Exhibit 10.2

 

2004 STOCK OPTION PLAN

FOR KEY EMPLOYEES OF

PANAMSAT CORPORATION AND ITS SUBSIDIARIES

 

1.             PURPOSE OF PLAN

 

The 2004 Stock Option Plan for Key Employees of PanAmSat Corporation and Its
Subsidiaries (the “Plan”) is designed:

 

(A)           TO PROMOTE THE LONG TERM FINANCIAL INTERESTS AND GROWTH OF
PANAMSAT CORPORATION (THE “COMPANY”) AND ITS SUBSIDIARIES BY ATTRACTING AND
RETAINING MANAGEMENT AND OTHER PERSONNEL WITH THE TRAINING, EXPERIENCE AND
ABILITY TO ENABLE THEM TO MAKE A SUBSTANTIAL CONTRIBUTION TO THE SUCCESS OF THE
COMPANY’S BUSINESS;

(B)           TO MOTIVATE MANAGEMENT PERSONNEL BY MEANS OF GROWTH-RELATED
INCENTIVES TO ACHIEVE LONG RANGE GOALS; AND

(C)           TO FURTHER THE ALIGNMENT OF INTERESTS OF PARTICIPANTS WITH THOSE
OF THE STOCKHOLDERS OF THE COMPANY THROUGH OPPORTUNITIES FOR INCREASED STOCK, OR
STOCK-BASED OWNERSHIP IN THE COMPANY.

2.             DEFINITIONS

 

As used in the Plan, the following words shall have the following meanings:

 

(A)           “AFFILIATE” MEANS WITH RESPECT TO ANY PERSON, ANY ENTITY DIRECTLY
OR INDIRECTLY CONTROLLING, CONTROLLED BY OR UNDER COMMON CONTROL WITH SUCH
PERSON.

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

(C)           “CHANGE IN CONTROL” MEANS IN ONE OR A SERIES OF TRANSACTIONS (I)
THE SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY TO AN
UNAFFILIATED PERSON; (II) A SALE RESULTING IN MORE THAN 50% OF THE VOTING STOCK
OF THE COMPANY BEING HELD BY AN UNAFFILIATED PERSON; (III) A MERGER,
CONSOLIDATION, RECAPITALIZATION OR REORGANIZATION OF THE COMPANY WITH OR INTO
ANOTHER UNAFFILIATED PERSON; IF AND ONLY IF ANY SUCH EVENT LISTED IN CLAUSES (I)
THROUGH (III) ABOVE RESULTS IN THE INABILITY OF THE INVESTORS, OR ANY MEMBER OR
MEMBERS OF THE INVESTORS, TO DESIGNATE OR ELECT A MAJORITY OF THE BOARD (OR THE
BOARD OF DIRECTORS OF THE RESULTING ENTITY OR ITS PARENT COMPANY).  FOR PURPOSES
OF THIS DEFINITION, THE TERM “UNAFFILIATED PERSON” MEANS ANY PERSON OR GROUP WHO
IS NOT (X) AN INVESTOR OR ANY MEMBER OF THE INVESTORS, (Y) A RULE 405 AFFILIATE
OF ANY INVESTOR OR ANY MEMBER OF ANY INVESTOR, OR (Z) AN ENTITY IN WHICH ANY
INVESTOR, OR ANY MEMBER OF ANY INVESTOR HOLDS, DIRECTLY OR INDIRECTLY, A
MAJORITY OF THE ECONOMIC INTERESTS IN SUCH ENTITY.

(D)           “COMMITTEE” MEANS THE COMPENSATION COMMITTEE OF THE BOARD OR, IF
NO SUCH COMMITTEE EXISTS, THE BOARD.

(E)           “COMMON STOCK” OR “SHARE” MEANS THE COMMON STOCK, PAR VALUE $0.01
PER SHARE, OF THE COMPANY, WHICH MAY BE AUTHORIZED BUT UNISSUED, OR ISSUED AND
REACQUIRED.

 

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(F)            “EMPLOYEE” MEANS A PERSON, INCLUDING AN OFFICER, IN THE REGULAR
EMPLOYMENT OF THE COMPANY OR ONE OF ITS SUBSIDIARIES WHO, IN THE OPINION OF THE
COMMITTEE, IS, OR IS EXPECTED TO HAVE INVOLVEMENT IN THE MANAGEMENT, GROWTH OR
PROTECTION OF SOME PART OR ALL OF THE BUSINESS OF THE COMPANY.

