Document:

Omnibus Stock Incentive Plan

 Exhibit 10.8 
  
 THE HOME DEPOT, INC. 
 2005 OMNIBUS STOCK INCENTIVE PLAN 
  
 (Effective May 26,
2005) 

 THE HOME DEPOT, INC. 
 2005 OMNIBUS STOCK INCENTIVE PLAN 
 TABLE OF CONTENTS

  

			
	 	  	PAGE

	 1. PURPOSE
	  	1
		
	 2. DEFINITIONS
	  	1
		
	 2.1 “Award”
	  	1
		
	 2.2 “Award Agreement”
	  	1
		
	 2.3 “Base Price”
	  	1
		
	 2.4 “Board”
	  	1
		
	 2.5 “Code”
	  	1
		
	 2.6 “Committee”
	  	1
		
	 2.7 “Company”
	  	1
		
	 2.8 “Deferral Period”
	  	1
		
	 2.9 “Deferred Shares”
	  	1
		
	 2.10 “Employee”
	  	1
		
	 2.11 “Fair Market Value”
	  	1
		
	 2.12 “Freestanding Stock Appreciation Right”
	  	2
		
	 2.13 “Grant Date”
	  	2
		
	 2.14 “Incentive Stock Option”
	  	2
		
	 2.15 “Non-employee Director”
	  	2
		
	 2.16 “Non-qualified Stock Option”
	  	2
		
	 2.17 “Option”
	  	2
		
	 2.18 “Optionee”
	  	2
		
	 2.19 “Option Price”
	  	2
		
	 2.20 “Participant”
	  	2
		
	 2.21 “Performance Objectives”
	  	2

  

 i 

			
		
	 2.22 “Performance Period”
	  	3
		
	 2.23 “Performance Share”
	  	3
		
	 2.24 “Performance Unit”
	  	3
		
	 2.25 “Performance Plan”
	  	3
		
	 2.26 “Qualified Performance-Based Award”
	  	3
		
	 2.27 “Restricted Shares”
	  	3
		
	 2.28 “Shares”
	  	3
		
	 2.29 “Spread”
	  	3
		
	 2.30 “Stock Appreciation Right”
	  	3
		
	 2.31 “Subsidiary”
	  	4
		
	 2.32 “Tandem Stock Appreciation Right”
	  	4
		
	 3. SHARES AVAILABLE UNDER THE PLAN
	  	4
		
	 3.1 Reserved Shares
	  	4
		
	 3.2 Reduction Ratio
	  	4
		
	 3.3 ISO Maximum
	  	4
		
	 3.4 Maximum Calendar Year Award
	  	4
		
	 4. PLAN ADMINISTRATION
	  	4
		
	 4.1 Board Committee Administration
	  	4
		
	 4.2 Committee Delegation
	  	5
		
	 5. OPTIONS
	  	5
		
	 5.1 Number of Shares
	  	5
		
	 5.2 Option Price
	  	5
		
	 5.3 Consideration
	  	5
		
	 5.4 Payment of Option Price in Shares
	  	5
		
	 5.5 Cashless Exercise
	  	5
		
	 5.6 Performance-Based Options
	  	5
		
	 5.7 Vesting
	  	6

  

 ii 

			
		
	 5.8 ISO Dollar Limitation
	  	6
		
	 5.9 Exercise Period
	  	6
		
	 5.10 Award Agreement
	  	6
		
	 6. STOCK APPRECIATION RIGHTS
	  	6
		
	 6.1 Payment in Cash or Shares
	  	6
		
	 6.2 Maximum SAR Payment
	  	6
		
	 6.3 Exercise Period
	  	6
		
	 6.4 Change in Control
	  	6
		
	 6.5 Dividend Equivalents
	  	7
		
	 6.6 Award Agreement
	  	7
		
	 6.7 Tandem Stock Appreciation Rights
	  	7
		
	 6.8 Exercise Period
	  	7
		
	 6.9 Freestanding Stock Appreciation Rights
	  	7
		
	 7. RESTRICTED SHARES
	  	7
		
	 7.1 Transfer of Shares
	  	7
		
	 7.2 Consideration
	  	8
		
	 7.3 Substantial Risk of Forfeiture
	  	8
		
	 7.4 Dividends, Voting and Other Ownership Rights
	  	8
		
	 7.5 Restrictions on Transfer
	  	8
		
	 7.6 Performance-Based Restricted Shares
	  	8
		
	 7.7 Dividends
	  	8
		
	 7.8 Award Agreements
	  	8
		
	 8. DEFERRED SHARES
	  	8
		
	 8.1 Deferred Compensation
	  	8
		
	 8.2 Consideration
	  	9
		
	 8.3 Deferral Period
	  	9
		
	 8.4 Dividend Equivalents and Other Ownership Rights
	  	9

  

 iii 

			
		
