurring dividend or other
distribution (whether in the form of cash or property other than Stock), recapitalization,



27









 




forward or reverse split, Stock dividend, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other similar corporate
transaction or event affects the Stock such that an adjustment is determined by the Committee to be
appropriate and, in the case of any outstanding Award, necessary in order to prevent dilution or
enlargement of the rights of the Participant, then the Committee shall, in an equitable manner as
determined by the Committee, adjust any or all of (i) the number and kind of shares of Stock which
may be delivered in connection with Awards granted thereafter, including the number of shares
available in Pool 1 and Pool 2, (ii) the number and kind of shares of Stock by which annual
per-person Award limitations are measured under Section 5 and Section 8 , (iii) the number and kind
of shares of Stock subject to or deliverable in respect of outstanding Awards and (iv) the exercise
price, grant price or purchase price relating to any Award or, if deemed appropriate, the Committee
may make provision for a payment of cash or property to the holder of an outstanding Option or SAR.
In addition, the Committee is authorized to make adjustments in the terms and conditions of, and
the criteria included in, Awards (including Performance Awards and performance goals and any
hypothetical funding pool relating thereto) in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding sentence, as well as acquisitions
and dispositions of businesses and assets) affecting the Company, any subsidiary or affiliate or
other business unit, or the financial statements of the Company or any subsidiary or affiliate, or
in response to changes in applicable laws, regulations, accounting principles, tax rates and
regulations or business conditions or in view of the Committee’s assessment of the business
strategy of the Company, any subsidiary or affiliate or business unit thereof, performance of
comparable organizations, economic and business conditions, personal performance of a Participant,
and any other circumstances deemed relevant; provided that no such adjustment shall be authorized
or made if and to the extent that the existence of such authority (i) would cause Options, SARs, or
Performance Awards granted under the Plan to Participants designated by the Committee as Covered
Employees and intended to qualify as “performance-based compensation” under Code Section 162(m) and
regulations thereunder to otherwise fail to qualify as “performance-based compensation” under Code
Section 162(m) and regulations thereunder, or (ii) would cause the Committee to be deemed to have
authority to change the targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi),
under the performance goals relating to Options or SARs granted to Covered Employees and intended
to qualify as “performance-based compensation” under Code Section 162(m) and regulations
thereunder.




     (d) Tax Provisions.




	 	(i)	 	Withholding. The Company and any subsidiary or affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock, or any payroll or other payment to a
Participant, amounts of withholding and other taxes due or potentially payable in
connection with any transaction involving an Award, and to take such other action as
the Committee may deem advisable to enable the Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax obligations relating to
any Award. This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof in satisfaction of a
Participant’s withholding obligations, either on a mandatory or elective basis in the
discretion of the Committee, or in satisfaction of other tax obligations. Other
provisions of the Plan notwithstanding, only the minimum amount of Stock deliverable
in connection with an Award necessary to satisfy statutory withholding requirements
will be withheld, unless withholding of any additional amount of Stock will not result
in additional accounting expense to the Company.
	 
	 	(ii)	 	Required Consent to and Notification of Code Section 83(b) Election. No
election under Section 83(b) of the Code (to include in gross income in the year




28









 






	 	 	 	of transfer the amounts specified in Code Section 83(b)) or under a similar
provision of the laws of a jurisdiction outside the United States may be made
unless expressly permitted by the terms of the Award document or by action of the
Committee in writing prior to the making of such election. In any case in which a
Participant is permitted to make such an election in connection with an Award, the
Participant shall notify the Company of such election within ten days of filing
notice of the election with the Internal Revenue Service or other governmental
authority, in addition to any filing and notification required pursuant to
regulations issued under Code Section 83(b) or other applicable provision.
	 
	 	(iii)	 	Requirement of Notification Upon Disqualifying Disposition Under Code
Section 421(b). If any Participant shall make any disposition of shares of Stock
delivered pursuant to the exercise of an ISO under the circumstances described in Code
Section 421(b) (i.e., a disqualifying disposition), such Participant shall notify the
Company of such disposition within ten days thereof.





