Document:

exv10wj

 

Exhibit 10.j

June 15, 2007

Mr. Donald DeMarie

[Address]

Dear Donny:

Richard, Alan and I, as well as other members of the executive staff and members of the Masco
Board, are delighted that you have decided to relocate to Michigan and the Masco Corporate Office.

Position

Your new position title is Executive Vice President. As we have discussed, you and I together with
the rest of the management team have a tremendous opportunity to continue building on the
foundation that Richard, Alan and others have put in place to drive value for our shareholders. We
have leadership positions in the markets we serve reflecting our products, brands and the
exceptional people who make up Masco; I am excited and I know you are too!

Cash Compensation

Effective July 1, 2007, your base salary will be increased to an annualized rate of $625,000.
This will continue to be reviewed, generally on an annual basis, with your next review
scheduled for July 1, 2008, or at such time as you assume additional responsibilities, as we
have discussed. Your executive cash bonus program will provide you the opportunity to earn a
cash bonus of up to 160% of base compensation, based on the yearly goals established for
Masco executives by the Organization & Compensation Committee of the Masco Board. The
executive stock award program also provides an annual stock award opportunity of up to 160%
of base salary.

In recognition of your promotion and to facilitate your relocation, Masco will also pay you an
additional, one time, $550,000 cash bonus, such payment to be made when you have signed a
purchase agreement on a new home here in the greater Detroit area.

Long Term Incentive Compensation

The Organization and Compensation Committee of the Masco Board approved a special stock award
and stock option in recognition of your promotion.

1) The Committee has approved a stock award of 75,000 shares of Masco Corporation common
stock. This award has an annual 10%, ten-year vesting schedule. All unvested shares will
pay a dividend if declared by the company.

2) The Committee has approved a stock option of 150,000 shares. The exercise price of this
stock option is $30.16 per share. Masco’s stock options vest at the rate of 20% per year and
are exercisable for ten years from the date of the grant.

 

 

Page 2 — DeMarie

Purchase of Current Residence

Masco will purchase your current residence for a minimum of $1,450,000. This amount will be
adjusted to reflect the higher of the appraisal currently in process or the selling price we
ultimately receive upon sale. As discussed, given the current market dynamics we agree that
this approach will provide an equitable outcome for you and the Company.

We want to help you make this move without losing focus on your businesses or causing undue
stress on your family. You would be responsible for the payment of any taxes or deferred
taxes involved in this purchase and the tax implications should be discussed with your
personal tax advisor. Masco will be responsible for closing costs on both our purchase and
subsequent sale including commissions on the subsequent sale. Any real estate taxes and
assessments owed up to the time of Masco’s purchase of the house, would remain your
responsibility. You and your family agree to cooperate in Masco’s subsequent showing and sale
of the residence through its authorized representative.

Relocation to Michigan Residence

Masco will reimburse you for duplicate living expenses while transitioning from your Florida
residence to the new Michigan residence.

Masco will arrange to move your household goods from the old residence to the new residence. The
cost of the moving expenses will be paid directly by Masco. Moving expenses include the charges
for packing, loading, transporting, unloading, unpacking, and insurance on the transported goods.

Masco will reimburse you for the closing costs and attorney’s fees related to the purchase of
your Michigan residence. Closing costs include processing fees, title search, state and
local transfer taxes, survey fees, credit reports, abstract fees, recording fees, notary
fees, owner’s or lender’s title insurance, termite inspection, mechanical/structural
inspection, tests for radon, gas and asbestos.

Contingent Right to Return to Florida

We recognize that you are agreeing to this relocation without contractual assurances of
future advancement within Masco. lf, during the three-year period commencing on the date of
this letter, you decide that you wish to return to Florida, Masco agrees that it will
guarantee that your sale of the Michigan residence you are currently purchasing, assuming
your continued ownership of same, will be no less than the purchase price. You, of course,
would remain free to sell the house personally if that would prove to be more financially
beneficial to you.