	 8.5 Performance Objectives
	  	9
		
	 8.6 Award Agreement
	  	9
		
	 9. PERFORMANCE SHARES AND PERFORMANCE UNITS
	  	9
		
	 9.1 Number of Performance Shares or Units
	  	9
		
	 9.2 Performance Period
	  	9
		
	 9.3 Performance Objectives
	  	9
		
	 9.4 Threshold Performance Objectives
	  	10
		
	 9.5 Payment of Performance Shares and Units
	  	10
		
	 9.6 Maximum Payment
	  	10
		
	 9.7 Dividend Equivalents
	  	10
		
	 9.8 Adjustment of Performance Objectives
	  	10
		
	 9.9 Award Agreement
	  	10
		
	 10. TRANSFERABILITY
	  	10
		
	 10.1 Transfer Restrictions
	  	10
		
	 10.2 Limited Transfer Rights
	  	11
		
	 10.3 Restrictions on Transfer
	  	11
		
	 11. ADJUSTMENTS
	  	11
		
	 12. FRACTIONAL SHARES
	  	11
		
	 13. WITHHOLDING TAXES
	  	11
		
	 14. CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP & APPROVED LEAVES OF ABSENCE
	  	12
		
	 15. FOREIGN PARTICIPANTS
	  	12
		
	 16. AMENDMENTS AND OTHER MATTERS
	  	12
		
	 16.1 Plan Amendments
	  	12
		
	 16.2 Award Deferrals
	  	12
		
	 16.3 Conditional Awards
	  	13
		
	 16.4 Repricing Prohibited
	  	13
		
	 16.5 No Employment Right
	  	13

  

 iv 

			
		
	 16.6 Tax Qualification
	  	13
		
	 17. EFFECTIVE DATE
	  	13
		
	 18. TERMINATION
	  	13
		
	 19. LIMITATIONS PERIOD
	  	13
		
	 20. GOVERNING LAW
	  	14

  

 v 

 THE HOME DEPOT, INC. 
 2005 OMNIBUS STOCK INCENTIVE PLAN 
  
 1. Purpose. The purpose of The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan (the “Plan”) is to attract and retain employees and directors for The Home Depot, Inc. and its subsidiaries and to provide such persons with
incentives and rewards for superior performance. 
  
 2.
Definitions. As used in this Plan, the following terms shall be defined as set forth below: 
  
 2.1 “Award” means any Option, Stock Appreciation Right, Restricted Shares, Deferred Shares, Performance Shares or Performance Units
granted under the Plan. 
  
 2.2 “Award Agreement”
means an agreement, certificate, resolution or other form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an Award. An Award Agreement may be in an electronic medium, may be limited to a notation
on the Company’s books and records and, if approved by the Committee, need not be signed by a representative of the Company or a Participant. 
  
 2.3 “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Freestanding Stock
Appreciation Right. 
  
 2.4 “Board” means the
Board of Directors of the Company. 
  
 2.5 “Code”
means the Internal Revenue Code of 1986, as amended from time to time. 
  
 2.6 “Committee” means the committee of the Board described in Section 4. 
  
 2.7 “Company” means The Home Depot, Inc., a Delaware corporation, or any successor corporation. 
  
 2.8 “Deferral Period” means the period of time during which
Deferred Shares are subject to deferral limitations under Section 8. 
  
 2.9 “Deferred Shares” means an Award pursuant to Section 8 of the right to receive Shares at the end of a specified Deferral Period. 
  

2.10 “Employee” means any person, including an officer, employed by the Company or a Subsidiary. 
  
 2.11 “Fair Market Value” means the fair market value of the
Shares as determined by the Committee from time to time. Unless otherwise determined by the 

  

 1 

 
Committee, the fair market value shall be the closing price for the Shares reported on a consolidated basis on the New York Stock Exchange on the relevant
date or, if there were no sales on such date, the closing price on the nearest preceding date on which sales occurred. 
  
 2.12 “Freestanding Stock Appreciation Right” means a Stock Appreciation Right granted pursuant to Section 6 that is not granted in tandem
with an Option or similar right. 
  
