Exhibit 10b.

BRISTOL-MYERS SQUIBB COMPANY

2002 STOCK INCENTIVE PLAN

(Amended and restated effective January 23, 2007)

1. Purpose: The purpose of the 2002 Stock Incentive Plan is to secure for the
Company and its stockholders the benefits of the incentive inherent in common
stock ownership by the officers and key employees of the Company and its
Subsidiaries and Affiliates who will be largely responsible for the Company’s
future growth and continued financial success and by providing long-term
incentives in addition to current compensation to certain key executives of the
Company and its Subsidiaries and Affiliates who contribute significantly to the
long-term performance and growth of the Company and such Subsidiaries and
Affiliates. It is intended that the former purpose will be effected through the
granting of stock options, stock appreciation rights, dividend equivalents,
restricted stock and/or restricted stock units under the Plan and that the
latter purpose will be effected through an award conditionally granting
performance units or performance shares under the Plan, either independently or
in conjunction with and related to a nonqualified stock option grant under the
Plan.

2. Definitions: For purposes of this Plan:

(a) “Affiliate” shall mean any entity in which the Company has an ownership
interest of at least 20%, subject to Section 13.

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(c) “Common Stock” shall mean the Company’s common stock (par value $.10 per
share).

(d) “Company” shall mean the Issuer (the Bristol-Myers Squibb Company), its
Subsidiaries and Affiliates.

(e) “Disability” or “Disabled” shall mean qualifying for and receiving payments
under a disability plan of the Company or any Subsidiary or Affiliate either in
the United States or in a jurisdiction outside of the United States, and in
jurisdictions outside of the United States shall also include qualifying for and
receiving payments under a mandatory or universal disability plan or program
managed or maintained by the government.

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

(g) “Fair Market Value” shall mean the last sale price of a share of Common
Stock before the 4 p.m. Eastern Time closing time (or equivalent earlier time
for partial trading days) on the New York Stock Exchange, Inc. composite tape on
the date of measurement as determined by the Committee or, if there were no
trades on such date, on the day on which a trade occurred next preceding such
date; provided, however, that Fair Market Value determined in connection with
any Excluded Options/SARs (as defined in Section 6) shall conform to applicable
requirements under Proposed Treasury Regulation § 1.409A-1(b)(5) and any
successor regulation.

(h) “Issuer” shall mean the Bristol-Myers Squibb Company.

(i) “Prior Plan” shall mean the Bristol-Myers Squibb Company 1997 Stock Option
Plan as amended and restated effective as of October 1, 2001.

(j) “Retirement” shall mean termination of the employment of an employee with
the Company or a Subsidiary or Affiliate on or after (i) the employee’s 65th
birthday or (ii) the employee’s 55th birthday if the employee has completed 10
years of service with the Company, its Subsidiaries and/or its Affiliates. For
purposes of this Section 2(j) and all other purposes of this Plan, Retirement
shall also mean termination of employment of an employee with the Company or a
Subsidiary or Affiliate for any reason (other than the

 

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employee’s death, resignation, willful misconduct or activity deemed detrimental
to the interests of the Company) where, on termination, (iii) the employee’s age
plus years of service (rounded up to the next higher whole number) equals at
least 70 and the employee has completed 10 years of service with the Company,
its Subsidiaries and/or its Affiliates, provided the Optionee executes a general
release agreement and where applicable, a non-solicitation and/or non-compete
agreement with the Company or (iv) the employee is at least 50 years of age and
the employee has completed 10 years of service with the Company, its
Subsidiaries and/or its Affiliates provided the Optionee executes a general
release agreement and, where applicable, a non-solicitation and/or non-compete
agreement with the Company. This section 2(j)(iv) shall expire on January 31,
2003.

Furthermore, an employee who makes an election to retire under Article 19 of the
Bristol-Myers Squibb Company Retirement Income Plan (the “Retirement Income
Plan”) shall have any additional years of age and service which are credited
under Article 19 of the Retirement Income Plan taken into account when
determining such employee’s age and service under this Section 2(j). Such
election shall be deemed a Retirement for purposes of this Section 2(j) and all
other purposes of this Plan.

(k) “Subsidiary” shall mean any corporation which at the time qualifies as a
subsidiary of the Company under the definition of “subsidiary corporation” in
Section 424 of the Code.

3. Amount of Stock: The amount of stock which may be made subject to grants of
options or awards of performance units under the Plan in calendar year 2002
shall not exceed an amount equal to the amount of shares available for, and not
made subject to, grants of options or awards under the Prior Plan as of the day
before the effective date of this plan. With respect to each succeeding year,
the amount of stock which may be made subject to grants of options or awards of
performance units under the Plan shall not exceed an amount equal to (i) 0.9% of
the outstanding shares of the Company’s Common Stock on January 1 of such year
plus, subject to this Section 3, (ii) in any year the number of shares equal to
the amount of shares that were available for grants and awards in the prior year
but were not made subject to a grant or award in such prior year, (iii) the
number of shares that were subject to options or awards granted hereunder or
under the Prior Plan, which options or awards terminated, were cancelled or
forfeited or expired in the prior year without being exercised, or were
forfeited and returned to the Company after exercise (iv) the number of shares
participants tendered in the prior year to pay the purchase price of options in
accordance with Section 6(b)(5), and (v) the number of shares the Company
retained or caused participants to surrender in the prior year to satisfy
Withholding Tax requirements in accordance with Section 11. No individual may be
granted options or awards under Sections 6, 7 or 8 in the aggregate, in respect
of more than 3,000,000 shares of the Company’s Common Stock in a calendar year,
subject to adjustment in number and kind pursuant to Section 10. Aggregate
shares issued under performance share and performance unit awards made pursuant
to Section 7 and restricted stock and restricted stock unit awards made pursuant
to Section 8 may not exceed 20,000,000 shares over the life of the Plan, subject
to adjustment in number and kind pursuant to Section 10. Common Stock issued
hereunder may be authorized and reissued shares or issued shares acquired by the
Company or its Subsidiaries on the market or otherwise.

4. Administration: The Plan shall be administered under the supervision of the
Board of Directors of the Company which shall exercise its powers, to the extent
herein provided, through the agency of a Compensation and Management Development
Committee (the “Committee”) which shall be appointed by the Board of Directors
of the Company. The Committee shall consist of not less than three (3) members
of the Board who meet the definition of “outside director” under the provisions
of Section 162(m) of the Code and the definition of “non-employee directors”
under the provisions of the Exchange Act or rules or regulations promulgated
thereunder. No act of the Committee shall be void or deemed without authority
solely because a member of the Committee, at the time such action was taken, did
not meet a qualification requirement under this Section 4.

The Committee, from time to time, may adopt rules and regulations
(“Regulations”) for carrying out the provisions and purposes of the Plan and
make such other determinations, not inconsistent with the terms of the Plan, as
the Committee shall deem appropriate. The interpretation and construction of any
provision of the Plan by the Committee shall, unless otherwise determined by the
Board of Directors, be final and conclusive.

 

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The Committee shall maintain a written record of its proceedings. A majority of
the Committee shall constitute a quorum, and the acts of a majority of the
members present at any meeting at which a quorum is present, or acts unanimously
approved in writing, shall be the acts of the Committee.

