Document:

EX-10.1 1999 STOCK PLAN

Exhibit 10.1

As amended through

March 27, 2009

TIME WARNER INC.

1999 STOCK PLAN

1.   PURPOSES OF THE PLAN.

     The Plan is intended to encourage ownership of Shares by Key Employees and directors of and
certain consultants to the Company or its Affiliates in order to attract and retain such people, to
motivate them to work for the benefit of the Company or an Affiliate, and to provide an additional
incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for
the granting of ISOs and Non-Qualified Options and awards of Stock Purchase Rights and Restricted
Stock Units.

2.   DEFINITIONS.

     Unless otherwise specified or unless the context otherwise requires, the following terms, as
used in this Time Warner Inc. 1999 Stock Plan, have the following meanings:

	 	 	 	Administrator means the Board of Directors, unless it has delegated power to
act on its behalf to the Committee, in which case the Administrator means the
Committee.
	 
	 	 	 	Affiliate, with respect to ISOs, means a corporation which, for purposes of
Section 424 of the Code, is a parent or subsidiary of the Company, direct or
indirect, and, with respect to Non-Qualified Options, means any corporation, company
or other entity whose financial results are consolidated with those of the Company
in accordance with U.S. generally accepted accounting principles, all as determined
by the Administrator.
	 
	 	 	 	Board of Directors means the Board of Directors of the Company.
	 
	 	 	 	Change in Control means either a Corporate Change in Control or a
Transactional Change in Control.
	 
	 	 	 	Code means the United States Internal Revenue Code of 1986, as amended.
	 
	 	 	 	Committee means the Compensation Committee of the Board of Directors, or its
successor, or such other committee of the Board of Directors to which the Board of
Directors has delegated power to act under or pursuant to the provisions of the Plan
or a subcommittee of the Compensation Committee established by the Compensation
Committee.
	 
	 	 	 	Common Stock means shares of the Company’s common stock, $.01 par value per
share.

 

 

	 	 	 	Company means (i) with respect to the periods prior to January 11, 2001,
America Online, Inc., a Delaware corporation and (ii) with respect to periods on and
after January 11, 2001, Time Warner Inc., a Delaware corporation named AOL Time
Warner Inc. prior to October 16, 2003.
	 
	 	 	 	Corporate Change in Control means the happening of any of the following
events:

	 	(1)	 	the acquisition by any individual, entity or group (an “Entity”), including any
“person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (i) the then outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined
voting power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); excluding, however, the following: (A) any acquisition directly from
the Company (excluding any acquisition by virtue of the exercise of an exercise,
conversion or exchange privilege unless the security being so exercised, converted
or exchanged was itself acquired directly from the Company), (B) any acquisition by
the Company, or (C) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or by any corporation controlled by the
Company; or
	 
	 	(2)	 	a change in the composition of the Board of Directors since October 28, 1999,
such that the individuals who, as of such date, constituted the Board of Directors
(the “Incumbent Board”) cease for any reason to constitute at least a majority of
such Board; provided that any individual who becomes a director of the Company
subsequent to October 28, 1999 whose election, or nomination for election by the
Company’s stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any individual who was initially elected
as a director of the Company as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person or Entity other than the Board shall not be
deemed a member of the Incumbent Board.

	 	 	 	Disability or Disabled means permanent and total disability as
defined in Section 22(e)(3) of the Code.
	 
	 	 	 	Fair Market Value of a Share of Common Stock means: (a) on and after October
1, 2008, the closing sale price of the Shares on the New York Stock Exchange
Composite Tape, or, if the Shares are not listed or admitted on any national
securities exchange, the average of the per Share closing bid price and per Share
closing asked price on such date as quoted on the National Association of Securities
Dealers Automated Quotation System (or such market in which such prices are
regularly quoted) (the “NASDAQ”), or, if no sale of Shares shall have been reported
on the New York Stock Exchange Composite Tape or quoted on the

2

 

	 	 	 	NASDAQ on such date, then the immediately preceding date on which sales of the
Shares have been so reported or quoted shall be used, and (ii) if there should not
be a public market for the Shares on such date, the Fair Market Value shall be the
value established by the Committee in good faith, and (b) prior to October 1, 2008:

	 	(1)	 	If the Common Stock is listed on a national securities exchange or traded in the
over-the-counter market and sales prices are regularly reported for the Common
Stock, the average of the high and low sales prices of a share of the Common Stock
on the New York Stock Exchange or other comparable reporting system for the
applicable date, or if the applicable date is not a trading day, the trading day
immediately preceding the applicable date;
	 
	 	(2)	 	If the Common Stock is not traded on a national securities exchange but is
traded on the over-the-counter market, if sales prices are not regularly reported
for the Common Stock for the trading day referred to in clause (1), and if bid and
asked prices for the Common Stock are regularly reported, the mean between the bid
and the asked price for the Common Stock at the close of trading in the
over-the-counter market on the applicable date, or if the applicable date is not a
trading day, on the trading day immediately preceding the applicable date; and
	 
	 	(3)	 	If the Common Stock is neither listed on a national securities exchange nor
traded in the over-the-counter market, such value as the Administrator, in good
faith, shall determine.

	 	 	 	Involuntary Employment Action shall mean any change in the terms and
conditions of the Participant’s employment with the Company or any successor,
without cause (as defined herein), to such extent that:

	 	(1)	 	the Participant shall fail to be vested with power, authority and resources
analogous to the Participant’s title and/or office prior to the Change in Control,
or
	 
	 	(2)	 	the Participant shall lose any significant duties or responsibilities attending
such office, or
	 
	 	(3)	 	there shall occur a reduction in the Participant’s base compensation, or
	 
	 	(4)	 	the Participant’s employment with the Company, or its successor, is terminated
without cause (as defined herein).

	 	 	 	ISO means an option meant to qualify as an incentive stock option under
Section 422 of the Code.
	 
	 	 	 	Key Employee means an employee of the Company or of an Affiliate (including,
without limitation, an employee who is also serving as an officer or director of the
Company or of an Affiliate), designated by the Administrator to be eligible to be
granted one or more Options, Stock Purchase Rights or Restricted Stock Units under
the Plan; provided however, that Key Employee shall not include any

3

 

	 	 	 	person who: (i) is not on the payroll of the Company or an Affiliate as a full-time
or part-time employee or (ii) directly or indirectly provides services to the
Company or an Affiliate pursuant to a contractual or other arrangement, written or
otherwise between the Company or an Affiliate and either that person or a third
party, which does not designate such person as an employee (regardless of whether a
government agency, court or other entity subsequently determines that such person is
an employee of the Company or an Affiliate for purposes of employment taxes or for
any other purpose). Anything in the prior sentence to the contrary notwithstanding,
a person who is providing services pursuant to a contractual or other arrangement
may be eligible for participation in the Plan as a consultant who is designated by
the Administrator in accordance with Paragraph 5 of the Plan.

	 	 	 	Non-Qualified Option means an option which is not intended to qualify as an
ISO.
	 
	 	 	 	Option means an ISO or Non-Qualified Option granted under the Plan.
	 
	 	 	 	Option Agreement means an agreement between the Company and a Participant
delivered pursuant to the Plan, in such form as the Administrator shall approve.
	 
	 	 	 	Participant means a Key Employee, director or consultant of the Company or
of an Affiliate to whom one or more Options, Stock Purchase Rights or Restricted
Stock Units are granted under the Plan. As used herein, “Participant” shall include
“Participant’s Survivors” where the context requires.
	 
	 	 	 	Plan means this Time Warner Inc. 1999 Stock Plan.
	 
	 	 	 	Restricted Stock means shares of Common Stock acquired pursuant to a grant
of Stock Purchase Rights under Paragraph 14 below.
	 
	 	 	 	Restricted Stock Purchase Agreement means a written agreement between the
Company and a Participant evidencing the terms and restrictions applying to stock
purchased under a Stock Purchase Right, in such form as the Administrator shall
approve.
	 
	 	 	 	Restricted Stock Unit means the right to receive Shares pursuant to
Paragraph 15 of the Plan, as evidenced by a Restricted Stock Units Agreement.
	 
	 	 	 	Restricted Stock Units Agreement means a written agreement between the
Company and a Participant evidencing the terms and restrictions applying to the
grant of a Restricted Stock Unit, in such form as the Administrator shall approve.
	 
	 	 	 	Shares means shares of the Common Stock as to which Options or Stock
Purchase Rights or Restricted Stock Units have been or may be granted under the Plan
or any shares of capital stock into which the Shares are changed or for which they
are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued
upon exercise of Options or Stock Purchase Rights or payment with respect

4

 

	 	 	 	to Restricted Stock Units granted under the Plan may be
authorized and unissued shares or shares held by the Company in its treasury, or both.

	 	 	 	Stock Purchase Right means the right to purchase Common Stock pursuant to
Paragraph 14 of the Plan, as evidenced by a Restricted Stock Purchase Agreement.
	 
	 	 	 	Survivors means a deceased Participant’s legal representatives and/or any
person or persons who acquired the Participant’s rights to an Option. Stock Purchase
Right or Restricted Stock Unit by will or by the laws of descent and distribution.
	 
	 	 	 	Transactional Change in Control shall mean any of the following transactions
to which the Company is a party:

	 	(1)	 	a reorganization, recapitalization, merger or consolidation (a “Corporate
Transaction”) of the Company, unless securities representing 60% or more of either
the outstanding shares of common stock or the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the Company or the corporation resulting from such Corporate
Transaction (or the parent of such corporation) are held subsequent to such
transaction by the person or persons who were the beneficial holders of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Corporate Transaction, in substantially the same
proportions as their ownership immediately prior to such Corporate Transaction; or
	 
	 	(2)	 	the sale, transfer or other disposition of all or substantially all of the
assets of the Company.

	 	 	 	To Vest means that you have obtained a contingent right to exercise,
purchase or receive Shares pursuant to a defined number of your awards hereunder, as
defined by and subject to the terms and conditions set forth in the pertinent
Agreement and this Plan. Unless and until your award Vests pursuant to the terms of
the pertinent Agreement and this Plan, as well as the vesting schedule included in
your notice of grant, you have not obtained any such right to exercise, purchase or
receive Shares pursuant to any of your unvested awards (except as may be provided in
Paragraphs 12 and 13 of this Plan and in the pertinent Agreement).