 2.13 “Grant
Date” means the date specified by the Committee on which a grant of an Award shall become effective, which shall not be earlier than the date on which the Committee takes action with respect thereto. 
  
 2.14 “Incentive Stock Option” means any Option that is
intended to qualify as an “incentive stock option” under Code Section 422 or any successor provision. 
  
 2.15 “Nonemployee Director” means a member of the Board who is not an Employee. 
  
 2.16 “Nonqualified Stock Option” means an Option that is not
intended to qualify as an Incentive Stock Option. 
  
 2.17
“Option” means any option to purchase Shares granted under Section 5. 
  
 2.18 “Optionee” means the person so designated in an agreement evidencing an outstanding Option. 
  
 2.19 “Option Price” means the purchase price payable upon the exercise of an Option. 
  
 2.20 “Participant” means an Employee or Nonemployee Director
who is selected by the Committee to receive benefits under this Plan, provided that only Employees shall be eligible to receive grants of Incentive Stock Options. 
  
 2.21 “Performance Objectives” means the performance objectives established pursuant to this Plan for
Participants who have received Awards. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or the Subsidiary, division, department or function
within the Company or Subsidiary in which the Participant is employed. Performance Objectives may be measured on an absolute or relative basis. Relative performance may be measured by a group of peer companies or by a financial market index. Any
Performance Objectives applicable to a Qualified Performance-Based Award shall be limited to specified levels of or increases in the Company’s or Subsidiary’s return on equity, diluted earnings per share, total earnings, earnings growth,
return on capital, return on assets, earnings before interest and taxes, sales, sales growth, gross margin return on investment, increase in the fair market value of the Shares, share price (including but not limited to, growth measures and total
stockholder return), operating profit, net earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), cash 

  

 2 

 
flow return on investment (which equals net cash flow divided by total capital), inventory turns, financial return ratios, total return to shareholders,
market share, earnings measures/ratios, economic value added (EVA), balance sheet measurements such as receivable turnover, internal rate of return, increase in net present value or expense targets, “Employer of Choice” or similar survey
results, customer satisfaction surveys and productivity. Except in the case of a Qualified Performance-Based Award, if the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or
the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may modify such Performance Objectives or the related minimum acceptable level of achievement, in whole or in
part, as the Committee deems appropriate and equitable. 
  
 2.22
“Performance Period” means a period of time established under Section 9 within which the Performance Objectives relating to a Performance Share, Performance Unit, Deferred Shares or Restricted Shares are to be achieved. 

 
 2.23 “Performance Share” means a bookkeeping entry that
records the equivalent of one Share awarded pursuant to Section 9. 
  
 2.24 “Performance Unit” means a bookkeeping entry that records a unit equivalent to $1.00 awarded pursuant to Section 9. 
  
 2.25 “Predecessor Plan” means The Home Depot, Inc. 1997 Omnibus Stock Option Plan. 
  
 2.26 “Qualified Performance-Based Award” means an Award or
portion of an Award that is intended to satisfy the requirements for “qualified performance-based compensation” under Code Section 162(m). The Committee shall designate any Qualified Performance-Based Award as such at the time of grant.

  
 2.27 “Restricted Shares” mean Shares granted
under Section 7 subject to a substantial risk of forfeiture. 
  
 2.28 “Shares” means shares of the Common Stock of the Company, $.05 par value, or any security into which Shares may be converted by reason of any transaction or event of the type referred to in Section 11. 
  
 2.29 “Spread” means, in the case of a Freestanding Stock
Appreciation Right, the amount by which the Fair Market Value on the date when any such right is exercised exceeds the Base Price specified in such right or, in the case of a Tandem Stock Appreciation Right, the amount by which the Fair Market Value
on the date when any such right is exercised exceeds the Option Price specified in the related Option. 
  
 2.30 “Stock Appreciation Right” means a right granted under Section 6, including a Freestanding Stock Appreciation Right or a Tandem
Stock Appreciation Right. 
  

 3 

 2.31 “Subsidiary” means a corporation or other entity in which the Corporation has a
direct or indirect ownership or other equity interest, provided that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation (within the
meaning of the Code) in which the Company owns or controls directly or indirectly more than 50 percent of the total combined voting power represented by all classes of stock issued by such corporation at the time of such grant. 
  
 2.32 “Tandem Stock Appreciation Right” means a Stock
Appreciation Right granted pursuant to Section 6 that is granted in tandem with an Option or any similar right granted under any other plan of the Company. 
  
