Exhibit 10.1

 

--------------------------------------------------------------------------------

 

ADOBE SYSTEMS INCORPORATED

2003 EQUITY INCENTIVE PLAN

 

Amended and Restated as of April 16, 2010

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

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

 

6

3.

 

Administration

 

6

 

 

3.1 Administration by the Committee

 

6

 

 

3.2 Authority of Officers

 

6

 

 

3.3 Administration with Respect to Insiders

 

6

 

 

3.4 Committee Complying with Section 162 (m)

 

6

 

 

3.5 Powers of the Committee

 

6

 

 

3.6 Repricing

 

7

 

 

3.7 Indemnification

 

8

4.

 

Shares Subject to Plan

 

8

 

 

4.1 Maximum Number of Shares Issuable

 

8

 

 

4.2 Adjustments for Changes in Capital Structure

 

9

5.

 

Eligibility and Award Limitations

 

9

 

 

5.1 Persons Eligible for Awards

 

9

 

 

5.2 Participation

 

9

 

 

5.3 Incentive Stock Option Limitations

 

9

 

 

5.4 Award Limits

 

10

6.

 

Terms and Conditions of Options

 

11

 

 

6.1 Exercise Price

 

11

 

 

6.2 Exercisability and Term of Options

 

11

 

 

6.3 Payment of Exercise Price

 

11

 

 

6.4 Effect of Termination of Service

 

12

 

 

6.5 Transferability of Options

 

12

 

i

--------------------------------------------------------------------------------

 

7.

 

Terms and Conditions of Stock Appreciation Rights

 

13

 

 

7.1 Types of SARs Authorized

 

13

 

 

7.2 Exercise Price

 

13

 

 

7.3 Exercisability and Term of SARs

 

13

 

 

7.4 Exercise of SARs

 

13

 

 

7.5 Deemed Exercise of SARs

 

14

 

 

7.6 Effect of Termination of Service

 

14

 

 

7.7 Nontransferability of SARs

 

14

8.

 

Terms and Conditions of Stock Awards

 

14

 

 

8.1 Types of Stock Awards Authorized

 

14

 

 

8.2 Purchase Price

 

14

 

 

8.3 Purchase Period

 

15

 

 

8.4 Payment of Purchase Price

 

15

 

 

8.5 Vesting: Restrictions on Transfer; Deferral

 

15

 

 

8.6 Voting Rights; Dividends and Distributions

 

15

 

 

8.7 Effect of Termination of Service

 

16

 

 

8.8 Nontransferability of Stock Award Rights

 

16

9.

 

Terms and Conditions of Performance Awards

 

16

 

 

9.1 Types of Performance Awards Authorized

 

16

 

 

9.2 Initial Value of Performance Shares and Performance Units

 

17

 

 

9.3 Establishment of Performance Period, Performance Goals and Performance Award
Formula

 

17

 

 

9.4 Measurement of Performance Goals

 

17

 

 

9.5 Settlement of Performance Awards

 

20

 

 

9.6 Dividend Equivalents

 

21

 

 

9.7 Effect of Termination of Service

 

21

 

 

9.8 Nontransferability of Performance Awards

 

21

10.

 

Standard Forms of Award Agreement

 

21

 

 

10.1 Award Agreements

 

21

 

 

10.2 Authority to Vary Terms

 

21

 

ii

--------------------------------------------------------------------------------

 

11.

 

Change of Control

 

22

 

 

11.1 Awards Granted Prior to January 24, 2008

 

22

 

 

11.2 Awards Granted On or After January 24, 2008

 

23

12.

 

Compliance with Securities Law

 

24

13.

 

Tax Withholding

 

25

 

 

13.1 Tax Withholding in General

 

25

 

 

13.2 Withholding in Shares

 

25

14.

 

Termination of Amendment of Plan

 

25

15.

 

Miscellaneous Provisions

 

25

 

 

15.1 Repurchase Rights

 

25

 

 

15.2 Provision of Information

 

26

 

 

15.3 Rights as Employee, Consultant or Director

 

26

 

 

15.4 Rights as a Stockholder

 

26

 

 

15.5 Fractional Shares

 

26

 

 

15.6 Beneficiary Designation

 

26

 

 

15.7 Unfunded Obligation

 

26

 

 

15.8 Section 409A

 

27

 

iii

--------------------------------------------------------------------------------

 

ADOBE SYSTEMS INCORPORATED

2003 EQUITY INCENTIVE PLAN

 

1.             ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

 

1.1           ESTABLISHMENT.  ADOBE SYSTEMS INCORPORATED, A DELAWARE
CORPORATION, HEREBY ESTABLISHES THE ADOBE SYSTEMS INCORPORATED 2003 EQUITY
INCENTIVE PLAN (AS AMENDED AND RESTATED, THE “PLAN”) EFFECTIVE AS OF APRIL 9,
2003, THE DATE OF ITS APPROVAL BY THE STOCKHOLDERS OF THE COMPANY (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, STOCK PURCHASE RIGHTS, STOCK BONUSES, RESTRICTED STOCK UNITS,
PERFORMANCE SHARES AND PERFORMANCE UNITS.

 

1.3           TERM OF PLAN.  THE PLAN SHALL CONTINUE IN EFFECT UNTIL THE EARLIER
OF ITS TERMINATION BY THE BOARD OR THE DATE ON WHICH ALL OF THE SHARES OF STOCK
AVAILABLE FOR ISSUANCE UNDER THE PLAN HAVE BEEN ISSUED AND ALL RESTRICTIONS ON
SUCH SHARES UNDER THE TERMS OF THE PLAN AND THE AGREEMENTS EVIDENCING AWARDS
GRANTED UNDER THE PLAN HAVE LAPSED.  HOWEVER, ALL INCENTIVE STOCK OPTIONS SHALL
BE GRANTED, IF AT ALL, WITHIN TEN (10) YEARS FROM THE EARLIER OF THE DATE THE
PLAN IS ADOPTED, AS AMENDED, BY THE BOARD OR THE DATE THE PLAN IS DULY APPROVED,
AS AMENDED, BY THE STOCKHOLDERS OF THE COMPANY.

 

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, SAR, STOCK PURCHASE RIGHT, STOCK BONUS,
RESTRICTED STOCK UNIT, PERFORMANCE SHARE OR PERFORMANCE UNIT GRANTED UNDER THE
PLAN.

 

(C)           “AWARD AGREEMENT” MEANS A WRITTEN AGREEMENT BETWEEN THE COMPANY
AND A PARTICIPANT SETTING FORTH THE TERMS, CONDITIONS AND RESTRICTIONS OF THE
AWARD GRANTED TO THE PARTICIPANT.  AN AWARD AGREEMENT MAY BE AN “OPTION
AGREEMENT, AN “SAR

 

--------------------------------------------------------------------------------

 

AGREEMENT,” A “STOCK PURCHASE AGREEMENT,” A “STOCK BONUS AGREEMENT, “ A
“RESTRICTED STOCK UNIT AGREEMENT,” “ A “PERFORMANCE SHARE AGREEMENT” OR A
“PERFORMANCE UNIT AGREEMENT.”

 

(D)           “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

 

(E)           “CODE” MEANS THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND
ANY APPLICABLE REGULATIONS PROMULGATED THEREUNDER.

 

(F)            “COMMITTEE” MEANS THE EXECUTIVE COMPENSATION COMMITTEE OR OTHER
COMMITTEE OF THE BOARD DULY APPOINTED TO ADMINISTER THE PLAN AND HAVING SUCH
POWERS AS SHALL BE SPECIFIED BY THE BOARD.  IF NO COMMITTEE OF THE BOARD HAS
BEEN APPOINTED TO ADMINISTER THE PLAN, THE BOARD SHALL EXERCISE ALL OF THE
POWERS OF THE COMMITTEE GRANTED HEREIN, AND, IN ANY EVENT, THE BOARD MAY IN ITS
DISCRETION EXERCISE ANY OR ALL OF SUCH POWERS.

 

(G)           “COMPANY” MEANS ADOBE SYSTEMS INCORPORATED, A DELAWARE
CORPORATION, OR ANY SUCCESSOR CORPORATION THERETO.

 

(H)           “CONSULTANT” MEANS A PERSON ENGAGED TO PROVIDE CONSULTING OR
ADVISORY SERVICES (OTHER THAN AS AN EMPLOYEE OR A MEMBER OF THE BOARD) TO A
PARTICIPATING COMPANY, PROVIDED THAT THE IDENTITY OF SUCH PERSON, THE NATURE OF
SUCH SERVICES OR THE ENTITY TO WHICH SUCH SERVICES ARE PROVIDED WOULD NOT
PRECLUDE THE COMPANY FROM OFFERING OR SELLING SECURITIES TO SUCH PERSON PURSUANT
TO THE PLAN IN RELIANCE ON (I) REGISTRATION ON A FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, OR (II) RULE 701 OF THE SECURITIES ACT, OR (III) OTHER
MEANS OF COMPLIANCE WITH THE SECURITIES LAWS OF ALL RELEVANT JURISDICTIONS.

 

(I)            “DIRECTOR” MEANS A MEMBER OF THE BOARD OR THE BOARD OF DIRECTORS
OF ANY OTHER PARTICIPATING COMPANY.

 

(J)            “DISABILITY” MEANS THE PERMANENT AND TOTAL DISABILITY OF THE
PARTICIPANT, WITHIN THE MEANING OF SECTION 22(E)(3) AND 409A(A)(2)(C)(I) OF THE
CODE.

 

(K)           “DIVIDEND EQUIVALENT” MEANS A CREDIT, MADE AT THE DISCRETION OF
THE COMMITTEE OR AS OTHERWISE PROVIDED BY THE PLAN, TO THE ACCOUNT OF A
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.

 

(L)            “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 AND, WITH RESPECT TO ANY INCENTIVE STOCK
OPTION GRANTED TO SUCH PERSON, WHO IS AN EMPLOYEE FOR PURPOSES OF SECTION 422 OF
THE CODE; 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.

 

(M)          “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(N)           “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,

 

2

--------------------------------------------------------------------------------

 

IN ITS DISCRETION, IF SUCH DETERMINATION IS EXPRESSLY ALLOCATED TO THE COMPANY
HEREIN, SUBJECT TO THE FOLLOWING:

 

(I)            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 NASDAQ GLOBAL SELECT MARKET, THE NASDAQ SMALLCAP MARKET OR SUCH
OTHER 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)           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.

 

(O)           “INCENTIVE STOCK OPTION” MEANS AN OPTION INTENDED TO BE (AS SET
FORTH IN THE AWARD AGREEMENT) AND WHICH QUALIFIES AS AN INCENTIVE STOCK OPTION
WITHIN THE MEANING OF SECTION 422(B) OF THE CODE.

