exv10w1



 







Exhibit 10.1




H&E EQUIPMENT SERVICES, INC.




2006 STOCK-BASED INCENTIVE COMPENSATION PLAN




ADOPTED JANUARY 23, 2006




AS AMENDED AND RESTATED, EFFECTIVE JUNE 6, 2006




 









 





H&E EQUIPMENT SERVICES, INC.




2006 STOCK-BASED INCENTIVE COMPENSATION PLAN




I. Purpose of the Plan




          The purpose of this Amended and Restated Plan is to assist the Company, its Subsidiaries and
Affiliates in attracting and retaining valued Employees and Directors by offering them a greater
stake in the Company’s success and a closer identity with it, and to encourage ownership of the
Company’s Stock by such Employees and Directors.




II. Definitions




     A. “Affiliate” means any entity other than the Subsidiaries in which the Company has a
substantial direct or indirect equity interest, as determined by the Board.



     B. “Award” means an award of Deferred Stock, Restricted Stock, or Options under the
Plan.



     C. “Board” means the Board of Directors of the Company.



     D. “Cause” means: (i) the Participant’s willful misconduct or gross negligence in
connection with the performance of the Participant’s duties for the Company, its Subsidiaries or
Affiliates; (ii) the Participant’s conviction of, or a plea of nolo contendere to, a felony
or a crime involving fraud or moral turpitude; (iii) the Participant’s engaging in any business
that directly or indirectly competes with the Company, its Subsidiaries or Affiliates; or (iv)
disclosure of trade secrets, customer lists or confidential information of the Company, its
Subsidiaries or Affiliates to a competitor or unauthorized person.



     E. “Change in Control” means:



          1. the acquisition in one or more transactions by any “Person” (as such term is used for
purposes of section 13(d) or section 14(d) of the 1934 Act) but excluding, for this purpose, the
Company or its Subsidiaries, any Stockholder of the Company immediately prior to the consummation
of the Company’s Initial Public Offering or any employee benefit plan of the Company or its
Subsidiaries, of “Beneficial Ownership” (within the meaning of Rule 13d-3 under the 1934 Act) of
thirty-five percent (35%) or more of the combined voting power of the Company’s then outstanding
voting securities (the “Voting Securities”);




 









 








          2. the individuals who, as of the effective date of the Plan, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that if the election, or nomination for election by the Company’s Stockholders, of any new
director was approved by a vote of at least a majority of the Incumbent Board, such new director
shall be considered as a member of the Incumbent Board, and provided further that any reductions in
the size of the Board that are instituted voluntarily by the Incumbent Board shall not constitute a
Change in Control, and after any such reduction the “Incumbent Board” shall mean the Board as so
reduced;




          3. a merger or consolidation involving the Company if the Stockholders of the Company,
immediately before such merger or consolidation, do not own, directly or indirectly, immediately
following such merger or consolidation, more than seventy percent (70%) of the combined voting
power of the outstanding Voting Securities of the corporation resulting from such merger or
consolidation;




          4. a complete liquidation or dissolution of the Company or a sale or other disposition of all
or substantially all of the assets of the Company; or




          5. acceptance by Stockholders of the Company of shares in a share exchange if the Stockholders
of the Company immediately before such share exchange, do not own, directly or indirectly,
immediately following such share exchange, more than seventy percent (70%) of the combined voting
power of the outstanding Voting Securities of the corporation resulting from such share exchange.




     F. “Code” means the Internal Revenue Code of 1986, as amended.



     G. “Committee” means the Board or such committee designated by the Board to administer
the Plan under Section IV.



     H. “Common Stock” means the common stock of the Company, par value $0.01 per share, or
such other class or kind of shares or other securities resulting from the application of Section
IX.



     I. “Company” means H&E Equipment Services, Inc., a Delaware Corporation, or any
successor company or corporation.



     J. “Company Stock” means the Common Stock or Preferred Stock of the Company.



     K. “Deferred Stock” means an Award made under Section VI of the Plan to receive
Company Stock at the end of a specified Deferral Period.



