Document:

Exhibit 10.2

 

AGREEMENT RE:
CHANGE IN CONTROL

 

This AGREEMENT RE: CHANGE IN CONTROL (this “Agreement”) is dated as of
June 9, 2005 and is entered into by and between Robert J. Bujarski (“Executive”)
and Quidel Corporation, a Delaware corporation (the “Company”).

 

Background

 

The Company believes that because of its position in the industry,
financial resources and historical operating results there is a possibility
that the Company may become the subject of a Change in Control (as defined
below), either now or at some time in the future.

 

The Company believes that it is in the best interest of the Company and
its stockholders to foster Executive’s objectivity in making decisions with
respect to any pending or threatened Change in Control of the Company and to
assure that the Company will have the continued dedication and availability of
Executive, notwithstanding the possibility, threat or occurrence of a Change in
Control. The Company believes that these goals can best be accomplished by
alleviating certain of the risks and uncertainties with regard to Executive’s
financial and professional security that would be created by a pending or
threatened Change in Control and that inevitably would distract Executive and
could impair his ability to objectively perform his duties for and on behalf of
the Company. Accordingly, the Company believes that it is appropriate and in
the best interest of the Company and its stockholders to provide to Executive
compensation arrangements upon a Change in Control that lessen Executive’s
financial risks and uncertainties and that are reasonably competitive with
those of other corporations.

 

With these and other considerations in mind, the Compensation Committee
of the Company has authorized the Company to enter into this Agreement with the
Executive to provide the protections set forth herein for Executive’s financial
security following a Change in Control.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration the receipt of which is hereby acknowledged, it is
hereby agreed as follows:

 

Agreement

 

1.             Term of Agreement.  This Agreement shall be effective from
Executive’s first day of employment with the Company and, subject to the
provisions of Section 4, shall extend to (and thereupon automatically
terminate) one (1) day after Executive’s termination of employment with the
Company for any reason. No termination of this Agreement shall limit, alter or
otherwise affect Executive’s rights hereunder with respect to a Change in
Control which has occurred prior to such termination, including without
limitation Executive’s right to receive the various benefits hereunder.

 

2.             Purpose of
Agreement.  The purpose of this
Agreement is to provide that, in the event of a “Change in Control,” Executive
may become entitled to receive certain additional benefits, as described
herein, in the event of his termination under specified circumstances.

 

3.             Change in Control.  As used in this Agreement, the phrase “Change
in Control” shall mean:

 

(i)            Except
as provided by subparagraph (iii) hereof, the acquisition (other than from the
Company) by any person, entity or “group”, within the meaning of section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) (excluding, for this purpose, the Company or its subsidiaries, or any
executive benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of forty percent (40%) or more of either the then outstanding shares of common
stock or the

 

 

combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directions; or

 

(ii)           Individuals who, as of
the date hereof, constitute the Board of Directors of the Company (as of the
date hereof the “Incumbent Board”) cease for any reason to constitute at least
a majority of the Board of Directors of the Company, provided that any person
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s stockholders, is or was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for
purposes of this Agreement, considered as though such person were a member of
the Incumbent Board; or

 

(iii)          Approval by the
stockholders of the Company of a reorganization, merger or consolidation with
any other person, entity or corporation, other than

 

(1)           a
merger or consolidation which would result 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
another entity) more than fifty percent (50%) of the combined voting power of
the voting securities of the Company or such other entity outstanding
immediately after such merger or consolidation, or

 

(2)           a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no person acquires forty percent (40%) or
more of the combined voting power of the Company’s then outstanding voting
securities; or

 

(iv)          Approval by the
stockholders of the Company of a plan of complete liquidation of the Company or
an agreement for the sale or other disposition by the Company of all or
substantially all of the Company’s assets.

 

4.             Effect of a Change
in Control.  In the event of a Change
in control, Sections 6 through 13 of this Agreement shall become applicable to
Executive. These Sections shall continue to remain applicable until the third
anniversary of the date upon which the Change in Control occurs.  On such third anniversary date, and provided
that the employment of Executive has not be terminated on account of a
Qualifying Termination (as defined in Section 5 below), this Agreement shall
terminate and be of no further force or effect.

 

5.             Qualifying
Termination.  If following, or within
thirty (30) days prior to, a Change in Control Executive’s employment with the
Company and its affiliated companies is terminated, such termination shall be
conclusively considered a “Qualifying Termination” unless:

 

(a)           Executive
voluntarily terminates his employment with the Company and its affiliated
companies. Executive, however, shall not be considered to have
voluntarily terminated his employment with the Company and its affiliated
companies if, following, or within thirty (30) days prior to, the Change in
Control, Executive’s overall compensation is reduced or adversely modified in
any material respect or Executive’s authority or duties are materially changed,
and subsequent to such reduction, modification or change Executive elects to
terminate his employment with the Company and its affiliated companies. For
such purposes, Executive’s authority or duties shall conclusively be considered
to have been “materially changed” if, without Executive’s express and voluntary
written consent, there is any substantial diminution or adverse modification in
Executive’s title, status, overall position, responsibilities, reporting
relationship, general working environment (including without limitation
secretarial and staff support, offices,

 

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and frequency and mode of travel), or if, without Executive’s express
and voluntary written consent, Executive’s job location is transferred to a
site more than twenty-five (25) miles away from his place of employment thirty
(30) days prior to the Change in Control. In this regard as well, Executive’s
authority and duties shall conclusively be considered to have been “materially
changed” if, without Executive’s express and voluntary written consent,
Executive no longer has the same reporting responsibilities, in each case with
respect and as to a publicly held parent company which is not controlled by
another entity or person.

 

(b)           The
termination is on account of Executive’s death or Disability. For such
purposes, “Disability” shall mean a physical or mental incapacity as a result
of which Executive becomes unable to continue the performance of his
responsibilities for the Company and its affiliated companies and which, at
least three (3) months after its commencement, is determined to be total and permanent
by a physician agreed to by the Company and Executive, or in the event of
Executive’s inability to designate a physician, Executive’s legal
representative. In the absence of agreement between the Company and Executive,
each party shall nominate a qualified physician and the two physicians so
nominated shall select a third physician who shall make the determination as to
Disability.

 

(c)           Executive
is involuntarily terminated for “Cause.” For this purpose, “Cause” shall be
limited to only three types of events:

 

(1)           the
willful and deliberate refusal of Executive to comply with a lawful, written
instruction of the Board of Directors, which refusal is not remedied by
Executive within a reasonable period of time after his receipt of written
notice from the Company identifying the refusal, so long as the instruction is
consistent with the scope and responsibilities of Executive’s position prior to
the Change in Control;

 

(2)           an
act or acts of personal dishonesty by Executive which were intended to result in
substantial personal enrichment of Executive at the expense of the company; or

 

(3)           Executive’s
conviction of any felony involving an act of moral turpitude.

 

6.             Severance Payment.  If Executive’s employment is terminated as a
result of a Qualifying Termination, the Company shall pay Executive within
thirty (30) days after the Qualifying Termination a cash lump sum equal to One
Hundred Percent (100%) of Executive’s Compensation (the “Severance Payment”).

