Document:

Exhibit
10.3

 

ENDORSEMENT TO 10% SENIOR SECURED CONVERTIBLE NOTE

 

Precision Optics Corporation, Inc.

	
   

  	
  New
  York, New York

  	
   

  
	
   

  	
  July 26,
  2010

  	
   

  

 

The
10% Senior Secured Convertible Note dated June 25, 2008 and amended December 11,
2008 and June 25, 2010 (the “Note”) of Precision Optics Corporation, Inc.,
a Massachusetts corporation (the “Company”), payable to the order of
Special Situations Fund III, QP, L.P. (the “Holder”) in an aggregate
principal amount of $275,000 and to which this Endorsement is affixed is hereby
amended in the following respects:

 

1.             The term “Stated Maturity Date” is
hereby restated to be “September 15, 2010.”

 

2.             In the event a default on the Note
occurred solely as a result of the Stated Maturity Date not being extended
prior to July 26, 2010, then the Holder waives any such default.

 

3.             Except as expressly amended by this
Endorsement, the Note remains in full force and effect and the Company hereby
reconfirms its obligations thereunder.

 

IN
WITNESS WHEREOF, the Company has caused this Endorsement to be duly executed,
and the Holder has caused this Endorsement to be duly accepted, by their
respective duly authorized representatives as of the day and year first above
written.

 

	
   

  	
  PRECISION
  OPTICS CORPORATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Richard E. Forkey

  
	
   

  	
   

  	
  Name:
  Richard E. Forkey

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
  Accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SPECIAL
  SITUATIONS FUND III QP, L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  David Greenhouse

  	
   

  	
   

  
	
  Name:

  	
  David
  Greenhouse

  	
   

  	
   

  
	
  Title:

  	
  General
  PartnerExhibit 10.4

 

ENDORSEMENT TO 10% SENIOR SECURED CONVERTIBLE NOTE

 

Precision Optics Corporation, Inc.

	
   

  	
  New
  York, New York

  	
   

  
	
   

  	
  July 26,
  2010

  	
   

  

 

The
10% Senior Secured Convertible Note dated June 25, 2008 and amended December 11,
2008 and June 25, 2010 (the “Note”) of Precision Optics Corporation, Inc.,
a Massachusetts corporation (the “Company”), payable to the order of
Arnold Schumsky (the “Holder”) in an aggregate principal amount of
$50,000 and to which this Endorsement is affixed is hereby amended in the following
respects:

 

1.             The term “Stated Maturity Date” is
hereby restated to be “September 15, 2010.”

 

2.             In the event a default on the Note
occurred solely as a result of the Stated Maturity Date not being extended
prior to July 26, 2010, then the Holder waives any such default.

 

3.             Except as expressly amended by this
Endorsement, the Note remains in full force and effect and the Company hereby
reconfirms its obligations thereunder.

 

IN
WITNESS WHEREOF, the Company has caused this Endorsement to be duly executed,
and the Holder has caused this Endorsement to be duly accepted, by their
respective duly authorized representatives as of the day and year first above
written.

 

	
   

  	
  PRECISION
  OPTICS CORPORATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Richard E. Forkey

  
	
   

  	
   

  	
  Name:
  Richard E. Forkey

  
	
   

  	
   

  	
  Title:
  Chief Executive Officer

  
	
  Accepted:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Arnold Schumsky

  	
   

  	
   

  
	
  Arnold
  SchumskyExhibit 10.1

 

JANUS CAPITAL GROUP INC.

 

2010 Long-Term Incentive Stock Plan

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE 1 HISTORY, EFFECTIVE DATE, OBJECTIVES AND
  DURATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 ADMINISTRATION

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 SHARES SUBJECT TO THE PLAN AND MAXIMUM
  AWARDS

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 ELIGIBILITY AND GENERAL CONDITIONS OF AWARDS

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 STOCK OPTIONS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 STOCK APPRECIATION RIGHTS

  	
   

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 RESTRICTED SHARES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 BENEFICIARY DESIGNATION

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 DEFERRALS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 RIGHTS OF EMPLOYEES/DIRECTORS/CONSULTANTS

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 CHANGE OF CONTROL

  	
   

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 AMENDMENT, MODIFICATION AND TERMINATION

  	
   

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14 WITHHOLDING

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15 SUCCESSORS

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16 ADDITIONAL PROVISIONS

  	
   

  	
  23

  

 

 

JANUS CAPITAL GROUP INC.

2010 LONG-TERM INCENTIVE STOCK PLAN

 

ARTICLE 1

 

HISTORY, EFFECTIVE DATE,
OBJECTIVES AND DURATION

 

1.1           History.  Janus Capital Group, Inc., a Delaware
corporation (the “Company”), has established the Janus Capital Group 2010
Long-Term Incentive Stock Plan, as set forth herein, and as the same may be
amended from time to time (the “Plan”).

 

1.2           Objectives of the Plan.  The Plan is intended to allow employees,
directors and consultants of the Company and its Subsidiaries to acquire or
increase equity ownership in the Company, thereby strengthening their
commitment to the success of the Company and stimulating their efforts on
behalf of the Company, and to assist the Company and its Subsidiaries in
attracting new employees, directors and consultants and retaining existing
employees, directors and consultants. 
The Plan also is intended to optimize the profitability and growth of
the Company through incentives which are consistent with the Company’s goals;
to provide employees, directors and consultants with an incentive for
excellence in individual performance; and to promote teamwork among employees,
directors and consultants.

 

1.3           Duration of the Plan.  The Plan shall commence on the Effective Date
and shall remain in effect, subject to the right of the Board to amend or
terminate the Plan at any time pursuant to Article 13 hereof, until the
earlier of (a) all Shares subject to the Plan have been purchased or
acquired according to the Plan’s provisions or (b) the tenth anniversary
of its Effective Date.  No Awards shall
be granted under the Plan after such termination date.

 

ARTICLE 2

 

DEFINITIONS

 

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

 

2.1           “Article”
means an Article of the Plan.

 

2.2           “Award”
means Options (including Incentive Stock Options), Restricted Shares (awarded
as Shares or Share Units), stock appreciation rights (SARs), Shares or Dividend
Equivalents granted under the Plan.

 

2.3           “Award Agreement”
means the written agreement by which an Award shall be evidenced.

 

2.4           “Board”
means the board of directors of the Company.

 

 

2.5           “Cause”
means, unless otherwise defined in an Award Agreement or any other agreement
between the Grantee and the Company or a Subsidiary,

 

(a)           before the occurrence of a Change of Control, any one or
more of the following, as determined by the Committee:

 

(1)           a Grantee’s commission of a crime which, in the judgment
of the Committee, resulted or is likely to result in damage or injury to the
Company or a Subsidiary;

 

(2)           the material violation by the Grantee of written policies
of the Company or a Subsidiary;

 

(3)           the habitual neglect or failure by the Grantee in the
performance of his or her duties to the Company or a Subsidiary (but only if
such neglect or failure is not remedied within a reasonable remedial period
after Grantee’s receipt of written notice from the Company which describes such
neglect or failure in reasonable detail and specifies the remedial period); or

 

(4)           action or inaction by the Grantee in connection with his
or her duties to the Company or a Subsidiary resulting, in the judgment of the
Committee, in material injury to the Company or a Subsidiary; and

 

(b)           from and after the occurrence of a Change of Control, the
occurrence of any one or more of the following, as determined in the good faith
and reasonable judgment by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting of the Board which was
called and held for the purpose of considering such termination (after
reasonable notice to the Grantee and an opportunity for the Grantee, together
with the Grantee’s counsel, to be heard before the Board):

 

(1)           the willful and continued failure by the Grantee to
substantially perform the Grantee’s duties with the Company (other than any
such failure resulting from the Grantee’s incapacity due to physical or mental
illness) that has not been cured within 30 days after a written demand for
substantial performance is delivered to the Grantee by the Board, which demand
specifically identifies the manner in which the Board believes that the Grantee
has not substantially performed the Grantee’s duties;

 

(2)           the willful engaging by the Grantee in conduct which is demonstrably
and materially injurious to the Company or a Subsidiary, monetarily or
otherwise; or

 

(3)           the willful or reckless violation by the Grantee of a
material legal or regulatory requirement that is materially and demonstrably
injurious to the Company.

