EXHIBIT 10.13
 
Multimedia Games, Inc.
2008 Employment Inducement Award Plan
 
TABLE OF CONTENTS
 

      Page
1.
Establishment, Purpose and Term of Plan
 
1
           
1.1
Establishment
 
1
 
1.2
Purpose
 
1
 
1.3
Term of Plan
 
1
         
2.
Definitions and Construction
 
1
           
2.1
Definitions
 
1
 
2.2
Construction
 
9
         
3.
Administration
 
9
           
3.1
Administration by the Committee
 
9
 
3.2
Authority of Officers
 
10
 
3.3
Administration with Respect to Insiders
 
10
 
3.4
Powers of the Committee
 
10
 
3.5
Option or SAR Repricing
 
11
 
3.6
Indemnification
 
11
         
4.
Shares Subject to Plan
 
12
           
4.1
Maximum Number of Shares Issuable
 
12
 
4.2
Share Counting
 
12
 
4.3
Adjustments for Changes in Capital Structure
 
12
         
5.
Eligibility, Participation and Award Limitations
 
13
           
5.1
Persons Eligible for Awards
 
13
 
5.2
Participation in the Plan
 
13
 
5.3
Award Limitations
 
13
         
6.
Stock Options
 
14
           
6.1
Exercise Price
 
14
 
6.2
Exercisability and Term of Options
 
14
 
6.3
Payment of Exercise Price
 
14
 
6.4
Effect of Termination of Service
 
15
 
6.5
Transferability of Options
 
16
         
7.
Stock Appreciation Rights
 
16
           
7.1
Types of SARs Authorized
 
16
 
7.2
Exercise Price
 
16
 
7.3
Exercisability and Term of SARs
 
17

 
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TABLE OF CONTENTS
(continued)

        Page  
7.4
Exercise of SARs
 
17
 
7.5
Deemed Exercise of SARs
 
17
 
7.6
Effect of Termination of Service
 
17
 
7.7
Transferability of SARs
 
18
         
8.
Restricted Stock Awards
 
18
           
8.1
Types of Restricted Stock Awards Authorized
 
18
 
8.2
Purchase Price
 
18
 
8.3
Purchase Period
 
18
 
8.4
Payment of Purchase Price
 
19
 
8.5
Vesting and Restrictions on Transfer
 
19
 
8.6
Voting Rights; Dividends and Distributions
 
19
 
8.7
Effect of Termination of Service
 
19
 
8.8
Nontransferability of Restricted Stock Award Rights
 
20
         
9.
Restricted Stock Unit Awards
 
20
           
9.1
Grant of Restricted Stock Unit Awards
 
20
 
9.2
Purchase Price
 
20
 
9.3
Vesting
 
20
 
9.4
Voting Rights, Dividend Equivalent Rights and Distributions
 
21
 
9.5
Effect of Termination of Service
 
21
 
9.6
Settlement of Restricted Stock Unit Awards
 
21
 
9.7
Nontransferability of Restricted Stock Unit Awards
 
22
         
10.
Performance Awards
 
22
           
10.1
Types of Performance Awards Authorized
 
22
 
10.2
Initial Value of Performance Shares and Performance Units
 
22
 
10.3
Establishment of Performance Period, Performance Goals and Performance Award
Formula
 
22
 
10.4
Measurement of Performance Goals
 
23
 
10.5
Settlement of Performance Awards
 
24
 
10.6
Voting Rights; Dividend Equivalent Rights and Distributions
 
26
 
10.7
Effect of Termination of Service
 
26
 
10.8
Nontransferability of Performance Awards
 
26
         
11.
Deferred Compensation Awards
 
27
           
11.1
Establishment of Deferred Compensation Award Programs
 
27
 
11.2
Terms and Conditions of Deferred Compensation Awards
 
27

 
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TABLE OF CONTENTS
(continued)

      Page
12.
Cash-Based Awards and Other Stock-Based Awards
 
28
           
12.1
Grant of Cash-Based Awards
 
28
 
12.2
Grant of Other Stock-Based Awards
 
28
 
12.3
Value of Cash-Based and Other Stock-Based Awards
 
29
 
12.4
Payment or Settlement of Cash-Based Awards and Other Stock-Based Awards
 
29
 
12.5
Voting Rights; Dividend Equivalent Rights and Distributions
 
29
 
12.6
Effect of Termination of Service
 
29
 
12.7
Nontransferability of Cash-Based Awards and Other Stock-Based Awards
 
29
         
13.
Standard Forms of Award Agreement
 
30
           
13.1
Award Agreements
 
30
 
13.2
Authority to Vary Terms
 
30
         
14.
Change in Control
 
30
           
14.1
Effect of Change in Control on Awards
 
30
 
14.2
Federal Excise Tax Under Section 4999 of the Code
 
32
         
15.
Compliance with Securities Law
 
32
         
16.
Compliance with Section 409A
 
33
           
16.1
Awards Subject to Section 409A
 
33
 
16.2
Deferral and/or Distribution Elections
 
33
 
16.3
Subsequent Elections
 
34
 
16.4
Distributions Pursuant to Deferral Elections
 
34
 
16.5
Unforeseeable Emergency
 
35
 
16.6
Disabled
 
35
 
16.7
Death
 
36
 
16.8
No Acceleration of Distributions
 
36
         
17.
Tax Withholding
 
36
           
17.1
Tax Withholding in General
 
36
 
17.2
Withholding in Shares
 
36
         
18.
Amendment or Termination of Plan
 
36
         
19.
Miscellaneous Provisions
 
37
           
19.1
Repurchase Rights
 
37
 
19.2
Forfeiture Events
 
37

 
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TABLE OF CONTENTS
(continued)

        Page  
19.3
Provision of Information
 
37
 
19.4
Rights as Employee
 
37
 
19.5
Rights as a Stockholder
 
38
 
19.6
Delivery of Title to Shares
 
38
 
19.7
Fractional Shares
 
38
 
19.8
Retirement and Welfare Plans
 
38
 
19.9
Beneficiary Designation
 
38
 
19.10
Severability
 
38
 
19.11
No Constraint on Corporate Action
 
38
 
19.12
Unfunded Obligation
 
39
 
19.13
Choice of Law
 
39

 
 
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1.           Establishment, Purpose and Term of Plan.
 
1.1           Establishment.  The Multimedia Games, Inc. 2008 Employment
Inducement Award Plan (the “Plan”) is hereby established effective as of
June 15, 2008 (the “Effective Date”).
 
1.2           Purpose.  The purpose of the Plan is to advance the interests of
the Participating Company Group and its stockholders by providing an incentive
to attract, retain and reward persons performing services for the Participating
Company Group and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group.  The Plan seeks to achieve
this purpose by providing for Awards in the form of Options, Stock Appreciation
Rights, Restricted Stock Purchase Rights, Restricted Stock Bonuses, Restricted
Stock Units, Performance Shares, Performance Units, Deferred Compensation
Awards, Cash-Based and Other Stock-Based Awards.  The Company intends that
Awards granted pursuant to the Plan be exempt from or comply with Section 409A
of the Code (including any amendments or replacements of such section), and the
Plan shall be so construed.
 
1.3           Term of Plan.  The Plan shall continue in effect until its
termination by the Committee; provided, however, that all Awards shall be
granted, if at all, within ten (10) years from the Effective Date.
 
2.           Definitions and Construction.
 
2.1           Definitions.  Whenever used herein, the following terms shall have
their respective meanings set forth below:
 
(a)           “Affiliate” means (i) an entity, other than a Parent Corporation,
that directly, or indirectly through one or more intermediary entities, controls
the Company or (ii) an entity, other than a Subsidiary Corporation, that is
controlled by the Company directly or indirectly through one or more
intermediary entities.  For this purpose, the term “control” (including the term
“controlled by”) means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the relevant
entity, whether through the ownership of voting securities, by contract or
otherwise; or shall have such other meaning assigned such term for the purposes
of registration on Form S-8 under the Securities Act.
 
(b)           “Award” means any Option, Stock Appreciation Right, Restricted
Stock Purchase Right, Restricted Stock Bonus, Restricted Stock Unit, Performance
Share, Performance Unit, Deferred Compensation Award, Cash-Based Award, Other
Stock-Based Award granted under the Plan.

 
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(c)           “Award Agreement” means a written or electronic agreement between
the Company and a Participant setting forth the terms, conditions and
restrictions of the Award granted to the Participant.
 
(d)           “Board” means the Board of Directors of the Company.
 
(e)           “Cash-Based Award” means an Award denominated in cash and granted
pursuant to Section 12.
 
(f)           “Cause” means, unless such term or an equivalent term is otherwise
defined with respect to an Award by the Participant’s Award Agreement or by a
written contract of employment or service, any of the following: (i) the
Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty
for personal profit, or falsification of any Participating Company documents or
records; (ii) the Participant’s material failure to abide by a Participating
Company’s code of conduct or other policies (including, without limitation,
policies relating to confidentiality and reasonable workplace conduct);
(iii) the Participant’s unauthorized use, misappropriation, destruction or
diversion of any tangible or intangible asset or corporate opportunity of a
Participating Company (including, without limitation, the Participant’s improper
use or disclosure of a Participating Company’s confidential or proprietary
information); (iv) any intentional act by the Participant which has a material
detrimental effect on a Participating Company’s reputation or business; (v) the
Participant’s repeated failure or inability to perform any reasonable assigned
duties after written notice from a Participating Company of, and a reasonable
opportunity to cure, such failure or inability; (vi) any material breach by the
Participant of any employment, service, non-disclosure, non-competition,
non-solicitation or other similar agreement between the Participant and a
Participating Company, which breach is not cured pursuant to the terms of such
agreement; or (vii) the Participant’s conviction (including any plea of guilty
or nolo contendere) of any criminal act involving fraud, dishonesty,
misappropriation or moral turpitude, or which impairs the Participant’s ability
to perform his or her duties with a Participating Company.
 
(g)           “Change in Control” means, unless such term or an equivalent term
is otherwise defined with respect to an Award by the Participant’s Award
Agreement or by a written contract of employment or service, the occurrence of
any of the following:
 
(i)           any “person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the total combined
voting power of the Company’s then-outstanding securities entitled to vote
generally in the election of Directors; provided, however, that the following
acquisitions shall not constitute a Change in Control: (1) an acquisition by any
such person who on the Effective Date is the beneficial owner of more than fifty
percent (50%) of such voting power, (2) any acquisition directly from the
Company, including, without limitation, a public offering of securities, (3) any
acquisition by the Company, (4) any acquisition by a trustee or other fiduciary
under an employee benefit plan of a Participating Company or (5) any acquisition
by an entity owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the voting securities
of the Company; or

 
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(ii)           an Ownership Change Event or series of related Ownership Change
Events (collectively, a “Transaction”) in which the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding securities entitled
to vote generally in the election of Directors or, in the case of an Ownership
Change Event described in Section 2.1(bb)(iii), the entity to which the assets
of the Company were transferred (the “Transferee”), as the case may be; or
 
(iii)           a liquidation or dissolution of the Company;
 
provided, however, that a Change in Control shall be deemed not to include a
transaction described in subsections (i) or (ii) of this Section 2.1(g) in which
a majority of the members of the board of directors of the continuing, surviving
or successor entity, or parent thereof, immediately after such transaction is
comprised of Incumbent Directors.  Notwithstanding the foregoing, to the extent
that any amount constituting Section 409A Deferred Compensation would become
payable under this Plan by reason of a Change in Control, such amount shall
become payable only if the event constituting a Change in Control would also
constitute a change in ownership or effective control of the Company or a change
in the ownership of a substantial portion of the assets of the Company within
the meaning of Section 409A.
 
For purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting
securities of one or more corporations or other business entities which own the
Company or the Transferee, as the case may be, either directly or through one or
more subsidiary corporations or other business entities.  The Committee shall
have the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and
its determination shall be final, binding and conclusive.
 
(h)           “Code” means the Internal Revenue Code of 1986, as amended, and
any applicable regulations or administrative guidelines promulgated thereunder.
 
(i)           “Committee” means the Compensation Committee and such other
committee of the Board comprised of a majority of Independent Directors, if any,
duly appointed to administer the Plan and having such powers in each instance as
shall be specified by the Board.
 
(j)           “Company” means Multimedia Games, Inc., a Texas corporation, or
any successor corporation thereto.
 
(k)            “Deferred Compensation Award” means an award granted to a
Participant pursuant to Section 11.
 