 

(a)           For
purposes of this Agreement, Executive’s “Compensation” shall equal the sum of
(i) Executive’s highest annual salary rate with the Company within the three
year period ending on the date of Executive’s Qualifying Termination, plus (ii)
a “Bonus Increment.” The Bonus Increment shall equal the annualized average of
all bonuses and incentive compensation payments paid to Executive during the
two (2) year period immediately before the date of Executive’s Qualifying
Termination under all of the Company’s bonus and incentive compensation plans
or arrangements.

 

(b)           In
lieu of a cash lump sum, Executive may, in his sole discretion, elect to
receive the Severance Payment provided by this Section in equal annual
installments over three (3) years. Such installments shall be paid to Executive
on each anniversary of the date of Executive’s Qualifying Termination,
beginning with the first such anniversary and continuing on each such
anniversary thereafter until fully paid. Such election to receive the Severance
Payment in installments may be made and/or revoked by Executive at any time
prior to the occurrence of a Change in Control by written notice to

 

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the Board of Directors of the Company. Upon
the occurrence of a Change in Control, any such election to receive the
Severance Payment in installments that has been made and not revoked prior to
the Change in Control shall be irrevocable and binding on both the Company and
Executive. In the event that at the time of a Change in Control there is not in
effect an election by Executive to receive the Severance Payment in
installments, such Severance Payment shall be paid to Executive in a single
cash lump sum as provided in subparagraph (a) above.

 

(c)           The
Severance Payment hereunder is in lieu of any severance payment that Executive
might otherwise be entitled to from the Company in the event of a Change in
Control under the Company’s applicable severance pay policies, if any, or under
any other oral or written agreement; provided, however, that
Executive shall continue to be entitled to receive the severance pay benefits
under the Company’s applicable policies, if any, or under another written
agreement if and to the extent Executive’s termination is not a Qualifying
Termination after, or within thirty (30) days prior to, a Change in Control.

 

7.             Additional
Benefits.

 

(a)           In
the event of a Qualifying Termination, any and all unvested stock options of
Executive shall immediately become fully vested and exercisable and any and all
restrictions on Executive’s restricted stock shall immediately and
automatically lapse.

 

(b)           In
the event of a Qualifying Termination, Executive shall be entitled to continue
to participate in the following executive benefit programs which had been made
available to Executive (including his family) before the Qualifying
Termination: group medical insurance, group dental insurance, and group vision
insurance. These programs shall be continued at no cost to Executive, except to
the extent that tax rules require the inclusion of the value of such benefits
in Executive’s income. The programs shall be continued in the same way and at
the same level as immediately prior to the Qualifying Termination.  The programs shall continue for the Executive’s
benefit for one (1) year after the date of the Qualifying Termination; provided,
however, that Executive’s participation in each of such programs shall
be earlier termination or reduced, as applicable, if and to the extent
Executive receives benefits as a result of concurrent coverage through another
program.

 

(c)           In
the event of a Qualifying Termination, Executive shall be entitled to receive
from the Company, upon such Termination, the sum of $25,000 to help defray
legal fees, tax and accounting fees, executive outplacement services, and other
costs associated with transitional matters.

 

8.             Limitation on
Payments.  Notwithstanding anything
to the contrary herein, in the event that the sum aggregate present value of
(i) the Severance payment payable under Section 6 hereof, (ii) any and all
additional amount or benefits which may be paid or conferred to or on behalf of
Executive in accordance with Section 7 hereof, and (iii) any and all other
amounts or benefits paid or conferred to or on behalf of Executive would
constitute a “parachute payment” (“parachute payment” as used in this Agreement
shall be defined in accordance with Section 280G(b)(2), or any successor
thereto, of the Internal Revenue Code of 1986, as amended), the payments under
this Agreement shall be reduced (by the minimum possible amounts) until no amount
payable to Executive under this Agreement constitutes a parachute payment; provided,
however, that no such reduction under this Section 8 shall be made if
the net after-tax payment (after taking into account, Federal, state, local or
other income and excise taxes) to which Executive would otherwise be entitled
without such reduction would be greater than the net after-tax payment (after
taking into account Federal, state, local or other income and excise taxes) to
Executive resulting from the receipt of such payments with such reduction. If,
as a result of subsequent events or conditions (including a subsequent payment
or absence of a subsequent payment under this Agreement), it is determined that
payments hereunder have been reduced by

 

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more than the minimum amount required under this Section 8, then an
additional payment shall be promptly made to Executive in an amount equal to
the excess reduction. All determinations required to be made under this Section
8, including whether a payment would result in a parachute payment and the
assumptions to be utilized in arriving at such determination, shall be made and
approved within fifteen (15) days after the Qualifying Termination by both (1)
accountants selected by the Company and (2) Executive’s designated financial
advisor.

 

9.             Nonsolicitation
Covenant. In consideration of the payments to be made to Executive
hereunder, Executive hereby covenants, for a period of two (2) years following
the Qualifying Termination, that he will not, directly or indirectly (whether
as an officer, director, employee, individual proprietor, control shareholder,
consultant, partner or otherwise) (i) solicit, recruit or hire-away any
employee of the Company or successor of the Company or (ii) solicit, influence
or attempt to influence any person or entity to terminate such person’s or
entity’s contractual and/or business relationship with the Company or successor
of the Company. With regard to this Section 9, Executive acknowledges that the
provisions herein are reasonable in both scope and duration and necessary to
protect the business of the Company or its successor.

 

10.           Rights and
Obligations Prior to a Change in Control. Prior to the date which is thirty
(30) days before a Change in Control, the rights and obligations of Executive
with respect to his employment by the Company shall be determined in accordance
with the policies and procedures adopted from time to time by the Company and
the provisions of any written employment contract in effect between the Company
and Executive from time to time. This Agreement deals only with certain rights
and obligations of Executive subsequent, or within thirty (30) days prior to, a
Change in Control, and the existence of this Agreement shall not be treated as
raising any inference with respect to what rights and obligations exist prior
to the date which is thirty (30) days before a Change in Control. Unless
otherwise expressly set forth in a separate written employment agreement
between Executive and the Company, the employment of Executive is expressly
at-will, and Executive or the Company may terminate Executive’s employment with
the Company at any time and for any reason, with or without cause, provided
that if such termination occurs within thirty (30) days prior to or three (3)
years after a Change in Control and constitutes a Qualifying Termination (as
defined in Section 5 above) the provisions of this Agreement shall govern the
payment of the Severance Payment and certain other benefits as provided herein.

 

11.           Non-Exclusivity of
Rights. Subject to Section 6(c) hereof, nothing in this Agreement shall
prevent or limit Executive’s continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company or any of its
affiliated companies and for which Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as Executive may have under any
stock option or other agreements with the Company or any of its affiliated
companies. Except as otherwise provided in Section 6(c) hereof, amounts which
are vested benefits or which Executive is otherwise entitled to receive under
any plan or program of the Company or any of its affiliated companies at or
subsequent to the date of any Qualified Termination shall be payable in
accordance with such plan or programs.

 

12.           Full Settlement.  The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counter-claim, recoupment,
defense or other claim, right, or action which the Company may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or to take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement. The Company
agrees to pay, to the full extent permitted by law, all legal fees and expenses
which Executive may reasonably incur as a result of Executive’s successful
collection efforts to receive amounts payable hereunder, or as a result of any
contest (regardless of the outcome thereof) by the Company or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by Executive about the amount of any payment pursuant to this Section).

 

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13.           Successors.

