Document:

Exhibit 4(d)

                        SUB-INVESTMENT ADVISORY AGREEMENT

      AGREEMENT dated October 2, 2006, between BlackRock Advisors, LLC, a
Delaware limited liability corporation (the "Advisor"), and BlackRock Investment
Management, LLC, a Delaware limited liability corporation (the "Sub-Advisor").

      WHEREAS, the Advisor has agreed to furnish investment advisory services to
the BlackRock High Yield Municipal Fund (the "Fund"), a series of BlackRock
Municipal Bond Fund, Inc., a Maryland corporation (the "Corporation"), an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act");

      WHEREAS, the Advisor wishes to retain the Sub-Advisor to provide it with
certain sub-advisory services as described below in connection with Advisor's
advisory activities on behalf of the Fund;

      WHEREAS, the advisory agreement between the Advisor and the Corporation,
dated October 2, 2006 (such agreement or the most recent successor agreement
between such parties relating to advisory services to the Corporation is
referred to herein as the "Advisory Agreement") contemplates that the Advisor
may sub-contract investment advisory services with respect to the Fund to a
sub-advisor pursuant to a sub-advisory agreement agreeable to the Corporation
and approved in accordance with the provisions of the 1940 Act; and

      WHEREAS, this Agreement has been approved in accordance with the
provisions of the 1940 Act, and the Sub-Advisor is willing to furnish such
services upon the terms and conditions herein set forth;

      NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is agreed by and between the parties hereto as
follows:

      1. Appointment. The Advisor hereby appoints the Sub-Advisor to act as
sub-advisor with respect to the Fund and the Sub-Advisor accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.

      2. Services of the Sub-Advisor. Subject to the succeeding provisions of
this section, the oversight and supervision of the Advisor and the direction and
control of the Corporation's Board of Directors, the Sub-Advisor will perform
certain of the day-to-day operations of the Fund, which may include one or more
of the following services, at the request of the Advisor: (a) acting as
investment advisor for and managing the investment and reinvestment of those
assets of the Fund as the Advisor may from time to time request and in
connection therewith have complete discretion in purchasing and selling such
securities and other assets for the Fund and in voting, exercising consents and
exercising all other rights appertaining to such securities and other assets on
behalf of the Fund; (b) arranging, subject to the provisions of paragraph 3
hereof, for the purchase and sale of securities and other assets of the Fund;
(c) providing investment research and credit analysis concerning the Fund's

<PAGE>

investments, (d) assist the Advisor in determining what portion of the Fund's
assets will be invested in cash, cash equivalents and money market instruments,
(e) placing orders for all purchases and sales of such investments made for the
Fund, and (f) maintaining the books and records as are required to support Fund
investment operations. At the request of the Advisor, the Sub-Advisor will also,
subject to the oversight and supervision of the Advisor and the direction and
control of the Corporation's Board of Directors, provide to the Advisor or the
Fund any of the facilities and equipment and perform any of the services
described in Section 3 of the Advisory Agreement. In addition, the Sub-Advisor
will keep the Fund and the Advisor informed of developments materially affecting
the Fund and shall, on its own initiative, furnish to the Fund from time to time
whatever information the Sub-Advisor believes appropriate for this purpose. The
Sub-Advisor will periodically communicate to the Advisor, at such times as the
Advisor may direct, information concerning the purchase and sale of securities
for the Fund, including: (a) the name of the issuer, (b) the amount of the
purchase or sale, (c) the name of the broker or dealer, if any, through which
the purchase or sale is effected, (d) the CUSIP number of the instrument, if
any, and (e) such other information as the Advisor may reasonably require for
purposes of fulfilling its obligations to the Fund under the Advisory Agreement.
The Sub-Advisor will provide the services rendered by it under this Agreement in
accordance with the Fund's investment objectives, policies and restrictions (as
currently in effect and as they may be amended or supplemented from time to
time) as stated in the Fund's Prospectus and Statement of Additional Information
and the resolutions of the Corporation's Board of Directors.

      3. Covenants. (a) In the performance of its duties under this Agreement,
the Sub-Advisor shall at all times conform to, and act in accordance with, any
requirements imposed by: (i) the provisions of the 1940 Act and the Investment
Advisers Act of 1940, as amended (the "Advisers Act") and all applicable Rules
and Regulations of the Securities and Exchange Commission (the "SEC"); (ii) any
other applicable provision of law; (iii) the provisions of the Charter and
By-Laws of the Corporation, as such documents are amended from time to time;
(iv) the investment objectives and policies of the Fund as set forth in the
Corporation's Registration Statement on Form N-1A and/or the resolutions of the
Board of Directors; and (v) any policies and determinations of the Board of
Directors of the Corporation and

            (b) In addition, the Sub-Advisor will:

                  (i) place orders either directly with the issuer or with any
            broker or dealer. Subject to the other provisions of this paragraph,
            in placing orders with brokers and dealers, the Sub-Advisor will
            attempt to obtain the best price and the most favorable execution of
            its orders. In placing orders, the Sub-Advisor will consider the
            experience and skill of the firm's securities traders as well as the
            firm's financial responsibility and administrative efficiency.
            Consistent with this obligation, the Sub-Advisor may select brokers
            on the basis of the research, statistical and pricing services they
            provide to the Fund and other clients of the Advisor or the
            Sub-Advisor. Information and research received from such brokers
            will be in addition to, and not in lieu of, the services required to
            be performed by the Sub-Advisor hereunder. A commission paid to such
            brokers may be higher than that which another qualified broker would
            have charged for effecting the same transaction, provided that the
            Sub-

                                       2
<PAGE>

            Advisor determines in good faith that such commission is reasonable
            in terms either of the transaction or the overall responsibility of
            the Advisor and the Sub-Advisor to the Fund and their other clients
            and that the total commissions paid by the Fund will be reasonable
            in relation to the benefits to the Fund over the long-term. Subject
            to the foregoing and the provisions of the 1940 Act, the Securities
            Exchange Act of 1934, as amended, and other applicable provisions of
            law, the Advisor may select brokers and dealers with which it or the
            Corporation is affiliated;

                  (ii) maintain books and records with respect to the Fund's
            securities transactions and will render to the Advisor and the
            Corporation's Board of Directors such periodic and special reports
            as they may request;

                  (iii) maintain a policy and practice of conducting its
            investment advisory services hereunder independently of the
            commercial banking operations of its affiliates. When the
            Sub-Advisor makes investment recommendations for the Fund, its
            investment advisory personnel will not inquire or take into
            consideration whether the issuer of securities proposed for purchase
            or sale for the Fund's account are customers of the commercial
            department of its affiliates; and

                  (iv) treat confidentially and as proprietary information of
            the Fund all records and other information relative to the Fund, and
            the Fund's prior, current or potential shareholders, and will not
            use such records and information for any purpose other than
            performance of its responsibilities and duties hereunder, except
            after prior notification to and approval in writing by the Fund,
            which approval shall not be unreasonably withheld and may not be
            withheld where the Sub-Advisor may be exposed to civil or criminal
            contempt proceedings for failure to comply, when requested to
            divulge such information by duly constituted authorities, or when so
            requested by the Fund.

      4. Services Not Exclusive. Nothing in this Agreement shall prevent the
Sub-Advisor or any officer, employee or other affiliate thereof from acting as
investment advisor for any other person, firm or corporation, or from engaging
in any other lawful activity, and shall not in any way limit or restrict the
Sub-Advisor or any of its officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting; provided, however, that the
Sub-Advisor will undertake no activities which, in its judgment, will adversely
affect the performance of its obligations under this Agreement.

      5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Advisor hereby agrees that all records which it
maintains for the Corporation are the property of the Corporation and further
agrees to surrender promptly to the Corporation any such records upon the
Corporation's request. The Sub-Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act (to the extent such books and
records are not maintained by the Advisor).