(l)           “Director” means a member of the Board.
 
(m)           “Disability” means the permanent and total disability of the
Participant, within the meaning of Section 22(e)(3) of the Code.

 
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(n)           “Dividend Equivalent Right” means the right of a Participant,
granted at the discretion of the Committee or as otherwise provided by the Plan,
to receive a credit for the account of such Participant in an amount equal to
the cash dividends paid on one share of Stock for each share of Stock
represented by an Award held by such Participant.
 
(o)           “Employee” means any person treated as an employee (including an
Officer or a member of the Board who is also treated as an employee) in the
records of a Participating Company; provided, however, that neither service as a
member of the Board nor payment of a director’s fee shall be sufficient to
constitute employment for purposes of the Plan.  The Company shall determine in
good faith and in the exercise of its discretion whether an individual has
become or has ceased to be an Employee and the effective date of such
individual’s employment or termination of employment, as the case may be.  For
purposes of an individual’s rights, if any, under the terms of the Plan as of
the time of the Company’s determination of whether or not the individual is an
Employee, all such determinations by the Company shall be final, binding and
conclusive as to such rights, if any, notwithstanding that the Company or any
court of law or governmental agency subsequently makes a contrary determination
as to such individual’s status as an Employee.
 
(p)           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
 
(q)           “Fair Market Value” means, as of any date, the value of a share of
Stock or other property as determined by the Committee, in its discretion, or by
the Company, in its discretion, if such determination is expressly allocated to
the Company herein, subject to the following:
 
(i)           Except as otherwise determined by the Committee, if, on such date,
the Stock is listed on a national or regional securities exchange or market
system, the Fair Market Value of a share of Stock shall be the closing price of
a share of Stock (or the mean of the closing bid and asked prices of a share of
Stock if the Stock is so quoted instead) as quoted on the national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in The Wall Street Journal or such other source as the
Company deems reliable.  If the relevant date does not fall on a day on which
the Stock has traded on such securities exchange or market system, the date on
which the Fair Market Value shall be established shall be the last day on which
the Stock was so traded prior to the relevant date, or such other appropriate
day as shall be determined by the Committee, in its discretion.
 
(ii)           Notwithstanding the foregoing, the Committee may, in its
discretion, determine the Fair Market Value of a share of Stock on the basis of
the opening, closing, or average of the high and low sale prices of a share of
Stock on such date or the preceding trading day, the actual sale price of a
share of Stock received by a Participant, any other reasonable basis using
actual transactions in the Stock as reported on a national or regional
securities exchange or market system and consistently applied, or on any other
basis consistent with the requirements of Section 409A.  The Committee may also
determine the Fair Market Value upon the average selling price of the Stock
during a specified period that is within thirty (30) days before or thirty (30)
days after such date, provided that, with respect to the grant of an Option or
SAR, the commitment to grant such Award based on such valuation method must be
irrevocable before the beginning of the specified period and such valuation
method must be used consistently for grants of Options and SARs under the same
and substantially similar programs.  The Committee may vary its method of
determination of the Fair Market Value as provided in this Section for different
purposes under the Plan to the extent consistent with the requirements of
Section 409A.

 
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(iii)           If, on such date, the Stock is not listed on a national or
regional securities exchange or market system, the Fair Market Value of a share
of Stock shall be as determined by the Committee in good faith, without regard
to any restriction other than a restriction which, by its terms, will never
lapse, and in a manner consistent with the requirements of Section 409A.
 
(r)           “Full Value Award” means any Award settled in Stock, other than
(i) an Option, (ii) a Stock Appreciation Right, or (iii) a Restricted Stock
Purchase Right or an Other Stock-Based Award under which the Company will
receive monetary consideration equal to the Fair Market Value (determined as of
the date of grant) of the shares subject to such Award.
 
(s)            “Incumbent Director” means a director who either (i) is a member
of the Board as of the Effective Date or (ii) is elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination, but who was not
elected or nominated in connection with an actual or threatened proxy contest
relating to the election of directors of the Company.
 
(t)           “Independent Director” means a person other than an executive
officer or Employee or any other individual having a relationship which, in the
opinion of the Board, would interfere with the exercise of independent judgment
in carrying out the responsibilities of a Director.  The following persons shall
not be considered independent:
 
(A) a Director who is, or at any time during the past three years was, employed
by the Company;

(B) a Director who accepted or who has a family member who accepted any
compensation from the company in excess of $100,000 during any period of twelve
(12) consecutive months within the three (3) years preceding the determination
of independence, other than the following:

(i) compensation for Board or Committee service;

(ii) compensation paid to a family member who is an Employee (other than an
Officer) of the Company; or

(iii) benefits under a tax-qualified retirement plan, or non-discretionary
compensation.

Provided, however, that in addition to the requirements contained in this
paragraph (B), audit committee members are also subject to additional, more
stringent requirements under Nasdaq Marketplace Rule 4350(d).

 
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(C) a Director who is a family member of an individual who is, or at any time
during the past three (3) years was, employed by the Company as an Officer;

(D) a Director who is, or has a family member who is, a partner in, or a
controlling shareholder or an Officer of, any organization to which the Company
made, or from which the Company received, payments for property or services in
the current or any of the past three (3) fiscal years that exceed 5% of the
recipient's consolidated gross revenues for that year, or $200,000, whichever is
more, other than the following:

(i) payments arising solely from investments in the company's securities; or

(ii) payments under non-discretionary charitable contribution matching programs.

(E) a Director who is, or has a family member who is, employed as an Officer of
another entity where at any time during the past three (3) years any of the
Officers serve on the compensation committee of such other entity; or

(F) a Director who is, or has a family member who is, a current partner of the
Company's outside auditor, or was a partner or employee of the Company's outside
auditor who worked on the Company's audit at any time during any of the past
three (3) years.

(G) in the case of an investment company, in lieu of paragraphs (A)–(F), a
Director who is an "interested person" of the Company as defined in Section
2(a)(19) of the Investment Company Act of 1940, other than in his or her
capacity as a member of the Board or any Committee.

(u)           “Insider” means an Officer, Director or any other person whose
transactions in Stock are subject to Section 16 of the Exchange Act.
 
(v)           “Insider Trading Policy” means the written policy of the Company
pertaining to the purchase, sale, transfer or other disposition of the Company’s
equity securities by Directors, Officers, Employees or other service providers
who may possess material, nonpublic information regarding the Company or its
securities.
 
(w)           “Net-Exercise” means a procedure by which the Participant will be
issued a number of whole shares of Stock upon the exercise of an Option
determined in accordance with the following formula:
 
N = X(A-B)/A, where

“N” = the number of shares of Stock to be issued to the Participant upon
exercise of the Option;

 
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“X” = the total number of shares with respect to which the Participant has
elected to exercise the Option;

“A” = the Fair Market Value of one (1) share of Stock determined on the exercise
date; and

“B” = the exercise price per share (as defined in the Participant’s Award
Agreement)

(x)            “Nonstatutory Stock Option” means an Option not intended to be
(as set forth in the Award Agreement) an incentive stock option within the
meaning of Section 422(b) of the Code.
 
(y)           “Officer” means any person designated by the Board as an officer
of the Company.
 
(z)           “Option” means a Nonstatutory Stock Option granted pursuant to
Section 6.
 
(aa)           “Other Stock-Based Award” means an Award denominated in shares of
Stock granted pursuant to Section 12.
 
(bb)           “Ownership Change Event” means the occurrence of any of the
following with respect to the Company:  (i) the direct or indirect sale or
exchange in a single or series of related transactions by the stockholders of
the Company of more than fifty percent (50%) of the voting stock of the Company;
(ii) a merger or consolidation in which the Company is a party; or (iii) the
sale, exchange, or transfer of all or substantially all of the assets of the
Company (other than a sale, exchange or transfer to one or more subsidiaries of
the Company).
 
(cc)           “Parent Corporation” means any present or future “parent
corporation” of the Company, as defined in Section 424(e) of the Code.
 
(dd)           “Participant” means any eligible person who has been granted one
or more Awards.
 
(ee)           “Participating Company” means the Company or any Parent
Corporation, Subsidiary Corporation or Affiliate.
 
(ff)           “Participating Company Group” means, at any point in time, all
entities collectively which are then Participating Companies.
 
(gg)           “Performance Award” means an Award of Performance Shares or
Performance Units.
 
(hh)           “Performance Award Formula” means, for any Performance Award, a
formula or table established by the Committee pursuant to Section 10.3 which
provides the basis for computing the value of a Performance Award at one or more
threshold levels of attainment of the applicable Performance Goal(s) measured as
of the end of the applicable Performance Period.

 
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(ii)           “Performance Goal” means a performance goal established by the
Committee pursuant to Section 10.3.
 
(jj)           “Performance Period” means a period established by the Committee
pursuant to Section 10.3 at the end of which one or more Performance Goals are
to be measured.
 
(kk)           “Performance Share” means a right granted to a Participant
pursuant to Section 10 to receive a payment equal to the value of a Performance
Share, as determined by the Committee, based on performance.
 
(ll)           “Performance Unit” means a right granted to a Participant
pursuant to Section 10 to receive a payment equal to the value of a Performance
Unit, as determined by the Committee, based upon performance.
 
(mm)                       “Restricted Stock Award” means an Award of a
Restricted Stock Bonus or a Restricted Stock Purchase Right.
 
(nn)           “Restricted Stock Bonus” means Stock granted to a Participant
pursuant to Section 8.
 
(oo)           “Restricted Stock Purchase Right” means a right to purchase Stock
granted to a Participant pursuant to Section 8.
 
(pp)           “Restricted Stock Unit” or “Stock Unit” means a right granted to
a Participant pursuant to Section 9 to receive a share of Stock on a date
determined in accordance with the provisions of such Section, as applicable, and
the Participant’s Award Agreement.
 
(qq)           “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended
from time to time, or any successor rule or regulation.
 
(rr)           “SAR” or “Stock Appreciation Right” means a right granted to a
Participant pursuant to Section 7 to receive payment, for each share of Stock
subject to such SAR, of an amount equal to the excess, if any, of the Fair
Market Value of a share of Stock on the date of exercise of the SAR over the
exercise price.
 
(ss)            “Section 409A” means Section 409A of the Code.
 
(tt)           “Section 409A Deferred Compensation” means compensation provided
pursuant to the Plan that constitutes deferred compensation subject to and not
exempted from the requirements of Section 409A.
 
(uu)           “Securities Act” means the Securities Act of 1933, as amended.

 
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(vv)           “Service” means a Participant’s employment or service with the
Participating Company Group.  Unless otherwise provided by the Committee, a
Participant’s Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders such Service or a change
in the Participating Company for which the Participant renders such Service,
provided that there is no interruption or termination of the Participant’s
Service.  Furthermore, a Participant’s Service shall not be deemed to have
terminated if the Participant takes any military leave, sick leave, or other
bona fide leave of absence approved by the Company.  However, unless otherwise
provided by the Committee, if any such leave taken by a Participant exceeds
ninety (90) days, then on the ninety-first (91st) day following the commencement
of such leave the Participant’s Service shall be deemed to have terminated,
unless the Participant’s right to return to Service is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated by the
Company or required by law, an unpaid leave of absence shall not be treated as
Service for purposes of determining vesting under the Participant’s Award
Agreement.  A Participant’s Service shall be deemed to have terminated either
upon an actual termination of Service or upon the entity for which the
Participant performs Service ceasing to be a Participating Company.  Subject to
the foregoing, the Company, in its discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such termination.
 
(ww)         “Stock” means the common stock of the Company, as adjusted from
time to time in accordance with Section 4.3.
 
(xx)            “Subsidiary Corporation” means any present or future “subsidiary
corporation” of the Company, as defined in Section 424(f) of the Code.
 
(yy)           “Vesting Conditions” mean those conditions established in
accordance with the Plan prior to the satisfaction of which shares subject to an
Award remain subject to forfeiture or a repurchase option in favor of the
Company exercisable for the Participant’s monetary purchase price, if any, for
such shares upon the Participant’s termination of Service.
 
2.2           Construction.  Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan.  Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the
singular.  Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise.
 
3.           Administration.
 
3.1           Administration by the Committee.  The Plan shall be administered
by the Committee.  All questions of interpretation of the Plan, of any Award
Agreement or of any other form of agreement or other document employed by the
Company in the administration of the Plan or of any Award shall be determined by
the Committee, and such determinations shall be final, binding and conclusive
upon all persons having an interest in the Plan or such Award, unless fraudulent
or made in bad faith.  Any and all actions, decisions and determinations taken
or made by the Committee in the exercise of its discretion pursuant to the Plan
or Award Agreement or other agreement thereunder (other than determining
questions of interpretation pursuant to the preceding sentence) shall be final,
binding and conclusive upon all persons having an interest therein.