 

(P)           “INSIDER” MEANS AN OFFICER, A MEMBER OF THE BOARD OR ANY OTHER
PERSON WHOSE TRANSACTIONS IN STOCK ARE SUBJECT TO SECTION 16 OF THE EXCHANGE
ACT.

 

(Q)           “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.

 

(R)            “OFFICER” MEANS ANY PERSON DESIGNATED BY THE BOARD AS AN OFFICER
OF THE COMPANY.

 

(S)           “OPTION” MEANS THE RIGHT TO PURCHASE STOCK AT A STATED PRICE FOR A
SPECIFIED PERIOD OF TIME GRANTED TO A PARTICIPANT PURSUANT TO SECTION 6 OF THE
PLAN.  AN OPTION MAY BE EITHER AN INCENTIVE STOCK OPTION OR A NONSTATUTORY STOCK
OPTION.

 

(T)            “PARENT CORPORATION” MEANS ANY PRESENT OR FUTURE “PARENT
CORPORATION” OF THE COMPANY, AS DEFINED IN SECTION 424(E) OF THE CODE.

 

(U)           “PARTICIPANT” MEANS ANY ELIGIBLE PERSON WHO HAS BEEN GRANTED ONE
OR MORE AWARDS.

 

(V)           “PARTICIPATING COMPANY” MEANS THE COMPANY OR ANY PARENT
CORPORATION, SUBSIDIARY CORPORATION OR AFFILIATE.

 

3

--------------------------------------------------------------------------------

 

(W)          “PARTICIPATING COMPANY GROUP” MEANS, AT ANY POINT IN TIME, ALL
CORPORATIONS COLLECTIVELY WHICH ARE THEN PARTICIPATING COMPANIES.

 

(X)            “PERFORMANCE AWARD” MEANS AN AWARD OF PERFORMANCE SHARES OR
PERFORMANCE UNITS.

 

(Y)           “PERFORMANCE AWARD FORMULA” MEANS, FOR ANY PERFORMANCE AWARD, A
FORMULA OR TABLE ESTABLISHED BY THE COMMITTEE PURSUANT TO SECTION 9.3 OF THE
PLAN 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.

 

(Z)            “PERFORMANCE GOAL” MEANS A PERFORMANCE GOAL ESTABLISHED BY THE
COMMITTEE PURSUANT TO SECTION 9.3 OF THE PLAN.

 

(AA)         “PERFORMANCE PERIOD” MEANS A PERIOD ESTABLISHED BY THE COMMITTEE
PURSUANT TO SECTION 9.3 OF THE PLAN AT THE END OF WHICH ONE OR MORE PERFORMANCE
GOALS ARE TO BE MEASURED.

 

(BB)         “PERFORMANCE SHARE” MEANS A BOOKKEEPING ENTRY REPRESENTING A RIGHT
GRANTED TO A PARTICIPANT PURSUANT TO SECTION 9 OF THE PLAN TO RECEIVE A PAYMENT
EQUAL TO THE VALUE OF A PERFORMANCE SHARE BASED ON PERFORMANCE.

 

(CC)         “PERFORMANCE UNIT” MEANS A BOOKKEEPING ENTRY REPRESENTING A RIGHT
GRANTED TO A PARTICIPANT PURSUANT TO SECTION 9 OF THE PLAN TO RECEIVE A PAYMENT
EQUAL TO THE VALUE OF A PERFORMANCE UNIT BASED UPON PERFORMANCE.

 

(DD)         “PREDECESSOR PLANS” MEAN, COLLECTIVELY, THE ADOBE SYSTEMS
INCORPORATED 1994 STOCK OPTION PLAN AND THE ADOBE SYSTEMS INCORPORATED 1999
EQUITY INCENTIVE PLAN.

 

(EE)         “RESTRICTED STOCK UNIT” MEANS A BOOKKEEPING ENTRY REPRESENTING A
RIGHT GRANTED TO A PARTICIPANT PURSUANT TO SECTION 8 OF THE PLAN TO RECEIVE ONE
SHARE OF STOCK, A CASH PAYMENT EQUAL TO THE VALUE OF ONE SHARE OF STOCK, OR A
COMBINATION THEREOF, AS DETERMINED IN THE SOLE DISCRETION OF THE COMMITTEE.

 

(FF)           “RESTRICTION PERIOD” MEANS THE PERIOD ESTABLISHED IN ACCORDANCE
WITH SECTION 8.5 OF THE PLAN DURING WHICH SHARES SUBJECT TO A STOCK AWARD ARE
SUBJECT TO VESTING CONDITIONS.

 

(GG)         “RULE 16B-3” MEANS RULE 16B-3 UNDER THE EXCHANGE ACT, AS AMENDED
FROM TIME TO TIME, OR ANY SUCCESSOR RULE OR REGULATION.

 

(HH)         “SAR” OR “STOCK APPRECIATION RIGHT” MEANS A BOOKKEEPING ENTRY
REPRESENTING, FOR EACH SHARE OF STOCK SUBJECT TO SUCH SAR, A RIGHT GRANTED TO A
PARTICIPANT PURSUANT TO SECTION 7 OF THE PLAN TO RECEIVE PAYMENT 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.

 

4

--------------------------------------------------------------------------------

 

(II)           “SECTION 162(M)” MEANS SECTION 162(M) OF THE CODE.

 

(JJ)           “SECURITIES ACT” MEANS THE SECURITIES ACT OF 1933, AS AMENDED.

 

(KK)         “SERVICE” MEANS A PARTICIPANT’S EMPLOYMENT OR SERVICE WITH THE
PARTICIPATING COMPANY GROUP AS AN EMPLOYEE, A CONSULTANT OR A DIRECTOR,
WHICHEVER SUCH CAPACITY THE PARTICIPANT HELD ON THE DATE OF GRANT OF AN AWARD. 
UNLESS OTHERWISE DETERMINED BY THE BOARD, A PARTICIPANT’S SERVICE SHALL BE
DEEMED TO HAVE TERMINATED IF THE PARTICIPANT CEASES TO RENDER SERVICE TO THE
PARTICIPATING COMPANY GROUP IN SUCH INITIAL CAPACITY.  HOWEVER, A PARTICIPANT’S
SERVICE SHALL NOT BE DEEMED TO HAVE TERMINATED MERELY BECAUSE OF A CHANGE IN THE
PARTICIPATING COMPANY FOR WHICH THE PARTICIPANT RENDERS SUCH SERVICE IN SUCH
INITIAL CAPACITY, 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 BONA FIDE LEAVE OF ABSENCE
APPROVED BY THE COMPANY OF NINETY (90) DAYS OR LESS.  IN THE EVENT OF A LEAVE IN
EXCESS OF NINETY (90) DAYS, THE PARTICIPANT’S SERVICE SHALL BE DEEMED TO
TERMINATE ON THE NINETY-FIRST (91ST) DAY OF THE LEAVE 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, A 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 CORPORATION 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.

 

(LL)           “STOCK” MEANS THE COMMON STOCK OF THE COMPANY, AS ADJUSTED FROM
TIME TO TIME IN ACCORDANCE WITH SECTION 4.2 OF THE PLAN.

 

(MM)       “STOCK AWARD” MEANS AN AWARD OF A STOCK BONUS, A STOCK PURCHASE RIGHT
OR A RESTRICTED STOCK UNIT AWARD.

 

(NN)         “STOCK BONUS” MEANS STOCK GRANTED TO A PARTICIPANT PURSUANT TO
SECTION 8 OF THE PLAN.

 

(OO)         “STOCK PURCHASE RIGHT” MEANS A RIGHT TO PURCHASE STOCK GRANTED TO A
PARTICIPANT PURSUANT TO SECTION 8 OF THE PLAN.

 

(PP)         “SUBSIDIARY CORPORATION” MEANS ANY PRESENT OR FUTURE “SUBSIDIARY
CORPORATION” OF THE COMPANY, AS DEFINED IN SECTION 424(F) OF THE CODE.

 

(QQ)         “TEN PERCENT OWNER” MEANS A PARTICIPANT WHO, AT THE TIME AN OPTION
IS GRANTED TO THE PARTICIPANT, OWNS STOCK POSSESSING MORE THAN TEN PERCENT (10%)
OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK OF A PARTICIPATING
COMPANY (OTHER THAN AN AFFILIATE) WITHIN THE MEANING OF SECTION 422(B)(6) OF THE
CODE.

 

(RR)           “VESTING CONDITIONS” MEAN THOSE CONDITIONS ESTABLISHED IN
ACCORDANCE WITH SECTION 8.5 OF THE PLAN PRIOR TO THE SATISFACTION OF WHICH
SHARES SUBJECT TO A STOCK AWARD REMAIN SUBJECT TO FORFEITURE OR A REPURCHASE
OPTION IN FAVOR OF THE COMPANY.

 

5

--------------------------------------------------------------------------------

 

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 OR OF ANY AWARD
SHALL BE DETERMINED BY THE COMMITTEE, AND SUCH DETERMINATIONS SHALL BE FINAL AND
BINDING UPON ALL PERSONS HAVING AN INTEREST IN THE PLAN OR SUCH AWARD.

 

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.  TO THE EXTENT
CONSISTENT WITH APPLICABLE LAW (INCLUDING BUT NOT LIMITED TO DELAWARE GENERAL
CORPORATION LAW SECTION 157(C)), THE BOARD MAY, IN ITS DISCRETION, DELEGATE TO A
COMMITTEE COMPRISED OF ONE OR MORE OFFICERS (ANY SUCH COMMITTEE, AN “OFFICER
COMMITTEE”) THE AUTHORITY TO DESIGNATE EMPLOYEES (OTHER THAN THEMSELVES) TO
RECEIVE ONE OR MORE OPTIONS OR RIGHTS TO ACQUIRE SHARES OF STOCK AND TO
DETERMINE THE NUMBER OF SHARES OF STOCK SUBJECT TO SUCH OPTIONS AND RIGHTS,
WITHOUT FURTHER APPROVAL OF THE BOARD OR THE COMMITTEE. ANY SUCH GRANTS WILL BE
SUBJECT TO THE TERMS OF THE BOARD RESOLUTIONS PROVIDING FOR SUCH DELEGATION OF
AUTHORITY.

 

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           COMMITTEE COMPLYING WITH SECTION 162(M).  IF THE COMPANY IS A
“PUBLICLY HELD CORPORATION” WITHIN THE MEANING OF SECTION 162(M), THE BOARD MAY
ESTABLISH A COMMITTEE OF “OUTSIDE DIRECTORS” WITHIN THE MEANING OF
SECTION 162(M) TO APPROVE THE GRANT OF ANY AWARD WHICH MIGHT REASONABLY BE
ANTICIPATED TO RESULT IN THE PAYMENT OF EMPLOYEE REMUNERATION THAT WOULD
OTHERWISE EXCEED THE LIMIT ON EMPLOYEE REMUNERATION DEDUCTIBLE FOR INCOME TAX
PURPOSES PURSUANT TO SECTION 162(M).

