Document:

Exhibit 10.2

 

APPENDIX B

 

CORN PRODUCTS INTERNATIONAL, INC.

STOCK INCENTIVE PLAN

(as amended March 17 and March 26, 2010)

 

I.  INTRODUCTION

 

1.1  Purpose.  The purpose of the Corn Products
International, Inc. Stock Incentive Plan (the “Plan”) is to promote
the long-term financial success of Corn Products International, Inc. (the “Company”)
by (i) attracting and retaining executive personnel of outstanding
ability; (ii) strengthening the Company’s capability to develop, maintain
and direct a competent management team; (iii) motivating executive
personnel by means of performance-related incentives to achieve longer-range
performance goals; (iv) providing incentive compensation opportunities
which are competitive with those of other major corporations; (v) enabling
such executive personnel to participate in the long-term growth and financial
success of the Company through increased stock ownership and (vi) serving
as a mechanism to compensate outside directors.

 

1.2  Certain Definitions.  In addition to the defined terms set forth
elsewhere in this Plan, the terms set forth below, shall, when capitalized,
have the following respective meanings.

 

“Agreement” shall mean the written
agreement evidencing an award hereunder between the Company and the recipient
of such award.

 

“Award” shall mean a Bonus Stock Award,
Performance Share Award, Restricted Stock Award or a Restricted Stock Unit
Award.

 

“Board” shall mean the Board of
Directors of the Company.

 

“Bonus Stock” shall mean shares of
Common Stock that are not subject to a Restriction Period or Performance
Measures.

 

“Bonus Stock Award” shall mean an award
of Bonus Stock under this Plan.

 

“Cause” shall mean the willful and
continued failure to substantially perform the duties assigned by the Company
(other than a failure resulting from the Participant’s Disability), the willful
engaging in conduct which is demonstrably injurious to the Company or any
Subsidiary, monetarily or otherwise, including conduct that, in the reasonable
judgment of the Committee, no longer conforms to the standard of the Company’s
executives, any act of dishonesty, commission of a felony, or a significant
violation of any statutory or common law duty of loyalty to the Company.

 

“Change in Control” shall have the
meaning set forth in Section 5.8(b).

 

“Code” shall mean the Internal Revenue
Code of 1986, as amended.

 

“Committee” shall mean the Compensation
Committee of the Board or a subcommittee thereof, or any other committee
designated by the Board to administer this Plan, consisting of two or more
members of the Board, each of whom shall be (i) a “Non-Employee Director”
within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside
director” within the meaning of Section 162(m) of the Code, and (iii) an
“Independent Director” within the meaning of the rules of the New York
Stock Exchange.”

 

“Common Stock” shall mean the common
stock, $.01 par value, of the Company.

 

“Disability Date” shall mean the date
on which a Participant becomes a “Disabled Participant” under the Corn Products
International, Inc. Retirement Savings Plan for Salaried Employees (the “Corn
Products Savings Plan”) or a successor to such plan or any such similar plan
containing a disability provision applicable to the Participant. If a
Participant is not covered by the Corn Products Savings Plan or a similar plan
containing a disability provision, the determination of whether the Participant
has a “Disability Date” shall be made by the Committee by applying the
provisions of the 

 

B-1

 

Corn Products Savings Plan as if the
Participant were a participant of such plan or any similar plan that the
Committee determines to be appropriate.

 

“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.

 

“Fair Market Value” shall mean the
closing price of a share of Common Stock as reported in the New York Stock
Exchange Composite Transactions on the date as of which such value is being
determined or, if there shall be no reported transactions for such date, on the
next preceding date for which transactions were reported; provided, however,
that, in the case of the exercise of an Incentive Stock Option or Non-Statutory
Stock Option through a broker, Fair Market Value for the purpose of tax
withholding shall mean the sales price received for a share of Common Stock
and, provided further, that Fair Market Value may be determined by the
Committee by whatever other means or method as the Committee, in the good faith
exercise of its discretion, shall at such time deem appropriate.

 

“Free-Standing SAR” shall mean an SAR
which is not granted in tandem with, or by reference to, an option, which
entitles the holder thereof to receive, upon exercise, shares of Common Stock
(which may be Restricted Stock), cash or a combination thereof with an
aggregate value equal to the excess of the Fair Market Value of one share of
Common Stock on the date of exercise over the base price of such SAR,
multiplied by the number of such SARs which are exercised.

 

“Incentive Stock Option” shall mean an
option to purchase shares of Common Stock which meets the requirements of Section 422
of the Code, or any successor provision, and which is intended by the Committee
to constitute an Incentive Stock Option.

 

“Non-Statutory Stock Option” shall mean
an option to purchase shares of Common Stock that is not an Incentive Stock
Option.

 

“Participant” shall mean an individual
who has been granted an Incentive Stock Option, a Non-Statutory Stock Option,
an SAR, a Bonus Stock Award, a Performance Share Award, a Restricted Stock
Award or a Restricted Stock Unit Award.

 

“Performance Measures” shall mean the
criteria and objectives, established by the Committee, which shall be satisfied
or met (i) as a condition to the exercisability of all or a portion of an
option or SAR, (ii) as a condition to the grant of a Stock Award or (iii) during
the applicable Restriction Period or Performance Period as a condition to the
holder’s receipt of Common Stock subject to a Restricted Stock Award,
Restricted Stock Unit Award or a Performance Share Award and/or of payment with
respect to such award. The Committee may amend or adjust the Performance
Measures or other terms and conditions of an outstanding award in recognition
of unusual or nonrecurring events affecting the Company or its financial
statements or changes in law or accounting, but only, in the case of any Award
intended to constitute “qualified performance-based compensation” within the
meaning of Section 162(m) of the Code, to the extent such adjustment
would not cause any portion of the award, upon payment, or the option, upon
exercise, to be nondeductible pursuant to Section 162(m) of the Code.
Such criteria and objectives may include one or more of the following: net
sales; pretax income before allocation of corporate overhead and bonus; budget;
earnings per share; net income; return on stockholders’ equity; return on
assets; return on capital employed; attainment of strategic and operational
initiatives; appreciation in and/or maintenance of the price of the Common Stock
or any other publicly traded securities of the Company; market share; gross
profits; earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; economic value-added models; comparisons with
various stock market indices; increase in number of customers and/or reductions
in costs; total stockholder return (based on the change in the price of a share
of the Company’s Common Stock and dividends paid); operating income; and cash
flows (including, but not limited to, operating cash flow, free cash flow, cash
flow return on equity and cash flow return on investment) for the applicable
Performance Period. If the Committee desires that compensation payable pursuant
to any award subject to Performance Measures be “qualified performance-based
compensation” within the meaning of Section 162(m) of the Code, the
Performance Measures (i) shall be established by the Committee no later
than 90 days after the commencement of or, if earlier, the end of the
first 25% of, 

 

B-2

 

the Performance Period or Restriction Period,
as applicable (or such other time designated by the Internal Revenue Service)
and (ii) shall satisfy all other applicable requirements imposed under
Treasury Regulations promulgated under Section 162(m) of the Code,
including the requirement that such Performance Measures be stated in terms of
an objective formula or standard.

