EX-10.1






Exhibit 10.1




BOWNE & CO., INC.

1999 Incentive Compensation Plan

As Amended and Restated December 31, 2008



Effective December 31, 2008, Bowne & Co., Inc., a corporation organized under the laws of the State
of Delaware, hereby amends and restates the 1999 Incentive Plan of Bowne & Co., Inc. (the “Plan”),
as previously amended and restated May 25, 2006. Amounts deferred and vested under the Plan prior
to January 1, 2005 shall be grandfathered and therefore shall continue to be governed by the terms
of the Plan as in effect on October 3, 2004. Any amendments to the Plan on or after October 4,
2004 will not affect the foregoing grandfathered amounts unless specifically stated.



1. Purpose. The purpose of this 1999 Incentive Compensation Plan of Bowne & Co., Inc., a Delaware
corporation (the “Company”), is to advance the interests of the Company and its stockholders by
providing a means to attract, retain and reward employees of the Company and its subsidiaries,
nonemployee directors of the Company, and consultants and other persons who provide substantial
services to the Company or its subsidiaries, to link compensation to measures of the Company’s
performance in order to provide additional stock-based and cash-based incentives to such persons
for the creation of stockholder value, and to enable such persons to acquire or increase a
proprietary interest in the Company in order to promote a closer identity of interests between such
persons and the Company’s stockholders.



2. Definitions. For purposes of the Plan, the following terms shall be defined as set forth
below, in addition to the terms defined in Section 1 and elsewhere in the Plan:





(a) “Annual Incentive Award” means a conditional right granted to a Participant under Section
8(c) to receive a cash payment, Stock or other Award, unless otherwise determined by the
Committee, based on performance in a specified fiscal year.




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




(c)
“Beneficiary” means the person, persons, trust or trusts which have been designated by a
Participant in his or her most recent written beneficiary designation filed with the Committee
to receive the benefits specified under the Plan upon such Participant’s death. If, upon a
Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary,
then the term Beneficiary means the person, persons, trust or trusts entitled by will or the
laws of descent and distribution to receive such benefits.




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




(e) “Change in Control” and related terms have the meanings specified in Section 9.




(f) “Code” means the Internal Revenue Code of 1986, as amended from time to time, including
regulations thereunder and successor provisions and regulations thereto.




(g) “Committee” means the Compensation and Management Development Committee of the Board. The
foregoing notwithstanding, the term “Committee” shall refer to the full Board in any case in
which it is performing any function of the Committee under the Plan.




(h) “Covered Employee” means an Eligible Person who is a Covered Employee as specified in
Section 11(j) of the Plan.



 









 






(i) “Deferred Stock Unit” or “Restricted Stock Unit” means a right, granted to a Participant
under Section 6(e), to receive Stock, cash or a combination thereof at the end of a specified
deferral period.




(j) “Dividend Equivalent” means a right, granted to a Participant under Section 6(g), to
receive cash, Stock, other Awards or other property equal in value to dividends paid with
respect to a specified number of shares of Stock, or other periodic payments.




(k) “Effective Date” means the effective date specified in Section 11(n).




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




(m) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
including rules thereunder and successor provisions and rules thereto.




(n) “Fair Market Value” means the fair market value of Stock, Awards or other property as
determined by the Committee or under procedures established by the Committee in accordance with
the requirements of Section 409A of the Code. Unless otherwise determined by the Committee, the
Fair Market Value of Stock shall be the mean between the highest and lowest sales prices
reported on a composite basis for Stock traded on the principal securities exchange or
automated quotation system on which Stock is then traded, on the date of the determination or,
if there was no trade reported for that date or the Committee so directs, on the latest date
for which a trade was reported.




(o) “Grant Date” means the date on which an Award is granted.




(p) “Incentive Stock Option” or “ISO” means any Option intended to be and designated as an
incentive stock option within the meaning of Code Section 422 or any successor provision
thereto.