5. Eligibility: Options and awards may be granted only to present or future
officers and key employees of the Company and its Subsidiaries and Affiliates,
including Subsidiaries and Affiliates which become such after the adoption of
the Plan. Any officer or key employee of the Company or of any such Subsidiary
or Affiliate shall be eligible to receive one or more options or awards under
the Plan. Any director who is not an officer or employee of the Company or one
of its Subsidiaries or Affiliates and any member of the Committee, during the
time of the member’s service as such or thereafter, shall be ineligible to
receive an option or award under the Plan. The adoption of this Plan shall not
be deemed to give any officer or employee any right to an award or to be granted
an option to purchase Common Stock of the Company, except to the extent and upon
such terms and conditions as may be determined by the Committee.

6. Stock Options: Stock options under the Plan shall consist of incentive stock
options under Section 422 of the Code or nonqualified stock options (options not
intended to qualify as incentive stock options), as the Committee shall
determine. In addition, the Committee may grant stock appreciation rights in
conjunction with an option, as set forth in Section 6(b)(11), or may grant
awards in conjunction with an option, as set forth in Section 6(b)(10) (an
“Associated Option”).

Each option shall be subject to the following terms and conditions:

(a) Grant of Options. The Committee shall (1) select the officers and key
employees of the Company and its Subsidiaries and Affiliates to whom options may
from time to time be granted, (2) determine whether incentive stock options or
nonqualified stock options are to be granted, (3) determine the number of shares
to be covered by each option so granted, (4) determine the terms and conditions
(not inconsistent with the Plan) of any option granted hereunder (including but
not limited to restrictions upon the options, circumstances, if any, under which
options or option gains may be forfeited, conditions of their exercise, or on
the shares of Common Stock issuable upon exercise thereof), (5) determine
whether nonqualified stock options or incentive stock options granted under the
Plan shall include stock appreciation rights and, if so, shall determine the
terms and conditions thereof in accordance with Section 6(b)(11) hereof,
(6) determine whether any nonqualified stock options granted under the Plan
shall be Associated Options, (7) determine whether the options or stock
appreciation rights are to be excluded from being a deferral arrangement under
Proposed Treasury Regulation § 1.409A-1(b)(5) and any successor regulation
(“Excluded Options/SARs”) or will comply with other applicable provisions of
Section 409A or exemptions thereunder (“409A Options/SARs”) and (8) prescribe
the form of the instruments necessary or advisable in the administration of
options.

(b) Terms and Conditions of Option. Any option granted under the Plan shall be
evidenced by a Stock Option Agreement entered into by the Company and the
optionee, in such form as the Committee shall approve, which agreement shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions not inconsistent with the Plan, and in the case of an
incentive stock option not inconsistent with the provisions of the Code
applicable to incentive stock options, as the Committee shall prescribe:

(1) Number of Shares Subject to an Option. The Stock Option Agreement shall
specify the number of shares of Common Stock subject to the Agreement. If the
option is an Associated Option, the number of shares of Common Stock subject to
such Associated Option shall initially be equal to the number of performance
units or performance shares subject to the award, but one share of Common Stock
shall be canceled for each performance unit or performance share paid out under
the award.

(2) Option Price. The purchase price per share of Common Stock purchasable under
an option will be determined by the Committee but will be not less than the Fair
Market Value of a share of Common Stock on the date of the grant of such option.

(3) Option Period. The period of each option shall be fixed by the Committee,
but no option shall be exercisable after the expiration of ten years from the
date the option is granted.

 

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(4) Consideration. Each optionee, as consideration for the grant of an option,
shall remain in the continuous employ of the Company or of one of its
Subsidiaries or Affiliates for at least one year or such lesser period as the
Committee shall so determine in its sole discretion from the date of the
granting of such option, and no option shall be exercisable until after the
completion of such one year or lesser period of employment by the optionee.

(5) Exercise of Option. An option may be exercised in whole or in part from time
to time during the option period (or, if determined by the Committee, in
specified installments during the option period) by giving written notice (or by
such other methods of notice as the Committee designates) of exercise to the
Company (or a representative designated by the Company for that purpose)
specifying the number of shares to be purchased, such notice to be accompanied
by payment in full of the purchase price and applicable Withholding Taxes (as
defined in Section 11 hereof) due either by (i) certified or bank check, (ii) in
shares of Common Stock of the Company having a Fair Market Value at the date of
exercise equal to such purchase price, provided, however, that payment in shares
of Common Stock of the Company will not be permitted unless at least 100 shares
of Common Stock are required and delivered for such purpose and shall be subject
to other restrictions as may be specified by the Company, (iii) in any
combination of the foregoing, or (iv) by any other method authorized by the
Committee. At its discretion, the Committee may modify or suspend any method for
the exercise of stock options, including any of the methods specified in the
previous sentence. Delivery of shares for exercising an option shall be made
either through the physical delivery of shares or through an appropriate
certification or attestation of valid ownership. No shares shall be issued until
full payment therefor has been made. An optionee shall have the rights of a
stockholder only with respect to shares of stock for which certificates have
been issued to the optionee.

Notwithstanding anything in the Plan to the contrary, the Company may, in its
sole discretion, allow the exercise of a lapsed grant if the Company determines
that: (i) the lapse was solely the result of the Company’s inability to execute
the exercise of an option award due to conditions beyond the Company’s control
and (ii) the optionee made valid and reasonable efforts to exercise the award.
In the event the Company makes such a determination, the Company shall allow the
exercise to occur as promptly as possible following its receipt of exercise
instructions subsequent to such determination.

(6) Nontransferability of Options. No option or stock appreciation right granted
under the Plan shall be transferable by the optionee otherwise than by will or
by the laws of descent and distribution, and such option or stock appreciation
right shall be exercisable, during the optionee’s lifetime, only by the
optionee. Notwithstanding the foregoing, the Committee may set forth in a Stock
Option Agreement at the time of grant or thereafter, that the options (other
than Incentive Stock Options) may be transferred to members of the optionee’s
immediate family, to trusts solely for the benefit of such immediate family
members and to partnerships in which such family members and/or trusts are the
only partners. For this purpose, immediate family means the optionee’s spouse,
parents, children, stepchildren, grandchildren and legal dependants. Any
transfer of options made under this provision will not be effective until notice
of such transfer is delivered to the Company.

(7) Retirement and Termination of Employment Other than by Death. If an optionee
shall cease to be employed by the Company or any of its Subsidiaries or
Affiliates for any reason (other than termination of employment by reason of
death) after the optionee shall have been continuously so employed for one year
after the granting of the option, or as otherwise determined by the Committee,
the option shall be exercisable only to the extent that the optionee was
otherwise entitled to exercise it at the time of such cessation of employment
with the Company, Subsidiary or Affiliate, unless otherwise determined by the
Committee. If the cessation of employment is on account of Retirement, the
option shall remain exercisable for the remainder of the option term (subject to
Section 6(b)(9)). If the cessation of employment is not on account of Retirement
or death, the option shall remain exercisable for three months after cessation
of employment (or, if earlier, the remainder of the option period), unless the
Committee determines otherwise. The Plan does not confer upon any optionee any
right with respect to continuation of employment by the Company or any of its
Subsidiaries or Affiliates.

 

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(8) Disability of Optionee. An optionee who becomes Disabled will not be deemed
to have terminated employment for the period during which, under the applicable
disability pay plan of the Company, Subsidiary or Affiliate, the optionee is
deemed to be employed and continues to receive disability payments. Upon the
cessation of payments under such disability pay plan, (i) if the optionee
returns to employment status with the Company, Subsidiary or Affiliate, he or
she will not be deemed to have terminated employment, and (ii), if the optionee
does not return to such employment status, he or she will be deemed to have
terminated employment at the date of cessation of such disability payments, with
such termination treated for purposes of the options as a Retirement, death, or
voluntary termination based on the optionee’s circumstances at the time of such
termination.