 

“Performance Period” shall mean any
period designated by the Committee during which the Performance Measures
applicable to a Performance Share Award shall be measured.

 

“Performance Share” shall mean a right,
contingent upon the attainment of specified Performance Measures within a
specified Performance Period, to receive one share of Common Stock, which may
be Restricted Stock, or in lieu of all or a portion thereof, at the Committee’s
discretion, the Fair Market Value of such Performance Share in cash.

 

“Performance Share Award” shall mean an
award of Performance Shares under this Plan.

 

“Permanent and Total Disability” shall
have the meaning set forth in Section 22(e)(3) of the Code or any
successor thereto.

 

“Restricted Stock” shall mean shares of
Common Stock that are subject to a Restriction Period.

 

“Restricted Stock Award” shall mean an
award of Restricted Stock under this Plan.

 

“Restricted Stock Unit” shall mean the
right to receive one share of Common Stock which shall be contingent upon the
expiration of a specified Restriction Period and subject to such additional
restrictions as may be contained in the Agreement relating thereto.

 

“Restricted Stock Unit Award” shall
mean an award of Restricted Stock Units under this Plan.

 

“Restriction Period” shall mean any
period designated by the Committee during which (i) the Common Stock
subject to a Restricted Stock Award may not be sold, transferred, assigned,
pledged, hypothecated or otherwise encumbered or disposed of, except as
provided in this Plan or the Agreement relating to such award or (ii) the
conditions to vesting applicable to an Award have been satisfied.

 

“SAR” shall mean a stock appreciation
right which may be a Free Standing SAR or a Tandem SAR.

 

“Stock Award” shall mean a Restricted
Stock Award, a Restricted Stock Unit Award, or a Bonus Stock Award.

 

“Tandem SAR” shall mean an SAR which is
granted in tandem with, or by reference to, an option (including a
Non-Statutory Stock Option granted on or prior to the date of grant of the
SAR), which entitles the holder thereof to receive, upon exercise of such SAR
and surrender for cancellation of all or a portion of such option, shares of
Common Stock (which may be Restricted Stock), cash or a combination thereof
with an aggregate value equal to the excess of the Fair Market Value of one
share of Common Stock on the date of exercise over the base price of such SAR,
multiplied by the number of shares of Common Stock subject to such option, or
portion thereof, which is surrendered.

 

1.3  Administration.  This Plan shall be administered by the
Committee. The Committee shall have the authority to determine eligibility for
awards hereunder and to determine the form, amount and timing of each award to
such persons and, if applicable, the number of shares of Common Stock, the
performance period, the restriction period and the number of shares subject to
such an award, the exercise price associated with the award, the time and
conditions of exercise or settlement of the award and all other terms and
conditions of the award, including, without limitation, the form of the
Agreement evidencing the award. The Committee may, in its sole discretion and
for any reason at any time, subject to the requirements imposed under Section 162(m) of
the Code and regulations promulgated thereunder in the case of an award
intended to be qualified performance-based compensation, take action such that (i) any
or all outstanding options and SARs shall become exercisable in part or in
full, (ii) the Performance Measures applicable to any outstanding
Restricted 

 

B-3

 

Stock Award (if any), to any
outstanding Restricted Stock Unit Award (if any) and to any outstanding
Performance Share Award shall be deemed to be satisfied at the maximum or any
other lower level.

 

The Committee shall, subject
to the terms of this Plan, interpret this Plan and the application thereof,
establish rules and regulations it deems necessary or desirable for the
administration of this Plan and may impose, incidental to the grant of an
award, conditions with respect to the award, such as limiting competitive employment
or other activities. All such interpretations, rules, regulations and
conditions shall be final, binding and conclusive.

 

The Committee shall keep
minutes of its meetings and of action taken by it without a meeting. A majority
of the Committee shall constitute a quorum. The acts of the Committee shall be
either (i) acts of a majority of the members of the Committee present at
any meeting at which a quorum is present or (ii) acts approved in writing
by all of the members of the Committee without a meeting.

 

Notwithstanding anything in
the Plan to the contrary, in accordance with Section 157(c) of the
Delaware General Corporation Law, the Committee may, by resolution, authorize
one or more executive officers of the Company to do one or both of the following:
(i) designate non-director and non-executive officer employees of the
Company or any of its Subsidiaries to be recipients of rights or options
entitling the holder thereof to purchase from the Company shares of its capital
stock of any class or other awards hereunder; and (ii) determine the
number of such rights, options, or awards to be received by such non-director
and non-executive officer employees; provided, however, that the resolution so
authorizing such executive officer or officers shall specify the total number
of rights, options, or awards such executive officer or officers may so award.
Any action taken pursuant to such authorization made in accordance with Section 157(c) of
the Delaware General Corporation Law shall be deemed to be action taken by the
Committee. The Committee may not authorize an executive officer to designate
himself or herself or any director or other executive officer of the Company to
be a recipient of any such rights, options, or awards.

 

Notwithstanding anything in the
Plan to the contrary, to the extent an award granted hereunder would be subject
to the requirements of Section 409A of the Code and the regulations
thereunder, then the Agreement for such award and the Plan shall be construed
and administered in a manner so that the award complies with Section 409A
of the Code and the regulations thereunder; provided, that no particular tax
result with respect to any income recognized by a Participant in connection
with an award under the Plan is guaranteed and each Participant shall be
responsible for any taxes imposed on the Participant in connection with awards
under the Plan.

 

1.4  Eligibility.  Participants in this Plan shall consist of
such directors, officers, and other employees of the Company and its
Subsidiaries from time to time, and any other entity designated by the Board or
the Committee (individually a “Subsidiary” and collectively the “Subsidiaries”)
as the Committee, in its sole discretion, directly or indirectly pursuant to
the fourth paragraph of Section 1.3, may select from time to time. For
purposes of this Plan, reference to employment by the Company shall also mean
employment by a Subsidiary.

 

1.5  Shares Available.  Subject to adjustment as provided in Section 5.7,
5,700,000 shares of Common Stock (the “Plan Maximum”) shall be available under
this Plan for awards that are granted after the Company’s 2010 Annual Meeting
of Stockholders (the “2010 Annual Meeting”). The Plan Maximum includes
shares of Common Stock that were available for new awards under the Plan as in
effect immediately prior to the 2010 Annual Meeting. Shares of Common
Stock subject to awards outstanding under the Plan immediately prior to the
2010 Annual Meeting shall also be available for issuance hereunder. The Plan
Maximum shall be reduced by the sum of the aggregate number of shares of Common
Stock (i) that are issued upon the grant of a Stock Award after the
2010 Annual Meeting or (ii) that become subject to options, SARs or
Performance Shares, in each case that are granted after the 2010 Annual
Meeting in the following ratios: 1 to 1 for each Incentive Stock Option,
Non-Statutory Stock Option or Free-Standing SAR, 2.5 to 1 for any other type of
award granted under the Plan after the Company’s 2005 Annual Meeting of
Stockholders and prior to the Company’s 2010 Annual Meeting of
Stockholders, and 2 to 1 for any other type of award granted under the Plan
after the Company’s 

 

B-4

 

