Exhibit 10.19


 


THE HAWKEYE HOLDINGS INC.


2006 STOCK INCENTIVE PLAN


 


AS ADOPTED _______, 2006


 


1.     Purpose. The Hawkeye Holdings Inc.
2006 Stock Incentive Plan (the “Plan”) is intended to provide incentives which
will attract, retain, motivate and reward highly competent people engaged by
the Company (as defined herein) or its subsidiaries or affiliates as officers,
directors and key employees of, and consultants to, Hawkeye Holdings Inc. (the “Company”)
and its subsidiaries and affiliates, by providing them opportunities to acquire
shares of the common stock, $0.001 par value per share, of the Company (the “Common
Stock”) or to receive monetary payments based on the value of such shares
pursuant to the Benefits (as defined below) described herein. Additionally, the
Plan is intended to assist in further aligning the interests of the Company’s
officers, directors, key employees and consultants to those of its other
stockholders.


 


2.               Administration.


 


(a) The Plan will be administered by a committee (the “Committee”)
appointed by the Board of Directors of the Company (the “Board”) from among its
members (which may be the Compensation Committee or the Stock Plan
Subcommittee).  The Committee shall be
comprised, unless otherwise determined by the Board, solely of not less than
two members who shall all be (i) “Non-Employee Directors” within the meaning of
Rule 16b-3(b)(3) (or any successor rule) promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), (ii) “outside directors”
within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) and (iii) “independent
directors” within the meaning of the listing requirements of the New York Stock
Exchange (and each other exchange on which the Company is listed). The
Committee is authorized, subject to the provisions of the Plan, to establish
such rules and regulations as it deems necessary for the proper administration
of the Plan and to make such determinations and interpretations and to take
such action in connection with the Plan and any Benefits (as defined below) granted
hereunder as it deems necessary or advisable, including the right to establish
the terms and conditions of Benefits, to accelerate the vesting or
exercisability of Benefits and to cancel Benefits. The Committee may determine
the extent to which any Benefit under the Plan is required to comply, or not
comply, with Section 409A of the Code. All determinations and interpretations
made by the Committee shall be binding and conclusive on all participants and
their legal representatives. No member of the Committee and no employee of the
Company shall be liable for any act or failure to act hereunder, except in
circumstances involving his or her bad faith, gross negligence or willful
misconduct, or for any act or failure to act hereunder by any other member or
employee or by any agent to whom duties in connection with the administration
of the Plan have been delegated. The Company shall indemnify members of the
Committee and any agent of the Committee who is an employee of the Company, a
subsidiary or an affiliate against any and all liabilities or expenses to which
they may be subjected by reason of any act or failure to act with respect to
their duties on behalf of the Plan, except in circumstances involving such
person’s bad faith, gross negligence or willful misconduct.


 


(b) The Committee may delegate to one or more of its
members, or to one or more agents, such administrative duties as it may deem advisable,
and the Committee, or any person to whom it has delegated duties as aforesaid,
may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion or computation received from any such counsel, consultant or agent.
Expenses incurred by the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company, or the subsidiary or
affiliate whose employees have benefited from the Plan, as determined by the
Committee.


 


3.     Participants. Participants will
consist of such officers, directors and key employees of, and such consultants
to, the Company and its subsidiaries and affiliates as the Committee in its
sole discretion may designate from time to time to receive Benefits under the
Plan. Designation of a participant in any year shall not require the Committee
to designate such person to receive a Benefit in any other year or, once
designated, to receive the same type or amount of Benefit as granted to the
participant in any other year. The Committee shall consider such factors as it
deems pertinent in selecting participants and in determining the type and
amount of their respective Benefits.


 

















 


4.     Type of Benefits. Benefits under
the Plan may be granted in any one or a combination of the following
(collectively, “Benefits”): (a) Stock Options, (b) Stock Appreciation Rights,
(c) Stock Awards, (d) Performance Awards and (e) Stock Units (each as described
below). Stock Awards, Performance Awards, and Stock Units may, as determined by
the Committee in its discretion, constitute Performance-Based Awards, as
described in Section 11 hereof. Benefits awarded to a participant shall be
evidenced by written and executed agreements between the Company and the
participant (which need not be identical) in such forms as the Committee may
from time to time approve (each a “Benefit Agreement”); provided,
however, that in the event of any
conflict between the provisions of the Plan and any Benefit Agreement, the
provisions of the Plan shall prevail.