                                       3
<PAGE>

      6. Expenses. During the term of this Agreement, the Sub-Advisor will bear
all costs and expenses of its employees and any overhead incurred by the
Sub-Advisor in connection with its duties hereunder; provided that the Board of
Directors of the Corporation may approve reimbursement to the Sub-Advisor of the
pro-rata portion of the salaries, bonuses, health insurance, retirement benefits
and all similar employment costs for the time spent on Fund operations
(including, without limitation, compliance matters) (other than the provision of
investment advice and administrative services required to be provided hereunder)
of all personnel employed by the Sub-Advisor who devote substantial time to Fund
operations or the operations of other investment companies advised or
sub-advised by the Sub-Advisor.

      7. Compensation.

            (a) The Advisor agrees to pay to the Sub-Advisor and the Sub-Advisor
      agrees to accept as full compensation for all services rendered by the
      Sub-Advisor as such, a monthly fee in arrears at an annual rate equal to
      the amount set forth in Schedule A hereto. For any period less than a
      month during which this Agreement is in effect, the fee shall be prorated
      according to the proportion which such period bears to a full month of 28,
      29, 30 or 31 days, as the case may be.

            (b) For purposes of this Agreement, the net assets of the Fund shall
      be calculated pursuant to the procedures adopted by resolutions of the
      Directors of the Corporation for calculating the value of the Fund's
      assets or delegating such calculations to third parties.

      8. Indemnity.

            (a) The Corporation may, in the discretion of the Board of Directors
      of the Corporation, indemnify the Sub-Advisor, and each of the
      Sub-Advisor's directors, officers, employees, agents, associates and
      controlling persons and the directors, partners, members, officers,
      employees and agents thereof (including any individual who serves at the
      Sub-Advisor's request as director, officer, partner, member, trustee or
      the like of another entity) (each such person being an "Indemnitee")
      against any liabilities and expenses, including amounts paid in
      satisfaction of judgments, in compromise or as fines and penalties, and
      counsel fees (all as provided in accordance with applicable state law)
      reasonably incurred by such Indemnitee in connection with the defense or
      disposition of any action, suit or other proceeding, whether civil or
      criminal, before any court or administrative or investigative body in
      which such Indemnitee may be or may have been involved as a party or
      otherwise or with which such Indemnitee may be or may have been
      threatened, while acting in any capacity set forth herein or thereafter by
      reason of such Indemnitee having acted in any such capacity, except with
      respect to any matter as to which such Indemnitee shall have been
      adjudicated not to have acted in good faith in the reasonable belief that
      such Indemnitee's action was in the best interest of the Corporation and
      furthermore, in the case of any criminal proceeding, so long as such
      Indemnitee had no reasonable cause to believe that the conduct was
      unlawful; provided, however, that (1) no Indemnitee shall be indemnified
      hereunder against any liability to the Corporation or its shareholders or
      any expense of such Indemnitee arising by reason of (i) willful
      misfeasance, (ii) bad faith, (iii) gross negligence or (iv) reckless
      disregard of the duties involved in the conduct of such Indemnitee's
      position (the conduct referred to in such clauses (i) through (iv)

                                       4
<PAGE>

      being sometimes referred to herein as "disabling conduct"), (2) as to any
      matter disposed of by settlement or a compromise payment by such
      Indemnitee, pursuant to a consent decree or otherwise, no indemnification
      either for said payment or for any other expenses shall be provided unless
      there has been a determination that such settlement or compromise is in
      the best interests of the Corporation and that such Indemnitee appears to
      have acted in good faith in the reasonable belief that such Indemnitee's
      action was in the best interest of the Corporation and did not involve
      disabling conduct by such Indemnitee and (3) with respect to any action,
      suit or other proceeding voluntarily prosecuted by any Indemnitee as
      plaintiff, indemnification shall be mandatory only if the prosecution of
      such action, suit or other proceeding by such Indemnitee was authorized by
      a majority of the full Board of Directors of the Corporation.

            (b) The Corporation shall make advance payments in connection with
      the expenses of defending any action with respect to which indemnification
      might be sought hereunder if the Corporation receives a written
      affirmation of the Indemnitee's good faith belief that the standard of
      conduct necessary for indemnification has been met and a written
      undertaking to reimburse the Corporation unless it is subsequently
      determined that such Indemnitee is entitled to such indemnification and if
      the Directors of the Corporation determine that the facts then known to
      them would not preclude indemnification. In addition, at least one of the
      following conditions must be met: (A) the Indemnitee shall provide a
      security for such Indemnitee undertaking, (B) the Fund shall be insured
      against losses arising by reason of any unlawful advance, or (C) a
      majority of a quorum consisting of Directors of the Corporation who are
      neither "interested persons" of the Corporation (as defined in Section
      2(a)(19) of the 1940 Act) nor parties to the proceeding ("Disinterested
      Non-Party Directors") or an independent legal counsel in a written
      opinion, shall determine, based on a review of readily available facts (as
      opposed to a full trial-type inquiry), that there is reason to believe
      that the Indemnitee ultimately will be found entitled to indemnification.

            (c) All determinations with respect to the standards for
      indemnification hereunder shall be made (1) by a final decision on the
      merits by a court or other body before whom the proceeding was brought
      that such Indemnitee is not liable by reason of disabling conduct, or (2)
      in the absence of such a decision, by (i) a majority vote of a quorum of
      the Disinterested Non-Party Directors of the Corporation, or (ii) if such
      a quorum is not obtainable or even, if obtainable, if a majority vote of
      such quorum so directs, independent legal counsel in a written opinion.
      All determinations that advance payments in connection with the expense of
      defending any proceeding shall be authorized shall be made in accordance
      with the immediately preceding clause (2) above.

      The rights accruing to any Indemnitee under these provisions shall not
exclude any other right to which such Indemnitee may be lawfully entitled.

      9. Limitation on Liability. The Sub-Advisor will not be liable for any
error of judgment or mistake of law or for any loss suffered by the Advisor or
by the Fund in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its duties under this Agreement. As used in this
Section 9(a), the term "Sub-Advisor" shall include any

                                       5
<PAGE>

affiliates of the Sub-Advisor performing services for the Fund contemplated
hereby and partners, directors, officers and employees of the Sub-Advisor and
such affiliates.

      10. Duration and Termination. This Agreement shall become effective as of
the date hereof and, unless sooner terminated with respect to the Fund as
provided herein, shall continue in effect for a period of two years. Thereafter,
if not terminated, this Agreement shall continue in effect with respect to the
Fund for successive periods of 12 months, provided such continuance is
specifically approved at least annually by both (a) the vote of a majority of
the Corporation's Board of Directors or a vote of a majority of the outstanding
voting securities of the Fund at the time outstanding and entitled to vote and
(b) by the vote of a majority of the Directors, who are not parties to this
Agreement or interested persons (as such term is defined in the 1940 Act) of any
such party, cast in person at a meeting called for the purpose of voting on such
approval. Notwithstanding the foregoing, this Agreement may be terminated by the
Corporation or the Advisor at any time, without the payment of any penalty, upon
giving the Sub-Advisor 60 days' notice (which notice may be waived by the
Sub-Advisor), provided that such termination by the Corporation or the Advisor
shall be directed or approved by the vote of a majority of the Directors of the
Corporation in office at the time or by the vote of the holders of a majority of
the voting securities of the Fund at the time outstanding and entitled to vote,
or by the Sub-Advisor on 60 days' written notice (which notice may be waived by
the Corporation and the Advisor), and will terminate automatically upon any
termination of the Advisory Agreement between the Corporation and the Advisor.
This Agreement will also immediately terminate in the event of its assignment.
(As used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
of such terms in the 1940 Act.)

      11. Notices. Any notice under this Agreement shall be in writing to the
other party at such address as the other party may designate from time to time
for the receipt of such notice and shall be deemed to be received on the earlier
of the date actually received or on the fourth day after the postmark if such
notice is mailed first class postage prepaid.

      12. Amendment of this Agreement. This Agreement may be amended by the
parties only if such amendment is specifically approved by the vote of the Board
of Directors of the Corporation, including a majority of those Directors who are
not parties to this Agreement or interested persons of any such party cast in
person at a meeting called for the purpose of voting on such approval and, where
required by the 1940 Act, by a vote of a majority of the outstanding voting
securities of the Fund.