 

 

Page 3 — DeMarie

This right to have Masco relocate you back to Florida is conditioned on your remaining with
Masco for, at least, an additional one-year period from the date of the return to Florida.
In the event you voluntarily resign or are discharged for cause from Masco, either during
the three-year period or during the one-year period following any return to Florida, you
agree to reimburse Masco for any payment on your behalf under this provision or forego any
payment that this provision might otherwise require.

Additional Provisions

The anticipated starting date here in Taylor is August 1, 2007. Chuck Greenwood will coordinate
the details of your relocation to Michigan.

I look forward to your relocation and the opportunity to work with you even more closely than in
the past.

Sincerely,

/s/ Tim Wadhams

Tim Wadhams

			
	CC:	 	Richard Manoogian

Chuck Greenwoodexv10w28

 

Exhibit 10.28

STOCK OPTION PROGRAM

FEBRUARY 14, 2008

KEY EMPLOYEE AWARD

TERMS AND CONDITIONS

This Key Employee Award Terms and Conditions describes terms and conditions of Stock Option (or
Stock Appreciation Rights) Awards, as part of the ConocoPhillips Stock Option Program (Program),
granted under the 2004 Omnibus Stock and Performance Incentive Plan of ConocoPhillips (referred to
as the Plan) by ConocoPhillips (Company) to certain eligible Employees (Employees). These Terms
and Conditions, together with the Annual Award Summary given to each Employee receiving an Award,
form the Award Agreement (the Agreement) relating to the Awards described. The Agreement covers
both Stock Options and Stock Appreciation Rights, and the term Employee covers recipients of Awards
made either in Stock Options or Stock Appreciation Rights.

	1.	 	Type and Size of Grant. Subject to the Plan and this Agreement, the Company grants
to certain eligible Employees a Nonqualified Stock Option to purchase all or any part of an
aggregate number of shares of Common Stock of the Company. In certain countries, grants will
be in the form of Stock Appreciation Rights (SARs). Individual awards will be as set forth in
the Annual Award Summary given to each Employee to whom an Award is granted. The Annual Award
Summary for each Employee is made a part of this Agreement with regard to such Employee.

	2.	 	Grant Date, Price, and Plan. The grant date is February 14, 2008 and the
Grant Price is $79.38. Awards are made under the 2004 Omnibus Stock and Performance
Incentive Plan.

	3.	 	Term of Awards, Exercise Installments, and Last Date to Exercise. Except as
otherwise noted in this Agreement, the following summary table describes term of awards,
exercise installments, and last date to exercise, subject to the more detailed provisions set
forth below:

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     Summary Table

	 	 	 	 	 
	Summary of Exercise Rules
	Status	 	Condition	 	Last Date to Exercise
	Active Employee

	 	 	 	10 years from grant date
	 
	 	 	 	 
	Retirement (age 55
and 5 years of
service)

	 	Prior to 6 months
from grant date
	 	Canceled upon Termination
	 
		 	6 months from grant
date & after
	 	10 years from grant date

	 
	Layoff

	 	Prior to 6 months
from grant date
	 	Canceled upon Termination
	 
		 	6 months to 1 year
from grant date
	 	10 years from grant date (award is prorated)
	 
		 	1 year from grant
date & after
	 	10 years from grant date
	 
	Disability

	 	Any date after
grant date
	 	10 years from grant date
	 
	 	 	 	 
	Death

	 	Any date after
grant date
	 	10 years from grant date
	 
	 	 	 	 
	Divestitures,
outsourcing, and
moves to joint
ventures

	 	Any date after
grant date
	 	Canceled upon Termination, unless
approval
otherwise
	 
	 	 	 	 
	All other Terminations

	 	 	 	Canceled upon Termination

	(a)	 	Exercise Installments and Expiration. Stock Options/SAR’s granted under this
Agreement will become exercisable to the extent that one third of the number of shares of
Stock subject to the Stock Option/SAR (rounded down to nearest whole share) shall be
exercisable on the first anniversary date of the Stock Option/SAR grant. On the second
anniversary date of the Stock Option/SAR grant, an additional one third of the number of
shares of Stock (rounded down to nearest whole share) shall become exercisable. On the
third anniversary date of the Stock Option/SAR grant, the remaining shares shall become
exercisable. To the extent that an installment is not exercised when it becomes first
exercisable, it will remain exercisable at any time thereafter until the Award shall be
canceled, expire, or be surrendered. A Stock Option or SAR expires on the tenth
anniversary of the date on which it was granted.

