exv10w5



 






Exhibit 10.5




CCE SPINCO, INC.

2005 STOCK INCENTIVE PLAN




     1. Purpose. The purpose of the plan is to facilitate the ability of CCE Spinco, Inc.,
a Delaware corporation (the “Company”) and its subsidiaries to attract, motivate and retain
eligible employees, directors and other personnel through the use of equity-based and other
incentive compensation opportunities. Awards made under the plan may take the form of options to
purchase shares of the Company’s common stock, $.01 par value (the “Common Stock”) granted pursuant
to Section 5, director shares issued pursuant to Section 6, stock appreciation rights granted
pursuant to Section 7, restricted stock and deferred stock rights issued or granted pursuant to
Section 8, other types of stock-based awards made pursuant to Section 9, and/or performance-based
awards made pursuant to Section 10.



     2. Administration.



          2.1 The Committee. The Plan will be administered by the compensation committee of the
Company’s board of directors, except the entire board will have sole authority for granting and
administering awards to non-employee directors.




          2.2 Responsibility and Authority of the Committee. Subject to the provisions of the
Plan, the committee, acting in its discretion, will have responsibility and the power and authority
to (a) select the persons to whom awards will be made, (b) prescribe the terms and conditions of
each award and make amendments thereto, (c) construe, interpret and apply the provisions of the
Plan and of any agreement or other document evidencing an award made under the Plan, and (d) make
any and all determinations and take any and all other actions as it deems necessary or desirable in
order to carry out the terms of the Plan. The committee may obtain at the Company’s expense such
advice, guidance and other assistance from outside compensation consultants and other professional
advisers as the committee deems appropriate in connection with the proper administration of the
plan.




          2.3 Delegation of Authority by Committee. Subject to the requirements of applicable
law, the committee may delegate to any person or group or subcommittee of persons (who may, but
need not be members of the committee) such Plan-related functions within the scope of its
responsibility, power and authority as it deems appropriate. If the committee wishes to delegate a
particular function to a subcommittee consisting solely of its own members, it may choose to do so
on a de facto basis by limiting the members entitled to vote on matters relating to that function.
Reference herein to the committee with respect to functions delegated to another person, group or
subcommittee will be deemed to refer to such person, group or subcommittee.




          2.4 Committee Actions. A majority of the members of the committee shall constitute a
quorum. The committee may act by the vote of a majority of its members present at a meeting at
which there is a quorum or by unanimous written consent. The decision of the committee as to any
disputed question arising under the plan or an agreement or other document governing an individual
award, including questions of construction, interpretation and administration, shall be final and
conclusive on all persons. The committee shall keep a record of





 









 







its proceedings and acts and shall keep or cause to be kept such books and records as may be
necessary in connection with the proper administration of the plan.




          2.5 Indemnification. The Company shall indemnify and hold harmless each member of the
board of directors of the committee or of any subcommittee appointed by the board of directors or
the committee and any employee of the Company or any of its subsidiaries and affiliates who
provides assistance with the administration of the plan or to whom a plan-related responsibility is
delegated, from and against any loss, cost, liability (including any sum paid in settlement of a
claim with the approval of the board of directors), damage and expense (including reasonable legal
fees and other expenses incident thereto and, to the extent permitted by applicable law,
advancement of such fees and expenses) arising out of or incurred in connection with the plan,
unless and except to the extent attributable to such person’s fraud or willful misconduct.




     3. Limitations on Company Stock Awards Under the Plan.



          3.1 Aggregate Share Limitation. Subject to adjustments required or permitted by the
plan, the Company may issue a total of nine million (9,000,000) shares of Common Stock under the
plan. For these purposes, the following shares of Common Stock will not be taken into account and
will remain available for issuance under the plan: (a) shares covered by awards that expire or are
canceled, forfeited, settled in cash or otherwise terminated, (b) shares delivered to the Company
and shares withheld by the Company for the payment or satisfaction of purchase price or tax
withholding obligations associated with the exercise or settlement of an award, and (c) shares
covered by stock-based awards assumed by the Company in connection with the acquisition of another
company or business.




