Document:

Exhibit
10.54

 

THIRD
AMENDMENT

 

THIS THIRD
AMENDMENT, dated as of December 18, 2009 (this “Amendment”), among AMYLIN PHARMACEUTICALS, INC., a Delaware
corporation (the “Company”),
each of the Company’s subsidiaries listed on the signature pages hereto
(collectively, together with the Company, the “Borrowers” and each a “Borrower”), the
Lenders (as defined below) party hereto, and BANK
OF AMERICA, N.A., as Administrative Agent, Collateral Agent and L/C
Issuer (in such capacity, the “Administrative Agent”) for the Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers are a party to a Credit
Agreement, dated as of December 21, 2007, among the Borrowers, the lenders
from time to time party thereto (the “Lenders”), the Administrative Agent, and the
other agents, lead arranger and book manager party thereto (as amended,
restated, supplemented or otherwise modified to but excluding the date hereof,
the “Existing Credit
Agreement”). Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Existing Credit
Agreement;

 

WHEREAS, pursuant to (i) Section 7.02(o) of
the Existing Credit Agreement, the Company is permitted to incur Indebtedness
under a Permitted Ohio Sale/Leaseback, and (ii) Section 7.05(g) of
the Existing Credit Agreement, the Company is permitted to Dispose of the Ohio
Sale/Leaseback Property in connection with a Permitted Ohio Sale/Leaseback;

 

WHEREAS, the definition of “Ohio Sale/Leaseback
Property” in Section 1.01 of the Existing Credit Agreement refers to
electrical equipment, a housing structure and related tangible property located
at 8874 Tradeport Drive (the “Original Address”), but the equipment, structure and
property subject to the Permitted Ohio Sale/Leaseback are located at 8814
Tradeport Drive, Building 1, and 8848 Tradeport Drive, Building 2(1)
(collectively, the “Corrected
Address”);

 

WHEREAS, the Company has requested that the Required
Lenders amend the definition of “Ohio Sale/Leaseback Property” as set forth
herein to correct the property description from the Original Address to the
Corrected Address;

 

WHEREAS, the undersigned Required Lenders have
agreed to amend the Existing Credit Agreement upon the terms and conditions set
forth herein;

 

NOW
THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:

 

SECTION 1.01.                   Amendment to Section 1.01
of the Existing Credit Agreement.  Effective immediately upon the Third
Amendment Effective Date, the definition of “Ohio Sale/Leaseback Property” set
forth in Section 1.01 of the Existing Credit Agreement is hereby deleted in its entirety and replaced
by following:

 

 

“Ohio Sale/Leaseback
Property” means electrical equipment and all accompanying accessories,
appurtenances, fences and attachments required for the equipment, a housing
structure and related tangible property located at 8814 Tradeport Drive,
Building 1, and 8848 Tradeport Drive, Building 2.

 

SECTION 1.02.                   Representations
and Warranties.  Each Borrower
hereby represents and warrants to the Administrative Agent and the Lenders, as
follows:

 

(a)           The representations
and warranties of such Borrower contained in Article V of the Existing
Credit Agreement, as modified hereby (the “Credit Agreement”), or any other Loan
Document (except for any Secured Hedge Agreements or Secured Cash Management
Agreements) or which are contained in any document furnished at any time under
or in connection therewith are true and correct in all material respects on and
as of the Third Amendment Effective Date with the same effect as if made on and
as of such date, except to the extent such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
in all material respects as of such earlier date, and except that the
representations and warranties contained in Sections 5.05(a) and (b) of
the Existing Credit Agreement shall be deemed to refer to the most recent
statements furnished pursuant to Sections 6.01(a) and (b) thereof, respectively.

 

(b)           Each Loan Party is
in compliance in all material respects with all the terms and conditions of the
Credit Agreement and the other Loan Documents on its part to be observed or
performed and no Default or Event of Default has occurred or is continuing
under the Credit Agreement.

 

(c)           The execution,
delivery and performance by such Borrower of this Amendment have been duly
authorized by such Borrower.

 

(d)           Each of this
Amendment and the Credit Agreement constitutes the legal, valid and binding
obligation of such Borrower, enforceable against such Borrower in accordance
with its terms subject to bankruptcy, insolvency, reorganization, moratorium,
or similar laws of general applicability relating to or affecting creditors’
rights.

 

(e)           The execution,
delivery, performance and compliance with the terms and provisions by such
Borrower of this Amendment and the consummation of the transactions
contemplated herein, do not and will not: (i) contravene the terms of any
of such Borrower’s Organization Documents; (ii) conflict with or result in
any breach or contravention of, or (except for the Liens created under the Loan
Documents) the creation of any Lien under, (A) any material Contractual
Obligation to which such Borrower is a party affecting such Borrower or the
properties of such Borrower or its Subsidiaries or (B) any material order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Borrower or its property is subject or (C) violate any Law
in any material respect.

 

SECTION 1.03.                   Effectiveness.  This Amendment shall become effective only
upon Administrative Agent’s receipt of duly executed counterparts of this
Amendment which, when taken together, bear the authorized signatures of the
Borrower, the Administrative Agent and the 

 

2

 

Required Lenders (the first date such condition has been satisfied
being herein called the “Third
Amendment Effective Date”).

 

SECTION 1.04.                   APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 1.05.                   Fees, Costs and
Expenses.  The
Borrowers promptly shall pay all costs and expenses of the Administrative Agent
in connection with the preparation, execution and delivery of this Amendment
and the other instruments and documents to be delivered hereunder (including,
without limitation, the reasonable fees and expenses of counsel for the
Administrative Agent) in accordance with and to the extent required by the
terms of Section 10.04(a) of the Credit Agreement.

 

SECTION 1.06.                   Loan Document;
Counterparts.  This
Amendment is, and from and after the Third Amendment Effective Date shall be
deemed to be, a “Loan Document” under the Credit Agreement. This Amendment may
be executed in any number of counterparts, each of which shall constitute an
original but all of which when taken together shall constitute but one
agreement. Delivery by facsimile or PDF by any of the parties hereto of an
executed counterpart of this Amendment shall be as effective as an original
executed counterpart hereof and shall be deemed a representation that an
original executed counterpart hereof will be delivered, but the failure to
deliver a manually executed counterpart shall not affect the validity,
enforceability or binding effect of this Amendment.

 

SECTION 1.07.                   Existing Credit
Agreement.  Except as
expressly set forth herein, the amendment provided herein shall not, by
implication or otherwise, limit, constitute a waiver of, or otherwise affect
the rights and remedies of the Administrative Agent or any other Secured Party
under the Existing Credit Agreement or any other Loan Document, nor shall it
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Existing Credit Agreement
or any other Loan Document.  The
amendment provided herein shall apply and be effective only with respect to the
provisions of the Existing Credit Agreement specifically referred to by such
amendment.  Except to the extent a
provision in the Existing Credit Agreement is expressly amended herein, the
Existing Credit Agreement and the other Loan Documents shall continue in full
force and effect in accordance with the provisions thereof and each of the undersigned
Loan Parties hereby ratifies and confirms in all respects its obligations under
and the continued full force and effect of the Amended Credit Agreement
and the other Loan Documents.

 

[Signature pages follow]

 

3

 

IN WITNESS WHEREOF, the parties hereto have
caused this Third Amendment to be duly executed by their duly authorized
officers, all as of the date first above written.

 

 

	
   

  	
  AMYLIN PHARMACEUTICALS, INC., as a
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark G. Foletta

  
	
   

  	
  Name:

  	
  Mark G. Foletta

  
	
   

  	
  Title:

  	
  Senior Vice President, Finance and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMYLIN OHIO LLC, as a Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Amylin Pharmaceuticals, Inc.,

  
	
   

  	
   

  	
   

  	
  its Sole Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark G. Foletta

  
	
   

  	
  Name:

  	
  Mark G. Foletta

  
	
   

  	
  Title:

  	
  Senior Vice President, Finance and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMYLIN INVESTMENTS LLC, as a
  Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Amylin Pharmaceuticals, Inc.,

  
	
   

  	
   

  	
   

  	
  its Sole Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark G. Foletta

  
	
   

  	
  Name:

  	
  Mark G. Foletta

  
	
   

  	
  Title:

  	
  Senior
  Vice President, Finance and CFO

  

 

Third Amendment

Signature Page

 

 

	
   

   

  	
  BANK OF AMERICA, N.A., as

  
	
   

  	
  Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brenda H. Little

  
	
   

  	
  Name:

  	
  Brenda H. Little

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  BANK OF AMERICA, N.A., as a
  Revolving Credit Lender, L/C Issuer and Hedge Bank under the Permitted F/X
  Facility

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher D. Pannacciulli

  
	
   

  	
  Name:

  	
  Christopher D. Pannacciulli

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  BANC OF AMERICA LEASING & CAPITAL, LLC, as a Term
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lori J. Noberini

  
	
   

  	
  Name:

  	
  Lori J. Noberini

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  SILICON VALLEY BANK, as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sarah Larson

  
	
   

  	
  Name:

  	
  Sarah Larson

  
	
   

  	
  Title:

  	
  Relationship
  Manager

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  COMERICA BANK, as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Greg Park

  
	
   

  	
  Name:

  	
  Greg Park

  
	
   

  	
  Title:

  	
  Vice President

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  BMO CAPITAL MARKETS FINANCING, INC., as a Term
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott W. Morris

  
	
   

  	
  Name:

  	
  Scott W. Morris

  
	
   

  	
  Title:

  	
  Vice President

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  FIRST BANK, as a Term Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gilmore Hector

  
	
   

  	
  Name:

  	
  Gilmore Hector

  
	
   

  	
  Title:

  	
  Vice President

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  UNION BANK OF CALIFORNIA, N.A., as a Term
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Moyer

  
	
   

  	
  Name:

  	
  Paul Moyer

  
	
   

  	
  Title:

  	
  Vice President

  

 

Third Amendment

Signature Page

 

 

	
   

  	
  AIB DEBT MANAGEMENT, LIMITED, as a Term
  Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brent Phillips

  
	
   

  	
  Name:

  	
  Brent Phillips

  
	
   

  	
  Title:

  	
  Vice President, Investment Advisor to AIB Debt 

  
	
   

  	
  Management Limited

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin Chin

  
	
   

  	
  Name:

  	
  Martin Chin

  
	
   

  	
  Title:

  	
  Senior Vice President, Investment Advisor to AIB 

  
	
   

  	
  Debt Management Limited

  

 

Third Amendment

Signature PageExhibit 10.1

 

DST SYSTEMS, INC. 2005 Equity Incentive Plan

(formerly the “1995 Stock Option and Performance
Award Plan” (the “1995 Plan”))

 

Section 1.

Effective Date,
Purpose and Duration

 

1.1           Effective Date of the Plan.  DST Systems, Inc., a Delaware corporation
(the “Company”), hereby amends and
restates the DST Systems, Inc. 2005 Equity Incentive Plan (the “Plan”).  The Plan was approved by the Board on February 23,
2010, and generally is effective May 11, 2010 (the “Effective
Date”), subject to approval by the Company’s
stockholders.

 

1.2           Purposes of the Plan.  The Plan is intended to generate an increased
incentive for eligible employees and consultants of the Company, its
subsidiaries and joint ventures, to contribute to the Company’s future success,
to secure for the Company and its stockholders the benefits inherent in equity
ownership by employees of the Company, its subsidiaries and joint ventures, and
to enhance the ability of the Company, and its subsidiaries and joint ventures,
to attract and retain exceptionally qualified employees upon whom, in large
measure, the sustained progress, growth and profitability of the Company
depend.  By encouraging employees of the
Company and its affiliates to acquire a proprietary interest in the Company’s
growth and performance, through both cash and stock Awards, the Company intends
to more closely align the interests of the Company’s employees, management and
stockholders, and motivate employees to enhance the value of the Company for
the benefit of all stockholders.

 

1.3           Duration of the Plan.  The Plan, as amended and restated herein,
shall apply as of the Effective Date and shall remain in effect, subject to the
right of the Board to amend or terminate the Plan at any time, until the
earlier of May 9, 2015, or the date on which all Shares subject to the
Plan shall have been delivered and the restrictions on all Restricted Stock
granted under the Plan shall have lapsed, according to the Plan’s
provisions.  The amendment and
restatement of the Plan shall not, unless otherwise expressly provided,
adversely affect any Awards outstanding on the Effective Date.  The termination or expiration of the Plan
shall not adversely affect any Awards outstanding on the date of termination or
expiration.

 

Section 2.

Definitions

 

As used in the Plan, the
following terms shall have the meanings set forth below:

 

2.1           “Affiliate”
means any Person that directly, or through one or more intermediaries, controls
or is controlled by, or is under common control with, the Company.

 

2.2           “Annual
Incentive Award” means an Award relating to a potential
performance bonus opportunity determined under Section 12.

 

2.3           “Award”
means any Option, Stock Appreciation Right, Performance Unit, Restricted Stock,
Shares, Restricted Stock Unit, Deferred Stock, Annual Incentive Award, Service
Award, Substitute Award, or Dividend Equivalent.

