Document:

exhibit10-42.htm

     

    EXHIBIT 10.42

      

    
      	    		   	
              EMPLOYEE STOCK PURCHASE
      PLAN 
(Amended and Current as of April 8,
      2010) 

               

            

    

     

    ARTICLE I - General

     

    
      	1.1	      
      	The purpose of
      Photronics, Inc. Employee Stock Purchase Plan is to provide eligible
      employees of the Company and its designated subsidiaries (if any) with an
      opportunity to acquire a proprietary interest in the Company by the
      purchase of shares of the Common Stock of the Company directly from the
      Company through payroll deductions. It is felt that employee participation
      in the ownership of the Company will be to the mutual benefit of both the
      employees and the Company.
	 
	1.2	
            	The Plan is
      intended to qualify as an "employee stock purchase plan" within the
      meaning of Section 423 of the Internal Revenue Code of 1986, as amended
      (the "Code"). The provisions of the Plan shall, accordingly, be construed
      so as to extend and/or limit eligibility and participation in a manner
      consistent, and so as to otherwise comply, with the requirements of the
      Code.
	 
	1.3	
            	Eligibility and
      participation in the Plan shall give any Employee only such rights as are
      set forth in the Plan and any amendments hereto and shall in no way affect
      or in any manner limit the Company's right to discharge the Employee,
      which right is expressly reserved by the Company, or impair the authority
      of the Plan Committee to limit the Employee's rights, claims or causes, as
      provided in the Plan.

    

     

    ARTICLE II - Definitions

     

    
      	2.1	      
      	The following
      words and phrases, when used in the Plan, shall have the following
      respective meanings, unless the context clearly indicates
    otherwise:

    

     

    "Authorized Leave of
Absence" 

     

    Any leave of absence authorized under the
Company's standard personnel practices, provided that all persons under similar
circumstances must be treated equally in the granting of such Authorized Leave
of Absence and provided further that the person returns to the employ of the
Company upon the expiration of an Authorized Leave of Absence. 

     

    "Board of Directors" 

     

    The Board of Directors of Photronics, Inc.

     

    "Code" 

     

    The Internal Revenue Code of 1986, as amended
from time to time, and applicable Treasury Department regulations issued
thereunder. 

     

    1

     

    

    
    

    "Common Stock" 

     

    The Common Stock, par value $0.01 per share,
of the Company, or the securities adjusted or substituted therefor pursuant to
Article XIV. 

     

    "Company" 

     

    Photronics, Inc., a Connecticut corporation,
or its successor or successors or any present or future subsidiary of
Photronics, Inc., which may be designated to participate in the Plan by the
Board of Directors. 

     

    "Compensation" 

     

    The Compensation of an Eligible Employee shall
be determined in accordance with procedures approved by the Plan Committee or
the Board of Directors. In the absence of the adoption of specific procedures,
Compensation of an Eligible Employee shall be the annualized salary or wages of
such Employee based on such Employee's current rate of pay and work schedule,
but excluding any discretionary overtime, sick pay, vacation pay or other
benefits.

     

    "Disability" 

     

    Disability shall have the same meaning set
forth in Section 22(e)(3) of the Code or any successor provision thereto. At
present, a disability is defined as a physical or mental impairment or
incapacity which, in the opinion of a physician selected by the Plan Committee,
can be expected to result in death or has lasted or can be expected to last for
a continuous period of at least twelve (12) months and renders the Participant
unable to engage in any substantial, gainful activity. 

     

    "Effective Date of the
Plan" 

     

    The date on which the Plan shall have become
effective pursuant to Article XVII, provided, however, that if the Plan shall
not be approved by the stockholders of the Company as provided in Article XVII,
the Plan and all rights granted hereunder shall be, and be deemed to have been,
null and void. 

     

    "Eligible Employee" 

     

    An Employee who is eligible to participate in
the Plan in accordance with provisions of Articles IV and V. 

     

    "Employee" 

     

    Any person who, on an Offering Date, is a
common law employee of the Company and whose customary employment is for more
than twenty (20) hours per week and for more than five (5) months per calendar
year, other than any highly compensated employees (within the meaning of Section
414[q] of the Code or any successor provision thereto) of the Company who are
excluded from participation hereunder by action of the Board of Directors. A
person who is or has been on an Authorized Leave of Absence, and who in the
absence of such Authorized Leave of Absence would have been classified as an
Employee, shall in the discretion of the Plan Committee be considered to be an
Employee, except to the extent that such determination is inconsistent with
Section 423 of the Code. Such determination by the Plan Committee shall be final
and conclusive. 

     

    "Offering" 

     

    An Offering in accordance with the provisions
of Article V. 

     

    2

     

    

    
    

    "Offering Date" 

     

    The date of an Offering as established by the
Plan Committee pursuant to Section 5.1 hereof. 

     

    "Participant" 

     

    An Eligible Employee who subscribes for Shares
pursuant to Article VI. 

     

    "Plan" 

     

    The Photronics, Inc. Employee Stock Purchase
Plan set forth herein, as amended from time to time in accordance with the
provisions of Article XV. 

     

    "Plan Committee" 

     

    The committee provided for in Article XII to
administer the Plan. 

     

    "Purchase Date" 

     

    A Purchase Date as provided in Sections 8.1 or
10.3, as appropriate. 

     

    "Shares" 

     

    Shares of Common Stock offered under the Plan.

     

               
The masculine gender, whenever used in the Plan, shall be deemed to
include the feminine gender, and whenever the plural is used it shall include
the singular, if the context so requires. 

     

    ARTICLE III - Shares Subject to the Plan 

     

    
      	3.1	      	Subject to the
      provisions of Article XIV hereof, the aggregate number of shares of Common
      Stock which may be issued under the Plan shall not exceed 1,200,000. The
      aggregate number of such shares which may be issued with respect to any
      Offering shall be determined by the Plan Committee with respect to such
      Offering. Such shares may be authorized but unissued shares of Common
      Stock or issued shares of Common Stock which are held by the Company. Any
      shares subscribed for under the Plan and not purchased as a result of the
      cancellation in whole or in part of such subscription shall (unless the
      Plan shall have terminated) be again available for issuance under the
      Plan.

    

     

    ARTICLE IV - Eligibility

     

    
      	4.1	      	Each
      Employee who has been continuously employed by the Company for the one
      complete calendar month (or such longer period as may be determined by the
      Plan Committee) ending immediately prior to an Offering Date shall be
      eligible to participate in the Offering under the Plan made on such
      Offering Date.
	 
	4.2	
            	Notwithstanding the provisions of Section 4.1, no Employee shall be
      offered Shares if, immediately after he would subscribe for such Shares,
      such Employee would own capital stock (including shares of Common Stock
      which may be purchased under such subscription and under any other
      outstanding subscriptions under the Plan or options to purchase shares of
      Common Stock of the Company held by such Employee, as computed in
      accordance with Section 423[b][3] of the Code or any successor provision
      thereto) possessing 5% or more of the total combined voting power or value of all classes of stock of
      the Company. For purposes of determining the stock ownership of any
      Employee, the provisions of Section 424[d] of the Code shall apply.
      

    

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    ARTICLE V - Offering Under the Plan 

     

    
      	5.1	      	Offerings under the Plan shall be made on such Offering Dates as
      shall be determined by the Plan Committee. Notwithstanding anything to the
      contrary, no Offering shall be made on any date prior to the date that a
      required registration statement with respect to such Offering filed under
      the Securities Act of 1933, as amended, has become effective. Nothing
      contained herein shall be deemed to require that an Offering be made in
      any year.
	 
	5.2	
            	[a]	      	Subject to the limitations set forth in
      Sections 5.2[b] and 6.3, and to the other terms and conditions of the
      Plan, in each offering under the Plan, each Eligible Employee on an
      Offering Date shall be offered the right during the Subscription Period as
      provided in Section 6.2, to subscribe to purchase such number of Shares as
      the percentage designated by the Plan Committee for such offering (not to
      exceed 5%) of his Compensation would buy, at a price equal to the product
      of (i) the fair market value of a Share on the Offering Date, multiplied
      by (ii) the Purchase Price percentage utilized under Section 5.3
      hereof.
	
            	
            	
            	
            	 
	 	
            	[b]	
            	Notwithstanding
      anything to the contrary contained in Sub-Section [a] of this Section 5.2,
      no Eligible Employee shall be eligible to subscribe for Shares in an
      Offering if, immediately after he would subscribe for such Shares, such
      subscription would permit his rights to purchase shares of Common Stock
      under all employee stock purchase plans of the Company to accrue at a rate
      which exceeds $25,000 (or such other maximum amounts as may be prescribed
      from time to time under the Code) of the fair market value of such shares
      (determined as of the Offering Date for such Offering) for each calendar
      year in which such subscription would be outstanding at any time. For
      purposes of this limitation the provisions of Section 423[b][8] of the
      Code shall be applicable.
	 
	5.3	
            	The
      Purchase Price per share subscribed for all Shares in a particular
      Offering shall be an amount equal to such percentages, not greater than
      100% nor less than 85%, as shall be determined by the Plan Committee on or
      prior to the Offering Date, of the fair market value of a share of Common
      Stock (determined in accordance with the provisions of Article XIII) on
      one of the following dates with respect to such Offering, with such date
      to be determined by the Plan Committee on or prior to the Offering Date:
      (i) the Offering Date, (ii) the Purchase Date, or (iii) the Offering Date
      or the Purchase Date (whichever would result in a lower Purchase Price for
      the Common Stock).
	 