     (e) Changes to the Plan. The Board may amend, suspend or terminate the Plan or the
Committee’s authority to grant Awards under the Plan without the consent of stockholders or
Participants; provided, however, that any amendment to the Plan shall be submitted to the Company’s
stockholders for approval not later than the earliest annual meeting for which the record date is
at or after the date of such Board action if such stockholder approval is required by any federal
or state law or regulation or the rules of the New York Stock Exchange or any other stock exchange
or automated quotation system on which the Stock may then be listed or quoted, or if such amendment
would materially increase the number of shares reserved for issuance and delivery under the Plan,
and the Board may otherwise, in its discretion, determine to submit other amendments to the Plan to
stockholders for approval; and provided further, that, without the consent of an affected
Participant, no such Board action may materially and adversely affect the rights of such
Participant under any outstanding Award (for this purpose, actions that alter the timing of federal
income taxation of a Participant will not be deemed material unless such action results in an
income tax penalty on the Participant). Without the approval of stockholders, the Committee will
not amend or replace previously granted Options or SARs in a transaction that constitutes a
“repricing,” as such term is used in Section 303A.08 of the Listed Company Manual of the New York
Stock Exchange. With regard to other terms of Awards, the Committee shall have no authority to
waive or modify any such Award term after the Award has been granted to the extent the waived or
modified term would be mandatory under the Plan for any Award newly granted at the date of the
waiver or modification.



     (f) Right of Setoff. The Company or any subsidiary or affiliate may, to the extent permitted
by applicable law, deduct from and set off against any amounts the Company or a subsidiary or
affiliate may owe to the Participant from time to time, including amounts payable in connection
with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such
amounts as may be owed by the Participant to the Company, including but not limited to amounts owed
under Section 11(a), although the Participant shall remain liable for any part of the Participant’s
payment obligation not satisfied through such deduction and setoff. By accepting any Award granted
hereunder, the Participant agrees to any deduction or setoff under this Section 12(f). With
respect to any amount that constitutes a deferral of compensation, the Company may implement a
setoff under this provision only at such time as the deferred compensation otherwise would be
distributable to the Participant (i.e., the settlement date for such deferred compensation).



     (g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made
to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan
or any Award shall give any such Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may



29









 




authorize the creation of trusts and deposit therein cash, Stock, other Awards or other property,
or make other arrangements to meet the Company’s obligations under the Plan. Such trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant.




     (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its
submission to the stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or a committee thereof to adopt such other incentive
arrangements, apart from the Plan, as it may deem desirable, including incentive arrangements and
awards which do not qualify under Code Section 162(m), and such other arrangements may be either
applicable generally or only in specific cases.



     (i) Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise determined by
the Committee, in the event of a forfeiture of an Award with respect to which a Participant paid
cash consideration, the Participant shall be repaid the amount of such cash consideration. No
fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, other Awards or other property shall be issued or paid in
lieu of such fractional shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.



     (j) Compliance with Code Section 162(m). It is the intent of the Company that Options and
SARs granted to Covered Employees and other Awards designated as Awards to Covered Employees
subject to Section 7 shall constitute qualified “performance-based compensation” within the meaning
of Code Section 162(m) and regulations thereunder, unless otherwise determined by the Committee at
the time of allocation of an Award. Accordingly, the terms of Sections 7(b), (c), and (d),
including the definitions of Covered Employee and other terms used therein, shall be interpreted in
a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a given Participant
will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by the Committee as likely to
be a Covered Employee with respect to a specified fiscal year. If any provision of the Plan or any
Award document relating to a Performance Award that is designated as intended to comply with Code
Section 162(m) does not comply or is inconsistent with the requirements of Code Section 162(m) or
regulations thereunder, such provision shall be construed or deemed amended to the extent necessary
to conform to such requirements, and no provision shall be deemed to confer upon the Committee or
any other person discretion to increase the amount of compensation otherwise payable in connection
with any such Award upon attainment of the applicable performance objectives.



     (k) Certain Limitations on Awards to Ensure Compliance with Section 409A.




	 	(i)	 	409A Awards and Deferrals. Other provisions of the Plan notwithstanding, the
terms of any 409A Award, including any authority of the Company and rights of the
Participant with respect to the 409A Award, shall be limited to those terms permitted
under Section 409A, and any terms not permitted under Section 409A shall be
automatically modified and limited to the extent necessary to conform with Section
409A but only to the extent that such modification or limitation is permitted under
Code Section 409A and the regulations and guidance issued thereunder. The following
rules will apply to 409A Awards:






	 	(A)	 	Elections. If a Participant is permitted to elect to defer
compensation and in lieu thereof receive an Award, or is permitted to elect to
defer any payment under an Award, such election will be permitted only at
times in compliance with Section 409A (including transition rules thereunder).
Such election shall be made in accordance with Exhibit A hereto;




30









 






