Document:

exv10w1

 

Exhibit 10.1

Separation Agreement

     This Separation Agreement is between Lawrence H. Fine (“Executive”) and A.C. Moore Arts &
Crafts, Inc. (the “Company”) (collectively the “Parties”) (the “Agreement”).

Recitals

     A. Executive served the Company as its President since June 2001 and as its Chief Operating
Officer since February 2003.

     B. Executive resigned from the Company effective as of June 11, 2007 (the “Separation Date”).

     C. The Parties have agreed that a severance payment equal to one (1) year’s compensation at
Executive’s rate as of the Separation Date is appropriate consideration in exchange for compliance
with the terms and conditions contained in this Agreement.

     D. As a condition of receipt of the payments being provided to Executive, including without
limitation the severance and other consideration provided by the Company to Executive and by
Executive to the Company, the receipt and sufficiency of which are acknowledged by the Parties, the
Parties have agreed to enter into this Agreement.

     NOW THEREFORE, in consideration of the foregoing recitals and other good and valuable
consideration, the Parties hereby agree as follows:

     1. Consideration. The Company will pay to Executive a severance payment in the aggregate
amount of $350,000, which amount is equal to one (1) years’ compensation at Executive’s rate as of
the Separation Date, paid in nine (9) equal installments, less appropriate tax withholdings and
authorized deductions (the “Severance Payment”). One-half of the Severance Payment constitutes
consideration in exchange for the release set forth in Paragraph 2 below, and one-half constitutes
consideration in exchange for the non-competition and non-solicitation covenants set forth in
Paragraph 7 below. The first installment of the Severance Payment shall be made within ten (10)
calendar days subsequent to the expiration of the revocation period referred to in Paragraph 9
below, and the remaining eight (8) installments shall be paid on the first Friday of each month
thereafter (beginning on August 3, 2007) in accordance with the Company’s current monthly payroll
practices; provided however that all nine (9) installments shall be paid in full no later than
March 15, 2008. In the event of Executive’s death prior to payment in full of the Severance
Payment, said payment shall be disbursed to Executive’s estate in accordance

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with Executive’s last will and testament or applicable law in the event of death. Payments
will be made to the Executive’s estate in accordance with the foregoing schedule; provided that all
payments hereunder shall be made no later than March 15, 2008.

     2. Releases. In consideration of the payments and other benefits being provided to Executive
by the Company, which are hereby acknowledged and agreed as being over and above any existing
obligations of the Company to Executive as of the date hereof and as constituting sufficient
consideration for his agreements set forth herein, Executive hereby RELEASES and FOREVER DISCHARGES
the Company and all of its subsidiaries, affiliated companies, and their respective predecessor
entities, their present and former officers, directors, shareholders, agents, employees, legal
representatives, successors, trustees, fiduciaries and assigns (individually a “Released Party” and
collectively the “Released Parties”) of and from (and does hereby WAIVE) any and all rights,
claims, grievances or causes of action (or rights to mediation or arbitration) which Executive has
or could assert, or which could be asserted on his behalf, and any and all attorney fees in
connection therewith (individually, a “Claim” and collectively, “Claims”), against the Released
Parties from the beginning of time through the date of the signing of this Agreement, including but
not limited to those relating in any manner to his hiring, employment with the Company or any
Released Party, libel, slander, defamation or tortious interference with actual or prospective
business or contractual relations, which are based in whole or in part on any facts, circumstances
or events which are now existing or which occurred on or prior to the date hereof, or his
separation from employment with the Company, whether by reason of contract or of any state,
federal, or local law, ordinance, or rule, except of course, any rights provided to Executive by
this Agreement. However, nothing contained in this Agreement shall be construed to release
Executive’s vested rights under the terms of any employee benefit plan of the Company in effect
during his employment with the Company.

     Except as expressly provided to the contrary in the first paragraph of this Section 2,
Executive agrees that this Agreement and the releases and waiver contained herein further include
but is not limited to any and all Claims and rights arising from or in connection with any
agreement of any kind Executive may have had with the Company or any Released Party or in
connection with Executive’s status or separation of employment from the Company, any and all Claims
or rights for wrongful discharge, breach of contract, either express or implied, emotional
distress, back pay, front pay, benefits, fraud or misrepresentation, any and all Claims and rights
arising under the New Jersey Law Against Discrimination and all similar state or local fair
employment practices statutes, the Age Discrimination in Employment Act (ADEA), the Americans with
Disabilities Act, as amended (ADA), Title VII of the Civil Rights Act of 1964 and the Civil Rights
Act of 1991, as amended, Sections 1981 through 1988 of Title 42 of the United States Code, as
amended, the Employee Retirement Income

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Security Act, as amended (ERISA), all other wage and hour/wage payment statutes and laws, the
Health Insurance Portability and Accountability Act (HIPAA), to the extent such statutes and laws
may be applicable, any and all claims growing out of any legal restrictions on the Company’s right
to terminate its employees, and any and all other Claims or rights whether arising under any other
statute, rule, regulation, state or local law, ordinance or public policy, and any and all common
law claims of any nature whatsoever.

     Executive understands and acknowledges, among other matters, that he is waiving and releasing
the Released Parties from and against any and all Claims, including without limitation, claims for
pain and suffering, emotional distress, compensatory and punitive damages and for employment
discrimination based upon age (including without limitation claims under the ADEA) or any
comparable state laws. He also understands that he is waiving and releasing any Claims based upon
gender, national origin, race or color, mental or physical handicap or disability or religious
belief. This Agreement does not prohibit Executive from participating in any investigation or
proceeding conducted by the U.S. Equal Employment Opportunity Commission.

     3. Waiver. Executive also WAIVES ANY AND ALL RIGHTS under the laws of any jurisdiction in the
United States that would or might limit the foregoing release.