3.   SHARES SUBJECT TO THE PLAN.

     The number of Shares which may be issued from time to time pursuant to this Plan shall be
44,843,049 or the equivalent of such number of Shares after the effect of any stock split, stock
dividend, combination, recapitalization or similar transaction in accordance with Paragraph 18 of
the Plan. No more than 5% of such number of Shares may be issued in connection with grants of
Stock Purchase Rights or Restricted Stock Units.

     If an Option ceases to be “outstanding”, in whole or in part, the Shares which were subject to
such Option shall be available for the granting of other Options under the Plan. Any

5

 

Option shall be treated as “outstanding” until such Option is exercised in full, or terminates
or expires under the provisions of the Plan, or by agreement of the parties to the pertinent Option
Agreement. Shares that have actually been issued under the Plan upon exercise of an Option or a
Stock Purchase Right or delivery of Shares pursuant to a Restricted Stock Unit shall not be
returned to the Plan and shall not become available for the granting of other Options, Stock
Purchase Rights or Restricted Stock Units under the Plan.

4.   ADMINISTRATION OF THE PLAN.

     Subject to the provisions of the Plan, the Administrator is authorized to:

	 	a.	 	Interpret the provisions of the Plan or of any Option, Option Agreement, Stock
Purchase Right, Restricted Stock Purchase Agreement, Restricted Stock Unit or
Restricted Stock Units Agreement and to make all rules and determinations which it
deems necessary or advisable for the administration of the Plan;
	 
	 	b.	 	Determine which employees of the Company or of an Affiliate shall be designated
as Key Employees and which of the Key Employees, directors and consultants shall be
granted Options, Stock Purchase Rights or Restricted Stock Units;
	 
	 	c.	 	Determine the number of Shares for which an Option, Options, Stock Purchase
Rights or Restricted Stock Units shall be granted, provided, however, that in no event
shall Options, Stock Purchase Rights or Restricted Stock Units to purchase more than
1,793,721 Shares be granted to any Participant in any fiscal year;
	 
	 	d.	 	Specify the terms and conditions upon which an Option, Options, Stock Purchase
Rights or Restricted Stock Units may be granted; and
	 
	 	e.	 	Award Options, Stock Purchase Rights or Restricted Stock Units to Participants
who are foreign nationals or employed or located outside the United States, or both, on
such terms and conditions, including imposing conditions on the exercise or Vesting of
Options, Stock Purchase Rights or Restricted Stock Units, different from those
applicable to Options, Stock Purchase Rights or Restricted Stock Units granted to
Participants employed or located in the United States as may, in the judgment of the
Administrator, be necessary or desirable in order to recognize differences in local
law, tax policy or customs;

provided, however, that all such interpretations, rules, determinations, terms and conditions shall
be made and prescribed in the context of preserving the tax status under Section 422 of the Code of
those Options which are designated as ISOs. Subject to the foregoing, the interpretation and
construction by the Administrator of any provisions of the Plan or of any Option, Stock Purchase
Right or Restricted Stock Units granted under it shall be final, unless otherwise determined by the
Board of Directors, if the Administrator is the Committee. The Administrator’s determinations
under the Plan need not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, Options, Stock Purchase Rights or Restricted Stock Units under the Plan
(whether or not such persons are similarly situated). Without limiting the generality of the
foregoing, the Administrator shall be entitled, among other things, to make

6

 

non-uniform and selective determinations, and to enter into non-uniform and selective Option
Agreements, Restricted Stock Purchase Agreements or Restricted Stock Units Agreements as to (a) the
persons to receive Options, Stock Purchase Rights or Restricted Stock Units under the Plan, (b) the
terms and provisions of Options, Stock Purchase Rights or Restricted Stock Units under the Plan,
and (c) whether a termination of service with the Company and any Affiliate has occurred.

     No member of the Board of Directors or the Administrator shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.

5.   ELIGIBILITY FOR PARTICIPATION.

     The Administrator will, in its sole discretion, name the Participants in the Plan, provided,
however, that each Participant must be a Key Employee, director or consultant of the Company or of
an Affiliate at the time an Option, Stock Purchase Right or Restricted Stock Unit is granted.
Members of the Company’s Board of Directors who are not employees of the Company or of an Affiliate
may receive Options, Stock Purchase Rights or Restricted Stock Units pursuant to Paragraph 6,
Subparagraph A (f), but only pursuant thereto. Notwithstanding any of the foregoing provisions,
the Administrator may authorize the grant of an Option, Stock Purchase Right, or Restricted Stock
Unit to a person not then a Key Employee, director or consultant of the Company or of an Affiliate.
The actual grant of such Option, Stock Purchase Right or Restricted Stock Unit, however, shall be
conditioned upon such person becoming eligible to become a Participant at or prior to the time of
the execution of the Option Agreement, Restricted Stock Purchase Agreement or Restricted Stock
Units Agreement evidencing such Option, Stock Purchase Right or Restricted Stock Unit, as
applicable. ISOs may be granted only to Key Employees. Non-Qualified Options may be granted to
any Key Employee, director or consultant of the Company or an Affiliate. Stock Purchase Rights and
Restricted Stock Units shall be granted only in connection with the hiring or retention of a Key
Employee. The granting of any Option, Stock Purchase Right or Restricted Stock Unit to any
individual shall neither entitle that individual to, nor disqualify him or her from, participation
in any other grant of Options, Stock Purchase Rights or Restricted Stock Unit.

6.   TERMS AND CONDITIONS OF OPTIONS.

     Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company
and, to the extent required by law or requested by the Company, by the Participant. The
Administrator may provide that Options be granted subject to such terms and conditions as the
Administrator may deem appropriate including, without limitation, subsequent approval by the
stockholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be
subject to at least the following terms and conditions:

	 	A.	 	Non-Qualified Options: Each Option intended to be a Non-Qualified
Option shall be subject to the terms and conditions which the Administrator determines
to be appropriate and in the best interest of the Company, subject to the following
minimum standards for any such Non-Qualified Option:

	 	a.	 	Option Price: The option price (per share) of the Shares
covered by each Option shall be determined by the Administrator but shall not
be less than one hundred percent (100%) of the Fair Market Value (per share) of
the Shares on the date of grant of the Option.

7

 

	 	b.	 	Each Option Agreement shall state the number of Shares to which
it pertains;
	 
	 	c.	 	Each Option Agreement shall state the date or dates on which it
first is exercisable and the date after which it may no longer be exercised,
and may provide that the Option rights Vest or become exercisable in
installments over a period of months or years, or upon the occurrence of
certain conditions or the attainment of stated goals or events; and
	 
	 	d.	 	Exercise of any Option may be conditioned upon the
Participant’s execution of a stock purchase agreement in form satisfactory to
the Administrator providing for certain protections for the Company and its
other stockholders, including requirements that:

	 	i.	 	The Participant’s or the Participant’s
Survivors’ right to sell or transfer the Shares may be restricted; and
	 
	 	ii.	 	The Participant or the Participant’s Survivors
may be required to execute letters of investment intent and must also
acknowledge that the Shares will bear legends noting any applicable
restrictions.

	 	e.	 	Limitation on Grant of Non-Qualified Options: No Non-Qualified
Option shall be granted after the date provided in Paragraph 24 of this Plan.
	 
	 	f.	 	Directors’ Options: Each director of the Company who is not an
employee of the Company or any Affiliate, upon first being elected or appointed
to the Board of Directors, shall be granted a Non-Qualified Option to purchase
3,588 Shares; provided, however, that the Administrator shall be entitled to
grant an Option for such higher number of Shares as may be appropriate (as
determined by the Board of Directors) for recruitment purposes. Each director
of the Company who is not an employee of the Company or any Affiliate on
January 18, 2001, shall be granted on such date a Non-Qualified Option to
purchase 23,319 Shares as an initial grant for joining the Board of Directors.
For the annual meeting of stockholders in 2002, on the date following the
annual meeting of stockholders of the Company, giving effect to the election of
any director or directors at such annual meeting of stockholders, each director
who is not an employee of the Company or any Affiliate and who has served at
least six months as a director shall be granted a Non-Qualified Option to
purchase 17,938 Shares. Beginning with the annual meeting of stockholders in
2003, on the date following the annual meeting of stockholders of the Company
each year, giving effect to the election of any director or directors at such

8

 

	 	 	 	annual meeting of stockholders, each director who is not an employee of the
Company or any Affiliate and who has served at least six months as a
director shall be granted a Non-Qualified Option to purchase 3,588 Shares.
Each Option granted pursuant to this Paragraph 6(A)(f) shall (i) have an
exercise price equal to the Fair Market Value (per share) of the Shares on
the date of grant of the Option, (ii) have a term of ten (10) years, and
(iii) Vest in installments of 25% annually over a four-year period and on
the date of a meeting of stockholders at which directors are elected if the
director does not stand for re-election or is not re-elected at such
meeting, unless a different vesting schedule is established by the
Administrator in the applicable Option Agreement. The Board of Directors
may amend this Paragraph 6(A)(f) to increase, reduce, eliminate, or
institute option grants for Board, Committee or other individual or
collective service under this Plan.

	 	B.	 	ISOs: Each Option intended to be an ISO shall so state and shall be
issued only to a Key Employee and be subject to at least the following terms and
conditions, with such additional restrictions or changes as the Administrator
determines are appropriate but not in conflict with Section 422 of the Code and
relevant regulations and rulings of the Internal Revenue Service:

	 	a.	 	Minimum standards: The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph 6(A) above, except
clauses (a) and (f) thereunder.
	 
	 	b.	 	Option Price: Immediately before the Option is granted, if the
Participant owns, directly or by reason of the applicable attribution rules in
Section 424(d) of the Code:

	 	i.	 	Ten percent (10%) or less of the total
combined voting power of all classes of stock of the Company or an
Affiliate, the Option price per share of the Shares covered by each
Option shall not be less than one hundred percent (100%) of the Fair
Market Value per share of the Shares on the date of the grant of the
Option.
	 
	 	ii.	 	More than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or an
Affiliate, the Option price per share of the Shares covered by each
Option shall not be less than one hundred ten percent (110%) of the
Fair Market Value on the date of grant.

	 	c.	 	Term of Option: For Participants who own

	 	i.	 	Ten percent (10%) or less of the total
combined voting power of all classes of stock of the Company or an
Affiliate, each Option shall terminate ten (10) years from the date of
the grant or at such earlier time as the Option Agreement may provide.