 - 2 -









 





     L. “Deferral Period” means the period during which the receipt of a Deferred Stock
Award under Section VI of the Plan will be deferred.



     M. “Director” means a member of either (i) the Company’s Board or (ii) the Board of
Directors of one of the Company’s Subsidiaries or Affiliates, who is not an Employee of the Company
or any Subsidiary.



     N. “Disability” means, as determined by the Committee in its sole discretion, that an
Employee or Director:



          1. is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, or




          2. is, by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than 3 months under an
accident and health plan covering Employees or Directors, as applicable, of the Company, its
Subsidiaries or Affiliates.




     O. “EBITDA” means for any given year, the Company’s earnings before interest, income
taxes, depreciation, amortization and any accounting charges incurred with respect to this Plan or
any Awards granted under this Plan as determined after payment of bonuses, if any, but adjusted for
purchase accounting or any other items that are considered unique, or likely to affect only one
accounting period (unique or “one time” charges are charges for which, under generally accepted
accounting principles consistently applied, an adjustment to EBITDA would be considered proper), as
determined by the Board, in its sole discretion, based on the audited financial statements for such
year.



     P. “Employee” means an officer or other key employee of the Company, a Subsidiary or
an Affiliate including a director who is such an employee.



     Q. “Fair Market Value” means, on any given date, the value of one share of Common
Stock of the Company’s stock as determined by the Board in its sole discretion.



     R. “Incentive Stock Option” means an Option intended to meet the requirements of an
incentive stock option as defined in section 422 of the Code and designated as an Incentive Stock
Option.



 - 3 -









 





     S. “Initial Public Offering” means the first underwritten public offering of the
Company’s stock pursuant to a Registration Statement filed with the United States Securities and
Exchange Commission on Form S-1, or its then equivalent.



     T. “1934 Act” means the Securities Exchange Act of 1934, as amended.



     U. “Non-Qualified Option” means an Option not intended to be an Incentive Stock
Option, and designated as a Non-Qualified Option.



     V. “Option” means any option to acquire Stock of the Company granted from time to time
under Section VIII of the Plan.



     W. “Participant” means an Employee or Director to whom an Award is made.



     X. “Plan” means the H&E Equipment Services, Inc. 2006 Stock-Based Incentive
Compensation Plan herein set forth, as amended from time to time.



     Y. “Preferred Stock” means the preferred stock of the Company, or such other class or
kind of shares or other securities resulting from the application of Section IX



     Z. “Restricted Stock” means Company Stock awarded by the Committee under Section VII
of the Plan.



     AA. “Restriction Period” means the period during which Restricted Stock awarded under
Section VII of the Plan is subject to forfeiture.



     BB. “Retirement” means, in the case of an Employee, retirement from the active
employment of the Company, a Subsidiary or an Affiliate pursuant to the relevant provisions of the
applicable pension plan of such entity or as otherwise determined by the Board. In the case of a
Director, “Retirement” means good-faith and complete termination of the Director’s service
for the Company, its Subsidiaries and Affiliates.



     CC. “Securities Act” means the Securities Act of 1933, as amended.



     DD. “Subsidiary” means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company (or any subsequent parent of the Company) if each of the
corporations other than the last corporation in the unbroken chain owns stock possession 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.



 - 4 -









 





     EE. “Ten Percent Stockholder” means a person who on any given date owns, either
directly or indirectly (taking into account the attribution rules contained in section 424(d) of
the Code), stock possessing more than 10% of the total combined voting power of all classes of
stock of the Company or a Subsidiary.



III. Eligibility




          Any Employee or Director is eligible to receive an Award.