          3.2 Individual Employee Limitations. In any calendar year, (a) the total number of
shares that may be covered by awards made to an individual may not exceed 1,000,000 plus the
aggregate amount of such individual’s unused annual share limit as of the close of the preceding
calendar year, (b) the maximum amount of cash that may be payable to an individual pursuant to
performance-based cash awards made under Section 10 of the plan is $5,000,000 plus the aggregate
amount of such individual’s unused annual dollar limit as of the close of the preceding calendar
year.




     4. Eligibility to Receive Awards. Awards may be granted under the plan to any present
or future director, officer, employee, consultant or adviser of or to the Company or any of its
subsidiaries. For purposes of the plan, a subsidiary is any entity in which the Company has a
direct or indirect ownership interest of at least 50%.



     5. Stock Option Awards.



          5.1 General. Stock options granted under the Plan will have such vesting and other
terms and conditions as the committee, acting in its discretion in accordance with the Plan, may
determine, either at the time the option is granted or, if the holder’s rights are not adversely
affected, at any subsequent time.




          5.2 Minimum Exercise Price. The exercise price per share of Common Stock covered by an
option granted under the plan may not be less than 100% of the fair market value





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per share on the date the option is granted (110% in the case of “incentive stock options”
(within the meaning of Section 422 of the Code) granted to an employee who is a 10% stockholder
within the meaning of Section 422(b)(6) of the Code). For purposes of the plan, unless determined
otherwise by the committee, the fair market value of a share of Common Stock on any date is the
closing sale price per share in consolidated trading of securities listed on the principal national
securities exchange or market on which shares of Common Stock are then traded, as reported by a
recognized reporting service or, if there is no sale on such date, on the first preceding date on
which such shares are traded.




          5.3 Limitation on Repricing of Options. Except for adjustments made in accordance with
Section 13, the repricing of stock options granted under the plan is prohibited in the absence of
stockholder approval.




          5.4 Maximum Duration. Unless sooner terminated in accordance with its terms, an option
granted under the plan will automatically expire on the tenth anniversary of the date it is granted
or, in the case of an “incentive stock option” granted to an employee who is a 10% stockholder, the
fifth anniversary of the date it is granted.




          5.5 Effect of Termination of Employment or Service. The committee may establish such
exercise and other conditions applicable to an option following the termination of the optionee’s
employment or other service with the Company and its subsidiaries as the committee deems
appropriate on a grant-by-grant basis. For purposes of the plan, an individual’s employment or
service with the Company and its subsidiaries will be deemed to have terminated if such individual
is no longer receiving or entitled to receive compensation for providing services to the Company
and its subsidiaries.




          5.6 Method of Exercise. An outstanding and exercisable option may be exercised by
transmitting to the Secretary of the Company (or other person designated for this purpose by the
committee) a written notice identifying the option that is being exercised and specifying the
number of whole shares to be purchased pursuant to that option, together with payment in full of
the exercise price and the withholding taxes due in connection with the exercise, unless and except
to the extent that other arrangements satisfactory to the Company have been made for such
payment(s). The exercise price may be paid in cash or in any other manner the committee, in its
discretion, may permit, including, without limitation, (a) by the delivery of previously-owned
shares, (b) by a combination of a cash payment and delivery of previously-owned shares, or (c)
pursuant to a cashless exercise program established and made available through a registered
broker-dealer in accordance with applicable law. Any shares transferred to the Company (or withheld
upon exercise) in connection with the exercise of an option shall be valued at fair market value
for purposes of determining the extent to which the exercise price and/or tax withholding
obligation is satisfied by such transfer (or withholding) of shares.