 
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3.2           Authority of Officers.  Any Officer shall have the authority to
act on behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated
to the Company herein, provided the Officer has apparent authority with respect
to such matter, right, obligation, determination or election.
 
3.3           Administration with Respect to Insiders.  With respect to
participation by Insiders in the Plan, at any time that any class of equity
security of the Company is registered pursuant to Section 12 of the Exchange
Act, the Plan shall be administered in compliance with the requirements, if any,
of Rule 16b-3.
 
3.4           Powers of the Committee.  In addition to any other powers set
forth in the Plan and subject to the provisions of the Plan, the Committee shall
have the full and final power and authority, in its discretion:
 
(a)           to determine the persons to whom, and the time or times at which,
Awards shall be granted and the number of shares of Stock, units or monetary
value to be subject to each Award;
 
(b)           to determine the type of Award granted;
 
(c)           to determine the Fair Market Value of shares of Stock or other
property;
 
(d)           to determine the terms, conditions and restrictions applicable to
each Award (which need not be identical) and any shares acquired pursuant
thereto, including, without limitation, (i) the exercise or purchase price of
shares pursuant to any Award, (ii) the method of payment for shares purchased
pursuant to any Award, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with Award, including by the withholding or
delivery of shares of Stock, (iv) the timing, terms and conditions of the
exercisability or vesting of any Award or any shares acquired pursuant thereto,
(v) the Performance Measures, Performance Period, Performance Award Formula and
Performance Goals applicable to any Award and the extent to which such
Performance Goals have been attained, (vi) the time of the expiration of any
Award, (vii) the effect of the Participant’s termination of Service on any of
the foregoing, and (viii) all other terms, conditions and restrictions
applicable to any Award or shares acquired pursuant thereto not inconsistent
with the terms of the Plan;
 
(e)           to determine whether an Award will be settled in shares of Stock,
cash, or in any combination thereof;
 
(f)           to approve one or more forms of Award Agreement;
 
(g)           to amend, modify, extend, cancel or renew any Award or to waive
any restrictions or conditions applicable to any Award or any shares acquired
pursuant thereto;

 
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(h)           to accelerate, continue, extend or defer the exercisability or
vesting of any Award or any shares acquired pursuant thereto, including with
respect to the period following a Participant’s termination of Service;
 
(i)           to prescribe, amend or rescind rules, guidelines and policies
relating to the Plan, or to adopt sub-plans or supplements to, or alternative
versions of, the Plan, including, without limitation, as the Committee deems
necessary or desirable to comply with the laws or regulations of or to
accommodate the tax policy, accounting principles or custom of, foreign
jurisdictions whose citizens may be granted Awards; and
 
(j)           to correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award Agreement and to make all other
determinations and take such other actions with respect to the Plan or any Award
as the Committee may deem advisable to the extent not inconsistent with the
provisions of the Plan or applicable law.
 
3.5           Option or SAR Repricing.  Without the affirmative vote of holders
of a majority of the shares of Stock cast in person or by proxy at a meeting of
the stockholders of the Company at which a quorum representing a majority of all
outstanding shares of Stock is present or represented by proxy, the Board shall
not approve (a) the cancellation of outstanding Options or SARs and the grant in
substitution therefore of new Options or SARs having a lower exercise price,
(b) the amendment of outstanding Options or SARs to reduce the exercise price
thereof, or (c) the cancellation of outstanding Options or SARs having exercise
prices per share greater than the then current Fair Market Value of a share of
Stock and the grant in substitution therefore of Full Value Awards.  This
paragraph shall not be construed to apply to “issuing or assuming a stock option
in a transaction to which section 424(a) applies,” within the meaning of
Section 424 of the Code.
 
3.6           Indemnification.  In addition to such other rights of
indemnification as they may have as members of the Board or the Committee or as
officers or employees of the Participating Company Group, members of the Board
or the Committee and any officers or employees of the Participating Company
Group to whom authority to act for the Board, the Committee or the Company is
delegated shall be indemnified by the Company against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that such person is liable for gross
negligence, bad faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Company, in writing, the opportunity
at its own expense to handle and defend the same.

 
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4.           Shares Subject to Plan.
 
4.1           Maximum Number of Shares Issuable.  Subject to adjustment as
provided in Section 4.3, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be equal to one million three hundred
thousand (1,300,000) shares, and shall consist of authorized but unissued or
reacquired shares of Stock or any combination thereof.
 
4.2           Share Counting.  If an outstanding Award for any reason expires or
is terminated or canceled without having been exercised or settled in full, or
if shares of Stock acquired pursuant to an Award subject to forfeiture or
repurchase are forfeited or repurchased by the Company for an amount not greater
than the Participant’s purchase price, the shares of Stock allocable to the
terminated portion of such Award or such forfeited or repurchased shares of
Stock shall again be available for issuance under the Plan.  Shares of Stock
shall not be deemed to have been issued pursuant to the Plan with respect to any
portion of an Award that is settled in cash.  Upon payment in shares of Stock
pursuant to the exercise of an SAR, the number of shares available for issuance
under the Plan shall be reduced by the gross number of shares for which the SAR
is exercised.  If the exercise price of an Option is paid by tender to the
Company, or attestation to the ownership, of shares of Stock owned by the
Participant, or by means of a Net-Exercise, the number of shares available for
issuance under the Plan shall be reduced by the gross number of shares for which
the Option is exercised.  If Options, SARs or Performance Awards are settled in
the form of Stock Units issued pursuant to a stock issuance deferral award
described in Section 11.1(b), the number of shares available for issuance under
the Plan shall be reduced by the number of shares subject to such Stock Units,
but shall not be further reduced by the number of shares of Stock originally
subject to such Options, SARs or Performance Awards settled in such
manner.  Shares withheld or reacquired by the Company in satisfaction of tax
withholding obligations pursuant to Section 17.2 shall not again be available
for issuance under the Plan.
 
4.3           Adjustments for Changes in Capital Structure.  Subject to any
required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether
through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the stockholders of the Company in a
form other than Stock (excepting normal cash dividends) that has a material
effect on the Fair Market Value of shares of Stock, appropriate and
proportionate adjustments shall be made in the number and kind of shares subject
to the Plan and to any outstanding Awards, in the Award limits set forth in
Section 5.3 and in the exercise or purchase price per share under any
outstanding Award in order to prevent dilution or enlargement of Participants’
rights under the Plan.  For purposes of the foregoing, conversion of any
convertible securities of the Company shall not be treated as “effected without
receipt of consideration by the Company.”  If a majority of the shares which are
of the same class as the shares that are subject to outstanding Awards are
exchanged for, converted into, or otherwise become (whether or not pursuant to
an Ownership Change Event) shares of another corporation (the “New Shares”), the
Committee may unilaterally amend the outstanding Awards to provide that such
Awards are for New Shares.  In the event of any such amendment, the number of
shares subject to, and the exercise or purchase price per share of, the
outstanding Awards shall be adjusted in a fair and equitable manner as
determined by the Committee, in its discretion.  Any fractional share resulting
from an adjustment pursuant to this Section 4.3 shall be rounded down to the
nearest whole number, and in no event may the exercise or purchase price under
any Award be decreased to an amount less than the par value, if any, of the
stock subject to such Award.  The Committee in its sole discretion, may also
make such adjustments in the terms of any Award to reflect, or related to, such
changes in the capital structure of the Company or distributions as it deems
appropriate.  The adjustments determined by the Committee pursuant to this
Section shall be final, binding and conclusive.

 
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The Committee may, without affecting the number of Shares reserved or available
hereunder, authorize the issuance or assumption of benefits under this Plan in
connection with any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate,
subject to compliance with Section 409A and any other applicable provisions of
the Code and related guidance issued by the U.S. Treasury Department.
 
5.           Eligibility, Participation and Award Limitations.
 
5.1           Persons Eligible for Awards.  Awards may be granted only to
Employees who, prior to the offer of an Award as an inducement to become an
Employee, were (i) neither Employees nor Directors or (ii) former Employees or
Directors whose period of Service was followed by a bona-fide period of
non-employment.  Deferred Compensation Awards may be granted only to individuals
who are among a select group of management or highly compensated Employees.
 
5.2           Participation in the Plan.  Awards are granted solely at the
discretion of the Committee.  Eligible persons may be granted more than one
Award.  However, eligibility in accordance with this Section shall not entitle
any person to be granted an Award, or, having been granted an Award, to be
granted an additional Award.
 
5.3           Award Limitations.
 
(a)           Aggregate Limit on Full Value Awards.  In no event shall more than
forty percent (40%) of the maximum aggregate number of shares of Stock that may
be issued under the Plan, determined in accordance with Sections 4.1, 4.2, and
4.3, be issued pursuant to Full Value Awards.
 
(b)           Limit on Full Value Awards without Minimum Vesting.  Except with
respect to a maximum of five percent (5%) of the maximum aggregate number of
shares of Stock that may be issued under the Plan, determined in accordance with
Sections 4.1, 4.2, and 4.3, Full Value Awards which vest on the basis of the
Participant’s continued Service shall provide for vesting over a period of not
less than three (3) years, and Full Value Awards which vest on the basis of the
attainment of performance goals shall provide for a performance period of not
less than twelve (12) months.  The foregoing limitations shall not preclude the
acceleration of vesting of any such Award upon the death, disability, retirement
or involuntary termination of Service of the Participant or upon or following a
Change in Control, as determined by the Committee in its discretion.

 
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6.           Stock Options.
 
Options shall be evidenced by Award Agreements specifying the number of shares
of Stock covered thereby, in such form as the Committee shall from time to time
establish.  Award Agreements evidencing Options may incorporate all or any of
the terms of the Plan by reference and shall comply with and be subject to the
following terms and conditions:
 
6.1           Exercise Price.  The exercise price for each Option shall be
established in the discretion of the Committee; provided, however, that the
exercise price per share shall be not less than the Fair Market Value of a share
of Stock on the effective date of grant of the Option.  Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the
provisions of Section 424(a) of the Code.
 
6.2           Exercisability and Term of Options.  Options shall be exercisable
at such time or times, or upon such event or events, and subject to such terms,
conditions, performance criteria and restrictions as shall be determined by the
Committee and set forth in the Award Agreement evidencing such Option; provided,
however, that no Option shall be exercisable after the expiration of ten (10)
years after the effective date of grant of such Option.  Subject to the
foregoing, unless otherwise specified by the Committee in the grant of an
Option, each Option shall terminate ten (10) years after the effective date of
grant of the Option, unless earlier terminated in accordance with its
provisions.
 
6.3           Payment of Exercise Price.
 
(a)           Forms of Consideration Authorized.  Except as otherwise provided
below, payment of the exercise price for the number of shares of Stock being
purchased pursuant to any Option shall be made (i) in cash or by check or cash
equivalent, (ii) by tender to the Company, or attestation to the ownership, of
shares of Stock owned by the Participant having a Fair Market Value not less
than the exercise price, (iii) by delivery of a properly executed notice of
exercise together with irrevocable instructions to a broker providing for the
assignment to the Company of the proceeds of a sale or loan with respect to some
or all of the shares being acquired upon the exercise of the Option (including,
without limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of Governors of the
Federal Reserve System) (a “Cashless Exercise”), (iv) by delivery of a properly
executed notice electing a Net-Exercise, (v) by such other consideration as may
be approved by the Committee from time to time to the extent permitted by
applicable law, or (vi) by any combination thereof.  The Committee may at any
time or from time to time grant Options which do not permit all of the foregoing
forms of consideration to be used in payment of the exercise price or which
otherwise restrict one or more forms of consideration.
 
(b)           Limitations on Forms of Consideration.
 
(i)           Tender of Stock.  Notwithstanding the foregoing, an Option may not
be exercised by tender to the Company, or attestation to the ownership, of
shares of Stock to the extent such tender or attestation would constitute a
violation of the provisions of any law, regulation or agreement restricting the
redemption of the Company’s stock.  Unless otherwise provided by the Committee,
an Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock unless such shares either have been owned by the
Participant for more than six (6) months (or such other period, if any, as the
Committee may permit) and not used for another Option exercise by attestation
during such period, or were not acquired, directly or indirectly, from the
Company.