 


5.               Common Stock Available Under the
Plan.


 


(a) Subject to the provisions of this Section 5 and
any adjustments made in accordance with Section 13 hereof, the maximum number
of shares of Common Stock that may be delivered to participants (including
permitted assignees) and their beneficiaries under this Plan shall be equal to ___
shares of Common Stock, which may be authorized and unissued or treasury
shares. Any shares of Common Stock covered by a Benefit (or portion of a
Benefit) granted under the Plan, which is forfeited or canceled, expires or, in
the case of a Benefit other than a Stock Option, is settled in cash, shall be
deemed not to have been delivered for purposes of determining the maximum
number of shares of Common Stock available for delivery under the Plan. The
preceding sentence shall apply only for purposes of determining the aggregate
number of shares of Common Stock subject to Benefits but shall not apply for
purposes of determining the maximum number of shares of Common Stock with
respect to which Benefits (including the maximum number of shares of Common Stock
subject to Stock Options and Stock Appreciation Rights) may be granted to an
individual participant under the Plan.


 


(b) If any Stock Option is exercised by tendering
shares of Common Stock, either actually or by attestation, to the Company as
full or partial payment in connection with the exercise of a Stock Option under
this Plan, only the number of shares of Common Stock issued net of the shares
of Common Stock tendered shall be deemed delivered for purposes of determining
the maximum number of shares of Common Stock available for delivery under the
Plan. Further, shares of Common Stock delivered under the Plan in settlement,
assumption or substitution of outstanding awards (or obligations to grant
future awards) under the plans or arrangements of another entity shall not
reduce the maximum number of shares of Common Stock available for delivery
under the Plan, to the extent that such settlement, assumption or substitution
is as a result of the Company or its subsidiaries or affiliates acquiring another
entity (or an interest in another entity). This Section 5(b) shall apply only
for purposes of determining the aggregate number of shares of Common Stock
subject to Benefits but shall not apply for purposes of determining (x) the
maximum number of shares of Common Stock with respect to which Benefits
(including the maximum number of shares of Common Stock subject to Stock
Options and Stock Appreciation Rights) may be granted to an individual
participant under the Plan or (y) the maximum number of shares of Common Stock
that may be delivered through Stock Options under the Plan.


 


(c) Subject to any adjustments made in accordance with
Section 13 hereof, the following additional aggregate and individual maximums
are imposed under the Plan.  During the
term of the Plan, the aggregate number of shares of Common Stock that may be
delivered through Incentive Stock Options shall not exceed ___ shares, subject
to the provisions of Section 422 or 424 of the Code or any successor provision.
 During the term of the Plan, the aggregate
number of shares of Common Stock with respect to which Benefits may be granted
to an individual participant shall not exceed ___ shares. The number of shares
of Common Stock with respect to which Benefits may be granted to an individual
participant under the Plan in any calendar year shall not exceed ___ shares.


 


6.    Stock Options. Stock Options will consist of awards from the
Company that will enable the holder to purchase a number of shares of Common
Stock at set terms. Stock Options may be “incentive stock options” within the
meaning of Section 422 of the Code (“Incentive Stock Options”), or Stock
Options which do not constitute Incentive Stock Options (“Nonqualified Stock
Options”). The Committee will have the authority to grant to any participant
one or more Incentive Stock Options, Nonqualified Stock Options, or both types
of Stock Options (in each case with or without Stock Appreciation Rights). All
Stock Options granted under the Plan shall be Nonqualified Stock Options unless
the Benefit Agreement expressly states that the Stock Option is intended to be
an Incentive Stock Option. Each Stock Option shall be subject to such terms and
conditions consistent with the Plan as the Committee may impose from time to
time, subject to the following limitations:


 


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(a) Exercise
Price. Each Stock Option granted hereunder shall have such per-share
exercise price as the Committee may determine at the date of grant; provided, however,
subject to subsection (d) below, that the per-share exercise price shall not be
less than 100% of the Fair Market Value (as defined below) of the Common Stock
on the date the Stock Option is granted.