(9) Death of Optionee. Except as otherwise provided in subsection (13), in the
event of the optionee’s death (i) while in the employ of the Company or any of
its Subsidiaries or Affiliates, (ii) while Disabled as described in subsection
(8) or (iii) after cessation of employment due to Retirement, the option shall
be fully exercisable by the executors, administrators, legatees or distributees
of the optionee’s estate, as the case may be, at any time following such death.
In the event of the optionee’s death after cessation of employment for any
reason other than Retirement, the option shall be exercisable by the executors,
administrators, legatees or distributees of the optionee’s estate, as the case
may be, at any time during the twelve month period following such death.
Notwithstanding the foregoing, in no event shall an option be exercisable unless
the optionee shall have been continuously employed by the Company or any of its
Subsidiaries or Affiliates for a period of at least one year, or such lesser
period as the Committee shall so determine in its sole discretion, after the
option grant, and no option shall be exercisable after the expiration of the
option period set forth in the Stock Option Agreement. In the event any option
is exercised by the executors, administrators, legatees or distributees of the
estate of a deceased optionee, the Company shall be under no obligation to issue
stock thereunder unless and until the Company is satisfied that the person or
persons exercising the option are the duly appointed legal representatives of
the deceased optionee’s estate or the proper legatees or distributees thereof.

(10) Long-Term Performance Awards. The Committee may from time to time grant
nonqualified stock options under the Plan in conjunction with and related to an
award of performance units or performance shares made under a Long-Term
Performance Award as set forth in Section 7(b)(11). In such event,
notwithstanding any other provision hereof, (i) the number of shares to which
the Associated Option applies shall initially be equal to the number of
performance units or performance shares granted by the award, but such number of
shares shall be reduced on a one-share-for-one unit or share basis to the extent
that the Committee determines pursuant to the terms of the award, to pay to the
optionee or the optionee’s beneficiary the performance units or performance
shares granted pursuant to such award; and (ii) such Associated Option shall be
cancelable in the discretion of the Committee, without the consent of the
optionee, under the conditions and to the extent specified in the award.

(11) Stock Appreciation Rights. In the case of any option granted under the
Plan, either at the time of grant or by amendment of such option at any time
after such grant there may be included a stock appreciation right which shall be
subject to such terms and conditions, not inconsistent with the Plan, as the
Committee shall impose, including the following:

(A) A stock appreciation right shall be exercisable to the extent, and only to
the extent, that the option in which it is included is at the time exercisable,
and may be exercised within such period only at such time or times as may be
determined by the Committee;

(B) A stock appreciation right shall entitle the optionee (or any person
entitled to act under the provisions of subsection (9) hereof) to surrender
unexercised the option in which the stock appreciation right is included (or any
portion of such option) to the Company and to receive from the Company in
exchange therefor that number of shares having an aggregate value equal to (or,
in the discretion of the Committee, less than) the excess of the value of one
share

 

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(provided such value does not exceed such multiple of the option price per share
as may be specified by the Committee) over the option price per share specified
in such option times the number of shares called for by the option, or portion
thereof, which is so surrendered. The Committee shall be entitled to cause the
Company to settle its obligation, arising out of the exercise of a stock
appreciation right, by the payment of cash equal to the aggregate value of the
shares the Company would otherwise be obligated to deliver or partly by the
payment of cash and partly by the delivery of shares. Any such election shall be
made within 30 business days after the receipt by the Committee of written
notice of the exercise of the stock appreciation right. The value of a share for
this purpose shall be the Fair Market Value thereof on the last business day
preceding the date of the election to exercise the stock appreciation right
(except as may be otherwise required under Proposed Treasury Regulation §
1.409A-1(b)(5) and any successor regulation);

(C) No fractional shares shall be delivered under this subsection (11) but in
lieu thereof a cash adjustment shall be made;

(D) If a stock appreciation right included in an option is exercised, such
option shall be deemed to have been exercised to the extent of the number of
shares called for by the option or portion thereof which is surrendered on
exercise of the stock appreciation right and no new option may be granted
covering such shares under this Plan; and

(E) If an option which includes a stock appreciation right is exercised, such
stock appreciation right shall be deemed to have been canceled to the extent of
the number of shares called for by the option or portion thereof is exercised
and no new stock appreciation rights may be granted covering such shares under
this Plan.

(F) If an option which includes a stock appreciation right is forfeited pursuant
to Section 6(b)(15), such stock appreciation right shall be deemed to have been
forfeited to the extent of the number of shares cancelled or forfeited under the
option.

(12) Incentive Stock Options. In the case of any incentive stock option granted
under the Plan, the aggregate Fair Market Value of the shares of Common Stock of
the Company (determined at the time of grant of each option) with respect to
which incentive stock options granted under the Plan and any other plan of the
Company or its parent or a Subsidiary which are exercisable for the first time
by an employee during any calendar year shall not exceed $100,000 or such other
amount as may be required by the Code. Only employees who are employed by the
Issuer or a Subsidiary shall be eligible to receive a grant of an Incentive
Stock Option. In any year, the maximum number of shares with respect to which
incentive stock options may be granted shall not exceed 8,000,000 shares,
subject to adjustment pursuant to Section 10.

(13) Rights of Transferee. Notwithstanding anything to the contrary herein, if
an option has been transferred in accordance with Section 6(b)(6), the option
shall be exercisable solely by the transferee. The option shall remain subject
to the provisions of the Plan, including that it will be exercisable only to the
extent that the optionee or optionee’s estate would have been entitled to
exercise it if the optionee had not transferred the option. In the event of the
death of the optionee prior to the expiration of the right to exercise the
transferred option, the period during which the option shall be exercisable will
terminate on the date one year following the date of the optionee’s death. In
the event of the death of the transferee prior to the expiration of the right to
exercise the option, the period during which the option shall be exercisable by
the executors, administrators, legatees and distributees of the transferee’s
estate, as the case may be, will terminate on the date one year following the
date of the transferee’s death. In no event will be the option be exercisable
after the expiration of the option period set forth in the Stock Option
Agreement. The option shall be subject to such other rules as the Committee
shall determine.

(14) Change in Control. In the event an optionee’s employment with the Company
terminates for a qualifying reason during the three (3) year period following a
change in control of the Company and prior to the exercise of options granted
under this Plan, all outstanding options shall become immediately fully vested
and exercisable notwithstanding any provisions of the Plan or of the applicable
stock option agreement to the contrary.

 

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(A) For the purpose of this Plan a change in control shall be deemed to have
occurred on the earlier of the following dates:

(1) The date any Person (as defined in Section 13(d)(3) of the Securities and
Exchange Act) shall have become the direct or indirect beneficial owner of
thirty percent (30%) or more of the then outstanding common shares of the
Company;

(2) The date of consummation of a merger or consolidation of the Company with
any other corporation other than (i) a merger or consolidation which would
result in the voting securities of the company outstanding immediately prior
thereto continuing to represent at least 51% of the combined voting power of the
voting securities of the Company or the surviving entity outstanding immediately
after such merger or consolidation, or (ii) a merger or consolidation effected
to implement a recapitalization of the Company in which no Person acquires more
than 50% of the combined voting power of the Company’s then outstanding
securities;

(3) The date the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company’s assets;

(4) The date there shall have been a change in the composition of the Board of
Directors of the Company within a two- (2) year period such that a majority of
the Board does not consist of directors who were serving at the beginning of
such period together with directors whose initial nomination for election by the
Company’s stockholders or, if earlier, initial appointment to the Board, was
approved by the vote of two-thirds of the directors then still in office who
were in office at the beginning of the two- (2) year period together with the
directors who were previously so approved.