	5.4	
            	In
      order to participate in any Offering, an Eligible Employee entitled to
      subscribe for Shares in such Offering shall comply with the subscription
      procedures set forth in Article VI.

    

     

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    ARTICLE VI - Subscriptions for Shares 

     

    
      	6.1	      	As soon as
      practicable after an Offering Date, the Company shall furnish to each
      Eligible Employee a Subscription Agreement setting forth the maximum
      number of Shares to which such Eligible Employee may subscribe in such
      Offering, the fair market value per share of Common Stock on the Offering
      Date, the Purchase Price for Shares in such Offering and such other terms
      and conditions consistent with the Plan as shall be determined by the Plan
      Committee.
	 
	6.2	
            	Within fifteen
      (15) days after receipt of such Subscription Agreement, an Eligible
      Employee desiring to participate in the Offering shall notify the Plan
      Committee of the number of Shares for which he desires to subscribe. Such
      notification shall be effected by the Eligible Employee's completing,
      executing and returning to the Secretary of the Company the Subscription
      Agreement. All such subscriptions shall be deemed to have been made as of
      the Offering Date. No subscription shall be accepted from any person who
      is not an Eligible Employee on the date his subscription is received by
      the Company.
	 
	6.3	
            	The minimum
      number of Shares for which an Eligible Employee will be permitted to
      subscribe in any Offering is ten (10) (or the number of Shares offered to
      him if fewer than ten). If at any time the Shares available for an
      Offering are oversubscribed, the Number of Shares for which each Eligible
      Employee is entitled to subscribe pursuant to Section 5.2 shall be
      reduced, pro rata, to such lower number as may be necessary to eliminate
      such over-subscription.
	 
	6.4	
            	If an Eligible
      Employee fails to subscribe to the Shares within the period and in the
      manner prescribed in Section 6.2, he shall waive all rights to purchase
      Shares in that Offering.

    

     

    ARTICLE VII - Payment for Shares 

     

    
      	7.1	      	The aggregate Purchase Price for the Shares for which a Participant
      subscribes in any Offering in accordance with the provisions of Article VI
      of the Plan shall be paid by means of payroll deductions.
	 
	7.2	
            	[a]	
            	The aggregate Purchase Price for
      Shares shall be paid by payroll deductions in equal amounts over a period
      of 24 months (or such shorter period as shall be determined by the Plan
      Committee in accordance with the Plan) from the Offering Date. The period
      over which such payroll deductions are to be made in hereinafter referred
      to as the "Payment Period".
	
            	
            	
            	
            	 
	 	
            	[b]	      	Such
      payroll deductions with respect to an Offering shall commence as soon as
      practicable after the receipt of the Company of the executed Subscription
      Agreement authorizing such payroll deductions, and shall cease upon the
      earlier of the termination of the Payment Period or payment in full of the
      Purchase Price for such Shares. A Participant may cancel his subscription
      to the extent provided for in Article X, but no other change in terms of
      his Subscription Agreement may be made during the Payment Period and, in
      particular, in no event may a Participant change the amount of his payroll
      deductions under such Subscription Agreement. All payroll deductions
      withheld from a Participant under a Subscription Agreement shall be
      credited to his account under the Plan. In the event that payroll
      deductions are simultaneously being made with respect to more than one
      Subscription Agreement, the aggregate amount of such payroll deductions at
      any payday shall be credited first toward the payment for Shares
      subscribed for in the earliest Offering. A Participant may not make any
      separate cash payment into his account, provided, however, that a
      Participant who has been deemed to be in the employ of the Company while
      on an Authorized Leave of Absence without pay during the Payment Period,
      may upon his return to the actual employ of the Company, make a cash
      payment into his account in an amount not exceeding the aggregate of the
      payroll deductions which would have been made during such Authorized Leave
      of Absence.

    

     

    5

     

    

    
    

    
      	 	
            	[c]	      	All funds
      representing payroll deductions for the accounts of Participants will,
      except as provided in Section 7.3, be paid into the general funds of the
      Company. No interest will be paid or accrued under any circumstances on
      any funds withheld by the Company as payroll deductions pursuant to this
      Section 7.2 or on any other funds paid to the Company for purchases of
      Shares under the Plan.
	 
	7.3	      	Notwithstanding anything in this Article VII to the contrary, with
      respect to any Offering which is made prior to the approval of the Plan by
      the stockholders of the Company, all payroll deductions withheld for the
      accounts of Participants shall, until the Plan is approved by the
      stockholders, be held by the Company in a special escrow account for the
      benefit of such Participants. No interest will be paid or accrued under
      any circumstances on such funds. No Shares will be issued to such
      Participants until after approval of the Plan by the stockholders. In the
      event that the Plan is not approved by the stockholders within the period
      specified in Article XVII, all such funds will thereupon be promptly
      refunded to the respective Participants.
	 
	7.4	
            	Failure
      to pay for subscribed Shares as provided in this Article VII shall
      constitute the cancellation of such subscription to the extent that any
      such Shares shall not have been so paid
for.

    

     

    ARTICLE VIII - Issuance of Shares 

     

    
      	8.1	      	At the end of the
      Payment Period for an Offering, (each of which dates is referred to as a
      "Purchase Date"), the balance of all amounts then held in the account of a
      Participant representing payroll deductions pursuant to a Subscription
      Agreement shall be applied to the purchase by the Participant from the
      Company of the number of Shares equal to the amount of such balance
      divided by the Purchase Price per share for such Shares applicable on such
      Purchase Date up to the number of Shares provided for in the respective
      Subscription Agreement. Any amount remaining in the Participant's account
      in excess of the sum required to purchase whole Shares on a Purchase Date
      shall be promptly refunded to the Participant. As soon as practicable
      after a Purchase Date, the Company will issue and deliver to the
      Participant a certificate representing the Shares purchased by him from
      the Company on such Purchase Date. No fractional shares will be issued at
      any time.
	 
	8.2	
            	A Participant who
      disposes (whether by sale, exchange, gift or otherwise) of any of the
      Shares acquired by him pursuant to the Plan within two (2) years after the
      Offering Date for such Shares or within one (1) year after the issuance of
      Shares to him shall notify the Company in writing of such disposition
      within thirty (30) days after such
disposition.

    

     

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    ARTICLE IX - Rights of Stockholders 

     

    
      	9.1	      	A Participant
      shall not have any rights to dividends or any other rights as a
      stockholder of the Company with respect to any Shares until such Shares
      shall have been issued to him as reflected by the books and records
      maintained by the Company's transfer agent relating to stockholders of the
      Company.

    

     

    ARTICLE X - Voluntary Withdrawal/Termination of Employment 

     

    
      	10.1	      	A Participant may
      discontinue his payroll deductions under a Subscription Agreement at any
      time by giving written notice thereof to the Plan Committee, effective for
      all payroll periods commencing five (5) days after receipt of such notice
      by the Plan Committee. The balance in the account of such Participant
      following such discontinuance shall be promptly refunded to the
      Participant. Withdrawal from an Offering pursuant to this Section 10.1
      shall not affect an Eligible Employee's eligibility to participate in any
      other Offering under the Plan.
	 
	10.2	
            	If the
      Participant's employment with the Company is terminated for any reason
      other than death while still an Employee, such Participant's rights to
      purchase Shares under any Subscription Agreement shall immediately
      terminate. Any balance remaining in his account as of the date of such
      termination of employment shall be promptly refunded to the
      Participant.
	 
	10.3	
            	In the event of
      the death of an Employee who was a Participant prior to the purchase of
      the Shares for which he subscribed pursuant to Article VI hereof, the
      person or persons who acquired by laws of descent and distribution (his
      "Estate") his rights to purchase Shares under his Subscription
      Agreement(s), shall have the right within ninety (90) days after the death
      of the Participant (but in no event later than the termination of the
      Payment Period) to purchase from the Company that number of Shares
      subscribed for and not issued to the Participant prior to his death which
      the balance in the Participant's payroll deduction account is sufficient
      to purchase. The failure of the person or persons so acquiring his rights
      to so give notice of intention to purchase shall constitute a forfeiture
      of all further rights of the Participant or other persons to purchase such
      Shares and in such event, the balance in the Participant's payroll
      deduction account will be refunded, without interest. If the Participant
      dies more than fifty (50) days prior to the termination of the Payment
      Period and his Estate elects to purchase the Shares subscribed for, the
      Purchase Price for his Shares shall be the percentage, designated pursuant
      to Section 5.3, of the fair market value on the Offering Date,
      irrespective of the Purchase Price for other
  Participants.

