Document:

Exhibit 10.1

 

Red Robin Gourmet Burgers, Inc.

6312 South Fiddlers Green Circle, # 200N

Greenwood Village, CO 80111

 

August 5,
2010

 

Mr. Gregory P. Taxin

Spotlight Advisors, LLC

9 West 57th Street, 26th Floor

New York, NY 
10019

 

Mr. Vincent Darpino

Clinton Group, Inc.

9 West 57th Street, 26th Floor

New York, NY 
10019

 

Dear Messrs. Taxin and Darpino:

 

The parties to that certain letter agreement dated March 4,
2010 (the “Agreement”) among Spotlight Advisors, LLC, a Delaware limited
liability company (“Spotlight”) and Clinton Group, Inc., a Delaware
corporation (“Clinton”), on behalf of themselves and their respective
affiliated funds, persons and entities, both current and future (collectively,
the “Investor Group”) and Red Robin Gourmet Burgers, Inc., a Delaware
corporation (the “Company”), hereby agree as follows (capitalized terms
used but not otherwise defined in this letter agreement shall have the meanings
given to such terms in the Agreement):

 

1.             Glenn
Kaufman shall constitute the Additional Director in accordance with Section 1(c) of
the Agreement.  The parties hereby agree
that Mr. Kaufman will serve as a Class II director, rather than a Class III
director, as originally contemplated by Section 1(c) of the
Agreement.

 

2.             For
purposes of clarification, should the Company publicly announce that (i) it
has entered into a definitive agreement with respect to the acquisition of all
or greater than 50% of its outstanding common stock or (ii) the Board has
determined to engage in a consideration of strategic alternatives, including
the potential sale of the Company, the restrictions in Sections 9(d) and 9(e) of
the Agreement shall not be deemed to apply to any action taken by the Investor
Group either alone or together with a third party to make preparations for and
present directly to the Board in a confidential manner an acquisition proposal;
and further, that any filing made by the Investor Group on Schedule 13D that is
required with respect to such a proposal shall not constitute a violation of
Subsection 9(d) or 9(e) of the Agreement.

 

3.             Except
as specifically set forth herein, the parties continue to be bound by the terms
and conditions of the Agreement.  This
letter agreement may be executed by the parties in counterparts, all of which
will be deemed an original instrument, but together will constitute one and the
same instrument.  The parties may execute
this letter agreement by facsimile or 

 

 

electronically
scanned signatures, and such signatures will be valid and binding as original
signatures.

 

If you are in agreement with the foregoing, please
so indicate by executing this letter agreement below.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RED ROBIN GOURMET
  BURGERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Pattye Moore

  
	
   

  	
   

  	
  Pattye Moore, Chair
  of the Board

  

 

Accepted and agreed to this

5th day of August,
2010:

 

 

SPOTLIGHT ADVISORS, LLC

on behalf of itself and its affiliates

	
  By:

  	
  /s/ Gregory P. Taxin

  	
   

  
	
   

  	
  Name:

  	
  Gregory P. Taxin

  	
   

  
	
   

  	
  Title:

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CLINTON GROUP, INC.

  	
   

  
	
  on behalf of itself and its affiliates

  	
   

  
	
  By:

  	
  /s/ Francis A.
  Ruchalski

  	
   

  
	
   

  	
  Name:

  	
  Francis A. Ruchalski

  	
   

  
	
   

  	
  Title:

  	
  DirectorExhibit 10.1

 

INVESTMENT TECHNOLOGY GROUP, INC.

 

2007 OMNIBUS EQUITY COMPENSATION
PLAN

 

Amended and Restated Effective May 11, 2010

 

 

INVESTMENT TECHNOLOGY GROUP, INC.

 

2007 OMNIBUS EQUITY COMPENSATION PLAN

 

1.                                      Purpose

 

The
purpose of the Investment Technology Group, Inc. 2007 Omnibus Equity
Compensation Plan (the “Plan”) is to provide (i) designated employees of
Investment Technology Group, Inc. (the “Company”) and its subsidiaries,
and (ii) non-employee members of the board of directors of the Company with
the opportunity to receive grants of stock options, stock units, stock awards,
dividend equivalents and other stock-based awards.  The Company believes that the Plan will
encourage the participants to contribute materially to the growth of the
Company, thereby benefiting the Company’s stockholders, and will align the
economic interests of the participants with those of the stockholders.  The Plan was originally effective on May 8,
2007 upon approval by the stockholders of the Company, and previously amended
and restated on May 12, 2009 upon approval by the stockholders of the
Company and on August 18, 2009. 
This amendment and restatement will be effective May 11, 2010,
subject to approval by the stockholders of the Company.

 

The
Investment Technology Group, Inc. Non-Employee Directors Stock Option Plan
(the “Director Plan”), the Investment Technology Group, Inc. Amended and
Restated 1994 Stock Option and Long-term Incentive Plan (the “1994 Plan”), the
Amended and Restated Investment Technology Group, Inc. Stock Unit Award
Program Subplan (the “SUA Subplan”), the Amended and Restated Investment
Technology Group, Inc. Directors’ Retainer Fee Subplan (the “Directors’
Retainer Fee Subplan”), and the Amended and Restated Investment Technology
Group, Inc. Directors’ Equity Subplan (the “Directors’ Equity Subplan”,
and collectively with the SUA Subplan and the Directors’ Retainer Fee Subplan,
the “Subplans”) were merged with and into this Plan as of May 8,
2007.  No additional grants will be made
thereafter under the Director Plan and the 1994 Plan.  Outstanding grants under the Director Plan,
the 1994 Plan and the Subplans as of May 8, 2007 will continue in effect
according to their terms as in effect on May 8, 2007 (subject to such
amendments as the Committee (as defined below) determines appropriate,
consistent with the terms of the Director Plan, the 1994 Plan or the Subplans,
as applicable), and the shares with respect to such outstanding grants will be
issued or transferred under this Plan. 
After May 8, 2007, the Subplans shall continue in effect as
subplans of the Plan and grants and/or deferrals may continue to be made under
the Subplans with shares associated with such grants and/or deferrals being
issued under this Plan.  Effective as of January 1,
2009, the Equity Deferral Award Program Subplan was added as a subplan under
the Plan.