2010 Annual Meeting of
Stockholders, it being understood that in the case of an SAR the reduction
shall be equal to the total number of SARs subject to the award, regardless of
the number of shares of Common Stock that may be issued upon settlement
thereof. Notwithstanding the immediately preceding sentence, the Plan Maximum
shall not be reduced by virtue of the grant of Performance Shares or SARs that
may only be settled in cash. To the extent that shares of Common Stock subject
to an option (other than in connection with the exercise of a Tandem SAR),
Stock Award or Performance Share Award are not issued or delivered by reason of
the expiration, termination, cancellation or forfeiture of such award: (i) such
shares of Common Stock shall again be available under this Plan and (ii) the
Plan Maximum shall be increased to the extent it was reduced when such award
was granted. If a Performance Share or SAR that can be settled in either cash
or Common Stock is settled in cash, in whole or in part, the Plan Maximum shall
be increased to the extent it was reduced with respect to the cash-settled
portion of the award when the award was granted. If an award is made in the
form of an option coupled with a Performance Share Award such that the
Participant can receive the designated number of shares either upon exercise of
the option or upon earning of the Performance Share, but not both, such coupled
award shall be treated as a single award of the designated number of shares for
purposes of this Section 1.5.

 

Notwithstanding anything in
this Section 1.5 to the contrary, shares of Common Stock subject to an
award under this Plan may not be made available for issuance under this Plan if
such shares are: (i) shares that were subject to a stock-settled SAR and
were not issued as a result of the net settlement or net exercise of such SAR, (ii) shares
used to pay the exercise price of an Incentive Stock Option or Non-Statutory
Stock Option, (iii) shares delivered to or withheld by the Company to pay
withholding taxes related to an award under this Plan, or (iv) shares
repurchased on the open market with the proceeds of an option exercise.

 

Shares of Common Stock shall
be made available from authorized and unissued shares of Common Stock, or
authorized and issued shares of Common Stock reacquired and held as treasury
shares or otherwise or a combination thereof.

 

To the extent required by Section 162(m) of
the Code and the rules and regulations thereunder, the maximum number of
shares of Common Stock with respect to which options, SARs, Stock Awards or
Performance Share Awards or a combination thereof may be granted during any
calendar year to any person shall be 500,000, subject to adjustment as provided
in Section 5.7.

 

Except with respect to a
maximum of five percent (5%) of the shares of Common Stock authorized in this Section 1.5,
any Stock Award which vests on the basis of a Participant’s continued
employment with or provision of service to the Company shall not provide for
vesting which is any more rapid than annual pro rata vesting over a three (3) year
period and any Stock Award which vests upon the attainment of performance goals
shall provide for a performance period of at least twelve (12) months;
provided that vesting may be shortened in the case of death, disability,
retirement or Change in Control as set forth in this Plan or determined by the
Committee.

 

II.  STOCK
OPTIONS AND STOCK APPRECIATION RIGHTS

 

2.1  Stock Options.  The Committee may, in its discretion, grant
Incentive Stock Options or Non-Statutory Stock Options to such eligible persons
under Section 1.4 as may be selected by the Committee.

 

Options shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable; provided, however, that no Incentive Stock Option or
Non-Statutory Stock Option shall provide for the payment of dividends or
dividend equivalents with respect to periods prior to exercise:

 

(a)  Number of Shares and Purchase Price.  The number of shares and the purchase price
per share of Common Stock subject to an option shall be determined by the
Committee, provided, 

 

B-5

 

however, that the purchase
price per share of Common Stock shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date of grant of such option and
provided further, that if an Incentive Stock Option shall be granted to any
person who, at the time such option is granted, owns capital stock possessing
more than ten percent of the total combined voting power of all classes of
capital stock of the Company (or of any parent or subsidiary as defined in Section 424
of the Code) (a “Ten Percent Holder”), the purchase price per share of
Common Stock shall be the price (currently 110% of Fair Market Value) required
by the Code in order to constitute an Incentive Stock Option.

 

(b)  Option Period and Exercisability.  Each option, by its terms, shall require the
Participant to remain in the continuous employ of the Company for at least one
year following the date of grant of the option before any part of the option
shall be exercisable, except in the case of a Change in Control. The period
during which an option may be exercised shall be determined by the Committee;
provided, however, that no Incentive Stock Option or Non-Statutory Stock Option
shall be exercised later than ten years after its date of grant; provided
further, that if an Incentive Stock Option is granted to a Ten Percent Holder,
such option shall not be exercised later than five years after its date of
grant. The Committee may, in its discretion, establish Performance Measures
which shall be satisfied or met as a condition to the grant of an option or to
the exercisability of all or a portion of an option. The Committee shall determine
whether an option shall become exercisable in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable option, or
portion thereof, may be exercised only for whole shares of Common Stock.

 

(c)  Method of Exercise.  An option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of Common
Stock to be purchased and accompanied by payment therefore in full (or
arrangement made for such payment to the Company’s satisfaction) either (A) by
the delivery of cash in the amount of the aggregate purchase price payable by
reason of such exercise, (B) by delivery (either actual delivery or by
attestation procedures established by the Company) of previously acquired
shares of Common Stock that have an aggregate Fair Market Value, determined as
of the date of exercise, equal to the aggregate purchase price payable by
reason of such exercise, (C) by the delivery of cash in the amount of the
aggregate purchase price payable by reason of such exercise by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise, (D) authorizing the Company to withhold whole shares
of Common Stock which would otherwise be delivered having an aggregate Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable by reason of such exercise, or (E) a combination of
(A) and (B), in each case to the extent set forth in the Agreement
relating to the option, (ii) if applicable, by surrendering to the Company
any Tandem SARs which are cancelled by reason of the exercise of the option and
(iii) by executing such documents as the Company may reasonably request.
Any fraction of a share of Common Stock which would be required to pay such
purchase price shall be paid in cash by the optionee. No certificate
representing Common Stock shall be delivered until the full purchase price
therefore has been paid (or arrangement made for such payment to the Company’s
satisfaction).

 

2.2  Stock Appreciation Rights.  The Committee may, in its discretion, grant
SARs to such eligible persons under Section 1.4 as may be selected by the
Committee. The Agreement relating to an SAR shall specify whether the SAR is a
Tandem SAR or a Free-Standing SAR. SARs shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem
advisable; provided, however, that no SAR shall provide for the payment of
dividends or dividend equivalents with respect to periods prior to settlement:

 

(a)  Number of SARs and Base Price.  The number of SARs subject to an award shall
be determined by the Committee. Any Tandem SAR related to an Incentive Stock
Option shall be granted at the same time that such Incentive Stock Option is
granted. The base price of a Tandem SAR shall be the purchase price per share
of Common Stock of the related option. The base price of a 

 

B-6

 

Free-Standing SAR shall be
determined by the Committee; provided, however, that such base price shall not
be less than 100% of the Fair Market Value of a share of Common Stock on the
date of grant of such SAR.