 

(a)           This
Agreement is personal to Executive, and without the prior written consent of
the Company shall not be assignable by Executive other than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit of and
be enforceable by Executive’s legal representatives.

 

(b)           The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company.

 

14.           Governing Law.    This
Agreement is made and entered into in the State of California, and the internal
laws of California shall govern its validity and interpretation in the
performance by the parties hereto of their respective duties and obligations
hereunder.

 

15.           Modifications.  This Agreement may be amended or modified
only by an instrument in writing executed by all of the parties hereto.

 

16.           Dispute Resolution.

 

(a)           Any
controversy or dispute between the parties involving the construction,
interpretation, application or performance of the terms, covenants, or
conditions of this Agreement or in any way arising under this Agreement (a “Covered
Dispute”) shall, on demand by either of the parties by written notice served on
the other party in the manner prescribed in Section 17 hereof, be referenced
pursuant to the procedures described in California Code of Civil Procedure (“CCP”)
Sections 638, et  seq., as they may be amended from time to time
(the “Reference Procedures”), to a retired Judge from the Superior Court for
the County of San Diego or the County of Orange for a decision.

 

(b)           The
Reference Procedures shall be commenced by either party by the filing in the
Superior Court of the State of California for the County of San Diego or the
County of Orange of a petition pursuant to CCP Section 638(a) (a “Petition”).
Said Petition shall designate as a referee a Judge from the list of retired San
Diego County and Orange County Superior Court Judges who have made themselves
available for trial or settlement of civil litigation under said Reference
Procedures. If the parties hereto are unable to agree on the designation of a
particular retired San Diego County or Orange County Superior Court Judge or
the designated Judge is unavailable or unable to serve in such capacity,
request shall be made in said Petition that the Presiding or Assistant
Presiding Judge of the San Diego County Superior Court or the Orange County
Superior Court, as relevant, appoint as referee a retired San Diego County or
Orange County Superior Court Judge from the aforementioned list.

 

(c)           Except
as hereafter agreed by the parties, the referee shall apply the internal law of
California in deciding the issues submitted hereunder. Unless formal pleadings
are waived by agreement among the parties and the referee, the moving party
shall file and serve its complaint within 15 days from the date a referee is
designated as provided herein, and the other party shall have 15 days hereafter
in which to plead to said complaint. Each of the parties reserves its
respective rights to allege and assert in such pleadings all claims, causes of
action, contentions and defenses which it may have arising out of or relating
to the general subject matter of the Covered Dispute that is being determined
pursuant to the Reference Procedures. Reasonable notice of any motions before
the referee shall be given, and all matters shall be set at the convenience of
the referee. Discovery shall be conducted as the parties agree or as allowed by
the referee. Unless waived by each of the parties, a reporter shall be present
at all proceedings before the referee.

 

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(d)           It
is the parties’ intention by this Section 16 that all issues of fact and law
and all matters of a legal and equitable nature related to any Covered Dispute
will be submitted for determination by a referee designated as provided herein.
Accordingly, the parties hereby stipulate that a referee designated as provided
herein shall have all powers of a Judge of the Superior Court including,
without limitation, the power to grant equitable and interlocutory and
permanent injunctive relief.

 

(e)           Each
of the parties specifically (i) consents to the exercise of jurisdiction over
his person by a referee designated as provided herein with respect to any and
all Covered Disputes; and (ii) consents to the personal jurisdiction of the California
courts with respect to any appeal or review of the decision of any such
referee.

 

(f)            Each
of the parties acknowledges that the decision by a referee designated as
provided herein shall be a basis for a judgment as provided in CCP Section 644
and shall be subject to exception and review as provided in CCP Section 645.

 

17.           Notices.  Any notice or communications required or
permitted to be given to the parties hereto shall be delivered personally or be
sent by United States registered or certified mail, postage prepaid and return
receipt requested, and addressed or delivered as follows, or at such other
addresses the party addressed may have substituted by notice pursuant to this
Section:

 

	
  Quidel Corporation

  	
   

  	
  Robert J. Bujarski

  
	
  10165 McKellar Court

  	
   

  	
  24402 La Cresta Drive

  
	
  San Diego, CA 92121

  	
   

  	
  Dana Point, CA 92629

  
	
  Attn: President

  	
   

  	
   

  

 

18.           Captions.  The captions of this Agreement are inserted
for convenience and do not constitute a part hereof.

 

19.           Severability.  In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein and there shall be deemed substituted
for such invalid, illegal or unenforceable provision such other provision as
will most nearly accomplish the intent of the parties to the extent permitted
by the applicable law. In case this Agreement, or any one or more the
provisions hereof, shall be held to be invalid, illegal or unenforceable within
any governmental jurisdiction or subdivision thereof, this Agreement or any such
provision thereof shall not as a consequence thereof be deemed to be invalid,
illegal or unenforceable in any other governmental jurisdiction or subdivision
thereof.

 

20.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one in the same Agreement.

 

[Remainder of page left blank intentionally,
signatures on following page]

 

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IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first written above in San
Diego, California.

 

	
   

  	
  Quidel Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Caren Mason

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Robert J. Bujarski

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Bujarski

  	
   

  
						

 

8Exhibit 10.1

 

MONSTER WORLDWIDE, INC.

1999 LONG TERM INCENTIVE PLAN

 

(As amended through June 16, 2005)

1.                                       General.

 

(a)                                  Purpose. 
The purpose of the Monster Worldwide, Inc. 1999 Long Term Incentive
Plan (the “Plan”) is to establish a flexible vehicle through which Monster
Worldwide, Inc. (formerly known as TMP Worldwide Inc., the “Company”)
can offer equity-based compensation incentives to eligible recipients with a
view toward promoting the long-term financial success of the Company and
enhancing stockholder value.

 

(b)                                 Types of Awards.  Awards under the Plan may be in the form of
any one or more of the following: (1) stock options, including “incentive
stock options” (“ISOs”) within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the “Code”) and options which do not qualify as ISOs (“NQSOs”),
described in Section 5; (2) stock appreciation rights (“SARs”),
described in Section 6; (3) awards of restricted stock (“Restricted
Stock”), described in Section 7; (4) performance-based awards (“Performance-Based
Awards”) described in Section 8; (5) prior to June 16, 2005,
automatic grants of NQSOs to Non-Employee Directors (within the meaning of Section 9(a))
described in Section 9; (6) from and after June 16, 2005,
automatic grants of shares of Common Stock to Non-Employee Directors (within
the meaning of Section 9(a)) described in Section 9A; and (7) such
other types of equity-based awards as the Committee (defined herein) deems
advisable, including, without limitation, phantom stock awards, stock bonus
awards, and dividend equivalent awards.

 

(c)                                  Stock
Covered by Awards.  Awards made under
the Plan will be made in the form of or with reference to shares of the Company’s
common stock, $.001 par value (“Common Stock”). Shares of Common Stock available
for issuance under the Plan may be either authorized and unissued or held by
the Company in its treasury. No fractional shares of Common Stock will be
delivered under the Plan.

 

(d)                                 Documentation of Awards.  Each award made under the Plan will be
evidenced by a written agreement or other written instrument the terms of which
will be established by the Committee. To the extent not inconsistent with the
provisions of the Plan, the written agreement or other instrument evidencing an
award will govern the rights and obligations of the parties with respect to the
award.