 3. Shares Available Under the Plan. 
  
 3.1 Reserved Shares. Subject to adjustment as provided in Section 11, the maximum number of Shares that may be (i) issued or transferred upon the
exercise of Options or Stock Appreciation Rights, (ii) awarded as Restricted Shares and released from substantial risk of forfeiture, (iii) issued or transferred in payment of Deferred Shares or Performance Shares, or (iv) issued or transferred in
payment of dividend equivalents paid with respect to Awards, shall not in the aggregate exceed 255,000,000 Shares. Such Shares may be Shares of original issuance, Shares held in Treasury, or Shares that have been reacquired by the Company.

  
 3.2 Reduction Ratio. For purposes of Section 3.1, each
Share issued or transferred pursuant to an Award other than a Stock Option shall reduce the number of Shares available for issuance under the Plan by 2.11 Shares. 
  
 3.3 ISO Maximum. In no event shall the number of Shares issued upon the exercise of Incentive Stock Options exceed
50,000,000 Shares, subject to adjustment as provided in Section 11. 
  
 3.4 Maximum Calendar Year Award. No Participant may receive Awards representing more than 1,000,000 Shares in any one calendar year, subject to adjustment as provided in Section 11. In addition, the maximum number of Performance
Units that may be granted to a Participant in any one calendar year is 5,000,000. 
  
 4. Plan Administration.  
  
 4.1 Board Committee Administration. This Plan shall be administered by a Committee appointed by the Board from among its members, provided that the full Board may at any time act as the Committee. The interpretation and construction
by the Committee of any provision of this Plan or of any Award Agreement and any determination by the Committee pursuant to any provision of this Plan or any such agreement, notification or document, shall be final and conclusive. No member of the
Committee shall be liable to any person for any such action taken or determination made in good faith. 
  

 4 

 4.2 Committee Delegation. The Committee may delegate to one or more officers of the Corporation
the authority to grant Awards to Participants who are not directors or executive officers of the Company, provided that the Committee shall have fixed the total number of shares of Stock subject to such grants. Any such delegation shall be subject
to the limitations of Section 157(c) of the Delaware General Corporation Law. 
  
 5. Options. The Committee may from time to time authorize grants to Participants of options to purchase Shares upon such terms and conditions as the Committee may determine in accordance with the following
provisions: 
  
 5.1 Number of Shares. Each grant shall
specify the number of Shares to which it pertains. 
  
 5.2
Option Price. Each grant shall specify an Option Price per Share, which shall be equal to or greater than the Fair Market Value per Share on the Grant Date. 
  
 5.3 Consideration. Each grant shall specify the form of consideration to be paid in satisfaction of the Option Price
and the manner of payment of such consideration, which may include (i) cash in the form of currency or check or other cash equivalent acceptable to the Company, (ii) nonforfeitable, unrestricted Shares owned by the Optionee which have a value at the
time of exercise that is equal to the Option Price, (iii) any other legal consideration that the Committee may deem appropriate, including without limitation any form of consideration authorized under Section 5.4, on such basis as the Committee may
determine in accordance with this Plan, or (iv) any combination of the foregoing. 
  
 5.4 Payment of Option Price in Shares. On or after the Grant Date of any Option other than an Incentive Stock Option, the Committee may determine that payment of the Option Price may also be made in whole or in
part in the form of Restricted Shares or other Shares that are subject to risk of forfeiture or restrictions on transfer. Unless otherwise determined by the Committee, whenever any Option Price is paid in whole or in part by means of any of the
forms of consideration specified in this Section 5.4, the Shares received by the Optionee upon the exercise of the Options shall be subject to the same risks of forfeiture or restrictions on transfer as those that applied to the consideration
surrendered by the Optionee, provided that such risks of forfeiture and restrictions on transfer shall apply only to the same number of Shares received by the Optionee as applied to the forfeitable or restricted Shares surrendered by the Optionee.

  
 5.5 Cashless Exercise. To the extent permitted by
applicable law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on the date of exercise of some or all of the Shares to which the exercise relates. 
  
 5.6 Performance-Based Options. Any grant of an Option may specify
Performance Objectives that must be achieved as a condition to exercise of the Option. 
  

 5 

 5.7 Vesting. Each Option grant may specify a period of continuous employment of the Optionee by
the Company or any Subsidiary (or, in the case of a Nonemployee Director, service on the Board) that is necessary before the Options or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of such rights
in the event of a change in control of the Company or other similar transaction or event. 
  