 

(b)  Exercise Period and Exercisability.  Each SAR, by its terms, shall require the
Participant to remain in the continuous employ of the Company for at least one
year following the date of grant of the SAR before any part of the SAR shall be
exercisable, except in the case of a Change in Control. The Agreement relating
to an award of SARs shall specify whether such award may be settled in shares
of Common Stock (including shares of Restricted Stock) or cash or a combination
thereof. The period for the exercise of an SAR shall be determined by the Committee;
provided, however, that no SAR may be exercised later than 10 years after
its date of grant; provided further, that no Tandem SAR shall be exercised
later than the expiration, cancellation, forfeiture or other termination of the
related option. The Committee may, in its discretion, establish Performance
Measures which shall be satisfied or met as a condition to the grant of an SAR
or to the exercisability of all or a portion of an SAR. The Committee shall
determine whether an SAR may be exercised in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable SAR, or portion
thereof, may be exercised, in the case of a Tandem SAR, only with respect to
whole shares of Common Stock and, in the case of a Free Standing SAR, only with
respect to a whole number of SARs. If an SAR is exercised for shares of
Restricted Stock, a certificate or certificates representing such Restricted
Stock shall be issued in accordance with Section 3.2(c) and the
holder of such Restricted Stock shall have such rights of a stockholder of the
Company as determined pursuant to Section 3.2(d). Prior to the exercise of
an SAR for shares of Common Stock, including Restricted Stock, the holder of
such SAR shall have no rights as a stockholder of the Company with respect to
the shares of Common Stock subject to such SAR.

 

(c)  Method of Exercise.  A Tandem SAR may be exercised (i) by
giving written notice to the Company specifying the number of whole SARs which
are being exercised, (ii) by surrendering to the Company any options which
are cancelled by reason of the exercise of the Tandem SAR and (iii) by
executing such documents as the Company may reasonably request. A Free-Standing
SAR may be exercised (i) by giving written notice to the Company specifying
the whole number of SARs which are being exercised and (ii) by executing
such documents as the Company may reasonably request.

 

2.3  Termination of Employment or Service.  (a) Non-Statutory
Stock Options and SARs. Unless otherwise specified in the Agreement
evidencing an option or SAR, but subject to Section 2.1(b) or Section 2.2(b),
as the case may be, if the holder of an option (other than an Incentive Stock
Option) or SAR terminates employment with the Company (1) by reason of (i) death,
or (ii) retirement on or after age 55 with a minimum of 10 years of
employment with or service to the Company, or (iii) the occurrence of such
Participant’s Disability Date, or (2) for any reason within two years
following a Change in Control, such option or SAR shall be exercisable for the
remainder of the option period or SAR period as stated under the terms of the
option or SAR, as the case may be, but only to the extent that such option or
SAR was exercisable at the date of such termination of employment.

 

If the employment with the
Company of the holder of an option (other than an Incentive Stock Option) or
SAR is terminated under any other circumstance, such option or SAR shall remain
exercisable to the extent that it was exercisable at the date of such termination
of employment, for a period of 90 days following such termination of
employment. Notwithstanding anything to the contrary contained in this Section 2.3(a),
if such holder’s employment with the Company is terminated by the Company for
Cause, his or her rights under all options and SARs shall terminate
automatically on the effective date of such termination of employment.

 

(b)  Termination
of Employment — Incentive Stock Options.  Unless otherwise specified in the Agreement
evidencing an option, but subject to Section 2.1(b), if the holder of an
Incentive Stock Option terminates employment with the Company by reason of
Permanent and Total Disability, such Incentive Stock Option shall be
exercisable only to the extent that it was exercisable on the effective 

 

B-7

 

 

date of such termination of employment and
may thereafter be exercised by such holder (or such holder’s legal
representative or similar person) until the date which is one year after the
effective date of such termination of employment.

 

Unless
otherwise specified in the Agreement evidencing an option, but subject to Section 2.1(b),
if the holder of an Incentive Stock Option ceases to be an employee of the
Company by reason of his or her death, such Incentive Stock Option shall be
exercisable only to the extent that it was exercisable on the date of such
optionee’s death and may thereafter be exercised by such optionee’s executor,
administrator, legal representative, beneficiary or similar person until the
date which is three years after the date of death.

 

If
the Company terminates the employment of the holder of an Incentive Stock
Option for Cause, such Incentive Stock Option shall terminate automatically on
the effective date of such termination of employment.

 

Unless
otherwise specified in the Agreement evidencing an option, but subject to Section 2.1(b),
if the Company’s employment of the holder of an Incentive Stock Option is
terminated for any reason other than Permanent and Total disability, death or
Cause, such Incentive Stock shall be excisable only to the extent that it was
exercisable on the effective date of such termination of employment, and may
thereafter be exercised by such holder (or such holder’s legal representative
or similar person) until the date which is 90 days after the effective date
of such termination of employment.

 

If
the holder of an Incentive Stock Option dies during the period set forth in the
first paragraph of this Subsection (b) following termination of
employment by reason of Permanent and Total Disability, or during the period
set forth in the fourth paragraph of this Subsection (b) following
termination of employment for any reason other than Permanent and Total
Disability for death or Cause, such Incentive Stock Option shall be exercisable
only to the extent it was exercisable on the date of the holder’s death and may
thereafter be exercised by the holder’s executor, administrator, legal
representative, beneficiary or similar person until the date which is three
years after the date of death.

 

2.4  No Repricing.  Notwithstanding anything in this Plan to the
contrary and subject to Section 5.7, without the approval of the
stockholders of the Company the Committee will not amend or replace any
previously granted option or SAR in a transaction that constitutes a “repricing,”
as such term is used in Section 303A.08 of the Listed Company Manual of
the New York Stock Exchange, will not cancel an option or SAR that has an
exercise price which is greater than the Fair Market Value of the underlying
Common Stock in exchange for stock, cash or other consideration and will not
cancel an option or SAR that has an exercise price greater than the Fair Market
Value of the underlying Common Stock and regrant such option or SAR with a
lower exercise price or base price.

 

III.  STOCK
AWARDS

 

3.1  Stock Awards.  The Committee may, in its discretion, grant
Stock Awards to such eligible persons under Section 1.4 as may be selected
by the Committee. The Agreement relating to the Stock Award shall specify
whether the Stock Award is a Restricted Stock Award, a Restricted Stock Unit
Award, or Bonus Stock Award.

 

3.2  Terms of Stock Awards.  Stock Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

 

(a)  Number of Shares and Other Terms.  The number of shares of Common Stock subject
to a Restricted Stock Award, Restricted Stock Unit Award, or Bonus Stock Award
and the Performance Measures (if any) and Restriction Period applicable to a
Restricted Stock Award or Restricted Stock Unit Award shall be determined by
the Committee.

 

(b)  Vesting and Forfeiture.  The Agreement relating to a Restricted Stock
Award or Restricted Stock Unit Award shall provide, in the manner determined by
the Committee, in its discretion, and 

 

B-8

 

subject
to the provisions of this Plan, for the vesting of the shares of Common Stock
subject to such award, in the case of a Restricted Stock Award, or the vesting
of the Restricted Stock Unit Award itself, in the case of Restricted Stock Unit
Award, (i) if specified Performance Measures are satisfied or met during
the specified Restriction Period or (ii) if the holder of such award remains
continuously in the employment of or service to the Company during the
specified Restriction Period, and for the forfeiture of the shares of Common
Stock subject to such award in the case of a Restricted Stock Award, or the
forfeiture of the Restricted Stock Unit Award itself, in the case of a
Restricted Stock Unit Award, (x) if specified Performance Measures are not
satisfied or met during the specified Restriction Period or (y) if the
holder of such award does not remain continuously in the employment of or
service to the Company during the specified Restriction Period.