      13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding on, and shall inure to the
benefit of the parties hereto and their respective successors.

                                       6
<PAGE>

      14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York for contracts to be performed
entirely therein without reference to choice of law principles thereof and in
accordance with the applicable provisions of the 1940 Act. To the extent that
the applicable laws of the State of New York, or any of the provisions, conflict
with the applicable provisions of the 1940 Act, the latter shall control.

      15. Counterparts. This Agreement may be executed in counterparts by the
parties hereto, each of which shall constitute an original counterpart, and all
of which, together, shall constitute one Agreement.

      IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers designated below as of the day and
year first above written.

                                    BLACKROCK ADVISORS, LLC

                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:

                                    BLACKROCK INVESTMENT MANAGEMENT, INC.

                                    By:
                                        ----------------------------------------
                                        Name:
                                        Title:

AGREED AND ACCEPTED
as of the date first set forth above

BLACKROCK MUNICIPAL BOND FUND, INC.

By:
   -----------------------------
Name:
Title:

                                       7
<PAGE>

                                   Schedule A

                           Sub-Investment Advisory Fee

_____% of the monthly advisory fee received by the Advisor from the Fund.exv10w1

 

Exhibit 10.1

AIRGAS, INC.

2006 EQUITY INCENTIVE PLAN

Section 1. Purpose of the Plan; Effective Date.

     1.1 Purpose . This 2006 Equity Incentive Plan (the “Plan”) is intended to promote the
interests of Airgas, Inc., a Delaware corporation (the “Company”), by: (a) enabling the Company and
its subsidiaries to recruit and retain highly qualified employees, directors and consultants; (b)
providing those employees, directors and consultants with an incentive for increasing stockholders’
value; and (c) providing those employees, directors and consultants with an opportunity to share in
the growth and value of the Company. If approved by the Company’s stockholders, the Plan shall
succeed the Company’s 1997 Stock Option Plan (the “1997 Plan”) and the Company’s 1997 Directors’
Stock Option Plan (the “Directors’ Plan,” and together with the 1997 Plan, the “Prior Plans”).
Following the Effective Date, no additional stock awards shall be granted under the Prior Plans.

     1.2 Effective Date. The Plan was approved by the Board on June 21, 2006 and will become
effective, subject to its approval by the stockholders of the Company, on August 31, 2006 (the
“Plan Effective Date”).

Section 2. Definitions. For the purposes of the Plan, the following definitions shall be
in effect.

     2.1 Affiliate: any person or entity that directly or indirectly is controlled by, controls
or is under common control with another person or entity.

     2.2 Award: a grant of Options, SARs, Restricted Shares or Restricted Share Units pursuant
to the provisions of the Plan.

     2.3 Award Document: with respect to any particular Award, the written document that sets
forth the terms of that Award.

     2.4 Board: the Company’s Board of Directors.

     2.5 Change in Control: a change in ownership or control of the Company effected through any of the following
transactions:

          2.5.1 the direct or indirect acquisition by (a) any “person” (as defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) (other than
Peter McCausland and any or all of his Affiliates, the Company or any majority-owned subsidiary or
any employee benefit plan sponsored by the Company or any trust or investment manager for the
account of such a plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange
Act) of securities possessing more than 20% of the total combined voting power of the

 

 

Company’s
then outstanding securities or (b) Peter McCausland, together with all of his Affiliates (other
than the Company or any majority-owned subsidiary or any employee benefit plan sponsored by the
Company or any trust or investment manager for the account of such a plan), of beneficial ownership
(within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than 30% of
the total combined voting power of the Company’s then outstanding securities;

          2.5.2 a change in the composition of the Board over a period of 24 months or less such that a
majority of the Board members ceases, by reason of one or more actual or threatened contested
elections for Board membership, to be comprised of individuals who either (a) have been Board
members continuously since the beginning of such period, or (b) have been elected or nominated for
election as Board members during such period by at least a majority of the Board members described
in clause (a) who were still in office at the time such election or nomination was approved by the
Board;

          2.5.3 the consummation of any consolidation, share exchange or merger of the Company (a) in
which the stockholders of the Company immediately prior to such transaction do not own at least a
majority of the voting power of the entity which survives/results from that transaction or, if
applicable, of the ultimate parent of such entity, in substantially the same proportion as the
voting power of such stockholders immediately prior to such transaction, (b) in which a stockholder
of the Company who does not own a majority of the voting stock of the Company immediately prior to
such transaction, owns a majority of the Company’s voting stock immediately after such transaction,
(c) following which the Company is not the surviving entity or (d) following which the Company is
the surviving entity but the shares of Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property, whether in the form of securities, cash
or otherwise;

          2.5.4 the approval of the stockholders of the Company of the liquidation or dissolution of the
Company; or

          2.5.5 any sale, lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company, including stock held in
Subsidiary corporations or interests held in Subsidiary ventures.

     2.6 Code: the Internal Revenue Code of 1986, as amended.

     2.7 Committee: the committee appointed by the Board to administer and interpret the Plan
in accordance with Section 3.1.

     2.8 Common Stock: shares of the Company’s common stock.

     2.9 Employee: an individual who performs services while in the employ of the Company or
any of its Subsidiaries, subject to the control and direction of the employer entity not only as to
the work to be performed but also as to the manner and method of performance.

 

 

     2.10 Exchange Act: the Securities Exchange Act of 1934, as amended.

     2.11 Exercise Date: the date on which all conditions for exercise, including without
limitation the giving of written notice to the Company and payment of the exercise price, have been
satisfied.

     2.12 Fair Market Value: the Fair Market Value per share of Common Stock determined in
accordance with the following provisions:

          2.12.1 NYSE. If, at the time of the grant of an Award or other event in question, the
Common Stock is traded on the New York Stock Exchange (the “NYSE”), the Fair Market Value shall be
at least 100% of the closing selling price per share of the Common Stock on the date the Award is
granted (or other event in question occurs), as such price is reported on the NYSE or any successor
system. If an Award is granted (or other event in question occurs) on a date for which there is no
reported closing selling price for the Common Stock, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation exists.

          2.12.2 Other National Securities Exchange or Market. If, at the time of the grant of
an Award or other event in question, the Common Stock is listed or admitted to trading on any
national securities exchange or over-the-counter market in lieu of the NYSE, then the Fair Market
Value shall be at least 100% of the closing selling price or transaction price per share of the
Common Stock on the date the Award is granted (or other event in question occurs), as such price is
officially reported or quoted on the exchange or market determined by the Committee to be the
primary market for the Common Stock. If an Award is granted (or other event in question occurs) on
a date for which there is no reported sale of Common Stock on such exchange or market, then the
Fair Market Value shall be the closing selling price or the last closing transaction price on the
exchange or market on the last preceding date for which such quotation exists.

          2.12.3 Not Publicly Traded. If, at the time of the grant of an Award or other event
in question, the Common Stock is neither listed nor admitted to trading on
any national securities exchange or market, then the Fair Market Value of the Common Stock on
such date shall be determined by the Committee in its sole and absolute discretion.

     2.13 Incentive Stock Option: an Option intended to be and designated as an “Incentive
Stock Option” within the meaning of Section 422 of the Code.

     2.14 Misconduct: (a) the commission of any act of fraud, embezzlement or dishonesty by
the Participant, (b) any unauthorized use or disclosure by such individual of confidential
information or trade secrets of the Company or of any Subsidiary, (c) any failure to perform any
specific lawful direction of the Company’s Board or officers of the Company, (d) any refusal or
neglect to perform such individual’s duties in connection with his or her employment, (e) any
conviction of, or entering of a plea of nolo contendere to, a crime that constitutes a felony, or
(f) any other misconduct by such individual adversely affecting the business or affairs of the
Company, each as determined

 

 

by the Committee in its sole and absolute discretion; provided, however
that if a Participant and the Company or any of its Subsidiaries have entered into an employment
agreement, consulting agreement or other similar agreement that specifically defines “misconduct,”
“cause” or another similar term, then with respect to that Participant, “Misconduct” shall have the
meaning ascribed to such term in that agreement. The foregoing definition shall not be deemed to
be inclusive of all the acts or omissions which the Company or any Subsidiary may consider as
grounds for the dismissal or discharge of any Participant or other individual in the Service of the
Company.