 


(b) Payment of
Exercise Price. The exercise price may be paid in cash or, in the
discretion of the Committee, by tendering shares of Common Stock of the Company
then owned by the participant or by a combination of these methods. In the
discretion of the Committee, payment also may be made by delivering a properly
executed exercise notice to the Company together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the exercise price. To facilitate the foregoing, the
Company may enter into agreements for coordinated procedures with one or more
brokerage firms. The Committee may prescribe any other method of paying the
exercise price that it determines to be consistent with applicable law and the
purposes of the Plan, including, without limitation, in lieu of the exercise of
a Stock Option by tendering shares of Common Stock of the Company then owned by
a participant, providing the Company with a notarized statement attesting to
the number of shares owned, in which case upon verification by the Company, the
Company would issue to the participant only the number of incremental shares to
which the participant is entitled upon exercise of the Stock Option. In
determining which methods a participant may utilize to pay the exercise price,
the Committee may consider such factors as it determines are appropriate.


 


(c) Exercise
Period. Stock Options granted under the Plan shall be vested and exercisable
at such time or times and subject to such terms and conditions as shall be
determined by the Committee; provided, however, that no Stock Option shall be exercisable later
than ten years after the date it is granted except in the event of a
participant’s death, in which case, the exercise period of such participant’s
Stock Options may be extended beyond such period but no longer than one year
after the participant’s death. All Stock Options shall terminate at such
earlier times and upon such conditions or circumstances as the Committee shall
in its discretion set forth in the 
Benefit Agreement relating to the Stock Option grant.


 


(d) Limitations
on Incentive Stock Options. Incentive Stock Options may be granted
only to participants who are employees of the Company or one of its
subsidiaries (within the meaning of Section 424(f) of the Code) at the date of
grant. The aggregate Fair Market Value (determined as of the time the Stock
Option is granted) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a participant during any calendar
year (under all option plans of the Company and of any parent corporation or
subsidiary corporation (as defined in Sections 424(e) and (f) of the Code,
respectively)) shall not exceed $100,000. For purposes of the preceding
sentence, Incentive Stock Options will be taken into account in the order in
which they are granted. The per-share exercise price of an Incentive Stock
Option shall not be less than 100% of the Fair Market Value of the Common Stock
on the date of grant, and no Incentive Stock Option may be exercised later than
ten years after the date it is granted; provided, however, that Incentive Stock Options may not be granted to
any participant who, at the time of grant, owns stock possessing (after the
application of the attribution rules of Section 424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company
or any parent or subsidiary corporation of the Company, unless the exercise
price is fixed at not less than 110% of the Fair Market Value of the Common
Stock on the date of grant and the exercise of such Incentive Stock Option is
prohibited by its terms after the expiration of five years from the date of
grant of such Incentive Stock Option. If a Stock Option is intended to be an
Incentive Stock Option, and if for any reason such Stock Option (or any portion
thereof) shall not qualify as an Incentive Stock Option, then, to the extent of
such nonqualification, such Stock Option (or portion thereof) shall be regarded
as a Nonqualified Stock Option appropriately granted under the Plan; provided
that such Stock Option (or portion thereof) otherwise complies with the Plan’s
requirement relating to Nonqualified Stock Options.


 


(e) Post-Employment
Exercises. The exercise of any Stock Option after a participant’s termination
of employment or service with the Company or its subsidiaries or affiliates
shall be subject to satisfaction of (i) the conditions precedent that the
participant neither competes with, or takes employment with or renders services
to a competitor of, the Company, its subsidiaries or affiliates as set forth in
the Benefit Agreement without the written consent of the Company, nor conducts
himself or herself in a manner adversely affecting the Company and (ii) any
other conditions as set forth in the Benefit Agreement.


 


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(f) Rights as a
Shareholder. No participant shall have any rights to dividends or
other shareholder rights with respect to shares of Common Stock subject to a
Stock Option until the participant has given written notice of exercise of the
Stock Option, paid in full for such shares, received such shares from the
Company and, if applicable, has satisfied any other conditions imposed by the
Committee pursuant to the Plan or an Benefit Agreement.