 5.8 ISO Dollar Limitation. Options granted under this Plan may be Incentive Stock Options, Nonqualified Stock Options or a combination of the foregoing, provided that only Nonqualified Stock Options may be
granted to Nonemployee Directors. Each grant shall specify whether (or the extent to which) the Option is an Incentive Stock Option or a Nonqualified Stock Option. Notwithstanding any such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by an Optionee during any calendar year (under all plans of the Company) exceeds $100,000, such Options shall be treated as
Nonqualified Stock Options. 
  
 5.9 Exercise Period. No
Option granted under this Plan may be exercised more than ten years from the Grant Date. 
  
 5.10 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with this Plan. 
  
 6. Stock Appreciation Rights. The Committee may also authorize grants
to Participants of Stock Appreciation Rights. A Stock Appreciation Right is the right of the Participant to receive from the Company an amount, which shall be determined by the Committee and shall be expressed as a percentage (not exceeding 100
percent) of the Spread at the time of the exercise of such right. Any grant of Stock Appreciation Rights under this Plan shall be upon such terms and conditions as the Committee may determine in accordance with the following provisions: 

 
 6.1 Payment in Cash or Shares. Any grant may specify that the
amount payable upon the exercise of a Stock Appreciation Right may be paid by the Company in cash, Shares or any combination thereof and may (i) either grant to the Participant or reserve to the Committee the right to elect among those alternatives
or (ii) preclude the right of the Participant to receive and the Company to issue Shares or other equity securities in lieu of cash. 
  
 6.2 Maximum SAR Payment. Any grant may specify that the amount payable upon the exercise of a Stock Appreciation Right shall not exceed a maximum
specified by the Committee on the Grant Date. 
  
 6.3 Exercise
Period. Any grant may specify (i) a waiting period or periods before Stock Appreciation Rights shall become exercisable and (ii) permissible dates or periods on or during which Stock Appreciation Rights shall be exercisable. 
  
 6.4 Change in Control. Any grant may specify that a Stock Appreciation
Right may be exercised only in the event of a change in control of the Company or other similar transaction or event. 
  

 6 

 6.5 Dividend Equivalents. On or after the Grant Date of any Stock Appreciation Rights, the
Committee may provide for the payment to the Participant of dividend equivalents thereon in cash or Shares on a current, deferred or contingent basis. 
  
 6.6 Award Agreement. Each grant shall be evidenced by an Award Agreement which shall describe the subject Stock Appreciation Rights, identify any
related Options, state that the Stock Appreciation Rights are subject to all of the terms and conditions of this Plan and contain such other terms and provisions as the Committee may determine consistent with this Plan. 
  
 6.7 Tandem Stock Appreciation Rights. Each grant of a Tandem Stock
Appreciation Right shall provide that such Tandem Stock Appreciation Right may be exercised only (i) at a time when the related Option (or any similar right granted under any other plan of the Company) is also exercisable and the Spread is positive;
and (ii) by surrender of the related Option (or such other right) for cancellation. 
  
 6.8 Exercise Period. No Stock Appreciation Right granted under this Plan may be exercised more than ten years from the Grant Date. 
  
 6.9 Freestanding Stock Appreciation Rights. Regarding Freestanding Stock Appreciation Rights only: 
  
 (i) Each grant shall specify in respect of each Freestanding Stock
Appreciation Right a Base Price per Share, which shall be equal to or greater than the Fair Market Value on the Grant Date; 
  
 (ii) Successive grants may be made to the same Participant regardless of whether any Freestanding Stock Appreciation Rights previously granted to such
Participant remain unexercised; and 
  
 (iii) Each grant shall
specify the period or periods of continuous employment of the Participant by the Company or any Subsidiary that are necessary before the Freestanding Stock Appreciation Rights or installments thereof shall become exercisable, and any grant may
provide for the earlier exercise of such rights in the event of a change in control of the Company or other similar transaction or event. 
  
 7. Restricted Shares. The Committee may also authorize grants to Participants of Restricted Shares upon such terms and conditions as the Committee
may determine in accordance with the following provisions: 
  
 7.1 Transfer of Shares. Each grant shall constitute an immediate transfer of the ownership of Shares to the Participant in consideration of the performance of services, subject to the substantial risk of forfeiture and restrictions
on transfer hereinafter referred to. 
  

 7 

 7.2 Consideration. Each grant may be made without additional consideration from the Participant or
in consideration of a payment by the Participant that is less than the Fair Market Value on the Grant Date. 
  