 

 

2.4           “Award
Agreement” means the written agreement which evidences an
Award and sets forth such applicable terms, conditions and limitations as the
Committee establishes for the Award.

 

2.5           “Beneficiary” or “Beneficiaries”
means the person designated to receive Plan benefits, if any, following the
Grantee’s or Permitted Transferee’s death in accordance with Section 17.

 

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

 

2.7           “Bonus
Opportunity” means the threshold, target and maximum
potential bonus opportunities under an Annual Incentive Award for an individual
for a Year, based on threshold, target and maximum bonus levels as determined
by the Committee.

 

2.8           “Change in
Control” has the meaning set forth in Section 14.

 

2.9           “Code”
means the Internal Revenue Code of 1986.

 

2.10         “Committee”
has the meaning set forth in Section 3.1(a).

 

2.11         “Common
Stock” means common stock, one cent ($.01) par value per
share, of the Company.

 

2.12         “Company”
means DST Systems, Inc., a Delaware corporation.

 

2.13         “Consultant”
means a non-employee consultant or advisor to the Company, a Subsidiary or a
Joint Venture who is a natural person (other than a non-employee director)
providing bona fide services that are not in connection with an offer or sale
of Company equity securities in a capital raising transaction; provided
the individual does not directly or indirectly maintain or promote a market in
Company securities.

 

2.14         “Covered Employee”
means a Grantee who, as of the last day of the fiscal year in which the value
of an Award is recognizable in income for federal income tax purposes, is one
of the groups of “covered employees,” within the meaning of Code Section 162(m),
with respect to the Company.

 

2.15         “Deferred
Stock” means a right, granted as an Award (under Section 11),
to receive payment in the form of Shares (or measured by the value of Shares)
at the end of a specified deferral period.

 

2.16         “Dividend
Equivalent” means a right granted appurtenant to an Award
to receive payments equal to dividends or property paid with respect to Shares
underlying such Award, at such time and on such terms and conditions as set
forth in the Award Agreement.

 

2.17         “Effective
Date” has the meaning set forth in Section 1.1.

 

2.18         “Eligible
Person” means any employee of an Employer, any individual
expected to become an employee of an Employer, and any Consultant.  A former employee of Employer 

 

2

 

shall also be treated as an
Eligible Person if and to the extent that such former employee is entitled to
be granted an Award under the Plan either as a result of an agreement entered
into in connection with such former employee’s Termination of Affiliation or
pursuant to the terms of an employment agreement or similar contract between
the former employee and the Employer that was entered into prior to such former
employee’s Termination of Affiliation. 
Solely for purposes of Section 2.50, the term Eligible Person
includes any current or former employee or non-employee director of, or
consultant to, an Acquired Entity (as defined in Section 2.50) who holds
Acquired Entity Awards (as defined in Section 2.50) immediately prior to
the Acquisition Date (as defined in Section 2.50).

 

2.19         “Employer”
means, with respect to any Eligible Person, the Company, the Subsidiary or the
Joint Venture (as the case may be) by whom he or she is employed.

 

2.20         “Exchange
Act” means the Securities and Exchange Act of 1934.

 

2.21         “Exercise
Date” means the date the holder of an Award that is
subject to exercise delivers notice of such exercise to the Company,
accompanied by such payment, attestations, representations or other
documentation as the Committee may specify; provided that if such notice is
delivered after 11:00 a.m. Central Time (or such other time as the
Committee may specify), the Exercise Date shall be the following day.

 

2.22         “Fair Market
Value” means

 

(a)           with respect to a Share or
other securities, (i) the average of the highest and lowest reported sales
prices on the New York Stock Exchange as reported in a financial publication of
general circulation as selected by the Committee from time to time; (ii) if
the Shares or other securities are not listed on the New York Stock Exchange,
the closing sales price of the Shares or other securities on such other
national exchange on which the Shares are principally traded, or as reported by
the National Market System, or similar organization, as reported in a financial
publication of general circulation as selected by the Committee from time to
time, or if no such quotations are available, the average of the high bid and
low asked quotations in the over-the-counter market as reported by the National
Quotation Bureau Incorporated or similar organizations; or (iii) in the
event that there shall be no public market for the Shares or other securities,
the fair market value of the Shares as determined (which determination shall be
conclusive) in good faith by the Committee. 
Except as provided in the following sentence, the valuation of a Share
or other securities on any date shall be determined as of that date (or, if no
sale of Shares or such other securities was reported for such date, on the most
recent trading day prior to such date on which a sale of Shares or such other
securities was reported).  On the
Exercise Date of an Award, the valuation of Shares shall be determined as of
the last trading day preceding the exercise of the Award;

 

(b)           with respect to any property
other than cash or securities, the market value of such property determined by
such methods or procedures as shall be established from time to time by the
Committee; and

 

(c)           with respect to cash, the
value of such cash in United States dollars.

 

3

 

2.23         “Grant Date”
means the date on which an Award is granted or such later date as specified in
advance by the Committee.  With respect
to Annual Incentive Awards payable in Shares, Options, Restricted Stock,
Restricted Stock Units or any other form of Award, the Grant Date shall be the
date on which the Committee certifies the attainment of the performance goals
as provided in Section 12.2(c), or such later date as specified in advance
by the Committee.

 

2.24         “Grantee”
means an Eligible Person who has been granted an Award.

 

2.25         “Incentive
Stock Option” means an Option granted as an Award under
the Plan that is intended to meet the requirements of Section 422 of the
Code.

 

2.26         “Including”
or “includes” means “including,
without limitation,” or “includes, without limitation,” respectively.

 

2.27         “Joint
Venture” means any Person in which the Company has an
ownership interest equal to at least fifty percent (50%) of the common stock,
voting rights or profits.

 

2.28         “Non-Qualified
Stock Option” means an Option granted as an Award under
the Plan that is not intended to be an Incentive Stock Option.

 

2.29         “Option”
means an Incentive Stock Option or Non-Qualified Stock Option.

 

2.30         “Option
Price” means the price at which a Share may be purchased
by a Grantee pursuant to an Option.

 

2.31         “Performance-Based
Exception” means the performance-based exception from the
tax deductibility limitations of Code Section 162(m) contained in
Code Section 162(m)(4)(C) (including the special provision for stock
options and stock appreciation rights thereunder).

 

2.32         “Performance
Measures” has the meaning set forth in Section 4.4.

 

2.33         “Performance
Goals” means the objective or subjective criteria
determined by the Committee, the degree of attainment of which will affect (a) in
the case of an Award other than the Annual Incentive Award, the amount of the
Award the Grantee is entitled to receive or retain, and (b) in the case of
an Annual Incentive Award, the portion of the individual’s Bonus Opportunity
potentially payable as an Annual Incentive Award.  Performance Goals may contain threshold,
target, and maximum levels of achievement and, to the extent the Committee
intends an Award (including the Annual Incentive Award) to comply with the
Performance-Based Exception, the Performance Goals shall be chosen from among
the Performance Measures.

 

2.34         “Performance
Period” means that period established by the Committee at
the time any Performance Unit is granted or at any time thereafter during which
the attainment of performance goals specified by the Committee, with respect to
such Award, are to be measured.  Except
as provided in Sections 8.1, 9.2 and 10.2, a Performance Period may be a year
or a longer or shorter period.

 

2.35         “Performance
Unit” means an Award under the Plan that is (a) a
bonus consisting of cash or other property, the amount or value of which,
and/or the entitlement to 

 

4

 

which, is conditioned upon
the attainment of Performance Goals, or (b) a unit valued by reference to
a designated amount of cash or property other than Shares.

 

2.36         “Person”
means any individual, sole proprietorship, corporation, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, institution, public benefit corporation, entity or
government instrumentality, division, agency, body or department.

 

2.37         “Plan”
has the meaning set forth in Section 1.1. 
If the Plan is amended, the term “Plan” shall mean the Plan as so
amended.

 

2.38         “Restricted
Stock” means any Share issued as an Award under the Plan
that is subject to Restrictions.

 

2.39         “Restricted
Stock Unit” or “RSU”
means the right granted as an Award under the Plan to receive a Share, conditioned
on the satisfaction of Restrictions imposed by the Committee, which
Restrictions may be time-based or performance-based.

 

2.40         “Restriction”
means any restriction on a Grantee’s free enjoyment of the Shares or other
rights underlying Awards, including (a) that the Grantee or other holder
may not sell, transfer, pledge, or assign a Share or right except as otherwise
allowed under the Plan or as specified in the Award Agreement, and (b) such
other restrictions as the Committee may impose in the Award Agreement
(including, without limitation, any restriction on the right to vote such
Share, and the right to receive any dividends or dividend equivalents).  Restrictions may be based on the passage of
time or the satisfaction of performance criteria (including Performance Goals)
or the occurrence of one or more events or conditions, and shall lapse
separately or in combination upon such conditions and at such time or times, in
installments or otherwise, as the Committee shall specify.  Awards subject to a Restriction shall be
forfeited if the Restriction does not lapse prior to such date or the
occurrence of such event or the satisfaction of such other criteria as the
Committee shall determine.

 

2.41         “Retirement”
means, unless otherwise defined in an Award Agreement in which case such
definition shall apply, a Termination of Affiliation, other than a Termination
of Affiliation for cause, on or after reaching age fifty-nine and one-half
(59-1/2).

 

2.42         “Rule 16b-3”
means Rule 16b-3 promulgated by the SEC under the Exchange Act.

 

2.43         “SEC”
means the United States Securities and Exchange Commission, or any successor
thereto.

 

2.44         “Section 16
Person” means a person who is subject to potential
liability under Section 16(b) of the Exchange Act with respect to
transactions involving equity securities of the Company.

 

2.45         “Service
Award” means an Award of Shares delivered automatically
to an individual pursuant to Section 13 in recognition of his or her
service.

 

5

 

2.46         “Share”
means a share of the Common Stock.

 

2.47         “Stock
Appreciation Right” or “SAR”
means a right granted as an Award under the Plan to receive, as of the date
specified in the Award Agreement, an amount equal to the number of Shares with
respect to which the SAR is exercised, multiplied by the excess of (a) the
Fair Market Value of one Share on the Exercise Date, over (b) the Strike
Price.

 

2.48         “Strike
Price” means the per-Share price used as the baseline
measure for the value of a SAR, as specified in the Award Agreement.

 

2.49         “Subsidiary”
means, except as provided in Section 6.5 with respect to an ISO, an
Affiliate controlled by the Company directly, or indirectly, through one or
more intermediaries.

 

2.50         “Substitute
Award” means an Award granted under the Plan in
substitution for stock or stock based awards (“Acquired
Entity Awards”) held by current and former employees or
former non-employee directors of, or consultants to, another corporation or
entity who become Eligible Persons as the result of a merger or consolidation
of the employing corporation or other entity (the “Acquired
Entity”) with the Company, a Subsidiary or a Joint
Venture, or the acquisition by the Company, an Affiliate, or a Joint Venture,
of property or stock of, or other ownership interest in, the Acquired Entity
immediately prior to such merger, consolidation or acquisition (“Acquisition Date”) as agreed to by
the parties to such corporate transaction and as may be set forth in the
definitive purchase agreement.  The
limitations of Sections 4.1 and 4.3 on the number of Shares reserved or
available for grants, and the limitations under Sections 6.3 and 7.3 with
respect to Option Prices and Strike Prices, shall not apply to Substitute
Awards.  Any issuance of a Substitute
Award which relates to an Option or a SAR shall be completed in conformity with
the rules under Code Section 409A relating to the substitutions and
assumptions of stock rights by reason of a corporate transaction.

 

2.51         “Term”
means the period beginning on the Grant Date of an Option, or SAR and ending on
the date such Option or SAR expires, terminates or is cancelled.

 

2.52         “Termination
of Affiliation” or similar phrase or concept (e.g.,
cessation of employment, separation from service, termination of employment,
etc.) means, the first day on which an individual is for any reason no longer
providing services to an Employer in the capacity of an employee or consultant
or, with respect to an individual who is an employee of or a consultant to a
Subsidiary or a Joint Venture, the first day on which such entity ceases to be
a Subsidiary or a Joint Venture of the Company as applicable; provided,
however, (i) where such term, phrase or concept is otherwise defined or
used in an Award Agreement, such definition shall apply, or (ii) with
respect to an Award subject to Code Section 409A where an applicable
payment event is the Termination of Affiliation or similar term, such
definition shall have the same meaning as a “separation from service” under
Code section 409A(a)(2)(A)(i).

 

2.53         “Year”
means the fiscal year of the Company.  As
of the Effective Date, the Company’s fiscal year is the calendar year.

 

6

 

Section 3.

Administration

 

3.1                                 Committee.

 

(a)           Subject to Section 3.2, the Plan shall be
administered by a committee (the “Committee”), the members of which shall be
appointed by the Board from time to time and may be removed by the Board from
time to time.  Unless the Board otherwise
specifies, the Compensation Committee of the Board shall be the Committee.  To the extent the Board considers it
desirable to comply with Rule 16b-3 or meet the Performance-Based
Exception, the Committee shall consist of two or more directors of the Company,
all of whom qualify as “non-employee directors” within the meaning of Code Section 162(m) and
“outside directors” under Rule 16b-3. 
The number of members of the Committee shall from time to time be
increased or decreased, and shall be subject to conditions, in each case if and
to the extent the Board deems it appropriate to permit transactions in Shares
pursuant to the Plan to qualify for an exemption from Section 16(b) of
the Exchange Act.