 
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(ii)           Cashless Exercise.  The Company reserves, at any and all times,
the right, in the Company’s sole and absolute discretion, to establish, decline
to approve or terminate any program or procedures for the exercise of Options by
means of a Cashless Exercise, including with respect to one or more Participants
specified by the Company notwithstanding that such program or procedures may be
available to other Participants.
 
6.4           Effect of Termination of Service.
 
(a)           Option Exercisability.  Subject to earlier termination of the
Option as otherwise provided herein and unless otherwise provided by the
Committee, an Option shall terminate immediately upon the Participant’s
termination of Service to the extent that it is then unvested and shall be
exercisable after the Participant’s termination of Service to the extent it is
then vested only during the applicable time period determined in accordance with
this Section and thereafter shall terminate:
 
(i)           Disability.  If the Participant’s Service terminates because of
the Disability of the Participant, the Option, to the extent unexercised and
exercisable for vested shares on the date on which the Participant’s Service
terminated, may be exercised by the Participant (or the Participant’s guardian
or legal representative) at any time prior to the expiration of twelve (12)
months after the date on which the Participant’s Service terminated, but in any
event no later than the date of expiration of the Option’s term as set forth in
the Award Agreement evidencing such Option (the “Option Expiration Date”).
 
(ii)           Death.  If the Participant’s Service terminates because of the
death of the Participant, then the Option, to the extent unexercised and
exercisable for vested shares on the date on which the Participant’s Service
terminated, may be exercised by the Participant’s legal representative or other
person who acquired the right to exercise the Option by reason of the
Participant’s death at any time prior to the expiration of twelve (12) months
after the date on which the Participant’s Service terminated, but in any event
no later than the Option Expiration Date.  The Participant’s Service shall be
deemed to have terminated on account of death if the Participant dies within
three (3) months after the Participant’s termination of Service.
 
(iii)           Termination for Cause.  Notwithstanding any other provision of
the Plan to the contrary, if the Participant’s Service is terminated for Cause
or if, following the Participant’s termination of Service and during any period
in which the Option otherwise would remain exercisable, the Participant engages
in any act that would constitute Cause, the Option shall terminate in its
entirety and cease to be exercisable immediately upon such termination of
Service or act.

 
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(iv)           Other Termination of Service.  If the Participant’s Service
terminates for any reason, except Disability, death or Cause, the Option, to the
extent unexercised and exercisable for vested shares on the date on which the
Participant’s Service terminated, may be exercised by the Participant at any
time prior to the expiration of three (3) months after the date on which the
Participant’s Service terminated, but in any event no later than the Option
Expiration Date.
 
(b)           Extension if Exercise Prevented by Law or Insider Trading
Policy.  Notwithstanding the foregoing, other than termination of Service for
Cause, if the exercise of an Option within the applicable time periods set forth
in Section 6.4(a) is prevented by the provisions of Section 15 below or a sale
of shares pursuant to a Cashless Exercise of the Option would violate the
provisions of the Insider Trading Policy, the Option shall remain exercisable
until thirty (30) days after the date such exercise or sale, as the case may be,
first would no longer be prevented by such provisions, but in any event no later
than the Option Expiration Date.
 
6.5           Transferability of Options.  During the lifetime of the
Participant, an Option shall be exercisable only by the Participant or the
Participant’s guardian or legal representative.  An Option shall not be subject
in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the laws of descent and
distribution.  Notwithstanding the foregoing, to the extent permitted by the
Committee, in its discretion, and set forth in the Award Agreement evidencing
such Option, a Nonstatutory Stock Option shall be assignable or transferable
subject to the applicable limitations, if any, described in the General
Instructions to Form S-8 under the Securities Act.
 
7.           Stock Appreciation Rights.
 
Stock Appreciation Rights shall be evidenced by Award Agreements specifying the
number of shares of Stock subject to the Award, in such form as the Committee
shall from time to time establish.  Award Agreements evidencing SARs may
incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:
 
7.1           Types of SARs Authorized.  SARs may be granted in tandem with all
or any portion of a related Option (a “Tandem SAR”) or may be granted
independently of any Option (a “Freestanding SAR”).  A Tandem SAR may only be
granted concurrently with the grant of the related Option.
 
7.2           Exercise Price.  The exercise price for each SAR shall be
established in the discretion of the Committee; provided, however, that (a) the
exercise price per share subject to a Tandem SAR shall be the exercise price per
share under the related Option and (b) the exercise price per share subject to a
Freestanding SAR shall be not less than the Fair Market Value of a share of
Stock on the effective date of grant of the SAR.

 
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7.3           Exercisability and Term of SARs.
 
(a)           Tandem SARs.  Tandem SARs shall be exercisable only at the time
and to the extent, and only to the extent, that the related Option is
exercisable, subject to such provisions as the Committee may specify where the
Tandem SAR is granted with respect to less than the full number of shares of
Stock subject to the related Option.  The Committee may, in its discretion,
provide in any Award Agreement evidencing a Tandem SAR that such SAR may not be
exercised without the advance approval of the Company and, if such approval is
not given, then the Option shall nevertheless remain exercisable in accordance
with its terms.  A Tandem SAR shall terminate and cease to be exercisable no
later than the date on which the related Option expires or is terminated or
canceled.  Upon the exercise of a Tandem SAR with respect to some or all of the
shares subject to such SAR, the related Option shall be canceled automatically
as to the number of shares with respect to which the Tandem SAR was
exercised.  Upon the exercise of an Option related to a Tandem SAR as to some or
all of the shares subject to such Option, the related Tandem SAR shall be
canceled automatically as to the number of shares with respect to which the
related Option was exercised.
 
(b)           Freestanding SARs.  Freestanding SARs shall be exercisable at such
time or times, or upon such event or events, and subject to such terms,
conditions, performance criteria and restrictions as shall be determined by the
Committee and set forth in the Award Agreement evidencing such SAR; provided,
however, that no Freestanding SAR shall be exercisable after the expiration of
ten (10) years after the effective date of grant of such SAR.
 
7.4           Exercise of SARs.  Upon the exercise (or deemed exercise pursuant
to Section 7.5) of an SAR, the Participant (or the Participant’s legal
representative or other person who acquired the right to exercise the SAR by
reason of the Participant’s death) shall be entitled to receive payment of an
amount for each share with respect to which the SAR is exercised equal to the
excess, if any, of the Fair Market Value of a share of Stock on the date of
exercise of the SAR over the exercise price.  Payment of such amount shall be
made (a) in the case of a Tandem SAR, solely in whole shares of Stock in a lump
sum as soon as practicable following the date of exercise of the SAR and (b) in
the case of a Freestanding SAR, in cash, whole shares of Stock, or any
combination thereof as determined by the Committee, in a lump sum as soon as
practicable following the date of exercise of the SAR.  When payment is to be
made in shares of Stock, the number of shares to be issued shall be determined
on the basis of the Fair Market Value of a share of Stock on the date of
exercise of the SAR.  For purposes of Section 7, an SAR shall be deemed
exercised on the date on which the Company receives notice of exercise from the
Participant or as otherwise provided in Section 7.5.
 
7.5           Deemed Exercise of SARs.  If, on the date on which an SAR would
otherwise terminate or expire, the SAR by its terms remains exercisable
immediately prior to such termination or expiration and, if so exercised, would
result in a payment to the holder of such SAR, then any portion of such SAR
which has not previously been exercised shall automatically be deemed to be
exercised as of such date with respect to such portion.
 
7.6           Effect of Termination of Service.  Subject to earlier termination
of the SAR as otherwise provided herein and unless otherwise provided by the
Committee in the grant of an SAR and set forth in the Award Agreement, an SAR
shall be exercisable after a Participant’s termination of Service only to the
extent and during the applicable time period determined in accordance with
Section 6.4 (treating the SAR as if it were an Option) and thereafter shall
terminate.

 
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7.7           Transferability of SARs.  During the lifetime of the Participant,
an SAR shall be exercisable only by the Participant or the Participant’s
guardian or legal representative.  An SAR shall not be subject in any manner to
anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and
distribution.  Notwithstanding the foregoing, to the extent permitted by the
Committee, in its discretion, and set forth in the Award Agreement evidencing
such Award, a Tandem SAR related to a Nonstatutory Stock Option or a
Freestanding SAR shall be assignable or transferable subject to the applicable
limitations, if any, described in the General Instructions to Form S-8 under the
Securities Act.
 
8.           Restricted Stock Awards.
 
Restricted Stock Awards shall be evidenced by Award Agreements specifying
whether the Award is a Restricted Stock Bonus or a Restricted Stock Purchase
Right and the number of shares of Stock subject to the Award, in such form as
the Committee shall from time to time establish.  Award Agreements evidencing
Restricted Stock Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:
 
8.1           Types of Restricted Stock Awards Authorized.  Restricted Stock
Awards may be granted in the form of either a Restricted Stock Bonus or a
Restricted Stock Purchase Right.  Restricted Stock Awards may be granted upon
such conditions as the Committee shall determine, including, without limitation,
upon the attainment of one or more Performance Goals described in
Section 10.4.  If either the grant of or satisfaction of Vesting Conditions
applicable to a Restricted Stock Award is to be contingent upon the attainment
of one or more Performance Goals, the Committee shall follow procedures
substantially equivalent to those set forth in Sections 10.3 through 10.5(a).
 
8.2           Purchase Price.  The purchase price for shares of Stock issuable
under each Restricted Stock Purchase Right shall be established by the Committee
in its discretion.  No monetary payment (other than applicable tax withholding)
shall be required as a condition of receiving shares of Stock pursuant to a
Restricted Stock Bonus, the consideration for which shall be services actually
rendered to a Participating Company or for its benefit.  Notwithstanding the
foregoing, if required by applicable state corporate law, the Participant shall
furnish consideration in the form of cash or past services rendered to a
Participating Company or for its benefit having a value not less than the par
value of the shares of Stock subject to a Restricted Stock Award.
 
8.3           Purchase Period.  A Restricted Stock Purchase Right shall be
exercisable within a period established by the Committee, which shall in no
event exceed thirty (30) days from the effective date of the grant of the
Restricted Stock Purchase Right.

 
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8.4           Payment of Purchase Price.  Except as otherwise provided below,
payment of the purchase price for the number of shares of Stock being purchased
pursuant to any Restricted Stock Purchase Right shall be made (a) in cash or by
check or cash equivalent, (b) by such other consideration as may be approved by
the Committee from time to time to the extent permitted by applicable law, or
(c) by any combination thereof.
 
8.5           Vesting and Restrictions on Transfer.  Subject to Section 5.3(b),
Shares issued pursuant to any Restricted Stock Award may (but need not) be made
subject to Vesting Conditions based upon the satisfaction of such Service
requirements, conditions, restrictions or performance criteria, including,
without limitation, Performance Goals as described in Section 10.4, as shall be
established by the Committee and set forth in the Award Agreement evidencing
such Award.  During any period in which shares acquired pursuant to a Restricted
Stock Award remain subject to Vesting Conditions, such shares may not be sold,
exchanged, transferred, pledged, assigned or otherwise disposed of other than
pursuant to an Ownership Change Event or as provided in Section 8.8.  The
Committee, in its discretion, may provide in any Award Agreement evidencing a
Restricted Stock Award that, if the satisfaction of Vesting Conditions with
respect to any shares subject to such Restricted Stock Award would otherwise
occur on a day on which the sale of such shares would violate the provisions of
the Insider Trading Policy, then satisfaction of the Vesting Conditions
automatically shall be determined on the next trading day on which the sale of
such shares would not violate the Insider Trading Policy.  Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.
 
8.6           Voting Rights; Dividends and Distributions.  Except as provided in
this Section, Section 8.5 and any Award Agreement, during any period in which
shares acquired pursuant to a Restricted Stock Award remain subject to Vesting
Conditions, the Participant shall have all of the rights of a stockholder of the
Company holding shares of Stock, including the right to vote such shares and to
receive all dividends and other distributions paid with respect to such
shares.  However, in the event of a dividend or distribution paid in shares of
Stock or other property or any other adjustment made upon a change in the
capital structure of the Company as described in Section 4.3, any and all new,
substituted or additional securities or other property (other than normal cash
dividends) to which the Participant is entitled by reason of the Participant’s
Restricted Stock Award shall be immediately subject to the same Vesting
Conditions as the shares subject to the Restricted Stock Award with respect to
which such dividends or distributions were paid or adjustments were made.
 
