Document:

exv10w7

 

Exhibit 10.7

LIN TV CORP.

AMENDED AND RESTATED

2002 STOCK PLAN

 

 

1. PURPOSE

LIN TV Corporation, a Delaware corporation (herein, together with its successors, referred to as
the “Company”), by means of this Amended and Restated 2002 Stock Plan (the “Plan”), desires to
afford certain individuals and key employees of the Company and any subsidiary corporation thereof
now existing or hereafter formed or acquired (such subsidiary corporations sometimes referred to
herein as “Related Entities”) who are responsible for the continued growth of the Company an
opportunity to acquire a proprietary interest in the Company, and thus to create in such persons an
increased interest in and a greater concern for the welfare of the Company and any Related
Entities.

The stock options described in Sections 6 and 9 (the “Options”), and the shares of Common Stock (as
hereinafter defined) acquired pursuant to the exercise of such Options, shares of Common Stock
awarded as described in Section 7 hereof (“Stock Awards”), and Performance-Based Awards (as
hereinafter defined) granted as described in Section 8 hereof are a matter of separate inducement
and are not in lieu of any salary or other compensation for services. As used in the Plan, the
terms “parent corporation” and “subsidiary corporation” shall mean, respectively, a corporation
within the definition of such terms contained in Sections 424(e) and 424(f), respectively, of the
Internal Revenue Code of 1986, as amended (the “Code”).

2. ADMINISTRATION

The Plan shall be administered by the Compensation Committee of the Board of Directors of the
Company (“Board of Directors”) or by any other committee appointed by the Board of Directors of the
Company to administer this Plan (the “Committee”); provided that the Board of Directors shall act
as the Committee if no such committee is appointed by the Board of Directors; further provided
that, the entire Board of Directors may act as the Committee if it chooses to do so. The number of
individuals that shall constitute the Committee shall be determined from time to time by a majority
of all the members of the Board of Directors, and, unless that majority of the Board of Directors
determines otherwise, shall consist of not less than two (2) members who shall be (i) “Non-Employee
Directors” within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (ii) “outside directors”
within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Code.

A majority of the Committee shall constitute a quorum (or if the Committee consists of only two
members, then both members shall constitute a quorum), and subject to the provisions of Section 5,
the acts of a majority of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be the acts of the Committee.

The members of the Committee shall serve at the pleasure of the Board of Directors, which shall
have the power, at any time and from time to time, to remove members from or add members to the
Committee. Removal from the Committee may be with or without cause. Any individual serving as a
member of the Committee shall have the right to resign from membership in the Committee by written
notice to the Board of Directors. The Board of Directors, and not the remaining members of the
Committee, shall have the power and authority to fill vacancies on the

 

 

Committee, however caused. The Board of Directors shall promptly fill any vacancy that causes the
number of members of the Committee to be below two.

3. SHARES AVAILABLE

     a. Basic Limitation. Subject to the adjustments provided in Section 11 hereof, the maximum
aggregate number of shares of Class A Common Stock, par value $.01 per share (“Common Stock”), of
the Company (“Shares”) in respect of which Options or Stock Awards may be granted for all purposes
under the Plan shall be 6,300,000 Shares. Options granted under the Plan may be fulfilled in
accordance with the terms of the Plan with (i) authorized and unissued Shares, (ii) issued Shares
held in the Company’s treasury, or (iii) issued Shares reacquired by the Company, in each situation
as the Board of Directors or the Committee may determine from time to time.

     b. Individual Limitation. Subject to the adjustments under Section 11 or Section 13 hereof, a
Participant shall not be granted an Option or Stock Award under the Plan and such Option or Stock
Award shall not vest with respect to more than 350,000 Shares in any calendar year to the extent
such Option or Stock Award is intended to satisfy the requirements applicable to Performance-Based
Awards under Section 8 hereof. The limitation in this Section 3(b) shall not apply to Options or
Stock Awards that are not intended to satisfy the requirements of “qualified performance-based
compensation” under Section 162(m) of the Code.

     c. Source of Shares. If, for any reason, any Shares as to which Options have been granted
cease to be subject to such Options (including as a result of the expiration, termination,
cancellation, or forfeiture of such Option) or any Shares acquired pursuant to a Stock Award are
returned to the Company (including as a result of a forfeiture of such Shares pursuant to the terms
of the Stock Award), such Shares shall thereafter be available for the grant of Options or Stock
Awards under the Plan.

     d. Certain Acquisitions. In connection with the acquisition of any business by the Company or
any of its subsidiaries or Affiliates, any outstanding option grants, stock awards or other similar
rights pertaining to such business may be assumed or replaced by Options or Stock Awards under the
Plan upon such terms and conditions as the Committee determines.

4. ELIGIBILITY AND BASES OF PARTICIPATION

     a. Key Employees. Grants of Incentive Stock Options (as hereinafter defined), Non-Qualified
Stock Options (as hereinafter defined) may be made under the Plan to Key Employees, subject to and
in accordance with Section 6 hereof. Stock Awards may be made under the Plan to Key Employees,
subject to and in accordance with Section 7 hereof. Performance-Based Awards may be made under the
Plan to Key Employees, subject to and in accordance with Section 8 hereof. As used herein, the term
“Key Employee” shall mean any employee of the Company or any Related Entity (including officers and
directors of the Company or any Related Entity who are also employees of the Company or any Related
Entity) who is regularly employed on a salaried basis, who is so employed on the date of such
grant, and whom the Committee identifies as having a direct and significant effect on the
performance of the Company or any Related Entity.

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     b. Eligible Non-Employees. Grants of Non-Qualified Stock Options may be made under the Plan
to Eligible Non-Employees, subject to and in accordance with Section 9 hereof. Stock Awards may be
made under the Plan to Eligible Non-Employees, subject to and in accordance with Section 7 hereof.
As used herein, the term “Eligible Non-Employee” shall mean any person or entity of any nature
whatsoever, other than a Non-Employee Director of the Company. Such term shall specifically include
any individual, a firm, a company, a corporation, a partnership, a trust, or other entity
(collectively, a “Person”), that the Committee designates as eligible for a grant of Options or
Stock Awards pursuant to this Plan because such Person performs bona fide consulting, advisory, or
other services for the Company or any Related Entity (other than services in connection with the
offer or sale of securities in a capital-raising transaction) and whom the Board of Directors or
the Committee determines has a direct and significant effect on the financial development of the
Company or any Related Entity.

     c. No Right to Become a Participant. The adoption of this Plan shall not be deemed to give
any Person a right to be granted any Options or Stock Awards, including Performance-Based Awards.
The recommendation or selection of a Key Employee or Eligible Non-Employee as a recipient of any
Option or Stock Award under the Plan shall not be deemed to entitle the Key Employee or Eligible
Non-Employee to such Option prior to the date it is granted or such Stock Award prior to the date
it is awarded. Each grant of an Option or Stock Award shall be evidenced by an Option Agreement or
Stock Award Agreement, as applicable, executed by the Participant and the Company. The agreement
shall include expressly or by reference the terms and conditions set forth in the Plan, and may
include such other provisions not inconsistent with the provisions of the Plan as the Committee
shall deem advisable.

5. AUTHORITY AND INDEMNIFICATION OF COMMITTEE

     a. Authority. Subject to and not inconsistent with the express provisions of the Plan, the
Code, including Section 162(m) of the Code, and, if applicable, Rule 16b-3, the Committee shall
have plenary authority to:

          (i) Determine the Key Employees and Eligible Non-Employees to whom Options and/or Stock Awards
shall be granted, the time when such Options and/or Stock Awards shall be granted, the number of
Shares subject to such Options or Stock Awards, the purchase price or exercise price of each Option
or Stock Award, the period(s) during which an Option shall be exercisable (whether in whole or in
part, including whether such Options shall become immediately exercisable upon the consummation of
a Change of Control), the period(s) during which restrictions on any Stock Award (if any) shall
lapse (including whether restrictions shall immediately lapse upon the consummation of a Change of
Control), the terms of any Performance-Based Award (as described in Section 8 hereof), and all
other terms and provisions thereof (which need not be identical);

          (ii) Require, as a condition to the granting of any Option or Stock Award, that the Person
receiving such Option or Stock Award agree not to sell or otherwise dispose of such Option, any
Shares acquired pursuant to an Option or Stock Award, or any other “derivative security” (as
defined by Rule 16a-1(c) under the Exchange Act) for a period of six months following the date of
the grant of such Option or Stock Award, or for such other period as the Committee may determine;