(q) “Option” means a right, granted to a Participant under Section 6(b), to purchase Stock or
other Awards at a specified price during specified time periods.




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




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




(t) “Performance Award” means a right, granted to a Participant under Section 8, to receive
Awards or payments based upon performance criteria specified by the Committee.




(u) “Preexisting Plan” means the Company’s 1992 Stock Option Plan and 1997 Stock Incentive
Plan.




(v) “Restricted Stock” means Stock granted to a Participant under Section 6(d) that is subject
to certain restrictions and to a risk of forfeiture.




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




(x)
“Stock” means the Company’s Common Stock, par value $.01 per share, and such other
securities as may be substituted (or resubstituted) for Stock pursuant to Section 11(c).




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



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



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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,
Shares, 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) and rules and regulations for the
administration of the Plan; 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. The Committee shall interpret and administer the Plan in a manner that will permit
the Awards to be exempt from the restrictions of Section 409A of the Code where possible and
that will permit the Deferred Stock Units, Restricted Stock Units or other nonqualified
deferred compensation to comply with the requirements of Section 409A of the Code, including
the payment restrictions applicable to “specified employees” as that term is defined in a
resolution of the Board setting forth the definition used by the Company to identify such
employees in accordance with Section 409A of the Code. 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
under Section 11(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, and the
Board otherwise may perform any function of the Committee under the Plan, including for the
purpose of ensuring that transactions under the Plan by Participants who are then subject to
Section 16 of the Exchange Act in respect of the Company are exempt under Rule 16b-3.




(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 delegate to officers or managers of
the Company or any subsidiary, 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 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. The Committee
may appoint agents to assist it in administering the Plan.




(c) Limitation of Liability. The Committee and each member thereof shall be entitled to, in
good faith, rely or act upon any report or other information furnished to him or her by any
executive officer, other officer or employee of the Company or a subsidiary, the Company’s
independent auditors, consultants or any other agents assisting in the administration of the
Plan. Members of the Committee and any officer or employee of the Company or a subsidiary
acting at the direction or on behalf of the Committee 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. Subject to adjustment as provided in
Section 11(c), the total number of shares of Stock reserved and available for delivery in
connection with Awards under the Plan shall be 6,450,000 plus the number of shares of Stock
remaining available under the Preexisting Plan immediately prior to the Effective Date or
subject to awards under the Preexisting Plan which become available in accordance with Section
4(b) after the Effective Date. No more than 1,000,000 shares may be issued in the form of
Incentive Stock Options.



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(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 if the number of shares of Stock actually delivered
differs from the number of shares previously counted in connection with an Award. The issuance
of Stock under the Plan shall be counted against the overall number of shares available for
delivery under a fungible reserve approach, to wit: the issuance of a share of Stock pursuant
to the exercise of an Option or SAR shall be counted as 1 share, and the issuance of a share of
Stock pursuant to the grant of an Award other than an Option or SAR shall be counted as 2.25
shares. Shares of Stock subject to an Award under the Plan or an award under the Preexisting
Plan that is canceled, expired, forfeited, settled in cash or otherwise terminated without a
delivery of shares to the Participant will again be available for Awards under the Plan. In
addition, in the case of any Award granted in substitution for an award of a company or
business acquired by the Company or a subsidiary, shares issued or issuable in connection with
such substitute Award shall not be counted against the number of shares reserved under the
Plan, but shall be deemed to be available under the Plan by virtue of the Company’s assumption
of the plan or arrangement of the acquired company or business. The foregoing provisions of
this Section 4 (b) shall apply to the number of shares reserved and available for ISOs only to
the extent consistent with applicable regulations relating to ISOs under the Code.