IV. Administration and Implementation of Plan




     A. The Plan shall be administered by the Committee, which shall have full power to interpret
and administer the Plan and full authority to act in selecting the Employees and Directors to whom
Awards will be granted, in determining the type and amount of Awards to be granted to each such
Participant, the terms and conditions of Awards granted under the Plan and the terms of agreements
which will be entered into with Participants.



     B. The Committee’s powers shall include, but not be limited to, the power to determine
whether, to what extent and under what circumstances an Option may be exchanged for cash, Company
Stock or some combination thereof; to determine whether, to what extent and under what
circumstances an Award is made hereunder; to determine whether, to what extent and under what
circumstances Company Stock or cash payable with respect to an Award shall be deferred, either
automatically or at the election of the Participant (including the power to add deemed earnings to
any such deferral); to grant Awards (other than Incentive Stock Options) that are transferable by
the Participant; and to determine the effect, if any, of a Change in Control of the Company upon
outstanding Awards. Upon a Change in Control, the Committee may, at its discretion, (i) fully vest
all Awards made under the Plan, (ii) cancel any outstanding Awards in exchange for a cash payment
of an amount equal to the difference between the then Fair Market Value of the stock underlying the
Award and the option or base price of the Award, (iii) after having given the Award Participant a
chance to exercise any outstanding Options, terminate any or all of the Award Participant’s
unexercised Options, or (iv) if the Company is not the surviving corporation, cause the surviving
corporation to assume or replace all outstanding Awards with comparable awards.



     C. The Committee shall have the power to adopt regulations for carrying out the Plan and to
make changes in such regulations as it shall, from time to time, deem advisable. The Committee
shall endeavor, in good faith, to avoid the application of section 409A of the Code to any Award by
taking such action,



 - 5 -









 







including suspending the operation of any provision of this Plan or any Award,
as it reasonably determines to be necessary or appropriate to that result. No such action shall be
deemed to be an amendment adverse to the Participant within the meaning of Section XII.F. Any
interpretation by the Committee of the terms and provisions of the Plan and the administration
thereof, and all action taken by the Committee, shall be final and binding on Participants.



     D. The Committee may condition the grant of any Award or the lapse of any Deferral or
Restriction Period (or any combination thereof) upon the Participant’s achievement of a Performance
Goal that is established by the Committee before the grant of the Award. For this purpose, a
“Performance Goal” shall mean a goal that must be met by the end of a period specified by the
Committee (but that is substantially uncertain to be met before the grant of the Award) based upon:
(i) the price of Common Stock, (ii) the market share of the Company, its Subsidiaries or Affiliates
(or any business unit thereof), (iii) sales by the Company, its Subsidiaries or Affiliates (or any
business unit thereof), (iv) earnings per share of Common Stock, (v) return on shareholder equity
of the Company, (vi) costs of the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (vii) cash flow of the Company, its Subsidiaries or Affiliates (or any business unit
thereof), (viii) return on total assets of the Company, its Subsidiaries or Affiliates (or any
business unit thereof), (ix) return on invested capital of the Company, its Subsidiaries or
Affiliates (or any business unit thereof), (x) return on net assets of the Company, its
Subsidiaries or Affiliates (or any business unit thereof), (xi) operating income of the Company,
its Subsidiaries or Affiliates (or any business unit thereof) including, without limitation,
EBITDA, or (xii) net income of the Company, its Subsidiaries or Affiliates (or any business unit
thereof). The Committee shall have discretion to determine the specific targets with respect to
each of these categories of Performance Goals. Before granting an Award or permitting the lapse of
any Deferral or Restriction Period subject to this Section, the Committee shall certify that an
individual has satisfied the applicable Performance Goal.



V. Shares of Stock Subject to the Plan




     A. Subject to adjustment as provided in Section IX, the total number of shares of Common Stock
available for Awards under the Plan shall be the number of shares equal to twelve percent (12%) of
the total number of shares of the Company’s Common Stock outstanding after the consummation of the
Company’s Initial Public Offering, including after the exercise, if any, of the underwriters’
option to cover over-allotments. The final number of shares of Common Stock available for Awards
under the Plan shall be determined by resolution of the



 - 6 -









 







Committee or the Board subsequent to the consummation of the Company’s Initial Public
Offering.



