Document:

EX-4.1

 

EXHIBIT 4.1

SUPPLEMENTAL

SAVINGS PROGRAM

Effective as of January 1, 2007

 

 

PBG

Supplemental Savings Program

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I — ESTABLISHMENT AND PURPOSE	 	 	3	 
	 
	 	1.1	 	Purpose	 	 	3	 
	 
	 	1.2	 	Type of Plan	 	 	3	 
	 
	 	1.3	 	Adoption and Effective Date	 	 	3	 
	ARTICLE II — DEFINITIONS	 	 	3	 
	 
	 	2.1	 	Account	 	 	3	 
	 
	 	2.2	 	Act	 	 	3	 
	 
	 	2.3	 	Beneficiary	 	 	3	 
	 
	 	2.4	 	Code	 	 	3	 
	 
	 	2.5	 	Company	 	 	3	 
	 
	 	2.6	 	Company Retirement Contribution Subaccount	 	 	3	 
	 
	 	2.7	 	Compensation	 	 	3	 
	 
	 	2.8	 	Compensation Limit	 	 	4	 
	 
	 	2.9	 	Distribution Valuation Date	 	 	4	 
	 
	 	2.10	 	EID	 	 	4	 
	 
	 	2.11	 	Eligible Employee	 	 	4	 
	 
	 	2.12	 	Employee	 	 	4	 
	 
	 	2.13	 	Employer	 	 	4	 
	 
	 	2.14	 	ERISA	 	 	4	 
	 
	 	2.15	 	Key Employee	 	 	4	 
	 
	 	2.16	 	NAV	 	 	5	 
	 
	 	2.17	 	Nonqualified Holding Contribution Subaccount	 	 	5	 
	 
	 	2.18	 	Participant	 	 	5	 
	 
	 	2.19	 	PBG Organization	 	 	5	 
	 
	 	2.20	 	Plan	 	 	5	 
	 
	 	2.21	 	Plan Administrator	 	 	5	 
	 
	 	2.22	 	Recordkeeper	 	 	5	 
	 
	 	2.23	 	Savings Plan	 	 	5	 
	 
	 	2.24	 	Savings Plan Pay	 	 	5	 
	 
	 	2.25	 	Section 409A	 	 	6	 
	 
	 	2.26	 	Separation from Service	 	 	6	 
	 
	 	2.27	 	Supplemental Company Retirement Contribution Subaccount	 	 	6	 
	 
	 	2.28	 	Valuation Date	 	 	6	 
	ARTICLE III — ELIGIBILITY AND PARTICIPATION	 	 	6	 
	 
	 	3.1	 	Eligibility to Participate	 	 	6	 
	 
	 	3.2	 	Termination of Participation	 	 	6	 
	ARTICLE IV — CONTRIBUTIONS	 	 	6	 
	 
	 	4.1	 	Company Retirement Contributions	 	 	6	 
	 
	 	4.2	 	Supplemental Company Retirement Contributions	 	 	7	 
	 
	 	4.3	 	Nonqualified Holding Contributions	 	 	7	 
	 
	 	4.4	 	Transfers to Company Retirement Contribution and	 	 	 	 
	 
	 	 	 	Supplemental Company Retirement Subaccount	 	 	7	 
	 
	 	4.5	 	Maximum Company Contributions	 	 	7	 
	ARTICLE V —PARTICIPANT ACCOUNTS	 	 	7	 
	 
	 	5.1	 	Establishment of Participant Accounts	 	 	7	 

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	 	 	 	 	 	 	Page
	 
	 	5.2	 	Credits to Accounts	 	 	7	 
	 
	 	5.3	 	Investment Options	 	 	8	 
	 
	 	5.4	 	Method of Allocation	 	 	9	 
	 
	 	5.5	 	Vesting of a Participant’s Account; Misconduct	 	 	10	 
	ARTICLE VI — PAYMENT OF BENEFITS	 	 	10	 
	 
	 	6.1	 	Time and Form of Payment	 	 	10	 
	 
	 	6.2	 	Six Month Deferral	 	 	11	 
	 
	 	6.3	 	Distributions on Account of Death	 	 	11	 
	 
	 	6.4	 	Valuation	 	 	11	 
	 
	 	6.5	 	Automatic Deferral	 	 	11	 
	SECTION VII — PLAN ADMINISTRATION	 	 	11	 
	 
	 	7.1	 	Plan Administrator	 	 	11	 
	 
	 	7.2	 	Action	 	 	11	 
	 
	 	7.3	 	Powers of the Plan Administrator	 	 	11	 
	 
	 	7.4	 	Compensation, Indemnity and Liability	 	 	13	 
	 
	 	7.5	 	Withholding	 	 	13	 
	ARTICLE VIII — CLAIMS PROCEDURE	 	 	13	 
	 
	 	8.1	 	Claims for Benefits	 	 	13	 
	 
	 	8.2	 	Appeals of Denied Claims	 	 	13	 
	 
	 	8.3	 	Limitations on Actions	 	 	14	 
	ARTICLE IX — AMENDMENT AND TERMINATION	 	 	14	 
	 
	 	9.1	 	Amendment of Plan	 	 	14	 
	 
	 	9.2	 	Termination of Plan	 	 	14	 
	ARTICLE X — MISCELLANEOUS	 	 	14	 
	 
	 	10.1	 	Limitation on Participant’s Rights	 	 	15	 
	 
	 	10.2	 	Unfunded Obligation of Individual Employer	 	 	15	 
	 
	 	10.3	 	Other Plans	 	 	15	 
	 
	 	10.4	 	Receipt or Release	 	 	15	 
	 
	 	10.5	 	Governing Law	 	 	15	 
	 
	 	10.6	 	Adoption of Plan by Related Employers	 	 	15	 
	 
	 	10.7	 	Facility of Payment	 	 	16	 

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ARTICLE I — ESTABLISHMENT AND PURPOSE

     1.1 Purpose. This Supplemental Savings Program is intended to provide benefits to employees
whose participation in the Company Retirement Contributions portion of the PBG 401(k) Savings
Program is limited because of the maximum amount of compensation which may be considered for
purposes of Company Retirement Contributions under Section 401(a)(17) of the Internal Revenue Code
or because of elective deferrals under the PBG Executive Income Deferral Program.

     1.2 Type of Plan. For federal income tax purposes, the PBG Supplemental Savings Program is
intended to be a non-qualified unfunded deferred compensation plan. For purposes of the Employee
Retirement Income Security Act of 1974 (“ERISA”), the Plan is intended to be a plan described in
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA providing benefits to a select group of
management or highly compensated employees.

     1.3 Adoption and Effective Date. The Pepsi Bottling Group, Inc. hereby adopts this PBG
Supplemental Savings Program effective as of January 1, 2007.

ARTICLE II — DEFINITIONS

     When used in this Plan, the following terms shall have the meanings set forth below unless a
different meaning is plainly required by the context:

     2.1 Account. The account maintained for a Participant on the books of his or her Employer to
determine, from time to time, the Participant’s interest under this Plan. The balance in such
Account shall be determined by the Recordkeeper pursuant to guidelines established by the Plan
Administrator. Each Participant’s Account shall consist of up to three subaccounts, as applicable:
a Company Retirement Contribution Subaccount, a Supplemental Company Retirement Contribution
Subaccount, and a Nonqualified Holding Contribution Subaccount. The Recordkeeper may also
establish such additional subaccounts as it deems necessary for the proper administration of the
Plan.

     2.2 Act. The Securities Exchange Act of 1934, as amended.

     2.3 Beneficiary. The person or persons (including a trust or trusts) properly designated by a
Participant, as determined by the Plan Administrator, to receive the Participant’s vested Account
in the event of the Participant’s death.

     2.4 Code. The Internal Revenue Code of 1986, as amended from time to time.

     2.5 Company. The Pepsi Bottling Group, Inc. (also referred to herein as “PBG”), a corporation
organized and existing under the laws of the State of Delaware, or its successor or successors.

     2.6 Company Retirement Contribution Subaccount. A subaccount of a Participant’s Account
maintained to reflect the Participant’s interest in the Plan attributable to Employer allocations
prescribed in Section 4.1.

     2.7 Compensation. A Participant’s Savings Plan Pay, determined without regard to the
Compensation Limit, plus amounts deferred under the EID. Deferred amounts shall be

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included in
Compensation at the time such amounts would have been payable if the Participant made no election
to defer receipt of such amounts pursuant to the EID, and amounts received in a later year pursuant
to an election to defer the payment in accordance with the EID shall not be treated as Compensation
in such later year.

     2.8 Compensation Limit. The maximum amount of compensation which may be considered in
determining the Company Retirement Contributions for a Participant in the Savings Plan under
Section 401(a)(17) of the Code.

     2.9 Distribution Valuation Date. Each date as specified by the Plan Administrator from time
to time as of which Participant Accounts are valued for purposes of a distribution from a
Participant’s Account. The initial Distribution Valuation Dates are the last day of each month.
The Distribution Valuation Date may be changed by the Plan Administrator, provided that such change
does not result in a change in when Accounts are paid out that is impermissible under Section 409A
of the Code. Values are determined as of the close of a Distribution Valuation Date or, if such
date is not a business day, as of the close of the immediately preceding business day.

     2.10 EID. The PBG Executive Income Deferral Program, as amended from time to time.

     2.11 Eligible Employee. The term Eligible Employee shall have the meaning given to it in
Section 3.1 of this Plan.

     2.12 Employee. An individual who is a common law employee of an Employer. In no event shall
a leased employee, independent contractor, or other non-employee contract worker be treated as an
Employee.

     2.13 Employer. The Company and each of the Company’s subsidiaries and affiliates (if any)
that are currently designated as an Employer by the Plan Administrator. An entity shall be an
Employer hereunder only for the period that it is (i) so designated by the Plan Administrator, and
(ii) a member of the PBG Organization.

     2.14 ERISA. Public Law 93-406, the Employee Retirement Income Security Act of 1974, as
amended from time to time.

     2.15 Key Employee. The individuals identified in accordance with principles set forth below.

	(a)	 	General. Any Participant who at any time during the applicable year is:

	 	(1)	 	An officer of any member of the PBG Organization having annual compensation
greater than $130,000 (as adjusted under Section 416(i)(1) of the Code);
	 
	 	(2)	 	A 5-percent owner of any member of the PBG Organization; or
	 
	 	(3)	 	A 1-percent owner of any member of the PBG Organization having annual
compensation of more than $150,000.