 

(b)           Subject to applicable law, the Committee may delegate to
the Chief Executive Officer or Chief Financial Officer of the Company any or
all of the authority of the Committee with respect to Awards to Grantees, other
than Grantees for whom (i) the Committee desires the Award to qualify for
an exemption from Section 16(b) of the Exchange Act as in effect at
the time any such delegated authority is exercised or (ii) the Committee
determines could be a Covered Employee at any time during the term of the
Award.

 

3.2                                 Powers of the Committee.  Subject to and consistent with the provisions
of the Plan, the Committee shall have full power and authority and sole
discretion as follows:

 

(a)           to determine when, to whom and in what types and amounts
Awards (including Substitute Awards) should be granted;

 

(b)           to grant Awards to Eligible Persons in any number, and to
determine the terms and conditions applicable to each Award;

 

(c)           to determine, as to all or part of any Award as to any
Grantee, at the time the Award is granted or thereafter, that the exercisability
or vesting of an Award shall be accelerated upon a Grantee’s death, disability,
retirement, Change in Control, or Termination of Affiliation following a Change
in Control, to determine that Awards shall continue to become exercisable or
vested in full or in installments after Termination of Affiliation, to extend
the period for exercise of Options or SARs following Termination of Affiliation
(but not beyond ten (10) years from the Grant Date of the Option or SAR)
or to provide that any Restricted Stock Award, Restricted Stock Unit Award,
Performance Unit Award or Service Award shall in whole or in part not be
forfeited upon Grantee’s death, disability, retirement, Change in Control or
Termination of Affiliation following a Change in Control, provided the
Committee shall consider potential tax consequences in making any such
determinations or taking any such actions;

 

7

 

(d)           to determine the benefit payable under any Performance
Unit or Dividend Equivalent, and to determine whether any performance or
vesting conditions have been satisfied;

 

(e)           to determine whether or not specific Awards shall be
granted in connection with other specific Awards, and if so, whether they shall
be exercisable cumulatively with, or alternatively to, such other specific
Awards and all other matters to be determined in connection with an Award;

 

(f)            to determine, with respect to Restricted Stock, whether
to permit or require the payment of cash dividends thereon, and whether
Restricted Stock (including Restricted Stock acquired upon the exercise of an
Option) shall be held in escrow or other custodial arrangement;

 

(g)           to determine whether, to what extent, and under what
circumstances an Award may be settled in, or the exercise price of an Award may
be paid in, cash, Shares, other Awards, or other property;

 

(h)           to determine whether, to what extent, and under what
circumstances an Award may be vested, canceled, forfeited or surrendered, or,
in connection with a Grantee’s death, disability, retirement, Change in
Control, or Termination of Affiliation following a Change in Control, whether
and to what extent any terms of, or restrictions on, an Award may be waived or
accelerated (including the acceleration of the exercisability of, or waiver of
all of the terms and conditions applicable to, any Award or any group of Awards
for any reason and at any time) or to extend the period subsequent to the
Termination of Affiliation within which an Award may be exercised;

 

(i)            to determine whether, to what extent and under what
circumstances cash, Shares, other Awards, other property and other amounts
payable with respect to an Award (other than with respect to an Option or a SAR
for which no additional deferral opportunity beyond the deferral inherent in
such Option or SAR is permitted under this Plan) will be deferred, either at
the election of the Grantee, or, if and to the extent specified in the Award
Agreement, automatically or at the election of the Committee (whether to limit
loss of deductions pursuant to Code Section 162(m) or otherwise), and
to provide for the payment of interest or other rate of return determined with
reference to a predetermined actual investment or independently set interest
rate, or with respect to other bases permitted under Code Sections 162(m), 409A
or otherwise, for the period between the Exercise Date, the date Restrictions
Lapse, or the maturity of an Award, as applicable, and the date of payment or
settlement of the Award;

 

(j)            to grant Awards in replacement of Awards previously
granted under this Plan or any other compensation plan of an Employer, provided
that any such replacement grant that would be considered a repricing shall be
subject to shareholder approval;

 

(k)           to make, amend, suspend, waive and rescind rules and
regulations relating to the Plan;

 

8

 

(l)            to appoint such agents as the Committee may deem
necessary or advisable to administer the Plan;

 

(m)          with the consent of the Grantee, to amend any Award
Agreement at any time; provided that the consent of the Grantee shall not be
required for any amendment (i) that, in the Committee’s determination,
does not materially adversely affect the rights of the Grantee, or (ii) which
is necessary or advisable (as determined by the Committee) to carry out the
purpose of the Award as a result of any new applicable law or change in an
existing applicable law, or (iii) to the extent the Award Agreement
specifically permits amendment without consent;

 

(n)           to impose such additional terms and conditions upon the
grant, exercise or retention of Awards as the Committee may, before or
concurrently with the grant thereof, deem appropriate, including limiting the
amount or percentage of Awards which may from time to time be exercised by a
Grantee, and including requiring the Grantee to enter into restrictive
covenants;

 

(o)           without the consent of the Grantee, to make adjustments in
the terms and conditions of, and the criteria in, Awards in recognition of
unusual or nonrecurring events (including events described in Section 4.2)
affecting an Employer or the financial statements of an Employer, or in
response to changes in applicable laws, regulations or accounting principles;
provided, however, that in no event shall such adjustment increase the value of
an Award for a person expected to be a Covered Employee for whom the Committee
desires to have the Performance-Based Exception apply;

 

(p)           to make such adjustments or modifications to Awards or to
adopt such sub-plans for Eligible Persons working outside of the United States
as are advisable to fulfill the purposes of the Plan;

 

(q)           to correct any defect or supply any omission or reconcile
any inconsistency, and to construe and interpret the Plan, the rules and
regulations, and Award Agreement or any other instrument entered into or
relating to an Award under the Plan, and to make all determinations, including
factual determinations, necessary or advisable for the administration of the
Plan;

 

(r)            to cause the forfeiture of any Award or recover any
Shares, cash or other property attributable to an Award for violations of any
Company ethics policy or pursuant to any Company compensation clawback policy;

 

(s)           to take any other action with respect to any matters
relating to the Plan for which it is responsible and to make all other
decisions and determinations as may be required under the terms of the Plan or
as the Committee may deem necessary or advisable for the administration of the
Plan; and

 

(t)            in addition to the delegation authority in Section 3.1(b),
to delegate to officers or managers of the Company, any Affiliate or any Joint
Venture, the authority, subject to such terms as the Committee shall determine,
to perform specified functions under the Plan (subject to Section 4.3); provided
that actions required to permit Awards 

 

9

 

to Section 16 Persons to qualify for an
exemption from Section 16(b) of the Exchange Act shall not be
delegated and provided further that actions required
to be taken by the Committee to permit an Award to qualify for the
Performance-Based Exception shall not be delegated.

 

Any action of the Committee
with respect to the Plan shall be final, conclusive and binding on all Persons,
including the Company, its Affiliates, any Joint Venture, any Grantee, any
Eligible Person, any Person claiming any rights under the Plan from or through
any Grantee, and stockholders, except to the extent the Committee may
subsequently modify, or take further action not consistent with, its prior
action.  If not specified in the Plan,
the time at which the Committee must or may make any determination shall be
determined by the Committee, and any such determination may thereafter be
modified by the Committee.  The express
grant of any specific power to the Committee, and the taking of any action by
the Committee, shall not be construed as limiting any power or authority of the
Committee.

 

Unless otherwise expressly
provided in the Plan, all determinations, designations, interpretations, and
other decisions of the Committee shall be final, conclusive and binding upon
all Persons, including the Company, any Grantee, any Eligible Person, any
stockholder, and any employee of the Company, or any Affiliate or Joint
Venture.  All determinations of the
Committee shall be made only if there is a quorum for Committee action and by a
majority of Committee members present, but no less than two members; provided
that any determination affecting any Awards made or to be made to a member of
the Committee may, at the Board’s election, be made by the Board.

 

Section 4.

Shares Subject to the Plan, Maximum Awards and 162(m) Compliance

 

4.1                                 Number of Shares Available
for Grants.

 

Subject to adjustment as
provided in Section 4.2, the number of Shares reserved for delivery under
the Plan shall be the sum of (a) four million (4,000,000), plus (b) the
number of remaining Shares under the 1995 Plan (not subject to outstanding
Awards under the 1995 Plan and not delivered out of the Shares reserved
thereunder) as of the date of the initial stockholder approval of this Plan,
plus (c) the number of Shares that became available under the 1995 Plan
after the date of the initial stockholder approval of this Plan pursuant to
forfeiture, termination, lapse or satisfaction of an Award in cash or property
other than Shares, application as payment for an Award, or, except with respect
to Restricted Stock, to satisfy tax withholding, plus (d) any Shares
required to satisfy Substitute Awards (the sum of (a), (b), (c) and (d),
the “Maximum Share Limit”).  The Shares
may be divided among the various Awards eligible to be granted under the Plan
as the Committee shall determine; provided, however, the maximum number of
Shares that may be issued pursuant to Incentive Stock Options shall be the
Maximum Share Limit.

 

If any Shares subject to an
Award granted hereunder are forfeited or such Award otherwise terminates or
lapses without the delivery of such Shares, the Shares subject to such Award,
to the extent of any such forfeiture, termination, or lapse shall again be
available for grant under the Plan.  If a
SAR is settled in Shares, only the number of Shares delivered in settlement of
a SAR shall cease to be available for grant under the Plan, regardless of the
number 

 

10

 

of
Shares with respect to which the SAR was exercised.  If any Shares subject to an Award granted
hereunder are withheld or applied as payment in connection with the exercise of
an Award (including the withholding of Shares on the exercise of a SAR that is
settled in Shares) or, except with respect to Shares of Restricted Stock, the
withholding or payment of taxes related thereto, such Shares shall again be
available for grant under the Plan.

 

The Committee shall, from
time to time, determine the appropriate methodology for calculating the number
of Shares that have been delivered pursuant to the Plan.

 

Shares delivered pursuant to
the Plan may be, in whole or in part, authorized and unissued Shares, or
treasury Shares, including Shares repurchased by the Company for purposes of
the Plan.

 

4.2                                 Adjustments in Authorized
Shares and Awards.  In the event of any corporate event or
transaction (including, but not limited to, a change in the Shares of the
Company or the capitalization of the Company) after the Effective Date such as
a merger, consolidation, reorganization, recapitalization, separation, stock
dividend, stock split, reverse stock split, split up, spin-off, or other
distribution of stock or property of the Company, combination of Shares,
exchange of Shares, dividend in kind, special cash dividend, or other like
change in capital structure or distribution (other than normal cash dividends)
to shareholders of the Company, or any similar corporate event or transaction,
the Committee, as necessary in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan,
shall appropriately and equitably substitute or adjust, as applicable, the
number and kind of Shares that may be issued under this Plan or under
particular forms of Awards, the number and kinds of Shares subject to
outstanding Awards, the Option Price or Strike Price applicable to outstanding
Awards, the annual individual limitations set forth below in Section 4.3(b),
and other value determinations applicable to outstanding Awards; provided,
in each case, that with respect to Awards of Incentive Stock Options intended
to continue to qualify as Incentive Stock Options after such adjustment, no
such adjustment shall be authorized to the extent that such adjustment would
cause the Incentive Stock Option to violate Section 424(a) of the
Code; and provided
further that the number of Shares subject to any Award denominated in Shares
shall always be a whole number.

 

4.3                                 Compliance With Code Section 162(m).

 

(a)           Section 162(m) Compliance.  To the extent the Committee determines that
compliance with the Performance-Based Exception is desirable with respect to an
Award (including Annual Incentive Awards under Article 13), this section
4.3(a) shall apply.  In the event
that changes are made to Code Section 162(m) to permit flexibility
with respect to the Award or Awards available under the Plan, the Committee
may, subject to this Section 4.3, make any adjustments to such Awards as
it deems appropriate.

 

(b)           Annual Individual Limitations.  No Grantee may be granted Awards of Options,
SARs, Restricted Stock, Restricted Stock Units or Performance Units (or any
other Award which is denominated in Shares) with respect to a number of Shares
in any one calendar year which, when added to the Shares subject to any other
Award denominated in Shares granted to such Grantee in the same calendar year
shall exceed 

 

11

 

Eight Hundred Thousand (800,000) Shares.  If an Award denominated in Shares is
cancelled, the cancelled Award continues to count against the maximum number of
Shares for which an Award denominated in Shares may be granted to a Grantee in
any calendar year.  The Share limit shall
be adjusted to the extent necessary to reflect adjustments to Shares required
by Section 4.2.  No Grantee may be
granted cash Annual Incentive Awards or other cash Awards in any one calendar
year, the maximum payout for which, when added to the maximum payout for all
other cash Awards granted to such Grantee in the same calendar year, shall
exceed 600% of the Grantee’s annual base salary (up to a maximum of $2,000,000
of base salary) as of the first day of such calendar year (or, if later, as of
the date on which the Grantee becomes an employee of the Company, a Subsidiary
or a Joint Venture); provided, however, that if the Performance Period
applicable to a Performance Unit exceeds twelve months, the 600% limit shall
apply to each 12-month period in the Performance Period.