 

Bonus
Stock Awards shall not be subject to any Performance Measures or Restriction
Periods.

 

(c)  Stock Issuance.  During the Restriction Period, the shares of
Restricted Stock shall be held by a custodian in book entry form with
restrictions on such shares duly noted or, alternatively, a certificate or
certificates representing a Restricted Stock Award shall be registered in the
holder’s name and may bear a legend, in addition to any legend which may be
required pursuant to Section 5.6, indicating that the ownership of the
shares of Common Stock represented by such certificate is subject to the
restrictions, terms and conditions of this Plan and the Agreement relating to
the Restricted Stock Award. All such certificates shall be deposited with the
Company, together with stock powers or other instruments of assignment
(including a power of attorney), each endorsed in blank with a guarantee of
signature if deemed necessary or appropriate by the Company, which would permit
transfer to the Company of all or a portion of the shares of Common Stock
subject to the Restricted Stock Award in the event such award is forfeited in
whole or in part. Upon termination of any applicable Restriction Period (and
the satisfaction or attainment of applicable Performance Measures), or upon the
grant of a Bonus Stock Award, in each case subject to the Company’s right to
require payment of any taxes in accordance with Section 5.5, the
restrictions shall be removed from the requisite number of shares of Common
Stock that are held in book entry form, and all certificates evidencing
ownership of the requisite number of shares of Common Stock shall be delivered
to the holder of such award.

 

(d)  Rights with Respect to Restricted Stock
Awards.  Unless otherwise
set forth in the Agreement relating to a Restricted Stock Award, and subject to
the terms and conditions of a Restricted Stock Award, the holder of such award
shall have all rights as a stockholder of the Company, including, but not
limited to, voting rights, the right to receive dividends and the right to
participate in any capital adjustment applicable to all holders of Common
Stock; provided, however, that a distribution with respect to shares of Common
Stock, other than a regular cash dividend, shall be deposited with the Company
and shall be subject to the same restrictions as the shares of Common Stock
with respect to which such distribution was made.

 

(e)  Rights and Provisions Applicable to
Restricted Stock Unit Awards. 
The Agreement relating to a Restricted Stock Unit Award shall specify
whether the holder thereof shall be entitled to receive, on a current or
deferred basis, dividend equivalents, or the deemed reinvestment of, any
deferred dividend equivalents, with respect to the number of shares of Common
Stock subject to such award. Prior to the settlement of a Restricted Stock Unit
Award, the holder thereof shall not have any rights as a stockholder of the
Company with respect to the shares of Common Stock subject to such award,
except to the extent that the Committee, in its sole discretion, may grant
dividend equivalents on Restricted Stock Unit Awards as provided above. No
shares of Common Stock and no certificates representing shares of Common Stock that
are the subject to a Restricted Stock Unit Award shall be issued upon the grant
of a Restricted Stock Unit Award. Instead, shares of Common Stock subject to
Restricted Stock Unit Awards and the certificates representing such shares of
Common Stock shall only be distributed at the time of settlement of such
Restricted Stock Unit Awards in accordance with the terms and conditions of
this Plan and the Agreement relating to such Restricted Stock Unit Award.

 

B-9

 

3.3  Termination of Employment or Service.  (a) Disability,
Retirement and Death. Unless otherwise set forth in the
Agreement relating to a Restricted Stock Award or Restricted Stock Unit Award,
if the employment with or service to the Company of the holder of such award
terminates (1) by reason of (i) death, or (ii) retirement on or
after age 55 with a minimum of 10 years of employment with or service to
the Company, or (iii) the occurrence of such Participant’s Disability
Date, or (2) for any reason within two years following a Change in
Control, or (iv) termination of employment under any other circumstances
that the Committee may determine shall warrant the application of this
provision, the restrictions imposed hereunder shall lapse with respect to such
number of shares of Restricted Stock, if any, or Restricted Stock Units, if
any, as the case may be, as shall be determined by the Committee, and the
balance of such shares of Restricted Stock or Restricted Stock Units, as the
case may be, shall be forfeited to the Company.

 

(b)  Other Termination.  Unless otherwise set forth in the Agreement
relating to a Restricted Stock Award or Restricted Stock Unit Award, if the
employment with or service to the Company of the holder of such award
terminates for any other reason during the Restriction Period, then the portion
of such award which is subject to a Restriction Period on the effective date of
such holder’s termination of employment or service shall be forfeited by such
holder and such portion shall be canceled by the Company.

 

IV.  PERFORMANCE
SHARE AWARDS

 

4.1  Performance Share Awards.  The Committee may, in its discretion, grant
Performance Share Awards to such eligible persons under Section 1.4 as may
be selected by the Committee.

 

4.2  Terms of Performance Share Awards.  Performance Share Awards shall be subject to
the following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.

 

(a)  Number of Performance Shares and Performance
Measures.  The number of
Performance Shares subject to any award and the Performance Measures and
Performance Period applicable to such award shall be determined by the
Committee.

 

(b)  Vesting and Forfeiture.  The Agreement relating to a Performance Share
Award shall provide, in the manner determined by the Committee, in its
discretion, and subject to the provisions of this Plan, for the vesting of such
award, if specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of such award, if
specified Performance Measures are not satisfied or met during the specified
Performance Period.

 

(c)  Settlement of Vested Performance Share
Awards.  The Agreement
relating to a Performance Share Award (i) shall specify whether such award
may be settled in shares of Common Stock (including shares of Restricted Stock)
or cash or a combination thereof and (ii) may specify whether the holder
thereof shall be entitled to receive, upon settlement of such award, dividend
equivalents, and, if determined by the Committee, interest on or the deemed
reinvestment of any deferred dividend equivalents, with respect to the number
of shares of Common Stock subject to such award. If a Performance Share Award
is settled in shares of Restricted Stock, a certificate or certificates
representing such Restricted Stock shall be issued in accordance with Section 3.2(c) and
the holder of such Restricted Stock shall have such rights of a stockholder of
the Company as determined pursuant to Section 3.2(d). Prior to the
settlement of a Performance Share Award in shares of Common Stock, including
Restricted Stock, the holder of such award shall have no rights as a
stockholder of the Company with respect to the shares of Common Stock subject
to such award and shall have rights as a stockholder of the Company in
accordance with Section 5.10. Notwithstanding any other provision of the
Plan to the contrary, payments of cash, shares of Common Stock, or any combination
thereof to any Participant in respect of the settlement of a Performance Share
Award for any Performance Period 

 

B-10

 

shall
not exceed $12,000,000, with respect to the cash payment for such award, and also
shall not exceed 400,000 shares of Common Stock, with respect to the Common
Stock payment for such award.