 7.3 Substantial Risk of Forfeiture. Each grant shall provide that the Restricted Shares covered thereby shall be subject to a “substantial
risk of forfeiture” within the meaning of Code Section 83 for a period to be determined by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such risk of forfeiture in the event of a change in
control of the Company or other similar transaction or event. 
  
 7.4 Dividends, Voting and Other Ownership Rights. Unless otherwise determined by the Committee, an award of Restricted Shares shall entitle the Participant to dividend, voting and other ownership rights during the period for which
such substantial risk of forfeiture is to continue. 
  
 7.5
Restrictions on Transfer. Each grant shall provide that, during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Committee on the Grant Date. Such restrictions may include, without limitation, rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to a continuing substantial risk of
forfeiture in the hands of any transferee. 
  
 7.6
Performance-Based Restricted Shares. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Objectives established by the Committee in accordance with the applicable provisions of Section 9 regarding
Performance Shares and Performance Units. 
  
 7.7
Dividends. Any grant may require that any or all dividends or other distributions paid on the Restricted Shares during the period of such restrictions be automatically sequestered and reinvested on an immediate or deferred basis in additional
Shares, which may be subject to the same restrictions as the underlying Award or such other restrictions as the Committee may determine. 
  
 7.8 Award Agreements. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine
consistent with this Plan. Unless otherwise directed by the Committee, all certificates representing Restricted Shares, together with a stock power that shall be endorsed in blank by the Participant with respect to such Shares, shall be held in
custody by the Company until all restrictions thereon lapse. 
  
 8. Deferred Shares. The Committee may authorize grants of Deferred Shares to Participants upon such terms and conditions as the Committee may determine in accordance with the following provisions: 
  
 8.1 Deferred Compensation. Each grant shall constitute the agreement
by the Company to issue or transfer Shares to the Participant in the future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify. 
  

 8 

 8.2 Consideration. Each grant may be made without additional consideration from the Participant or
in consideration of a payment by the Participant that is less than the Fair Market Value on the Grant Date. 
  
 8.3 Deferral Period. Each grant shall provide that the Deferred Shares covered thereby shall be subject to a Deferral Period, which shall be fixed
by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such period in the event of a change in control of the Company or other similar transaction or event. 
  
 8.4 Dividend Equivalents and Other Ownership Rights. During the
Deferral Period, the Participant shall not have any right to transfer any rights under the subject Award, shall not have any rights of ownership in the Deferred Shares and shall not have any right to vote such shares, but the Committee may on or
after the Grant Date authorize the payment of dividend equivalents on such shares in cash or additional Shares on a current, deferred or contingent basis. 
  
 8.5 Performance Objectives. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Objectives established
by the Committee in accordance with the applicable provisions of Section 9 regarding Performance Shares and Performance Units. 
  
 8.6 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine
consistent with this Plan. 
  
 9. Performance Shares and
Performance Units. The Committee may also authorize grants of Performance Shares and Performance Units, which shall become payable to the Participant upon the achievement of specified Performance Objectives, upon such terms and conditions as the
Committee may determine in accordance with the following provisions: 
  
 9.1 Number of Performance Shares or Units. Each grant shall specify the number of Performance Shares or Performance Units to which it pertains, which may be subject to adjustment to reflect changes in compensation or other factors.

  
 9.2 Performance Period. The Performance Period with
respect to each Performance Share or Performance Unit shall commence on the Grant Date and may be subject to earlier termination in the event of a change in control of the Company or other similar transaction or event. 
  
 9.3 Performance Objectives. Each grant shall specify the Performance
Objectives that are to be achieved by the Participant. 
  

 9 

 9.4 Threshold Performance Objectives. Each grant may specify in respect of the specified
Performance Objectives a minimum acceptable level of achievement below which no payment will be made and may set forth a formula for determining the amount of any payment to be made if performance is at or above such minimum acceptable level but
falls short of the maximum achievement of the specified Performance Objectives. 
  
 9.5 Payment of Performance Shares and Units. Each grant shall specify the time and manner of payment of Performance Shares or Performance Units that shall have been earned, and any grant may specify that any
such amount may be paid by the Company in cash, Shares or any combination thereof and may either grant to the Participant or reserve to the Committee the right to elect among those alternatives. 
  
 9.6 Maximum Payment. Any grant of Performance Shares may specify that
the amount payable with respect thereto may not exceed a maximum specified by the Committee on the Grant Date. Any grant of Performance Units may specify that the amount payable, or the number of Shares issued, with respect thereto may not exceed
maximums specified by the Committee on the Grant Date. 
  