          5.7 Non-Transferability. No option shall be assignable or transferable except upon the
optionee’s death to a beneficiary designated by the optionee in a manner prescribed or approved for
this purpose by the committee or, if no designated beneficiary shall survive the optionee, pursuant
to the optionee’s will or by the laws of descent and distribution. During an optionee’s lifetime,
options may be exercised only by the optionee or the optionee’s guardian or





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legal representative. Notwithstanding the foregoing, the committee may permit the inter vivos
transfer of an option (other than an “incentive stock option”) pursuant to a domestic relations
order (within the meaning of Rule 16a-12 promulgated under the Exchange Act) in settlement of
marital property rights, or by gift to any “family member” (within the meaning of Item A.1.(5) of
the General Instructions to Form S-8 or any successor provision), on such terms and conditions as
the committee deems appropriate.




          5.8 Rights as a Stockholder. No shares of Common Stock shall be issued in respect of
the exercise of an option until payment of the exercise price and the applicable tax withholding
obligations have been satisfied or provided for to the satisfaction of the Company, and the holder
of an option shall have no rights as a stockholder with respect to any shares covered by the option
until such shares are duly and validly issued by the Company to or on behalf of such holder.




     6. Director Shares.



          6.1 The committee may permit non-employee directors to elect to receive all or part of their
annual retainers in the form of shares (“Director Shares”). Unless the committee determines
otherwise, any such elections may be made during the month a director first becomes a director and
during the last month of each calendar quarter thereafter, and shall remain in effect unless and
until the end of the calendar quarter in which a new election is made (or, if later, the calendar
quarter next following the calendar quarter in which the director first becomes a director). Any
such election shall also indicate the percentage of the retainer to be paid in shares and shall
contain such other information as the committee or the Board may require.




          6.2 The Company shall issue Director Shares on the first trading day of each calendar quarter
to all directors on that trading day except any director whose retainer is to be paid entirely in
cash. The number of Director Shares issuable to a director on the relevant trading date shall
equal:




[ % multiplied by (R/4) ] divided by P




          WHERE:




          % = the percentage of the director’s retainer that is payable in shares;




          R = the director’s retainer for the applicable calendar year; and




          P = the closing price, as quoted on the principal exchange on
which shares are traded, on the date of issuance.



Director Shares shall not include any fractional shares. Fractions shall be rounded to the nearest
whole share.




     7. Stock Appreciation Rights.



          7.1 General. The committee may grant stock appreciation rights (“SARs”), either alone
or in connection with the grant of an option, upon such vesting and other terms and




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conditions as the committee, acting in its discretion in accordance with the Plan, including,
as applicable, Section 5 (relating to options), may determine, either at the time the SARs are
granted or, if the holder’s rights are not adversely affected, at any subsequent time. Upon
exercise, the holder of an SAR shall be entitled to receive a number of whole shares of Common
Stock having a fair market value equal to the product of X and Y, where—





X = the number of whole shares of Common Stock as to which the SAR is being
exercised, and




Y = the excess of the fair market value per share of Common Stock on the date of
exercise over the fair market value per share of Common Stock on the date the SAR is
granted (or such greater base value as the committee may prescribe at the time the
SAR is granted).



          7.2 Tandem SARs. An SAR granted in tandem with an option shall cover the same shares
covered by the option (or such lesser number of shares as the committee may determine) and, unless
the committee determines otherwise, shall be subject to the same terms and conditions as the
related option. Upon the exercise of an SAR granted in tandem with an option, the option shall be
canceled to the extent of the number of shares as to which the SAR is exercised, and, upon the
exercise of an option granted in tandem with an SAR, the SAR shall be canceled to the extent of the
number of shares as to which the option is exercised.




          7.3 Method of Exercise. An outstanding and exercisable SAR may be exercised by
transmitting to the Secretary of the Company (or other person designated for this purpose by the
committee) a written notice identifying the SAR that is being exercised and specifying the number
of shares as to which the SAR is being exercised, together with payment in full of the withholding
taxes due in connection with the exercise, unless and except to the extent that other arrangements
satisfactory to the Company have been made for such payment. The withholding taxes may be paid in
cash or in any other manner the committee, in its discretion, may permit, including, without
limitation, (a) by the delivery of previously-owned shares of Common Stock, or (b) by a combination
of a cash payment and the delivery of previously-owned shares. The committee may impose such
additional or different conditions for exercise of an SAR as it deems appropriate. No fractional
shares will be issued in connection with the exercise of an SAR.