5. Eligibility; Per-Person Award Limitations. Awards may be granted under the Plan only to
Eligible Persons. For purposes of the Plan, an “Eligible Person” means an executive officer of the
Company, an employee of the Company or any subsidiary, a non-employee director of the Company, a
consultant or other person who provides substantial services to the Company or a subsidiary, and
any person who has been offered employment by the Company or a subsidiary, 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. An employee on leave of
absence may be considered as still in the employ of the Company or a subsidiary for purposes of
eligibility for participation in the Plan. 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) up to his or her Annual Limit (such
Annual Limit to apply separately to Awards under each subsection). A Participant’s Annual Limit, in
any year during any part of which the Participant is then eligible under the Plan, shall equal 1.5
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 11(c)
and determined in accordance with the share counting rules specified for this purpose in Code
Section 162(m). 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 Treasury
Regulation 1.162-27(e)(4) (including a Performance Award under Section 8 not related to an Award
specified in Section 6), an Eligible Person may not be granted Awards authorizing payment during
any calendar year of an amount that exceeds the Participant’s Annual Limit, which for this purpose
shall equal $3.5 million plus the amount of the Participant’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, a Participant’s Annual Limit is used if it may be potentially earned or paid under a
Performance Award, regardless of whether it is 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 Grant Date
or thereafter (subject to Section 11(e)), 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 and terms permitting a Participant to make elections relating to his or her



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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. Except in cases in which the
Committee is authorized to require other forms of consideration under the Plan, or to the
extent other forms of consideration must by paid to satisfy the requirements of the Delaware
General Corporation Law, no consideration other than services may be required for the grant
(but not the exercise) of any Award.




(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 Grant Date of such Option.




(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 exceed a period of ten years from the
Grant Date. 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, the form of such payment, including,
without limitation, cash or Stock, including “cashless exercise” arrangements, to the
extent permitted by applicable law, and the methods by or forms in which Stock will be
delivered or deemed to be delivered to Participants.




(iii) ISOs. The terms of any ISO granted under the Plan shall comply in all respects with
the provisions of Code Section 422, including but not limited to the requirement that no
ISO shall be granted more than ten years after the Effective Date.




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




(i) Right to Payment. A 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 Fair Market Value of one share of Stock on the
Grant Date, as determined by the Committee, times the number of shares of Stock for which
the SAR is being exercised. The Committee shall determine the term of each SAR, provided
that in no event shall the term exceed a period of ten years from the Grant Date.




(ii) Other Terms. Subject to the provisions of Section 11(e) providing for the amendment
of Awards, the Committee shall determine at the Grant Date, 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 in tandem or in combination with any other Award, and any other terms
and conditions of any SAR. SARs may be either freestanding or in tandem with other Awards.




(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 risk of forfeiture
and such restrictions on transferability 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, as the Committee may determine at
the Grant Date 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



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vote the Restricted Stock and the right to receive dividends thereon (subject to any
mandatory reinvestment or other requirement imposed by the Committee). During the
restricted period applicable to the Restricted Stock, subject to Section 11(b) below, the
Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Participant.




(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 cash dividends paid on a share of Restricted Stock be
automatically reinvested in additional shares of Restricted Stock or applied to the
purchase of additional Awards under the Plan. 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 and Restricted Stock Units. The Committee is authorized to grant Deferred
Stock or Restricted Stock Units to Participants, which are the right to receive Stock, cash, or
a combination thereof at the end of a specified deferral or restricted period, subject to the
requirements of Section 409A of the Code and the following additional terms and conditions:




(i) Award and Restrictions. Except as otherwise determined by the Committee, issuance of
Stock will occur in the calendar year following the calendar year in which the deferral or
restricted period specified for an Award of Deferred Stock or Restricted Stock Unit by the
Committee (or, if permitted by the Committee, as elected by the Participant) expires. In
addition, Deferred Stock or Restricted Stock Units shall be subject to such restrictions
(which may include a risk of forfeiture) as the Committee may impose, if any, which
restrictions shall lapse at the expiration of the deferral or restricted 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. Deferred Stock or Restricted
Stock Units may be satisfied by delivery of Stock, cash equal to the Fair Market Value of
the specified number of shares of Stock covered by the Deferred Stock or Restricted Stock
Units or a combination thereof, as determined by the Committee at the Grant Date or
thereafter.




(ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of
employment or service during the applicable deferral or restricted period or portion
thereof to which forfeiture conditions apply (as provided in the Award document evidencing
the Deferred Stock or Restricted Stock Unit), all Deferred Stock or Restricted Stock Units
that are at that time subject to deferral (other than a deferral at the election of the
Participant) or restrictions shall be forfeited; provided that the Committee may provide,
by rule or regulation or in any Award document, or may determine in any



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individual case, that restrictions or forfeiture conditions relating to the Deferred Stock
or Restricted Stock Units will lapse in whole or in part, including in the event of
terminations resulting from specified causes.




(iii) Dividend Equivalents. Unless otherwise determined by the Committee as of the Grant
Date, Dividend Equivalents on the specified number of shares of Stock covered by Deferred
Stock or a Restricted Stock Units shall be deferred with respect to such Deferred Stock or
Restricted Stock Units and the amount or value thereof automatically deemed reinvested in
additional Deferred Stock or Restricted Stock Units, other Awards or other investment
vehicles, as the Committee shall determine; provided, however, that the Committee may
permit a Participant to make elections relating to Dividend Equivalents on the Grant Date
if and to the extent that such elections will not result in the Participant being in
constructive receipt of or in violation of Section 409A of the Code with respect to amounts
otherwise intended to be subject to deferral or restriction for tax purposes.




(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 to pay cash or deliver other property under the Plan or under other plans or
compensatory arrangements. Stock or Awards granted hereunder shall be subject to such other
terms as shall be determined by the Committee. In the case of any grant of Stock to an officer
or non-employee director of the Company in lieu of salary, fees or other cash compensation, the
number of shares granted in place of such compensation shall be reasonable, as determined by
the Committee.




(g) Dividend Equivalents. Subject to other provisions of this Plan, the Committee is
authorized to grant Dividend Equivalents to a Participant, entitling the Participant to receive
cash, Stock, other Awards, or other property equal in value to dividends paid with respect to a
specified number of shares of Stock, or other periodic payments. Dividend Equivalents may be
awarded only in connection with an Award other than Options or SARs. The Committee may provide
on the Grant Date that Dividend Equivalents shall be paid or distributed when accrued on the
dividend payment date or shall be deemed to have been reinvested in additional Stock, Awards,
or other investment vehicles, and subject to such restrictions on transferability and risks of
forfeiture, as the Committee may specify.




(h) Other Stock-Based and Cash Awards. The Committee is authorized, subject to limitations
under applicable law, including Section 409A of the Code, 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, as
deemed by the Committee to be consistent with the purposes of the Plan, 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 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. 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).



7. 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 another
plan of the Company, any subsidiary, or any business entity to be acquired by the



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Company or a subsidiary, or any other right of a Participant to receive payment from the
Company or any subsidiary; provided, however, that no substitution or exchange shall result in
the reduction of the exercise price of any outstanding Option, grant price of any outstanding
SAR, or purchase price of any other outstanding Award conferring a right to purchase Stock to
an amount less than the Fair Market Value of a share at the Grant Date of the outstanding
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.




(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 Section 6(b)(ii), 6(c)(i) and
elsewhere in the Plan.




(c) Form and Timing of Payment under Awards. Subject to the requirements of Section 409A of
the Code and the terms of the Plan and any applicable Award document, payments to be made by
the Company or a subsidiary 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 on the Grant Date, including,
without limitation, cash, Stock, or other property, and may be made in a single payment or
transfer, in installments, or on a deferred basis, and the settlement of any Award may be
accelerated, and cash paid in lieu of Stock in connection with such settlement, upon the
occurrence of one or more specified events (in addition to a Change in Control) specified on
the Grant Date and in compliance with Section 409A of the Code. Notwithstanding the preceding
provisions of this Section 7(c), no Option may be settled by a cash payment on any date when
the Fair Market Value of the Stock is below the exercise price of the Option.