 9.7
Dividend Equivalents. Any grant of Performance Shares may provide for the payment to the Participant of dividend equivalents thereon in cash or additional Shares on a current, deferred or contingent basis. 
  
 9.8 Adjustment of Performance Objectives. If provided in the terms of
the grant, the Committee may adjust Performance Objectives and the related minimum acceptable level of achievement if, in the sole judgment of the Committee, events or transactions have occurred after the Grant Date that are unrelated to the
performance of the Participant and result in distortion of the Performance Objectives or the related minimum acceptable level of achievement. 
  
 9.9 Award Agreement. Each grant shall be evidenced by an Award Agreement which shall state that the Performance Shares or Performance Units are
subject to all of the terms and conditions of this Plan and such other terms and provisions as the Committee may determine consistent with this Plan. 
  
 10. Transferability. 
  
 10.1 Transfer Restrictions. Except as provided in Section 10.2, no Award granted under this Plan shall be transferable by a Participant other than
by will or the laws of descent and distribution, and Options and Stock Appreciation Rights shall be exercisable during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity, by his guardian
or legal representative acting in a fiduciary capacity on behalf of the Participant under state law. Any attempt to transfer an Award in violation of this Plan shall render such Award null and void. 
  

 10 

 10.2 Limited Transfer Rights. The Committee may expressly provide in an Award agreement (or an
amendment to an Award agreement) that a Participant may transfer such Award (other than an Incentive Stock Option), in whole or in part, to a spouse or lineal descendant (a “Family Member”), a trust for the exclusive benefit of Family
Members, a partnership or other entity in which all the beneficial owners are Family Members, or any other entity affiliated with the Participant that may be approved by the Committee. Subsequent transfers of Awards shall be prohibited except in
accordance with this Section 10.2. All terms and conditions of the Award, including provisions relating to the termination of the Participant’s employment or service with the Company or a Subsidiary, shall continue to apply following a transfer
made in accordance with this Section 10.2. 
  
 10.3
Restrictions on Transfer. Any Award made under this Plan may provide that all or any part of the Shares that are (i) to be issued or transferred by the Company upon the exercise of Options or Stock Appreciation Rights, upon the termination of
the Deferral Period applicable to Deferred Shares or upon payment under any grant of Performance Shares or Performance Units, or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 7,
shall be subject to further restrictions upon transfer. 
  
 11.
Adjustments. The Committee may make or provide for such adjustments in the (a) number of Shares covered by outstanding Options, Stock Appreciation Rights, Deferred Shares, Restricted Shares and Performance Shares granted hereunder, (b) prices
per share applicable to such Options and Stock Appreciation Rights, and (c) kind of shares covered thereby (including shares of another issuer), as the Committee in its sole discretion may in good faith determine to be equitably required in order to
prevent dilution or enlargement of the rights of Participants that otherwise would result from (x) any stock dividend, stock split, combination or exchange of Shares, recapitalization or other change in the capital structure of the Company, (y) any
merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidation or other distribution of assets (other than a normal cash dividend), issuance of rights or warrants to purchase securities or (z) any
other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Awards under this Plan such
alternative consideration as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all Awards so replaced. The Committee may also make or provide for such adjustments in each
of the limitations specified in Section 3 as the Committee in its sole discretion may in good faith determine to be appropriate in order to reflect any transaction or event described in this Section 11. 
  
 12. Fractional Shares. The Company shall not be required to issue any
fractional Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash. 
  
 13. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, it shall be a condition to the receipt of such payment 

  

 11 

 
or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of all such taxes
required to be withheld. At the discretion of the Committee, such arrangements may include relinquishment of a portion of such benefit. 
  
 14. Certain Terminations of Employment, Hardship and Approved Leaves of Absence. Notwithstanding any other provision of this Plan to the contrary,
in the event of termination of employment by reason of death, disability, normal retirement, early retirement with the consent of the Company or leave of absence approved by the Company, or in the event of hardship or other special circumstances, of
a Participant who holds an Option or Stock Appreciation Right that is not immediately and fully exercisable, any Restricted Shares as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, any
Deferred Shares as to which the Deferral Period is not complete, any Performance Shares or Performance Units that have not been fully earned, or any Shares that are subject to any transfer restriction pursuant to Section 10.3, the Committee may in
its sole discretion take any action that it deems to be equitable under the circumstances or in the best interests of the Company, including, without limitation, waiving or modifying any limitation or requirement with respect to any Award under this
Plan. 
  