(B) For purposes of this Plan provision, a qualifying termination shall be
deemed to have occurred under the following circumstances:

(1) A Company initiated termination for reason other than the employee’s death,
resignation without good cause, willful misconduct or activity deemed
detrimental to the interests of the Company provided the optionee executes a
general release and, where applicable, a non-solicitation and/or non-compete
agreement with the Company;

(2) The optionee resigns with good cause, which includes (i) a substantial
adverse alteration in the nature or status of the optionee’s responsibilities,
(ii) a reduction in the optionee’s base salary and/or levels of entitlement or
participation under any incentive plan, award program or employee benefit
program without the substitution or implementation of an alternative arrangement
of substantially equal value, or, (iii) the Company requiring the optionee to
relocate to a work location more than fifty (50) miles from his/her work
location prior to the change in control.

(15) Special Forfeiture Provisions. The Committee may, in its discretion,
provide in a Stock Option Agreement that, in the event that the optionee
engages, within a specified period after termination of employment, in certain
activity specified by the Committee that is deemed detrimental to the interests
of the Company (including, but not limited to, the breach of any
non-solicitation and/or non-compete agreements with the Company), the optionee
will forfeit all rights under any options and/or stock appreciation rights that
remain outstanding as of the time of such act and will return to the Company an
amount of shares with a Fair Market Value (determined as of the date such shares
are returned) or, in the case of stock appreciation rights that are settled in
cash, an amount of cash, equal to the amount of any gain realized upon the
exercise of any option or stock appreciation right that occurred within a
specified time period.

 

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7. Long-term Performance Awards: Awards under the Plan shall consist of the
conditional grant to the participants of a specified number of performance units
or performance shares. The conditional grant of a performance unit to a
participant will entitle the participant to receive a specified dollar value,
variable under conditions specified in the award, if the performance objectives
specified in the award are achieved and the other terms and conditions thereof
are satisfied. The conditional grant of a performance share to a participant
will entitle the participant to receive a specified number of shares of Common
Stock of the Company, or the equivalent cash value, if the objective(s)
specified in the award are achieved and the other terms and conditions thereof
are satisfied.

Each award will be subject to the following terms and conditions:

(a) Grant of Awards. The Committee shall (1) select the officers and key
executives of the Company and its Subsidiaries and Affiliates to whom awards may
from time to time be granted, (2) determine the number of performance units or
performance shares covered by each award, (3) determine the terms and conditions
of each performance unit or performance share awarded and the award period and
performance objectives with respect to each award, (4) determine the periods
during which a participant may request the Committee to approve deferred payment
of a percentage (not less than 25%) of an award (the “Deferred Portion”),
subject to Section 13, and the interest or rate of return thereon or the basis
on which such interest or rate of return thereon is to be determined,
(5) determine whether payment with respect to the portion of an award which has
not been deferred (the “Current Portion”) and the payment with respect to the
Deferred Portion of an award shall be made entirely in cash, entirely in Common
Stock or partially in cash and partially in Common Stock, (6) determine whether
the award is to be made independently of or in conjunction with a nonqualified
stock option granted under the Plan, (7) determine the circumstances, if any,
under which an award may be cancelled or forfeited, and (8) prescribe the form
of the instruments necessary or advisable in the administration of the awards.

(b) Terms and Conditions of Award. Any award conditionally granting performance
units or performance shares to a participant shall be evidenced by a Performance
Unit Agreement or Performance Share Agreement, as applicable, executed by the
Company and the participant, in such form as the Committee shall approve, which
Agreement shall contain in substance the following terms and conditions
applicable to the award and such additional terms and conditions as the
Committee shall prescribe:

(1) Number and Value of Performance Units. The Performance Unit Agreement shall
specify the number of performance units conditionally granted to the
participant. If the award has been made in conjunction with the grant of an
Associated Option, the number of performance units granted shall initially be
equal to the number of shares which the participant is granted the right to
purchase pursuant to the Associated Option, but one performance unit shall be
canceled for each share of the Company’s Common Stock purchased upon exercise of
the Associated Option or for each stock appreciation right included in such
option that has been exercised. The Performance Unit Agreement shall specify the
threshold, target and maximum dollar values of each performance unit and
corresponding performance objectives as provided under Section 6(b)(5). No
payout under a performance unit award to an individual participant may exceed
0.15% of the pre-tax earnings of the Company for the fiscal year which coincides
with the final year of the performance unit period.

(2) Number and Value of Performance Shares. The Performance Share Agreement
shall specify the number of performance shares conditionally granted to the
participant. If the award has been made in conjunction with the grant of an
Associated Option, the number of performance shares granted shall initially be
equal to the number of shares which the participant is granted the right to
purchase pursuant to the Associated Option, but one performance share shall be
canceled for each share of the Company’s Common Stock purchased upon exercise of
the Associated Option or for each stock appreciation right included in such
option that has been exercised. The Performance Share Agreement shall specify
that each Performance Share will have a value equal to one (1) share of Common
Stock of the Company.

 

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(3) Award Periods. For each award, the Committee shall designate an award period
with a duration to be determined by the Committee in its discretion within which
specified performance objectives are to be attained. There may be several award
periods in existence at any one time and the duration of performance objectives
may differ from each other.

(4) Consideration. Each participant, as consideration for the award of
performance units or performance shares, shall remain in the continuous employ
of the Company or of one of its Subsidiaries or Affiliates for at least one year
or such lesser period as the Committee shall so determine in its sole discretion
after the date of the making of such award, and no award shall be payable until
after the completion of such one year or lesser period of employment by the
participant.

(5) Performance Objectives. The Committee shall establish performance objectives
with respect to the Company for each award period on the basis of such criteria
and to accomplish such objectives as the Committee may from time to time
determine. Performance criteria for awards under the Plan may include one or
more of the following measures of the operating performance:

 

  a. Earnings   d. Financial return ratios       b. Revenue   e. Total
Shareholder Return       c. Operating or net cash flows   f. Market share    

The Committee shall establish the specific targets for the selected criteria.
These targets may be set at a specific level or may be expressed as relative to
the comparable measure at comparison companies or a defined index. These targets
may be based upon the total Company or upon a defined business unit which the
executive has responsibility for or influence over.

(6) Determination and Payment of Performance Units or Performance Shares Earned.
As soon as practicable after the end of an award period, the Committee shall
determine the extent to which awards have been earned on the basis of the
Company’s actual performance in relation to the established performance
objectives as set forth in the Performance Unit Agreement or Performance Share
Agreement and certify these results in writing. The Performance Unit Agreement
or Performance Share Agreement shall specify that, as soon as practicable after
the end of each award period, the Committee shall determine whether the
conditions of Sections 7(b)(4) and 7(b)(5) hereof have been met and, if so,
shall ascertain the amount payable or shares which should be distributed to the
participant in respect of the performance units or performance shares. In the
case of a participant who has been Disabled during part of the award period, the
Committee shall apply the prorationing rule, if applicable, under
Section 7(b)(9). As promptly as practicable after it has determined that an
amount is payable or should be distributed in respect of an award, the Committee
shall cause the Current Portion of such award to be paid or distributed to the
participant or the participant’s beneficiaries, as the case may be, in the
Committee’s discretion, either entirely in cash, entirely in Common Stock or
partially in cash and partially in Common Stock. The Deferred Portion of an
award shall be contingently credited and payable to the participant over a
deferred period and shall be credited with interest, rate of return, or other
valuation as determined by the Committee. The Committee, in its discretion,
shall determine the conditions upon, and method of, payment of such Deferred
Portions, subject to Section 13, and whether such payment will be made entirely
in cash, entirely in Common Stock or partially in cash and partially in Common
Stock.