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

(H)           “FAIR MARKET VALUE” MEANS THE PRICE PER SHARE EQUAL TO (I) THE
AVERAGE OF THE LAST SALE PRICE OF THE COMMON STOCK FOR THE FIVE TRADING DAYS
ENDING ON THE APPLICABLE DATE ON EACH STOCK EXCHANGE ON WHICH THE COMMON STOCK
MAY AT THE TIME BE LISTED OR, (II) IF THERE SHALL HAVE BEEN NO SALES ON ANY SUCH
EXCHANGES ON SUCH DATE ON ANY GIVEN DAY, THE AVERAGE OF THE CLOSING BID AND
ASKED PRICES ON EACH SUCH EXCHANGE FOR THE FIVE TRADING DAYS ENDING ON SUCH DATE
OR, (III) IF THERE IS NO SUCH BID AND ASKED PRICE ON SUCH DATE, ON THE NEXT
PRECEDING DATE WHEN SUCH BID AND ASKED PRICE OCCURRED OR, (IV) IF THE COMMON
STOCK SHALL NOT BE SO LISTED, THE AVERAGE OF THE CLOSING SALES PRICES AS
REPORTED BY NASDAQ FOR THE FIVE TRADING DAYS ENDING ON SUCH DATE IN THE
OVER-THE-COUNTER MARKET OR, (V) IF THERE HAVE BEEN NO SUCH SALES, BID OR ASKED
PRICES, OR IF THERE HAS BEEN NO PUBLIC OFFERING, THE FAIR MARKET VALUE OF THE
COMMON STOCK AS DETERMINED IN THE GOOD FAITH DISCRETION OF THE BOARD.

(I)            “GRANT” MEANS AN AWARD MADE TO A PARTICIPANT PURSUANT TO THE PLAN
AND DESCRIBED IN SECTION 5, INCLUDING, WITHOUT LIMITATION, AN AWARD OF A STOCK
OPTION, STOCK APPRECIATION RIGHT OR DIVIDEND EQUIVALENT RIGHT (AS SUCH TERMS ARE
DEFINED IN SECTION 5), OR ANY COMBINATION OF THE FOREGOING.

(J)            “GRANT AGREEMENT” MEANS AN AGREEMENT BETWEEN THE COMPANY AND A
PARTICIPANT THAT SETS FORTH THE TERMS, CONDITIONS AND LIMITATIONS APPLICABLE TO
A GRANT.

(K)           “GROUP” MEANS “GROUP,” AS SUCH TERM IS USED FOR PURPOSES OF
SECTION 13(D) OR 14(D) OF THE EXCHANGE ACT.

(L)            “INVESTORS” MEANS CONSTELLATION, LLC, A DELAWARE LIMITED
LIABILITY COMPANY, CARLYLE PANAMSAT I, L.L.C., A DELAWARE LIMITED LIABILITY
COMPANY, CARLYLE PANAMSAT II, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY, PEP
PAS, LLC, A DELAWARE LIMITED LIABILITY COMPANY, AND PEOP PAS, LLC, A DELAWARE
LIMITED LIABILITY COMPANY.

(M)          “PARTICIPANT” MEANS AN EMPLOYEE, NON-EMPLOYEE MEMBER OF THE BOARD,
CONSULTANT OR OTHER PERSON HAVING A RELATIONSHIP WITH THE COMPANY OR ONE OF ITS
SUBSIDIARIES, TO WHOM ONE OR MORE GRANTS HAVE BEEN MADE AND REMAIN OUTSTANDING.

(N)           “PERSON” MEANS “PERSON,” AS SUCH TERM IS USED FOR PURPOSES OF
SECTION 13(D) OR 14(D) OF THE EXCHANGE ACT.

(O)           “SUBSIDIARY” MEANS ANY CORPORATION IN AN UNBROKEN CHAIN OF
CORPORATIONS BEGINNING WITH THE COMPANY IF EACH OF THE CORPORATIONS, OR GROUP OF
COMMONLY CONTROLLED CORPORATIONS, OTHER THAN THE LAST CORPORATION IN THE
UNBROKEN CHAIN THEN OWNS STOCK POSSESSING 50% OR MORE OF THE TOTAL COMBINED
VOTING POWER OF ALL CLASSES OF STOCK IN ONE OF THE OTHER CORPORATIONS IN SUCH
CHAIN.