	(b)	 	Last Date to Exercise (Terminations).

	 	(i)	 	General Rule for Termination. If, prior to the exercise of Stock
Options/SAR grants, the Optionee’s employment with a Participating Company shall be
terminated for any reason except death, Disability, Retirement, or Layoff, such Award
shall be canceled and all rights thereunder shall cease; provided that the Authorized
Party may, in its or his sole discretion, determine that all or any portion of any
other Award shall not be canceled due to Termination of Employment.

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	 	(ii)	 	Layoff Within Six Months. If, prior to a date six months from the date
an Award is granted, the Optionee’s employment with a Participating Company shall be
terminated by reason of Layoff, such Award shall be canceled and all rights thereunder
shall cease.
	 
	 	(iii)	 	Layoff After Six Months but Within One Year. If, on or after a date
six months from the date an Award is granted but prior to a date one year from the date
an Award is granted, the Optionee’s employment with a Participating Company shall be
terminated by reason of Layoff, the Optionee shall retain a prorated number of the
Award shares granted. The number of Award shares retained will be computed by
multiplying the original number of Award shares granted by a fraction, the numerator of
which is the number of full months of employment from the first day of the month in
which the Award was granted until the date the employee is terminated and the
denominator of which is 12. Such calculation shall be rounded down to the nearest
whole share.
	 
	 	(iv)	 	Layoff After One Year. If, on or after a date one year from the date
an Award is granted, the Optionee’s employment with a Participating Company shall be
terminated by reason of Layoff, the Optionee shall retain all rights provided by the
Award at the time of such Termination of Employment.
	 
	 	(v)	 	Retirement After Six Months. If, on or after a date six months from
the Grant Date of an Award, the Optionee’s employment with a Participating Company
shall be terminated by reason of Retirement, the Optionee shall retain all rights
provided by the Award at the time of such Termination of Employment.
	 
	 	(vi)	 	Disability. If, after the date the Award is granted, an Optionee shall
terminate employment following Disability of the Optionee, the Optionee shall retain
all rights provided by the Award at the time of such Termination of Employment.
	 
	 	(vii)	 	Death. If, after the date an Award is granted, an Optionee shall die
while in the employ of a Participating Company, or after Termination of Employment by
reason of Retirement, Disability, or Layoff (and prior to the cancellation of the
Award), the executor or administrator of the estate of the Optionee or the person or
persons to whom the Award shall have been validly transferred by the executor or the
administrator pursuant to will or the laws of descent and distribution shall have the
right to exercise the Award to the same extent the Optionee could have, had the
Optionee not died. No transfer of an Award by the Optionee by will or by the laws of
descent and distribution shall be effective to bind the Company unless the Company
shall have been furnished with written notice thereof and a copy of the will and such
other evidence as the Company may deem necessary to establish the validity of the
transfer and the acceptance by the transferee or transferees of the terms and
conditions of such Award.
	 
	 	(viii)	 	Transfers and Leaves. Transfer of employment between Participating Companies
shall not constitute Termination of Employment for the purpose of any Award granted
under the Program. Whether any leave of absence shall constitute Termination of
Employment for the purposes of any Award granted under the Program shall be determined
in each case in accordance with applicable law and by application of the policies and
procedures adopted by the Company in relation to such leave of absence.
	 