 

2.                                      Definitions

 

Whenever
used in this Plan, the following terms will have the respective meanings set
forth below:

 

(a)                                  “Board” means the
Company’s Board of Directors.

 

(b)                                 “Change
in Control” means and shall be deemed to have occurred:

 

(i)                                     if any person
(within the meaning of the Exchange Act), other than the Company or a Related
Party, is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of Voting Securities
representing 35% percent or more of the total voting power of all the
then-outstanding Voting Securities; or

 

(ii)                                  if the
individuals who, as of the date hereof, constitute the Board, together with
those who first become directors subsequent to such date and whose
recommendation, election or nomination for election to the Board was approved
by a vote of at least a majority of the directors then still in office who
either were directors as of the date hereof or whose 

 

2

 

recommendation, election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the members of the Board; or

 

(iii)                               upon
consummation of a merger, consolidation, recapitalization or reorganization of
the Company, reverse split of any class of Voting Securities, or an acquisition
of securities or assets by the Company other than (i) any such transaction
in which the holders of outstanding Voting Securities immediately prior to the
transaction receive (or retain), with respect to such Voting Securities, voting
securities of the surviving or transferee entity representing more than 50
percent of the total voting power outstanding immediately after such transaction,
with the voting power of each such continuing holder relative to other such
continuing holders not substantially altered in the transaction, or (ii) any
such transaction which would result in a Related Party beneficially owning more
than 50 percent of the voting securities of the surviving or transferee entity
outstanding immediately after such transaction; or

 

(iv)                              upon
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets, other than any such transaction which would result
in a Related Party owning or acquiring more than 50 percent of the assets owned
by the Company immediately prior to the transaction; or

 

(v)                                 if the
stockholders of the Company approve a plan of complete liquidation of the Company.

 

(c)                                  “Code” means the
Internal Revenue Code of 1986, as amended.

 

(d)                                 “Committee” means (i) with
respect to Grants to Employees, the Compensation Committee of the Board or
another committee appointed by the Board to administer the Plan, (ii) with
respect to Grants made to Non-Employee Directors, the Board, and
(iii) with respects to Grants that are intended to be “qualified
performance-based compensation” under section 162(m) of the Code, a
committee that consists of two or more persons appointed by the Board, all of
whom shall be “outside directors” as defined under section 162(m) of
the Code and related Treasury regulations.

 

(e)                                  “Company” means
Investment Technology Group, Inc. and any successor corporation.

 

(f)                                    “Company
Stock” means the common stock of the Company.

 

(g)                                 “Dividend
Equivalent” means an amount determined by multiplying the
number of shares of Company Stock subject to a Grant by the per-share cash
dividend, or the per-share fair market value (as determined by the Committee)
of any dividend in consideration other than cash, paid by the Company on its
Company Stock.

 

(h)                                 “Employee” means a person
classified as an employee of the Employer (including an officer or director who
is also an employee) for payroll purposes, as determined in the sole discretion
of the Employer.  Notwithstanding the
foregoing, if a person is engaged in a non-employee status (including, but not
limited to, as an independent contractor, an individual being paid through an
employee leasing company or other third party agency) and is subsequently
reclassified by the Company, the Internal Revenue Service, or a court as an
employee for payroll purposes, such person, for purposes of this Plan, shall be
deemed an Employee from the actual (and not the effective) date of such
reclassification, unless expressly provided otherwise by the Company.

 

(i)                                     “Employer” means the
Company and its subsidiaries.

 

(j)                                     “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(k)                                  “Exercise
Price” means the per share price at which shares of Company Stock may be
purchased under an Option, as designated by the Committee.

 

3

 

(l)                                     “Fair
Market Value,” unless otherwise required by an applicable
provision of the Code, as of any date, means the closing sales price of the
Common Stock as reported on the New York Stock Exchange on the date of grant;
provided, however, that at any time that the Common Stock is not quoted on the
New York Stock Exchange on such trading days, Fair Market Value shall be
determined by the Committee in its discretion.

 

(m)                               “Grant” means an
Option, Stock Unit, Stock Award, SAR, Dividend Equivalent or Other Stock-Based
Award granted under the Plan.

 

(n)                                 “Grant
Agreement” means the written instrument that sets forth the
terms and conditions of a Grant, including all amendments thereto.

 

(o)                                 “Incentive
Stock Option” means an Option that is intended to meet the
requirements of an incentive stock option under section 422 of the Code.

 

(p)                                 “Non-Employee
Director” means a member of the Board who is not an employee
of the Employer.

 

(q)                                 “Nonqualified
Stock Option” means an Option that is not intended to be taxed as
an incentive stock option under section 422 of the Code.

 

(r)                                    “Option”
means an option to purchase shares of Company Stock, as described in Section 7.

 

(s)                                  “Other
Stock-Based Award” means any Grant based on, measured by or payable
in, Company Stock (other than a Grant described in Sections 7, 8, 9 or 10(a) of
the Plan), as described in Section 10(b).