    

     

    ARTICLE XI - Non-Transferability of Subscription Rights 

     

    
      	11.1	      	During the
      lifetime of a Participant, the Shares for which he subscribes may be
      purchased only by him. No Subscription Agreement of a Participant and no
      right under or interest in the Plan or any such Subscription Agreement
      (hereinafter collectively referred to as "Subscription Rights") may be
      assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law
      or otherwise), except by the Participant's will or by the applicable laws
      of descent and distribution, or may be subject to execution, attachment or
      similar process. Any assignment, transfer, pledge, hypothecation or other
      disposition of Subscription Rights, or any levy of execution, attachment
      or other process attempted upon Subscription Rights, shall be null and
      void and without effect, and in any such event all Subscription Rights
      shall, in the sole discretion of the Plan Committee (exercised by written
      notice to the Participant or to the person then entitled to purchase the
      Shares under the provisions of Sections 10.3 hereof), terminate as of the
      occurrence of any such event. 

    

     

    7

     

    

    
    

    ARTICLE XII - Administration of the Plan 

     

    
      	12.1	      	The Plan shall be
      administered by a Plan Committee which shall consist of two (2) or more
      members of the Board of Directors, none of whom shall be eligible to
      participate in the Plan. The members of the Plan Committee shall be
      appointed, and may be removed, by the Board of Directors. The Board of
      Directors shall have the power to remove and substitute for members of the
      Plan Committee and to fill any vacancy which may occur in the Plan
      Committee.
	 
	12.2	
            	Unless otherwise
      determined by the Board of Directors, the members of the Plan Committee
      shall serve without additional compensation for their services. All
      expenses in connection with the administration of the Plan, including, but
      not limited to, clerical, legal and accounting fees, and other costs of
      administration, shall be paid by the Company.
	 
	12.3	
            	The Chairman of
      the Plan Committee shall be designated by the Board of Directors. The Plan
      Committee shall select a Secretary who need not be a member of the Plan
      Committee. The Secretary, or in his absence, any member of the Plan
      Committee designated by the Chairman, shall keep the minutes of the
      proceedings of the Plan Committee and all data, records and documents
      relating to the administration of the Plan by the Plan
  Committee.
	 
	12.4	
            	A quorum of the
      Plan Committee shall be such number as the Committee shall from time to
      time determine, but shall not be less than a majority of the entire Plan
      Committee. The acts of a majority of the members of the Plan Committee
      present at any meeting at which a quorum is present shall be the act of
      the Plan Committee. Members of the Plan Committee may participate in a
      meeting by means of telephone conference or similar communications
      procedure pursuant to which all persons participating in the meeting can
      hear each other. The Plan Committee may take action without a meeting if
      such action is evidenced by a writing signed by at least a majority of the
      entire Plan Committee.
	 
	12.5	
            	The Plan
      Committee may, by an instrument in writing, delegate to one or more of its
      members or to an officer or officers of the Company any of its powers and
      its authority under the Plan, including the execution and delivery on its
      behalf of instruments, instructions and other documents.
	 
	12.6	
            	It shall be the
      sole and exclusive duty and authority of the Plan Committee to interpret
      and construe the provisions of the Plan, to decide any disputes which may
      arise with regard to the status, eligibility and rights of Employees under
      the terms of the Plan, and any other persons claiming an interest under
      the terms of the Plan, and, in general, to direct the administration of
      the Plan.
	 
	12.7	
            	The Plan
      Committee may adopt, and from time to time amend, such rules and
      regulations consistent with the
      purposes and provisions of the Plan, as it deems necessary or advisable to
      administer and effectuate the Plan.

    

     

    8

     

    

    
    

    
      	12.8	      	The Plan
      Committee may shorten, lengthen (but not beyond thirty (30) days) or waive
      the time required by the Plan for the filing of any notice or other form
      under the Plan.
	 
	12.9	
            	The discretionary
      powers granted hereunder to the Plan Committee shall in no event be
      exercised in any manner that will discriminate against individual
      employees or a class of employees or discriminate in favor of employees
      who are shareholders, officers, supervisors or highly compensated
      employees of the Company.

    

     

    ARTICLE XIII - Valuation of Shares of Common Stock 

     

    
      	13.1	      	For
      purposes of the Plan, the "fair market value" of a share of Common Stock
      as of any date shall be determined as follows:
	 
	
            	
            	[a]	      	If the Common
      Stock is then listed on a national securities exchange, the "fair market
      value" shall be the closing price of a share of Common Stock on such
      exchange on such date, or, if there has been no sale of shares of Common
      Stock on that date, the closing price of a share of Common Stock on such
      exchange on the last preceding business day on which shares of Common
      Stock were traded.
	 
	
            	
            	[b]	
            	If the Common
      Stock is then listed on the National Association of Securities Dealers
      Automatic Quotation System National Market System, the "fair market value"
      shall be the average of the high and low sales prices of a share of Common
      Stock on that date, or if there has been no sale of shares of Common Stock
      on that date, the average of the high and low sales prices of Common Stock
      on the last preceding business day on which shares of Common Stock were
      traded. 

    

     

    ARTICLE XIV - Adjustments in Certain Events 

     

    
      	14.1	      	If (i) the
      Company shall at any time be involved in a transaction to which
      sub-section [a] of Section 424 of the Code is applicable, (ii) the Company
      shall declare a dividend payable in, or shall sub-divide or combine, its
      Common Stock, or (iii) any other event shall occur which in the judgment
      of the Board of Directors necessitates action by way of adjusting the
      terms of the outstanding Subscription Agreements, the Board of Directors
      shall take any such action as in its judgment shall be appropriate to
      preserve Participant rights substantially proportionate to the rights
      existing prior to such event. To the extent that such action shall include
      an increase or decrease in the number of shares of Common Stock subject to
      outstanding Subscription Agreements, the aggregate number of shares
      available under Article III hereof for issuance under the Plan pursuant to
      outstanding Subscription Agreements and Subscription Agreements which may
      be entered into, and the aggregate number of shares available for issuance
      in any Offering and the number which may be subscribed for, shall be
      proportionately increased or decreased, as the case may be. No action
      shall be taken by the Board of Directors under the provisions of this
      Article XIV which, in its judgment, would constitute a modification,
      extension or renewal of the Subscription Agreement (within the meaning of
      Section 424[h] of the Code), or would prevent the Plan from qualifying as
      an "employee stock purchase plan" (within the meaning of Section 423 of the Code). The
      determination of the Board of Directors with respect to any matter
      referred to in this Article XIV shall be conclusive and binding upon each
      Participant. 

    

     

    9

     

    

    
    

    ARTICLE XV - Termination and Amendment of the Plan 

     

    
      	15.1	      	The Board of
      Directors may, without further approval by the stockholders of the
      Company, at any time terminate or amend the Plan without notice, or make
      such modifications of the Plan as it shall deem advisable; provided that
      the Board of Directors may not, without prior approval by the holders of a
      majority of the outstanding shares of Common Stock of the Company, amend
      or modify the Plan so as to (i) increase the maximum number of shares of
      Common Stock which may be issued under the Plan (except as contemplated in
      Article XIV hereof), (ii) extend the term during which Offerings may be
      made under the Plan or (iii) increase the maximum number of Shares which
      an Eligible Employee is entitled to purchase (except as contemplated in
      Article XIV hereof); and provided further that the Board of Directors may
      not amend or modify the Plan in any manner which would prevent the Plan
      from qualifying as an "employee stock purchase plan" (within the meaning
      of Section 423 of the Code). No termination, amendment or modification of
      the Plan may, without the consent of a Participant, adversely affect the
      rights of such Participant under an outstanding Subscription
      Agreement.

    

     

    ARTICLE XVI - Miscellaneous 

     

    
      	16.1	      	Unless otherwise
      expressly provided in the Plan, all notices or other communications by a
      Participant to the Company under or in connection with the Plan shall be
      deemed to have been duly given when received by the Secretary of the
      Company or when received in the form specified by the Company at the
      location and by the persons, designated by the Company for the receipt
      thereof.
	 
	16.2	
            	Notwithstanding
      anything hereunder to the contrary, the offer, sale and delivery by the
      Company of Shares under the Plan to any Eligible Employee is subject to
      compliance with all applicable securities regulation and other federal and
      state laws. The terms of this Plan shall be construed under the laws of
      the State of Connecticut.

    

     

    ARTICLE XVII - Effective Date 

     

    
      	17.1	      	The Plan shall
      become effective at such time as the Plan has been adopted by the Board of
      Directors or such later date as shall be designated by the Board of
      Directors upon its adoption of the Plan; provided, however, that the Plan
      and all Subscription Agreements entered into thereunder shall be, and be
      deemed to have been, null and void if the Plan is not approved by the
      holders of a majority of the outstanding shares of Common Stock of the
      Company within twelve (12) months after the date on which the Plan is
      adopted by the Board of
    Directors.

    

     

    10exhibit10-43.htm

     

    EXHIBIT
10.43

    Photronics, Inc.
2007 Long Term Equity Incentive Plan
(as Amended on April 8, 2010) 

     

    1. Purposes of the Plan 

     

         The purposes of the Plan are to (a) promote
the long-term success of the Company and its Subsidiaries and to increase
stockholder value by providing Eligible Individuals with incentives to
contribute to the long-term growth and profitability of the Company by offering
them an opportunity to obtain a proprietary interest in the Company through the
grant of equity-based awards and (b) assist the Company in attracting, retaining
and motivating highly qualified individuals who are in a position to make
significant contributions to the Company and its Subsidiaries. 

     

         Upon the Effective Date, no further
Awards will be granted under the Prior Plans. 