9

 

	 	ii.	 	More than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or an
Affiliate, each Option shall terminate five (5) years from the date of
the grant or at such earlier time as the Option Agreement may provide.

	 	d.	 	Limitation on Yearly Exercise: The Option Agreements shall
restrict the amount of Options which may be exercisable in any calendar year
(under this or any other ISO plan of the Company or an Affiliate) so that the
aggregate Fair Market Value (determined at the time each ISO is granted) of the
stock with respect to which ISOs are exercisable for the first time by the
Participant in any calendar year does not exceed one hundred thousand dollars
($100,000), provided that this subparagraph (d) shall have no force or effect
if its inclusion in the Plan is not necessary for Options issued as ISOs to
qualify as ISOs pursuant to Section 422(d) of the Code.
	 
	 	e.	 	Limitation on Grant of ISOs: No ISOs shall be granted after
the date provided in Paragraph 24 of this Plan.
	 
	 	f.	 	To the extent that an Option which is intended to be an ISO
fails to so qualify, it shall be treated as a Non-Qualified Option.

7.   EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.

     An Option (or any part or installment thereof) shall be exercised in accordance with
procedures established by the Company by giving written notice to the Company at its principal
executive office address, or such other address as the Company shall determine, together with
provision for payment of the full purchase price in accordance with this Paragraph for the Shares
as to which the Option is being exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is being exercised and
shall contain any representation required by the Plan or the Option Agreement. Payment of the
purchase price for the Shares as to which such Option is being exercised shall be made (a) in
United States dollars in cash or by check, or (b) at the discretion of the Administrator, through
delivery of shares of Common Stock having a Fair Market Value equal as of the date of the exercise
to the cash exercise price of the Option, or (c) at the discretion of the Administrator, by
delivery of the grantee’s personal recourse note bearing interest payable not less than annually at
no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (d)
at the discretion of the Administrator, in accordance with a cashless exercise program established
with a securities brokerage firm, and approved by the Administrator, or (e) at the discretion of
the Administrator, through such other method of payment approved by the Administrator, or (f) at
the discretion of the Administrator, by any combination of (a), (b), (c), (d) and (e) above.
Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an
ISO as is permitted by Section 422 of the Code.

     The Company shall then reasonably promptly deliver the Shares as to which such Option was
exercised to the Participant (or to the Participant’s Survivors, as the case may be). In
determining what constitutes “reasonably promptly,” it is expressly understood that the delivery

10

 

of the Shares may be delayed by the Company in order to comply with any law or regulation
(including, without limitation, state securities or “blue sky” laws) which requires the Company to
take any action with respect to the Shares prior to their issuance. The Shares shall, upon
delivery, be evidenced by an appropriate certificate or certificates for fully paid, non-assessable
Shares.

     The Administrator shall have the right to accelerate the date of exercise of any installment
of any Option; provided that the Administrator shall not accelerate the exercise date of any
installment of any Option granted to any Key Employee as an ISO (and not previously converted into
a Non-Qualified Option pursuant to Paragraph 21) if such acceleration would violate the annual
vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(B)(d).

     The Administrator may, in its discretion, amend any term or condition of an outstanding Option
provided (i) such term or condition as amended is permitted by the Plan, (ii) if any amendment is
materially adverse to the Participant, any such amendment shall be made only with the consent of
the Participant to whom the Option was granted, or in the event of the death of the Participant,
the Participant’s Survivors, and (iii) any such amendment of any ISO shall be made only after the
Administrator, after consulting with counsel for the Company, determines whether such amendment
would constitute a “modification” of any Option which is an ISO (as that term is defined in Section
424(h) of the Code) or would cause any adverse tax consequences for the holder of such ISO.

8.   RIGHTS AS A STOCKHOLDER.

     No Participant to whom an Option has been granted shall have rights as a stockholder with
respect to any Shares covered by such Option, except after due exercise of the Option and tender of
the full purchase price for the Shares being purchased pursuant to such exercise (and satisfaction
of such other conditions for the transfer of Shares as may be required pursuant to the Option) and
registration of the Shares in the Company’s share register in the name of the Participant. No
Participant to whom a Stock Purchase Right has been granted shall have rights as a stockholder with
respect to any Shares covered by such Stock Purchase Right, except after tender of the full
purchase price for the Shares being purchased (and satisfaction of such other conditions for the
transfer of Shares as may be required pursuant to the Stock Purchase Right) and registration of the
Shares in the Company’s share register in the name of the purchaser. Once the Stock Purchase Right
is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall
be a stockholder when his or her purchase is entered upon the records of the duly authorized
transfer agent of the Company. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Stock Purchase Right is exercised, except as provided in
Paragraph 18 of this Plan. No Participant to whom a Restricted Stock Unit has been granted shall
have rights as a stockholder with respect to any Shares covered by such Restricted Stock Unit until
the registration of the Shares in the Company’s share register in the name of the Participant has
occurred.

11

 

			
	9.	 	ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS AND RESTRICTED
STOCK UNITS.

     By its terms, an Option, Stock Purchase Right or Restricted Stock Unit granted to a
Participant shall not be transferable by the Participant other than (i) by will or by the laws of
descent and distribution, or (ii) as otherwise determined by the Administrator and set forth in the
applicable Option Agreement, Restricted Stock Purchase Agreement or Restricted Stock Units
Agreement. The designation of a beneficiary of an Option by a Participant shall not be deemed a
transfer prohibited by this Paragraph. Except as provided above, an Option or Stock Purchase Right
shall be exercisable, and a Restricted Stock Unit may be held, during the Participant’s lifetime,
only by such Participant (or by his or her legal representative) and shall not be assigned, pledged
or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment, pledge,
hypothecation or other disposition of any Option, Stock Purchase Right or Restricted Stock Unit or
of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon an Option, Stock Purchase Right or Restricted Stock Unit, shall
be null and void.

			
	10.	 	EFFECT OF TERMINATION OF SERVICE OTHER THAN “FOR CAUSE” OR DEATH OR DISABILITY.

     Except as otherwise provided in the pertinent Option Agreement, in the event of a termination
of service (whether as an employee, director or consultant) with the Company or an Affiliate before
the Participant has exercised all Options, the following rules apply:

	 	a.	 	A Participant who ceases to be an employee, director or consultant of the
Company or of an Affiliate (for any reason other than termination “for cause”,
Disability, or death for which events there are special rules in Paragraphs 11, 12, and
13, respectively), may exercise any Option granted to him or her to the extent that the
Option is exercisable on the date of such termination of service, but only within such
term as the Administrator has designated in the pertinent Option Agreement. An Option
that is not exercisable on the date of termination of service is canceled on such date
and may not be exercised. An Option that is exercisable on the date of termination of
service, but not exercised within the term as the Administrator has designated in the
pertinent Option Agreement is canceled and may not be exercised thereafter.

	 	b.	 	Except as provided in Paragraph 12, in no event may an Option Agreement
provide, if the Option is intended to be an ISO, that the time for exercise be later
than three (3) months after the Participant’s termination of employment.
	 
	 	c.	 	The provisions of this Paragraph, and not the provisions of Paragraph 12 or 13,
shall apply to a Participant who subsequently becomes Disabled or dies after the
termination of employment, director status or consultancy, provided, however, in the
case of a Participant’s Disability or death within three (3) months after the
termination of employment, director status or consultancy, the Participant or the
Participant’s Survivors may exercise the Option within one (1) year after the date of
the Participant’s termination of employment, but in no event after the date of
expiration of the term of the Option.

12

 

	 	d.	 	Notwithstanding anything herein to the contrary, if subsequent to a
Participant’s termination of employment, termination of director status or termination
of consultancy, but prior to the exercise of an Option, the Board of Directors
determines that, either prior or subsequent to the Participant’s termination, the
Participant engaged in conduct which would constitute “cause” (as defined in Paragraph
11 below), then such Participant shall forthwith cease to have any right to exercise
any Option, whether or not such Option was previously exercisable.
	 
	 	e.	 	A Participant to whom an Option has been granted under the Plan who is absent
from work with the Company or with an Affiliate because of temporary disability (any
disability other than a permanent and total Disability as defined in Paragraph 2
hereof), or who is on leave of absence for any purpose, shall not, during the period of
any such absence, be deemed, by virtue of such absence alone, to have terminated such
Participant’s employment, director status or consultancy with the Company or with an
Affiliate, except to the extent that the Administrator so determines as Company policy
or to the extent that the Option Agreement may otherwise expressly provide.
	 
	 	f.	 	Except as required by law or as set forth in the pertinent Option Agreement,
Options granted under the Plan shall not be affected by any change of a Participant’s
status within or among the Company and any Affiliates, so long as the Participant
continues to be a Key Employee, director or consultant of the Company or any Affiliate.

11.   EFFECT OF TERMINATION OF SERVICE “FOR CAUSE”.

     Except as otherwise provided in the pertinent Option Agreement, the following rules apply if
the Participant’s service (whether as an employee, director or consultant) with the Company or an
Affiliate is terminated for “cause” prior to the time that all his or her outstanding Options have
been exercised:

	 	a.	 	All outstanding and unexercised Options as of the time the Participant is
notified his or her service is terminated for “cause” will immediately be forfeited.
	 
	 	b.	 	For purposes of this Plan, except as otherwise provided in the pertinent Option
Agreement, Restricted Stock Purchase Agreement or Restricted Stock Units Agreement,
“cause” shall include (and is not limited to) dishonesty with respect to the Company or
any Affiliate, insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, and conduct substantially
prejudicial to the business of the Company or any Affiliate. The determination of the
Administrator as to the existence of “cause” will be conclusive on the Participant and
the Company.
	 
	 	c.	 	“Cause” is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s finding of “cause”
occur prior to termination. If the Administrator determines, subsequent to a
Participant’s termination of service but prior to the exercise of an Option, that

13

 

	 	 	 	either prior or subsequent to the Participant’s termination the Participant engaged
in conduct which would constitute “cause,” then the right to exercise any Option is
forfeited.

	 	d.	 	Any definition in an agreement between the Participant and the Company or an
Affiliate, which contains a conflicting definition of “cause” for termination and which
is in effect at the time of such termination, shall supersede the definition in this
Plan with respect to such Participant.

12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.