In making the payment of an award in Common Stock hereunder, the cash equivalent
of such Common Stock shall be determined by the Fair Market Value of the Common
Stock on the day the Committee designates the performance units shall be
payable.

(7) Nontransferability of Awards and Designation of Beneficiaries. No award
under this Section of the Plan shall be transferable by the participant other
than by will or by the laws of descent and distribution, except that a
participant may designate a beneficiary pursuant to the provisions hereof.

 

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If any participant or the participant’s beneficiary shall attempt to assign the
participant’s rights under the Plan in violation of the provisions thereof, the
Company’s obligation to make any further payments to such participant or the
participant’s beneficiaries shall forthwith terminate.

A participant may name one or more beneficiaries to receive any payment of an
award to which the participant may be entitled under the Plan in the event of
the participant’s death, on a form to be provided by the Committee. A
participant may change the participant’s beneficiary designation from time to
time in the same manner.

If no designated beneficiary is living on the date on which any payment becomes
payable to a participant’s beneficiary, or if no beneficiary has been specified
by the participant, such payment will be payable to the person or persons in the
first of the following classes of successive preference:

 

  (i) Widow or widower, if then living,

 

  (ii) Surviving children, equally,

 

  (iii) Surviving parents, equally,

 

  (iv) Surviving brothers and sisters, equally,

 

  (v) Executors or administrators

and the term “beneficiary” as used in the Plan shall include such person or
persons.

(8) Retirement and Termination of Employment Other Than by Death. In the event
of the Retirement prior to the end of an award period of a participant who has
satisfied the one year employment requirement of Section 7(b)(4) with respect to
an award prior to Retirement, the participant, or his estate, shall be entitled
to a payment of such award at the end of the award period, pursuant to the terms
of the Plan and the participant’s Performance Unit Agreement or Performance
Share Agreement, provided, however, that the participant shall be deemed to have
earned that proportion (to the nearest whole unit or share) of the value of the
performance units or performance shares granted to the participant under such
award as the number of months of the award period which have elapsed since the
first day of the calendar year in which the award was made to the end of the
month in which the participant’s Retirement occurs (the “period worked”), bears
to the total number of months in the award period, subject to the attainment of
performance objectives associated with the award as certified by the Committee.
The period worked for purposes of this prorationing calculation shall be reduced
by the number of months (including fractions) during such period in which the
participant was Disabled in excess of 26 weeks. The participant’s right to
receive any remaining performance units or performance shares shall be canceled
and forfeited. Notwithstanding the foregoing, the Committee may, in its
discretion, provide in a Performance Unit Agreement and/or Share Unit Agreement
that a participant’s award or awards payable in the future will be cancelled and
forfeited in the event that a participant engages, within a specified time
period after termination of employment, in certain activity specified by the
Committee that is deemed detrimental to the interests of the Company (including,
but not limited to, the breach of any non-solicitation and/or non-compete
agreements with the Company) and may require the return of award payments that
were paid within a specified period of time prior to such activity. The
Committee may, in its discretion, waive, in whole or in part, any cancellation
and forfeiture of any performance units or performance shares provided that any
such action does not affect the award of any person covered by Section 162(m) of
the Code, and subject to Section 13.

Subject to Section 7(b)(6) hereof, the Performance Unit Agreement or Performance
Share Agreement shall specify that the right to receive the performance units or
performance shares granted to such participant shall be conditional and shall be
canceled, forfeited and surrendered if the participant’s continuous employment
with the Company and its Subsidiaries and Affiliates shall terminate for any
reason, other than the participant’s death or Retirement prior to the end of the
award period.

 

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(9) Disability of Participant. A participant who becomes Disabled will not be
deemed to have terminated employment for the period during which, under the
applicable disability pay plan of the Company, Subsidiary or Affiliate, the
participant is deemed to be employed and continues to receive disability
payments. Upon the cessation of payments under such disability pay plan, (i) if
the participant returns to employment status with the Company, Subsidiary or
Affiliate, he or she will not be deemed to have terminated employment, and (ii),
if the participant does not return to such employment status, he or she will be
deemed to have terminated employment at the date of cessation of such disability
payments, with such termination treated for purposes of the performance shares
or performance units as a Retirement, death, or voluntary termination based on
the participant’s circumstances at the time of such termination. In the case of
any participant who has been Disabled for a period in excess of 26 weeks in the
aggregate during the award period, the amount payable or shares earned in
respect of an award period under Section 7(b)(6) shall be prorated by
multiplying the gross amount of performance units or performance shares by a
fraction the numerator of which is the length of the award period in months
(including fractions) minus the number of months (including fractions) during
such period in which the participant was Disabled in excess of 26 weeks, and the
denominator of which is the aggregate length of the award period. The resulting
number of performance units or performance shares earned shall be rounded to the
nearest whole unit or share.

The participant’s right to receive any remaining performance units shall be
canceled and forfeited. The Committee may, in its discretion, waive, in whole or
in part, such cancellation and forfeiture of any performance units or
performance shares provided that any such action does not affect the award of
any person covered by Section 162(m) of the Code, and subject to Section 13.

(10) Death of Participant. In the event of the death prior to the end of an
award period of a participant who has satisfied the one year employment
requirement with respect to an award prior to the date of death, the
participant’s beneficiaries or estate, as the case may be, shall be entitled to
a payment of such award upon the end of the award period, pursuant to the terms
of the Plan and the participant’s Performance Unit Agreement or Performance
Share Agreement, provided, however, that the participant shall be deemed to have
earned that proportion (to the nearest whole unit or share) of the value of the
performance units or performance shares granted to the participant under such
award as the number of months of the award period which have elapsed since the
first day of the calendar year in which the award was made to the end of the
month in which the participant’s death occurs (the “period worked”), bears to
the total number of months in the award period. The period worked for purposes
of this prorationing calculation shall be reduced by the number of months
(including fractions) during such period in which the participant was Disabled
in excess of 26 weeks. The participant’s right to receive any remaining
performance units or performance shares shall be canceled and forfeited. The
Committee may, in its discretion, waive, in whole or in part, such cancellation
and forfeiture of any performance units or performance shares.

(11) Grant of Associated Option. If the Committee determines that the
conditional grant of performance units or performance shares under the Plan is
to be made to a participant in conjunction with the grant of a nonqualified
stock option under the Plan, the Committee shall grant the participant an
Associated Option under the Plan subject to the terms and conditions of this
subsection (11). In such event, such award under the Plan shall be contingent
upon the participant’s being granted such an Associated Option pursuant to
which: (i) the number of shares the optionee may purchase shall initially be
equal to the number of performance units or performance shares conditionally
granted by the award, (ii) such number of shares shall be reduced on a
one-share-for-one-unit or share basis to the extent that the Committee
determines, pursuant to Section 7(b)(6) hereof, to pay to the participant or the
participant’s beneficiaries the performance units or performance shares
conditionally granted pursuant to the award, and (iii) the Associated Option
shall be cancelable in the discretion of the Committee, without the consent of
the participant, under the conditions and to the extent specified herein and in
Section 7(b)(6) hereof.