 

4.4                                 Performance-Based Exception
Under Section 162(m).

 

(a)                                  Performance Measures.  Unless and until the Company’s stockholders
approve a change in the general Performance Measures set forth in this Section 4.4,
for Awards (other than Options or SARs) designed to qualify for the
Performance-Based Exception, objective performance criteria shall be one or
more of the following (each a “Performance Measure”), which may be measured
either in the aggregate or on per Share basis:

 

(i)            Earnings measures, including net earnings on either a
LIFO, FIFO or other basis;

 

(ii)           Operating measures, including operating income, operating
earnings or operating margin;

 

(iii)          Income or loss measures, including net income or net loss;

 

(iv)          Cash flow measures, including cash flow or free cash flow;

 

(v)           Revenue measures;

 

(vi)          Reductions in expense measures;

 

(vii)         Operating and maintenance cost management and employee
productivity measures;

 

(viii)        Company return measures, including
return on assets, investments, equity, or sales;

 

(ix)           Growth or rate of growth of any of the Performance
Measures set forth herein;

 

12

 

(x)            Share price (including attainment of a specified
per-Share price during the Performance Period; growth measures and total
stockholder return or attainment by the Shares of a specified price for a
specified period of time);

 

(xi)           Strategic business criteria, consisting of one or more
objectives based on meeting specified revenue, market share, market
penetration, business expansion targets, project milestones, production volume
levels and cost targets;

 

(xii)          Accomplishment of, or goals related to, mergers,
acquisitions, dispositions, public offerings or similar extraordinary business
transactions; or

 

(xiii)         Achievement of business or operational
goals such as market share, business development and/or customer objectives;

 

provided that applicable Performance Measures may be
applied on a pre- or post-tax basis; may be established and measured on a
Company-wide basis, on a subsidiary basis, business unit or units basis or
other Company division or segment basis; and provided further that the
Committee may, on the Grant Date of an Award intended to comply with the
Performance-Based Exception, and in the case of other grants, within the
allowable adjustment period set forth below in Section 4.4(c), provide
that the formula for such Award may include or exclude items to measure
specific objectives, such as losses from discontinued operations, extraordinary
gains or losses, the cumulative effect of accounting changes, acquisitions or
divestitures, foreign exchange impacts and any unusual, nonrecurring gain or
loss.

 

(b)                                 Flexibility as to Timing, Weighting, Applicable Business Unit.  For Awards intended to comply with the
Performance-Based Exception, the Committee shall set the Performance Goals
within the time period prescribed by Section 162(m) of the Code.  The levels of performance required with
respect to Performance Measures may be expressed in absolute or relative levels
and may be based upon a set increase, a set positive result, maintenance of the
status quo, a set decrease or a set negative result.  Performance Measures may differ for Awards to
different Grantees.  The Committee shall
specify the weighting (which may be the same or different for multiple
objectives) to be given to each performance objective for purposes of
determining the final amount payable with respect to any such Award.  Any one or more of the Performance Measures
may apply to a Grantee, to the Company as a whole, to one or more Affiliates or
to a department, unit, division or function within the Company, within any one
or more Affiliates or any one or more Joint Ventures, and may apply either
alone or relative to the performance of other businesses or individuals
(including industry or general market indices).

 

(c)                                  Discretion to Adjust.  The Committee shall have the discretion to
adjust the determinations of the degree of attainment of the pre-established
performance goals; provided, however, that any such adjustments must be
determined prior to the end of the Performance Period and that the degree of
attainment of Awards which are designed to qualify for the Performance-Based
Exception may not (unless the Committee determines to amend the Award so that
it no longer qualifies for the Performance-Based Exception) be adjusted
upward.  The Committee shall retain the
discretion to adjust such Awards 

 

13

 

downward prior to the end of the Performance
Period.  The Committee may not, unless
the Committee determines to amend the Award so that it no longer qualifies for
the Performance-Based Exception, delegate any responsibility with respect to
Awards intended to qualify for the Performance-Based Exception.  All determinations by the Committee as to the
achievement of the Performance Measure(s) shall be certified in writing
prior to payment of the Award.

 

(d)           Alteration of Performance Measures.  In the event that applicable laws allow an Award
to qualify for the Performance-Based Exception even if the Committee alters the
governing Performance Measures without obtaining stockholder approval, the
Committee shall have sole discretion to make such changes without obtaining
stockholder approval.

 

Section 5.

Eligibility and General Conditions of Awards

 

5.1                                 Eligibility.  The Committee may in its discretion grant
Awards to any Eligible Person, whether or not he or she has previously received
an Award; provided, however, eligibility to receive Annual Incentive Awards
shall be in accordance with Section 12 and eligibility to receive Service
Awards shall be in accordance with Section 13.

 

5.2                                 Award Agreement.  To the extent not set forth in the Plan, the
terms and conditions of each Award shall be set forth in an Award Agreement.

 

5.3                                 General Terms and
Termination of Affiliation.  Except as provided in an Award Agreement or
as otherwise determined by the Committee, all Options or SARs that have not
been exercised, or any other Awards that remain subject to a Restriction or
that have outstanding Performance Periods, or (in the case of Service Awards)
that have not been granted, shall be cancelled and forfeited to the Company
upon a Termination of Affiliation.  If Dividend
Equivalents have been credited with respect to any Award or dividends have
accrued on Restricted Stock, and such Award (in whole or in part) is forfeited,
all Dividend Equivalents or dividends credited or accrued in connection with
such forfeited Award (or portion of an Award) shall also be forfeited to the
Company.

 

5.4                                 Nontransferability of Awards.

 

(a)           Each Award and each right under any Award shall be
exercisable only by the Grantee during the Grantee’s lifetime, or, if
permissible under applicable law, by the Grantee’s guardian or legal
representative.

 

(b)           No Award (prior to the time, if applicable, Shares are
delivered in respect of such Award), and no right under any Award, may be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by a Grantee otherwise than by will or by the laws of descent and
distribution (or in the case of Restricted Stock, to the Company), and any such
purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company, any Affiliate
or any Joint Venture; provided that the designation of a Beneficiary to receive

 

14

 

benefits in the event of the Grantee’s death
shall not constitute an assignment, alienation, pledge, attachment, sale,
transfer or encumbrance.

 

(c)           Notwithstanding subsections (a) and (b) above,
to the extent allowed by the Committee or as may be provided in the Award
Agreement, an Award (other than an Incentive Stock Option) may be transferred,
without consideration other than nominal consideration, to a Permitted
Transferee.  For this purpose, a “Permitted Transferee” in respect
of any Grantee means any member of the Immediate Family of such Grantee, any
trust of which all of the primary beneficiaries are such Grantee or members of
his or her Immediate Family, or any partnership (including limited liability
companies and similar entities) of which all of the partners or members are
such Grantee or members of his or her Immediate Family; and the “Immediate Family” of a Grantee
includes any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the Grantee’s household (other than a tenant
or employee), a trust in which these persons have more than fifty percent of
the beneficial interest, a foundation in which these persons (or the Grantee)
control the management of assets, and any other entity in which these persons
(or the Grantee) control the management of assets, and any other entity in
which these persons (or the Grantee) own more than fifty percent of the voting
interests.  Such Award may be exercised by
such transferee in accordance with the terms of such Award.  If so determined by the Committee, a Grantee
may, in the manner established by the Committee, designate a Beneficiary or
Beneficiaries to exercise the rights of the Grantee and to receive any distribution
with respect to any Award upon the death of the Grantee.  A transferee, Beneficiary, guardian, legal
representative or other person claiming any rights under the Plan from or
through any Grantee shall be subject to any restrictions or limitations in the
Plan or in any applicable Award Agreement, and to any additional restrictions
or limitations deemed necessary or appropriate by the Committee.

 

(d)           Nothing herein shall be construed as requiring the
Committee to honor the order of a domestic relations court regarding an Award,
except to the extent required under applicable law.

 

5.5                                 Cancellation and Rescission
of Awards; Clawback Policy.  Unless the Award Agreement specifies
otherwise, the Committee may cancel, rescind, suspend, withhold, or otherwise
limit or restrict any unexercised Award at any time if the Grantee is not in
compliance with all applicable provisions of the Award Agreement and the Plan,
or is in violation of any restrictive covenant or other agreement with the
Company, an Affiliate or a Joint Venture, or has a Termination of
Affiliation.  All Awards granted under
this Plan, any property, including Shares, received in connection with any
exercise or vesting of, or lapse of Restriction on, any Awards, and any
proceeds received from the disposition of any such property, shall be subject
to any clawback policy adopted, and amended from time to time, by the
Committee.

 

5.6                                 Stand-Alone, Tandem and
Substitute Awards.

 

Subject to any limitation as
set forth in Section 2.50, Awards granted under the Plan may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in 

 

15

 

substitution
for, any other Award granted under the Plan or any award or benefit granted by
an Employer under any other plan, program, arrangement, contract or agreement
(a “Non-Plan Award”); provided that if the stand-alone, tandem or substitute
Award is intended to qualify for the Performance-Based Exception, it must
separately satisfy the requirements of the Performance-Based Exception.  If an Award is granted in substitution for
another Award or any Non-Plan Award, the Committee shall require the surrender
of such other Award or Non-Plan Award as consideration for the grant of the new
Award.  Awards granted in addition to or
in tandem with other Awards or Non-Plan Awards may be granted either at the
same time as or at a different time from the grant of such other Awards or
Non-Plan Awards.

 

The Committee may, in its
discretion and on such terms and conditions as the Committee considers
appropriate in the circumstances, grant Substitute Awards under the Plan.

 

5.7                                 Deferral of Award Payouts.  The Committee may permit a Grantee to defer,
or if and to the extent specified in an Award Agreement require the Grantee to
defer, receipt of the payment of cash or the delivery of Shares that would
otherwise be due under the Award Agreement pursuant to the lapse or waiver of
Restrictions with respect to Restricted Stock or Restricted Stock Units, or the
satisfaction of any requirements or goals with respect to Performance Units. If
any such deferral is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures governing such deferrals that
are in accordance with the Plan and Code Section 409A. Except as otherwise
provided in an Award Agreement, any payment or any Shares that are subject to
such deferral shall be made or delivered to the Grantee as specified in the
Award Agreement or pursuant to the Grantee’s deferral election.  No deferral shall be permitted with respect
to an Option unless, the deferral only defers the recognition of income until
the later of (i) the exercise or disposition of the option under Treasury
Regulation section 1.83-7 or (ii) the time the stock acquired pursuant to
the exercise of the Option first becomes substantially vested under Treasury
Regulation section 1.83-3(b).  No
deferral shall be permitted with respect to a SAR other than the deferral of
recognition of income until the exercise of the SAR.

 

5.8                                 Exercise by Non-Grantee.  If any Award is exercised as permitted by the
Plan by any Person other than the Grantee, the exercise notice shall be
accompanied by documentation as may reasonably be required by the Committee,
including evidence of the authority of such Person or Persons to exercise the
Award and, if the Committee so specifies, evidence satisfactory to the Company
that any death taxes payable with respect to such Shares have been paid or
provided for.

 

5.9                                 No Cash Consideration for
Awards.  Awards may
be granted for no cash consideration or for such minimal cash consideration as
may be required by applicable law.

 

5.10                           No Fractional Shares.  No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares, or whether such fractional Shares or any
rights thereto shall be canceled, terminated, or otherwise eliminated.

 

5.11                           Tax Obligations.  No Award shall be settled, whether in cash or
Shares, unless the applicable tax withholding requirements have been met to the
satisfaction of the Committee.

 

16

 

Section 6.

Stock Options

 

6.1                                 Grant of Options.

 

(a)           Committee Grant.  Subject to and consistent with the provisions
of the Plan, Options may be granted to any Eligible Person in such number, and
upon such terms, and at any time and from time to time as shall be determined
by the Committee.

 

(b)           Option Election.  In addition, if and to the extent permitted
by the Committee, an Eligible Person may elect (an “Option Election”) at such
times and in accordance with such rules and procedures adopted by the Committee,
to receive all or any portion of his salary and/or bonus (including any cash
Award payable under this Plan) in the form of an Award of Options (which the
Committee shall duly grant) having a fair market value (as determined by the
Committee using a Black Scholes option pricing model or similar option pricing
model, applied on the basis of such risk-free interest rate, expected option
life, volatility, average stock price, and other applicable parameters, or
formula therefor, as the Committee in its sole discretion deems appropriate)
equal to the amount of salary and/or bonus subject to such Option Election.

 

6.2                                 Award Agreement.  Each Option shall be evidenced by an Award
Agreement that shall specify the Option Price, the Option Term (ten (10) years
from its Grant Date unless a longer or shorter term is specified in the Award
Agreement), the number of Shares to which the Option pertains, the time or
times at which such Option shall be exercisable and such other provisions as
the Committee shall determine.