For purposes of (1) above, no more than 50 employees identified in the order of their
annual compensation shall be treated as officers. For purposes of this section, annual
compensation means compensation as defined in Section 415(c)(3) of the Code. The

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Plan
Administrator shall determine who is a Key Employee in accordance with Section 416(i) of
the Code and the applicable regulations and other guidance of general applicability issued
thereunder or in connection therewith, and provided further that the applicable year shall
be determined in accordance with Section 409A and that any modification of the foregoing
definition that applies under Section 409A shall be taken into account.

	(b)	 	Applicable Year. Except as otherwise required by Section 409A, the Plan Administrator shall
determine Key Employees as of the last day of each calendar year, based on compensation for
such year, and such designation shall be effective for purposes of this Plan for the twelve
month period commencing on April 1st of the next following calendar year.

	(c)	 	Rule of Administrative Convenience. In addition to the foregoing, the Company shall treat
all other Employees classified as E5 and above as a Key Employee for purposes of the Plan.

     2.16 NAV. The net asset value of a phantom unit in one of the phantom funds offered for
investment under the Plan, determined as of any date in the same manner as applies on that date
under the actual fund that is the basis of the phantom fund offered by the Plan.

     2.17 Nonqualified Holding Contribution Subaccount. A subaccount of a Participant to reflect
the Participant’s interest in the Plan attributable to Employer allocations prescribed in Section
4.3.

     2.18 Participant. Any Eligible Employee who has an Account. An active Participant is one who
is currently receiving credits to such Account in accordance with Article IV.

     2.19 PBG Organization. The controlled group of organizations of which the Company is a part,
as defined by Sections 414(b) and (c) of the Code and the regulations issued thereunder. An entity
shall be considered a member of the PBG Organization only during the period it is one of the group
of organizations described in the preceding sentence.

     2.20 Plan. The PBG Supplemental Savings Program, the plan set forth herein, as it may be
amended from time to time.

     2.21 Plan Administrator. The Compensation and Management Development Committee of the Board
of Directors of the
Company (the “Compensation Committee”) or its delegate or delegates, which shall have the
authority to administer the Plan as provided in Article VII.

     2.22 Recordkeeper. For any designated period of time, the party that is delegated the
responsibility, pursuant to the authority granted by the Plan Administrator, to maintain the
records of Participant Accounts, process Participant transactions and perform other duties in
accordance with procedures and rules established by the Plan Administrator.

     2.23 Savings Plan. The PBG 401(k) Savings Program, as amended from time to time.

     2.24 Savings Plan Pay. The Participant’s compensation as defined in the Savings Plan for
purposes of Company Retirement Contributions under the Savings Plan.

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     2.25 Section 409A. Section 409A of the Code and the applicable regulations and other guidance
issued thereunder.

     2.26 Separation from Service. A Participant’s separation from service with the PBG
Organization, within the meaning of Section 409A(a)(2)(A)(i) of the Code. Notwithstanding the
preceding, a Participant’s transfer to PepsiCo, Inc. shall not be a Separation from Service, if
Section 409A expressly provides that a transfer to a pre-designated affiliate is not a Separation
from Service. In such event, Separation of Service shall be deemed to occur on such Participant’s
Separation from Service with PepsiCo, Inc.

     2.27 Supplemental Company Retirement Contribution Subaccount. A Subaccount of a Participant’s
Account maintained to reflect the Participant’s interest in the Plan attributable to Employer
allocations prescribed in Section 4.2.

     2.28 Valuation Date. Each date, as determined by the Plan Administrator from time to time, as
of which Participant Accounts are valued in accordance with Plan procedures.

ARTICLE III — ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility to Participate.

	(a)	 	In General.

	 	(1)	 	Each Employee who is eligible for Company Retirement Contributions under the
Savings Plan and (i) whose allocations of Company Retirement Contributions under such
plan are curtailed by the Compensation Limit; or (ii) who elects to make elective
deferrals under the EID shall be eligible to participate in this Plan.
	 
	 	(2)	 	Notwithstanding paragraph (1) above, from time to time the Plan Administrator
may modify, limit or expand the class of individuals eligible to participate in the
Plan, pursuant to criteria for eligibility that need not be uniform among all or
any group of Employees.

	(b)	 	During the period an individual satisfies all of the eligibility requirements of this
section, he or she shall be referred to as an Eligible Employee.
	 
	(c)	 	Each Eligible Employee becomes an active Participant on the date an amount is first credited
to the Eligible Employee’s Account by the Recordkeeper or the Plan Administrator pursuant to
Section 4.1.

     3.2 Termination of Participation. An individual, who has been an active Participant under the
Plan, ceases to be a Participant on the date his or her Account is fully paid out.

ARTICLE IV — CONTRIBUTIONS

     4.1 Company Retirement Contributions. As soon as administratively feasible following the end
of each calendar year (or, in the event the Eligible Employee Separates from Service during such
year, as soon as administratively feasible following Separation from Service),

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the Plan
Administrator shall credit each Eligible Employee’s Company Retirement Contribution Subaccount the
amount, if any, determined under Section 4.4.

     4.2 Supplemental Company Retirement Contributions. As soon as administratively feasible
following each payroll period of an Employer, the Plan Administrator shall credit each Eligible
Employee’s Supplemental Company Retirement Contribution Subaccount an amount, if any, equal to two
percent (2%) of the Eligible Employee’s Savings Plan Pay for such period in excess of the
Compensation Limit. As soon as administratively feasible following the end of each calendar year
(or, in the event the Eligible Employee Separates from Service during such year, as soon as
administratively feasible following Separation from Service), the Plan Administrator shall credit
each Eligible Employee’s Supplemental Company Retirement Contribution Subaccount the amount, if
any, determined under Section 4.4.

     4.3 Nonqualified Holding Contributions. As soon as administratively feasible following each
payroll period of an Employer, the Plan Administrator shall credit each Eligible Employee’s
Nonqualified Holding Contribution Subaccount an amount, if any, equal to two percent (2%) of the
Eligible Employees elective EID deferrals for such period.

     4.4 Transfers to Company Retirement Contribution and Supplemental Company Retirement
Contribution Subaccounts. As soon as administratively feasible following the last day of each
calendar year (or in the event a Participant Separates from Service during such year, as soon as
administratively feasible following Separation from Service), the Plan Administrator shall transfer
from each Participant’s Nonqualified Holding Contribution Subaccount to such Participant’s Company
Retirement Contribution Subaccount an amount, if any, equal to the sum of (i) the Participant’s
elective EID deferrals credited for such calendar year that do not exceed the difference between
the Compensation Limit and the Participant’s Savings Plan Pay not in excess of such Limit,
multiplied by two percent (2%); and (ii) gains and losses
credited with respect to such amount for such calendar year, determined by the Plan
Administrator based on the ratio of contributions to be transferred and the total contribution to
the subaccount for such year. After such transfer, the balance in the Eligible Employee’s
Nonqualified Holding Contribution Subaccount shall be transferred to such Participant’s
Supplemental Company Retirement Contribution Subaccount.

     4.5 Maximum Company Contributions. Notwithstanding any provisions of the Plan to the
contrary, in no event shall the Company Contributions credited to a Participant’s Account exclusive
of gains and losses credited in accordance with Section 5.2(b), for a calendar year exceed two
percent (2%) of such Participant’s Compensation for such year, less the amount credited to the
Participant’s Company Retirement Contribution Account in the Savings Plan.

ARTICLE V — PARTICIPANT ACCOUNTS

     5.1 Establishment of Participant Accounts. The Plan Administrator shall establish and
maintain an Account for each Participant to which amounts credited pursuant to this Plan, and the
investment performance of underlying investments attributable to such amounts will be credited.

     5.2 Credits to Accounts.

	(a)	 	The Plan Administrator shall credit amounts prescribed in Article IV to the Account of the
Participant as soon as administratively feasible after such amount is determined.

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	(b)	 	Account Earnings or Losses. As of each Valuation Date, a Participant’s Account shall be
credited with earnings and gains (and shall be debited for expenses and losses) determined as
if the amounts credited to his or her Account had actually been invested as directed by the
Participant in accordance with this Article. The Plan provides only for “phantom
investments,” and therefore such earnings, gains, expenses and losses are hypothetical and not
actual. However, they shall be applied to measure the value of a Participant’s Account and
the amount of his or her Employer’s liability to make deferred payments to or on behalf of the
Participant.

     5.3 Investment Options.

	(a)	 	General. Each Participant’s Account shall be invested on a phantom basis in any combination
of phantom investment options specified by the Participant from those offered by the Plan
Administrator for this purpose from time to time. The Plan Administrator may discontinue any
phantom investment option with respect to some or all Accounts, and it may provide rules for
transferring a Participant’s phantom investment from the discontinued option to a specified
replacement option (unless the Participant selects another replacement option in accordance
with such requirements as the Plan Administrator may apply).

	(b)	 	Phantom Investment Options. The basic phantom investment options offered under the Plan are
as follows:

	 	(1)	 	Phantom PBG Stock Fund. Participant Accounts (or designated portions
thereof) invested in this phantom option are adjusted to reflect an investment in the
PBG Stock Fund, which is offered under the Savings Plan. An amount initially invested
or transferred into this option is converted to phantom units in the PBG Stock Fund by
dividing such amount by the NAV of the fund on the Valuation Date as of which the
amount is treated as invested in this option by the Plan Administrator. A
Participant’s interest in the Phantom PBG Stock Fund is valued as of a Valuation Date
(or a Distribution Valuation Date) by multiplying the number of phantom units credited
to the Participant’s Account on such date by the NAV of a unit in the PBG Stock Fund
on such date. If shares of PBG Common Stock change by reason of any stock split,
stock dividend, recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other any other corporate change treated as subject to this
provision by the Plan Administrator, such equitable adjustment shall be made in the
number and kind of phantom units credited to an Account as the Plan Administrator may
determine to be necessary or appropriate. In no event will shares of PBG Common Stock
actually be purchased or held under this Plan, and no Participant shall have any
rights as a shareholder of PBG Common Stock on account of an interest in this phantom
option.
	 
	 	(2)	 	Phantom Savings Plan Funds. From time to time, the Plan Administrator shall
designate which (if any) of the investment options under the Savings Plan shall be
available as phantom investment options under this Plan. Participant Accounts
invested in these phantom options are adjusted to reflect an investment in the
corresponding investment options under the Savings Plan. An amount initially credited
or transferred into one of these options is converted to phantom units in the
applicable Savings Plan fund of equivalent value by dividing such 

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	 	 	 	amount by the NAV of
a unit in such fund on the date as of which the amount is treated as invested in the
option by the Plan Administrator. Thereafter, a Participant’s interest in each such
phantom option is valued as of a Valuation Date (or a Distribution Valuation Date) by
multiplying the number of phantom units credited to his or her Account on such date by
the NAV of a unit in the applicable Savings Plan fund on such date.
	 