     Except as otherwise provided in the pertinent Option Agreement, a Participant who terminates
his or her employment, directorship or consultancy with the Company or an Affiliate by reason of
Disability may exercise any Option granted to such Participant:

	 	a.	 	To the extent exercisable but not exercised on the date of such cessation; and
	 
	 	b.	 	In the event rights to exercise the Option Vest periodically, to the extent of
a pro rata portion of any additional rights as would have Vested had the Participant
not terminated his or her employment, directorship or consultancy by reason of such
Disability, prior to the end of the Vesting period which next ends following the date
of such termination. The proration shall be based upon the number of days of such
Vesting period prior to the date of such termination.

     Except as otherwise provided in the pertinent Option Agreement, a Disabled Participant may
exercise such rights only within the period ending one (1) year after the date of the Participant’s
termination of employment, directorship or consultancy, as the case may be, notwithstanding that
the Participant might have been able to exercise the Option as to some or all of the Shares on a
later date if the Participant had not become disabled and had continued to be an employee, director
or consultant or, if earlier, within the originally prescribed term of the Option.

     The Company shall make the determination both of whether Disability has occurred and the date
of its occurrence (unless a procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such procedure shall be used for such
determination). If requested, the Participant shall be examined by a physician selected or
approved by the Company, the cost of which examination shall be paid for by the Company.

14

 

13.   EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

     Except as otherwise provided in the pertinent Option Agreement, in the event of the death of a
Participant while the Participant is an employee, director or consultant of the Company or of an
Affiliate, such Option may be exercised by the Participant’s Survivors:

	 	a.	 	To the extent exercisable but not exercised on the date of death; and
	 
	 	b.	 	In the event rights to exercise the Option Vest periodically, to the extent of
a pro rata portion of any additional rights which would have Vested had the Participant
not died prior to the end of the Vesting period which next ends following the date of
death. The proration shall be based upon the number of days of such Vesting period
prior to the Participant’s death.

     Except as otherwise provided in the pertinent Option Agreement, if the Participant’s Survivors
wish to exercise the Option, they must take all necessary steps to exercise the Option within one
(1) year after the date of Participant’s termination of employment, directorship or consultancy, as
the case may be, notwithstanding that the decedent might have been able to exercise the Option as
to some or all of the Shares on a later date if he or she had not died and had continued to be an
employee, director or consultant or, if earlier, within the originally prescribed term of the
Option.

14.   STOCK PURCHASE RIGHTS.

	 	a.	 	Rights to Purchase. Stock Purchase Rights may be issued either alone,
in addition to, or in tandem with other awards granted under the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the Plan, it
shall advise the offeree in writing, by means of an Agreement, of the terms, conditions
and restrictions related to the offer, including the number of Shares that the offeree
shall be entitled to purchase, the price to be paid (which shall not be less than the
par value of the Shares), and the time within which the offeree must accept such offer,
which shall in no event exceed six (6) months from the date upon which the
Administrator made the determination to grant the Stock Purchase Right. The offer
shall be accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
	 
	 	b.	 	Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser’s employment
with the Company for any reason (including death or Disability). The purchase price
for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the
original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall lapse at a
rate determined by the Administrator.
	 
	 	c.	 	Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the Plan as
may be

15

 

	 	 	 	determined by the Administrator in its sole discretion. In addition, the provisions
of Restricted Stock Purchase Agreements need not be the same with respect to each
purchaser.

15.   RESTRICTED STOCK UNITS.

	 	a.	 	Grant. Restricted Stock Units may be granted either alone, in addition
to, or in tandem with other awards granted under the Plan. After the Administrator
determines that it will grant Restricted Stock Units under the Plan, it shall advise
the Participant in writing, by means of an Agreement, of the terms, conditions and
restrictions related to the award, including the number of Shares subject to the
Restricted Stock Unit.
	 
	 	b.	 	Forfeiture Provisions. Unless the Administrator determines otherwise,
the Restricted Stock Units Agreement shall provide that the Restricted Stock Unit shall
be forfeited upon the voluntary or involuntary termination of the Participant’s
employment with the Company for any reason (including death or Disability).
	 
	 	c.	 	Other Provisions. The Restricted Stock Units Agreement shall contain
such other terms, provisions and conditions not inconsistent with the Plan as may be
determined by the Administrator in its sole discretion. In addition, the provisions of
Restricted Stock Units Agreements need not be the same with respect to each
Participant.

16.   PURCHASE FOR INVESTMENT.

     Unless the offering and sale of the Shares to be issued upon the particular exercise of or
delivery pursuant to an Option, Stock Purchase Right or Restricted Stock Unit shall have been
effectively registered under the Securities Act of 1933, as now in force or hereafter amended (the
“1933 Act”), the Company shall be under no obligation to issue the Shares covered by such exercise
unless and until the following conditions have been fulfilled:

	 	a.	 	The person(s) who exercise(s) or is to receive Shares pursuant to such Option,
Stock Purchase Right or Restricted Stock Unit shall warrant to the Company, prior to
the receipt of such Shares, that such person(s) are acquiring such Shares for their own
respective accounts, for investment, and not with a view to, or for sale in connection
with, the distribution of any such Shares, in which event the person(s) acquiring such
Shares shall be bound by the provisions of the following legend which shall be endorsed
upon the certificate(s) evidencing their Shares issued pursuant to such exercise of
such grant:

	 	 	 	“The shares represented by this certificate have been taken for investment
and they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement
with respect to such shares shall be effective under the Securities Act of 1933, as amended, or
(b) the Company shall have received an opinion of counsel

16

 

	 	 	 	satisfactory to it that an exemption from registration under such Act is
then available, and (2) there shall have been compliance with all applicable
state securities laws.”

	 	b.	 	At the discretion of the Administrator, the Company shall have received an
opinion of its counsel that the Shares may be issued upon such particular exercise in
compliance with the 1933 Act without registration thereunder.

     The Company may delay issuance of the Shares until completion of any action or obtaining of
any consent which the Company deems necessary under any applicable law (including, without
limitation, state securities or “blue sky” laws.)

17.   DISSOLUTION OR LIQUIDATION OF THE COMPANY.

     Upon the dissolution or liquidation of the Company, all Options, Stock Purchase Rights and
Restricted Stock Units granted under this Plan which as of such date shall not have been exercised
will terminate and become null and void; provided, however, that if the rights of a Participant or
a Participant’s Survivors have not otherwise terminated and expired, (i) the Participant or the
Participant’s Survivors will have the right immediately prior to such dissolution or liquidation
(A) to exercise any Option or Stock Purchase Right to the extent that the Option or Stock Purchase
Right is exercisable as of the date immediately prior to such dissolution or liquidation and (B) to
receive Shares pursuant to any Vested and outstanding Restricted Stock Unit; and (ii) if a Change
in Control shall have occurred within the twelve months immediately prior to the date of such
dissolution or liquidation, such Participant or such Participant’s Survivors will have the right
immediately prior to such dissolution or liquidation to exercise any Option, Stock Purchase Right
or receive Shares pursuant to any Restricted Stock Unit then outstanding whether or not such
Option, Stock Purchase Right or Restricted Stock Unit is Vested and/or exercisable as of such date.

18.   ADJUSTMENTS.

     Upon the occurrence of any of the following events, the adjustments as hereinafter provided
shall be made, unless otherwise specifically provided in a pertinent Option Agreement, Restricted
Stock Purchase Agreement or Restricted Stock Units Agreement:

	 	A.	 	Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional
shares or new or different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of Shares deliverable upon the
exercise of an Option or Stock Purchase Right or pursuant to a Restricted Stock Unit may be
appropriately increased or decreased proportionately, and appropriate adjustments may be made in
the purchase price per share to reflect such subdivision, combination or stock dividend. The
number of Shares subject to options to be granted (i) pursuant to Paragraph 3 or to directors
pursuant to Paragraph 6(A)(f) shall also be proportionately adjusted upon the occurrence of such
events, except as the Administrator shall

17

 

	 	 	 	otherwise determine in its sole discretion or (ii) pursuant to Paragraph 4(c) shall also be
proportionately adjusted upon the occurrence of such events.

	 	B.	 	Corporate Changes in Control. In the event of a Corporate Change in
Control,

	 	i.	 	Each Option, Stock Purchase Right or Restricted Stock Unit outstanding as of the date such
Corporate Change in Control is determined to have occurred, and which is not then exercisable or
Vested by reason of Vesting requirements, shall automatically accelerate the Vesting so that the
Option, Stock Purchase Right or Restricted Stock Unit shall become fully Vested and, where
applicable, shall become fully exercisable and, in the case of Restricted Stock Units, Shares shall
be transferred to the Participant, on the first to occur of (x) the date the Option, Stock Purchase
Right or Restricted Stock Unit becomes Vested and, if applicable, exercisable under its original
terms (with respect only to such Options, Stock Purchase Rights or Restricted Stock Units as
otherwise would Vest during such one-year period under their terms), (y) the first anniversary of
the date such Corporate Change in Control is determined to have occurred, and (z) the occurrence of
an Involuntary Employment Action; and
	 
	 	ii.	 	The Options or Stock Purchase Rights so accelerated shall remain so exercisable until the
earlier of the original expiration date of the Option or Stock Purchase Right and the earlier
termination of the Option or Stock Purchase Right in accordance with the Plan and the applicable
Agreement.