	 	(ix)	 	Divestiture, Outsourcing, or Move to Joint Venture. If, after the date
the Award is granted, an Optionee ceases to be employed by a Participating Company as a
result of (a) the outsourcing of a function, (b) the sale or transfer of all or a
portion of the equity

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	 	 	 	interest of such Participating Company (removing it from the controlled group of
companies of which the Company is a part), (c) the sale of all or substantially all
of the assets of such Participating Company to another employer outside of the
controlled group of corporations (whether the Optionee is offered employment or
accepts employment with the other employer), (d) the Termination of the Optionee by
Participating Company followed by employment within a reasonable time with a company
or other entity in which the Company owns, directly or indirectly, at least a 50%
interest, prior to exercise of an Award, or (e) any other sale of assets determined
by the Authorized Party to be considered a divestiture under this program, the
Authorized Party may, in its or his sole discretion, determine that all or a portion
of any such Award shall not be canceled.

	(c)	 	Detrimental Activities and Suspension of Exercises.

	 	(i)	 	If the Authorized Party determines that, subsequent to the grant of any Award,
the Employee has engaged or is engaging in any activity which, in the sole judgment of
the Authorized Party, is or may be detrimental to the Company or a subsidiary, the
Authorized Party may suspend the right of the Employee to exercise, refuse to honor the
exercise of such Employee’s Awards already requested, or cancel all or part of the
Award or Awards granted to that Employee.
	 
	 	(ii)	 	If the Authorized Party, in its or his sole discretion, determines that the
exercise of any Award has the possibility of violating any law, regulation, or decree
pertaining to the Company, a subsidiary, or the Employee, the Authorized Party may
freeze or suspend the Employee’s right to exercise until such time as the exercise of
the Award would no longer, in the sole discretion of the Authorized Party, have the
possibility of violating such law, regulation, or decree.

	4.	 	Exercising the Stock Option. The Company has retained outside firms to administer
Stock Options (and SARs) granted under the Plans (the “third party administrators”). The
Option (or SAR) must be exercised in accordance with methods and at times set by the third
party administrator and by the Employee’s delivering to the third party administrators such
authorization as may be required.

	5.	 	Payment for Shares. The Grant Price for all shares of Stock purchased upon the
exercise of a Stock Option, or a portion thereof, shall be paid in full at the time of such
exercise. Such payment may be made in cash or by tendering shares of Stock having a value on
the date of exercise equal to the Grant Price. Such value shall be the average of the high
and low trading prices of the stock on the day of exercise. If the Optionee makes payment of
the Grant Price by tendering shares of Stock, such Stock must be registered in the sole name
of the Optionee on the exercise date or an appropriate Stock Power acceptable to the Company
to transfer such stock to the sole name of the Optionee must be provided at the time of
exercise. In the case of an Optionee who makes payment of the Grant Price by tendering shares
of Stock, if the Company deems it appropriate, and if allowed by the applicable laws,
regulations and rulings, the Company may accept an attestation from the Optionee in lieu of
actual physical delivery to the Company of the shares to be tendered. The attestation must
indicate the number of shares held, and if deemed necessary by the Company, the certificate
numbers if the Stock is held in certificate form, or the broker and brokerage account number
if the shares are held in a brokerage account, and any other information necessary to confirm
ownership of the shares. The Company may not accept an attestation in lieu of physical
delivery of the shares unless the shares are held in the sole name of the Optionee either in
certificate form, or in a single brokerage account, or in such other form as the Company may
deem appropriate. Depending on its source, Stock tendered in the exercise of a Stock Option
must have met the appropriate holding period required by current tax, accounting, legal, or
other applicable rules and regulations. At the election of the Optionee (but

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	 	 	subject to any administrative limitations on exercise of Stock Options or permissible methods of
option exercise imposed), the Stock Option may also be exercised by a “net-share settlement”
method for exercising outstanding nonqualified stock options. The Committee, in its sole
discretion and judgment, limit the extent to which shares of Stock may be used in exercising
Stock Options or limit the use of any method or time of option exercise.