 

For purposes of this
definition, no act, or failure to act, on the Grantee’s part shall be deemed “willful”
unless done, or omitted to be done, by the Grantee not in good faith and
without reasonable belief that the Grantee’s act, or failure to act, was in the
best 

 

2

 

interest of the Company.  Any act, or failure to act, based upon
express written authority by the Board, Chief Executive Officer and/or Chief
Investment Officer with respect to such act or omission or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Grantee in good faith and in the best interests of
the Company.

 

2.6           “Change of Control”
shall, unless otherwise defined in the Award Agreement, be deemed to have
occurred if the event set forth in any one of the following paragraphs shall
have occurred:

 

(a)           a change in the composition of the Board such that the
individuals who, as of the effective date of the this Agreement, constitute the
Board (such Board shall be hereinafter referred to as the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, for purposes of this definition, that any individual who
becomes a member of the Board subsequent to the effective date hereof, whose
election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of those individuals who are members
of the Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such individual
were a member of the Incumbent Board; but, provided  further, that
any such individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act, as modified) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be so considered as a member of the
Incumbent Board; or

 

(b)           consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of the assets or stock of another entity (“Business
Combination”); excluding, however, such a Business Combination pursuant to
which (1) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination will beneficially own, directly or indirectly, more than 50 percent
of, respectively, the outstanding shares of common stock, and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (2) no
Person (other than the Company or any employee benefit plan (or related trust)
of the Company or the corporation resulting from such Business Combination)
will beneficially own, directly or indirectly, 20 percent or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
outstanding voting securities of such corporation entitled to vote generally in
the election of directors except to the extent that such ownership existed
prior to the Business Combination; and (3) individuals who were members of
the Incumbent Board will constitute at 

 

3

 

least a majority of the members of the board of
directors of the corporation resulting form such Business Combination; or

 

(c)           the approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.

 

Notwithstanding
(a), (b) and (c) above, that for each Award subject to Section 409A
of the Code, a Change of Control shall be deemed to have occurred under this
Plan with respect to such Award only if a change in the ownership or effective
control of the Company or a change in the ownership of a substantial portion of
the assets of the Company shall also be deemed to have occurred under Section 409A
of the Code.

 

2.7           “Change of Control
Value” means the Fair Market Value of a Share on the date of a
Change of Control.

 

2.8           “Code” means
the Internal Revenue Code of 1986, as amended from time to time, and
regulations and rulings thereunder. 
References to a particular section of the Code include references to
successor provisions of the Code or any successor code.

 

2.9           “Committee”
has the meaning set forth in Article 3.

 

2.10         “Common Stock”
means the common stock, $.01 par value, of the Company.

 

2.11         “Company” has
the meaning set forth in Section 1.1.

 

2.12         “Covered Employee”
means a Grantee who, as of the date that the value of an Award is recognizable
as taxable income, is one of the group of “covered employees,” within the
meaning of Section 162(m) of the Code.

 

2.13         “Disability”
means that a Grantee (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three (3) months under an accident and health plan covering employees
of the Company or a Subsidiary of the Company.

 

2.14         “Disqualifying
Disposition” has the meaning set forth in Section 6.4.

 

2.15         “Dividend Equivalents”
has the meaning set forth in Section 11.3.

 

2.16         “Effective Date”
shall mean the later of (a) the date that the Plan was adopted by the
Board and (b) the date the Plan was approved by stockholders of the
Company.

 

2.17         “Eligible Person”
means (i) any employee (including any officer) of the Company or any
Subsidiary, including any such employee who is on an approved leave of 

 

4

 

absence, layoff, or has been subject to a disability
which does not qualify as a Disability, (ii) any director of the Company
or any Subsidiary and (iii) any person performing services for the Company
or a Subsidiary in the capacity of a consultant or otherwise.

 

2.18         “Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time.  References to a particular section of the
Exchange Act include references to successor provisions.

 

2.19         “Fair Market Value”
means (A) with respect to any property other than Shares, the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee, and (B) with respect to
Shares, unless otherwise determined by the Committee, as of any date, (i) the
average of the high and low trading prices on the date of determination on the
New York Stock Exchange (or, if no sale of Shares was reported for such date, on
the next preceding date on which a sale of Shares was reported); (ii) if
the Shares are not listed on the New York Stock Exchange, the average of the
high and low trading prices of the Shares on such other national exchange on
which the Shares are principally traded or as reported by the National Market
System, or similar organization, or if no such quotations are available, the
average of the high bid and low asked quotations in the over-the-counter market
as reported by the National Quotation Bureau Incorporated or similar
organizations; or (iii) in the event that there shall be no public market
for the Shares, the fair market value of the Shares as determined by the
Committee.

 

2.20         “Freestanding SAR”
means an SAR that is granted independently of any other Award.

 

2.21         “Grant Date”
has the meaning set forth in Section 5.2.

 

2.22         “Grantee”
means an individual who has been granted an Award.

 

2.23         “Incentive Stock Option”
means an option granted under Article 6 of the Plan that is intended to
meet the requirements of Section 422 of the Code or any successor
provisions thereto.

 

2.24         “including” or
“includes” means “including,
without limitation,” or “includes, without limitation,” respectively.

 

2.25         “Management Committee” has
the meaning set forth in Article 3.

 

2.26         “Option” means
an option granted under Article 6 of the Plan.

 

2.27         “Outside Director”
means a member of the Board who is not an employee of the Company or any
Subsidiary and who meets the other requirements to be an outside director (as
that term is defined for purposes of the regulations under Section 162(m) of
the Code.

 

2.28         “Performance-Based
Exception” means the performance-based exception from the tax
deductibility limitations of Section 162(m) of the Code.