 

(t)                                    “Participant” means an
Employee or Non-Employee Director designated by the Committee to participate in
the Plan.

 

(u)                                 “Person”
means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, an estate, a trust, a joint
venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.

 

(v)                                 “Plan” means this
Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan,
as in effect from time to time.

 

(w)                               “Related
Party” means (a) a Subsidiary of the Company; (b) an employee or
group of employees of the Company or any Subsidiary of the Company; (c) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any majority-owned Subsidiary of the Company; or (d) a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of Voting Securities.

 

(x)                                   “SAR” means a stock
appreciation right as described in Section 10(a).

 

(y)                                 “Stock
Award” means an award of Company Stock as described in Section 9.

 

(z)                                   “Stock
Unit” means an award of a phantom unit representing a share of Company
Stock, as described in Section 8.

 

(aa)                            “Subsidiary”
or “Subsidiaries” means, with respect to any Person, any corporation,
partnership, limited liability company, association or other business entity of
which (a) if a corporation, fifty (50) percent or more of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or combination thereof; or
(b) if a partnership, limited liability company, association or other
business entity, fifty (50) percent or 

 

4

 

more of the partnership or
other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that
Person or a combination thereof.  For
purposes of this definition, a Person or Persons will be deemed to have a fifty
(50) percent or more ownership interest in a partnership, limited liability
company, association or other business entity if such Person or Persons are
allocated fifty (50) percent or more of partnership, limited liability company,
association or other business entity gains or losses or control the managing
director or member or general partner of such partnership, limited liability
company, association or other business entity.

 

(bb)                          “Voting Securities or Security” means any
securities of the Company which carry the right to vote generally in the election
of directors.

 

3.                                      Administration

 

(a)                                  Committee.  The Plan shall be administered and
interpreted by the Compensation Committee of the Board or another committee
appointed by the Board to administer the Plan with respect to grants to
Employees.  The Plan shall be
administered and interpreted by the Board with respect to grants to
Non-Employee Directors.  The Board or
committee, as applicable, that has authority with respect to a specific Grant
shall be referred to as the “Committee” with respect to that Grant.  Ministerial functions may be performed by an
administrative committee comprised of Company employees appointed by the
Committee.

 

(b)                                 Committee
Authority.  The
Committee shall have the sole authority to (i) determine the Participants
to whom Grants shall be made under the Plan, (ii) determine the type, size
and terms and conditions of the Grants to be made to each such Participant, (iii) determine
the time when the grants will be made and the duration of any applicable
exercise or restriction period, including the criteria for exercisability and
the acceleration of exercisability, (iv) amend the terms and conditions of
any previously issued Grant, subject to the provisions of Section 18
below, and (v) deal with any other matters arising under the Plan.

 

(c)                                  Committee
Determinations.  The
Committee shall have full power and express discretionary authority to
administer and interpret the Plan, to make factual determinations and to adopt
or amend such rules, regulations, agreements and instruments for implementing
the Plan and for the conduct of its business as it deems necessary or
advisable, in its sole discretion.  The
Committee’s interpretations of the Plan and all determinations made by the
Committee pursuant to the powers vested in it hereunder shall be conclusive and
binding on all persons having any interest in the Plan or in any awards granted
hereunder.  All powers of the Committee
shall be executed in its sole discretion, in the best interest of the Company,
not as a fiduciary, and in keeping with the objectives of the Plan and need not
be uniform as to similarly situated Participants.

 

4.                                      Grants

 

(a)                                  Grants under
the Plan may consist of Options as described in Section 7, Stock Units as
described in Section 8, Stock Awards as described in Section 9, and
SARs or Other Stock-Based Awards as described in Section 10.  All Grants shall be subject to such terms and
conditions as the Committee deems appropriate and as are specified in writing
by the Committee to the Participant in the Grant Agreement.

 

(b)                                 All Grants
shall be made conditional upon the Participant’s acknowledgement, in writing or
by acceptance of the Grant, that all decisions and determinations of the
Committee shall be final and binding on the Participant, his or her
beneficiaries and any other person having or claiming an interest under such
Grant.  Grants under a particular Section of
the Plan need not be uniform as among the Participants.

 

5

 

5.                                      Shares
Subject to the Plan

 

(a)                                  Shares Authorized.  The total aggregate number of shares of
Company Stock that may be issued under the Plan is the sum of the following (i) 1,900,000
new shares of Company Stock plus (ii) that number of shares of Company
Stock subject to outstanding grants under the Plan as of May 11, 2010 plus
(iii) that number of shares remaining available for issuance under the
Plan but not subject to previously exercised, vested or paid grants as of May 11,
2010; subject to the limitation that of the 1,300,000 shares added to the number
of shares of Company Stock authorized for issuance under the Plan on May 12,
2009, 50,000 shares shall be used solely to grant Options.

 

(b)                                 Source of
Shares; Share Counting. 
Shares issued under the Plan may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company on the open market for purposes of the Plan.  If and to the extent Options or SARs granted
under the Plan (including options granted under the Director Plan, the 1994
Plan and the Subplans) terminate, expire, or are canceled, forfeited, exchanged
or surrendered without having been exercised, and if and to the extent that any
Stock Awards, Stock Units, or Other Stock-Based Awards (including any stock
awards, stock units or other-stock based awards granted under the Director
Plan, the 1994 Plan and the Subplans) are forfeited or terminated, or otherwise
are not paid in full, the shares reserved for such Grants shall again be
available for purposes of the Plan. 
Shares of Company Stock surrendered in payment of the Exercise Price of
an Option shall again be available for purposes of the Plan.  To the extent any Grants are paid in cash,
and not in shares of Company Stock, any shares previously subject to such
Grants shall again be available for issuance or transfer under the Plan.