 


7.               Stock Appreciation Rights.


 


(a) The Committee may, in its discretion, grant Stock
Appreciation Rights to the holders of any Stock Options granted hereunder. In
addition, Stock Appreciation Rights may be granted independently of, and
without relation to, Stock Options. A Stock Appreciation Right is a right to
receive a payment in cash, Common Stock or a combination thereof, in an amount
equal to the excess of (x) the Fair Market Value, or other specified valuation
(which shall be no greater than the Fair Market Value), of a specified number
of shares of Common Stock on the date the right is exercised over (y) the Fair
Market Value, or other specified valuation (which shall be no less than the
Fair Market Value) of such shares of Common Stock on the date the right is
granted, all as determined by the Committee; provided,
however, that if a Stock Appreciation
Right is granted in tandem with or in substitution for a Stock Option, the Fair
Market Value designated in the Benefit Agreement may be the Fair Market Value
on the date such Stock Option was granted. Each Stock Appreciation Right shall
be subject to such terms and conditions as the Committee shall impose from time
to time.


 


(b) Stock Appreciation Rights granted under the Plan
shall be vested and exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Committee; provided,
however, that no Stock Appreciation
Right shall be exercisable later than ten years after the date it is granted
except in the event of a participant’s death, in which case, the exercise
period of such participant’s Stock Appreciation Rights may be extended beyond
such period but no longer than one year after the participant’s death. All
Stock Appreciation Rights shall terminate at such earlier times and upon such
conditions or circumstances as the Committee shall in its discretion set forth
in the Benefit Agreement.


 


(c) The exercise of any Stock Appreciation Right after
a participant’s termination of employment or service with the Company or its
subsidiaries or affiliates shall be subject to satisfaction of (i) the
conditions precedent that the participant neither competes with, or takes
employment with or renders services to a competitor of, the Company, its
subsidiaries or affiliates as set forth in the Benefit Agreement without the
written consent of the Company, nor conducts himself or herself in a manner
adversely affecting the Company and (ii) any other conditions as set forth in
the Benefit Agreement..


 


8.     Stock Awards. The Committee may, in its discretion, grant
Stock Awards (which may include mandatory payment of bonus incentive
compensation in stock) consisting of Common Stock issued or transferred to
participants with or without payments therefor. Stock Awards may be subject to
such terms and conditions as the Committee determines to be appropriate,
including, without limitation, restrictions on the sale or other disposition of
such shares and the right of the Company to reacquire such shares for no
consideration upon termination of the participant’s employment within specified
periods, and may constitute Performance-Based Awards, as described in Section
11 hereof. The Committee may require the participant to deliver a duly signed
stock power, endorsed in blank, relating to the Common Stock covered by a Stock
Award. The Committee also may require that the stock certificates evidencing
such shares be held in custody or bear restrictive legends until the
restrictions thereon shall have lapsed. The Stock Award shall specify whether
the participant shall have, with respect to the shares of Common Stock subject
to a Stock Award, all of the rights of a holder of shares of Common Stock of
the Company, including the right to receive dividends and to vote the shares.


 


9.               Performance Awards.


 


(a) Performance Awards may be granted to participants
at any time and from time to time, as shall be determined by the Committee.
Performance Awards may constitute Performance-Based Awards, as described in
Section 11 hereof. The Committee shall have complete discretion in determining the
number, amount and timing of awards granted to each participant. Such
Performance Awards may be in the form of shares of Common Stock or Stock Units.
Performance Awards may be awarded as short-term or long-term incentives.
Performance targets may be based upon Company-wide, divisional and/or
individual performance, or other factors as determined by the Committee.


 


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(b) With respect to those Performance Awards that are
not intended to constitute Performance-Based Awards, the Committee shall have
the authority at any time to make adjustments to performance targets for any
outstanding Performance Awards which the Committee deems necessary or desirable
unless at the time of establishment of such targets the Committee shall have
precluded its authority to make such adjustments.