(d) Exemptions from Section 16(b) Liability. With respect to a Participant who is then
subject to the reporting requirements of Section 16(a) of the Exchange Act in respect of the
Company, the Committee shall implement transactions under the Plan and administer the Plan in a
manner that will ensure that each transaction by such a Participant is exempt from liability
under Rule 16b-3, except that this provision shall not limit sales by such a Participant, and
such a Participant may engage in other non-exempt transactions under the Plan. The Committee
may authorize the Company to repurchase any Award or shares of Stock resulting from any Award
in order to prevent a Participant who is subject to Section 16 of the Exchange Act from
incurring liability under Section 16(b). Unless otherwise specified by the Participant, equity
securities or derivative securities acquired under the Plan which are disposed of by a
Participant shall be deemed to be disposed of in the order acquired by the Participant.



8. Performance and Annual Incentive Awards.





(a) Performance Conditions. The right of a Participant to exercise or receive a grant or
settlement of any Award, and the timing thereof, may be subject to 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 8(b) and 8(c) in the case
of a Performance Award or Annual Incentive Award intended to qualify under Code Section 162(m).




(b) Performance Awards Granted to Designated 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 preestablished performance goals and other terms
set forth in this Section 8(b).




(i) Performance Goals Generally. The performance goals for such Performance Awards shall
consist of one or more business criteria and a targeted level or levels of



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performance with respect to each of such criteria, as specified by the Committee consistent
with this Section 8(b). Performance goals shall be objective and shall otherwise meet the
requirements of Code Section 162(m) and regulations thereunder (including Regulation
1.162-27 and successor regulations thereto), 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 business units of the Company
(except with respect to the total stockholder return and similar measures applicable to the
Company as a whole), shall be used by the Committee in establishing performance goals for
such Performance Awards: (1) earnings per share; (2) revenues; (3) cash flow, free cash
flow, or cash flow return on investment; (4) interest expense after taxes; (5) return on
net assets, return on assets, return on investment, return on invested capital, return on
total capital, or return on equity; (6) value created; (7) operating margin; (8) net income
before or after taxes, pretax earnings, pretax earnings before interest, depreciation and
amortization, pretax operating earnings after interest expense and before incentives,
service fees, and extraordinary or special items, operating earnings, or net cash provided
by operations; (9) stock price or total stockholder return; (10) sales above a specified
threshold or in relation to prior periods; (11) reductions in operating expenses, (12)
productivity improvements, and (13) an executive’s attainment of objective and measurable
strategic business criteria, consisting of one or more objectives based on meeting
specified market penetration, geographic business expansion goals, cost targets, management
of employment practices and employee benefits, supervision of litigation and information
technology, and goals relating to acquisitions or divestitures. 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
to the performance of one or more comparable companies or an index covering multiple
companies.




(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 ten years, as specified by the Committee. Performance goals
shall be established not later than 90 days after the beginning of any performance period
applicable to such Performance Awards, or at such other date as may be required or
permitted for “performance- based compensation” under Code Section 162(m).




(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 8(b)(ii) during the given performance period, as
specified by the Committee in accordance with Section 8(b)(iii) . 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 such Performance Awards
shall be in cash, Stock, other Awards or other property, in the discretion of the
Committee. The Committee may, in its discretion, reduce the amount of a settlement
otherwise to be made in connection with such Performance Awards, but may not



9









 







exercise discretion to increase any such amount payable to a Covered Employee in respect of
a Performance Award subject to this Section 8(b). For performance periods commencing on or
prior to January 1, 2009, the Committee may specify the circumstances in which a
Performance Award 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 fiscal
year or settlement of such Performance Award, but only to the extent such circumstance
would not cause the Performance Award to cease to qualify as “performance-based
compensation” for purposes of Code Section 162(m),




(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 therefore its grant,
exercise and/or settlement shall be contingent upon achievement of preestablished performance
goals and other terms set forth in this Section 8(c).