     2.15 Non-Employee Director: a member of the Board who is not an Employee.

     2.16 Non-Qualified Option: an Option that is not an Incentive Stock Option.

     2.17 Option: an option to purchase shares of Common Stock (including Restricted Shares, if
the Committee so determines) granted pursuant to Section 6 of the Plan.

     2.18 Optionee: a person to whom an Option is granted under the Plan.

     2.19 Participant: a person who is issued an Award under the Plan.

     2.20 Permanent Disability: a permanent and total disability as defined in Section 22(e)(3)
of the Code.

     2.21 Qualifying Performance Criteria: the performance criteria set forth in Section
10.3.2.

     2.22 Restricted Shares: shares that are granted under and subject to restrictions pursuant
to Section 8 of the Plan.

     2.23 Restricted Share Unit: a right granted under and subject to restrictions pursuant to
Section 9 of the Plan.

     2.24 Retirement: the termination of an Employee’s Service by such Employee (and not
related to any Misconduct) where on the termination date, the Employee is at least age 65 or the
sum of the Employee’s age and years of employment with the Company or a Subsidiary measured from
the Employee’s date of hire is at least 75.

     2.25 SAR: a stock appreciation right granted under and described in Section 7 of the Plan.

     2.26 Service: the performance of services on a periodic basis for the Company (or any
Subsidiary) in the capacity of an Employee, a Non-Employee Director or an independent consultant,
except to the extent otherwise specifically provided in the applicable Award Document.

 

 

     2.27 Subsidiary: each corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, provided that each such corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination, stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.

     2.28 Ten Percent Stockholder: a stockholder owning 10% or more of the total combined
voting power of all classes of stock of the Company or of its parent or subsidiary corporation,
within the meaning of Section 422(b)(6) of the Code.

Section 3. Administration of the Plan.

     3.1 The Committee. The Board shall appoint a Committee to administer and interpret the
Plan. The Committee shall consist of two or more Board members, each of whom is “independent” as
defined in the rules of the NYSE, is an “outside director” as defined under Code Section 162(m) and
related Treasury Regulations and may be a “non-employee director” as defined under Rule 16b-3 of
the Exchange Act; provided that the fact that a Committee member shall fail to meet any of such
requirements shall not invalidate any Award granted by the Committee that is otherwise validly
granted under the Plan. Members of the Committee shall serve for such period as the Board may
decide. The Committee shall have full power and authority (subject to the express provisions of
the Plan) to:

          3.1.1 determine from time to time (A) which of the persons eligible under the Plan shall be
granted Awards; (B) when and how each Award shall be granted;
(C) what type or combination of types of Award shall be granted; (D) the provisions of each
Award granted (which need not be identical), including the time or times when a person shall be
permitted to receive cash or Common Stock pursuant to an Award; and (E) the number of shares of
Common Stock with respect to which an Award shall be granted to each such person.

          3.1.2 construe and interpret the Plan and Awards granted under it, and establish, amend and
revoke rules and regulations for its administration.

          3.1.3 settle all controversies regarding the Plan and Awards granted under it.

          3.1.4 approve forms of Award Documents for use under the Plan and amend the terms of any one
or more Awards or stock awards granted under the Prior Plans to provide terms more favorable than
previously provided in the Award Document or award agreement, subject to any specified limits in
the Plan that are not subject to the discretion of the Committee.

          3.1.5 exercise such powers and perform such acts as the Committee deems necessary or expedient
to promote the best interests of the Company and that are not in conflict with the provisions of
the Plan or Awards.

 

 

          3.1.6 adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees, Non-Employee Directors or Consultants who are foreign
nationals or employed outside the United States.

     No member of the Board, or delegate thereof, will be liable for any good faith determination
or act in connection with the Plan or any Award.

     3.2 Delegation of Authority. The Board or the Committee may appoint one or more officers
of the Company, Board members, or a committee of officers and/or Board members to act individually
or jointly, as set forth in the delegating resolution. To the extent permitted in accordance with
Section 157 of the Delaware General Corporation Law and within the limits established by the Board
or the Committee, as applicable, at the time of the delegation, each such person shall have the
authority to grant Awards to Participants who are not subject, as a result of their relationship to
the Company or ownership of the Company’s securities, to Section 16 of the Exchange Act or Section
162(m) of the Code, and solely with respect to any Awards so granted, references in the Plan to the
Committee will be deemed to also refer to such persons to whom authority has been granted.

Section 4. Eligibility.

     4.1 Eligible Persons. Subject to the terms of the Plan, the persons eligible to
participate in the Plan shall be limited to the following:

          4.1.1 officers and other Employees of the Company (or any Subsidiary);

          4.1.2 Non-Employee Directors and the non-employee members of the board of directors of any
Subsidiary; and

          4.1.3 consultants who provide Services to the Company (or any Subsidiary), provided that any
such consultant must be eligible to be offered securities of the Company pursuant to Securities and
Exchange Commission (“SEC”) Form S-8.

     4.2 International Participants. Notwithstanding any provision of the Plan to the contrary,
in order to foster and promote achievement of the purposes of the Plan or to comply with provisions
of law in other countries in which the Company or any of its Subsidiaries operates or has
Employees, the Committee, in its sole discretion, shall have the power and authority to (i)
determine which eligible Participants employed by the Company or any of its Subsidiaries outside
the United States should participate in the Plan, (ii) modify the terms and conditions of any
Awards made to such eligible Participants, and (iii) establish subplans, modified Option exercise
procedures and other Award terms, conditions and procedures to the extent such actions may be
necessary or advisable to comply with provisions of the laws and regulations of countries outside
the United States in order to assure the lawfulness, validity and effectiveness of Awards granted
under the Plan.

 

 

Section 5. Stock Subject to the Plan.

     5.1 Number of Shares Available for Grant. The maximum number of shares of Common Stock
that may be subject to Options, SARs, Restricted Shares and Restricted Share Units under the Plan
shall not exceed the aggregate of (a) 3,200,000 shares, (b) the shares remaining for issuance under
the Prior Plans as of the date of stockholder approval of the Plan, and (c) the shares subject to
options outstanding as of the Plan Effective Date under the Company’s Prior Plans that terminate,
expire or are canceled without having been exercised on or after the Plan Effective Date, subject
to adjustment from time to time in accordance with the provisions of Section 5.4. All outstanding
options granted under the Prior Plans shall remain subject to the terms of those plans. All Awards
granted subsequent to the Plan Effective Date shall be subject to the terms of this Plan. In
addition, Awards may be issued in connection with a merger or acquisition permitted by NYSE Company
Manual Section 303A.08, and such issuance shall not reduce the number of shares available for
issuance under the Plan.

     5.2 Annual Per-Participant Limit. The aggregate number of shares of Common Stock subject
to Options or SARs granted under the Plan in any fiscal year of the Company to any one Participant
in the Plan shall not exceed 1,000,000 shares. The aggregate number of shares of Common Stock
subject to Restricted Share or Restricted Share Unit Awards granted under the Plan during any
fiscal year of the Company to any one Participant shall not exceed 500,000. Notwithstanding the
foregoing limitations, no Non-Employee Director may receive Awards in any given fiscal year of the
Company with respect to more than 100,000 shares. Notwithstanding anything to the contrary in the
Plan, the foregoing limitations shall be subject to adjustment under Section 5.4.

     5.3 Forfeited Awards and Other Shares Again Available for Grant. If and to the extent that
an Option, SAR or Restricted Share Unit expires, terminates or is canceled, surrendered or
forfeited for any reason without having been exercised or settled in full, the shares of Common
Stock associated with that Option, SAR or Restricted Share Unit will again become available for
grant under the Plan. Similarly, if and to the extent any Restricted Share is canceled, forfeited
or repurchased for any reason, that share will again be available for grant under the Plan. The
number of shares that will be considered issued under the Plan shall equal the number of shares
issued upon exercise or settlement of an Award and shall not include the number of shares returned
or delivered to the Company for any reason, including the cancellation, expiration, forfeiture,
surrender or repurchase of an Award.