8.7           Effect of Termination of Service.  Unless otherwise provided by
the Committee in the Award Agreement evidencing a Restricted Stock Award, if a
Participant’s Service terminates for any reason, whether voluntary or
involuntary (including the Participant’s death or disability), then (a) the
Company shall have the option to repurchase for the purchase price paid by the
Participant any shares acquired by the Participant pursuant to a Restricted
Stock Purchase Right which remain subject to Vesting Conditions as of the date
of the Participant’s termination of Service and (b) the Participant shall
forfeit to the Company any shares acquired by the Participant pursuant to a
Restricted Stock Bonus which remain subject to Vesting Conditions as of the date
of the Participant’s termination of Service.  The Company shall have the right
to assign at any time any repurchase right it may have, whether or not such
right is then exercisable, to one or more persons as may be selected by the
Company.

 
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8.8           Nontransferability of Restricted Stock Award Rights.  Rights to
acquire shares of Stock pursuant to a Restricted Stock Award shall not be
subject in any manner to anticipation, alienation, sale, exchange, transfer,
assignment, pledge, encumbrance or garnishment by creditors of the Participant
or the Participant’s beneficiary, except transfer by will or the laws of descent
and distribution.  All rights with respect to a Restricted Stock Award granted
to a Participant hereunder shall be exercisable during his or her lifetime only
by such Participant or the Participant’s guardian or legal representative.
 
9.           Restricted Stock Unit Awards.
 
Restricted Stock Unit Awards shall be evidenced by Award Agreements specifying
the number of Restricted Stock Units subject to the Award, in such form as the
Committee shall from time to time establish.  Award Agreements evidencing
Restricted Stock Units may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:
 
9.1           Grant of Restricted Stock Unit Awards.  Restricted Stock Unit
Awards may be granted upon such conditions as the Committee shall determine,
including, without limitation, upon the attainment of one or more Performance
Goals described in Section 10.4.  If either the grant of a Restricted Stock Unit
Award or the Vesting Conditions with respect to such Award is to be contingent
upon the attainment of one or more Performance Goals, the Committee shall follow
procedures substantially equivalent to those set forth in Sections 10.3
through 10.5(a).
 
9.2           Purchase Price.  No monetary payment (other than applicable tax
withholding, if any) shall be required as a condition of receiving a Restricted
Stock Unit Award, the consideration for which shall be services actually
rendered to a Participating Company or for its benefit.  Notwithstanding the
foregoing, if required by applicable state corporate law, the Participant shall
furnish consideration in the form of cash or past services rendered to a
Participating Company or for its benefit having a value not less than the par
value of the shares of Stock issued upon settlement of the Restricted Stock Unit
Award.
 
9.3           Vesting.  Subject to Section 5.3(b), Restricted Stock Unit Awards
may (but need not) be made subject to Vesting Conditions based upon the
satisfaction of such Service requirements, conditions, restrictions or
performance criteria, including, without limitation, Performance Goals as
described in Section 10.4, as shall be established by the Committee and set
forth in the Award Agreement evidencing such Award.  The Committee, in its
discretion, may provide in any Award Agreement evidencing a Restricted Stock
Unit Award that, if the satisfaction of Vesting Conditions with respect to any
shares subject to the Award would otherwise occur on a day on which the sale of
such shares would violate the provisions of the Insider Trading Policy, then
satisfaction of the Vesting Conditions automatically shall be determined on the
first to occur of (a) the next trading day on which the sale of such shares
would not violate the Insider Trading Policy or (b) the later of (i) the last
day of the calendar year in which the original vesting date occurred or (ii) the
last day of the Company’s taxable year in which the original vesting date
occurred.

 
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9.4           Voting Rights, Dividend Equivalent Rights and
Distributions.  Participants shall have no voting rights with respect to shares
of Stock represented by Restricted Stock Units until the date of the issuance of
such shares (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company).  However, the Committee,
in its discretion, may provide in the Award Agreement evidencing any Restricted
Stock Unit Award that the Participant shall be entitled to Dividend Equivalent
Rights with respect to the payment of cash dividends on Stock during the period
beginning on the date such Award is granted and ending, with respect to each
share subject to the Award, on the earlier of the date the Award is settled or
the date on which it is terminated.  Such Dividend Equivalent Rights, if any,
shall be paid by crediting the Participant with additional whole Restricted
Stock Units as of the date of payment of such cash dividends on Stock.  The
number of additional Restricted Stock Units (rounded to the nearest whole
number) to be so credited shall be determined by dividing (a) the amount of cash
dividends paid on such date with respect to the number of shares of Stock
represented by the Restricted Stock Units previously credited to the Participant
by (b) the Fair Market Value per share of Stock on such date.  Such additional
Restricted Stock Units shall be subject to the same terms and conditions and
shall be settled in the same manner and at the same time as the Restricted Stock
Units originally subject to the Restricted Stock Unit Award.  In the event of a
dividend or distribution paid in shares of Stock or other property or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.3, appropriate adjustments shall be made in the
Participant’s Restricted Stock Unit Award so that it represents the right to
receive upon settlement any and all new, substituted or additional securities or
other property (other than normal cash dividends) to which the Participant would
be entitled by reason of the shares of Stock issuable upon settlement of the
Award, and all such new, substituted or additional securities or other property
shall be immediately subject to the same Vesting Conditions as are applicable to
the Award.
 
9.5           Effect of Termination of Service.  Unless otherwise provided by
the Committee and set forth in the Award Agreement evidencing a Restricted Stock
Unit Award, if a Participant’s Service terminates for any reason, whether
voluntary or involuntary (including the Participant’s death or disability), then
the Participant shall forfeit to the Company any Restricted Stock Units pursuant
to the Award which remain subject to Vesting Conditions as of the date of the
Participant’s termination of Service.
 
9.6           Settlement of Restricted Stock Unit Awards.  The Company shall
issue to a Participant on the date on which Restricted Stock Units subject to
the Participant’s Restricted Stock Unit Award vest or on such other date
determined by the Committee, in its discretion, and set forth in the Award
Agreement one (1) share of Stock (and/or any other new, substituted or
additional securities or other property pursuant to an adjustment described in
Section 9.4) for each Restricted Stock Unit then becoming vested or otherwise to
be settled on such date, subject to the withholding of applicable taxes, if
any.  If permitted by the Committee, the Participant may elect, consistent with
the requirements of Section 409A, to defer receipt of all or any portion of the
shares of Stock or other property otherwise issuable to the Participant pursuant
to this Section, and such deferred issuance date(s) and amount(s) elected by the
Participant shall be set forth in the Award Agreement.  Notwithstanding the
foregoing, the Committee, in its discretion, may provide in any Award Agreement
for settlement of any Restricted Stock Unit Award by payment to the Participant
in cash of an amount equal to the Fair Market Value on the payment date of the
shares of Stock or other property otherwise issuable to the Participant pursuant
to this Section.

 
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9.7           Nontransferability of Restricted Stock Unit Awards.  The right to
receive shares pursuant to a Restricted Stock Unit Award shall not be subject in
any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the laws of descent and
distribution.  All rights with respect to a Restricted Stock Unit Award granted
to a Participant hereunder shall be exercisable during his or her lifetime only
by such Participant or the Participant’s guardian or legal representative.
 
10.           Performance Awards.
 
Performance Awards shall be evidenced by Award Agreements in such form as the
Committee shall from time to time establish.  Award Agreements evidencing
Performance Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and
conditions:
 
10.1           Types of Performance Awards Authorized.  Performance Awards may
be granted in the form of either Performance Shares or Performance Units.  Each
Award Agreement evidencing a Performance Award shall specify the number of
Performance Shares or Performance Units subject thereto, the Performance Award
Formula, the Performance Goal(s) and Performance Period applicable to the Award,
and the other terms, conditions and restrictions of the Award.
 
10.2           Initial Value of Performance Shares and Performance
Units.  Unless otherwise provided by the Committee in granting a Performance
Award, each Performance Share shall have an initial monetary value equal to the
Fair Market Value of one (1) share of Stock, subject to adjustment as provided
in Section 4.3, on the effective date of grant of the Performance Share, and
each Performance Unit shall have an initial monetary value established by the
Committee at the time of grant.  The final value payable to the Participant in
settlement of a Performance Award determined on the basis of the applicable
Performance Award Formula will depend on the extent to which Performance Goals
established by the Committee are attained within the applicable Performance
Period established by the Committee.
 
10.3           Establishment of Performance Period, Performance Goals and
Performance Award Formula.  In granting each Performance Award, the Committee
shall establish in writing the applicable Performance Period (subject to
Section 5.3(b)), Performance Award Formula and one or more Performance Goals
which, when measured at the end of the Performance Period, shall determine on
the basis of the Performance Award Formula the final value of the Performance
Award to be paid to the Participant.  The Committee shall establish the
Performance Goal(s) and Performance Award Formula applicable to each Performance
Award no later than the earlier of (a) the date ninety (90) days after the
commencement of the applicable Performance Period or (b) the date on which 25%
of the Performance Period has elapsed, and, in any event, at a time when the
outcome of the Performance Goals remains substantially uncertain.  Once
established, the Performance Goals and Performance Award Formula applicable to a
Covered Employee shall not be changed during the Performance Period.  The
Company shall notify each Participant granted a Performance Award of the terms
of such Award, including the Performance Period, Performance Goal(s) and
Performance Award Formula.

 
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10.4           Measurement of Performance Goals.  Performance Goals shall be
established by the Committee on the basis of targets to be attained
(“Performance Targets”) with respect to one or more measures of business or
financial performance (each, a “Performance Measure”), subject to the following:
 
(a)           Performance Measures.  Performance Measures shall have the same
meanings as used in the Company’s financial statements, or, if such terms are
not used in the Company’s financial statements, they shall have the meaning
applied pursuant to generally accepted accounting principles, or as used
generally in the Company’s industry.  Performance Measures shall be calculated
with respect to the Company and each Subsidiary Corporation consolidated
therewith for financial reporting purposes or such division or other business
unit as may be selected by the Committee.  For purposes of the Plan, the
Performance Measures applicable to a Performance Award shall be calculated in
accordance with generally accepted accounting principles, if applicable, but
prior to the accrual or payment of any Performance Award for the same
Performance Period and excluding the effect (whether positive or negative) of
any change in accounting standards or any extraordinary, unusual or nonrecurring
item, as determined by the Committee, occurring after the establishment of the
Performance Goals applicable to the Performance Award.  Each such adjustment, if
any, shall be made solely for the purpose of providing a consistent basis from
period to period for the calculation of Performance Measures in order to prevent
the dilution or enlargement of the Participant’s rights with respect to a
Performance Award.  Performance Measures may be one or more of the following, as
determined by the Committee:
 
(i)               revenue;
 
(ii)              sales;
 
(iii)             expenses;
 
(iv)             operating income;
 
(v)              gross margin;
 
(vi)             operating margin;
 
(vii)            earnings before any one or more of: stock-based compensation
expense, interest, taxes, depreciation and amortization;
 
(viii)           pre-tax profit;
 
(ix)              net operating income;
 
(x)               net income;

 
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(xi)              economic value added;
 
(xii)             free cash flow;
 
(xiii)            operating cash flow;
 
(xiv)            balance of cash, cash equivalents and marketable securities;
 
(xv)             stock price;
 
(xvi)            earnings per share;
 
(xvii)           return on stockholder equity;
 
(xviii)          return on capital;
 
(xix)             return on assets;
 
(xx)              return on investment;
 
(xxi)             employee satisfaction;
 
(xxii)            employee retention;
 
(xxiii)           market share;
 
(xxiv)           customer satisfaction;
 
(xxv)            product development;
 
(xxvi)           research and development expenses;
 
(xxvii)          completion of an identified special project; and
 
(xxviii)         completion of a joint venture or other corporate transaction.
 
(b)           Performance Targets.  Performance Targets may include a minimum,
maximum, target level and intermediate levels of performance, with the final
value of a Performance Award determined under the applicable Performance Award
Formula by the level attained during the applicable Performance Period.  A
Performance Target may be stated as an absolute value or as a value determined
relative to an index, budget or other standard selected by the Committee.
 
10.5           Settlement of Performance Awards.
 
(a)           Determination of Final Value.  As soon as practicable following
the completion of the Performance Period applicable to a Performance Award, the
Committee shall certify in writing the extent to which the applicable
Performance Goals have been attained and the resulting final value of the Award
earned by the Participant and to be paid upon its settlement in accordance with
the applicable Performance Award Formula.