If no amount is payable in respect of the conditionally granted performance
units or performance shares, the award and such performance units or performance
shares shall be deemed to have been canceled, forfeited and surrendered, and the
Associated Option, if any, shall continue in effect in accordance with its
terms. If any amount is payable in respect of the performance units or
performance shares and such units or shares were granted in conjunction with an
Associated Option, the Committee shall, within 30 days after the determination
of the Committee referred to in the first sentence of Section 7(b)(6),
determine, in its sole discretion, either:

(A) to cancel in full the Associated Option, in which event the value of the
performance units or performance shares payable pursuant to Sections 7(b)(5) and
(6) shall be paid or the performance shares shall be distributed;

 

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(B) to cancel in full the performance units or performance shares, in which
event no amount shall be paid to the participant in respect thereof and no
shares shall be distributed but the Associated Option shall continue in effect
in accordance with its terms; or

(C) to cancel some, but not all, of the performance units or performance shares,
in which event the value of the performance units payable pursuant to Sections
7(b)(5) and (6) which have not been canceled shall be paid and/or the
performance shares shall be distributed and the Associated Option shall be
canceled with respect to that number of shares equal to the number of
conditionally granted performance units or performance shares that remain
payable.

Any action taken by the Committee pursuant to the preceding sentence shall be
uniform with respect to all awards having the same award period. If the
Committee takes no such action, it shall be deemed to have determined to cancel
in full the award in accordance with clause (b) above.

(12) Change-in-Control. In the event that a long-term performance award
recipient’s employment with the Company terminates for a qualifying reason (as
defined in Section (6)(b)(14)(B)) during the three- (3) year period following a
change in control of the Company (as that term is defined in
Section 6(b)(14)(A)), the award recipient will receive the following: (i) With
respect to any part of a performance award for which the number of performance
units or performance shares cannot be reduced based on performance in a period
or periods ending after such termination (i.e., the performance units or shares
are “earned,” although they may remain subject to further vesting conditions
based on service), any service, vesting or other non-performance requirement
relating to such award will be deemed met and such award will be fully vested
and non-forfeitable upon such qualifying termination; and (ii), with respect to
any part of a performance award for which the number of performance units or
performance shares remains at risk based on performance in a period or periods
ending after such termination (i.e., the performance units or shares are not yet
“earned”), an amount equal to the pro-rata portion of such unearned award or
award opportunity (or the portion thereof that is unearned) shall vest and
become non-forfeitable upon such qualifying termination, calculated assuming
that any performance goal or measurement will have been achieved at the target
level of achievement, and any service, vesting or other non-performance
requirement relating to such pro-rata portion of the award, including a service
period that would have extended after the performance period, will be deemed
met; provided, however, that, in each of the cases referred to in clause (i) and
(ii), any additional forfeiture conditions in the nature of a “clawback”
contained in any plan or award agreement shall continue to apply to any payment;
and provided further, that the vesting authorized in this Section 7(b)(12) will
apply without regard to whether the award was or was not outstanding for more
than one year. The pro-rata portion shall be determined based on the proportion
of the performance period applicable to the unearned award elapsed from the
beginning of such period until the date of termination (the “period worked”).
The period worked for purposes of this prorationing calculation shall be reduced
by the number of months (including fractions) during such period in which the
participant was Disabled in excess of 26 weeks. A distribution under this
Section 7(b)(12) will be made within 75 days after the qualifying termination,
subject to Section 13 (which may require a delay in distribution until six
months after the qualifying termination in some cases). Any portion of a
performance award that is not deemed vested and non-forfeitable upon application
of the prorationing under clause (ii) above shall be forfeited.

8. Restricted Stock and Restricted Stock Units (RSUs): Restricted stock awards
under the Plan shall consist of grants of shares of Common Stock of the Issuer
subject to the terms and conditions hereinafter provided. Restricted stock units
(“RSUs”) under the Plan shall constitute an award conferring upon the
participant a right to receive one share of Common Stock at a specified future
settlement date subject to the terms and conditions hereafter provided.

 

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(a) Grant of Awards: The Committee shall (i) select the officers and key
employees to whom restricted stock or RSUs may from time to time be granted,
(ii) determine the number of shares to be covered by each award granted,
(iii) determine the terms and conditions (not inconsistent with the Plan) of any
award granted hereunder, and (iv) prescribe the form of the agreement, legend or
other instrument necessary or advisable in the administration of awards under
the Plan.

(b) Terms and Conditions of Awards: Any restricted stock award or RSUs granted
under the Plan shall be evidenced by an award agreement executed by the Issuer
and the recipient (if deemed necessary or appropriate by the Committee), in such
form as the Committee shall approve, which agreement shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions not inconsistent with the Plan as the Committee shall prescribe:

(1) Number of Shares Subject to an Award: The Restricted Stock Agreement or RSU
Agreement shall specify the number of shares of Common Stock subject to the
award.

(2) Restriction Period: The period of restriction applicable to each award shall
be established by the Committee but may not be less than one year. The
Restriction Period applicable to each award shall commence on the award grant
date.

(3) Consideration: Each recipient, as consideration for the grant of an award,
shall remain in the continuous employ of the Company for at least one year or
such lesser period as the Committee shall so determine in its sole discretion
from the date of the granting of such award, and any shares covered by such a
restricted stock award or any RSUs shall be forfeited if the recipient does not
remain in the continuous employ of the Company for at least one year or lesser
period from the date of the granting of the award.

(4) Restriction Criteria: The Committee shall establish the criteria upon which
the restriction period shall be based. Restrictions may be based upon either the
continued employment of the recipient or upon the attainment by the Company of
one or more of the following measures of the operating performance:

 

 

a. Earnings

  d. Financial return ratios    

b. Revenue

  e. Total Shareholder Return    

c. Operating or net cash flows

  f. Market share  

The Committee shall establish the specific targets for the selected criteria.
These targets may be set at a specific level or may be expressed as relative to
the comparable measure at comparison companies or a defined index. Performance
objectives may be established in combination with restrictions based upon the
continued employment of the recipient. These targets may be based upon the total
Company or upon a defined business unit which the executive has responsibility
for or influence over.

In cases where objective performance criteria are established, the Committee
shall determine the extent to which the criteria have been achieved and the
corresponding level to which restrictions will be removed from the award or the
extent to which a participant’s right to receive an award should be lapsed in
cases where the performance criteria have not been met and shall certify these
determinations in writing. The Committee may provide for the determination of
the attainment of such restrictions in installments where deemed appropriate.

(c) Terms and Conditions of Restrictions and Forfeitures: Awards under this
Section 8 shall be subject to the following restrictions and conditions:

(1) During the Restriction Period, the participant will not be permitted to
sell, transfer, pledge or assign restricted stock (including the shares of
Common Stock subject thereto) or RSUs awarded under this Plan.

 

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(2) Except as provided in this Section 8, or as the Committee may otherwise
determine, the participant shall have all of the rights of a stockholder of the
Issuer with respect to Common Stock subject to an award of restricted stock,
including the right to vote the shares and receive dividends and other
distributions provided that distributions in the form of stock shall be subject
to the same restrictions as the underlying restricted stock. With respect to
RSUs, a participant shall have no rights of a stockholder of an Issuer until
such time as the RSUs are settled and in connection therewith Common Stock is
delivered to the participant. However, a participant may be awarded dividend
equivalents in connection with RSUs.