     

    2. Definitions and Rules of Construction

     

         (a) Definitions. For purposes of the Plan, the following
capitalized words shall have the meanings set forth below: 

     

         “Award” means
an Option, Restricted Stock, Restricted Stock Unit, Stock Appreciation Right,
Performance Stock, Performance Unit or Other Award granted by the Committee
pursuant to the terms of the Plan.

     

         “Award Document” means an agreement, certificate or other type or form of document or
documentation approved by the Committee that sets forth the terms and conditions
of an Award. An Award Document may be in written, electronic or other media, may
be limited to a notation on the books and records of the Company and, unless the
Committee requires otherwise, need not be signed by a representative of the
Company or a Participant.

     

         “Beneficial Owner” and “Beneficially Owned” have the meaning set forth in Rule 13d-3 under the Exchange
Act.

     

         “Board” means
the Board of Directors of the Company, as constituted from time to
time.

     

         “Change of Control” means: 

     

         (i) Any Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing thirty-five percent (35%) or more of the
combined voting power of the Company’s then outstanding securities;
or 

     

         (ii) The following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
Effective Date, constitute the Board and any new director (other than a director
whose initial assumption of office is in connection with an actual or threatened
election contest, including, but not limited to, a consent solicitation,
relating to the election of directors of the Company) whose appointment or
election by the Board or nomination for election by the Company’s stockholders
was approved or recommended by a vote of at least a majority of the directors
then still in office who either were directors on the Effective Date or whose
appointment, election or
nomination for election was previously so approved or recommended; or

     

    

    
    

         (iii) There is consummated a merger or consolidation of the Company or
any Subsidiary with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in combination with
the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, more than
fifty percent (50%) of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing thirty-five percent (35%) or more of the
combined voting power of the Company’s then outstanding securities;
or

     

         (iv) The stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, more than fifty percent
(50%) of the combined voting power of the voting securities of which are owned
by stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such sale. 

     

         Notwithstanding the foregoing, with respect to
an Award that is subject to Section 409A of the Code and the payment or
settlement of the Award will accelerate upon a Change of Control, no event set
forth herein will constitute a Change of Control for purposes of the Plan or any
Award Document unless such event also constitutes a “change in ownership,”
“change in effective control,” or “change in the ownership of a substantial
portion of the Company’s assets” as defined under Section 409A of the
Code. 

     

         “Code” means
the Internal Revenue Code of 1986, as amended, and the applicable rulings and
regulations promulgated thereunder.

     

         “Committee”
means the Compensation Committee of the Board, any successor committee thereto
or any other committee appointed from time to time by the Board to administer
the Plan, which committee shall meet the requirements of Section 162(m) of the
Code, Section 16(b) of the Exchange Act and the applicable rules of the NASDAQ;
provided, however, that, if
any Committee member is found not to have met the qualification requirements of
Section 162(m) of the Code and Section 16(b) of the Exchange Act, any actions
taken or Awards granted by the Committee shall not be invalidated by such
failure to so qualify.

     

         “Common Stock” means the common stock of the Company, par value $0.01 per share, or
such other class of share or other securities as may be applicable under Section
13 of the Plan.

     

         “Company”
means Photronics, Inc., a Connecticut corporation, or any successor to all or
substantially all of the Company's business that adopts the Plan.

     

         “EBITDA”
means earnings before interest, taxes, depreciation and amortization.

     

    2 

     

    

    
    

         “Effective Date” means the date on which the Plan is adopted by the Board and approved
by the Shareholders of the Company.

     

         “Eligible Individuals” means the individuals described in Section 4(a) of the Plan who are
eligible for Awards under the Plan.

     

         “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

     

         “Fair Market Value” means, with respect to a share of Common Stock, the fair market value
on the date of valuation of such Award as determined by the Compensation
Committee; provided, however, that with respect to an incentive stock option
issued to a 10% or more shareholder, Fair Market Value shall mean 110% of the
fair market value or such other percentage as may be permitted by the Code and
regulations promulgated thereunder.

     

         “Incentive Stock Option” means an Option that is intended to comply
with the requirements of Section 422 of the Code or any successor provision
thereto.

     

         “NASDAQ”
means the NASDAQ Stock Market, Inc. 

     

         “Non-Employee Director” means any member of the Board who is not an
officer or employee of the Company or any Subsidiary. 

     

         “Nonqualified Stock Option” means an Option that is not intended to
comply with the requirements of Section 422 of the Code or any successor
provision thereto. 

     

         “Option”
means an Incentive Stock Option or Nonqualified Stock Option granted pursuant to
Section 7 of the Plan. 

     

         “Other Award”
means any form of Award other than an Option, Restricted Stock, Restricted Stock
Unit or Stock Appreciation Right granted pursuant to Section 11 of the
Plan. 

     

         “Participant”
means an Eligible Individual who has been granted an Award under the
Plan. 

     

         “Performance Period” means the period established by the Committee and set forth in the
applicable Award Document over which Performance Targets are
measured. 

     

         “Performance Stock” means a Target Number of Shares granted pursuant to Section 10(a) of
the Plan. 

     

         “Performance Target” means the performance measures established by the Committee, from among
the performance criteria provided in Section 6(g), and set forth in the
applicable Award Document. 

     

         “Performance Unit” means a right to receive a Target Number of Shares or cash in the
future granted pursuant to Section 10(b) of the Plan. 

     

         “Permitted Transferees” means (i) a Participant’s family member,
(ii) one or more trusts established in whole or in part for the benefit of one
or more of such family members, (iii) one or more entities which are beneficially owned in
whole or in part by one or more such family members, or (iv) a charitable or
not-for-profit organization. 

     

    3 

     

    

    
    

         “Person”
means any person, entity or "group" within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, except that such term shall not include
(i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, or (v) a person or group as used in Rule
13d-1(b) under the Exchange Act. 

     

         “Plan” means
this 2007 Long Term Equity Incentive Plan, as amended or restated from time to
time. 

     

         “Plan Limit”
means the maximum aggregate number of Shares that may be issued for all purposes
under the Plan as set forth in Section 5(a)
of the Plan. 

     

         “Prior Plan”
means the 1996 Stock Option Plan, the 1998 Stock Option Plan, and the 2000 Stock
Plan, as amended from time to time. 

     

         “Restricted Stock” means one or more Shares granted or sold pursuant to Section
8(a) of the Plan. 

     

         “Restricted Stock Unit” means a
right to receive one or more Shares (or cash, if applicable) in the future
granted pursuant to Section 8(b)
of the Plan. 

     

         “Shares”
means shares of Common Stock, as may be adjusted pursuant to Section
13(b). 

     

         “Stock Appreciation Right” means a right to receive all or some portion
of the appreciation on Shares granted pursuant to Section 9 of
the Plan. 

     

         “Subsidiary”
means (i) a corporation or other entity with respect to which the Company,
directly or indirectly, has the power, whether through the ownership of voting
securities, by contract or otherwise, to elect at least a majority of the
members of such corporation’s board of directors or analogous governing body, or
(ii) any other corporation or other entity in which the Company, directly or
indirectly, has an equity or similar interest and which the Committee designates
as a Subsidiary for purposes of the Plan. For purposes of determining
eligibility for the grant of Incentive Stock Options under the Plan, the term
“Subsidiary” shall be defined in the manner required by Section 424(f) of the
Code. 

     

         “Substitute Award” means any Award granted upon assumption of, or in substitution or
exchange for, outstanding employee equity awards previously granted by a company
or other entity acquired by the Company or with which the Company combines
pursuant to the terms of an equity compensation plan that was approved by the
stockholders of such company or other entity. 

     

         “Target Number” means the target number of Shares or cash value established by the
Committee and set forth in the applicable Award Document. 

     

         (b) Rules of Construction. The masculine pronoun shall be deemed to
include the feminine pronoun, and the singular form of a word shall be deemed to
include the plural form, unless the context requires otherwise. Unless the text indicates otherwise,
references to sections are to sections of the Plan. 

     

    4 

     

    

    
    

    3. Administration 

     

         (a) Committee. The Plan shall be administered by the
Committee, which shall have full power and authority, subject to the express
provisions hereof, to:

     

         (i) select the Participants from the Eligible
Individuals;

     

         (ii) grant Awards in accordance with the Plan; 

     

         (iii) determine the number of Shares subject to each
Award or the cash amount payable in connection with an Award; 

     

         (iv) determine the terms and conditions of each
Award, including, without limitation, those related to term, permissible methods
of exercise, vesting, cancellation, payment, settlement, exercisability,
Performance Periods, Performance Targets, and the effect, if any, of a
Participant’s termination of employment with the Company or any of its Subsidiaries or, subject to Section 6(d), a Change
of Control of the Company; 

     

         (v) subject to Sections 16 and 17(e) of the Plan, amend the terms and
conditions of an Award after the granting thereof; 

     

         (vi) specify and approve the provisions of the
Award Documents delivered to Participants in connection with their
Awards; 

     

         (vii) construe and interpret any Award Document delivered under the
Plan;

     

         (viii) make factual determinations in connection with
the administration or interpretation of the Plan; 

     

         (ix) adopt, prescribe, amend, waive and rescind
administrative regulations, rules and procedures relating to the
Plan; 

     

         (x) employ such legal counsel, independent
auditors and consultants as it deems desirable for the administration of the
Plan and to rely upon any advice, opinion or computation received
therefrom; 

     

         (xi) vary the terms of Awards to take account of
tax and securities law and other regulatory requirements or to procure favorable
tax treatment for Participants;

     

         (xii) correct any defects, supply any omission or
reconcile any inconsistency in any Award Document or the Plan;
and 

     

         (xiii) make all other determinations and take any
other action desirable or necessary to interpret, construe or implement properly
the provisions of the Plan or any Award Document. 