 

6.3                                 Option Price.  The Option Price shall be determined by the
Committee; provided, however, that except with respect to Substitute Options,
the Option Price shall not be less than one hundred percent (100%) of the Fair
Market Value of a Share on the Grant Date; provided that if the Committee so
determines, in the case of any Option retroactively granted in tandem with or
in substitution for another Award or any outstanding Award granted under any
other plan of the Company, the purchase price per Share shall not be less than
the purchase price on the Grant Date of such other Award or award under another
Company plan.

 

6.4                                 Repriced Options Subject to
Stockholder Approval.  The Committee may grant Options in
replacement of Options previously granted under this Plan or any other
compensation plan of an Employer, for such purposes and on such terms
(including Option Price) as it deems appropriate, subject to stockholder
approval if such grant would be deemed to be a repricing under the rules of
the New York Stock Exchange.

 

6.5                                 Grant of Incentive Stock
Options.  At the time
of the grant of any Option, the Committee may, in its discretion, designate
that such Option shall be made subject to additional restrictions to permit it
to qualify as an Incentive Stock Option. 
Any Option designated as an Incentive Stock Option:

 

(a)           shall not be granted more than ten (10) years after
the Effective Date;

 

17

 

(b)           shall be granted only to an employee of the Company or a Subsidiary
Corporation (as defined below);

 

(c)           shall have an Option Price of not less than 100% of the
Fair Market Value of a Share on the Grant Date, and, if granted to a person who
owns capital stock (including stock treated as owned under Section 424(d) of
the Code), possessing more than 10% of the total combined voting power of all
classes of capital stock of the Company or any Subsidiary Corporation (a “10% Owner”), have an Option Price
not less than 110% of the Fair Market Value of a Share on its Grant Date;

 

(d)           shall have an Option Term of not more than ten (10) years
(five years if the Grantee is a 10% Owner) from its Grant Date, and shall be
subject to earlier termination as provided herein or in the applicable Award
Agreement;

 

(e)           shall not have an aggregate Fair Market Value (as of the
Grant Date) of the Shares with respect to which Incentive Stock Options
(whether granted under the Plan or any other stock option plan of the Grantee’s
employer or any parent or Subsidiary Corporation (“Other Plans”))
are exercisable for the first time by such Grantee during any calendar year (“Current Grant”), determined in
accordance with the provisions of Section 422 of the Code, which exceeds
$100,000 (the “$100,000 Limit”);

 

(f)            shall, if the aggregate Fair Market Value of the Shares
(determined on the Grant Date) with respect to the Current Grant and all
Incentive Stock Options previously granted under the Plan and any Other Plans
which are exercisable for the first time during a calendar year (“Prior Grants”), would exceed the
$100,000 Limit, be, as to the portion in excess of the $100,000 Limit,
exercisable as a separate option that is not an Incentive Stock Option at such
date or dates as are provided in the Current Grant;

 

(g)           shall require the Grantee to notify the Committee of any
disposition of any Shares delivered pursuant to the exercise of the Incentive
Stock Option under the circumstances described in Section 421(b) of
the Code (relating to holding periods and certain disqualifying dispositions) (“Disqualifying Disposition”),
within 10 days of such a Disqualifying Disposition;

 

(h)           shall by its terms not be assignable or transferable other
than by will or the laws of descent and distribution, and may be exercised,
during the Grantee’s lifetime, only by the Grantee; provided, however, that
the Grantee may, to the extent provided in the Plan, in any manner specified by
the Committee, designate in writing a Beneficiary to exercise his or her
Incentive Stock Option after the Grantee’s death; and

 

(i)            shall, if such Option nevertheless fails to meet the
foregoing requirements, or otherwise fails to meet the requirements of Section 422
of the Code for an Incentive Stock Option, be treated for all purposes of this
Plan, except as otherwise provided in subsections (d) and (e) above,
as an Option that is not an Incentive Stock Option.

 

For purposes of this Section 6.5,
“Subsidiary Corporation” means a
corporation other than the Company, in an unbroken chain of corporations
beginning with the Company, if, at the time of granting the Option, each of the
corporations other than the last corporation in the 

 

18

 

unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in such chain.  Notwithstanding the foregoing and Section 3.2,
the Committee may, without the consent of the Grantee, at any time before the
exercise of an Option (whether or not an Incentive Stock Option), take any
action necessary to prevent such Option from being treated as an Incentive
Stock Option.

 

6.6                                 Method of Option Exercise.

 

(a)           Except as may otherwise be provided by the Committee in an
Award Agreement, Options shall be exercised by the delivery of a written notice
to the Company, setting forth the number of Shares with respect to which the
Option is to be exercised, accompanied by full payment (including any
applicable tax withholding) for the Shares made by any one or more of the
following means on the Exercise Date (or such other date as may be permitted in
writing by the Secretary of the Company):

 

(i)            cash, personal check or wire transfer;

 

(ii)           with the approval of the Committee, Shares valued at their
Fair Market Value on the Exercise Date (including, in lieu of actually
surrendering to the Company a number of Shares then owned by the Grantee, the
Company may, in its discretion, permit the Grantee to submit to the Company a
statement affirming ownership by the Grantee of such number of Shares and
request that such Shares, although not actually surrendered, be deemed to have
been surrendered by the Grantee as payment of the exercise price);

 

(iii)          subject to applicable law (including the prohibited loan
provisions of Section 402 of the Sarbanes-Oxley Act of 2002), through the
sale of the Shares acquired on exercise of the Option through a broker dealer
to whom the Grantee has submitted an irrevocable notice of exercise and
irrevocable instructions to deliver promptly to the Company the amount of sale
or loan proceeds sufficient to pay for such Shares, together with, if requested
by the Company, the amount of federal, state, local or foreign withholding
taxes payable by Grantee by reason of such exercise;

 

(iv)          with the approval of the Committee, for any Nonqualified Stock
Option, by a “net exercise” arrangement pursuant to which the Company will not
require a payment of the Option Price but will reduce the number of Shares upon
the exercise by the largest number of whole Shares that has a Fair Market Value
on the date of exercise that does not exceed the aggregate Option Price; or

 

(v)           Any combination of (i) through (iv) above.

 

(b)                                 The Committee
may in its discretion and subject to applicable tax laws including Section 409A,
specify that, if any Shares of Restricted Stock (“Tendered Restricted Shares”)
are used to pay the Option Price, (x) all the Shares acquired on exercise
of the Option shall be subject to the same restrictions as the Tendered
Restricted Shares, determined as of the Exercise Date, or (y) a number of Shares
acquired on exercise of the Option equal to the number of Tendered Restricted
Shares shall be subject 

 

19

 

to the same restrictions as the Tendered
Restricted Shares, determined as of the Exercise Date.

 

(c)           At the discretion of the Committee and subject to
applicable law (including the prohibited loan provisions of Section 402 of
the Sarbanes-Oxley Act of 2002), the Company may loan a Grantee all or any
portion of the amount payable by the Grantee to the Company upon exercise of
the Option.

 

6.7           Shareholder Privileges.  No Grantee or Permitted Transferee shall have
any rights as a shareholder with respect to any Shares covered by an Option
until the Grantee/Permitted Transferee becomes the holder of record of such
Shares, and no adjustments shall be made for dividends or other distributions
or other rights as to which there is a record date preceding the date such
Grantee/Permitted Transferee becomes the holder of record of such Shares,
except as provided in Section 4.2.

 

Section 7.

Stock Appreciation Rights

 

7.1           Grant of
SARs.  Subject to
and consistent with the provisions of the Plan, the Committee, at any time and
from time to time, may grant SARs to any Eligible Person either alone or in
addition to other Awards granted under the Plan.  SARs may, but need not, be granted in
connection with a specific Option.  Any
SAR related to a Non-Qualified Option may be granted at the same time such
Option is granted or at any time thereafter before exercise or expiration of
such Option, but in no event may the Strike Price of a SAR granted related to a
Non-Qualified Option be less than the Option Price of the related Non-Qualified
Option.  Any SAR related to an Incentive
Stock Option must be granted at the same time such Option is granted.  The Committee may impose such conditions or
restrictions on the exercise of any SAR as it shall deem appropriate.  In no event may the compensation payable
under a SAR be greater than the excess of the Fair Market Value of the Share on
the date the SAR is exercised over the Fair Market Value of the Share on the
date of grant of the SAR.  The stock
appreciation right does not include any feature for the deferral of
compensation other than the deferral of recognition of income until the
exercise of the stock appreciation right.

 

7.2           Award
Agreements.  Each
SAR shall be evidenced by an Award Agreement in such form as the Committee may
approve, which shall contain such terms and conditions not inconsistent with
the provisions of the Plan as shall be determined from time to time by the
Committee.  Unless otherwise provided in
the Award Agreement, (a) no SAR grant shall have a Term of more than ten (10) years
from the date of grant of the SAR, and (b) SARs granted in tandem with
Options shall vest at the same time and in the same proportions as the
underlying Options.

 

7.3           Strike
Price.  The Strike
Price of a SAR shall be determined by the Committee in its sole discretion;
provided that the Strike Price shall not be less than the lesser of 100% of the
Fair Market Value of a Share on the Grant Date of the SAR or the Option Price
under the Non-Qualified Option to which the SAR relates.

 

20

 

7.4           Exercise
and Payment. 
Except as may otherwise be provided by the Committee in an Award
Agreement, SARs shall be exercised by the delivery of a written notice to the
Company, setting forth the number of Shares with respect to which the SAR is to
be exercised.  Payments made in
connection with the exercise of a SAR shall be made on or as soon as
administratively practicable following the exercise date.  No payment of a SAR shall be made unless
applicable tax withholding requirements have been satisfied in accordance with Section 16.1(a) or
otherwise. Any payment by the Company in respect of a SAR may be made in cash,
Shares, other property, or any combination thereof, as the Committee, in its
sole discretion, shall determine.

 

7.5           Grant
Limitations.  The
Committee may at any time impose any other limitations upon the exercise of
SARs which it deems necessary or desirable in order for the Grant to qualify
for an exemption from Section 16(b) of the Exchange Act, an exemption
from Code Section 162(m) or to achieve any other desirable tax
results for the Grantee or the Company.

 

Section 8.

Performance Units

 

8.1           Grant of
Performance Units. 
Subject to and consistent with the provisions of the Plan, Performance
Units may be granted to any Eligible Person in such number, and upon such
terms, and at any time and from time to time, as shall be determined by the
Committee.  Performance Units shall be
evidenced by an Award Agreement in such form as the Committee may approve,
which shall contain such terms and conditions not inconsistent with the
provisions of the Plan as shall be determined from time to time by the
Committee.  If entitlement to Performance
Units is conditioned upon the attainment of Performance Goals in a Performance
Period, the Performance Period will not be less than one year.

 

8.2           Value/Performance
Goals.  The
Committee shall set Performance Goals which, depending on the extent to which
they are met during a Performance Period, will determine the number or value of
Performance Units that will be paid to the Grantee at the end of the
Performance Period.  To the extent the
Committee deems it appropriate to comply with Section 162(m) of the
Code, all Performance Goals shall be objective, and shall be based on
Performance Measures.

 

8.3           Earning of
Performance Units. 
After the applicable Performance Period has ended, the holder of
Performance Units shall be entitled to payment based on the performance level
attained with respect to Performance Goals set by the Committee and as
described in Section 8.2.  If the
Performance Unit Award is intended to comply with the Performance-Based
Exception, the Committee shall certify the level of attainment of the
Performance Goals in writing before the Award is settled.  At the discretion of the Committee, the Award
Agreement may specify that an Award of Performance Units is payable in cash,
Shares, Restricted Stock, or Restricted Stock Units.

 

8.4           Adjustment
on Change of Position. 
If a Grantee is promoted, demoted or transferred to a different business
unit of the Company during a Performance Period, then, to the extent the
Committee determines that the Award, the performance goals, or the Performance 

 

21

 

Period are no longer
appropriate, (taking into account the desirability of satisfying the
Performance-Based Exception), the Committee may adjust, change, eliminate or
cancel the Award, the performance goals, or the applicable Performance Period,
as it deems appropriate in order to make them appropriate and comparable to the
initial Award, the performance goals, or the Performance Period.

 

8.5                                 Crediting of
Dividend Equivalents.  At the
discretion of the Committee, a Grantee may be entitled to receive Dividend
Equivalents declared with respect to any Shares underlying any Performance
Units.  To the extent such Dividend
Equivalents are eligible to be received, at the discretion of the Committee and
as set forth in the Award Agreement, such accrued Dividend Equivalents may be
credited in the form of additional property (including additional Performance
Units), having a value not to exceed the aggregate value of such Dividend
Equivalents on the payment date of the related dividends, or credited into a
notional deferred cash account, which may or may not accrue interest.  Any additional amounts or property
attributable to the payment of Dividend Equivalents as provided herein shall be
subject to the same restrictions and other terms as apply to the Performance
Units with respect to which such Dividend Equivalents are credited and in no
event will the payment of such property or deferred cash be made before the
underlying Performance Units are payable.

 

Section 9.