	 	C.	 	Transactional Changes in Control. In the event of a Transactional Change in
Control,

	 	i.	 	Each Option, Stock Purchase Right or Restricted Stock Unit outstanding as of the date such
Transactional Change in Control is determined to have occurred shall be: (a) assumed by the
successor corporation (or its parent) or replaced with a comparable option, stock purchase right or
restricted stock unit with respect to shares of the capital stock of the successor corporation (or
its parent) on an equitable basis, (b) terminated upon written notice to the Participants stating
that (i), in the case of Options and Stock Purchase Rights, all such Options or Stock Purchase
Rights (for purposes of this Subparagraph all Options or Stock Purchase Rights then outstanding
shall be deemed to be exercisable) must be exercised within a specified number of days (which shall
not be less than 15 days) from the date such notice is given, at the end of which period the
Options or Stock Purchase Rights shall terminate and (ii) in the case of Restricted Stock Units,
that Shares shall be delivered to the Participant pursuant to such awards within 15 days after the
date such notice is given, or (c) terminated in exchange for a cash payment equal to (i), in the
case of Options and Stock Purchase Rights, the excess of the Fair Market Value of the shares
subject to such Options or Stock Purchase Rights (for purposes of this Subparagraph all Options
then outstanding shall be deemed to be exercisable) over the exercise price thereof and (ii) in the
case of Restricted Stock Units, the Fair Market Value of the Shares subject to such Restricted
Stock Units. The determination of which of the treatments set forth in clauses (a), (b) and (c)
above to provide and of comparability under clause (a) above shall be made by the Administrator and
its determinations shall be final, binding and conclusive.
	 
	 	ii.	 	The Vesting of each Option, Stock Purchase Right or Restricted Stock Unit that is assumed
or replaced in connection with a Transactional Change in Control shall automatically

18

 

	 	 	 	accelerate so that the Option, Stock Purchase Right or Restricted Stock Unit shall become
fully Vested and, where applicable, shall become fully exercisable, and, in the case of Restricted
Stock Units, Shares shall be transferred to the Participant, on the first to occur of (x) the date
the Option, Stock Purchase Right or Restricted Stock Unit becomes Vested and, if applicable,
exercisable under its original terms (with respect only to such Options, Stock Purchase Rights or
Restricted Stock Units as otherwise would Vest during such one-year period under their terms), (y)
the first anniversary of the date such Transactional Change in Control is determined to have
occurred, and (z) the occurrence of an Involuntary Employment Action. The Options or Stock Purchase
Rights so accelerated shall remain so exercisable until the earlier of the original expiration date
of the Option or Stock Purchase Right and the earlier termination of the Option or Stock Purchase
Right in accordance with the Plan and the applicable Agreement.

	 	D.	 	Corporate Transaction. In the event of a Corporate Transaction that does not
constitute a Transactional Change in Control or in the event of a similar event, pursuant to which
securities of the Company or of another corporation or entity are issued with respect to the
outstanding shares of Common Stock, a Participant upon exercising an Option or Stock Purchase Right
or becoming Vested under a Restricted Stock Unit shall be entitled to receive (where applicable,
for the purchase price paid upon such exercise) the securities which would have been received if
such Option or Stock Purchase Right had been exercised, or such Restricted Stock Unit had become
Vested, prior to such Corporate Transaction.
	 
	 	E.	 	Modification of ISOs. Notwithstanding the foregoing, any adjustments made pursuant
to Subparagraph A, B, C, or D with respect to ISOs shall be made only after the Administrator,
after consulting with counsel for the Company, determines whether such adjustments would constitute
a “modification” of such ISOs (as that term is defined in Section 424(h) of the Code) or would
cause any adverse tax consequences for the holders of such ISOs. If the Administrator determines
that such adjustments made with respect to ISOs would constitute a “modification” of such ISOs, it
may refrain from making such adjustments, unless the holder of an ISO specifically requests in
writing that such adjustment be made and such writing indicates that the holder has full knowledge
of the consequences of such “modification” on his or her income tax treatment with respect to the
ISO.

19.   ISSUANCES OF SECURITIES.

     Except as expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares subject to Options,
Stock Purchase Rights or Restricted Stock Units. Except as expressly provided herein, no
adjustments shall be made for dividends paid in cash or in property (including without limitation,
securities) of the Company.

19

 

20.   FRACTIONAL SHARES.

     No fractional shares shall be issued under the Plan and the person exercising such right shall
receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value
thereof.

21.   CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.

     The Administrator, at the written request of any Participant, may in its discretion take such
actions as may be necessary to convert such Participant’s ISOs (or any portions thereof) that have
not been exercised on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of the Company or an
Affiliate at the time of such conversion. Such actions may include, but not be limited to,
extending the exercise period or reducing the exercise price of the appropriate installments of
such Options. At the time of such conversion, the Administrator (with the consent of the
Participant) may impose such conditions on the exercise of the resulting Non-Qualified Options as
the Administrator in its discretion may determine, provided that such conditions shall not be
inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the right
to have such Participant’s ISOs converted into Non-Qualified Options, and no such conversion shall
occur until and unless the Administrator takes appropriate action. The Administrator, with the
consent of the Participant, may also terminate any portion of any ISO that has not been exercised
at the time of such conversion.

22.   WITHHOLDING.

     In the event that any federal, state, or local income taxes, employment taxes, Federal
Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts are required by applicable
law or regulation to be withheld from the Participant’s salary, wages or other remuneration in
connection with the exercise of an Option or a Disqualifying Disposition (as defined in Paragraph
23) or the Vesting of Shares issued pursuant to Stock Purchase Rights or the delivery of Shares
pursuant to Restricted Stock Units, the Company may deduct from any amounts due to the Participant,
such as compensation or reimbursements, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the Participant, the amount
of such withholdings unless a different withholding arrangement, including the use of shares of the
Company’s Common Stock or a promissory note, is authorized by the Administrator (and permitted by
law), provided, however, that with respect to persons subject to Section 16 of the 1934 Act, any
such withholding arrangement shall be in compliance with any applicable provisions of Rule 16b-3
promulgated under Section 16 of the 1934 Act. For purposes hereof, the fair market value of the
shares withheld for purposes of payroll withholding shall be determined in the manner provided in
Paragraph 2 above, as of the most recent practicable date prior to the date of exercise. If the
fair market value of the shares withheld is less than the amount of payroll withholdings required,
the Participant may be required to advance the difference in cash to the Company or the Affiliate
employer. The Administrator in its discretion may condition the exercise of an Option for less
than the then Fair Market Value on the Participant’s payment of such additional withholding.

20

 

23.   NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

     Each Key Employee who receives an ISO must agree to notify the Company in writing immediately
after the Key Employee makes a Disqualifying Disposition of any shares acquired pursuant to the
exercise of an ISO. A Disqualifying Disposition is any disposition (including any sale) of such
shares before the later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the ISO. If the Key
Employee has died before such stock is sold, these holding period requirements do not apply and no
Disqualifying Disposition can occur thereafter.

24.   TERMINATION OF THE PLAN.

     Unless sooner terminated by the Board of Directors, the Plan shall terminate on October 28,
2009, and no Options, Stock Purchase Rights or Restricted Stock Units shall thereafter be granted
under the Plan. All Options, Stock Purchase Rights or Restricted Stock Units granted under the
Plan prior to that date shall remain in effect until such Options, Stock Purchase Rights or
Restricted Stock Units shall have been exercised, paid out or terminated in accordance with the
terms and provisions of the Plan and the applicable Agreements. The Board of Directors may
terminate the Plan at any time; provided, however, that any such termination will not materially
impair any rights under any Option, Stock Purchase Right or Restricted Stock Unit theretofore made
under the Plan without the consent of the Participant.

25.   AMENDMENT OF THE PLAN AND AGREEMENTS.

     The Plan may be amended by the stockholders of the Company. The Plan may also be amended by
the Board of Directors or the Administrator, including, without limitation, to the extent necessary
to qualify any or all outstanding Options granted under the Plan or Options to be granted under the
Plan for favorable federal income tax treatment (including deferral of taxation upon exercise) as
may be afforded incentive stock options under Section 422 of the Code, for as long as the Company
has a class of stock registered pursuant to Section 12 of the 1934 Act and to the extent necessary
to qualify the shares issuable upon exercise of any outstanding Options granted, or Options to be
granted, under the Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers. Any amendment approved by the
Administrator which the Administrator determines is of a scope that requires stockholder approval
shall be subject to obtaining such stockholder approval. Any modification or amendment of the Plan
shall not, without the consent of a Participant, materially adversely affect his or her rights
under an Option, Stock Purchase Right or Restricted Stock Unit previously granted to him or her.
With the consent of the Participant affected, the Administrator may amend outstanding Option
Agreements, Restricted Stock Purchase Agreements or Restricted Stock Units Agreements in a manner
which may be materially adverse to the Participant but which is not inconsistent with the Plan. In
the discretion of the Administrator, outstanding Option Agreements, Restricted Stock Purchase
Agreements or Restricted Stock Units Agreements may be amended by the Administrator in a manner
which is not materially adverse to the Participant.

21

 

26.   EMPLOYMENT OR OTHER RELATIONSHIP.

     Nothing in this Plan or any Option Agreement, Restricted Stock Purchase Agreement or
Restricted Stock Units Agreement shall be deemed to prevent the Company or an Affiliate from
terminating the employment, consultancy or director status of a Participant, nor to prevent a
Participant from terminating his or her own employment, consultancy or director status or to give
any Participant a right to be retained in employment or other service by the Company or any
Affiliate for any period of time.

     All Options, Stock Purchase Rights and Restricted Stock Units shall constitute a special
incentive payment to the Participant and shall not be taken into account in computing the amount of
salary or compensation of the Participant for the purpose of determining any benefits under any
pension, retirement, profit-sharing, bonus, life insurance or other benefit plan of the Company or
under any agreement between the Company and the Participant, unless such plan or agreement
specifically provides otherwise.

27.   GOVERNING LAW.

     With respect to Options and Stock Purchase Rights granted prior to January 18, 2001, this Plan
shall be governed by and construed in accordance with the laws of the State of Delaware, the
Company’s state of incorporation and, except as otherwise provided in the pertinent Option
Agreement or Restricted Stock Purchase Agreement, the United States District Court for the Eastern
District of Virginia shall have exclusive jurisdiction over any and all disputes between a
Participant and the Company related to or arising out of Options or Restricted Stock Purchase
Rights granted under this Plan. With respect to Options, Stock Purchase Rights and Restricted
Stock Units granted on or after January 18, 2001, this Plan shall be governed by and construed in
accordance with the laws of the State of New York and, except as otherwise provided in the
pertinent Option Agreement, Restricted Stock Purchase Agreement or Restricted Stock Units
Agreement, any and all disputes between a Participant and the Company related to or arising out of
Options, Stock Purchase Rights or Restricted Stock Units granted under this Plan shall be brought
only in a state or federal court of competent jurisdiction sitting in Manhattan, New York.

28.   Section 409A

     Notwithstanding other provisions of the Plan or any award agreements thereunder, no award
shall be granted, deferred, accelerated, extended, paid out or modified under this Plan in a manner
that would result in the imposition of an additional tax under Section 409A of the Code upon a
Participant. In the event that it is reasonably determined by the Committee that, as a result of
Section 409A of the Code, payments in respect of any award under the Plan may not be made at the
time contemplated by the terms of the Plan or the relevant award agreement, as the case may be,
without causing the Participant holding such award to be subject to taxation under Section 409A of
the Code, the Company will make such payment on the first day that would not result in the
Participant incurring any tax liability under Section 409A of the Code; which, if the Participant
is a “specified employee” within the meaning of the Section 409A, shall be the first day following
the six-month period beginning on the date of Participant’s termination of employment. The Company
shall use commercially reasonable efforts to implement the provisions of this Section 28 in good
faith; provided that neither the Company, the Committee nor any of the Company’s employees, directors or representatives shall have any
liability to Participants with respect to this Section 28.