 


(c) Payment of earned Performance Awards shall be made
in accordance with terms and conditions prescribed or authorized by the
Committee. Subject to Section 12 herein, the participant may elect to defer, or
the Committee may require or permit the deferral of, the receipt of Performance
Awards upon such terms as the Committee deems appropriate.


 


10.         Stock Units.


 


(a) The Committee may, in its discretion, grant Stock
Units to participants hereunder. A “Stock Unit” means a notional unit
representing one share of Common Stock. The Committee shall determine the
criteria for the vesting of Stock Units. Stock Units may constitute
Performance-Based Awards, as described in Section 11 hereof. A Stock Unit
granted by the Committee shall provide for payment in shares of Common Stock at
such time as the Benefit Agreement shall specify. Shares of Common Stock issued
pursuant to this Section 10 may be issued with or without payments or other
consideration therefor, as may be required by applicable law or as may be
determined by the Committee. The Committee shall determine whether a
participant granted a Stock Unit shall be entitled to a Dividend Equivalent
Right. A “Dividend Equivalent Right” means the right to receive the amount of
any dividend paid on the share of Common Stock underlying a Stock Unit, which
shall be payable in cash or in the form of additional Stock Units.


 


(b) Upon vesting of a Stock Unit, unless the Committee
has determined to defer payment with respect to such unit or a participant has
elected to defer payment under subsection (c) below, Common Stock shall be
distributed to the participant in respect of the Stock Units unless the
Committee, with the consent of the participant, provides for the payment of the
Stock Unit in cash or partly in cash and partly in shares of Common Stock equal
to the value of the shares of Common Stock which would otherwise be distributed
to the participant.


 


(c) Subject to Section 12 herein, the Committee may
permit a participant to elect not to receive Common Stock upon the vesting of
such Stock Unit and for the Company to continue to maintain the Stock Unit on
its books of account. In such event, the value of a Stock Unit shall be payable
in shares of Common Stock pursuant to the agreement of deferral.


 


11.   Performance-Based Awards. Certain Benefits granted under the
Plan may be granted in a manner such that the Benefits qualify for the
performance-based compensation exception to Section 162(m) of the Code (“Performance-Based
Awards”). As determined by the Committee in its sole discretion, either the
granting or vesting of such Performance-Based Awards shall be based on
achievement of hurdle rates and/or growth rates in one or more business
criteria that apply to the individual participant, one or more business units
or the Company as a whole. The business criteria shall be as follows,
individually or in combination: (i) net earnings; (ii) earnings per share;
(iii) net sales; (iv) market share; (v) net operating profit; (vi) expense
targets; (vii) working capital targets relating to inventory and/or accounts
receivable; (viii) operating margin; (ix) return on equity; (x) return on
assets; (xi) planning accuracy (as measured by comparing planned results to
actual results); (xii) market price per share; (xiii) gross margin; (xiv) total
return to stockholders or certain stockholders; and (xv) earnings before
interest, taxes, depreciation and amortization.  In addition, Performance-Based Awards may
include comparisons to the performance of other companies, such performance to
be measured by one or more of the foregoing business criteria. Furthermore, the
measurement of performance against goals may exclude or adjust for the impact
of certain events or occurrences that were not budgeted or planned for in
setting the goals, including, among other things, the impact of charges for
restructurings, discontinued operations, extraordinary items and other unusual
or non-recurring items, and the cumulative effects of accounting changes, each
as defined by generally accepted accounting principles as identified in the
financial statements, notes to the financial statements or management’s
discussion or analysis.  With respect to
Performance-Based Awards, (i) the Committee shall establish in writing (x) the
performance goals applicable to a given period specifying in terms of an
objective formula or standard the method for computing the amount of
compensation payable to the participant if such performance goals are achieved
and (y) the individual employees or class of employees to which such
performance goals apply no later than 90 days after


 


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the commencement of such period (but in no event after
one-quarter of such period has elapsed) and (ii) no Performance-Based Awards
shall be payable to or vest with respect to any participant for a given period
until the Committee certifies in writing that the objective performance goals
(and any other material terms) applicable to such period have been satisfied.
With respect to any Benefits intended to qualify as Performance-Based Awards,
after establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder (as determined
in accordance with Section 162(m) of the Code) upon the attainment of such
performance goal.  Notwithstanding the
preceding sentence, and unless restricted by the applicable Benefit Agreement,
the Committee may reduce or eliminate the number of shares of Common Stock or
cash granted or the number of shares of Common Stock vested upon the attainment
of such performance goal.