 

3.5           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 OR UNITS TO BE SUBJECT
TO EACH AWARD;

 

(B)           TO DETERMINE THE TYPE OF AWARD GRANTED AND TO DESIGNATE OPTIONS AS
INCENTIVE STOCK OPTIONS OR NONSTATUTORY STOCK OPTIONS;

 

6

--------------------------------------------------------------------------------

 

(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 PURCHASED 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 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 OF SARS, RESTRICTED STOCK UNITS,
PERFORMANCE SHARES OR PERFORMANCE UNITS 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;

 

(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 OF OR TO ACCOMMODATE THE LAWS,
REGULATIONS, TAX OR ACCOUNTING EFFECTIVENESS, 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.

 

3.6           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 PROGRAM PROVIDING FOR EITHER (A) THE CANCELLATION OF OUTSTANDING
OPTIONS OR SARS AND THE GRANT IN SUBSTITUTION THEREFOR OF NEW AWARDS HAVING A
LOWER EXERCISE OR PURCHASE PRICE OR (B) THE AMENDMENT OF OUTSTANDING OPTIONS OR
SARS TO REDUCE THE EXERCISE PRICE THEREOF.  THIS PARAGRAPH SHALL NOT BE
CONSTRUED TO APPLY TO

 

7

--------------------------------------------------------------------------------

 

“ISSUING OR ASSUMING A STOCK OPTION IN A TRANSACTION TO WHICH SECTION
424(A) APPLIES,” WITHIN THE MEANING OF SECTION 424 OF THE CODE.

 

3.7           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.

 

4.             SHARES SUBJECT TO PLAN.

 

4.1           MAXIMUM NUMBER OF SHARES ISSUABLE.  SUBJECT TO ADJUSTMENT AS
PROVIDED IN SECTION 4.2, THE MAXIMUM AGGREGATE NUMBER OF SHARES OF STOCK THAT
MAY BE ISSUED UNDER THE PLAN SHALL BE TWO HUNDRED AND SEVENTEEN MILLION TWO
HUNDRED AND FIFTY-NINE THOUSAND SIX HUNDRED AND TWENTY (217,259,620).  THE
NUMBER OF SHARES OF STOCK AVAILABLE FOR ISSUANCE UNDER THE PLAN SHALL BE REDUCED
(A) BY ONE SHARE FOR EACH SHARE ISSUED PURSUANT TO OPTIONS OR RIGHTS GRANTED
PURSUANT TO THE PREDECESSOR PLANS OR PURSUANT TO OPTIONS OR STOCK APPRECIATION
RIGHTS, AND (B) BY ONE AND SEVENTY SEVEN-HUNDREDTHS (1.77) SHARES FOR EACH SHARE
ISSUED PURSUANT TO AWARDS OTHER THAN THOSE SET FORTH IN THE PRECEDING CLAUSE
(A); PROVIDED, HOWEVER, THAT (A) FOR AWARDS GRANTED PRIOR TO APRIL 5, 2007, THE
REDUCTION WAS ONE SHARE OF STOCK FOR EACH SHARE OF STOCK ISSUED PURSUANT TO ANY
AWARDS, (B) FOR AWARDS GRANTED ON APRIL 5, 2007 THROUGH AND INCLUDING APRIL 9,
2008, THE REDUCTION WAS TWO AND ONE-TENTH (2.1) SHARES FOR EACH SHARE ISSUED
PURSUANT TO ANY AWARDS OTHER THAN OPTIONS OR RIGHTS GRANTED PURSUANT TO THE
PREDECESSOR PLANS OR PURSUANT TO OPTIONS OR STOCK APPRECIATION RIGHTS, AND
(C) FOR AWARDS GRANTED ON APRIL 10, 2008 THROUGH AND INCLUDING MARCH 31, 2009,
THE REDUCTION WAS TWO AND FOUR-TENTHS (2.4) SHARES FOR EACH SHARE ISSUED
PURSUANT TO ANY AWARDS OTHER THAN OPTIONS OR RIGHTS GRANTED PURSUANT TO THE
PREDECESSOR PLANS OR PURSUANT TO OPTIONS OR STOCK APPRECIATION RIGHTS.  SUCH
SHARES SHALL CONSIST OF AUTHORIZED BUT UNISSUED OR REACQUIRED SHARES OF STOCK OR
ANY COMBINATION THEREOF.  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 AT THE PARTICIPANT’S
PURCHASE PRICE TO EFFECT A FORFEITURE OF UNVESTED SHARES UPON TERMINATION OF
SERVICE, THE SHARES OF STOCK ALLOCABLE TO THE TERMINATED PORTION OF SUCH AWARD
OR SUCH FORFEITED OR REPURCHASED SHARES OF STOCK SHALL BE ADDED BACK TO THE PLAN
SHARE RESERVE IN AN AMOUNT CORRESPONDING TO THE REDUCTION IN SUCH SHARE RESERVE
PREVIOUSLY MADE IN ACCORDANCE WITH THE RULES DESCRIBED ABOVE IN THIS SECTION 4.1
AND AGAIN BE AVAILABLE FOR ISSUANCE UNDER THE PLAN.  SHARES OF STOCK SHALL NOT
BE

 

8

--------------------------------------------------------------------------------

 

DEEMED TO HAVE BEEN ISSUED PURSUANT TO THE PLAN WITH RESPECT TO ANY PORTION OF
AN AWARD (OTHER THAN A SAR THAT MAY BE SETTLED IN SHARES OF STOCK AND/OR CASH)
THAT IS SETTLED IN CASH. SHARES WITHHELD IN SATISFACTION OF TAX WITHHOLDING
OBLIGATIONS PURSUANT TO SECTION 13.2 SHALL NOT AGAIN BECOME AVAILABLE FOR
ISSUANCE UNDER THE PLAN.  UPON EXERCISE OF A SAR, WHETHER IN CASH OR SHARES OF
STOCK, 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 “NET EXERCISE” (AS DESCRIBED IN
SECTION 6.3(A)(IV)) OR TENDER TO THE COMPANY, OR ATTESTATION TO THE OWNERSHIP,
OF SHARES OF STOCK OWNED BY THE PARTICIPANT, 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.

 

4.2           ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.  IN THE EVENT OF ANY
CHANGE IN THE STOCK 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 ADJUSTMENTS SHALL BE MADE IN THE NUMBER AND CLASS OF SHARES
SUBJECT TO THE PLAN, IN THE ISO SHARE LIMIT SET FORTH IN SECTION 5.3(B), THE
AWARD LIMITS SET FORTH IN SECTION 5.4 AND TO ANY OUTSTANDING AWARDS, AND IN THE
EXERCISE OR PURCHASE PRICE PER SHARE UNDER ANY OUTSTANDING AWARD. 
NOTWITHSTANDING THE FOREGOING, ANY FRACTIONAL SHARE RESULTING FROM AN ADJUSTMENT
PURSUANT TO THIS SECTION 4.2 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 ADJUSTMENTS DETERMINED BY THE COMMITTEE PURSUANT TO THIS SECTION 4.2
SHALL BE FINAL, BINDING AND CONCLUSIVE.

 

5.             ELIGIBILITY AND AWARD LIMITATIONS.

 

5.1           PERSONS ELIGIBLE FOR AWARDS.  AWARDS MAY BE GRANTED ONLY TO
EMPLOYEES, DIRECTORS AND CONSULTANTS.  NO AWARD SHALL BE GRANTED PRIOR TO THE
DATE ON WHICH SUCH PERSON COMMENCES SERVICE.

 

5.2           PARTICIPATION.  EXCEPT AS OTHERWISE PROVIDED IN SECTION 3.2 ABOVE,
AWARDS ARE GRANTED SOLELY AT THE DISCRETION OF THE COMMITTEE.  ELIGIBLE PERSONS
MAY BE GRANTED MORE THAN ONE (1) 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           INCENTIVE STOCK OPTION LIMITATIONS.

 

(A)           PERSONS ELIGIBLE.  AN INCENTIVE STOCK OPTION MAY BE GRANTED ONLY
TO A PERSON WHO, ON THE EFFECTIVE DATE OF GRANT, IS AN EMPLOYEE OF THE COMPANY,
A PARENT CORPORATION OR A SUBSIDIARY CORPORATION (EACH BEING AN “ISO-QUALIFYING
CORPORATION”).  ANY PERSON WHO IS NOT AN EMPLOYEE OF AN ISO-QUALIFYING
CORPORATION ON THE EFFECTIVE DATE OF THE GRANT OF AN OPTION TO SUCH PERSON, BUT
WHO IS OTHERWISE AN EMPLOYEE OR A DIRECTOR OF, OR

 

9

--------------------------------------------------------------------------------

 

CONSULTANT TO, THE COMPANY OR ANY OF ITS AFFILIATES, MAY BE GRANTED ONLY A
NONSTATUTORY STOCK OPTION.

 

(B)           ISO SHARE LIMIT.  SUBJECT TO ADJUSTMENT AS PROVIDED IN
SECTION 4.2, IN NO EVENT SHALL MORE THAN 188,259,620 SHARES OF STOCK BE
AVAILABLE FOR ISSUANCE PURSUANT TO THE EXERCISE OF INCENTIVE STOCK OPTIONS
GRANTED UNDER THE PLAN OR THE PREDECESSOR PLANS (THE “ISO SHARE LIMIT”).