          7.4 Rights as a Stockholder. No shares of Common Stock shall be issued in respect of
the exercise of an SAR until payment of the applicable tax withholding obligations have been
satisfied or provided for to the satisfaction of the Company, and the holder of an SAR shall have
no rights as a stockholder with respect to any shares issuable upon such exercise until such shares
are duly and validly issued by the Company to or on behalf of such holder.




     8. Restricted Stock and Deferred Stock Awards.



          8.1 General. Under a restricted stock award, shares of Common Stock will be issued by
the Company to the recipient at the time of the award. Under a deferred stock award, the recipient
will be entitled to receive shares of Common Stock in the future. The shares covered by a
restricted stock award and the right to receive shares under a deferred stock award




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will be subject to such vesting and other conditions and restrictions as the committee, acting
in its discretion in accordance with the plan, may determine.




          8.2 Minimum Purchase Price. Unless the committee, acting in accordance with applicable
law, determines otherwise, the purchase price payable for shares of Common Stock transferred
pursuant to a restricted or deferred stock award must be at least equal to the par value of the
shares.




          8.3 Issuance of Restricted Stock. Shares of Common Stock issued pursuant to a
restricted stock award may be evidenced by book entries on the Company’s stock transfer records
pending satisfaction of the applicable vesting conditions. If a stock certificate for restricted
shares is issued, the certificate will bear an appropriate legend to reflect the nature of the
conditions and restrictions applicable to the shares. The Company may require that any or all such
stock certificates be held in custody by the Company until the applicable conditions are satisfied
and other restrictions lapse. The committee may establish such other conditions as it deems
appropriate in connection with the issuance of certificates for restricted shares, including,
without limitation, a requirement that the recipient deliver a duly signed stock power, endorsed in
blank, for the shares covered by the award.




          8.4 Stock Certificates for Vested Stock. The recipient of a restricted or deferred
stock award will be entitled to receive a certificate, free and clear of conditions and
restrictions (except as may be imposed in order to comply with applicable law), for shares that
vest in accordance with the award, subject, however, to the payment or satisfaction of applicable
withholding taxes. The delivery of vested shares covered by a deferred stock award may be deferred
if and to the extent provided by the terms of the award, subject, however, to the applicable
deferral requirements of Section 409A of the Code.




          8.5 Rights as a Stockholder. Subject to and except as otherwise provided by the terms
of a restricted stock award, the holder of restricted shares of Common Stock will be entitled to
receive dividends paid on, and exercise voting rights associated with, such shares as if the shares
were fully vested. The holder of a deferred stock award shall no rights as a stockholder with
respect to shares covered by a deferred stock award unless and until the award vests and the shares
are issued; provided, however, that the committee, in its discretion, may provide for the payment
of dividend equivalents on shares covered by a deferred stock award.




          8.6 Nontransferability. Neither a restricted or deferred stock award nor restricted
shares of Common Stock issued pursuant to any such award may be sold, assigned, transferred,
disposed of, pledged or otherwise hypothecated other than to the Company or its designee in
accordance with the terms of the award or of the plan, and any attempt to do so shall be null and
void and, unless the committee determines otherwise, shall result in the immediate forfeiture of
the award or the restricted shares, as the case may be.




          8.7 Termination of Service Before Vesting; Forfeiture. Unless the committee determines
otherwise, shares of restricted stock and non-vested deferred stock awards will be forfeited upon
the recipient’s termination of employment or other service with the Company and its subsidiaries.
If shares of restricted stock are forfeited, any certificate representing such shares will be
canceled on the books of the Company and the recipient will be entitled to receive from





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the Company an amount equal to any cash purchase price previously paid for such shares. If a
non-vested deferred stock award is forfeited, the recipient will have no further right to receive
the shares of Common Stock covered by the non-vested award.