     

         (b) Plan Construction and
Interpretation. The
Committee shall have full power and authority, subject to the express provisions
hereof, to construe and interpret the Plan. 

     

    5 

     

    

    
    

         (c) Determinations of Committee Final and
Binding. All
determinations by the Committee in carrying out and administering the Plan and
in construing and interpreting the Plan shall be made in the Committee’s sole
discretion and shall be final, binding and conclusive for all purposes and upon
all persons interested herein. 

     

         (d) Delegation of Authority. To the extent not prohibited by applicable
laws, rules and regulations, the Committee may, from time to time, delegate some
or all of its authority under the Plan to a subcommittee or subcommittees
thereof or other persons or groups of persons as it deems necessary, appropriate
or advisable under such conditions or limitations as it may set at the time of
such delegation or thereafter; provided,
however, that the Committee may not delegate its
authority (i) to make Awards to employees (A) who are subject on the date of the
Award to the reporting rules under Section 16(a) of the Exchange Act, (B) whose
compensation for such fiscal year may be subject to the limit on deductible
compensation pursuant to Section 162(m) of the Code or (C) who are officers of
the Company who are delegated authority by the Committee hereunder, or (ii)
pursuant to Section 16 of the Plan. For purposes of the Plan, reference to the
Committee shall be deemed to refer to any subcommittee, subcommittees, or other
persons or groups of persons to whom the Committee delegates authority pursuant
to this Section 3(d). 

     

         (e) Liability of Committee. Subject to applicable laws, rules and
regulations: (i) no member of the Board or Committee (or its delegates) shall be
liable for any good faith action or determination made in connection with the
operation, administration or interpretation of the Plan and (ii) the members of
the Board or the Committee (and its delegates) shall be entitled to
indemnification and reimbursement in the manner provided in the Company’s
Certificate of Incorporation as it may be amended from time to time. In the
performance of its responsibilities with respect to the Plan, the Committee
shall be entitled to rely upon information and/or advice furnished by the
Company’s officers or employees, the Company’s accountants, the Company’s
counsel and any other party the Committee deems necessary, and no member of the
Committee shall be liable for any action taken or not taken in reliance upon any
such information and/or advice. 

     

         (f) Action by the Board. Anything in the Plan to the contrary
notwithstanding, subject to applicable laws, rules and regulations, any
authority or responsibility that, under the terms of the Plan, may be exercised
by the Committee may alternatively be exercised by the Board.

     

    4. Eligibility 

     

         (a) Eligible Individuals. Awards may be granted to officers,
employees, directors, Non-Employee Directors, consultants, advisors and
independent contractors of the Company or any of its Subsidiaries or joint
ventures, partnerships or business organizations in which the Company or its
Subsidiaries have an equity interest; provided,
however, that only employees of the Company or
Subsidiary may be granted Incentive Stock Options. The Committee shall have the
authority to select the persons to whom Awards may be granted and to determine
the type, number and terms of Awards to be granted to each such Participant.
Under the Plan, references to “employment” or “employed” include the engagement
of Participants who are consultants, advisors and independent contractors of the
Company or its Subsidiaries and the service of Participants who are Non-Employee
Directors, except for purposes of determining eligibility to be granted
Incentive Stock Options. 

     

         (b) Grants to Participants. The Committee shall have no obligation to
grant any Eligible Individual an Award or to designate an Eligible Individual as
a Participant solely by reason of such Eligible Individual having received a
prior Award or having been previously designated as a Participant. The Committee
may grant more than one Award to a Participant and may designate an Eligible
Individual as a Participant for overlapping periods of time. 

     

    6 

     

    

    
    

    5. Shares Subject to the Plan

     

         (a) Plan Limit. Subject to adjustment in accordance with
Section 13 of the Plan, the maximum aggregate number of Shares that may be
issued for all purposes under the Plan shall be six million (6,000,000) plus any
Shares that are available for issuance under the Prior Plans or that become
available for issuance upon cancellation or expiration of awards granted under
the Prior Plans without having been exercised or settled. Shares to be issued
under the Plan may be authorized and unissued shares, issued shares that have
been reacquired by the Company (in the open-market or in private transactions)
and that are being held in treasury, or a combination thereof. All of the Shares
subject to the Plan Limit may be issued pursuant to Incentive Stock
Options.

     

         (b) Rules Applicable to Determining Shares
Available for Issuance.
The number of Shares remaining available for issuance will be reduced by the
number of Shares subject to outstanding Awards and, for Awards that are not
denominated by Shares, by the number of Shares actually delivered upon
settlement or payment of the Award. For purposes of determining the number of
Shares that remain available for issuance under the Plan, (i) the number of
Shares that are tendered by a Participant or withheld by the Company to pay the
exercise price of an Award or to satisfy the Participant’s tax withholding
obligations in connection with the exercise or settlement of an Award and (ii)
all of the Shares covered by a stock-settled Stock Appreciation Right to the
extent exercised, will not be added back to the Plan Limit. In addition, for
purposes of determining the number of Shares that remain available for issuance
under the Plan, the number of Shares corresponding to Awards under the Plan that
are forfeited or cancelled or otherwise expire for any reason without having
been exercised or settled or that is settled through issuance of consideration
other than Shares (including, without limitation, cash) shall be added back to
the Plan Limit and again be available for the grant of Awards; provided,
however, that this provision shall not be applicable
with respect to (i) the cancellation of a Stock Appreciation Right granted in
tandem with an Option upon the exercise of the Option or (ii) the cancellation
of an Option granted in tandem with a Stock Appreciation Right upon the exercise
of the Stock Appreciation. 

     

         (c) Special Limits. Anything to the contrary in Section 5(a)
above notwithstanding, but subject to adjustment under Section 13 of the Plan,
the following special limits shall apply to Shares available for Awards under
the Plan: 

     

         (i) the maximum number of Shares that may be
issued pursuant to awards of Restricted Stock, Restricted Stock Units,
Performance Stock, Performance Units and Other Awards that are payable in Shares
granted under the Plan shall equal fifteen percent of the Shares in the
aggregate;

     

         (ii) the maximum amount of Awards (other than those
Awards set forth in Section 5(c)) that may be awarded to any Eligible Individual
in any calendar year is fifteen percent of the Shares measured as of the date of
grant (with respect to Awards denominated in Shares). 

     

         (d) Any Shares underlying Substitute Awards
shall not be counted against the number of Shares remaining for issuance and
shall not be subject to Section 5(c).

     

    6. Awards in General 

     

         (a) Types of Awards. Awards under the Plan may consist of
Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Stock, Performance Units and Other Awards. Any Award described in
Sections 7 through 11 of the Plan may be granted singly or in combination or
tandem with any other Award, as the Committee may determine. Awards under the
Plan may be made in combination
with, in replacement of, or as alternatives to awards or rights under any other
compensation or benefit plan of the Company, including the plan of any acquired
entity. 

     

    7 

     

    

    
    

         (b) Terms Set Forth in Award
Document. The terms and
conditions of each Award shall be set forth in an Award Document in a form
approved by the Committee for such Award, which Award Document shall contain
terms and conditions not inconsistent with the Plan. Notwithstanding the
foregoing, and subject to applicable laws, the Committee may accelerate (i) the
vesting or payment of any Award, (ii) the lapse of restrictions on any Award or
(iii) the date on which any Award first becomes exercisable. The terms of Awards
may vary among Participants, and the Plan does not impose upon the Committee any
requirement to make Awards subject to uniform terms. Accordingly, the terms of
individual Award Documents may vary.

     

         (c) Termination of Employment. The Committee shall specify at or after the
time of grant of an Award the provisions governing the disposition of an Award
in the event of a Participant’s termination of employment with the Company or
any of its Subsidiaries. Subject to applicable laws, rules and regulations, in
connection with a Participant’s termination of employment, the Committee shall
have the discretion to accelerate the vesting, exercisability or settlement of,
eliminate the restrictions and conditions applicable to, or extend the
post-termination exercise period of an outstanding Award. Such provisions may be
specified in the applicable Award Document or determined at a subsequent time.