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          (iii) Provide an arrangement through registered broker-dealers whereby temporary financing may
be made available to a Participant by the broker-dealer, under the rules and regulations of the
Board of Governors of the Federal Reserve, for the purpose of assisting the Participant in the
exercise of an Option and/or the payment of any tax withholding obligations arising in connection
with the exercise of an Option, such authority to include the payment by the Company of the
commissions of the broker-dealer;

          (iv) Provide the establishment of procedures for a Participant to exercise all or a portion of
an Option by delivering that number of Shares previously acquired by the Participant and held by
the Participant for at least six months prior to the exercise date, having an aggregate Fair Market
Value equal to the per Share exercise price of the Option multiplied by the number of Shares
subject to the portion of the Option being exercised and to deliver the Shares surrendered by such
Participant in payment of such exercise price;

          (v) Provide (in accordance with Section 14 hereof or otherwise) the establishment of a
procedure whereby a number of Shares or other securities may be withheld from the total number of
Shares or other securities to be issued upon exercise of an Option (other than an Incentive Stock
Option) or in connection with the granting or vesting of a Stock Award to meet the minimum required
tax withholding obligations of a Participant with respect to federal income tax, federal employment
tax, and other taxes incurred by a Participant upon such grant, vesting, or exercise or taxes
required to be withheld by the Company or a Related Entity in connection with such grant, vesting,
or exercise;

          (vi) Prescribe, amend, modify and rescind rules and regulations relating to the Plan; and

          (vii) Make all determinations permitted or deemed necessary, appropriate or advisable for the
administration of the Plan, interpret the terms and conditions of the Plan, any Option Agreement,
or any Stock Award Agreement, perform all other acts, exercise all other powers, and establish any
other procedures determined by the Committee to be necessary, appropriate, or advisable in
administering the Plan or for the conduct of the Committee’s business. Any act of the Committee,
including interpretations of the provisions of the Plan or any Option Agreement or Stock Award
Agreement and determinations under the Plan or any such agreement shall be final, conclusive and
binding on all parties.

     b. Delegation. The Committee may delegate to one or more of its members, or to one or more
agents, such administrative duties as it may deem advisable, and the Committee or any Person to
whom it has delegated duties as aforesaid may employ one or more Persons to render advice with
respect to any responsibility the Committee or such Person may have under the Plan. The Committee
may employ attorneys, consultants, accountants, or other Persons and the Committee, the Company,
and its officers and directors shall be entitled to rely upon the advice, opinions, or valuations
of any such Persons.

     c. Indemnification. No member of the Committee and no employee of the Company shall be liable
for any act or failure to act hereunder, except in circumstances involving his or her bad faith,
gross negligence or willful misconduct, or for any act or failure to act hereunder by any other
member or employee or by any agent to whom duties in connection with the

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administration of this Plan have been delegated. The Company shall indemnify members of the
Committee and any agent of the Committee who is an employee of the Company, a Subsidiary or an
Affiliate against any and all liabilities or expenses to which they may be subjected by reason of
any act or failure to act with respect to their duties on behalf of the Plan, except in
circumstances involving such person’s bad faith, gross negligence or willful misconduct.

6. OPTIONS GRANTED TO KEY EMPLOYEES

Subject to the express provisions of this Plan, the Committee shall have the authority to grant
options intended to satisfy the requirements of Section 422 of the Code regarding incentive stock
options (“Incentive Stock Options”), to grant non-qualified stock options (options which are not
intended to meet the requirements applicable to incentive stock options under Section 422 of the
Code) (“Non-Qualified Stock Options”), and to grant both types of Options to Key Employees. No
Incentive Stock Option shall be granted pursuant to this Plan after the earlier of ten years from
the date of adoption of the Plan or ten years from the date of approval of the Plan by the
stockholders of the Company. Incentive Stock Options shall be granted only to Key Employees. The
terms and conditions of the Options granted under this Section 6 shall be determined from time to
time by the Committee; provided, however, that the Options granted under this Section 6 shall be
subject to all terms and provisions of the Plan (other than Section 7, 8 (except with respect to
Options granted to “covered employees” within the meaning of Section 162(m) of the Code), or 9
hereof), including the following:

     a. Option Exercise Price. Subject to Section 4 hereof, the Committee shall establish the
Option exercise price at the time an Option is granted at such amount as the Committee shall
determine in its sole discretion; provided, that, in the case of an Incentive Stock Option, such
exercise price shall not be less than the Fair Market Value per Share on the date the Option is
granted; and provided, further, that in the case of an Incentive Stock Option granted to a person
who, at the time such Incentive Stock Option is granted, owns shares of stock of the Company or any
Related Entity which possess more than 10% of the total combined voting power of all classes of
shares of stock of the Company or of any Related Entity (“Substantial Shareholder”), the Incentive
Stock Option exercise price shall not be less than 110% of the Fair Market Value per Share on the
date the Incentive Stock Option is granted. The Option exercise price shall be subject to
adjustment in accordance with the provisions of Section 11 of the Plan.

     b. Option Term. Each Option Agreement shall specify the period during which the Option may be
exercised and shall provide that the Option shall expire at the end of such period. The Option
Agreement shall provide that the exercise of an Option shall not be permitted more than ten years
after the date on which the Option is granted, subject to earlier termination or cancellation as
provided in the Plan; provided that, in the case of an Incentive Stock Option granted to a
Substantial Shareholder, the exercise of an Incentive Stock Option shall not be permitted more than
five years after the date on which the Incentive Stock Option is granted.

     c. Payment. The exercise price per Share with respect to each Option shall be payable at the
time of such exercise. Such price shall be payable in cash or by any other means acceptable to the
Committee, including delivery to the Company of Shares previously acquired by the Participant or by
the delivery or withholding of Shares pursuant to a procedure created pursuant to Section
5(a)(iii), (iv) or (v) of the Plan. Shares delivered to or withheld by the

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Company in payment of the Option exercise price shall be valued at the Fair Market Value of
the Share on the day preceding the date of the exercise of the Option.

     d. Exercisability of Stock Option. Unless otherwise determined by the Committee at the time of
grant and as provided in an Option Agreement, Options granted hereunder shall become exercisable
according to the vesting schedule set forth below:

	 	•  	one-fourth of the Shares subject to the Option shall become exercisable on the first
anniversary of the date of grant and shall remain exercisable until the Option expires,
terminates, or is cancelled; and
	 
	 	•  	one-fourth of the Shares subject to the Option shall become exercisable on the
second anniversary of the date of grant and shall remain exercisable until the Option
expires, terminates, or is cancelled; and
	 
	 	•  	one-fourth of the Shares subject to the Option shall become exercisable on the third
anniversary of the date of grant and shall remain exercisable until the Option expires,
terminates, or is cancelled; and
	 
	 	•  	one-fourth of the Shares subject to the Option shall become exercisable on the
fourth anniversary of the date of grant and shall remain exercisable until the Option
expires, terminates, or is cancelled.

     e. Death. If a Key Employee’s employment with the Company or a Related Entity terminates due
to the death of such Key Employee, the estate of such Key Employee, or a Person who acquired the
right to exercise such Option by bequest or inheritance or by reason of the death of the Key
Employee, shall have the right to exercise such Option, to the extent such Option was vested on the
date the Key Employee’s employment terminated, in accordance with the terms of the Option Agreement
at any time and from time to time before the earlier to occur of the following (1) the expiration
of 365 days after the date the Key Employee’s employment with the Company or a Related Entity
terminated by reason of his death, or (2) the expiration date of such Option, unless a shorter
period is expressly provided in the Option Agreement evidencing such Option or is established by
the Committee pursuant to Section 10 (but in no event after the expiration date of the Option).

     f. Disability. If any Key Employee’s employment with the Company or a Related Entity
terminates because of his Disability (as defined in Section 21 hereof), such Participant or his
legal representative shall have the right to exercise the Option, to the extent the Option was
vested as of the date the Key Employee’s employment terminated, in accordance with the terms of the
Option Agreement at any time and from time to time before the earlier to occur of the following (1)
the expiration of 365 days after the date the Key Employee’s employment with the Company or a
Related Entity terminated by reason of his Disability, or (2) the expiration date of such Option,
unless a shorter period is expressly provided in such Option or established by the Committee
pursuant to Section 10.

     g. Termination for Cause. Unless a Key Employee’s Option expressly provides otherwise, such
Key Employee shall immediately forfeit all rights under his Option, except as to

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the Shares previously acquired thereunder, if the employment of such Key Employee with the
Company or a Related Entity is terminated by the Company or any Related Entity for Cause (as
defined in Section 21 hereof). The determination that Cause for termination exists shall be made by
the Committee (unless otherwise agreed to in the Option Agreement or in writing by the Company and
the Key Employee).