     4. Exclusions from Release. Executive is not releasing and hereby expressly retains any and
all rights to which he is entitled under the terms of this Agreement. Executive also excludes from
this Agreement and retains any claim for indemnification to which he may be entitled as a former
officer and director of the Company, whether by contract or under applicable law or the Bylaws of
the Company, and the Company hereby affirmatively agrees to honor such indemnification obligations.

     5. Confidentiality; Confidential Information. Executive acknowledges and agrees that the
terms and provisions of this Agreement, as well as any and all incidents leading to or resulting
from this Agreement, are confidential and that Executive shall not discuss them with any individual
without the prior written consent of the Company’s Chief Executive Officer or its General Counsel,
except this Agreement shall not prohibit Executive from making required confidential disclosures to
Executive’s attorney, accountant, or legally required disclosures to any governmental authority, or
discussing the matter with Executive’s respective immediate family on a need to know basis or as
otherwise required by law. Executive further agrees that all documents, records, techniques,
business secrets and other information relating to the business of the Company that have come into
his possession from time to time during his affiliation with the Company shall be deemed to be
confidential and proprietary to the Company and shall be its sole and exclusive property.
Executive agrees to

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keep confidential and not use or divulge to any other individual or harm or destroy any of the
Company’s confidential information and business secrets, except as required by law. Both Parties
agree that this Agreement may be used as evidence in a lawsuit in which either party alleges a
breach of the promises contained herein. In the event Executive has in his possession or under his
control any materials in any form or medium relating to the Company’s confidential and proprietary
information or the Company’s business, Executive will return immediately to the Company any and all
such confidential and proprietary information, as well as all property, equipment and materials of
the Company that are in his possession or under his control.

     6. Cooperation. Executive will cooperate with the Company, in any litigation or
administrative proceeding involving any matters with which he was involved during his affiliation
with the Company. The Company shall reimburse Executive for travel and expenses approved in
advance in writing by the Company, which Executive incurred in providing such assistance.

     7. Non-Compete, Non-Solicitation. (a) In consideration of the payment to be made to Executive
referred to in Paragraph 1, above, Executive agrees that for a period of twelve (12) months after
the effective date of this Agreement (the “Non-Compete Period”), Executive shall not directly or
indirectly own any interest in, manage, control, participate in, consult with, render services for,
or in any manner engage in any business competing with the businesses of the Company and its
subsidiaries (such businesses being the retail sale of arts and crafts and related products), as
such businesses exist or are in process as of the Separation Date, within a fifty (50) mile radius
of any geographic location in which the Company and its subsidiaries engage in such businesses or
actively plan to engage in such businesses. Nothing herein shall prohibit Executive from being a
passive owner of not more than 2% of the outstanding stock of any class of a corporation which is
publicly traded and which competes with the businesses of Company, its subsidiaries and affiliated
companies, so long as Executive has no direct or indirect active participation in the business of
such corporation. Furthermore, the foregoing shall not prevent Executive from performing
services for a competitive business if (i) such competitive business is also engaged in other lines
of business, (ii) the amount of gross revenue of such competitive business derived from businesses
competitive to the Company was less than 10% of such competitive business’s gross revenue for its
most recently completed fiscal year, and (iii) Executive’s services are restricted to employment in
such other (non-competitive) lines of business.

     (b) During the Non-Compete Period, Executive shall not directly or indirectly through another
person or entity (i) induce or attempt to induce any employee of the Company, its subsidiaries to
leave the employ of the Company or such subsidiary or affiliated company, or in any way interfere
with the

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relationship between the Company and its subsidiaries and any employee thereof, (ii) hire an
employee of the Company or any subsidiary, or (iii) induce or attempt to induce any customer,
supplier, licensee, licensor, franchisee or other business relation of the Company or any
subsidiary to cease doing business with the Company or such subsidiary, or in any way interfere
with the relationship between any such customer, supplier, licensee, licensor, franchisee, or
business relation and the Company or any subsidiary (including, without limitation, making any
negative statements or communications about the Company or its subsidiaries).

     (c) The provisions of this paragraph 7 will be enforced to the fullest extent permitted by the
law in the state in which Executive resides or is employed at the time of the enforcement of the
provision. If, at the time of enforcement of this paragraph 7, a court shall hold that the
duration, scope or area restrictions stated herein are unreasonable under circumstances then
existing, the Parties agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and that the court shall
be allowed to revise the restrictions contained herein to cover the maximum period, scope and area
permitted by law. Executive agrees that the restrictions contained in this paragraph 7 are
reasonable.

     (d) In the event of the breach or a threatened breach by Executive of any of the provisions of
this paragraph 7, the Company, in addition and supplementary to other rights and remedies existing
in its favor, may apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive or other relief in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security). In addition, in the event of an
alleged breach or violation by Executive of this paragraph 7, the Non-Compete Period shall be
tolled until such breach or violation has been duly cured.

     8. Non-Disparagement. Executive agrees that he will refrain from making any derogatory or
disparaging statements about the Company or any of its officers, directors, employees or agents to
any person or entity. The Company agrees that it shall use its best efforts to cause its officers
(employees at the Vice President level or above) and members of its Board of Directors to refrain
from making any derogatory or disparaging statements about Executive dealing with his tenure as an
executive with the Company.

     9. Executive’s Rights under Laws Intended for His Benefit in Signing this Agreement. The
Company hereby advises Executive that he should carefully read the provisions of this Agreement and
that he should consult with an attorney before signing this Agreement. Executive acknowledges that
he will have twenty-one (21) calendar days from the day he is presented with this

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Agreement to execute it. Executive agrees that any modifications, material or otherwise, made to
this Agreement do not restart or affect in any manner the original twenty-one (21) day
consideration period. If Executive has not executed this Agreement by the twenty-first day, it
will be null and void and revoked. Executive acknowledges that if he signs and returns this
release before the end of the 21-day period, Executive will have voluntarily waived Executive’s
right to consider this Agreement for the full twenty-one (21) days.