     5.4 Adjustments upon Changes in Common Stock; Change in Control.

          5.4.1 Adjustments. Should any change be made to the Common Stock issuable under the Plan
by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without the Company’s
receipt of consideration, then appropriate adjustments shall be made to (a) the maximum number
and/or class of securities issuable under the Plan, (b) the maximum amount and/or class of
securities for which any one individual participating in the Plan may be granted Options,
separately

 

 

exercisable SARs, Restricted Shares and Restricted Share Units for any given year under
the Plan, (c) the number and/or class of securities and price per share in effect under each Option
and SAR outstanding under the Plan (provided that this adjustment also may be made, in the
discretion of the Committee, in the event of an extraordinary cash dividend in respect of the
Common Stock), and (d) the number of Restricted Share Units outstanding under the Plan and/or the
class of securities referenced for determining payment in respect thereof. Such adjustments to
outstanding Awards are to be effected in a manner intended to avoid the enlargement or dilution of
rights and benefits under such Awards. The adjustments determined by the Committee shall be final,
binding and conclusive.

          5.4.2 Change in Control. The following provisions shall apply to Awards in the event of a
Change in Control unless otherwise provided in the instrument evidencing the Award or any other
written agreement between the Company and the holder of the Award or unless otherwise expressly
provided by the Board or the Committee, as applicable, at the time of grant of an Award.

               (a) Merger or Similar Transaction — Awards May Be Assumed. Except as otherwise stated
in the Award Document, in the event of a Change in Control as set forth in Section 2.5.3 of the
Plan, any surviving corporation or acquiring corporation (or the surviving or acquiring
corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan
or may substitute comparable stock awards for Awards outstanding under the Plan (including but not
limited to, awards
to acquire the same consideration paid to the stockholders of the Company pursuant to the
Change in Control), and any reacquisition or repurchase rights held by the Company in respect of
Common Stock issued pursuant to Awards may be assigned by the Company to the successor or acquirer
of the Company (or the successor’s parent company, if any), in connection with such Change in
Control. A surviving corporation or acquiring corporation (or its parent) may choose to assume or
continue only a portion of an Award or substitute a comparable stock award for only a portion of an
Award. The terms of any assumption, continuation or substitution shall be set by the Committee in
accordance with the provisions of Section 3.

               (b) Merger or Similar Transaction — Awards Held by Participants. Except as otherwise
stated in the Award Document, in the event of a Change in Control as set forth in Section 2.5.3 of
the Plan, in which the surviving corporation or acquiring corporation (or its parent company) does
not assume or continue such outstanding Awards or substitute comparable stock awards for such
outstanding Awards, then with respect to Awards held by Participants that have not been assumed,
continued or substituted, the vesting of such Awards (and, if applicable, the time at which such
Awards may be exercised) shall (contingent upon the effectiveness of the Change in Control) be
accelerated in full to a date prior to the effective time of such Change in Control as the
Committee shall determine (or, if the Committee shall not determine such a date, to the date that
is five (5) days prior to the effective time of the Change in Control), and such Awards shall
terminate if not exercised (if applicable) at or prior to the effective time of the Change in
Control, and any reacquisition or repurchase rights held

 

 

by the Company with respect to such Awards
shall lapse (contingent upon the effectiveness of the Change in Control).

               (c) Merger or Similar Transaction — Payment for Awards in Lieu of Exercise.
Notwithstanding the foregoing, in the event that pursuant to Section 5.4.2(b) an Award will
terminate if not assumed, continued or substituted by the surviving or acquiring corporation or
exercised prior to the effective time of a Change in Control in accordance with Section 2.5.3 of
the Plan, the Board or the Committee may provide, in its sole discretion, that the holder of such
Award may not exercise such Award but will receive a payment, in such form as may be determined by
the Committee, equal in value to the excess, if any, of (A) the value of the property the holder of
the Award would have received upon the exercise or payment of the Award, over (B) any exercise
price payable by such holder in connection with such exercise.

               (d) Acquisition of Securities, Change in Board, Sale of Assets or Liquidation. Except
as otherwise stated in the Award Document, in the event of a Change in Control as set forth in
Sections 2.5.1, 2.5.2, 2.5.4 or 2.5.5 of the Plan, then with respect to Awards held by
Participants, the vesting of such Awards (and, if applicable, the time at which such Awards may be
exercised) shall (contingent upon the effectiveness of the Change in Control) be accelerated in
full to a date prior to the effective time of such Change in Control as the Committee shall
determine (or, if the Committee shall not determine such a date, to the date that is five (5) days
prior to the effective time of the Change in Control).

Section 6. Stock Options; In General.

     6.1 Option Grant and Award Document. Subject to the terms of the Plan, the Committee and,
subject further to the delegating resolution, the persons who are delegated authority under Section
3.2, are authorized to grant Incentive Stock Options and Non-Qualified Options (including Options
to purchase Restricted Shares) to eligible individuals. Each granted Option shall be evidenced by
an Award Document in the form that is approved by the Committee and that is not inconsistent with
the terms and conditions of the Plan.

          6.1.1 No ISOs for Non-Employees. Individuals who are not Employees may only be
granted Non-Qualified Options.

          6.1.2 $100,000 ISO Limit. The aggregate Fair Market Value (determined as of the
respective date or dates of grant) of the Common Stock for which one or more Incentive Stock
Options granted to any Employee under the Plan (or any other option plan of the Company or any
parent or Subsidiary) may for the first time become exercisable during any one calendar year shall
not exceed the sum of $100,000. To the extent the Employee holds two or more such Options which
become exercisable for the first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Stock Options shall be applied on the basis of the
order in which such Options are granted. Notwithstanding the foregoing, should the number of
shares of Common Stock for which any Incentive Stock Option first becomes exercisable

 

 

in any
calendar year exceed the applicable $100,000 limitation, then that Option may nevertheless be
exercised in that calendar year (or thereafter in accordance with its terms) for the excess number
of shares as a Non-Qualified Option.

     6.2 Exercise Price. The exercise price per share of each Option granted under the Plan
shall be fixed by the Committee, in accordance with the following provisions: The exercise price
per share of Common Stock subject to an Option shall in no event be less than 100% of the Fair
Market Value of such Common Stock on the grant date; provided that, if the individual to whom an
Incentive Stock Option is granted is a Ten Percent Stockholder, then the exercise price per share
shall not be less than 110% of the Fair Market Value per share of Common Stock on the grant date.
Notwithstanding the foregoing, an Option may be granted with an exercise price lower than 100% of
the Fair Market Value of the Common Stock if such Option is granted pursuant to an assumption or
substitution of another option in a manner consistent with the provisions of Section 409A of the
Code and, to the extent such Option is an Incentive Stock Option, the provisions of Section 424(a)
of the Code.

     6.3 Exercisability and Term of Options. Each Option granted under the Plan shall be
exercisable at such time or times and during such period as is determined by the Committee and set
forth in the Award
Document evidencing the grant. No such Option, however, shall have a maximum term in excess of ten
years measured from the grant date (five years if the option is an Incentive Stock Option granted
to a Ten Percent Stockholder).

     6.4 Exercise and Payment of the Exercise Price. An Option shall be deemed to be exercised
when the person entitled to exercise the Option gives notice of exercise to the Company in
accordance with the Option’s terms and the Company receives payment in full for the Shares as to
which the Option is exercised in one or more of the forms specified below as permitted by the
Committee or other provision for such payment is made in accordance with determinations made by the
Committee:

          6.4.1 by cash or check made payable to the Company;

          6.4.2 in shares of Common Stock held by the Optionee, provided that, if such stock was
acquired directly from the Company, it has been held for at least six months prior to such tender;

          6.4.3 pursuant to a broker assisted cashless exercise;

          6.4.4 by an arrangement substantially comparable to the preceding provisions; or

          6.4.5 by such other forms of legal consideration as determined by the Committee.