 

5

 

2.29         “Performance Measures”
means the criteria and objectives, determined by the Committee, which must be
met during the applicable Performance Period as a condition of the Grantee’s
receipt of payment with respect to an Award. 
Unless and until the Committee proposes for stockholder vote and
stockholders approve a change in the general performance measures set forth in
this section, with respect to Covered Employees, performance measures may
include any or all of the following or any combination thereof: (a) stock
price; (b) market share; (c) sales (gross or net); (d) asset
quality; (e) non-performing assets; (f) earnings per share; (g) return
on equity; (h) costs; (i) operating income; (j) net income; (k) marketing-spending
efficiency; (l) return on operating assets; (m) return on assets; (n) core
non-interest income; (o) fund performance; (p) pre-tax margin; (q) pre-tax
income; (r) levels of cost savings; (s) operating margin; (t) flows
into Janus products (gross or net), (u) earnings, (v) earnings before
interest, taxes, depreciation and amortization, and/or (w) improvements in
productivity and objective operating goals. 
Any of the foregoing performance measures may be applied, as determined
by the Committee, in respect of the Company or any of its Subsidiaries,
affiliates, business units or divisions and/or the Company’s or any of its
Subsidiaries, affiliates, business units or divisions worldwide, regional or
country specific operations (or any combination of the foregoing).  Performance measures shall specify whether
they are to be measured relative to budgeted or other internal goals,
operations, performance or results of the Company and/or any of its
Subsidiaries, affiliates, business units or divisions, or relative to the
performance of one or more peer groups of the Company and/or any of its
Subsidiaries, affiliates, business units or divisions, with the composition of
any such peer groups to be determined by the Committee at the time the
performance measure is established. 
Performance measures may be stated in the alternative or in
combination.  The Committee shall have
the right but not the obligation to make adjustments to a performance measure
to take into account any unusual or extraordinary events, to the extent not
inconsistent with the requirements of the Performance-Based Exception.  In the event that applicable tax and/or
securities laws change to permit Committee discretion to alter the governing
performance measures without obtaining stockholder approval of such changes,
and still qualify for the Performance-Based Exception, the Committee shall have
sole discretion to make such changes without obtaining stockholder approval.

 

2.30         “Performance Period”
means the time period during which the Performance Measures must be met.

 

2.31         “Period of Restriction”
means the period during which the transfer of Restricted Shares is limited in
some way (the length of the period being based on the passage of time, the
achievement of Performance Measures, or upon the occurrence of other events as
determined by the Committee), and the Shares are subject to a substantial risk
of forfeiture, as provided in Article 8.

 

2.32         “Person” shall
have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including
a “group” as defined in Section 13(d) thereof.

 

2.33         “Plan” has the
meaning set forth in Section 1.1.

 

2.34         “Plan Committee”
has the meaning set forth in Article 3.

 

6

 

2.35         “Required Withholding”
has the meaning set forth in Article 14.

 

2.36         “Restricted Shares”
means Shares or Share Units that are subject to forfeiture if the Grantee does
not satisfy the conditions specified in the Award Agreement applicable to such
Shares or Share Units.

 

2.37         “Retirement”
means, for any Grantee who is a director or employee of the Company or any
Subsidiary, (A) for any Award other than a Share Unit, a Termination of
Affiliation by the Grantee upon having both attained age fifty-five (55) and
completed at least ten (10) years of service with the Company or a
Subsidiary, and (B) for any Share Unit, the Grantee having both attained
age fifty-five (55) and completed at least ten (10) years of service with
the Company or a Subsidiary.

 

2.38         “Rule 16b-3”
means Rule 16b-3 promulgated by the SEC under the Exchange Act, as amended
from time to time, together with any successor rule, as in effect from time to
time.

 

2.39         “SAR” means a
stock appreciation right.

 

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

 

2.41         “Section”
means, unless the context otherwise requires, a Section of the Plan.

 

2.42         “Section 16 Person”
means a person who is subject to potential liability under Section 16(b) of
the 1934 Act with respect to transactions involving equity securities of the
Company.

 

2.43         “Share” means
a share of Common Stock.

 

2.44         “Share Unit”
means a bookkeeping entry representing the equivalent of one share of Common
Stock that is payable in the form of Common Stock, cash, or any combination of
the foregoing.

 

2.45         “Strike Price”
of any SAR shall equal, for any Tandem SAR (whether such Tandem SAR is granted
at the same time as or after the grant of the related Option), the option price
of such Option, or for any other SAR, 100 percent of the Fair Market Value of a
Share on the Grant Date of such SAR; provided that the Committee may specify a
higher Strike Price in the Award Agreement.

 

2.46         “Subsidiary”
means a United States or foreign corporation or limited liability company,
partnership or other similar entity with respect to which the Company owns,
directly or indirectly, 50 percent or more of the Voting Power of such
corporation, limited liability company, partnership or other similar entity

 

2.47         “Tandem SAR”
means an SAR that is granted in connection with a related Option, the exercise
of which shall require cancellation of the right to purchase a Share under the 

 

7

 

related Option (and when a Share is purchased under
the related Option, the Tandem SAR shall similarly be canceled).

 

2.48         “Termination of
Affiliation” occurs on the first day on which an individual is for
any reason no longer an employee, director or consultant of the Company or any
Subsidiary, or with respect to an individual who is an employee or director of,
or consultant to, a corporation which is a Subsidiary, the first day on which
such corporation ceases to be a Subsidiary; provided, however, that for each
Award subject to Section 409A of the Code, a Termination of Affiliation
shall be deemed to have occurred under this Plan with respect to such award on
the first day on which an individual has experienced a “separation from service”
within the meaning of Section 409A of the Code.

 

2.49         “10% Owner”
means a person who owns capital stock (including stock treated as owned under Section 424(d) of
the Code) possessing more than 10 percent of the total combined voting power of
all classes of capital stock of the Company or any Subsidiary.

 

2.50         “Voting Power”
means the combined voting power of the then-outstanding securities of a
corporation entitled to vote generally in the election of directors.

 

ARTICLE 3

 

ADMINISTRATION

 

3.1           Committee.

 

(a)           Subject to Article 13 and to Section 3.2, the
Plan shall be administered by the Board, or a committee appointed by the Board
to administer the Plan (the “Plan Committee”). 
To the extent the Board considers it desirable to comply with or qualify
under Rule 16b-3 or meet the Performance-Based Exception, the Plan Committee
shall consist of two or more directors of the Company, all of whom qualify as
Outside Directors and “non-employee directors” within the meaning of Rule 16b-3.  The number of members of the Plan Committee
shall from time to time be increased or decreased, and shall be subject to such
conditions, in each case as the Board deems appropriate to permit transactions
in Shares pursuant to the Plan to satisfy such conditions of Rule 16b-3
and the Performance-Based Exception as then in effect.

 

(b)           The Board or the Plan Committee may appoint and delegate
to another committee (“Management Committee”) any or all of the authority of
the Board or the Committee, as applicable, with respect to Awards to Grantees
other than Grantees who are Section 16 Persons at the time any such
delegated authority is exercised.  With
respect to Awards that are intended to meet the Performance-Based Exception and
that are made to a Grantee who is expected to be a Covered Employee, such
delegation shall not include any authority, which if exercised by the
Management Committee rather than by the Plan Committee, would cause the Grantee’s
Award to fail to meet the Performance-Based Exception.

 

8

 

(c)           Any references herein to “Committee” are references to the
Board, or the Plan Committee or the Management Committee, as applicable.