Restricted Stock

 

9.1                                 Grant of Restricted Stock.  Subject to and consistent with the provisions
of the Plan, the Committee, at any time and from time to time, may grant Restricted
Stock to any Eligible Person in such amounts as the Committee shall determine.

 

9.2                                 Award Agreement.  Each grant of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Restrictions, the number
of Shares subject to the Restricted Stock Award, and such other provisions as
the Committee shall determine.  The
Committee may impose such Restrictions on any Restricted Stock, including
time-based Restrictions, Restrictions based upon the achievement of specific
performance goals, time-based Restrictions following the achievement of
specific performance goals, and/or restrictions under applicable securities
laws; provided that any time-based Restrictions (other than time-based
Restrictions following the achievement of specific performance goals) shall
remain in effect (in whole or in part) at least until the third anniversary of
the Grant Date, except as may otherwise be provided in an Award Agreement for
accelerated vesting in the event of death, disability, retirement, Change in Control
or a Termination of Affiliation following a Change in Control.  In the case of Restricted Stock awarded based
on performance in a Performance Period, the Performance Period will be no less
than one year.

 

9.3                                 Consideration for Restricted
Stock.  The Committee
shall determine the amount, if any, that a Grantee shall pay for Restricted
Stock.

 

9.4                                 Effect of Forfeiture.  If Restricted Stock is forfeited, and if the
Grantee paid for such Restricted Stock or acquired such Restricted Stock upon
the exercise of an Option, the Grantee shall be deemed to have resold such
Restricted Stock to the Company at a price equal to the lesser of (x) the
amount paid by the Grantee for such Restricted Stock or the exercise price of 

 

22

 

the Option, as applicable,
or (y) the Fair Market Value of a Share on the date of such
forfeiture.  The Company shall pay to the
Grantee the deemed sale price as soon as is administratively practical.  Such Restricted Stock shall cease to be outstanding,
and shall no longer confer on the Grantee thereof any rights as a stockholder
of the Company, from and after the date of the event causing the forfeiture,
whether or not the Grantee accepts the Company’s tender of payment for such
Restricted Stock.

 

9.5                                 Escrow; Legends.  The Committee may provide that the evidence
of ownership of Shares of Restricted Stock (x) shall be held (together
with a stock power executed in blank by the Grantee) in escrow or other
custodial arrangement by the Secretary of the Company until such Restricted
Stock becomes nonforfeitable or is forfeited and/or (y) shall bear an
appropriate legend restricting the transfer of such Restricted Stock under the
Plan.  If any Restricted Stock becomes
nonforfeitable, the Company shall cause certificates (or other evidence of
ownership) for such Shares to be delivered without such legend or shall cause a
release of restrictions on a book entry account maintained by the Company’s
transfer agent.

 

9.6           Stockholder
Rights in Restricted Stock.  Restricted Stock, whether held by a Grantee
or in escrow or other custodial arrangement by the Secretary of the Company,
shall confer on the Grantee all rights of a stockholder of the Company, except
as otherwise provided in the Plan or Award Agreement.  Unless otherwise provided in an Award
Agreement, any cash dividends paid with respect to Shares of Restricted Stock
will automatically be deferred and reinvested in additional Shares of
Restricted Stock and any cash dividends or stock dividends paid with respect to
Restricted Stock shall be subject to the same restrictions and other terms as
apply to the Shares of Restricted Stock with respect to which such dividends
are issued.  The Committee may in its
discretion provide for payment of interest on deferred cash dividends.  Notwithstanding any of the foregoing, in no
event may any cash dividends or stock dividends paid with respect to Restricted
Stock be paid to the Grantee earlier than the date the underlying Shares of
Restricted Stock become vested.

 

Section 10.

Restricted Stock Units

 

10.1                           Grant of Restricted Stock
Units.  Subject to
and consistent with the provisions of the Plan and Code Sections 409A(a)(2), (3) and
(4), the Committee, at any time and from time to time, may grant Restricted
Stock Units to any Eligible Person, in such amount and upon such terms as the
Committee shall determine.  A Grantee
shall have no voting rights in Restricted Stock Units.

 

10.2                           Award Agreement.  Each grant of Restricted Stock Units shall be
evidenced by an Award Agreement that shall specify the Restrictions, the number
of Shares subject to the Restricted Stock Units granted, and such other
provisions as the Committee shall determine in accordance with the Plan and
Code Section 409A.  The Committee
may impose such Restrictions on Restricted Stock Units, including time-based
Restrictions, Restrictions based on the achievement of specific performance
goals, time-based Restrictions following the achievement of specific
performance goals, Restrictions based on the occurrence of a specified event,
and/or restrictions under applicable securities laws; provided that any
time-based restrictions (other than time-based Restrictions following the
achievement of specific 

 

23

 

performance goals) shall
remain in effect (in whole or in part) at least until the third anniversary of
the Grant Date, except as may otherwise be provided in an Award Agreement for
accelerated vesting in the event of death, disability, retirement, Change in
Control or a Termination of Affiliation following a Change in Control.  In the case of Restricted Stock Units awarded
based on performance in a Performance Period, the Performance Period will not
be less than one year.

 

10.3                           Crediting Restricted Stock
Units.  The Company
shall establish an account (“RSU Account”) on its books for each Eligible
Person who receives a grant of Restricted Stock Units.  Restricted Stock Units shall be credited to
the Grantee’s RSU Account as of the Grant Date of such Restricted Stock
Units.  RSU Accounts shall be maintained
for recordkeeping purposes only and the Company shall not be obligated to
segregate or set aside assets representing securities or other amounts credited
to RSU Accounts.  The obligation to make
distributions of securities or other amounts credited to RSU Accounts shall be
an unfunded, unsecured obligation of the Company.

 

(a)           Crediting of Dividend Equivalents.  Except
as otherwise provided in an Award Agreement, whenever dividends are paid or
distributions are made with respect to Shares, Dividend Equivalents shall be
credited to RSU Accounts on all Restricted Stock Units credited thereto, as of
the record date for such dividend or distribution.  Such Dividend Equivalents shall be credited
to the RSU Account either (i) in the form of additional Restricted Stock
Units (in a number determined by dividing the aggregate value of such Dividend
Equivalents by the Fair Market Value of a Share at the payment date of such
dividend or distribution) or (ii) deferred cash.  Any additional RSUs or deferred cash amounts
shall be subject to the same restrictions and other terms as apply to the RSUs
with respect to which such Dividend Equivalents are credited and in no event
will the payment of such property or deferred cash be made before the
underlying RSUs are payable.

 

(b)           Settlement of RSU Accounts.  The Company shall settle an RSU Account by
delivering to the holder thereof (which may be the Grantee or his or her
Beneficiary, as applicable) a number of Shares equal to the whole number of
Shares underlying the Restricted Stock Units then credited to the Grantee’s RSU
Account (or a specified portion in the event of any partial settlement);
provided that any fractional Shares underlying Restricted Stock Units remaining
in the RSU Account on the Settlement Date shall be distributed in cash in an
amount equal to the Fair Market Value of a Share as of the Settlement Date
multiplied by the remaining fractional Restricted Stock Unit.  Subject to any deferral election made by the
Grantee or the terms of any Award Agreement providing for a deferral of
settlement of Shares underlying the Restricted Stock Units or alternative
settlement date, the “Settlement Date”
for all Restricted Stock Units credited to a Grantee’s RSU Account and that
otherwise have not been forfeited shall be the earlier of (i) when
Restrictions applicable to an Award of Restricted Stock Units have lapsed, or (ii) as
soon as administratively practical following the Grantee’s death, disability,
retirement, Change in Control or Termination of Affiliation following a Change
in Control; provided, however, to the extent an RSU is subject to Code Section 409A,
no settlement shall be made on account of a disability unless such disability
meets the definition of “disability” as defined in Code Section 409A(a)(2)(C)(i)),
and no settlement shall be made on account of a retirement or 

 

24

 

Termination of Affiliation unless such
retirement or Termination of Affiliation constitutes a “separation from service”
(as provided in Code Section 409A(a)(2)(A)(i)).

 

Section 11.

Deferred Stock

 

11.1         Grant of
Deferred Stock. 
Subject to and consistent with the provisions of the Plan and Code
Sections 409A(a)(2), (3), and (4), the Committee, at any time and from time to
time, may grant Deferred Stock to any Eligible Person in such number, and upon
such terms, as the Committee, at any time and from time to time, shall
determine, including grants at the election of a Grantee to convert Shares to
be acquired upon lapse of restrictions on Restricted Stock or Restricted Stock
Units into such Deferred Stock.  A
Grantee shall have no voting rights in Deferred Stock.

 

11.2         Award
Agreement.  Each
grant of Deferred Stock shall be evidenced by an Award Agreement that shall
specify the number of Shares underlying the Deferred Stock subject to an Award,
the date such Shares of Deferred Stock shall be settled and such other
provisions as the Board shall determine that are in accordance with the Plan
and Code Section 409A.

 

11.3         Deferred
Stock Elections.

 

(a)           Making of Deferral Elections.  If and to the extent permitted by the
Committee, an Eligible Person may elect (a “Deferral Election”) at such times
and in accordance with rules and procedures adopted by the Committee (which
shall comport with Code Section 409A), to receive all or any portion of
his salary and/or bonus (including any cash or Share Award payable under this
Plan) in the form of a number of shares of Deferred Stock equal to the quotient
of the amount of salary and/or cash bonus or other Award to be paid in the form
of Deferred Stock divided by the Fair Market Value of a Share on the date such
salary or bonus or other Award would otherwise be paid in cash.  The Grant Date for an Award of Deferred Stock
made pursuant to a Deferral Election shall be the date the Deferrable Amount
subject to a Deferral Election would otherwise have been paid to the Grantee in
cash or Shares.

 

(b)           Timing of Deferral Elections.  An initial Deferral Election must be filed
with the Controller of the Company no later than December 31 of the year
preceding the calendar year in which the amounts subject to the Deferral
Election would otherwise be earned, subject to such restrictions and advance
filing requirements as the Company may impose. 
A Deferral Election shall be irrevocable as of the filing deadline.  Each Deferral Election shall remain in effect
with respect to subsequently earned amounts unless the Eligible Person revokes
or changes such Deferral Election.  Any
such revocation or change shall have prospective application only.

 

11.4         Deferral
Account.

 

(a)           Establishment of Deferral Accounts.  The Company shall establish an account (“Deferral Account”) on its books
for each Eligible Person who receives a grant of Deferred Stock or makes a
Deferral Election.  Deferred Stock shall
be credited to the Grantee’s Deferral Account as of the Grant Date of such
Deferred Stock.  Deferral 

 

25

 

Accounts shall be maintained for
recordkeeping purposes only and the Company shall not be obligated to segregate
or set aside assets representing securities or other amounts credited to
Deferral Accounts.  The obligation to
make distributions of securities or other amounts credited to Deferral Accounts
shall be an unfunded, unsecured obligation of the Company.

 

(b)           Crediting of Dividend Equivalents.  Except as otherwise provided in an Award
Agreement, whenever dividends are paid or distributions made with respect to
Shares, Dividend Equivalents shall be credited to Deferral Accounts on all
Deferred Stock credited thereto as of the record date for such dividend or
distribution.  Such Dividend Equivalents
shall be credited to the Deferral Account either (i) in the form of
additional Deferred Stock (in a number determined by dividing the aggregate
value of such Dividend Equivalents by the Fair Market Value of a Share at the
payment date of such dividend or distribution) or (ii) deferred cash.  Any additional Deferred Stock or deferred
cash amounts shall be subject to the same restrictions and other terms as apply
to the Shares with respect to which such Dividend Equivalents are credited and
in no event will the payment of such property or deferred cash be made before
the underlying Shares are payable.

 

(c)           Settlement of Deferral Accounts.  The Company shall settle a Deferral Account
by delivering to the holder thereof (which may be the Grantee or his or her
Beneficiary or estate, as applicable) a number of Shares equal to the whole
number of Shares of Deferred Stock then credited to the Grantee’s Deferral
Account (or a specified portion in the event of any partial settlement);
provided that any fractional Shares of Deferred Stock remaining in the Deferral
Account on the Settlement Date shall be distributed in cash in an amount equal
to the Fair Market Value of a Share as of the Settlement Date multiplied by the
remaining fractional Share.  The “Settlement
Date” for all Deferred Stock credited to a Grantee’s Deferral Account shall be
determined in accordance with Code Section 409A.

 

Section 12.