 


12.   Section 409A of the Code.  Notwithstanding anything herein or in any
Benefit Agreement to the contrary, this Plan and any Benefit shall be
interpreted in accordance with Section 409A of the Code, Department of Treasury
regulations and other interpretive guidance issued thereunder, including
without limitation any such regulations or other guidance that may be issued
after the Effective Date. 
Notwithstanding any provision of the Plan or an Benefit Agreement to the
contrary, in the event that the Committee determines that the Plan and/or
Benefits are subject to Section 409A of the Code, the Committee may, in its
sole discretion and without a participant’s prior consent, amend the Plan
and/or Benefits, adopt policies and procedures, or take any other actions
(including amendments, policies, procedures and actions with retroactive
effect) as are necessary or appropriate to (a) exempt the Plan and/or any
Benefits from the application of Section 409A of the Code, (b) preserve the
intended tax treatment of any such Benefit, and (c) comply with the
requirements of Section 409A of the Code, including any regulations or other
interpretive guidance that may be issued after the grant of any Benefit.   Notwithstanding the foregoing, neither the
Committee nor the Company is obligated to ensure that Benefits comply with
Section 409A of the Code or to take any actions to ensure such compliance.  To the extent applicable, all Benefits shall
be paid or otherwise settled on or as soon as practicable after the applicable
payment date, but in no event later than the 15th day of the third month from
the end of (i) the participant’s tax year that includes the applicable payment
date, or (ii) the Company’s tax year that includes the applicable payment date,
whichever is later.  Such  payment or payments are intended to comply
with the “short-term deferral” exemption from the application of  Section 409A of the Code.  For purposes of this subparagraph, “payment
date” means the date such Benefit is no longer subject to a “substantial risk
of forfeiture” for purposes of Section 409A of the Code.


 


13.   Foreign Laws.  The Committee may grant Benefits to
individual participants who are subject to the tax laws of nations other than
the United States, which Benefits may have terms and conditions which the
Committee determines to be necessary to comply with applicable foreign laws.
The Committee may take any action which it deems advisable to obtain approval
of such Benefits by the appropriate foreign governmental entity; provided, however, that
no Benefits may be granted pursuant to this Section 13 and no action may be
taken which would result in a violation of the Exchange Act, the Code or any
other applicable law.


 


14.         Adjustment Provisions; Change in Control.


 


(a) If there shall be any change in the Common Stock
of the Company, through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, reverse stock split, split up,
spinoff, combination of shares, exchange of shares, dividend in kind or other
like change in capital structure or distribution (other than normal cash
dividends) to stockholders of the Company, an adjustment shall be made to each
outstanding Stock Option and Stock Appreciation Right such that each such Stock
Option and Stock Appreciation Right shall thereafter be exercisable for such
securities, cash and/or other property as would have been received in respect
of the  Common Stock subject to such
Stock Option or Stock Appreciation Right had such Stock Option or Stock
Appreciation Right been exercised in full immediately prior to such change or
distribution, and such an adjustment shall be made successively each time any
such change shall occur. In addition, in the event of any such change or
distribution or any extraordinary dividend or distribution of cash or other
assets, in order to prevent dilution or enlargement of participants’ rights
under the Plan, the Committee will have authority to adjust, in an equitable
manner, the number and kind of shares that may be issued and granted under the
Plan, the number and kind of shares subject to outstanding Benefits, the
exercise price applicable to outstanding Benefits, and the Fair Market Value of
the Common Stock and other value determinations or affected terms applicable to
outstanding Benefits. Appropriate adjustments also may be made by the Committee
in the terms of any Benefits (other than Benefits intended to constitute
Performance-Based Awards except to the extent permitted under Section 11 hereof)
under the Plan to reflect such changes or distributions (and any extraordinary
dividend or distribution of cash or other assets) and to


 


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modify any other terms of outstanding Benefits (other than Benefits
intended to constitute Performance-Based Awards except to the extent permitted
under Section 11 hereof) on an equitable basis, including modifications of
performance targets and changes in the length of performance periods. In
addition, other than with respect to Stock Options, Stock Appreciation Rights,
and other awards intended to constitute Performance-Based Awards, the Committee
is authorized to make adjustments to the terms and conditions of, and the
criteria included in, Benefits in recognition of unusual or nonrecurring events
affecting the Company or the financial statements of the Company, or in
response to changes in applicable laws, regulations, or accounting principles.