	 	(B)	 	Changes in Distribution Terms. The Committee may, in its
discretion, require or permit on an elective basis a change in the
distribution terms applicable to 409A Awards (and Non-409A Awards that qualify
for the short-term deferral exemption under Section 409A) in accordance with,
and to the fullest extent permitted by, applicable guidance of the Internal
Revenue Service (including Proposed Treasury Regulation § 1.409A, Preamble §
XI.C and IRS Notice 2005-1), and otherwise in accordance with Section 409A and
regulations thereunder. The General Counsel of the Company is authorized to
modify any such outstanding Awards to permit election of different deferral
periods provided that any such modifications may not otherwise increase the
benefits to Participants or the costs of such Awards to the Company. Other
provisions of this Plan notwithstanding, changes to distribution timing
resulting from amendments to this Plan or changes in Participant elections in
2008 shall not have the affect of accelerating distributions into 2008 or
causing distributions that otherwise would have occurred in 2008 to be
deferred until a year after 2008;
	 
	 	(C)	 	Exercise and Distribution. Except as provided in Section
12(k)(i)(D) hereof, no 409A Award shall be exercisable (if the exercise would
result in a distribution) or otherwise distributable to a Participant (or his
or her beneficiary) except upon the occurrence of one of the following (or a
date related to the occurrence of one of the following), which must be
specified in a written document governing such 409A Award and otherwise meet
the requirements of Treasury Regulation § 1.409A-3:






	 	(1)	 	Specified Time. A specified time or a
fixed schedule;
	 
	 	(2)	 	Separation from Service. The Participant’s
separation from service (within the meaning of Treasury Regulation §
1.409A-1(h) and other applicable rules under Code Section 409A);
provided, however, that if the Participant is a “specified employee”
under Treasury Regulation § 1.409A-1(i), settlement under Section
12(k)(i)(C)(2) shall instead occur at the expiration of the six-month
period following separation from service under Section
409A(a)(2)(B)(i). During such six-month delay period, no
acceleration of settlement may occur, except (1) acceleration shall
occur in the event of death of the Participant, (2), if the
distribution date was specified as the earlier of separation from
service or a fixed date and the fixed date falls within the delay
period, the distribution shall be triggered by the fixed date, and
(3) acceleration may be permitted otherwise if and to the extent
permitted under Section 409A. In the case of installments, this
delay shall not affect the timing of any installment otherwise
payable after the six-month delay period. With respect to any 409A
Award, a reference in any agreement or other governing document to a
“termination,” “termination of employment,” “separation” or similar
term which triggers a distribution shall be deemed to mean a
“separation from service” within the meaning of Treasury Regulation §
1.409A-1(h);
	 
	 	(3)	 	Death. Unless a specific time otherwise is
stated for payment of a 409A Award upon death, such payment shall
occur in the calendar year in which falls the 30th day
after death;




31









 






	 	(4)	 	Disability. The date the Participant has
experienced a 409A Disability (as defined below); and
	 
	 	(5)	 	409A Change in Control. The occurrence of
a 409A Change in Control (as defined below).






	 	(D)	 	No Acceleration. The exercise or distribution of a 409A
Award may not be accelerated prior to the time specified in accordance with
Section 12(k)(i)(C) hereof, except in the case of one of the following events:






	 	(1)	 	Unforeseeable Emergency. The occurrence of
an Unforeseeable Emergency, as defined below, but only if the net
amount payable upon such settlement does not exceed the amounts
necessary to relieve such emergency plus amounts necessary to pay
taxes reasonably anticipated as a result of the settlement, after
taking into account the extent to which the emergency is or may be
relieved through reimbursement or compensation from insurance or
otherwise or by liquidation of the Participant’s other assets (to the
extent such liquidation would not itself cause severe financial
hardship), or by cessation of deferrals under the Plan. Upon a
finding that an Unforeseeable Emergency has occurred with respect to
a Participant, any election of the Participant to defer compensation
that will be earned in whole or part by services in the year in which
the emergency occurred or is found to continue will be immediately
cancelled.
	 
	 	(2)	 	Domestic Relations Order. The 409A Award
may permit the acceleration of the exercise or distribution time or
schedule to an individual other than the Participant as may be
necessary to comply with the terms of a domestic relations order (as
defined in Section 414(p)(1)(B) of the Code).
	 
	 	(3)	 	Conflicts of Interest. Such 409A Award may
permit the acceleration of the settlement time or schedule as may be
necessary to comply with an ethics agreement with the Federal
government or to comply with a Federal, state, local or foreign
ethics law or conflict of interest law in compliance with Treasury
Regulation § 1.409A-3(j)(4)(iii).
	 