     h. Other Termination of Employment. If the employment of a Key Employee with the Company or a
Related Entity terminates for any reason other than those specified in subsection (e), (f) or (g)
above, such Key Employee shall have the right to exercise his Option, to the extent the Option was
vested as of the date of termination of employment, in accordance with the terms of the Option
Agreement, before the first to occur of the following (1) the expiration of 60 days after the date
of such termination of employment, or (2) the expiration date of the Option, unless a longer or
shorter period is expressly provided in the Option Agreement or is established by the Committee
(but in no event shall such period continue after the expiration date of the Option); provided,
that no Incentive Stock Option shall be exercisable more than three months after such termination.

     i. Maximum Exercise. To the extent the aggregate Fair Market Value (determined as of the time
the Option is granted) of Shares subject to a Key Employee’s Incentive Stock Options that first
become exercisable during a calendar year (under all option plans of the Company and of any Parent
Corporation or Subsidiary Corporation ) exceeds $100,000, such Incentive Stock Options shall be
treated as Non-Qualified Stock Options. For purposes of the preceding sentence, Incentive Stock
Options shall be taken into account in the order in which they are granted. To the extent an Option
that is intended to be treated as an Incentive Stock Option does not satisfy any requirement of
Section 422 of the Code such Option shall be treated as a Non-Qualified Stock Option.

     j. Continuation of Employment. Each Incentive Stock Option shall require the Key Employee to
remain in the continuous employ of the Company or any Related Entity from the date of grant of the
Incentive Stock Option until no more than three months prior to the date of exercise of the
Incentive Stock Option, subject to the maximum exercise periods described in subsections (e), (f),
(g), and (h), above. The Committee may, in its sole discretion, permit the exercise of an Option
that is intended to be an Incentive Stock Option more than three months after the date the
Participant ceases to be employed by the Company or any Related Entity, provided that the Option
shall be treated as a Non-Qualified Stock Option if it is exercised more than three months after
the date the Key Employee’s employment with the Company or a Related Entity terminates, except as
provided in subsections (e) and (f), above.

7. STOCK AWARDS

     a. Generally. The Committee may, in its discretion, grant Stock Awards (which may include
mandatory payment of any bonus in stock) consisting of Shares issued or transferred to Key
Employees or Eligible Non-Employees with or without other payments therefor. A Stock Award shall be
construed as an offer by the Company to the Participant to purchase the number of Shares subject to
the Stock Award at the purchase price, if any, established therefor.

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     b. Payment of the Purchase Price. If the Stock Award Agreement requires payment for Shares
acquired pursuant to the Stock Award, the purchase price of any Shares subject to the Stock Award
may be paid in any manner authorized by the Committee, which may include any manner authorized
under the Plan for the payment of the exercise price of an Option.

     c. Additional Terms. Stock Awards shall be subject to such terms and conditions as the
Committee determines appropriate, including restrictions on the sale or other disposition of such
shares and the right of the Company to reacquire such shares for no consideration upon termination
of the Participant’s employment or service within specified periods. The Committee may require the
Participant to deliver a duly signed stock power, endorsed in blank, relating to the Common Stock
covered by such an Award. The Committee may also require that the stock certificates evidencing
such shares be held in custody or bear restrictive legends until the restrictions thereon shall
have lapsed.

     d. Rights as a Shareholder. The Stock Award Agreement shall specify whether the Participant
shall have, with respect to Shares subject to the Stock Award, all of the rights of a holder of
Shares, including the right to receive dividends and to vote the Shares.

8. PERFORMANCE-BASED AWARDS

     a. Stock Awards or Options. The Committee may, in its discretion, grant Stock Awards or
Options that are intended to meet the requirements applicable to “qualified performance-based
compensation” for purposes of the exemption from the compensation deduction limitation described in
Section 162(m) of the Code (“Performance-Based Awards”). It is the intent of the Company that
Performance-Based Awards made to Persons who are “covered employees” within the meaning of Section
162(m) of the Code shall constitute “qualified performance-based compensation” satisfying the
requirements of Section 162(m) of the Code. Options granted to Participants who are “covered
employees” within the meaning of Section 162(m) of the Code shall be intended to be
Performance-Based Awards, except as otherwise provided by the Committee. Accordingly, the
provisions of the Plan shall be interpreted in a manner consistent with Section 162(m) of the Code
with respect to Performance-Based Awards. If any other provision of the Plan or a Performance-Based
Award is intend to but does not comply with, or is inconsistent with, the requirements of Section
162(m) of the Code, such provision shall be construed or deemed amended to the extent necessary to
conform to and comply with such requirements. Nothing in this Section 8 shall subject a
Performance-Based Award to terms or conditions in excess of the minimum requirements necessary for
the Performance-Base Award to comply with the requirements of Section 162(m) of the Code.

     b. As determined by the Committee in its sole discretion, either the granting of, vesting of,
or other lapsing of restrictions related to Performance-Based Awards shall be based on achievement
of hurdle rates and/or growth rates in one or more business criteria that apply to the individual
Participant, one or more business units or the Company as a whole. The business criteria shall be
as follows, individually or in combination: (i) net earnings; (ii) earnings per share; (iii) net
sales growth; (iv) market share; (v) net operating profit; (vi) expense targets; (vii) working
capital targets; (viii) operating margin; (ix) return on equity; (x) return on assets; (xi)
planning accuracy (as measured by comparing planned results to actual results); (xii) market price
per share; (xiii) total return to stockholders and (xiv) broadcast cash flow (as defined

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below). Broadcast cash flow is defined as operating income plus corporate expenses plus
depreciation and amortization of intangible assets and amortization of program rights plus other
non-cash expenses or credits, minus cash program payments. In addition, Performance-Based Awards
may include comparisons to the performance of other companies, such performance to be measured by
one or more of the foregoing business criteria. Such performance goals may be adjusted to exclude
any one or more of (i) extraordinary items, (ii) gains or losses on the dispositions of
discontinued operations, (iii) the cumulative effects of changes in accounting principles, (iv) the
writedown of any asset, and (v) charges for restructuring and rationalization programs.

     c. The per Share exercise price of Performance-Based Awards that are Options shall not be less
than the Fair Market Value of a Share on the grant date of such Option.

     d. With respect to Performance-Based Awards that are Stock Awards, the Committee shall
establish in writing (i) the performance goals applicable to a given period, and such performance
goals shall state, in terms of an objective formula or standard, the method for computing the
amount of compensation payable to the Participant if such performance goals are obtained and (ii)
the individual employees or class of employees to which such performance goals apply no later than
ninety (90) days after the commencement of such period (but in no event after twenty-five percent
(25%) of such period has elapsed).

     e. No Performance-Based Awards shall be payable to or vest with respect to, as the case may
be, any Participant for a given period until the Committee certifies in writing that the objective
performance goals (and any other material terms) applicable to such period have been satisfied.

     f. After establishment of a performance goal, the Committee shall not revise such performance
goal or increase the amount of compensation payable thereunder (as determined in accordance with
Section 162(m) of the Code) upon the attainment of such performance goal. Notwithstanding the
preceding sentence, the Committee may reduce or eliminate the number of Shares subject to a
Performance-Based Award or the number of shares of Common Stock vested upon the attainment of such
performance goal.

9. OPTIONS GRANTED TO ELIGIBLE NON-EMPLOYEES

     Subject to the express provisions of this Plan, the Committee shall have the authority to
grant Non-Qualified Stock Options (and not Incentive Stock Options) to Eligible Non-Employees. The
terms and conditions of the Non-Qualified Stock Options granted under this Section 9 shall be
determined from time to time by the Committee; provided, however, that the Non-Qualified Stock
Options granted under this Section 9 shall be subject to all terms and provisions of the Plan
(other than Section 6, 7, or 8 (except as otherwise provided in an Option Agreement) hereof),
including the following:

     a. Option Exercise Price. Subject to Section 4, the Committee shall establish the exercise
price of a Non-Qualified Stock Option at the time the Non-Qualified Stock Option is granted at such
amount as the Committee shall determine in its sole discretion. The exercise

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price of a Non-Qualified Stock Option shall be subject to adjustment in accordance with the
provisions of Section 11 of the Plan.

     b. Option Term. Each Option Agreement shall specify the period during which the Non-Qualified
Stock Option may be exercised and shall provide that the Non-Qualified Stock Option shall expire at
the end of such period. No Non-Qualified Stock Option by its terms shall be exercisable after the
expiration of ten years after the date of grant of the Non-Qualified Stock Option.