     

         (d) Change of Control. (i) The Committee shall have full authority
to determine the effect, if any, of a Change of Control of the Company or any
Subsidiary on the vesting, exercisability, settlement,
payment or lapse of restrictions applicable to an Award, which effect may be
specified in the applicable Award Document or determined at a subsequent time.
Subject to applicable laws, rules and regulations, the Board or the Committee
shall, at any time prior to, coincident with or after the effective time of a
Change of Control, take such actions as it may consider appropriate, including,
without limitation: (A) providing for the acceleration of any vesting conditions
relating to the exercise or settlement of an Award or that an Award shall
terminate or expire unless exercised or settled in full on or before a date
fixed by the Committee; (B) making such adjustments to the Awards then
outstanding as the Committee deems appropriate to reflect such Change of
Control; (C) causing the Awards then outstanding to be assumed, or new rights
substituted therefor, by the surviving corporation in such Change of Control; or
(D) permit or require Participants to surrender outstanding Options and Stock
Appreciation Rights in exchange for a cash payment, if any, equal to the
difference between the highest price paid for a Share in the Change of Control
transaction and the Exercise Price of the Award. In addition, except as
otherwise specified in an Award Document (or a Participant’s written employment
agreement with the Company or any Subsidiary): 

     

         (1) any and all Options and Stock Appreciation
Rights outstanding as of the effective date of the Change of Control shall
become immediately exercisable, and shall remain exercisable until the earlier
of the expiration of their initial term or the second (2nd) anniversary of the Participant's termination
of employment with the Company;

     

         (2) any restrictions imposed on Restricted Stock
and Restricted Stock Units outstanding as of the effective date of the Change of
Control shall lapse; 

     

         (3) the Performance Targets with respect to all
Performance Units, Performance Stock and other performance-based Awards granted
pursuant to Sections 6(g) or 10 outstanding as of the effective date of the
Change of Control shall be deemed to have been attained at the specified target
level of performance; and

     

    8 

     

    

    
    

         (4) the vesting of all Awards denominated in
Shares outstanding as of the effective date of the Change in Control shall be
accelerated. 

     

         (ii) Subject to applicable laws, rules and regulations, the Committee may
provide, in an Award Document or subsequent to the grant of an Award for the
accelerated vesting, exercisability and/or the deemed attainment of a
Performance Target with respect to an Award upon specified events similar to a
Change of Control.

     

         (iii) Notwithstanding any other provision of the Plan or any Award Document,
the provisions of this Section 6(d) may not be terminated, amended, or modified
upon or after a Change of Control in a manner that would adversely affect a
Participant’s rights with respect to an outstanding Award without the prior
written consent of the Participant. Subject to Section 16, the Board, upon
recommendation of the Committee, may terminate, amend or modify this Section
6(d) at any time and from time to time prior to a Change of
Control.

     

         (e) Dividends and Dividend
Equivalents. The Committee
may provide Participants with the right to receive dividends or payments
equivalent to dividends or interest with respect to an outstanding Award, which
payments can either be paid currently or deemed to have been reinvested in
Shares, and can be made in Shares, cash or a combination thereof, as the
Committee shall determine; provided,
however, that the terms of any reinvestment of
dividends must comply with all applicable laws, rules and regulations,
including, without limitation, Section 409A of the Code. Notwithstanding the
foregoing, no dividends or dividend equivalents shall be paid with respect to
Options or Stock Appreciation Rights. 

     

         (f) Rights of a Stockholder. A Participant shall have no rights as a
stockholder with respect to Shares covered by an Award (including voting rights)
until the date the Participant or his nominee becomes the holder of record of
such Shares. No adjustment shall be made for dividends or other rights for which
the record date is prior to such date, except as provided in Section 13.

     

         (g) Performance-Based Awards. (i) The Committee may determine whether any
Award under the Plan is intended to be “performance-based compensation” as that
term is used in Section 162(m) of the Code. Any such Awards designated to be
“performance-based compensation” shall be conditioned on the achievement of one
or more Performance Targets to the extent required by Section 162(m) of the Code
and will be subject to all other conditions and requirements of Section 162(m).
The Performance Targets will be comprised of specified levels of one or more of
the following performance criteria as the Committee deems appropriate: net
income; cash flow or cash flow on investment; pre-tax or post-tax profit levels
or earnings; operating earnings; return on investment; earned value added
expense reduction levels; free cash flow; free cash flow per share; earnings per
share; net earnings per share; return on assets; return on net assets; return on
equity; return on capital; return on sales; growth in managed assets; operating
margin; total stockholder return or stock price appreciation; EBITDA; adjusted
EBITDA; revenue; revenue before deferral, in each case determined in accordance
with generally accepted accounting principles (subject to modifications approved
by the Committee) consistently applied on a business unit, divisional,
subsidiary or consolidated basis or any combination thereof. The Performance
Targets may be described in terms of objectives that are related to the
individual Participant or objectives that are Company-wide or related to a
Subsidiary, division, department, region, function or business unit and may be
measured on an absolute or cumulative basis or on the basis of percentage of
improvement over time, and may be measured in terms of Company performance (or
performance of the applicable Subsidiary, division, department, region, function
or business unit) or measured relative to selected peer companies or a market
index. In addition, for Awards not intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Committee may establish
Performance Targets based on other criteria as it deems appropriate.

     

    9 

     

    

    
    

         (ii) The Participants will be designated, and
the applicable Performance Targets will be established, by the Committee within
ninety (90) days following the commencement of the applicable Performance Period
(or such earlier or later date permitted or required by Section 162(m) of the
Code). Each Participant will be assigned a Target Number payable if Performance
Targets are achieved. Any payment of an Award granted with Performance Targets
shall be conditioned on the written certification of the Committee in each case
that the Performance Targets and any other material conditions were satisfied.
The Committee may determine, at the time of Award grant, that if performance
exceeds the specified Performance Targets, the Award may be settled with payment
greater than the Target Number, but in no event may such payment exceed the
limits set forth in Section 5(c). The Committee retains the right to reduce any
Award notwithstanding the attainment of the Performance Targets.

     

         (h) Deferrals. In accordance with the procedures authorized
by, and subject to the approval of, the Committee, Participants may be given the
opportunity to defer the payment or settlement of an Award to one or more dates
selected by the Participant; provided,
however, that the terms of any deferrals must comply
with all applicable laws, rules and regulations, including, without limitation,
Section 409A of the Code. No deferral opportunity shall exist with respect to an
Award unless explicitly permitted by the Committee on or after the time of
grant. 

     

         (i) Repricing of Options and Stock Appreciation
Rights. Notwithstanding
anything in the Plan to the contrary, an Option or Stock Appreciation Right
shall not be granted in substitution for a previously granted Option or Stock
Appreciation Right being canceled or surrendered as a condition of receiving a
new Award, if the new Award would have a lower exercise price than the Award it
replaces, nor shall the exercise price of an Option or Stock Appreciation Right
be reduced once the Option or Stock Appreciation Right is granted. The foregoing
shall not (i) prevent adjustments pursuant to Section 13 or (ii) apply to grants
of Substitute Awards. 

     

    7. Terms and Conditions of Options

     

         (a) General. The Committee, in its discretion, may grant
Options to Eligible Individuals and shall determine whether such Options shall
be Incentive Stock Options or Nonqualified Stock Options. Each Option shall be
evidenced by an Award Document that shall expressly identify the Option as an
Incentive Stock Option or Nonqualified Stock Option, and be in such form and
contain such provisions as the Committee shall from time to time deem
appropriate. 

     

         (b) Exercise Price. The exercise price of an Option shall be
fixed by the Committee at the time of grant or shall be determined by a method
specified by the Committee at the time of grant. In no event shall the exercise
price of an Option be less than one hundred percent (100%) of the Fair Market
Value of a Share on the date of grant; provided,
however that the exercise price of a Substitute Award
granted as an Option shall be determined in accordance with Section 409A of the
Code and may be less than one hundred percent (100%) of the Fair Market Value.

     

         (c) Term. An Option shall be effective for such term
as shall be determined by the Committee and as set forth in the Award Document
relating to such Option, and the Committee may extend the term of an Option
after the time of grant; provided,
however, that the term of an Option may in no event
extend beyond the tenth (10th) anniversary
of the date of grant of such Option. 

     

    10 

     

    

    
    

         (d) Exercise; Payment of Exercise
Price. Options shall be
exercised by delivery of a notice of exercise in a form approved by the Company.
Subject to the provisions of the applicable Award Document, the exercise price
of an Option may be paid (i) in cash or cash equivalents, (ii) by actual
delivery or attestation to ownership of freely transferable Shares already owned
by the person exercising the Option, (iii) by a combination of cash and Shares
equal in value to the exercise price, (iv) through net share settlement or similar procedure
involving the withholding of Shares subject to the Option with a value equal to
the exercise price or (v) by such other means as the Committee may authorize. In
accordance with the rules and procedures authorized by the Committee for this
purpose, the Option may also be exercised through a “cashless exercise”
procedure authorized by the Committee from time to time that permits
Participants to exercise Options by delivering irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds
necessary to pay the exercise price and the amount of any required tax or other
withholding obligations or such other procedures determined by the Company from
time to time. 

     

         (e) Incentive Stock Options. The exercise price per Share of an Incentive
Stock Option shall be fixed by the Committee at the time of grant or shall be
determined by a method specified by the Committee at the time of grant, but in
no event shall the exercise price of an Incentive Stock Option be less than one
hundred percent (100%) of the Fair Market Value of a Share on the date of grant.
No Incentive Stock Option may be issued pursuant to the Plan to any individual
who, at the time the Incentive Stock Option is granted, owns stock possessing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries, unless (i) the exercise price
determined as of the date of grant is at least one hundred ten percent (110%) of
the Fair Market Value on the date of grant of the Shares subject to such
Incentive Stock Option and (ii) the Incentive Stock Option is not exercisable
more than five (5) years from the date of grant thereof. No Participant shall be
granted any Incentive Stock Option which would result in such Participant
receiving a grant of Incentive Stock Options that would have an aggregate Fair
Market Value in excess of one hundred thousand dollars ($100,000), determined as
of the time of grant, that would be exercisable for the first time by such
Participant during any calendar year. No Incentive Stock Option may be granted
under the Plan after the tenth anniversary of the Effective Date. The terms of
any Incentive Stock Option granted under the Plan shall comply in all respects
with the provisions of Section 422 of the Code, or any successor provision
thereto, as amended from time to time. 