 


(b) Notwithstanding any other provision of this Plan,
in the event of a Change in Control (as defined below), the Committee, in its
discretion, may take such actions as it deems appropriate with respect to
outstanding Benefits, including, without limitation, accelerating the
exercisability or vesting of such Benefits, or such other actions provided in
an agreement approved by the Board in connection with a Change in Control and
such Benefits shall be subject to the terms of such agreement as the Committee,
in its discretion, shall determine.  The
Committee, in its discretion, may determine that, upon the occurrence of a
Change in Control of the Company, each Stock Option and Stock Appreciation
Right outstanding hereunder shall terminate within a specified number of days
after notice to the holder, and such holder shall receive, with respect to each
share of Common Stock subject to such Stock Option or Stock Appreciation Right,
an amount equal to the excess of the Fair Market Value of such shares of Common
Stock immediately prior to the occurrence of such Change in Control over the
exercise price per share of such Stock Option or Stock Appreciation Right; such
amount to be payable in cash, in one or more kinds of property (including the
property, if any, payable in the transaction) or in a combination thereof, as
the Committee, in its discretion, shall determine. For purposes of this Section
14(b), a “Change in Control” of the Company shall be deemed to have occurred
upon any of the following events:


 


(i) A change in control
of the direction and administration of the Company’s business of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act; or


 


(ii) During any period of
two (2) consecutive years, the individuals who at the beginning of such period
constitute the Company’s Board of Directors or any individuals who would be “Continuing
Directors” (as hereinafter defined) cease for any reason to constitute at least
a majority thereof; or


 


(iii) The Company’s
Common Stock shall cease to be publicly traded; or


 


(iv) The Company’s Board
of Directors shall approve a sale of all or substantially all of the assets of
the Company, and such transaction shall have been consummated; or


 


(v) The Company’s Board
of Directors shall approve any merger, consolidation, or like business
combination or reorganization of the Company, the consummation of which would
result in the occurrence of any event described in Section 14(b)(ii) or (iii) above,
and such transaction shall have been consummated.


 


Notwithstanding the foregoing, any spin-off of a
division or subsidiary of the Company to its stockholders shall not constitute
a Change in Control of the Company.


 


For purposes of this
Section 14(b), “Continuing Directors” shall mean (x) the directors of the
Company in office on the Effective Date (as defined below) and (y) any
successor to any such director and any additional director who after the
Effective Date was nominated or elected by a majority of the Continuing
Directors in office at the time of his or her nomination or election.


 


15.   Nontransferability. Each Benefit granted under the Plan to a
participant (other than stock for which there are no transfer restrictions) shall
not be transferable otherwise than by will or the laws of descent and
distribution, and shall be exercisable, during the participant’s lifetime, only
by the participant. In the event of the death of a participant, each Stock
Option or Stock Appreciation Right theretofore granted to him or her shall be
exercisable during such period after his or her death as the Committee shall in
its discretion set forth in the Benefit Agreement at the date of grant, subject
to the restrictions set forth in Sections 6(c) and 7(b) herein, and then only
by the executor or administrator of the estate of the deceased participant or
the person or persons to whom the deceased participant’s rights under the Stock
Option or Stock Appreciation Right shall pass by will or


 


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the laws of descent and distribution. Notwithstanding
the foregoing, at the discretion of the Committee, an award of a Benefit other
than an Incentive Stock Option may permit the transferability of a Benefit by a
participant solely to the participant’s spouse, siblings, parents, children and
grandchildren or trusts for the benefit of such persons or partnerships,
corporations, limited liability companies or other entities owned solely by
such persons, including trusts for such persons, subject to any restriction
included in the award of the Benefit.