     c. Payment. The exercise price per Share subject to a Non-Qualified Stock Option shall be
payable at the time of such exercise. Such exercise price shall be payable in cash or by any other
means acceptable to the Committee, including delivery to the Company of Shares previously acquired
by the Eligible Non-Employee or by the delivery or withholding of Shares pursuant to a procedure
created pursuant to Section 5(a)(iii), (iv) or (v) of the Plan. If Shares are delivered to or
withheld by the Company in payment of the Non-Qualified Stock Option exercise price, such Shares
shall be valued at the Fair Market Value of the Shares on the day preceding the date of the
exercise of the Non-Qualified Stock Option.

     d. Exercisability of Stock Option. Subject to Section 10 hereof, each Non-Qualified Stock
Option shall become exercisable in one or more installments, as the Committee may determine at the
time of the grant.

     e. Death. If the retention by the Company or any Related Entity of the services of any
Eligible Non-Employee terminates because of his death, the estate of such Eligible Non-Employee, or
a Person who acquired the right to exercise a Non-Qualified Stock Option by bequest or inheritance
or by reason of the death of the Eligible Non-Employee, shall have the right to exercise such
Option in accordance with the terms of the Option Agreement to the extent such Option was vested as
of the date the Eligible Non-Employee’s services terminated because of his death, at any time and
from time to time before the earlier to occur of the following (1) the expiration of 365 days after
the date of the Eligible Non-Employee’s death, or (2) the expiration date of the Option, unless a
longer or shorter period is expressly provided in such Option Agreement or established by the
Committee pursuant to Section 10 (but in no event after the expiration date of the Option).

     f. Disability. If the retention by the Company or any Related Entity of the services of any
Eligible Non-Employee terminates because of his disability, as determined by the Committee in its
sole discretion, such Eligible Non-Employee or his legal representative shall have the right to
exercise a Non-Qualified Stock Option in accordance with the terms of the Option Agreement to the
extent the Non-Qualified Stock Option was vested as of the date the Eligible Non-Employee’s service
with the Company or a Related Entity terminated because of his disability, at any time and from
time to time within the earlier to occur of the following (1) the expiration of 365 days after the
date of the Eligible Non-Employee’s services were terminated, or (2) the expiration date of the
Option, unless a longer or shorter period is expressly provided in such Option Agreement or
established by the Committee pursuant to Section 10 (but not after the expiration of the Option).

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     g. Cause. If the retention by the Company or any Related Entity of the services of any
Eligible Non-Employee is terminated (i) for Cause, or (ii) as a result of the removal of the
Eligible Non-Employee from office as a director of the Company or of any Related Entity for cause
action of the stockholders of the Company or such Related Entity in accordance with the by-laws of
the Company or such Related Entity, as applicable, and the corporate law of the jurisdiction of
incorporation of the Company or such Related Entity, then such Eligible Non-Employee shall forfeit
his rights under his Options except as to Shares previously acquired through the exercise of the
Option. The determination that Cause for the termination of the Eligible Non-Employee’s services
exists shall be made by the Committee (unless otherwise provided in the Option Agreement or as
otherwise agreed to in writing by the Company and the Eligible Non-Employee).

     h. Other Termination of Relationship. If the retention by the Company or any Related Entity
of the services of any Eligible Non-Employee terminates for any reason other than those specified
in subsections (e), (f), or (g) above, such Participant shall have the right to exercise his or its
Non-Qualified Stock Option, to the extent such Option was vested on the date of such termination,
in accordance with the terms of the Option Agreement within 60 days after the date of such
termination, unless a longer or shorter period is expressly provided in such Option Agreement or
established by the Committee pursuant to Section 10 (but not after the expiration date of the
Option).

10. CHANGE OF CONTROL

If (i) a Change of Control shall occur, (ii) the Company shall enter into an agreement providing
for a Change of Control, or (iii) any member of the HMC Group shall enter into an agreement
providing for a Change of Control, then the Committee may declare any or all Options outstanding
under the Plan to be exercisable in full, to the extent such Options were not previously
exercisable, at such time or times as the Committee shall determine, notwithstanding the express
provisions of any Option Agreement; similarly, the Committee may declare that any restrictions
applicable to any Stock Award shall completely lapse (to the extent not then lapsed), at such time
or times as the Committee shall determine, notwithstanding the terms of any Stock Award Agreement.
Each Option accelerated by the Committee pursuant to the preceding sentence shall terminate,
notwithstanding any express provision thereof or any other provision of the Plan, on such date (not
later than the stated exercise date) as the Committee shall determine.

11. ADJUSTMENT OF SHARES

Unless otherwise expressly provided in a particular Option Agreement or Stock Award Agreement, in
the event that, by reason of any merger, consolidation, combination, liquidation, reorganization,
recapitalization, stock dividend, stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares or other like change in capital structure of the Company (collectively,
a “Reorganization”), the Common Stock is substituted, combined, or changed into any cash, property,
or other securities, or the shares of Common Stock are changed into a greater or lesser number of
shares of Common Stock, the number and/or kind of shares and/or interests subject to an Option or
Stock Award and the per share price or value thereof shall be appropriately adjusted by the
Committee to give appropriate effect to such Reorganization. Any fractional shares or interests
resulting from such adjustment shall be

11

 

eliminated. Notwithstanding the foregoing, (i) each such adjustment with respect to an Incentive
Stock Option shall comply with the rules of Section 424(a) of the Code, and (ii) in no event shall
any adjustment be made which would render any Incentive Stock Option granted hereunder other than
an “incentive stock option” for purposes of Section 422 of the Code.

In the event the Company is not the surviving entity of a Reorganization and, following such
Reorganization, any Participant holding Options or Stock Awards issued pursuant to this Plan which
have not been exercised, cancelled, or terminated in connection therewith, the Company shall cause
such Options and Stock Awards to be assumed (or cancelled and replacement Options and Stock Awards
issued) by the surviving entity or a Related Entity.

12. ASSIGNMENT OR TRANSFER

Except as otherwise expressly provided in the Option Agreement for a Non-Qualified Stock Option, no
Option granted under the Plan or any rights or interests therein shall be assignable or
transferable by a Participant except by will or the laws of descent and distribution, and during
the lifetime of a Participant, Options granted to him or her hereunder shall be exercisable only by
the Participant or, in the event that a legal representative has been appointed in connection with
the disability of a Participant, such legal representative. The Committee may, on a case by case
basis, permit a Participant to transfer a Non-Qualified Stock Option, in whole or in part, during
the Participant’s lifetime to one or more members of the Participant’s immediate family or to a
trust established exclusively for one or more such family members, and the extent of such
permission shall be enumerated in the Participant’s Option Agreement. The transferred portion of
the Non-Qualified Stock Option may be exercised only by the person or persons who acquire a
proprietary interest in the Non-Qualified Stock Option pursuant to the transfer. The terms
applicable to the transferred portion of the Non-Qualified Stock Option shall be the same as those
in effect for the Non-Qualified Stock Option under the Participant’s Option Agreement immediately
prior to the transfer. The Committee may impose on any transferable Non-Qualified Stock Option such
limitations and conditions as the Committee deems appropriate in its sole discretion. Any attempt
to transfer an Option in violation of this Section 12 shall be null and void and shall be
disregarded by the Company.

13. OTHER PROVISIONS

The grant of any Option or any Stock Award under the Plan may also be subject to such other
provisions (whether or not applicable to an Option granted or a Stock Award made to any other
Participant) as the Committee determines appropriate, including provisions relating to compliance
with federal and state securities laws, or and provisions and conditions relating to a
Participant’s employment or retention which may be in addition to those specifically provided for
under the Plan.

14. WITHHOLDING TAXES

By acceptance of an Option or a Stock Award, a Participant shall be deemed to (i) agree to
reimburse the Company or Related Entity by which the Participant is employed or retained for any
federal, state, or local taxes or other amounts required by any government to be withheld or
otherwise deducted by such corporation in respect of the Participant’s exercise of all or a portion

12

 

of the Option or the grant of or lapse of any restrictions related to a Stock Award; (ii) authorize
the Company or any Related Entity by which the Participant is employed or retained to withhold from
any cash compensation paid to the Participant or in the Participant’s behalf, an amount sufficient
to discharge any federal, state, and local taxes or other amounts imposed on the Company, or the
Related Entity by which the Participant is employed or retained, and which otherwise has not been
reimbursed by the Participant, in respect of the Participant’s exercise of all or a portion of the
Option or the grant of or lapse of any restrictions related to a Stock Award; and (iii) agree that
the Company may, in its discretion, hold the stock certificate to which the Participant is entitled
upon exercise of the Option (or refuse to release from escrow certificate related to any restricted
Stock Award), until cash sufficient to pay that liability has been accumulated, and may, in its
discretion, effect such withholding by retaining shares issuable upon the exercise of the Option
having a Fair Market Value on the date of exercise which is equal to the amount to be withheld or
in the case of a Stock Award, require the Participant to return to the Company a number of shares
of Common Stock sufficient to satisfy the withholding requirement.