 

4.3  Termination of Employment.  (a) Disability,
Retirement and Death. Unless otherwise set forth in the
Agreement relating to a Performance Share Award, if the employment with the
Company of the holder of such award terminates prior to the end of the
Performance Period applicable to such award (1) by reason of (i) death,
or (ii) retirement on or after age 55 (with a minimum of 10 years of
employment or service with the Company, or (iii) the occurrence of such
Participant’s Disability Date, or (2) for any reason within two years
following a Change in Control, or (3) termination of employment under any
other circumstances that the Committee may determine shall warrant the
application of this provision, the Committee, in its sole discretion and taking
into consideration the performance of such Participant and the performance of
the Company during the Performance Period, may authorize the payment to such
Participant (or his legal representative) at the end of the Performance Period
of all or any portion of the Performance Award which would have been paid to
such Participant for such Performance Period. Notwithstanding the foregoing, in
the case of any award which is intended to be “qualified performance-based
compensation” within the meaning of Section 162(m) of the Code, no
payment will be made in connection with the retirement of the holder of the
award under the circumstances specified above unless the applicable Performance
Measures have been satisfied.

 

(b)  Other Termination.  Unless otherwise set forth in the Agreement
relating to a Performance Share Award, if the employment with the Company of
the holder of a Performance Share Award terminates for any other reason prior
to the end of a Performance Period, then the portion of such award which is
subject to such Performance Period on the effective date of such holder’s
termination of employment shall be forfeited and such portion shall be canceled
by the Company.

 

V.  GENERAL

 

5.1  Effective Date and Term of Plan.  This Plan has been approved by the
stockholders of the Company and became effective as of January 1, 1998.
This Plan shall terminate on May 1, 2020, unless terminated earlier by the
Board. Termination of this Plan shall not affect the terms or conditions of any
award granted prior to termination.

 

5.2  Amendments.  The Board may amend this Plan as it shall
deem advisable, subject to any requirement of stockholder approval required by
applicable law, rule or regulation, including Section 162(m) and
Section 422 of the Code; provided, however, that no amendment shall be
made without stockholder approval if such amendment would (a) increase the
maximum number of shares of Common Stock available under this Plan (subject to Section 5.7),
(b) effect any change inconsistent with Section 422 of the Code, (c) extend
the term of this Plan or (d) reduce the minimum purchase price or base
price of a share of Common Stock subject to an option or SAR. No amendment may
impair the rights of a holder of an outstanding award without the consent of
such holder.

 

5.3  Agreement.  Each award under this Plan shall be evidenced
by an Agreement setting forth the terms and conditions applicable to such
award. No award shall be valid until an Agreement is executed by the Company
and the recipient of such award and, upon execution by each party and delivery
of the Agreement to the Company (which may occur by facsimile or other
electronic transmission), such award shall be effective as of the effective
date set forth in the Agreement.

 

5.4  Non-Transferability of Awards.  Unless otherwise specified in the Agreement
relating to an award, no award shall be transferable other than by will, the
laws of descent and distribution or pursuant to beneficiary designation
procedures, if any, approved by the Company. Except to the extent permitted by
the foregoing sentence or the Agreement relating to an award, each award may be
exercised or settled during the holder’s lifetime only by the holder or the
holder’s legal representative or similar person. Except to the extent permitted
by the second preceding sentence or the Agreement 

 

B-11

 

relating
to an award, no award may be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar process. Upon
any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise
dispose of any such award, such award and all rights thereunder shall
immediately become null and void.

 

5.5  Tax Withholding.  The Company shall have the right to require,
prior to the issuance or delivery of any shares of Common Stock or the payment
of any cash pursuant to an award made hereunder, payment by the holder of such
award of any Federal, state, local or other taxes which may be required to be
withheld or paid in connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as of
the date the obligation to withhold or pay taxes arises in connection with an
award (the “Tax Date”), or withhold an amount of cash which would
otherwise be payable to a holder, in the amount necessary to satisfy any such
obligation or (ii) the holder may satisfy any such obligation by any of
the following means: (A) a cash payment to the Company in the amount necessary
to satisfy any such obligation, (B) delivery (either actual delivery or by
attestation procedures established by the Company) to the Company of shares of
Common Stock having an aggregate Fair Market Value, determined as of the Tax
Date, equal to the amount necessary to satisfy any such obligation, (C) authorizing
the Company to withhold whole shares of Common Stock which would otherwise be
delivered having an aggregate Fair Market Value, determined as of the Tax Date,
or withhold an amount of cash which would otherwise be payable to a holder,
equal to the amount necessary to satisfy any such obligation, (D) in the
case of the exercise of an Incentive Stock Option or Non-Statutory Stock
Option, a cash payment in the amount necessary to satisfy any such obligation
by a broker-dealer acceptable to the Company to whom the optionee has submitted
an irrevocable notice of exercise or (E) any combination of (A), (B) and
(C), in each case to the extent set forth in the Agreement relating to the
award. Shares of Common Stock to be delivered or withheld may not have an
aggregate Fair Market Value, determined as of the Tax Date, in excess of the
amount determined by applying the minimum statutory withholding rate. Any
fraction of a share of Common Stock which would be required to satisfy such an
obligation shall be disregarded and the remaining amount due shall be paid in
cash by the holder.

 

5.6  Restrictions on Shares.  Each award made hereunder shall be subject to
the requirement that if at any time the Company determines that the listing,
registration or qualification of the shares of Common Stock subject to such
award upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action is necessary or
desirable as a condition of, or in connection with, the exercise or settlement
of such award or the delivery of shares thereunder, such award shall not be
exercised or settled and such shares shall not be delivered unless such
listing, registration, qualification, consent, approval or other action shall
have been effected or obtained, free of any conditions not acceptable to the
Company. The Company may require that certificates evidencing shares of Common
Stock delivered pursuant to any award made hereunder bear a legend indicating
that the sale, transfer or other disposition thereof by the holder is
prohibited except in compliance with the Securities Act of 1933, as amended,
and the rules and regulations thereunder.

 

5.7  Adjustment.  In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a regular cash dividend, the number and class of securities available
under this Plan, the maximum number of shares of Common Stock with respect to
which options, SARs, Stock Awards or Performance Share Awards or a combination
thereof may be awarded during any calendar year to any one person, the maximum
number of shares of Common Stock that may be issued pursuant to Awards in the
form of Incentive Stock Options, the number and class of securities subject to
each outstanding option and the purchase price per security, the terms of each
outstanding SAR, the number and class of securities subject to 

 

B-12

 

each
outstanding Stock Award, and the terms of each outstanding Performance Share
shall be appropriately adjusted by the Committee, such adjustments to be made
in the case of outstanding options and SARs without an increase in the
aggregate purchase price or base price. The decision of the Committee regarding
any such adjustment shall be final, binding and conclusive. If any such
adjustment would result in a fractional security being (a) available under
this Plan, such fractional security shall be disregarded, or (b) subject
to an award under this Plan, the Company shall pay the holder of such award, in
connection with the first vesting, exercise or settlement of such award, in
whole or in part, occurring after such adjustment, an amount in cash determined
by multiplying (i) the fraction of such security (rounded to the nearest
hundredth) by (ii) the excess, if any, of (A) the Fair Market Value
on the vesting, exercise or settlement date over (B) the exercise or base
price, if any, of such award.