	6.	 	Assignment of Option and Exercises After Death. Rights under the Plans and this
Agreement cannot be assigned or transferred other than by (i) will, (ii) beneficiary
designation, or (iii) the laws of descent and distribution. In the event that a beneficiary
designation conflicts with an assignment by will or under the laws of descent and
distribution, the beneficiary designation will prevail. Upon the death of an Employee,
exercise of the grant will be permitted only by the Employee’s designated beneficiary,
executor, or personal representative of the Employee’s estate.

	7.	 	Tax Withholding. In the U.S. and many countries, the difference between the Grant
Price and the value of the stock at the time of an Option exercise multiplied by the number of
shares purchased is compensation subject to tax withholding. The Option exercise will not be
completed until all federal, state, local and other governmental withholding tax requirements
have been met. Should a withholding tax obligation arise upon the exercise of a Stock Option,
the withholding tax may be satisfied by withholding shares of Stock or by payment of cash.
This withholding obligation includes, but is not limited to, federal, state, and local taxes,
including applicable non-U.S. taxes, such as U.K. PAYE. The plan administrator will take such
steps, as it deems necessary or desirable for the withholding of any taxes that are required
by laws or regulations of any governmental authority in connection with any exercise. For
SARs, the SAR Gain will be paid through the local payroll and is subject to applicable
withholding taxes.

	8.	 	Shareholder Rights. The Employee shall not have the rights of a shareholder until
the Option has been exercised and ownership of shares of Common Stock has been transferred to
the Employee. SARs never convey shareholder rights.

	9.	 	Certain Adjustments. In the event certain corporate transactions, recapitalizations,
or stock splits occur while a Stock Option (or SAR) is outstanding, the Grant Price and the
number of Stock Option Shares (or SARs) shall be correspondingly adjusted.

	10.	 	Relationship to the Plan. In addition to the terms and conditions described in this
Agreement, Awards are subject to all other applicable provisions of the Plan. The decisions
of the Committee with respect to questions arising as to the interpretation of the Plan or
this Agreement and as to findings of fact shall be final, conclusive, and binding.

	11.	 	No Employment Guarantee. No provision of this Agreement shall confer any right upon
the Employee to continued employment with any Participating Company.

	12.	 	Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Delaware.

	13.	 	Amendment. Without the consent of the Employee, this Agreement may be amended or
supplemented (i) to cure any ambiguity or to correct or supplement any provision herein which
may be defective or inconsistent with any other provision herein, or (ii) to add to the
covenants and agreements of the Company for the benefit of an Employee or to add to the rights
of an Employee or to surrender any right or power reserved to or conferred upon the Company in
this Agreement, provided, in each case, that such changes or corrections shall not adversely
affect the rights of the Employee with respect to the grant of an Option (or SAR) evidenced
hereby without the Employee’s

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	 	 	consent, or (iii) to make such other changes as the Company, upon advice of counsel, determines
are necessary or advisable because of the adoption or promulgation of, or change in or of the
interpretation of, any law or governmental rule or regulation, including any applicable federal
or state securities or tax laws.

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DEFINITIONS

Capitalized terms not defined below shall have the meanings set forth in the Plan under which the
Award is granted.

“Authorized Party” means the person who is authorized to approve an Award, exercise discretion or
take action under the Administrative Procedure for the Stock Option (and Stock Appreciation Rights)
Program and pursuant to the Program. With regard to Senior Officers, the Committee is the
Authorized Party. With regard to other Employees, the Chief Executive Officer is the Authorized
Party, although the Committee may act concurrently as the Authorized Party.

“Award” means any Stock Option or SAR granted to an Employee pursuant to such applicable terms,
conditions, and limitations as the Authorized Party may establish in order to fulfill the
objectives of the Program.

“Change of Control” has the meaning set forth in Attachment A to these Terms and Conditions.

“Committee” means the Compensation Committee of the Board of Directors of the Company.

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

“Company” means ConocoPhillips a Delaware corporation.