(i) Grant of Annual Incentive Awards. Not later than the end of the 90th day of each
fiscal year, or at such other date as may be required or permitted in the case of Awards
intended to be “performance-based compensation” under Code Section 162(m), the Committee
shall determine the Covered Employees who will potentially receive Annual Incentive Awards,
and the amount(s) potentially payable thereunder, for that fiscal year. The amount(s)
potentially payable 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 8(b)(ii) in the given
performance year, 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,
provided that the portion of such pool potentially payable to the Covered Employee shall be
preestablished. 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 fiscal year, the Committee
shall determine the amount, if any, of the Annual Incentive Award for that fiscal year
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. For performance periods commencing on or prior to January 1, 2009, the Committee
may 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 (including a
Change in Control) prior to the end of a fiscal year or settlement of such Annual Incentive
Award, but only to the extent such circumstance would not cause the Annual Incentive Award
to cease to qualify as “performance-based compensation” for purposes of Code Section
162(m),




(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 achievement of 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, except in the case of Performance Awards not intended to
qualify under Section 162(m). Specifically, the Committee shall certify in writing, in a manner
conforming to applicable regulations under Section 162(m), prior to settlement of each such
Award granted to a Covered Employee, that the performance objective relating to operating
profits and other material terms of the Award upon which settlement of the Award was
conditioned have been satisfied.



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9. Change in Control.





(a) Effect of “Change in Control.” In the event of a “Change in Control,” the following
provisions shall apply unless otherwise provided in the Award document:




(i) 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, subject only to
applicable restrictions set forth in Section 11(a);




(ii) The restrictions, deferral of settlement, and forfeiture conditions applicable to any
other Award granted under the Plan shall lapse and such Awards shall be deemed fully vested
as of the time of the Change in Control, except to the extent of any waiver by the
Participant and subject to applicable restrictions set forth in Section 11(a); and




(iii) With respect to any outstanding Award subject to achievement of performance goals
and conditions under the Plan, such performance goals and other conditions will be deemed
to be met if and to the extent so provided by the Committee in the Award document relating
to such Award or other agreement with the Participant.


(b) Definition of “Change in Control.” A “Change in Control” means, in accordance with the
requirements of Section 409A of the Code, the occurrence of one of the following events:





(i) The date any one person, or more than one person acting as a group, acquires ownership
of Stock of the Company that, together with Stock held by such person or group, constitutes
more than 50 percent of the total fair market value or total voting power of the Stock of
the Company.




(ii) The date any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of Stock of the Company possessing 30 percent or more of
the total voting power of the Stock of the Company.




(iii) The date a majority of the members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority of the
members of the Board before the date of the appointment or election.




(iv) The date any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Company that have a total gross fair market value
equal to or more than 40 percent of the total gross fair market value of all of the assets
of the Company immediately before such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of the Company, or the value of the assets
being disposed of, determined without regard to any liabilities associated with such
assets.




Any determination of the occurrence of any Change in Control made in good faith by the Board,
on the basis of information available at the time to it, shall be conclusive and binding for
all purposes under the Plan.



10. Additional Award Forfeiture Provisions





(a) Forfeiture of Options and Other Awards and Gains Realized Upon Prior Option Exercises.
Unless otherwise determined by the Committee, each Award granted hereunder shall be subject to
the following additional forfeiture conditions, to which each Participant who accepts an Award
hereunder is hereby deemed to agree. If any of the events specified in Section 10(b)(i), (ii),
or (iii) occurs (a “Forfeiture Event”), all of the following forfeitures will result:



11









 






(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) will be immediately forfeited and cancelled 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 Option Gain
(as defined herein) realized by Participant upon each exercise of an Option 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 Participant was employed by the Company or a
subsidiary, or (B) the date that is six months prior to the date Participant’s employment
by the Company or a subsidiary terminated, if the Forfeiture Event occurred after
Participant ceased to be so employed. For purposes of this Section, the term “Option Gain”
in respect of a given exercise shall mean 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.