 

3.2           Powers of Committee.

 

Subject
to the express provisions of the Plan, the Committee has full and final
authority and sole discretion as follows:

 

(a)           to determine when, to whom and in what types and amounts
Awards should be granted and the terms and conditions applicable to each Award,
including the benefit payable under any SAR, and whether or not specific Awards
shall be granted in connection with other specific Awards, and if so whether
they shall be exercisable cumulatively with, or alternatively to, such other
specific Awards;

 

(b)           to determine the amount, if any, that a Grantee shall pay
for Restricted Shares, whether to permit or require the payment of cash
dividends thereon to be deferred and the terms related thereto, when Restricted
Shares (including Restricted Shares acquired upon the exercise of an Option)
shall be forfeited and whether such shares shall be held in escrow;

 

(c)           to construe and interpret the Plan and to make all
determinations necessary or advisable for the administration of the Plan;

 

(d)           to make, amend, and rescind rules relating to the
Plan, including rules with respect to the exercisability and
non-forfeitability of Awards upon the Termination of Affiliation of a Grantee;

 

(e)           to determine the terms and conditions of all Award
Agreements (which need not be identical) and, with the consent of the Grantee,
to amend any such Award Agreement at any time, among other things, to permit
transfers of such Awards to the extent permitted by the Plan; provided that the consent of the Grantee
shall not be required for any amendment which (i) does not adversely
affect the rights of the Grantee, or (ii) is necessary or advisable (as
determined by the Committee) to carry out the purpose of the Award as a result
of any new or change in existing applicable law;

 

(f)            to cancel, with the consent of the Grantee, outstanding
Awards and to grant new Awards in substitution therefore;

 

(g)           to accelerate the exercisability (including exercisability
within a period of less than six months after the Grant Date) or the vesting
of, and to accelerate or waive any or all of the terms and conditions
applicable to, any Award or any group of Awards for any reason and at any time,
including in connection with a Termination of Affiliation;

 

(h)           subject to Section 5.3, to extend the time during
which any Award or group of Awards may be exercised;

 

9

 

(i)            to make such adjustments or modifications to Awards to
Grantees working outside the United States as are advisable to fulfill the
purposes of the Plan or to comply with applicable local law;

 

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

 

(k)           to take any other action with respect to any matters
relating to the Plan for which it is responsible.

 

All
determinations on all matters relating to the Plan or any Award Agreement may
be made in the sole and absolute discretion of the Committee, and all such
determinations of the Committee shall be final, conclusive and binding on all
Persons.  No member of the Committee
shall be liable for any action or determination made with respect to the Plan
or any Award.

 

ARTICLE 4

 

SHARES SUBJECT TO THE PLAN
AND MAXIMUM AWARDS

 

4.1           Number of Shares
Available for Grants.  Subject
to adjustment as provided in Section 4.2, the number of Shares hereby
reserved for issuance under the Plan shall be 4,400,000.  Notwithstanding anything herein to the
contrary, all Shares subject to a SAR award that are settled in Shares shall be
counted in full against the number of shares reserved for issuance under the
Plan.  The number of Shares for which
Awards may be granted to any Grantee on any Grant Date, when aggregated with
the number of Shares for which Awards have previously been granted to such
Grantee in the same calendar year, shall not exceed one percent (1%) of the
total Shares outstanding as of such Grant Date; provided, however, that the
total number of Shares for which Awards may be granted to any Grantee in any
calendar year shall not exceed 500,000. 
For purposes of determining the maximum for a Grantee under the
preceding sentence, any Award of Shares that the Grantee receives under the
Company’s Employment Inducement Award Plan shall be treated as if it were an
Award of Shares under this Plan.  
Determinations made in respect of the limitation set forth above shall
be made in a manner consistent with Section 162(m) of the Code.  If any Shares subject to an Award granted hereunder
are forfeited, terminated, expired or canceled or such Award otherwise
terminates without the issuance of such Shares or of other consideration in
lieu of such Shares, the Shares subject to such Award, to the extent of any
such forfeiture, termination, expiration or cancellation shall again be
available for grant under the Plan (without a charge against the aggregate
number of Shares available for issuance hereunder).  Notwithstanding the foregoing, Shares surrendered
or withheld as payment of either the Strike Price of an Award (including Shares
otherwise underlying an Award of a SAR that are retained by the Company to
account for the grant price of such SAR) and/or withholding taxes in respect of
an Award shall no longer be available for grant under the Plan.  The Committee may from time to time determine
the 

 

10

 

appropriate methodology for calculating the number
of Shares (i) issued pursuant to the Plan, and (ii) granted to any
Grantee pursuant to the Plan.  Shares
issued pursuant to the Plan may be treasury Shares or newly-issued Shares.

 

4.2           Adjustments in
Authorized Shares.  In the
event that the Committee determines that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, subdivision, consolidation
or reduction of capital, reorganization, merger, split-up, spin-off or
combination involving the Company or repurchase or exchange of Shares or other
rights to purchase Shares or other securities of the Company, or other similar
corporate transaction or event affects the Shares such that any adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and type of Shares (or
other securities or property) with respect to which Awards may be granted; (ii) the
number and type of Shares (or other securities or property) subject to
outstanding Awards; and (iii) the grant or exercise price with respect to
any Award or, if deemed appropriate, cancel an outstanding Award, in exchange
for, if deemed appropriate,  a cash
payment to the holder of an outstanding Award or the substitution of other
property for Shares subject to an outstanding Award; provided, in each case that with respect to Awards of
Incentive Stock Options no such adjustment shall be authorized to the extent
that such adjustment would cause the Plan to violate Section 422(b)(1) of
the Code or any successor provision thereto; and provided further, that with respect to Options and SARs,
such adjustment shall be made in accordance with the provisions of Section 424(h) of
the Code; and, provided further,
that the number of Shares subject to any Award denominated in Shares shall
always be a whole number.

 

ARTICLE 5

 

ELIGIBILITY AND GENERAL
CONDITIONS OF AWARDS

 

5.1           Eligibility.  The Committee may grant Awards to any
Eligible Person, whether or not he or she has previously received an Award.

 

5.2           Grant Date.  The Grant Date of an Award shall be the date
on which the Committee grants the Award or such later date as specified by the
Committee.

 

5.3           Maximum Term.  Except with respect to an Option Award, the
term during which an Award may be outstanding shall under no circumstances
extend more than 10 years after the Grant Date, and shall be subject to earlier
termination as herein provided.

 

5.4           Award Agreement.  To the extent not set forth in the Plan, the
terms and conditions of each Award (which need not be the same for each grant
or for each Grantee) shall be set forth in an Award Agreement.

 

5.5           Restrictions on Share
Transferability.  The
Committee may impose such restrictions on any Shares acquired pursuant to the
exercise or vesting of an Award as it may deem advisable, including
restrictions under applicable federal securities laws.

 

11

 

5.6           Termination of
Affiliation.  Except as
otherwise provided by the Committee or in the applicable Award Agreement, and
subject to the provisions of Article 12, the extent to which the Grantee
shall have the right to exercise, vest in, or receive payment in respect of an
Award following Termination of Affiliation shall be determined in accordance
with the following provisions of this Section 5.6.

 

(a)           For Cause.  If a Grantee has a Termination of Affiliation
for Cause, (i) the Grantee’s Restricted Shares that are forfeitable shall
thereupon be forfeited, subject to the provisions of Section 8.5 regarding
repayment of certain amounts to the Grantee; and (ii) any unexercised
Option or SAR shall terminate effective immediately upon such Termination of
Affiliation.

 

(b)           On Account of Death or
Disability.  If a Grantee has
a Termination of Affiliation on account of death or Disability, then:

 

(1)           the Grantee’s Restricted Shares that were forfeitable
shall thereupon become non-forfeitable; and

 

(2)           any unexercised Option or SAR, whether or not exercisable
on the date of such Termination of Affiliation, may be exercised, in whole or
in part, within the first 12 months after such Termination of Affiliation (but
only during the option term) and shall terminate immediately thereafter; such
Option or SAR may be exercised to the extent permitted under this section by
the Grantee or, after his or her death, by (i) his or her personal
representative or the person to whom the Option or SAR, as applicable, is transferred
by will or the applicable laws of descent and distribution, or (ii) the
Grantee’s beneficiary designated in accordance with Article 9.