     6.5 Transfer of an Option.

 

 

          6.5.1 In General; No Transfers. During the lifetime of the Optionee, the Option, together
with any related SAR, shall be exercisable only by the Optionee and shall not be assignable or
transferable by the Optionee, except: (a) for a transfer of the Option by will or by the laws of
descent and distribution following the Optionee’s death; or (b) with respect to Non-Qualified
Options, transfers during the Optionee’s lifetime (i) pursuant to a domestic relations order (as
defined under the Code or Treasury Regulations), (ii) to immediate family members, (iii) to a trust
for the benefit of such person or persons, (iv) to a partnership in which such persons are the only
partners and/or (v) to other persons or entities according to such terms as the Committee may
determine, provided that, in any such instance set forth above, the transfer is not a “transfer for
value,” as described in the instructions to SEC Form S-8. A transferee of an Option shall be
required to furnish proof satisfactory to the Committee that the transfer meets one of the criteria
set forth in the preceding sentence.

          6.5.2 Transferred Options Still Subject to the Plan. Any Option transferred in accordance
with the provisions of Section 6.5.1 above shall continue to be subject to the same terms and
conditions of the Plan as were applicable to the Option immediately before the transfer.

     6.6 No Stockholder Rights. An Optionee shall have no stockholder rights with respect to
any shares covered by the Option until such individual shall have exercised the Option and paid the
exercise price for the purchased shares.

     6.7 Exercise and Forfeiture Following Termination of Service.

          6.7.1 In General. Except as otherwise provided in Sections 6.7.2 or 6.7.3 below (as such
Sections may be affected by the Committee pursuant to Section 6.7.5), upon a Participant’s death or
termination of Service, all Options and SARs held by the Participant that are not exercisable
immediately prior to the death or termination of Service shall terminate immediately.

          6.7.2 Exercise Period Following Termination. In the event of the death or termination of
Service of a Participant who is not a Non-Employee Director, the following provisions shall govern
the exercise period applicable to the portion of Options and SARs held by the Participant that is
exercisable immediately prior to the Participant’s death or termination of Service:

               (a) Other than Death, Permanent Disability, Retirement or Misconduct. If the
Participant terminates Service for any reason other than death, Permanent Disability, Misconduct or
Retirement while holding one or more exercisable Options or SARs, then each outstanding Option and
SAR held by such Participant shall remain exercisable during the three-month period following the
date of such termination of Service, or until the expiration of the Option, whichever period is
shorter.

               (b) Disability. If the Participant terminates Service by reason of his or her
Permanent Disability while holding one or more exercisable Options or SARs, then each outstanding
Option and SAR held by the Participant shall remain

 

 

exercisable during the 12-month period
following the date of such termination of Service, or until the expiration of the Option, whichever
period is shorter.

               (c) Death. If the Participant dies while holding one or more exercisable Options or
SARs, then each such Option and SAR shall remain exercisable until the expiration of the Option.
During such period, the Options and SARs may be exercised by the personal representative of the
Participant’s estate or by the person or persons to whom the Options and SARs are transferred
pursuant to the Participant’s will or in accordance with the laws of descent and distribution.

               (d) Misconduct. Upon termination of the Participant’s Service for Misconduct, all
outstanding Options and SARs held by the Participant shall terminate immediately and cease to be
outstanding.

               (e) Retirement. If the Participant terminates Service due to Retirement, then each
portion of an outstanding Option or SAR Award held by such
Participant (i) that is exercisable immediately prior to the date of such termination shall
remain exercisable until the expiration of the Option or SAR and (ii) that is not 100% exercisable
as of the date of such termination, but would become exercisable on the next anniversary of the
date of grant of such Option or SAR, shall become exercisable as of such anniversary date and shall
remain exercisable until the expiration of the Option or SAR.

               (f) Employment Agreements. Notwithstanding any other provision of this Section 6.7,
with respect to the particular Participant, if there is any conflict between this Section 6.7 and
any employment agreement or change of control agreement between the Participant and the Company,
such agreement will control.

          6.7.3 Exercise Period Following Termination for Non-Employee Directors. In the
event of the death or termination of Service of a Non-Employee Director, the following provisions
shall govern the exercise period applicable to the portion of Options and SARs held by the
Non-Employee Director that is exercisable immediately prior to the Non-Employee Director’s death or
termination of Service:

               (a) Other than Death or Misconduct. Upon cessation of Service as a Non-Employee
Director (for reasons other than death or Misconduct), only those Options and SARs exercisable at
the date of cessation of service shall be exercisable by the Non-Employee Director. Such Options
and SARs shall be exercisable as if such person had remained a Non-Employee Director until the
expiration of the Option or SAR.

               (b) Death. Upon the death of a Non-Employee Director, Options and SARs shall be
exercisable to the extent then exercisable, for a period of one year from the date of the
termination of the Non-Employee Director’s Service due to death, or until the expiration of the
Option or SAR, whichever period is shorter.

 

 

               (c) Misconduct. Upon termination of the Non-Employee Director’s Service for
Misconduct, all outstanding Options and SARs held by the Non-Employee Director shall terminate
immediately and cease to be outstanding.

          6.7.4 No Exercise After Expiration of Term. Notwithstanding the foregoing or any other
provision of this Plan, under no circumstances shall any Option or SAR be exercisable after the
specified expiration date of the Option or SAR.

          6.7.5 Committee Discretion. The Committee shall have complete discretion, exercisable
either at the time the Option or SAR is granted or at any time while the Option or SAR remains
outstanding:

               (a) to extend the period of time for which the Option or SAR is to remain exercisable
following the Participant’s death or cessation of Service other than for Misconduct from the
limited period in effect under Sections 6.7.2 or 6.7.3 to such
greater period of time as the Committee shall deem appropriate; provided that in no event
shall such Option or SAR be exercisable after the specified expiration date of the Option or SAR
term and no such extension of such period of time may cause the Option or SAR to be subject to tax
penalties under Section 409A of the Code; and/or

               (b) to permit one or more Options or SARs held by the Participant to be exercised, during the
limited post-Service exercise period applicable under this Section 6.7, or the extended period
under Section 6.7.5, not only with respect to the number of vested shares of Common Stock for which
each such Option or SAR is exercisable at the time of the Participant’s cessation of Service but
also with respect to any other shares subject to that Option or SAR.

Section 7. Stock Appreciation Rights.

     7.1 In General. Subject to the terms of the Plan, the Committee and, subject further to
the delegating resolution, the persons authorized under Section 3.2, are authorized to grant SARs
to eligible Participants. Each granted SAR shall be evidenced by an Award Document in the form
that is approved by the Committee and that is not inconsistent with the terms and conditions of the
Plan. The grant of an SAR provides the holder the right to receive the appreciation in value of
shares of Common Stock between the date of grant and the date of exercise. SARs may be granted
alone (“Stand-Alone SARs”) or in conjunction with all or part of any Option (“Tandem SARs”). In
the case of a Non-Qualified Option, a Tandem SAR may be granted either at or after the time of the
grant of such Option. In the case of an Incentive Stock Option, a Tandem SAR may be granted only
at the time of the grant of such Option.

     7.2 Exercise. An SAR may be exercised by a Participant by giving notice of intent to
exercise to the Company to the extent that the SAR is then, by its terms, exercisable. Upon the
exercise of a Stand-Alone SAR, a Participant will be entitled to receive, in either cash and/or
shares of Common Stock, as specified in the Award Document or determined by the Committee, an
amount equal to the excess, if any, of (a) the Fair Market Value, as of the date the SAR (or
portion thereof) is exercised, of the

 

 

shares covered by the SAR (or portion thereof) over (b) the
Fair Market Value of the shares covered by the SAR (or a portion thereof) as of the date the SAR
was granted.

     7.3 Other Terms.

          7.3.1 Term of SAR. Unless otherwise provided in the applicable Award Document at the
time of grant, the term of an SAR will be ten years, and in any event shall not exceed ten years.

          7.3.2 Exercisability. SARs will vest and become exercisable at such time or times and
subject to such terms and conditions as will be determined by the Committee at the time of grant.

          7.3.3 Termination of Service. Unless otherwise provided by the Committee at the time
of grant, SARs will be subject to the terms of Section 6.7 with respect to exercise following
termination of Service.