 

2.                                       Administration.

 

(a)                                  Committee. 
The Plan will be administered by a committee (the “Committee”) of two or
more members of the Company’s Board of Directors (the “Board”). The members of
the Committee will be appointed by and serve at the pleasure of the Board.
Unless the Board determines otherwise, each member of the Committee must be a “non-employee
director” within the meaning of Rule 16b-3 issued under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Plan will
be administered by the Board with respect to discretionary grants made to
Non-Employee Directors.

 

(b)                                 Authority of Committee.  Subject to the limitations of the Plan, the
Committee, acting in its sole and absolute discretion, will have full power and
authority to (1) select the persons to whom awards will be made under the
Plan, (2) make awards to such persons and prescribe the terms and
conditions of such awards (including, without limitation, nonsolicitation,
confidentiality and mandatory dispute resolution conditions), (3) interpret
and apply the provisions of the Plan and of any agreement or other document
evidencing an award made under the Plan, (4) carry out any responsibility
or duty specifically reserved to the Committee under the Plan, and (5) make
any and all determinations and interpretations and take such other actions as
may be necessary or desirable in order to carry out the provisions, intent and
purposes of the Plan. A majority of the members of the Committee will
constitute a quorum. The Committee may act by the vote of a majority of its
members present at a meeting at which there is a quorum or by unanimous written
consent. The decision of the Committee as to any disputed question, including
questions of construction, interpretation and administration, will be final and
conclusive on all persons.

 

 

(c)                                  Delegation of Authority.  The Committee may delegate any of its powers
and duties under the Plan to such officers of the Company or other persons as
the Committee deems appropriate in accordance with such guidelines as the
Committee may establish, provided, however, that no such delegation may be made
(1) with respect to any award intended to qualify for the performance-based
compensation exception of Section 162(m)(4)(C) of the Code, or (2) to
the extent it would enable the delegate to grant, fix the terms of or amend or
cancel an award under the Plan to an individual who is required to file reports
with respect to securities of the Company pursuant to Section 16(a) of
the Exchange Act.

 

(d)                                 Indemnification.  The Company will indemnify and hold harmless
each member of the Committee and any employee or director of the Company or an
affiliate to whom any duty or power relating to the administration or
interpretation of the Plan is delegated from and against any loss, cost,
liability (including any sum paid in settlement of a claim with the approval of
the Board), damage and expense (including legal and other expenses incident
thereto) arising out of or incurred in connection with the Plan, unless and
except to the extent attributable to such person’s fraud or willful misconduct.

 

3.                                       Participation.

 

(a)                                  Awards
may be granted under the Plan to any member of the Board (whether or not an
employee of the Company or an affiliate), to any officer or other employee of
the Company or an affiliate and to any consultant or other independent
contractor who performs or will perform services for the Company or an
affiliate. In selecting participants and determining the nature and terms of
awards made under the Plan, the Committee may give consideration to the
functions and responsibilities of a potential recipient, his or her previous
and/or expected contributions to the business of the Company or its affiliates
and such other factors as the Committee deems relevant under the circumstances.

 

(b)                                 Prior
to June 16, 2005, Non-Employee Directors will receive automatic grants of
NQSOs pursuant to Section 9. From and after June 16, 2005,
Non-Employee Directors will receive automatic grants of shares of Common Stock
pursuant to Section 9A.

 

4.                                       Limitations on Awards under the Plan.

 

(a)                                  Aggregate Number of Shares.  The maximum number of shares of Common Stock
that may be issued under the Plan is the sum of (1) 30,000,000, and (2) the
number of shares remaining available for new awards under the TMP
Worldwide Inc. 1996 Stock Option Plan, as amended, and the TMP
Worldwide Inc. 1996 Stock Option Plan for Non-Employee Directors
(collectively, the “Prior Plans”) including, without limitation, shares covered
by any option outstanding under the Prior Plans which, by reason of the
subsequent expiration or cancellation of the option, are not issued under the
Prior Plans. In determining the number of shares that remain issuable under the
Plan at any time after the date the Plan is adopted, the following shares will
be deemed not to have been issued (and will be deemed to remain available for
issuance) under the Plan: (i)  shares remaining under an award made under
this Plan or under an option granted under the Prior Plans that terminates or
is canceled without having been exercised or earned in full; (ii) shares
subject to an award under this Plan where cash is delivered to the holder of
the award in lieu of such shares; (iii) shares of restricted stock awarded
under this Plan that are forfeited in accordance with the terms of the
applicable award; and (iv) shares that are withheld in order to pay the
purchase price of shares acquired upon the exercise of outstanding options
granted under the Prior Plans or of awards granted under the Plan or to satisfy
the tax withholding obligations associated with such exercise. The number of
shares of Common Stock issued in connection with the exercise of an option
under the Prior Plans or an award under the Plan will be determined net of any
previously-owned shares tendered by the holder of the option or award in
payment of the exercise price or of applicable withholding taxes.

 

2

 

(b)                                 Individual Award Limits.  The maximum number of shares of Common Stock
for which stock options may be granted under the Plan to any person in any
calendar year shall be 1,000,000. The maximum number of shares of Common Stock
subject to SARs granted under the Plan to any person in any calendar year shall
be 1,000,000. The aggregate maximum number of shares of Common Stock subject to
awards, other than options or SARs, that may be granted under the Plan to any
person in any calendar year shall be 1,000,000. For purposes of this subsection,
the repricing of a stock option or SAR shall be treated as a new grant to the
extent required under Section 162(m) of the Code. Subject to these
limitations, each person eligible to participate in the Plan will be eligible
in any year to receive awards covering up to the full number of shares of
Common Stock then available for awards under the Plan. No more than $1,000,000
may be paid to any individual with respect to any cash Performance-Based Award
covered by Section 8. In applying this limitation, multiple Performance-Based
Awards to the same individual will be subject to a single $1,000,000 limit if
they are either (1) determined by reference to performance periods of one
year or less ending with or within the same fiscal year of the Company, or (2) determined
by reference to one or more multi-year performance periods ending in the same
fiscal year of the Company.

 

5.                                       Stock Options Awards.

 

(a)                                  ISOs and NQSOs.  Subject to the provisions hereof, including,
without limitation, this Section and Sections 10 and 11, the Committee may
grant ISOs and NQSOs to eligible personnel to purchase shares of Common Stock
upon such terms and conditions as the Committee deems appropriate, provided
that the Committee may only grant ISOs to employees of the Company and its “subsidiaries”
within the meaning of Section 424 of the Code.

 

(b)                                 Replacement Options.  The Committee, acting in its discretion, may
provide with respect to an option granted pursuant to this Section 5
(including, without limitation, any option described in this subsection) that,
if the grantee, while still an employee or otherwise in the service of the
Company or an affiliate, exercises the option in whole or in part using shares
of Common Stock that were owned by the holder for at least six months prior to
such exercise to pay the exercise price, then the grantee will automatically
receive an additional option (“replacement option”) to purchase shares of
Common Stock. The number of shares covered by a replacement option may not be
greater than the number of shares used to pay the exercise price under the
original option plus the number of shares withheld by the Company for the
payment of income taxes associated with the exercise of the original option
(whether or not such income taxes are required to be withheld). Unless the
Committee determines otherwise, a replacement option will not become
exercisable, if at all, for at least six months after the date it is granted
and, unless sooner terminated, will expire ten years after the date the option is
granted. The Committee may prescribe such rules and procedures in
connection with the exercise of options and the issuance of replacement options
as it deems appropriate, including, without limitation, procedures for
telephonic exercise.