 

(c)           On Account of
Retirement.  Upon Grantee’s
Retirement, then:

 

(1)           the Grantee’s Restricted Shares that were forfeitable
shall thereupon become nonforfeitable; and

 

(2)           any unexercised Option or SAR, whether or not exercisable
on the date of such Termination of Affiliation, may be exercised, in whole or
in part, within the first five years after such Termination of Affiliation (but
only during the option term) and shall terminate immediately thereafter; such
Option or SAR may be exercised to the extent permitted under this section by
the Grantee or, after his or her death, by (i) his or her personal
representative or the person to whom the Option or SAR, as applicable, is
transferred by will or the applicable laws of descent and distribution, or (ii) the
Grantee’s beneficiary designated in accordance with Article 9.

 

(d)           Any Other Reason.  If a Grantee has a Termination of Affiliation
for any reason other than for Cause, death, Disability or Retirement, then:

 

(1)           the Grantee’s Restricted Shares, to the extent forfeitable
on the date of the Grantee’s Termination of Affiliation, shall be forfeited on
such date;

 

12

 

(2)           if such Termination of Affiliation is the result of the
Grantee’s voluntary termination of employment, any unexercised Option or SAR,
to the extent not exercisable immediately before the Grantee’s Termination of
Affiliation shall terminate immediately upon such Termination of Affiliation,
and to the extent exercisable immediately before the Grantee’s Termination of
Affiliation, may be exercised in whole or in part, not later than three months
after such Termination of Affiliation (but only during the option term) and
shall terminate immediately thereafter; such Option or SAR may be exercised to
the extent permitted under this section by the Grantee or, after his or her
death, by (i) his or her personal representative or the person to whom the
Option or SAR, as applicable, is transferred by will or the applicable laws of
descent and distribution, or (ii) the Grantee’s beneficiary designated in
accordance with Article 9; and

 

(3)           if such Termination of Affiliation is the result of the
Grantee’s termination of employment by the Company or a Subsidiary (other than
for Cause), then, any unexercised Option, whether or not exercisable
immediately before the Grantee’s Termination of Affiliation, may be exercised
in whole or in part, not later than three months after such Termination of
Affiliation (but only during the option term) and shall terminate immediately
thereafter; such Option or SAR may be exercised to the extent permitted under
this section by the Grantee or, after his or her death, by (i) his or her
personal representative or the person to whom the Option is transferred by will
or the applicable laws of descent and distribution, or (ii) the Grantee’s
beneficiary designated in accordance with Article 9.

 

5.7           Non-transferability of
Awards.

 

(a)           Except as provided in Section 5.7(c) below, each
Award, and each right under any Award, shall be exercisable only by the Grantee
during the Grantee’s lifetime, or, if permissible under applicable law, by the
Grantee’s guardian or legal representative.

 

(b)           Except as provided in Section 5.7(c) below, no
Award (prior to the time, if applicable, Shares are issued in respect of such
Award), and no right under any Award, may be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by a Grantee otherwise
than by will or by the laws of descent and distribution (or in the case of
Restricted Shares, to the Company), and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Subsidiary; provided, that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.

 

(c)           To the extent and in the manner permitted by the
Committee, and subject to such terms, conditions, restrictions or limitations
that may be prescribed by the Committee, a Grantee may transfer an Award (other
than an Incentive Stock Option) to (i) a spouse, sibling, parent, child
(including an adopted child) or grandchild (any of which, an “Immediate Family
Member”) of the Grantee; (ii) a trust, the primary beneficiaries of which
consist exclusively of the Grantee or Immediate Family Members of the Grantee;
or (iii) a corporation, partnership or similar entity, the owners of which
consist exclusively of the Grantee or Immediate Family Members of the Grantee.

 

13

 

5.8           Cancellation and
Rescission of Awards.  Unless
the Award Agreement specifies otherwise, the Committee may cancel, rescind,
suspend, withhold, or otherwise limit or restrict any unexercised Award at any
time if the Grantee is not in compliance with all applicable provisions of the
Award Agreement and the Plan or if the Grantee has a Termination of Affiliation
for Cause.

 

5.9           Loans and Guarantees.  The Committee may, subject to applicable law,
(i) allow a Grantee to defer payment to the Company of all or any portion
of the option price of an Option or the purchase price of Restricted Shares, or
(ii) cause the Company to loan to the Grantee, or guarantee a loan from a
third party to the Grantee for, all or any portion of the option price of an
Option or the purchase price of Restricted Shares or all or any portion of any
taxes associated with the exercise of, nonforfeitability of, or payment of
benefits in connection with, an Award. 
Any such payment deferral, loan or guarantee by the Company shall be on
such terms and conditions as the Committee may determine.  Notwithstanding the foregoing, the Company
shall not loan to the Grantee, or guarantee a loan from a third party to the
Grantee, as described in the preceding sentence, if such loan is prohibited
under Section 402 of the Sarbanes-Oxley Act of 2002, as may be amended.

 

ARTICLE 6

 

STOCK OPTIONS

 

6.1           Grant of Options.  Subject to the terms and provisions of the
Plan, Options may be granted to any Eligible Person in such number, and upon
such terms, and at any time and from time to time as shall be determined by the
Committee.  Without in any manner
limiting the generality of the foregoing and in a manner intended to comply
with Section 409A of the Code, the Committee may grant to any Eligible
Person, or permit any Eligible Person to elect to receive, an Option in lieu of
or in substitution for any other compensation (whether payable currently or on
a deferred basis, and whether payable under this Plan or otherwise) which such
Eligible Person may be eligible to receive from the Company or a Subsidiary.

 

6.2           Award Agreement.  Each Option grant shall be evidenced by an
Award Agreement that shall specify the option price, the option term, the
number of shares to which the Option pertains, the time or times at which such
Option shall be exercisable and such other provisions as the Committee shall
determine.  In no event shall the Option
be exercisable for a period of more than seven (7) years from its Grant
Date, provided that it may be subject to earlier termination as provided herein
or in the applicable Award Agreement.

 

6.3           Option Price.  The option price of an Option under this Plan
shall be determined by the Committee, and shall be equal to or more than 100
percent of the Fair Market Value of a Share on the Grant Date; provided,
however, that any Option that is (x) granted to a Grantee in connection
with the acquisition (“Acquisition”), however effected, by the Company of
another corporation or entity (“Acquired Entity”) or the assets thereof, (y) associated
with an option to purchase shares of stock of the Acquired Entity or an affiliate
thereof (“Acquired Entity Option”) held by such Grantee immediately prior to
such Acquisition, and (z) intended to 

 

14

 

preserve for the Grantee the economic value of all
or a portion of such Acquired Entity Option (“Substitute Option”) may, to the
extent necessary to achieve such preservation of economic value, be granted
with an option price that is less than 100 percent of the Fair Market Value of
a Share on the Grant Date, provided that such grant is made in a manner that
will not result in the Substitute Option being subject to the requirements of Section 409A
of the Code.