     Executive understands and acknowledges that he has seven (7) calendar days following his
execution of this Agreement to revoke his acceptance of this Agreement (the “Revocation Period”)
and that this Agreement shall not become effective or enforceable until the Revocation Period has
expired. If Executive revokes this Agreement within this seven (7) calendar day period, this
Agreement will be null and void and of no further force and effect.

     The Agreement will become effective as of the expiration of that seven (7) day period without
Executive having given notice. Revocation of this Agreement must be made by delivering a written
notice of revocation to the Company’s General Counsel. For this revocation to be effective,
written notice must be received by the General Counsel no later than the close of business on the
seventh day after Executive signs this Agreement. In addition, Executive understands and
acknowledges that no monies will be paid to Executive pursuant to the terms of the Agreement, until
the end of the Revocation Period, except for any amounts otherwise required by law. Should
Executive revoke this Agreement or refuse to execute this Agreement within the time frame provided
herein, Executive will not be entitled to any monies, as prescribed in this Agreement.

     Executive acknowledges he has read and fully considered this Agreement and has had the
opportunity to discuss the advisability of entering into this Agreement with his counsel.
Executive acknowledges that he in fact has been given at least twenty-one (21) calendar days to
review and consider the provisions of this Agreement and that he is voluntarily and knowingly
signing this Agreement. Executive acknowledges that Executive is waiving any rights
Executive may have under the Age Discrimination in Employment Act, that Executive was advised to
review this Agreement with Executive’s legal counsel before signing the Agreement, that Executive
has been advised to carefully read the provisions of this release and that Executive understands
its contents.

     10. No Wrongdoing by Company. Executive acknowledges and understands that by offering and/or
executing this Agreement, Company does not admit, and indeed expressly denies, that Company, its
employees, managers, agents, directors and officers have done anything improper or violated

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any law. The signing of this Agreement is not an admission of liability or wrongdoing by
Company, its employees, managers, agents, directors or officers.

     11. Additional Obligations of Executive. In conjunction with the execution of this Agreement
and for the consideration received herein, and in addition to Executive’s obligations set forth
elsewhere in this Agreement, Executive further agrees as follows: (a) To take no action and make
no statement which is inconsistent with his obligations contained in this Agreement; (b) Not to
apply for or seek employment with Company or any entity owned, purchased or otherwise acquired by
Company at any time hereafter; and (c) To return or confirm that he no longer has any material or
property belonging to Company, including but not limited to, any credit cards, computer equipment,
and keys.

     12. Stock Options. Any and all options to purchase the Company’s common stock which were held
by Executive as of the Separation Date shall continue to be governed by the terms of the Company’s
1997 Employee, Director and Consultant Stock Option Plan or the 2002 Stock Option Plan, as
applicable, and the related individual option agreements entered into between Company and Executive
for such options. Any and all stock options held by Executive as of the Separation Date which were
unvested as of the Separation Date (including without limitation the options purportedly granted to
Executive in February 2007) were immediately forfeited upon the Separation Date.

     13. Taxes. Company will withhold all appropriate taxes and issue to Executive an IRS Tax Form
W-2. The Parties acknowledge, however, that there may be tax consequences for Executive in excess
of the amounts withheld from the consideration described in Paragraph 1 of this Agreement. It is
expressly understood that Executive is responsible for all taxes which Executive may owe as a
result of Executive receiving the consideration under this Agreement. Executive expressly
understands that if Executive or Executive’s family owe taxes, or additional taxes, at any time as
a result of the impact of this Agreement, that Executive alone is responsible for making those
payments and that Executive will not seek additional sums from Company to make those payments.
Similarly, if Executive seeks to recover certain portions of or all of the withheld amounts from
the appropriate taxation authorities, such a recovery would be a private matter between Executive
and the appropriate government agency or agencies. Company will not provide Executive with, nor
will Executive ask for, any additional funds to offset the amount paid or owed in taxes, accrued
interest, penalties or for attorney’s fees which Executive may incur in resolving Executive’s
claims with any government agency or agencies or courts of law.

     14. Complete Integration. The terms contained in this Agreement are the only terms agreed
upon by Executive and Company. Notwithstanding any

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other statements, all benefits which Executive had as a result of Executive’s employment, and
which are not expressly listed in this Agreement, terminate in accordance with Company’s benefit
contracts, but in no case later than the end of June, 2007. It is the express intent of the
Parties that this Agreement fully integrates, replaces, extinguishes and supersedes any and all
prior discussions, communications or agreements of any sort whatsoever, existing between the
Company and Executive, of whatsoever nature. Any other conversations, promises or conditions which
do not appear in this document are waived or rejected by agreement of Executive and Company.

     15. Interpretation. Because Executive has been advised to seek counsel prior to signing this
Agreement, the Parties agree that the general rule that the document shall be interpreted against
the party that drafted it shall not apply to any subsequent issue of interpretation.
Executive agrees that if any provision of this release is or shall be declared invalid or
unenforceable by a court of competent jurisdiction, then such provision will be modified only to
the extent necessary to cure such invalidity and with a view to enforcing the Parties’ intention as
set forth in this Agreement to the extent permissible and the remaining provisions shall not be
affected thereby and shall remain in full force and effect.

     16. Enforcement. In the event a dispute arises over the terms of this Agreement, both
Executive and Company are equal without regard to who authored this document. All claims, disputes
or issues of interpretation which arise, or may arise, out of this Agreement shall be resolved by
an Arbitrator under the American Arbitration Association’s Rules and Procedures for Employment
Cases, except for injunction actions arising in connection with Paragraphs 5 and 7 above. The
Arbitrator shall have the power to order appropriate remedies for any proven breaches of this
Agreement. However, each side shall bear its own attorneys fees. The decision and award of any
Arbitrator shall be final and binding. The Parties agree to keep any Decision and Award
confidential.