 

(C)           FAIR MARKET VALUE LIMITATION.  TO THE EXTENT THAT OPTIONS
DESIGNATED AS INCENTIVE STOCK OPTIONS (GRANTED UNDER ALL STOCK OPTION PLANS OF
THE PARTICIPATING COMPANY GROUP, INCLUDING THE PLAN) BECOME EXERCISABLE BY A
PARTICIPANT FOR THE FIRST TIME DURING ANY CALENDAR YEAR FOR STOCK HAVING A FAIR
MARKET VALUE GREATER THAN ONE HUNDRED THOUSAND DOLLARS ($100,000), THE PORTION
OF SUCH OPTIONS WHICH EXCEEDS SUCH AMOUNT SHALL BE TREATED AS NONSTATUTORY STOCK
OPTIONS.  FOR PURPOSES OF THIS SECTION, OPTIONS DESIGNATED AS INCENTIVE STOCK
OPTIONS SHALL BE TAKEN INTO ACCOUNT IN THE ORDER IN WHICH THEY WERE GRANTED, AND
THE FAIR MARKET VALUE OF STOCK SHALL BE DETERMINED AS OF THE TIME THE OPTION
WITH RESPECT TO SUCH STOCK IS GRANTED.  IF THE CODE IS AMENDED TO PROVIDE FOR A
DIFFERENT LIMITATION FROM THAT SET FORTH IN THIS SECTION, SUCH DIFFERENT
LIMITATION SHALL BE DEEMED INCORPORATED HEREIN EFFECTIVE AS OF THE DATE AND WITH
RESPECT TO SUCH OPTIONS AS REQUIRED OR PERMITTED BY SUCH AMENDMENT TO THE CODE. 
IF AN OPTION IS TREATED AS AN INCENTIVE STOCK OPTION IN PART AND AS A
NONSTATUTORY STOCK OPTION IN PART BY REASON OF THE LIMITATION SET FORTH IN THIS
SECTION, THE PARTICIPANT MAY DESIGNATE WHICH PORTION OF SUCH OPTION THE
PARTICIPANT IS EXERCISING.  IN THE ABSENCE OF SUCH DESIGNATION, THE PARTICIPANT
SHALL BE DEEMED TO HAVE EXERCISED THE INCENTIVE STOCK OPTION PORTION OF THE
OPTION FIRST.  UPON EXERCISE, EACH PORTION SHALL BE SEPARATELY IDENTIFIED.

 

5.4           AWARD LIMITS.

 

(A)           SECTION 162(M) AWARD LIMITS.  THE FOLLOWING LIMITS SHALL APPLY TO
THE GRANT OF ANY AWARD IF, AT THE TIME OF GRANT, THE COMPANY IS A “PUBLICLY HELD
CORPORATION” WITHIN THE MEANING OF SECTION 162(M).

 

(I)            OPTIONS AND SARS.  SUBJECT TO ADJUSTMENT AS PROVIDED IN
SECTION 4.2, NO EMPLOYEE SHALL BE GRANTED WITHIN ANY FISCAL YEAR OF THE COMPANY
ONE OR MORE OPTIONS OR FREESTANDING SARS WHICH IN THE AGGREGATE ARE FOR MORE
THAN FOUR MILLION (4,000,000) SHARES OF STOCK.  AN OPTION WHICH IS CANCELED (OR
A FREESTANDING SAR AS TO WHICH THE EXERCISE PRICE IS REDUCED TO REFLECT A
REDUCTION IN THE FAIR MARKET VALUE OF THE STOCK) IN THE SAME FISCAL YEAR OF THE
COMPANY IN WHICH IT WAS GRANTED SHALL CONTINUE TO BE COUNTED AGAINST SUCH LIMIT
FOR SUCH FISCAL YEAR.

 

(II)           STOCK AWARDS. SUBJECT TO ADJUSTMENT AS PROVIDED IN SECTION 4.2,
NO EMPLOYEE SHALL BE GRANTED WITHIN ANY FISCAL YEAR OF THE COMPANY ONE OR MORE
STOCK AWARDS, SUBJECT TO VESTING CONDITIONS BASED ON THE ATTAINMENT OF
PERFORMANCE GOALS, FOR MORE THAN TWO HUNDRED THOUSAND (200,000) SHARES OF STOCK.

 

(III)          PERFORMANCE AWARDS.  SUBJECT TO ADJUSTMENT AS PROVIDED IN
SECTION 4.2, NO EMPLOYEE SHALL BE GRANTED (A) PERFORMANCE SHARES WHICH COULD
RESULT IN SUCH EMPLOYEE RECEIVING MORE THAN TWO HUNDRED THOUSAND (200,000)
SHARES OF STOCK FOR EACH FULL

 

10

--------------------------------------------------------------------------------

 

FISCAL YEAR OF THE COMPANY CONTAINED IN THE PERFORMANCE PERIOD FOR SUCH AWARD,
OR (B) PERFORMANCE UNITS WHICH COULD RESULT IN SUCH EMPLOYEE RECEIVING MORE THAN
TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000) FOR EACH FULL FISCAL YEAR
OF THE COMPANY CONTAINED IN THE PERFORMANCE PERIOD FOR SUCH AWARD.  NO
PARTICIPANT MAY BE GRANTED MORE THAN ONE PERFORMANCE AWARD FOR THE SAME
PERFORMANCE PERIOD.

 

6.             TERMS AND CONDITIONS OF 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.  No Option or purported Option shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Award Agreement. 
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 (A) 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 AND (B) NO INCENTIVE STOCK
OPTION GRANTED TO A TEN PERCENT OWNER SHALL HAVE AN EXERCISE PRICE PER SHARE
LESS THAN ONE HUNDRED TEN PERCENT (110%) OF THE FAIR MARKET VALUE OF A SHARE OF
STOCK ON THE EFFECTIVE DATE OF GRANT OF THE OPTION.  NOTWITHSTANDING THE
FOREGOING, AN OPTION (WHETHER AN INCENTIVE STOCK OPTION OR A NONSTATUTORY STOCK
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
SECTIONS 409A AND 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 (A) NO OPTION SHALL BE EXERCISABLE AFTER THE EXPIRATION OF  SEVEN
(7) YEARS AFTER THE EFFECTIVE DATE OF GRANT OF SUCH OPTION, AND (B) NO INCENTIVE
STOCK OPTION GRANTED TO A TEN PERCENT OWNER SHALL BE EXERCISABLE AFTER THE
EXPIRATION OF FIVE (5) 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, ANY OPTION GRANTED HEREUNDER TO AN EMPLOYEE, CONSULTANT OR
DIRECTOR SHALL TERMINATE SEVEN (7) 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, 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

 

11

--------------------------------------------------------------------------------

 

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 A “NET EXERCISE” ARRANGEMENT PURSUANT TO WHICH THE
COMPANY WILL REDUCE THE NUMBER OF SHARES OF STOCK ISSUED UPON EXERCISE BY THE
LARGEST WHOLE NUMBER OF SHARES WITH A FAIR MARKET VALUE THAT DOES NOT EXCEED THE
AGGREGATE EXERCISE PRICE; PROVIDED, HOWEVER, THAT THE COMPANY SHALL ACCEPT A
CASH OR OTHER PAYMENT FROM THE PARTICIPANT TO THE EXTENT OF ANY REMAINING
BALANCE OF THE AGGREGATE EXERCISE PRICE NOT SATISFIED BY SUCH REDUCTION IN THE
NUMBER OF WHOLE SHARES TO BE ISSUED; PROVIDED FURTHER, HOWEVER, THAT SHARES OF
STOCK WILL NO LONGER BE OUTSTANDING UNDER AN OPTION AND WILL NOT BE EXERCISABLE
THEREAFTER TO THE EXTENT THAT (A) SHARES ARE USED TO PAY THE EXERCISE PRICE
PURSUANT TO THE “NET EXERCISE,” (B) SHARES ARE DELIVERED TO THE PARTICIPANT AS A
RESULT OF SUCH EXERCISE, AND (C) SHARES ARE WITHHELD TO SATISFY TAX WITHHOLDING
OBLIGATIONS; OR (V) BY SUCH OTHER CONSIDERATION AS MAY BE APPROVED BY THE
COMMITTEE FROM TIME TO TIME TO THE EXTENT PERMITTED BY APPLICABLE LAW, OR (V) 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 LONGER OR SHORTER PERIOD AS
NECESSARY TO AVOID A CHARGE TO EARNINGS FOR FINANCIAL ACCOUNTING PURPOSES) AND
NOT USED FOR ANOTHER OPTION EXERCISE BY ATTESTATION DURING ANY SUCH PERIOD OR
WERE NOT ACQUIRED, DIRECTLY OR INDIRECTLY, FROM THE COMPANY.

 

(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.

 

6.4           EFFECT OF TERMINATION OF SERVICE.  AN OPTION SHALL BE EXERCISABLE
AFTER A PARTICIPANT’S TERMINATION OF SERVICE TO SUCH EXTENT AND DURING SUCH
PERIOD AS DETERMINED BY THE COMMITTEE, IN ITS DISCRETION, AND SET FORTH IN THE
AWARD AGREEMENT EVIDENCING SUCH OPTION.

 

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.  NO OPTION SHALL BE ASSIGNABLE
OR TRANSFERABLE BY THE PARTICIPANT, EXCEPT 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, AN OPTION SHALL BE ASSIGNABLE OR TRANSFERABLE SUBJECT TO THE
APPLICABLE LIMITATIONS, IF ANY, DESCRIBED IN THE GENERAL INSTRUCTIONS TO
FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT.

 

12

--------------------------------------------------------------------------------

 

7.             TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.

 

SARs 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.  No SAR or purported SAR shall be a valid and binding obligation
of the Company unless evidenced by a fully executed Award Agreement.  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 BE GRANTED
EITHER CONCURRENTLY WITH THE GRANT OF THE RELATED OPTION OR AT ANY TIME
THEREAFTER PRIOR TO THE COMPLETE EXERCISE, TERMINATION, EXPIRATION OR
CANCELLATION OF SUCH 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.

 

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
EIGHT (8) 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

 

13

--------------------------------------------------------------------------------

 

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 IN CASH, SHARES OF STOCK, OR ANY COMBINATION THEREOF
AS DETERMINED BY THE COMMITTEE.  UNLESS OTHERWISE PROVIDED IN THE AWARD
AGREEMENT EVIDENCING SUCH SAR, PAYMENT SHALL BE MADE IN A LUMP SUM AS SOON AS
PRACTICABLE FOLLOWING THE DATE OF EXERCISE OF THE SAR.  THE AWARD AGREEMENT
EVIDENCING ANY SAR MAY PROVIDE FOR DEFERRED PAYMENT IN A LUMP SUM OR IN
INSTALLMENTS.  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.

 

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.  AN SAR SHALL BE EXERCISABLE
AFTER A PARTICIPANT’S TERMINATION OF SERVICE TO SUCH EXTENT AND DURING SUCH
PERIOD AS DETERMINED BY THE COMMITTEE, IN ITS DISCRETION, AND SET FORTH IN THE
AWARD AGREEMENT EVIDENCING SUCH SAR.

 

7.7           NONTRANSFERABILITY OF SARS.  SARS MAY NOT BE ASSIGNED OR
TRANSFERRED IN ANY MANNER EXCEPT BY WILL OR THE LAWS OF DESCENT AND
DISTRIBUTION, AND, DURING THE LIFETIME OF THE PARTICIPANT, SHALL BE EXERCISABLE
ONLY BY THE PARTICIPANT OR THE PARTICIPANT’S GUARDIAN OR LEGAL REPRESENTATIVE.