Section 8. Restricted Shares.

     8.1 In General. Subject to the other terms of the Plan, the Committee and, subject further
to the delegating resolution, the persons authorized under Section 3.2 may grant Restricted Shares
to eligible individuals and may impose conditions, including continued employment or performance
conditions, on such shares as it deems appropriate. Each issued Restricted Share shall be
evidenced by an Award Document in the form that is approved by the Committee and that is not
inconsistent with the terms and conditions of the Plan. The terms and conditions applicable to a
Restricted Share issuance, including the vesting periods and conditions, the form of consideration
payable, if any, and the Company’s right to repurchase unvested Restricted Shares upon a
Participant’s termination of employment shall be determined by the Committee; provided, however,
that (a) in no event shall the grant, issuance, retention, vesting and/or settlement of Restricted
Shares that are based on the achievement of “Qualifying Performance Criteria,” as defined in
Section 10.3.2, and intended to satisfy the requirements of Section 162(m) of the Code, be subject
to a performance period of less than one year and (b) no condition that is based upon continued
employment or the passage of time shall provide for vesting or settlement in full of an Award of
Restricted Shares over a period of less than three years from the date the Award is made, other
than as determined by the Committee in its sole discretion upon a Change in Control or upon the
Participant’s death, Permanent Disability or Retirement.

     8.2 Stockholder Rights. Except as otherwise set forth in Section 8.2.2 below, elsewhere in
the Plan or determined by the Committee in its sole discretion, the Participant shall have full
stockholder rights with respect to any shares of Common Stock issued to him or her as Restricted
Shares under the Plan, whether or not his or her interest in those shares is vested.

          8.2.1 Voting; Change in Shares. The Participant shall have the right to vote with
respect to any shares of Common Stock issued to him or her as Restricted

 

 

Shares under the Plan.
Any new, additional or different shares of stock or other property (including money paid other than
as a regular cash dividend) which the Participant may have the right to receive with respect to his
or her unvested shares by reason of any stock split, recapitalization, combination of shares,
exchange of shares or other change affecting the outstanding Common Stock as a class without the
Company’s receipt of consideration or by reason of any Change in Control, shall be issued subject
to (a) the same vesting requirements applicable to his or her unvested shares and (b) such escrow
arrangements as the Committee shall deem appropriate.

          8.2.2 Cash and Stock Dividends. Cash dividends and stock dividends with respect to a
Participant’s Restricted Shares shall be withheld by the Company for the
Participant’s account, and interest may be credited on the amount of cash dividends withheld
at a rate and subject to such terms as determined by the Committee. The dividends so withheld and
attributable to any particular Restricted Share (and interest thereon, if applicable) shall be
distributed to the Participant in cash or, at the discretion of the Committee, in shares of Common
Stock having a fair market value equal to the amount of such dividends and interest, if applicable,
upon the release of restrictions on such Restricted Share and, if such Restricted Share is
forfeited, the Participant shall have no right to such cash dividends, stock dividends or interest.

     8.3 Unvested Shares May be Escrowed. Unvested Restricted Shares, including any unvested
Restricted Shares purchased pursuant to the exercise of an Option, may, in the Committee’s
discretion, be held in escrow by the Company until the Participant’s interest in such Restricted
Shares vests or may be issued directly to the Participant with restrictive legends on the
certificates evidencing such unvested shares.

     8.4 Transferability of Shares. The Participant shall have no right to transfer any
unvested shares of Common Stock issued to him or her under this Section 8. For purposes of this
restriction, the term “transfer” shall include (without limitation) any sale, pledge, assignment,
encumbrance, gift or other disposition of such shares, whether voluntary or involuntary. However,
the Participant shall have the right to make a gift of unvested shares issued to him or her under
this Section 8 to his or her spouse or issue, including adopted children, or to a trust established
for such spouse or issue, provided the transferee of such shares delivers to the Company a written
agreement to be bound by all the provisions of the Plan, including without limitation this Section
8, and the Award Document applicable to the gifted shares.

Section 9. Restricted Share Units. Subject to the other terms of the Plan, the Committee
and, subject further to the delegating resolution, the persons authorized under Section 3.2, may
grant Restricted Share Units to eligible individuals and may impose conditions, including continued
employment or performance conditions, on such units as it may deem appropriate. Each granted
Restricted Share Unit shall be evidenced by an Award Document in the form that is approved by the
Committee and that is not inconsistent with the terms and conditions of the Plan. Each granted
Restricted Share Unit shall entitle the Participant to whom it is granted to a distribution from
the Company in an amount equal to the Fair Market Value (at the time of the distribution) of one
share of Common Stock. Distributions may be made in cash and/or shares of Common Stock.

 

 

All other
terms governing Restricted Share Units, such as number of units granted, vesting, performance
criteria, if any, time and form of payment and termination of units shall be set forth in the Award
Document; provided, however, that (a) in no event shall the grant, issuance, retention, vesting
and/or settlement of Restricted Share Units that is based on the achievement of Qualifying
Performance Criteria, and intended to satisfy the requirements of Section 162(m) of the Code, be
subject to a performance period of less than one year and (b) no condition that is based upon
continued employment or the passage of time shall provide for vesting or
settlement in full of an Award of Restricted Share Units over a period of less than three years
from the date the Award is made, other than as determined by the Committee in its sole discretion
upon a Change in Control or upon the Participant’s death, Permanent Disability or Retirement..

Section 10. Miscellaneous Provisions.

     10.1 Amendment and Termination of the Plan and Awards. Except as provided herein, the
Board has complete and exclusive power and authority to amend, modify or terminate the Plan (or any
component thereof) in any or all respects whatsoever at any time, provided, however, that
stockholder approval shall be required for any amendment that (a) increases the total number of
shares reserved for the purposes of the Plan and the maximum number of shares for which any one
individual may be granted Awards for any given year under the Plan, except for permitted
adjustments under Section 5.4 of the Plan, (b) expands the persons or class of persons eligible to
receive Awards, or (c) materially increases the benefits accruing to Participants under the Plan,
but only to the extent required by law or under the listing requirements of the NYSE or other
exchange or market on which the Common Stock is at the time listed or admitted to trading.

     No such amendment, modification or termination shall adversely affect the rights or
obligations with respect to Awards then outstanding under the Plan, unless the Participant consents
to such amendment, modification or termination except to the extent that the Committee reasonably
determines that such amendment, modification or termination is necessary or appropriate to comply
with applicable law or the rules or regulations of any securities exchange or market on which the
Common Stock is listed or admitted to trading. Notwithstanding the foregoing, an amendment to the
Plan shall be subject to stockholder approval to the extent required by law or under the listing
requirements of the NYSE or other market or exchange on which the Common Stock is at the time
listed or admitted to trading.

     10.2 Tax Withholding. No later than the date as of which an amount first becomes
includible in the gross income of the Participant for federal income tax purposes with respect to
any Award under the Plan, the Participant will pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of any federal, state or local taxes of any
kind required by law to be withheld with respect to such amount. Notwithstanding anything
contained in the Plan to the contrary, the obligations of the Company under the Plan will be
conditioned on such payment or arrangements, and the Company will, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise due to the
Participant.

 

 

     10.3 Qualifying Performance-Based Compensation.

          10.3.1 General. The Committee may establish performance criteria and level of achievement versus such criteria
that shall determine the number of shares of Common Stock to be granted, retained, vested, issued
or issuable under or in settlement of or the amount payable pursuant to an Award, which criteria
may be based on Qualifying Performance Criteria or other standards of financial performance and/or
personal performance evaluations. In addition, the Committee may specify a percentage of an Award
that is intended to satisfy the requirements for “performance-based compensation” under Section
162(m) of the Code, provided that the performance criteria for any portion of an Award that is
intended by the Committee to satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code shall be a measure based on one or more Qualifying Performance Criteria
selected by the Committee and specified in writing at the time the Award is granted not later than
ninety (90) days (or such shorter time as may be required by Section 162(m) of the Code) after the
commencement of the period of service to which the performance goals relate, provided that the
outcome is substantially uncertain at that time. The Committee shall certify the extent to which
any Qualifying Performance Criteria has been satisfied and the amount payable as a result thereof,
prior to payment, settlement or vesting of any Award that is intended to satisfy the requirements
for “performance-based compensation” under Section 162(m) of the Code. Notwithstanding
satisfaction of any performance goals, the number of shares of Common Stock issued under or the
amount paid under an Award may, to the extent specified in the Award Document, be reduced by the
Committee on the basis of such further considerations as the Committee in its sole discretion shall
determine.