15. COSTS AND EXPENSES

The costs and expenses of administering the Plan shall be borne by the Company and shall not be
charged against any Option or Stock Award or to any Participant receiving an Option or Stock Award
        .

16. FUNDING OF PLAN

The Plan shall be unfunded. The Company shall not be required to make any segregation of assets to
assure the payment of any Option or Stock Award under the Plan.

17. OTHER INCENTIVE PLANS

The adoption of the Plan does not preclude the adoption by appropriate means of any other incentive
plan for employees.

18. EFFECT ON TENURE

Nothing contained in the Plan or any Option Agreement or Stock Award Agreement shall affect, or be
construed as affecting, the terms of employment of any Key Employee (or the terms of the
relationship between the Company or any Related Entity and any Eligible Non-Employee) except to the
extent specifically provided herein or therein. Nothing contained in the Plan or any Option
Agreement or Stock Award Agreement shall impose, or be construed as imposing, an obligation on (i)
the Company or any Related Entity to continue the employment of any Key Employee (or retention of
any Eligible Non-Employee), and (ii) any Key Employee to remain in the employ (or any Eligible
Non-Employee to remain in the service) of the Company or any Related Entity.

19. NO FRACTIONAL SHARES

No fractional Shares shall be issued or delivered under the Plan or any Option or Stock Award. The
Committee shall have full discretion to determine whether cash, other securities, or other

13

 

property shall be paid or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled or terminated.

20. EXCHANGE PROGRAMS; REPRICINGS

     a. Exchange Programs. The Committee may, without stockholder approval, cancel any outstanding
Option and grant in exchange therefor a new Option or Stock Award covering the same or a different
number of shares of Common Stock and having an exercise price per share lower than the then-current
exercise price per share of the cancelled Option.

     b. Repricings. The Committee may, without stockholder approval, amend any outstanding Option
granted under the Plan to provide an exercise price per share that is lower than the then-current
exercise price per share of such outstanding Option.

21. DEFINITIONS

In addition to the terms specifically defined elsewhere in the Plan, as used in the Plan, the
following terms shall have the respective meanings indicated:

     “Affiliate” shall mean, as to any Person, a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control with, such Person.
“Board of Directors” shall have the meaning set forth in Section 2 hereof.

     “Cause”, with respect to any Key Employee, shall mean (unless another definition is agreed to
in writing by the Company and the Participant) termination by action of the Board of Directors
because of: (A) the Participant’s conviction of, or plea of nolo contendere to, a felony or a crime
involving moral turpitude; (B) the Participant’s personal dishonesty, incompetence, willful
misconduct, willful violation of any law, rule, or regulation (other than minor traffic violations
or similar offenses) or breach of fiduciary duty which involves personal profit; (C) the
Participant’s commission of material mismanagement in the conduct of his duties as assigned to him
by the Board of Directors or the Participant’s supervising officer or officers of the Company; (D)
the Participant’s willful failure to execute or comply with the policies of the Company or his
stated duties as established by the Board of Directors or the Participant’s supervising officer or
officers of the Company, or the Participant’s intentional failure to perform the Participant’s
stated duties; or (E) substance abuse or addiction on the part of the Participant. “Cause”, with
respect to any Eligible Non-Employee, shall mean (unless another definition is agreed to in writing
by the Company and the Participant) termination by action of the Board of Directors because of: (A)
the Participant’s conviction of, or plea of nolo contendere to, a felony or a crime involving moral
turpitude; (B) the Participant’s personal dishonesty, incompetence, willful misconduct, willful
violation of any law, rule, or regulation (other than minor traffic violations or similar offenses)
or breach of fiduciary duty which involves personal profit; (C) the Participant’s commission of
material mismanagement in providing services to the Company or any Related Entity; (D) the
Participant’s willful failure to comply with the policies of the Company in providing services to
the Company or any Related Entity, or the Participant’s intentional failure to perform the services
for which the Participant has been engaged; (E) substance abuse or addiction on the part of the
Participant; or (F) the Participant’s willfully making any material misrepresentation or willfully

14

 

omitting to disclose any material fact to the board of directors of the Company or any Related
Entity with respect to the business of the Company or any Related Entity.

     “Change of Control” shall mean the first to occur of the following events: (i) any sale,
lease, exchange, or other transfer (in one transaction or series of related transactions) of all or
substantially all of the assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act other than one or more members of the HMC Group, (ii)
a majority of the Board of Directors of the Company shall consist of Persons who are not Continuing
Directors; or (iii) the acquisition by any Person or Group (other than one or more members of the
HMC Group) of the power, directly or indirectly, to vote or direct the voting of securities having
more than 50% of the ordinary voting power for the election of directors of the Company.

     “Code” shall have the meaning set forth in Section 1 hereof.

     “Committee” shall have the meaning set forth in Section 2 hereof.

     “Common Stock” shall have the meaning set forth in Section 3 hereof.

     “Company” shall have the meaning set forth in Section 1 hereof.

     “Continuing Director” shall mean, as of the date of determination, any Person who (i) was a
member of the Board of Directors of the Company on the date of adoption of this Plan, (ii) was
nominated for election or elected to the Board of Directors of the Company with the affirmative
vote of a majority of the Continuing Directors who were members of such Board of Directors at the
time of such nomination or election, or (iii) is a member of the HMC Group.

     “Disability” shall mean permanent disability as defined under the appropriate provisions of
the applicable long-term disability plan maintained for the benefit of employees of the Company or
any Related Entity who are regularly employed on a salaried basis unless another meaning shall be
agreed to in writing by the Committee and the Participant; provided, however, that in the case of
an Incentive Stock Option “disability” shall have the meaning specified in Section 22(e)(3) of the
Code.

     “Eligible Non-Employee” shall have the meaning set forth in Section 4 hereof.

     “Exchange Act” shall have the meaning set forth in Section 2 hereof. “Fair Market Value”
shall, as it relates to the Common Stock, mean the average of the high and low prices of such
Common Stock as reported on the principal national securities exchange on which the shares of
Common Stock are then listed on the date specified herein, or if there were no sales on such date,
on the next preceding day on which there were sales, or if such Common Stock is not listed on a
national securities exchange, the last reported bid price in the over-the-counter market, or if
such shares are not traded in the over-the-counter market, the per share cash price for which all
of the outstanding Common Stock could be sold to a willing purchaser in an arms length transaction
(without regard to minority discount, absence of liquidity, or transfer restrictions imposed by any
applicable law or agreement) at the date of the event giving rise to a need for a determination.
Except as may be otherwise expressly provided in a particular Option, Fair Market Value shall be
determined in good faith by the Committee.

15

 

     “HMC Group” shall mean Hicks, Muse, Tate & Furst Incorporated, its Affiliates and their
respective employees, officers, and directors (and members of their respective families and trusts
for the primary benefit of such family members).

     “Incentive Stock Options” shall have the meaning set forth in Section 6 hereof.

     The term “including” when used herein shall mean “including, but not limited to”.“Key
Employee” shall have the meaning set forth in Section 4 hereof.

     “Non-Qualified Stock Options” shall have the meaning set forth in Section 6 hereof.

     “Option Agreement” shall mean the written agreement or other written instrument(s) evidencing
the grant of an Option.

     “Options” shall have the meaning set forth in Section 1 hereof.

     “Participant” shall mean a Person who has received an Option or a Stock Award under the Plan.

     “Performance-Based Award” shall have the meaning set forth in Section 8 hereof.

     “Person” shall have the meaning set forth in Section 4 hereof.

     “Plan” shall have the meaning set forth in Section 1 hereof.

     “Related Entities” shall have the meaning set forth in Section 1 hereof.

     “Reorganization” shall have the meaning set forth in Section 11 hereof.

     “Rule 16b-3” shall have the meaning set forth in Section 2 hereof.

     “Stock Award” shall have the meaning set forth in Section 1 hereof.

     “Stock Award Agreement” shall mean the written agreement or other written instrument(s)
evidencing a Stock Award.

     “Subsidiary” shall mean, with respect to any Person, any other Person of which such first
Person owns or has the power to vote, directly or indirectly, securities representing a majority of
the votes ordinarily entitled to be cast for the election of directors or other governing Persons.