	 	(3)	 	Other Funds. From time to time, the Plan Administrator shall designate which
(if any) other investment options shall be available as phantom investment options
under this Plan. These may be in addition to those provided for above. They may also
be in lieu of some or all of them. Any of these phantom investment options shall be
administered under procedures implemented from time to time by the Plan Administrator.

     5.4 Method of Allocation.

	(a)	 	The Participant must designate, in accordance with procedures established by the Plan
Administrator, the allocation of credits to the Participant’s Account in 5% increments among
the phantom investment options then offered by the Plan Administrator. If such a designation
specifies phantom investment options for less than 100% of the Participant’s Account, the Plan
Administrator shall allocate the Participant’s Account to a default fund designated by the
Plan Administrator to the extent necessary to provide for investment of 100% of the credits to
such Participant’s Account. If an election specifies phantom investment options for more than
100% of the amounts credited for the Participant’s
Account, the election shall be void and the Participant must make a new election. In the
absence of a valid election, the Plan Administrator shall allocate the Participant’s
Account to a default fund designated by the Plan Administrator.

	(b)	 	Fund Transfers. A Participant may reallocate previously credited amounts among the phantom
investment options in accordance with procedures established by the Plan Administrator. Such
an election must specify, in 1% increments, but not less than $250.00, the reallocation of his
or her Account among the phantom investment options then offered by the Plan Administrator for
this purpose. If a fund transfer election provides for investing less than or more than 100%
of the Participant’s Account, it will be void and no transfers shall be made. Fund transfers
shall be effective as of the Valuation Date next occurring after receipt by the Recordkeeper,
but the Plan Administrator or the Recordkeeper may also specify a minimum number of days in
advance of which such transfer instruction must be received in order to become effective as of
such next Valuation Date. If more than one transfer request is received on a timely basis for
an Account, the transfer request that the Plan Administrator or Recordkeeper determines to be
the most recent shall be followed.

	(c)	 	Phantom PBG Stock Fund Restrictions. To the extent necessary to ensure compliance with Rule
16b-3(f) of the Securities Exchange Act of 1934, the Company may arrange for tracking of any
such transaction defined in Rule 16b-3(b)(1) of the Securities Exchange Act of 1934 involving
the Phantom PBG Stock Fund and the Company may bar any such transaction to the extent it would
not be exempt under Rule 16b-3(f). The Company may impose blackout periods pursuant to the
requirements of the Sarbanes-Oxley Act of 2002 whenever the Company determines that
circumstances warrant. Further, the Company may impose quarterly blackout periods on insider
trading in the Phantom PBG Stock Fund as needed (as determined by the Company), timed to
coincide with the release of 

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	 	 	the Company’s quarterly earnings reports. The commencement and
termination of these blackout periods in each quarter, the parties to which they apply and the
activities they restrict shall be as set forth in the official insider trading policy
promulgated by the Company from time to time.

     5.5 Vesting of a Participant’s Account; Misconduct. Subject to the following paragraph, the
amount credited to a Participant’s Supplemental Company Retirement Contribution Subaccount and
Nonqualified Holding Contribution Subaccount shall be fully vested on the earlier of the date the
Participant, while an Employee, (a) has completed ten years of Service, as defined by the Savings
Plan, and attained age 55, (b) has completed five years of Service, as defined by the Savings Plan,
and attained age 65 and (c) dies. The amount credited to a Participant’s Company Retirement
Contribution Subaccount (after all transfers prescribed in Section 4.4), if any, shall be fully
vested on the earlier of the date the Participant (a) has completed three years of Service, as
defined in the Savings Plan, and (b) dies.

          Notwithstanding any other provisions of this Plan, including this Section 5.5, to the
contrary, a Participant shall forfeit his or her entire Account if the Plan Administrator
determines that such Participant has engaged in “Misconduct” as defined below. The Plan
Administrator may, in its sole discretion, require the Participant to pay to the Employer any
amount distributed to the Participant from the Participant’s Account within the twelve month period
immediately preceding a date on which the Participant engaged in such Misconduct, as determined by
the Plan Administrator.

          “Misconduct” means any of the following, as determined by the Plan Administrator in good
faith: (i) violation of any agreement between the Company or Employer and the Participant,
including but not limited to a violation relating to the disclosure of confidential information or
trade secrets, the solicitation of employees, customers, suppliers, licensors or contractors, or
the performance of competitive services; (ii) violation of any duty to the Company or Employer,
including but not limited to violation of the Company’s Code of Conduct; (iii) making, or causing
or attempting to cause any other person to make, any statement (whether written, oral or
electronic), or conveying any information about the Company or Employer which is disparaging or
which in any way reflects negatively upon the Company or Employer unless required by law or
pursuant to a Company or Employer policy; (iv) improperly disclosing or otherwise misusing any
confidential information regarding the Company or Employer; (v) unlawful trading in the securities
of the Company or of another company based on information garnered as a result of that
Participant’s employment or other relationship with the Company; (vi) engaging in any act which is
considered to be contrary to the best interests of the Company or Employer, including but not
limited to recruiting or soliciting employees of the Employer; or (vii) commission of a felony or
other serious crime or engaging in any activity which constitutes gross misconduct.

ARTICLE VI — PAYMENT OF BENEFITS

     6.1 Time and Form of Payment. Subject to Sections 6.2 and 6.5, the balance credited to an
Account, to the extent vested, shall be payable in a single lump sum payment as soon as
administratively feasible following the Distribution Valuation Date that next follows the earlier
of (i) the Participant’s Separation from Service; and (ii) a change in control of the Participant’s
Employer (other than the Company), as defined in Section 409A.

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     6.2 Six Month Deferral. If the Participant is classified as a Key Employee at the time
of the Participant’s Separation from Service (or at such other time for determining Key Employee
status as may apply under Section 409A), then such Participant’s vested Account shall be paid, as a
result of the Participant’s Separation from Service, as soon as administratively practicable
following the first Distribution Valuation Date that occurs at least six months after the
Participant’s Separation from Service.

     6.3 Distributions on Account of Death. Upon a Participant’s death, the value of the
Participant’s Vested Account under the Plan shall be distributed to the Participant’s Beneficiary
in a single lump sum payment as soon as administratively practicable following the Distribution
Valuation Date next following the date of the Participant’s death.

          Each Participant may designate a Beneficiary or Beneficiaries (contingently, consecutively, or
successively) of a death benefit and, from time to time, may change his or her designated
Beneficiary. A Beneficiary may be a trust. A beneficiary designation shall be made in writing in
a form prescribed by the Plan Administrator and delivered to the Plan Administrator while the
Participant is alive. The designation of a non-spouse Beneficiary shall be vested only if the
Participant’s spouse shall have in writing consented to such designation, the consent acknowledges
the effect of such designation, and the consent is witnessed by a Plan representative or a notary
public. If there is no designated Beneficiary surviving at the death of a Participant, payment of
any death benefit of the Participant shall be made to the surviving spouse of the Participant, and
if the Participant leaves no spouse, to the surviving children of the Participant and if the
Participant leaves no spouse or children surviving, to the estate of the Participant.

     6.4 Valuation. In determining the amount of a distribution pursuant to this Article, the
Participant’s Account shall continue to be credited with earnings and gains (and debited for
expenses and losses) as specified in Article V until the Distribution Valuation Date that is used
in determining the amount of the distribution under this Article.

     6.5 Automatic Deferral. Notwithstanding any other provision of this Plan to the contrary, no
amount shall be paid to any Participant before the earliest date on which the Employer’s federal
income tax deduction for such payment is not precluded by Section 162(m) of the Code. In the event
any payment is delayed solely as a result of the preceding restriction, such payment shall be made
as soon as administratively feasible following the first date as of which Section 162(m) of the
Code no longer precludes the deduction by the Employer.

SECTION VII — PLAN ADMINISTRATION

     7.1 Plan Administrator. The Plan Administrator is responsible for the administration of the
Plan. The Plan Administrator has the authority to name one or more delegates to carry out certain
responsibilities hereunder, as specified in Section 7.3. Any such delegation shall state the scope
of responsibilities being delegated.

     7.2 Action. Action by the Plan Administrator may be taken in accordance with procedures that
the Plan Administrator adopts from time to time or that the Company’s Law Department determines are
legally permissible.

     7.3 Powers of the Plan Administrator. The Plan Administrator shall administer and manage the
Plan and shall have (and shall be permitted to delegate) all powers necessary to accomplish that
purpose, including the following:

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	(a)	 	To exercise its discretionary authority to construe, interpret, and administer this Plan;

	(b)	 	To exercise its discretionary authority to make all decisions regarding eligibility,
participation and credits to Accounts, to make allocations and determinations required by this
Plan, and to maintain records regarding Participants’ Accounts;

	(c)	 	To compute and certify to the Employers the amount and kinds of payments to Participants or
their Beneficiaries, and to determine the time and manner in which such payments are to be
paid;

	(d)	 	To authorize all disbursements by the Employer pursuant to this Plan;

	(e)	 	To maintain (or cause to be maintained) all the necessary records for administration of this
Plan;

	(f)	 	To make and publish such rules for the regulation of this Plan as are not inconsistent with
the terms hereof;

	(g)	 	To delegate to other individuals or entities from time to time the performance of any of its
duties or responsibilities hereunder;

	(h)	 	To establish or to change the phantom investment options or arrangements under Article V;

	(i)	 	To hire agents, accountants, actuaries, consultants and legal counsel to assist in operating
and administering the Plan; and

	(j)	 	Notwithstanding any other provision of this Plan, the Plan Administrator or the Recordkeeper
may take any action the Plan Administrator deems is necessary to assure compliance with any
policy of the Company respecting insider trading as may be in effect from time to time. Such
actions may include altering the effective date of intra-fund transfers or the distribution
date of Accounts. Any such actions shall alter the normal operation of the Plan to the
minimum extent necessary, and shall comply with any applicable requirements of Section 409A.