 

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3.             ADMINISTRATION OF PLAN

 

(A)           THE PLAN SHALL BE ADMINISTERED BY THE COMMITTEE.  THE COMMITTEE
MAY ADOPT ITS OWN RULES OF PROCEDURE, AND ACTION OF A MAJORITY OF THE MEMBERS OF
THE COMMITTEE TAKEN AT A MEETING, OR ACTION TAKEN WITHOUT A MEETING BY UNANIMOUS
WRITTEN CONSENT, SHALL CONSTITUTE ACTION BY THE COMMITTEE.  THE COMMITTEE SHALL
HAVE THE POWER AND AUTHORITY TO ADMINISTER, CONSTRUE AND INTERPRET THE PLAN, TO
MAKE RULES FOR CARRYING IT OUT AND TO MAKE CHANGES IN SUCH RULES.  ANY SUCH
INTERPRETATIONS, RULES, AND ADMINISTRATION SHALL BE CONSISTENT WITH THE BASIC
PURPOSES OF THE PLAN.

(B)           THE COMMITTEE MAY DELEGATE TO THE CHIEF EXECUTIVE OFFICER AND TO
OTHER SENIOR OFFICERS OF THE COMPANY ITS DUTIES UNDER THE PLAN SUBJECT TO SUCH
CONDITIONS AND LIMITATIONS AS THE COMMITTEE SHALL PRESCRIBE EXCEPT THAT ONLY THE
COMMITTEE MAY DESIGNATE AND MAKE GRANTS TO PARTICIPANTS WHO ARE SUBJECT TO
SECTION 16 OF THE EXCHANGE ACT.

(C)           THE COMMITTEE MAY EMPLOY COUNSEL, CONSULTANTS, ACCOUNTANTS,
APPRAISERS, BROKERS OR OTHER PERSONS.  THE COMMITTEE, THE COMPANY, AND THE
OFFICERS AND DIRECTORS OF THE COMPANY SHALL BE ENTITLED TO RELY UPON THE ADVICE,
OPINIONS OR VALUATIONS OF ANY SUCH PERSONS.  ALL ACTIONS TAKEN AND ALL
INTERPRETATIONS AND DETERMINATIONS MADE BY THE COMMITTEE IN GOOD FAITH SHALL BE
FINAL AND BINDING UPON ALL PARTICIPANTS, THE COMPANY AND ALL OTHER INTERESTED
PERSONS.  NO MEMBER OF THE COMMITTEE SHALL BE PERSONALLY LIABLE FOR ANY ACTION,
DETERMINATION OR INTERPRETATION MADE IN GOOD FAITH WITH RESPECT TO THE PLAN OR
THE GRANTS, AND ALL MEMBERS OF THE COMMITTEE SHALL BE FULLY PROTECTED BY THE
COMPANY WITH RESPECT TO ANY SUCH ACTION, DETERMINATION OR INTERPRETATION.

4.             ELIGIBILITY

 

The Committee may from time to time make Grants under the Plan to such
Employees, or other persons having a relationship with Company or any of its
Subsidiaries, and in such form and having such terms, conditions and limitations
as the Committee may determine.  The terms, conditions and limitations of each
Grant under the Plan shall be set forth in a Grant Agreement, in a form approved
by the Committee, consistent, however, with the terms of the Plan; provided,
however, that such Grant Agreement shall contain provisions dealing with the
treatment of Grants in the event of the termination of employment, death or
disability of a Participant, and may also include provisions concerning the
treatment of Grants in the event of a Change in Control of the Company.

 

5.             GRANTS

 

From time to time, the Committee will determine the forms and amounts of Grants
for Participants.  Such Grants may take the following forms in the Committee’s
sole discretion:

 

(A)           STOCK OPTIONS - THESE ARE OPTIONS TO PURCHASE COMMON STOCK.  AT
THE TIME OF GRANT THE COMMITTEE SHALL DETERMINE, AND SHALL INCLUDE IN THE GRANT
AGREEMENT OR OTHER PLAN RULES, THE OPTION EXERCISE PERIOD, THE OPTION EXERCISE
PRICE, VESTING REQUIREMENTS, AND SUCH OTHER TERMS, CONDITIONS OR RESTRICTIONS ON
THE GRANT OR EXERCISE OF THE OPTION AS THE COMMITTEE DEEMS APPROPRIATE
INCLUDING, WITHOUT LIMITATION, THE RIGHT TO RECEIVE DIVIDEND EQUIVALENT PAYMENTS
ON VESTED AND/OR UNVESTED OPTIONS.  IN ADDITION TO OTHER RESTRICTIONS CONTAINED
IN THE PLAN, AN OPTION GRANTED UNDER THIS SECTION 5(A) MAY NOT BE EXERCISED MORE
THAN 10 YEARS AFTER THE DATE IT IS GRANTED. 