     17. Choice of Law. This Agreement shall at all times be construed and governed by the laws of
the State of New Jersey regardless of conflicts of laws principles. It may not be changed unless
the change is in writing and signed by all Parties.

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     18. Counter-parts. This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one and the same
instrument. Facsimile signatures will be considered original signatures.

[Signature Page Follows on the Next Page.]

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     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	EXECUTIVE:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Lawrence H. Fine	 	 	 	July 13, 2007
	 	 	 	 	 	 	 
	Lawrence H. Fine	 	 	 	Date:
	 
	 	 	 	 	 	 	 	 
	Presented to Executive on June 25, 2007	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	A.C. MOORE ARTS & CRAFTS, INC:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Rick A. Lepley	 	 	 	July 17, 2007
	 	 	 	 	 	 	 
	Name:

	 	Rick A. Lepley
	 	 	 	Date:	 	 
	Title:

	 	President and Chief Executive Officer	 	 	 	 	 	 

Page 10 of 10DOW JONES & COMPANY, INC. 

1992 LONG TERM INCENTIVE PLAN

1.            PURPOSE.  The purpose of this Plan is to provide a means whereby Dow Jones & Company, Inc. (the “Company”) may, through the grant of (i) options to purchase Common Stock of the Company and (ii) contingent stock rights, both as described herein (collectively, “Plan Awards”), to employees of the Company and of any Subsidiary (employees to whom Plan Awards are granted being hereinafter called “Participants”), attract and retain persons of ability as key employees (including officers and directors who are also employees) and motivate such employees to exert their best efforts on behalf of the Company and any Subsidiary.  When used in the Plan with reference to employment, the term “Company” shall include Subsidiaries of the Company.  As used herein the term
“Subsidiary” shall mean any corporation more than 50% of the voting stock of which is owned directly or indirectly by the Company.

2.            STOCK AVAILABLE FOR PLAN AWARDS.  The stock to be subject to or related to Plan Awards shall be shares of Common Stock ($1.00 par value) of the Company (“Common Stock”), and may be either authorized and unissued or held by the Company in its treasury.  The maximum number of shares of Common Stock with respect to which Plan Awards may be granted under the Plan shall not exceed 1,500,000 shares, subject to adjustment in accordance with the provisions of Section 7 hereof.  The shares related to the unexercised or undistributed portion of any terminated, expired, cancelled or forfeited Plan Award (including, without limitation, the shares involved in any Target Award (as hereinafter defined) that are not included in the related Final Award (as hereinafter defined)) shall be made available
for further Plan Awards.  Shares of Common Stock that are used by a Participant as full or partial payment to the Company of the purchase price of shares of Common Stock acquired upon exercise of an option pursuant to this Plan shall not be made available for further Plan Awards.  Shares of Common Stock withheld pursuant to Section 4(d)(4) shall not be made available for further Plan Awards.  Shares of Common Stock subject to an option or portion of an option that is cancelled pursuant to Section 5(b)(8) shall not be made available for further Plan Awards.

3.            ADMINISTRATION OF THE PLAN.  The Plan shall be administered by the Compensation Committee (the “Committee”) consisting of not less than two members appointed by the Board of Directors of the Company.  Each member of the Committee shall be a member of the Board who has not received any Plan Awards under the Plan or any options under any other plan of the Company or of any Subsidiary during the preceding year.  Any vacancy occurring in the membership of the Committee shall be filled by appointment of the Board.  The Committee may interpret the Plan, prescribe, amend and rescind any rules and regulations necessary or appropriate for the administration of the Plan, and make such other determinations and take such other actions as it deems necessary or advisable, except as otherwise expressly
reserved to the Board of Directors of the Company in the Plan.  Without limiting the generality of the foregoing sentence, the Committee may, in its discretion, treat all or any portion of any period during which a Participant is on military or other approved leave of absence from the Company as a period of employment of such Participant by the Company for purposes of accrual of his or her rights under his or her Plan Award; provided, however, that no Plan Award may be granted to an employee while he or she is on a leave of absence.  Any interpretation, determination or other action made or taken by the Committee shall be final, binding and conclusive.

 

	
             
 	
             
 	
             
 

 

 

  4.            CONTINGENT STOCK RIGHTS AND FINAL AWARDS.

(a)          Grant of Contingent Stock Rights.  The term “Contingent Stock Right” (“Right”), as used in the Plan, shall mean the right to receive, without payment to the Company, the number of shares of Common Stock specified therein, subject to the terms and provisions of the Plan.  The Committee, at any time and from time to time while the Plan is in effect, may grant, or authorize the granting of, Rights to such officers and other key employees of the Company (whether or not members of the Board of Directors) as it may select and for such numbers of shares as it shall designate, subject to the provisions of this Section 4 and Section 3 hereof; provided, however, that no person while a member of the Committee shall be eligible to receive or hold a Right or a Final Award under the Plan.