 15. Foreign Participants. In order to facilitate
the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for Awards to Participants who are foreign nationals, or who are employed by or perform services for the Company or any Subsidiary
outside of the United States of America, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements or
alternative versions of, this Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of this Plan as in effect for any other purpose, provided that no such supplements, amendments, restatements or
alternative versions shall include any provisions that are inconsistent with the terms of this Plan, as then in effect, unless this Plan could have been amended to eliminate such inconsistency without further approval by the stockholders of the
Company. 
  
 16. Amendments and Other Matters. 

 
 16.1 Plan Amendments. This Plan may be amended from time to time
by the Board, but no such amendment shall increase any of the limitations specified in Section 3, other than to reflect an adjustment made in accordance with Section 11, without the further approval of the stockholders of the Company. The Board may
condition any amendment on the approval of the stockholders of the Company if such approval is necessary or deemed advisable with respect to the applicable listing or other requirements of a national securities exchange or other applicable laws,
policies or regulations. 
  
 16.2 Award Deferrals. The
Committee may permit Participants to elect to defer the issuance of Shares or the settlement of Awards in cash under the Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan. In the case of an award of

  

 12 

 
Restricted Shares, the deferral may be effected by the Participant’s agreement to forego or exchange his of her award of Restricted Shares and receive
an award of Deferred Shares. The Committee also may provide that deferred settlements include the payment or crediting of interest on the deferral amounts, or the payment or crediting of dividend equivalents where the deferral amounts are
denominated in Shares. 
  
 16.3 Conditional Awards. The
Committee may condition the grant of any award or combination of Awards under the Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Corporation or any
Subsidiary to the Participant. 
  
 16.4 Repricing
Prohibited. The Committee shall not reprice any outstanding Option, directly or indirectly, without the approval of the stockholders of the Company, provided that nothing herein shall prevent the Committee from taking any action provided for in
Section 11. 
  
 16.5 No Employment Right. This Plan shall
not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary and shall not interfere in any way with any right that the Company or any Subsidiary would otherwise have to
terminate any Participant’s employment or other service at any time. 
  
 16.6 Tax Qualification. To the extent that any provision of this Plan would prevent any Option that was intended to qualify under particular provisions of the Code from so qualifying, such provision of this
Plan shall be null and void with respect to such Option, provided that such provision shall remain in effect with respect to other Options, and there shall be no further effect on any provision of this Plan. 
  
 17. Effective Date. This Plan shall become effective upon its approval
by the stockholders of the Company. 
  
 18. Termination.
This Plan shall terminate on the tenth anniversary of the date upon which it is approved by the stockholders of the Company, and no Award shall be granted after that date. 
  
 19. Limitations Period. Any person who believes he or she is being denied any benefit or right under the Plan may
file a written claim with the Committee. Any claim must be delivered to the Committee within forth-five (45) days of the specific event giving rise to the claim. Untimely claims will not be processed and shall be deemed denied. The Committee, or its
designated agent, will notify the Participant of its decision in writing as soon as administratively practicable. Claims not responded to by the Committee in writing within ninety (90) days of the date the written claim is delivered to the Committee
shall be deemed denied. The Committee’s decision is final and conclusive and binding on all persons. No lawsuit relating to the Plan may be filed before a written claim is filed with the Committee and is denied or deemed denied and any lawsuit
must be filed within one year of such denial or deemed denial or be forever barred. 
  

 13 

 20. Governing Law. The validity, construction and effect of this Plan and any Award hereunder will
be determined in accordance with (i) the Delaware General Corporation Law, and (ii) to the extent applicable, other laws (including those governing contracts) of the State of Georgia. 
  
 *** *** *** *** *** *** *** *** *** *** *** 
  

 142005 Executive Officer Base Salary and Equity Compensation

 Exhibit 10.1 
  
 2005 Executive Officer Base Salary and Equity Compensation 
  

						
	 Name and Title

	  	2005 Base
Salary

	  	Stock
Options

	 Elizabeth McLaughlin, Chief Executive Officer
	  	$	700,000	  	175,000
			
	 Gerald Cook, President, Hot Topic
	  	$	450,000	  	85,000
			
	 Patricia Van Cleave, President, Torrid
	  	$	420,000	  	85,000
			
	 James McGinty, Chief Financial Officer
	  	$	300,000	  	60,000
			
	 Thomas Beauchamp, Senior Vice President, Chief Information Officer
	  	$	280,000	  	50,000
			
	 Christopher Kearns, Senior Vice President, General Counsel and Secretary
	  	$	250,000	  	50,000

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