22EX-10.2 2006 STOCK INCENTIVE PLAN

Exhibit 10.2

Final
as amended
Through March 27, 2009

TIME WARNER INC.

2006 STOCK INCENTIVE PLAN

1.   Purpose of the Plan

     The purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining
employees, directors and advisors and to motivate such employees, directors and advisors to exert
their best efforts on behalf of the Company and its Affiliates by providing incentives through the
granting of Awards. The Company expects that it will benefit from the added interest which such
employees, directors and advisors will have in the welfare of the Company as a result of their
proprietary interest in the Company’s success.

2.   Definitions

     The following capitalized terms used in the Plan have the respective meanings set forth in
this Section:

	 	(a)	 	“Act” means The Securities Exchange Act of 1934, as
amended, or any successor thereto.
	 
	 	(b)	 	“Affiliate” means any entity that is consolidated with
the Company for financial reporting purposes or any other entity designated by
the Board in which the Company or an Affiliate has a direct or indirect equity
interest of at least twenty percent (20%), measured by reference to vote or
value.
	 
	 	(c)	 	“Award” means an Option, Stock Appreciation Right,
Restricted Stock or Other Stock-Based Award granted pursuant to the Plan.
	 
	 	(d)	 	“Board” means the Board of Directors of the Company.
	 
	 	(e)	 	“Change in Control” means the occurrence of any of the
following events:

	 	(i)	 	any “Person” within the meaning of Section 13(d)(3) or 14(d)(2) of
the Act (other than the Company or any company owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company) becomes the
“Beneficial Owner” within the meaning of Rule 13d-3 promulgated under the
Act of 30% or more of the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors; excluding, however, any circumstance in which
such beneficial ownership resulted from any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Company or by
any corporation controlling, controlled by, or under common control with,
the Company;

 

	 	 	 	2

	 	(ii)	 	a change in the composition of the Board since the Effective Date,
such that the individuals who, as of such date, constituted the Board (the
“ Incumbent Board”) cease for any reason to constitute at least a
majority of such Board; provided that any individual who becomes a
director of the Company subsequent to the Effective Date whose election, or
nomination for election by the Company’s stockholders, was approved by the
vote of at least a majority of the directors then comprising the Incumbent
Board shall be deemed a member of the Incumbent Board; and provided
further, that any individual who was initially elected as a director of
the Company as a result of an actual or threatened election contest, as such
terms are used in Rule 14a-12 of Regulation 14A promulgated under the Act,
or any other actual or threatened solicitation of proxies or consents by or
on behalf of any person or Entity other than the Board shall not be deemed a
member of the Incumbent Board;
	 
	 	(iii)	 	a reorganization, recapitalization, merger or consolidation (a
“Corporate Transaction”) involving the Company, unless securities
representing 60% or more of the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors of the Company or the corporation resulting from such Corporate
Transaction (or the parent of such corporation) are held subsequent to such
transaction by the person or persons who were the beneficial holders of the
outstanding voting securities entitled to vote generally in the election of
directors of the Company immediately prior to such Corporate Transaction, in
substantially the same proportions as their ownership immediately prior to
such Corporate Transaction; or
	 
	 	(iv)	 	the sale, transfer or other disposition of all or substantially
all of the assets of the Company.

	 	(f)	 	“Code” means The Internal Revenue Code of 1986, as
amended, or any successor thereto.
	 
	 	(g)	 	“Committee” means the Compensation and Human
Development Committee of the Board or its successor, or such other committee of
the Board to which the Board has delegated power to act under or pursuant to
the provisions of the Plan or a subcommittee of the Compensation and Human
Development Committee (or such other committee) established by the Compensation
and Human Development Committee or such other committee.
	 
	 	(h)	 	“Company” means Time Warner Inc., a Delaware
corporation.

 

	 	 	 	3

	 	(i)	 	“Effective Date” means the date the Board approved the
Plan (March 23, 2006).
	 
	 	(j)	 	“Employment” means (i) a Participant’s employment if
the Participant is an employee of the Company or any of its Affiliates and (ii)
a Participant’s services as a non-employee director, if the Participant is a
non-employee member of the Board or the board of directors of an Affiliate;
provided, however that unless otherwise determined by the
Committee, a change in a Participant’s status from employee to non-employee
(other than a director of the Company or an Affiliate) shall constitute a
termination of employment hereunder.
	 
	 	(k)	 	“Fair Market Value” means, on a given date, (i) if
there should be a public market for the Shares on such date, (x) prior to
October 1, 2008, the average of the high and low prices of the Shares on the
New York Stock Exchange, or, if the Shares are not listed or admitted on any
national securities exchange, the average of the per Share closing bid price
and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System (or such market in
which such prices are regularly quoted) (the “NASDAQ”), or, if no sale of
Shares shall have been reported on the New York Stock Exchange or quoted on the
NASDAQ on such date, then the immediately preceding date on which sales of the
Shares have been so reported or quoted shall be used, and (y) on and after
October 1, 2008, the closing sale price of the Shares on the New York Stock
Exchange Composite Tape, or, if the Shares are not listed or admitted on any
national securities exchange, the average of the per Share closing bid price
and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System (or such market in
which such prices are regularly quoted) (the “NASDAQ”), or, if no sale of
Shares shall have been reported on the New York Stock Exchange Composite Tape
or quoted on the NASDAQ on such date, then the immediately preceding date on
which sales of the Shares have been so reported or quoted shall be used, and
(ii) if there should not be a public market for the Shares on such date, the
Fair Market Value shall be the value established by the Committee in good
faith.
	 
	 	(l)	 	“ISO” means an Option that is also an incentive stock
option granted pursuant to Section 6(d).
	 
	 	(m)	 	“Option” means a stock option granted pursuant to
Section 6.
	 
	 	(n)	 	“Option Price” means the price for which a Share can be
purchased upon exercise of an Option, as determined pursuant to Section 6(a).

 

	 	 	 	4

	 	(o)	 	“Other Stock-Based Awards” means awards granted
pursuant to Section 9.
	 
	 	(p)	 	“Participant” means an employee, prospective employee,
director or advisor of the Company or an Affiliate who is selected by the
Committee to participate in the Plan.
	 
	 	(q)	 	“Performance-Based Awards” means certain Other
Stock-Based Awards granted pursuant to Section 9(b).
	 
	 	(r)	 	“Plan” means the Time Warner Inc. 2006 Stock Incentive
Plan, as amended from time to time.
	 
	 	(s)	 	“Restricted Stock” means any Share granted under
Section 8.
	 
	 	(t)	 	“Shares” means shares of common stock of the Company,
$.01 par value per share.
	 
	 	(u)	 	“Stock Appreciation Right” means a stock appreciation
right granted pursuant to Section 7.
	 
	 	(v)	 	“Subsidiary” means a subsidiary corporation, as defined
in Section 424(f) of the Code (or any successor section thereto), of the
Company.

3.   Shares Subject to the Plan

     The total number of Shares which may be issued under the Plan is 67,264,573, of which no more
than 30% may be issued in the form of Restricted Stock or Other Stock-Based Awards payable in
Shares. The maximum aggregate number of Shares with respect to which Awards may be granted during
a calendar year, net of any Shares which are subject to Awards (or portions thereof) which, during
such year, terminate or lapse without payment of consideration, shall be equal to 1.5% of the
number of Shares outstanding on December 31 of the preceding calendar year. The maximum number of
Shares with respect to which Awards may be granted during a calendar year to any Participant shall
be 896,860; provided that the maximum number of Shares that may be awarded in the form of
Restricted Stock or Other Stock-Based Awards payable in Shares during any calendar year to any
Participant shall be 269,058. The number of Shares available for issuance under the Plan shall be
reduced by the full number of Shares covered by Awards granted under the Plan (including, without
limitation, the full number of Shares covered by any Stock Appreciation Right, regardless of
whether any such Stock Appreciation Right or other Award covering Shares under the Plan is
ultimately settled in cash or by delivery of Shares); provided, however, that the number of
Shares covered by Awards (or portions thereof) that are forfeited or that otherwise terminate or
lapse without the payment of consideration in respect thereof shall again become available for
issuance under the Plan; and provided further that any Shares that are forfeited after the
actual issuance of such Shares to a Participant under the Plan shall not become available for
re-issuance under the Plan.

 

	 	 	 	5

4.   Administration

	 	(a)	 	The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any subcommittee thereof
consisting solely of at least two individuals who are intended to qualify as
“independent directors” within the meaning of the New York Stock Exchange
listed company rules, “Non-Employee Directors” within the meaning of Rule 16b-3
under the Act (or any successor rule thereto) and, to the extent required by
Section 162(m) of the Code (or any successor section thereto), “outside
directors” within the meaning thereof. In addition, the Committee may delegate
the authority to grant Awards under the Plan to any employee or group of
employees of the Company or an Affiliate; provided that such grants are
consistent with guidelines established by the Committee from time to time.
	 
	 	(b)	 	The Committee shall have the full power and authority to make,
and establish the terms and conditions of, any Award to any person eligible to
be a Participant, consistent with the provisions of the Plan and to waive any
such terms and conditions at any time (including, without limitation,
accelerating or waiving any vesting conditions). Awards may, in the discretion
of the Committee, be made under the Plan in assumption of, or in substitution
for, outstanding awards previously granted by the Company or its affiliates or
a company acquired by the Company or with which the Company combines. The
number of Shares underlying such substitute awards shall be counted against the
aggregate number of Shares available for Awards under the Plan.
	 
	 	(c)	 	The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan,
and to make any other determinations that it deems necessary or desirable for
the administration of the Plan, and may delegate such authority, as it deems
appropriate. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors).
	 
	 	(d)	 	The Committee shall require payment of any amount it may
determine to be necessary to withhold for federal, state, local or other taxes
as a result of the exercise, grant or vesting of an Award. Unless the
Committee specifies otherwise, the Participant may elect to pay a portion or
all of such withholding taxes by (a) delivery of Shares or (b) having Shares
withheld by the Company with a Fair Market Value equal to the minimum statutory
withholding rate from any Shares that would have otherwise been received by the
Participant.