     9. Other Equity-Based Awards. The committee may grant dividend equivalent payment
rights, phantom shares, bonus shares and other forms of equity-based awards to eligible persons,
subject to such terms and conditions as it may establish. Awards made pursuant to this section may
entail the transfer of shares of Common Stock to the recipient or the payment in cash or otherwise
of amounts based on the value of shares of Common Stock and may include, without limitation, awards
designed to comply with or take advantage of applicable tax and/or other laws, provided, that the
terms and conditions of any award that is treated as non-qualified deferred compensation must
satisfy the applicable deferral requirements of Section 409A of the Code.



     10. Performance Awards.



          10.1 General. The committee may condition the grant, exercise, vesting or settlement
of equity-based awards under the Plan (whether settled in shares of Common Stock or cash or other
property) on the achievement of specified performance goals in accordance with this section.




          10.2 Objective Performance Goals. A performance goal established in connection with an
award covered by this section must be (a) objective, so that a third party having knowledge of the
relevant facts could determine whether the goal is met; (b) prescribed in writing by the committee
at a time when the outcome is substantially uncertain, but in no event later than the first to
occur of (1) the 90th day of the applicable performance period, or (2) the date on which
25% of the performance period has elapsed; and (c) based on any one or more of the following
business criteria, applied to an individual, a subsidiary, a business unit or division, the Company
and any one or more of its subsidiaries, or such other operating unit(s) as the committee may
designate (in each case, subject to the conditions of the performance-based compensation exemption
from Section 162(m) of the Code):





	 	(i)	 	earnings per share,
	 
	 	(ii)	 	share price or total shareholder return,
	 
	 	(iii)	 	pre-tax profits,
	 
	 	(iv)	 	net earnings,
	 
	 	(v)	 	return on equity or assets,
	 
	 	(vi)	 	revenues,
	 
	 	(vii)	 	operating income before depreciation,
amortization and non-cash compensation expense,
	 
	 	(viii)	 	market share or market penetration, or
	 
	 	(ix)	 	any combination of the foregoing.




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The applicable performance goals may be expressed in absolute or relative terms, and must include
an objective formula or standard for computing the amount of compensation payable to an employee if
the goal is attained. A formula or standard is objective if a third party having knowledge of the
relevant performance results could calculate the amount to be paid to the employee. The formula or
standard may provide for the payment of a higher or lower amount depending upon whether and the
extent to which a performance goal is attained. The committee may not use its discretion to
increase the amount of compensation payable that would otherwise be due upon attainment of a
performance goal; provided that, subject to the requirements for exemption under Section 162(m) of
the Code, the committee may make appropriate adjustments to an award in order to equitably reflect
changes in accounting rules, corporate transactions (including, without limitation, dispositions
and acquisitions) and other similar types of events or circumstances occurring during the
applicable performance period.




          10.3 Determination of Amount Payable. Following the expiration of the performance
period applicable to an award made under this section, the committee shall determine whether and
the extent to which the performance goals have been attained and the amount of compensation, if
any, that is payable as a result. The committee must certify in writing prior to payment of the
compensation that the performance goals and any other material terms of the award were in fact
satisfied. Compensation otherwise payable pursuant to a performance-based award made under this
section will be subject to the individual limitations set forth in section 3.2.




     11. Capital Changes, Reorganization or Sale of the Company.



          11.1 Adjustments Upon Changes in Capitalization. The aggregate number and class of
shares issuable under the plan, the total number and class of shares with respect to which awards
may be granted to any individual in any calendar year, the number and class of shares and the
exercise price per share covered by each outstanding option, the number and class of shares and the
base price per share covered by each outstanding SAR, and the number and class of shares covered by
each outstanding deferred stock award or other-equity-based award, and any per-share base or
purchase price or target market price included in the terms of any such award, and related terms
shall be subject to adjustment in order to equitably reflect the effect on issued shares of Common
Stock resulting from a split-up, spin-off, recapitalization, consolidation of shares or any similar
capital adjustment, and/or to reflect a change in the character or class of shares covered by the
plan and an award. For the avoidance of doubt, no adjustments will be required or made under this
section in respect of the spin-off of the Company by Clear Channel Communications, Inc.