22. AMENDMENT OF PLAN

The Board of Directors shall have the right to amend, modify, suspend or terminate the Plan at any
time; provided that, an amendment that would: (i) disqualify any Incentive Stock Options granted
under the Plan; (ii) increase the aggregate number of Shares reserved for issuance pursuant to the
exercise of Options; (iii) increase the annual per-Participant limit set forth in Section 3(a)
hereof; or (v) modify the requirements as to eligibility for participation in the Plan shall not
become effective without the approval of a majority of the stockholders of the Company.
Notwithstanding the preceding sentence, the Board of Directors shall be authorized to

16

 

amend the Plan and the Options granted thereunder (i) to the extent necessary to cause Incentive
Stock Options to satisfy the requirements applicable to “incentive stock options” under Section 422
of the Code, (ii) to comply with Rule 16b-3 (or any successor rule) under the Exchange Act (or any
successor law) and the regulations (including any temporary regulations) promulgated thereunder,
(iii) to cause the Options or Stock Awards intended to be Performance-Based Awards to qualify as
“performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code. No
amendment, modification, suspension or termination of the Plan shall cause, without the consent of
the holder, any previously-granted Options or Stock Awards to be forfeited or altered in a way that
materially and adversely affects the holder thereof or his rights or benefits under such Option or
Stock Award.

23. GOVERNING LAW

The validity and construction of the Plan and any agreement evidencing the grant of an Option or
Stock Award thereunder shall be governed by the laws of the State of Delaware, excluding any
conflicts or choice of law rules or principles that might otherwise refer construction or
interpretation of any provision of the Plan or any such agreement to the substantive law of another
jurisdiction, except to the extent superseded by any applicable federal law.

24. EFFECTIVE DATE

The 2002 Stock Plan (the “Original Plan”) was effective as of May 1, 2002. The Plan shall be
effective as of May 4, 2005, and shall be void ab initio if not approved by the stockholders of the
Company within twelve months thereafter and the terms of the Original Plan shall remain in full
force effect.

Amended and Restated 2002 Stock Plan,

approved by the Board of Directors on March 16, 2005

and by the stockholders on [May 4, 2005.]

17exv10w8

 

Exhibit 10.8

LIN TV CORP.

AMENDED AND RESTATED

2002 NON-EMPLOYEE DIRECTOR

STOCK PLAN

EFFECTIVE AS OF MAY 4, 2005

 

 

 

 

 

 

 

1

 

LIN TV CORP.

AMENDED AND RESTATED

2002 NON-EMPLOYEE DIRECTOR STOCK PLAN

1. PURPOSE

The purpose of the LIN TV Corp. Amended and Restated 2002 Non-Employee Director Stock Plan (“Plan”)
is to attract highly qualified individuals who are not current employees of LIN TV Corp. (the
“Company”) to serve as members of the Board of Directors of the Company and to enable such
individuals to increase their ownership in the Company’s Class A common stock, par value $.01 per
share (the “Common Stock”). Capitalized terms in the Plan or in any agreement evidencing an award
granted under the Plan shall have the meaning assigned to such terms in the Plan, except to the
extent the context requires a different construction. In any necessary construction of the Plan,
the masculine shall include the feminine and the singular shall include the plural and vice versa.

2. ADMINISTRATION

     (a) Committee. The Plan shall be administered by the Compensation Committee of the Board of
Directors of the Company (“Board of Directors”) or by any other committee appointed by the Board of
Directors of the Company to administer the Plan (the “Committee”); provided that the Board of
Directors shall act as the Committee if no such committee is appointed by the Board of Directors;
further provided that, the entire Board of Directors may act as the Committee if it chooses to do
so. The number of individuals that shall constitute the Committee shall be determined from time to
time by a majority of all the members of the Board of Directors, and, unless that majority of the
Board of Directors determines otherwise, shall consist of not less than two (2) members who shall
be “non-employee directors” within the meaning of Rule 16b-3(b)(3) (or any successor rule)
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

     (b) Authority. The Committee shall have full and final authority, subject to the terms of the
Plan:

          (i) to establish such rules and regulations as it deems necessary for the proper
administration of the Plan;

          (ii) to make all determinations permitted or deemed necessary, appropriate, or advisable for
the administration of the Plan;

          (iii) to interpret the terms and conditions of the Plan and any agreement evidencing an award
granted under the Plan; and

1

 

          (iv) to perform all other acts, exercise all other powers, and establish any other procedures
determined by the Committee to be necessary, appropriate, advisable, in its sole discretion, for
the administration of the Plan or for the conduct of the Committee’s business.

All determinations and interpretations made by the Committee with respect to the Plan or an award
granted under the Plan shall be binding and conclusive on all individuals and their legal
representatives.

     (c) Indemnification. No member of the Committee and no employee of the Company shall be
liable for any act or failure to act hereunder, except in circumstances involving his bad faith,
gross negligence or willful misconduct, or for any act or failure to act hereunder by any other
member or employee or by any agent to whom duties in connection with the administration of this
Plan have been delegated. The Company shall indemnify members of the Committee and any agent of the
Committee who is an employee of the Company against any and all liabilities or expenses to which
they may be subjected by reason of any act or failure to act with respect to their duties on behalf
of the Plan, except in circumstances involving such person’s bad faith, gross negligence or willful
misconduct.

     (d) Delegation and Advisers. The Committee may delegate to one or more of its members, or to
one or more agents, such administrative duties as it may deem advisable, and the Committee, or any
person to whom it has delegated duties as aforesaid, may employ one or more persons to render
advice with respect to any responsibility the Committee or such person may have under the Plan. The
Committee may employ such legal or other counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or computation received from any
such counsel, consultant or agent. Expenses incurred by the Committee in the engagement of such
counsel, consultant or agent shall be paid by the Company.

3. ELIGIBILITY

Each active member of the Company’s Board of Directors who is not a current employee of the Company
and who is not eligible to participate in the LIN TV Corp. Amended and Restated 2002 Stock Plan, as
amended (including any successor thereto), shall be eligible to participate in the Plan (“Eligible
Non-Employee Director”). An Eligible Non-Employee Director shall become a participant in the Plan
(“Participant”) upon his execution of an Option Agreement (as defined in Section 4(a) herein) or a
Stock Award Agreement (as defined in Section 4(b) herein).

4. AWARDS

     (a) The Plan provides for the grant of rights to purchase shares of Common Stock (“Stock
Options”) in accordance with the terms described herein and subject to the terms of the written
agreement executed by the Company and the Participant evidencing the grant of such Stock Option
(“Option Agreement”). Stock Options granted under the Plan shall be designated as non-qualified
stock options.

     (b) The Plan provides for the grant of awards with respect to shares of Common Stock (“Stock
Awards”), as described in Section 7 herein. Each Stock Award shall be subject to

2

 

the terms of the Plan and the written agreement executed by the Company and the Participant
evidencing the grant of such Stock Award (“Stock Award Agreement”).

     (c) Any Stock Option or Stock Award granted to a member of the Committee shall be approved by
the Board of Directors, and no member of the Committee may approve the grant of a Stock Option or
Stock Award to himself. Eligibility to participate in the Plan shall not entitle an Eligible
Non-Employee Director to receive a Stock Option or Stock Award prior to the date such Stock Option
or Stock Award is granted under the Plan. The granting of any Stock Option or Stock Award under the
Plan shall not be deemed to either entitle a Participant to receive or to disqualify a Participant
from receiving any other Stock Option or Stock Award under the Plan.

5. COMMON STOCK RESERVED UNDER THE PLAN

     (a) Basic Limitations. The aggregate number of shares of Common Stock that may be subject to
Stock Options or Stock Awards granted under the Plan shall be 400,000 shares of Common Stock, which
may be authorized and unissued or treasury shares, subject to any adjustments made in accordance
with Section 8 hereof.

     (b) Additional Shares. Any shares of Common Stock subject to a Stock Option that for any
reason is cancelled, expires, forfeited, or terminates without having been exercised, or any shares
of Common Stock subject to a Stock Award that is cancelled, expires, forfeited, or terminates
without payment, if any, having been made by the Participant for such shares of Common Stock shall
again be available for the grant of Stock Options or Stock Awards under the Plan.

6. OPTIONS

     (a) Initial Grant. Each newly-elected Eligible Non-Employee Director shall be granted a Stock
Option with respect to 10,000 shares of Common Stock effective as of the first Option Grant Date
following the date of his election to the Board of Directors, subject to Section 18 herein.

     (b) Subsequent Grants. Each Eligible Non-Employee Director who is reelected or continues to
serve (after his election to the Board of Directors) as an Eligible Non-Employee Director after the
adjournment of an Annual Meeting of Stockholders of the Company shall be granted a Stock Option
exercisable for that number of shares of Common Stock equal to one-third of the Base Amount,
subject to Section 18 herein. “Base Amount” shall mean 4,000 shares of Common Stock in 2005,
increasing to 9,000 shares of Common Stock over the following three years and remaining at 9,000
shares of Common Stock thereafter.