“Disability” means a disability for which the employee in question has been determined to be
entitled to either (i) benefits under the applicable plan of long-term disability of the Company or
its subsidiaries or (ii) disability benefits under the Social Security Act. In the absence of any
such determination, the Authorized Party may make a determination that the employee has a
Disability.

“Fair Market Value” means, as of a particular date, the mean between the highest and lowest sales
price per share of such Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are listed on that date, or,
if there shall have been no such sale so reported on that date, on the next succeeding date on
which such a sale was so reported, or, at the discretion of the Committee, the price prevailing on
the exchange at the time of exercise.

“Grant Price” means the price at which an Employee may exercise his or her right to receive cash or
Common Stock, as applicable, under the terms of an Award.

“Layoff” means an applicable Termination of Employment due to layoff under the ConocoPhillips
Severance Pay Plan, the ConocoPhillips Executive Severance Plan, or the ConocoPhillips Key Employee
Change in Control Severance Plan, or layoff or redundancy under any similar layoff or redundancy
plan which the Company or its subsidiaries may adopt from time to time. If all or any portion of
the benefits under the redundancy or layoff plan are contingent on the employee’s signing a general
release of liability, such Termination shall not be considered as a “Layoff” for purposes of this
Award unless the employee executes and does not revoke a general release of liability, acceptable
to the Company, under the terms of such layoff or redundancy plan.

“Nonqualified Stock Option” means a Stock Option that is not an Incentive Stock Option.

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“Optionee” means an individual holding a Stock Option or SAR.

“Option Shares” means the shares of Common Stock issueable upon exercise of a Stock Option covered
by this Agreement.

“Participating Company” includes ConocoPhillips and its 100% owned subsidiaries, including both
those directly owned and those owned through subsidiaries, whose participation has been approved by
the Authorized Party.

“Retirement” means Termination at age 55 or older with a minimum of 5 years service with a
Participating Company; provided, however, that with regard to an Employee not on the United States
payroll, the CEO may approve the use of a different definition. Service is defined by the policies
of the Participating Company.

“Senior Officer” means the Chairman of the Board, the CEO, all other executive officers of the
Company (determined in accordance with the Company’s custom and practice pursuant to section 16(b)
of the Securities Exchange Act of 1934, as amended), all other employees of the Company who report
directly to the CEO and whose salary grade is 23 or higher, and all other employees of the Company
whose salary grade is 26 or higher.

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

“Stock Appreciation Right (SAR)” means a right to receive a payment, in cash equal to the excess of
the Fair Market Value or other specified valuation of a specified number of shares of Common Stock
on the date the right is exercised over a specified Grant Price, in each case, as determined by the
Authorized Party.

“Stock Option” means the right to purchase a specified number of shares of Common Stock at a
specified Grant Price pursuant to such applicable terms, conditions and limitations established by
the Authorized Party.

“SAR Gain” means the difference between the Grant Price and the Fair Market Value (or other
specified valuation) of a share of Common Stock at the time of an SAR exercise, multiplied by the
number of shares that are exercised.

“Termination” and “Termination of Employment” mean cessation of employment with the Participating
Companies, determined in accordance with the policies and practices of the Participating Company
for whom the Employee was last performing services.

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Attachment “A”

“Change of Control”

          The following definitions apply to the Change of Control provision in Paragraph 10 of the
Plan.

          “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on February 14, 2008.

          “Associate” shall mean, with reference to any Person, (a) any corporation, firm, partnership,
association, unincorporated organization or other entity (other than the Company or a subsidiary of
the Company) of which such Person is an officer or general partner (or officer or general partner
of a general partner) or is, directly or indirectly, the Beneficial Owner of 10% or more of any
class of equity securities, (b) any trust or other estate in which such Person has a substantial
beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity
and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same
home as such Person.