(b)          Terms and Provisions of Contingent Stock Rights.  The Committee shall determine the terms and provisions of each Right, including, without limitation, (i) the number of shares of Common Stock to be covered by such Right (the “Target Award”), (ii) such subjective and objective criteria for evaluating the performance of the Participant and the Company as the Committee shall deem appropriate in determining whether and to what extent the Target Award shall be earned (the “Performance Criteria”), (iii) the period of time with respect to which such performance is to be measured (the “Performance Period”), and (iv) the period of time following the expiration of the Performance Period during which the disposition of shares of Common Stock covered by any Final Award
relating to such Right shall be restricted as provided in Section 4(h) hereof (the “Restriction Period”); provided, however, that the Committee may establish the Restriction Period applicable to any Right at the time of or at any time prior to the granting of the related Final Award rather than at the time of granting such Right.  If the Committee shall so determine, the Performance Criteria provided in any Right may include the performance of the Company or any division, operation or subsidiary thereof during a Performance Period compared with performance by other corporations or other business units during such Performance Period, and may reflect both quantitative and qualitative standards.  During the Performance Period relating to any Right, the Committee may adjust the Performance Criteria provided in such Right and otherwise modify the terms and provisions of such Right.  Each Right shall be evidenced by a letter, an agreement or such other document as the Committee
may determine.

(c)          Dividend Equivalents on Rights.  Each Participant to whom a Right has been granted shall be entitled to receive payment of the same amount of cash that such Participant would have received as cash dividends if, on each dividend record date during the entire Performance Period relating to such Right, such Participant had been the holder of record of a number of shares of Common Stock equal to the number of shares then covered by such Right (as adjusted pursuant to Section 7 hereof).  In the case of any Right granted to a Participant after the commencement of the related Performance Period, any such payment relating to any dividend payable prior to the date of grant of such Right shall be made at the same time as the Performance Period relating to the payment relating to the first dividend
paid after such date of grant.  If the Company shall declare a dividend on Common Stock payable in Common Stock or in other securities to holders of record of Common Stock during the Performance Periods relating to any Right, such dividend shall be dealt with as provided in Section 7 hereof.

(d)          Final Awards.

 

	
             
 	
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(1)          Not earlier than 90 days prior to the completion of the Performance Period relating to any Right, and not later than 90 days thereafter, the Committee shall determine the percentage (which shall not exceed 125%) of the Target Award (as adjusted pursuant to Section 7 hereof) that shall be awarded finally to the Participant who holds such Right (the number of shares of Common Stock resulting from the application of such percentage being hereinafter called the “Final Award”).  Each Final Award shall represent only full shares of Common Stock, and any fractional share that would result from the application of such percentage shall be disregarded.  In making such determination, the Committee may take into account (i) the extent to which the Performance Criteria provided in such Right
were, in the Committee’s sole opinion, achieved, (ii) the individual performance of such Participant during the related Performance Period and (iii) such other factors as the Committee may deem relevant, including, without limitation, any change in circumstances or unforeseen events, relating to the Company, the economy or otherwise, since the date of grant of such Right.  The Committee shall notify such Participant of such Participant’s Final Award as soon as practicable following such determination.

(2)          Following the determination of each Final Award, the Company shall issue or cause to be issued certificates for the number of shares of Common Stock representing such Final Award, registered in the name of the Participant who received such Final Award.  Such Participant shall thereupon become the holder of record of the number of shares of Common Stock evidenced by such certificates, entitled to dividends, voting rights and other rights of a holder thereof, subject to the terms and provisions of the Plan, including, without limitation, the provisions of Sections 4(e), 4(h) and 7 hereof.  Concurrently with the issuance of such certificates, the Company shall deliver to such Participant an amount equal to the amount of the cash dividends that such Participant would have received with
respect to the shares of Common Stock representing such Final Award if such Participant had been the holder of record of such shares immediately following completion of the Performance Period relating to such Final Award.  The Committee may require that such certificates bear such restrictive legend as the Committee may specify and be held by the Company in escrow or otherwise pursuant to any form of agreement or instrument that the Committee may specify.  If the Company shall have declared a dividend on Common Stock payable in Common Stock or in other securities to holders of record of Common Stock during the period following completion of the Performance Period relating to any Final Award, and prior to the date on which such Participant shall have been the holder of record of the shares representing such Final Award, such dividend shall be dealt with as provided in Section 7 hereof.

(3)          Upon the expiration of the Restriction Period relating to any Final Award, the certificates for the shares of Common Stock, issued in such Participant’s name with respect to such Final Award, shall be delivered to such Participant as soon as practicable, free of all restrictions and restrictive legends.

(4)          Prior to the delivery under the Plan (pursuant to this Section 4 or otherwise) of certificates for shares of Common Stock, appropriate arrangements shall be made for the payment of any taxes required to be withheld by federal, state or local law.  At the election of the Participant, the Company may satisfy such tax withholding obligation by withholding shares of Common Stock with an aggregate fair market value equal to the tax required to be withheld.

 

	
             
 	
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(e)          Effect of Termination of Employment or Death.

(1)          If a Participant’s employment with the Company shall terminate prior to the expiration of the Performance Period relating to any Right granted to such Participant for any reason other than death, permanent disability or retirement, such Right shall be forfeited and cancelled forthwith, except as otherwise determined by the Committee.

(2)          If a Participant’s employment with the Company shall terminate because of his or her death, permanent disability, or retirement, then, with respect to each Right held by such Participant, he or she shall be deemed to have satisfied the Performance Criteria with respect to that percentage of the Target Award which corresponds to a fraction, the numerator of which is the number of months (treating any part of a month as a complete month) during the Performance Period which elapsed prior to termination of the Participant’s employment, and the denominator of which is the number of months in the Performance Period; provided, however, that the Committee may, in its absolute discretion, increase the result obtained by the foregoing computation by up to 25%.  The Company shall issue or
cause to be issued certificates for the number of shares of Common Stock representing the Final Award attributable to each such Right, determined in accordance with the preceding sentence, as soon as practicable following the termination of the Participant’s employment.  Any and all certificates issued pursuant to this Section 4(e)(2) shall not be, and any certificates previously issued pursuant to Final Awards under this Plan to a Participant who has subsequently died, become permanently disabled or retired, shall upon the occurrence of any such event cease to be, subject to the restrictions imposed by Section 4(h) hereof.  Where appropriate, replacement certificates shall be delivered to the Participant or his beneficiary, free of all restrictive legends.