 

(c)                                  Exercise Price.  The purchase price per share of Common Stock
covered by an option granted pursuant to this Section 5 will be determined
by the Committee when the option is granted. The purchase price per share of
Common Stock covered by an NQSO must be at least equal to the par value per
share of Common Stock on the date the option is granted, provided, however,
that the purchase price per share of Common Stock covered by an NQSO which is a
replacement option (described in the preceding subsection) or which is an option
intended to qualify for the performance-based compensation exception of Section 162(m)(4)(C) of
the Code, may not be less than the fair market value per share of Common Stock
(determined under the next subsection) on the date the option is granted. The purchase
price per share of Common Stock covered by an ISO may not be less than 100% of
the fair market value of a share of Common Stock on the date the ISO is granted
(or, in the case of an optionee who, at the time the option is granted, owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or a “subsidiary” of the Company within the
meaning of Section 424 of the Code, 110%).

 

3

 

(d)                                 Fair Market Value of Common Stock.  For all purposes of the Plan, the fair market
value of a share of Common Stock on any date will be equal to the closing price
per share as published by the principal national securities exchange
(including, but not limited to, NASDAQ) on which shares of the Common Stock are
traded on such date or, if there is no sale of Common Stock on such date, the
average of the bid and asked prices on such exchange at the close of trading on
such date, or if shares of the Common Stock are not listed on a national
securities exchange on such date, the closing price or, if none, the average of
the bid and asked prices in the over the counter market at the close of trading
on such date, of if the Common Stock is not traded on a national securities
exchange or the over the counter market value of a share of the Common Stock on
such date as determined in good faith by the Board.

 

(e)                                  Option Period.  Subject to the provisions hereof, unless the
Committee determines otherwise, no option granted pursuant to this Section 5
may be exercised within six months after the date the option is granted. Unless
sooner terminated, all such options will expire ten years after the date the
option is granted (or, in the case of an ISO granted to a ten percent
stockholder described in Section 424 of the Code, five years).

 

(f)                                    Vesting Conditions.  The Committee may establish such vesting and
other restrictions on the exercise of an option and/or upon the disposition of
the stock acquired upon the exercise of an option as it deems appropriate.
Unless the Committee prescribes otherwise, during an optionee’s employment or
service with the Company or an affiliate, each option granted pursuant to this Section 5
(other than a replacement option) will be subject to a four-year vesting schedule pursuant
to which, unless sooner terminated or accelerated, the option will become
vested as to 25% of the shares originally covered thereby at the end of each of
the first four years following the date of grant, and each replacement option
will become fully vested as to all of the shares covered thereby on the first
anniversary of the date the option is granted.

 

(g)                                 Exercise of Options.  An option may be exercised by transmitting to
the Company (1) a notice specifying the number of shares to be purchased
and (2) payment of the exercise price, together with the amount, if any,
deemed necessary by the Committee to enable the Company to satisfy its federal,
foreign or other tax withholding obligations with respect to such exercise
(unless other arrangements acceptable to the Company are made with respect to
the satisfaction of such withholding obligations). The Committee may establish
such rules and procedures as it deems appropriate for the exercise of
options under the Plan, including, without limitation, procedures for
telephonic exercise. The purchase price of shares of Common Stock acquired
pursuant to the exercise of an option granted under the Plan may be paid in
cash and/or such other form of payment as may be permitted by the Committee
under the option agreement, including, without limitation, shares of Common
Stock which have been owned by the holder for at least six (6) months and
installment payments under the optionee’s promissory note.

 

(h)                                 Rights as a Stockholder.  No shares of Common Stock will be issued in
respect of the exercise of an option granted under the Plan until full payment
therefor has been made (and/or provided for where all or a portion of the
purchase price is being paid in installments), and the applicable income tax
withholding obligation has been satisfied or provided for. The holder of an
option will have no rights as a stockholder with respect to any shares covered
by an option until the date a stock certificate for such shares is issued to
him or her. Except as otherwise provided herein, no adjustments shall be made
for dividend distributions or other rights for which the record date is prior
to the date such stock certificate is issued.

 

(i)                                     Other Provisions.  The Committee may impose such other
conditions with respect to the exercise of options, including, without
limitation, any conditions relating to the application of federal or state
securities laws or exchange requirements, as it may deem necessary or
advisable.

 

4

 

6.                                       Stock Appreciation Rights.

 

(a)                                  General. 
Subject to the provisions hereof, the Committee may award SARs to
eligible personnel upon such terms and conditions as it deems appropriate. A
SAR is an award entitling the holder, upon exercise, to receive an amount, in
cash or shares of Common Stock or a combination thereof, as determined by the
Committee in its sole discretion, determined with reference to the
appreciation, if any, in the fair market value of Common Stock during the
period beginning on the date the SAR is granted and ending on the date the SAR
is exercised.

 

(b)                                 Types of SARs.  SARs may be awarded under the Plan in
conjunction with a stock option award (“tandem SARs”) or independent of any
stock option award (“stand-alone SARs”). Tandem SARs awarded in conjunction
with a NQSO may be awarded either at or after the time the NQSO is granted.
Tandem SARs awarded in conjunction with an ISO may only be awarded at the time
the ISO is granted.

 

(c)                                  Exercisability of SARs.  Unless the Committee determines otherwise, no
SAR may be exercised until the expiration of six months from the date the SAR
is awarded. Except as otherwise provided herein, a tandem SAR will be
exercisable only at the same time and to the same extent and subject to the
same conditions as the related option is exercisable. The exercise of a tandem
SAR will cancel the related option to the extent of the shares of Common Stock
with respect to which the SAR is exercised, and vice versa. Tandem SARs may be
exercised only when the fair market value of the Common Stock to which it
relates exceeds the option exercise price. The Committee may impose such
additional service or performance-based vesting conditions upon the exercise of
a SAR (tandem or stand-alone) as it deems appropriate.

 

(d)                                 Exercise of SARs.  A SAR may be exercised by giving written
notice to the Company identifying the SAR that is being exercised, specifying
the number of shares covered by the exercise and containing such other
information or statements as the Committee may require. The Committee may
establish such rules and procedures as it deems appropriate for the
exercise of SARs under the Plan, including, without limitation, procedures for
telephonic exercise. Upon the exercise of a SAR, the holder will be entitled to
receive an amount (in cash and/or shares of Common Stock as determined by the
Committee) equal to the product of (1) the number of shares with respect
to which the SAR is being exercised and (2) the difference between the
fair market value of a share of Common Stock on the date the SAR is exercised
(or such other exercise price as may be specified in the award) and the
exercise price per share of the SAR. As a condition of exercise, the holder
must pay to the Company or make arrangements satisfactory to the Company for
the payment of applicable withholding taxes.

 

(e)                                  Deferral of Payment.  The Committee may at any time and from time
to time provide for the deferral of delivery of any shares and/or cash for
which a SAR may be exercisable until such date or dates and upon such other
terms and conditions as the Committee may determine.