 

8.             TERMS AND CONDITIONS OF STOCK AWARDS.

 

Stock Awards shall be evidenced by Award Agreements specifying whether the Award
is a Stock Bonus, a Stock Purchase Right or a Restricted Stock Unit, and the
number of shares of Stock subject to the Award, in such form as the Committee
shall from time to time establish.  No Stock Award or purported Stock Award
shall be a valid and binding obligation of the Company unless evidenced by a
fully executed Award Agreement.  Award Agreements evidencing 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 STOCK AWARDS AUTHORIZED.  STOCK AWARDS MAY BE IN THE FORM
OF A STOCK BONUS, A STOCK PURCHASE RIGHT OR A RESTRICTED STOCK UNIT.  STOCK
AWARDS MAY BE GRANTED UPON SUCH CONDITIONS AS THE COMMITTEE SHALL DETERMINE,
INCLUDING, WITHOUT LIMITATION, SERVICE TO A PARTICIPATING COMPANY OR UPON THE
ATTAINMENT OF ONE OR MORE PERFORMANCE GOALS DESCRIBED IN SECTION 9.4.  IF EITHER
THE GRANT OF A STOCK AWARD OR THE LAPSING OF THE RESTRICTION PERIOD 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 9.3 THROUGH 9.5(A).

 

8.2           PURCHASE PRICE.  THE PURCHASE PRICE FOR SHARES OF STOCK ISSUABLE
UNDER EACH STOCK PURCHASE RIGHT SHALL BE ESTABLISHED BY THE COMMITTEE IN ITS
DISCRETION.  NO MONETARY

 

14

--------------------------------------------------------------------------------

 

PAYMENT (OTHER THAN APPLICABLE TAX WITHHOLDING) SHALL BE REQUIRED AS A CONDITION
OF RECEIVING SHARES OF STOCK PURSUANT TO A STOCK BONUS, THE CONSIDERATION FOR
WHICH SHALL BE SERVICES ACTUALLY RENDERED TO A PARTICIPATING COMPANY OR FOR ITS
BENEFIT.  NOTWITHSTANDING THE FOREGOING, 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 SUCH STOCK AWARD.

 

8.3           PURCHASE PERIOD.  A 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 STOCK PURCHASE
RIGHT; PROVIDED, HOWEVER, THAT NO STOCK PURCHASE RIGHT GRANTED TO AN EMPLOYEE, A
CONSULTANT OR A DIRECTOR MAY BECOME EXERCISABLE PRIOR TO THE DATE ON WHICH SUCH
PERSON COMMENCES SERVICE.

 

8.4           PAYMENT OF PURCHASE PRICE.  STOCK BONUSES SHALL BE ISSUED IN
CONSIDERATION FOR PAST SERVICES ACTUALLY RENDERED TO A PARTICIPATING COMPANY OR
FOR ITS BENEFIT.  AT THE TIME OF GRANT OF RESTRICTED STOCK UNITS, THE COMMITTEE
WILL DETERMINE THE CONSIDERATION, IF ANY, TO BE PAID BY THE PARTICIPANT UPON
DELIVERY OF EACH SHARE OF STOCK ACQUIRED PURSUANT TO RESTRICTED STOCK UNITS. 
EXCEPT AS OTHERWISE PROVIDED BELOW, PAYMENT OF THE PURCHASE PRICE FOR THE NUMBER
OF SHARES OF STOCK BEING PURCHASED PURSUANT TO ANY STOCK PURCHASE RIGHT OR
DELIVERED PURSUANT TO A RESTRICTED STOCK UNIT SHALL BE MADE (I) IN CASH, BY
CHECK, OR CASH EQUIVALENT, (II) BY SUCH OTHER CONSIDERATION AS MAY BE APPROVED
BY THE COMMITTEE FROM TIME TO TIME TO THE EXTENT PERMITTED BY APPLICABLE LAW, OR
(III) BY ANY COMBINATION THEREOF, IN EACH CASE CONSISTENT WITH ANY REQUIREMENTS
UNDER APPLICABLE LAW REGARDING PAYMENT IN RESPECT OF THE “PAR VALUE” OF THE
STOCK.  THE COMMITTEE MAY AT ANY TIME OR FROM TIME TO TIME GRANT STOCK PURCHASE
RIGHTS OR RESTRICTED STOCK UNITS WHICH DO NOT PERMIT ALL OF THE FOREGOING FORMS
OF CONSIDERATION TO BE USED IN PAYMENT OF THE PURCHASE PRICE OR WHICH OTHERWISE
RESTRICT ONE OR MORE FORMS OF CONSIDERATION.

 

8.5           VESTING; RESTRICTIONS ON TRANSFER; DEFERRAL.  SHARES ISSUED
PURSUANT TO ANY STOCK AWARD MAY OR MAY NOT BE MADE SUBJECT TO VESTING
CONDITIONED UPON THE SATISFACTION OF SUCH SERVICE REQUIREMENTS, CONDITIONS,
RESTRICTIONS OR PERFORMANCE CRITERIA, INCLUDING, WITHOUT LIMITATION, PERFORMANCE
GOALS AS DESCRIBED IN SECTION 9.4 (THE “VESTING CONDITIONS”), AS SHALL BE
ESTABLISHED BY THE COMMITTEE AND SET FORTH IN THE AWARD AGREEMENT EVIDENCING
SUCH AWARD.  DURING ANY PERIOD (THE “RESTRICTION PERIOD”) IN WHICH SHARES
ACQUIRED PURSUANT TO A 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 A CHANGE OF CONTROL AS PROVIDED IN
SECTION 11, OR AS PROVIDED IN SECTION 8.8.  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. RESTRICTED STOCK UNITS MAY BE SUBJECT
TO SUCH CONDITIONS THAT MAY DELAY THE DELIVERY OF THE SHARES OF STOCK (OR THEIR
CASH EQUIVALENT) SUBJECT TO RESTRICTED STOCK UNITS AFTER THE VESTING OF SUCH
AWARD.

 

8.6           VOTING RIGHTS; DIVIDENDS AND DISTRIBUTIONS.  EXCEPT AS PROVIDED IN
THIS SECTION, SECTION 8.5 AND ANY AWARD AGREEMENT, DURING THE RESTRICTION PERIOD
APPLICABLE TO SHARES SUBJECT TO A STOCK BONUS OR RESTRICTED STOCK PURCHASE
RIGHT, THE PARTICIPANT SHALL HAVE ALL

 

15

--------------------------------------------------------------------------------

 

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.  WITH RESPECT TO RESTRICTED
STOCK UNITS, THE COMMITTEE MAY, IN ITS SOLE DISCRETION, PROVIDE THAT DIVIDEND
EQUIVALENTS SHALL NOT BE PAID OR PROVIDE EITHER FOR THE CURRENT PAYMENT OF
DIVIDEND EQUIVALENTS OR FOR THE ACCUMULATION AND PAYMENT OF DIVIDEND EQUIVALENTS
TO THE EXTENT THAT THE RESTRICTED STOCK UNITS BECOME NONFORFEITABLE.  IN THE
EVENT OF A DIVIDEND OR DISTRIBUTION PAID IN SHARES OF STOCK OR ANY OTHER
ADJUSTMENT MADE UPON A CHANGE IN THE CAPITAL STRUCTURE OF THE COMPANY AS
DESCRIBED IN SECTION 4.2, THEN 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 STOCK AWARD SHALL BE
IMMEDIATELY SUBJECT TO THE SAME VESTING CONDITIONS AND, IF APPLICABLE, DEFERRAL
ELECTIONS AS THE SHARES SUBJECT TO THE 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 GRANT OF A STOCK AWARD AND SET FORTH IN THE AWARD
AGREEMENT, IF A PARTICIPANT’S SERVICE TERMINATES FOR ANY REASON, WHETHER
VOLUNTARY OR INVOLUNTARY (INCLUDING THE PARTICIPANT’S DEATH OR DISABILITY), THEN
(I) 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 STOCK
PURCHASE RIGHT WHICH REMAIN SUBJECT TO VESTING CONDITIONS AS OF THE DATE OF THE
PARTICIPANT’S TERMINATION OF SERVICE, (II) THE PARTICIPANT SHALL FORFEIT TO THE
COMPANY ANY SHARES ACQUIRED BY THE PARTICIPANT PURSUANT TO A STOCK BONUS WHICH
REMAIN SUBJECT TO VESTING CONDITIONS AS OF THE DATE OF THE PARTICIPANT’S
TERMINATION OF SERVICE AND (III) THE PARTICIPANT SHALL FORFEIT ALL RIGHTS IN ANY
PORTION OF A RESTRICTED STOCK UNIT AWARD THAT HAS NOT VESTED 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.

 

8.8           NONTRANSFERABILITY OF STOCK AWARD RIGHTS.  RIGHTS TO ACQUIRE
SHARES OF STOCK PURSUANT TO A STOCK AWARD MAY 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 BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION, AND, DURING
THE LIFETIME OF THE PARTICIPANT, SHALL BE EXERCISABLE ONLY BY THE PARTICIPANT OR
THE PARTICIPANT’S GUARDIAN OR LEGAL REPRESENTATIVE.

 

9.             TERMS AND CONDITIONS OF PERFORMANCE AWARDS.

 

Performance Awards shall be evidenced by Award Agreements in such form as the
Committee shall from time to time establish.  No Performance Award or purported
Performance Award shall be a valid and binding obligation of the Company unless
evidenced by a fully executed Award Agreement.  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:

 

9.1           TYPES OF PERFORMANCE AWARDS AUTHORIZED.  PERFORMANCE AWARDS MAY BE
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) 

 

16

--------------------------------------------------------------------------------

 

AND PERFORMANCE PERIOD APPLICABLE TO THE AWARD, AND THE OTHER TERMS, CONDITIONS
AND RESTRICTIONS OF THE AWARD.

 

9.2           INITIAL VALUE OF PERFORMANCE SHARES AND PERFORMANCE UNITS.  UNLESS
OTHERWISE PROVIDED BY THE COMMITTEE (OR, AS APPLICABLE FOR AWARDS NOT GRANTED IN
A MANNER INTENDING TO COMPLY WITH SECTION 162(M), A DULY AUTHORIZED OFFICER
COMMITTEE IN ACCORDANCE WITH APPLICABLE LAW) IN GRANTING A PERFORMANCE AWARD,
EACH PERFORMANCE SHARE SHALL HAVE AN INITIAL VALUE EQUAL TO THE FAIR MARKET
VALUE OF ONE (1) SHARE OF STOCK, SUBJECT TO ADJUSTMENT AS PROVIDED IN
SECTION 4.2, ON THE EFFECTIVE DATE OF GRANT OF THE PERFORMANCE SHARE, AND EACH
PERFORMANCE UNIT SHALL HAVE AN INITIAL VALUE OF ONE HUNDRED DOLLARS ($100).  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.

 

9.3           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, 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. 
UNLESS OTHERWISE PERMITTED IN COMPLIANCE WITH THE REQUIREMENTS UNDER
SECTION 162(M) WITH RESPECT TO “PERFORMANCE-BASED COMPENSATION,” 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 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.