     B. The maximum number of shares of Company Stock subject to Awards that may be granted to any
Participant during any calendar year (the “Individual Limit”) shall not exceed 20% of the number of
shares initially available for Awards under Section V.A. Subject to Section V.C, Section IX and
Section XII.F, any Award that is canceled or amended by the Committee shall count against the
Individual Limit. Notwithstanding the foregoing, the Individual Limit may be adjusted to reflect
the effect on Awards of any transaction or event described in Section IX.



     C. Any shares issued by the Company through the assumption or substitution of outstanding
grants from an acquired company shall not (i) reduce the shares available for Awards under the
Plan, or (ii) be counted against the Individual Limit. Any shares issued hereunder may consist, in
whole or in part, of authorized and unissued shares or treasury shares. If any shares subject to
any Award granted hereunder are forfeited or such Award otherwise terminates without the issuance
of such shares or the payment of other consideration in lieu of such shares, the shares subject to
such Award, to the extent of any such forfeiture or termination, shall again be available for
Awards under the Plan.



VI. Deferred Stock




          An Award of Deferred Stock is an agreement by the Company to deliver to the recipient a
specified number of shares of Company Stock at the end of a specified deferral period or periods.
Such an Award shall be subject to the following terms and conditions:




     A. Deferred Stock Awards shall be evidenced by Deferred Stock agreements. Such agreements
shall conform to the requirements of the Plan and may contain such other provisions as the
Committee shall deem advisable.



     B. Upon determination of the number of shares of Deferred Stock to be awarded to a
Participant, the Committee shall direct that the same be credited to the Participant’s account on
the books of the Company but that issuance and delivery of the same shall be deferred until the
date or dates provided in Section VI.E hereof. Prior to issuance and delivery hereunder the
Participant shall have no rights as an stockholder with respect to any shares of Deferred Stock
credited to the Participant’s account.



     C. No dividends shall be paid with respect to Deferred Stock. In lieu thereof, at the end of
the Deferral Period the Participant will be credited with that



 - 7 -









 







number of additional whole shares of Company Stock that can be purchased (based on their Fair
Market Value at the end of the Deferral Period) with the sum of the dividends that would have been
paid with respect to an equal number of shares of Company Stock between the grant date of such
Deferred Stock and the end of the Deferral Period.



     D. The Committee may condition the grant of an Award of Deferred Stock or the expiration of
the Deferral Period upon the Participant’s achievement of one or more Performance Goals specified
in the Deferred Stock agreement. If the Participant fails to achieve the specified Performance
Goals, the Committee shall not grant the Deferred Stock Award to the Participant, or the
Participant shall forfeit the Award and no Company Stock shall be transferred to him pursuant to
the Deferred Stock Award.



     E. The Deferred Stock agreement shall specify the duration of the Deferral Period taking into
account termination of employment or service as a Director on account of death, Disability,
Retirement or other cause. The Deferral Period may consist of one or more installments. At the
end of the Deferral Period or any installment thereof the shares of Deferred Stock applicable to
such installment credited to the account of a Participant shall be issued and delivered to the
Participant (or, where appropriate, the Participant’s legal representative) in accordance with the
terms of the Deferred Stock agreement. The Committee may, in its sole discretion, amend a Deferred
Stock Award pursuant to Section IV.C hereof.



VII. Restricted Stock




          An Award of Restricted Stock is a grant by the Company of a specified number of shares of
Company Stock to the Participant, which shares are subject to forfeiture upon the happening of
specified events. Such an Award shall be subject to the following terms and conditions:




     A. Restricted Stock shall be evidenced by Restricted Stock agreements. Such agreements shall
conform to the requirements of the Plan and may contain such other provisions as the Committee
shall deem advisable.