 

7.                                       Restricted Stock Awards.

 

(a)                                  General. 
Subject to the provisions of the Plan, the Committee may award shares of
Common Stock to eligible personnel upon such terms and subject to such forfeiture
and other conditions as the Committee deems appropriate. The terms and
conditions of any such stock award will be evidenced by a written restricted
stock agreement or other instrument approved for this purpose by the Committee.

 

(b)                                 Stock Certificates for Restricted Stock.  Unless the Committee elects to use a
different method (such as, for example, the issuance and delivery of stock
certificates) shares of restricted stock will be evidenced by book entries on
the Company’s stock transfer records pending the expiration of restrictions

 

5

 

thereon. If a stock certificate for restricted stock is issued in the
name of the grantee, it will bear an appropriate legend to reflect the nature
of the restrictions applicable to the shares represented by the certificate,
and the Committee may require that such stock certificates be held in custody
by the Company until the restrictions on such shares have lapsed. The Committee
may establish such other conditions as it deems appropriate in connection with
the issuance of stock certificates for shares of restricted stock, including,
without limitation, a requirement that the grantee deliver a duly signed stock
power, endorsed in blank, for the shares covered by the award.

 

(c)                                  Purchase Price.  The purchase price payable for shares of
restricted stock awarded under the Plan will be determined by the Committee. To
the extent permitted by applicable law, the purchase price may be as low as
zero and, to the extent required by the applicable law, the purchase price will
be no less than the par value of the shares covered by the award.

 

(d)                                 Restrictions and Vesting.  The Committee will establish such conditions
as it deems appropriate on the grant or vesting of restricted stock awarded
under the Plan. Such conditions may be based upon continued service, the
attainment of performance goals (which, in the case of grants of restricted
stock intended to qualify for the performance-based compensation exception
under Section 162(m)(4)(C) of the Code, satisfy the requirements of Section 8)
and/or such other relevant factors or criteria designated by the Committee. The
holder of restricted stock will not be permitted to transfer shares of
restricted stock awarded under the Plan before the time the applicable vesting
conditions are satisfied.

 

(e)                                  Rights as a Stockholder.  Except as provided herein and as otherwise
determined by the Committee, the recipient of a restricted stock award shall
have with respect to his or her restricted stock all of the rights of a holder
of shares of Common Stock, including, without limitation, the right to receive
any dividends, the right to vote such shares and, subject to satisfaction of
the applicable vesting conditions, the right to tender such shares. The
Committee may, in its sole discretion, determine at the time of grant that the
payment of dividends will be deferred until, and conditioned upon, the
satisfaction of the applicable vesting conditions.

 

(f)                                    Lapse of Restrictions.  If and when the vesting conditions are
satisfied with respect to a restricted stock award, a certificate for the
shares covered by the award, to the extent vested, will be delivered to the
grantee. All legends shall be removed from said certificates at the time of
delivery except as otherwise required by applicable law.

 

8.                                       Performance-Based Awards.

 

(a)                                  General. 
The Committee may condition the exercise, vesting or settlement of an
award made under the Plan on the achievement of specified performance goals.
The provisions of this Section will apply in the case of a performance-based
award that is intended to generate “qualified performance-based compensation”
within the meaning of Section 162(m) of the Code.

 

(b)                                 Objective Performance Goals.  A performance goal established in connection
with an award covered by this Section must be (1) objective, in the
sense that a third party having knowledge of the relevant facts could determine
whether the goal is met, (2) prescribed in writing by the Committee before
the beginning of the applicable performance period or at such later date (when
fulfillment is substantially uncertain) as may be permitted under Section 162(m)
of the Code, and (3) expressed in the following manner with respect to any
one or more of the following business criteria:

 

(A)                              attainment of certain
target levels of, or a specified percentage increase in, revenues, income
before income taxes and extraordinary items (determined in accordance with
standards established by Opinion No. 30 of the Accounting Principles
Board), net income,

 

6

 

earnings before income tax, earnings before interest, taxes,
depreciation and amortization or a combination of any or all of the foregoing;

 

(B)                                attainment of certain
target levels of, or a percentage increase in, after-tax or pre-tax profits;

 

(C)                                attainment of certain
target levels of, or a specified increase in, operational cash flow;

 

(D)                               achievement of a certain
level of, reduction of, or other specified objectives with regard to limiting
the level of increase in, all or a portion of, the Company’s bank debt or other
long-term or short-term public or private debt or other similar financial
obligations of the Company, which may be calculated net of such cash balances
and/or other offsets and adjustments as may be established by the Committee;

 

(E)                                 attainment of a
specified percentage increase in earnings per share or earnings per share from
continuing operations;

 

(F)                                 attainment of certain
target levels of, or a specified increase in return on capital employed or
return on invested capital;

 

(G)                                attainment of certain
target levels of, or a percentage increase in, after-tax return on stockholders’
equity;

 

(H)                               attainment of certain
target levels of, or a specified increase in, economic value added targets
based on a cash flow return on investment formula;

 

(I)                                    attainment of
certain target levels in the fair market value of the shares of the Company’s
Common Stock; and

 

(J)                                   growth in the value
of an investment in the Company’s Common Stock assuming the reinvestment of
dividends.

 

If and to the extent permitted under Section 162(m) of the Code,
such performance goals may be determined without regard to (or adjusted for)
changes in accounting methods, corporate transactions (including, without limitation,
dispositions and acquisitions) and other similar types of events or
circumstances occurring during the applicable performance period. The Committee
may not delegate any responsibility with respect to the establishment or
determination of performance goals to which awards covered by this Section are
subject.

 

(c)                                  Calculation of Performance-Based Award.  At the expiration of the applicable
performance period, the Committee will determine the extent to which the
performance goals established pursuant to this Section are achieved and
the percentage of each performance-based award that has been earned. The
Committee may reduce the amount that would otherwise be payable pursuant to an
award covered by this Section, but may not exercise its discretion to increase
such amount.

 

9.                                       Non-Employee Director Stock Option Awards.

 

(a)                                  Definition.  For all purposes hereof, the term “Non-Employee
Director” means any member of the Board who is not also an employee of the
Company or any affiliate.

 

(b)                                 Automatic Grants.  Without further action by the Board or the
stockholders of the Company, (1) each Non-Employee Director shall, subject
to the terms of the Plan, be granted an option to

 

7

 

purchase 22,500 shares of Common Stock on the date he or she first
commences service as a Non-Employee Director provided such date occurs after
the date the Plan is adopted (the “Initial Grant”), and (2) each
Non-Employee Director will be granted an option to purchase 5,000 shares of
Common Stock on the trading day following each annual meeting of the Company’s
stockholders that occurs after the date the Plan is adopted and at least one
year after the date he or she first became a Non-Employee Director (the “Annual
Grant”). Notwithstanding the foregoing, no future grants of options pursuant to
this Section 9 shall be made on or after June 16, 2005.

 

(c)                                  Option Agreement.  Stock options granted pursuant to this Section 9
will be NQSOs. Such options shall be evidenced by written option agreements on
a form approved by the Board. Such agreements shall contain such terms and
conditions as are not inconsistent with the terms and conditions hereof.

 

(d)                                 Terms of Options.

 

(i)                                     Exercise
Price.  The purchase price per share
deliverable upon the exercise of an option shall be 100% of the closing price
of such Common Stock, as published by the principal national securities
exchange (including, but not limited to, NASDAQ) on which shares of the Common
Stock are traded on such date, at the date of the grant of the Option.