Annual Incentive Awards

 

12.1                           Annual Incentive Awards.  Subject to and consistent with the provisions
of the Plan, Annual Incentive Awards may be granted to any Eligible Person in
accordance with this Section 12. 
The Committee shall from time to time designate the individuals eligible
to be granted an Annual Incentive Award for a Year.  The Performance Goals for a Year must be
established in writing not later than ninety (90) days after the commencement
of the Performance Period and the outcome must be substantially uncertain at
the time the Performance Goals are established. 
Notwithstanding the preceding sentence, with respect to Covered
Employees who are designated as eligible to be granted an Annual Incentive
Award for such Year in accordance with this Section 12, such designation
shall be made not later than ninety (90) days after the commencement of such
Year or, in the case of a Covered Employee who becomes eligible for an Annual
Incentive Award due to being hired or promoted during the Year, such
designation shall not be made after more than 25% of the portion of the Year
remaining (after such hiring or promotion) has elapsed.  The Committee may designate an Eligible
Person as eligible for a full Year or for a period of less than a full
Year.  An Eligible Person who, for any
reason, is

 

26

 

designated as eligible to be
granted an Annual Incentive Award for a Year after the Performance Goals for
the Year have been set shall only be eligible to defer a portion of the Annual
Incentive Award in accordance with applicable guidance under Section 409A
of the Code.  The opportunity to be
granted an Annual Incentive Award shall be evidenced by an Award Agreement,
which shall contain such terms not inconsistent with the Plan as the Committee
shall determine.  The Committee may
designate an Eligible Person as eligible for a full Year or for a period of
less than a full Year.  The opportunity
to be granted an Annual Incentive Award shall be evidenced by an Award
Agreement, which shall specify the individual’s Bonus Opportunity, the
Performance Goals, and such other terms not inconsistent with the Plan as the
Committee shall determine.

 

12.2                           Determination of Amount of
Annual Incentive Awards.

 

(a)                                  Aggregate Maximum.  The Committee may establish guidelines as to
the maximum aggregate amount of Annual Incentive Awards payable for any year.

 

(b)                                 Establishment of Performance Goals and Bonus Opportunities.  Within the first ninety (90) days of each
Year, the Committee shall establish Performance Goals for the Year (which may
be the same or different for some or all Eligible Persons) and shall establish
the threshold, target and maximum Bonus Opportunity for each Participant for
the attainment of specified threshold, target and maximum Performance
Goals.  Performance Goals and Bonus
Opportunities may be weighted for different factors and measures as the
Committee shall determine.

 

(c)                                  Committee Certification and Determination of Amount of Annual Incentive
Award.  The
Committee shall determine and certify in writing the degree of attainment of
Performance Goals as soon as administratively practicable after the end of each
Year but not later than ninety (90) days after the end of such Year.  The Committee shall determine an individual’s
maximum Annual Incentive Award based on the level of attainment of the
Performance Goals (as certified by the Committee) and the individual’s Bonus
Opportunity.  The Committee reserves the
discretion to reduce (but not below zero) the amount of an individual’s Annual
Incentive Award below the maximum Annual Incentive Award; provided, however,
that any such reduction must be determined prior to the end of the Year for
which such Annual Incentive Award relates. 
The determination of the Committee to reduce (or not pay) an individual’s
Annual Incentive Award for a Year shall not affect the maximum Annual Incentive
Award payable to any other individual. 
No Annual Incentive Award shall be payable to an individual unless at
least the threshold Performance Goal is attained.

 

(d)                                 Termination of Affiliation.  If an individual has a Termination of Affiliation
during the Year, the Committee may authorize the payment of an Annual Incentive
Award to such individual, and in the absence of such authorization, the
individual shall receive no Annual Incentive Award for such Year.

 

12.3                           Time of Payment of Annual
Incentive Awards.  Annual Incentive Awards shall be paid as soon
as administratively practicable after the Committee certifies the degree of
attainment of the Performance Goals and determines the amount of the Annual
Incentive Award, 

 

27

 

but not later than 2 1⁄2
months following the end of the Year to which the Annual Incentive Award
pertains.

 

12.4                           Form of Payment of
Annual Incentive Awards.  An individual’s Annual Incentive Award for a
Year shall be paid in cash, Shares, Restricted Stock, Options, or any other
form of Award or any combination thereof as is provided in the Award
Agreement.  The Committee may provide in
an Award Agreement that payment of an Annual Incentive Award may be deferred in
accordance with any rules or procedures that may be established by the
Committee from time to time, either before or after the decision or election to
defer is made.

 

Section 13.

Service Awards

 

13.1                           Service Awards.  Subject to and consistent with the provisions
of the Plan, Service Awards shall be granted in accordance with this Section 13.

 

13.2                           Definitions.  For purposes of this Section 13, the
following terms have the meaning set forth below:

 

(a)                                  “Anniversary Date” means the
12-month anniversary of an individual’s Hire Date.

 

(b)                                 “Five-Year Anniversary Date” means
each Anniversary Date as of which an individual’s number of years of service is
a whole number that is a multiple of five.

 

(c)                                  “Hire Date” means the date an
individual first performed services as an employee for the Company, for an
entity that is a Designated Subsidiary (as defined in Section 13.6), or
(except as provided in Section 13.4(c)) for Kansas City Southern
Industries, Inc. or its successor (“KCSI”); provided, however, that the
Chief Executive Officer of the Company (or the Committee with respect to Section 16
Persons) can determine that the Hire Date shall be the date an individual first
performs service for an entity that later becomes a Designated Subsidiary.

 

(d)                                 “Quarter End” means the last day of
the calendar quarter in which (or on which) occurs a Five-Year Anniversary Date
with respect to an Eligible Person.

 

13.3                           Granting of Service Awards.                                      Each Eligible
Person who is an employee of the Company or a Designated Subsidiary shall (subject
to Committee approval in the case of a Section 16 Person) be granted a
Service Award as of the Quarter End for the calendar quarter in which each
Five-Year Anniversary Date occurs; provided that such Eligible Person (a) is
an employee of the Company or a Designated Subsidiary on such Quarter End, or (b) died
or had a Termination of Affiliation on account of disability or Retirement on
or after the Eligible Person’s relevant Five-Year Anniversary Date and prior to
such Quarter End.  The number of Shares
to be delivered in satisfaction of the Service Award shall be determined under
the following table:

 

28

 

	
  Years of
  Service

  	
   

  	
  Shares to
  Be Awarded

  
	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  5

  
	
  10

  	
   

  	
  10

  
	
  15

  	
   

  	
  15

  
	
  20

  	
   

  	
  20

  
	
  25

  	
   

  	
  25

  
	
  30

  	
   

  	
  30

  
	
  35

  	
   

  	
  35

  
	
  40

  	
   

  	
  40

  
	
  45

  	
   

  	
  45

  
	
  50

  	
   

  	
  50

  

 

For five year increment
anniversaries above fifty years of service, the number of Shares awarded shall,
as shown above, equal the number of years of service.

 

13.4                           Determination of Years of
Service.  An employee
of the Company or a Designated Subsidiary shall be credited with one year of
service for each 12-month period of continuous full time employment (regularly
employed more than 20 hours per week) with the Company or a Designated
Subsidiary or, except as provided in Section 13.4(c), with KCSI, measured
from the individual’s Hire Date and anniversaries of the Hire Date, subject to
the special rules set forth below:

 

(a)                                  If an Employee
has a Termination of Affiliation and then becomes reemployed with the Company
or a Designated Subsidiary within five years of such Termination of
Affiliation, the Employee’s complete (but not partial) Years of Service earned
prior to such Termination of Affiliation shall continue to count towards the
individual’s Years of Service.  In such
case, the individual’s Hire Date (for purposes of determining the date of the
Five-Year Anniversary Date) shall be deemed to be the date the individual
returns to employment with the Company or a Designated Subsidiary.  No credit shall be given for any partial or
complete Years of Service which occurred prior to a five (5) year or more
break in employment with the Company and its Designated Subsidiaries.

 

(b)                                 An individual’s
service shall be deemed continuous throughout an approved leave of absence not
exceeding one year, provided the individual returns to
employment with the Company or a Designated Subsidiary for at least 30 days
upon the conclusion of the approved leave of absence.  If the individual does not so return, the
individual shall be deemed to have had a Termination of Affiliation at the
commencement of the approved leave of absence. 
Thus, any Service Award that would be delivered to an individual during
an approved leave of absence shall not be delivered until the individual has
completed at least 30 days of employment following the conclusion of the
approved leave of absence.

 

(c)                                  With respect to
any individual who became an employee of the Company or a Designated Subsidiary
on or after October 7, 2002, service with KCSI after June 28, 2000,
shall be disregarded.

 

29

 

The Committee shall
establish rules for determining the years of service in cases not covered
by the foregoing.

 

13.5                           Delivery of Service Awards.

 

(a)                                  Service Awards
shall be delivered as soon as administratively practical following the
applicable Quarter End, provided the individual (i) is an
Eligible Person on such Quarter End, or (ii) died or had a Termination of
Affiliation on account of disability (as defined by the Committee, or if not so
defined, as defined in Code Section 409A(a)(2)(C)(i)) or Retirement on or
after the individual’s relevant Five-Year Anniversary and prior to applicable
Quarter End.  Service Awards may be
accompanied by such cash payments as the Committee determines to be appropriate
to reduce or eliminate the tax effect of the receipt of a Service Award by an
individual.

 

(b)                                 All Shares
issued in connection with a Service Award shall be subject to the other
provisions of the Plan.

 

13.6                           Designation of Subsidiaries.  The Committee shall designate those
Subsidiaries and Joint Ventures whose employees shall be eligible for Service
Awards.  Such Subsidiaries and Joint
Ventures shall be “Designated Subsidiaries” for purposes of this Section 13.  The Committee shall keep records of Designated
Subsidiaries, together with any special terms and conditions applicable to
participation by employees of a Designated Subsidiary.

 

13.7                           Committee Delegation.  The Committee hereby delegates its authority
under Section 3 with respect to this Section 13 to the Chief
Executive Officer of the Company; provided that the Committee’s authority with
respect to Section 16 Persons is not delegated.  The Committee reserves the right to revoke
this delegation in whole or in part at any time.

 

Section 14.

Change in
Control

 

14.1                           Special Treatment in the
Event of a Change in Control.

 

(a)                                  In order to
maintain the Grantee’s rights in the event of any Change in Control of the
Company, as hereinafter defined, the Committee, as constituted before such
Change in Control, may, in its sole discretion, as to any Award, either at the
time an Award is made hereunder or any time thereafter, take any one (1) or
more of the following actions: (i) provide for the purchase by the Company
of any such Award, upon the Grantee’s request, for an amount of cash equal to
the amount that could have been attained upon the exercise of such Award or
realization of the Grantee’s rights had such Award been currently exercisable
or payable; (ii) make such adjustment to any such Award then outstanding
as the Committee deems appropriate to reflect such Change in Control; or (iii) cause
any such Award then outstanding to be assumed, or new rights substituted
therefor, by the acquiring or surviving corporation after such Change in
Control.

 

(b)                                 Except where an
Award Agreement or other agreement approved by the Committee to which a Grantee
is a party addresses the effect of a Change in Control or 

 

30

 

Termination of Affiliation following a Change
in Control on an Award, in which case such agreement will control, in the event
that within the period commencing on a Change in Control of the Company and
ending on the third anniversary of the Change in Control, the Company
terminates a Grantee’s employment other than for cause (as defined in the Award
Agreement), there shall be an automatic acceleration of any time periods
relating to the exercise or realization of any such Award (other than Service
Awards) and all performance goals relating to Performance Units and/or Annual
Incentive Awards shall be deemed satisfactorily completed without any action
required by the Committee so that such Award may be exercised or realized in
full on or before a date fixed by the Committee.  The Committee may, in its discretion, include
such further provisions and limitations in any Award Agreement as it may deem
in the best interests of the Company.

 

14.2                           Definition of Change in
Control.  For
purposes of this Plan, a “Change in Control”
shall be deemed to have occurred if:

 

(a)                                  the Incumbent
Directors cease for any reason to constitute at least seventy-five percent
(75%) of the directors of the Company then serving;

 

(b)                                 any “person” (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) other than the Company
or any majority-owned Subsidiary of the Company, or an employee benefit plan of
the Company or of any majority-owned Subsidiary of the Company shall have
become the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act) directly or indirectly, of securities of the Company
representing twenty percent (20%) or more (calculated in accordance with Rule 13d-3)
of the combined voting power of the Company’s then outstanding voting
securities; provided, however, that a person’s becoming such a beneficial owner
shall not constitute a Change in Control if such person is party to an
agreement that limits the ability of such person and its affiliates (as defined
in Rule 12b-2 under the Exchange Act) to obtain and exercise control over
the management and policies of the Company.

 

(c)                                  a
Reorganization Transaction is consummated, other than a Reorganization
Transaction which results in the Voting Securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into Voting Securities of the surviving entity) at least
sixty percent (60%) of the total voting power represented by the Voting
Securities of such surviving entity outstanding immediately after the
Reorganization Transaction, if the voting rights of each Voting Security
relative to the other Voting Securities were not altered in the Reorganization
Transaction; or

 

(d)                                 the
stockholders of the Company approve a plan of complete liquidation of the
Company, other than in connection with a Reorganization Transaction.

 

Notwithstanding the
occurrence of any of the foregoing events, (x) a Change in Control shall
not occur with respect to a Grantee if, in advance of such event, the Grantee
agrees in writing that such event shall not constitute a Change in Control, and
(y) to the extent that any payment under the Plan is subject to Code Section 409A
and an applicable payment event is a 

 

31

 

Change
in Control, in addition to satisfying the above definition of Change in
Control, such Change in Control must also constitute a Change in Control under
Code Section 409A.