 

5.8  Change in Control.

 

(a)(1) Notwithstanding
any provision in this Plan or any Agreement, in the event of a Change in
Control pursuant to Section (b)(3) or (4) below in connection
with which the holders of Common Stock receive shares of common stock that are
registered under Section 12 of the Exchange Act, (i) all outstanding
options and SARs shall immediately become exercisable in full, (ii) the
Restriction Period applicable to any outstanding Restricted Stock Award or
Restricted Stock Unit shall lapse, (iii) the Performance Period applicable
to any outstanding Performance Share shall lapse, (iv) the Performance
Measures applicable to any outstanding Restricted Stock Award (if any),
Restricted Stock Unit Award (if any) and to any outstanding Performance Share
shall be deemed to be satisfied at the target level and (v) there shall be
substituted for each share of Common Stock available under this Plan, whether
or not then subject to an outstanding award, the number, type and class of
shares into which each outstanding share of Common Stock shall be converted
pursuant to such Change in Control. In the event of any such substitution, the
purchase price per share in the case of an option and the base price in the
cases of an SAR shall be appropriately adjusted by the Committee (whose
determination shall be final, binding and conclusive), such adjustments to be
made in the case of outstanding options and SARs without an increase in the
aggregate purchase price or base price.

 

(2)                                  Notwithstanding
any provision in this Plan or any Agreement, in the event of a Change in
Control pursuant to Section (b)(1) or (2) below, or in the event
of a Change in Control pursuant to Section (b)(3) or (4) below
in connection with which the holders of Common Stock receive consideration
other than shares of common stock that are registered under Section 12 of
the Exchange Act, each outstanding award shall be surrendered to the Company by
the holder thereof, and each such award shall immediately be canceled by the
Company, and the holder shall receive, within ten days of the occurrence of a
Change in Control a cash payment from the Company in an amount equal to (i) in
the case of an option, the number of shares of Common Stock then subject to
such option, multiplied by the excess, if any, of the greater of (A) the
highest per share price offered to stockholders of the Company in any
transaction whereby the Change in Control takes place and (B) the Fair
Market Value of a share of Common Stock on the date of occurrence of the Change
in Control, over the purchase price per share of Common Stock subject to the
option, (ii) in the case of a Free-Standing SAR, the number of shares of
Common Stock then subject to such SAR, multiplied by the excess, if any, of the
greater of (A) the highest per share price offered to stockholders of the
Company in any transaction whereby the Change in Control takes place or (B) the
Fair Market Value of a share of Common Stock on the date of occurrence of the
Change in Control, over the base price of the SAR, (iii) in the case of a
Restricted Stock Award or Restricted Stock Unit Award, the number of shares of
Common Stock then subject to such award, multiplied by the greater of (A) the
highest per share price offered to 

 

B-13

 

stockholders of the Company
in any transaction whereby the Change in Control takes place and (B) the
Fair Market Value of a share of Common Stock on the date of occurrence of the
Change in Control or (iv) in the case of a Performance Share Award, the
target number of Performance Shares then subject to such award, multiplied by
the greater of (A) the highest per share price offered to stockholders of
the Company in any transaction whereby the Change in Control takes place and (B) the
highest Fair Market Value of a share of Common Stock during the 90-day period
immediately preceding the date of the Change in Control. In the event of a
Change in Control, each Tandem SAR shall be surrendered by the holder thereof
and shall be canceled simultaneously with the cancellation of the related
option. The Company may, but is not required to, cooperate with any person who
is subject to Section 16 of the Exchange Act to assure that any cash
payment in accordance with the foregoing to such person is not subject to
recapture under Section 16 and the rules and regulations thereunder.

 

(b)                                 “Change in
Control” shall mean:

 

(1)                                  the acquisition
by any individual, entity or group (a “Person”), including any “person”
within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of beneficial ownership within the meaning of Rule 13d-3
promulgated under the Exchange Act, of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Common
Stock”) or (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”); excluding, however, the
following: (A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of an exercise, conversion or exchange
privilege unless the security being so exercised, converted or exchanged was
acquired directly from the Company), (B) any acquisition by the Company, (C) any
acquisition by an employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (3) of this Section 5.8(b);
provided further, that for purposes of clause (B), if any Person (other
than the Company or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company) shall
become the beneficial owner of 20% or more of the Outstanding Common Stock or
20% or more of the Outstanding Voting Securities by reason of an acquisition by
the Company, and such Person shall, after such acquisition by the Company,
become the beneficial owner of any additional shares of the Outstanding Common
Stock or any additional Outstanding Voting Securities and such beneficial
ownership is publicly announced, such additional beneficial ownership shall
constitute a Change in Control;

 

(2)                                  individuals
who, as of the beginning of any consecutive two-year period constitute the
Board of Directors (the “Incumbent Board”) cease for any reason to
constitute at least a majority of such Board; provided that any individual who
subsequently becomes a director of the Company and whose election, or
nomination for election by the Company’s stockholders, was approved by the vote
of at least a majority of the directors then comprising the Incumbent Board
shall be deemed a member of the Incumbent Board; and provided further, that any
individual who was initially elected as a director of the Company as a result
of an actual or threatened solicitation by a Person other than the Board for
the purpose of opposing a solicitation by any other Person with respect to the
election or removal of directors, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than
the Board shall not be deemed a member of the Incumbent Board;

 

(3)                                  the
consummation of a reorganization, merger or consolidation of the Company or
sale or other disposition of all or substantially all of the assets of the
Company (a “Corporate Transaction”); excluding, however, a Corporate
Transaction pursuant to which (i) all or substantially all of the
individuals or entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 50% of, respectively, the outstanding shares of common
stock, and the combined voting power of the outstanding securities of such
corporation entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s
assets either directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior to such 

 

B-14

 

Corporate Transaction, of
the Outstanding Common Stock and the Outstanding Voting Securities, as the case
may be, (ii) no Person (other than: the Company; any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; the corporation resulting from such Corporate
Transaction; and any Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 15% or more of the Outstanding
Common Stock or the Outstanding Voting Securities, as the case may be) will
beneficially own, directly or indirectly, 25% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the election of
directors and (iii) individuals who were members of the Incumbent Board
will constitute at least a majority of the members of the board of directors of
the corporation resulting from such Corporate Transaction; or

 

(4)                                  the
consummation of a plan of complete liquidation or dissolution of the Company.

 

5.9  No Right of Participation or Employment.  No person shall have any right to participate
in this Plan. The Committee’s selection of a person to participate in this Plan
at any time shall not require the Committee to select such person to
participate in this Plan at any other time. Neither this Plan nor any award
made hereunder shall confer upon any person any right to continued employment
by the Company, any Subsidiary or any affiliate of the Company or affect in any
manner the right of the Company, any Subsidiary or any affiliate of the Company
to terminate the employment of any person at any time without liability
hereunder.

 

5.10  Rights as Stockholder.  No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or other
equity security of the Company which is subject to an award hereunder unless
and until such person becomes a stockholder of record with respect to such
shares of Common Stock or equity security.