 

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PAYMENT OF THE OPTION EXERCISE PRICE SHALL BE MADE IN CASH OR IN SHARES OF
COMMON STOCK THAT THE PARTICIPANT HAS HELD FOR AT LEAST SIX MONTHS, OR A
COMBINATION THEREOF, IN ACCORDANCE WITH THE TERMS OF THE PLAN, THE GRANT
AGREEMENT AND OF ANY APPLICABLE GUIDELINES OF THE COMMITTEE IN EFFECT AT THE
TIME.

(B)           STOCK APPRECIATION RIGHTS - THE COMMITTEE MAY GRANT STOCK
APPRECIATION RIGHTS IN CONNECTION WITH THE GRANT OF A STOCK OPTION.  EACH STOCK
APPRECIATION RIGHT SHALL BE SUBJECT TO SUCH OTHER TERMS AS THE COMMITTEE MAY
DETERMINE.  A STOCK APPRECIATION RIGHT MEANS THE RIGHT TO TRANSFER AND SURRENDER
TO THE COMPANY ALL OR A PORTION OF A STOCK OPTION IN EXCHANGE FOR A CASH AMOUNT
EQUAL TO THE EXCESS OF (I) THE AGGREGATE FAIR MARKET VALUE, AS OF THE DATE SUCH
OPTION OR PORTION THEREOF IS TRANSFERRED OR SURRENDERED, OF THE COMMON STOCK
UNDERLYING BY SUCH OPTION OR PORTION THEREOF, OVER (II) THE AGGREGATE EXERCISE
PRICE OF SUCH OPTION OR PORTION THEREOF, RELATING TO SUCH COMMON STOCK.

(C)           DIVIDEND EQUIVALENT RIGHTS — THE COMMITTEE MAY GRANT DIVIDEND
EQUIVALENT RIGHTS EITHER ALONE OR IN CONNECTION WITH THE GRANT OF A STOCK
OPTION.  A DIVIDEND EQUIVALENT RIGHT MEANS THE RIGHT TO RECEIVE A PAYMENT IN
RESPECT OF ONE SHARE OF COMMON STOCK (WHETHER OR NOT SUBJECT TO A STOCK OPTION)
EQUAL TO THE AMOUNT OF ANY DIVIDEND PAID IN RESPECT OF ONE SHARE OF COMMON STOCK
HELD BY A SHAREHOLDER IN THE COMPANY.  EACH DIVIDEND EQUIVALENT RIGHT SHALL BE
SUBJECT TO SUCH TERMS AS THE COMMITTEE MAY DETERMINE.

6.             LIMITATIONS AND CONDITIONS

 

(A)           THE NUMBER OF SHARES AVAILABLE FOR GRANTS UNDER THIS PLAN SHALL BE
1,300,000 UNLESS RESTRICTED BY APPLICABLE LAW.  SHARES RELATED TO GRANTS THAT
ARE FORFEITED, TERMINATED, CANCELED OR EXPIRE UNEXERCISED, SHALL IMMEDIATELY
BECOME AVAILABLE FOR NEW GRANTS.

(B)           NO GRANTS SHALL BE MADE UNDER THE PLAN BEYOND TEN YEARS AFTER THE
EFFECTIVE DATE OF THE PLAN, BUT THE TERMS OF GRANTS MADE ON OR BEFORE THE
EXPIRATION OF THE PLAN MAY EXTEND BEYOND SUCH EXPIRATION.  AT THE TIME A GRANT
IS MADE OR AMENDED OR THE TERMS OR CONDITIONS OF A GRANT ARE CHANGED IN
ACCORDANCE WITH THE TERMS OF THE PLAN OR THE GRANT AGREEMENT, THE COMMITTEE MAY
PROVIDE FOR LIMITATIONS OR CONDITIONS ON SUCH GRANT.

(C)           NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE COMPANY OR
ANY OF ITS SUBSIDIARIES TO TERMINATE ANY PARTICIPANT’S EMPLOYMENT AT ANY TIME OR
FOR ANY REASON.