(b) Events Triggering Forfeiture. The forfeitures specified in Section 10(a) will be
triggered upon the occurrence of any one of the following Forfeiture Events at any time during
Participant’s employment by the Company or a subsidiary or during the one-year period following
termination of such employment (but not later than 18 months after the Award terminates or, in
the case of an Option, is fully exercised):




(i) 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; (B) induces any customer or supplier of the
Company or a subsidiary with whom Participant has had contacts or relationships, directly
or indirectly, during and within the scope of his employment with the Company or any
subsidiary, to curtail, cancel, not renew, or not continue his or her or its business with
the Company or any subsidiary; or (C) induces, or attempts to influence, any employee of or
service provider to the Company or a subsidiary 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 10(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 it its discretion, of less than five percent of the outstanding equity of the
entity;




(ii) Participant discloses, uses, sells, or otherwise transfers, except in the course of
employment with or other service to the Company or any subsidiary, any proprietary
information of the Company or any subsidiary 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 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) Participant fails to cooperate with the Company or any subsidiary by making himself
or herself available to testify on behalf of the Company or such subsidiary in any action,
suit, or proceeding, whether civil, criminal, administrative, or investigative, or
otherwise



12









 







fails to assist the Company or any subsidiary in 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, as reasonably requested.




(c) Agreement Does Not Prohibit Competition or Other Participant Activities. Although the
conditions set forth in this Section 10 are deemed to be incorporated into an Award, a
Participant is not thereby prohibited from engaging in any activity, including but not limited
to competition with the Company and its subsidiaries. Rather, the non-occurrence of the
Forfeiture Events set forth in Section 10(b) is a condition to Participant’s right to realize
and retain value from his or her compensatory Options and Awards, and the consequence under the
Plan if Participant engages in an activity giving rise to any such Forfeiture Event, which
Forfeiture Events and activities are hereby acknowledged to be harmful to the Company, are the
forfeitures specified herein. The Company and Participant shall not be precluded by this
provision or otherwise from entering into other agreements concerning the subject matter of
Section 10(a) and 10(b).




(d) Right of Setoff. Participant agrees that the Company or any subsidiary may, to the extent
permitted by applicable law, deduct from and set off against any amounts the Company or a
subsidiary may owe to Participant from time to time, including amounts owed as wages or other
compensation, fringe benefits, or other amounts owed to Participant, such amounts as may be
owed by Participant to the Company under Section 10(a), although Participant shall remain
liable for any part of Participant’s payment obligation under Section 10(a) not satisfied
through such deduction and setoff.




(e)
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 any such Award.



11. General Provisions.





(a) Compliance with Legal and Other Requirements. The Company may postpone the issuance or
delivery of Stock or payment of other benefits under any Award if the Company reasonably
anticipates that the delivery of such Stock or payment of other benefits would violate any
federal or state law, rule or regulation 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
provided however that delivery of Stock or payment of other benefits shall be made at the
earliest date at which the Company reasonably anticipates that such delivery of Stock or
payment of other benefits will not cause a violation of the applicable laws, rules and
regulations. 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 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