 

(c)                                  Individual
Limits.  All Grants under the Plan
shall be expressed in shares of Company Stock. 
The maximum aggregate number of shares of Company Stock with respect to
which all Grants may be made under the Plan to any individual during any
calendar year shall be 1,000,000 shares, subject to adjustment as described in
subsection (d) below.  A Participant
may not accrue Dividend Equivalents during any calendar year in excess of
$1,000,000.  The individual limits of
this subsection (c) shall apply without regard to whether the Grants are
to be paid in Company Stock or cash.  All
cash payments (other than with respect to Dividend Equivalents) shall equal the
Fair Market Value of the shares of Company Stock to which the cash payments
relate.

 

(d)                                 Adjustments.  If there is any change in the number or kind
of shares of Company Stock outstanding by reason of a stock dividend, spinoff,
stock split or reverse stock split, or by reason of a combination, reorganization,
recapitalization or reclassification affecting the outstanding Company Stock as
a class without the Company’s receipt of consideration, the maximum number of
shares of Company Stock available for Grants, the maximum number of shares of
Company Stock that any individual participating in the Plan may be granted in
any year, the number of shares covered by outstanding Grants, the kind of
shares issued under the Plan and outstanding Grants, and the price per share of
outstanding Grants shall be equitably adjusted by the Committee, as the
Committee deems appropriate, to reflect any increase or decrease in the number
of, or change in the kind or value of, issued shares of Company Stock to
preclude, to the extent practicable, the enlargement or dilution of rights and
benefits under Grants; provided, however, that any fractional shares resulting
from such adjustment shall be eliminated. 
In addition, the Committee shall have discretion to make the foregoing
equitable adjustments in any circumstances in which an adjustment is not
mandated by this subsection (d) or applicable law, including in the event
of a Change in Control.  Any adjustments
to outstanding Grants shall be consistent with section 409A or 422 of the Code,
to the extent applicable.  Any adjustments
determined by the Committee shall be final, binding and conclusive.

 

6.                                      Eligibility
for Participation

 

(a)                                  Eligible
Persons.  All Employees, including
Employees who are officers or members of the Board, and all Non-Employee
Directors shall be eligible to participate in the Plan.

 

6

 

(b)                                 Selection of
Participants.  The
Committee shall select the Employees and Non-Employee Directors to receive
Grants and shall determine the number of shares of Company Stock subject to
each Grant.

 

7.                                      Options

 

(a)                                  General
Requirements. The Committee may grant Options to an Employee or
Non-Employee Director upon such terms and conditions as the Committee deems
appropriate under this Section 7. 
The Committee shall determine the number of shares of Company Stock that
will be subject to each Grant of Options to Employees and Non-Employee
Directors.

 

(b)                                 Type of Option,
Price and Term.

 

(i)                                     The Committee
may grant Incentive Stock Options or Nonqualified Stock Options or any combination
of the two, all in accordance with the terms and conditions set forth
herein.  Incentive Stock Options may be
granted only to Employees of the Company or its parents or subsidiaries, as
defined in section 424 of the Code. 
Nonqualified Stock Options may be granted to Employees or Non-Employee
Directors.

 

(ii)                                  The Exercise
Price of Company Stock subject to an Option shall be determined by the
Committee and may be equal to or greater than the Fair Market Value of a share
of Company Stock on the date the Option is granted.  However, an Incentive Stock Option may not be
granted to an Employee who, at the time of grant, owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary, as defined in section 424 of the Code,
unless the Exercise Price per share is not less than 110% of the Fair Market
Value of the Company Stock on the date of grant.

 

(iii)                               The Committee
shall determine the term of each Option, which shall not exceed ten years from
the date of grant.  However, an Incentive
Stock Option that is granted to an Employee who, at the time of grant, owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary, as defined in
section 424 of the Code, may not have a term that exceeds five years from the
date of grant.

 

(c)                                  Exercisability
of Options.

 

(i)                                     Options shall
become exercisable in accordance with such terms and conditions as may be
determined by the Committee and specified in the Grant Agreement.  The Committee may accelerate the
exercisability of any or all outstanding Options at any time for any reason.

 

(ii)                                  The Committee
may provide in a Grant Agreement that the Participant may elect to exercise
part or all of an Option before it otherwise has become exercisable.  Any shares so purchased shall be restricted
shares and shall be subject to a repurchase right in favor of the Company
during a specified restriction period, with the repurchase price equal to the
lesser of (A) the Exercise Price or (B) the Fair Market Value of such
shares at the time of repurchase, or such other restrictions as the Committee
deems appropriate.

 

(iii)                               Options granted
to persons who are non-exempt employees under the Fair Labor Standards Act of
1938, as amended, may not be exercisable for at least six months after the date
of grant (except that such Options may become exercisable, as determined by the
Committee, upon the Participant’s death, Disability or retirement, or upon a
Change in Control or other circumstances permitted by applicable regulations).

 

(d)                                 Termination of
Employment or Service. 
Except as provided in the Grant Agreement, an Option may only be
exercised while the Participant is employed by the Employer, or providing
service as a Non-Employee Director.  The
Committee shall determine in the Grant Agreement under what

 

7

 

circumstances and during what time periods a
Participant may exercise an Option after termination of employment or service.