     The Plan Administrator has the exclusive and discretionary authority to construe and to
interpret the Plan, to decide all questions of eligibility for benefits, to determine the amount
and manner of payment of such benefits and to make any determinations that are contemplated by (or
permissible under) the terms of this Plan, and its decisions on such matters will be final and
conclusive on all parties. Any such decision or determination shall be made in the absolute and
unrestricted discretion of the Plan Administrator, even if (1) such discretion is not expressly
granted by the Plan provisions in question, or (2) a determination is not expressly called for by
the Plan provisions in question, and even though other Plan provisions expressly grant
discretion or call for a determination. As a result, benefits under this Plan will be paid only if
the Plan Administrator decides in its discretion that the applicant is entitled to them. In the
event of a review by a court, arbitrator or any other tribunal, any exercise of the Plan
Administrator’s discretionary authority shall not be disturbed unless it is clearly shown to be
arbitrary and capricious.

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     7.4 Compensation, Indemnity and Liability. The Plan Administrator will serve without bond and
without compensation for services hereunder. All expenses of the Plan and the Plan Administrator
will be paid by the Employers. To the extent deemed appropriate by the Plan Administrator, any
such expense may be charged against specific Participant Accounts, thereby reducing the obligation
of the Employers. No member of the Compensation Committee (which serves as the Plan
Administrator), and no individual acting as the delegate of such committee, shall be liable for any
act or omission of any other member or individual, nor for any act or omission on his or her own
part, excepting his or her own willful misconduct. The Employers will indemnify and hold harmless
each member of the Compensation Committee and any employee of the Company (or a Company affiliate,
if recognized as an affiliate for this purpose by the Plan Administrator) acting as the delegate of
such committee against any and all expenses and liabilities, including reasonable legal fees and
expenses, arising in connection with this Plan out of his or her membership on the Compensation
Committee (or his or her serving as the delegate of such committee), excepting only expenses and
liabilities arising out of his or her own willful misconduct or bad faith.

     7.5 Withholding. The Employer shall withhold from amounts due under this Plan, the amount
necessary to enable the Employer to remit to the appropriate government entity or entities on
behalf of the Participant as may be required by the federal income tax withholding provisions of
the Code, by an applicable state’s income tax, or by an applicable city, county or municipality’s
earnings or income tax act. The Employer shall withhold from the payroll of, or collect from, a
Participant the amount necessary to remit on behalf of the Participant any FICA taxes which may be
required with respect to amounts accrued by a Participant hereunder, as determined by the Company.

ARTICLE VIII — CLAIMS PROCEDURE

     8.1 Claims for Benefits. If a Participant, Beneficiary or other person (hereafter,
“Claimant”) does not receive timely payment of any benefits which he or she believes are due and
payable under the Plan, he or she may make a claim for benefits to the Plan Administrator. The
claim for benefits must be in writing and addressed to the Plan Administrator. If the claim for
benefits is denied, the Plan Administrator will notify the Claimant within 90 days after the Plan
Administrator initially received the benefit claim. However, if special circumstances require an
extension of time for processing the claim, the Plan Administrator will furnish notice of the
extension to the Claimant prior to the termination of the initial 90-day period and such extension
may not exceed one additional, consecutive 90-day period. Any notice of a denial of benefits shall
advise the Claimant of the basis for the denial, any additional material or information necessary
for the Claimant to perfect his or her claim, and the steps which the Claimant must take to appeal
his or her claim for benefits.

     8.2 Appeals of Denied Claims. Each Claimant whose claim for benefits has been denied may file
a written appeal for a review of his or her claim by the Plan Administrator. The request for
review must be filed by the Claimant within 60 days after he or she received the notice denying his
or her claim. The decision of the Plan Administrator will be communicated to the Claimant within
60 days after receipt of a request for appeal. The notice shall set forth the basis for the Plan
Administrator’s decision. However, if special circumstances require an extension of time for
processing the appeal, the Plan Administrator will furnish notice of the extension to the Claimant
prior to the termination of the initial 60-day period and such extension may not exceed one
additional, consecutive 60-day period.

-13-

 

     8.3 Limitations on Actions. Any claim filed under this Article VIII and any action brought in
state or federal court by or on behalf of a Participant or a Beneficiary for the alleged wrongful
denial of Plan benefits or for the alleged interference with ERISA-protected rights must be brought
within three years of the date the Participant’s or Beneficiary’s cause of action first accrues.
Failure to bring any such cause of action within this three-year time frame shall preclude a
Participant or Beneficiary, or any representative of the Participant or Beneficiary, from bringing
the claim or cause of action. Correspondence or other communications following the mandatory
appeals process described in this Article VIII shall have no effect on this three-year time frame.

ARTICLE IX — AMENDMENT AND TERMINATION

     9.1 Amendment of Plan. The Compensation Committee has the right in its sole discretion to
amend this Plan in whole or in part at any time and in any manner, including the manner of making
deferral elections, the terms on which distributions are made, and the form and timing of
distributions. However, except for mere clarifying amendments necessary to avoid an inappropriate
windfall, no Plan amendment shall reduce the vested amount credited to the Account of any
Participant as of the date such amendment is adopted. Any amendment shall be in writing and
adopted by the Compensation Committee. All Participants and Beneficiaries shall be bound by such
amendment. Any amendments made to the Plan shall be subject to any restrictions on amendment that
are applicable to ensure continued compliance under Section 409A.

     9.2 Termination of Plan. The Company may terminate the Plan and all other plans aggregated
with the Plan pursuant to Treas. Reg. §1.409A-1(c), and distribute all vested amounts credited to
Participants’ Accounts in a lump sum after the first anniversary of the date of the Plan
termination and before the second anniversary of the date of the Plan termination, subject to the
restrictions on maintaining future deferred compensation arrangements set forth in Treas. Reg.
§1.409A-3(h)(2)(viii) (no new nonqualified plan within five years).

     The Company also may terminate the Plan and distribute all vested amounts credited to
Participants’ Accounts in a lump sum payment within twelve months after a change in control as
permitted under Section 409A.

     The Company also may terminate the Plan and distribute all vested amounts credited to
Participants’ Accounts in a lump sum payment as of the date of the corporate dissolution of the
Company in a transaction taxable under Section 331 of the Code or in the event of the
bankruptcy of the Company with the approval of the Bankruptcy Court pursuant to 11 U.S.C.
§504(b)(1).

     In addition, the Company may terminate the Plan and distribute all vested amounts credited to
Participants’ Accounts as may otherwise be permitted by the Commissioner of the Internal Revenue
Service under Section 409A.

     A termination of the Plan must comply with the provisions of Section 409A, including, but not
limited to, restrictions on the timing of final distributions and the adoption of future deferred
compensation arrangements.

ARTICLE X — MISCELLANEOUS

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     10.1 Limitation on Participant’s Rights. Participation in this Plan does not give any
Participant the right to be retained in the Employer’s or Company’s employ (or any right or
interest in this Plan or any assets of the Company or Employer other than as herein provided). The
Company and the Employers reserve the right to terminate the employment of any Participant without
any liability for any claim against the Company or the Employers under this Plan, except for a
claim for payment of deferrals as provided herein.

     10.2 Unfunded Obligation of Individual Employer. The benefits provided by this Plan are
unfunded. All amounts payable under this Plan to Participants are paid from the general assets of
the Participant’s individual Employer. Nothing contained in this Plan requires the Company or an
Employer to set aside or hold in trust any amounts or assets for the purpose of paying benefits to
Participants. Neither a Participant, Beneficiary, nor any other person shall have any property
interest, legal or equitable, in any specific Employer asset. This Plan creates only a contractual
obligation on the part of a Participant’s Employer, and the Participant has the status of a general
unsecured creditor of this Employer with respect to amounts of compensation deferred hereunder.
Such a Participant shall not have any preference or priority over, the rights of any other
unsecured general creditor of the Employer. No other Employer guarantees or shares such
obligation, and no other Employer shall have any liability to the Participant or his or her
Beneficiary. In the event, a Participant transfers from the employment of one Employer to another,
the former Employer shall transfer the liability for deferrals made while the Participant was
employed by that Employer to the new Employer (and the books of both Employers shall be adjusted
appropriately).

     10.3 Other Plans. This Plan shall not affect the right of any Participant to participate in
and receive benefits under and in accordance with the provisions of any other employee benefit
plans which are now or hereafter maintained by any Employer, unless the terms of such other
employee benefit plan or plans specifically provide otherwise or it would cause such other plan to
violate a requirement for tax favored treatment.

     10.4 Receipt or Release. Any payment to a Participant in accordance with the provisions of
this Plan shall, to the extent thereof, be in full satisfaction of all claims against the Plan
Administrator, the Recordkeeper, the Employers and the Company, and the Plan Administrator may
require such Participant, as a condition precedent to such payment, to execute a receipt and
release to such effect.

     10.5 Governing Law. This Plan shall be construed, administered, and governed in all respects
in accordance with applicable federal law and, to the extent not preempted by federal law, in
accordance with the laws of the State of New York. If any provisions of this instrument shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.

     10.6 Adoption of Plan by Related Employers. The Plan Administrator may select as an Employer
any subsidiary or affiliate related to the Company by ownership (and that is a member of the PBG
Organization), and permit or cause such division, subsidiary or affiliate to adopt the Plan. The
selection by the Plan Administrator shall govern the effective date of the adoption of the Plan by
such related Employer. The requirements for Plan adoption are entirely within the discretion of
the Plan Administrator and, in any case where the status of an entity as an Employer is at issue,
the determination of the Plan Administrator shall be absolutely conclusive.

     The amounts credited to the Account of a Participant are not (except as provided in Section
7.5) subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,

-15-

 

encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary,
and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of any right to any benefits payable hereunder, including, without limitation,
any assignment or alienation in connection with a separation, divorce, child support or similar
arrangement, will be null and void and not binding on the Plan or the Company or any Employer.
Notwithstanding the foregoing, the Plan Administrator reserves the right to make payments in
accordance with a divorce decree, judgment or other court order as and when cash payments are made
in accordance with the terms of this Plan from the Account of a Participant. Any such payment
shall be charged against and reduce the Participant’s Account.

     10.7 Facility of Payment. Whenever, in the Plan Administrator’s opinion, a Participant or
Beneficiary entitled to receive any payment hereunder is under a legal disability or is
incapacitated in any way so as to be unable to manage his or her financial affairs, the Plan
Administrator may direct the Employer to make payments to such person or to the legal
representative of such person for his or her benefit, or to apply the payment for the benefit of
such person in such manner as the Plan Administrator considers advisable. Any payment in
accordance with the provisions of this section shall be a complete discharge of any liability for
the making of such payment to the Participant or Beneficiary under the Plan.