 
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(b)           Effect of Leaves of Absence.  Unless otherwise required by law or
a Participant’s Award Agreement, payment of the final value, if any, of a
Performance Award held by a Participant who has taken in excess of thirty (30)
days in unpaid leaves of absence during a Performance Period shall be prorated
on the basis of the number of days of the Participant’s Service during the
Performance Period during which the Participant was not on a leave of absence.
 
(c)           Notice to Participants.  As soon as practicable following the
Committee’s determination and certification in accordance with Sections 10.5(a),
the Company shall notify each Participant of the determination of the Committee.
 
(d)           Payment in Settlement of Performance Awards.  As soon as
practicable following the Committee’s determination and certification in
accordance with Sections 10.5(a), but in any event within the Short-Term
Deferral Period described in Section 16.1 (except as otherwise provided below or
consistent with the requirements of Section 409A), payment shall be made to each
eligible Participant (or such Participant’s legal representative or other person
who acquired the right to receive such payment by reason of the Participant’s
death) of the final value of the Participant’s Performance Award.  Payment of
such amount shall be made in cash, shares of Stock, or a combination thereof as
determined by the Committee.  Unless otherwise provided in the Award Agreement
evidencing a Performance Award, payment shall be made in a lump sum.  If
permitted by the Committee, the Participant may elect, consistent with the
requirements of Section 409A, to defer receipt of all or any portion of the
payment to be made to the Participant pursuant to this Section, and such
deferred payment date(s) elected by the Participant shall be set forth in the
Award Agreement.  If any payment is to be made on a deferred basis, the
Committee may, but shall not be obligated to, provide for the payment during the
deferral period of Dividend Equivalent Rights or interest.
 
(e)           Provisions Applicable to Payment in Shares.  If payment is to be
made in shares of Stock, the number of such shares shall be determined by
dividing the final value of the Performance Award by the Fair Market Value of a
share of Stock determined by the method specified in the Award
Agreement.  Shares of Stock issued in payment of any Performance Award may be
fully vested and freely transferable shares or may be shares of Stock subject to
Vesting Conditions as provided in Section 8.5.  Any shares subject to Vesting
Conditions shall be evidenced by an appropriate Award Agreement and shall be
subject to the provisions of Sections 8.5 through 8.8 above.

 
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10.6           Voting Rights; Dividend Equivalent Rights and
Distributions.  Participants shall have no voting rights with respect to shares
of Stock represented by Performance Share Awards until the date of the issuance
of such shares, if any (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company).  However,
the Committee, in its discretion, may provide in the Award Agreement evidencing
any Performance Share Award that the Participant shall be entitled to Dividend
Equivalent Rights with respect to the payment of cash dividends on Stock during
the period beginning on the date the Award is granted and ending, with respect
to each share subject to the Award, on the earlier of the date on which the
Performance Shares are settled or the date on which they are forfeited.  Such
Dividend Equivalent Rights, if any, shall be credited to the Participant in the
form of additional whole Performance Shares as of the date of payment of such
cash dividends on Stock.  The number of additional Performance Shares (rounded
to the nearest whole number) to be so credited shall be determined by dividing
(a) the amount of cash dividends paid on the dividend payment date with respect
to the number of shares of Stock represented by the Performance Shares
previously credited to the Participant by (b) the Fair Market Value per share of
Stock on such date.  Dividend Equivalent Rights may be paid currently or may be
accumulated and paid to the extent that Performance Shares become
nonforfeitable, as determined by the Committee.  Settlement of Dividend
Equivalent Rights may be made in cash, shares of Stock, or a combination thereof
as determined by the Committee, and may be paid on the same basis as settlement
of the related Performance Share as provided in Section 10.5.  Dividend
Equivalent Rights shall not be paid with respect to Performance Units.  In the
event of a dividend or distribution paid in shares of Stock or other property or
any other adjustment made upon a change in the capital structure of the Company
as described in Section 4.3, appropriate adjustments shall be made in the
Participant’s Performance Share Award so that it represents the right to receive
upon settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would be
entitled by reason of the shares of Stock issuable upon settlement of the
Performance Share Award, and all such new, substituted or additional securities
or other property shall be immediately subject to the same Performance Goals as
are applicable to the Award.
 
10.7           Effect of Termination of Service.  Unless otherwise provided by
the Committee and set forth in the Award Agreement evidencing a Performance
Award, the effect of a Participant’s termination of Service on the Performance
Award shall be as follows:
 
(a)           Death or Disability.  If the Participant’s Service terminates
because of the death or Disability of the Participant before the completion of
the Performance Period applicable to the Performance Award, the final value of
the Participant’s Performance Award shall be determined by the extent to which
the applicable Performance Goals have been attained with respect to the entire
Performance Period and shall be prorated based on the number of months of the
Participant’s Service during the Performance Period.  Payment shall be made
following the end of the Performance Period in any manner permitted by
Section 10.5.
 
(b)           Other Termination of Service.  If the Participant’s Service
terminates for any reason except death or Disability before the completion of
the Performance Period applicable to the Performance Award, such Award shall be
forfeited in its entirety; provided, however, that in the event of an
involuntary termination of the Participant’s Service, the Committee, in its sole
discretion, may waive the automatic forfeiture of all or any portion of any such
Award.
 
10.8           Nontransferability of Performance Awards.  Prior to settlement in
accordance with the provisions of the Plan, no Performance Award shall be
subject in any manner to anticipation, alienation, sale, exchange, transfer,
assignment, pledge, encumbrance, or garnishment by creditors of the Participant
or the Participant’s beneficiary, except transfer by will or by the laws of
descent and distribution.  All rights with respect to a Performance Award
granted to a Participant hereunder shall be exercisable during his or her
lifetime only by such Participant or the Participant’s guardian or legal
representative.

 
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11.           Deferred Compensation Awards.
 
11.1           Establishment of Deferred Compensation Award Programs.  This
Section 11 shall not be effective unless and until the Committee determines to
establish a program pursuant to this Section.  The Committee, in its discretion
and upon such terms and conditions as it may determine, consistent with the
requirements of Section 409A, may establish one or more programs pursuant to the
Plan under which:
 
(a)           Elective Cash Compensation Reduction Awards.  Participants
designated by the Committee who are among a select group of management or highly
compensated Employees may irrevocably elect, prior to a date specified by the
Committee in compliance with Section 409A, to reduce such Participant’s
compensation otherwise payable in cash (subject to any minimum or maximum
reductions imposed by the Committee) and to be granted automatically at such
time or times as specified by the Committee one or more Awards of Stock Units
with respect to such numbers of shares of Stock as determined in accordance with
the rules of the program established by the Committee and having such other
terms and conditions as established by the Committee.
 
(b)           Stock Issuance Deferral Awards.  Participants designated by the
Committee who are among a select group of management or highly compensated
Employees may irrevocably elect, prior to a date specified by the Committee in
compliance with Section 409A, to be granted automatically an Award of Stock
Units with respect to such number of shares of Stock and upon such other terms
and conditions as established by the Committee in lieu of:
 
(i)           shares of Stock otherwise issuable to such Participant upon the
exercise of an Option; or
 
(ii)          cash or shares of Stock otherwise issuable to such Participant
upon the exercise of an SAR; or
 
(iii)         cash or shares of Stock otherwise issuable to such Participant
upon the settlement of a Performance Award.
 
11.2           Terms and Conditions of Deferred Compensation Awards.  Deferred
Compensation Awards granted pursuant to this Section 11 shall be evidenced by
Award Agreements in such form as the Committee shall from time to time
establish.  Award Agreements evidencing Deferred Compensation Awards may
incorporate all or any of the terms of the Plan by reference and, except as
provided below, shall comply with and be subject to the terms and conditions of
Section 9.

 
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(a)           Voting Rights; Dividend Equivalent Rights and
Distributions.  Participants shall have no voting rights with respect to shares
of Stock represented by Stock Units until the date of the issuance of such
shares (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company).  However, a Participant shall
be entitled to Dividend Equivalent Rights with respect to the payment of cash
dividends on Stock during the period beginning on the date the Stock Units are
granted automatically to the Participant and ending on the earlier of the date
on which such Stock Units are settled or the date on which they are
forfeited.  Such Dividend Equivalent Rights shall be paid by crediting the
Participant with additional whole Stock Units as of the date of payment of such
cash dividends on Stock.  The number of additional Stock Units (rounded to the
nearest whole number) to be so credited shall be determined by dividing (A) the
amount of cash dividends paid on the dividend payment date with respect to the
number of shares of Stock represented by the Stock Units previously credited to
the Participant by (B) the Fair Market Value per share of Stock on such
date.  Such additional Stock Units shall be subject to the same terms and
conditions and shall be settled in the same manner and at the same time as the
Stock Units originally subject to the Stock Unit Award.  In the event of a
dividend or distribution paid in shares of Stock or other property or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.3, appropriate adjustments shall be made in the
Participant’s Stock Unit Award so that it represents the right to receive upon
settlement any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant would be
entitled by reason of the shares of Stock issuable upon settlement of the Award.
 
(b)           Settlement of Deferred Compensation Awards.  A Participant
electing to receive an Award of Stock Units pursuant to this Section 11 shall
specify at the time of such election a settlement date with respect to such
Award in compliance with the requirements of Section 409A.  The Company shall
issue to the Participant on the settlement date elected by the Participant, or
as soon thereafter as practicable, a number of whole shares of Stock equal to
the number of vested Stock Units subject to the Stock Unit Award.  Such shares
of Stock shall be fully vested, and the Participant shall not be required to pay
any additional consideration (other than applicable tax withholding) to acquire
such shares.
 
12.           Cash-Based Awards and Other Stock-Based Awards.
 
Cash-Based Awards and Other Stock-Based Awards shall be evidenced by Award
Agreements in such form as the Committee shall from time to time
establish.  Award Agreements evidencing Cash-Based Awards and Other Stock-Based
Awards may incorporate all or any of the terms of the Plan by reference and
shall comply with and be subject to the following terms and conditions:

12.1           Grant of Cash-Based Awards.  Subject to the provisions of the
Plan, the Committee, at any time and from time to time, may grant Cash-Based
Awards to Participants in such amounts and upon such terms and conditions,
including the achievement of performance criteria, as the Committee may
determine.
 
12.2           Grant of Other Stock-Based Awards.  The Committee may grant other
types of equity-based or equity-related Awards not otherwise described by the
terms of this Plan (including the grant or offer for sale of unrestricted
securities, stock-equivalent units, stock appreciation units, securities or
debentures convertible into common stock or other forms determined by the
Committee) in such amounts and subject to such terms and conditions as the
Committee shall determine.  Such Awards may involve the transfer of actual
shares of Stock to Participants, or payment in cash or otherwise of amounts
based on the value of Stock and may include, without limitation, Awards designed
to comply with or take advantage of the applicable local laws of jurisdictions
other than the United States.

 
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12.3           Value of Cash-Based and Other Stock-Based Awards.  Each
Cash-Based Award shall specify a monetary payment amount or payment range as
determined by the Committee.  Each Other Stock-Based Award shall be expressed in
terms of shares of Stock or units based on such shares of Stock, as determined
by the Committee.  Subject to Section 5.3(b), the Committee may require the
satisfaction of such Service requirements, conditions, restrictions or
performance criteria, including, without limitation, Performance Goals as
described in Section 10.4, as shall be established by the Committee and set
forth in the Award Agreement evidencing such Award.  If the Committee exercises
its discretion to establish performance criteria, the final value of Cash-Based
Awards or Other Stock-Based Awards that will be paid to the Participant will
depend on the extent to which the performance criteria are met.
 
12.4           Payment or Settlement of Cash-Based Awards and Other Stock-Based
Awards.  Payment or settlement, if any, with respect to a Cash-Based Award or an
Other Stock-Based Award shall be made in accordance with the terms of the Award,
in cash, shares of Stock or other securities or any combination thereof as the
Committee determines.  To the extent applicable, payment or settlement with
respect to each Cash-Based Award and Other Stock-Based Award shall be made in
compliance with the requirements of Section 409A.
 