 

(e)                                  Exercise of
Options.  A Participant may exercise an
Option that has become exercisable, in whole or in part, by delivering a notice
of exercise to the Company.  The
Participant shall pay the Exercise Price for the Option (i) in cash, (ii) if
permitted by the Committee, by delivering shares of Company Stock owned by the
Participant and having a Fair Market Value on the date of exercise equal to the
Exercise Price or by attestation to ownership of shares of Company Stock having
an aggregate Fair Market Value on the date of exercise equal to the Exercise
Price, (iii) by payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board, or (iv) by such
other method as the Committee may approve. 
Shares of Company Stock used to exercise an Option shall have been held
by the Participant for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option.  Payment for the shares pursuant to the
Option, and any required withholding taxes, must be received by the time
specified by the Committee depending on the type of payment being made, but in
all cases prior to the issuance of the Company Stock.

 

(f)                                    Limits on
Incentive Stock Options.  Each
Incentive Stock Option shall provide that, if the aggregate Fair Market Value
of the stock on the date of the grant with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar
year, under the Plan or any other stock option plan of the Company or a parent
or subsidiary, as defined in section 424 of the Code, exceeds $100,000, then
the Option, as to the excess, shall be treated as a Nonqualified Stock
Option.  An Incentive Stock Option shall
not be granted to any person who is not an Employee of the Company or a parent
or subsidiary, as defined in section 424 of the Code.

 

8.                                      Stock
Units

 

(a)                                  General
Requirements.  The
Committee may grant Stock Units to an Employee or Non-Employee Director, upon
such terms and conditions as the Committee deems appropriate under this Section 8.  Each Stock Unit shall represent the right of
the Participant to receive a share of Company Stock or an amount based on the
value of a share of Company Stock.  All
Stock Units shall be credited to bookkeeping accounts on the Company’s records
for purposes of the Plan.

 

(b)                                 Terms of Stock
Units.  The Committee may grant Stock
Units that are payable on terms and conditions determined by the Committee,
which may include payment based on achievement of performance goals.  Stock Units may be paid at the end of a
specified vesting or performance period, or payment may be deferred to a date
authorized by the Committee.  The
Committee shall determine the number of Stock Units to be granted and the
requirements applicable to such Stock Units.

 

(c)                                  Payment With
Respect to Stock Units. 
Payment with respect to Stock Units shall be made in cash, in Company
Stock, or in a combination of the two, as determined by the Committee.  The Grant Agreement shall specify the maximum
number of shares that can be issued under the Stock Units.

 

(d)                                 Requirement of
Employment or Service.  The
Committee shall determine in the Grant Agreement under what circumstances a
Participant may retain Stock Units after termination of the Participant’s
employment or service, and the circumstances under which Stock Units may be
forfeited.

 

9.                                      Stock
Awards

 

(a)                                  General
Requirements. The Committee may issue shares of Company Stock to
an Employee or Non-Employee Director under a Stock Award, upon such terms and
conditions as the Committee deems appropriate under this Section 9.  Shares of Company Stock issued pursuant to
Stock Awards may be issued for cash consideration or for no cash consideration,
and subject to restrictions or no restrictions, as determined by the
Committee.  The Committee may establish
conditions under which 

 

8

 

restrictions on Stock Awards shall lapse over a
period of time or according to such other criteria as the Committee deems
appropriate, including restrictions based upon the achievement of specific
performance goals.  The Committee shall
determine the number of shares of Company Stock to be issued pursuant to a
Stock Award.

 

(b)                                 Requirement of
Employment or Service.  The
Committee shall determine in the Grant Agreement under what circumstances a
Participant may retain Stock Awards after termination of the Participant’s
employment or service, and the circumstances under which Stock Awards may be
forfeited.

 

(c)                                  Restrictions on
Transfer.  While Stock
Awards are subject to restrictions, a Participant may not sell, assign,
transfer, pledge or otherwise dispose of the shares of a Stock Award except
upon death as described in Section 15(a). 
Each certificate for a share of a Stock Award shall contain a legend
giving appropriate notice of the restrictions in the Grant.  The Participant shall be entitled to have the
legend removed when all restrictions on such shares have lapsed.  The Company may retain possession of any
certificates for Stock Awards until all restrictions on such shares have
lapsed.

 

(d)                                 Right to Vote
and to Receive Dividends.  The
Committee shall determine to what extent, and under what conditions, the
Participant shall have the right to vote shares of Stock Awards and to receive
any dividends or other distributions paid on such shares during the restriction
period.

 

10.                               Stock
Appreciation Rights and Other Stock-Based Awards

 

(a)                                  SARs.  The Committee may grant SARs to an Employee
or Non-Employee Director separately or in tandem with an Option.  The following provisions are applicable to
SARs:

 

(i)                                     Base Amount.  The Committee shall establish the base amount
of the SAR at the time the SAR is granted. 
The base amount of each SAR shall be equal to the per share Exercise
Price of the related Option or, if there is no related Option, an amount that
is at least equal to the Fair Market Value of a share of Company Stock as of
the date of Grant of the SAR.

 

(ii)                                  Tandem SARs.  The Committee may grant tandem SARs either at
the time the Option is granted or at any time thereafter while the Option
remains outstanding; provided, however, that, in the case of an Incentive Stock
Option, SARs may be granted only at the date of the grant of the Incentive
Stock Option.  In the case of tandem
SARs, the number of SARs granted to a Participant that shall be exercisable
during a specified period shall not exceed the number of shares of Company
Stock that the Participant may purchase upon the exercise of the related Option
during such period.  Upon the exercise of
an Option, the SARs relating to the Company Stock covered by such Option shall
terminate.  Upon the exercise of SARs,
the related Option shall terminate to the extent of an equal number of shares
of Company Stock.