     (c) Option Grant Date. The “Option Grant Date” shall be the first Friday following the Annual
Meeting of Stockholders of the Company; provided, however, that if, on such date, the General
Counsel of the Company determines, in his sole discretion, that the Company is in possession of
material, undisclosed information about the Company, then the annual grant of Stock Options to
Eligible Non-Employee Directors shall be suspended until the second business day after public
dissemination of such information and the Option Grant Date of such Stock Options shall be such
date.

3

 

     (d) Exercise Price. Each Stock Option granted hereunder shall have a per-share exercise price
equal to the Fair Market Value of a share of Common Stock on the Option Grant Date for such Stock
Option.

     (e) Payment of Exercise Price. In no event shall any shares of Common Stock be issued
pursuant to the exercise of a Stock Option until the Participant has made full payment for the
shares of Common Stock (including payment of the exercise price and any taxes required to be
withheld by the Company in connection with the exercise of the Stock Option).

The exercise price shall be payable in United States dollars in cash or by check or in such form as
the Committee may from time to time designate. The Participant also shall pay to the Company an
amount determined by the Company to be sufficient to pay any applicable federal or state
withholding taxes imposed as a result of the exercise of the Stock Option. In the sole discretion
of the Committee, a Participant may make payment of either or both of the exercise price and any
required federal or state withholding taxes, in whole or in part, by delivering shares of Common
Stock to the Company. The Committee may impose such limitations and restrictions on payments with
shares of Common Stock as the Committee, in its sole discretion, deems advisable. However, to the
extent the Participant is permitted to deliver shares of Common Stock to pay any portion of the
exercise price, the Participant must have owned the shares of Common Stock for at least six months
as of the delivery date.

     (f) Vesting. A Stock Option may be exercised to the extent the Stock Option is vested. Unless
otherwise determined by the Committee at the time of grant and as provided in an Option Agreement,
a Stock Option granted under the Plan shall become vested and exercisable in accordance with the
vesting schedule set forth below, unless vesting is accelerated pursuant to Section 6(g) or Section
8(c) herein.

	 	 	 	 	 
	 	 	PERCENTAGE OF GRANT	 	 
	 	 	VESTED AND EXERCISABLE	 	VESTING DATE
	 
	 	 	 	 
	

	 	          25%
	 	1st anniversary of grant date
	 
	 	 	 	 
	

	 	          25%
	 	2nd anniversary of grant date
	 
	 	 	 	 
	

	 	          25%
	 	3rd anniversary of grant date
	 
	 	 	 	 
	

	 	          25%
	 	4th anniversary of grant date

4

 

     (g) Acceleration of Vesting. To the extent a Stock Option has not previously vested or
expired, a Stock Option shall become 100% vested and exercisable effective as of the date an
Eligible Non-Employee Director ceases to provide services as an Eligible Non-Employee Director of
the Company, provided that such cessation of service occurs as a result of his death or Retirement.
For purposes of the Plan, “Retirement” shall mean cessation of service as an Eligible Non-Employee
Director of the Company on or after (i) the date on which an Eligible Non-Employee Director attains
age 60 with ten (10) or more years of service with the Company as a Non-Employee Director or (ii)
the date on which an Eligible Non-Employee Director attains age 65 with five (5) or more years of
service with the Company as an Eligible Non-Employee Director.

     (h) Term of Stock Options. A Stock Option granted under the Plan shall terminate or expire on
the earlier to occur of the following, subject to Section 8(c) herein:

          (i) Ten (10) years after the Option Grant Date; or

          (ii) Three (3) months after the date of an individual’s cessation of service as an Eligible
Non-Employee Director.

5

 

     (i) Exchange Programs. The Committee may, without stockholder approval, cancel any
outstanding Stock Option and grant in exchange therefor a new Stock Option or Stock Award covering
the same or a different number of shares of Common Stock and having an exercise price per share
lower than the then-current exercise price per share of the cancelled Stock Option.

7. STOCK AWARDS

     (a) Generally. The Committee may, in its discretion, grant Stock Awards consisting of shares
of Common Stock issued or transferred to an Eligible Non-Employee Director with or without payments
therefor. A Stock Award shall be construed as an offer by the Company to the Participant to
purchase the number of shares of Common Stock subject to the Stock Award at the purchase price, if
any, established therefor.

     (b) Payment of the Purchase Price. If the Stock Award Agreement requires payment for shares
of Common Stock acquired pursuant to the Stock Award, the purchase price of any shares of Common
Stock subject to the Stock Award may be paid in any manner authorized by the Committee, which may
include any manner authorized under the Plan for the payment of the exercise price of a Stock
Option.

     (c) Additional Terms. Stock Awards shall be subject to such terms and conditions as the
Committee determines, in its sole discretion, to be appropriate, including restrictions on the sale
or other disposition of shares of Common Stock acquired pursuant to the Stock Award and the right
of the Company to reacquire such shares for no consideration on or after the termination of the
Participant’s service with the Company. The Committee may require the Participant to deliver a duly
signed stock power, endorsed in blank, relating to the shares of Common Stock subject to a Stock
Award. The Committee may also require that the stock certificates evidencing shares of Common Stock
subject to a Stock Award be held in custody or bear restrictive legends until the restrictions
thereon shall have lapsed.

     (d) Rights as a Shareholder. The Stock Award Agreement shall specify whether the Participant
shall have, with respect to shares of Common Stock subject to the Stock Award, all of the rights of
a holder of shares of Common Stock, including the right to receive dividends and to vote the shares
of Common Stock.

     (e) Annual Grants. Each Eligible Non-Employee Director who is reelected or continues to serve
(after his election to the Board of Directors) as an Eligible Non-Employee Director after the
adjournment of an Annual Meeting of Stockholders of the Company shall be granted a Stock Award
equal to (i) two-thirds of the Base Amount, divided by (ii) three, subject to Section 18 herein.

8. ADJUSTMENT PROVISIONS; CHANGE OF CONTROL

     (a) Adjustment Generally. If there shall be any change in the shares of Common Stock through
merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock
split, split up, spin-off, combination of shares, exchange of shares, dividend in kind or other
like change in capital structure or distribution (other than normal cash dividends) to stockholders
of the Company, the number of shares of Common Stock reserved under the Plan as

6

 

set forth in Section 5(a) herein, the number and kind of shares issuable under an outstanding
Stock Option, and the exercise price of a Stock Option shall be adjusted, as may be deemed
appropriate by the Committee, to reflect such change in the shares of Common Stock.

     (b) Adjustment to Stock Awards. In the event of any change in the shares of Common Stock
described in subsection (a) above, the Committee may specify the effect of such change on Stock
Awards under the Plan.

     (c) Effect of a Change of Control. If (1) a Change of Control shall occur, (2) the Company
shall enter into an agreement providing for a Change of Control, or (3) any member of the HMC Group
shall enter into an agreement providing for a Change of Control, then the Committee may declare any
or all Stock Options outstanding under the Plan to be exercisable in full, to the extent such Stock
Options were not previously exercisable, at such time or times as the Committee shall determine,
notwithstanding the express provisions of any Option Agreement; similarly, the Committee may
declare that any restrictions applicable to any Stock Award shall completely lapse (to the extent
not then lapsed), at such time or times as the Committee shall determine, notwithstanding the terms
of any Stock Award Agreement. Each Stock Option the vesting of which is accelerated by the
Committee pursuant to the preceding sentence shall terminate, notwithstanding any express provision
thereof or any other provision of the Plan, on such date (not later than the stated expiration date
of such Stock Option) as the Committee shall determine.

     (d) Definitions.

          (i) “Change of Control” of the Company shall mean, for purposes of the Plan, the first to
occur of the following events: (i) any sale, lease, exchange, or other transfer (in one transaction
or series of related transactions) of all or substantially all of the assets of the Company to any
Person or group of related Persons for purposes of Section 13(d) of the Exchange Act other than one
or more members of the HMC Group, (ii) a majority of the Board of Directors of the Company shall
consist of Persons who are not Continuing Directors; or (iii) the acquisition by any Person or
Group (other than one or more members of the HMC Group) of the power, directly or indirectly, to
vote or direct the voting of securities having more than 50% of the ordinary voting power for the
election of directors of the Company.

          (ii) “HMC Group” shall mean Hicks, Muse, Tate & Furst Incorporated, its affiliates and their
respective employees, officers, and directors (and members of their respective families and trusts
for the primary benefit of such family members). An affiliate of Hicks, Muse, Tate & Furst
Incorporated shall mean, any individual or legal entity that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control with Hicks, Muse,
Tate & Furst Incorporated.