-16-EX-10.1

 

Exhibit
10.1

EXHIBIT A

NRG ENERGY, INC.

AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN

(As Amended and Restated April 25, 2007)

	1.	 	Purpose.

          This plan shall be known as the NRG Energy, Inc. Long-Term Incentive Plan (the
“Plan”). The purpose of the Plan shall be to promote the long-term growth and
profitability of NRG Energy, Inc., a Delaware corporation (the “Company”), and its
Subsidiaries by (i) providing certain directors, officers and employees of, and certain other
individuals who perform services for, or to whom an offer of employment has been extended by, the
Company and its Subsidiaries with incentives to maximize shareholder value and otherwise contribute
to the success of the Company and (ii) enabling the Company to attract, retain and reward the best
available persons for positions of responsibility. Grants of Incentive Stock Options or
Non-qualified Stock Options, stock appreciation rights (“SARs”), either alone or in tandem
with options, restricted stock, restricted stock units, performance awards, deferred stock units or
any combination of the foregoing (collectively, the “Awards”) may be made under the Plan.
Notwithstanding any provision of the Plan, to the extent that any Award would be subject to Section
409A of the Code, no such Award may be granted if it would fail to comply with the requirements set
forth in Section 409A of the Code and any regulations or guidance promulgated thereunder.

	2.	 	Definitions.

          (a) “Board” means the board of directors of the Company.

          (b) “Cause”, unless otherwise defined in a Participant’s Grant Agreement or in a
Participant’s written employment arrangements with the Company or any of its Subsidiaries in effect
on the date of grant (as amended from time to time thereafter), means the occurrence of one or more
of the following events:

               (i) Conviction of, or agreement to a plea of nolo contendere to, a felony, or any crime or
offense lesser than a felony involving the property of the Company or a Subsidiary; or

               (ii) Conduct that has caused demonstrable and serious injury to the Company or a Subsidiary,
monetary or otherwise; or

               (iii) Willful refusal to perform or substantial disregard of duties properly assigned, as
determined by the Company; or

               (iv) Breach of duty of loyalty to the Company or a Subsidiary or other act of fraud or
dishonesty with respect to the Company or a Subsidiary; or

 

 

               (v) Violation of the Company’s code of conduct.

          The definition of Cause set forth in a Participant’s Grant Agreement shall control if such
definition is different from the definition of Cause set forth in a Participant’s written
employment arrangements with the Company or any of its Subsidiaries.

          (c) “Change in Control”, unless otherwise defined in a Participant’s Grant Agreement,
means the occurrence of one of the following events:

               (i) Any “person” (as that term is used in Sections 13 and 14(d)(2) of the Exchange Act or any
successors thereto) becomes the “beneficial owner” (as that term is used in Section 13(d) of the
Exchange Act or any successor thereto), directly or indirectly, of 50% or more of the Company’s
capital stock entitled to vote in the election of directors, excluding any “person” who becomes a
“beneficial owner” in connection with a Business Combination (as defined in paragraph (iii) below)
which does not constitute a Change in Control under said paragraph (iii); or

               (ii) Persons who on the effective date of the plan of reorganization of the Company (the
“Commencement Date”) constitute the Board (the “Incumbent Directors”) cease for any
reason, including without limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority thereof; provided that, any person becoming
a director of the Company subsequent to the Commencement Date shall be considered an Incumbent
Director if such person’s election or nomination for election was approved by a vote of at least
two-thirds (2/3) of the Incumbent Directors; but provided further that, any such person whose
initial assumption of office is in connection with an actual or threatened election contest
relating to the election of members of the Board or other actual or threatened solicitation of
proxies or consents by or on behalf of a “person” (as defined in Sections 13(d) and 14(d) of the
Exchange Act) other than the Board, including by reason of agreement intended to avoid or settle
any such actual or threatened contest or solicitation, shall not be considered an Incumbent
Director; or

               (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless, following such Business Combination, all or substantially all of the individuals
and entities who were the beneficial owners of outstanding voting securities of the Company
immediately prior to such Business Combination beneficially own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the company resulting from such
Business Combination (including, without limitation, a company which, as a result of such
transaction, owns the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the outstanding voting securities of the
Company; or

               (iv) The shareholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company.

2

 

          (d) “Code” means the Internal Revenue Code of 1986, as amended.

          (e) “Committee” means the Compensation Committee of the Board or such other committee
which shall consist solely of two or more members of the Board, each of whom is an “outside
director” within the meaning of Treasury Regulation §1.162-27(e)(3); provided that, if for any
reason the Committee shall not have been appointed by the Board to administer the Plan, all
authority and duties of the Committee under the Plan shall be vested in and exercised by the Board,
and the term “Committee” shall be deemed to mean the Board for all purposes herein.

          (f) “Common Stock” means the Common Stock, par value $0.01 per share, of the Company,
and any other shares into which such stock may be changed by reason of a recapitalization,
reorganization, merger, consolidation or any other change in the corporate structure or capital
stock of the Company.

          (g) “Disability”, unless otherwise defined in a Participant’s Grant Agreement, means a
disability that would entitle an eligible Participant to payment of monthly disability payments
under any Company long-term disability plan or as otherwise determined by the Committee.

          (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (i) “Fair Market Value” of a share of Common Stock of the Company means, as of the
date in question, and except as otherwise provided in any Grant Agreement entered into pursuant to
agreements in effect as of the Commencement Date, the officially-quoted closing selling price of
the stock (or if no selling price is quoted, the bid price) on the principal securities exchange on
which the Common Stock is then listed for trading (including for this purpose the Nasdaq National
Market) (the “Market”) for the applicable trading day or, if the Common Stock is not then
listed or quoted in the Market, the Fair Market Value shall be the fair value of the Common Stock
determined in good faith by the Board and, in the case of an Incentive Stock Option, in accordance
with Section 422 of the Code; provided, however, that when shares received upon exercise of an
option are immediately sold in the open market, the net sale price received may be used to
determine the Fair Market Value of any shares used to pay the exercise price or applicable
withholding taxes and to compute the withholding taxes.

          (j) “Family Member” has the meaning given to such term in General Instructions
A.1(a)(5) to Form S-8 under the Securities Act of 1933, as amended, and any successor thereto.

          (k) “Grant Agreement” means the written agreement that each Participant to whom an
Award is made under the Plan is required to enter into with the Company containing the terms and
conditions of such grant as are determined by the Committee and consistent with the Plan.

          (l) “Incentive Stock Option” means an option conforming to the requirements of Section
422 of the Code and any successor thereto.

3

 

          (m) “Non-qualified Stock Option” means any stock option other than an Incentive Stock
Option.

          (n) “Participant” means any director, officer or employee of, or other individual
performing services for, or to whom an offer of employment has been extended by, the Company or any
Subsidiary who has been selected by the Committee to participate in the Plan (including a
Participant located outside the United States).

          (o) “Retirement”, (i) for any non-director, unless otherwise determined by the
Committee, means (A) termination of service as a non-director after at least 10 years of service by
such non-director and (B) attaining at least 55 years of age, and (ii) for any director,
unless otherwise determined by the Committee, means termination of service as a director after at
least five years of Board service by such director.

          (p) “Subsidiary” means a corporation or other entity of which outstanding shares or
ownership interests representing 50% or more of the combined voting power of such corporation or
other entity entitled to elect the management thereof, or such lesser percentage as may be approved
by the Committee, are owned directly or indirectly by the Company.

	3.	 	Administration.

          The Plan shall be administered by the Committee. In no event, however, shall the Committee
modify the distribution terms in any Award or Grant Agreement that has a feature for the deferral
of compensation if such modification would result in taxes, additional interest and/or penalties
pursuant to Code Section 409A. Subject to the provisions of the Plan, the Committee shall be
authorized to (i) select persons to participate in the Plan, (ii) determine the form and substance
of grants made under the Plan to each Participant, and the conditions and restrictions, if any,
subject to which such grants will be made, (iii) determine the form and substance of the Grant
Agreements reflecting the terms and conditions of each grant made under the Plan, (iv) certify that
the conditions and restrictions applicable to any grant have been met, (v) modify the terms of
grants made under the Plan, (vi) interpret the Plan and Grant Agreements entered into under the
Plan, (vii) determine the duration and purposes for leaves of absence which may be granted to a
Participant on an individual basis without constituting a termination of employment or services for
purposes of the Plan, (viii) make any adjustments necessary or desirable in connection with grants
made under the Plan to eligible Participants located outside the United States, (ix) adopt, amend,
or rescind rules and regulations for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any inconsistency in the Plan or in
any Grant Agreement, in the manner and to the extent it shall deem necessary or advisable,
including so that the Plan and the operation of the Plan complies with Rule 16b-3 under the
Exchange Act, the Code to the extent applicable and other applicable law and make such other
determinations for carrying out the Plan as it may deem appropriate, and (x) exercise such powers
and perform such acts as are deemed necessary or advisable to promote the best interests of the
Company with respect to the Plan. Notwithstanding the foregoing, the Committee shall not take any
of the following actions without shareholder approval, except as provided in Section 17: (i) reduce the exercise price following the grant
of an option; (ii) exchange an option which has an exercise price that is greater than the Fair
Market Value of a Share for cash or Shares or (iii) cancel an option in exchange for a replacement option

4

 

with a lower exercise price. Decisions of the Committee on all matters relating to the
Plan, any Award granted under the Plan and any Grant Agreement shall be in the Committee’s sole
discretion and shall be conclusive and binding on the Company, all Participants and all other
parties, unless an arbitration or other provision is expressly provided in a Participant’s Grant
Agreement. The validity, construction, and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with applicable federal and state laws and
rules and regulations promulgated pursuant thereto. No member of the Committee and no officer of
the Company shall be liable for any action taken or omitted to be taken by such member, by any
other member of the Committee or by any officer of the Company in connection with the performance
of duties under the Plan, except for such person’s own willful misconduct or as expressly provided
by statute.

          The expenses of the Plan shall be borne by the Company. The Plan shall not be required to
establish any special or separate fund or make any other segregation of assets to assume the
payment of any Award under the Plan, and rights to the payment of such Awards shall be no greater
than the rights of the Company’s general creditors.

	4.	 	Shares Available for the Plan.

          Subject to adjustments as provided in Section 17, an aggregate of 16,000,000 shares of
Common Stock (the “Shares”) may be issued pursuant to the Plan. Such Shares may be in
whole or in part authorized and unissued or held by the Company as treasury shares. If any grant
under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited as to any
Shares, or is tendered or withheld as to any Shares in payment of the exercise price of the grant
or the taxes payable with respect to the exercise, then such unpurchased, forfeited, tendered or
withheld Shares shall thereafter be available for further grants under the Plan unless, in the case
of options granted under the Plan, related SARs are exercised.