     B. Upon determination of the number of shares of Restricted Stock to be granted to the
Participant, the Committee shall direct that a certificate or certificates representing the number
of shares of Company Stock be issued to the Participant with the Participant designated as the
registered owner. The certificates representing such shares shall be legended as to sale,
transfer, assignment, pledge or other encumbrances during the Restriction Period and



 - 8 -









 







deposited by the Participant, together with a stock power endorsed in blank, with the Company,
to be held in escrow during the Restriction Period.



     C. During the Restriction Period the Participant shall have the right to receive dividends
from and to vote the shares of Restricted Stock.



     D. The Committee may condition the grant of an Award of Restricted Stock or the expiration of
the Restriction Period upon the Participant’s achievement of one or more Performance Goals
specified in the Restricted Stock Agreement. If the Participant fails to achieve the specified
Performance Goals, the Committee shall not grant the Restricted Stock to the Participant, or the
Participant shall forfeit the Award of Restricted Stock and the underlying Company Stock shall be
forfeited to the Company.



     E. The Restricted Stock agreement shall specify the duration of the Restriction Period and the
performance, employment, service as a Director or other conditions (including termination of
employment or service as a Director on account of death, Disability, Retirement or other cause)
under which the Restricted Stock may be forfeited to the Company. At the end of the Restriction
Period the restrictions imposed hereunder shall lapse with respect to the number of shares of
Restricted Stock as determined by the Committee, and the legend shall be removed and such number of
shares delivered to the Participant (or, where appropriate, the Participant’s legal
representative). The Committee may, in its sole discretion, amend a Restricted Stock Award
pursuant to Section IV.C hereof.



VIII. Options




          Options give a Participant the right to purchase a specified number of shares of Company Stock
from the Company for a specified time period at a fixed price. Options may be either Incentive
Stock Options or Non-Qualified Stock Options. The grant of Options shall be subject to the
following terms and conditions:




     A. Option Grants: Options shall be evidenced by Option agreements. Such agreements shall
conform to the requirements of the Plan, and may contain such other provisions as the Committee
shall deem advisable.



     B. Option Price: The price per share at which Company Stock may be purchased upon exercise of
an Option shall be determined by the Committee, but shall be not less than the Fair Market Value of
a share of Company Stock on the date of grant. In the case of any Incentive Stock Option granted
to a Ten Percent



 - 9 -









 







Stockholder, the option price per share shall not be less than 110% of the Fair Market Value
of a share of Company Stock on the date of grant.



     C. Term of Options: The Option agreements shall specify when an Option may be exercisable and
the terms and conditions applicable thereto. The term of an Option shall in no event be greater
than ten years (five years in the case of an Incentive Stock Option granted to a Ten Percent
Stockholder and ten years in the case of all other Incentive Stock Options).



     D. Incentive Stock Options: Each provision of the Plan and each Option agreement relating to
an Incentive Stock Option shall be construed so that each Incentive Stock Option shall be an
incentive stock option as defined in section 422 of the Code, and any provisions of the Option
agreement thereof that cannot be so construed shall be disregarded. In no event may a Participant
be granted an Incentive Stock Option which does not comply with such grant and vesting limitations
as may be prescribed by section 422(b) of the Code. Incentive Stock Options may not be granted to
Directors or employees of Affiliates.



     E. Restrictions on Transferability: No Incentive Stock Option shall be transferable otherwise
than by will or the laws of descent and distribution and, during the lifetime of the Participant,
shall be exercisable only by the Participant. Upon the death of a Participant, the person to whom
the rights have passed by will or by the laws of descent and distribution may exercise an Incentive
Stock Option only in accordance with this Section VIII.