(3)          Notwithstanding any other provision of the Plan to the contrary, a Right shall be forfeited and cancelled forthwith, unless the Committee shall determine otherwise, if a Participant’s employment with the Company shall for any reason terminate (i) within 180 days following the commencement of the Performance Period relating to such Right (or such other period as the Committee may specify) or (ii) within 180 days following the date of grant of such Right.

(4)          In the event of the death of any Participant, the term “Participant” as used in the Plan shall thereafter be deemed to refer to the beneficiary designated pursuant to Section 6 hereof or, if no such designation is in effect, the person to whom the Participant’s rights pass by will or applicable law, or, if no such person has such right, the executor or administrator of the estate of such Participant.

(f)           Recommendations to Committee.  Recommendations as to the employees to be granted Rights, the Target Awards, Performance Criteria, Performance Periods, Restriction Periods and other terms to be provided therein, and adjustments, if any, in Performance Criteria and any other modifications of the terms and provisions of such Rights, and the amounts of Final Awards, shall be made to the Committee by the Chief Executive Officer, except that he or she shall not make any such recommendation as to himself or herself.

 

	
             
 	
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(g)          Restrictions on Transfer of Rights.  No Right shall be transferred, assigned or otherwise disposed of by a Participant otherwise than by will or the laws of descent and distribution.

(h)          Restrictions on Transfer of Final Awards.  Until the expiration of the applicable Restriction Period, no shares of Common Stock covered by any Final Award shall be transferred, assigned or otherwise disposed of by a Participant other than in satisfaction of a tax withholding obligation as provided in Section 4(d)(4), and otherwise than by will or the laws of descent and distribution; provided, however, that the Committee may permit the use of Common Stock included in any Final Award as partial or full payment upon exercise of an option under the Plan or a stock option under any stock option plan of the Company prior to the expiration of such Restriction Period.

	
            5.
 	
            STOCK OPTIONS.
 

(a)          Grant of Stock Options.  Subject to the provisions of the Plan, the Committee shall have the power to:

(1)          determine and designate from time to time those employees of the Company to whom options are to be granted and the number of shares to be optioned to each such employee; provided, however, that no option shall be granted after the expiration of the period of ten years from the effective date of the Plan specified in Section 11;

(2)          authorize the granting of options which qualify as incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”) (“Incentive Stock Options”), and options which do not qualify as Incentive Stock Options, both of which are referred to herein as options;

(3)          determine the number of shares subject to each option;

(4)          determine the time or times and the manner when each option shall be exercisable and the duration of the exercise period, which period shall in no event exceed ten years (or five years as specified in Section 5(b)(10) hereof) from the date the option is granted;

(5)          extend the term of an option (including extension by reason of an optionee’s death, permanent disability or retirement) but not beyond ten years (or five years as specified in Section 5(b)(10) hereof) from the date of the grant; and

(6)          cancel all or any portion of any option as provided in Section 5(b) (8).

No director of the Company who is not also an employee of the Company shall be entitled to receive any option under the Plan.

(b)          Terms and Conditions of Options.  Each option granted under the Plan shall be evidenced by an agreement, in form approved by the Committee, which shall be subject to the following express terms and conditions and to such other terms and conditions as the Committee may deem appropriate:

 

	
             
 	
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(1)          Option Period.  Each option agreement shall specify the period for which the option thereunder is granted (which in no event shall exceed ten years (or five years as specified in Section 5(b)(10) hereof) from the date of grant) and shall provide that the option shall expire at the end of such period.

(2)          Option Price.  The option price per share shall be determined by the Committee at the time any option is granted, and shall be not less than the fair market value (but in no event less than the par value) of the Common Stock of the Company on the date the option is granted, as determined by the Committee.

(3)          Exercise of Option.  No part of any option may be exercised until the optionee shall have remained in the employ of the Company for such period after the date on which the option is granted as the Committee may specify in the option agreement.

(4)          Payment of Purchase Price upon Exercise.  The purchase price of the shares as to which an option shall be exercised shall be paid to the Company at the time of exercise either (i) in cash, or (ii) by delivering Common Stock of the Company already owned by the optionee (including Common Stock obtained pursuant to Final Awards before expiration of the related Restriction Period) and having a total fair market value on the date of such delivery equal to the purchase price, or (iii) by delivering a combination of cash and Common Stock of the Company having a total fair market value on the date of such delivery equal to the purchase price.

(5)          Exercise in the Event of Death or Termination of Employment.  (A) If an optionee’s employment by the Company or a Subsidiary shall terminate because of his or her death, retirement or permanent disability, his or her option may be exercised, to the extent provided in the option agreement, by him or her or by the person or persons to whom the optionee’s rights under the option pass by designation pursuant to Section 6, or, absent a designation, by will or applicable law, or if no such person has such right, by the executor or administrator of his or her estate, at any time, or from time to time, but not later than the earlier of (i) the expiration date specified pursuant to Section 5(b)(1) or (ii) the expiration of the period, if any, prescribed in the agreement for such an
exercise.  (B) If an optionee’s employment shall terminate for any reason other than death, permanent disability or retirement, all right to exercise his or her option shall terminate at the date of such termination of employment.

(6)          Transferability of Options.  No option granted under the Plan shall be transferable other than by will or by the laws of descent and distribution.  During the lifetime of the optionee an option shall be exercisable only by him or her.

(7)          Investment Representation.  Upon demand by the Committee, the optionee (or any person acting under Section 5(b)(5)) shall deliver to the Committee at the time of any exercise of an option a written representation that the shares to be acquired upon such exercise are to be acquired for investment and not for resale or with a view to the distribution thereof.  Upon such demand, delivery of such representation prior to the delivery of any shares issued upon exercise of an option and prior to the expiration of the option period shall be a condition precedent to the right of the optionee or such other person to purchase any shares (and each option agreement shall contain an undertaking to deliver such a representation).