12.5           Voting Rights; Dividend Equivalent Rights and
Distributions.  Participants shall have no voting rights with respect to shares
of Stock represented by Other Stock-Based Awards until the date of the issuance
of such shares of Stock (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), if any, in
settlement of such Award.  However, the Committee, in its discretion, may
provide in the Award Agreement evidencing any Other Stock-Based Award that the
Participant shall be entitled to Dividend Equivalent Rights with respect to the
payment of cash dividends on Stock during the period beginning on the date such
Award is granted and ending, with respect to each share subject to the Award, on
the earlier of the date the Award is settled or the date on which it is
terminated.  Such Dividend Equivalent Rights, if any, shall be paid in
accordance with the provisions set forth in Section 9.4.  Dividend Equivalent
Rights shall not be granted with respect to Cash-Based Awards.
 
12.6           Effect of Termination of Service.  Each Award Agreement
evidencing a Cash-Based Award or Other Stock-Based Award shall set forth the
extent to which the Participant shall have the right to retain such Award
following termination of the Participant’s Service.  Such provisions shall be
determined in the sole discretion of the Committee, need not be uniform among
all Cash-Based Awards or Other Stock-Based Awards, and may reflect distinctions
based on the reasons for termination.
 
12.7           Nontransferability of Cash-Based Awards and Other Stock-Based
Awards.  Prior to the payment or settlement of a Cash-Based Award or Other
Stock-Based Award, the Award shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution.  The
Committee may impose such additional restrictions on any shares of Stock issued
in settlement of Cash-Based Awards and Other Stock-Based Awards as it may deem
advisable, including, without limitation, minimum holding period requirements,
restrictions under applicable federal securities laws, under the requirements of
any stock exchange or market upon which such shares of Stock are then listed
and/or traded, or under any state securities laws applicable to such shares of
Stock.

 
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13.           Standard Forms of Award Agreement.
 
13.1           Award Agreements.  Each Award shall comply with and be subject to
the terms and conditions set forth in the appropriate form of Award Agreement
approved by the Committee and as amended from time to time.  No Award or
purported Award shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement.  Any Award Agreement may consist
of an appropriate form of Notice of Grant and a form of Agreement incorporated
therein by reference, or such other form or forms, including electronic media,
as the Committee may approve from time to time.
 
13.2           Authority to Vary Terms.  The Committee shall have the authority
from time to time to vary the terms of any standard form of Award Agreement
either in connection with the grant or amendment of an individual Award or in
connection with the authorization of a new standard form or forms; provided,
however, that the terms and conditions of any such new, revised or amended
standard form or forms of Award Agreement are not inconsistent with the terms of
the Plan.
 
14.           Change in Control.
 
14.1           Effect of Change in Control on Awards.  Subject to the
requirements and limitations of Section 409A if applicable, the Committee may
provide for any one or more of the following:
 
(a)           Accelerated Vesting.  The Committee may, in its discretion,
provide in any Award Agreement or, in the event of a Change in Control, may take
such actions as it deems appropriate to provide for the acceleration of the
exercisability, vesting and/or settlement in connection with such Change in
Control of each or any outstanding Award or portion thereof and shares acquired
pursuant thereto upon such conditions, including termination of the
Participant’s Service prior to, upon, or following such Change in Control, to
such extent as the Committee shall determine.
 
(b)           Assumption, Continuation or Substitution.  In the event of a
Change in Control, the surviving, continuing, successor, or purchasing
corporation or other business entity or parent thereof, as the case may be (the
“Acquiror”), may, without the consent of any Participant, either assume or
continue the Company’s rights and obligations under each or any Award or portion
thereof outstanding immediately prior to the Change in Control or substitute for
each or any such outstanding Award or portion thereof a substantially equivalent
award with respect to the Acquiror’s stock, as applicable.  For purposes of this
Section, if so determined by the Committee, in its discretion, an Award
denominated in shares of Stock shall be deemed assumed if, following the Change
in Control, the Award confers the right to receive, subject to the terms and
conditions of the Plan and the applicable Award Agreement, for each share of
Stock subject to the Award immediately prior to the Change in Control, the
consideration (whether stock, cash, other securities or property or a
combination thereof) to which a holder of a share of Stock on the effective date
of the Change in Control was entitled; provided, however, that if such
consideration is not solely common stock of the Acquiror, the Committee may,
with the consent of the Acquiror, provide for the consideration to be received
upon the exercise or settlement of the Award, for each share of Stock subject to
the Award, to consist solely of common stock of the Acquiror equal in Fair
Market Value to the per share consideration received by holders of Stock
pursuant to the Change in Control.  If any portion of such consideration may be
received by holders of Stock pursuant to the Change in Control on a contingent
or delayed basis, the Committee may, in its sole discretion, determine such Fair
Market Value per share as of the time of the Change in Control on the basis of
the Committee’s good faith estimate of the present value of the probable future
payment of such consideration.  Any Award or portion thereof which is neither
assumed or continued by the Acquiror in connection with the Change in Control
nor exercised or settled as of the time of consummation of the Change in Control
shall terminate and cease to be outstanding effective as of the time of
consummation of the Change in Control.

 
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(c)           Cash-Out of Outstanding Stock-Based Awards.  The Committee may, in
its discretion and without the consent of any Participant, determine that, upon
the occurrence of a Change in Control, each or any Award denominated in shares
of Stock or portion thereof outstanding immediately prior to the Change in
Control and not previously exercised or settled shall be canceled in exchange
for a payment with respect to each vested share (and each unvested share, if so
determined by the Committee) of Stock subject to such canceled Award in
(i) cash, (ii) stock of the Company or of a corporation or other business entity
a party to the Change in Control, or (iii) other property which, in any such
case, shall be in an amount having a Fair Market Value equal to the Fair Market
Value of the consideration to be paid per share of Stock in the Change in
Control, reduced by the exercise or purchase price per share, if any, under such
Award.  If any portion of such consideration may be received by holders of Stock
pursuant to the Change in Control on a contingent or delayed basis, the
Committee may, in its sole discretion, determine such Fair Market Value per
share as of the time of the Change in Control on the basis of the Committee’s
good faith estimate of the present value of the probable future payment of such
consideration.  In the event such determination is made by the Committee, the
amount of such payment (reduced by applicable withholding taxes, if any) shall
be paid to Participants in respect of the vested portions of their canceled
Awards as soon as practicable following the date of the Change in Control and in
respect of the unvested portions of their canceled Awards in accordance with the
vesting schedules applicable to such Awards.

 
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14.2           Federal Excise Tax Under Section 4999 of the Code.
 
(a)           Excess Parachute Payment.  In the event that any acceleration of
vesting pursuant to an Award and any other payment or benefit received or to be
received by a Participant would subject the Participant to any excise tax
pursuant to Section 4999 of the Code due to the characterization of such
acceleration of vesting, payment or benefit as an “excess parachute payment”
under Section 280G of the Code, the Participant may elect, in his or her sole
discretion, to reduce the amount of any acceleration of vesting called for under
the Award in order to avoid such characterization.
 
(b)           Determination by Independent Accountants.  To aid the Participant
in making any election called for under Section 14.2(a), no later than the date
of the occurrence of any event that might reasonably be anticipated to result in
an “excess parachute payment” to the Participant as described in
Section 14.2(a), the Company shall request a determination in writing by
independent public accountants selected by the Company (the “Accountants”).  As
soon as practicable thereafter, the Accountants shall determine and report to
the Company and the Participant the amount of such acceleration of vesting,
payments and benefits which would produce the greatest after-tax benefit to the
Participant.  For the purposes of such determination, the Accountants may rely
on reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code.  The Company and the Participant shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make their required determination.  The Company shall bear
all fees and expenses the Accountants may reasonably charge in connection with
their services contemplated by this Section.
 
15.           Compliance with Securities Law.
 
The grant of Awards and the issuance of shares of Stock pursuant to any Award
shall be subject to compliance with all applicable requirements of federal,
state and foreign law with respect to such securities and the requirements of
any stock exchange or market system upon which the Stock may then be listed.  In
addition, no Award may be exercised or shares issued pursuant to an Award unless
(a) a registration statement under the Securities Act shall at the time of such
exercise or issuance be in effect with respect to the shares issuable pursuant
to the Award or (b) in the opinion of legal counsel to the Company, the shares
issuable pursuant to the Award may be issued in accordance with the terms of an
applicable exemption from the registration requirements of the Securities
Act.  The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance and sale of any shares hereunder shall relieve
the Company of any liability in respect of the failure to issue or sell such
shares as to which such requisite authority shall not have been obtained.  As a
condition to issuance of any Stock, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation
or warranty with respect thereto as may be requested by the Company.

 
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16.           Compliance with Section 409A.
 
16.1           Awards Subject to Section 409A.  The provisions of this
Section 16 shall apply to any Award or portion thereof that is or becomes
subject to Section 409A, notwithstanding any provision to the contrary contained
in the Plan or the Award Agreement applicable to such Award.  Awards subject to
Section 409A include, without limitation:
 
(a)           Any Nonstatutory Stock Option or SAR that permits the deferral of
compensation other than the deferral of recognition of income until the exercise
of the Award.
 
(b)           Each Deferred Compensation Award.
 
(c)           Any Restricted Stock Unit Award, Cash-Based Award or Other
Stock-Based Award if either (i) the Award provides by its terms for settlement
of all or any portion of the Award on one or more dates following the Short-Term
Deferral Period (as defined below) or (ii) the Committee permits or requires the
Participant to elect one or more dates on which the Award will be settled.
 
Subject to any applicable U.S. Treasury Regulations promulgated pursuant to
Section 409A or other applicable guidance, the term “Short-Term Deferral Period”
means the period ending on the later of (i) the 15th day of the third month
following the end of the Company’s fiscal year in which the applicable portion
of the Award is no longer subject to a substantial risk of forfeiture or
(ii) the 15th day of the third month following the end of the Participant’s
taxable year in which the applicable portion of the Award is no longer subject
to a substantial risk of forfeiture.  For this purpose, the term “substantial
risk of forfeiture” shall have the meaning set forth in any applicable U.S.
Treasury Regulations promulgated pursuant to Section 409A or other applicable
guidance.
 
16.2           Deferral and/or Distribution Elections.  Except as otherwise
permitted or required by Section 409A or any applicable U.S. Treasury
Regulations promulgated pursuant to Section 409A or other applicable guidance,
the following rules shall apply to any deferral and/or distribution elections
(each, an “Election”) that may be permitted or required by the Committee
pursuant to an Award subject to Section 409A:
 
(a)           All Elections must be in writing and specify the amount of the
distribution in settlement of an Award being deferred, as well as the time and
form of distribution as permitted by this Plan.
 
(b)           All Elections shall be made by the end of the Participant’s
taxable year prior to the year in which services commence for which an Award may
be granted to such Participant; provided, however, that if the Award qualifies
as “performance-based compensation” for purposes of Section 409A and is based on
services performed over a period of at least twelve (12) months, then the
Election may be made no later than six (6) months prior to the end of such
period.
 
(c)           Elections shall continue in effect until a written election to
revoke or change such Election is received by the Company, except that a written
election to revoke or change such Election must be made prior to the last day
for making an Election determined in accordance with paragraph (b) above or as
permitted by Section 16.3.

 
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16.3           Subsequent Elections.  Except as otherwise permitted or required
by Section 409A or any applicable U.S. Treasury Regulations promulgated pursuant
to Section 409A or other applicable guidance, any Award subject to Section 409A
which permits a subsequent Election to delay the distribution or change the form
of distribution in settlement of such Award shall comply with the following
requirements:
 
(a)           No subsequent Election may take effect until at least twelve (12)
months after the date on which the subsequent Election is made;
 
(b)           Each subsequent Election related to a distribution in settlement
of an Award not described in Section 16.4(b), 16.4(c) or 16.4(f) must result in
a delay of the distribution for a period of not less than five (5) years from
the date such distribution would otherwise have been made; and
 
(c)           No subsequent Election related to a distribution pursuant to
Section 16.4(d) shall be made less than twelve (12) months prior to the date of
the first scheduled payment under such distribution.
 
16.4           Distributions Pursuant to Deferral Elections.  Except as
otherwise permitted or required by Section 409A or any applicable U.S. Treasury
Regulations promulgated pursuant to Section 409A or other applicable guidance,
no distribution in settlement of an Award subject to Section 409A may commence
earlier than:
 
(a)           Separation from service (as determined by the Secretary of the
United States Treasury);
 
(b)           The date the Participant becomes Disabled (as defined below);
 
(c)           Death;
 
(d)           A specified time (or pursuant to a fixed schedule) that is either
(i) specified by the Committee upon the grant of an Award and set forth in the
Award Agreement evidencing such Award or (ii) specified by the Participant in an
Election complying with the requirements of Section 16.2 and/or 16.3, as
applicable;
 
(e)           To the extent provided by the Secretary of the U.S. Treasury, a
change in the ownership or effective control of the Company or in the ownership
of a substantial portion of the assets of the Company; or
 
(f)           The occurrence of an Unforeseeable Emergency (as defined by
applicable U.S. Treasury Regulations promulgated pursuant to Section 409A).
 