 

(iii)                               Exercisability.  An SAR shall be exercisable during the period
specified by the Committee in the Grant Agreement and shall be subject to such
vesting and other restrictions as may be specified in the Grant Agreement.  The Committee may grant SARs the exercise of
which is subject to achievement of performance goals or other conditions.  The Committee may accelerate the
exercisability of any or all outstanding SARs at any time for any reason.  The Committee shall determine in the Grant
Agreement under what circumstances and during what periods a Participant may
exercise an SAR after termination of employment or service.  A tandem SAR shall be exercisable only while
the Option to which it is related is exercisable.

 

(iv)                              Grants to
Non-Exempt Employees.  SARs
granted to persons who are non-exempt employees under the Fair Labor Standards
Act of 1938, as amended, may not be exercisable for at least six months after
the date of grant (except that such SARs may become exercisable, as determined
by the Committee, upon the Participant’s death, Disability or retirement, or
upon a Change in Control or other circumstances permitted by applicable
regulations).

 

9

 

(v)                                 Value of SARs.  When a Participant exercises SARs, the
Participant shall receive in settlement of such SARs an amount equal to the
value of the stock appreciation for the number of SARs exercised.  The stock appreciation for an SAR is the
amount by which the Fair Market Value of the underlying Company Stock on the
date of exercise of the SAR exceeds the base amount of the SAR as described in
subsection (i).

 

(vi)                              Form of
Payment.  The Committee shall determine
whether the stock appreciation for an SAR shall be paid in the form of shares
of Company Stock, cash or a combination of the two.  For purposes of calculating the number of
shares of Company Stock to be received, shares of Company Stock shall be valued
at their Fair Market Value on the date of exercise of the SAR.  If shares of Company Stock are to be received
upon exercise of an SAR, cash shall be delivered in lieu of any fractional
share.

 

(b)                                 Other
Stock-Based Awards.  The
Committee may grant other awards not specified in Sections 7, 8 or 9 or subsection
(a) above that are based on or measured by Company Stock to Employees and
Non-Employee Directors, on such terms and conditions as the Committee deems
appropriate.  Other Stock-Based Awards
may be granted subject to achievement of performance goals or other conditions
and may be payable in Company Stock or cash, or in a combination of the two, as
determined by the Committee in the Grant Agreement.

 

11.                               Dividend
Equivalents.

 

(a)                                  General
Requirements.  When the
Committee makes a Grant under the Plan, the Committee may grant Dividend
Equivalents in connection with the Grant, under such terms and conditions as
the Committee deems appropriate under this Section 11.  Dividend Equivalents may be paid to
Participants currently or may be deferred, as determined by the Committee.  All Dividend Equivalents that are not paid
currently shall be credited to bookkeeping accounts on the Company’s records
for purposes of the Plan.  Dividend
Equivalents may be accrued as a cash obligation, or may be converted to Stock
Units for the Participant, and deferred Dividend Equivalents may accrue
interest, all as determined by the Committee. 
The Committee may provide that Dividend Equivalents shall be payable
based on the achievement of specific performance goals.

 

(b)                                 Payment with
Respect to Dividend Equivalents.  Dividend Equivalents may be payable in cash
or shares of Company Stock or in a combination of the two, as determined by the
Committee.

 

12.                               Qualified
Performance-Based Compensation

 

(a)                                  Designation as
Qualified Performance-Based Compensation.  The Committee may determine that Stock Units,
Stock Awards, Dividend Equivalents or Other Stock-Based Awards granted to an
Employee shall be considered “qualified performance-based compensation” under
section 162(m) of the Code, in which case the provisions of this Section 12
shall apply.  The Committee may also
grant Options or SARs under which the exercisability of the Options is subject
to achievement of performance goals as described in this Section 12 or
otherwise.

 

(b)                                 Performance
Goals.  When Grants are made under
this Section 12, the Committee shall establish in writing (i) the
objective performance goals that must be met, (ii) the period during which
performance will be measured, (iii) the maximum amounts that may be paid
if the performance goals are met, and (iv) any other conditions that the
Committee deems appropriate and consistent with the requirements of section 162(m) of
the Code for “qualified performance-based compensation.”  The performance goals shall satisfy the
requirements for “qualified performance-based compensation,” including the
requirement that the achievement of the goals be substantially uncertain at the
time they are established and that the performance goals be established in such
a way that a third party with knowledge of the relevant facts could determine
whether and to what extent the performance goals have been met.  The Committee shall not have discretion to
increase the amount of compensation that 

 

10

 

is payable, but may reduce the amount of
compensation that is payable, pursuant to Grants identified by the Committee as
“qualified performance-based compensation.”

 

(c)                                  Criteria Used
for Objective Performance Goals.  The Committee shall use objectively
determinable performance goals based on one or more of the following
criteria:  stock price, earnings per
share, price-earnings multiples, net earnings, operating earnings, revenue,
number of days sales outstanding in accounts receivable, productivity, margin,
EBITDA (earnings before interest, taxes, depreciation and amortization), net
capital employed, return on assets, shareholder return, return on equity,
return on capital employed, growth in assets, unit volume, sales, cash flow,
market share, relative performance to a comparison group designated by the
Committee, or strategic business criteria consisting of one or more objectives
based on meeting specified revenue goals, market penetration goals, customer
growth, geographic business expansion goals, cost targets or goals relating to
acquisitions or divestitures.  The
performance goals may relate to one or more business units or the performance
of the Company as a whole, or any combination of the foregoing.  Performance goals need not be uniform as
among Participants.

 

(d)                                 Timing of
Establishment of Goals. The Committee shall establish the
performance goals in writing either before the beginning of the performance
period or during a period ending no later than the earlier of (i) 90 days
after the beginning of the performance period or (ii) the date on which
25% of the performance period has been completed, or such other date as may be
required or permitted under applicable regulations under section 162(m) of
the Code.