 

	 	 	 	6

5.   Limitations

	 	(a)	 	No Award may be granted under the Plan after the fifth
anniversary of the meeting of shareholders of the Company at which the Plan is
approved, but Awards granted prior to such fifth anniversary may extend beyond
that date.
	 
	 	(b)	 	No Option or Stock Appreciation Right, once granted hereunder,
may be repriced.
	 
	 	(c)	 	With respect to any Awards granted to a Participant who is a
non-employee member of the Board at the time of grant, such Awards shall be
made pursuant to formulas established by the Board in advance of such grant.
Any such Awards shall be made at the time such a Participant first becomes a
member of the Board and, thereafter, on an annual basis at or following the
annual meeting of stockholders. Such formulas may include any one or more of
the following: (i) a fixed number of Options or Stock Appreciation Rights, (ii)
a fixed number of Shares of Restricted Stock or a number of Shares of
Restricted Stock determined by reference to a fixed dollar amount (calculated
based on the Fair Market Value of a Share on the date of grant), and (iii)
Other Stock-Based Awards determined either by reference to a fixed number of
Shares or to a fixed dollar amount (calculated based on the Fair Market Value
of a Share on the date of grant).

6.   Terms and Conditions of Options

     Options granted under the Plan shall be, as determined by the Committee, nonqualified or
incentive stock options for federal income tax purposes, as evidenced by the related Award
agreements, and shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the Committee shall determine, and
as evidenced by the related Award agreement:

	 	(a)	 	Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of a Share on the date an Option is granted.
	 
	 	(b)	 	Exercisability. Options granted under the Plan shall
be exercisable at such time and upon such terms and conditions as may be
determined by the Committee, but in no event shall an Option be exercisable
more than ten years after the date it is granted, except as may be provided
pursuant to Section 15.
	 
	 	(c)	 	Exercise of Options. Except as otherwise provided in
the Plan or in an Award agreement, an Option may be exercised for all, or from
time to time any part, of the Shares for which it is then exercisable. For
purposes of this Section 6, the exercise date of an Option shall be the date a
notice

 

	 	 	 	7

	 	 	 	of exercise is received by the Company, together with provision for payment
of the full purchase price in accordance with this Section 6(c). The
purchase price for the Shares as to which an Option is exercised shall be
paid to the Company, as designated by the Committee, pursuant to one or more
of the following methods: (i) in cash or its equivalent (e.g., by check);
(ii) in Shares having a Fair Market Value equal to the aggregate Option
Price for the Shares being purchased and satisfying such other requirements
as may be imposed by the Committee; provided that such Shares have
been held by the Participant for no less than six months (or such other
period as established from time to time by the Committee in order to avoid
adverse accounting treatment applying generally accepted accounting
principles); (iii) partly in cash and partly in such Shares or (iv) if there
is a public market for the Shares at such time, through the delivery of
irrevocable instructions to a broker to sell Shares obtained upon the
exercise of the Option and to deliver promptly to the Company an amount out
of the proceeds of such Sale equal to the aggregate Option Price for the
Shares being purchased. No Participant shall have any rights to dividends
or other rights of a stockholder with respect to Shares subject to an Option
until the Shares are issued to the Participant.

	 	(d)	 	ISOs. The Committee may grant Options under the Plan
that are intended to be ISOs. Such ISOs shall comply with the requirements of
Section 422 of the Code (or any successor section thereto). No ISO may be
granted to any Participant who at the time of such grant, owns more than ten
percent of the total combined voting power of all classes of stock of the
Company or of any Subsidiary, unless (i) the Option Price for such ISO is at
least 110% of the Fair Market Value of a Share on the date the ISO is granted
and (ii) the date on which such ISO terminates is a date not later than the day
preceding the fifth anniversary of the date on which the ISO is granted. Any
Participant who disposes of Shares acquired upon the exercise of an ISO either
(i) within two years after the date of grant of such ISO or (ii) within one
year after the transfer of such Shares to the Participant, shall notify the
Company of such disposition and of the amount realized upon such disposition.
All Options granted under the Plan are intended to be nonqualified stock
options, unless the applicable Award agreement expressly states that the Option
is intended to be an ISO. If an Option is intended to be an ISO, and if for
any reason such Option (or portion thereof) shall not qualify as an ISO, then,
to the extent of such nonqualification, such Option (or portion thereof) shall
be regarded as a nonqualified stock option granted under the Plan;
provided that such Option (or portion thereof) otherwise
complies with the Plan’s requirements relating to nonqualified stock options.
In no event shall any member of the Committee, the Company or any of its
Affiliates (or their respective employees, officers or directors) have any
liability to any Participant (or any other person) due to the failure of an
Option to qualify for any reason as an ISO.

 

	 	 	 	8

	 	(e)	 	Attestation. Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay the exercise price of an
Option or taxes relating to the exercise of an Option by delivering Shares, the
Participant may, subject to procedures satisfactory to the Committee, satisfy
such delivery requirement by presenting proof of beneficial ownership of such
Shares, in which case the Company shall treat the Option as exercised without
further payment and/or shall withhold such number of Shares from the Shares
acquired by the exercise of the Option, as appropriate.

7.   Terms and Conditions of Stock Appreciation Rights

	 	(a)	 	Grants. The Committee may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock Appreciation Right
in connection with an Option, or a portion thereof. A Stock Appreciation Right
granted pursuant to clause (ii) of the preceding sentence (A) may be granted at
the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same number of Shares
covered by an Option (or such lesser number of Shares as the Committee may
determine) and (C) shall be subject to the same terms and conditions as such
Option except for such additional limitations as are contemplated by this
Section 7 (or such additional limitations as may be included in an Award
agreement).
	 
	 	(b)	 	Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but in no
event shall such amount be less than the Fair Market Value of a Share on the
date the Stock Appreciation Right is granted; provided,
however, that notwithstanding the foregoing in the case of a Stock
Appreciation Right granted in conjunction with an Option, or a portion thereof,
the exercise price may not be less than the Option Price of the related Option.
Each Stock Appreciation Right granted independent of an Option shall entitle a
Participant upon exercise to an amount equal to (i) the excess of (A) the Fair
Market Value on the exercise date of one Share over (B) the exercise price per
Share, times (ii) the number of Shares covered by the Stock Appreciation Right.
Each Stock Appreciation Right granted in conjunction with an Option, or a
portion thereof, shall entitle a Participant to surrender to the Company the
unexercised Option, or any portion thereof, and to receive from the Company in
exchange therefor an amount equal to (i) the excess of (A) the Fair Market
Value on the exercise date of one Share over (B) the Option Price per Share,
times (ii) the number of Shares covered by the Option, or portion thereof,
which is surrendered. Payment shall be made in Shares or in cash, or partly in
Shares and partly in cash (any such Shares valued at such Fair Market Value),
all as shall be determined by the Committee. Stock Appreciation Rights may be
exercised from time to time upon actual receipt by the Company of written
notice of exercise stating the number of Shares with respect to which the

 

	 	 	 	9

	 	 	 	Stock Appreciation Right is being exercised. The date a notice of exercise
is received by the Company shall be the exercise date. No fractional Shares
will be issued in payment for Stock Appreciation Rights, but instead cash
will be paid for a fraction or, if the Committee should so determine, the
number of Shares will be rounded downward to the next whole Share. No
Participant shall have any rights to dividends or other rights of a
stockholder with respect to Shares covered by Stock Appreciation Rights
until the Shares are issued to the Participant.

	 	(c)	 	Limitations. The Committee may impose, in its
discretion, such conditions upon the exercisability of Stock Appreciation
Rights as it may deem fit, but in no event shall a Stock Appreciation Right be
exercisable more than ten years after the date it is granted, except as may be
provided pursuant to Section 15.

8.   Restricted Stock

	 	(a)	 	Grant. Subject to the provisions of the Plan, the
Committee shall determine the number of Shares of Restricted Stock to be
granted to each Participant, the duration of the period during which, and the
conditions, if any, under which, the Restricted Stock may be forfeited to the
Company, and the other terms and conditions of such Awards; provided
that not less than 95% of the Shares of Restricted Stock shall remain
subject to forfeiture for at least three years after the date of grant, subject
to earlier termination of such potential for forfeiture in whole or in part in
the event of a Change in Control or the death, disability or other termination
of the Participant’s employment.
	 
	 	(b)	 	Transfer Restrictions. Shares of Restricted Stock may
not be sold, assigned, transferred, pledged or otherwise encumbered, except as
provided in the Plan or the applicable Award agreement. Certificates, or other
evidence of ownership, issued in respect of Shares of Restricted Stock shall
be registered in the name of the Participant and deposited by such Participant,
together with a stock power endorsed in blank, with the Company. After the
lapse of the restrictions applicable to such Shares of Restricted Stock, the
Company shall deliver such certificates, or other evidence of ownership, to the
Participant or the Participant’s legal representative.
	 
	 	(c)	 	Dividends. Dividends paid on any Shares of Restricted
Stock may be paid directly to the Participant, withheld by the Company subject
to vesting of the Restricted Shares pursuant to the terms of the applicable
Award agreement, or may be reinvested in additional Shares of Restricted Stock,
as determined by the Committee in its sole discretion.

 

	 	 	 	10

	 	(d)	 	Performance-Based Grants. Notwithstanding anything to
the contrary herein, certain Shares of Restricted Stock granted under this
Section 8 may, at the discretion of the Committee, be granted in a manner which
is intended to be deductible by the Company under Section 162(m) of the Code
(or any successor section thereto). The restrictions applicable to such
Restricted Stock shall lapse based wholly or partially on the attainment of
written performance goals approved by the Committee for a performance period
established by the Committee (i) while the outcome for that performance period
is substantially uncertain and (ii) no more than 90 days after the commencement
of the performance period to which the performance goal relates or, if less,
the number of days which is equal to 25 percent of the relevant performance
period. The performance goals, which must be objective, shall be based upon
one or more of the criteria set forth in Section 9(b) below. The Committee
shall determine in its discretion whether, with respect to a performance
period, the applicable performance goals have been met with respect to a given
Participant and, if they have, shall so certify prior to the release of the
restrictions on the Shares.