 

9.4           MEASUREMENT OF PERFORMANCE GOALS.  PERFORMANCE GOALS SHALL BE
ESTABLISHED BY THE COMMITTEE ON THE BASIS OF TARGETS TO BE ATTAINED WITH RESPECT
TO ONE OR MORE MEASURES OF BUSINESS OR FINANCIAL PERFORMANCE (EACH, A
“PERFORMANCE MEASURE”), SUBJECT TO THE FOLLOWING:

 

(A)           PERMITTED PERFORMANCE MEASURES.  PERFORMANCE MEASURES MAY BE ONE
OR MORE OF THE FOLLOWING, AS DETERMINED BY THE COMMITTEE:

 

(I)            GROWTH IN REVENUE;

 

(II)           GROWTH IN THE MARKET PRICE OF THE STOCK;

 

(III)          OPERATING MARGIN;

 

(IV)          GROSS MARGIN;

 

17

--------------------------------------------------------------------------------

 

(V)           OPERATING INCOME;

 

(VI)          PRE-TAX PROFIT;

 

(VII)         EARNINGS BEFORE INTEREST, TAXES AND DEPRECIATION;

 

(VIII)        EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION;

 

(IX)           NET INCOME;

 

(X)            TOTAL RETURN ON SHARES OF STOCK RELATIVE TO THE INCREASE IN AN
APPROPRIATE INDEX AS MAY BE SELECTED BY THE COMMITTEE;

 

(XI)           EARNINGS PER SHARE;

 

(XII)          RETURN ON STOCKHOLDER EQUITY;

 

(XIII)         RETURN ON NET ASSETS;

 

(XIV)        EXPENSES;

 

(XV)         RETURN ON CAPITAL;

 

(XVI)        ECONOMIC VALUE ADDED;

 

(XVII)       MARKET SHARE;

 

(XVIII)      OPERATING CASH FLOW;

 

(XIX)         CASH FLOW, AS INDICATED BY BOOK EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION;

 

(XX)          CASH FLOW PER SHARE;

 

(XXI)         CUSTOMER SATISFACTION;

 

(XXII)        IMPLEMENTATION OR COMPLETION OF PROJECTS OR PROCESSES;

 

(XXIII)       IMPROVEMENT IN OR ATTAINMENT OF WORKING CAPITAL LEVELS;

 

(XXIV)       STOCKHOLDERS’ EQUITY; AND

 

(XXV)        OTHER MEASURES OF PERFORMANCE SELECTED BY THE COMMITTEE.

 

(B)           STRUCTURE OF PERFORMANCE MEASURES AND PERFORMANCE GOALS. 
PERFORMANCE MEASURES AND PERFORMANCE GOALS MAY DIFFER FROM PARTICIPANT TO
PARTICIPANT AND FROM PERFORMANCE AWARD TO PERFORMANCE AWARD.  PERFORMANCE GOALS
MAY, AS THE COMMITTEE SPECIFIES, EITHER INCLUDE OR EXCLUDE THE EFFECT OF PAYMENT
OF PERFORMANCE AWARDS UNDER THIS PLAN

 

18

--------------------------------------------------------------------------------

 

AND ANY OTHER PERFORMANCE PLANS OF THE COMPANY.  IN ESTABLISHING A PERFORMANCE
GOAL, THE COMMITTEE MAY PROVIDE THAT PERFORMANCE SHALL BE APPROPRIATELY ADJUSTED
AS FOLLOWS:

 

(I)            TO EXCLUDE RESTRUCTURING AND/OR OTHER NONRECURRING CHARGES;

 

(II)           TO EXCLUDE EXCHANGE RATE EFFECTS, AS APPLICABLE, FOR NON-U.S.
DOLLAR DENOMINATED NET SALES AND OPERATING EARNINGS;

 

(III)          TO EXCLUDE THE EFFECTS OF CHANGES TO GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES REQUIRED BY THE FINANCIAL ACCOUNTING STANDARDS BOARD;

 

(IV)          TO EXCLUDE THE EFFECTS OF ANY STATUTORY ADJUSTMENTS TO CORPORATE
TAX RATES;

 

(V)           TO EXCLUDE THE EFFECTS OF ANY “EXTRAORDINARY ITEMS” AS DETERMINED
UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES;

 

(VI)          TO EXCLUDE ANY OTHER UNUSUAL, NON-RECURRING GAIN OR LOSS OR OTHER
EXTRAORDINARY ITEM;

 

(VII)         TO RESPOND TO, OR IN ANTICIPATION OF, ANY UNUSUAL OR EXTRAORDINARY
CORPORATE ITEM, TRANSACTION, EVENT OR DEVELOPMENT;

 

(VIII)        TO RESPOND TO, OR IN ANTICIPATION OF, CHANGES IN APPLICABLE LAWS,
REGULATIONS, ACCOUNTING PRINCIPLES, OR BUSINESS CONDITIONS;

 

(IX)           TO EXCLUDE THE DILUTIVE EFFECTS OF ACQUISITIONS OR JOINT
VENTURES;

 

(X)            TO ASSUME THAT ANY BUSINESS DIVESTED BY THE COMPANY ACHIEVED
PERFORMANCE OBJECTIVES AT TARGETED LEVELS DURING THE BALANCE OF A PERFORMANCE
PERIOD FOLLOWING SUCH DIVESTITURE;

 

(XI)           TO EXCLUDE THE EFFECT OF ANY CHANGE IN THE OUTSTANDING SHARES OF
STOCK BY REASON OF ANY STOCK DIVIDEND OR SPLIT, STOCK REPURCHASE,
REORGANIZATION, RECAPITALIZATION, MERGER, CONSOLIDATION, SPIN-OFF, COMBINATION
OR EXCHANGE OF SHARES OR OTHER SIMILAR CORPORATE CHANGE, OR ANY DISTRIBUTIONS TO
COMMON SHAREHOLDERS OTHER THAN REGULAR CASH DIVIDENDS;

 

(XII)          TO REFLECT A CORPORATE TRANSACTION, SUCH AS A MERGER,
CONSOLIDATION, SEPARATION (INCLUDING A SPINOFF OR OTHER DISTRIBUTION OF STOCK OR
PROPERTY BY A CORPORATION), OR REORGANIZATION (WHETHER OR NOT SUCH
REORGANIZATION COMES WITHIN THE DEFINITION OF SUCH TERM IN SECTION 368 OF THE
CODE); AND

 

(XIII)         TO REFLECT ANY PARTIAL OR COMPLETE CORPORATE LIQUIDATION.

 

(C)           PERFORMANCE GOALS.  PERFORMANCE GOALS MAY INCLUDE A MINIMUM,
MAXIMUM, TARGET LEVEL AND INTERMEDIATE LEVELS OF PERFORMANCE, WITH THE FINAL
VALUE OF A

 

19

--------------------------------------------------------------------------------

 

PERFORMANCE AWARD DETERMINED UNDER THE APPLICABLE PERFORMANCE AWARD FORMULA BY
THE LEVEL ATTAINED DURING THE APPLICABLE PERFORMANCE PERIOD.  A PERFORMANCE GOAL
MAY BE STATED AS AN ABSOLUTE VALUE OR AS A VALUE DETERMINED RELATIVE TO A
STANDARD SELECTED BY THE COMMITTEE.

 

9.5           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.

 

(B)           DISCRETIONARY ADJUSTMENT OF AWARD FORMULA.  IN ITS DISCRETION, THE
COMMITTEE MAY, EITHER AT THE TIME IT GRANTS A PERFORMANCE AWARD OR AT ANY TIME
THEREAFTER, PROVIDE FOR THE POSITIVE OR NEGATIVE ADJUSTMENT OF THE PERFORMANCE
AWARD FORMULA APPLICABLE TO A PERFORMANCE AWARD GRANTED TO ANY PARTICIPANT WHO
IS NOT A “COVERED EMPLOYEE” WITHIN THE MEANING OF SECTION 162(M) (A “COVERED
EMPLOYEE”) TO REFLECT SUCH PARTICIPANT’S INDIVIDUAL PERFORMANCE IN HIS OR HER
POSITION WITH THE COMPANY OR SUCH OTHER FACTORS AS THE COMMITTEE MAY DETERMINE. 
IF PERMITTED UNDER A COVERED EMPLOYEE’S AWARD AGREEMENT, THE COMMITTEE SHALL
HAVE THE DISCRETION, ON THE BASIS OF SUCH CRITERIA AS MAY BE ESTABLISHED BY THE
COMMITTEE, TO REDUCE SOME OR ALL OF THE VALUE OF THE PERFORMANCE AWARD THAT
WOULD OTHERWISE BE PAID TO THE COVERED EMPLOYEE UPON ITS SETTLEMENT
NOTWITHSTANDING THE ATTAINMENT OF ANY PERFORMANCE GOAL AND THE RESULTING VALUE
OF THE PERFORMANCE AWARD DETERMINED IN ACCORDANCE WITH THE PERFORMANCE AWARD
FORMULA.  NO SUCH REDUCTION MAY RESULT IN AN INCREASE IN THE AMOUNT PAYABLE UPON
SETTLEMENT OF ANOTHER PARTICIPANT’S PERFORMANCE AWARD.

 

(C)           EFFECT OF LEAVES OF ABSENCE.  UNLESS OTHERWISE REQUIRED BY LAW,
PAYMENT OF THE FINAL VALUE, IF ANY, OF A PERFORMANCE AWARD HELD BY A PARTICIPANT
WHO HAS TAKEN IN EXCESS OF THIRTY (30) DAYS OF 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.

 

(D)           NOTICE TO PARTICIPANTS.  AS SOON AS PRACTICABLE FOLLOWING THE
COMMITTEE’S DETERMINATION AND CERTIFICATION IN ACCORDANCE WITH
SECTIONS 9.5(A) AND (B), THE COMPANY SHALL NOTIFY EACH PARTICIPANT OF THE
DETERMINATION OF THE COMMITTEE.

 

(E)           PAYMENT IN SETTLEMENT OF PERFORMANCE AWARDS.  AS SOON AS
PRACTICABLE FOLLOWING THE COMMITTEE’S DETERMINATION AND CERTIFICATION IN
ACCORDANCE WITH SECTIONS 9.5(A) AND (B), 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.  AN AWARD
AGREEMENT MAY PROVIDE FOR DEFERRED PAYMENT IN A LUMP SUM OR IN INSTALLMENTS AT
THE ELECTION OF THE PARTICIPANT OR OTHERWISE.  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 EQUIVALENTS OR INTEREST.