     “Beneficial Owner” shall mean, with reference to any securities, any Person if:

     (a) such Person or any of such Person’s Affiliates and Associates, directly or
indirectly, is the “beneficial owner” of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as in effect on February 14, 2008)
such securities or otherwise has the right to vote or dispose of such securities, including
pursuant to any agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to
“beneficially own,” any security under this subsection (a) as a result of an agreement,
arrangement or understanding to vote such security if such agreement, arrangement or
understanding: (i) arises solely from a revocable proxy or consent given in response to a
public (i.e., not including a solicitation exempted by Rule 14a-2(b)(2) of the General Rules
and Regulations under the Exchange Act) proxy or consent solicitation made pursuant to, and
in accordance with, the applicable provisions of the General Rules and Regulations under the
Exchange Act and (ii) is not then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report);

     (b) such Person or any of such Person’s Affiliates and Associates, directly or
indirectly, has the right or obligation to acquire such securities (whether such right or
obligation is exercisable or effective immediately or only after the passage of time or the
occurrence of an event) pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange rights, other rights,
warrants or options, or otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to “beneficially own,” (i) securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase or exchange or (ii) securities issuable
upon exercise of Exempt Rights; or

     (c) such Person or any of such Person’s Affiliates or Associates (i) has any agreement,
arrangement or understanding (whether or not in writing) with any other Person (or any
Affiliate or Associate thereof) that beneficially owns such securities for the purpose of
acquiring, holding, voting (except as set forth in the proviso to subsection (a) of this
definition) or disposing of such securities or (ii) is a member of a group (as that term is
used in Rule 13d-5(b) of the General Rules and Regulations under the Exchange Act) that
includes any other Person that beneficially owns such securities;

- 9 -

 

provided, however, that nothing in this definition shall cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to “beneficially own,” any securities
acquired through such Person’s participation in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such acquisition. For purposes hereof, “voting” a
security shall include voting, granting a proxy, consenting or making a request or demand relating
to corporate action (including, without limitation, a demand for a stockholder list, to call a
stockholder meeting or to inspect corporate books and records) or otherwise giving an authorization
(within the meaning of Section 14(a) of the Exchange Act) in respect of such security.

          The terms “beneficially own” and “beneficially owning” shall have meanings that are
correlative to this definition of the term “Beneficial Owner.”

     “Board” shall have the meaning set forth in the foregoing Plan.

     “Change of Control” shall mean any of the following occurring on or after February 14, 2008:

     (a) any Person (other than an Exempt Person) shall become the Beneficial Owner of 20%
or more of the shares of Common Stock then outstanding or 20% or more of the combined voting
power of the Voting Stock of the Company then outstanding; provided, however, that no Change
of Control shall be deemed to occur for purposes of this subsection (a) if such Person shall
become a Beneficial Owner of 20% or more of the shares of Common Stock or 20% or more of the
combined voting power of the Voting Stock of the Company solely as a result of (i) an Exempt
Transaction or (ii) an acquisition by a Person pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of subsection (c) of this definition are satisfied;

     (b) individuals who, as of February 14, 2008, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to February 14, 2008 whose
election, or nomination for election by the Company’s shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; provided,
further, that there shall be excluded, for this purpose, any such individual whose initial
assumption of office occurs as a result of any actual or threatened Election Contest that is
subject to the provisions of Rule 14a-11 of the General Rules and Regulations under the
Exchange Act;

     (c) the Company shall consummate a reorganization, merger, or consolidation, in each
case, unless, following such reorganization, merger, or consolidation, (i) 50% or more of
the then outstanding shares of common stock of the corporation resulting from such
reorganization, merger, or consolidation and the combined voting power of the then
outstanding Voting Stock of such corporation are beneficially owned, directly or indirectly,
by all or substantially all of the Persons who were the Beneficial Owners of the outstanding
Common Stock immediately prior to such reorganization, merger, or consolidation in
substantially the same proportions as their ownership, immediately prior to such
reorganization, merger, or consolidation, of the outstanding Common Stock, (ii) no Person
(excluding any Exempt Person or any Person beneficially owning, immediately prior to such
reorganization, merger, or consolidation, directly or indirectly, 20% or more of the Common
Stock then outstanding or 20% or more of the combined voting power of the Voting Stock of
the Company then outstanding) beneficially owns, directly or indirectly, 20% or more of the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger, or consolidation or the combined voting power of the then
outstanding