9.   Other Stock-Based Awards

	 	(a)	 	Generally. The Committee, in its sole discretion, may
grant or sell Awards of Shares and Awards that are valued in whole or in part
by reference to, or are otherwise based on the Fair Market Value of, Shares
(“Other Stock-Based Awards”). Such Other Stock-Based Awards shall be in such
form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive, or vest with respect to,
one or more Shares (or the equivalent cash value of such Shares) upon the
completion of a specified period of service, the occurrence of an event and/or
the attainment of performance objectives. Other Stock-Based Awards may be
granted alone or in addition to any other Awards granted under the Plan.
Subject to the provisions of the Plan, the Committee shall determine the number
of Shares to be awarded to a Participant under (or otherwise related to) such
Other Stock-Based Awards; whether such Other Stock-Based Awards shall be
settled in cash, Shares or a combination of cash and Shares; and all other
terms and conditions of such Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Shares so awarded and
issued shall be fully paid and non-assessable). The maximum amount of Other
Stock-Based Awards that may be granted during a calendar year to any
Participant shall be: (x) with respect to Other Stock-Based Awards that are
denominated or payable in Shares, 269,058 Shares and (y) with respect to Other
Stock-Based Awards that are not denominated or payable in Shares, $10 million.
Notwithstanding any other provision, with respect to (i) Other Stock-Based
Awards settled in Shares that are subject to time-based vesting, not less than
95% of such Other Stock Based Awards

 

	 	 	 	11

	 	 	 	payable in Shares shall vest and become payable at least three years after
the date of grant, subject to earlier vesting in whole or in part in the
event of a Change in Control or the death, disability or other termination
of the Participant’s employment, and (ii) Other Stock-Based Awards settled
in Shares that are subject to vesting upon the attainment of performance
objectives, the minimum performance period shall be one year.

	 	(b)	 	Performance-Based Awards. Notwithstanding anything to
the contrary herein, certain Other Stock-Based Awards granted under this
Section 9 may be granted in a manner which is intended to be deductible by the
Company under Section 162(m) of the Code (or any successor section thereto)
(“Performance-Based Awards”). A Participant’s Performance-Based Award shall be
determined based on the attainment of written performance goals approved by the
Committee for a performance period of not less than one year established by the
Committee (i) while the outcome for that performance period is substantially
uncertain and (ii) no more than 90 days after the commencement of the
performance period to which the performance goal relates or, if less, the
number of days which is equal to 25 percent of the relevant performance period.
The performance goals, which must be objective, shall be based upon one or
more of the following criteria: (i) operating income before depreciation and
amortization; (ii) operating income; (iii) earnings per Share; (iv) return on
shareholders’ equity; (v) revenues or sales; (vi) free cash flow; (vii) return
on invested capital and (viii) total shareholder return. The foregoing
criteria may relate to the Company, one or more of its Affiliates or one or
more of its or their divisions or units, or any combination of the foregoing,
and may be applied on an absolute basis and/or be relative to one or more peer
group companies or indices, or any combination thereof, all as the Committee
shall determine. In addition, to the degree consistent with Section 162(m) of
the Code (or any successor section thereto), the performance goals may be
calculated without regard to extraordinary items. The Committee shall
determine whether, with respect to a performance period, the applicable
performance goals have been met with respect to a given Participant and, if
they have, shall so certify and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards will be paid for such
performance period until such certification is made by the Committee. The
amount of the Performance-Based Award actually paid to a given Participant may
be less than the amount determined by the applicable performance goal formula,
at the discretion of the Committee. The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however,
that a Participant may, if and to the extent permitted by the Committee and
consistent with the provisions of Section 162(m) of the Code and Section 19 below, elect to defer payment of a Performance-Based
Award.

 

	 	 	 	12

10.  Adjustments Upon Certain Events

     Notwithstanding any other provisions in the Plan to the contrary, the following provisions
shall apply to all Awards granted under the Plan:

	 	(a)	 	Generally. In the event of any change in the
outstanding Shares (including, without limitation, the value thereof) after the
Effective Date by reason of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination, combination or
transaction or exchange of Shares or other corporate exchange, or any
distribution to shareholders of Shares other than regular cash dividends or any
transaction similar to the foregoing, the Committee in its sole discretion and
without liability to any person shall make such substitution or adjustment, if
any, as it deems to be equitable (subject to Section 19), as to (i) the number
or kind of Shares or other securities issued or reserved for issuance pursuant
to the Plan or pursuant to outstanding Awards, (ii) the maximum number of
Shares for which Awards (including limits established for Restricted Stock or
Other Stock-Based Awards) may be granted during a calendar year to any
Participant, (iii) the Option Price or exercise price of any Stock Appreciation
Right and/or (iv) any other affected terms of such Awards.
	 
	 	(b)	 	Change in Control. In the event of a Change in Control
after the Effective Date, the Committee may (subject to Section 19), but shall
not be obligated to, (A) accelerate, vest or cause the restrictions to lapse
with respect to, all or any portion of an Award, (B) cancel Awards for fair
value (as determined in the sole discretion of the Committee) which, in the
case of Options and Stock Appreciation Rights, may equal the excess, if any, of
value of the consideration to be paid in the Change in Control transaction to
holders of the same number of Shares subject to such Options or Stock
Appreciation Rights (or, if no consideration is paid in any such transaction,
the Fair Market Value of the Shares subject to such Options or Stock
Appreciation Rights) over the aggregate exercise price of such Options or Stock
Appreciation Rights, (C) provide for the issuance of substitute Awards that
will substantially preserve the otherwise applicable terms of any affected
Awards previously granted hereunder as determined by the Committee in its sole
discretion or (D) provide that for a period of at least 30 days prior to the
Change in Control, such Options shall be exercisable as to all shares subject
thereto and that upon the occurrence of the Change in Control, such Options
shall terminate and be of no further force and effect.

 

	 	 	 	13

11.  No Right to Employment or Awards

     The granting of an Award under the Plan shall impose no obligation on the Company or any
Affiliate to continue the Employment of a Participant and shall not lessen or affect the Company’s
or Subsidiary’s right to terminate the Employment of such Participant. No Participant or other
person shall have any claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders of Awards. The terms and conditions of Awards and the
Committee’s determinations and interpretations with respect thereto need not be the same with
respect to each Participant (whether or not such Participants are similarly situated).

12.  Successors and Assigns

     The Plan shall be binding on all successors and assigns of the Company and a Participant,
including without limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or representative of the
Participant’s creditors.

13.  Nontransferability of Awards

     Unless otherwise determined by the Committee (and subject to the limitation that in no
circumstances may an Award may be transferred by the Participant for consideration or value), an
Award shall not be transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. An Award exercisable after the death of a Participant may be
exercised by the legatees, personal representatives or distributees of the Participant.

14.  Amendments or Termination

     The Board or the Committee may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made, (a) without the approval of the shareholders of the
Company, if such action would (except as is provided in Section 10 of the Plan), increase the total
number of Shares reserved for the purposes of the Plan or increase the maximum number of Shares of
Restricted Stock or Other Stock-Based Awards that may be awarded hereunder, or the maximum number
of Shares for which Awards may be granted to any Participant, (b) without the consent of a
Participant, if such action would diminish any of the rights of the Participant under any Award
theretofore granted to such Participant under the Plan or (c) to Section 5(b), relating to
repricing of Options or Stock Appreciation Rights, to permit such repricing; provided,
however, that the Committee may amend the Plan in such manner as it deems necessary to
permit the granting of Awards meeting the requirements of the Code or other applicable laws.

     Without limiting the generality of the foregoing, to the extent applicable, notwithstanding
anything herein to the contrary, this Plan and Awards issued hereunder shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date. Notwithstanding any provision of the
Plan to the contrary, in the event that the Committee determines that any amounts payable hereunder
will be taxable to a Participant under Section 409A of the Code and related Department of Treasury
guidance, prior to payment to such Participant of such amount,

 

	 	 	 	14

the Company may (a) adopt such amendments to the Plan and Awards and appropriate policies and
procedures, including amendments and policies with retroactive effect, that the Committee
determines necessary or appropriate to preserve the intended tax treatment of the benefits provided
by the Plan and Awards hereunder and/or (b) take such other actions as the Committee determines
necessary or appropriate to avoid the imposition of an additional tax under Section 409A of the
Code.

15.  International Participants

     With respect to Participants who reside or work outside the United States of America and who
are not (and who are not expected to be) “covered employees” within the meaning of Section 162(m)
of the Code, the Committee may, in its sole discretion, amend the terms of the Plan or Awards with
respect to such Participants in order to conform such terms with the requirements of local law or
to obtain more favorable tax or other treatment for a Participant, the Company or an Affiliate.

16.  Other Benefit Plans

     All Awards shall constitute a special incentive payment to the Participant and shall not be
taken into account in computing the amount of salary or compensation of the Participant for the
purpose of determining any benefits under any pension, retirement, profit-sharing, bonus, life
insurance or other benefit plan of the Company or under any agreement between the Company and the
Participant, unless such plan or agreement specifically provides otherwise.

17.  Choice of Law

     The Plan shall be governed by and construed in accordance with the laws of the State of New
York without regard to conflicts of laws, and except as otherwise provided in the pertinent Award
agreement, any and all disputes between a Participant and the Company or any Affiliate relating to
an Award shall be brought only in a state or federal court of competent jurisdiction sitting in
Manhattan, New York.

18.  Effectiveness of the Plan

     The Plan shall be effective as of the Effective Date, subject to the approval of the
shareholders of the Company.

19.  Section 409A

     Notwithstanding other provisions of the Plan or any Award agreements thereunder, no Award
shall be granted, deferred, accelerated, extended, paid out or modified under this Plan in a manner
that would result in the imposition of an additional tax under Section 409A of the Code upon a
Participant. In the event that it is reasonably determined by the Committee that, as a result of
Section 409A of the Code, payments in respect of any Award under the Plan may not be made at the
time contemplated by the terms of the Plan or the relevant Award agreement, as the case may be,
without causing the Participant holding such Award to be

 

	 	 	 	15

subject to taxation under Section 409A of the Code, the Company will make such payment on the
first day that would not result in the Participant incurring any tax liability under Section 409A
of the Code; which, if the Participant is a “specified employee” within the meaning of the Section
409A, shall be the first day following the six-month period beginning on the date of Participant’s
termination of Employment. The Company shall use commercially reasonable efforts to implement the
provisions of this Section 19 in good faith; provided that neither the Company, the Committee nor
any of the Company’s employees, directors or representatives shall have any liability to
Participants with respect to this Section 19.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]