          11.2 Cash, Stock or Other Property for Stock. Except as otherwise provided in this
Section, in the event of an Exchange Transaction (as defined below), all option holders shall be
permitted to exercise their outstanding options and SARs in whole or in part (whether or not
otherwise exercisable) immediately prior to such Exchange Transaction, and any outstanding options
and SARs which are not exercised before the Exchange Transaction shall thereupon terminate.
Notwithstanding the preceding sentence, if, as part of an Exchange Transaction, the stockholders of
the Company receive capital stock of another corporation (“Exchange Stock”) in exchange for their
shares of Common Stock (whether or not such Exchange Stock is the sole consideration), and if the
Company’s board of directors, in its sole discretion, so directs, then all





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options and SARs for Common Stock that are outstanding at the time of the Exchange Transaction
shall be converted into options or SARs (as the case may be) for shares of Exchange Stock. The
number of shares of Exchange Stock and the exercise price per share under a converted option will
be adjusted such that (a) the ratio of the exercise price per share to the value per share at the
time of the conversion (which value will be equal to the consideration payable for each share of
Common Stock in the Exchange Transaction) is the same as the ratio of the per share exercise price
to the value of per share of Common Stock under the original option; and (b) the aggregate
difference between the value of the shares of Exchange Stock and the exercise price under the
converted option immediately after the Exchange Transaction is the same as the aggregate difference
between the value of the shares of Common Stock and the exercise price under the original option
immediately before the Exchange Transaction. Similar adjustments will be made to the number of
shares of Exchange Stock and the base value per share covered by SARs that are converted. Unless
the Company’s board of directors determines otherwise, the vesting and other terms and conditions
of the converted options and SARs shall be substantially the same as the vesting and corresponding
other terms and conditions of the original options and SARs. The Company’ board of directors,
acting in its discretion, may accelerate vesting of other non-vested awards, and cause cash
settlements and/or other adjustments to be made to any outstanding awards (including, without
limitation, options and SARs) as it deems appropriate in the context of an Exchange Transaction,
taking into account with respect to other awards the manner in which outstanding options and SARs
are being treated.




          11.3 Definition of Exchange Transaction. For purposes of the plan, the term “Exchange
Transaction” means a merger (other than a merger of the Company in which the holders of Common
Stock immediately prior to the merger have the same proportionate ownership of Common Stock in the
surviving corporation immediately after the merger), consolidation, acquisition or disposition of
property or stock, separation, reorganization (other than a mere reincorporation or the creation of
a holding company), liquidation of the Company or any other similar transaction or event so
designated by the Company’s board of directors in its sole discretion, as a result of which the
stockholders of the Company receive cash, stock or other property in exchange for or in connection
with their shares of Common Stock.




          11.4 Fractional Shares. In the event of any adjustment in the number of shares covered
by any award pursuant to the provisions hereof, any fractional shares resulting from such
adjustment shall be disregarded, and each such award shall cover only the number of full shares
resulting from the adjustment.




          11.5 Determination of Board to be Final. All adjustments under this Section shall be
made by the Company’s board of directors, and its determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding and conclusive.




     12. Termination and Amendment of the Plan. The board of directors of the Company may
terminate the plan at any time or amend the plan at any time and from time to time; provided,
however, that:



                  (a) no such action shall impair or adversely alter any awards theretofore granted under the
plan, except with the consent of the recipient or holder, nor shall



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any such action deprive any such person of any shares which he or she may have acquired
through or as a result of the plan; and




                  (b) to the extent necessary under applicable law or the requirements of any stock exchange or
market upon which the shares of Common Stock may then be listed, no amendment shall be effective
unless approved by the stockholders of the Company in accordance with applicable law.