	 	(4)	 	Change. The Committee may exercise the
discretionary right to accelerate the lapse of the substantial risk
of forfeiture of any unvested compensation deemed to be a 409A Award
upon a 409A Change in Control or to terminate the Plan upon or within
12 months after a 409A Change in Control, or otherwise to the extent
permitted under Treasury Regulation § 1.409A-3(j)(4)(ix), or
accelerate settlement of such 409A Award in any other circumstance
permitted under Treasury Regulation § 1.409A-3(j)(4).




32









 












	 	(E)	 	Definitions. For purposes of this Section 12(k), the
following terms shall be defined as set forth below:






	 	(1)	 	“409A Change in Control” shall be deemed to
have occurred if, in connection with a Change in Control (or any
other event defined as a change in control relating to a 409A Award
under any applicable Company document), there occurs a change in the
ownership of the Company, a change in effective control of the
Company, or a change in the ownership of a substantial portion of the
assets of the Company, as defined in Treasury Regulation §
1.409A-3(i)(5).
	 
	 	(2)	 	“409A Disability” means an event which
results in the Participant being (i) unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than
12 months, or (ii), by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering
employees of the Company or its subsidiaries.
	 
	 	(3)	 	“Unforeseeable Emergency” means a severe
financial hardship to the Participant resulting from an illness or
accident of the Participant, the Participant’s spouse, or a dependent
(as defined in Code Section 152, without regard to Code Sections
152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of the
Participant’s property due to casualty, or similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
control of the Participant, and otherwise meeting the definition set
forth in Treasury Regulation § 1.409A-3(i)(3).






	 	(F)	 	Time of Distribution. In the case of any distribution of a
409A Award, if the timing of such distribution is not otherwise specified in
the Plan or an Award agreement or other governing document, the distribution
shall be made within 60 days after the date at which the settlement of the
Award is specified to occur. In the case of any distribution of a 409A Award
during a specified period following a settlement date, the maximum period
shall be 90 days, and the Participant shall have no influence (other than
permitted deferral elections) on any determination as to the tax year in which
the distribution will be made during any period in which a distribution may be
made;
	 
	 	(G)	 	Determination of “Specified Employee.” For purposes of a
distribution under Section 12(k)(i)(C)(2), status of a Participant as a
“specified employee” shall be determined annually under the Company’s
administrative procedure for such determination for purposes of all plans
subject to Code Section 409A.




33









 






	 	(H)	 	Non-Transferability. The provisions of Section 12(b)
notwithstanding, no 409A Award or right relating thereto shall be subject to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment, or garnishment by creditors of the Participant or creditors of
the Participant’s Beneficiary.
	 
	 	(I)	 	Limitation on Setoffs. If the Company has a right of setoff
that could apply to a 409A Award, such right may only be exercised at the time
the 409A Award would have been distributed to the Participant or his or her
Beneficiary.
	 
	 	(J)	 	409A Rules Do Not Constitute Waiver of Other Restrictions.
The rules applicable to 409A Awards under this Section 12(k)(i) constitute
further restrictions on terms of Awards set forth elsewhere in this Plan.






	 	(ii)	 	Separate Payments. Unless otherwise specified in the applicable Award
agreement, each vesting tranche of an Award shall be deemed to be a separate payment
for purposes of Code Section 409A, and any portion of a vesting tranche that would
vest on a pro rata basis in the event of a separation from service on December 31 of a
given year, and the remaining portion of such vesting tranche that would not so vest,
each shall be deemed to be a separate payment for purposes of Code Section 409A.
	 
	 	(iii)	 	Distributions Upon Vesting. In the case of any Non-409A Award providing for
a distribution upon the lapse of a substantial risk of forfeiture, if the timing of
such distribution (compliant with Section 409A) is not otherwise specified in the Plan
or an Award agreement or other governing document, the distribution shall be made not
later than March 15 of the year following the year in which the substantial risk of
forfeiture lapsed, and if a determination is to be made promptly following the end of
a calendar-year performance year then the determination of the level of achievement of
performance and the distribution shall be made between January 1 and March 15 of the
year following the performance year. In all cases, the Participant shall have no
influence (aside from any permitted deferral election) on any determination as to the
tax year in which the distribution will be made.
	 
	 	(iv)	 	Limitation on Adjustments. Any adjustment under Section 12(c) shall be
implemented in a way that complies with applicable requirements under Section 409A so
that Non- 409A Option/SARs do not, due to the adjustment, become 409A Awards, and
otherwise so that no adverse consequences under Section 409A result to Participants.
	 