     F. Payment of Option Price: The option price of the shares of Company Stock upon the exercise
of an Option shall be paid: (i) in full in cash at the time of the exercise or, (ii) with the
consent of the Committee, in whole or in part in Company Stock held by the Participant for at least
six months valued at Fair Market Value on the date of exercise. With the consent of the Committee,
payment upon the exercise of a Non-Qualified Option may be made in whole or in part by Restricted
Stock which has been held by the Participant for at least six months (based on the fair market
value of the Restricted Stock on the date the Option is exercised, as determined by the Committee).
In such case the Company Stock to which the Option relates shall be subject to the same forfeiture
restrictions originally imposed on the Restricted Stock exchanged therefor.



     G. Termination by Death: If a Participant’s employment by or service as a Director of the
Company, a Subsidiary or Affiliate terminates by reason of death, any Option granted to such
Participant may thereafter be exercised (to the extent such Option was exercisable at the time of
death or on such accelerated basis as the



 - 10 -









 







Committee may determine at or after grant) by, where appropriate, the
Participant’s transferee or by the Participant’s legal representative, for a period of 12
months from the date of death or until the expiration of the stated term of the Option, whichever
period is shorter.



     H. Termination by Reason of Disability: If a Participant’s employment by or service as a
Director of the Company, a Subsidiary or Affiliate terminates by reason of Disability, any
unexercised Option granted to the Participant may thereafter be exercised by the Participant (or,
where appropriate, the Participant’s transferee or legal representative), to the extent it was
exercisable at the time of termination, for a period of 24 months or such shorter term as
determined by the Committee (12 months in the case of an Incentive Stock Option) from the date of
such termination of employment or until the expiration of the stated term of the Option, whichever
period is shorter.



     I. Termination by Reason of Retirement: If a Participant’s employment by or service as a
Director of the Company, a Subsidiary or Affiliate terminates by reason of Retirement, any
unexercised Option granted to the Participant may thereafter be exercised by the Participant (or,
where appropriate, the Participant’s transferee or legal representative), to the extent it was
exercisable at the time of termination, for a period of 5 years or such shorter term as determined
by the Committee (12 months in the case of an Incentive Stock Option) from the date of such
termination of employment or service as a Director or until the expiration of the stated term of
the Option, whichever period is shorter. Notwithstanding the foregoing, if, and to the extent,
required by section 409A of the Code in the case of a Specified Employee, as defined in section
409A(a)(2)(B) of the Code, any unexercised Option shall not be exercised earlier than six months
after the date of retirement.



     J. Termination Not for Cause: If a Participant’s employment by or service as a Director of
the Company, a Subsidiary or Affiliate is terminated by the Company, the Subsidiary or Affiliate
not for Cause, any unexercised Option granted to the Participant may thereafter be exercised by the
Participant (or, where appropriate, the Participant’s transferee or legal representative), to the
extent it was exercisable at the time of termination, for a period of 60 days or such shorter term
as determined by the Committee from the date of such termination of employment or service as a
Director or until the expiration of the stated term of the Option, whichever period is shorter.
Notwithstanding the foregoing, and to the extent required by section 409A of the Code in the case
of a Specified Employee, as defined in section 409A(a)(2)(B) of the Code, any unexercised Option
shall not be exercised earlier than six months after the date of termination not for cause.



 - 11 -









 





     K. Termination for Cause or Other Reason: If a Participant’s employment by or service as a
Director of the Company, a Subsidiary or Affiliate is terminated
by the Company, the Subsidiary or Affiliate for Cause, or otherwise terminates for any reason
not specified in this Section VIII (including a voluntary termination), all unexercised Options
awarded to the Participant shall terminate on the date of such termination.



IX. Adjustments upon Changes in Capitalization




          In the event of a reorganization, recapitalization, stock split, spin-off, split-off,
split-up, stock dividend, issuance of stock rights, combination of shares, merger, consolidation or
any other change in the corporate structure of the Company affecting Company Stock, or any
distribution to stockholders other than a cash dividend, the Board shall make appropriate
adjustment in the number and kind of shares authorized by the Plan and any other adjustments to
outstanding Awards as it determines appropriate. No fractional shares of Company Stock shall be
issued pursuant to such an adjustment. The Fair Market Value of any fractional shares resulting
from adjustments pursuant to this Section shall, where appropriate, be paid in cash to the
Participant.