Notwithstanding the foregoing, no incentive stock options may be granted subsequent to the tenth
anniversary of the date the plan is adopted. The plan does not have a fixed termination date.




                  (c) Limitation of Rights. Nothing contained in the plan or in any award agreement
shall confer upon any recipient of an award any right with respect to the continuation of his or
her employment or other service with the Company or a subsidiary or other affiliate, or interfere
in any way with the right of the Company and its subsidiaries and other affiliates at any time to
terminate such employment or other service or to increase or decrease, or otherwise adjust, the
compensation and/or other terms and conditions of the recipient’s employment or other service.



     13. Miscellaneous.



          13.1 Governing Law. The plan and the rights of all persons claiming under the plan
shall be governed by the laws of the State of Delaware, without giving effect to conflicts of laws
principles thereof.




          13.2 Shares Issued Under Plan. Shares of Common Stock available for issuance under the
plan may be authorized and unissued, held by the Company in its treasury or otherwise acquired for
purposes of the plan. No fractional shares of Common Stock will be issued under the plan.




          13.3 Compliance with Law. The Company will not be obligated to issue or deliver shares
of Common Stock pursuant to the plan unless the issuance and delivery of such shares complies with
applicable law, including, without limitation, the Securities Act of 1933, as amended, the Exchange
Act, and the requirements of any stock exchange or market upon which the Common Stock may then be
listed, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.




          13.4 Transfer Orders; Placement of Legends. All certificates for shares of Common
Stock delivered under the plan shall be subject to such stock-transfer orders and other
restrictions as the Company may deem advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange or market upon which the Common Stock
may then be listed, and any applicable federal or state securities law. The Company may cause a
legend or legends to be placed on any such certificates to make appropriate reference to such
restrictions.




          13.5 Decisions and Determinations Final. All decisions and determinations made by the
Company’s board of directors pursuant to the provisions hereof and, except to the extent rights or
powers under the Plan are reserved specifically to the discretion of the board of





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directors, all decisions and determinations of the committee, shall be final, binding and
conclusive on all persons.




          13.6 Withholding of Taxes. As a condition to the exercise and/or settlement of any
award or the lapse of restrictions on any award or shares, or in connection with any other event
that gives rise to a federal or other governmental tax withholding obligation on the part of the
Company or a subsidiary with respect to an award, the Company and/or the subsidiary may (a) deduct
or withhold (or cause to be deducted or withheld) from any payment or distribution otherwise
payable to the award recipient, whether or not such payment or distribution is covered by the plan,
or (b) require the recipient to remit cash (through payroll deduction or otherwise) or make other
arrangements permitted by the Company, in each case in an amount or of a nature sufficient in the
opinion of the Company to satisfy or provide for the satisfaction of such withholding obligation.
If the event giving rise to the withholding obligation involves a transfer of shares of Common
Stock, then, at the sole discretion of the committee, the recipient may satisfy the withholding
obligations associated with such transfer by electing to have the Company withhold shares of Common
Stock or by tendering previously-owned shares of Common Stock, in each case having a fair market
value equal to the amount of tax to be withheld.




          13.7 Disqualifying Disposition. If a person acquires shares of Common Stock pursuant
to the exercise of an incentive stock option and the shares so acquired are sold or otherwise
transferred in a “disqualifying disposition” (within the meaning of Section 424(c) of the Code)
within two-years from the date the option was granted or one year after the option is exercised,
such person shall, within ten days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office.




          13.8 Effective Date. The plan shall become effective on the date it is initially
approved and adopted by the Company’s board of directors. However, no awards may be made pursuant
to the plan after the date preceding the date of the first annual meeting of the Company’s
stockholders occurring after December 31, 2006, unless the Company’s stockholders approve the plan
at such meeting.





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