9. NONTRANSFERABILITY

Except as otherwise expressly provided in the Option Agreement, no Stock Option granted under the
Plan or any rights or interests therein shall be assignable or transferable by a Participant except
by will or the laws of descent and distribution, and during the lifetime of a Participant, Stock
Options granted to him under the Plan shall be exercisable only by the Participant. The

7

 

Committee may, on a case by case basis, permit a Participant to transfer a Stock Option, in whole
or in part, during the Participant’s lifetime to one or more members of the Participant’s immediate
family or to a trust established exclusively for one or more such family members, and the extent of
such permission shall be enumerated in the Participant’s Option Agreement. The transferred portion
of the Stock Option may be exercised only by the person or persons who acquire a proprietary
interest in the Stock Option pursuant to the transfer. The terms applicable to the transferred
portion of the Stock Option shall be the same as those in effect for the Stock Option under the
Participant’s Option Agreement immediately prior to the transfer. The Committee may impose on any
transferable Stock Option such limitations and conditions as the Committee deems appropriate in its
sole discretion. Any attempt to transfer a Stock Option in violation of this Section 9 shall be
null and void and shall be disregarded by the Company.

10. FAIR MARKET VALUE

For purposes of the Plan and any Stock Options or Stock Awards granted hereunder, “Fair Market
Value” shall mean the closing price of a share of Common Stock on the determination date (or on the
last preceding trading date if Common Stock was not traded on the determination date) if the
Company’s Common Stock is readily tradable on a national securities exchange or other market
system, and if the Company’s Common Stock is not readily tradable, Fair Market Value shall mean the
amount determined in good faith by the Committee as the fair market value of a share of Common
Stock.

11. WITHHOLDING

By acceptance of a Stock Option or a Stock Award, a Participant shall be deemed to (i) agree to
reimburse the Company for any federal, state, or local taxes or other amounts required by any
government to be withheld or otherwise deducted by such corporation in respect of the Participant’s
exercise of all or a portion of the Stock Option, the grant of a Stock Award, or the lapse of any
restrictions related to a Stock Award; (ii) authorize the Company to withhold from any cash
compensation paid to the Participant or in the Participant’s behalf, an amount sufficient to
discharge any federal, state, and local taxes or other amounts required to be withheld by the
Company, and which otherwise has not been paid by the Participant, in respect of the Participant’s
exercise of all or a portion of a Stock Option or the grant of or lapse of any restrictions related
to a Stock Award; and (iii) agree that the Company may, in its discretion, hold the stock
certificate to which the Participant is entitled upon exercise of the Stock Option (or refuse to
release from escrow certificate related to any restricted Stock Award), until cash sufficient to
pay that liability has been accumulated, and may, in its discretion, effect such withholding by
retaining shares issuable upon the exercise of the Stock Option having a Fair Market Value on the
date of exercise which is equal to the amount to be withheld or, in the case of a Stock Award,
require the Participant to return to the Company a number of shares of Common Stock sufficient to
satisfy the withholding requirement.

12. TENURE

Nothing contained in the Plan, any Option Agreement, or any Stock Award Agreement shall affect, or
be construed as affecting, the terms of relationship between the Company and any Eligible
Non-Employee Director. Nothing contained in the Plan, any Option Agreement, or any

8

 

Stock Award Agreement shall impose, or be construed as imposing, an obligation on the Company to
retain the services of any individual.

13. UNFUNDED PLAN

Participants shall have no right, title, or interest whatsoever in or to any investments which the
Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the
Plan, and no action taken pursuant to its provisions, shall create or be construed to create a
trust of any kind, or a fiduciary relationship between the Company and any participant,
beneficiary, legal representative or any other person. To the extent that any person acquires a
right to receive payments from the Company under the Plan, such right shall be no greater than the
right of an unsecured general creditor of the Company. All payments to be made hereunder shall be
paid from the general funds of the Company and no special or separate fund shall be established and
no segregation of assets shall be made to assure payment of such amounts except as expressly set
forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income
Security Act of 1974, as amended.

14. NO FRACTIONAL SHARES

No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The
Committee shall determine whether cash, or Options, or other property shall be issued or paid in
lieu of fractional shares or whether such fractional shares of Common Stock or any rights thereto
shall be forfeited or otherwise eliminated.

15. RIGHTS AS A SHAREHOLDER

Except as otherwise provided by the Committee, a Participant shall have no rights as a shareholder
with respect to shares of Common Stock covered by a Stock Option or Stock Award until the issuance
of an unrestricted stock certificate to the Participant with respect to such shares. No adjustment
shall be made for dividends or other rights for which the record date is prior to the issuance of
such unrestricted stock certificate.

16. DURATION, AMENDMENT AND TERMINATION

     (a) Duration. No Stock Option shall be granted after May 1, 2012 but Stock Options granted
prior to that date shall continue to become exercisable, and may be exercised, according to their
terms.

     (b) Amendment and Termination. Except as provided in Section 16(c) herein, the Plan may be
terminated or amended by the Board of Directors, in whole or in part, at any time.

     (c) Limitations on Amendment. No amendment to the Plan may revoke or alter the terms of any
previously-granted Stock Option or Stock Award outstanding as of the effective date of such Plan
amendment without the Participant’s consent, to the extent such amendment would materially and
adversely affect the Participant’s rights under, or the value of, such Stock Option or Stock Award.
Additionally, no amendment to the Plan shall become effective before the date stockholders approve
such amendment where the absence of such approval would cause

9

 

the Plan to fail to comply with Rule 16b-3 under the Exchange Act, or any other requirement of
applicable law or regulation.

17. GOVERNING LAW

The validity and construction of the Plan and any agreement evidencing the grant of a Stock Option
or Stock Award thereunder shall be governed by the laws of the State of Delaware, excluding any
conflicts or choice of law rules or principles that might otherwise refer construction or
interpretation of any provision of the Plan or any such agreement to the substantive law of another
jurisdiction, except to the extent superseded by any applicable federal law.

18. EFFECTIVE DATE

The 2002 Non-Employee Director Plan was effective as of May 1, 2002 (the “Original Plan”). The
Plan shall be effective as of May 4, 2005, and shall be void ab initio if not approved by the
stockholders of the Company within twelve months thereafter and, in such case, the terms of the
Original Plan shall remain in full force effect. Any Stock Option or Stock Award granted under the
Original Plan prior to such approval of stockholders shall be effective as of the grant date
(unless the Committee specifies otherwise at the time of grant), and such Stock Option may be
exercised prior to such stockholder approval. Any Stock Option or Stock Award granted under the
Plan prior to such approval of stockholders, shall be effective as of the grant date (unless the
Committee specifies otherwise at the time of grant), but no such Stock Option may be exercised nor
may such Stock Award be deemed valid, as the case may be, prior to such stockholder approval, and
if stockholders fail to approve the Plan as specified hereunder, any such Stock Option or Stock
Award shall be null and void as of the grant date.

Amended and Restated 2002
Non-Employee Director Stock Plan,

approved by the Board of Directors on March 16, 2005

and by the stockholders on [May 4, 2005.]

10

 

INDEX OF DEFINED TERMS

	 	 	 	 	 
	TERM	 	SECTION WHERE DEFINED OR FIRST USED
	 
	 	 	 	 
	Base Amount
	 	 	6	(b)
	 
	 	 	 	 
	Board of Directors
	 	 	2	(a)
	 
	 	 	 	 
	Change of Control
	 	 	8	(d)(1)
	 
	 	 	 	 
	Committee
	 	 	2	(a)
	 
	 	 	 	 
	Common Stock
	 	 	1	 
	 
	 	 	 	 
	Company
	 	 	1	 
	 
	 	 	 	 
	Effective Date
	 	 	6	 
	 
	 	 	 	 
	Eligible Non-Employee Director
	 	 	3	 
	 
	 	 	 	 
	Exchange Act
	 	 	2	(a)
	 
	 	 	 	 
	Fair Market Value
	 	 	10	 
	 
	 	 	 	 
	HMC Group
	 	 	8	(d)(2)
	 
	 	 	 	 
	Option Agreement
	 	 	4	(a)
	 
	 	 	 	 
	Option Grant Date
	 	 	6	(c)
	 
	 	 	 	 
	Participant
	 	 	3	 
	 
	 	 	 	 
	Plan
	 	 	1	 
	 
	 	 	 	 
	Retirement
	 	 	6	(g)
	 
	 	 	 	 
	Stock Award
	 	 	4	(b)
	 
	 	 	 	 
	Stock Award Agreement
	 	 	4	(b)
	 
	 	 	 	 
	Stock Option
	 	 	4	(a)

11

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