 


16.   Other Provisions. The award of any Benefit under the Plan
also may be subject to such other provisions (whether or not applicable to a
Benefit awarded to any other participant) as the Committee determines
appropriate, including, without limitation, for the installment purchase of
Common Stock under Stock Options, for the installment exercise of Stock
Appreciation Rights, for the forfeiture of, or restrictions on resale or other
disposition of, Common Stock acquired under any form of Benefit, for the
acceleration of exercisability or vesting of Benefits in the event of a change of
control (whether or not a Change in Control) of the Company, for the payment of
the value of Benefits to participants in the event of a change of control (whether
or not a Change in Control) of the Company, or to comply with federal and state
securities laws, or understandings or conditions as to the participant’s
employment in addition to those specifically provided for under the Plan. The
award of any Benefit under the Plan shall be subject to the receipt of the
Company of consideration required under applicable state law.


 


17.   Fair Market Value. For purposes of this Plan and any
Benefits awarded hereunder, Fair Market Value shall be the closing price of the
Common Stock on the date of calculation (or on the last preceding trading date
if Common Stock was not traded on such date) if the Common Stock is readily
tradeable on a national securities exchange or other market system, and if the
Common Stock is not readily tradeable, Fair Market Value shall mean the amount
determined in good faith by the Committee as the fair market value of the
Common Stock.


 


18.   Withholding. All payments or distributions of Benefits made
pursuant to the Plan shall be net of any amounts required to be withheld
pursuant to applicable federal, state and local tax-withholding requirements at
the minimum statutory withholding rates. Notwithstanding the foregoing, if the
Company proposes or is required to distribute Common Stock pursuant to the
Plan, it may require the recipient to remit to it or to the corporation that
employs such recipient an amount sufficient to satisfy such tax-withholding
requirements prior to the delivery of any certificates for such Common Stock.
In lieu thereof, the Company or the employing corporation shall have the right
to withhold the amount of such taxes from any other sums due or to become due
from such corporation to the recipient as the Committee shall prescribe. The
Committee may, in its discretion and subject to such rules as it may adopt
(including any as may be required to satisfy applicable tax and/or non-tax
regulatory requirements), permit an optionee or award or right holder to pay
all or a portion of the federal, state and local withholding taxes arising in
connection with any Benefit consisting of shares of Common Stock by electing to
have the Company withhold shares of Common Stock having a Fair Market Value
equal to the amount of tax to be withheld at the minimum statutory withholding
rates.


 


19.   Tenure. A participant’s right, if any, to continued
employment with the Company or any of its subsidiaries or affiliates as an
officer, employee, or otherwise, shall not be enlarged or otherwise affected by
his or her designation as a participant under the Plan.


 


20.   Unfunded Plan. Participants shall have no right, title, or
interest whatsoever in or to any investments that the Company may make to aid
it in meeting its obligations under the Plan. Nothing contained in the Plan,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company and
any participant, beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be
paid from the general funds of the Company and no special or separate fund
shall be established and no segregation of assets shall be made to assure
payment of such amounts except as expressly set forth in the Plan.


 


21.   No Fractional Shares. No fractional shares of Common Stock
shall be issued or delivered pursuant to the Plan or any Benefit. The Committee
shall determine whether cash, or Benefits, or other property shall be issued


 


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or paid in lieu of fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.


 


22.   Duration, Amendment and Termination. No Benefit shall be
granted more than ten years after the Effective Date. The Committee may amend
the Plan from time to time or suspend or terminate the Plan at any time. No
amendment of the Plan may be made without approval of the stockholders of the
Company if such approval is necessary under the terms of the Plan or by law in
order to be effective.


 


23.   Governing Law. This Plan, Benefits granted hereunder and
actions taken in connection herewith shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).


 


24.   Effective Date. The Plan shall be effective on the date it
is approved by the stockholders of the Company at an annual meeting or any
special meeting of stockholders of the Company or valid written consent of
stockholders in lieu thereof permitted by the Company’s bylaws (the “Effective
Date”).


 


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