 

(e)                                  Certification
of Results.  The
Committee shall certify the performance results for the performance period
specified in the Grant Agreement after the performance period ends.  The Committee shall determine the amount, if
any, to be paid pursuant to each Grant based on the achievement of the
performance goals and the satisfaction of all other terms of the Grant
Agreement.

 

(f)                                    Death,
Disability or Other Circumstances.  The Committee may provide in the Grant
Agreement that Grants under this Section 12 shall be payable, in whole or
in part, in the event of the Participant’s death or disability, a Change in
Control or under other circumstances consistent with the Treasury regulations
and rulings under section 162(m) of the Code.

 

13.                               Deferrals

 

The
Committee may permit or require a Participant to defer receipt of the payment
of cash (including dividend equivalents) or the delivery of shares that would
otherwise be due to the Participant in connection with any Grant.  The Committee shall establish rules and
procedures for any such deferrals, consistent with applicable requirements of
section 409A of the Code.

 

14.                               Withholding
of Taxes

 

(a)                                  Required
Withholding.  All Grants
under the Plan shall be subject to applicable federal (including FICA), state
and local tax withholding requirements.  The Company may require that the Participant
or other person receiving or exercising Grants pay to the Company the amount of
any federal, state or local taxes that the Company is required to withhold with
respect to such Grants, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Grants.

 

(b)                                 Election to
Withhold Shares.  If the
Committee so permits, a Participant may elect to satisfy the Company’s tax
withholding obligation with respect to Grants paid in Company Stock by having
shares withheld, at the time such Grants become taxable, up to an amount that
does not exceed the minimum applicable withholding tax rate for federal
(including FICA), state and local tax liabilities.  The election must be in a form and manner
prescribed by the Committee.

 

11

 

15.                               Transferability
of Grants

 

(a)                                  Restrictions on
Transfer.  Except as
described in subsection (b) below, only the Participant may exercise rights
under a Grant during the Participant’s lifetime, and a Participant may not
transfer those rights except by will or by the laws of descent and
distribution.  When a Participant dies,
the personal representative or other person entitled to succeed to the rights
of the Participant may exercise such rights. 
Any such successor must furnish proof satisfactory to the Company of his
or her right to receive the Grant under the Participant’s will or under the
applicable laws of descent and distribution.

 

(b)                                 Transfer of
Nonqualified Stock Options to or for Family Members.  Notwithstanding subsection (a) above,
the Committee may provide, in a Grant Agreement, that a Participant may
transfer Nonqualified Stock Options to family members, or one or more trusts or
other entities for the benefit of or owned by family members, consistent with
the applicable securities laws, according to such terms as the Committee may
determine; provided that the Participant receives no consideration for the
transfer of an Option and the transferred Option shall continue to be subject
to the same terms and conditions as were applicable to the Option immediately
before the transfer.

 

16.                               Consequences
of a Change in Control

 

(a)                                  In the event of
a Change in Control, the Committee may take any one or more of the following
actions with respect to some or all outstanding Grants, without the consent of
any Participant: (i) the Committee may determine that outstanding Options
and SARs shall be fully exercisable, and restrictions on outstanding Stock
Awards and Stock Units shall lapse, as of the date of the Change in Control or
at such other time as the Committee determines, (ii) the Committee may
require that Participants surrender their outstanding Options and SARs in
exchange for one or more payments by the Company, in cash or Company Stock as
determined by the Committee, in an amount equal to the amount by which the then
Fair Market Value of the shares of Company Stock subject to the Participant’s
unexercised Options and SARs exceeds the Exercise Price, or Base Amount, as
applicable, if any, and on such terms as the Committee determines, (iii) after
giving Participants an opportunity to exercise their outstanding Options and
SARs, the Committee may terminate any or all unexercised Options and SARs at
such time as the Committee deems appropriate, (iv) with respect to
Participants holding Stock Units, Other Stock-Based Awards or Dividend
Equivalents, the Committee may determine that such Participants shall receive
one or more payments in settlement of such Stock Units, Other Stock-Based
Awards or Dividend Equivalents, in such amount and form and on such terms as
may be determined by the Committee, (v) if the Company is the surviving
corporation, the Committee may determine that Grants will remain outstanding
after the Change in Control, or (vi) if the Company is not the surviving
corporation, the Committee may determine that Grants that remain outstanding
after the Change in Control shall be converted to similar grants of the
surviving corporation (or a parent or subsidiary of the surviving
corporation).  Such acceleration,
surrender, termination, settlement or conversion shall take place as of the
date of the Change in Control or such other date as the Committee may specify.

 

(b)                                 Other
Transactions.  The
Committee may provide in a Grant Agreement that a sale or other transaction
involving a subsidiary or other business unit of the Company shall be
considered a Change in Control for purposes of a Grant, or the Committee may
establish other provisions that shall be applicable in the event of a specified
transaction.

 

17.                               Requirements
for Issuance of Shares

 

No
Company Stock shall be issued in connection with any Grant hereunder unless and
until all legal requirements applicable to the issuance of such Company Stock
have been complied with to the satisfaction of the Committee.  The Committee shall have the right to
condition any Grant made to any Participant hereunder on such Participant’s
undertaking in writing to comply with such restrictions on 

 

12

 

his
or her subsequent disposition of such shares of Company Stock as the Committee
shall deem necessary or advisable, and certificates representing such shares
may be legended to reflect any such restrictions.  Certificates representing shares of Company
Stock issued under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed
thereon.  Except as determined under Section 9(a),
no Participant shall have any right as a shareholder with respect to Company
Stock covered by a Grant until shares have been issued to the Participant.