(D)           OTHER THAN AS SPECIFICALLY PROVIDED IN THE FORM OF MANAGEMENT
STOCKHOLDER’S AGREEMENT ATTACHED HERETO AS EXHIBIT A, NO BENEFIT UNDER THE PLAN
SHALL BE SUBJECT IN ANY MANNER TO ANTICIPATION, ALIENATION, SALE, TRANSFER,
ASSIGNMENT, PLEDGE, ENCUMBRANCE, OR CHARGE, AND ANY ATTEMPT TO DO SO SHALL BE
VOID.  NO SUCH BENEFIT SHALL, PRIOR TO RECEIPT THEREOF BY THE PARTICIPANT, BE IN
ANY MANNER LIABLE FOR OR SUBJECT TO THE DEBTS, CONTRACTS, LIABILITIES,
ENGAGEMENTS, OR TORTS OF THE PARTICIPANT.

(E)           PARTICIPANTS SHALL NOT BE, AND SHALL NOT HAVE ANY OF THE RIGHTS OR
PRIVILEGES OF, STOCKHOLDERS OF THE COMPANY IN RESPECT OF ANY SHARES PURCHASABLE
IN CONNECTION WITH ANY GRANT UNLESS AND UNTIL CERTIFICATES REPRESENTING ANY SUCH
SHARES HAVE BEEN ISSUED BY THE COMPANY TO

 

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SUCH PARTICIPANTS (OR BOOK ENTRY REPRESENTING SUCH SHARES HAS BEEN MADE AND SUCH
SHARES HAVE BEEN DEPOSITED WITH THE APPROPRIATE REGISTERED BOOK-ENTRY
CUSTODIAN).

(F)            NO ELECTION AS TO BENEFITS OR EXERCISE OF ANY GRANT MAY BE MADE
DURING A PARTICIPANT’S LIFETIME BY ANYONE OTHER THAN THE PARTICIPANT EXCEPT BY A
LEGAL REPRESENTATIVE APPOINTED FOR OR BY THE PARTICIPANT.

(G)           ABSENT EXPRESS PROVISIONS TO THE CONTRARY, ANY GRANT UNDER THIS
PLAN SHALL NOT BE DEEMED COMPENSATION FOR PURPOSES OF COMPUTING BENEFITS OR
CONTRIBUTIONS UNDER ANY RETIREMENT PLAN OF THE COMPANY OR ITS SUBSIDIARIES AND
SHALL NOT AFFECT ANY BENEFITS UNDER ANY OTHER BENEFIT PLAN OF ANY KIND NOW OR
SUBSEQUENTLY IN EFFECT UNDER WHICH THE AVAILABILITY OR AMOUNT OF BENEFITS IS
RELATED TO LEVEL OF COMPENSATION.  THIS PLAN IS NOT A “RETIREMENT PLAN” OR
“WELFARE PLAN” UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED.

(H)           UNLESS THE COMMITTEE DETERMINES OTHERWISE, NO BENEFIT OR PROMISE
UNDER THE PLAN SHALL BE SECURED BY ANY SPECIFIC ASSETS OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES, NOR SHALL ANY ASSETS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES
BE DESIGNATED AS ATTRIBUTABLE OR ALLOCATED TO THE SATISFACTION OF THE COMPANY’S
OBLIGATIONS UNDER THE PLAN.

7.             TRANSFERS AND LEAVES OF ABSENCE

 

For purposes of the Plan, unless the Committee determines otherwise: (a) a
transfer of a Participant’s employment without an intervening period of
separation among the Company and any Subsidiary (or among any Subsidiaries)
shall not be deemed a termination of employment, and (b) a Participant who is
granted in writing a leave of absence or who is entitled to a statutory leave of
absence shall be deemed to have remained in the employ of the Company (and any
Subsidiary) during such leave of absence.

 

8.             ADJUSTMENTS

 

In the event of any change in the outstanding Common Stock by reason of a stock
split, spin-off, stock combination, reclassification, recapitalization,
liquidation, dissolution, reorganization, merger, Change in Control, or other
event affecting the capital stock of the Company, the Committee may adjust
appropriately (a) the number and kind of shares subject to the Plan and
available for or covered by Grants and (b) share prices related to outstanding
Grants, and make such other revisions to outstanding Grants as it deems, in good
faith, are equitably required (including, without limitation, to the exercise
price of Stock Options).