 

14.3                           Definitions.  For purposes of this Section 14 and the
definition of Change in Control, the following terms have the meaning set forth
below:

 

(a)                                  “Incumbent
Directors” means (i) an individual who was a member of the Board on the
Effective Date; or (ii) an individual whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least seventy-five
percent (75%) of the members of the Board then still in office who were members
of the Board on the Effective Date; or (iii) individuals whose election,
or nomination for election by the Company’s stockholders, was approved by a
vote of at least seventy-five percent (75%) of the members of the Board then
still in office who were elected in the manner described in (i) or (ii) above;
provided that no director whose election was in connection with a proposed
transaction which, if consummated, would be a Change in Control, shall be an
Incumbent Director.

 

(b)                                 “Related Party”
means (i) a majority-owned Subsidiary of the Company; or (ii) an
employee or group of employees of the Company or of any majority-owned
Subsidiary of the Company; or (iii) an employee benefit plan of the
Company or of any majority-owned Subsidiary of the Company; or (iv) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of the voting power of
Voting Securities of the Company.

 

(c)                                  “Reorganization
Transaction” means a merger, reorganization, consolidation, or similar
transaction or a sale of all or substantially all of the Company’s assets other
than any such sale which would result in a Related Party owning or acquiring
more than fifty percent (50%) of the assets owned by the Company immediately
prior to the sale.

 

(d)                                 “Voting
Securities” of a corporation means securities of such corporation that are
entitled to vote generally in the election of directors, but not including any
other class of securities of such corporation that may have voting power by
reason of the occurrence of a contingency.

 

Section 15.

Amendment,
Modification, and Termination

 

15.1                           Amendment, Modification, and
Termination.

 

(a)                                  Board Authority.  Subject to Section 15.2, the Board may,
at any time and from time to time, alter, amend, suspend, discontinue or
terminate the Plan in whole or in part without the approval of the Company’s
stockholders, except that (i) any amendment or alteration shall be subject
to the approval of the Company’s stockholders if such stockholder approval is
required by any federal or state law or regulation or the rules of any
stock exchange or automated quotation system on which the Shares may then be
listed or quoted, and (ii) the Board may otherwise, in its discretion,
determine to submit other such amendments or alterations to stockholders for
approval, or if such amendment, 

 

32

 

in the determination of the Board, materially
increases benefits accruing to Plan participants, and (iii) any Plan
amendment or termination will not accelerate the timing of any payments that
constitute deferred compensation under Code Section 409A unless such
acceleration of payment is permitted by Code Section 409A.

 

(b)                                 Delegation to Chief Executive Officer.  Notwithstanding Section 15.1(a), the
authority to amend (or terminate) Section 13 (other than the schedule of
Shares to be delivered as Service Awards), is hereby delegated to the Chief
Executive Officer of the Company.  The
Board reserves the right to revoke this delegation in whole or in part at any
time.

 

15.2                           Awards Previously Granted.  Except as otherwise specifically permitted in
the Plan (including Sections 3.2(m), 3.2(o), and 5.5 of the Plan) or an Award
Agreement, no termination, amendment, or modification of the Plan shall
adversely affect in any material way any Award previously granted under the
Plan, without the written consent of the Grantee of such Award.

 

15.3                           Pro Rata Annual Incentive.  With respect to Annual Incentive Awards and
Performance Units and subject to the attainment of the established Performance
Goals, in the event of a termination of the Plan or an amendment which
adversely affects the computation of an award to a Participant which occurs
during a Year or other applicable Performance Period, the Participant shall be
entitled to receive (i) a pro rata award to the effective date of such
termination or amendment, calculated under the terms and conditions of the Plan
immediately prior to such effective date and (ii) any award provided by
such amended Plan for the balance of such Year or other applicable Performance
Period. Any such pro rata payment shall be made as soon as administratively
practicable following certification of the Performance Goals.

 

Section 16.

Withholding

 

16.1                           Required Withholding.

 

(a)                                  The Committee
in its sole discretion may provide that when taxes are to be withheld in
connection with the exercise of an Option or of a SAR, or upon the lapse of
Restrictions on an Award, or upon payment of any other benefit or right under
this Plan (the Exercise Date, date such Restrictions lapse or such payment of
any other benefit or right occurs hereinafter referred to as the “Tax Date”),
the Grantee may elect to make payment for the withholding of federal, state and
local taxes, including Social Security and Medicare (“FICA”) taxes by one or a
combination of the following methods:

 

(i)                                     payment of an
amount in cash equal to the amount to be withheld;

 

(ii)                                  requesting the
Company to withhold from those Shares that would otherwise be received upon
exercise of the Option or the SAR payable in Shares, upon the lapse of
Restrictions on an Award, a number of Shares having a Fair Market Value on the
Tax Date equal to the amount to be withheld; or

 

(iii)                               withholding
from any compensation otherwise due to the Grantee.

 

33

 

The Committee in its sole discretion may
provide that the maximum amount of tax withholding upon exercise of an Option
or a SAR payable in Shares to be satisfied by withholding Shares upon exercise
of such Option or SAR pursuant to clause (iii) above shall not exceed the
minimum amount of taxes, including FICA taxes, required to be withheld under
federal, state and local law.  An
election by Grantee under this subsection is irrevocable.  Any fractional share amount and any
additional withholding not paid by the withholding or surrender of Shares must
be paid in cash.  If no timely election
is made, the Grantee must deliver cash to satisfy all tax withholding
requirements.

 

(b)                                 Any Grantee who
makes a Disqualifying Disposition (as defined in Section 6.5(g)) or an
election under Section 83(b) of the Code shall remit to the Company
an amount sufficient to satisfy all resulting tax withholding requirements, if
any, in the same manner as set forth in subsection (a).

 

16.2                           Notification Under Code Section 83(b).  If the Grantee, in connection with the grant
of Restricted Stock, makes the election permitted under Section 83(b) of
the Code to include in such Grantee’s gross income in the year of transfer the
amounts specified in Section 83(b) of the Code, then such Grantee
shall notify the Company of such election within 10 days of filing the notice
of the election with the Internal Revenue Service, in addition to any filing
and notification required pursuant to regulations issued under Section 83(b) of
the Code.  The Committee may, in
connection with the grant of an Award or at any time thereafter, prohibit a
Grantee from making the election described above.

 

Section 17.

Beneficiary
Designation

 

Each Grantee under the Plan
may, from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all of such
benefit.  Each such designation shall
revoke all prior designations by the same Grantee, shall be in a form
prescribed by the Company, and will be effective only when filed by the Grantee
in writing with the Company during the Grantee’s lifetime.  In the absence of any such designation,
benefits remaining unpaid at the Grantee’s death shall be paid to the Grantee’s
estate.

 

Section 18.

Additional
Provisions

 

18.1                           Governing Law.  The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Delaware, other than its
law respecting choice of laws and applicable Federal law.

 

18.2                           Severability.  If any provision of this Plan or any Award is
or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction, or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee, 

 

34

 

materially altering the
intent of the Plan or the Award, it shall be stricken and the remainder of the
Plan and any such Award shall remain in full force and effect.

 

18.3                           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.

 

18.4                           Requirements of Law.  The granting of Awards and the delivery of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required. 
Notwithstanding any provision of the Plan or any Award, Grantees shall
not be entitled to exercise, or receive benefits under, any Award, and the
Company (and any Affiliate or Joint Venture) shall not be obligated to deliver
any Shares or deliver benefits to a Grantee, if such exercise or delivery would
constitute a violation by the Grantee or the Company, or an Affiliate or Joint
Venture, of any applicable law or regulation.

 

18.5                           Securities Law Compliance.  If the Committee deems it necessary to comply
with any applicable securities law, or the requirements of any stock exchange
upon which Shares may be listed, the Committee may impose any restriction on
Awards or Shares acquired pursuant to Awards under the Plan as it may deem
advisable.  All evidence of Share
ownership delivered pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the SEC,
any stock exchange upon which Shares are then listed, and any applicable
securities law.  If so requested by the
Company, the Grantee shall make a written representation to the Company that he
or she will not sell or offer to sell any Shares unless a registration
statement shall be in effect with respect to such Shares under the Securities
Act of 1933, as amended, and any applicable state securities law, or unless he
or she shall have furnished to the Company, in form and substance satisfactory
to the Company, that such registration is not required.

 

If the Committee determines
that the exercise or nonforfeitability of, or delivery of benefits pursuant to,
any Award would violate any applicable provision of securities laws or the
listing requirements of any national securities exchange or national market
system on which are listed any of the Company’s equity securities, then the
Committee may postpone any such exercise, nonforfeitability or delivery, as
applicable, but the Company shall use all reasonable efforts to cause such
exercise, nonforfeitability or delivery to comply with all such provisions at
the earliest practicable date.

 

18.6                           No Rights as a Stockholder.  No Grantee shall have any rights as a
stockholder of the Company with respect to the Shares (except as provided in Section 9.6
with respect to Restricted Stock) which may be deliverable upon exercise or
payment of such Award until such Shares have been delivered to him or her.

 

18.7                           Awards Not Taken into
Account for Other Benefits.  Awards shall be special incentive payments to
the Grantee and shall not be taken into account in computing the amount of
salary or compensation of the Grantee for purposes of determining any pension,
retirement, 

 

35

 

death or other benefit under
(a) any pension, retirement, profit-sharing, bonus, insurance or other
employee benefit plan of an Employer, except as such plan shall otherwise
expressly provide, or (b) any agreement between an Employer and the
Grantee, except as such agreement shall otherwise expressly provide.

 

18.8                           Employment Agreement
Supersedes Award Agreement.  In the event a Grantee is a party to an
employment agreement with the Company or an Affiliate that provides for
vesting, extended exercisability or transferability of equity compensation
awards on terms more favorable to the Grantee than the Grantee’s Award
Agreement, the employment agreement shall be controlling; provided that (a) if
the Grantee is a Section 16 Person, any terms in the employment agreement
requiring Board Compensation Committee, Board, or stockholder approval in order
for an exemption from Section 16(b) of the Exchange Act to be
available shall have been approved by the Board Compensation Committee, Board
or stockholders, as applicable, and (b) the employment agreement shall not
be controlling to the extent the Grantee and Grantee’s Employer agree it shall
not be controlling.

 

18.9                           Non-Exclusivity of Plan.  Neither the adoption of the Plan by the Board
nor its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board to adopt such
other compensatory arrangements for employees as it may deem desirable.

 

18.10                     Unfunded Status of Awards;
Creation of Trusts.  The Plan is intended to constitute an “unfunded”
plan for incentive and deferred compensation. 
With respect to any payments not yet made to a Grantee pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give any such
Grantee any rights that are greater than those of a general creditor of the
Company; provided, however, that the Committee may authorize the creation of
trusts or make other arrangements to meet the Company’s obligations under the
Plan to deliver cash, Shares or other property pursuant to any Award which
trusts or other arrangements shall be consistent with the “unfunded” status of
the Plan unless the Committee otherwise determines.

 

18.11                     No Right to Continued
Employment or Awards.  No employee shall have the right to be
selected to receive an Award under this Plan or, having been so selected, to be
selected to receive a future Award. 
Neither receipt of an Award hereunder, nor eligibility for an Award
shall interfere with or limit in any way the right of the Company, an Affiliate
or a Joint Venture to terminate any individual’s employment or affiliation at
any time, nor confer on any Grantee the right to continue in the employ of, or
as a consultant to, the Company, any Affiliate or any Joint Venture.

 

18.12                     Military Service.  Awards shall be administered in accordance
with Section 414(u) of the Code and the Uniformed Services Employment
and Reemployment Rights Act of 1994.

 

18.13                     Construction.                     The following rules of
construction will apply to the Plan: (a) the word “or” is disjunctive but
not necessarily exclusive, (b) words in the singular include the plural,
words in the plural include the singular, and words in the neuter gender
include the masculine and feminine genders and words in the masculine or
feminine gender include the other neuter genders, (c) the terms “hereof,” “herein,”
and “herewith” and words of similar import 

 

36

 

shall, unless otherwise
stated, be construed to refer to this Plan and not to any particular provision
of this Plan, and references to Sections are references to the Sections of this
Plan unless otherwise specified; (d) the word “including” and words of
similar import when used in this Plan shall mean “including, without
limitation,” unless otherwise specified; and (e) any reference to any
U.S.  federal, state, or local statute or
law shall be deemed to also refer to all amendments or successor provisions
thereto, as well as all rules and regulations promulgated under such
statute or law, unless the context otherwise requires.  The headings of sections and subsections are
included solely for convenience of reference, and if there is any conflict
between such headings and the text of this Plan, the text shall control.

 

18.14                     Obligations.  Unless otherwise specified in the Award
Agreement, the obligation to deliver, pay or transfer any amount of money or
other property pursuant to Awards under this Plan shall be the sole obligation
of a Grantee’s employer; provided that the obligation to deliver or transfer
any Shares pursuant to Awards under this Plan shall be the sole obligation of
the Company.

 

18.15                     Stockholder Approval.  All Awards granted on or after the Effective
Date and prior to the date the Company’s stockholders approve the amended and
restated Plan are expressly conditioned upon and subject to approval of the
amended and restated Plan by the Company’s stockholders.

 

37

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