     

    8. Terms and Conditions of Restricted Stock and
Restricted Stock Units 

     

         (a) Restricted Stock. The Committee, in its discretion, may grant
or sell Restricted Stock to Eligible Individuals. An Award of Restricted Stock
shall consist of one or more Shares granted or sold to an Eligible Individual,
and shall be subject to the terms, conditions and restrictions set forth in the
Plan and established by the Committee in connection with the Award and specified
in the applicable Award Document. Restricted Stock may, among other things, be
subject to restrictions on transferability, vesting requirements or other
specified circumstances under which it may be canceled. 

     

         (b) Restricted Stock Units. The Committee, in its discretion, may grant
Restricted Stock Units to Eligible Individuals. A Restricted Stock Unit shall
entitle a Participant to receive, subject to the terms, conditions and
restrictions set forth in the Plan and the applicable Award Document, one or
more Shares. Restricted Stock Units may, among other things, be subject to
restrictions on transferability, vesting requirements or other specified
circumstances under which they may be canceled. If and when the cancellation
provisions lapse, the Restricted Stock Units shall become Shares owned by the
applicable Participant or, at the sole discretion of the Committee, cash, or a
combination of cash and Shares, with a value equal to the Fair Market Value of
the Shares at the time of payment. 

     

    11 

     

    

    
    

    9. Stock Appreciation Rights 

     

         (a) General. The Committee, in its discretion, may grant
Stock Appreciation Rights to Eligible Individuals. A Stock Appreciation Right
shall entitle a Participant to receive, upon satisfaction of the conditions to
payment specified in the applicable Award Document, an amount equal to the
excess, if any, of the Fair Market Value on the exercise date of the number of
Shares for which the Stock Appreciation Right is exercised over the grant price for such Stock
Appreciation Right specified in the applicable Award Document. The grant price
per share of Shares covered by a Stock Appreciation Right shall be fixed by the
Committee at the time of grant or, alternatively, shall be determined by a
method specified by the Committee at the time of grant, but in no event shall
the grant price of a Stock Appreciation Right be less than one hundred percent
(100%) of the Fair Market Value of a Share on the date of grant; provided,
however, that the grant price of a Substitute Award
granted as a Stock Appreciation Rights shall be in accordance with Section 409A
of the Code and may be less than one hundred percent (100%) of the Fair Market
Value. Payments to a Participant upon exercise of a Stock Appreciation Right may
be made in cash or Shares, having an aggregate Fair Market Value as of the date
of exercise equal to the excess, if any, of the Fair Market Value on the
exercise date of the number of Shares for which the Stock Appreciation Right is
exercised over the grant price for such Stock Appreciation Right. The term of a
Stock Appreciation Right settled in Shares shall not exceed seven (7) years.

     

         (b) Stock Appreciation Rights in Tandem with
Options. A Stock
Appreciation Right granted in tandem with an Option may be granted either at the
same time as such Option or subsequent thereto. If granted in tandem with an
Option, a Stock Appreciation Right shall cover the same number of Shares as
covered by the Option (or such lesser number of shares as the Committee may
determine) and shall be exercisable only at such time or times and to the extent
the related Option shall be exercisable, and shall have the same term as the
related Option. The grant price of a Stock Appreciation Right granted in tandem
with an Option shall equal the per-share exercise price of the Option to which
it relates. Upon exercise of a Stock Appreciation Right granted in tandem with
an Option, the related Option shall be canceled automatically to the extent of
the number of Shares covered by such exercise; conversely, if the related Option
is exercised as to some or all of the shares covered by the tandem grant, the
tandem Stock Appreciation Right shall be canceled automatically to the extent of
the number of Shares covered by the Option exercise. 

     

    10. Terms and Conditions of Performance Stock and
Performance Units 

     

         (a) Performance Stock. The Committee may grant Performance Stock to
Eligible Individuals. An Award of Performance Stock shall consist of a Target
Number of Shares granted to an Eligible Individual based on the achievement of
Performance Targets over the applicable Performance Period, and shall be subject
to the terms, conditions and restrictions set forth in the Plan and established
by the Committee in connection with the Award and specified in the applicable
Award Document.

     

         (b) Performance Units. The Committee, in its discretion, may grant
Performance Units to Eligible Individuals. A Performance Unit shall entitle a
Participant to receive, subject to the terms, conditions and restrictions set
forth in the Plan and established by the Committee in connection with the Award
and specified in the applicable Award Document, a Target Number of Shares or
cash based upon the achievement of Performance Targets over the applicable
Performance Period. At the sole discretion of the Committee, Performance Units
shall be settled through the delivery of Shares or cash, or a combination of
cash and Shares, with a value equal to the Fair Market Value of the underlying
Shares as of the last day of the applicable Performance Period. 

     

    11. Other Awards 

     

         The Committee shall have the authority to
specify the terms and provisions of other forms of equity-based or
equity-related Awards not described above that the Committee determines to be
consistent with the purpose of the Plan and the interests of the Company, which
Awards may provide for cash payments based in whole or in part on the value or
future value of Shares, for the acquisition or future acquisition of Shares, or
any combination thereof. 

     

    12 

     

    

    
    

    12. Certain Restrictions 

     

         (a) Transfers. No Award shall be
transferable other than pursuant to a beneficiary designation under Section
12(c), by last will and testament or by the laws of descent and distribution or,
except in the case of an Incentive Stock Option, pursuant to a domestic
relations order, as the case may be; provided, however, that the Committee may, subject to
applicable laws, rules and regulations and such terms and conditions as it shall
specify, permit the transfer of an Award, other than an Incentive Stock Option,
for no consideration to a Permitted Transferee. Any Award transferred to a
Permitted Transferee shall be further transferable only by last will and
testament or the laws of descent and distribution or, for no consideration, to
another Permitted Transferee of the Participant. 

     

         (b) Award Exercisable Only by
Participant. During the
lifetime of a Participant, an Award shall be exercisable only by the Participant
or by a Permitted Transferee to whom such Award has been transferred in
accordance with Section 12(a) above. The grant of an Award shall impose no
obligation on a Participant to exercise or settle the Award. 

     

         (c) Beneficiary Designation. The beneficiary or beneficiaries of the
Participant to whom any benefit under the Plan is to be paid in case of his
death before he receives any or all of such benefit shall be determined under
the Company's Group Life Insurance Plan. A Participant may, from time to time,
name any beneficiary or beneficiaries to receive any benefit in case of his
death before he receives any or all of such benefit. Each such designation shall
revoke all prior designations by the same Participant, including the beneficiary
designated under the Company's Group Life Insurance Plan, and will be effective
only when filed by the Participant in writing (in such form or manner as may be
prescribed by the Committee) with the Company during the Participant's lifetime.
In the absence of a valid designation under the Company's Group Life Insurance
Plan or otherwise, if no validly designated beneficiary survives the Participant
or if each surviving validly designated beneficiary is legally impaired or
prohibited from receiving the benefits under an Award, the Participant's
beneficiary shall be the Participant's estate. 

     

    13. Recapitalization or Reorganization

     

         (a) Authority of the Company and
Stockholders. The
existence of the Plan, the Award Documents and the Awards granted hereunder
shall not affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or business, any merger or consolidation of the Company, any issue of
stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Shares or the rights thereof or which are convertible into or
exchangeable for Shares, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

     

         (b) Change in Capitalization. Notwithstanding any provision of the Plan or
any Award Document, the number and kind of Shares authorized for issuance under
Section 5 of the Plan, including the maximum number of Shares available under
the special limits provided for in Section 5(c), may be equitably adjusted in
the sole discretion of the Committee in the event of a stock split, reverse
stock spit, stock dividend, recapitalization, reorganization, partial or
complete liquidation, reclassification, merger, consolidation, separation,
extraordinary cash dividend, split-up, spin-off, combination, exchange of
Shares, warrants or rights offering to purchase Shares at a price substantially
below Fair Market Value, or any other corporate event or distribution of stock
or property of the Company affecting the Shares in order to preserve, but not
increase, the benefits or potential benefits intended to be made available under
the Plan. In addition, upon the occurrence of any of the foregoing events, the
number and kind of Shares subject
to any outstanding Award and the exercise price per Share (or the grant price
per Share, as the case may be), if any, under any outstanding Award may be
equitably adjusted (including by payment of cash to a Participant) in the sole
discretion of the Committee in order to preserve the benefits or potential
benefits intended to be made available to Participants. Such adjustments shall
be made by the Committee. Unless otherwise determined by the Committee, such
adjusted Awards shall be subject to the same restrictions and vesting or
settlement schedule to which the underlying Award is subject.