 

6.4           Grant of Incentive
Stock Options.  At the time of
the grant of any Option, the Committee may designate that such Option shall be
made subject to additional restrictions to permit it to qualify as an “incentive
stock option” under the requirements of Section 422 of the Code.  Any Option designated as an Incentive Stock
Option shall, to the extent required by Section 422 of the Code:

 

(a)           if granted to a 10% Owner, have an option price not less
than 110 percent of the Fair Market Value of a Share on its Grant Date;

 

(b)           be exercisable for a period of not more than seven (7) years
(five years in the case of an Incentive Stock Option granted to a 10% Owner)
from its Grant Date, and be subject to earlier termination as provided herein
or in the applicable Award Agreement;

 

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

 

(d)           if the aggregate Fair Market Value of the Shares
(determined on the Grant Date) with respect to the portion of such grant which
is exercisable for the first time during any calendar year (“Current Grant”)
and all Incentive Stock Options previously granted under the Plan and any Other
Plans which are exercisable for the first time during the same calendar year (“Prior
Grants”) would exceed the $100,000 Limit be exercisable as follows:

 

(1)           the portion of the Current Grant which would, when added
to any Prior Grants, be exercisable with respect to Shares which would have an
aggregate Fair Market Value (determined as of the respective Grant Date for
such options) in excess of the $100,000 Limit shall, notwithstanding the terms
of the Current Grant, be exercisable for the first time by the Grantee in the
first subsequent calendar year or years in which it could be exercisable for
the first time by the Grantee when added to all Prior Grants without exceeding
the $100,000 Limit; and

 

(2)           if, viewed as of the date of the Current Grant, any
portion of a Current Grant could not be exercised under the preceding
provisions of this Section during any calendar year commencing with the
calendar year in which it is first exercisable through and including the last
calendar year in which it may by its terms be exercised, such portion of the
Current Grant shall not be an Incentive Stock Option, but shall be exercisable
as an Option which is not an Incentive Stock Option at such date or dates as
are provided in the Current Grant;

 

15

 

(e)           be granted within seven (7) years from the earlier of
the date the Plan is adopted or the date the Plan is approved by the
stockholders of the Company; and

 

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

 

Any Option designated as an Incentive Stock Option shall also require
the Grantee to notify the Committee of any disposition of any Shares issued
pursuant to the exercise of the Incentive Stock Option under the circumstances
described in Section 421(b) of the Code (relating to certain
disqualifying dispositions) (any such circumstance, a “Disqualifying
Disposition”), within 10 days of such Disqualifying Disposition.

 

Notwithstanding
Section 3.2(e), the Committee may, without the consent of the Grantee, at
any time before the exercise of an Option (whether or not an Incentive Stock
Option), take any action necessary to prevent such Option from being treated as
an Incentive Stock Option.

 

6.5           Payment.  Options granted under this Article 6
shall be exercised by the delivery of a written notice of exercise to the
Company, setting forth the number of Shares with respect to which the Option is
to be exercised, accompanied by full payment for the Shares made by any one or
more of the following means subject to the approval of the Committee:

 

(a)           cash, personal check or wire transfer;

 

(b)           Shares, valued at their Fair Market Value on the date of
exercise;

 

(c)           Restricted Shares, each such Share valued at the Fair
Market Value of a Share on the date of exercise;

 

(d)           subject to applicable law, pursuant to procedures approved
by the Committee, through the sale of the Shares acquired on exercise of the
Option, valued at their Fair Market Value in the date of exercise, sufficient
to pay for such Shares, together with, if requested by the Company, the amount
of federal, state, local or foreign withholding taxes payable by Grantee by
reason of such exercise; or

 

(e)           when permitted by the Committee, payment may also be made
in accordance with Section 5.9.

 

If
any Restricted Shares (“Tendered Restricted Shares”) are used to pay the option
price, a number of Shares acquired on exercise of the Option equal to the
number of Tendered Restricted Shares shall be subject to the same restrictions
as the Tendered Restricted Shares, determined as of the date of exercise of the
Option.

 

16

 

ARTICLE 7

 

STOCK APPRECIATION RIGHTS

 

7.1           Grant of SARs.  Subject to the terms and conditions of the
Plan, SARs may be granted to any Eligible Person at any time and from time to
time as shall be determined by the Committee. 
The Committee may grant Freestanding SARs, Tandem SARs, or any
combination thereof.  The Committee shall
determine the number of SARs granted to each Grantee (subject to Article 4),
the Strike Price thereof, and, consistent with Section 7.2 and the other
provisions of the Plan, the other terms and conditions pertaining to such
SARs.  The Strike Price shall be
determined by the Committee, and shall be equal to or more than 100 percent of
the Fair Market Value of a Share on the Grant Date; provided, however, that any
Option that is (x) granted to a Grantee in connection with the acquisition
(“Acquisition”), however effected, by the Company of another corporation or
entity (“Acquired Entity”) or the assets thereof, (y) associated with an
option to purchase shares of stock of the Acquired Entity or an affiliate
thereof (“Acquired Entity Option”) held by such Grantee immediately prior to
such Acquisition, and (z) intended to preserve for the Grantee the economic
value of all or a portion of such Acquired Entity Option (“Substitute Option”)
may, to the extent necessary to achieve such preservation of economic value, be
granted with an option price that is less than 100 percent of the Fair Market
Value of a Share on the Grant Date, provided that such grant is made in a
manner that will not result in the Substitute Option being subject to the
requirements of Section 409A of the Code.

 

7.2           Exercise of Tandem SARs.  Tandem SARs may be exercised for all or part
of the Shares subject to the related Award upon the surrender of the right to
exercise the equivalent portion of the related Award.  A Tandem SAR may be exercised only with
respect to the Shares for which its related Award is then exercisable.  Notwithstanding any other provision of this
Plan to the contrary, with respect to a Tandem SAR, (i) the Tandem SAR
will expire no later than the expiration of the underlying Option; (ii) the
value of the payout with respect to the Tandem SAR may be for no more than 100
percent of the difference between the option price of the underlying Option and
the Fair Market Value of the Shares subject to the underlying Option at the
time the Tandem SAR is exercised; and (iii) the Tandem SAR may be
exercised only when the Fair Market Value of the Shares subject to the Option
exceeds the option price of the Option.

 

7.3           Payment of SAR Amount.  Upon exercise of an SAR, the Grantee shall be
entitled to receive payment from the Company in an amount determined by
multiplying:

 

(a)           the excess of the Fair Market Value of a Share on the date
of exercise over the Strike Price;

 

by

 

(b)           the number of Shares with respect to which the SAR is
exercised;

 

provided
that the Committee may provide in the Award Agreement that the benefit payable
on exercise of an SAR shall not exceed such percentage of the Fair Market Value
of a Share on the Grant Date as the Committee shall specify.  As provided by the Committee in the Award
Agreement, the payment upon exercise of a Freestanding SAR or Tandem SAR shall either
be in 

 

17

 

Shares
which have an aggregate Fair Market Value (as of the date of exercise of the
SAR) equal to the amount of the payment or cash.

 

ARTICLE 8

 

RESTRICTED SHARES

 

8.1           Grant of Restricted Shares.  Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Restricted
Shares to any Eligible Person in such amounts as the Committee shall determine.

 

8.2           Award Agreement.  Each grant of Restricted Shares shall be
evidenced by an Award Agreement that shall specify the period(s) of
restriction, the number of Restricted Shares granted, and such other provisions
as the Committee shall determine including, with respect to each Restricted
Share that is also a Share Unit, the time and form of payment of such
Restricted Share; provided, however, that with respect to Restricted Shares
that are also Share Units, if such Share Units would be subject to Section 409A
of the Code, the provisions of such Share Unit shall comply with the
requirements set forth in Section 409A of the Code.