 

20

--------------------------------------------------------------------------------

 

(F)            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 VALUE OF A SHARE OF
STOCK DETERMINED BY THE METHOD SPECIFIED IN THE AWARD AGREEMENT.  SUCH METHODS
MAY INCLUDE, WITHOUT LIMITATION, THE CLOSING MARKET PRICE ON A SPECIFIED DATE
(SUCH AS THE SETTLEMENT DATE) OR AN AVERAGE OF MARKET PRICES OVER A SERIES OF
TRADING DAYS.  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.

 

9.6           DIVIDEND EQUIVALENTS.  IN ITS DISCRETION, THE COMMITTEE MAY
PROVIDE IN THE AWARD AGREEMENT EVIDENCING ANY PERFORMANCE SHARE AWARD THAT THE
PARTICIPANT SHALL BE ENTITLED TO RECEIVE DIVIDEND EQUIVALENTS WITH RESPECT TO
THE PAYMENT OF CASH DIVIDENDS ON STOCK HAVING A RECORD DATE PRIOR TO THE DATE ON
WHICH THE PERFORMANCE SHARES ARE SETTLED OR FORFEITED.  DIVIDEND EQUIVALENTS 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 EQUIVALENTS 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 9.5. 
DIVIDEND EQUIVALENTS SHALL NOT BE PAID WITH RESPECT TO PERFORMANCE UNITS.

 

9.7           EFFECT OF TERMINATION OF SERVICE.  THE EFFECT OF A PARTICIPANT’S
TERMINATION OF SERVICE ON THE PARTICIPANT’S PERFORMANCE AWARD SHALL BE AS
DETERMINED BY THE COMMITTEE, IN ITS DISCRETION, AND SET FORTH IN THE AWARD
AGREEMENT EVIDENCING SUCH PERFORMANCE AWARD.

 

9.8           NONTRANSFERABILITY OF PERFORMANCE AWARDS.  PRIOR TO SETTLEMENT IN
ACCORDANCE WITH THE PROVISIONS OF THE PLAN, NO PERFORMANCE AWARD MAY 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 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.

 

10.           STANDARD FORMS OF AWARD AGREEMENT.

 

10.1         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.  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 AS THE COMMITTEE
MAY APPROVE FROM TIME TO TIME.

 

10.2         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,

 

21

--------------------------------------------------------------------------------

 

REVISED OR AMENDED STANDARD FORM OR FORMS OF AWARD AGREEMENT ARE NOT
INCONSISTENT WITH THE TERMS OF THE PLAN.

 

11.           CHANGE OF CONTROL.

 

11.1        AWARDS GRANTED PRIOR TO JANUARY 24, 2008.  THE FOLLOWING PROVISIONS
SHALL CONTROL FOR AWARDS GRANTED PRIOR TO JANUARY 24, 2008:

 

(A)   EXCEPT AS OTHERWISE PROVIDED IN A PARTICIPANT’S AWARD AGREEMENT:

 

(I)            AN “OWNERSHIP CHANGE EVENT” SHALL BE DEEMED TO HAVE OCCURRED IF
ANY OF THE FOLLOWING OCCURS WITH RESPECT TO THE COMPANY:  (I) THE DIRECT OR
INDIRECT SALE OR EXCHANGE BY THE STOCKHOLDERS OF THE COMPANY OF ALL OR
SUBSTANTIALLY ALL OF THE VOTING STOCK OF THE COMPANY; (II) A MERGER OR
CONSOLIDATION IN WHICH THE COMPANY IS A PARTY; (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); OR
(IV) A LIQUIDATION OR DISSOLUTION OF THE COMPANY.

 

(II)           A “CHANGE IN CONTROL” SHALL MEAN 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 VOTING SECURITIES OF THE COMPANY OR, IN THE CASE OF AN OWNERSHIP
CHANGE EVENT DESCRIBED IN SECTION 11.1(A)(III), THE ENTITY TO WHICH THE ASSETS
OF THE COMPANY WERE TRANSFERRED.

 

(B)   EFFECT OF CHANGE IN CONTROL ON OPTIONS, SARS AND RESTRICTED STOCK UNITS. 
IN THE EVENT OF A CHANGE IN CONTROL, THE SURVIVING, CONTINUING, SUCCESSOR, OR
PURCHASING ENTITY OR PARENT THEREOF, AS THE CASE MAY BE (THE “ACQUIROR”), MAY,
WITHOUT THE CONSENT OF ANY PARTICIPANT, EITHER ASSUME THE COMPANY’S RIGHTS AND
OBLIGATIONS UNDER OUTSTANDING OPTIONS, SARS AND RESTRICTED STOCK UNITS OR
SUBSTITUTE FOR OUTSTANDING OPTIONS, SARS AND RESTRICTED STOCK UNITS
SUBSTANTIALLY EQUIVALENT EQUITY AWARDS FOR THE ACQUIROR’S STOCK.  IN THE EVENT
THE ACQUIROR ELECTS NOT TO ASSUME OR SUBSTITUTE FOR OUTSTANDING OPTIONS, SARS OR
RESTRICTED STOCK UNITS IN CONNECTION WITH A CHANGE IN CONTROL, THE COMMITTEE
SHALL PROVIDE THAT ANY UNEXERCISED AND/OR UNVESTED PORTIONS OF SUCH OUTSTANDING
AWARDS SHALL BE IMMEDIATELY EXERCISABLE AND VESTED IN FULL AS OF THE DATE THIRTY
(30) DAYS PRIOR TO THE DATE OF THE CHANGE IN CONTROL.  THE EXERCISE AND/OR
VESTING OF ANY OPTION, SAR OR RESTRICTED STOCK UNIT THAT WAS PERMISSIBLE SOLELY
BY REASON OF THIS PARAGRAPH 10.2 SHALL BE CONDITIONED UPON THE CONSUMMATION OF
THE CHANGE IN CONTROL.  ANY OPTIONS, SARS OR RESTRICTED STOCK UNITS WHICH ARE
NOT ASSUMED OR REPLACED BY THE ACQUIROR IN CONNECTION WITH THE CHANGE IN CONTROL
NOR EXERCISED 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.

 

(C)   EFFECT OF CHANGE IN CONTROL ON STOCK AWARDS.  THE COMMITTEE MAY, IN ITS
DISCRETION, PROVIDE IN ANY AWARD AGREEMENT EVIDENCING A STOCK AWARD THAT, IN THE
EVENT OF A CHANGE IN CONTROL, THE LAPSING OF THE RESTRICTION PERIOD APPLICABLE
TO THE SHARES SUBJECT TO THE STOCK AWARD HELD BY A PARTICIPANT WHOSE SERVICE HAS
NOT TERMINATED PRIOR TO SUCH

 

22

--------------------------------------------------------------------------------

 

DATE SHALL BE ACCELERATED EFFECTIVE AS OF THE DATE OF THE CHANGE IN CONTROL TO
SUCH EXTENT AS SPECIFIED IN SUCH AWARD AGREEMENT.  ANY ACCELERATION OF THE
LAPSING OF THE RESTRICTION PERIOD THAT WAS PERMISSIBLE SOLELY BY REASON OF THIS
SECTION 11.1(C) AND THE PROVISIONS OF SUCH AWARD AGREEMENT SHALL BE CONDITIONED
UPON THE CONSUMMATION OF THE CHANGE IN CONTROL.

 

(D)   EFFECT OF CHANGE IN CONTROL ON PERFORMANCE AWARDS.  THE COMMITTEE MAY, IN
ITS DISCRETION, PROVIDE IN ANY AWARD AGREEMENT EVIDENCING A PERFORMANCE AWARD
THAT, IN THE EVENT OF A CHANGE IN CONTROL, THE PERFORMANCE AWARD HELD BY A
PARTICIPANT WHOSE SERVICE HAS NOT TERMINATED PRIOR TO SUCH DATE SHALL BECOME
PAYABLE EFFECTIVE AS OF THE DATE OF THE CHANGE IN CONTROL TO SUCH EXTENT AS
SPECIFIED IN SUCH AWARD AGREEMENT.

 

11.2         AWARDS GRANTED ON OR AFTER JANUARY 24, 2008.  THE FOLLOWING
PROVISIONS SHALL CONTROL FOR AWARDS GRANTED ON OR AFTER JANUARY 24, 2008:

 

(A)   EXCEPT AS OTHERWISE PROVIDED IN A PARTICIPANT’S AWARD AGREEMENT, “CHANGE
OF CONTROL” SHALL MEAN A CHANGE OF CONTROL OF THE COMPANY OF A NATURE THAT WOULD
BE REQUIRED TO BE REPORTED IN RESPONSE TO ITEM 6(E) OF SCHEDULE 14A OF
REGULATION 14A PROMULGATED UNDER THE EXCHANGE ACT, WHETHER OR NOT THE COMPANY IS
THEN SUBJECT TO SUCH REPORTING REQUIREMENT; PROVIDED, HOWEVER, THAT ANYTHING IN
THIS PLAN TO THE CONTRARY NOTWITHSTANDING, A CHANGE OF CONTROL SHALL BE DEEMED
TO HAVE OCCURRED IF:

 

(I)            ANY INDIVIDUAL, PARTNERSHIP, FIRM, CORPORATION, ASSOCIATION,
TRUST, UNINCORPORATED ORGANIZATION OR OTHER ENTITY OR PERSON, OR ANY SYNDICATE
OR GROUP DEEMED TO BE A PERSON UNDER SECTION 14(D)(2) OF THE EXCHANGE ACT, IS OR
BECOMES THE “BENEFICIAL OWNER” (AS DEFINED IN RULE 13D-3 OF THE GENERAL
RULES AND REGULATIONS UNDER THE EXCHANGE ACT), DIRECTLY OR INDIRECTLY, OF
SECURITIES OF THE COMPANY REPRESENTING 30% OR MORE OF THE COMBINED VOTING POWER
OF THE COMPANY’S THEN OUTSTANDING SECURITIES ENTITLED TO VOTE IN THE ELECTION OF
DIRECTORS OF THE COMPANY;

 

(II)           DURING ANY PERIOD OF TWO (2) CONSECUTIVE YEARS, INDIVIDUALS WHO
AT THE BEGINNING OF SUCH PERIOD CONSTITUTED THE BOARD AND ANY NEW DIRECTORS,
WHOSE ELECTION BY THE BOARD OR NOMINATION FOR ELECTION BY THE COMPANY’S
STOCKHOLDERS WAS APPROVED BY A VOTE OF AT LEAST THREE-FOURTHS (3/4THS) OF THE
DIRECTORS THEN STILL IN OFFICE WHO EITHER WERE DIRECTORS AT THE BEGINNING OF THE
PERIOD OR WHOSE ELECTION OR NOMINATION FOR ELECTION WAS PREVIOUSLY SO APPROVED
(THE “INCUMBENT DIRECTORS”), CEASE FOR ANY REASON TO CONSTITUTE A MAJORITY
THEREOF;