 

9.             MERGER, CONSOLIDATION, EXCHANGE, ACQUISITION, LIQUIDATION OR
DISSOLUTION

 

In its absolute discretion, acting in good faith, and on such terms and
conditions as it deems appropriate, coincident with or after the grant of any
Grant, the Committee may provide that such Grant cannot be exercised after the
amalgamation, merger or consolidation of the Company with or into another
corporation, the exchange of all or substantially all of the assets of the
Company for the securities of another corporation, the acquisition by another
corporation of 80% or more of the Company’s then outstanding shares of voting
stock or the recapitalization, reorganization, reclassification, liquidation,
dissolution, or other event affecting the capital stock of the Company,

 

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and the Committee shall, on such terms and conditions as it deems appropriate,
acting in good faith, also provide, either by the terms of such Grant or by a
resolution adopted prior to the occurrence of such amalgamation, merger,
consolidation, exchange, acquisition, recapitalization, reorganization,
reclassification, liquidation, dissolution or other event affecting the capital
stock of the Company, that, after written notice to all affected Participants
and for a reasonable period of time prior to such event, such Grant shall be
exercisable as to any Shares subject thereto which is being made unexercisable
after any such event, notwithstanding anything to the contrary herein (but
subject to the provisions of Section 6(b)) and that, upon the occurrence of such
event, such Grant shall terminate and be of no further force or effect;
provided, however, that the Committee may also provide, in its absolute
discretion, that even if the Grant shall remain exercisable after any such
event, from and after such event, any such Grant shall be exercisable only for
the kind and amount of securities and/or other property, or the cash equivalent
thereof (as determined by the Committee in good faith), receivable as a result
of such event by the holder of a number of Shares for which such Grant could
have been exercised immediately prior to such event.

 

10.           AMENDMENT AND TERMINATION

 

(a)           The Committee shall have the authority to make such amendments to
any terms and conditions applicable to outstanding Grants as are consistent with
this Plan provided that no such action shall modify any Grant in a manner
adverse to the Participant without the Participant’s consent except as such
modification is provided for or contemplated in the terms of the Grant or this
Plan (except that any adjustment that is made pursuant to Section 8 or 9 hereof
may be made by the Committee in good faith).

 

(b)           The Board of Directors may amend, suspend or terminate the Plan
except that no such action, other than an action under Section 8 or 9 hereof,
may be taken which would, without stockholder approval, increase the aggregate
number of Shares available for Grants under the Plan, decrease the price of
outstanding Grants, change the requirements relating to the Committee, extend
the term of the Plan or be materially adverse to all Participants with respect
to any outstanding Grants.

 

11.           GOVERNING LAW; INTERNATIONAL PARTICIPANTS

 

(A)           THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF DELAWARE APPLICABLE THEREIN.

(B)           WITH RESPECT TO PARTICIPANTS WHO RESIDE OR WORK OUTSIDE THE UNITED
STATES OF AMERICA AND WHO ARE NOT (AND WHO ARE NOT EXPECTED TO BE) “COVERED
EMPLOYEES” WITHIN THE MEANING OF SECTION 162(M) OF THE CODE, THE COMMITTEE MAY,
IN ITS SOLE DISCRETION, AMEND THE TERMS OF THE PLAN OR AWARDS WITH RESPECT TO
SUCH PARTICIPANTS IN ORDER TO CONFORM SUCH TERMS WITH THE REQUIREMENTS OF LOCAL
LAW OR TO OBTAIN MORE FAVORABLE TAX OR OTHER TREATMENT FOR A PARTICIPANT, THE
COMPANY OR AN AFFILIATE.

12.           WITHHOLDING TAXES

 

The Company shall have the right to deduct from any cash payment made under the
Plan any minimum federal, state or local income or other taxes required by law
to be withheld with

 

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respect to such payment.  It shall be a condition to the obligation of the
Company to deliver Shares upon the exercise of a Stock Option that the
Participant pay to the Company such amount as may be requested by the Company
for the purpose of satisfying any liability for such minimum withholding taxes.

 

13.           EFFECTIVE DATE AND TERMINATION DATES

 

The Plan shall be effective on and as of the date of its approval by the
stockholders of the Company and shall terminate ten years later, subject to
earlier termination by the Board pursuant to Section 10.

 

APPROVED BY STOCKHOLDERS ON AUGUST 20, 2004.

 

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