 

	
             
 	
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(8)          Other Option Provisions.  The form of option authorized by the Plan may contain such other provisions as the Committee may, from time to time, determine.  Without limiting the foregoing, the Committee may, with the consent of the optionee, from time to time cancel all or any portion of any option then subject to exercise, and the Company’s obligation in respect of such option may be discharged either by (i) payment to the optionee of any amount in cash equal to the excess, if any, of the fair market value at such time of the shares subject to the portion of the option so cancelled over the aggregate purchase price of such shares, (ii) the issuance or transfer to the optionee of shares of Common Stock of the Company with a fair market value at such time equal to any such excess, or
(iii) a combination of cash and shares with a combined value equal to any such excess, all as determined by the Committee in its discretion.

(9)          Limitation on Value of Incentive Stock Options.  The aggregate fair market value (determined as of the time the option is granted) of the stock for which Incentive Stock Options granted to any one employee under this Plan and under all stock option plans of the Company and its Subsidiaries may by their terms first become exercisable during any calendar year shall not exceed $100,000.

(10)        Grants to Certain Holders.  Notwithstanding Sections 5(b)(1) and 5(b)(2) hereof, if an Incentive Stock Option is granted to an optionee who owns stock representing more than ten percent of the voting power of all classes of stock of the Company or a Subsidiary, the period specified in the option agreement for which the Incentive Stock Option thereunder is granted and at the end of which the Incentive Stock Option shall expire, shall not exceed five years from the date of grant and the option price shall be at least 110% of the fair market value (as of the time of grant) of the Common Stock subject to the option.

6.            DESIGNATION OF BENEFICIARIES.  A Participant may file with the Company a written designation of a beneficiary or beneficiaries under the Plan and may from time to time revoke or change any such designation of beneficiary.  Any designation of beneficiary under the Plan shall be controlling over any other disposition, testamentary or otherwise; provided, however, that if the Committee shall be in doubt as to the entitlement of any such beneficiary to any Right, Final Award or option, the Committee may determine to recognize only the legal representative of such Participant, in which case the Company, the Committee and the members thereof shall not be under any further liability to anyone.

  7.            Adjustment Upon Certain Changes

  

(a)          Increase or Decrease in Issued Shares Without Consideration 

Subject to any required action by the shareholders of the Company, in the event of any increase or decrease in the number of issued shares of Common Stock resulting from a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend (but only on the shares of Common Stock), or any other increase or decrease in the number of such shares effected without receipt or payment of consideration by the Company, the Committee shall adjust the number and kind of shares subject to outstanding Plan Awards (and, in the case of options, adjust the exercise price of the options), but not any other terms or conditions of any Plan Award, in order to preserve the economic value thereof. 

 

 

	
             
 	
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(b)          Certain Mergers

Subject to any required action by the shareholders of the Company, in the event that the Company shall be the surviving corporation in any merger, consolidation or similar transaction as a result of which the holders of shares of Common Stock receive consideration consisting exclusively of securities of such surviving corporation, the Committee shall adjust each Plan Award outstanding on the date of such merger or consolidation so that, in each case, it pertains and applies to the securities which a holder of the number of shares of Common Stock subject to such Plan Award would have received in such merger or consolidation (and, in the case of options, adjust the exercise price of the options), but not any other terms or conditions of or any Plan Award, in order to preserve the economic value thereof.

(c)          Certain Other Transactions

In the event of (i) a dissolution or liquidation of the Company, (ii) a sale of all or substantially all of the Company’s assets (on a consolidated basis), (iii) a merger, consolidation or similar transaction involving the Company in which the Company is not the surviving corporation or (iv) a merger, consolidation or similar transaction involving the Company in which the Company is the surviving corporation but the holders of shares of Common Stock receive in full or partial exchange for such shares of Common Stock, securities of another corporation and/or other property, including cash, the Committee shall either:

(A) cancel, effective immediately prior to the occurrence of such event, each Plan Award outstanding on the date of such merger or consolidation (whether or not then exercisable or vested), and, in full consideration of such cancellation, pay to the Participant to whom such Plan Award was granted an amount in cash equal to the value at the time of such event of the maximum number of shares of Common Stock subject to such Plan Award, provided that with respect to each outstanding option such value shall be equal to the excess, if any, of (x) the value, as determined by the Committee in its reasonable discretion, of the property (including cash) received by the holder of a share of Common Stock as a result of such event over (y) the exercise price of such option; or

(B) provide for the exchange of each Plan Award (whether or not then exercisable or vested) for a new Plan Award that relates and pertains to the property which a holder of the number of shares of Common Stock subject to such Plan Award would have received in such transaction (and adjust, in the case of options, the exercise price of the options, but not any other terms or conditions of any Plan Award), or provide for a cash payment to the Participant to whom such Plan Award was granted in partial consideration for the exchange of the Plan Award, in order to preserve the economic value thereof.

 

	
             
 	
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(d)          Other Changes

In the event of any change in the capitalization of the Company or corporate change other than those specifically referred to in paragraphs (a), (b) or (c), the Committee shall adjust the number and class of shares subject to Plan Awards outstanding on the date on which such change occurs and such other terms of such Plan Awards as is necessary to preserve the economic value thereof.

(e)          No Other Rights

Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of the Company or any other corporation.  Except as expressly provided in the Plan, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares or amount of other property subject to, or the terms related to, any Plan Award.