 

(ii)                                  Vesting
Conditions.  An Initial Grant will be
50% vested at the time of the grant, and will become 100% vested on the first
anniversary of the date of grant, provided the optionee is still a Non-Employee
Director on the vesting date. An Annual Grant will become vested as to 50% of
the shares originally covered thereby on each of the first two anniversaries of
the grant date, provided the optionee is still a Non-Employee Director on the
vesting date.

 

(iii)                               Effect
of Termination of Service.  The
provisions of Section 11(a) shall apply to options granted pursuant
to this Section 9.

 

(iv)                              Capital
Transactions; Change in Control.  The
provisions of Section 12 shall apply to options granted pursuant to this Section 9.

 

(e)                                  Expiration.  Except as otherwise provided herein, if not
previously exercised, each option will expire on the tenth anniversary of the
date of grant.

 

9A.                             Non-Employee Director Common Stock Awards.

 

(a)                                  Automatic Grants.  From and after June 16, 2005, without
further action by the Board or the stockholders of the Company: (1) each
Non-Employee Director shall be granted 5,000 shares of Common Stock on the date
he or she first commences service as a Non-Employee Director (the “Initial
Stock Grant”), and (2) each Non-Employee Director shall be granted 2,500
shares of Common Stock on the trading day following each annual meeting of the
Company’s stockholders, provided that such Non-Employee Director was a Non-Employee
Director at or was appointed or elected to the Board as a Non-Employee Director
at the preceding annual meeting of the Company’s stockholders (the “Annual
Stock Grant”).

 

(b)                                 Award Agreement.  The Initial Stock Grant and the Annual Stock
Grant shall be evidenced by written award agreements on a form approved by the Board.
Such agreements shall contain such terms and conditions as are not inconsistent
with the terms and conditions hereof.

 

8

 

(c)                                  Terms and Conditions of Common Stock Awards.

 

(i)                                     Vesting
Conditions.  Each Initial Stock Grant
shall be immediately vested with respect to fifty percent (50%) of the shares
of Common Stock on the grant date and shall become vested with respect to the
remaining fifty percent (50%) of the shares of Common Stock on the first anniversary
of the grant date, provided the Non-Employee Director remains in service on the
Board through such anniversary date. Each Annual Stock Grant shall become
vested with respect to fifty percent (50%) of the shares of Common Stock on
each of the first two anniversaries of the grant date, provided the
Non-Employee Director remains in service on the Board through such anniversary
date. Notwithstanding the foregoing, all unvested shares of Common Stock
granted pursuant to this Section 9A shall immediately vest in full upon
the occurrence of a Change in Control (as defined below).

 

(ii)                                  Transfer
Restrictions.  A Non-Employee
Director may not sell, assign, transfer, dispose of, pledge or otherwise
hypothecate any unvested shares of Common Stock granted pursuant to this Section 9A
prior to the date on which such shares become vested pursuant to subsection (c)(i) above.

 

(iii)                               Termination
of Service on the Board.  Upon the
termination of a Non-Employee Director’s service on the Board for any reason
(including death and disability) or no reason, all then unvested shares of
Common Stock granted pursuant to this Section 9A shall automatically be
forfeited by the Non-Employee Director (or his successors) to the Company,
without compensation, and any certificate therefor or book entry with respect
thereto or other evidence thereof will be canceled.

 

(iv)                              Stock
Certificates.  Unless the Board
elects to use a different method, if and when the vesting conditions, if any,
are satisfied with respect to shares of Common Stock granted pursuant to this Section 9A,
a stock certificate or certificates representing such shares will be promptly
delivered to the Non-Employee Director (and shall not bear any legend at the
time of delivery, except as otherwise required by applicable law).

 

(v)                                 Rights
as a Stockholder.  A Non-Employee
Director shall not have the rights of a stockholder with respect to unvested
shares of Common Stock granted pursuant to this Section 9A, except the
right to receive any dividends with respect thereto and, subject to
satisfaction of the applicable vesting conditions with respect to any unvested
shares of Common Stock, the right to tender such shares. Any such dividend
shall be subject to the vesting, transfer and forfeiture conditions contained
herein to the same extent as the shares with respect to which such dividend is
made.

 

10.                                 Non-Transferability of Awards.  No stock option, SAR, Performance Award or
other stock-based award under the Plan shall be transferable by the recipient
other than upon the recipient’s death to a beneficiary designated by the
recipient in a manner acceptable to the Committee, or, if no designated
beneficiary shall survive the recipient, pursuant to the recipient’s will or by
the laws of descent and distribution. All stock options and SARs shall be
exercisable during the recipient’s lifetime only by the recipient. Tandem stock
appreciation rights shall be transferable, to the extent permitted above, only
with the underlying stock option. Shares of restricted stock may not be
transferred prior to the date on which shares are issued, or, if later, the
date on which such shares have vested and are free of any applicable

 

9

 

restriction imposed hereunder. Except as otherwise specifically provided
by law or the provisions hereof, no award received under the Plan may be
transferred in any manner, and any attempt to transfer any such award shall be
void, and no such award shall in any manner be liable for or subject to the
debts, contracts, liabilities, engagements or torts of any person who shall be
entitled to such award, nor shall it be subject to attachment or legal process
for or against such person. Notwithstanding the foregoing, the Committee may
determine at the time of grant or thereafter that an NQSO is transferable in
whole or part to such persons, under such circumstances, and subject to such
conditions as the Committee may prescribe.

 

11.                                 Effect of Termination of Employment or Service.  Unless otherwise determined by the Committee
at grant or, if no rights of the participant are thereby reduced, thereafter,
and subject to earlier termination in accordance with the provisions hereof,
the following rules apply with regard to vesting and exercise of awards
held by a participant at the time of his or her termination of employment or
other service with the Company and its affiliates.

 

(a)                                  Rules Applicable
to Stock Options and SARs.

 

(1)                                  Termination
by Reason of Death.  If a participant’s
employment or service terminates by reason of his or her death, then any stock
option or SAR held by the deceased participant will thereupon become fully
vested and may be exercised by the deceased participant’s beneficiary at any
time within one year from the date of death but in no event after expiration of
the stated term.

 

(2)                                  Termination
by Reason of Disability.  If a
participant’s employment or service terminates by reason of his or her
disability (defined below), then any stock option or SAR held by the
participant, to the extent exercisable on the date his or her employment or
service terminates, may be exercised by the participant at any time within one
year from the date his or her employment or service terminates but in no event
after expiration of the stated term. If the participant dies during such one-year
period and before the option or SAR is exercised, then the deceased participant’s
beneficiary may exercise the option or SAR, to the extent exercisable by the
deceased participant immediately prior to his or her death, for a period of one
year following the date of death but in no event after expiration of the stated
term. For the purposes hereof, the term “disability” means the inability of a
participant to perform the customary duties of his or her employment or other
service for the Company or an affiliate by reason of a physical or mental
incapacity which is expected to result in death or be of indefinite duration.

 

(3)                                  Other
Termination.  If a participant’s
employment or service terminates for any reason (other than death or
disability) or no reason, then all stock options and SARs held by the
participant, to the extent otherwise exercisable on the date his or her
employment or service is terminated, may be exercised by the participant at any
time within a period of six months from the termination date, but in no event
beyond the expiration of the stated term of such stock options and SARs.