 

5.11  Stock Certificates.  To the extent that this Plan provides for
issuance of certificates to reflect the issuance of shares of Common Stock, the
issuance may be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of the New York Stock Exchange.

 

5.12  Governing Law.  This Plan, each award hereunder and the
related Agreement, and all determinations made and actions taken pursuant
thereto, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.

 

5.13  Foreign Employees.  Without amending this Plan, the Committee may
grant awards to eligible persons who are foreign nationals or who reside
outside the U.S. on such terms and conditions different from those specified in
this Plan as may in the judgment of the Committee be necessary or desirable to
foster and promote achievement of the purpose of this Plan and, in furtherance
of such purpose, the Committee may make such modifications, amendments,
procedures, subplans and the like as may be necessary or advisable to comply
with provisions of laws in other countries or jurisdictions in which the
Company or any of its Subsidiaries operates or has employees.

 

B-15Exhibit 10.3

 

Proposal 4. Amendment and Reapproval of the Annual Incentive
Plan

 

General

 

On November 19, 1997,
the board unanimously approved the adoption of the company’s short-term
incentive cash compensation program, which it has designated the Annual Incentive
Plan, for selected officers and other key employees of the company and its
subsidiaries, including the named executive officers. On May 17, 2000 and May 18,
2005, the Annual Incentive Plan was approved by the company’s stockholders with
respect to its material terms which enabled the compensation paid to each of
the named executive officers under the Annual Incentive Plan to qualify as “qualified
performance-based compensation” eligible for exclusion from the deduction
limits under Section 162(m) of the Internal Revenue Code (“Section 162(m)”).
On March 17, 2010, the Compensation Committee, authorized and adopted,
subject to stockholder approval, amendments to the Annual Incentive Plan and
the Board of Directors approved the submission of the Annual Incentive Plan for
approval by you. We are asking you to approve the Annual Incentive Plan
including those Amendments.

 

The most significant of the
proposed amendments to the Annual Incentive Plan is to increase the maximum
bonus payment to any participant for any performance period to $5 million
from $2.5 million.

 

The Plan has been designed
to meet the requirements of Section 162(m) of the Internal Revenue
Code regarding deductibility of certain executive compensation. Section 162(m) generally
limits to $1 million the amount that a publicly held corporation is
allowed to deduct each year for the compensation paid to each of the company’s
Chief Executive Officer or any of the company’s three other executive officers,
other than the Chief Executive Officer, whose compensation is required to be
disclosed in this proxy statement by reason of their being among the most
highly compensated officers for the taxable year and who are employed by us as
of the end of the year. However, “qualified performance-based compensation” is
not subject to the $1 million deduction limit. To qualify as qualified
performance-based compensation, certain criteria must be satisfied and the
material terms under which the compensation is to be paid, including the
performance goals, must be disclosed to, and approved by a separate majority
vote of, stockholders before the compensation is paid. If approved by the
company’s stockholders, the Annual Incentive Plan will enable the Compensation
Committee to continue to grant awards under the Annual Incentive Plan that will
be exempt from the deduction limits of Section 162(m) of the Internal
Revenue Code.

 

The material features of the
Annual Incentive Plan are summarized below. The following summary of the Annual
Incentive Plan is qualified in its entirety by reference to the full text of
the Annual Incentive Plan, which is included as Appendix C to this Proxy
Statement.

 

68

 

Description
of the Annual Incentive Plan

 

Administration.  The Annual Incentive Plan will be
administered by the Compensation Committee which currently consists of four
directors, each of whom is (i) a “Non-Employee Director” within the
meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside
director” within the meaning of Section 162(m) and an independent
director, as “independent” is defined under the rules of the New York
Stock Exchange.

 

Subject to the express
provisions of the Annual Incentive Plan, the Compensation Committee has the
authority to select officers and other key employees of the company, and its
subsidiaries, who will receive annual incentive awards and to determine all of
the terms and conditions of each award. All annual incentive awards are subject
to such provisions not inconsistent with the Annual Incentive Plan, as the
Compensation Committee shall approve. The Compensation Committee also has
authority to prescribe rules and regulations for administering the Annual
Incentive Plan and to decide questions of interpretation or application of any
provision of the Annual Incentive Plan. Except to the extent prohibited by law,
the Compensation Committee may delegate in writing some or all of its power and
authority to administer the Annual Incentive Plan to any person or persons.

 

Amendment.  The Compensation Committee may amend the
Annual Incentive Plan at any time, subject to any requirement of stockholder
approval required by applicable law, rule or regulation.

 

Annual
Incentive Awards.  The Annual
Incentive Plan provides for the grant of annual incentive awards. Each annual
incentive award is a right, contingent upon the attainment of performance
measures within a specified performance period, to receive payment in cash of a
specified amount. The maximum amount that may be paid to any individual under
any annual incentive award for any performance period shall not exceed
$5 million. The terms relating to the satisfaction of performance measures
in connection with an annual incentive award shall be determined by the
Compensation Committee and communicated to the recipient of an annual incentive
award at the time the award is granted. In order to be eligible to receive a
bonus payment for a performance period, a participant must (i) be an
employee of the company on the last day of the performance period, or have
terminated employment during the performance period due to retirement,
disability or death and (ii) have been employed by the company during at
least six months of the performance period. A participant who is eligible to
receive a bonus payment for a performance period, but who was not actively
employed during the entire performance period, shall receive a prorated bonus
payment determined in accordance with rules established by the
Compensation Committee. An annual incentive award for a performance period is
to be paid within two and one-half months after the end of the performance
period.

 

Performance
Goals.  Under the Annual Incentive
Plan, the payment of annual incentive awards will be subject to the
satisfaction of performance objectives established by the Compensation
Committee. If the Compensation Committee desires that compensation payable
pursuant to any award be “qualified performance-based compensation” within the
meaning of Section 162(m), the applicable performance measures (i) will
be established by the Committee no later than 90 days after the beginning
of the performance period (or such other time designated by the Internal
Revenue Service), (ii) will satisfy all other applicable requirements
imposed under Treasury Regulations promulgated under Section 162(m),
including the requirement that such performance measures be stated in terms of
an objective formula or standard and (iii) will be based on one or more of
the following business criteria, determined with respect to the performance of
the company as a whole, or, where determined to be appropriate by the
Committee, with respect to the performance of one or more divisions or groups
within the company, or with respect to the performance of individual
participants: net sales; pretax income before allocation of corporate overhead
and bonus; budget; earnings per share; net income; return on stockholders’
equity; return on assets; return on capital employed; attainment of strategic
and operational initiatives; appreciation in and/or maintenance of the price of
the common 

 

69

 

stock or any other publicly traded securities
of the company; market share; gross profits; earnings before interest and
taxes; earnings before interest, taxes, depreciation and amortization; economic
value-added models; comparisons with various stock market indices; increase in
number of customers and/or reductions in costs; total stockholder return (based
on the change in the price of a share of the company’s common stock and
dividends paid); operating income; and cash flows (including, but not limited
to, operating cash flow, free cash flow, cash flow return on equity and cash
flow return on investment) for the applicable performance period.

 

Performance
Periods.  A performance
period consists of one fiscal year of the company.

 

70

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