          10.3.2 Qualifying Performance Criteria. For purposes of this Plan, the term “Qualifying
Performance Criteria” shall mean any one or more of the following performance criteria, either
individually, alternatively or in any combination, applied to either the Company as a whole or to a
business unit, Subsidiary or business segment, either individually, alternatively or in any
combination, and measured either annually or cumulatively over a period of years, on an absolute
basis or relative to a pre-established target, to previous years’ results or to a designated
comparison group, in each case as specified by the Committee in the Award: (i) after tax cash flow;
(ii) earnings per-share; (iii) earnings before interest; taxes, depreciation and amortization
(“EBITDA”); (iv) free cash flow; (v) return on capital; (vi) return on equity; (vii) return on
average capital employed; (viii) sales; (iv) operating expenses as a percentage of sales; (x) gross
profit; (xi) days’ purchases outstanding; (xii) days’ sales outstanding; (xiii) operating income;
(xiv) growth in stockholder value relative to a peer group index; (xv) working capital; and (xvi)
economic value added. The Committee may appropriately adjust any evaluation of performance under a
Qualifying Performance Criteria to exclude any of the following events that occurs during a
performance period, provided that the decision to make any such adjustment must occur at the time
the applicable Award is granted: (A) asset write-downs; (B) litigation or claim judgments or
settlements; (C) the effect of changes in tax law, accounting principles or other such laws or
provisions affecting reported results; (D) accruals for reorganization and restructuring programs;
and (E) any extraordinary non-recurring items as described in Accounting Principles Board Opinion

 

 

No. 30 and/or in management’s discussion and analysis of
financial condition and results of operations appearing in the Company’s annual report to
stockholders for the applicable year.

          10.3.3 Section 162(m) Stockholder Re-Approval. If so determined by the Committee, the
provisions of the Plan regarding performance-based compensation intended to be exempt from the
application of Section 162(m) of the Code described in this Section 10.3.3 and elsewhere in the
Plan shall be disclosed and re-approved by stockholders of the Company no later than the first
stockholder meeting that occurs in the fifth year following the year that the stockholders
previously approved such provisions, in order for the Awards granted after such time to be exempt
from the deduction limitations of Section 162(m) of the Code. Nothing in this Section 10.3.3,
however, shall affect the validity of Awards granted after such time if such stockholder approval
has not been obtained.

     10.4 Effective Date and Term of Plan.

          10.4.1 Effective Date. Subject to the approval of the Company’s stockholders as described
in Section 1 of the Plan, the Plan will become effective on August 31, 2006 (the Plan Effective
Date, as defined in Section 1.2).

          10.4.2 Term of the Plan. The Plan will continue in effect through and including the date
which is the 10th anniversary of the Plan Effective Date, provided that any Award that
is granted on or prior to such 10th anniversary may extend pursuant to its terms beyond
that date.

     10.5 No Employment or Service Rights. Neither the action of the Company in establishing
the Plan, nor any action taken by the Committee hereunder, nor any provision of the Plan shall be
construed so as to grant any individual the right to remain in the employ or service of the Company
(or any Subsidiary) for any period of specific duration, and the Company (or any Subsidiary
retaining the services of such individual) may terminate such individual’s employment or service at
any time and for any reason, with or without cause. Nothing in the Plan will prevent the Board
from adopting other or additional compensation arrangements, subject to stockholder approval if
such approval is required; and such arrangements may be either generally applicable or applicable
only in specific cases.

     10.6 Unfunded Status of Plan. The Plan is intended to be “unfunded.” With respect to any
payments not yet made to a Participant by the Company, nothing contained herein will give any such
Participant any rights that are greater than those of a general unsecured creditor of the Company.
In its sole discretion, the Committee may authorize the creation of grantor trusts or other
arrangements to meet the obligations created under the Plan with respect to Awards.

     10.7 Representations; Legends. The Committee may require each Participant to represent to and agree with the Company in writing
that the Participant is acquiring securities of the Company for investment purposes and without a
view to distribution

 

 

thereof and as to such other matters as the Committee believes are
appropriate. The certificate evidencing any Award and any securities issued pursuant thereto may
include any legend that the Committee deems appropriate to reflect any restrictions on transfer and
compliance with securities laws.

     10.8 Regulatory Matters. The implementation of the Plan, the granting of any Award under
the Plan and the issuance of any shares under the Plan shall be subject to the Company’s
procurement of all approvals and permits required by regulatory authorities having jurisdiction
over the Plan, the Awards granted under it, and the Common Stock issued pursuant to it. All
certificates for Common Stock or other securities delivered under the Plan shall be subject to such
share-transfer orders and other restrictions as the Board may deem advisable under the rules,
regulations, and other requirements of the Securities Act of 1933, as amended, the Exchange Act,
the NYSE or other exchange or market on which the Common Stock is at the time listed or admitted to
trading, and any other applicable federal or state securities laws.

     10.9 Invalid Provisions. In the event that any provision of the Plan is found to be
invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability
shall not be construed as rendering any other provision contained herein as invalid or
unenforceable, and all such other provisions shall be given full force and effect to the same
extent as though the invalid or unenforceable provision was not contained in the Plan.

     10.10 Committee Action. Notwithstanding anything to the contrary set forth in the Plan,
any and all actions of the Committee, taken under or in connection with the Plan and any
agreements, instruments, documents, certificates or other writings entered into, executed, granted,
issued and/or delivered pursuant to the terms hereof, will be subject to and limited by any and all
votes, consents, approvals, waivers or other actions of all or certain stockholders of the Company
or other persons required by:

          10.10.1 the Company’s Certificate of Incorporation (as the same may be amended and/or restated
from time to time);

          10.10.2 the Company’s By-laws (as the same may be amended and/or restated from time to time);
and

          10.10.3 any other agreement, instrument, document or writing now or hereafter existing,
between or among the Company and its stockholders or other persons (as the same may be amended from
time to time).

     10.11 Deferrals. To the extent permitted by applicable law, the Committee, in its sole discretion, may determine
that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement
of all or a portion of any Award may be deferred and may establish programs and procedures for
deferral elections to be made by Participants. Deferrals by Participants will be made in
accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Committee
may provide for distributions while a Participant is still an employee. The Committee is
authorized to

 

 

make deferrals of Awards and determine when, and in what annual percentages,
Participants may receive payments, including lump sum payments, following the Participant’s
termination of employment or retirement, and implement such other terms and conditions consistent
with the provisions of the Plan and in accordance with applicable law.

     10.12 Governing Law. The Plan and all Awards granted hereunder shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to the application of
the principles of conflicts of laws.

     10.13 Successors and Assigns. The provisions of the Plan shall inure to the benefit of,
and be binding upon, the Company and its successors or assigns and the Participants, the legal
representatives of their estates, their heirs or legatees and their permitted assignees.

     10.14 Notices. Any notice to be given to the Company pursuant to the provisions of the
Plan shall be addressed to the Company in care of its Secretary (or such other person as the
Company may designate from time to time) at its principal executive office, and any notice to be
given to a Participant will be delivered personally or addressed to him or her at the address last
known by or on file with the Company, or at such other address as such Participant may hereafter
designate in writing to the Company. Any such notice will be deemed duly given on the date and at
the time delivered via personal, courier or recognized overnight delivery service or, if sent via
facsimile, on the date and at the time faxed with confirmation of delivery or, if mailed, on the
date five days after the date of the mailing. Delivery of a notice by telecopy (with confirmation)
will be permitted and will be considered delivery of a notice notwithstanding that it is not an
original that is received.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]