 

(b)                                 Rules Applicable to Restricted Stock.  Upon the termination of a participant’s
employment or service for any reason (including death and disability) or no
reason, restricted stock which has not yet become fully vested will, unless
otherwise determined by the Committee, automatically be forfeited by the
participant (or the participant’s successors) and any certificate therefor or
book entry with respect thereto or other evidence thereof will be canceled.

 

(c)                                  Rules Applicable to Performance-Based Awards.  Upon termination of a participant’s

 

10

 

employment or service for any reason (including death and disability)
or no reason, then the participant’s outstanding performance-based awards will,
unless otherwise determined by the Committee, thereupon expire and the
participant (or his or her beneficiary, as the case may be) will not be
entitled to receive any amount in respect of the performance period or cycle
within which the participant’s employment or service is terminated.

 

(d)                                 Rules Applicable to Other Stock-Based Awards.  Rules similar to those set forth in subsection (b) (relating
to restricted stock awards) will apply in connection with the termination of
employment or service of a participant who holds any other form of stock-based
award granted under the plan that has not yet vested and/or is contingent upon
future performance of services.

 

12.                                 Capital Changes; Change in Control.

 

(a)                                  Adjustments Upon Changes in Capitalization.  The aggregate number and class of shares for
which awards may be granted under the Plan, the maximum number of shares
covered by awards that may be granted to any individual in any calendar year,
the number and class of shares that will be covered by automatic grants made to
Non-Employee Directors pursuant to Section 9A, the number and class of
shares covered by each outstanding award and, if applicable, the exercise price
per share shall all be adjusted proportionately or as otherwise appropriate to
reflect any increase or decrease in the number of issued shares of Common Stock
resulting from a split-up or consolidation of shares or any like capital
adjustment, or the payment of any stock dividend, and/or to reflect a change in
the character or class of shares covered by the Plan arising from a
readjustment or recapitalization of the Company’s capital stock.

 

(b)                                 Change in Control.  If, in connection with a Change in Control
(defined below), the stockholders of the Company receive capital stock of
another corporation (“Exchange Stock”) in exchange for their shares of Common
Stock (whether or not such Exchange Stock is the sole consideration), and if
the Board so directs, then all outstanding options will be converted into
options to purchase shares of Exchange Stock. The number of shares and exercise
price under the converted options will be determined by adjusting the number of
shares and exercise price for the options granted hereunder on the same basis
as the determination of the number of shares of Exchange Stock the holders of
Common Stock will receive in connection with the Change in Control and, unless
the Board determines otherwise, the vesting conditions with respect to the converted
options will be substantially the same as the vesting conditions set forth in
the original option agreement. If the Board does not direct the conversion of
outstanding options in connection with a Change in Control, then all optionees
will be permitted to exercise their outstanding options in whole or in part
(whether or not otherwise vested or exercisable) prior to the Change in
Control, and any outstanding options which are not exercised before the Change
in Control will thereupon terminate.

 

(c)                                  Definition of Change in Control.  For purposes hereof, the term “Change in
Control” shall be deemed to occur if (1) there shall be consummated (A) any
consolidation, merger or reorganization involving the Company, unless such
consolidation, merger or reorganization is a “Non-Control Transaction” (as
defined below) or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company, or (2) the stockholders of the Company shall
approve any plan or proposal for liquidation or dissolution of the Company, or (3) any
person (as such term is used in Section 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), shall
become the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act) of more than 50% of the combined voting power of the Company’s
then outstanding voting securities other than (a) a person who owns or
owned shares of Class B Common Stock of the Company, (b) pursuant to
a plan or arrangement entered into by such person and the Company or (c) pursuant
to receipt of such shares from a stockholder of the Company pursuant to such
stockholder’s will or the laws of descent and distribution, or (4)  during
any period of two consecutive years, individuals who at the beginning of such
period constitute the entire Board shall cease for any reason to constitute a
majority

 

11

 

thereof unless the election, or the nomination for election by the
Company’s stockholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period. A “Non-Control Transaction” shall mean a consolidation,
merger or reorganization of the Company where (1) the stockholders of the
Company immediately before such consolidation, merger or reorganization own,
directly or indirectly, at least a majority of the combined voting power of the
outstanding voting securities of the corporation resulting from such
consolidation, merger or reorganization (the “Surviving Corporation”), (2) the
individuals who were members of the Board of the Company immediately prior to
the execution of the agreement providing for such consolidation, merger or
reorganization constitute at least 50% of the members of the Board of Directors
of the Surviving Corporation, or a corporation directly or indirectly
beneficially owning a majority of the voting securities of the Surviving
Corporation and (3) no person (other than (a) the Company, (b) any
subsidiary of the Company, (c) any employee benefit plan (or any trust
forming a part thereof) maintained by the Company, the Surviving Corporation or
any subsidiary, or (d) any person who, immediately prior to such
consolidation, merger or reorganization, beneficially owned more than 50% of
the combined voting power of the Company’s then outstanding voting securities)
beneficially owns more than 50% of the combined voting power of the Surviving
Corporation’s then outstanding voting securities.

 

(d)                                 Fractional Shares.  In the event of any adjustment in the number
of shares covered by any option pursuant to the provisions hereof, any
fractional shares resulting from such adjustment will be disregarded, and each
such option will cover only the number of full shares resulting from the
adjustment.

 

(e)                                  Determination of Board to be Final.  All adjustments under this Section shall
be made by the Board, and its determination as to what adjustments shall be made,
and the extent thereof, shall be final, binding and conclusive.

 

13.                                 Amendment and Termination.  The Board may amend or terminate the Plan,
provided, however, that no such action may affect adversely the accrued rights
of the holder of any outstanding award without the consent of the holder.
Except as otherwise provided in Section 12, any amendment which would
increase the aggregate number of shares of Common Stock for which awards may be
granted under the Plan or modify the class of recipients eligible to receive
stock-based awards under the Plan shall be subject to the approval of the
Company’s stockholders. The Committee may amend the terms of any agreement or
certificate made or issued hereunder at any time and from time to time
provided, however, that any amendment which would adversely affect the accrued
rights of the holder may not be made without his or her consent.

 

14.                                 No Rights Conferred.  Nothing contained herein will be deemed to
give any individual any right to receive an option under the Plan or to be
retained in the employ or service of the Company or any affiliate of the
Company.

 

15.                                 Governing Law.  The Plan and each option agreement shall be
governed by the laws of the State of Delaware, except as otherwise provided in
the option agreement.

 

16.                                 Decisions and Determinations of Committee to be
Final.  Any decision or
determination made by the Board pursuant to the provisions hereof and, except
to the extent rights or powers under this Plan are reserved specifically to the
discretion of the Board, all decisions and determinations of the Committee are
final and binding.

 

17.                                 Term of the Plan.  The Plan shall be effective as of December 9,
1998, subject to the approval of the stockholders of the Company within one
year from the date of adoption by the Board. The Plan will terminate on December 9,
2008, unless sooner terminated by the Board. The rights of any person with
respect to an award made under the Plan that is outstanding at the time of the
termination of the Plan

 

12

 

shall not be affected solely by reason of the termination of the Plan
and shall continue in accordance with the terms of the award (as then in effect
or thereafter amended) and the Plan.

 

13

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