	 	(v)	 	Release or Other Termination Agreement. If the Company requires a
Participant to execute a release, non-competition, or other agreement as a condition
to receipt of a payment upon or following a termination of employment, the Company
will supply to the Participant a form of such release or other document not later than
the date of the Participant’s termination of employment, which must be returned within
the minimum time period required by law and must not be revoked by the Participant
within the applicable time period for revocation in order for the Participant to
satisfy any such condition. If any amount payable during a fixed period following
termination of employment is subject to such a requirement and the fixed period would
begin in one tax year and end in the next tax year, the Company, in determining the
time of payment of any such amount, will not be influenced by the timing of any action
of the Participant including execution of such a release or other document and
expiration of any revocation period. In particular, the Company will be entitled in
its discretion to deposit any such payment in escrow during either year comprising
such fixed period, so that such deposited amount is constructively received and
taxable income to the Participant upon deposit but with distribution from such escrow
remaining subject to the Participant’s execution and non-revocation of such release or
other document.




34









 






	 	(vi)	 	Limit on Authority to Amend. The authority to adopt amendments under Section
12(e) does not include authority to take action by amendment that would have the
effect of causing Awards to fail to meet applicable requirements of Section 409A.
	 
	 	(vii)	 	Scope and Application of this Provision. For purposes of this Section
12(k), references to a term or event (including any authority or right of the Company
or a Participant) being “permitted” under Section 409A mean that the term or event
will not cause the Participant to be deemed to be in constructive receipt of
compensation relating to the 409A Award prior to the distribution of cash, Shares or
other property or to be liable for payment of interest or a tax penalty under Section
409A.





     (l) Governing Law. The validity, construction, and effect of the Plan, any rules and
regulations relating to the Plan and any Award document shall be determined in accordance with the
laws of the State of Delaware, without giving effect to principles of conflicts of laws, and
applicable provisions of federal law.



     (m) Awards to Participants Outside the United States. The Committee may modify the terms of
any Award under the Plan made to or held by a Participant who is then resident or primarily
employed outside of the United States in any manner deemed by the Committee to be necessary or
appropriate in order that such Award shall conform to laws, regulations, and customs of the country
in which the Participant is then resident or primarily employed, or so that the Award otherwise
will have appropriate terms that advance the purposes of the Plan. An Award may be modified under
this Section 12(m) in a manner that is inconsistent with the express terms of the Plan, so long as
such modifications will not contravene any applicable law or regulation or result in actual
liability under Section 16(b) for the Participant whose Award is modified.



     (n) Limitation on Rights Conferred under Plan. Neither the Plan nor any action taken
hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue
as an Eligible Person or Participant or in the employ or service of the Company or a subsidiary or
affiliate, (ii) interfering in any way with the right of the Company or a subsidiary or affiliate
to terminate any Eligible Person’s or Participant’s employment or service at any time (subject to
the terms and provisions of any separate written agreements), (iii) giving an Eligible Person or
Participant any claim to be granted any Award under the Plan or to be treated uniformly with other
Participants and employees, or (iv) conferring on a Participant any of the rights of a stockholder
of the Company unless and until the Participant is duly issued or transferred shares of Stock in
accordance with the terms of an Award or an Option is duly exercised. Except as expressly provided
in the Plan and an Award document, neither the Plan nor any Award document shall confer on any
person other than the Company and the Participant any rights or remedies thereunder.



     (o) Severability; Entire Agreement. If any of the provisions of this Plan or any Award
document is finally held to be invalid, illegal or unenforceable (whether in whole or in part),
such provision shall be deemed modified to the extent, but only to the extent, of such invalidity,
illegality or unenforceability, and the remaining provisions shall not be affected thereby;
provided, that, if any of such provisions is finally held to be invalid, illegal, or unenforceable
because it exceeds the maximum scope determined to be acceptable to permit such provision to be
enforceable, such provision shall be deemed to be modified to the minimum extent necessary to
modify such scope in order to make such provision enforceable hereunder. The Plan and any Award
documents contain the entire agreement of the parties with respect to the subject matter thereof
and supersede all prior agreements, promises, covenants, arrangements, communications,
representations and warranties between them, whether written or oral with respect to the subject
matter thereof.



     (p) Plan Effective Date and Termination. The Plan originally became effective on April 26,
2005. The December 31, 2008 amendment and restatement is effective as of that date except to the
extent otherwise expressly provided herein. Unless earlier terminated by action of the Board of
Directors, the authority of the Committee to make grants under the Plan shall terminate on the date
that is ten years after the latest date upon which stockholders of the Company have approved the
Plan (including any amendment and restatement thereof), and the Plan will remain in effect until
such time as no Stock remains available for delivery under the Plan and the Company has no further
rights or obligations under the Plan with respect to any outstanding Awards under the Plan.




35