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Voting Stock of such corporation, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger, or
consolidation were members of the Incumbent Board at the time of the initial agreement or
initial action by the Board providing for such reorganization, merger, or consolidation; or

     (d) (i) the shareholders of the Company shall approve a complete liquidation or
dissolution of the Company unless such liquidation or dissolution is approved as part of a
plan of liquidation and dissolution involving a sale or disposition of all or substantially
all of the assets of the Company to a corporation with respect to which, following such sale
or other disposition, all of the requirements of clauses (ii)(A), (B), and (C) of this
subsection (d) are satisfied, or (ii) the Company shall consummate the sale or other
disposition of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which, following such sale or other disposition, (A) 50% or
more of the then outstanding shares of common stock of such corporation and the combined
voting power of the Voting Stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the Persons who were the Beneficial Owners of the
outstanding Common Stock immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such sale or
other disposition, of the outstanding Common Stock, (B) no Person (excluding any Exempt
Person and any Person beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 20% or more of the Common Stock then outstanding or 20%
or more of the combined voting power of the Voting Stock of the Company then outstanding)
beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of
common stock of such corporation and the combined voting power of the then outstanding
Voting Stock of such corporation, and (C) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the time of the initial
agreement or initial action of the Board providing for such sale or other disposition of
assets of the Company.

     “Common Stock” shall have the meaning set forth in the foregoing Plan.

     “Company” shall have the meaning set forth in the foregoing Plan.

          “Election Contest” shall mean a solicitation of proxies of the kind described in Rule
14a-12(c) under the Exchange Act.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

          “Exempt Person” shall mean any of the Company, any subsidiary of the Company, any employee
benefit plan of the Company or any subsidiary of the Company, and any Person organized, appointed
or established by the Company for or pursuant to the terms of any such plan.

          “Exempt Rights” shall mean any rights to purchase shares of Common Stock or other Voting Stock
of the Company if at the time of the issuance thereof such rights are not separable from such
Common Stock or other Voting Stock (i.e., are not transferable otherwise than in connection with a
transfer of the underlying Common Stock or other Voting Stock), except upon the occurrence of a
contingency, whether such rights exist as of February 14, 2008 or are thereafter issued by the
Company as a dividend on shares of Common Stock or other Voting Securities or otherwise.

          “Exempt Transaction” shall mean an increase in the percentage of the outstanding shares of
Common Stock or the percentage of the combined voting power of the outstanding Voting Stock of the
Company beneficially owned by any Person solely as a result of a reduction in the number of shares
of Common Stock then outstanding due to the repurchase of Common Stock or Voting Stock by the

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Company, unless and until such time as (a) such Person or any Affiliate or Associate of such
Person shall purchase or otherwise become the Beneficial Owner of additional shares of Common Stock
constituting 1% or more of the then outstanding shares of Common Stock or additional Voting Stock
representing 1% or more of the combined voting power of the then outstanding Voting Stock, or
(b) any other Person (or Persons) who is (or collectively are) the Beneficial Owner of shares of
Common Stock constituting 1% or more of the then outstanding shares of Common Stock or Voting Stock
representing 1% or more of the combined voting power of the then outstanding Voting Stock shall
become an Affiliate or Associate of such Person.

          “Person” shall mean any individual, firm, corporation, partnership, association, trust,
unincorporated organization or other entity.

          “Voting Stock” shall mean, with respect to a corporation, all securities of such corporation
of any class or series that are entitled to vote generally in the election of directors of such
corporation (excluding any class or series that would be entitled so to vote by reason of the
occurrence of any contingency, so long as such contingency has not occurred).

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