 

8.3           Restrictions.  The Committee may impose such
conditions and/or restrictions on any Restricted Shares granted pursuant to the
Plan as it may deem advisable, including restrictions based upon the
achievement of Performance Measures, the achievement of individual performance
goals, time-based restrictions on vesting, and/or restrictions under applicable
securities laws.  If vesting conditions
directly relate to performance-based vesting, then in addition to achieving the
necessary performance measures needed for vesting, there shall be a one-year
holding period following the vesting of the Restricted Shares.  Subject to Article 12 and Section 5.6
of the Plan, if vesting conditions relate exclusively to the passage of time
and continued employment, then such vesting time period shall not be less than
36 months, with 1/3 of the Award vesting every year from the date of the Award,
with the following exceptions:  a)
immediately vested Restricted Share grants may be made to members of Janus’
Board of Directors in accordance with its compensation program; and b)
Restricted Share awards made to new hires shall have a vesting schedule over at
least two (2) calendar years. 
However, in no event shall the total number of Restricted Shares granted
to new hires and members of Janus’ Board of Directors in accordance with the
above two exceptions exceed twenty percent (20%) of the total authorized shares
of the Plan.

 

8.4           Consideration.  The Committee shall determine the amount, if
any, that a Grantee shall pay for Restricted Shares.  Such payment shall be made in full by the
Grantee before the delivery of the Shares or Share Units and in any event no
later than 10 business days after the Grant Date for such Shares or Share
Units.

 

8.5           Effect of Forfeiture.  If Restricted Shares are forfeited, and if
the Grantee was required to pay for such Shares or Share Units or acquired such
Restricted Shares upon the exercise of an Option, the Grantee shall be deemed
to have resold such Restricted Shares to the Company at a price equal to the
lesser of (x) the amount paid by the Grantee for such Restricted Shares,
or (y) the Fair Market Value of a Share or Share Unit on the date of such
forfeiture.  The

 

18

 

Company shall pay to the Grantee the required amount
as soon as is administratively practical. 
Such Restricted Shares shall cease to be outstanding, and shall no
longer confer on the Grantee thereof any rights as a stockholder of the
Company, from and after the date of the event causing the forfeiture, whether
or not the Grantee accepts the Company’s tender of payment for such Restricted
Shares.

 

8.6           Escrow; Legends.  The Committee may provide that the
certificates for any Restricted Shares (x) shall be held (together with a
stock power executed in blank by the Grantee) in escrow by the Secretary of the
Company until such Restricted Shares become nonforfeitable or are forfeited
and/or (y) shall bear an appropriate legend restricting the transfer of
such Restricted Shares.  If any
Restricted Shares become non-forfeitable, the Company shall cause any
certificates for such Shares to be issued without such legend.

 

ARTICLE 9

 

BENEFICIARY DESIGNATION

 

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

 

ARTICLE 10

 

DEFERRALS

 

The
Committee may require or permit Grantees to elect to defer the receipt of the
payment of cash or the delivery of Shares that would otherwise be due by virtue
of the exercise of an Option or SAR or the lapse or waiver of restrictions with
respect to Restricted Shares under such rules and procedures as
established under the Plan or such other rules and procedures as the
Committee shall establish; provided, however, to the extent that such deferral
is subject to Section 409A of the Code the rules and procedures
established by the Committee shall comply with Section 409A of the
Code.  Except as otherwise provided in an
Award Agreement, any payment or any Shares that are subject to such deferral
shall be made or delivered to the Grantee upon the Grantee’s Termination of
Affiliation.

 

19

 

ARTICLE 11

 

RIGHTS OF
EMPLOYEES/DIRECTORS/CONSULTANTS

 

11.1         Employment.  Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Grantee’s
employment, directorship or consultancy at any time, nor confer upon any
Grantee the right to continue in the employ or as a director or consultant of
the Company.

 

11.2         Participation.  No employee, director or consultant shall
have the right to be selected to receive an Award under the Plan or, having
been so selected, to be selected to receive a future Award.

 

11.3         Dividend Equivalents.  Subject to the provisions of the Plan and any
Award, the recipient of an Award (including any Award deferred in accordance
with procedures established pursuant to Article 10) may, if so determined
by the Committee, be entitled to receive, currently or on a deferred basis, cash,
stock or other property dividends, or cash payments in amounts equivalent to
cash, property, or other property dividends on shares of Common Stock (“Dividend
Equivalents”) with respect to the number of shares of Common Stock covered by
the Award, as determined by the Committee, in its sole discretion, and the
Committee may provide that such amounts (if any) shall be deemed to have been
reinvested in additional shares or otherwise reinvested; provided, however,
that if such payment of dividends or Dividend Equivalents would be subject to Section 409A
of the Code, no such payment may be made if it would fail to comply with the
requirements set forth in Section 409A of the Code.  Notwithstanding the foregoing, no dividends
or Dividend Equivalents will be paid with respect to unvested performance
Awards.

 

ARTICLE 12

 

CHANGE OF CONTROL

 

12.1         General Rules.  Except as otherwise provided in an
Award Agreement or determined by the Committee at the time an Award is granted,
if a Change of Control occurs, then:

 

(a)           the Grantee’s Restricted Shares that were forfeitable
shall thereupon become non-forfeitable;

 

(b)           any unexercised Option or SAR, whether or not exercisable
on the date of such Change of Control, shall thereupon be fully exercisable and
may be exercised, in whole or in part; and

 

(c)           in the discretion of the Committee, and to the extent
permitted by Section 409A of the Code without the imposition of additional
taxes, the Committee may terminate Awards issued hereunder effective as of a
Change of Control in exchange for a payment to the Grantee of an amount in cash
equal to the value of the per Share consideration 

 

20

 

paid in the Change of Control multiplied by the
number of Shares subject to the Award less, in the case of Options and Stock
Appreciation Rights, the exercise price for such Awards.

 

12.2         409A Exception.  With respect to each Award that is
subject to Section 409A of the Code, if a Change in Control would have
occurred under the Plan pursuant to the definition in Section 2.6 except
that such Change in Control does not constitute a change in the ownership or
effective control of the Company or a change in the ownership of a substantial
portion of the assets of the Company under Section 409A, then each such
Award shall become vested and non-forfeitable; provided, however, that the
Grantee shall not be able to exercise the Award, and the Award shall not become
payable, except in accordance with the terms of such Award or until such
earlier time as the exercise and/or payment complies with Section 409A of
the Code.

 

ARTICLE 13

 

AMENDMENT, MODIFICATION AND
TERMINATION

 

13.1         Amendment, Modification,
and Termination.  Subject to
the terms of the Plan, the Board may at any time and from time to time, alter, amend,
suspend or terminate the Plan in whole or in part.  To the extent applicable and required by Code
Sections 162(m) or 422 or the rules of the New York Stock Exchange
(or such other exchange upon which the Company lists its shares for trading) or
any other applicable law, rule or regulation, no amendment and no
transaction that would constitute a repricing shall be effective unless
approved by the Company’s stockholders. 
Except in connection with a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, or exchange of shares), the terms of
outstanding awards may not be amended to reduce the exercise price of
outstanding Options or SARs or cancel outstanding Options or SARS in exchange
for cash, other awards or Options or SARs with an exercise price that is less
than the exercise price of the original Options or SARs without stockholder
approval.  The Board may delegate to the
Plan Committee any or all of the authority of the Board under Section 13.1
to alter, amend, suspend or terminate the Plan.

 

13.2         Adjustment of Awards Upon
the Occurrence of Certain Unusual or Non-recurring Events.  The Committee may make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of
unusual or non-recurring events (including the events described in Section 4.2)
affecting the Company or the financial statements of the Company or of changes
in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan; provided that no such adjustment shall be authorized
to the extent that such authority would be inconsistent with the Plan’s meeting
the requirements of the Performance-Based Exception.