X. Effective Date, Termination and Amendment




          This Amendment and Restatement of the Plan shall become effective on the date the Amendment
and Restatement is approved by the Board, provided that Options granted under the Plan to Directors
shall expressly not be exercisable until this Amendment and Restatement shall have been approved by
the Company’s stockholders in accordance with the rules of the NASDAQ Stock Market and applicable
law. The Plan shall remain in full force and effect until the earlier of ten years from the
effective date, or the date it is terminated by the Board. The Board shall have the power to
amend, suspend or terminate the Plan at any time, provided that no such amendment shall be made
without stockholder approval which shall (i) increase (except as provided in Section IX) the total
number of shares available for issuance pursuant to the Plan; (ii) change the class of Employees or
Directors eligible to be Participants; (iii) modify the Individual Limit (except as provided
Section IX) or the categories of Performance Goals set forth in Section IV.D; or (iv) change the
provisions of this Section X. Termination of the Plan pursuant to this Section X shall not affect
Awards outstanding under the Plan at the time of termination.




XI. Transferability




 - 12 -









 








          Except as provided below, Awards may not be pledged, assigned or transferred for any reason
during the Participant’s lifetime, and any attempt to do so shall be void and the relevant Award
shall be forfeited. The Committee may grant Awards (except Incentive Stock Options) that are transferable by the Participant during
his lifetime, but such Awards shall be transferable only to the extent specifically provided in the
agreement entered into with the Participant. The transferee of the Participant shall, in all
cases, be subject to the provisions of the agreement between the Company and the Participant.




XII. General Provisions




     A. Nothing contained in the Plan, or any Award granted pursuant to the Plan, shall confer upon
any Employee or Director any right to continued employment by or service as a Director of the
Company, a Subsidiary or Affiliate, nor interfere in any way with the right of the Company, a
Subsidiary or Affiliate to terminate the employment or service as a Director of any Participant at
any time.



     B. For purposes of this Plan, transfer of employment or service as a Director between the
company and its Subsidiaries and Affiliates shall not be deemed termination of employment or
service as a Director.



     C. Participants shall be responsible to make appropriate provision for all taxes required to
be withheld in connection with any Award, the exercise thereof and the transfer of shares of
Company Stock pursuant to this Plan. Such responsibility shall extend to all applicable Federal,
state, local or foreign withholding taxes. In the case of the payment of Awards in the form of
Company Stock, or the exercise of Options, the Company shall, at the election of the Participant,
have the right to retain the number of shares of Company Stock whose Fair Market Value equals the
amount legally required to be withheld in satisfaction of the applicable withholding taxes.
Agreements evidencing such Awards shall contain appropriate provisions to effect withholding in
this manner.



     D. Without amending the Plan, Awards may be granted to Employees or Directors who are foreign
nationals or employed outside the United States or both, on such terms and conditions different
from those specified in the Plan as may, in the judgment of the committee, be necessary or
desirable to further the purpose of the Plan.



     E. To the extent that Federal laws (such as the 1934 Act, the Code or the Employee Retirement
Income Security Act of 1974) do not otherwise control, the Plan and all determinations made and
actions taken pursuant hereto shall be governed by the law of Delaware and construed accordingly.



 - 13 -









 





     F. The Committee may amend any outstanding Awards to the extent it deems appropriate;
provided, however, except as provided in Section IX, no Award
may be repriced, replaced, regranted through cancellation, or modified without stockholder
approval. The Committee may amend Awards without the consent of the Participant, except in the
case of amendments adverse to the Participant, in which case the Participant’s consent is required
to any such amendment.




 - 14 -