          Without limiting the generality of the foregoing provisions of this Section 4 or the
generality of the provisions of Sections 3, 6, 7, 8, 9,
10 or 19 or any other section of this Plan, the Committee may, at any time or from
time to time, and on such terms and conditions (that are consistent with and not in contravention
of the other provisions of this Plan) as the Committee may determine, enter into Grant Agreements
(or take other actions with respect to the Awards) for new Awards containing terms (including,
without limitation, exercise prices) more (or less) favorable than the then-outstanding Awards.

	5.	 	Participation.

          Participation in the Plan shall be limited to the Participants. Nothing in the Plan or in any
Grant Agreement shall confer any right on a Participant to continue in the employ of the Company or
any Subsidiary as a director, officer or employee of or in the performance of services for the
Company or shall interfere in any way with the right of the Company to terminate the employment or
performance of services or to reduce the compensation or responsibilities of a Participant at any
time. By accepting any Award under the Plan, each Participant and each person claiming under or through him or her shall be conclusively deemed
to have indicated his or her acceptance and ratification of, and consent to, any action taken under
the Plan by the Company, the Board or the Committee.

5

 

          Awards may be granted to such persons and for such number of Shares as the Committee shall
determine, subject to the limitations contained herein (such individuals to whom grants are made
being sometimes herein called “optionees” or “grantees,” as the case may be). Determinations made
by the Committee under the Plan need not be uniform and may be made selectively among eligible
individuals under the Plan, whether or not such individuals are similarly situated. A grant of any
type made hereunder in any one year to an eligible Participant shall neither guarantee nor preclude
a further grant of that or any other type to such Participant in that year or subsequent years.

	6.	 	Incentive and Non-qualified Options.

          The Committee may from time to time grant to eligible Participants Incentive Stock Options,
Non-qualified Stock Options, or any combination thereof; provided that, the Committee may grant
Incentive Stock Options only to eligible employees of the Company or its Subsidiaries (as defined
for this purpose in Section 424(f) of the Code or any successor thereto). In any one calendar
year, the Committee shall not grant to any one Participant options to purchase a number of Shares
of Common Stock in excess of 1,000,000 shares of Common Stock. The options granted under the Plan
shall be evidenced by a Grant Agreement and shall take such form as the Committee shall determine,
subject to the terms and conditions of the Plan.

          It is the Company’s intent that Non-qualified Stock Options granted under the Plan not be
classified as Incentive Stock Options, that Incentive Stock Options be consistent with and contain
or be deemed to contain all provisions required under Section 422 of the Code and any successor
thereto, and that any ambiguities in construction be interpreted in order to effectuate such
intent. If an Incentive Stock Option granted under the Plan does not qualify as such for any
reason, then to the extent of such non-qualification, the stock option represented thereby shall be
regarded as a Non-qualified Stock Option duly granted under the Plan; provided that, such stock
option otherwise meets the Plan’s requirements for Non-qualified Stock Options.

          (a) Price. The price per Share deliverable upon the exercise of each option (the
“exercise price”) shall be established by the Committee, except that in the case of the
grant of any option, the exercise price may not be less than 100% of the Fair Market Value of a
share of Common Stock as of the date of grant of the option, and in the case of the grant of any
Incentive Stock Option to an employee who, at the time of the grant, owns more than 10% of the
total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the
exercise price may not be less than 110% of the Fair Market Value of a share of Common Stock as of
the date of grant of the option, in each case unless otherwise permitted by Section 422 of the Code
or any successor thereto.

          (b) Payment. Options may be exercised, in whole or in part, upon payment of the
exercise price of the Shares to be acquired. Unless otherwise determined by the Committee, payment
shall be made (i) in cash (including check, bank draft, money order or wire transfer of immediately
available funds), (ii) by delivery of outstanding shares of Common Stock with a
Fair Market Value on the date of exercise equal to the aggregate exercise price payable with
respect to the options’ exercise, (iii) by means of any cashless exercise procedures approved by
the Committee and as may be in effect on the date of exercise or (iv) by any combination of the
foregoing.

6

 

          In the event a grantee is permitted to, and elects to pay the exercise price payable with
respect to an option pursuant to clause (ii) above, (A) only a whole number of share(s) of Common
Stock (and not fractional shares of Common Stock) may be tendered in payment, (B) such grantee must
present evidence acceptable to the Company that he or she has owned any such shares of Common Stock
tendered in payment of the exercise price (and that such tendered shares of Common Stock have not
been subject to any substantial risk of forfeiture) for at least six months prior to the date of
exercise or such longer period as determined from time to time by the Committee, and (C) Common
Stock must be delivered to the Company. Delivery for this purpose may, at the election of the
grantee, be made either by (A) physical delivery of the certificate(s) for all such shares of
Common Stock tendered in payment of the exercise price, accompanied by duly executed instruments of
transfer in a form acceptable to the Company, (B) direction to the grantee’s broker to transfer, by
book entry, such shares of Common Stock from a brokerage account of the grantee to a brokerage
account specified by the Company, or (C) the attestation of the grantee’s shares of Common Stock.
When payment of the exercise price is made by delivery of Common Stock, the difference, if any,
between the aggregate exercise price payable with respect to the option being exercised and the
Fair Market Value of the shares of Common Stock tendered in payment (plus any applicable taxes)
shall be paid in cash. No grantee may tender shares of Common Stock having a Fair Market Value
exceeding the aggregate exercise price payable with respect to the option being exercised (plus any
applicable taxes).

          (c) Terms of Options. The term during which each option may be exercised shall be
determined by the Committee, but if required by the Code, no option shall be exercisable in whole
or in part more than ten years from the date it is granted, and no Incentive Stock Option granted
to an employee who at the time of the grant owns more than 10% of the total combined voting power
of all classes of stock of the Company or any of its Subsidiaries shall be exercisable more than
five years from the date it is granted. All rights to purchase Shares pursuant to an option shall,
unless sooner terminated, expire on the date designated by the Committee. The Committee shall
determine the date on which each option shall become exercisable and may provide that an option
shall become exercisable in installments. The Shares constituting each installment may be
purchased in whole or in part at any time after such installment becomes exercisable, subject to
such minimum exercise requirements as may be designated by the Committee. Prior to the exercise of
an option and delivery of the Shares represented thereby, the optionee shall have no rights as a
shareholder with respect to any Shares covered by such outstanding option (including any dividend
or voting rights).

          (d) Limitations on Grants. If required by the Code, the aggregate Fair Market Value
(determined as of the grant date) of Shares for which an Incentive Stock Option is exercisable for
the first time during any calendar year under all equity incentive plans of the Company and its
Subsidiaries (as defined in Section 422 of the Code or any successor thereto) may not exceed
$100,000.

          (e) Termination; Forfeiture.

               (i) Death. Unless otherwise provided in a Participant’s Grant Agreement, if a
Participant ceases to be a director, officer or employee of, or to perform other

7

 

services for, the Company or any Subsidiary due to his or her death, all of the Participant’s Awards shall become
fully vested and all of the Participant’s options shall become exercisable and shall remain so for
a period of one year from the date of such death, but in no event after the expiration date of the
options.

               (ii) Disability. Unless otherwise provided in a Participant’s Grant Agreement, if a
Participant ceases to be a director, officer or employee of, or to perform other services for, the
Company or any Subsidiary due to Disability, (A) all of the Participant’s options that were
exercisable on the date of Disability shall remain exercisable for, and shall otherwise terminate
and thereafter be forfeited at the end of, a period of one year after the date of Disability, but
in no event after the expiration date of the options, and (B) all of the Participant’s Awards that
were not fully vested (or, with respect to the Participant’s options, exercisable) on the date of
Disability shall be forfeited immediately upon such Disability; provided, however, that such Awards
may become fully vested (and, with respect to the Participant’s options, exercisable) in the
discretion of the Committee. Notwithstanding the foregoing, if the Disability giving rise to the
termination of employment is not within the meaning of Section 22(e)(3) of the Code or any
successor thereto, Incentive Stock Options not exercised by such Participant within 90 days after
the date of termination of employment will cease to qualify as Incentive Stock Options and will be
treated as Non-qualified Stock Options under the Plan if required to be so treated under the Code.

               (iii) Retirement. Unless otherwise provided in a Participant’s Grant Agreement, if a
Participant ceases to be an officer or employee of, or to perform other services for, the Company
or any Subsidiary upon the occurrence of his or her Retirement, (A) all of the Participant’s
options that were exercisable on the date of Retirement shall remain exercisable for, and shall
otherwise terminate and thereafter be forfeited at the end of, a period of two years after the date
of Retirement, but in no event after the expiration date of the options, and (B) all of the
Participant’s Awards that were not fully vested (or, with respect to the Participant’s options,
exercisable) on the date of Retirement shall be forfeited immediately upon such Retirement;
provided, however, that such Awards may become fully vested (and, with respect to the Participant’s
options, exercisable) in the discretion of the Committee. Notwithstanding the foregoing, Incentive
Stock Options not exercised by such Participant within 90 days after Retirement will cease to
qualify as Incentive Stock Options and will be treated as Non-qualified Stock Options under the
Plan if required to be so treated under the Code.

               Unless otherwise provided in a Participant’s Grant Agreement, if a Participant ceases to be a
director of the Company or any Subsidiary upon the occurrence of his or her Retirement, all of the
Participant’s Awards shall become fully vested and all of the Participant’s options shall become
exercisable and shall remain so for a period of two years after the date of Retirement, but in no
event after the expiration date of the options.

               (iv) Discharge for Cause. Unless otherwise provided in a Participant’s Grant
Agreement, if a Participant ceases to be a director, officer or employee of, or to perform
other services for, the Company or a Subsidiary due to Cause, or if a Participant does not
become a director, officer or employee of, or does not begin performing other services for, the
Company or a Subsidiary for any reason, all of the Participant’s Awards shall be forfeited
immediately and

8

 

all of the Participant’s options shall expire and be forfeited immediately, whether
or not then exercisable, upon such cessation or non-commencement.