 

13.3         Awards Previously Granted.  Notwithstanding any other provision of the
Plan to the contrary, no termination, amendment or modification of the Plan
shall adversely 

 

21

 

affect in any material way any Award previously
granted under the Plan, without the written consent of the Grantee of such
Award.

 

ARTICLE 14

 

WITHHOLDING

 

14.1         Withholding.

 

(a)           Mandatory Tax Withholding.

 

(1)           Whenever, under the Plan, Shares are to be delivered upon
exercise or payment of an Award or upon Restricted Shares becoming
nonforfeitable, or any other event with respect to rights and benefits
hereunder, the Company shall be entitled to require (i) that the Grantee
remit an amount in cash, or if determined by the Committee, Shares, sufficient
to satisfy all federal, state, local and foreign tax withholding requirements
related thereto (“Required Withholding”), (ii) the withholding of such
Required Withholding from compensation otherwise due to the Grantee or from any
Shares or other payment due to the Grantee under the Plan or (iii) any
combination of the foregoing.

 

(2)           Any Grantee who makes a Disqualifying Disposition or an
election under Section 83(b) of the Code shall remit to the Company
an amount sufficient to satisfy all resulting Required Withholding; provided that, in lieu of or in addition
to the foregoing, the Company shall have the right to withhold such Required
Withholding from compensation otherwise due to the Grantee or from any Shares
or other payment due to the Grantee under the Plan.

 

(b)           Elective Share
Withholding.

 

(1)           Subject to subsection 14.1(b)(2), a Grantee may elect the
withholding (“Share Withholding”) by the Company of a portion of the Shares
subject to an Award upon the exercise of such Award or upon Restricted Shares
becoming non-forfeitable or upon making an election under Section 83(b) of
the Code (each, a “Taxable Event”) having a Fair Market Value equal to (i) the
minimum amount necessary to satisfy Required Withholding liability attributable
to the Taxable Event; or (ii) with the Committee’s prior approval, a
greater amount, not to exceed the estimated total amount of such Grantee’s tax
liability with respect to the Taxable Event.

 

(2)           Each Share Withholding election shall be subject to the
following conditions:

 

(i)                    any Grantee’s election shall be subject to the
Committee’s discretion to revoke the Grantee’s right to elect Share Withholding
at any time before the Grantee’s election if the Committee has reserved the
right to do so in the Award Agreement;

 

22

 

(ii)                   the Grantee’s election must be made before the
date (the “Tax Date”) on which the amount of tax to be withheld is determined;
and

 

(iii)                  the Grantee’s election shall be irrevocable.

 

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

 

ARTICLE 15

 

SUCCESSORS

 

All
obligations of the Company under the Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise of all or substantially all of the business
and/or assets of the Company.

 

ARTICLE 16

 

ADDITIONAL PROVISIONS

 

16.1         Gender and Number.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine, the
plural shall include the singular and the singular shall include the plural.

 

16.2         Severability.  If any part of the Plan is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan.  Any Section or part of a Section so
declared to be unlawful or invalid shall, if possible, be construed in a manner
which will give effect to the terms of such Section or part of a Section to
the fullest extent possible while remaining lawful and valid.

 

16.3         Requirements of Law.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or stock
exchanges as may be required.  Notwithstanding
any provision of the Plan or any Award, Grantees shall not be entitled to
exercise, or receive benefits under, any Award, and the Company shall not be
obligated to deliver any Shares or other 

 

23

 

benefits to a Grantee, if such exercise or delivery
would constitute a violation by the Grantee or the Company of any applicable
law or regulation.

 

16.4         Securities Law Compliance.

 

(a)           If the Committee deems it necessary to comply with any
applicable securities law, or the requirements of any stock exchange upon which
Shares may be listed, the Committee may impose any restriction on Shares
acquired pursuant to Awards under the Plan as it may deem advisable.  All certificates for Shares delivered under
the Plan pursuant to any Award or the exercise thereof shall be subject to such
stop transfer orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the SEC, any stock
exchange upon which Shares are then listed, any applicable securities law, and
the Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.  If so requested by the Company, the Grantee
shall make a written representation to the Company that he or she will not sell
or offer to sell any Shares unless a registration statement shall be in effect
with respect to such Shares under the Securities Act of 1993, as amended, and
any applicable state securities law or unless he or she shall have furnished to
the Company evidence satisfactory to the Company that such registration is not
required.

 

(b)           If the Committee determines that the exercise or
non-forfeitability of, or delivery of benefits pursuant to, any Award would violate
any applicable provision of securities laws or the listing requirements of any
stock exchange upon which any of the Company’s equity securities are listed,
then the Committee may postpone any such exercise, non-forfeitability or
delivery, as applicable, but the Company shall use all reasonable efforts to
cause such exercise, non-forfeitability or delivery to comply with all such
provisions at the earliest practicable date.

 

16.5         No Rights as a
Stockholder.  A Grantee shall
not have any rights as a stockholder of the Company with respect to the Shares
(other than Restricted Shares) which may be deliverable upon exercise or
payment of such Award until such shares have been delivered to him or her.  Restricted Shares, whether held by a Grantee
or in escrow by the Secretary of the Company, shall confer on the Grantee all
rights of a stockholder of the Company, except as otherwise provided in the
Plan or Award Agreement.  At the time of
a grant of Restricted Shares, the Committee may require the payment of cash
dividends thereon to be deferred and, if the Committee so determines,
reinvested in additional Restricted Shares. 
Stock dividends and deferred cash dividends issued with respect to
Restricted Shares shall be subject to the same restrictions and other terms as
apply to the Restricted Shares with respect to which such dividends are
issued.  The Committee may provide for
payment of interest on deferred cash dividends.

 

16.6         Nature of Payments.  Awards shall be special incentive payments to
the Grantee and shall not be taken into account in computing the amount of
salary or compensation of the Grantee for purposes of determining any pension,
retirement, death or other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan of the Company
or any Subsidiary or (b) any agreement between (i) the Company or any
Subsidiary and (ii) the Grantee, except as such plan or agreement shall
otherwise expressly provide.

 

24

 

16.7         Governing Law.  The Plan, and all agreements hereunder, shall
be construed in accordance with and governed by the laws of the State of
Delaware other than its laws respecting choice of law.

 

16.8         Code Section 409A
Compliance.  The intent of the
parties is that payments and benefits under this Plan comply with Section 409A
of the Code to the extent subject thereto, and, accordingly, to the maximum
extent permitted, this Plan shall be interpreted and be administered to be in
compliance therewith.  Any payments
described in this Plan that are due within the “short term deferral period” as
defined in Section 409A of the Code shall not be treated as deferred
compensation unless applicable law requires otherwise.  Notwithstanding anything to the contrary in
this Plan, to the extent required in order to avoid accelerated taxation and/or
tax penalties under Section 409A of the Code, amounts that would otherwise
be payable and benefits that would otherwise be provided pursuant to this Plan
during the six-month period immediately following the Grantee’s termination of
employment shall instead be paid on the first business day after the date that
is six months following the Grantee’s separation from service (or upon
Participant’s death, if earlier).  In
addition, for purposes of this Plan, each amount to be paid or benefit to be
provided to the Grantee pursuant to the Plan, which constitute deferred
compensation subject to Section 409A of the Code, shall be construed as a
separate identified payment for purposes of Section 409A of the Code..

 

25

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