     

    13 

     

    

    
    

    14. Term of the Plan 

     

         Unless earlier terminated pursuant to Section
16, the Plan shall terminate on the tenth (10th) anniversary
of the Effective Date, except with respect to Awards then outstanding. No Awards
may be granted under the Plan after the tenth (10th) anniversary
of the Effective Date. 

     

    15. Effective Date 

     

         The Plan shall become effective on the
Effective Date, subject to approval by the stockholders of the Company.

     

    16. Amendment and Termination 

     

         Subject to applicable laws, rules and
regulations, the Board may at any time terminate or, from time to time, amend,
modify or suspend the Plan; provided,
however, that no termination, amendment, modification
or suspension (i) will be effective without the approval of the stockholders of
the Company if such approval is required under applicable laws, rules and
regulations, including the rules of NASDAQ and (ii) shall materially and
adversely alter or impair the rights of a Participant in any Award previously
made under the Plan without the consent of the holder thereof. Notwithstanding
the foregoing, the Board shall have broad authority to amend the Plan or any
Award under the Plan without the consent of a Participant to the extent it deems
necessary or desirable (a) to comply with, take into account changes in, or
interpretations of, applicable tax laws, securities laws, employment laws,
accounting rules and other applicable laws, rules and regulations, (b) to take
into account unusual or nonrecurring events or market conditions (including,
without limitation, the events described in Section 13(b)), or (c) to take into
account significant acquisitions or dispositions of assets or other property by
the Company. 

     

    17. Miscellaneous 

     

         (a) Tax Withholding. The Company or a Subsidiary, as appropriate,
may require any individual entitled to receive a payment of an Award to remit to
the Company, prior to payment, an amount sufficient to satisfy any applicable
tax withholding requirements. In the case of an Award payable in Shares, the
Company or a Subsidiary, as appropriate, may permit or require a Participant to
satisfy, in whole or in part, such obligation to remit taxes by directing the
Company to withhold shares that would otherwise be received by such individual
or to repurchase shares that were issued to the Participant to satisfy the
minimum statutory withholding rates for any applicable tax withholding purposes,
in accordance with all applicable laws and pursuant to such rules as the
Committee may establish from time to time. The Company or a Subsidiary, as
appropriate, shall also have the right to deduct from all cash payments made to
a Participant (whether or not such payment is made in connection with an Award)
any applicable taxes required to be withheld with respect to such payments.

     

    14 

     

    

    
    

         (b) No Right to Awards or
Employment. No person
shall have any claim or right to receive Awards under the Plan. Neither the
Plan, the grant of Awards under the Plan nor any action taken or omitted to be
taken under the Plan shall be deemed to create or confer on any Eligible
Individual any right to be
retained in the employ of the Company or any Subsidiary or other affiliate
thereof, or to interfere with or to limit in any way the right of the Company or
any Subsidiary or other affiliate thereof to terminate the employment of such
Eligible Individual at any time. No Award shall constitute salary, recurrent
compensation or contractual compensation for the year of grant, any later year
or any other period of time. Payments received by a Participant under any Award
made pursuant to the Plan shall not be included in, nor have any effect on, the
determination of employment-related rights or benefits under any other employee
benefit plan or similar arrangement provided by the Company and the
Subsidiaries, unless otherwise specifically provided for under the terms of such
plan or arrangement or by the Committee. 

     

         (c) Securities Law Restrictions. An Award may not be exercised or settled,
and no Shares may be issued in connection with an Award, unless the issuance of
such shares (i) has been registered under the Securities Act of 1933, as
amended, (ii) has qualified under applicable state “blue sky” laws (or the
Company has determined that an exemption from registration and from
qualification under such state “blue sky” laws is available) and (iii) complies
with all applicable foreign securities laws. The Committee may require each
Participant purchasing or acquiring Shares pursuant to an Award under the Plan
to represent to and agree with the Company in writing that such Eligible
Individual is acquiring the Shares for investment purposes and not with a view
to the distribution thereof. All certificates for Shares delivered under the
Plan shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any exchange upon which
the Shares are then listed, and any applicable securities law, and the Committee
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions. 

     

         (d) Section 162(m) of the Code. The Plan is intended to comply in all
respects with Section 162(m) of the Code; provided,
however, that in the event the Committee determines
that compliance with Section 162(m) of the Code is not desired with respect to a
particular Award, compliance with Section 162(m) of the Code will not be
required. In addition, if any provision of this Plan would cause Awards that are
intended to constitute “qualified performance-based compensation” under Section
162(m) of the Code, to fail to so qualify, that provision shall be severed from,
and shall be deemed not to be a part of, the Plan, but the other provisions
hereof shall remain in full force and effect. 

     

         (e) Section 409A of the Code. Notwithstanding any contrary provision in
the Plan or an Award Document, if any provision of the Plan or an Award Document
contravenes any regulations or guidance promulgated under Section 409A of the
Code or would cause an Award to be subject to additional taxes, accelerated
taxation, interest and/or penalties under Section 409A of the Code, such
provision of the Plan or Award Document may be modified by the Committee without
consent of the Participant in any manner the Committee deems reasonable or
necessary. In making such modifications the Committee shall attempt, but shall
not be obligated, to maintain, to the maximum extent practicable, the original
intent of the applicable provision without contravening the provisions of
Section 409A of the Code. Moreover, any discretionary authority that the
Committee may have pursuant to the Plan shall not be applicable to an Award that
is subject to Section 409A of the Code to the extent such discretionary
authority would contravene Section 409A of the Code or the guidance promulgated
thereunder. 

     

         (f) Awards to Individuals Subject to Laws of a
Jurisdiction Outside of the United States. To the extent that Awards under the Plan are
awarded to Eligible Individuals who are domiciled or resident outside of the
United States or to persons who are domiciled or resident in the United States
but who are subject to the tax laws of a jurisdiction outside of the United
States, the Committee may adjust the terms of the Awards granted hereunder to
such person (i) to comply with the laws, rules and regulations of such
jurisdiction and (ii) to permit the grant of the Award not to be a taxable event
to the Participant. The authority granted under the previous sentence shall
include the discretion for the Committee to adopt, on behalf of the Company, one or more sub-plans
applicable to separate classes of Eligible Individuals who are subject to the
laws of jurisdictions outside of the United States. 

     

    15 

     

    

    
    

         (g) Satisfaction of Obligations. Subject to applicable law, the Company may
apply any cash, Shares, securities or other consideration received upon exercise
or settlement of an Award to any obligations a Participant owes to the Company
and the Subsidiaries in connection with the Plan or otherwise, including,
without limitation, any tax obligations or obligations under a currency facility
established in connection with the Plan. 

     

         (h) No Limitation on Corporate
Actions. Nothing contained
in the Plan shall be construed to prevent the Company or any Subsidiary from
taking any corporate action, whether or not such action would have an adverse
effect on any Awards made under the Plan. No Participant, beneficiary or other
person shall have any claim against the Company or any Subsidiary as a result of
any such action. 

     

         (i) Unfunded Plan. The Plan is
intended to constitute an unfunded plan for incentive compensation. Prior to the
issuance of Shares, cash or other form of payment in connection with an Award,
nothing contained herein shall give any Participant any rights that are greater
than those of a general unsecured creditor of the Company. The Committee may,
but is not obligated, to authorize the creation of trusts or other arrangements
to meet the obligations created under the Plan to deliver Shares with respect to
awards hereunder. 

     

         (j) Successors. All obligations of the Company under the
Plan with respect to Awards granted hereunder shall be binding on any successor
to the Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company. 

     

         (k) Application of Funds. The proceeds received by the Company from
the sale of Shares pursuant to Awards will be used for general corporate
purposes. 

     

         (l) Award Document. In the event of any conflict or
inconsistency between the Plan and any Award Document, the Plan shall govern and
the Award Document shall be interpreted to minimize or eliminate any such
conflict or inconsistency. 

     

         (m) Headings. The headings of Sections herein are included
solely for convenience of reference and shall not affect the meaning of any of
the provisions of the Plan. 

     

         (n) Severability. If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full force and effect
without regard to such unenforceable provision and shall be applied as though
the unenforceable provision were not contained in the Plan.

     

         (o) Expenses. The costs and expenses of administering the
Plan shall be borne by the Company. 

     

    16 

     

    

    
    

         (p) Arbitration. Any dispute, controversy or claim arising
out of or relating to the Plan that cannot be resolved by the Participant on the
one hand, and the Company on the other, shall be submitted to arbitration in the
State of Connecticut under the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association; provided,
however, that any such submission by the Participant
must be made within one (1) year of the date of the events giving rise to such
dispute, controversy or claim. The determination of the arbitrator shall be
conclusive and binding on the Company and the Participant, and judgment may be
entered on the arbitrator’s award in any court having jurisdiction. The expenses of such
arbitration shall be borne by the Company; provided,
however, that each party shall bear its own legal
expenses unless the Participant is the prevailing party, in which case the
Company shall promptly pay or reimburse the Participant for the reasonable legal
fees and expenses incurred by the Participant in connection with such contest or
dispute (excluding any fees payable pursuant to a contingency fee arrangement).

     

         (q) Governing Law. Except as to matters of federal law, the
Plan and all actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of Connecticut. 

     

    17

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