8.            NO RIGHTS AS STOCKHOLDER OR TO CONTINUANCE OF EMPLOYMENT.  No Participant shall have any rights as a stockholder with respect to any shares subject to his or her option or Rights prior to the date of issuance to him or her of a certificate or certificates for such shares.  The Plan and any option or Right granted under the Plan shall not confer upon any Participant any right with respect to any continuance of employment by the Company, nor shall they interfere in any way with the right of the Company to terminate his or her employment at any time.

9.            COMPLIANCE WITH GOVERNMENT LAW AND REGULATIONS.  The Plan, the grant and exercise of options and the grant of Rights and Final Awards thereunder, and the obligation of the Company to sell and deliver shares under such options and to deliver shares under such Final Awards, shall be subject to all applicable laws, rules and regulations and to such approvals by any government or regulatory agency that may be required.  The Company shall not be required to issue or deliver any certificates for shares of Common Stock prior to (i) the listing of such shares on any stock exchange on which the Common Stock may then be listed and (ii) the completion of any registration or qualification of such shares under any state or federal law, or any ruling or regulation of any governmental body which the Company
shall, in its sole discretion, determine to be necessary or advisable.

10.          AMENDMENT OR DISCONTINUANCE OF THE PLAN.  The Board of Directors of the Company may at any time amend or discontinue the Plan; provided, however, that, subject to the provisions of Section 7 no action of the Board of Directors or of the Committee may (i) increase the number of shares with respect to which Plan Awards may be granted under the Plan, (ii) permit the granting of any option at an option price less than that determined in accordance with Section 5(b)(2) or (iii) permit the extension or granting of options which expire beyond the ten year period provided for in Sections 5(a)(5) and 5(b)(1).  Without the written consent of a Participant, no amendment or discontinuance of the Plan shall alter or impair any Plan Award previously granted to him or her under the Plan.

 

	
             
 	
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11.          EFFECTIVE DATE AND TERM OF THE PLAN.  The effective date of the Plan shall be the date of approval of the Plan by stockholders of the Company holding not less than a majority of the votes of the shares present and voting at a meeting at which the Plan is proposed for approval.  No Plan Award may be granted under the Plan later than December 31, 1996.

  12.          NAME. The Plan shall be known as the “Dow Jones 1992 Long Term Incentive Plan.”

  13.          Section 409A Compliance.

(a)          In the event that the Plan or any benefit paid or due to any Participant hereunder is deemed by the Committee to be subject to Section 409A of the Code and not to comply with the requirements of such Section, the Committee shall, notwithstanding anything herein to the contrary but subject to Section 13(b), have the authority to take such actions as it determines to comply with Section 409A of the Code. In any such event, the Committee shall use reasonable efforts not to reduce the economic value of any benefits due to the Participant hereunder but shall not be obligated to cause the Company to incur any cost in furtherance of that objective. No action, or failure to act, pursuant to this paragraph 13(a) shall subject the Committee or the Company to any claim, liability or expense, and neither
the Committee nor the Company shall have any obligation to indemnify or otherwise protect any Participant from the obligation to pay any taxes pursuant to Section 409A of the Code.

(b)          Notwithstanding any provision to the contrary in Section 13(a), in the event that the Plan is not amended to comply with Section 409A of the Code prior to a Change in Control (as defined below), then the Plan shall thereafter be amended in a manner that preserves the economic value of the compensation payable hereunder to Participants (including, without limitation, the payment of interest at a rate equal to 120% of the “applicable federal rate” determined under Section 1274(d) of the Code as in effect on the date on which any benefit would have been paid to a Participant but for this Section 13 with respect to a debt instrument with a term equal to the period during which payment of such benefit is delayed pursuant to this Section 13) and that preserves, to the greatest extent
possible, the form and time at which such compensation is paid.  Following a Change in Control and pending such amendment, this Plan shall be operated in accordance with the standard described in the preceding sentence.  

(c) For the purpose of this Section 13, a “Change in Control” shall mean:

(x)          Any acquisition or series of acquisitions during any twelve (12) month period after which any “Person” (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than any Bancroft Person (as defined below)) is the “Beneficial Owner” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty percent (30%) or more of the combined voting power of the outstanding voting securities of the Company; provided, however, that:

	
             
 	
            (i)
 	
            the acquisition of Beneficial Ownership by a Person by reason of such Person’s having entered into a voting, tender or option agreement with Bancroft Persons approved by the Board of Directors of the Company for purposes of Section 203 of the Delaware General Corporation Law in connection with the Company’s entering into a definitive agreement for a Merger (as defined 
 

 

 

	
             
 	
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    below) shall not by reason of this clause (a) constitute a Change in Control, provided, further that whether the consummation of any such Merger, the applicable tender offer or the exercise of such option would constitute a Change in Control shall be determined without regard for the exception in this sub-clause(i), and 

	 	(ii)	a Change inf Control that would otherwise occur pursuant to this clause (a) shall be deemed to not have occurred pursuant to this clause (a) so long as Bancroft Persons have Beneficial Ownership, directly or indirectly, of fifty percent (50%) or more of the combined voting power of the outstanding voting securities of the Company; or

(y)          The consummation of a merger, consolidation or reorganization with, into or of the Company (each, “Merger”), unless immediately following the Merger, Bancroft Persons have Beneficial Ownership, directly or indirectly, of fifty percent (50%) or more of the combined voting power of the outstanding voting securities of (x) the corporation or other entity resulting from such Merger (the “Surviving Entity”), if fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Surviving Corporation is not Beneficially Owned, directly or indirectly by another corporation (a “Parent Entity”), or (y) if there is one or more Parent Entities, the ultimate Parent Entity.

A “Bancroft Person” means any Person who is, or is controlled by, Bancroft Family Members, trustees of Bancroft Trusts (solely in their capacity as trustees), Bancroft Charitable Organizations or Bancroft Entities, each as defined in the By-laws of the Company as in effect as of the date hereof.

 

 

 

	
             
 	
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