               (v) Other Termination. Unless otherwise provided in a Participant’s Grant Agreement,
if a Participant ceases to be a director, officer or employee of, or to otherwise perform services
for, the Company or a Subsidiary for any reason other than death, Disability, Retirement or Cause,
(A) all of the Participant’s options that were exercisable on the date of such cessation shall
remain exercisable for, and shall otherwise terminate and thereafter be forfeited at the end of, a
period of 90 days after the date of such cessation, but in no event after the expiration date of
the options, and (B) all of the Participant’s Awards that were not fully vested (or, with respect
to the Participant’s options, exercisable) on the date of such cessation shall be forfeited
immediately upon such cessation.

               (vi) Change in Control. Unless otherwise provided in a Participant’s Grant Agreement,
if there is a Change in Control of the Company, all of the Participant’s Awards shall become fully
vested upon such Change in Control (and, with respect to the Participant’s options, exercisable
upon such Change in Control and shall remain so until the expiration date of the options), whether
or not the Participant is subsequently terminated.

	7.	 	Stock Appreciation Rights.

          The Committee shall have the authority to grant SARs under this Plan, either alone or to any
optionee in tandem with options (either at the time of grant of the related option or thereafter by
amendment to an outstanding option). SARs shall be subject to such terms and conditions as the
Committee may specify. In any one calendar year, the Committee shall not grant to any one
Participant SARs with respect to a number of Shares of Common Stock in excess of 1,000,000 shares
of Common Stock.

          The exercise price of an SAR must equal or exceed the Fair Market Value of a share of Common
Stock on the date of grant of the SAR. Prior to the exercise of the SAR and delivery of the Shares
represented thereby, the Participant shall have no rights as a shareholder with respect to Shares
covered by such outstanding SAR (including any dividend or voting rights).

          SARs granted in tandem with options shall be exercisable only when, to the extent and on the
conditions that any related option is exercisable. The exercise of an option shall result in an
immediate forfeiture of any related SAR to the extent the option is exercised, and the exercise of
an SAR shall cause an immediate forfeiture of any related option to the extent the SAR is
exercised.

          Upon the exercise of an SAR, the Participant shall be entitled to a distribution from the
Company in an amount equal to the difference between the Fair Market Value of a share of Common
Stock on the date of exercise and the exercise price of the SAR or, in the case of SARs granted in
tandem with options, any option to which the SAR is related, multiplied by
the number of Shares as to which the SAR is exercised. Such distribution shall be in Shares
having a Fair Market Value equal to such amount.

9

 

          All SARs will be exercised automatically on the last day prior to the expiration date of the
SAR or, in the case of SARs granted in tandem with options, any related option, so long as the Fair
Market Value of a share of Common Stock on that date exceeds the exercise price of the SAR or any
related option, as applicable. An SAR granted in tandem with options shall expire at the same time
as any related option expires and shall be transferable only when, and under the same conditions
as, any related option is transferable. Unless otherwise determined by a Participant’s Grant
Agreement, each SAR shall be subject to the termination and forfeiture provisions as set forth in
Section 6(e).

	8.	 	Restricted Stock; Restricted Stock Units.

          The Committee may at any time and from time to time grant Shares of restricted stock or
restricted stock units under the Plan to such Participants and in such amounts as it determines.
Each restricted stock unit shall be equivalent in value to one share of Common Stock and shall
entitle the Participant to receive from the Company at the end of the vesting period (the “Vesting
Period”) applicable to such unit the Fair Market Value of one share of Common Stock, unless the
Participant has elected at a time that complies with Code Section 409A to defer the receipt of
shares of Common Stock.

          Each grant of restricted stock units or Shares of restricted stock shall be evidenced by a
Grant Agreement which shall specify the applicable restrictions on such units or Shares, the
duration of such restrictions, and the time or times at which such restrictions shall lapse with
respect to all or a specified number of units or Shares that are part of the grant; provided,
however, except for maximum aggregate Awards of restricted stock or restricted stock units of 10%
of the aggregate Shares authorized by Section 4, if the vesting condition for any Award, other than
an Incentive Stock Option or Non-qualified Stock Option, that is settled in Common Stock (including
Awards of restricted stock and restricted stock units)(a “Full Value Award”), excluding any such
Award made to a Participant upon commencement of his employment, relates (x) exclusively to the
passage of time and continued employment, such time period shall not be less than 36 months, with
thirty-three and one-third percent (331⁄3%) of the Award vesting every 12 months from the date of the
Award, subject to Section 6(e) and (y) to the attainment of specified performance goals, such Full
Value Award shall vest over a performance period of not less than one (1) year. Except for maximum
aggregate Awards of restricted stock or restricted stock units of 10% of the aggregate Shares
authorized by Section 4, the Committee shall not waive or modify any vesting condition for a Full
Value Award after such vesting condition has been established with respect to such Award.

          Except as otherwise provided in any Grant Agreement, the Participant will be required to pay
the Company the aggregate par value of any Shares of restricted stock within ten days of the date
of grant, unless such Shares of restricted stock are treasury shares. Unless otherwise determined
by the Committee, certificates representing Shares of restricted stock granted under the Plan will
be held in escrow by the Company on the Participant’s behalf during any period of restriction
thereon and will bear an appropriate legend specifying the applicable restrictions thereon, and the
Participant will be required to execute a blank stock power therefor.

          Restricted stock units may be granted without payment of cash or consideration to the Company.
Except as otherwise provided in any Grant Agreement, on the date the restricted

10

 

stock units become fully vested and nonforfeitable, the Participant shall receive, upon payment by the Participant to
the Company of the aggregate par value of the shares of Common Stock underlying each fully vested
restricted stock unit, stock certificates evidencing the conversion of restricted stock units into
shares of Common Stock.

          Except as otherwise provided in any Grant Agreement, with respect to Shares of restricted
stock, during such period of restriction the Participant shall have all of the rights of a holder
of Common Stock, including but not limited to the rights to receive dividends and to vote, and any
stock or other securities received as a distribution with respect to such Participant’s Shares of
restricted stock shall be subject to the same restrictions as then in effect for the Shares of
restricted stock. Except as otherwise provided in any Grant Agreement, with respect to the
restricted stock units, during such period of restriction the Participant shall not have any rights
as a shareholder of the Company; provided that, unless otherwise provided in a Participant’s Grant
Agreement, the Participant shall have the right to receive accumulated dividends or distributions
with respect to the corresponding number of shares of Common Stock underlying each restricted stock
unit at the end of the Vesting Period, unless such restricted stock units are converted into
deferred stock units, in which case such accumulated dividends or distributions shall be paid by
the Company to the Participant at such time as the deferred stock units are converted into shares
of Common Stock.

          Unless otherwise provided in a Participant’s Grant Agreement, each unit or Share of restricted
stock shall be subject to the termination and forfeiture provisions as set forth in Section 6(e).

	9.	 	Performance Awards.

          Performance awards may be granted to Participants at any time and from time to time as
determined by the Committee. The Committee shall determine the size and composition of performance
awards granted to a Participant and the appropriate period over which performance is to be measured
(a “performance cycle”). Performance awards may include (i) specific dollar-value target
awards (ii) performance units, the value of each such unit being determined by the Committee at the
time of issuance, and/or (iii) performance Shares, the value of each such Share being equal to the
Fair Market Value of a share of Common Stock. In any one calendar year, the Committee shall not
grant to any one Participant performance awards (i) payable in Common Stock for an amount in excess
of 1,000,000 shares of Common Stock, or (ii) for performance awards payable in Other Securities or
a combination of Common Stock and Other Securities, with a maximum amount payable thereunder of
more than the Fair Market Value of 1,000,000 shares of Common Stock determined either on the date
of grant of the award or the date the award is paid, whichever is greater.

          The value of each performance award may be fixed or it may be permitted to fluctuate based on
a performance factor (e.g., return on equity) selected by the Committee; provided that, payment of
any performance award that is intended to qualify as “qualified performance-based compensation”
within the meaning of Treasury Regulation §1.162-27(e) shall be based solely on the satisfaction of
pre-established, objective goals determined with reference to one or more of the following
performance factors: (i) return on equity, (ii) earnings per share, (iii) return on gross or
net assets, (iv) return on gross or net revenue, (v) pre- or after-tax net

11

 

income, (vi) earnings before interest, taxes, depreciation and amortization, (vii)
operating income and (viii) revenue growth.

          The Committee shall establish performance goals and objectives for each performance cycle on
the basis of such criteria and objectives as the Committee may select from time to time, including,
without limitation, the performance of the Participant, the Company, one or more of its
Subsidiaries or divisions or any combination of the foregoing. During any performance cycle, the
Committee shall have the authority to adjust the performance goals and objectives for such cycle
for such reasons as it deems equitable.

          The Committee shall determine the portion of each performance award that is earned by a
Participant on the basis of the Company’s performance over the performance cycle in relation to the
performance goals for such cycle. The earned portion of a performance award may be paid out in
Shares, Other Company Securities or any combination thereof, as the Committee may determine.

          A Participant must be a director, officer or employee of, or otherwise perform services for,
the Company or its Subsidiaries at the end of the performance cycle in order to be entitled to
payment of a performance award issued in respect of such cycle; provided, however, unless otherwise
provided in a Participant’s Grant Agreement, each performance award shall be subject to the
termination and forfeiture provisions as set forth in Section 6(e).

	10.	 	Deferred Stock Units.

          Deferred stock units (A) may be granted to Participants at any time and from time to time as
determined by the Committee, and (B) shall be issued to Participants who elected prior to the date
the restricted stock units were granted to defer delivery of shares of Common Stock that would
otherwise be due by virtue of the lapse or waiver of the vesting requirements of their restricted
stock units. All elections with respect to deferred stock units shall be made in accordance with
the election and distribution timing rules in Code Section 409A.

          Except as otherwise provided in any Grant Agreement, deferred stock units shall be granted
without payment of cash or other consideration to the Company but in consideration of services
performed for or for the benefit of the Company or any Subsidiary by such Participant. Payment of
the value of deferred stock units shall be made by the Company in shares of Common Stock; provided
that, the Participant shall receive a number of shares of Common Stock equal to the number of
matured or earned deferred stock units. Upon payment in respect of a deferred stock unit, such
unit shall be terminated and thereafter forfeited. Payments in respect of deferred stock units
shall be made only at the end of the Deferral Period applicable to such units, the duration of
which Deferral Period shall be determined by the Committee at the time of grant of such deferred
stock units and set forth in the applicable Grant Agreement (or by the Participant in the case of
an election to defer the receipt of Common Stock beyond the Vesting Period).