13









 







that Awards and other rights (other than ISOs and SARs in tandem therewith) may be transferred
to one or more family members of the Participant (or trusts established on their behalf) 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 pursuant to the express terms of an Award document (subject to any terms and
conditions which the Committee may impose thereon). Notwithstanding anything herein to the
contrary, in no event may any outstanding Award be transferred by a Participant for value or
consideration, nor may the Committee permit such a transfer. 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 dividend or other distribution (whether in the form of
cash, Stock, or other property), recapitalization, forward or reverse split, 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 under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of
 shares of Stock which may be delivered in connection with Awards granted thereafter, (ii) the
number and kind of shares of Stock by which annual per-person Award limitations are measured
under Section 5, (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, upon a Change in Control, the Committee may
make provision for a cash payment to the holder of an outstanding Option in consideration for
the cancellation of such Option in an amount equal to the excess, if any, of the amount of cash
and fair market value of property that is the price per share paid in any transaction
triggering the Change in Control over the per share exercise price of such Option, multiplied
by the number of shares of Stock covered by such Option. 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 Annual Incentive Awards and any
Annual Incentive Award pool or performance goals 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 any business unit, or the financial statements of the Company or any subsidiary,
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 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 such authority or the making of such adjustment would cause
Options, SARs, Performance Awards granted under Section 8(b) or Annual Incentive Awards granted
under Section 8(c) 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. Any adjustment to an Option or SAR pursuant to
this section 10(c) must meet the requirements of Section 409A of the Code.




(d) Taxes. The Company and any subsidiary 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



14









 







Stock or other property and to make cash payments in respect thereof in satisfaction of a
Participant’s mandatory withholding obligations, either on a mandatory or elective basis in the
discretion of the Committee. In each such case, the Fair Market Value of the Stock withheld
shall not exceed the minimum dollar amount that is required to be withheld by the Company under
applicable federal, state or local income tax laws, or the comparable rules of jurisdictions
outside of the United States.




(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, except in the case of adjustments authorized under
Section 11(c), no amendment shall reduce the exercise price of any outstanding Option, grant
price of any outstanding SAR, or purchase price of any other outstanding Award conferring a
right to purchase Stock to an amount less than the Fair Market Value of a share at the Grant
Date of the outstanding award; and provided further, that any amendment to the Plan shall be
subject to the approval of the Company’s stockholders not later than the annual meeting for
which the record date is 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 any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, 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.




(f) 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, (ii) interfering in any way with the right of the Company or a subsidiary to
terminate any Eligible Person’s or Participant’s employment or service at any time, (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.




(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 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 as it may deem desirable including incentive arrangements and awards which do not
qualify under Code Section 162(m), including the granting of awards otherwise than under the
Plan, and such 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.



15









 






(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 8 shall constitute qualified “performance-based compensation” within the
meaning of Code Section 162(m) and regulations thereunder (including Proposed Regulation
1.162-27). However, the Committee retains the right to grant awards which do not qualify as
performance based compensation under Code Section 162(m). If the Committee decides that an
award will comply with Code Section 162(m) then, in such event, the terms of Sections 8(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, at the time of grant of Performance Awards or an Annual Incentive Award, 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 or Annual Incentive 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) Governing Law. The validity, construction and effect of the Plan, any rules and
regulations under the Plan, and any Award document shall be determined in accordance with the
Delaware General Corporation Law, the laws of the state of New York applicable to contracts
made and to be performed in the State of New York, without regard to principles of conflicts of
laws, and applicable federal law.




(l) Awards under Preexisting Plans. Upon approval of the Plan by stockholders of the Company
as required under Section 11(m), no further awards shall be granted under the Preexisting
Plans.




(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 value
and other benefits of the Award to the Participant, as affected by foreign tax laws and other
restrictions applicable as a result of the Participant’s residence or employment abroad, shall
be comparable to the value of such an Award to a Participant who is resident or primarily
employed in the United States. An Award may be modified under this Section 11(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) Plan Effective Date and Stockholder Approval. The Amended and Restated Plan shall become
effective if, and at such time as, the stockholders of the Company have approved it by the
affirmative votes of the holders of a majority of the voting securities of the Company present,
or represented, and entitled to vote on the subject matter at a duly held meeting of
stockholders. Unless earlier terminated by action of the Board of Directors, 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 outstanding
Awards under the Plan.




16