 

(III)          THERE OCCURS A REORGANIZATION, MERGER, CONSOLIDATION OR OTHER
CORPORATE TRANSACTION INVOLVING THE COMPANY (A “TRANSACTION”), IN EACH CASE WITH
RESPECT TO WHICH THE STOCKHOLDERS OF THE COMPANY IMMEDIATELY PRIOR TO SUCH
TRANSACTION DO NOT, IMMEDIATELY AFTER THE TRANSACTION, OWN SECURITIES
REPRESENTING MORE THAN 50% OF THE COMBINED VOTING POWER OF THE COMPANY, A PARENT
OF THE COMPANY OR OTHER CORPORATION RESULTING FROM SUCH TRANSACTION (COUNTING,
FOR THIS PURPOSE, ONLY THOSE SECURITIES HELD BY THE COMPANY’S STOCKHOLDERS
IMMEDIATELY AFTER THE TRANSACTION THAT WERE RECEIVED IN EXCHANGE FOR, OR
REPRESENT THEIR CONTINUING OWNERSHIP OF, SECURITIES OF THE COMPANY HELD BY THEM
IMMEDIATELY PRIOR TO THE TRANSACTION);

 

23

--------------------------------------------------------------------------------

 

(IV)          ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY ARE SOLD,
LIQUIDATED OR DISTRIBUTED; OR

 

(V)           THERE IS A “CHANGE OF CONTROL” OR A “CHANGE IN THE EFFECTIVE
CONTROL” OF THE COMPANY WITHIN THE MEANING OF SECTION 280G OF THE CODE AND THE
REGULATIONS PROMULGATED THEREUNDER.

 

(B)   THE COMMITTEE OR THE BOARD MAY, IN ITS DISCRETION, PROVIDE IN ANY AWARD
AGREEMENT, SEVERANCE PLAN OR OTHER INDIVIDUAL AGREEMENT, THAT, IN THE EVENT OF A
CHANGE OF CONTROL OF THE COMPANY, THE AWARD HELD BY A PARTICIPANT SHALL BECOME
VESTED, EXERCISABLE AND/OR PAYABLE TO SUCH EXTENT AS SPECIFIED IN SUCH DOCUMENT.

 

(C)   IN THE EVENT OF A CHANGE OF CONTROL, THE SURVIVING, CONTINUING, SUCCESSOR,
OR PURCHASING ENTITY OR PARENT THEREOF, AS THE CASE MAY BE (THE “ACQUIROR”),
MAY, WITHOUT THE CONSENT OF ANY PARTICIPANT, EITHER ASSUME THE COMPANY’S RIGHTS
AND OBLIGATIONS UNDER OUTSTANDING AWARDS OR SUBSTITUTE FOR OUTSTANDING AWARDS
SUBSTANTIALLY EQUIVALENT EQUITY AWARDS FOR THE ACQUIROR’S STOCK.  IN THE EVENT
THE ACQUIROR ELECTS NOT TO ASSUME OR SUBSTITUTE FOR OUTSTANDING AWARDS IN
CONNECTION WITH A CHANGE OF CONTROL, ANY UNEXERCISED AND/OR UNVESTED PORTIONS OF
SUCH OUTSTANDING AWARDS SHALL BECOME IMMEDIATELY EXERCISABLE AND VESTED IN FULL
AS OF IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE CHANGE OF CONTROL.  THE
EXERCISE AND/OR VESTING OF ANY AWARD THAT WAS PERMISSIBLE SOLELY BY REASON OF
THIS PARAGRAPH 11.2 SHALL BE CONDITIONED UPON THE CONSUMMATION OF THE CHANGE IN
CONTROL.  ANY AWARDS WHICH ARE NOT ASSUMED OR REPLACED BY THE ACQUIROR IN
CONNECTION WITH THE CHANGE OF CONTROL NOR EXERCISED AS OF THE TIME OF
CONSUMMATION OF THE CHANGE OF CONTROL SHALL TERMINATE AND CEASE TO BE
OUTSTANDING EFFECTIVE AS OF THE TIME OF CONSUMMATION OF THE CHANGE OF CONTROL.

 

12.           COMPLIANCE WITH SECURITIES LAW.

 

12.1         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 (I) 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 (II) 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.

 

12.2         IF THE EXERCISE OF AN AWARD, OR THE PURCHASE OR DELIVERY OF SHARES
OF STOCK SUBJECT TO AN AWARD, FOLLOWING THE TERMINATION OF THE PARTICIPANT’S
SERVICE WOULD BE PROHIBITED

 

24

--------------------------------------------------------------------------------

 

AT ANY TIME DURING THE APPLICABLE POST-TERMINATION PERIOD SOLELY BECAUSE THE
ISSUANCE OF SHARES OF STOCK WOULD VIOLATE THE REGISTRATION REQUIREMENTS UNDER
THE SECURITIES ACT, THEN THE AWARD SHALL TERMINATE ON THE EARLIER OF (I) THE
EXPIRATION OF A PERIOD OF THREE (3) MONTHS AFTER THE TERMINATION OF THE
PARTICIPANT’S SERVICE DURING WHICH THE EXERCISE OF THE AWARD WOULD NOT BE IN
VIOLATION OF SUCH REGISTRATION REQUIREMENTS, OR (II) THE EXPIRATION OF THE TERM
OF THE AWARD AS SET FORTH IN THE AWARD AGREEMENT.

 

13.           TAX WITHHOLDING.

 

13.1         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, INCLUDING
BY MEANS OF A CASHLESS EXERCISE OF AN OPTION, 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.

 

13.2         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.

 

14.           TERMINATION OR AMENDMENT OF PLAN.

 

The Committee may terminate or amend the Plan at any time.  However, without the
approval of the Company’s stockholders, there shall be (a) no increase in the
maximum aggregate number of shares of Stock that may be issued under the Plan
(except by operation of the provisions of Section 4.2), (b) no change in the
class of persons eligible to receive Incentive Stock Options, and (c) no other
amendment of the Plan that would require approval of the Company’s stockholders
under any applicable law, regulation or rule.  No termination or amendment of
the Plan shall affect any then outstanding Award unless expressly provided by
the Committee.  In any event, no termination or amendment of the Plan may
adversely affect any then outstanding Award without the consent of the
Participant, unless such termination or amendment is necessary to comply with
any applicable law, regulation or rule.

 

15.           MISCELLANEOUS PROVISIONS.

 

15.1         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

 

25

--------------------------------------------------------------------------------

 

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.

 

15.2         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.

 

15.3         RIGHTS AS EMPLOYEE, CONSULTANT OR DIRECTOR.  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, A CONSULTANT OR A
DIRECTOR, 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 CAN 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.

 

15.4         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 4.2 OR ANOTHER PROVISION OF THE PLAN.

 

15.5         FRACTIONAL SHARES.  THE COMPANY SHALL NOT BE REQUIRED TO ISSUE
FRACTIONAL SHARES UPON THE EXERCISE OR SETTLEMENT OF ANY AWARD.

 

15.6         BENEFICIARY BENEFITS.  SUBJECT TO LOCAL LAWS AND PROCEDURES, THE
COMPANY MAY REQUEST APPROPRIATE WRITTEN DOCUMENTATION FROM A TRUSTEE OR OTHER
LEGAL REPRESENTATIVE, COURT, OR SIMILAR LEGAL BODY, REGARDING ANY BENEFIT UNDER
THE PLAN TO WHICH THE PARTICIPANT IS ENTITLED IN THE EVENT OF SUCH PARTICIPANT’S
DEATH BEFORE SUCH REPRESENTATIVE SHALL BE ENTITLED TO ACT ON BEHALF OF THE
PARTICIPANT AND BEFORE A BENEFICIARY RECEIVES ANY OR ALL OF SUCH BENEFIT.

 

15.7         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, THE OFFICER 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

 

26

--------------------------------------------------------------------------------

 

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.

 

15.8         SECTION 409A. TO THE EXTENT THAT THE COMMITTEE DETERMINES THAT ANY
AWARD GRANTED UNDER THE PLAN IS, OR MAY REASONABLY BE, SUBJECT TO SECTION 409A
OF THE CODE (TOGETHER, WITH ANY STATE LAW OF SIMILAR EFFECT, “SECTION 409A”),
THE AWARD AGREEMENT EVIDENCING SUCH AWARD SHALL INCORPORATE THE TERMS AND
CONDITIONS NECESSARY TO AVOID THE CONSEQUENCES DESCRIBED IN
SECTION 409A(A)(1) OF THE CODE (OR ANY SIMILAR PROVISION).  TO THE EXTENT
APPLICABLE AND PERMITTED BY LAW, THE PLAN AND AWARD AGREEMENTS SHALL BE
INTERPRETED IN ACCORDANCE WITH SECTION 409A AND DEPARTMENT OF TREASURY
REGULATIONS AND OTHER INTERPRETIVE GUIDANCE ISSUED THEREUNDER, INCLUDING WITHOUT
LIMITATION ANY SUCH REGULATIONS OR OTHER GUIDANCE THAT MAY BE ISSUED OR AMENDED
AFTER THE DATE OF GRANT OF ANY AWARD HEREUNDER.

 

Notwithstanding any provision of the Plan to the contrary, in the event that the
Committee determines that any Award is, or may reasonably be, subject to
Section 409A and related Department of Treasury guidance (including such
Department of Treasury guidance issued from time to time), the Committee may,
without the Participant’s consent, adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Committee determines are necessary or appropriate to
(A) exempt the Award from Section 409A and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (B) comply with
the requirements of Section 409A and related Department of Treasury guidance.

 

In addition, and except as otherwise set forth in the applicable Award
Agreement, if the Company determines that any Award granted under this Plan
constitutes, or may reasonably constitute, “deferred compensation” under
Section 409A and the Participant is a “specified employee” of the Company at the
relevant date, as such term is defined in Section 409A(a)(2)(B)(i), then any
payment or benefit resulting from such Award will be delayed until the earliest
date following the Participant’s “separation from service” with the
Participating Company Group within the meaning of Section 409A on which the
Company can provide such payment or benefit to the Participant without the
Participant’s incurrence of any additional tax or interest pursuant to
Section 409A, with all payments or benefits due thereafter occurring in
accordance with the original schedule.  In addition, this Plan and the benefits
to be provided hereunder are intended to comply in all respects with the
applicable provisions of Section 409A.

 

Notwithstanding anything to the contrary contained herein, neither the Company
nor any of its Affiliates shall be responsible for, or required to reimburse or
otherwise make any Participant whole for, any tax or penalty imposed on, or
losses incurred by, any Participant that arises in connection with the potential
or actual application of Section 409A to any Award granted hereunder.

 

27

--------------------------------------------------------------------------------