Notwithstanding anything else herein to the contrary, to the extent that a
Participant is a “Specified Employee” (as defined in Section 409A(a)(2)(B)(i) of
the Code) of the Company, no distribution pursuant to Section 16.4(a) in
settlement of an Award subject to Section 409A may be made before the date (the
“Delayed Payment Date”) which is six (6) months after such Participant’s date of
separation from service, or, if earlier, the date of the Participant’s
death.  All such amounts that would, but for this paragraph, become payable
prior to the Delayed Payment Date shall be accumulated and paid on the Delayed
Payment Date.

 
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16.5           Unforeseeable Emergency.  The Committee shall have the authority
to provide in the Award Agreement evidencing any Award subject to Section 409A
for distribution in settlement of all or a portion of such Award in the event
that a Participant establishes, to the satisfaction of the Committee, the
occurrence of an Unforeseeable Emergency.  In such event, the amount(s)
distributed with respect to such Unforeseeable Emergency cannot exceed the
amounts necessary to satisfy such Unforeseeable Emergency plus amounts necessary
to pay taxes reasonably anticipated as a result of such distribution(s), after
taking into account the extent to which such hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise, by liquidation
of the Participant’s assets (to the extent the liquidation of such assets would
not itself cause severe financial hardship) or by cessation of deferrals under
the Award.  All distributions with respect to an Unforeseeable Emergency shall
be made in a lump sum as soon as practicable following the Committee’s
determination that an Unforeseeable Emergency has occurred.
 
The occurrence of an Unforeseeable Emergency shall be judged and determined by
the Committee.  The Committee’s decision with respect to whether an
Unforeseeable Emergency has occurred and the manner in which, if at all, the
distribution in settlement of an Award shall be altered or modified, shall be
final, conclusive, and not subject to approval or appeal.
 
16.6           Disabled.  The Committee shall have the authority to provide in
any Award subject to Section 409A for distribution in settlement of such Award
in the event that the Participant becomes Disabled.  A Participant shall be
considered “Disabled” if either:
 
(a)           the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, or
 
(b)           the Participant is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3)
months under an accident and health plan covering employees of the Participant’s
employer.
 
All distributions payable by reason of a Participant becoming Disabled shall be
paid in a lump sum or in periodic installments as established by the
Participant’s Election, commencing as soon as practicable following the date the
Participant becomes Disabled.  If the Participant has made no Election with
respect to distributions upon becoming Disabled, all such distributions shall be
paid in a lump sum as soon as practicable following the date the Participant
becomes Disabled.

 
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16.7           Death.  If a Participant dies before complete distribution of
amounts payable upon settlement of an Award subject to Section 409A, such
undistributed amounts shall be distributed to his or her beneficiary under the
distribution method for death established by the Participant’s Election as soon
as administratively possible following receipt by the Committee of satisfactory
notice and confirmation of the Participant’s death.  If the Participant has made
no Election with respect to distributions upon death, all such distributions
shall be paid in a lump sum as soon as practicable following the date of the
Participant’s death.
 
16.8           No Acceleration of Distributions.  Notwithstanding anything to
the contrary herein, this Plan does not permit the acceleration of the time or
schedule of any distribution under an Award subject to Section 409A, except as
provided by Section 409A and/or the Secretary of the U.S. Treasury.
 
17.           Tax Withholding.
 
17.1           Tax Withholding in General.  The Company shall have the right to
deduct from any and all payments made under the Plan, or to require the
Participant, through payroll withholding, cash payment or otherwise, to make
adequate provision for, the federal, state, local and foreign taxes, if any,
required by law to be withheld by the Participating Company Group with respect
to an Award or the shares acquired pursuant thereto.  The Company shall have no
obligation to deliver shares of Stock, to release shares of Stock from an escrow
established pursuant to an Award Agreement, or to make any payment in cash under
the Plan until the Participating Company Group’s tax withholding obligations
have been satisfied by the Participant.
 
17.2           Withholding in Shares.  The Company shall have the right, but not
the obligation, to deduct from the shares of Stock issuable to a Participant
upon the exercise or settlement of an Award, or to accept from the Participant
the tender of, a number of whole shares of Stock having a Fair Market Value, as
determined by the Company, equal to all or any part of the tax withholding
obligations of the Participating Company Group.  The Fair Market Value of any
shares of Stock withheld or tendered to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.
 
18.           Amendment or Termination of Plan.
 
The Committee may amend, suspend or terminate the Plan at any time.  No
amendment, suspension or termination of the Plan shall affect any then
outstanding Award unless expressly provided by the Committee.  Except as
provided by the next sentence, no amendment, suspension or termination of the
Plan may adversely affect any then outstanding Award without the consent of the
Participant.  Notwithstanding any other provision of the Plan to the contrary,
the Committee may, in its sole and absolute discretion and without the consent
of any Participant, amend the Plan or any Award Agreement, to take effect
retroactively or otherwise, as it deems necessary or advisable for the purpose
of conforming the Plan or such Award Agreement to any present or future law,
regulation or rule applicable to the Plan, including, but not limited to,
Section 409A.
 

 
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19.           Miscellaneous Provisions.
 
19.1           Repurchase Rights.  Shares issued under the Plan may be subject
to one or more repurchase options, or other conditions and restrictions as
determined by the Committee in its discretion at the time the Award is
granted.  The Company shall have the right to assign at any time any repurchase
right it may have, whether or not such right is then exercisable, to one or more
persons as may be selected by the Company.  Upon request by the Company, each
Participant shall execute any agreement evidencing such transfer restrictions
prior to the receipt of shares of Stock hereunder and shall promptly present to
the Company any and all certificates representing shares of Stock acquired
hereunder for the placement on such certificates of appropriate legends
evidencing any such transfer restrictions.
 
19.2           Forfeiture Events.
 
(a)           The Committee may specify in an Award Agreement that the
Participant’s rights, payments, and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of specified events, in addition to any otherwise applicable vesting
or performance conditions of an Award.  Such events may include, but shall not
be limited to, termination of Service for Cause or any act by a Participant,
whether before or after termination of Service, that would constitute Cause for
termination of Service.
 
(b)           If the Company is required to prepare an accounting restatement
due to the material noncompliance of the Company, as a result of misconduct,
with any financial reporting requirement under the securities laws, any
Participant who knowingly or through gross negligence engaged in the misconduct,
or who knowingly or through gross negligence failed to prevent the misconduct,
and any Participant who is one of the individuals subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, shall reimburse
the Company the amount of any payment in settlement of an Award earned or
accrued during the twelve (12) month period following the first public issuance
or filing with the United States Securities and Exchange Commission (whichever
first occurred) of the financial document embodying such financial reporting
requirement.
 
19.3           Provision of Information.  Each Participant shall be given access
to information concerning the Company equivalent to that information generally
made available to the Company’s common stockholders.
 
19.4           Rights as Employee.  No person, even though eligible pursuant to
Section 5, shall have a right to be selected as a Participant, or, having been
so selected, to be selected again as a Participant.  Nothing in the Plan or any
Award granted under the Plan shall confer on any Participant a right to remain
an Employee or interfere with or limit in any way any right of a Participating
Company to terminate the Participant’s Service at any time.  To the extent that
an Employee of a Participating Company other than the Company receives an Award
under the Plan, that Award shall in no event be understood or interpreted to
mean that the Company is the Employee’s employer or that the Employee has an
employment relationship with the Company.

 
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19.5           Rights as a Stockholder.  A Participant shall have no rights as a
stockholder with respect to any shares covered by an Award until the date of the
issuance of such shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company).  No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such shares are issued, except as provided
in Section 4.3 or another provision of the Plan.
 
19.6           Delivery of Title to Shares.  Subject to any governing rules or
regulations, the Company shall issue or cause to be issued the shares of Stock
acquired pursuant to an Award and shall deliver such shares to or for the
benefit of the Participant by means of one or more of the following: (a) by
delivering to the Participant evidence of book entry shares of Stock credited to
the account of the Participant, (b) by depositing such shares of Stock for the
benefit of the Participant with any broker with which the Participant has an
account relationship, or (c) by delivering such shares of Stock to the
Participant in certificate form.
 
19.7           Fractional Shares.  The Company shall not be required to issue
fractional shares upon the exercise or settlement of any Award.
 
19.8           Retirement and Welfare Plans.  Neither Awards made under this
Plan nor shares of Stock or cash paid pursuant to such Awards may be included as
“compensation” for purposes of computing the benefits payable to any Participant
under any Participating Company’s retirement plans (both qualified and
non-qualified) or welfare benefit plans unless such other plan expressly
provides that such compensation shall be taken into account in computing a
Participant’s benefit.
 
19.9           Beneficiary Designation.  Subject to local laws and procedures,
each Participant may file with the Company a written designation of a
beneficiary who is to receive any benefit under the Plan to which the
Participant is entitled in the event of such Participant’s death before he or
she receives any or all of such benefit.  Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Company, and will be effective only when filed by the Participant in writing
with the Company during the Participant’s lifetime.  If a married Participant
designates a beneficiary other than the Participant’s spouse, the effectiveness
of such designation may be subject to the consent of the Participant’s
spouse.  If a Participant dies without an effective designation of a beneficiary
who is living at the time of the Participant’s death, the Company will pay any
remaining unpaid benefits to the Participant’s legal representative.
 
19.10                      Severability.  If any one or more of the provisions
(or any part thereof) of this Plan shall be held invalid, illegal or
unenforceable in any respect, such provision shall be modified so as to make it
valid, legal and enforceable, and the validity, legality and enforceability of
the remaining provisions (or any part thereof) of the Plan shall not in any way
be affected or impaired thereby.
 
19.11                      No Constraint on Corporate Action.  Nothing in this
Plan shall be construed to: (a) limit, impair, or otherwise affect the Company’s
or another Participating Company’s right or power to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer
all or any part of its business or assets; or (b) limit the right or power of
the Company or another Participating Company to take any action which such
entity deems to be necessary or appropriate.

 
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19.12                      Unfunded Obligation.  Participants shall have the
status of general unsecured creditors of the Company.  Any amounts payable to
Participants pursuant to the Plan shall be unfunded and unsecured obligations
for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974.  No Participating Company shall be
required to segregate any monies from its general funds, or to create any
trusts, or establish any special accounts with respect to such obligations.  The
Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder.  Any investments or the creation or maintenance of any
trust or any Participant account shall not create or constitute a trust or
fiduciary relationship between the Committee or any Participating Company and a
Participant, or otherwise create any vested or beneficial interest in any
Participant or the Participant’s creditors in any assets of any Participating
Company.  The Participants shall have no claim against any Participating Company
for any changes in the value of any assets which may be invested or reinvested
by the Company with respect to the Plan.
 
19.13                      Choice of Law.  Except to the extent governed by
applicable federal law, the validity, interpretation, construction and
performance of the Plan and each Award Agreement shall be governed by the laws
of the State of Texas, without regard to its conflict of law rules.
 
IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing sets forth the Multimedia Games, Inc. 2008 Employment Inducement Award
Plan as duly adopted by the Board on June 15, 2008.
 

 
/s/ Randy Cieslewicz
 
Printed Name: Randy Cieslewicz

 
39

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PLAN HISTORY AND NOTES TO COMPANY

June 15, 2008
 
Board adopts Plan with a share reserve equal to 1,300,000 shares.
     
IMPORTANT NOTE:  Implementation of Section 11—Deferred Compensation Awards or
deferral of settlement of any Award
 
Upon establishment of a provision for deferral of settlement of any Award,
determine whether such program will constitute a “top-hat” pension plan under
ERISA.  If so, file notice with Dept. of Labor under ERISA Reg. 2520.104-23
within 120 days of adoption of resolutions by the Committee to establish the
program to obtain exemption from reporting and disclosure requirements of
ERISA.  Include claims procedure in award agreements evidencing such awards.
     
July 22, 2008
 
Committee amends Plan to increase share reserve to 1,800,000 shares.
     
September 14, 2008
 
Committee amends Plan to increase share reserve to 2,100,000 shares.
     
November 10, 2008
 
Committee amends Plan to increase share reserve to 2,500,000 shares.

 
 
 
 

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