(3) In the event of a participant’s Retirement or death prior to the end of the
Restriction Period for a participant who has satisfied the applicable employment
requirement of Section 8(b)(2) with respect to an award prior to Retirement or
death, the participant, or his/her estate, shall be entitled to receive, in the
case of restricted stock, or to have the risk of forfeiture lapse on, in the
case of RSUs, that proportion (to the nearest whole share) of the number of
shares subject to the award granted as the number of months of the Restriction
Period which have elapsed since the award date to the date at which the
participant’s Retirement or death occurs, bears to the total number of months in
the Restriction Period. The participant’s right to receive any remaining shares
or otherwise to any remaining portion of the award shall be canceled and
forfeited and, in the case of restricted stock, the shares will be deemed to be
reacquired by the Issuer. Notwithstanding the foregoing, the Committee may, in
its discretion, provide in an award agreement that the participant will forfeit
his or her right to receive all shares subject to the award in the event that a
participant engages, within a specified time period after termination of
employment, in certain activity specified by the Committee that is deemed
detrimental to the interests of the Company (including, but not limited to, the
breach of any non-solicitation and/or non-compete agreements with the Company)
and may require the return to the Company of any shares that were received
within a specified time period prior to such activity.

(4) A participant who becomes Disabled will not be deemed to have terminated
employment for the period during which, under the applicable disability pay plan
of the Company, Subsidiary or Affiliate, the participant is deemed to be
employed and continues to receive disability payments. Upon the cessation of
payments under such disability pay plan, (i) if the participant returns to
employment status with the Company, Subsidiary or Affiliate, he or she will not
be deemed to have terminated employment, and (ii), if the participant does not
return to such employment status, he or she will be deemed to have terminated
employment at the date of cessation of such disability payments, with such
termination treated for purposes of the restricted stock or RSUs as a
Retirement, death, or voluntary termination based on the participant’s
circumstances at the time of such termination.

(5) In the event of a participant’s Retirement, death, Disability or in cases of
special circumstances as determined by the Committee, the Committee may, in its
sole discretion when it finds that such an action would be in the best interests
of the Company, accelerate or waive in whole or in part any or all remaining
time-based restrictions with respect to all or part of such participant’s
restricted stock or RSUs.

(6) Upon termination of employment for any reason during the Restriction Period,
subject to the provisions of paragraph (3) or (5) above or in the event that the
participant fails promptly to pay or make satisfactory arrangements as to the
withholding taxes as provided in the following paragraph, any remaining portion
of an award of restricted stock or RSUs (including all shares) still subject to
restriction shall be forfeited by the participant and will be deemed to be
reacquired by the Company.

 

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(7) A participant may, at any time prior to the expiration of the Restriction
Period, waive all right to receive all or some of the shares of a restricted
stock award by delivering to the Company a written notice of such waiver.

(8) Notwithstanding the other provisions of this Section 8, the Committee may
adopt rules which would permit a gift by a participant of restricted stock or
transfer of RSUs to members of his/her immediate family (spouse, parents,
children, stepchildren, grandchildren or legal dependants) or to a Trust whose
beneficiary or beneficiaries shall be either such a person or persons or the
participant.

(9) Any attempt to dispose of restricted stock or transfer RSUs in a manner
contrary to the restrictions shall be ineffective.

(10) The settlement date of RSUs may be at the same date as the Restriction
Period ends or may be at a later date as the Committee may either specify at the
time of grant of the RSUs or may permit to be elected by the participant.

9. Determination of Breach of Conditions: The determination of the Committee as
to whether an event has occurred resulting in a forfeiture or a termination or
reduction of the Company’s obligations in accordance with the provisions of the
Plan shall be conclusive.

10. Adjustment in the Event of Change in Stock: In the event of a change in the
outstanding Common Shares of the Company (including but not limited to changes
in either the number of shares or the value of shares) by reason of any stock
split, reverse stock split, dividend or other distribution (whether in the form
of cash, shares, other securities or other property), extraordinary cash
dividend, recapitalization, merger, consolidation, split-up, spin-off,
reorganization, combination, repurchase or exchange of shares or other
securities, the issuance of warrants or other rights to purchase shares or other
securities, or other similar corporate transaction or event, if the Committee
shall determine, in its sole discretion, that, in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, such transaction or event equitably requires an adjustment in
the aggregate number and/or class of shares available under the Plan, in the
number, class and/or price of shares subject to an outstanding options and/or
awards, or in the number of performance units and/or dollar value of each such
unit, such adjustment shall be made by the Committee and shall be conclusive and
binding for all purposes under the Plan. A participant holding an outstanding
award has a legal right to an adjustment that preserves without enlarging the
value of such award, with the terms and manner of such adjustment to be
determined by the Committee. Notwithstanding the foregoing, no adjustments shall
be made with respect to an award granted to an employee covered under
Section 162(m) of the Code to the extent such adjustment would cause the award
to fail to qualify as performance-based compensation under that Section.

11. Taxes:

 

  (a) Each participant shall, no later than the Tax Date (as defined below), pay
to the Company, or make arrangements satisfactory to the Committee regarding
payment of, any Withholding Tax (as defined below) with respect to an option or
award, and the Company shall, to the extent permitted by law, have the right to
deduct such amount from any payment of any kind otherwise due to the
participant. The Company shall also have the right to retain or sell without
notice, or to demand surrender of, shares of Common Stock in value sufficient to
cover the amount of any Withholding Tax, and to make payment (or to reimburse
itself for payment made) to the appropriate taxing authority of an amount in
cash equal to the amount of such Withholding Tax, remitting any balance to the
participant. For purposes of the paragraph, the value of shares of Common Stock
so retained or surrendered shall be the average of the high and low sales prices
per share on the New York Stock Exchange composite tape on the date that the
amount of the Withholding Tax is to be determined (the “Tax Date”) and the value
of shares of Common Stock so sold shall be the actual net sale price per share
(after deduction of commissions) received by the Company.

 

  (b) Notwithstanding the foregoing, if the stock options have been transferred,
the optionee shall provide the Company with funds sufficient to pay such
Withholding Tax. If such optionee does not satisfy the optionee’s tax payment
obligation and the stock options have been transferred, the transferee may
provide the funds sufficient to enable the Company to pay such taxes. However,
if the stock options have been transferred, the Company shall have no right to
retain or sell without notice, or to demand surrender from the transferee of,
shares of Common Stock in order to pay such Withholding Tax.

 

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  (c) The term “Withholding Tax” means the minimum required withholding amount
applicable to the participant, including federal, state and local income taxes,
Federal Insurance Contribution Act taxes and other governmental impost or levy.

 

  (d) Notwithstanding the foregoing, the participant shall be entitled to
satisfy the obligation to pay any Withholding Tax, in whole or in part, by
providing the Company with funds sufficient to enable the Company to pay such
Withholding Tax or by requiring the Company to retain shares that are vested and
deliverable in connection with the award or to accept upon delivery thereof by
the participant shares of Common Stock owned by the participant having a Fair
Market Value sufficient to cover the amount of such Withholding Tax. Each
election by a participant to have shares retained or to deliver shares for this
purpose shall be subject to the following restrictions: (i) the election must be
in writing and be made on or prior to the Tax Date; (ii) the election must be
irrevocable; (iii) the election shall be subject to the disapproval of the
Committee.

12. Deferral Election: An optionee or participant shall not be permitted to
elect to defer the delivery of the proceeds of the exercise of any stock option
or stock appreciation rights.