 

18.                               Amendment
and Termination of the Plan

 

(a)                                  Amendment.  The Board may amend or terminate the Plan at
any time; provided, however, that the Board shall not amend the Plan without
approval of the stockholders of the Company if such approval is required in
order to comply with the Code or applicable laws, or to comply with applicable
stock exchange requirements.  No
amendment or termination of this Plan shall, without the consent of the
Participant, materially impair any rights or obligations under any Grant previously
made to the Participant under the Plan, unless such right has been reserved in
the Plan or the Grant Agreement, or except as provided in Section 19(b) below.  Notwithstanding anything in the Plan to the
contrary, the Board may amend the Plan in such manner as it deems appropriate
in the event of a change in applicable law or regulations.

 

(b)                                 No Repricing
Without Stockholder Approval.  Except as otherwise provided in Section 5(d),
the terms of outstanding Grants may not be amended to reduce the exercise price
of outstanding Options or the base amount of outstanding SARs or to cancel
outstanding Options or SARs in exchange for cash, other awards, Options with an
exercise price that is less than the exercise price of the original Options or
SARs with a base amount that is less than the base amount for the original
SARs, without stockholder approval.

 

(c)                                  Stockholder
Approval for “Qualified Performance-Based Compensation.”  If Grants are made under Section 12
above, the Plan must be reapproved by the Company’s stockholders no later than
the first stockholders meeting that occurs in the fifth year following the year
in which the stockholders previously approved the provisions of Section 12,
if additional Grants are to be made under Section 12 and if required by
section 162(m) of the Code or the regulations thereunder.

 

(d)                                 Termination of
Plan.  The Plan shall terminate on May 7,
2017, unless the Plan is terminated earlier by the Board or is extended by the
Board with the approval of the stockholders. 
The termination of the Plan shall not impair the power and authority of
the Committee with respect to an outstanding Grant.

 

19.                               Miscellaneous

 

(a)                                  Grants in
Connection with Corporate Transactions and Otherwise.  Nothing contained in this Plan shall be
construed to (i) limit the right of the Committee to make Grants under
this Plan in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation, firm
or association, including Grants to employees thereof who become Employees, or for
other proper corporate purposes, or (ii) limit the right of the Company to
grant stock options or make other stock-based awards outside of this Plan.  Without limiting the foregoing, the Committee
may make a Grant to an employee of another corporation who becomes an Employee
by reason of a corporate merger, consolidation, acquisition of stock or
property, reorganization or liquidation involving the Company in substitution
for a grant made by such corporation. 
The terms and conditions of the Grants may vary from the terms and
conditions required by the Plan and from those of the substituted stock
incentives, as determined by the Committee.

 

(b)                                 Compliance with
Law.  The Plan, the exercise of
Options and the obligations of the Company to issue or transfer shares of
Company Stock under Grants shall be subject to all applicable laws and to
approvals by any governmental or regulatory agency as may be required.  With respect to persons 

 

13

 

subject to section 16 of the Exchange Act, it is the
intent of the Company that the Plan and all transactions under the Plan comply
with all applicable provisions of Rule 16b-3 or its successors under the
Exchange Act.  In addition, it is the
intent of the Company that Incentive Stock Options comply with the applicable
provisions of section 422 of the Code, that Grants of “qualified
performance-based compensation” comply with the applicable provisions of
section 162(m) of the Code and that, to the extent applicable, Grants are either
exempt from, or comply with, the requirements of section 409A of the Code.  To the extent that any legal requirement of
section 16 of the Exchange Act or section 422, 162(m) or 409A of the Code
as set forth in the Plan ceases to be required under section 16 of the Exchange
Act or section 422, 162(m) or 409A of the Code, that Plan provision shall
cease to apply.  The Committee may revoke
any Grant if it is contrary to law or modify a Grant to bring it into
compliance with any valid and mandatory government regulation.  The Committee may also adopt rules regarding
the withholding of taxes on payments to Participants.

 

(c)                                  Enforceability.  The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.

 

(d)                                 Funding of the
Plan; Limitation on Rights.  This Plan shall be unfunded.  The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under this Plan.  Nothing contained in the Plan and no action
taken pursuant hereto shall create or be construed to create a fiduciary
relationship between the Company and any Participant or any other person.  No Participant or any other person shall under
any circumstances acquire any property interest in any specific assets of the
Company.  To the extent that any person
acquires a right to receive payment from the Company hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Company.

 

(e)                                  Rights of Participants.  Nothing in this Plan shall entitle any
Employee, Non-Employee Director or other person to any claim or right to
receive a Grant under this Plan.  Neither
this Plan nor any action taken hereunder shall be construed as giving any
individual any rights to be retained by or in the employment or service of the
Employer.

 

(f)                                    No Fractional
Shares.  No fractional shares of
Company Stock shall be issued or delivered pursuant to the Plan or any
Grant.  The Committee shall determine
whether cash, other awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.

 

(g)                                 Employees
Subject to Taxation Outside the United States.  With respect to Participants who are subject
to taxation in countries other than the United States, the Committee may make
Grants on such terms and conditions as the Committee deems appropriate to
comply with the laws of the applicable countries, and the Committee may create
such procedures, addenda and subplans and make such modifications as may be
necessary or advisable to comply with such laws.

 

(h)                                 Governing Law.  The validity, construction, interpretation
and effect of the Plan and Grant Agreements issued under the Plan shall be
governed and construed by and determined in accordance with the laws of the
State of New York, without giving effect to the conflict of laws provisions
thereof.

 

14

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