          Except as otherwise provided in any Grant Agreement, during such Deferral Period the
Participant shall not have any rights as a shareholder of the Company; provided that, unless
otherwise provided in a Participant’s Grant Agreement, the Participant shall have the right

12

 

to receive accumulated dividends or distributions with respect to the corresponding number of shares
of Common Stock underlying each deferred stock unit at the end of the Deferral Period when such
deferred stock units are converted into shares of Common Stock.

          Unless otherwise provided in the Participant’s Grant Agreement or related election form, if a
Participant dies while serving as a director, officer or employee of the Company or its Subsidiary
prior to the end of the Deferral Period, the Participant shall receive payment in respect to such
Participant’s deferred stock units which would have matured or been earned at the end of such
Deferral Period as if the applicable Deferral Period had ended as of the date of such Participant’s
death.

          Unless otherwise provided in a Participant’s Grant Agreement or related election form, if a
Participant ceases to be a director, officer or employee of, or to otherwise perform services for,
the Company or its Subsidiaries upon his or her Disability or Retirement prior to the end of the
Deferral Period, the Participant shall receive payment in respect of such Participant’s deferred
stock units at the end of such Deferral Period.

          Unless otherwise provided in the Participant’s Grant Agreement or related election form, at
such time as a Participant ceases to be, or in the event a Participant does not become, a director,
officer or employee of, or otherwise performing services for, the Company or its subsidiaries for
any reason other than Disability, Retirement or death, such Participant shall immediately forfeit
any unvested deferred stock units which would have matured or been earned at the end of such
Deferral Period.

	11.	 	Grant of Dividend Equivalent Rights.

          The Committee may include in a Participant’s Grant Agreement a dividend equivalent right
entitling the grantee to receive amounts equal to all or any portion of the dividends that would be
paid on the shares of Common Stock covered by such Award if such Shares had been delivered pursuant
to such Award. In the event such a provision is included in a Grant Agreement, the Committee shall
determine whether such payments shall be made in cash, in shares of Common Stock or in another
form, whether they shall be conditioned upon the exercise of the Award to which they relate, the
time or times at which they shall be made, and such other terms and conditions as the Committee
shall deem appropriate.

	12.	 	Withholding Taxes.

          (a) Participant Election. Unless otherwise determined by the Committee, a Participant
may elect to deliver shares of Common Stock (or have the Company withhold Shares acquired upon
exercise of an option or SAR or deliverable upon grant of restricted stock or vesting of restricted
stock units or deferred stock units or the receipt of Common Stock, as the case may be) to satisfy,
in whole or in part, the amount the Company is required to withhold for taxes in connection with
the exercise of an option or SAR or the delivery of restricted stock upon grant or vesting or the
receipt of Common Stock, as the case may be. Such election must be made on or before the date
the amount of tax to be withheld is determined. Once made, the election shall be irrevocable.
The fair market value of the shares to be withheld or delivered will be the Fair Market
Value as of the date the amount of tax to be withheld is determined. In the

13

 

event a Participant elects to deliver or have the Company withhold shares of Common Stock pursuant to this
Section 12(a), such delivery or withholding must be made subject to the conditions and
pursuant to the procedures set forth in Section 6(b) with respect to the
delivery or withholding of Common Stock in payment of the exercise price of options.

          (b) Company Requirement. The Company may require, as a condition to any grant or
exercise under the Plan or to the delivery of certificates for Shares issued hereunder, that the
grantee make provision for the payment to the Company, either pursuant to Section 12(a) or
this Section 12(b), of federal, state or local taxes of any kind required by law to be
withheld with respect to any grant or delivery of Shares. The Company, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind (including salary or
bonus) otherwise due to a grantee, an amount equal to any federal, state or local taxes of any kind
required by law to be withheld with respect to any grant or delivery of Shares under the Plan.

	13.	 	Grant Agreement; Vesting.

          Each employee to whom an Award is made under the Plan shall enter into a Grant Agreement with
the Company that shall contain such provisions, including without limitation vesting requirements,
consistent with the provisions of the Plan, as may be approved by the Committee. Unless the
Committee determines otherwise and except as otherwise provided in Sections 6, 7,
8, 9 and 10 in connection with a Change of Control or certain occurrences
of termination, no Award under this Plan may be exercised, and no restrictions relating thereto may
lapse, within six months of the date such Award is made.

	14.	 	Transferability.

          Unless otherwise provided in any Grant Agreement, no Award granted under the Plan shall be
transferable by a Participant other than by will or the laws of descent and distribution or to a
Participant’s Family Member by gift or a qualified domestic relations order as defined by the Code.
Unless otherwise provided in any Grant Agreement, an option, SAR or performance award may be
exercised only by the optionee or grantee thereof; by his or her Family Member if such person has
acquired the option, SAR or performance award by gift or qualified domestic relations order; by the
executor or administrator of the estate of any of the foregoing or any person to whom the Option is
transferred by will or the laws of descent and distribution; or by the guardian or legal
representative of any of the foregoing; provided that, Incentive Stock Options may be exercised by
any Family Member, guardian or legal representative only if permitted by the Code and any
regulations thereunder. All provisions of this Plan shall in any event continue to apply to any
Award granted under the Plan and transferred as permitted by this Section 14, and any
transferee of any such Award shall be bound by all provisions of this Plan as and to the same
extent as the applicable original grantee.

	15.	 	Listing, Registration and Qualification.

          If the Committee determines that the listing, registration or qualification upon any
securities exchange or under any law of Shares subject to any Award is necessary or desirable as a
condition of, or in connection with, the granting of same or the issue or purchase of Shares
thereunder, no such option or SAR may be exercised in whole or in part, no such performance

14

 

award, restricted stock unit or deferred stock unit may be paid out, and no Shares may be issued, unless
such listing, registration or qualification is effected free of any conditions not acceptable to
the Committee.

	16.	 	Transfer of Employee.

          The transfer of an employee from the Company to a Subsidiary, from a Subsidiary to the
Company, or from one Subsidiary to another Subsidiary shall not be considered a termination of
employment; nor shall it be considered a termination of employment if an employee is placed on
military or sick leave or such other leave of absence which is considered by the Committee as
continuing intact the employment relationship.

	17.	 	Adjustments.

          In the event that any reorganization, recapitalization, stock split, reverse stock split,
stock dividend, combination of shares, merger, consolidation, distribution of assets, or any other
change in the corporate structure or shares of the Company affects Shares such that an adjustment
is appropriate in order to prevent dilution or enlargement of the rights of Participants under the
Plan, the Committee shall make such equitable adjustments in any or all of the following in order
to prevent such dilution or enlargement of rights: the number and kind of Shares or other property
available for issuance under the Plan (including, without limitation, the total number of Shares
available for issuance under the Plan pursuant to Section 4), the number and kind of Awards
or other property covered by Awards previously made under the Plan, and the exercise price of
outstanding options and SARs. Any such adjustment shall be final, conclusive and binding for all
purposes of the Plan. In the event of any merger, consolidation or other reorganization in which
the Company is not the surviving or continuing corporation or in which a Change in Control is to
occur, all of the Company’s obligations regarding any Awards that were granted hereunder and that
are outstanding on the date of such event shall, on such terms as may be approved by the Committee
prior to such event, be assumed by the surviving or continuing corporation or canceled in exchange
for property (including cash).

          Without limitation of the foregoing, in connection with any transaction of the type specified
by clause (iii) of the definition of a Change in Control in Section 2(c), the Committee may
(i) cancel any or all outstanding options under the Plan in consideration for payment to the
holders thereof of an amount equal to the portion of the consideration, if any, that would have
been payable to such holders pursuant to such transaction if their options had been fully exercised
immediately prior to such transaction, less the aggregate exercise price that would have been
payable therefor, or (ii) if the amount that would have been payable to the option holders pursuant
to such transaction if their options had been fully exercised immediately prior thereto would be
equal to or less than the aggregate exercise price that would have been payable therefor, cancel
any or all such options for no consideration or payment of any kind. Payment of
any amount payable pursuant to the preceding sentence may be made in cash or, in the event
that the consideration to be received in such transaction includes securities or other property, in
cash and/or securities or other property in the Committee’s discretion.

	18.	 	Amendment and Termination of the Plan.

15

 

          The Board or the Committee, without approval of the shareholders, may amend or terminate the
Plan at any time, except that no amendment shall become effective without prior approval of the
shareholders of the Company if (i) shareholder approval would be required by applicable law or
regulations, including if required by any listing requirement of the principal stock exchange or
national market on which the Common Stock is then listed, (ii) such amendment would remove from the
Plan a provision which, without giving effect to such amendment, is subject to shareholder
approval, or (iii) such amendment would directly or indirectly increase the Share limits set forth
in Section 4 of the Plan.

	19.	 	Amendment or Substitution of Awards under the Plan.

          The terms of any outstanding Award under the Plan may be amended from time to time by the
Committee in any manner that it deems appropriate (including, but not limited to, acceleration of
the date of exercise of any Award and/or payments thereunder or of the date of lapse of
restrictions on Shares); provided that, except as otherwise provided in Section 17, no such
amendment shall adversely affect in a material manner any right of a Participant under the Award
without his or her written consent, and provided further that, the Committee shall not reduce the
exercise price of any options or SARs awarded under the Plan without approval of the shareholders
of the Company. The Committee may, in its discretion, permit holders of Awards under the Plan to
surrender outstanding Awards in order to exercise or realize rights under other awards, or in
exchange for the grant of new awards, or require holders of Awards to surrender outstanding Awards
as a condition precedent to the grant of new awards under the Plan. Notwithstanding the foregoing,
in no event shall the Committee amend the distribution terms in any Award or Grant Agreement that
has a feature for the deferral of compensation if such amendment would result in taxes, additional
interest and/or penalties pursuant to Code Section 409A.

	20.	 	Commencement Date; Termination Date

          The date of commencement of the Plan shall be the Commencement Date.

          Unless previously terminated upon the adoption of a resolution of the Board terminating the
Plan, the Plan shall terminate at the close of business ten years after the Commencement Date. No
termination of the Plan shall materially and adversely affect any of the rights or obligations of
any person, without his or her written consent, under any Award or other incentives theretofore
granted under the Plan.

21. Severability. Whenever possible, each provision of the Plan shall be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of the Plan is
held to be prohibited by or invalid under applicable law, such provision shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating the remainder of the Plan.

16

 

22. Governing Law. The Plan shall be governed by the corporate laws of the State of
Delaware, without giving effect to any choice of law provisions that might otherwise refer
construction or interpretation of the Plan to the substantive law of another jurisdiction.

*     *     *     *

17

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