13. Compliance with Code Section 409A.

(a) 409A Deferrals. Other provisions of the Plan notwithstanding, the terms of
any award granted to an employee subject to United States federal income tax and
which constitutes a deferral of compensation under Code Section 409A (“409A
Deferrals,” which excludes any award that was both granted and vested before
2005 and therefore is deemed to be “grandfathered” under applicable IRS
regulations and guidance), including any authority of the Company and rights of
the participant with respect to the 409A Deferrals, shall be limited to those
terms permitted under Section 409A, and any terms not permitted under
Section 409A shall be automatically modified and limited to the extent necessary
to conform with Section 409A. The following rules will apply to 409A Deferrals:

(i) If a participant is permitted to elect to defer an award or any payment
under an award in 2005 or thereafter, such election will be permitted only at
times in compliance with Section 409A (including transition rules thereunder).
The Committee may, in its discretion, require or permit on an elective basis a
change in the distribution terms applicable to 409A Deferrals during 2005 and
2006 in accordance with, and to the fullest extent permitted by, Proposed
Treasury Regulation § 1.409A (including Preamble § XI.C) and IRS Notice 2005-1,
and at any time in accordance with Section 409A and regulations thereunder;

(ii) The Company shall have no authority to accelerate distributions relating to
409A Deferrals in excess of the authority permitted under Section 409A;

(iii) Any distribution of a 409A Deferral triggered by a participant’s
termination of employment and intended to qualify under Section 409A(a)(2)(A)(i)
shall be made only at the time that the participant has had a “separation from
service” within the meaning of Section 409A(a)(2)(A)(i) (or earlier at such
time, after a termination of employment, that there occurs another event
triggering a distribution under the Plan or the applicable award agreement in
compliance with Section 409A);

 

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(iv) Any distribution of a 409A Deferral subject to Section 409A(a)(2)(A)(i)
that would be made within six months following a separation from service of a
“Specified Employee” (or “key employee”) as defined under
Section 409A(a)(2)(B)(i) shall instead occur at the expiration of the six-month
period under Section 409A(a)(2)(B)(i). In the case of installments, this delay
shall not affect the timing of any installment otherwise payable after the
six-month delay period;

(v) If any portion of an award that is scheduled to vest at a single specified
date (a vesting “tranche”) is partly deemed a 409A Deferral and partly deemed
exempt from Section 409A (as a short-term deferral or otherwise), the time of
settlement of the entire tranche will be governed by the distribution rules
applicable to the 409A Deferral; and

(vi) The rules applicable to 409A Deferrals under this Section 13(a) constitute
further restrictions on terms of awards set forth elsewhere in this Plan. Thus,
for example, a 409A Option/SAR shall be subject to restrictions, including
restrictions on rights otherwise specified in Section 6(b), in order that such
award shall not result in constructive receipt of income before exercise or tax
penalties under Section 409A.

(b) Grandfathered Awards. Any award that was both granted and vested before 2005
and which otherwise might constitute a deferral of compensation under
Section 409A is intended to be “grandfathered” under Section 409A. No amendment
or change to the Plan or other change (including an exercise of discretion) with
respect to such a grandfathered award after October 3, 2004, shall be effective
if such change would constitute a “material modification” within the meaning of
applicable guidance or regulations under Section 409A, except in the case of an
award that is specifically modified to become compliant as a 409A Deferral or
compliant with an exemption under Section 409A.

(c) Rules Applicable to Excluded Option/SARs. With respect to Excluded Options/
SARs, in applying Code Sections 1563(a)(1), (2) and (3) for purposes of
determining a controlled group of corporations under Code Section 414(b), the
language “at least 20 percent” shall be used instead of “at least 80 percent” at
each place it appears in Sections 1563(a)(1), (2) and (3), and in applying
Treasury Regulation §1.414(c)-2 (or any successor provision) for purposes of
determining trades or businesses (whether or not incorporated) that are under
common control for purposes of Section 414(c), the language “at least 20
percent” shall be used instead of “at least 80 percent” at each place it appears
in Treasury Regulation §1.414(c)-2.

(d) Distributions Upon Vesting. In the case of any award providing for a
distribution upon the lapse of a risk of forfeiture, if the timing of such
distribution is not otherwise specified in the Plan or an award agreement, the
distribution shall be made not later than March 15 of the year following the
year in which the risk of forfeiture lapsed.

(e) Scope and Application of this Provision. For purposes of this Section 13,
references to a term or event (including any authority or right of the Company
or a participant) being “permitted” under Section 409A mean that the term or
event will not cause the participant to be deemed to be in constructive receipt
of compensation relating to the 409A Deferral prior to the distribution of cash,
shares or other property or to be liable for payment of interest or a tax
penalty under Section 409A. The rules under this Section 13, and all other
provisions relating to Section 409A, apply retroactively as of January 1, 2005.
Each award outstanding between January 1, 2005 and the date of adoption of this
Section 13 shall be deemed to be amended so that Section 13 shall apply to such
award in accordance with the terms hereof.

14. Amendment of the Plan: The Board of Directors may amend or suspend the Plan
at any time and from time to time. No such amendment of the Plan may, however,
increase the maximum number of shares to be offered under options or awards, or
change the manner of determining the option price, or change the designation of
employees or class of employees eligible to receive options or awards, or permit
the transfer or issue of stock before payment therefor in full, or, without the
written consent of the optionee or participant, alter or impair any option or
award previously granted under the Plan or Prior Plan. Notwithstanding the
foregoing, if an option has been transferred in accordance with Section 6(b)(6),
written consent of the transferee (and not the optionee) shall be necessary to
alter or impair any option or award previously granted under the Plan.

 

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15. Miscellaneous:

(a) By accepting any benefits under the Plan, each optionee or participant and
each person claiming under or through such optionee or participant shall be
conclusively deemed to have indicated acceptance and ratification of, and
consent to, any action taken or made to be taken or made under the Plan by the
Company, the Board, the Committee or any other Committee appointed by the Board.

(b) No participant or any person claiming under or through him shall have any
right or interest, whether vested or otherwise, in the Plan or in any option, or
stock appreciation right or award thereunder, contingent or otherwise, unless
and until all of the terms, conditions and provisions of the Plan and the
Agreement that affect such participant or such other person shall have been
complied with.

(c) Nothing contained in the Plan or in any Agreement shall require the Company
to segregate or earmark any cash or other property.

(d) Neither the adoption of the Plan nor its operation shall in any way affect
the rights and powers of the Company or any of its Subsidiaries or Affiliates to
dismiss and/or discharge any employee at any time.

16. Term of the Plan: The Plan, if approved by stockholders, will be effective
May 7, 2002. The Plan shall expire on May 31, 2007 unless suspended or
discontinued by action of the Board of Directors. The expiration of the Plan,
however, shall not affect the rights of Optionees under options theretofore
granted to them or the rights of participants under awards theretofore granted
to them, and all unexpired options and awards shall continue in force and
operation after termination of the Plan except as they may lapse or be
terminated by their own terms and conditions.

17. Employees Based Outside of the United States: Notwithstanding any provision
of the Plan to the contrary, in order to foster and promote achievement of the
purposes of the Plan or to comply with provisions of laws in other countries in
which the Company, its Affiliates and its Subsidiaries operate or have
Employees, the Committee, in its sole discretion, shall have the power and
authority to (i) determine which Employees employed outside the United States
are eligible to participate in the Plan, (ii) modify the terms and conditions of
options granted to Employees who are employed outside the United States,
(iii) establish subplans, modify option exercise procedures and other terms and
procedures to the extent such actions may be necessary or advisable, and
(iv) grant to Employees employed in countries wherein the granting of stock
options is impossible or impracticable, as determined by the Committee, stock
appreciation rights with terms and conditions that, to the fullest extent
possible, are substantially identical to the stock options granted hereunder.

 

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